FORM ~~10-Q~~ 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☒~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

FOR THE QUARTERLY PERIOD ENDED ~~SEPTEMBER~~ JUNE 30, ~~2019~~2020

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐~~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 ~~1-12494~~ (CBL & ASSOCIATES PROPERTIES, INC.)

COMMISSION FILE NO. 333-182515-01 ~~333-182515-01~~ (CBL & ASSOCIATES LIMITED PARTNERSHIP)

~~______________~~

CBL & ASSOCIATES PROPERTIES, ~~INC~~

INC.

CBL & ~~Associates Limited Partnership~~

ASSOCIATES LIMITED PARTNERSHIP

(Exact Name of registrant as specified in its charter)

~~______________~~



Delaware	~~(CBL~~ (CBL & ASSOCIATES PROPERTIES, INC.)		62-1545718
Delaware	~~(CBL~~ (CBL & ASSOCIATES LIMITED PARTNERSHIP)		62-1542285
(State or other jurisdiction of incorporation or organization)		~~(I.R.S.~~ (I.R.S. Employer Identification Number)

2030 Hamilton Place Blvd., Suite 500,, ~~Chattanooga~~, TN~~37421-6000~~

Chattanooga, TN 37421-6000

(Address of principal executive office, including zip code)

423-855-0001

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.



CBL & Associates Properties, Inc.	Yes	☒	No	☐
CBL & Associates Limited Partnership	Yes	☒	No	☐

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.	Yes	☒	No	☐
CBL & Associates Limited Partnership	Yes	☒	No	☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.



CBL & Associates Properties, Inc.
Large accelerated filer	☒ ☐	Accelerated filer	☐ ☒
Non-accelerated filer	☐	Smaller reporting company	☐ ☒
Emerging growth company	☐

CBL & Associates Limited Partnership
Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
Emerging growth company	☐

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~~.Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).



CBL & Associates Properties, Inc.	Yes	☐	No	☒
CBL & Associates Limited Partnership	Yes	☐	No	☒

Securities registered under Section 12(b) of the Act:

CBL & Associates Properties, Inc.



Title of each Class	~~Trading~~ ~~Symbol(s)~~	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	~~CBL~~	CBL	New York Stock Exchange
7.375% Series D Cumulative Redeemable Preferred Stock, $0.01 par value	~~CBLprD~~	CBLprD	New York Stock Exchange
6.625% Series E Cumulative Redeemable Preferred Stock, $0.01 par value	~~CBLprE~~	CBLprE	New York Stock Exchange

CBL & Associates Limited Partnership: None

As of ~~November 8, 2019,~~August 11, 2020, there were ~~173,503,412~~194,073,103 shares of CBL & Associates Properties, Inc.'s common stock, par value $0.01 per share, outstanding.

EXPLANATORY NOTE

(Dollars in thousands, except share data)

This report combines the quarterly reports on Form 10-Q for the quarter ended ~~September~~June 30, ~~2019~~2020 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.

Due to the departure of a member of the Company’s financial reporting staff during the quarterly close and financial reporting process and the impact of recent developments related to the Company’s indebtedness, the Company was not able to complete its close process and prepare its Form 10-Q on a timely basis and its independent registered public accounting firm was unable to complete its review of the condensed consolidated financial statements for the quarter ended June 30, 2020 to be included in the Form 10-Q. The Company filed a “Notification of Late Filing” on Form 12b-25 on August 11, 2020 pursuant to Rule 12b-25 of the Securities Exchange Act of 1934 to delay the filing of this Form 10-Q.

The Company is a real estate investment trust ("REIT") whose stock is traded on the New York Stock Exchange. The Company is the 100% owner of two qualified REIT subsidiaries, CBL Holdings I, Inc. and CBL Holdings II, Inc. At ~~September~~June 30, ~~2019,~~2020, 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%~~a 94.2% limited partner interest for a combined interest held by the Company of ~~86.6%~~95.2%.

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;

~~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

~~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;~~

•

creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

~~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;~~

•

condensed consolidated financial statements;

•

certain accompanying notes to condensed consolidated financial statements, including Note 7- Unconsolidated Affiliates and Noncontrolling Interests; Note 8- Mortgage and Other Indebtedness, Net; and Note 11- Earnings per Share and Earnings per Unit;

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•	controls and procedures in Item 4of Part I of this report;


•	information concerning unregistered sales of equity securities and use of proceeds in Item 2of Part II of this report; and

~~certifications of the Chief Executive Officer and Chief Financial Officer included as Exhibits 31.1 through 32.4.~~

•

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~~four 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.” 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 condensed combined financial statements and notes to the condensed 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 or within Management’s Discussion and Analysis which accompanies the 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 condensed 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 condensed 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

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PART I	FINANCIAL INFORMATION	1
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	1

CBL & Associates Properties, Inc.
	Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018~~2019	1

	Condensed Consolidated Statements of Operations for the Three and ~~Nine~~Six Months Ended ~~September~~ June 30, ~~2019~~2020 and ~~2018~~2019	2

	Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2020 and 2019	3
	Condensed Consolidated Statements of Equity for the Three and ~~Nine~~Six Months Ended ~~September~~ June 30, ~~2019~~2020 and ~~2018~~2019	3 4

	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~ June 30, ~~2019~~2020 and ~~2018~~2019	7 5

CBL & Associates Limited Partnership
	Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018~~2019	9 6

	Condensed Consolidated Statements of Operations for the Three and ~~Nine~~Six Months Ended ~~September~~ June 30, ~~2019~~2020 and ~~2018~~2019	10 7

	Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2020 and 2019	8
	Condensed Consolidated Statements of Capital for the Three and ~~Nine~~Six Months Ended ~~September~~ June 30, ~~2019~~2020 and ~~2018~~2019	11 9

	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~ June 30, ~~2019~~2020 and ~~2018~~2019	15 11

CBL & Associates Properties, Inc. and CBL & Associates Limited Partnership
	Notes to Unaudited Condensed Consolidated Financial Statements	17 12

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	46 41
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	66 65
Item 4.	Controls and Procedures	66 65

PART II	OTHER INFORMATION	67

Item 1.	Legal Proceedings	67
Item1A.	Risk Factors	68
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	68 72
Item 3.	Defaults Upon Senior Securities	68 72
Item 4.	Mine Safety Disclosures	68 72
Item 5.	Other Information	68 72
Item 6.	Exhibits	69 73

	SIGNATURES	70 75

PART I – FINANCIAL INFORMATION

ITEM 1: Financial Statements

CBL & Associates Properties, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share data)

(Unaudited)

ASSETS ⁽¹⁾	June 30, 2020			December 31, 2019
Real estate assets:
Land	$	719,497		$	730,218
Buildings and improvements		5,285,259			5,631,831
		6,004,756			6,362,049
Accumulated depreciation		( 2,199,622	)		( 2,349,404	)
		3,805,134			4,012,645
Developments in progress		30,600			49,351
Net investment in real estate assets		3,835,734			4,061,996
Cash and cash equivalents		123,388			32,816
Available-for-sale securities - at fair value (amortized cost of $152,460 in 2020)		152,418			—
Receivables:
Tenant		125,930			75,252
Other		5,457			10,792
Mortgage and other notes receivable		2,729			4,662
Investments in unconsolidated affiliates		301,148			307,354
Intangible lease assets and other assets		108,355			129,474
	$	4,655,159		$	4,622,346
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Mortgage and other indebtedness, net	$	3,774,034		$	3,527,015
Accounts payable and accrued liabilities		227,147			231,306
Total liabilities ⁽¹⁾		4,001,181			3,758,321
Commitments and contingencies (Note 8 and Note 12)
Redeemable noncontrolling interests		525			2,160
Shareholders' equity:
Preferred Stock, $.01 par value, 15,000,000 shares authorized:
7.375% Series D Cumulative Redeemable Preferred Stock, 1,815,000 shares outstanding		18			18
6.625% Series E Cumulative Redeemable Preferred Stock, 690,000 shares outstanding		7			7
Common stock, $.01 par value, 350,000,000 shares authorized, 191,951,454 and 174,115,111 issued and outstanding in 2020 and 2019, respectively		1,920			1,741
Additional paid-in capital		1,982,454			1,965,897
Accumulated other comprehensive loss		( 42	)		—
Dividends in excess of cumulative earnings		( 1,354,253	)		( 1,161,351	)
Total shareholders' equity		630,104			806,312
Noncontrolling interests		23,349			55,553
Total equity		653,453			861,865
	$	4,655,159		$	4,622,346

~~(Unaudited)~~

ASSETS ⁽¹⁾
September 30,
2019 December 31,
2018
Real estate assets:
Land $ 741,060
$ 793,944
Buildings and improvements 5,819,655
6,414,886
6,560,715
7,208,830
Accumulated depreciation (2,404,565 ) (2,493,082 )
4,156,150
4,715,748
Held for sale —
30,971
Developments in progress 63,891
38,807
Net investment in real estate assets 4,220,041
4,785,526
Cash and cash equivalents 34,565
25,138
Receivables:
Tenant, net of allowance for doubtful accounts of $2,337 in 2018 76,947
77,788
Other, net of allowance for doubtful accounts of $838 in 2018
6,577
7,511
Mortgage and other notes receivable 5,818
7,672
Investments in unconsolidated affiliates 279,934
283,553
Intangible lease assets and other assets 146,036
153,665
$ 4,769,918
$ 5,340,853

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

Mortgage and other indebtedness, net $ 3,699,007
$ 4,043,180
Accounts payable and accrued liabilities 260,264
218,217
Liabilities related to assets held for sale —
43,716
Total liabilities ⁽¹⁾
3,959,271
4,305,113
Commitments and contingencies (Note 8 and Note 12)

Redeemable noncontrolling interests 1,864
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
6.625% Series E Cumulative Redeemable Preferred
Stock, 690,000 shares outstanding 7
7
Common stock, $.01 par value, 350,000,000 shares
authorized, 173,469,264 and 172,656,458 issued and
outstanding in 2019 and 2018, respectively 1,735
1,727
Additional paid-in capital 1,965,230
1,968,280
Dividends in excess of cumulative earnings (1,194,620 ) (1,005,895 )
Total shareholders' equity 772,370
964,137
Noncontrolling interests 36,413
68,028
Total equity 808,783
1,032,165
$ 4,769,918
$ 5,340,853

(1)
~~(1)~~	As of ~~September~~June 30, ~~2019~~,2020, includes ~~$484,345~~$369,359 of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities and ~~$346,999~~$171,518 of liabilities of consolidated variable interest entities for which creditors do not have recourse to the general credit of the Company. See Note 7.

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

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CBL & Associates Properties, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
REVENUES:
Rental revenues	$	120,222		$	185,393		$	281,395		$	376,373
Management, development and leasing fees		1,055			2,586			3,147			5,109
Other		2,934			5,398			7,243			9,925
Total revenues		124,211			193,377			291,785			391,407
OPERATING EXPENSES:
Property operating		( 16,906	)		( 26,532	)		( 42,615	)		( 55,512	)
Depreciation and amortization		( 52,663	)		( 64,478	)		( 108,565	)		( 134,270	)
Real estate taxes		( 17,837	)		( 19,148	)		( 36,285	)		( 39,067	)
Maintenance and repairs		( 6,042	)		( 11,298	)		( 17,250	)		( 24,074	)
General and administrative		( 18,727	)		( 14,427	)		( 36,563	)		( 36,434	)
Loss on impairment		( 13,274	)		( 41,608	)		( 146,918	)		( 66,433	)
Litigation settlement		—			—			—			( 88,150	)
Other		( 242	)		( 34	)		( 400	)		( 34	)
Total operating expenses		( 125,691	)		( 177,525	)		( 388,596	)		( 443,974	)
OTHER INCOME (EXPENSES):
Interest and other income		891			356			3,288			845
Interest expense		( 52,631	)		( 52,482	)		( 99,623	)		( 106,480	)
Gain on extinguishment of debt		—			—			—			71,722
Gain on sales of real estate assets		2,623			5,527			2,763			5,755
Income tax provision		( 16,117	)		( 813	)		( 16,643	)		( 952	)
Equity in earnings (losses) of unconsolidated affiliates		( 6,079	)		1,872			( 5,061	)		5,180
Total other expenses		( 71,313	)		( 45,540	)		( 115,276	)		( 23,930	)
Net loss		( 72,793	)		( 29,688	)		( 212,087	)		( 76,497	)
Net loss attributable to noncontrolling interests in:
Operating Partnership		2,077			5,454			18,491			13,212
Other consolidated subsidiaries		487			57			694			132
Net loss attributable to the Company		( 70,229	)		( 24,177	)		( 192,902	)		( 63,153	)
Preferred dividends declared		—			( 11,223	)		—			( 22,446	)
Preferred dividends undeclared		( 11,223	)		—			( 22,446	)		—
Net loss attributable to common shareholders	$	( 81,452	)	$	( 35,400	)	$	( 215,348	)	$	( 85,599	)
Basic and diluted per share data attributable to common shareholders:
Net loss attributable to common shareholders	$	( 0.42	)	$	( 0.20	)	$	( 1.16	)	$	( 0.49	)
Weighted-average common and potential dilutive common shares outstanding		191,962			173,473			185,547			173,363

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,
2019 2018 2019 2018
REVENUES:
Rental revenues $ 180,616
$ 200,311
$ 556,989
$ 620,608
Management, development and leasing fees 2,216
2,658
7,325
8,022
Other 4,419
3,909
14,344
13,046
Total revenues 187,251
206,878
578,658
641,676

OPERATING EXPENSES:

Property operating (27,344 ) (30,004 ) (82,856 ) (92,357 )
Depreciation and amortization (64,168 ) (71,945 ) (198,438 ) (217,261 )
Real estate taxes (18,699 ) (19,433 ) (57,766 ) (61,737 )
Maintenance and repairs (10,253 ) (11,475 ) (34,327 ) (36,713 )
General and administrative (12,467 ) (16,051 ) (48,901 ) (47,845 )
Loss on impairment (135,688 ) (14,600 ) (202,121 ) (84,644 )
Litigation settlement 22,688
—
(65,462 ) —
Other (7 ) (38 ) (41 ) (377 )
Total operating expenses (245,938 ) (163,546 ) (689,912 ) (540,934 )

OTHER INCOME (EXPENSES):
Interest and other income 1,367
283
2,212
714
Interest expense (50,515 ) (55,194 ) (156,995 ) (163,164 )
Gain on extinguishment of debt —
—
71,722
—
Gain on investments/deconsolidation 11,174
—
11,174
387
Gain on sales of real estate assets 8,056
7,880
13,811
15,998
Income tax benefit (provision) (1,670 ) (1,034 ) (2,622 ) 1,846
Equity in earnings (losses) of unconsolidated affiliates (1,759 ) 1,762
3,421
9,869
Total other expenses (33,347 ) (46,303 ) (57,277 ) (134,350 )
Net loss (92,034 ) (2,971 )
(168,531 )
(33,608 )
Net (income) loss attributable to noncontrolling interests in:

Operating Partnership 13,904
1,628
27,116
8,978
Other consolidated subsidiaries (763 ) (24 ) (631 ) 369
Net loss attributable to the Company (78,893 ) (1,367 ) (142,046 ) (24,261 )
Preferred dividends (11,223 ) (11,223 ) (33,669 ) (33,669 )
Net loss attributable to common shareholders $ (90,116 ) $ (12,590 ) $ (175,715 ) $ (57,930 )

Basic and diluted per share data attributable to common shareholders:
Net loss attributable to common shareholders $ (0.52 ) $ (0.07 ) $ (1.01 ) $ (0.34 )
Weighted-average common and potential dilutive common shares outstanding 173,471
172,665
173,400
172,426

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

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CBL & Associates Properties, Inc.

Condensed Consolidated Statements of ~~Equity~~

Comprehensive Loss

(In thousands, except share data)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Net loss	$	( 72,793	)	$	( 29,688	)	$	( 212,087	)	$	( 76,497	)

Other comprehensive loss:
Unrealized loss on available-for-sale securities		( 64	)		—			( 42	)		—

Comprehensive loss		( 72,857	)		( 29,688	)		( 212,129	)		( 76,497	)
Comprehensive loss attributable to noncontrolling interests in:
Operating Partnership		2,080			5,454			18,494			13,212
Other consolidated subsidiaries		487			57			694			132
Comprehensive loss attributable to the Company:	$	( 70,290	)	$	( 24,177	)	$	( 192,941	)	$	( 63,153	)

~~(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, 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 interests 1,399
—
—
(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, 2018 6,467
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 interests 829
—
—
(2,300 ) —
(2,300 ) 1,469
(831 )
Adjustment to record redeemable noncontrolling interests at redemption value 2,865
—
—
(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

Net loss (97 ) —
—
—
(1,367 ) (1,367 ) (1,507 ) (2,874 )
Dividends declared - common stock ($0.200 per share) —
—
—
—
(34,534 ) (34,534 ) —
(34,534 )
Dividends declared - preferred stock —
—
—
—
(11,223 ) (11,223 ) —
(11,223 )
Issuances of 7,177 shares of common stock and restricted common stock —
—
—
39
—
39
—
39
Cancellation of 5,012 shares of restricted common stock —
—
—
(13 ) —
(13 ) —
(13 )
Performance stock units —
—
—
299
—
299
—
299
Forfeiture of performance stock units —
—
—
(250 ) —
(250 ) —
(250 )
Amortization of deferred compensation —
—
—
836
—
836
—
836
Adjustment for noncontrolling interests 805
—
—
(1,292 ) —
(1,292 ) 489
(803 )
Adjustment to record redeemable noncontrolling interests at redemption value (2,031 ) —
—
1,772
—
1,772
257
2,029
Distributions to noncontrolling interests (1,143 ) —
—
—
—
—
(8,466 ) (8,466 )
Balance, September 30, 2018 $ 6,228
$ 25
$ 1,727
$ 1,967,882
$ (927,416 ) $ 1,042,218
$ 79,275
$ 1,121,493

~~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, 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 interests 1,038
—
—
(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, 2019 3,017
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 interests 1,130
—
—
(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

Net loss (811 ) —
—
—
(78,893 ) (78,893 ) (12,330 ) (91,223 )
Dividends declared - preferred stock —
—
—
—
(11,223 ) (11,223 ) —
(11,223 )
Issuances of 1,681 shares of common stock and restricted common stock —
—
—
2
—
2
—
2
Cancellation of 4,310 shares of restricted common stock —
—
—
(4 ) —
(4 ) —
(4 )
Performance stock units —
—
—
313
—
313
—
313
Amortization of deferred compensation —
—
—
591
—
591
—
591
Adjustment for noncontrolling interests 1,131
—
—
(2,221 ) —
(2,221 ) 1,089
(1,132 )
Distributions to noncontrolling interests (1,143 ) —
—
—
—
—
(2,857 ) (2,857 )
Deconsolidation of investment —
—
—
—
—
—
(4,270 ) (4,270 )
Balance, September 30, 2019 $ 1,864
$ 25
$ 1,735
$ 1,965,230
$ (1,194,620 ) $ 772,370
$ 36,413
$ 808,783

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

Table of Contents

CBL & Associates Properties, Inc.

Condensed Consolidated Statements of Equity

(In thousands, except share data)

(Unaudited)

				Equity
				Shareholders' Equity
	Redeemable Noncontrolling Interests			Preferred Stock		Common Stock			Additional Paid-in Capital			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	)
Issuance 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 interests		1,038			—		—			( 2,356	)		—			( 2,356	)		1,318			( 1,038	)
Distributions to noncontrolling interests		( 1,143	)		—		—			—			—			—			( 4,450	)		( 4,450	)
Contributions from noncontrolling interests		—			—		—			—			—			—			455			455
Balance, March 31, 2019	$	3,017		$	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 interests		1,130			—		—			( 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

				Equity
				Shareholders' Equity
	Redeemable Noncontrolling Interests			Preferred Stock		Common Stock			Additional Paid-in Capital			Accumulated Other Comprehensive Income			Dividends in Excess of Cumulative Earnings			Total Shareholders' Equity			Noncontrolling Interests			Total Equity
Balance, January 1, 2020	$	2,160		$	25	$	1,741		$	1,965,897		$	—		$	( 1,161,351	)	$	806,312		$	55,553		$	861,865
Net loss		( 1,158	)		—		—			—			—			( 122,673	)		( 122,673	)		( 15,463	)		( 138,136	)
Other comprehensive income		—			—		—			—			22			—			22			—			22
Conversion of 16,333,947 Operating Partnership common units into shares of common stock		—			—		163			20,888			—			—			21,051			( 21,051	)		—
Issuance of 1,633,345 shares of common stock and restricted common stock		—			—		17			520			—			—			537			—			537
Cancellation of 116,781 shares of restricted common stock		—			—		( 1	)		( 96	)		—			—			( 97	)		—			( 97	)
Amortization of deferred compensation		—			—		—			633			—			—			633			—			633
Performance stock units		—			—		—			390			—			—			390			—			390
Adjustment for noncontrolling interests		60			—		—			( 10,341	)		—						( 10,341	)		10,281			( 60	)
Distributions to noncontrolling interests		—			—		—			—			—			—			—			( 731	)		( 731	)
Contributions from noncontrolling interests		—			—		—			—			—			—			—			668			668
Balance, March 31, 2020		1,062			25		1,920			1,977,891			22			( 1,284,024	)		695,834			29,257			725,091
Net loss		( 654	)		—		—			—			—			( 70,229	)		( 70,229	)		( 1,910	)		( 72,139	)
Other comprehensive loss		—			—		—			—			( 64	)		—			( 64	)		—			( 64	)
Issuance of 5,891 shares of common stock and restricted common stock		—			—		—			2			—			—			2			—			2
Cancellation of 20,059 shares of restricted common stock		—			—		—			( 14	)		—			—			( 14	)		—			( 14	)
Amortization of deferred compensation		—			—		—			384			—			—			384			—			384
Performance stock units		—			—		—			379			—			—			379			—			379
Adjustment for noncontrolling interests		117			—		—			3,812			—			—			3,812			( 3,929	)		( 117	)
Distributions to noncontrolling interests		—			—		—			—			—			—			—			( 94	)		( 94	)
Contributions from noncontrolling interests		—			—		—			—			—			—			—			25			25
Balance, June 30, 2020	$	525		$	25	$	1,920		$	1,982,454		$	( 42	)	$	( 1,354,253	)	$	630,104		$	23,349		$	653,453

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)

	Six Months Ended June 30,
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	( 212,087	)	$	( 76,497	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		108,565			134,270
Net amortization of deferred financing costs, premiums on available-for-sale securities and debt premiums and discounts		4,595			4,306
Net amortization of intangible lease assets and liabilities		( 753	)		( 1,071	)
Gain on sales of real estate assets		( 2,763	)		( 5,755	)
Gain on insurance proceeds		( 511	)		( 421	)
Write-off of development projects		400			34
Share-based compensation expense		2,293			2,938
Loss on impairment		146,918			66,433
Gain on extinguishment of debt		—			( 71,722	)
Equity in (earnings) losses of unconsolidated affiliates		5,061			( 5,180	)
Distributions of earnings from unconsolidated affiliates		3,797			11,320
Change in estimate of uncollectable rental revenues		41,955			1,692
Change in deferred tax accounts		15,596			90
Changes in:
Tenant and other receivables		( 87,298	)		( 473	)
Other assets		753			( 2,036	)
Accounts payable and accrued liabilities		11,849			68,104
Net cash provided by operating activities		38,370			126,032
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to real estate assets		( 36,413	)		( 51,148	)
Proceeds from sales of real estate assets		3,579			69,238
Purchase of available-for-sale securities		( 153,193	)		—
Proceeds from insurance		600			740
Payments received on mortgage and other notes receivable		703			1,346
Additional investments in and advances to unconsolidated affiliates		( 10,990	)		( 780	)
Distributions in excess of equity in earnings of unconsolidated affiliates		5,255			8,565
Changes in other assets		( 920	)		( 857	)
Net cash provided by (used in) investing activities		( 191,379	)		27,104
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from mortgage and other indebtedness		365,000			1,019,369
Principal payments on mortgage and other indebtedness		( 120,467	)		( 1,113,337	)
Additions to deferred financing costs		( 240	)		( 15,546	)
Proceeds from issuances of common stock		5			38
Contributions from noncontrolling interests		693			4,603
Payment of tax withholdings for restricted stock awards		( 87	)		( 132	)
Distributions to noncontrolling interests		( 825	)		( 11,722	)
Dividends paid to holders of preferred stock		—			( 22,446	)
Dividends paid to common shareholders		—			( 25,959	)
Net cash provided by (used in) financing activities		244,079			( 165,132	)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		91,070			( 11,996	)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period		59,058			57,512
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period	$	150,128		$	45,516
Reconciliation from consolidated statements of cash flows to consolidated balance sheets:
Cash and cash equivalents	$	123,388		$	20,483
Restricted cash ⁽¹⁾:
Restricted cash		249			84
Mortgage escrows		26,491			24,949
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period	$	150,128		$	45,516

SUPPLEMENTAL INFORMATION
Cash paid for interest, net of amounts capitalized	$	51,703		$	105,621

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

Nine Months Ended
September 30,
2019 2018
CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss $ (168,531 ) $ (33,608 )
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 198,438
217,261
Net amortization of deferred financing costs, debt premiums and discounts 6,328
5,451
Net amortization of intangible lease assets and liabilities (1,212 ) 198
Gain on sales of real estate assets (13,811 ) (15,998 )
Gain on insurance proceeds (421 ) —
Gain on investments/deconsolidation (11,174 ) (387 )
Write-off of development projects 41
377
Share-based compensation expense 3,838
4,310
Loss on impairment 202,121
84,644
Gain on extinguishment of debt (71,722 ) —
Equity in earnings of unconsolidated affiliates (3,421 ) (9,869 )
Distributions of earnings from unconsolidated affiliates 15,635
12,574
Change in estimate of uncollectable rental revenues 1,504
3,273
Change in deferred tax accounts 1,026
(2,706 )
Changes in:
Tenant and other receivables (2,926 ) 3,493
Other assets (5,541 ) (4,640 )
Accounts payable and accrued liabilities 75,071
16,034
Net cash provided by operating activities 225,243
280,407

CASH FLOWS FROM INVESTING ACTIVITIES:

Additions to real estate assets (90,436 ) (107,981 )
Acquisitions of real estate assets —
(3,301 )
Proceeds from sales of real estate assets 128,364
70,419
Proceeds from disposal of investment 9,225
—
Proceeds from insurance 740
—
Payments received on mortgage and other notes receivable 1,853
775
Additional investments in and advances to unconsolidated affiliates (2,634 ) (2,243 )
Distributions in excess of equity in earnings of unconsolidated affiliates 11,255
33,909
Changes in other assets (2,497 ) (5,903 )
Net cash provided by (used in) investing activities 55,870
(14,325 )

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

Nine Months Ended
September 30,
2019 2018
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from mortgage and other indebtedness $ 1,043,496
$ 530,679
Principal payments on mortgage and other indebtedness (1,232,480 ) (649,904 )
Additions to deferred financing costs (15,545 ) (238 )
Proceeds from issuances of common stock 39
117
Purchases of noncontrolling interests in the Operating Partnership —
(2,246 )
Contributions from noncontrolling interests 4,603
7,859
Payment of tax withholdings for restricted stock awards (132 ) (271 )
Distributions to noncontrolling interests (15,722 ) (27,156 )
Dividends paid to holders of preferred stock (33,669 ) (33,669 )
Dividends paid to common shareholders (25,959 ) (103,280 )
Net cash used in financing activities (275,369 ) (278,109 )

NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 5,744
(12,027 )
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period 57,512
68,172
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period $ 63,256
$ 56,145

Reconciliation from condensed consolidated statements of cash flows to condensed consolidated balance sheets:
Cash and cash equivalents $ 34,565
$ 20,695
Restricted cash ⁽¹⁾:

Restricted cash 180
4,681
Mortgage escrows 28,511
30,769
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period $ 63,256
$ 56,145

SUPPLEMENTAL INFORMATION:

Cash paid for interest, net of amounts capitalized $ 136,117
$ 136,301

(1)
~~(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.

Table of Contents

CBL & Associates Limited Partnership

Condensed Consolidated Balance Sheets

(In thousands, except unit data)

(Unaudited)

ASSETS ⁽¹⁾	June 30, 2020			December 31, 2019
Real estate assets:
Land	$	719,497		$	730,218
Buildings and improvements		5,285,259			5,631,831
		6,004,756			6,362,049
Accumulated depreciation		( 2,199,622	)		( 2,349,404	)
		3,805,134			4,012,645
Developments in progress		30,600			49,351
Net investment in real estate assets		3,835,734			4,061,996
Cash and cash equivalents		123,380			32,813
Available-for-sale securities - at fair value (amortized cost of $152,460 in 2020)		152,418			—
Receivables:
Tenant		125,930			75,252
Other		5,409			10,744
Mortgage and other notes receivable		2,729			4,662
Investments in unconsolidated affiliates		301,677			307,885
Intangible lease assets and other assets		108,235			129,354
	$	4,655,512		$	4,622,706
LIABILITIES, REDEEMABLE INTERESTS AND CAPITAL
Mortgage and other indebtedness, net	$	3,774,034		$	3,527,015
Accounts payable and accrued liabilities		227,218			231,377
Total liabilities ⁽¹⁾		4,001,252			3,758,392
Commitments and contingencies (Note 8 and Note 12)
Redeemable common units		525			2,160
Partners' capital:
Preferred units		565,212			565,212
Common units:
General partner		658			2,765
Limited partners		64,772			270,216
Accumulated other comprehensive loss		( 42	)		—
Total partners' capital		630,600			838,193
Noncontrolling interests		23,135			23,961
Total capital		653,735			862,154
	$	4,655,512		$	4,622,706

~~(Unaudited)~~

ASSETS ⁽¹⁾
September 30,
2019 December 31,
2018
Real estate assets:
Land $ 741,060
$ 793,944
Buildings and improvements 5,819,655
6,414,886
6,560,715
7,208,830
Accumulated depreciation (2,404,565 ) (2,493,082 )
4,156,150
4,715,748
Held for sale —
30,971
Developments in progress 63,891
38,807
Net investment in real estate assets 4,220,041
4,785,526
Cash and cash equivalents 34,562
25,138
Receivables:

Tenant, net of allowance for doubtful accounts of $2,337 in 2018 76,947
77,788
Other, net of allowance for doubtful accounts of $838 in 2018
6,528
7,462
Mortgage and other notes receivable 5,818
7,672
Investments in unconsolidated affiliates 280,466
284,086
Intangible lease assets and other assets 145,917
153,545
$ 4,770,279
$ 5,341,217

LIABILITIES, REDEEMABLE INTERESTS AND CAPITAL

Mortgage and other indebtedness, net $ 3,699,007
$ 4,043,180
Accounts payable and accrued liabilities 260,335
218,288
Liabilities related to assets held for sale —
43,716
Total liabilities ⁽¹⁾
3,959,342
4,305,184
Commitments and contingencies (Note 8 and Note 12)

Redeemable common units 1,864
3,575
Partners' capital:

Preferred units 565,212
565,212
Common units:
General partner 2,388
4,628
Limited partners 233,339
450,507
Total partners' capital 800,939
1,020,347
Noncontrolling interests 8,134
12,111
Total capital 809,073
1,032,458
$ 4,770,279
$ 5,341,217

(1)

~~(1)~~

As of ~~September~~June 30, ~~2019~~,2020, includes ~~$484,345~~$369,359 of assets related to consolidated variable interest entities that can only be used to settle obligations of the consolidated variable interest entities and ~~$346,999~~$171,518 of liabilities of consolidated variable interest entities for which creditors do not have recourse to the general credit of the Operating Partnership. See Note 7 ...

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

Table of Contents

CBL & Associates Limited Partnership

Condensed Consolidated Statements of Operations

(In thousands, except per unit data)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
REVENUES:
Rental revenues	$	120,222		$	185,393		$	281,395		$	376,373
Management, development and leasing fees		1,055			2,586			3,147			5,109
Other		2,934			5,398			7,243			9,925
Total revenues		124,211			193,377			291,785			391,407
OPERATING EXPENSES:
Property operating		( 16,906	)		( 26,532	)		( 42,615	)		( 55,512	)
Depreciation and amortization		( 52,663	)		( 64,478	)		( 108,565	)		( 134,270	)
Real estate taxes		( 17,837	)		( 19,148	)		( 36,285	)		( 39,067	)
Maintenance and repairs		( 6,042	)		( 11,298	)		( 17,250	)		( 24,074	)
General and administrative		( 18,727	)		( 14,427	)		( 36,563	)		( 36,434	)
Loss on impairment		( 13,274	)		( 41,608	)		( 146,918	)		( 66,433	)
Litigation settlement		—			—			—			( 88,150	)
Other		( 242	)		( 34	)		( 400	)		( 34	)
Total operating expenses		( 125,691	)		( 177,525	)		( 388,596	)		( 443,974	)
OTHER INCOME (EXPENSES):
Interest and other income		891			356			3,288			845
Interest expense		( 52,631	)		( 52,482	)		( 99,623	)		( 106,480	)
Gain on extinguishment of debt		—			—			—			71,722
Gain on sales of real estate assets		2,623			5,527			2,763			5,755
Income tax provision		( 16,117	)		( 813	)		( 16,643	)		( 952	)
Equity in earnings (losses) of unconsolidated affiliates		( 6,079	)		1,872			( 5,061	)		5,180
Total other expenses		( 71,313	)		( 45,540	)		( 115,276	)		( 23,930	)
Net loss		( 72,793	)		( 29,688	)		( 212,087	)		( 76,497	)
Net loss attributable to noncontrolling interests		487			57			694			132
Net loss attributable to the Operating Partnership		( 72,306	)		( 29,631	)		( 211,393	)		( 76,365	)
Distributions to preferred unitholders declared		—			( 11,223	)		—			( 22,446	)
Distributions to preferred unitholders undeclared		( 11,223	)		—			( 22,446	)		—
Net loss attributable to common unitholders	$	( 83,529	)	$	( 40,854	)	$	( 233,839	)	$	( 98,811	)
Basic and diluted per unit data attributable to common unitholders:
Net loss attributable to common unitholders	$	( 0.41	)	$	( 0.20	)	$	( 1.16	)	$	( 0.49	)
Weighted-average common and potential dilutive common units outstanding		201,702			200,231			201,480			200,122

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

Table of Contents

CBL & Associates Limited Partnership

Condensed Consolidated Statements of Comprehensive Loss

(In thousands, except per unit data)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Net loss	$	( 72,793	)	$	( 29,688	)	$	( 212,087	)	$	( 76,497	)

Other comprehensive income:
Unrealized loss on available-for-sale securities		( 64	)		—			( 42	)		—

Comprehensive loss		( 72,857	)		( 29,688	)		( 212,129	)		( 76,497	)
Comprehensive loss attributable to noncontrolling interests		487			57			694			132
Comprehensive loss attributable to the Operating Partnership:	$	( 72,370	)	$	( 29,631	)	$	( 211,435	)	$	( 76,365	)

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,
2019 2018 2019 2018
REVENUES:
Rental revenues $ 180,616
$ 200,311
$ 556,989
$ 620,608
Management, development and leasing fees 2,216
2,658
7,325
8,022
Other 4,419
3,909
14,344
13,046
Total revenues 187,251
206,878
578,658
641,676

OPERATING EXPENSES:

Property operating (27,344 ) (30,004 ) (82,856 ) (92,357 )
Depreciation and amortization (64,168 ) (71,945 ) (198,438 ) (217,261 )
Real estate taxes (18,699 ) (19,433 ) (57,766 ) (61,737 )
Maintenance and repairs (10,253 ) (11,475 ) (34,327 ) (36,713 )
General and administrative (12,467 ) (16,051 ) (48,901 ) (47,845 )
Loss on impairment (135,688 ) (14,600 ) (202,121 ) (84,644 )
Litigation settlement 22,688
—
(65,462 ) —
Other (7 ) (38 ) (41 ) (377 )
Total operating expenses (245,938 ) (163,546 ) (689,912 ) (540,934 )

OTHER INCOME (EXPENSES):
Interest and other income 1,367
283
2,212
714
Interest expense (50,515 ) (55,194 ) (156,995 ) (163,164 )
Gain on extinguishment of debt —
—
71,722
—
Gain on investments/deconsolidation 11,174
—
11,174
387
Gain on sales of real estate assets 8,056
7,880
13,811
15,998
Income tax benefit (provision) (1,670 ) (1,034 ) (2,622 ) 1,846
Equity in earnings (losses) of unconsolidated affiliates (1,759 ) 1,762
3,421
9,869
Total other expenses (33,347 ) (46,303 ) (57,277 ) (134,350 )
Net loss (92,034 ) (2,971 )
(168,531 )
(33,608 )
Net (income) loss attributable to noncontrolling interests (763 ) (24 ) (631 ) 369
Net loss attributable to the Operating Partnership (92,797 ) (2,995 ) (169,162 ) (33,239 )
Distributions to preferred unitholders (11,223 ) (11,223 ) (33,669 ) (33,669 )
Net loss attributable to common unitholders $ (104,020 ) $ (14,218 ) $ (202,831 ) $ (66,908 )

Basic and diluted per unit data attributable to common unitholders:
Net loss attributable to common unitholders $ (0.52 ) $ (0.07 ) $ (1.01 ) $ (0.34 )
Weighted-average common and potential dilutive common units outstanding 200,230
199,432
200,158
199,630

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

Table of Contents

CBL & Associates Limited Partnership

Condensed Consolidated Statements of Capital

(In thousands)

(Unaudited)

				Number of								Common Units
	Redeemable Common Units			Preferred Units		Common Units			Preferred Units			General Partner			Limited Partners			Total Partner's 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	)
Issuances of common units		—			—		863			—			—			717			717			—			717
Distributions declared - common units		( 1,143	)		—		—			—			( 151	)		( 15,897	)		( 16,048	)		—			( 16,048	)
Distributions declared - preferred units		—			—		—			( 11,223	)		—			—			( 11,223	)		—			( 11,223	)
Cancellation of restricted common units		—			—		( 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' capital		1,038			—		—			—			( 34	)		( 1,004	)		( 1,038	)		—			( 1,038	)
Distributions to noncontrolling interests		—			—		—			—			—			—			—			( 1,412	)		( 1,412	)
Contributions from noncontrolling interests		—			—		—			—			—			—			—			455			455
Balance, March 31, 2019	$	3,017			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		( 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 units		—			—		( 5	)		—			—			( 6	)		( 6	)		—			( 6	)
Performance stock units		—			—		—			—			3			310			313			—			313
Amortization of deferred compensation		—			—		—			—			6			581			587			—			587
Allocation of partners' capital		1,130			—		—			—			( 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

~~(Unaudited)~~

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) (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 —
—
—
(11,223 ) —
—
(11,223 ) —
(11,223 )
Issuances of common units —
—
8
—
—
37
37
—
37
Redemptions of common units —
—
(527 ) —
—
(2,246 ) (2,246 ) —
(2,246 )
Cancellation of restricted common stock —
—
(3 ) —
—
(3 ) (3 ) —
(3 )
Performance stock units —
—
—
—
3
272
275
—
275
Amortization of deferred compensation —
—
—
—
9
805
814
—
814
Allocation of partners' capital 829
—
—
—
(18 ) (805 ) (823 ) —
(823 )
Adjustment to record redeemable interests at redemption value 2,865
—
—
—
(29 ) (2,835 ) (2,864 ) —
(2,864 )
Contributions from noncontrolling interests —
—
—
—
—
—
—
7,859
7,859
Distributions to noncontrolling interests —
—
—
—
—
—
—
(1,188 ) (1,188 )
Balance, June 30, 2018 8,694
25,050
199,428
565,212
6,074
591,202
1,162,488
14,261
1,176,749

Net loss (97 ) —
—
11,223
(145 ) (13,976 ) (2,898 ) 24
(2,874 )
Distributions declared - common units ($0.209 per unit) (1,143 ) —
—
—
(402 ) (40,111 ) (40,513 ) —
(40,513 )
Distributions declared - preferred units —
—
—
(11,223 ) —
—
(11,223 ) —
(11,223 )
Issuances of common units —
—
7
—
—
39
39
—
39
Cancellation of restricted common stock —
—
(6 ) —
—
(13 ) (13 ) —
(13 )
Performance stock units —
—
—
—
3
296
299
—
299
Forfeiture of performance stock units —
—
—
—
(3 ) (247 ) (250 ) —
(250 )
Amortization of deferred compensation —
—
—
—
8
828
836
—
836
Allocation of partners' capital 805
—
—
—
(15 ) (836 ) (851 ) —
(851 )
Adjustment to record redeemable interests at redemption value (2,031 ) —
—
—
20
2,009
2,029
—
2,029
Distributions to noncontrolling interests —
—
—
—
—
—
—
(2,486 ) (2,486 )
Balance, September 30, 2018 $ 6,228
25,050
199,429
$ 565,212
$ 5,540
$ 539,191
$ 1,109,943
$ 11,799
$ 1,121,742

Table of Contents

CBL & Associates Limited Partnership

Condensed Consolidated Statements of Capital

(Continued)

(In thousands)

(Unaudited)

				Number of							Common Units
	Redeemable Common Units			Preferred Units		Common Units			Preferred Units		General Partner			Limited Partners			Accumulated Other Comprehensive Income			Total Partner's Capital			Noncontrolling Interests			Total Capital
Balance, January 1, 2020	$	2,160			25,050		200,189		$	565,212	$	2,765		$	270,216		$	—		$	838,193		$	23,961		$	862,154
Net loss		( 1,158	)		—		—			—		( 1,406	)		( 136,523	)		—			( 137,929	)		( 207	)		( 138,136	)
Other comprehensive income		—			—		—			—		—			—			22			22			—			22
Issuances of common units		—			—		1,633			—		—			536			—			536			—			536
Cancellation of restricted common units		—			—		( 116	)		—		—			( 97	)		—			( 97	)		—			( 97	)
Allocation of partners' capital		60			—		—			—		( 1	)		( 64	)		—			( 65	)		—			( 65	)
Amortization of deferred compensation		—			—		—			—		18			615			—			633			—			633
Adjustment to record redeemable interests at redemption value		—			—		—			—		( 8	)		8			—			—			—			—
Distributions to noncontrolling interests		—			—		—			—		—			—			—			—			( 731	)		( 731	)
Contributions from noncontrolling interests		—			—		—			—		—			—			—			—			668			668
Performance stock units		—			—		—			—		4			386			—			390			—			390

Balance, March 31, 2020		1,062			25,050		201,706			565,212		1,372			135,077			22			701,683			23,691			725,374
Net loss		( 654	)		—		—			—		( 728	)		( 70,924	)		—			( 71,652	)		( 487	)		( 72,139	)
Other comprehensive loss		—			—		—			—		—			—			( 64	)		( 64	)		—			( 64	)
Issuances of common units		—			—		6			—		—			2			—			2			—			2
Cancellation of restricted common units		—			—		( 21	)		—		—			( 14	)		—			( 14	)		—			( 14	)
Allocation of partners' capital		117			—		—			—		( 1	)		( 117	)		—			( 118	)		—			( 118	)
Amortization of deferred compensation		—			—		—			—		11			373			—			384			—			384
Distributions to noncontrolling interests		—			—		—			—		—			—			—			—			( 94	)		( 94	)
Contributions from noncontrolling interests		—			—		—			—		—			—			—			—			25			25
Performance stock units		—			—		—			—		4			375			—			379			—			379

Balance, June 30, 2020	$	525			25,050		201,691		$	565,212	$	658		$	64,772		$	( 42	)	$	630,600		$	23,135		$	653,735

~~(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, 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' capital 1,038
—
—
—
(34 ) (1,004 ) (1,038 ) —
(1,038 )
Contributions from noncontrolling interests —
—
—
—
—
—
—
455
455
Distributions to noncontrolling interests —
—
—
—
—
—
—
(1,412 ) (1,412 )
Balance, March 31, 2019 3,017
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⁾
(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' capital 1,130
—
—
—
(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

Net income (loss) (811 ) —
—
11,223
(1,056 ) (102,153 ) (91,986 ) 763
(91,223 )
Distributions declared - common units ($0.012 per unit) ⁽¹⁾
(1,143 ) —
—
—
—
(1,314 ) (1,314 ) —
(1,314 )
Distributions declared - preferred units —
—
—
(11,223 ) —
—
(11,223 ) —
(11,223 )
Issuances of common units —
—
2
—
—
39
39
—
39
Cancellation of restricted common stock —
—
(4 ) —
—
(4 ) (4 ) —
(4 )
Performance stock units —
—
—
—
4
309
313
—
313
Amortization of deferred compensation —
—
—
—
6
585
591
—
591
Allocation of partners' capital 1,131
—
—
—
(14 ) (1,120 ) (1,134 ) —
(1,134 )
Distributions to noncontrolling interests —
—
—
—
—
—
—
(1,581 ) (1,581 )
Deconsolidation of investment —
—
—
—
—
—
—
(4,270 ) (4,270 )
Balance, September 30, 2019 $ 1,864
25,050
200,228
$ 565,212
$ 2,388
$ 233,339
$ 800,939
$ 8,134
$ 809,073


~~(1)~~	~~$0.740 per special common unit~~

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)

	Six Months Ended June 30,
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	( 212,087	)	$	( 76,497	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		108,565			134,270
Net amortization of deferred financing costs, premiums on available-for-sale securities and debt premiums and discounts		4,595			4,306
Net amortization of intangible lease assets and liabilities		( 753	)		( 1,071	)
Gain on sales of real estate assets		( 2,763	)		( 5,755	)
Gain on insurance proceeds		( 511	)		( 421	)
Write-off of development projects		400			34
Share-based compensation expense		2,293			2,938
Loss on impairment		146,918			66,433
Gain on extinguishment of debt		—			( 71,722	)
Equity in (earnings) losses of unconsolidated affiliates		5,061			( 5,180	)
Distributions of earnings from unconsolidated affiliates		3,797			11,321
Change in estimate of uncollectable rental revenues		41,955			1,692
Change in deferred tax accounts		15,596			90
Changes in:
Tenant and other receivables		( 87,298	)		( 473	)
Other assets		753			( 2,036	)
Accounts payable and accrued liabilities		11,845			68,102
Net cash provided by operating activities		38,366			126,031
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to real estate assets		( 36,413	)		( 51,148	)
Proceeds from sales of real estate assets		3,579			69,238
Purchase of available-for-sale securities		( 153,193	)		—
Proceeds from insurance		600			740
Payments received on mortgage and other notes receivable		703			1,346
Additional investments in and advances to unconsolidated affiliates		( 10,990	)		( 780	)
Distributions in excess of equity in earnings of unconsolidated affiliates		5,255			8,565
Changes in other assets		( 920	)		( 857	)
Net cash provided by (used in) investing activities		( 191,379	)		27,104
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from mortgage and other indebtedness		365,000			1,019,369
Principal payments on mortgage and other indebtedness		( 120,467	)		( 1,113,337	)
Additions to deferred financing costs		( 240	)		( 15,546	)
Proceeds from issuances of common units		5			38
Contributions from noncontrolling interests		693			4,603
Payment of tax withholdings for restricted stock awards		( 87	)		( 132	)
Distributions to noncontrolling interests		( 825	)		( 5,646	)
Distributions to preferred unitholders		—			( 22,446	)
Distributions to common unitholders		—			( 32,035	)
Net cash provided by (used in) financing activities		244,079			( 165,132	)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		91,066			( 11,997	)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period		59,054			57,512
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period	$	150,120		$	45,515
Reconciliation from consolidated statements of cash flows to consolidated balance sheets:
Cash and cash equivalents	$	123,380		$	20,482
Restricted cash ⁽¹⁾:
Restricted cash		249			84
Mortgage escrows		26,491			24,949
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period	$	150,120		$	45,515

SUPPLEMENTAL INFORMATION:
Cash paid for interest, net of amounts capitalized	$	51,703		$	105,621

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

Nine Months Ended
September 30,
2019 2018
CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss $ (168,531 ) $ (33,608 )
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 198,438
217,261
Net amortization of deferred financing costs, debt premiums and discounts 6,328
5,451
Net amortization of intangible lease assets and liabilities (1,212 ) 198
Gain on sales of real estate assets (13,811 ) (15,998 )
Gain on insurance proceeds (421 ) —
Gain on investments/deconsolidation (11,174 ) (387 )
Write-off of development projects 41
377
Share-based compensation expense 3,838
4,310
Loss on impairment 202,121
84,644
Gain on extinguishment of debt (71,722 ) —
Equity in earnings of unconsolidated affiliates (3,421 ) (9,869 )
Distributions of earnings from unconsolidated affiliates 15,636
12,569
Change in estimate of uncollectable rental revenues 1,504
3,273
Change in deferred tax accounts 1,026
(2,706 )
Changes in:

Tenant and other receivables (2,926 ) 3,493
Other assets (5,541 ) (4,640 )
Accounts payable and accrued liabilities 75,067
16,039
Net cash provided by operating activities 225,240
280,407

CASH FLOWS FROM INVESTING ACTIVITIES:

Additions to real estate assets (90,436 ) (107,981 )
Acquisition of real estate assets —
(3,301 )
Proceeds from sales of real estate assets 128,364
70,419
Proceeds from disposal of investment 9,225
—
Proceeds from insurance 740
—
Payments received on mortgage and other notes receivable 1,853
775
Additional investments in and advances to unconsolidated affiliates (2,634 ) (2,243 )
Distributions in excess of equity in earnings of unconsolidated affiliates 11,255
33,909
Changes in other assets (2,497 ) (5,903 )
Net cash provided by (used in) investing activities 55,870
(14,325 )

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

Nine Months Ended
September 30,
2019 2018
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from mortgage and other indebtedness $ 1,043,496
$ 530,679
Principal payments on mortgage and other indebtedness (1,232,480 ) (649,904 )
Additions to deferred financing costs (15,545 ) (238 )
Proceeds from issuances of common units 39
117
Redemptions of common units —
(2,246 )
Contributions from noncontrolling interests 4,603
7,859
Payment of tax withholdings for restricted stock awards (132 ) (271 )
Distributions to noncontrolling interests (8,369 ) (8,821 )
Distributions to preferred unitholders (33,669 ) (33,669 )
Distributions to common unitholders (33,312 ) (121,615 )
Net cash used in financing activities (275,369 ) (278,109 )

NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 5,741
(12,027 )
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period 57,512
68,172
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period $ 63,253
$ 56,145

Reconciliation from condensed consolidated statements of cash flows to condensed consolidated balance sheets:
Cash and cash equivalents $ 34,562
$ 20,695
Restricted cash ⁽¹⁾:

Restricted cash 180
4,681
Mortgage escrows 28,511
30,769
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period $ 63,253
$ 56,145

SUPPLEMENTAL INFORMATION:

Cash paid for interest, net of amounts capitalized $ 136,117
$ 136,301

(1)
~~(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 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 ~~September~~June 30, ~~2019,~~2020, the Operating Partnership owned interests in the following properties:

			All Other Properties
	Malls ⁽¹⁾		Associated Centers		Community Centers		Office Buildings and Other			Total
Consolidated Properties		53		20		1		4	⁽²⁾		78
Unconsolidated Properties⁽³⁾		10		3		5		3			21
Total		63		23		6		7			99

Other Properties

Malls ⁽¹⁾

Associated
Centers

Community
Centers

Office
Buildings/Other
Total
Consolidated properties 55 20 1 4
⁽²⁾
80
Unconsolidated properties ⁽³⁾
8 3 5 2 18
Total 63 23 6 6 98

(1)
~~(1)~~	Category consists of regional malls, open-air centers and outlet centers (including 1one mixed-use center).

(2)
~~(2)~~	Includes CBL's 2 corporate office buildings.

(3)
~~(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 ~~September~~June 30, ~~2019,~~2020, the Operating Partnership had ~~interests~~an interest in one self-storage facility that was under development (the "Construction Properties").

The Malls, All Other Properties ("Associated Centers, Community Centers, Office Buildings and Other") and the ~~following properties under development:~~



	~~Consolidated Properties~~		~~Unconsolidated Properties~~
	~~Malls~~	~~All Other~~	~~Malls~~	~~All Other~~
~~Development~~	—	—	—	2
~~Redevelopments~~	6	—	—	—

Construction Properties are collectively referred to as the “Properties” and individually as a “Property.”

CBL is the 100% owner of 2 qualified REIT subsidiaries, CBL Holdings I, Inc. and CBL Holdings II, Inc. At ~~September~~June 30, ~~2019,~~2020, 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%~~a 94.2% limited partner interest for a combined interest held by CBL of ~~86.6%~~95.2%.

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. In March 2020, the Company issued 16,333,947 shares of the Company’s common stock to CBL’s Predecessor in exchange for a like number of common units of limited partnership interest in the Operating Partnership pursuant to exchange notices received from CBL’s Predecessor.At ~~September~~June 30, ~~2019,~~2020, CBL’s Predecessor owned a ~~9.1%~~0.9% limited partner interest and third parties owned a ~~4.3%~~3.9% limited partner interest in the Operating Partnership. CBL's Predecessor also owned ~~4.3~~19.9 million shares of CBL’s common stock at ~~September~~June 30, ~~2019,~~2020, for a total combined effective interest of ~~11.2%~~10.7% 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”).

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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 ~~September~~June 30 ~~2019~~, 2020 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, as amended, for the year ended December 31, ~~2018.~~

~~Reclassifications~~

~~Certain reclassifications~~2019.

COVID-19

The COVID-19 pandemic has had, and likely will continue to have, ~~been made~~repercussions across local, national and global economies and financial markets. COVID-19 has impacted all states where the Company’s tenants operate their businesses or where the Company’s properties are located and measures taken to ~~amounts~~prevent or remediate COVID-19, including “shelter-in place” or “stay-at-home” orders or other quarantine mandates issued by local, state or federal authorities, have had an adverse effect on its business and the businesses of its tenants. The full extent of the adverse impact on, among other things, the Company’s results of operations, liquidity (including its ability to access capital markets), the possibility of future impairments of long-lived assets or its investments in unconsolidated joint ventures, its compliance with debt covenants, its ability to renew and re-lease its leased space, the ~~Company's prior-year financial statements~~outlook for the retail environment, potential bankruptcies or other store closings and its ability to ~~conform~~develop, acquire, dispose or lease properties, is unknown and will depend on future developments, which are highly uncertain and cannot be predicted. The Company expects a material adverse impact on its revenues, results of operations, and cash flows for the year ended December 31, 2020. The situation is rapidly changing and additional impacts to the ~~current~~business may arise that the Company is not aware of currently.

Listing Criteria

On February 5, 2020, the Company received notice from the New York Stock Exchange ("NYSE") that its common stock is no longer in compliance with NYSE continued listing criteria set forth in Section 802.01C of the Listed Company Manual of the NYSE, which require listed companies to maintain an average closing share price of at least $1.00 over a period ~~presentation.~~of 30 consecutive trading days. The Company ~~reclassified certain amounts related to operating expense reimbursements in its condensed consolidated statements~~has until October 14, 2020, inclusive of ~~operations for~~extensions of the ~~three and nine months ended September 30, 2018 related to~~cure period provided by the adoption of ASC 606. As a result, operating expense reimbursements of $2,086 and $6,597, previously included in tenant reimbursements, were reclassified to other revenues for the three months and nine months ended September 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 nine months ended September 30, 2018 related to the adoption of ASC 842. Lastly, in accordance with ASC 360, andNYSE in response to the ~~SEC's "Disclosure Update and Simplification" release effective November 5, 2018,~~COVID-19 pandemic, to regain compliance with the continued listing criteria. During this period, the Company ~~reclassified gains~~expects its common stock to continue to trade on the NYSE, which will allow for flexibility in addressing this matter. On May 7, 2020, the Company’s shareholders voted to approve an amendment to the Company’s Amended and ~~losses resulting from wholly owned real estate dispositions~~Restated Certificate of Incorporation, as amended, to effect a reverse stock split at a ratio between 1-for-5 and 1-for-25, and a proportionate reduction in the number of authorized shares of common stock, to be determined at the discretion of the board of directors for the purpose of complying with NYSE Listing Standards, subject to the board of directors’ discretion to abandon this amendment. The Company’s board of directors has not yet taken action to effect the reverse stock split . The Company intends to actively evaluate and monitor the price of its common stock between the date of this report and October 2020. A delisting of the Company’s common stock from the ~~line item following "Income (loss) from continuing operations before gain on sales~~NYSE could negatively impact it by, among other things, reducing the trading liquidity of, ~~real estate assets"~~and the market price for, its common stock.

Liquidity and Going Concern Considerations

In accordance with the accounting guidance related to the ~~"Other Income (Expenses)" section~~presentation of financial statements, when preparing financial statements for each annual and interim reporting period, management evaluates whether there are conditions or events that, when considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. In making its ~~condensed consolidated statements~~assessment, management considered the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows and conditional and unconditional obligations due over the next twelve months.

The Operating Partnership received notices of ~~operations.~~default and reservation of rights letters from the administrative agent under the secured credit facility asserting that certain defaults and events of default have occurred and continue to exist as of June 30, 2020 by reason of the Operating Partnership’s failure to comply with certain restrictive covenants, including the liquidity covenant, in the secured credit facility. As of the date of this report, the lenders under the secured credit facility have not accelerated the outstanding amount due and payable on the loans or commenced foreclosure proceedings, but they may seek to exercise one or more of these remedies in the future.

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respectively, as well as the cumulative unpaid dividends on the Company’s preferred stock and the special common units of limited partnership interest in the Operating Partnership. The Advisors commenced discussions in May 2020 with advisors to certain holders of the N otes and the credit committee of the senior secured credit facility. Management may pursue a comprehensive capital structure solution that will address the Company’s funded indebtedness and outstanding equity interests that may result in the reorganization of the Company.

Given the impact of the COVID-19 pandemic on the retail and broader markets, the ongoing weakness of the credit markets, and the Operating Partnership’s default of certain restrictive covenants, the Company believes that there is substantial doubt that it will continue to operate as a going concern within one year after the date these condensed consolidated financial statements are issued. The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of ~~operations,~~America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, the condensed consolidated financial statements do not reflect any adjustments related to the recoverability of assets and satisfaction of liabilities that might be necessary should the Company ~~reclassified $7,880 and $15,998~~be unable to ~~the "Other Income (Expenses)" section for the three and nine months ended September 30, 2018, respectively.~~

continue as a going concern.

Note 2 – ~~Recent~~Summary of Significant Accounting ~~Pronouncements~~

Policies

Accounting Guidance Adopted


Description	Expected Adoption Date & Application Method
~~Description~~	~~Date Adopted &~~ ~~Application~~ ~~Method~~	Financial Statement Effect and Other Information
~~ASU 2016-02,~~ ~~Leases, and related subsequent amendments~~	~~January 1, 2019 -~~ ~~Modified Retrospective (elected 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. Putting nearly all leases on the balance sheet is the biggest change for lessees, as lessees will now be required to recognize a right-of-use Accounting Standards Update (“~~ROU”~~ASU”) 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 to 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 transfer control of the underlying asset to the lessee. As a lessee, the guidance impacted the Company's condensed consolidated financial 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~~ 2016-13, 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~~entity’s estimate of contractual cash flows not expected to be collected. The Company has determined that its available-for-sale debt securities, guarantees, mortgage and other notes receivable and receivables within the scope of ASC 606 fall under the scope of this standard. ~~After evaluating~~ The adoption of this guidance did not have a material impact on the ~~impact that this update will have on its~~Company’s condensed consolidated financial statements ~~and related disclosures, the Company does not believe it will have a material impact upon adoption.~~ or disclosures.

ASU 2018-13, Fair Value Measurement	January 1, 2020 - Prospective	The guidance eliminates, adds and modifies certain disclosure requirements for fair value measurements. Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The ~~Company does not expect the~~ adoption of this guidance ~~will~~did not have a material impact on ~~its~~the Company’s condensed consolidated financial statements or disclosures.

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~~did not have a material impact on ~~its~~the Company’s condensed consolidated financial statements or disclosures.

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Lease Modification Q&A

April 1, 2020 –

Prospective

In April 2020, the FASB issued a question-and-answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance related to lease concessions provided as a result of COVID-19. Under existing lease guidance, the Company would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated within the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A clarifies that entities may elect to not evaluate whether lease-related relief that lessors provide to mitigate the economic effects of COVID-19 on lessees is a lease modification under Topic 842, Leases .. Instead, an entity that elects not to evaluate whether a concession directly related to COVID-19 is a modification can then elect whether to apply the modification guidance (i.e. assume the relief was always contemplated by the contract or assume the relief was not contemplated by the contract). Both lessees and lessors may make this election.

The Company has elected to apply the relief provided under the Lease Modification Q&A and will avail itself of the election to avoid performing a lease by lease analysis for the lease concessions that were (1) granted as relief due to the COVID-19 pandemic and (2) result in the cash flows remaining substantially the same or less than the original contract. The Lease Modification Q&A had a material impact on the Company’s consolidated financial statements as of and for the three and six months ended June 30, 2020. However, its future impact to the Company is dependent upon the extent of lease concessions granted to tenants as a result of the COVID-19 pandemic in future periods and the elections made by the Company at the time of entering such concessions.

The Lease Modification Q&A allows the Company to determine accounting policy elections at a disaggregated level, and the elections should be applied consistently by either the type of concession, underlying asset class or on another reasonable basis. As a result, the Company has made the following policy elections based on the type of concession agreed to with the respective tenant.

Rent Deferrals

The Company will account for rental deferrals using the receivables model as described within the Lease Modification Q&A. Under the receivables model, the Company will continue to recognize lease revenue in a manner that is unchanged from the original lease agreement and continue to recognize lease receivables and rental revenue during the deferral period.

Rent Abatements

The Company will account for rental abatements using the negative variable income model as described within the Lease Modification Q&A. Under the negative variable income model, the Company will recognize negative variable rent for the current period reduction of rental revenue associated with any lease concessions we provide.

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Accounts Receivable

Receivables include amounts billed and currently due from tenants pursuant to lease agreements and receivables attributable to straight-line rents associated with those lease agreements. Individual leases where the collection of rents is in dispute are assessed for collectability based on management’s best estimate of collection considering the anticipated outcome of the dispute. Individual leases that are not in dispute are assessed for collectability and upon the determination that the collection of rents over the remaining lease term is not probable, accounts receivable are reduced as an adjustment to rental revenues. Revenue from leases where collection is deemed to be less than probable is recorded on a cash basis until collectability is determined to be probable. Further, management assesses whether operating lease receivables, at a portfolio level, are appropriately valued based upon an analysis of balances outstanding, historical collection levels and current economic trends. An allowance for the uncollectible portion of the portfolio is recorded as an adjustment to rental revenues. Management’s estimate of the collectability of accounts receivable from tenants is based on the best information available to management at the time of evaluation.

The duration of the COVID-19 pandemic and our tenants’ ability to resume operations once governmental and legislative restrictions are lifted has caused uncertainty in the Company’s ongoing ability to collect rents when due. Considering the potential impact of these uncertainties, management’s collection assessment also took into consideration the type of retailer and current discussions with the tenants, as well as recent rent collection experience and tenant bankruptcies based on the best information available to management at the time of evaluation. For the three and six months ended June 30, 2020, the Company recorded $36,912 and $40,692, respectively, associated with potentially uncollectible revenues, which includes $1,088 and $2,557, respectively, for straight-line rent receivables ..

Carrying Value of Long-Lived Assets and Investment in Unconsolidated Affiliates

The Company evaluates its real estate assets and investment in unconsolidated affiliates for impairment indicators whenever events or changes in circumstances indicate that recoverability of its investment in the asset is not reasonably assured. Furthermore, this evaluation is conducted no less frequently than quarterly, irrespective of changes in circumstances. The prolonged outbreak of the COVID-19 pandemic has resulted in sustained closure of the Company’s properties, as well as the cessation of the operations of certain of its tenants, which will likely result in a reduction in the revenues and cash flows of many of its properties due to the adverse financial impacts on its tenants, as well as reductions in other sources of income generated by its properties. In addition to reduced revenues, the Company’s ability to obtain sufficient financing for such properties may be impaired as well as its ability to lease or re-lease properties as a result of worsening market and economic conditions resulting from the COVID-19 pandemic.

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As of June 30 , 2020, the Company’s evaluation of impairment of real estate assets considered its estimate of cash flow declines caused by the COVID-19 pandemic, but its other assumptions, including estimated hold period, were generally unchanged given the highly uncertain environment. The worsening of estimated future cash flows due to a change in the Company’s plans , policies, or views of market and economic conditions as it relates to one or more of its properties adversely impacted by the COVID-19 pandemic could result in the recognition of substantial impairment charges on its assets, which could adversely impact its financial results. For the three months ended June 30, 2020, the Company recorded an impairment charge of $ 13,274 related to 1 mall. For the six months ended June 30 , 2020, the Company recorded impairment charges of $ 146,918related to3of its malls . As of June 30, 2020,4other properties had impairment indicators; however, based on the Company’s plans with respect to those properties and the economic environment as of June 30 , 2020, 0 additional impairment charges were recorded .

As of June 30, 2020, the Company’s estimates of fair value for each investment are based on a number of assumptions that are subject to economic and market uncertainties including, but not limited to, demand for space, competition for tenants, changes in market rental rates, and operating costs. Future declines in the fair value of the Company’s investments in unconsolidated affiliates, including those resulting from the adverse impact of the COVID-19 pandemic on the real estate assets owned by the unconsolidated affiliates, could result in the recognition of substantial impairment charges on its investments in unconsolidated affiliates to the extent such declines are determined to be other-than-temporary. NaN impairments of investments in unconsolidated affiliates were recorded in the three and six-month periods ended June 30, 2020 and 2019. As of June 30, 2020, there were indicators that the fair value of 1 investment in unconsolidated affiliates had declined below the Company’s carrying value of the investment; however, the decline was determined to not be other-than-temporary.

Note 3 – Revenues

~~Contract Balances~~

Revenues~~A summary of the Company's contract assets activity during the nine months ended September 30, 2019 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
Tenant openings (142 )
Executed leases 118
Balance as of September 30, 2019 $ 202

~~A summary of the Company's contract liability activity during the nine months ended September 30, 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
Completed performance obligation —
Contract obligation —
Balance as of September 30, 2019 $ 261

~~The Company has the following contract balances as of September 30, 2019:~~

As of
September 30, 2019
Expected Settlement Period
Description Financial Statement Line Item
2019 ⁽¹⁾
2020 2021 2022 2023
Contract assets ⁽²⁾
Management, development and leasing fees $ 202
$ (19 ) $ (136 ) $ (43 ) $ —
$ (4 )
Contract liability ⁽³⁾
Other rents 261
(99 ) (54 ) (54 ) (54 ) —


~~(1)~~	~~Reflects fiscal period October 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.~~


~~(3)~~	~~Relates to a contract in which the Company received advance payments in the initial year of the multi-year contract.~~

~~Revenues~~

The following table presents the Company's revenues disaggregated by revenue source:

	Three Months Ended June 30, 2020		Three Months Ended June 30, 2019		Six Months Ended June 30, 2020		Six Months Ended June 30, 2019
Rental revenues ⁽¹⁾	$	120,222	$	185,393	$	281,395	$	376,373
Revenues from contracts with customers (ASC 606):
Operating expense reimbursements ⁽²⁾		2,103		2,061		4,492		4,204
Management, development and leasing fees ⁽³⁾		1,055		2,586		3,147		5,109
Marketing revenues ⁽⁴⁾		351		1,218		1,094		2,092
		3,509		5,865		8,733		11,405

Other revenues		480		2,119		1,657		3,629
Total revenues ⁽⁵⁾	$	124,211	$	193,377	$	291,785	$	391,407

Three Months Ended
September 30, 2019

Three Months Ended
September 30, 2018
Nine Months Ended
September 30, 2019 Nine Months Ended
September 30, 2018
Rental revenues ⁽¹⁾
$ 180,616
$ 200,311
$ 556,989
$ 620,608
Revenues from contracts with customers (ASC 606):
  Operating expense reimbursements ⁽²⁾
2,449
2,086
6,653
6,597
  Management, development and leasing fees ⁽³⁾
2,216
2,658
7,325
8,022
  Marketing revenues ⁽⁴⁾
1,056
1,162
3,148
3,385
5,721
5,906
17,126
18,004

Other revenues 914
661
4,543
3,064
Total revenues ⁽⁵⁾
$ 187,251
$ 206,878
$ 578,658
$ 641,676

(1)
~~(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~~. 840.

( 2 )

~~(2)~~

Includes ~~$2,374~~$2,024 in the Malls segment and ~~$75~~$79 in the All Other segment for the three months ended ~~September~~June 30, ~~2019~~,2020, and includes ~~$1,903~~$1,892 in the Malls segment and ~~$183~~$169 in the All Other segment for the three months ended ~~September~~June 30, ~~2018~~.2019. Includes ~~$6,458~~$4,345 in the Malls segment and ~~$195~~$147 in the All Other segment for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~,2020, and includes ~~$6,176~~$4,084 in the Malls segment and ~~$421~~$120 in the All Other segment for the ~~nine~~six months ended ~~September~~June 30, ~~2018~~.

2019.

( 3 )
~~(3)~~	Included in All Other segment.

( 4 )
~~(4)~~	Marketing revenues solely relate to the Malls segment for all periods presented. ~~See description below.~~

( 5 )
~~(5)~~	Sales taxes are excluded from revenues.

See Note 10for information on the Company's segments.

Revenue from Contracts with Customers

~~Operating expense reimbursements~~

~~Under operating~~

Expected credit losses

During the three and ~~other agreements with third parties that own anchor or outparcel buildings at the Company's properties and pay no rent,~~six months ended June 30, 2020, the Company ~~receives reimbursements~~individually evaluated tenant receivables within the scope of ASC 606, of which a significant portion are short term. These receivables are assessed for certain operating expenses such as 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 allocatedcollectability based on ~~square footage or sales.~~ management’s best estimate of collection considering balances outstanding, historical collection levels and current economic trends. The ~~majority~~Company recognized bad debt expense of ~~these contracts have an initial term~~$1,041 and ~~1 or more extension options, which cumulatively approximate 50 or more years as historically the initial term and any extension options are reasonably certain~~$1,263 related to this class 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 obligationreceivables that ~~directly relates to the value the customer receives~~were deemed uncollectable for the ~~services being provided. Revenue is recognized as services are transferred to the customer. Variable consideration is based on historical experience~~three and ~~is generally recognized over time using the cost-to-cost method~~six months ended June 30, 2020, respectively.

Table 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.Contents

~~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).

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 is 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 fixed operating expense reimbursements for providing certain maintenance and other services as described above. As of ~~September~~June 30, ~~2019,~~2020, 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

25,080

52,220

47,746

125,046

Performance obligation Less than 5 years 5-20 years Over 20 years Total
Fixed operating expense reimbursements $ 25,698
$ 48,088
$ 48,283
$ 122,069

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, are 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, Lessor~~Leases~~.

To determine whether a contract contained a lease, the Company evaluated its contracts and verified that there was an identified asset and that the Company, or the tenant, had the right to obtain substantially all the economic benefits from the use of the asset throughout the contract term. If a contract was determined to contain a lease and the Company was a lessee, the lease was evaluated to determine whether it was an operating or financing lease. If a contract was determined to contain a lease and the Company was a lessor, the lease was evaluated to determine whether it was an operating, direct financing or sales-type lease. After determining that the contract contained 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 was 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 lease 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 $(188) and $1,504 of uncollectable operating lease receivables as an (increase)/reduction of rental revenues for the three months and nine months ended September 30, 2019, respectively, and recognized $487 and $3,273 of uncollectable operating lease receivables as a property operating expense for the three months and nine months ended September 30, 2018, respectively.

The components of rental revenues are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Fixed lease payments	$	99,150	$	151,730	$	236,544	$	311,002
Variable lease payments		21,072		33,663		44,851		65,371
Total rental revenues	$	120,222	$	185,393	$	281,395	$	376,373

Three Months
Ended
September 30, 2019
Three Months
Ended
September 30, 2018
Nine Months
Ended
September 30, 2019
Nine Months
Ended
September 30, 2018
Fixed lease payments $ 149,582
$ 166,927
$ 460,584
$ 513,356
Variable lease payments 31,034
33,384
96,405
107,252
Total rental revenues $ 180,616
$ 200,311
$ 556,989
$ 620,608

The undiscounted future fixed lease payments to be received under the Company's operating leases as of ~~September~~June 30, ~~2019,~~2020, are as ~~follows:~~follows :

Years Ending December 31,	Operating Leases
2020 ⁽¹⁾	$	242,571
2021		446,200
2022		376,986
2023		313,251
2024		248,727
2025		185,386
Thereafter		451,572
Total undiscounted lease payments	$	2,264,693

Years Ending December 31, Operating Leases
2019 ⁽¹⁾
$ 136,521
2020 510,318
2021 448,880
2022 373,820
2023 312,028
2024 245,029
Thereafter 615,720
Total undiscounted lease payments $ 2,642,316

(1)
~~(1)~~	Reflects rental payments for the fiscal period ~~October~~July 1, ~~2019 through~~2020 to December 31, ~~2019.~~2020.

~~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

~~Lessee~~

The Company has 8 ground leases and 1 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~~where we have no plans to ~~cease~~continue operating our assets under the current terms 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 1one office lease is subleased as of ~~September~~June 30, ~~2019.~~2020. As of ~~September~~June 30, ~~2019,~~2020, these leases have a weighted-average remaining lease term of ~~39.7~~42.9 years and a weighted-average discount rate of ~~8.0%~~8.1%.

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 nine months ended September 30, 2019 is presented below:

ROU Asset Lease Liability
Balance as of January 1, 2019 $ 4,160
$ 4,074
Cash reduction (365 ) (365 )
Noncash increase 172
266
Balance as of September 30, 2019 $ 3,967
$ 3,975

The components of lease expense are presented below:

	Three Months Ended June 30, 2020		Three Months Ended June 30, 2019			Six Months Ended June 30, 2020		Six Months Ended June 30, 2019
Lease expense:
Operating lease expense	$	114	$	207		$	239	$	425
Variable lease expense		31		( 2	)		116		30
Total lease expense	$	145	$	205		$	355	$	455

Three Months
Ended
September 30, 2019 Nine Months
Ended
September 30, 2019
Lease expense:
Operating lease expense $ 10
$ 435
Variable lease expense 247
277
Rent Expense $ 257
$ 712

~~The undiscounted future lease payments to be paid under the Company's operating leases as~~Table of ~~September 30, 2019, are as follows:~~

Year Ending December 31,
Operating
Leases
2019 ⁽¹⁾
$ 193
2020 567
2021 608
2022 332
2023 284
2024 263
Thereafter 12,019
Total undiscounted lease payments $ 14,266
Less imputed interest (10,291 )
Lease Liability $ 3,975


~~(1)~~	~~Reflects rental payments for the fiscal period October 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~~Contents ~~for additional information about these accounting standards.~~

Note 5 – 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 ~~$3,283,919~~$2,652,997 and ~~$3,740,431~~$2,970,246 at ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, 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.

During March 2020, the Company purchased U.S. Treasury securities that are scheduled to mature between April 2021 and June 2021. The Company has designated these securities as available-for-sale (“AFS”). The fair value of these securities was calculated based on quoted market prices in active markets and are included in the Level 1 fair value hierarchy. The Company believes the market for U.S. Treasury securities is an actively traded market given the high level of daily trading volume. The following table sets forth information regarding the Company’s AFS securities that were measured at fair value for the six months ended June 30, 2020:

AFS Security

Amortized

Cost

Allowance

for credit

losses ⁽¹⁾

Total unrealized gains/(losses)

Fair Value

U.S. Treasury securities

152,460

—

( 42

)

152,418

(1)

U.S Treasury securities have a long history with no credit losses. Additionally, the Company notes that U.S Treasury securities are explicitly fully guaranteed by a sovereign entity that can print its own currency and that the sovereign entity’s currency is routinely held by central banks and other major financial institutions, is used in international commerce, and commonly viewed as a reserve currency, all of which qualitatively indicate that historical credit loss information should be minimally affected by current conditions and reasonable and supportable forecasts. Therefore, the Company did not record expected credit losses for its U.S Treasury securities for the three and six months ended June 30, 2020.

The Company adopted ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326), on January 1, 2020. Under ASC Topic 326-30, the Company elected to exclude applicable accrued interest from both the fair value and the amortized cost basis of the available-for-sale debt securities, and separately present the accrued interest receivable balance within the Other Receivables line item of the condensed consolidated balance sheets. The accrued interest receivables balance totaled $329 as of June 30, 2020. The Company elected not to measure an allowance for credit losses on accrued interest receivable as an allowance on possible uncollectable accrued interest receivable is recorded in a timely manner.

Table of Contents

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 ~~2019~~

2020

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 ~~nine~~six months ended ~~September~~June 30, ~~2019:~~2020:

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 $ 160,740
$ —
$ —
$ 160,740
$ 202,121

			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
2020:
Long-lived assets	$	166,900	$	—	$	—	$	166,900	$	146,918

During the ~~nine~~six months ended ~~September~~June 30, 2020, the Company recognized impairments of real estate of $146,918 related to three malls.

Impairment Date	Property	Location	Segment Classification	Loss on Impairment		Fair Value
March	Burnsville Center ⁽¹⁾	Burnsville, MN	Malls	$	26,562	$	47,300
March	Monroeville Mall ⁽²⁾	Pittsburgh, PA	Malls		107,082		67,000
June	Asheville Mall ⁽³⁾	Asheville, NC	Malls		13,274		52,600
				$	146,918	$	166,900

(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 $47,300. The mall had experienced a decline of NOI due to store closures and rent reductions. These factors resulted in a reduction of the expected hold period for this asset based on Management’s assessment that there was an increased likelihood that the loan secured by the mall may not be successfully restructured or refinanced. Management determined the fair value of Burnsville Center 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 of 15.5%.

(2)

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 $67,000. The mall had experienced a decline of NOI due to store closures and rent reductions. Management determined the fair value of Monroeville 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 14.0% and a discount rate of 14.5%.

(3)

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 $52,600. The mall had experienced a decline of NOI due to store closures and rent reductions. These factors resulted in a reduction of the expected hold period for this asset based on Management’s assessment that there was an increased likelihood that the loan secured by the mall may not be successfully restructured or refinanced. Management determined the fair value of Asheville 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 13.25% and a discount rate of 14.0%.

Long-lived Assets Measured at Fair Value in 2019

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, 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
2019:
Long-lived assets	$	127,319	$	—	$	—	$	127,319	$	66,433

Table of Contents

During the six months ended June 30, 2019, the Company recognized impairments of real estate of ~~$202,121~~$66,662 related to 5three malls and 1one community ~~center.~~center:

Impairment

Date

Property

Location

Segment

Classification

Loss on

Impairment

Fair

Value

March

Greenbrier Mall ⁽¹⁾

Chesapeake, VA

Malls

22,770

56,300

March/April

Honey Creek Mall ⁽²⁾

Terre Haute, IN

Malls

2,045

14,360

June

The Forum at Grandview ⁽³⁾

Madison, MS

All Other

8,582

31,559

June

EastGate Mall ⁽⁴⁾

Cincinnati, OH

Malls

33,265

25,100

January/March

Other adjustments ⁽⁵⁾

Various

Malls

( 229

)

—

66,433

127,319

Impairment Date Property Location
Segment
Classification

Loss on
Impairment

Fair
Value
March
Greenbrier Mall ⁽¹⁾
Chesapeake, VA Malls $ 22,770
$ 56,300
March/April
Honey Creek Mall ⁽²⁾
Terre Haute, IN Malls 2,045
—
June
The Forum at Grandview ⁽³⁾
Madison, MS All Other 8,582
—
June
EastGate Mall ⁽⁴⁾
Cincinnati, OH Malls 33,265
25,100
September
Mid Rivers Mall ⁽⁵⁾
St. Peters, MO Malls 83,621
53,340
September
Laurel Park Place ⁽⁶⁾
Livonia, MI Malls 52,067
26,000
January/March
Other adjustments ⁽⁷⁾
Various Malls (229 ) —
$ 202,121
$ 160,740

(1)

~~(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~~.$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. These factors resulted in a reduction of the expected hold period for this asset based on Management’s assessment that there was an increased likelihood that the loan secured by the mall may not be successfully restructured or refinanced. 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%~~11.5% and a discount rate of 11.5%.

(2)

~~(2)~~

~~During the quarter ended March 31, 2019, the~~The Company adjusted the book value of the mall to the net sales price of ~~$14,360~~$14,360 based on a signed contract with a ~~third party~~third-party buyer, adjusted to reflect estimated disposition costs. The mall was sold in April ~~2019 and~~ 2019.~~$(239)~~ ~~was recorded related to a true-up of closing costs. See~~ ~~Note 6~~ ~~for additional information.~~

(3)
~~(3)~~	The Company adjusted the book value to the net sales price of ~~$31,559~~$31,559 based on a signed contract with a ~~third party~~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)

~~(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~~.$25,100. The mall ~~has~~had experienced a decline in cash flows due to store closures and rent reductions. These factors resulted in a reduction of the expected hold period for this asset based on Management’s assessment that there was an increased likelihood that the loan secured by the mall may not be successfully restructured or refinanced. 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 of 15.0%.

(5)

~~(5)~~

~~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~~ ~~$53,340~~. The mall has experienced a decline in cash flows due to store closures and rent reductions. Management determined the fair value of Mid Rivers 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~~ ~~12.5%~~ ~~and a discount rate~~ ~~13.25%~~.

~~(6)~~

~~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~~ ~~$26,000~~. The mall has experienced a decline in cash flows due to store closures and rent reductions. Management determined the fair value of Laurel Park Place 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~~ ~~13.5%~~ ~~and a discount rate~~ ~~14.0%~~.


~~(7)~~	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 nine months ended September 30, 2018:

~~During the nine months ended September 30, 2018, the Company recognized impairments of real estate of $84,644 related to 2 malls and undeveloped land:~~

Impairment Date Property Location
Segment
Classification

Loss on
Impairment

Fair
Value
March
Janesville Mall ⁽¹⁾
Janesville, WI Malls $ 18,061
$ —
⁽²⁾
June
Cary Towne Center ⁽³⁾
Cary, NC Malls 51,985
34,000

September
Vacant land ⁽⁴⁾
D'Iberville, MS All Other 14,598
8,100

$ 84,644
$ 42,100


~~(1)~~	~~The Company adjusted the book value of the mall to the net sales price of~~ ~~$17,640~~ ~~in a signed contract with a third party buyer, adjusted to reflect estimated disposition costs. The mall was sold in July 2018.~~


~~(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 matures on the date the IKEA contract terminates if that date is 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. The Company wrote down the book value of the mall to its estimated fair value of ~~$34,000. 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 8~~ ~~for additional information.~~


~~(4)~~	~~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.~~

Note 6 – 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 loss for all periods presented, as applicable.

~~2019~~

2020 Dispositions

~~Net proceeds realized from the 2019 dispositions listed below were used to reduce the outstanding balance on the Company's credit facility.~~

Sales Price
Sales Date Property Property Type Location Gross Net Gain
April
Honey Creek Mall ⁽¹⁾
Malls Terre Haute, IN $ 14,600
$ 14,360
$ —
April The Shoppes at Hickory Point Malls 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
July 850 Greenbrier Circle All Other Chesapeake, VA 10,500
10,332
96
July Kroger at Foothills Plaza All Other Maryville, TN 2,350
2,267
1,139
July The Forum at Grandview All Other Madison, MS 31,750
31,606
47
July Barnes & Noble parcel All Other High Point, NC 2,000
1,899
821
September Dick's Sporting Goods at Hanes Mall All Other Winston-Salem, NC 10,000
9,649
2,907
$ 88,808
$ 87,315
$ 8,246

~~(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 a gain of ~~$2,631~~$2,623 related to the sale of 2 outparcels ~~and a loss of $187 related to land contributed in the formation of the Hamilton Place Self Storage, LLC joint venture (See~~ ~~Note 7~~ ~~for additional~~

~~information)~~ during the three months ended ~~September~~June 30, ~~2019. The Company~~2020, and realized ~~gains~~a gain of ~~$4,731~~$2,763 related to the sale of 3 outparcels ~~a gain of $433 related to the formation of the Parkdale Self Storage, LLC joint venture and a loss of $187 related to the formation of the Hamilton Place Self Storage, LLC joint venture~~ during the ~~nine~~six months ended ~~September~~June 30, ~~2019. Also, the Company realized gains of $602 and $588 related to~~ ~~a reversal of estimated prior period expenses~~ ~~during the three and nine months ended September 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.~~

Sale/Transfer
Date

Balance of
Non-recourse
Debt

Gain on
Extinguishment
of Debt
Property Property Type Location
January
Acadiana Mall ⁽¹⁾
Malls Lafayette, LA $ 119,760
$ 61,796
January
Cary Towne Center ⁽²⁾
Malls Cary, NC 43,716
9,926
$ 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. A loss on impairment of real estate of~~ ~~$43,007~~ ~~was recorded in 2017 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 during January 2019, 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.

2020.

Note 7 – Unconsolidated Affiliates and Noncontrolling Interests

Unconsolidated Affiliates

Although the Company had majority ownership of certain joint ventures during ~~2019~~2020 and ~~2018,~~2019, 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 pro forma for the development~~

•

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

Table of ~~the project and any material deviations or modifications thereto;~~Contents

•

any material acquisitions or dispositions with respect to the project.

~~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 ~~September~~June 30, ~~2019,~~2020, the Company had investments in 2429 entities, which are accounted for using the equity method of accounting. The Company's ownership interest in these unconsolidated affiliates ranges from ~~20.0%~~20% to ~~65.0%~~65%. Of these entities, 1617 are owned in 50/50 joint ventures.

~~2019~~

2020 Activity - Unconsolidated Affiliates

~~Bullseye,~~

Atlanta Outlet JV, LLC

In ~~September 2018,~~February 2020, Atlanta Outlet JV, LLC, a 50/50 joint venture, closed on a new loan in the amount of $4,680, with an interest rate of LIBOR plus 2.5% and a maturity date of November 2023 .. Proceeds were used to retire the previous loan. The Operating Partnership and its joint venture partner have each guaranteed 100% of the loan. See Note 12for more information.

BI Development II, LLC

In June 2020, the Company entered into a joint venture, ~~Bullseye,~~BI Development II, LLC, to ~~develop a~~acquire, redevelop and operate the vacant ~~land~~Sears parcel ~~adjacent to Hamilton Corner~~at Northgate Mall in Chattanooga, TN. ~~During January 2019, the joint venture closed on the purchase of the land parcel for a gross purchase price of $3,310.~~ The Company has a 20% membership interest in the joint venture. ~~Additionally,~~As of June 30, 2020, the Company made no initial ~~investment~~capital contribution and has no future funding obligations. The unconsolidated affiliate is a variable interest entity ("VIE").

~~El Paso Outlet Center Holding,~~

CBL/T-C, LLC ~~and El Paso Outlet Outparcels, LLC~~

~~In August 2019,~~

As of June 30, 2020, the non-recourse loan that is secured by Oak Park Mall was in default. The loan, which matures in October 2025 , had an outstanding balance of $262,971 at June 30, 2020. The Company ~~sold 25% of its interest~~has been in ~~The Outlet Shoppes at El Paso, in El Paso, TX, to its existing joint venture partner for total consideration of $27,750. The sales price included $18,525 in related debt. Following~~discussions with the ~~sale, the Company and its joint venture partner both own~~lender regarding a 50% interest in The Outlet Shoppes at El Paso. This resulted in the Company deconsolidating this property and recognizing a gain on investment/deconsolidation of $11,174, which was made up of a $3,884 gain on the salerestructure of the ~~Company's 25% interest and a $7,290 gain related to adjusting~~loan. As of the ~~Company's remaining 50% share to fair value.~~

~~G&I VIII CBL Triangle LLC~~

~~In July 2019,~~date of this report, the lender ~~foreclosed~~has not accelerated the outstanding amount due and payable on the loan ~~secured by Triangle Town Center. In September 2018, the Company wrote down its investment~~or commenced foreclosure proceedings, but it may seek to exercise one or more of these remedies in the ~~unconsolidated 90/10 joint venture to 0.~~

~~Hamilton Place Self Storage, LLC~~

future.

In September 2019, the Company entered into a joint venture, Hamilton Place Self Storage, LLC, to develop a self-storage facility adjacent to Hamilton Place Mall. The Company has a 54% share in the joint venture, and recorded a $187 loss on sale of real estate assets related to land that 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~~ ~~2019 Financings~~.

~~Parkdale Self Storage, LLC~~

In May 2019, the Company entered into a 50/50 joint venture, Parkdale Self Storage, LLC, to develop a self-storage facility adjacent to Parkdale Mall. The Company recorded a $433 gain on sale of real estate assets related to land that 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~~ ~~2019 Financings~~.

~~Vision-CBL Hamilton Place, LLC~~

~~In November 2018, the Company entered into a 50/50 joint venture, Vision-CBL Hamilton Place, LLC, to acquire, develop and operate a hotel on a parcel adjacent to Hamilton Place Mall. See~~ ~~Note 15~~ ~~for further details.~~

Condensed Combined Financial Statements - Unconsolidated Affiliates

Condensed combined financial statement information of the unconsolidated affiliates is as follows:

	June 30, 2020			December 31, 2019
ASSETS:
Investment in real estate assets	$	2,324,956		$	2,293,438
Accumulated depreciation		( 835,032	)		( 803,909	)
		1,489,924			1,489,529
Developments in progress		47,761			46,503
Net investment in real estate assets		1,537,685			1,536,032
Other assets		170,711			154,427
Total assets	$	1,708,396		$	1,690,459
LIABILITIES:
Mortgage and other indebtedness, net	$	1,432,269		$	1,417,644
Other liabilities		40,449			41,007
Total liabilities		1,472,718			1,458,651
OWNERS' EQUITY:
The Company		150,542			149,376
Other investors		85,136			82,432
Total owners' equity		235,678			231,808
Total liabilities and owners’ equity	$	1,708,396		$	1,690,459

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	Three Months Ended June 30,
	2020			2019
Total revenues	$	46,661		$	54,230
Net income (loss) ⁽¹⁾	$	( 6,511	)	$	2,993
(1) The Company's pro rata share of net income (loss) is $( 6,079) and $1,872 for the three months ended June 30, 2020 and 2019, respectively.

	Six Months Ended June 30,
	2020			2019
Total revenues	$	107,175		$	110,097
Net income (loss) ⁽¹⁾	$	( 1,468	)	$	9,003

September 30,
2019 December 31,
2018
ASSETS
Investment in real estate assets $ 2,135,627
$ 2,097,088
Accumulated depreciation (741,802 ) (674,275 )
1,393,825
1,422,813
Developments in progress 27,309
12,569
Net investment in real estate assets 1,421,134
1,435,382
Other assets 150,597
188,521
    Total assets $ 1,571,731
$ 1,623,903
LIABILITIES
Mortgage and other indebtedness, net $ 1,252,003
$ 1,319,949
Other liabilities 44,194
39,777
    Total liabilities 1,296,197
1,359,726

OWNERS' EQUITY
The Company 173,340
191,050
Other investors 102,194
73,127
Total owners' equity 275,534
264,177
    Total liabilities and owners' equity $ 1,571,731
$ 1,623,903

Total for the Three Months
Ended September 30,
2019 2018
Total revenues $ 52,867
$ 54,579
Net income (loss) ⁽¹⁾
$ 81,300
$ (85,136 )

(1)
~~(1)~~	The Company's pro rata share of net income (loss) is ~~$(1,759)~~$( 5,061) and ~~$1,762~~$5,180 for the ~~three~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~,2019, respectively.

Total for the Nine Months
Ended September 30,
2019 2018
Total revenues $ 162,964
$ 166,843
Net income (loss) ⁽¹⁾
$ 90,303
$ (72,585 )


~~(1)~~	~~The Company's share of net income is~~ ~~$3,421~~ ~~and~~ ~~$9,869~~ ~~for the nine months ended~~ ~~September 30, 2019~~ ~~and~~ ~~2018, 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, Mid Rivers Mall, Parkdale Mall and Hamilton Place Mall. See ~~Note 12~~ ~~for a description of guarantees the Operating Partnership has issued related to these unconsolidated affiliates.~~

~~2019 Financings~~

~~The Company's unconsolidated affiliates had the following loan activity in 2019:~~

Date Property Stated
Interest Rate Maturity Date
Amount
Financed or
Extended
May
Parkdale Self Storage ⁽¹⁾
5.25%
⁽²⁾
July 2024 $ 6,500
September
Hamilton Place Self Storage ⁽³⁾
LIBOR + 2.75 September 2024 $ 7,002

~~(1)~~

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 the development of a climate controlled self-storage facility adjacent to Parkdale Mall in Beaumont, TX. The Company's share of the outstanding balance of the construction loan was $189 at September 30, 2019. 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.~~


~~(2)~~	~~The interest rate is variable and is the greater of 5.25% or LIBOR + 2.80%.~~

~~(3)~~

Hamilton Place Self Storage, LLC, a 54/46 joint venture, closed on a construction loan with a total borrowing capacity of up to $7,002 for the development of a climate controlled self-storage facility adjacent to Hamilton Place Mall in Chattanooga, TN. There were no draws on the construction loan at September 30, 2019. The Operating Partnership has guaranteed 100% of the construction loan, but it has a back-up guaranty with its joint venture partner for 50% of the construction loan. See ~~Note 12~~ ~~for more information.~~

Noncontrolling Interests

Noncontrolling interests consist of the following:

	As of
	June 30, 2020		December 31, 2019
Noncontrolling interests:
Operating Partnership	$	214	$	31,592
Other consolidated subsidiaries		23,135		23,961
	$	23,349	$	55,553

As of

September 30,
2019
December 31, 2018
Noncontrolling interests:
Operating Partnership $ 28,279
$ 55,917
Other consolidated subsidiaries 8,134
12,111
$ 36,413
$ 68,028

Accounts Receivable

See Note 2 – Summary of Significant Accounting Policies for the Company’s accounting policy related to accounts receivable, which is also applicable to the unconsolidated affiliates. The duration of the COVID-19 pandemic and the unconsolidated affiliates’ tenants’ ability to resume operations once governmental and legislative restrictions are lifted has caused uncertainty in the unconsolidated affiliates’ ongoing ability to collect rents when due. Considering the potential impact of these uncertainties, the unconsolidated affiliates’ collection assessment also took into consideration the type of retailer and current discussions with the tenants, as well as recent rent collection experience and tenant bankruptcies based on the best information available to management at the time of evaluation. For the three and six months ended June 30, 2020, the unconsolidated affiliates recorded $11,799 and $13,535, respectively, associated with potentially uncollectible revenues, which includes $250 and $435, respectively, for straight-line rent receivables.

At June 30, 2020, the unconsolidated affiliates’ Receivables include $1,944 related to receivables that have been deferred and are to be repaid over periods generally starting in late 2020 and extending for some portion of 2021. The unconsolidated affiliates granted abatements of $1,191 for the three and six months ended June 30, 2020. As of early August 2020, the Company estimates that the unconsolidated affiliates will defer $3,200 of the rents that were billed for April, May and June 2020 based on agreements that have been executed or are in active negotiation. The unconsolidated affiliates continue to assess rent relief requests from their tenants but are unable to predict the resolution or impact of these discussions.

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

Table of Contents

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 ~~September~~June 30, ~~2019,~~2020, the Company had investments in 1412 consolidated VIEs with ownership interests ranging from 50% to 92%.

Unconsolidated VIEs

The table below lists the Company's unconsolidated VIEs as of ~~September~~June 30, ~~2019:~~2020:

Unconsolidated VIEs:	Investment in Real Estate Joint Ventures and Partnerships		Maximum Risk of Loss
Ambassador Infrastructure, LLC ⁽¹⁾	$	—	$	9,360
BI Development, LLC		—		—
BI Development II, LLC		—		—
Bullseye, LLC		—		—
Continental 425 Fund LLC		7,120		7,120
EastGate Storage, LLC ⁽¹⁾		654		3,904
Hamilton Place Self Storage ⁽¹⁾		1,406		8,408
Parkdale Self Storage, LLC ⁽¹⁾		1,088		7,588
PHG-CBL Lexington, LLC		35		35
Self Storage at Mid Rivers, LLC ⁽¹⁾		605		3,599
Shoppes at Eagle Point, LLC ⁽¹⁾		16,818		29,558
Vision - CBL Hamilton Place, LLC		3,620		3,620
	$	31,346	$	73,192

Investment in Real
Estate Joint
Ventures and
Partnerships

Maximum
Risk of Loss
Ambassador Infrastructure, LLC ⁽¹⁾
$ —
$ 10,050
Bullseye, LLC 5
5
Continental 425 Fund LLC 7,243
7,243
EastGate Storage, LLC ⁽¹⁾
885
3,250
Hamilton Place Self Storage, LLC ⁽¹⁾
1,463
7,002
Parkdale Self Storage, LLC ⁽¹⁾
1,190
6,500
Self-Storage at Mid Rivers, LLC ⁽¹⁾
844
2,994
Shoppes at Eagle Point, LLC⁽¹⁾
16,268
16,268

(1)
~~(1)~~	The Operating Partnership has guaranteed all or a portion of the debt of each of ~~the VIEs listed above.~~these VIEs. See Note 12for more information.

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Note 8 – 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~~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 secured credit facility and secured term loan as of ~~September~~June 30, ~~2019.~~

2020.

Debt of the Operating Partnership

Net mortgage and other indebtedness consisted of the following:

	June 30, 2020						December 31, 2019
	Amount			Weighted- Average Interest Rate ⁽¹⁾			Amount			Weighted- Average Interest Rate ⁽¹⁾
Fixed-rate debt:
Non-recourse loans on operating Properties	$	1,230,227			5.19	%	$	1,330,561			5.27	%
Senior unsecured notes due 2023 ⁽²⁾		448,139			5.25	%		447,894			5.25	%
Senior unsecured notes due 2024 ⁽³⁾		299,964			4.60	%		299,960			4.60	%
Senior unsecured notes due 2026 ⁽⁴⁾		617,911			5.95	%		617,473			5.95	%
Total fixed-rate debt		2,596,241			5.31	%		2,695,888			5.35	%
Variable-rate debt:
Recourse loan on operating Property		41,500			2.82	%		41,950			4.34	%
Construction loan		27,215			3.07	%		29,400			4.60	%
Secured line of credit		675,925			2.42	%		310,925			3.94	%
Secured term loan		447,500			2.42	%		465,000			3.94	%
Total variable-rate debt		1,192,140			2.45	%		847,275			3.98	%
Total fixed-rate and variable-rate debt		3,788,381			4.41	%		3,543,163			5.02	%
Unamortized deferred financing costs ⁽⁵⁾		( 14,347	)					( 16,148	)
Total mortgage and other indebtedness, net	$	3,774,034					$	3,527,015

September 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
$ 1,495,896
5.21% $ 1,783,097
5.33%
Senior unsecured notes due 2023 ⁽²⁾
447,775
5.25% 447,423
5.25%
Senior unsecured notes due 2024⁽³⁾
299,958
4.60% 299,953
4.60%
Senior unsecured notes due 2026 ⁽⁴⁾
617,260
5.95% 616,635
5.95%
Total fixed-rate debt 2,860,889
5.31% 3,147,108
5.37%

September 30, 2019 December 31, 2018
Amount
Weighted-
Average
Interest
Rate ⁽¹⁾
Amount
Weighted-
Average
Interest
Rate ⁽¹⁾
Variable-rate debt:

Recourse loans on operating properties 56,178
4.71% 68,607
4.97%
Construction loan 21,061
4.99% 8,172
5.25%
Secured line of credit
304,769
4.35% —
—%
Unsecured lines of credit
—
—% 183,972
3.90%
Secured term loan 473,750
4.35% —
—%
Unsecured term loans —
—% 695,000
4.21%
Total variable-rate debt 855,758
4.39% 955,751
4.21%
Total fixed-rate and variable-rate debt 3,716,647
5.10% 4,102,859
5.10%
Unamortized deferred financing costs (17,640 ) (15,963 )
Liabilities related to assets held for sale ⁽⁵⁾
—
(43,716 )
Total mortgage and other indebtedness, net $ 3,699,007
$ 4,043,180

(1)
~~(1)~~	Weighted-average interest rate includes the effect of debt premiums and discounts, but excludes amortization of deferred financing costs.

(2)
~~(2)~~	The balance is net of an unamortized discount of ~~$2,225~~$1,861 and ~~$2,577~~$2,106 as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018~~,2019, respectively.

(3)
~~(3)~~	The balance is net of an unamortized discount of ~~$42~~$36 and ~~$47~~$40 as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018~~,2019, respectively.

(4)
~~(4)~~	The balance is net of an unamortized discount of ~~$7,740~~$7,090 and ~~$8,365~~$7,527 as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018~~,2019, respectively.

(5)

~~(5)~~

~~Represents a~~

Includes $4,795 of unamortized deferred financing costs related to the secured term loan and certain property-level, non-recourse mortgage ~~loan secured by Cary Towne Center~~loans that ~~was classified on~~may be required to be written off in the ~~condensed consolidated balance sheet as liabilities~~event that a waiver or restructuring of terms cannot be negotiated and the debt is either redeemed or otherwise extinguished. Additionally, intangible lease assets and other assets includes $7,828 of unamortized deferred financing costs related to ~~assets held for sale as~~the secured line of ~~December 31, 2018.~~credit that may be required to be written off in the event that a waiver or restructuring of terms cannot be negotiated and the debt is either redeemed or otherwise extinguished.

Non-recourse term loans, recourse term loans, the secured line of credit and the secured term loan include loans that are secured by Properties owned by the Company that have a net carrying value of $2,378,939 at June 30, 2020.

Senior Unsecured Notes

Description	Issued ⁽¹⁾	Amount		Interest Rate			Maturity Date ⁽²⁾
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

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)
~~(1)~~	Issued by the Operating Partnership. CBL is a limited guarantor of the Operating Partnership's obligations under the Notes as described above.

( 2 )

~~(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~~ ~~September 30, 2019, this ratio was~~ ~~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,

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each issuance of Notes is redeemable at the treasury rate plus ~~0.50%~~, ~~0.35%~~0.50 %, 0.35 % and ~~0.40%~~0.40 % for the 2026 Notes, the 2024 Notes and the 2023 Notes, respectively.

~~Senior Secured Credit Facility~~

~~In January 2019,~~

The Company elected to not make the $11,813 interest payment due and payable on June 1, 2020, with respect to the Operating Partnership’s 5.25% senior unsecured notes due 2023 (the “2023 Notes”) (the “2023 Notes Interest Payment”). The Company also elected to not make the $18,594 interest payment due and payable on June 15, 2020, with respect to the Operating Partnership’s 5.95% senior unsecured notes due 2026 (the “2026 Notes”) (the “2026 Notes Interest Payment”). The Operating Partnership did not make either the 2023 Notes Interest Payment or the 2026 Notes Interest Payment by the last day of the respective 30-day grace periods provided for in the indenture governing the 2023 Notes and the 2026 Notes. The Operating Partnership’s failure to make the 2023 Notes Interest Payment and the 2026 Notes Interest Payment during the applicable grace periods constituted an “event of default” with respect to each of the 2023 Notes and the 2026 Notes.

The Company entered into forbearance agreements, as amended, with certain beneficial owners and/or investment advisors or managers of discretionary funds, accounts or other entities for the holders or beneficial owners (the “Holders”) of in excess of50% of the aggregate principal amount of each of the 2023 Notes and the 2026 Notes. Pursuant to the forbearance agreements, among other provisions, the Holders of the 2023 Notes and the 2026 Notes agreed to forbear from exercising any rights and remedies under the indenture governing the 2023 Notes and the 2026 Notes solely with respect to the respective defaults from the nonpayment of the 2023 Notes Interest Payment and the 2026 Notes Interest Payment. The event of default caused by the Operating Partnership’s failure to make the 2023 Notes Interest Payment and the 2026 Notes Interest Payment resulted in a cross default under the secured credit facility. The Company entered into a ~~new~~forbearance agreement, as amended, (the “Bank Forbearance Agreement”) with the administrative agent for the lenders under the secured credit facility pursuant to which, among other provisions, the administrative agent, on behalf of itself and the lenders, agreed to forbear from exercising any rights and remedies under the secured credit facility agreement solely with respect to the specified defaults (as defined in the Bank Forbearance Agreement), including the cross-default resulting from the failure to pay the 2023 Notes Interest Payment and the 2026 Notes Interest Payment.

On August 5, 2020, prior to the expiration of the forbearance periods in the forbearance agreements with the Holders of the 2023 Notes and the 2026 Notes and the Bank Forbearance Agreement, the Operating Partnership made the 2023 Notes Interest Payment to the holders of the 2023 Notes and the 2026 Notes Interest Payment to the holders of the 2026 Notes. Accordingly, from and after such payment, the nonpayment of each of the 2023 Notes Interest Payment and the 2026 Notes Interest Payment no longer constitutes (i) an “event of default” under the indenture governing the 2023 Notes and the 2026 Notes that occurred and is continuing or (ii) to the extent provided in the Bank Forbearance Agreement, an “event of default” under the secured credit facility. See Financial Covenants and Restrictionsbelow for more information.

Senior Secured Credit Facility

The Company has a $1,185,000 senior secured credit facility, which ~~included a fully-funded $500,000 term loan and~~includes a revolving line of credit with a borrowing capacity of ~~$685,000. The facility replaced all of the Company's prior unsecured bank facilities, which included 3 unsecured~~$685,000 and a term ~~loans~~loan with an ~~aggregate~~outstanding balance of $695,000 and 3 unsecured revolving lines of credit with an aggregate capacity of $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.$447,500 at June 30, 2020. The facility matures in July 2023 and ~~bears~~bore interest at a variable rate of LIBOR plus 2.25% through March 30, 2020. As described in Note 15 – Subsequent Events , on August 6, 2020, the Operating Partnership received a notice of imposition of base rate and post-default rate letter from the administrative agent under the secured credit facility, which (i) informed the Operating Partnership that following an asserted event of default on March 19, 2020, all outstanding loans were converted to base rate loans at the expiration of the applicable interest periods and (ii) seeks payment of $4,812 related thereto for April through June 2020. The base rate is defined as the highest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) the LIBOR Market Index Rate plus 1.0%, plus 1.25%. The ~~facility had an~~base rate on June 30, 2020 was 4.50% based on the prime rate plus 1.25%. The administrative agent also informed the Operating Partnership that from and after August 6, 2020, interest will accrue on all outstanding obligations at the post-default rate, which is equal to the rate that otherwise would be in effect plus 5.0%. The post-default interest rate at the time of ~~4.35% at September 30, 2019.~~ notification was 9.50%.

The Operating Partnership is required to pay an annual facility fee, to be paid quarterly, which ranges from 0.25% to 0.35%, based on the unused capacity of the line of credit. The principal balance on the term loan will be reduced by $35,000 per year in quarterly installments. At ~~September~~June 30, ~~2019,~~2020, the secured line of credit had an outstanding balance of ~~$304,769~~$675,925. In March 2020, the Company drew $280,000 on its secured credit facility to increase liquidity and preserve financial flexibility in light of the ~~secured term loan had an outstanding balance~~uncertainty surrounding the impact of ~~$473,750.~~

COVID-19.

The secured 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 54 malls, 2 associated centers and 4 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

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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 as additional disclosure in the notes to the Operating Partnership's consolidated financial statements or within Management’s Discussion and Analysis which accompanies the 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 condensed 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 condensed combined financial statements and notes are presented as an exhibit to this quarterly report on Form 10-Q for ease of reference.

Financial Covenants and Restrictions

The agreements for the Notes and the 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 September 30, 2019.

~~The following presents the Company's compliance with key covenant ratios, as defined, of the Notes and the senior secured credit facility as of September 30, 2019:~~



~~Ratio~~	~~Required~~	~~Actual~~
~~Total debt to total assets~~	~~< 60%~~	~~53%~~
~~Secured debt to total assets~~	~~< 40%~~⁽¹⁾	~~34%~~
~~Total unencumbered assets to unsecured debt~~	~~> 150%~~	~~169%~~
~~Consolidated income available for debt service to annual debt service charge~~	~~> 1.5x~~	~~2.4x~~


~~(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, 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 and the senior secured credit facility. Additionally, the senior secured credit facility contains a provision that any default on a payment of non-recourse indebtedness in excess of $150,000 is also a default of the senior secured credit facility.

In connection with the Company’s election to not make the 2023 Notes Interest Payment and the 2026 Notes Interest Payment, the Company entered into forbearance agreements, as amended, with the Holders of in excess of 50 % of the aggregate principal amount of each of the 2023 Notes and the 2026 Notes.

Pursuant to the forbearance agreements, among other provisions, the Holders of the 2023 Notes and the 2026 Notes agreed to forbear from exercising any rights and remedies under the indenture governing the 2023 Notes and the 2026 Notes solely with respect to the respective defaults from the nonpayment of the 2023 Notes Interest Payment and the 2026 Notes Interest Payment .. The event of default caused by the Operating Partnership’s failure to make the 2023 Notes Interest Payment and the 2026 Notes Interest Payment resulted in a cross default under the secured credit facility. The Company entered into a forbearance agreement, as amended, (the “Bank Forbearance Agreement”) with the administrative agent for the lenders under the secured credit facility pursuant to which, among other provisions, the administrative agent, on behalf of itself and the lenders, agreed to forbear from exercising any rights and remedies under the secured credit facility agreement solely with respect to the specified defaults (as defined in the Bank Forbearance Agreement), including the cross-default resulting from the failure to pay the 2023 Notes Interest Payment and the 2026 Notes Interest Payment.

On each of May 26, 2020, June 2, 2020, June 16, 2020 and August 6, 2020, the Operating Partnership received notices of default and reservation of rights letters from the administrative agent under the secured credit facility asserting that certain defaults and events of default have occurred and continue to exist by reason of the Operating Partnership’s failure to comply with certain restrictive covenants, including the liquidity covenant, in the secured credit facility and resulting from the failure to make the 2023 Notes Interest Payment and the 2026 Notes Interest Payment prior to the expiration of the applicable grace periods. In addition, as described in Note 15 – Subsequent Events, on August 6, 2020, the Operating Partnership received a notice of imposition of base rate and post-default rate letter from the administrative agent under the secured credit facility, which (i) informed the Operating Partnership that following an asserted event of default on March 19, 2020, all outstanding loans were converted to base rate loans at the expiration of the applicable interest periods and (ii) seeks payment of approximately $4,812 related thereto for April through June 2020. The base rate is defined as the highest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) the LIBOR Market Index Rate plus 1.0%, plus 1.25%. The base rate on June 30, 2020 was 4.50% based on the prime rate plus 1.25%. The administrative agent also informed the Operating Partnership that from and after August 6, 2020, interest will accrue on all outstanding obligations at the post-default rate, which is equal to the rate that otherwise would be in effect plus 5.0%. The post-default interest rate at the time of notification was 9.50%.

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Violation of each of the covenants as described above provides the lenders with the option to accelerate the maturity of the secured credit facility. As of the date of this report, the lenders under the secured credit facility have not accelerated the outstanding amount due and payable on the loans or commenced foreclosure proceedings, but they may seek to exercise one or more of these remedies in the future. In addition, as a result of the events of default asserted by the administrative agent in such letters, the administrative agent may deny the Operating Partnership’s request for future LIBOR interest periods, which would result in an increase in annual interest expense of approximately $23,100 based on the base rate and $78,600 based on the post-default rate. The Operating Partnership has commenced discussions with the administrative agent on behalf of the lenders with respect to these assertions; however, there can be no assurance that the Operating Partnership will agree upon a favorable resolution with respect to such claims. Failure to reach a consensual resolution of these claims or to complete a refinancing or other restructuring could have a material adverse effect on the Operating Partnership’s liquidity, financial condition and results of operations, which may result in filing a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in order to implement a restructuring plan. See Liquidity and Going Concern Considerationsin Note 1 – Organization and Basis of Presentationand Note 15 – Subsequent Eventsfor additional information.

Mortgages on Operating Properties

2020 Loan Repayments

Date

Property

Interest

Rate at

Repayment Date

Scheduled

Maturity Date

Principal

Balance

Repaid ⁽¹⁾

February

Parkway Place

6.50%

July 2020

33,186

February

Valley View Mall

6.50%

July 2020

51,360

84,546

~~2019 Financings~~

(1)	The Company retired the loans with borrowings from its secured line of credit.

~~In April 2019,~~

Loans in Default

As of June 30, 2020, six non-recourse loans that are each secured by one of the Company’s malls were in default. The Company has been in discussions with the lenders for each of these properties regarding a restructure of each respective loan. As of the date of this report, the lenders under each of these loans have not accelerated the outstanding amount due and payable on the loans or commenced foreclosure proceedings, but they may seek to exercise one or more of these remedies in the future. Management has previously impaired the mall that secures each loan due to a shortened expected hold period resulting from management’s assessment that there is an increased likelihood that the loan secured by ~~Volusia Mall was refinanced to increase the principal balance to $50,000. In addition, the maturity date was extended to April 2024 and the fixed interest rate was reduced from 8.00% to 4.56%.~~each mall may not be successfully restructured or refinanced. The ~~net proceeds from the new loan were used to retire the $41,000 existing loan.~~

~~In May 2019, the Company exercised an option to extend the loan secured by The Outlet Shoppes~~non-recourse loans that are in default at ~~Laredo to May 2021. In conjunction with the amendment, a payment~~June 30, 2020 are as follows:

Property	Location	Interest Rate	Scheduled Maturity Date	Loan Amount
Greenbrier Mall	Chesapeake, VA	5.41%	Dec-19	$	64,501
Hickory Point Mall	Forsyth, IL	5.85%	Dec-19		27,446
Burnsville Center	Burnsville, MN	6.00%	Jul-20		64,233
EastGate Mall	Cincinnati, OH	5.83%	Apr-21		31,952
Park Plaza	Little Rock, AR	5.28%	Apr-21		77,577
Asheville Mall	Asheville, NC	5.80%	Sep-21		63,041

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~~$10,800~~ ~~was made to reduce the outstanding balance of the loan to~~ ~~$43,000. The noncontrolling interest partner in the joint venture funded its 35% share of the $10,800 payment.~~

~~2019 Loan Repayments~~

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 loan using proceeds from 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 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.~~

Scheduled Principal Payments

As of ~~September~~June 30, ~~2019,~~2020, 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~~the secured line of credit, are as follows:

2020 ⁽¹⁾	$	101,401
2021		557,157
2022		465,844
2023		1,491,825
2024		341,398
2025		36,160
Thereafter		711,636
		3,705,421
Net unamortized discounts and premium		( 8,987	)
Unamortized deferred financing costs		( 14,347	)
Principal balance of loans with a maturity date prior to June 30, 2020 ⁽²⁾		91,947
Total mortgage and other indebtedness, net	$	3,774,034

2019 ⁽¹⁾
$ 117,948
2020 246,342
2021 551,962
2022 469,036
2023 1,189,130
2024 404,496
Thereafter 747,740
3,726,654
Unamortized discounts (10,007 )
Unamortized deferred financing costs (17,640 )
Total mortgage and other indebtedness, net $ 3,699,007

(1 )
~~(1)~~	Reflects payments for the fiscal period ~~October~~July 1, ~~2019~~2020 through December 31, ~~2019.~~2020.

(2)	Represents the aggregate principal balance as of June 30, 2020 of two non-recourse loans, secured by Greenbrier Mall and Hickory Point Mall, which were in default. The loans secured by Greenbrier Mall and Hickory Point Mall matured in December 2019.

Of the ~~$117,948~~$101,401 of scheduled principal payments in ~~2019, $97,323~~2020, $64,233 relates to the maturing principal balance of ~~three~~1 operating property ~~loans.~~

loan.

The Company’s mortgage and other indebtedness had a weighted-average maturity of ~~4.0~~3.3 years as of ~~September~~June 30, ~~2019~~2020 and 3.7 years as of December 31, ~~2018.~~

2019.

Note 9 – Mortgage and Other Notes Receivable

~~Each of the~~

The Company’s mortgage ~~notes~~note 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 June 30, 2020			As of December 31, 2019
	Maturity Date		Interest Rate	Balance		Interest Rate	Balance
Mortgages	Dec 2016	⁽¹⁾	3.48%	$	1,100	4.28% - 9.50%	$	2,637
Other Notes Receivable	Sep 2021- Apr 2026		4.00% - 5.00%		1,629	4.00% - 5.00%		2,025
				$	2,729		$	4,662

As of September 30, 2019 As of December 31, 2018

Maturity
Date

Interest
Rate
Balance
Interest
Rate
Balance
Mortgages ⁽¹⁾

Dec 2016 - Jan 2047 ⁽²⁾
4.90% - 9.50% $ 3,604
4.00% - 9.50% $ 4,884
Other Notes Receivable Sep 2021 - Apr 2026 4.00% - 5.00% 2,214
4.00% - 5.00% 2,788
$ 5,818
$ 7,672

(1)
~~(1)~~	~~Includes the Village Square note that was retired subsequent to September 30, 2019. See~~ ~~Note 15~~ ~~for more information.~~


~~(2)~~	Includes a ~~$1,100~~$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~~partner’s interest in the joint venture.

Expected credit losses

As of June 30, 2020, the one mortgage note receivable is in default, but as noted above, the Company has a noncontrolling interest recorded related to the defaulting partner’s interest that serves as collateral on the note, and that amount is greater than the outstanding balance on the note. Based on this information, the Company did not record a credit loss for this class of receivables for the six months ended June 30, 2020.

During the six months ended June 30, 2020, the Company assessed each of its note receivables factoring in credit quality indicators such as collection experience and future expectations of performance to determine whether a credit loss should be recorded. Based on this information, the Company wrote off a $1,230 note receivable associated with amounts due from a government sponsored district at The Shoppes at St. Clair during the three months ended March 31, 2020. The Company did not record any other credit losses for this class of receivables for the three months ended June 30, 2020.

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Note 10 – 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.

Information on the Company’s segments is presented as follows:

Three Months Ended June 30, 2020	Malls			All Other ⁽¹⁾			Total
Revenues ⁽²⁾	$	112,002		$	12,209		$	124,211
Property operating expenses ⁽³⁾		( 38,385	)		( 2,400	)		( 40,785	)
Interest expense		( 18,960	)		( 33,671	)		( 52,631	)
Other expense		—			( 242	)		( 242	)
Gain on sales of real estate assets		—			2,623			2,623
Segment profit (loss)	$	54,657		$	( 21,481	)		33,176
Depreciation and amortization								( 52,663	)
General and administrative expense								( 18,727	)
Interest and other income								891
Loss on impairment								( 13,274	)
Income tax provision								( 16,117	)
Equity in earnings (losses) of unconsolidated affiliates								( 6,079	)
Net loss							$	( 72,793	)
Capital expenditures ⁽⁴⁾	$	9,754		$	1,377		$	11,131



Three Months Ended June 30, 2019	Malls			All Other ⁽¹⁾			Total
Revenues ⁽²⁾	$	170,976		$	22,401		$	193,377
Property operating expenses ⁽³⁾		( 53,599	)		( 3,379	)		( 56,978	)
Interest expense		( 21,556	)		( 30,926	)		( 52,482	)
Other expense		—			( 34	)		( 34	)
Gain on sales of real estate assets		2,478			3,049			5,527
Segment profit (loss)	$	98,299		$	( 8,889	)		89,410
Depreciation and amortization								( 64,478	)
General and administrative expense								( 14,427	)
Interest and other income								356
Loss on impairment								( 41,608	)
Income tax provision								( 813	)
Equity in earnings (losses) of unconsolidated affiliates								1,872
Net loss							$	( 29,688	)
Capital expenditures ⁽⁴⁾	$	31,560		$	1,413		$	32,973

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Six Months Ended June 30, 2020	Malls			All Other ⁽¹⁾			Total
Revenues ⁽²⁾	$	265,353		$	26,432		$	291,785
Property operating expenses ⁽³⁾		( 90,483	)		( 5,667	)		( 96,150	)
Interest expense		( 37,107	)		( 62,516	)		( 99,623	)
Other expense		—			( 400	)		( 400	)
Gain (loss) on sales of real estate assets		( 25	)		2,788			2,763
Segment profit (loss)	$	137,738		$	( 39,363	)		98,375
Depreciation and amortization								( 108,565	)
General and administrative expense								( 36,563	)
Litigation settlement								—
Interest and other income								3,288
Gain on extinguishment of debt								—
Loss on impairment								( 146,918	)
Income tax provision								( 16,643	)
Equity in earnings (losses) of unconsolidated affiliates								( 5,061	)
Net loss							$	( 212,087	)
Capital expenditures ⁽⁴⁾	$	27,810		$	3,653		$	31,463


Six Months Ended June 30, 2019	Malls			All Other ⁽¹⁾			Total
Revenues ⁽²⁾	$	354,840		$	36,567		$	391,407
Property operating expenses ⁽³⁾		( 110,780	)		( 7,873	)		( 118,653	)
Interest expense		( 44,746	)		( 61,734	)		( 106,480	)
Other expense		—			( 34	)		( 34	)
Gain on sales of real estate assets		2,478			3,277			5,755
Segment profit (loss)	$	201,792		$	( 29,797	)		171,995
Depreciation and amortization								( 134,270	)
General and administrative expense								( 36,434	)
Litigation settlement								( 88,150	)
Interest and other income								845
Gain on extinguishment of debt								71,722
Loss on impairment								( 66,433	)
Income tax provision								( 952	)
Equity in earnings (losses) of unconsolidated affiliates								5,180
Net loss							$	( 76,497	)
Capital expenditures ⁽⁴⁾	$	59,584		$	1,528		$	61,112

Total Assets	Malls		All Other ⁽¹⁾		Total
June 30, 2020	$	3,994,951	$	660,208	$	4,655,159

December 31, 2019	$	4,180,515	$	441,831	$	4,622,346

Three Months Ended September 30, 2019 Malls
All Other ⁽¹⁾
Total
Revenues⁽²⁾
$ 171,514
$ 15,737
$ 187,251
Property operating expenses ⁽³⁾
(53,384 ) (2,912 ) (56,296 )
Interest expense (20,866 ) (29,649 ) (50,515 )
Other expense —
(7 ) (7 )
Gain on sales of real estate assets 3,292
4,764
8,056
Segment profit (loss) $ 100,556
$ (12,067 ) 88,489
Depreciation and amortization expense (64,168 )
General and administrative expense (12,467 )
Litigation settlement 22,688
Interest and other income 1,367
Loss on impairment (135,688 )
Gain on investments/deconsolidation 11,174
Income tax provision (1,670 )
Equity in losses of unconsolidated affiliates (1,759 )
Net loss $ (92,034 )
Capital expenditures⁽⁴⁾
$ 34,961
$ 1,530
$ 36,491

Three Months Ended September 30, 2018 Malls
All Other⁽¹⁾
Total
Revenues ⁽²⁾
$ 188,440
$ 18,438
$ 206,878
Property operating expenses ⁽³⁾
(57,243 ) (3,669 ) (60,912 )
Interest expense (24,665 ) (30,529 ) (55,194 )
Other expense —
(38 ) (38 )
Gain on sales of real estate assets 92
7,788
7,880
Segment profit (loss) $ 106,624
$ (8,010 ) 98,614
Depreciation and amortization expense

(71,945 )
General and administrative expense

(16,051 )
Interest and other income

283
Loss on impairment (14,600 )
Income tax provision

(1,034 )
Equity in earnings of unconsolidated affiliates 1,762
Net loss

$ (2,971 )
Capital expenditures⁽⁴⁾
$ 38,512
$ 2,671
$ 41,183

Nine Months Ended September 30, 2019 Malls
All Other ⁽¹⁾
Total
Revenues⁽²⁾
$ 526,354
$ 52,304
$ 578,658
Property operating expenses ⁽³⁾
(164,164 ) (10,785 ) (174,949 )
Interest expense (65,612 ) (91,383 ) (156,995 )
Other expense —
(41 ) (41 )
Gain on sales of real estate assets 5,770
8,041
13,811
Segment profit (loss) $ 302,348
$ (41,864 ) 260,484
Depreciation and amortization expense (198,438 )
General and administrative expense (48,901 )
Litigation settlement expense (65,462 )
Interest and other income 2,212
Gain on extinguishment of debt 71,722
Loss on impairment (202,121 )
Gain on investments/deconsolidation 11,174
Income tax provision (2,622 )
Equity in earnings of unconsolidated affiliates 3,421
Net loss $ (168,531 )
Capital expenditures⁽⁴⁾
$ 94,545
$ 3,058
$ 97,603

Nine Months Ended September 30, 2018 Malls
All Other ⁽¹⁾
Total
Revenues⁽²⁾
$ 585,097
$ 56,579
$ 641,676
Property operating expenses ⁽³⁾
(179,012 ) (11,795 ) (190,807 )
Interest expense (76,401 ) (86,763 ) (163,164 )
Other expense (84 ) (293 ) (377 )
Gain on sales of real estate assets 92
15,906
15,998
Segment profit (loss) $ 329,692
$ (26,366 ) 303,326
Depreciation and amortization expense (217,261 )
General and administrative expense (47,845 )
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 )

Nine Months Ended September 30, 2018 Malls
All Other ⁽¹⁾
Total
Capital expenditures⁽⁴⁾
$ 105,593
$ 10,063
$ 115,656

Total Assets Malls
All Other ⁽¹⁾
Total
September 30, 2019 $ 4,351,303
$ 418,615
$ 4,769,918

December 31, 2018 $ 4,868,141
$ 472,712
$ 5,340,853

(1)
~~(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)
~~(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)
~~(3)~~	Property operating expenses include property operating, real estate taxes and maintenance and repairs.

(4)
~~(4)~~	~~Amounts include~~ Includes additions to and acquisitions of real estate assets and investments in unconsolidated affiliates. Developments in progress are included in the All Other category.

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Note 11 – 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 0 potential dilutive common shares and there were 0 anti-dilutive shares for the three and ~~nine~~six month periods ended ~~September~~June 30, ~~2019.~~

~~There were 0 potential dilutive common shares for the three~~2020 and nine month periods ended September 30, 2018. There were 0 anti-dilutive shares for the three month period ended September 30, 2018. Due to a net loss for the nine month period ended September 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 nine months ended September 30, 2018, the denominator for diluted EPS would have been 172,563,094, including 137,094 contingently issuable shares related to performance stock unit ("PSU") awards.

2019.

Earnings per Unit of the Operating Partnership

Basic earnings per unit (“EPU”) is computed ~~by dividing~~using the two-class method. The two-class method is required when either (i) participating securities or (ii) multiple classes of common stock exists. The Operating Partnership’s special common units, and common units issued upon the conversion or redemption of special common units, meet the definition of participating securities as these units have the contractual right and obligation to share in the Operating Partnership’s net income (loss) and distributions. Under this approach net income (loss) attributable to common unitholders is reduced by the amount of distributions made (declared) to all common unitholders and by the amount of distributions that are required to be made (declared and undeclared) to special common unitholders. Distributed and undistributed earnings is subsequently divided by the weighted-average number of common and special common units outstanding for the ~~period.~~period to compute basic EPU for each unit. Undistributed losses are allocated 100 percent to common units, other than common units issued upon the conversion or redemption of special common units. The special common units, and common units issued upon the conversion or redemption of special common units, only participate in undistributed losses in the event of a liquidation. Diluted EPU is computed by considering either the two-class method or the if-converted method, whichever results in more dilution. The if-converted method assumes the issuance of common units for all potential dilutive special common units outstanding. Due to the loss position (negative earnings) of the Operating Partnership for the three and six month periods ended June 30, 2020 and 2019 all special common units, and common units issued upon the conversion or redemption of special common units, are antidilutive. The calculation of diluted EPU through the if-converted method would reduce the loss per share (as a result of an increase number of shares in the denominator) for the common units. Therefore in a loss position diluted EPU is equal to basic EPU. There were 0 potential dilutive common units and there were 0 anti-dilutive units other than the special common units, and common units issued upon the conversion or redemption of special common units, outstanding for the three and ~~nine~~six month periods ended ~~September~~June 30, 2020 and 2019.

~~There were 0 potential dilutive~~

The following table presents basic and diluted EPU for common and special common units for the ~~three~~three-month and ~~nine month~~six-month periods ended ~~September~~June 30, ~~2018. There were 0 anti-dilutive~~2020 and 2019.

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	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands, except per unit data)		2020			2019			2020			2019
Net Loss Attributable to Common Unitholders	$	( 83,529	)	$	( 40,854	)	$	( 233,839	)	$	( 98,811	)
Distributions to Common Unitholders - Declared Only		—			( 14,594	)		—			( 14,639	)
Distributions to Special Common Unitholders - Declared and Undeclared
Common units issued on conversion of SCUs		—			( 178	)		—			( 133	)
S-SCUs		( 1,143	)		( 1,143	)		( 2,286	)		( 2,286	)
L-SCUs		-			( 433	)		( 433	)		( 866	)
K-SCUs		( 844	)		( 844	)		( 1,687	)		( 1,687	)
Total Undistributed Losses Available to Common and Special Common Unitholders	$	( 85,516	)	$	( 58,046	)	$	( 238,245	)	$	( 118,421	)

Distributed Earnings:
Common units issued on conversion of SCUs		—			—			—			133
S-SCUs		1,143			1,143			2,286			4,572
L-SCUs		433			433			433			1,732
K-SCUs		844			844			1,687			3,375
Common Units		—			—			—			14,639

Undistributed Losses:
Common units issued on conversion of SCUs	$	—		$	—		$	—		$	—
S-SCUs		—			—			—			—
L-SCUs		—			—			—			—
K-SCUs		—			—			—			—
Common Units		( 85,513	)		( 43,274	)		( 238,243	)		( 201,801	)

Weighted Average:
Common units issued on conversion of SCUs		1,697			1,770			1,697			1,758
S-SCUs		1,561			1,561			1,561			1,561
L-SCUs		572			572			572			572
K-SCUs		1,137			1,137			1,137			1,137
Common Units		196,736			195,192			196,513			195,142

Basic EPU:
Common units issued on conversion of SCUs	$	—		$	—		$	—		$	—
S-SCUs		0.73			0.73			1.46			2.93
L-SCUs		0.76			0.76			0.76			3.03
K-SCUs		0.74			0.74			1.48			2.97
Common Units		( 0.43	)		( 0.22	)		( 1.21	)		( 0.96	)

Total Basic EPU	$	( 0.41	)	$	( 0.20	)	$	( 1.16	)	$	( 0.49	)

Diluted EPU:
Common units issued on conversion of SCUs	$	—		$	—		$	—		$	—
S-SCUs		0.73			0.73			1.46			2.93
L-SCUs		0.76			0.76			0.76			3.03
K-SCUs		0.74			0.74			1.48			2.97
Common Units		( 0.43	)		( 0.22	)		( 1.21	)		( 0.53	)

Total Diluted EPU	$	( 0.41	)	$	( 0.20	)	$	( 1.16	)	$	( 0.49	)

For additional information regarding the participation rights and minimum distributions relating to the common and special common units, see Note 9. Shareholders’ Equity and Partners’ Capital and Note 10. Redeemable Interests and Noncontrolling Interests of the Company’s Annual Report on Form 10-K, as amended, for the ~~three month period~~year ended ~~September 30, 2018. Due to a net loss for the nine month period ended September 30, 2018, the computation~~December 31, 2019.

Table of diluted EPU does not include contingently issuable units due to their anti-dilutive nature. Had the Operating Partnership reported net income for the nine months ended September 30, 2018, the denominator for diluted EPU would have been 199,767,094, including 137,094 contingently issuable units related to PSU awards.

Contents

Note 12 – Contingencies

Litigation

to the Court's order will receive payment of their claims in cash. Class members who are current tenants ~~will receive~~began receiving monthly credits against rents and future charges ~~beginning no earlier than January 1,~~during the three months ended June 30, 2020 and ~~continuing~~will continue 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)~~$27,000), ~~any~~ incentive award to the class representative (up to a maximum of $50), and class administration costs (which are expected to not exceed $100), have or will be funded by the common fund, which has been approved by the Court. Under the terms of the settlement agreement, the Company did 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~~During the three-month periods ended September 30, 2019 and December 31, 2019, the Company reduced the accrued liability by ~~$22,688 during the three months ended September 30, 2019,~~$26,396, a majority of which was related to past tenants that did not submit a claim pursuant to the terms of the settlement agreement with the remainder relating to tenants that either opted out of the ~~lawsuit. Subsequent~~lawsuit or waived their rights to ~~September 30, 2019,~~their respective settlement amounts. Additionally, the Company ~~paid~~reduced the accrued liability during the three months ended December 31, 2019 by $23,050 inrelated to attorney and administrative fees that were paid pursuant to the settlement agreement. During the three months and six months ended June 30, 2020, the Company reduced the accrued liability by $3,276, which was related to ~~the previously accrued litigation settlement payable (see~~ ~~Note 15~~).monthly credits against rents and other charges for current tenants. The Company ~~also~~ received document requests in the third quarter of 2019, in the form of subpoenas, from the Securities and Exchange Commission and the Department of Justice regarding the Wave Lengths Hair Salons of Florida, Inc. litigation and other related matters. The Company is ~~cooperating~~continuing to cooperate in these matters.

See Note 15 – Subsequent Events

for discussion of events that occurred subsequent to June 30, 2020 in connection with the class action litigation settlement.

Securities Litigation

The Company and certain of its officers and directors were 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. Those cases were consolidated on July 17, 2019, under the caption In re CBL & Associates Properties, Inc. Securities Litigation , 1:19-cv-00149-JRG-CHS.

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 nine 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, September 5, 2019 and September 25, 2019, respectively, other shareholders filed three additional putative derivative complaints, each in the United States District Court for the District of Delaware, captioned as follows: Robert Cohen v. Stephen D. Lebovitz et al. , 1:19-cv-01185-LPS (the “ Cohen Derivative Action”); Travis Lore v. Stephen D. Lebovitz et al. , 1:19-cv-01665-LPS (the “ Lore Derivative Action”), and City of Gainesville Cons. Police Officers’ and Firefighters Retirement Plan v. Stephen D. Lebovitz et al. , 1:19-cv-01800 (the “ Gainesville Derivative Action”), each 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 (the " Consolidated Derivative

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Action"). On July 25, 2019, the Court stayed proceedings in the ConsolidatedDerivative Action pending resolution of an eventual motion to dismiss in the Securities Class Action Litigation. On October 14, 2019, the parties to the GainesvilleDerivative Action and the LoreDerivative Action filed a joint stipulation and proposed order confirming that each of those cases is subject to the consolidation order previously entered by the Court in the ConsolidatedDerivative Action and that further proceedings in those cases are stayed pending resolution of an eventual motion to dismiss in the Securities Class Action Litigation. On July 22, 2019, a 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 (the “ShebitzDerivative Action”); on January 10, 2020, a shareholder filed a putative derivative complaint captioned Chatman v. Lebovitz, et al.,2020-0011-JTL, in the Delaware Chancery Court (the “Chatman Derivative Action”); on February 12, 2020, a shareholder filed a putative derivative complaint captioned Kurup v. Lebovitz, et al.,2020-0070-JTL, in the Delaware Chancery Court (the “KurupDerivative Action”); on February 26, 2020, a shareholder filed a putative derivative complaint captioned Kemmer v. Lebovitz, et al.,1:20-cv-00052, in the United States District Court for the Eastern District of Tennessee (the “KemmerDerivative Action”) ; and on April 14, 2020, a shareholder filed a putative derivative complaint captioned Hebig v. Lebovitz, et al.,1:19-cv-00149-JRG-CHS , in the United States District Court for the Eastern District of Tennessee (the “HebigDerivative Action”) , each asserting substantially similar claims purportedly on behalf of the Company against similar defendants. On October 7, 2019, the Court stayed the ShebitzDerivative Action, pending resolution of an eventual motion to dismiss in the related Securities Class Action Litigation; the Company expects the Chatman, Kurup, Kemmer , and HebigDerivative Actions to be stayed as well .

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.

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. On September 26, 2019, the~~ ~~Merelles~~ ~~complaint was voluntarily dismissed.~~

Certain of the Company’s current and former directors and officers have been named as defendants in five 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, September 5, 2019 and September 25, 2019, respectively,~~

~~other shareholders filed three additional putative derivative complaints, each in the United States District Court for the District of Delaware, captioned as follows:~~ ~~Robert Cohen v. Stephen D. Lebovitz et al., 1:19-cv-01185-LPS (the “Cohen~~ ~~Derivative Action”);~~ ~~Travis Lore v. Stephen D. Lebovitz et al., 1:19-cv-01665-LPS (the “Lore~~ ~~Derivative Action”), and~~ ~~City of Gainesville Cons. Police Officers’ and Firefighters Retirement Plan v. Stephen D. Lebovitz et al., 1:19-cv-01800 (the “Gainesville~~ ~~Derivative Action”), each 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 (the "Consolidated~~ ~~Derivative Action"). On July 25, 2019, the Court stayed proceedings in the~~ ~~Consolidated~~ ~~Derivative Action pending resolution of an eventual motion to dismiss in the Securities Class Action Litigation. On October 14, 2019, the parties to the~~ ~~Gainesville~~ ~~Derivative Action and the~~ ~~Lore~~ ~~Derivative Action filed a joint stipulation and proposed order confirming that each of those cases is subject to the consolidation order previously entered by the Court in the~~ ~~Consolidated~~ Derivative Action and that further proceedings in those cases are stayed 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 (the “Shebitz~~ ~~Derivative Action”), asserting substantially similar claims purportedly on behalf of the Company against similar defendants. On October 7, 2019, the Court stayed the~~ ~~Shebitz~~ ~~Derivative Action pending resolution of an eventual motion to dismiss in the related Securities Class Action Litigation.~~

~~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~~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.

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The following table represents the Operating Partnership's guarantees of unconsolidated affiliates' debt as reflected in the accompanying condensed consolidated balance sheets as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018:~~2019:

	As of June 30, 2020									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⁾		June 30, 2020		December 31, 2019
West Melbourne I, LLC - Phase I	50%	$	40,567	50%		$	20,284	Feb-2021	⁽²⁾	$	203	$	199
West Melbourne I, LLC - Phase II	50%		14,603	50%			7,302	Feb-2021	⁽²⁾		73		78
Port Orange I, LLC	50%		53,792	50%			26,896	Feb-2021	⁽²⁾		269		270
Ambassador Infrastructure, LLC	65%		9,360	100%			9,360	Aug-2020			94		101
Shoppes at Eagle Point, LLC	50%		35,189	35%	⁽³⁾		12,740	Oct-2020	⁽⁴⁾		127		127
EastGate Storage, LLC	50%		6,439	50%	⁽⁵⁾		3,250	Dec-2022			33		33
Self Storage at Mid Rivers, LLC	50%		5,843	50%	⁽⁶⁾		2,994	Apr-2023			30		30
Parkdale Self Storage, LLC	50%		5,483	100%	⁽⁷⁾		6,500	Jul-2024			65		65
Hamilton Place Self Storage, LLC	54%		5,146	100%	⁽⁸⁾		7,002	Sep-2024			70		70
Atlanta Outlet JV, LLC	50%		4,680	100%			4,680	Nov-2023			—		—
Louisville Outlet Shoppes, LLC	50%		9,182	100%	⁽⁹⁾		9,182	Jul-2020			—		—
Total guaranty liability										$	964	$	973

As of September 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⁾
9/30/2019 12/31/2018
West Melbourne I, LLC
- Phase II ⁽²⁾
50% 15,737
50 % 7,869
Feb-2021 79
80
Port Orange I, LLC 50% 54,350
50 % 27,175
Feb-2021 272
280
Ambassador
Infrastructure, LLC
65% 10,050
100 % 10,050
Aug-2020 101
106
Shoppes at
Eagle Point, LLC
50% 35,189
35 %
⁽³⁾
12,740
Oct-2020
⁽⁴⁾
127
364
EastGate Storage, LLC 50% 6,145
50 %
⁽⁵⁾
3,250
Dec-2022 33
65
Self-Storage at
Mid Rivers, LLC
50% 5,538
50 %
⁽⁶⁾
2,994
Apr-2023 30
60
Parkdale Self Storage, LLC 50% 189
100 %
⁽⁷⁾
6,500
Jul-2024 65
—
Hamilton Place Self Storage, LLC 54% —
100 %
⁽⁸⁾
7,002
Sep-2024 70
—
Total guaranty liability $ 977
$ 1,158

(1)
~~(1)~~	Excludes any extension options.

(2)
~~(2)~~	~~The loan is secured by Hammock Landing - Phase I and Hammock Landing - Phase II, respectively.~~ These loans have 2 one-year extension options at the joint venture’s election.

(3)
~~(3)~~	The guaranty is for a fixed amount of ~~$12,740~~$12,740 throughout the term of the loan, including any extensions.

(4)
~~(4)~~	The loan has 1 two-year1 ~~two-year~~ extension option, at the joint venture's election, for an outside maturity date of October 2022.

(5)
~~(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)
~~(6)~~	~~The Company received a~~ 1% ~~fee for the guaranty when the loan was issued in April 2018. 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.

(7)
~~(7)~~	Parkdale Self Storage, LLC, a 50/50/50 joint venture, closed on a construction loan with a total borrowing capacity of up to ~~$6,500~~$6,500 for 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 50/50/50 partner. Therefore, the maximum guarantee is 100% of the loan.

(8)

~~(8)~~

Hamilton Place Self Storage, LLC, a 54/54/46 joint venture, closed on a construction loan with a total borrowing capacity of up to ~~$7,002~~$7,002 for the development of a climate controlled self-storage facility adjacent to Hamilton Place ~~Mall~~ in Chattanooga, TN. The Operating Partnership has guaranteed 100% of the construction loan, but it has a back-up guaranty with its joint venture partner for 50% of the construction loan. The guaranty may be reduced to 50% upon opening, and further reduced to 25% once certain debt and operations metrics are met.

(9)	In July 2020, the maturity date was extended to October 2020.

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 ~~$12,400~~$11,600 as of ~~September~~June 30, ~~2019.~~2020. 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 ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018.~~

2019.

Expected credit losses

During the three and six months ended June 30, 2020, the Company evaluated each guarantee individually by looking at the debt service ratio, cash flow forecasts and the performance of each loan. The result of the analysis was that each loan is current and performing, and if applicable, none of the loans that are guaranteed by the Company are in violation of their debt covenants, each operating property has positive cash flows that are sufficient to cover debt service and forecasted cash flows for each operating property do not indicate that there is more than a remote probability that the Company will be required to perform under each guaranty. Historically, the Company has not had to perform on any of its guarantees of unconsolidated affiliates’ debt. Based on current and future conditions, the Company does not expect to have to perform, and therefore did not record a credit loss for the three and six months ended June 30, 2020.

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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 ~~$15,824~~$4,902 and ~~$16,003~~$13,660 at ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively.

Note 13 – Share-Based Compensation

As of ~~September~~June 30, ~~2019,~~2020, the Company has outstanding awards under the CBL & Associates Properties, Inc. 2012 Stock Incentive Plan ~~("the 2012~~(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~~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 ~~$571~~$361 and ~~$787~~$546 for the three months ended ~~September~~June 30, 2020 and 2019,~~and2018,~~ respectively, and ~~$2,830~~$1,505 and ~~$3,263~~$2,259 for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, respectively. Share-based compensation cost capitalized as part of real estate assets was ~~$13~~$5 and ~~$36~~$27 for the three months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, respectively, and ~~$54~~$12 and ~~$260~~$41 for the ~~nine~~six months ended ~~September~~June 30, 2020 and 2019, ~~and 2018,~~ respectively.

A summary of the status of the Company’s nonvested restricted stock awards as of ~~September~~June 30, ~~2019,~~2020, and changes during the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, is presented below:

	Shares			Weighted- Average Grant-Date Fair Value
Nonvested at January 1, 2020		971,846		$	5.16
Granted		1,628,397		$	0.86
Vested		( 1,051,783	)	$	2.86
Forfeited		( 24,911	)	$	4.64
Nonvested at June 30, 2020		1,523,549		$	2.16

Shares
Weighted-Average
Grant Date
Fair Value
Nonvested at January 1, 2019 875,497
$ 7.99
Granted 855,681
$ 2.23
Vested (746,134 ) $ 5.11
Forfeited (12,024 ) $ 5.98
Nonvested at September 30, 2019 973,020
$ 5.16

As of ~~September~~June 30, ~~2019,~~2020, there was ~~$3,534~~$2,709 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 ~~2.5~~2.4 years.

Long-Term Incentive Program

In 2015, the Company adopted a long-term incentive program ("LTIP") for its named executive officers, which consists of performance 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~~is based on the achievement of TSR relative to the NAREIT Retail Index while the remaining ~~one-third will be~~one -third is based on the achievement of absolute TSR metrics for the Company. ToBeginning with the 2018 PSU grant, to maintain compliance with ~~the~~a 200,000 share annual equity grant limit ~~under~~(the “Section 162(m) Grant Limit”) that was included in the 2012 Plan ~~beginning with~~to satisfy the ~~2018 PSU grant,~~“qualified performance-based compensation” exception to the deduction limits for certain executive compensation under Section 162(m) of the Code, 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~~such 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.

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In conjunction with the February 2020 approval of the 2020 LTIP grants for the named executive officers, the 2012 Stock Incentive Plan was amended to remove the Section 162(m) Grant Limit, which no longer served its original purpose because the “qualified performance-based compensation” exception to the Section 162(m) deduction limits was repealed by the 2017 tax reform legislation. However, NYSE rules also include an annual equity grant limit which effectively limits the number of shares that can be subject to stock awards to any individual named executive officer, without additional shareholder approval, to one percent ( 1 %) of the total number of outstanding shares of the Company’s Common Stock (the “NYSE Annual Grant Limit”). To maintain NYSE compliance following elimination of the Section 162(m) Grant Limit, the Company’s Compensation Committee revised PSU awards under the LTIP, beginning in 2020, to provide that if a grant of PSUs could result in the issuance of a number of shares to a named executive officer at the conclusion of the 3-year performance period that would exceed the NYSE Annual Grant Limit, when coupled with the number of shares subject to other stock awards (e.g., the time-vesting restricted stock component of the LTIP) issued in the same year that such PSUs were issued, any such excess will instead be converted to a cash bonus award, while remaining subject to vesting conditions as described below.

Any such portion of the value of the 2018 PSUs, the 2019 PSUs or the ~~2019~~2020 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.~~PSUs. 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 4 equal annual installments.

Performance Stock Units

A summary of the status of the Company’s PSU activity as of ~~September~~June 30, ~~2019,~~2020, and changes during the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, is presented below:

	PSUs		Weighted-Average Grant Date Fair Value
Outstanding at January 1, 2020		1,766,580	$	2.96
2020 PSUs granted ⁽¹⁾		3,408,083	$	0.84
Outstanding at June 30, 2020 ⁽²⁾		5,174,663	$	1.56

PSUs
Weighted-Average
Grant Date
Fair Value
Outstanding at January 1, 2019 910,911
$ 4.67
2019 PSUs granted ⁽¹⁾
1,103,537
$ 2.40
Outstanding at September 30, 2019 ⁽²⁾
2,014,448
$ 3.42

(1)
~~(1)~~	Includes ~~566,862~~211,375 shares classified as a liability due to the potential cash component described above.

( 2 )
~~(2)~~	NaN of the PSUs outstanding at ~~September~~June 30, ~~2019~~2020 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 ~~2019~~2020 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 ~~September~~June 30, ~~2019~~2020 with an adjustment to compensation expense. If the performance criterion is not satisfied at the end of the performance period for the ~~2019~~2020 PSUs, previously recognized compensation expense related to the liability-classified awards would be reversed as there would be no value at the settlement date.

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Share-based compensation expense related to the PSUs was ~~$409~~$( 60) and ~~$178~~$443 for the three months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, respectively, and ~~$1,278~~$418 and ~~$1,130~~$869 for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, respectively. Unrecognized compensation costs related to the PSUs was ~~$2,930~~$3,597 as of ~~September~~June 30, ~~2019,~~2020, which is expected to be recognized over a weighted-average period of ~~4.0~~4.2 years.

The following table summarizes the assumptions used in the Monte Carlo simulation pricing model related to the PSUs:

	2020 PSUs			2019 PSUs			2018 PSUs
Grant date	February 10, 2020			February 11, 2019			February 12, 2018
Fair value per share on valuation date ⁽¹⁾	$	0.84		$	4.74		$	4.76
Risk-free interest rate ⁽²⁾		1.39	%		2.54	%		2.36	%
Expected share price volatility ⁽³⁾		57.98	%		60.99	%		42.02	%

2019 PSUs 2018 PSUs 2017 PSUs
Grant date February 11, 2019 February 12, 2018 February 7, 2017
Fair value per share on valuation date ⁽¹⁾
$ 4.74
$ 4.76
$ 6.86

Risk-free interest rate ⁽²⁾
2.54 % 2.36 % 1.53 %
Expected share price volatility⁽³⁾
60.99 % 42.02 % 32.85 %

( 1)

~~(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-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 ~~2019~~2020 PSUs classified as equity consists of ~~357,800~~2,131,245 shares at a fair value of ~~$2.45~~$0.88 (which relate to relative TSR) and ~~178,875~~1,065,463 shares at a fair value of ~~$2.29~~$0.75 per share (which relate to absolute TSR). The weighted-average fair value per share related to the ~~2018~~2019 PSUs classified as equity consists of ~~240,164~~357,800 shares at a fair value of ~~$3.13~~$2.45 per share (which relate to relative TSR) and ~~$120,064~~178,875 shares at a fair value of ~~$1.63~~$2.29 per share (which relate to absolute TSR).

(2)
~~(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)

~~(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 five-year period for the 2020 PSUs and a three-year period for the 2019 and 2018 PSUs 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 14 – Noncash Investing and Financing Activities

The Company’s noncash investing and financing activities were as follows:

	Six Months Ended June 30,
	2020			2019
Accrued dividends and distributions payable	$	—		$	2,420
Additions to real estate assets accrued but not yet paid		14,130			26,572
Transfer of real estate assets in settlement of mortgage debt obligations:
Decrease in real estate assets		—			( 60,059	)
Decrease in mortgage and other indebtedness		—			124,111
Decrease in operating assets and liabilities		—			9,333
Decrease in intangible lease and other assets		—			( 1,663	)
Conversion of Operating Partnership units to common stock		21,051			—
Increase (decrease) in lease liabilities arising from right-of-use assets		( 159	)		4,042
Deconsolidation upon formation or transfer of interests in joint ventures:
Decrease in real estate assets		—			( 566	)
Increase in investment in unconsolidated affiliates		—			999

Nine Months Ended
September 30,
2019 2018
Accrued dividends and distributions payable $ 2,420
$ 41,657

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Nine Months Ended
September 30,
2019 2018
Additions to real estate assets accrued but not yet paid 23,148
22,428
Conversion of Operating Partnership units for common stock —
3,059
Lease liabilities arising from obtaining right-of-use assets 3,975
—
Deconsolidation upon contribution/assignment of interests in joint venture: ⁽¹⁾

Decrease in real estate assets (93,360 ) (587 )
Increase in investment in unconsolidated affiliates 17,903
974
Decrease in mortgage and other indebtedness 73,283
—
Decrease in operating assets and liabilities 2,443
—
Decrease in intangible lease and other assets (908 ) —
Decrease in noncontrolling interest and joint venture interest 4,271
—
Transfer of real estate assets in settlement of mortgage debt obligation:
Decrease in real estate assets (60,059 ) —
Decrease in mortgage and other indebtedness 124,111
—
Decrease in operating assets and liabilities 9,333
—
Decrease in intangible lease and other assets (1,663 ) —


~~(1)~~	~~See~~ ~~Note 7~~ ~~for additional information.~~

Note 15 – Subsequent Events

The Company elected to not make the 2026 Notes Interest Payment by the end of the 30-day grace period to make such payment. The Company made the 2023 Notes Interest Payment and the 2026 Notes Interest Payment on August 5, 2020. See Note 8 – Mortgage and Other Indebtedness, Net for more information.

On August 6, 2020, the Operating Partnership received a notice of imposition of base rate and post-default rate letter from the administrative agent under the secured credit facility, which (i) informed the Operating Partnership that following an asserted event of default on March 19, 2020, all outstanding loans were converted to base rate loans at the expiration of the applicable interest periods and (ii) seeks payment of approximately $4,812 related thereto for April through June 2020.The administrative agent also informed the Operating Partnership that from and after August 6, 2020, interest will accrue on all outstanding obligations at the post-default rate, which is equal to the rate that otherwise would be in effect plus 5.0%. See Note 8 – Mortgage and Other Indebtedness, Netfor more information.

The maturity date of the loan secured by The Outlet Shoppes of the Bluegrass – Phase II that was scheduled to mature in July 2020 was extended to October ~~2019,~~2020 ..

With respect to the class action litigation settlement discussed in Note 12 – Contingencies , the Company ~~contributed land~~made the final fee payment of $4,000 to ~~its 50/50 joint venture, Vision-CBL Hamilton Place, LLC, and closed on a loan, with a borrowing capacity of $16,800, for the construction of an Aloft by Marriott hotel.~~

~~In October 2019, the Village Square note receivable was retired~~class counsel in ~~the amount of $910.~~

~~In October 2019,~~July 2020. Additionally, the Company paid ~~$23,050~~$4,915 in ~~attorney~~July 2020 to settle claims of former tenants in connection with the class action litigation settlement.

In July 2020, the Company issued 1,783,403 and ~~administrative fees related~~338,331 shares of the Company’s common stock to certain individuals and entities included in CBL’s Predecessor and a third party, respectively, in exchange for a like number of common units of limited partnership interest in the ~~previously accrued litigation settlement payable discussed in~~ Operating Partnership pursuant to exchange notices received from CBL’s Predecessor and such third party.

~~Note 12~~Table of Contents.

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. Currently, one of the most significant factors that could cause actual outcomes to differ materially from our forward-looking statements is the potential adverse effect of the COVID-19 pandemic, and federal, state, and/or local regulatory guidelines to control it, on our financial condition, operating results and cash flows, our tenants and their customers, the real estate market in which we operate, the global economy and the financial markets. The extent to which the COVID-19 pandemic impacts us and our tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the direct and indirect economic effects of the pandemic and containment measures, and potential changes in consumer behavior, among others. In addition to the risk factors described in Part I, Item 1A of our Annual Report on Form 10-K, as amended, for the year ended December 31, ~~2018,~~2019, and in Part II, Item 1A of this report, such known risks and uncertainties, many of which may be influenced by the COVID-19 pandemic, include, without limitation:

•

general industry, economic and business conditions;

~~general industry, economic and business conditions;~~

•

interest rate fluctuations;

~~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;

•

uncertainty and economic impact of pandemics, epidemics or other public health emergencies or fear of such events, such as the recent COVID-19 pandemic;

•

cyber-attacks or acts of cyber-terrorism;

Table of ~~capital, including debt, and capital requirements;~~Contents

•

changes in , or withdraw al of, the credit ratings of the Operating Partnership's senior unsecured long-term indebtedness;

~~costs and availability of real estate;~~

•

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

~~inability to consummate acquisition opportunities and other risks associated with acquisitions;~~

•

other risks referenced from time to time in filings with the SEC and those factors listed or incorporated by reference into this report.

~~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;~~

~~other risks referenced from time to time in filings with the SEC and those factors listed or incorporated by reference into this report.~~

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, office and ~~office~~other properties. See Note 1to the condensed consolidated financial statements for information on our property interests as of ~~September~~June 30, ~~2019.~~2020. We have elected to be taxed as a REIT for federal income tax purposes.

On March 11, 2020, the World Health Organization classified COVID-19 as a pandemic. Due to the extraordinary governmental actions taken to contain COVID-19, we are unable to predict the full extent of the pandemic’s impact on our results of operations for the remainder of 2020. As a result, we previously withdrew our full-year 2020 same-center NOI and FFO per share, as adjusted, guidance and underlying assumptions and do not plan to reinstate full-year 2020 guidance until there is further clarity on the impact of the pandemic.

In response to local and state mandated closures, our entire portfolio, except for a few properties, closed in March. Beginning in late April, government agencies began allowing the re-opening of properties with specified health and safety restrictions. As of August 1, 2020, all of our mall properties, but one, have re-opened and we have implemented strict procedures and guidelines for our employees, tenants and property visitors based on CDC and other health agency recommendations. Our properties continue to update these policies and procedures, following any new mandates and regulations, as required. The safety and health of our customers, employees and tenants remains a top priority.

Our financial and operating results for the second quarter reflect the temporary closure of our portfolio for a significant period due to government mandates. Revenues for the quarter were impacted by a major increase in the estimate for uncollectible revenues related to rents due from tenants that recently filed for bankruptcy or are struggling financially, as well as amounts that were abated as part of negotiations. Store closures and rent loss from prior tenant bankruptcies and lower percentage rent related to lower retail sales also impacted revenues. We offset a portion of this decline through aggressive actions to reduce costs both at the property and corporate levels, including company-wide salary reductions, furloughs, reductions-in-force and other expense reduction initiatives. However, the pandemic has accelerated a number of tenant bankruptcies, resulting in an expectation of additional store closures and lost rent through the remainder of the year.

The mandated closures resulted in nearly all of our tenants closing for a period of time and/or shortening operating hours. As a result, we have experienced an increased level of requests for rent deferrals and abatements, as well as defaults on rent obligations. While, in general, we believe that tenants have a clear contractual obligation to pay rent, we have been working with our tenants to address rent deferral requests. Based on completed or in process agreements with 20 of our top tenants as a percentage of total revenues, excluding tenants in bankruptcy, we anticipate collecting over 60% of related rent for the second quarter, with the remainder expected to be deferred or abated. We remain in negotiations with tenants and are unable to predict the outcome of those discussions. As we finalize negotiations, rent collections as a percentage of billed cash-based rents have increased with certain past-due amounts being paid, resulting in an overall collection rate for April through July 2020 of over 54%. As of early August 2020, July rent collections are currently estimated at 49%; however, we anticipate an improvement in the collection rate as we finalize negotiations with retailers and additional past due amounts are collected. We currently estimate that we will defer $17.0 million, at our share, of rents that were billed for April, May and June 2020 based on agreements that have been executed or are in active negotiation. We continue to assess rent relief requests from our tenants but are unable to predict the resolution or impact of these discussions.

We implemented a full financial COVID-19 response to improve liquidity and reduce costs. These significant actions included drawing $280 million on our secured line of credit, eliminating all non-essential expenditures, implementing a company-wide furlough and salary reduction program and delaying and suspending capital expenditures, including redevelopment investments. See the "Liquidity and Capital Resources"section for more information.

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As discussed in “Note 1 – Organization and Basis of Presentation” and “Note 8 – Mortgage and Other Indebtedness, Net” to the condensed consolidated financial statements and in “Liquidity and Capital Resources” herein, we havereceived notices of default and reservation of rights lettersfrom the administrative agent under the secured credit facility asserting that certain defaults and events of default have occurred and continue to exist by reason of the our failure to comply with certain restrictive covenants, including the liquidity covenant, in the secured credit facility and resulting from the failure to make the 2023 Notes Interest Payment and the 2026 Notes Interest Payment prior to the expiration of the applicable grace periods. In addition, on August 6, 2020, we received a notice of imposition of base rate and post-default rate letter from the administrative agent under the secured credit facility, which (i) informed us that following an asserted event of default on March 19, 2020, all outstanding loans were converted to base rate loans at the expiration of the applicable interest periods and (ii) seeks payment of approximately $4.8 million related thereto for April through June 2020. The administrative agent also informed us that from and after August 6, 2020, interest will accrue on all outstanding obligations at the post-default rate. See Note 1 – Organization and Basis of Presentationand Liquidity and Capital Resourcesfor additional information.

We have engaged Weil, Gotshal & Manges LLP and Moelis & Company LLC (the “Advisors”) to assist us in exploring several alternatives to reduce overall leverage and interest expense and to extend the maturity of our debt including (i) the senior secured credit facility, which includes a revolving facility with a balance of $675.9 million and term loan with a balance of $447.5 million as of June 30, 2020, that matures in July 2023 and (ii) the Notes with balances of $450.0 million, $300.0 million, and $625.0 million, as of June 30, 2020, that mature in December 2023, October 2024 and December 2026, respectively, as well as the cumulative unpaid dividends on our preferred stock and the special common units of limited partnership interest in the Operating Partnership. The Advisors commenced discussions in May 2020 with advisors to certain holders of the Notes and the credit committee of the senior secured credit facility. We may pursue a comprehensive capital structure solution that will address our funded indebtedness and outstanding equity interests that may result in the reorganization of the Company.

Given the impact of the COVID-19 pandemic on the retail and broader markets, the ongoing weakness of the credit markets and significant uncertainties associated with each of these matters, we believe that there is substantial doubt that we will continue to operate as a going concern within one year after the date our condensed consolidated financial statements for the quarter ended June 30, 2020 are issued. See “Note 1 – Organization and Basis of Presentation” to the condensed consolidated financial statements for additional information.

We had a net loss for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 of ~~$(92.0)~~$72.8 million and ~~$(168.5)~~$212.1 million respectively, compared to a net loss for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 of ~~$(3.0)~~$29.7 million and ~~$(33.6)~~$76.5 million, respectively. We recorded a net loss attributable to common shareholders for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 of ~~$(90.1)~~$81.5 million and ~~$(175.7)~~$215.3 million, respectively compared to a net loss for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 of ~~$(12.6)~~$35.4 million and ~~$(57.9)~~$85.6 million, respectively. ~~For~~In addition to the ~~three month period, earnings from Comparable Properties (defined below) were down primarily due to store~~impact of the government mandated closures, ~~and rent concessions for tenants with high occupancy cost levels, including tenants~~significant items that ~~declared bankruptcy in 2018 and 2019. Additionally, a greater amount of~~affected the comparability between the three-month periods include loss on impairment ~~was recognized as compared~~that is $28.3 million lower and an increase in the income tax provision of $15.3 million due to the ~~prior period, which was partially offset by a gain on the disposition~~recognition of a ~~portion of~~valuation allowance against our ~~interest~~deferred tax assets. For the six-month periods, in an outlet center. The decline in earnings from the Comparable Properties for the nine month period was primarily due to store closures and rent concessions for tenants with high occupancy cost levels, including tenants that declared bankruptcy in 2018 and 2019. Also contributingaddition to the decline was the litigation settlement expense that was recognized in the first quarter of 2019 along with a greater amount of loss on impairment, which was partially offset by gain on extinguishment of debt recognized in the first quarter of 2019, the reductionimpact of the ~~accrued liability related to~~government mandated closures, significant items that affected the ~~litigation settlement and a gain on~~comparability between the ~~disposition of a portion of our interest in an outlet center in the third quarter of 2019.~~

Quarterly results were in-line with our expectations. Lease spreads on new leases improved and same-center sales increased over 3% during the third quarter. We have 27 replacements committed, under construction or open for the more than 40 closed anchors in 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 drive traffic and strengthen our properties. See the ~~"Liquidity and Capital Resources"~~ ~~section for information on our development, expansion and redevelopment projects as of September 30, 2019.~~

We continue to strengthen our balance sheet by extending our maturity schedule. In January 2019, we replaced all of our unsecured lines of credit and unsecured term 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.~~

In 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 proper 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 recognizedsix-month periods include litigation settlement expense of $88.2 million ~~during~~and gain on extinguishment of debt of $71.7 million that were recognized in the ~~first quarter~~six months ended June 30, 2019, as ~~a result of~~well as loss on impairment that is $80.5 million higher in the ~~settlement, and during~~six months ended June 30, 2020. We also deconsolidated three outlet centers in the third ~~quarter that amount was reduced by $22.7 million, a majority~~and fourth quarters of ~~which was related to past tenants that did not submit a claim pursuant to the terms of the settlement agreement with the remainder relating to tenants that opted out of the lawsuit. See~~ ~~Note 12~~ ~~to the condensed consolidated financial statements for more information.~~

We continue to capitalize on opportunities to raise attractively priced capital from non-core assets, as evidenced by the $161.4 million in gross asset sales that have been completed year-to-date. Net cash proceeds from sales of $128.4 million, combined with our estimated free cash flow of approximately $200.0 million, provides liquidity to invest in our redevelopment program and reduce debt.

2019.

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 Incomein ““Results of ~~Operations~~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 ~~2018~~2019 and the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 are referred to as the “Comparable Properties.” Since January 1, ~~2018,~~2019, we have opened ~~two~~one self-storage ~~facilities~~facility, deconsolidated three outlet centers and ~~one community center as follows:~~

disposed of ten properties:

Properties Opened

Property	Location	Date Opened

~~Property~~	~~Location~~	~~Date Opened~~
~~EastGate Mall - CubeSmart Self-storage~~ ⁽¹⁾	~~Cincinnati, OH~~	~~September 2018~~
~~The Shoppes at Eagle Point~~ ⁽¹⁾	~~Cookeville, TN~~	~~November 2018~~
Mid Rivers Mall -– CubeSmart Self-storage ⁽¹⁾	St. Peters, MO	January 2019

(1)
~~(1)~~	~~Each of these properties~~ This property is owned by 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.

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Deconsolidations

Property	Location	Date of Deconsolidation
The Outlet Shoppes at Atlanta ⁽¹⁾	Woodstock, GA	December 2019
The Outlet Shoppes at El Paso ⁽¹⁾	El Paso, TX	August 2019
The Outlet Shoppes of the Bluegrass ⁽¹⁾	Simpsonville, KY	November 2019

(1)

This property is owned by a 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 from the date of deconsolidation.

Dispositions

Property	Location	Sales Date
850 Greenbrier Circle	Chesapeake, VA	July 2019
Acadiana Mall	Lafayette, LA	January 2019
Barnes & Noble parcel	High Point, NC	July 2019
Cary Towne Center	Cary, NC	January 2019
Courtyard by Marriott at Pearland Town Center	Pearland, TX	June 2019
Dick’s Sporting Goods at Hanes Mall	Winston-Salem, NC	September 2019
The Forum at Grandview	Madison, MS	July 2019
Honey Creek Mall	Terre Haute, IN	April 2019
Kroger at Foothills Plaza	Maryville, TN	July 2019
The Shoppes at Hickory Point	Forsyth, IL	April 2019

Non-core properties are defined as Excluded Malls - see definition that follows under "Operational Review."

Comparison of the Three Months Ended ~~September~~ June 30, ~~2019~~2020 to the Three Months Ended ~~September~~ June 30, ~~2018~~

2019

Revenues

	Total for the Three Months Ended June 30,							Comparable Properties
	2020		2019		Change			Core			Non-core			Deconsolidation			Dispositions			Total Change
Rental revenues	$	120,222	$	185,393	$	(65,171	)	$	(46,375	)	$	(4,749	)	$	(10,735	)	$	(3,312	)	$	(65,171	)
Management, development and leasing fees		1,055		2,586		(1,531	)		(1,531	)		—			—			—			(1,531	)
Other		2,934		5,398		(2,464	)		(1,904	)		(385	)		(86	)		(89	)		(2,464	)
Total revenues	$	124,211	$	193,377	$	(69,166	)	$	(49,810	)	$	(5,134	)	$	(10,821	)	$	(3,401	)	$	(69,166	)

Total for the Three
Months
Ended September 30,

Comparable
Properties

2019 2018 Change Core Non-core Dispositions Change
Rental revenues $ 180,616
$ 200,311
$ (19,695 ) $ (7,999 ) $ (750 ) $ (10,946 ) $ (19,695 )
Management, development and leasing fees 2,216
2,658
(442 ) (442 ) —
—
(442 )
Other 4,419
3,909
510
474
11
25
510
Total revenues $ 187,251
$ 206,878
$ (19,627 ) $ (7,967 ) $ (739 ) $ (10,921 ) $ (19,627 )

Rental revenues from the Comparable Properties declined ~~primarily~~ due to ~~store closures~~$1.6 million of rent abatements on past due rents and an estimate of $31.5 million in uncollectible revenues for past due rents related to tenants that are in bankruptcy or are struggling financially, primarily as a result of mandated property closures. Percentage rent declined as a result of lower retail sales due to mandated property closures. Rental revenues were also negatively impacted by rent concessions that were in effect prior to the COVID-19 pandemic for tenants with high occupancy cost levels ~~including~~and tenants that ~~declared bankruptcy~~closed in ~~2018 and 2019.~~

2019 due to bankruptcy.

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Operating Expenses

	Total for the Three Months Ended June 30,									Comparable Properties
	2020			2019			Change			Core			Non-core			Deconsolidation		Dispositions		Total Change
Property operating	$	(16,906	)	$	(26,532	)	$	9,626		$	5,106		$	1,024		$	2,611	$	885	$	9,626
Real estate taxes		(17,837	)		(19,148	)		1,311			91			(117	)		956		381		1,311
Maintenance and repairs		(6,042	)		(11,298	)		5,256			3,871			725			300		360		5,256
Property operating expenses		(40,785	)		(56,978	)		16,193			9,068			1,632			3,867		1,626		16,193
Depreciation and amortization		(52,663	)		(64,478	)		11,815			5,538			1,759			3,741		777		11,815
General and administrative		(18,727	)		(14,427	)		(4,300	)		(4,300	)		—			—		—		(4,300	)
Loss on impairment		(13,274	)		(41,608	)		28,334			4,226			16,230			—		7,878		28,334
Other		(242	)		(34	)		(208	)		(208	)		—			—		—		(208	)
Total operating expenses	$	(125,691	)	$	(177,525	)	$	51,834		$	14,324		$	19,621		$	7,608	$	10,281	$	51,834

Total for the Three
Months
Ended September 30,

Comparable
Properties

2019 2018 Change Core Non-core Dispositions Change
Property operating $ (27,344 ) $ (30,004 ) $ 2,660
$ 629
$ (51 ) $ 2,082
$ 2,660
Real estate taxes (18,699 ) (19,433 ) 734
(185 ) 131
788
734
Maintenance and repairs (10,253 ) (11,475 ) 1,222
221
(7 ) 1,008
1,222
Property operating expenses (56,296 ) (60,912 ) 4,616
665
73
3,878
4,616

Depreciation and amortization (64,168 ) (71,945 ) 7,777
3,246
1,484
3,047
7,777
General and administrative (12,467 ) (16,051 ) 3,584
3,584
—
—
3,584
Loss on impairment (135,688 ) (14,600 ) (121,088 ) (121,090 ) —
2
(121,088 )
Litigation settlement 22,688
—
22,688
22,688
—
—
22,688
Other (7 ) (38 ) 31
31
—
—
31
Total operating expenses $ (245,938 ) $ (163,546 ) $ (82,392 ) $ (90,876 ) $ 1,557
$ 6,927
$ (82,392 )

Property operating expenses at the Comparable Properties decreased ~~partially~~primarily due to ~~a change in~~ the ~~classification~~implementation of ~~bad debt expense~~comprehensive programs to reduce operating expenses as a result of mandated property closures, including salary reductions, furloughs, reductions-in-force and other operating expense initiatives.

The decrease in depreciation and amortization expense related to the ~~adoption~~Comparable Properties primarily relates to lower a lower basis in depreciable assets resulting from impairments recorded since the prior year period.

General and administrative expenses increased primarily due to $7.9 million of ~~ASC 842 effective January 1, 2019. Bad~~costs related to the Company’s negotiations to restructure its corporate-level debt, ~~expense~~which was partially offset by the implementation of comprehensive programs to reduce expenses, including salary reductions, furloughs, reductions-in-force and other general and administrative expenses.

In the second quarter of 2020, we recognized $13.3 million of loss on impairment of real estate to write down the book value of one mall. In the second 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. See Note 5to the condensed consolidated financial statements for more information.

Other Income and Expenses

Interest and other income increased $0.5 million compared to the prior-year period primarily due to interest income related to the U.S. Treasury securities that we invested in using a portion of the $280 million we drew on our secured line of credit in March 2020 to increase liquidity and preserve financial flexibility in light of the uncertainty surrounding the impact of the COVID-19 pandemic .. This was ~~included~~partially offset by a decrease in ~~property operating expenses for~~interest income due to several mortgage and other notes receivable being retired since the prior year period.

Interest expense increased $0.1 million due to an increase of $2.9 million in corporate interest expense primarily due to the increase in the interest rate on the secured credit facility as a result of notices of default received from the administrative agent under the secured credit facility plus default interest expense related to property-level nonrecourse loans that are in default. These increases were mostly offset by a $2.8 million decrease in property-level interest expense from the deconsolidation of three encumbered properties since the prior-year period and lower interest expense due to the continued amortization of the secured term loan and non-recourse property-level loans.

During the three months ended ~~September~~June 30, ~~2018; however, beginning January 1,~~2020, we recognized $2.6 million of gain on sales of real estate assets related to the sale of two outparcels. During the three months ended June 30, 2019, ~~rental revenues~~we recognized $5.5 million of gain on sales of real estate assets primarily related to the sale of a center, a hotel and an outparcel.

The income tax provision increased $15.3 million as compared to the prior-year period as we recorded a valuation allowance of $15.8 million, which reflects a full valuation allowance on our deferred tax assets. The valuation allowance was recorded due to management’s evaluation of positive and negative indicators and determination that ~~are estimated~~the deferred tax assets would not be realized.

Equity in earnings of unconsolidated affiliates decreased by $7.9 million during the three months ended June 30, 2020 compared to ~~be uncollectable are reflected as a~~the prior-year period. The decrease ~~in rental revenues. The remaining decrease in property operating expenses of the Comparable Properties~~ was primarily due to an increase in the amortization of our inside/outside basis difference related to the three properties that were deconsolidated since the end of the prior year period as well as lower ~~utilities, security~~earnings of our unconsolidated affiliates due to the mandated property closures and ~~payroll expenses. Real estate tax expense~~an increase in estimates of uncollectible rental revenues.

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Comparison of the Six Months EndedJune 30, 2020to the Six Months EndedJune 30, 2019

Revenues

	Total for the Six Months Ended June 30,							Comparable Properties
	2020		2019		Change			Core			Non-core			Deconsolidation			Dispositions			Total Change
Rental revenues	$	281,395	$	376,373	$	(94,978	)	$	(57,541	)	$	(7,454	)	$	(21,231	)	$	(8,752	)	$	(94,978	)
Management, development and leasing fees		3,147		5,109		(1,962	)		(1,962	)		—			—			—			(1,962	)
Other		7,243		9,925		(2,682	)		(1,955	)		(187	)		(303	)		(237	)		(2,682	)
Total revenues	$	291,785	$	391,407	$	(99,622	)	$	(61,458	)	$	(7,641	)	$	(21,534	)	$	(8,989	)	$	(99,622	)

Rental revenues from the Comparable Properties declined due to $1.7 million of rent abatements on past due rents and an estimate of $32.0 million in uncollectible revenues for past due rents related to tenants that are in bankruptcy or are struggling financially, primarily as a result of mandated property closures. Percentage rent declined as a ~~number~~result of lower retail sales due to mandated property closures. Rental revenues were also negatively impacted by rent concessions that were in effect prior to the COVID-19 pandemic for tenants with high occupancy cost levels and tenants that closed in 2019 due to bankruptcy.

Operating Expenses

	Total for the Six Months Ended June 30,									Comparable Properties
	2020			2019			Change			Core			Non-core		Deconsolidation		Dispositions		Total Change
Property operating	$	(42,615	)	$	(55,512	)	$	12,897		$	4,397		$	1,147	$	5,036	$	2,317	$	12,897
Real estate taxes		(36,285	)		(39,067	)		2,782			(53	)		139		1,888		808		2,782
Maintenance and repairs		(17,250	)		(24,074	)		6,824			4,465			920		506		933		6,824
Property operating expenses		(96,150	)		(118,653	)		22,503			8,809			2,206		7,430		4,058		22,503
Depreciation and amortization		(108,565	)		(134,270	)		25,705			12,981			3,447		7,195		2,082		25,705
General and administrative		(36,563	)		(36,434	)		(129	)		(129	)		—		—		—		(129	)
Loss on impairment		(146,918	)		(66,433	)		(80,485	)		(102,857	)		12,438		—		9,934		(80,485	)
Litigation settlement		—			(88,150	)		88,150			88,150			—		—		—		88,150
Other		(400	)		(34	)		(366	)		(366	)		—		—		—		(366	)
Total operating expenses	$	(388,596	)	$	(443,974	)	$	55,378		$	6,588		$	18,091	$	14,625	$	16,074	$	55,378

Property operating expenses at the Comparable Properties ~~experienced reductions in real estate taxes in their respective markets. Maintenance and repairs expenses~~ decreased primarily due to ~~lower janitorial costs.~~

the implementation of comprehensive programs to reduce operating expenses following mandated property closures during the second quarter 2020, including salary reductions, furloughs, reductions-in-force and other operating expense initiatives.

The ~~$7.8 million~~ decrease in depreciation and amortization expense related to the Comparable Properties primarily relates to a ~~decrease~~lower basis in depreciable assets resulting from impairments recorded since the prior year period, as well as a higher amount of write-offs of tenant improvements and intangible lease assets related to store closings in the prior year ~~period, as well as store closures since September 30, 2018.~~

period.

General and administrative expenses ~~decreased primarily~~increased slightly due to ~~reductions in salary and stock compensation expenses, which were~~$7.9 million of costs related to the Company’s negotiations to restructure its corporate-level debt, partially offset by the implementation of comprehensive programs to reduce expenses, including salary reductions, furloughs and reductions-in-force, as well higher legal expenses in the prior year period related to ~~ongoing~~the litigation settlement and ~~no longer capitalizing the cost of leasing personnel for development projects as a result of adopting~~ the new ~~leasing standard in 2019.~~

Insecured credit facility.

For the ~~third quarter of 2019,~~six months ended June 30, 2020, we recognized ~~$135.7~~$146.9 million of loss on impairment of real estate to write down the book value of ~~two~~three malls. InFor the ~~third quarter of 2018, we recognized a $14.6 million loss on impairment of real estate to write down the book value of vacant land. See~~ ~~Note 5~~ ~~to the condensed consolidated financial statements for more information.~~

~~Other Income and Expenses~~

~~Interest expense decreased $4.7 million for the three~~six months ended September 30, 2019 compared to the prior-year period. The decrease was primarily due to a $5.1 million decrease in property-level interest expense, including default interest expense, due to dispositions of encumbered properties during 2019. This decrease was partially offset by an increase of $0.4 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 prior, as well as increases in LIBOR.

Equity in earnings of unconsolidated affiliates decreased by $3.5 million during the three months ended September 30, 2019 compared to the prior-year period. The decrease was primarily due to an increase in depreciation and amortization expense related to the retirement of certain real estate assets 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 three months ended September~~June 30, 2019, we recognized $8.1 million of gain on sales of real estate assets primarily related the sale of a community center, an office building and five outparcels. During the three months ended September 30, 2018, we recognized $7.9 million of gain on sales of real estate assets primarily related to the sale of a community center and five outparcels.

For the three months ended September 30, 2019, we recorded a reduction of $22.7 million to the litigation settlement liability that was recorded in the first quarter of 2019 related to the settlement of a class action lawsuit. See ~~Note 12~~ ~~to the condensed consolidated financial statements for more information.~~

~~Comparison of the Nine Months Ended September 30, 2019 to the Nine Months Ended September 30, 2018~~

~~Revenues~~

Total for the Nine
Months
Ended September 30,

Comparable
Properties

2019 2018 Change Core Non-core Dispositions Change
Rental revenues $ 556,989
$ 620,608
$ (63,619 ) $ (34,158 ) $ (968 ) $ (28,493 ) $ (63,619 )
Management, development and leasing fees 7,325
8,022
(697 ) (697 ) —
—
(697 )
Other 14,344
13,046
1,298
1,316
73
(91 ) 1,298
Total revenues $ 578,658
$ 641,676
$ (63,018 ) $ (33,539 ) $ (895 ) $ (28,584 ) $ (63,018 )

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 Nine
Months
Ended September 30,

Comparable
Properties

2019 2018 Change Core Non-core Dispositions Change
Property operating $ (82,856 ) $ (92,357 ) $ 9,501
$ 4,764
$ (4 ) $ 4,741
$ 9,501
Real estate taxes (57,766 ) (61,737 ) 3,971
2,224
140
1,607
3,971
Maintenance and repairs (34,327 ) (36,713 ) 2,386
(18 ) 193
2,211
2,386
Property operating expenses (174,949 ) (190,807 ) 15,858
6,970
329
8,559
15,858

Total for the Nine
Months
Ended September 30,

Comparable
Properties

2019 2018 Change Core Non-core Dispositions Change
Depreciation and amortization (198,438 ) (217,261 ) 18,823
7,890
1,156
9,777
18,823
General and administrative (48,901 ) (47,845 ) (1,056 ) (1,056 ) —
—
(1,056 )
Loss on impairment (202,121 ) (84,644 ) (117,477 ) (151,057 ) (26,532 ) 60,112
(117,477 )
Litigation settlement (65,462 ) —
(65,462 ) (65,462 ) —
—
(65,462 )
Other (41 ) (377 ) 336
336
—
—
336
Total operating expenses $ (689,912 ) $ (540,934 ) $ (148,978 ) $ (202,379 ) $ (25,047 ) $ 78,448
$ (148,978 )

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 $3.3 million was included in property operating expenses for the nine months ended September 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 nine months ended September 30, 2019, we recognized $1.5 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.

The $18.8 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 September 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 nine months ended September 30, 2019, we recognized $202.1~~$66.4 million of loss on impairment of real estate to write down the book value of ~~five~~three malls and one community center. ~~For the nine months ended September 30, 2018, we recognized a $84.6 million loss on impairment of real estate to write down the book value of two malls and vacant land.~~ See Note 5to the condensed consolidated financial statements for more information.

~~For~~

During the ~~nine~~three months ended ~~September~~June 30, 2019, we recognized ~~$65.5~~$88.2 million of litigation settlement expense related to the settlement of a class action lawsuit. See Note 12 to the condensed consolidated financial statements for more information.

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Other Income and Expenses

Interest and other income increased $2.4 million during the six months ended June 30, 2020 compared to the prior-year period primarily due to additional interest income received related to a mortgage note receivable that was retired in the current year and interest income related to the U.S. Treasury securities that we invested in using a portion of the $280 million we drew on our secured line of credit in March 2020 to increase liquidity and preserve financial flexibility in light of the uncertainty surrounding the impact of the COVID-19 pandemic ..

Interest expense decreased ~~$6.2~~$6.9 million ~~for the nine months ended September 30, 2019~~ compared to the prior-year period. The decrease was primarily due to a ~~$11.0~~$5.6 million decrease in property-level interest expense ~~including default~~from the deconsolidation of three encumbered properties since the prior-year period and $5.3 million lower interest expense due to ~~dispositions~~the continued amortization of ~~encumbered properties during 2019~~non-recourse property-level loans and ~~a paydown in May 2019~~the retirement of ~~a portion of the loan that is secured by The Outlet Shoppes at Laredo. This decrease was~~two property-level loans. These decreases were partially offset by an increase of ~~$4.7~~$0.8 million in ~~corporate-level~~corporate interest expense primarily due to the increase in the interest rate on the secured credit facility in the second quarter 2020 as a result of notices of default received from the administrative agent under the secured credit facility plus $2.3 million higher ~~variable rates on our corporate-level debt as compared to the prior-year quarter, partially~~default interest expense related to ~~the higher interest rate spread under our new credit facility as compared with the previous credit facility, as well as increases~~property-level nonrecourse loans that are in ~~LIBOR.~~

default.

During the ~~nine~~three months ended ~~September~~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~~property. The remaining principal balance was forgiven.

Equity in earnings of unconsolidated affiliates decreased by ~~$6.4~~$10.2 million during the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 compared to the prior-year period. The decrease was primarily due to an increase in ~~depreciation and~~the amortization ~~expense~~of our inside/outside basis difference related to the ~~retirement~~three properties that were deconsolidated since the end of ~~certain real estate assets and decreases in rental revenues at several malls primarily~~the prior year period as well as lower earnings of our unconsolidated affiliates due to ~~store~~the mandated property closures and ~~rent concessions for tenants with high occupancy cost levels, including tenants~~an increase in ~~bankruptcy.~~

~~During the nine months ended September 30, 2019, we recognized $13.8 million~~estimates of ~~gain on sales of real estate assets primarily related to the sale of two centers, a hotel, an office building and six outparcels. During the nine months~~

~~ended September 30, 2018, we recognized $16.0 million of gain on sales of real estate assets primarily related to the sale of two community centers and 10 outparcels.~~

uncollectible rental revenues.

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 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, amortization of above and below market lease intangibles and write-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 these criteria. Properties excluded from the same-center pool that would otherwise meet these 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. Asheville Mall, Burnsville Center, EastGate Mall, Hickory Point Mall, ~~and~~ Greenbrier Mall and Park Plaza were classified as Lender Malls at ~~September~~June 30, ~~2019.~~

2020.

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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 loss for the ~~three~~three- and ~~nine month periods~~six-month period s ended ~~September~~June 30 ~~2019~~, 20 20 and ~~2018~~201 9 is as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Net loss	$	(72,793	)	$	(29,688	)	$	(212,087	)	$	(76,497	)
Adjustments: ⁽¹⁾
Depreciation and amortization		65,895			73,292			134,384			151,593
Interest expense		59,736			57,351			113,822			116,153
Abandoned projects expense		242			34			400			34
Gain on sales of real estate assets		(2,623	)		(5,524	)		(2,763	)		(6,382	)
Gain on extinguishment of debt		—			—			—			(71,722	)
Loss on impairment		13,274			41,608			146,918			66,433
Litigation settlement		—			—			—			88,150
Income tax provision		16,117			813			16,643			952
Lease termination fees		(1,433	)		(1,073	)		(1,653	)		(2,090	)
Straight-line rent and above- and below-market rent		(236	)		(1,408	)		(2,031	)		(2,453	)
Net loss attributable to noncontrolling interests in other consolidated subsidiaries		487			57			694			132
General and administrative expenses		18,727			14,427			36,563			36,434
Management fees and non-property level revenues		(1,142	)		(4,118	)		(5,320	)		(6,784	)
Operating Partnership's share of property NOI		96,251			145,771			225,570			293,953
Non-comparable NOI		(5,523	)		(12,336	)		(13,222	)		(27,338	)
Total same-center NOI	$	90,728		$	133,435		$	212,348		$	266,615

Three Months Ended
September 30, Nine Months Ended
September 30,
2019 2018 2019 2018
Net loss $ (92,034 ) $ (2,971 ) $ (168,531 ) $ (33,608 )
Adjustments: ⁽¹⁾

Depreciation and amortization 76,608
80,247
228,201
242,014
Interest expense 55,640
59,870
171,793
176,101
Abandoned projects expense 7
38
41
377
Gain on sales of real estate assets (8,056 ) (7,852 ) (14,438 ) (16,562 )
Gain on investments/deconsolidation (11,174 ) —
(11,174 ) (387 )
Gain on extinguishment of debt —
—
(71,722 ) —
Loss on impairment 135,688
14,600
202,121
84,644
Litigation settlement (22,688 ) —
65,462
—
Income tax (benefit) provision 1,670
1,034
2,622
(1,846 )
Lease termination fees (848 ) (783 ) (2,938 ) (9,788 )
Straight-line rent and above- and below-market lease amortization (1,881 ) 822
(4,334 ) 2,941

Three Months Ended
September 30, Nine Months Ended
September 30,
2019 2018 2019 2018
Net (income) loss attributable to noncontrolling interests in other consolidated subsidiaries (763 ) (24 ) (631 ) 369
General and administrative expenses 12,467
16,051
48,901
47,845
Management fees and non-property level revenues (2,293 ) (2,293 ) (9,077 ) (9,642 )
Operating Partnership's share of property NOI 142,343
158,739
436,296
482,458
Non-comparable NOI (3,292 ) (10,967 ) (14,855 ) (36,409 )
Total same-center NOI $ 139,051
$ 147,772
$ 421,441
$ 446,049

(1)
~~(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 ~~5.9%~~32.0% for the three months ended ~~September~~June 30, ~~2019~~2020 as compared to the prior-year period. The ~~$8.7~~$42.7 million decrease for the three months ended ~~September~~June 30, ~~2019~~2020 compared to the same period in ~~2018~~2019 primarily consisted of a ~~$10.0~~$54.8 million decrease in revenues offset by a ~~$1.3~~$11.3 million decline in operating expenses. Rental revenues declined ~~$12.5~~$50.5 million during the quarter primarily ~~due~~related to ~~the impact~~$37.8 million of estimated uncollectible revenues related to tenants in bankruptcy or struggling financially and $2.4 million of rent abatements. Same-center NOI was also negatively impacted by store closures and rent concessions that were in effect prior to the COVID-19 pandemic for tenants with high occupancy cost levels ~~including~~and tenants that ~~declared~~closed in 2019 due to bankruptcy. ~~The $1.3 million decrease in operating expenses includes a decrease in property operating expenses of $1.1 million.~~

Same-center NOI decreased ~~5.5%~~20.3% for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 as compared to the prior-year period. The ~~$24.6~~$54.3 million decrease for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 compared to the same period in ~~2018~~2019 primarily consisted of a ~~$34.4~~$66.0 million decrease in revenues ~~partially~~ offset by ~~an $9.8~~a $11.7 million decline in operating expenses. Rental revenues declined ~~$41.7~~$64.5 million during the ~~year~~quarter primarily ~~due~~related to ~~the impact~~$41.0 million of estimated uncollectible revenues related to tenants in bankruptcy or struggling financially and $2.4 million of rent abatements. Same-center NOI was also negatively impacted by store closures and rent concessions that were in effect prior to the COVID-19 pandemic for tenants with high occupancy cost levels ~~including~~and tenants that ~~declared~~closed in 2019 due to bankruptcy. The decrease in rental revenues includes the impact of $1.1 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 $9.8 million decrease in operating expenses was primarily driven by bad debt expense of $3.7 million in the prior-year period. Maintenance and repair expenses decreased $1.0 million and real estate tax expenses decreased $2.7 million.

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.

In response to local and state mandated closures due to the COVID-19 pandemic, our entire portfolio, except for a few properties, closed. All but one of our mall properties have re-opened and we have implemented strict procedures and guidelines for our employees, tenants and property visitors based on CDC and other health agency recommendations.

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percentage of total revenues, excluding tenants in bankruptcy, we anticipate collecting over 60% of related rent for the second quarter, with the remainder expected to be deferred or abated. We remain in negotiations with tenants and are unable to predict the outcome of those discussions. As we finalize negotiations, rent collections as a percentage of billed cash-based rents have increased with certain past-due amounts being paid, resulting in an overall collection rate April through July of over 54%. As of early August 2020, July rent collections are currently estimated at 49%; however, we anticipate an improvement in the collection rate as we finalize negotiations with retailers and additional past due amounts are collected. We estimate that we will defer $17.0 million, at our share, of rents that were billed for April, May and June 2020 based on agreements that have been executed or are in active negotiation. We continue to assess rent relief requests from our tenants but are unable to predict the resolution or impact of these discussions.

Year-to-date, twelve national tenants have declared bankruptcy, including major tenants such as J.C. Penney, Ascena Retail Group, Stage Stores and GNC. As of June 30, 2020, J.C. Penney and Ascena Retail Group, Inc. represented $18.5 million in gross annual revenue and comprised 6.1 million square feet. The remaining ten tenants in bankruptcy represented approximately $22.3 million in gross annual revenue and comprised 1.1 million square feet. The majority of these have announced some store closures but are expected to reorganize and continue to operate.

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 ~~September~~June 30, ~~2019~~2020 and 2019. The Outlet Shoppes at Laredo will be classified as a stabilized mall starting January 1, 2021.~~2018~~.


(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:

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. Asheville Mall, Burnsville Center, EastGate Mall, Hickory Point Mall, ~~and~~ Greenbrier Mall and Park Plaza were classified as Lender Malls as of ~~September~~June 30, ~~2019~~,2020, and ~~Acadiana~~Greenbrier Mall, Hickory Point Mall and ~~Cary Towne~~Triangle Town Center were classified as Lender Malls as of ~~September~~June 30, ~~2018~~.2019. 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.~~properties.

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 ~~September~~June 30, ~~2019. Hickory Point Mall was classified as a Repositioning Mall as of~~ ~~September~~2020 and June 30, ~~2018~~2019..


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~~ ~~September 30, 2019. Triangle Town Center was classified as a Minority Interest Mall as of~~ ~~September 30, 2018~~.

We derive the majority of our total revenues from the mall properties. The sources of our total revenues by property type were as follows:

	Six Months Ended June 30,
	2020			2019
Malls		90.9	%		88.4	%
Other Properties		9.1	%		11.6	%

Nine Months Ended September 30,
2019 2018
Malls 91.6% 91.2%
Other properties 8.4% 8.8%

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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~~Due to temporary mall and store closures that occurred during the second quarter 2020, the majority of CBL’s tenants did not report sales for the full reporting period. As a result, CBL is not able to provide a ~~comparison~~complete measure of ~~our~~sales per square foot for the trailing twelve months ended June 30, 2020. Stabilized mall same-center sales per square ~~foot:~~

Twelve Months Ended September 30,
2019 2018 % Change
Stabilized mall same-center sales per square foot $383 $379 1.1%
Stabilized mall sales per square foot $383 $378 1.3%

foot for the twelve months ended June 30, 2019 were $383.

Occupancy

Our portfolio occupancy is summarized in the following table ⁽¹⁾:

	As of June 30,
	2020			2019
Total portfolio		88.1	%		90.2	%
Malls:
Total Mall portfolio		86.6	%		88.1	%
Same-center Malls		86.6	%		88.3	%
Stabilized Malls		86.8	%		88.3	%
Non-stabilized Malls ⁽²⁾		79.2	%		78.0	%
Other Properties:
Associated centers		90.5	%		96.3	%
Community centers		95.2	%		97.6	%

As of September 30,
2019 2018
Total portfolio 90.5% 92.0%
Malls:
Total mall portfolio 88.7% 90.5%
Same-center malls 88.7% 90.7%
Stabilized malls 88.8% 90.8%
Non-stabilized malls⁽²⁾
83.8% 73.6%
Other properties: 96.4% 96.9%
Associated centers 96.3% 97.2%
Community centers 96.3% 96.8%

(1)
~~(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)
~~(2)~~	Represents occupancy for The Outlet Shoppes at Laredo as of ~~September~~June 30, ~~2019~~2020 and 2019.~~2018~~.

~~Bankruptcy-related store closures impacted third~~

Leasing

Leasing activity for the quarter ~~occupancy by approximately 409 basis points~~was muted as we shifted our focus to negotiating with existing tenants. To-date we have completed or

~~722,000 square feet. See~~ ~~Leasing~~ ~~below for an update~~ are finalizing negotiations with retailers representing the majority of second quarter rent. These agreements generally include flexible terms on ~~our progress in replacing these stores.~~

~~Leasing~~

second quarter rent to certain retailers that require assistance, such as rent deferrals, while at the same time preserving current and future income.

The following is a summary of the total square feet of leases signed in the three- and ~~nine-month~~six-month periods ended ~~September 30,~~June, 2020 and 2019:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Operating portfolio:
New leases		141,751		256,648		420,117		528,461
Renewal leases		133,671		461,251		766,431		1,153,378
Development portfolio:
New leases		—		54,702		7,929		204,439
Total leased		275,422		772,601		1,194,477		1,886,278

Three Months Ended
September 30, Nine Months Ended
September 30,
2019 2018 2019 2018
Operating portfolio:
New leases 239,645
154,968
768,106
763,104
Renewal leases 472,636
590,923
1,626,014
1,907,874
Development portfolio:
New leases 1,175
87,293
205,614
190,951
Total leased 713,456
833,184
2,599,734
2,861,929

Average annual base rents per square foot are based on contractual rents in effect as of ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, 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~~ type:

Table of Contents⁽¹⁾:

	June 30,
	2020		2019
Malls ⁽¹⁾:
Same-center Stabilized Malls	$	32.14	$	32.50
Stabilized Malls		32.24		32.48
Non-stabilized Malls ⁽²⁾		24.74		24.65
Other Properties ⁽³⁾:		15.72		15.36
Associated centers		14.32		13.85
Community centers		16.97		16.65
Office buildings		19.16		17.94

As of September 30,
2019 2018
Malls: $ 31.94
$ 32.69
Same-center stabilized malls 31.94
32.79
Stabilized malls 32.05
32.77
Non-stabilized malls⁽²⁾
24.12
25.48
Other properties: 15.40
15.16
Associated centers 13.75
13.68
Community centers 16.99
16.44
Office buildings 18.87
18.01

(1)
~~(1)~~	~~As noted above, excluded~~ Excluded properties are not included.

(2)	Represents average annual base rents for The Outlet Shoppes at Laredo as of June 30, 2020 and 2019.

(3)	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~~ ~~September 30, 2019~~ ~~and~~ ~~2018~~.

Results from new and renewal leasing of comparable small shop space of less than 10,000 square feet during the ~~three and nine~~six month ~~periods~~period ended ~~September~~June 30, ~~2019~~2020 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
Quarter:
All Property Types ⁽²⁾		77,127	$	28.55	$	27.00		(5.4	)%	$	28.09		(1.6	)%
Stabilized Malls		51,365		32.19		30.91		(4.0	)%		32.46		0.8	%
New leases		2,490		47.45		54.12		14.1	%		57.37		20.9	%
Renewal leases		48,875		31.42		29.73		(5.4	)%		31.19		(0.7	)%

Year-to-Date:
All Property Types ⁽²⁾		537,651	$	28.06	$	25.75		(8.2	)%	$	26.22		(6.6	)%
Stabilized Malls		496,089		28.21		25.93		(8.1	)%		26.41		(6.4	)%
New leases		51,694		23.67		29.42		24.3	%		30.89		30.5	%
Renewal leases		444,395		28.74		25.53		(11.2	)%		25.88		(10.0	)%

Property Type 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⁾
423,779
$ 35.97
$ 33.44
(7.0 )% $ 33.98
(5.5 )%
Stabilized malls 396,998
36.82
33.96
(7.8 )% 34.49
(6.3 )%
  New leases 64,537
35.15
38.79
10.4 % 41.79
18.9 %
  Renewal leases 332,461
37.15
33.03
(11.1 )% 33.07
(11.0 )%

Year-to-Date:
All Property Types ⁽²⁾
1,406,372
$ 37.28
$ 34.24
(8.2 )% $ 34.82
(6.6 )%
Stabilized malls 1,278,943
38.20
35.01
(8.4 )% 35.58
(6.9 )%
  New leases 158,382
44.00
45.40
3.2 % 48.07
9.3 %
  Renewal leases 1,120,561
37.38
33.54
(10.3 )% 33.81
(9.6 )%

(1)
~~(1)~~	Average gross rent does not incorporate allowable future increases for recoverable common area expenses.

(2)
~~(2)~~	Includes stabilized malls, associated centers, community centers and office buildings.

Spreads on new leases for stabilized malls increased 18.9% and renewal leases were signed at an average of 11.0% lower than the expiring rent. This quarter’s results demonstrate a significant improvement from recent past quarters.

New and renewal leasing activity of comparable small shop space of less than 10,000 square feet 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 2020:
New		68		232,843		7.50	$	29.33	$	30.88	$	23.98	$	5.35		22.3	%	$	6.90		28.8	%
Renewal		320		1,022,993		2.64		27.58		27.81		32.03		(4.45	)	(13.9	)%		(4.22	)	(13.2	)%
Commencement 2020 Total		388		1,255,836		3.49		27.90		28.38		30.66		(2.76	)	(9.0	)%		(2.28	)	(7.4	)%


Commencement 2021:
Renewal		45		158,020		3.27		34.89		35.78		34.33		0.56		1.6	%		1.45		4.2	%
Commencement 2021 Total		45		158,020		3.27		34.89		35.78		34.33		0.56		1.6	%		1.45		4.2	%

Total 2020/2021		433		1,413,856		3.47	$	28.68	$	29.21	$	31.07	$	(2.39	)	(7.7	)%	$	(1.86	)	(6.0	)%

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:
New 99
204,992
7.21
$ 44.12
$ 46.56
$ 44.65
$ (0.53 ) (1.2 )% $ 1.91
4.3 %
Renewal 485
1,537,015
2.72
30.65
30.88
35.11
(4.46 ) (12.7 )% (4.23 ) (12.0 )%
Commencement 2019 Total 584
1,742,007
3.48
32.23
32.72
36.23
(4.00 ) (11.0 )% (3.51 ) (9.7 )%

Commencement 2020:
New 11
29,737
8.46
44.93
48.74
32.24
12.69
39.4 % 16.50
51.2 %
Renewal 97
301,448
3.24
32.65
33.21
33.96
(1.31 ) (3.9 )% 0.75
(2.2 )%
Commencement 2020 Total 108
331,185
3.77
33.75
34.60
33.80
(0.05 ) 0.1 % 0.80
2.4 %

Total 2019/2020 692
2,073,192
3.53
$ 32.48
$ 33.02
$ 35.84
$ (3.36 ) (9.4 )% $ (2.82 ) (7.9 )%

Across our portfolio, we are diversifying the uses at our centers, which will provide a more stable base of revenues. Overall, 74% of new mall leasing and 60% of total mall leasing, including renewals, this year has been non-apparel. Adding non-retail and mixed uses is another focus and we are currently under construction, have agreements executed or are in active negotiation on two multi-family projects, 15 entertainment operations, including two casinos, 9 hotels, 31 restaurants, eight fitness centers, eight medical uses, two self-storage facilities and several other non-retail uses. The market dominant locations of our properties are driving this strong interest. These uses complement our existing tenant base, drive new traffic to our properties and strengthen the overall portfolio.

LIQUIDITY AND CAPITAL RESOURCES

As of ~~September~~June 30, ~~2019,~~2020, we had ~~$304.8~~$275.8 million available in cash and U.S. Treasury securities and we had $675.9 million outstanding on our secured credit facility leaving ~~$380.2~~$4.3 million of availability, after considering outstanding letters of credit of ~~$4.8 million, as well as unrestricted cash and cash equivalents of $34.6~~$1.3 million. Our total pro rata share of debt at ~~September~~June 30, ~~2019~~2020 was ~~$4.3~~$4.5 billion. ~~Our consolidated unencumbered properties generated approximately 26.5%~~

Table of ~~total consolidated NOI for the nine months ended September 30, 2019 (excluding dispositions and Excluded Malls).~~

Contents

In ~~January 2019,~~February 2020, we ~~completed the sale of Cary Towne Center and the transfer of Acadiana Mall and recognized a $71.7 million gain on extinguishment of the related $163.5 million in debt.~~

~~In January 2019, we entered into a new $1.185 billion senior~~utilized our secured credit facility which included a fully-funded $500 million term loan and a revolving line of credit with a borrowing capacity of $685 million. The facility replaced all of the Company's prior unsecured bank facilities, which included three unsecured term loans with an aggregate balance of $695 million and three unsecured revolving lines of credit with an aggregate capacity of $1.1 billion. At closing, we utilized the line of credit to reduce the principal balance of the unsecured term loans from $695 million to $500 million. The facility matures in July 2023 and bears interest at a variable rate of LIBOR plus 2.25%. The Operating Partnership is required to pay an annual facility fee on the line of credit balance, to be paid quarterly, which ranges from 0.25% to 0.35%, based on the unused capacity of the line of credit. The principal balance on the term loan will be reduced by $35 million per year in quarterly installments.

~~In April 2019, the loan~~off two loans secured by ~~Volusia~~Parkway Place and Valley View Mall ~~was refinanced to increase the principal balance to $50.0~~totaling $84.5 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~~Also, we closed on a new loan were used to retire the $41.0 million existing loan. During the three months ended June 30, 2019, we sold three properties for a total gross sales price of $32.2 million. The majority of the excess sales proceeds were used to reduce the outstanding balance on our secured line of credit. The remaining portion of those proceeds related to the Honey Creek Mall sale, which were combined with the net proceeds from the refinancing of the loan secured by Volusia Mall to retire the $23.5 million loan 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 ~~Laredo~~Atlanta – Phase II in the amount of $4.7 million, with an interest rate of LIBOR plus 2.5% and a maturity date of November 2023. Proceeds were used to ~~May 2021.~~retire the $4.4 million existing loan. In ~~conjunction~~March 2020, we drew $280.0 million on our secured line of credit to increase liquidity and preserve financial flexibility in light of the uncertainty surrounding the impact of the COVID-19 pandemic. We purchased $1 54.2 million , including accrued interest, of U.S. Treasury securities with a portion of the ~~amendment, a payment~~borrowings on our secured line of ~~$10.8 million was made~~credit .

In response to the COVID-19 pandemic, we implemented comprehensive programs to halt all non-essential expenditures, to reduce operating and overhead expenses and to reduce, defer or suspend capital expenditures, including redevelopment investments. These programs include a temporary 50% reduction to the compensation of our Chairman of the Board, our CEO and our President as well as independent director fees, a temporary 20% reduction to the compensation of our other named executive officers, salary reductions to all staff, a broad-based furlough program and 2020 capital expenditure reductions or deferrals estimated in the range of $60.0 million to $80.0 million.

~~outstanding~~While we have paused several major projects, we are pursuing capital lite solutions for backfilling our remaining available anchors, including joint venture partnerships, favorable lease structures and third-party arrangements – all of which benefit our portfolio while preserving capital. Additionally, we were able to achieve debt service payment deferrals for a portion of our secured loans. Securitized lenders in general have shown minimal flexibility in amending loan payments.

We have addressed nearly all our major debt maturities for 2020 and are in discussions with existing lenders for certain 2021 secured loan maturities. We have no significant unsecured debt maturities until December 2023. We are being proactive to determine the best strategies for addressing these future maturities and significantly reducing leverage.

We have engaged Weil, Gotshal & Manges LLP and Moelis & Company LLC (the “Advisors”) to assist us in exploring several alternatives to reduce overall leverage and interest expense and to extend the maturity of our debt including (i) the senior secured credit facility, which includes a revolving facility with a balance of $675.9 million and a term loan with a balance of $447.5 million as of June 30, 2020, that matures in July 2023 and (ii) the ~~loan~~Notes with balances of $450.0 million, $300.0 million, and $625.0 million, as of June 30, 2020, that mature in December 2023, October 2024 and December 2026, respectively, as well as the cumulative unpaid dividends on our preferred stock and the special common units of limited partnership interest in the Operating Partnership. The Advisors commenced discussions in May 2020 with advisors to ~~$43.0 million. The noncontrolling interest partner in The Outlet Shoppes at Laredo joint venture funded its 35% share~~certain holders 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~~Notes and ~~closed in May 2019 on a five-year $6.5 million construction loan which bears interest at~~ the ~~greater of 5.25% or LIBOR plus 2.80% to fund the project.~~

~~In April 2019, we entered into a settlement agreement and release with respect to a class action lawsuit. Under the terms~~credit committee of the ~~settlement agreement, we did not pay any dividends to holders of~~senior secured credit facility. We may pursue a comprehensive capital structure solution that will address our ~~common shares payable~~funded indebtedness and outstanding equity interests that may result in the ~~third~~reorganization of the Company.

As discussed in “ Note 8 – Mortgage and ~~fourth quarters of 2019. The settlement agreement does not restrict our ability to declare dividends payable in 2020 or in subsequent years. See~~ Other Indebtedness, Net~~Note 12~~ ” to the condensed consolidated financial statements, ~~for more information related~~we elected to not make the $11.8 million interest payment due and payable on June 1, 2020, with respect to the ~~settlement.~~

~~During~~5.25% senior unsecured notes due 2023 (the “2023 Notes”) (the “2023 Notes Interest Payment”). We also elected to not make the ~~three months ended September 30, 2019,~~$18.6 million interest payment due and payable on June 15, 2020, with respect to our 5.95% senior unsecured notes due 2026 (the “2026 Notes”) (the “2026 Notes Interest Payment”). We did not make either the ~~Company sold~~2023 Notes Interest Payment or the 2026 Notes Interest Payment by the last day of the respective 30-day grace periods that were provided for in the indenture governing the 2023 Notes and the 2026 Notes. Our failure to make the 2023 Notes Interest Payment and the 2026 Notes Interest Payment during the applicable grace periods constituted an “event of default” with respect to each of the 2023 Notes and the 2026 Notes. The event of default caused by our failure to make the 2023 Notes Interest Payment and the 2026 Notes Interest Payment resulted in a ~~25% interest~~cross default under the secured credit facility. On August 5, 2020, we made the 2023 Notes Interest Payment to the holders of the 2023 Notes and the 2026 Notes Interest Payment to the holders of the 2026 Notes. Accordingly, from and after such payment, the nonpayment of each of the 2023 Notes Interest Payment and the 2026 Notes Interest Payment no longer constitutes (i) an “event of default” under the indenture governing the 2023 Notes and the 2026 Notes that occurred and is continuing or (ii) to the extent provided in ~~The Outlet Shoppes at El Paso to its existing joint venture partner, five properties, two outparcels~~the Bank Forbearance Agreement, an “event of default” under the secured credit facility. See the section below titled Financial Covenants and ~~a tract of land~~ Restrictionsfor a ~~total gross sales price~~discussion regarding the violation of $87.8 million. After the joint venture partner’s assumption of $18.5 million of debt on The Outlet Shoppes at El Paso, the aggregate net sales proceeds of $68.1 million were used to reduce the outstanding balance oncertain covenants under our secured ~~line of credit. Following~~credit facility, the ~~sale of~~2023 Notes and the ~~25% interest in The Outlet Shoppes at El Paso, the Company and its joint venture partner both own a 50% interest.~~

Subsequent to September 30, 2019, the Company contributed land to its 50/50 joint venture, Vision-CBL Hamilton Place, LLC, and closed on a loan, with a borrowing capacity of $16.8 million, for the construction of an Aloft by Marriott hotel.

2026 Notes.

We derive the 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 cash on hand and our ~~debt and equity sources and the availability under our credit facilities and proceeds from dispositions~~investment in U.S. Treasury securities will, for the foreseeable future, provide adequate liquidity to meet our cash ~~needs.~~needs assuming we continue to operate as a going concern within twelve months of the date our condensed consolidated financial statements are issued. 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.

Table of Contents

Cash Flows - Operating, Investing and Financing Activities

There was ~~$63.3~~$150.1 million of cash, cash equivalents and restricted cash as of ~~September~~June 30, ~~2019,~~2020, an increase of ~~$5.7~~$91.1 million from December 31, ~~2018.~~2019. Of this amount, ~~$34.6~~$123.4 million was unrestricted cash and cash equivalents as of ~~September~~June 30, ~~2019.~~

2020. Also, at June 30, 2020, we had $152.4 million in U.S. Treasuries that are scheduled to mature between April 2021 and June 2021.

Our net cash flows are summarized as follows (in thousands):

	Six Months Ended June 30,
	2020			2019			Change
Net cash provided by operating activities	$	38,370		$	126,032		$	(87,662	)
Net cash provided by (used in) investing activities		(191,379	)		27,104			(218,483	)
Net cash provided by (used in) financing activities		244,079			(165,132	)		409,211
Net cash flows	$	91,070		$	(11,996	)	$	103,066

Nine Months Ended
September 30,
2019 2018 Change
Net cash provided by operating activities $ 225,243
$ 280,407
$ (55,164 )
Net cash provided by (used in) investing activities 55,870
(14,325 ) 70,195
Net cash used in financing activities (275,369 ) (278,109 ) 2,740
Net cash flows $ 5,744
$ (12,027 ) $ 17,771

Cash Provided by Operating Activities

Cash provided by operating activities decreased ~~$55.2~~$87.6 million primarily due to a decline in cash payments of rental revenues ~~related~~from tenants due to ~~sold properties and a decline~~the closure of most of our malls in ~~rental~~response to government mandates that began in March. Rental revenues ~~related~~also decreased due to store closures and rent concessions for tenants with high occupancy cost levels, including tenants that closed in ~~bankruptcy.~~

2019 and 2020 due to bankruptcy prior to the government mandated closures, as well as a decline in rental revenues related to dispositions.

Cash Provided by (Used in) Investing Activities

~~Cash flows~~

Net cash used in investing activities for 2020 was primarily related to the purchase of $153.2 million of U.S. Treasury securities using a portion of the $280.0 million that we drew on our secured line of credit. We also expended $36.4 million on additions to real estate assets, primarily related to redevelopment projects. Net cash provided by investing activities ~~increased $70.2 million compared to~~in the prior ~~year.~~ year period related to $69.2 million of proceeds from dispositions of properties, which was partially offset by $51.1 million of additions to real estate assets.

Cash Provided by (Used in) Financing Activities

The net cash inflow for ~~2019 was~~2020 is primarily ~~related~~due to ~~a greater amount~~the $280.0 million draw on our secured credit facility in order to increase liquidity and preserve financial flexibility in light of ~~proceeds from sales in~~ the ~~current period combined with lower cash~~uncertainty surrounding the impact of the COVID-19 pandemic. Additionally, there were no common or preferred stock dividends paid for ~~capital expenditures~~the six months ended June 30, 2020, as ~~we continue~~compared to focus on controlling such expenditures. These increases were partially offset by a lower amount of distributions from unconsolidated affiliates in 2019 as we received a distribution from an unconsolidated affiliate in 2018 related to excess proceeds from the refinancing of a mortgage loan.

~~Cash Used in Financing Activities~~

~~Cash flows used in financing activities decreased $2.7~~$25.9 million in ~~2019 compared~~dividends paid to ~~the prior year. Although the reduction in our~~holders of common stock ~~dividend resulted in savings~~and $22.4 million in dividends ~~and distributions~~ paid to ~~common shareholders and~~holders of preferred stock during the noncontrolling interest holders in the Operating Partnership, this was offset by the additional principal payments on debt and the payment of deferred financing costs, which were mostly related to our new secured credit facility.six months ended June 30, 2019.

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 8to 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 secured credit facility as of ~~September~~June 30, ~~2019.~~2020.

Table of Contents

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):

June 30, 2020:	Consolidated			Noncontrolling Interests			Unconsolidated Affiliates			Total			Weighted- Average Interest Rate ⁽¹⁾
Fixed-rate debt:
Non-recourse loans on operating Properties ⁽²⁾	$	1,230,227		$	(30,377	)	$	618,902		$	1,818,752			4.80	%
Recourse loans on operating Properties ⁽³⁾		—			—			9,360			9,360			3.74	%
Senior unsecured notes due 2023 ⁽⁴⁾		448,139			—			—			448,139			5.25	%
Senior unsecured notes due 2024 ⁽⁵⁾		299,964			—			—			299,964			4.60	%
Senior unsecured notes due 2026 ⁽⁶⁾		617,911			—			—			617,911			5.95	%
Total fixed-rate debt		2,596,241			(30,377	)		628,262			3,194,126			5.07	%
Variable-rate debt:
Recourse loans on operating Properties		41,500			—			68,936			110,436			2.68	%
Construction loans		27,215			—			48,779			75,994			3.13	%
Secured line of credit		675,925			—			—			675,925			2.42	%
Secured term loan		447,500			—			—			447,500			2.42	%
Total variable-rate debt		1,192,140			—			117,715			1,309,855			2.49	%
Total fixed-rate and variable-rate debt		3,788,381			(30,377	)		745,977			4,503,981			4.32	%
Unamortized deferred financing costs		(14,347	)		291			(2,769	)		(16,825	)
Total mortgage and other indebtedness, net	$	3,774,034		$	(30,086	)	$	743,208		$	4,487,156

December 31, 2019:	Consolidated			Noncontrolling Interests			Unconsolidated Affiliates			Total			Weighted- Average Interest Rate ⁽¹⁾
Fixed-rate debt:
Non-recourse loans on operating Properties ⁽²⁾	$	1,330,561		$	(30,658	)	$	623,193		$	1,923,096			4.88	%
Recourse loans on operating Properties ⁽³⁾		—			—			10,050			10,050			3.74	%
Senior unsecured notes due 2023 ⁽⁴⁾		447,894			—			—			447,894			5.25	%
Senior unsecured notes due 2024 ⁽⁵⁾		299,960			—			—			299,960			4.60	%
Senior unsecured notes due 2026 ⁽⁶⁾		617,473			—			—			617,473			5.95	%
Total fixed-rate debt		2,695,888			(30,658	)		633,243			3,298,473			5.10	%
Variable-rate debt:
Recourse loans on operating Properties		41,950			—			69,046			110,996			4.13	%
Construction loans		29,400			—			35,362			64,762			4.45	%
Secured line of credit		310,925			—			—			310,925			3.94	%
Secured term loan		465,000			—			—			465,000			3.94	%
Total variable-rate debt		847,275			—			104,408			951,683			4.00	%
Total fixed-rate and variable-rate debt		3,543,163			(30,658	)		737,651			4,250,156			4.86	%
Unamortized deferred financing costs		(16,148	)		318			(2,851	)		(18,681	)
Total mortgage and other indebtedness, net	$	3,527,015		$	(30,340	)	$	734,800		$	4,231,475

September 30, 2019 Consolidated Noncontrolling
Interests Unconsolidated
Affiliates Total
Weighted-
Average
Interest
Rate ⁽¹⁾
Fixed-rate debt:
  Non-recourse loans on operating
properties ⁽²⁾
$ 1,495,896
$ (74,486 ) $ 555,192
$ 1,976,602
4.89%
Recourse loan on operating property⁽³⁾
—
—
10,050
10,050
3.74%
  Senior unsecured notes due 2023 ⁽⁴⁾
447,775
—
—
447,775
5.25%
  Senior unsecured notes due 2024 ⁽⁵⁾
299,958
—
—
299,958
4.60%
  Senior unsecured notes due 2026 ⁽⁶⁾
617,260
—
—
617,260
5.95%
Total fixed-rate debt 2,860,889
(74,486 ) 565,242
3,351,645
5.10%
Variable-rate debt:

  Recourse loans on operating properties 56,178
—
82,995
139,173
4.58%
  Construction loans 21,061
—
—
21,061
4.99%
  Secured line of credit ⁽⁷⁾
304,769
—
—
304,769
4.35%
  Secured term loan ⁽⁷⁾
473,750
—
—
473,750
4.35%
Total variable-rate debt 855,758
—
82,995
938,753
4.40%
Total fixed-rate and variable-rate debt 3,716,647
(74,486 ) 648,237
4,290,398
4.95%
  Unamortized deferred financing costs (17,640 ) 516
(2,607 ) (19,731 )
Mortgage and other indebtedness, net $ 3,699,007
$ (73,970 ) $ 645,630
$ 4,270,667

December 31, 2018 Consolidated Noncontrolling
Interests Unconsolidated
Affiliates Total
Weighted-
Average
Interest
Rate ⁽¹⁾
Fixed-rate debt:

  Non-recourse loans on operating properties ⁽²⁾
$ 1,783,097
$ (94,361 ) $ 540,068
$ 2,228,804
5.01%
  Recourse loans on operating properties ⁽³⁾
—
—
10,605
10,605
3.74%
  Senior unsecured notes due 2023 ⁽⁴⁾
447,423
—
—
447,423
5.25%
  Senior unsecured notes due 2024 ⁽⁵⁾
299,953
—
—
299,953
4.60%

December 31, 2018 Consolidated Noncontrolling
Interests Unconsolidated
Affiliates Total
Weighted-
Average
Interest
Rate ⁽¹⁾
  Senior unsecured notes due 2026 ⁽⁶⁾
616,635
—
—
616,635
5.95%
Total fixed-rate debt 3,147,108
(94,361 ) 550,673
3,603,420
5.16%
Variable-rate debt:

Recourse loans on operating properties 68,607
—
96,012
164,619
4.91%
  Construction loan 8,172
—
3,892
12,064
5.20%
  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 955,751
—
99,904
1,055,655
4.28%
Total fixed-rate and variable-rate debt 4,102,859
(94,361 ) 650,577
4,659,075
4.96%
  Unamortized deferred financing costs (15,963 ) 804
(2,687 ) (17,846 )
  Liabilities related to assets held for sale ⁽⁸⁾
(43,716 ) —
—
(43,716 )
Mortgage and other indebtedness, net $ 4,043,180
$ (93,557 ) $ 647,890
$ 4,597,513

(1)
~~(1)~~	Weighted-average interest rate includes the effect of debt premiums and discounts but excludes amortization of deferred financing costs.

(2)
~~(2)~~	An unconsolidated affiliate has an interest rate swap on a notional amount outstanding of ~~$43,938~~$43,199 as of ~~September~~June 30, ~~2019~~2020 and ~~$44,863~~$43,623 as of December 31, ~~2018~~2019 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)
~~(3)~~	The unconsolidated affiliate has an interest rate swap on a notional amount outstanding of $9,360 as of June 30, 2020 and $10,050 as of ~~September 30, 2019~~ ~~and $10,605 as of~~ December 31, ~~2018~~2019 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)
~~(4)~~	The balance is net of an unamortized discount of ~~$2,225~~$1,861 and ~~$2,577~~$2,106 as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018~~,2019, respectively.

(5)
~~(5)~~	The balance is net of an unamortized discount of ~~$42~~$36 and ~~$47~~$40 as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018~~,2019, respectively.

(6)
~~(6)~~	The balance is net of an unamortized discount of ~~$7,740~~$7,090 and ~~$8,365~~$7,527 as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018~~,2019, respectively.


~~(7)~~	~~We replaced our unsecured lines of credit and unsecured term loans in January 2019 with a new secured senior credit facility.~~

~~(8)~~

Table of Contents

~~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 ~~4.2~~3. 4 years and ~~4.0~~3.9 years at ~~September~~June 30 ~~2019~~, 2020 and December 31, ~~2018,~~201 9 , respectively. The weighted-average remaining term of our pro rata share of fixed-rate debt was ~~4.4~~3. 6 and ~~4.8~~4. 1 years at ~~September~~June 30 ~~2019~~, 2020 and December 31, ~~2018,~~201 9 , respectively.

As of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, our pro rata share of consolidated and unconsolidated variable-rate debt represented ~~22.0%~~29.2% and ~~22.8%~~22.5%, respectively, of our total pro rata share of debt.

See ~~Note 8~~ 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 September 30, 2019, as well as activity related to consolidated property loans.

~~See~~ Note 7to the condensed consolidated financial statements for information concerning activity related to unconsolidated affiliates.

Credit Ratings

~~The~~

During the quarter ended June 30, 2020, Fitch Ratings, Moody’s Investors Service and S&P Global Ratings terminated their coverage of the Operating Partnership's ~~credit ratings of its~~ unsecured long-term ~~indebtedness were~~indebtedness.

Senior Unsecured Notes

The following presents the Company's compliance with key covenant ratios, as ~~follows~~defined, of the Notes and the senior secured credit facility as of ~~September~~June 30, ~~2019:~~

2020:

Debt Covenant Compliance Ratios ⁽¹⁾	Required	Actual
Total debt to total assets	< 60%		56	%
Secured debt to total assets	< 40%		36	%
Total unencumbered assets to unsecured debt	> 150%		191	%
Consolidated income available for debt service to annual debt service charge	> 1.5x		2.4	x
Minimum debt yield on outstanding balance ⁽²⁾	> 10%		11.1	%


(1)
~~Rating Agency~~	~~Rating~~	~~Outlook~~
~~Fitch~~	B-	~~Negative~~
~~Moody's~~	~~Caa1~~	~~Negative~~
~~S&P~~	~~BB-~~	~~Negative~~ The debt covenant compliance ratios for the secured line of credit, the secured term loan and the senior unsecured notes are defined and computed on the same basis.

(2) The minimum debt yield on outstanding balance debt covenant compliance ratio only applies to the secured credit facility. If the minimum debt yield on outstanding balance is 11.0% or below, then the lender will initiate a cash trap where all cash flow of the properties that secure the credit facility will be held in escrow and may also be used for debt service. If subsequently the minimum debt yield on outstanding balance is greater than 11.0% for two consecutive quarters, then all amounts are released from escrow and returned to the borrower.

Management projects that the Company will maintain compliance with the above covenants through June 30, 2021. Uncertainty in the current economic environment due to the COVID-19 pandemic may significantly impact the judgments regarding estimates and assumptions utilized by management in preparing its projections of future cash flows, which were made using the best information available to management at the time. Actual results could differ materially from management’s projections.

Financial Covenants and Restrictions

As discussed in “ Note 8 – Mortgage and Other Indebtedness, Net ” to the condensed consolidated financial statements, we elected not to make the 2023 Notes Interest Payment and the 2026 Notes Interest Payment. The Operating Partnership did not make either the 2023 Notes Interest Payment or the 2026 Notes Interest Payment by the last day of the respective 30-day grace periods provided for in the indenture governing the 2023 Notes and the 2026 Notes. The Operating Partnership’s failure to make the 2023 Notes Interest Payment and the 2026 Notes Interest Payment during the applicable grace periods constituted an “event of default” with respect to each of the 2023 Notes and the 2026 Notes. We entered into forbearance agreements, as amended, with certain beneficial owners and/or investment advisors or managers of discretionary funds, accounts or other entities for the holders or beneficial owners (the “Holders”) of in excess of 50% of the aggregate principal amount of each of the 2023 Notes and the 2026 Notes. Pursuant to the forbearance agreements, among other provisions, the Holders of the 2023 Notes and the 2026 Notes agreed to forbear from exercising any rights and remedies under the indenture governing the 2023 Notes and the 2026 Notes solely with respect to the respective defaults from the nonpayment of the 2023 Notes Interest Payment and the 2026 Notes Interest Payment. The event of default caused by the Operating Partnership’s failure to make the 2023 Notes Interest Payment and the 2026 Notes Interest Payment resulted in a cross default under the secured credit facility. We entered into a forbearance agreement, as amended, (the “Bank Forbearance Agreement”) with the administrative agent for the lenders under the secured credit facility pursuant to which, among other provisions, the administrative agent, on behalf of itself and the lenders, agreed to forbear from exercising any rights and remedies under the secured credit facility agreement solely with respect to the specified defaults (as defined in the Bank Forbearance Agreement), including the cross-default resulting from the failure to pay the 2023 Notes Interest Payment or the 2026 Notes Interest Payment.

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On August 5, 2020, prior to the expiration of the forbearance periods in the forbearance agreements with the Holders of the 2023 Notes and the 2026 Notes and the Bank Forbearance Agreement, we made the 2023 Notes Interest Payment to the holders of the 2023 Notes and the 2026 Notes Interest Payment to the holders of the 2026 Notes. Accordingly, from and after such payment, the nonpayment of each of the 2023 Notes Interest Payment and the 2026 Notes Interest Payment no longer constitutes (i) an “event of default” under the indenture governing the 2023 Notes and the 2026 Notes that occurred and is continuing or (ii) to the extent provided in the Bank Forbearance Agreement, an “event of default” under the secured credit facility.

On each of May 26, 2020, June 2, 2020, June 16, 2020 and August 6, 2020, we received notices of default and reservation of rights letters from the administrative agent under our secured credit facility asserting that certain defaults and events of default have occurred and continue to exist by reason of our failure to comply with certain restrictive covenants, including the liquidity covenant, in the secured credit facility and resulting from the failure to make the 2023 Notes Interest Payment and the 2026 Notes Interest Payment prior to the expiration of the applicable grace periods. In addition, on August 6, 2020, we received a notice of imposition of base rate and post-default rate letter from the administrative agent under the secured credit facility, which (i) informed us that following an asserted event of default on March 19, 2020, all outstanding loans were converted to base rate loans at the expiration of the applicable interest periods and (ii) seeks payment of approximately $4.8 million related thereto for April through June 2020. The base rate is defined as the highest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) the LIBOR Market Index Rate plus 1.0%, plus 1.25%. The base rate on July 1, 2020 was 4.50%. The administrative agent also informed us that from and after August 6, 2020, interest will accrue on all outstanding obligations at the post-default , which is equal to the rate that otherwise would be in effect plus 5.0%. The post-default rate at the time of notification was 9.50% .. We disagree with the assertions made by the administrative agent as to the imposition of the base rate and post-default rate interest and related matters, and intend to vigorously defend any such claims. As of the date of this report, the lenders under the secured credit facility have not accelerated the outstanding amount due and payable on the loans or commenced foreclosure proceedings, but they may seek to exercise one or more of these remedies in the future. In addition, as a result of the events of default asserted by the administrative agent in such letters, the administrative agent may deny our request for future LIBOR interest periods, which would result in an increase in annual interest expense of approximately $23.1 million based on the base rate and $78.6 million based on the post-default rate .. We have commenced discussions with the administrative agent on behalf of the lenders with respect to these assertions; however, there can be no assurance that we will agree upon a favorable resolution with respect to such claims. Failure to reach a consensual resolution of these claims or to complete a refinancing or other restructuring could have a material adverse effect on our liquidity, financial condition and results of operations, which may result in filing a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in order to implement a restructuring plan.

Given the impact of the COVID-19 pandemic on the retail and broader markets, the ongoing weakness of the credit markets and significant uncertainties associated with each of these matters, we believe that there is substantial doubt that we will continue to operate as a going concern within one year after the date our condensed consolidated financial statements for the six months ended June 30, 2020 are issued. See Note 1 – Organization and Basis of Presentationto the condensed consolidated financial statements for additional information.

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 Six Months Ended
	6/30/20	⁽³⁾	6/30/19		6/30/20			6/30/19			6/30/20			⁽⁴	⁾
Unencumbered consolidated Properties:
Tier 1 Malls			$	375		88.8	%		83.1	%		19.2	%	⁽⁵	⁾
Tier 2 Malls				337		80.7	%		86.2	%		34.5	%
Tier 3 Malls				278		82.6	%		86.5	%		23.9	%
Total Malls	N/A			320		82.9	%		85.8	%		77.6	%

Total Associated Centers	N/A		N/A			90.9	%		96.1	%		16.3	%

Total Community Centers	N/A		N/A			98.8	%		99.4	%		5.3	%

Total Office Buildings & Other	N/A		N/A			100.0	%		86.7	%		0.8	%

Total Unencumbered Consolidated Portfolio	N/A		$	320		86.3	%		89.8	%		100.0	%

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Sales Per Square
Foot for the Twelve
Months Ended ^{(1) (2)}

Occupancy⁽²⁾

% of
Consolidated
Unencumbered
NOI for the
Nine Months
Ended
9/30/19 ⁽³⁾

09/30/19 09/30/18 09/30/19 09/30/18
Unencumbered consolidated properties:
Tier 1 Malls N/A
N/A
N/A
N/A
6.0 %
⁽⁴⁾
Tier 2 Malls $ 339
$ 340
84.0 % 85.7 % 45.4 %
Tier 3 Malls 277
281
86.8 % 89.6 % 27.5 %
Total Malls $ 313
$ 315
85.3 % 87.5 % 78.9 %

Total Associated Centers N/A
N/A
95.9 % 97.0 % 15.8 %

Total Community Centers N/A
N/A
97.3 % 98.1 % 5.0 %

Total Office Buildings and Other N/A
N/A
86.7 % 93.6 % 0.3 %

Total Unencumbered Consolidated Portfolio $ 313
$ 315
89.1 % 90.9 % 100.0 %

(1)
~~(1)~~	Represents same-center sales per square foot for mall tenants 10,000 square feet or less for stabilized malls.

(2)
~~(2)~~	Operating metrics are included for unencumbered operating properties and do not include sales or occupancy of unencumbered parcels.

(3)	Due to temporary mall and store closures that occurred during the second quarter 2020, the majority of CBL’s tenants did not report sales for the full reporting period. As a result, CBL is not able to provide a complete measure of sales per square foot for the quarter or trailing twelve months.

~~(3)~~

( 4 )

Our consolidated unencumbered properties generated approximately ~~26.5%~~34.7% of total consolidated NOI of ~~$383,213~~ ~~(which~~$176,749,047 (which excludes NOI related to dispositions) for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~.

2020.

( 5 )
~~(4)~~	NOI is derived from unencumbered portions of Tier One properties that are otherwise secured by a loan. The unencumbered portions include outparcels, anchors and former anchors that have been redeveloped.

Equity

~~During the nine months ended September 30,~~

In 2019, we ~~paid~~suspended all future dividends ~~of $59.6 million to holders of CBL's~~on our common stock and preferred stock, as well as ~~$15.7 million in~~ distributions to ~~the~~all noncontrolling interest investors in our Operating Partnership. The dividend arrearage created by our board of directors’ decision to suspend the dividends that continue to accrue on our outstanding preferred stock currently makes us ineligible to use the abbreviated, and less costly, SEC Form S-3 registration statement to register our securities for sale. This means we will be required to use a registration statement on Form S-1 to register additional securities for sale with the SEC, which we expect to hinder our ability to act quickly in relation to, and raise our costs incurred in, future capital raising activities. This preferred dividend arrearage (and the Operating Partnership’s related arrearage in distributions to its preferred units of limited partnership underlying our outstanding preferred shares) also will require that we not resume any payment of dividends on our common stock unless full cumulative dividends accrued with respect to our preferred stock (and such underlying preferred units) for all past quarters and the then-current quarter are first declared and paid in cash, or declared with a sum sufficient for the payment thereof having been set apart for such payment in cash. In addition, for so long as this distribution suspension results in the existence of a distribution shortfall (as described in the Partnership Agreement of the Operating Partnership) with respect to any of the S-SCUs, the L-SCUs or the K-SCUs (an “SCU Distribution Shortfall”), we (i) may not cause the Operating Partnership to resume distributions to holders of its outstanding common units of limited partnership until all holders of SCUs have received distributions sufficient to satisfy the SCU Distribution Shortfall for all prior quarters and ~~other consolidated subsidiaries. The~~the then-current quarter (which effectively also prevents the resumption of common stock dividends, since our common stock dividends are funded by distributions the Company receives on the underlying common units it holds in the Operating Partnership) and (ii) may not elect to settle any exchange requested by a holder of common units of the Operating Partnership ~~paid distributions~~in cash, and may only settle any such exchange through the issuance of ~~$33.7 million and $33.3 million on~~shares of common stock or other units of the ~~preferred~~Operating Partnership ranking junior to any such units ~~and common units, respectively,~~ as ~~well as distributions~~to which a distribution shortfall exists. Our board of ~~$8.3 million~~directors has prospectively approved that, to the ~~noncontrolling interests in other consolidated subsidiaries.~~

~~Future dividends payable will be determined by our Board~~extent any partners exercise any or all of ~~Directors based upon circumstances at~~their exchange rights while the time of declaration. The dividend was 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 termsexistence of the ~~class action settlement agreement (see~~ SCU Distribution Shortfall requires an exchange to be settled through the issuance of shares of common stock or other units of the Operating Partnership, the consideration paid shall be in the form of shares of common stock. We will review taxable income on a regular basis and take measures, if necessary, to ensure that we meet the minimum distribution requirements to maintain our status as a REIT.

See Listing Criteria in Note 121to the condensed consolidated financial ~~statements),~~statements for additional information regarding a notice we ~~did not pay any dividends~~received from the NYSE regarding our non-compliance with the NYSE Listing Standards and our plans 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.~~address this non-compliance.

As a publicly traded company, and as a subsidiary of a publicly traded company, we previously have accessed capital through both the public equity and debt markets. We ~~currently~~ have a shelf registration statement on Form S-3 on file with the SEC ~~authorizing~~that previously authorized 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. This shelf registration statement also authorized the Operating Partnership to publicly issue unsubordinated debt securities. This shelf registration statement was due to expire in July 2021. However, as a result of both (i) the fact that the Company no longer qualifies as a well-known seasoned issuer under SEC rules and (ii) our loss of eligibility to use Form S-3 to register offers and sales of securities as described above, we ~~therefore~~ are unable to use this shelf ~~registration.~~

registration statement.

Additionally, while we had previously suspended quarterly dividend payments on our common stock during 2019, a very small amount of monthly “cash option” investments in shares continued into May 2020, pursuant to the terms of the Company’s dividend reinvestment plan (“DRIP”). Due in part to impacts on the Company’s operations and staffing resulting from ongoing efforts to address the COVID-19 pandemic, we inadvertently failed to suspend the operation of these “cash option” investments during the months of March, April and May 2020, after we lost the ability to use the Form S-3 registration statement for the DRIP, effective with the filing of our Annual Report on Form 10-K in March, due to the dividend arrearage with respect to our preferred stock. We have now fully suspended the operation of our DRIP, including the cash option feature but, as a result of this oversight, we issued a total of 6,134 shares of common stock that were not registered under the Securities Act of 1933, as amended (the “Securities Act”) for aggregate consideration of $1,346.94 prior to such suspension. The purchasers of these shares, issued pursuant to our DRIP when we were not eligible to issue shares on Form S-3, could bring claims against us for rescission and other damages under federal or state securities laws.

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Market Capitalization

Our total-market capitalization as of ~~September~~June 30, ~~2019~~2020 was ~~computed~~ as follows (in thousands, except stock prices):

	Shares Outstanding		Stock Price ⁽¹⁾
Common stock and operating partnership units		201,691	$	0.27
7.375% Series D Cumulative Redeemable Preferred Stock		1,815		250.00
6.625% Series E Cumulative Redeemable Preferred Stock		690		250.00

Shares
Outstanding
Stock Price⁽¹⁾
Value
Common stock and operating partnership units 200,228
$ 1.29
$ 258,294
7.375% Series D Cumulative Redeemable Preferred Stock 1,815
250.00
453,750
6.625% Series E Cumulative Redeemable Preferred Stock 690
250.00
172,500
Total market equity

884,544
Company’s share of total debt, excluding unamortized deferred financing costs

4,290,398
Total market capitalization

$ 5,174,942

(1)
~~(1)~~	Stock price for common stock and Operating Partnership units equals the closing price of CBL's common stock on ~~September~~June 30, ~~2019.~~2020. 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 included in the determination of CAM expense that is billed to tenants in accordance with their lease agreements. These expenditures are generally 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-~~three and ~~nine-month~~six month periods ended ~~September~~June 30, ~~2019~~2020 compared to the same periods in ~~2018~~2019 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Tenant allowances⁽¹⁾	$	1,360	$	8,796	$	8,578	$	11,050

Deferred maintenance:
Parking area and parking area lighting		15		126		270		214
Roof repairs and replacements		1,748		2,612		1,899		2,674
Other capital expenditures		645		5,898		3,841		9,484
Total deferred maintenance		2,408		8,636		6,010		12,372

Capitalized overhead		100		425		731		1,372

Capitalized interest		366		619		1,092		1,182

Total capital expenditures	$	4,234	$	18,476	$	16,411	$	25,976

Three Months Ended
September 30, Nine Months Ended
September 30,
2019 2018 2019 2018
Tenant allowances⁽¹⁾
$ 10,781
$ 6,978
$ 21,831
$ 35,199

Renovations —
—
—
563

Deferred maintenance:
  Parking lot and parking lot lighting 315
206
529
871
  Roof repairs and replacements 2,083
270
4,757
3,694
  Other capital expenditures 5,610
5,255
15,094
15,035
Total deferred maintenance 8,008
5,731
20,380
19,600

Capitalized overhead 423
832
1,795
4,123

Capitalized interest 787
1,198
1,969
2,736

Total capital expenditures $ 19,999
$ 14,739
$ 45,975
$ 62,221

(1)
~~(1)~~	Tenant allowances primarily relate to new leases. Tenant allowances related to renewal leases were not material for the periods presented.

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. As noted above, in response to the impact from COVID-19 we have deferred or suspended capital expenditures, including redevelopment expenditures, in the range of $60.0 million to $80.0 million. We believe that property operating cash flows, which include reimbursements from tenants for certain expenses, and readily available cash on hand will provide the necessary funding for these expenditures.

Developments, Expansions and Redevelopments

The following tables summarize our development, expansion and redevelopment projects as of ~~September~~June 30, ~~2019.~~

2020.

Table of Contents

Properties Opened During the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~

2020

(Dollars in thousands)

					CBL's Share of
Property	Location	CBL Ownership Interest	Total Project Square Feet		Total Cost ⁽¹⁾		Cost to Date ⁽²⁾		2019 Cost		Opening Date	Initial Unleveraged Yield
Outparcel Development:
Fremaux Town Center - Old Navy	Slidell, LA	90%		12,467	$	1,919	$	1,553	$	100	May-20		9.2	%
Parkdale Mall - Self-storage ⁽³⁾⁽⁴⁾	Beaumont, TX	50%		69,341		4,435		3,543		1,039	Apr-20		10.2	%

Total Outparcel Development Completed				81,808	$	6,354	$	5,096	$	1,139

(1)	Total Cost is presented net of reimbursements to be received.

CBL's Share of
Property Location CBL
Ownership
Interest Total
Project
Square
Feet
Total
Cost ⁽¹⁾

Cost to
Date ⁽²⁾

2019 YTD
Cost

Opening
Date
Initial
Unleveraged
Yield
Other - Outparcel Development:
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.
(2) Cost to Date does not reflect reimbursements until they are received.
(3) Outparcel development adjacent to the mall.
(4) Yield is based on the expected yield of the stabilized project.

(2)	Cost to Date does not reflect reimbursements until they are received.

(3)	Yield is based on expected yield upon stabilization.

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

(4)	Total cost includes an allocated value for the Company’s land contribution.

Redevelopments Completed During the ~~Nine~~Six Months Ended ~~September~~ June 30, ~~2019~~

2020

(Dollars in thousands)

					CBL's Share of
Property	Location	CBL Ownership Interest	Total Project Square Feet		Total Cost ⁽¹⁾		Cost to Date ⁽²⁾		2020 Cost		Opening Date	Initial Unleveraged Yield
Mall Redevelopments:
CherryVale Mall - Sears Redevelopment (Tilt)	Rockford, IL	100%		114,118	$	3,508	$	2,981	$	78	Jun-20		8.3	%
Dakota Square Mall - Herbergers Redevelopment (Ross/shops)	Minot, ND	100%		30,096		6,410		4,537		188	Jan-20		7.2	%
Hamilton Place - Sears Redevelopment (Cheesecake Factory/Dicks Sporting Goods/Dave & Buster's/Office) ⁽³⁾	Chattanooga, TN	100%		195,166		38,715		28,327		2,471	Mar-20		7.8	%
Mall del Norte - Forever 21 Redevelopment (Main Event)	Laredo, TX	100%		81,242		10,514		6,674		1,016	Sep-19/Feb-20		9.3	%
The Promenade - (Five Below/Carter's)	D'Iberville, MS	100%		14,007		2,832		2,263		251	Feb-20/Apr-20		11.4	%
Total Redevelopments Completed				434,629	$	61,979	$	44,782	$	4,004

(1)	Total Cost is presented net of reimbursements to be received.

(2)	Cost to Date does not reflect reimbursements until they are received.

CBL's Share of
Property 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:
Dakota Square Mall - HomeGoods Minot, ND 100% 28,406
$ 2,478
$ 2,293
$ 1,315
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
1,696
289
Apr-19 10.3%
Hanes Mall - Dave & Buster's Winston-Salem, NC 100% 44,922
5,932
4,559
2,413
May-19 11.0%
Northgate Mall - Sears Auto Center Redevelopment (Aubrey's/Panda Express) Chattanooga, TN 100% 10,000
1,797
530
17
Feb-19 7.6%
Parkdale Mall - Macy's Redevelopment (Dick's Sporting Goods/Five Below/HomeGoods) ⁽³⁾
Beaumont, TX 100% 86,136
20,899
17,641
11,161
May-19 6.4%
Volusia Mall - Sears Auto Center Redevelopment (Bonefish Grill/Metro Diner) Daytona Beach, FL 100% 23,341
9,795
5,558
144
Apr-19 8.0%
Total Redevelopments Completed 228,853
$ 46,142
$ 34,764
$ 15,410

(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 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 Sears building in 2017.

Table of Contents

Properties Under ~~Redevelopment~~D evelopment at ~~September~~June 30 ~~2019~~

, 2020

(Dollars in thousands)

					CBL's Share of
Property	Location	CBL Ownership Interest	Total Project Square Feet		Total Cost ⁽¹⁾		Cost to Date ⁽²⁾		2020 Cost		Expected Opening Date ⁽³⁾	Initial Unleveraged Yield
Outparcel Developments:
Hamilton Place - Self Storage ⁽⁴⁾⁽⁵⁾	Chattanooga, TN	60%		68,875	$	5,824	$	3,639	$	2,520	Q3 '20		8.7	%
Hamilton Place Development - Aloft Hotel ⁽⁵⁾	Chattanooga, TN	50%		89,674		12,000		4,742		4,099	Q1 '21		9.2	%
Mayfaire Town Center - First Watch	Wilmington, NC	100%		6,300		2,267		1,437		1,071	Q3 '20		10.1	%
Pearland Town Center - HCA Offices	Pearland, TX	100%		48,416		14,186		3,148		2,291	Q1 '21		11.8	%
				213,265	$	34,277	$	12,966	$	9,981
Mall Redevelopments:
Coastal Grand - Dick's Sporting Goods/Golf Galaxy	Myrtle Beach, SC	50%		132,727	$	7,050	$	4,452	$	3,386	Q3 '20		11.6	%
Westmoreland Mall - JC Penney Redevelopment (Chipotle)	Greensburg, PA	100%		2,300		1,017		1,085		840	Q3 '20		9.4	%
				135,027	$	8,067	$	5,537	$	4,226
Total Properties Under Development				348,292	$	42,344	$	18,503	$	14,207

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
Other Developments:
Hamilton Place - Self Storage ⁽³⁾
Chattanooga, TN 60% 68,875
$ 5,824
$ 299
$ 299
Q2 '20 8.7%
Parkdale Mall - Self Storage ⁽³⁾
Beaumont, TX 50% 69,341
4,435
1,373
1,373
Q4 '19 10.2%
138,216
10,259
1,672
1,672

Mall Redevelopments:
Brookfield Square - Sears Redevelopment (Whirlyball/Marcus Theatres) ⁽⁴⁾
Brookfield, WI 100% 130,075
$ 25,233
$ 24,061
$ 10,890
Q3/Q4 '19 10.1%
CherryVale Mall - Sears Redevelopment (Tilt) Rockford, IL 100% 114,118
3,508
1,564
1,564
Q2 '20 8.3%
Dakota Square Mall - Herberger's Redevelopment (Ross/Retail Shops/T-Mobile) Minot, ND 100% 30,096
6,410
3,348
3,205
Q1 '20 7.2%
Hamilton Place - Sears Redevelopment (Cheesecake Factory/Dick's Sporting Goods/Dave & Buster's/Hotel/Office) ⁽⁴⁾
Chattanooga, TN 100% 195,166
38,715
23,132
12,893
Q2/Q3 '20 7.8%
Laurel Park Place - Carson's Redevelopment (Dunham's Sports) Livonia, MI 100% 45,000
3,886
2,898
2,876
Q4 '19 5.9%
Mall del Norte - Forever 21 Redevelopment (Main Event) Laredo, TX 100% 81,242
10,514
3,959
3,914
Q3 '19/Q2 '20 9.3%
595,697
88,266
58,962
35,342

��
Total Properties Under Redevelopment 733,913
$ 98,525
$ 60,634
$ 37,014

(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 expected yield once project stabilizes.
(4) 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.

(1)	Total Cost is presented net of reimbursements to be received.

(2)

Cost to Date does not reflect reimbursements until they are received.

(3)	As a result of government mandated construction halts due to the COVID-19 pandemic, opening dates may change from what is currently reflected.

( 4 )

Yield is based on expected yield once project stabilizes.

(5)	Total cost includes an allocated value for the Company’s land contribution.

Off-Balance Sheet Arrangements

Unconsolidated Affiliates

We have ownership interests in 2428 unconsolidated affiliates as of ~~September~~June 30, ~~2019~~2020 that are described in Note 7to 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.

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 12to the condensed consolidated statements for information related to our guarantees of unconsolidated affiliates' debt as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018.~~2019.

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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, as amended, for the year ended December 31, ~~2018~~2019 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~~Uncertainty in the current economic environment due to ~~these~~the effects of the COVID-19 pandemic has and may continue to significantly impact management’s judgments regarding estimates and assumptions. In addition to the critical accounting policies and estimates ~~during the nine months ended September 30, 2019. Our significant accounting policies are disclosed~~discussed in ~~Note 2 to the consolidated financial statements included~~Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form ~~10‑K~~10-K, as amended, we are adding the following due to significant changes in judgements related to the COVID-19 pandemic.

Revenue Recognition and Accounts Receivable

Receivables include amounts billed and currently due from tenants pursuant to lease agreements and receivables attributable to straight-line rents associated with those lease agreements. Individual leases where the collection of rents is in dispute are assessed for collectability based on management’s best estimate of collection considering the anticipated outcome of the dispute. Individual leases that are not in dispute are assessed for collectability and upon the determination that the collection of rents over the remaining lease term is not probable, accounts receivable are reduced as an adjustment to rental revenues. Revenue from leases where collection is deemed to be less than probable is recorded on a cash basis until collectability is determined to be probable. Further, management assesses whether operating lease receivables, at a portfolio level, are appropriately valued based upon an analysis of balances outstanding, historical collection levels and current economic trends. An allowance for the ~~year~~uncollectible portion of the portfolio is recorded as an adjustment to rental revenues. Management’s estimate of the collectability of accounts receivable from tenants is based on the best information available to management at the time of evaluation.

We review current economic considerations each reporting period, including the effects of tenant bankruptcies. Additionally, with the uncertainties regarding COVID-19, our assessment also took into consideration the type of tenant and current discussions with the tenants, as well as recent rent collection experience. Evaluating and estimating uncollectible lease payments and related receivables requires a significant amount of judgment by management and is based on the best information available to management at the time of evaluation. For the three and six months ended ~~December 31, 2018.~~

June 30, 2020, we reduced rental revenue by $36.9 million and $40.7 million, respectively, due to lease-related reserves and write-offs, which includes $1.1 million and $2.6 million, respectively, for straight-line rent receivables. Actual results could differ from these estimates and such differences could be material to our consolidated financial statements.

Lease Modifications

In April 2020, the FASB issued a question-and-answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance related to lease concessions provided as a result of COVID-19. Under existing lease guidance, we would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated within the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A clarifies that entities may elect to not evaluate whether lease-related relief that lessors provide to mitigate the economic effects of COVID-19 on lessees is a lease modification under Topic 842, Leases .. Instead, an entity that elects not to evaluate whether a concession directly related to COVID-19 is a modification can then elect whether to apply the modification guidance (i.e. assume the relief was always contemplated by the contract or assume the relief was not contemplated by the contract). Both lessees and lessors may make this election.

We have elected to apply the relief provided under the Lease Modification Q&A and will avail ourselves of the election to avoid performing a lease by lease analysis for the lease concessions that were (1) granted as relief due to the COVID-19 pandemic and (2) result in the cash flows remaining substantially the same or less than the original contract. The Lease Modification Q&A had a material impact on our consolidated financial statements as of and for the three and six months ended June 30, 2020. However, its future impact to us is dependent upon the extent of lease concessions granted to tenants as a result of the COVID-19 pandemic in future periods and the elections made by us at the time of entering such concessions.

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The Lease Modification Q&A allows us to determine accounting policy elections at a disaggregated level, and the elections should be applied consistently by either the type of concession, underlying asset class or on another reasonable basis . As a result, we have made the following policy elections based on the type of concession agreed to with the respective tenant.

Rent Deferrals

Rent Abatements

At June 30, 2020, our receivables include $9.1 million related to receivables that have been deferred and are to be repaid over periods generally starting in late 2020 and extending for some portion of 2021. We granted abatements of $1.8 million for the three and six months ended June 30, 2020. As of early August 2020, we estimate that we will defer $15.5 million of rents that were billed for April, May and June 2020 based on agreements that have been executed or are in active negotiation. We continue to assess rent relief requests from our tenants but are unable to predict the resolution or impact of these discussions.

Recent Accounting Pronouncements

See Note 2to 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.

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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 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 ~~increased 16.8%~~declined to ~~$90.4~~$(5.2) million for the three months ended ~~September~~June 30, ~~2019 as compared to $77.4~~2020 from $68.5 million for the prior-year period and ~~decreased 19.6%~~declined to ~~$203.0~~$45.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2019 as compared to $252.5~~2020 from $112.6 million for the prior-year period. Excluding the adjustments noted below, FFO of the Operating Partnership, as adjusted, ~~decreased 14.5%~~declined to $4.9 million for the three months ended ~~September~~June 30, ~~2019 to $67.8 million compared to $79.2~~2020 from $68.5 million for the same period in ~~2018,~~2019, and ~~decreased 23.1%~~declined to $56.5 million for the ~~nine~~six months ended ~~September~~June 30, ~~2019 to $196.8 million compared to $255.8~~2020 from $129.1 million for the same period in ~~2018.~~2019. The ~~decrease~~decreases in FFO, as adjusted, ~~was~~for the three- and six- month periods were primarily driven by lower property-level NOI, ~~dilution from asset sales~~which includes the estimate for uncollectable rental revenues and ~~higher general and administrative expenses resulting from legal fees related to litigation and third party fees related~~rent abatements due to the ~~new secured term loan.~~

mandated property closures a result of the COVID-19 pandemic. The reduction in rental revenues was partially offset by the program we put in place to eliminate all non-essential expenditures and the company-wide furlough and salary reduction program.

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The reconciliation of net 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 June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Net loss attributable to common shareholders	$	(81,452	)	$	(35,400	)	$	(215,348	)	$	(85,599	)
Noncontrolling interest in income (loss) of Operating Partnership		(2,077	)		(5,454	)		(18,491	)		(13,212	)
Depreciation and amortization expense of:
Consolidated Properties		52,663			64,478			108,565			134,270
Unconsolidated affiliates		14,020			11,462			27,530			22,128
Non-real estate assets		(812	)		(902	)		(1,729	)		(1,799	)
Noncontrolling interests' share of depreciation and amortization		(788	)		(2,648	)		(1,711	)		(4,805	)
Loss on impairment		13,274			41,608			146,918			66,433
(Gain) loss on depreciable property		—			(4,599	)		25			(4,841	)
FFO allocable to Operating Partnership common unitholders		(5,172	)		68,545			45,759			112,575
Debt restructuring expenses ⁽¹⁾		7,857			—			7,857			—
Litigation settlement, net of taxes ⁽²⁾		—			—			—			87,667
Non-cash default interest expense ⁽³⁾		2,203			—			2,893			542
Gain on extinguishment of debt ⁽⁴⁾		—			—			—			(71,722	)
FFO allocable to Operating Partnership common unitholders, as adjusted	$	4,888		$	68,545		$	56,509		$	129,062

FFO per diluted share	$	(0.03	)	$	0.34		$	0.23		$	0.56

FFO, as adjusted, per diluted share	$	0.02		$	0.34		$	0.28		$	0.64

(1)	Represents professional fees related to the Company's negotiations with the administrative agent and lenders under the secured credit facility and certain holders of the Company's senior unsecured notes regarding a restructure of such indebtedness.

(2)	The six months ended June 30, 2019 is comprised of the accrued maximum expense of $88.2 million related to the proposed settlement of a class action lawsuit.

( 3 )

The six months ended June 30, 2020 includes default interest expense related to Greenbrier Mall, Hickory Point Mall, Eastgate Mall, Asheville Mall, Burnsville Center and Park Plaza Mall. The six months ended June 30, 2019 includes default interest expense related to Acadiana Mall and Cary Towne Center.

Three Months Ended
September 30, Nine Months Ended
September 30,
2019 2018 2019 2018
Net loss attributable to common shareholders $ (90,116 ) $ (12,590 ) $ (175,715 ) $ (57,930 )
Noncontrolling interest in loss of Operating Partnership (13,904 ) (1,628 ) (27,116 ) (8,978 )
Depreciation and amortization expense of:
Consolidated properties 64,168
71,945
198,438
217,261
Unconsolidated affiliates 14,471
10,438
36,599
31,177
Non-real estate assets (920 ) (910 ) (2,719 ) (2,748 )
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries (2,031 ) (2,136 ) (6,836 ) (6,424 )
Loss on impairment 135,688
14,600
202,121
84,644
Loss on impairment of unconsolidated affiliates —
1,022
—
1,022
Gain on depreciable property, net of taxes (16,914 ) (3,307 ) (21,755 ) (5,543 )
FFO allocable to Operating Partnership common unitholders 90,442
77,434
203,017
252,481
Litigation settlement, net of taxes ⁽¹⁾
(22,688 ) —
64,979
—
Gain on investments, net of taxes ⁽²⁾
—
—
—
(287 )
Non-cash default interest expense ⁽³⁾
—
1,784
542
3,616
Gain on extinguishment of debt ⁽⁴⁾
—
—
(71,722 ) —
FFO allocable to Operating Partnership common unitholders, as adjusted $ 67,754
$ 79,218
$ 196,816
$ 255,810

FFO per diluted share $ 0.45
$ 0.39
$ 1.01
$ 1.26

FFO, as adjusted, per diluted share $ 0.34
$ 0.40
$ 0.98
$ 1.28

Weighted-average common and potential dilutive common shares outstanding with Operating Partnership units fully converted 200,230
199,432
200,158
199,630

(1) The three months ended September 30, 2019 represents a reduction of $22,688 to the accrued maximum expense of $88,150 related to the settlement of a class action lawsuit that was recorded in the three months ended March 31, 2019. A majority of the reduction of $22,688 relates to past tenants that did not submit a claim pursuant to the terms of the settlement agreement with the remainder relating to tenants that opted out of the lawsuit. The nine months ended September 30, 2019 is comprised of the accrued maximum expense related to the settlement of a class action lawsuit less the reduction recorded in the three months ended September 30, 2019.
(2) The nine months ended September 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 nine months ended September 30, 2019 includes default interest expense related to Acadiana Mall and Cary Towne Center. The three months and nine months ended September 30, 2018 include default interest expense related to Acadiana Mall and Cary Towne Center.
(4) The nine months ended September 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.

( 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:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Diluted EPS attributable to common shareholders	$	(0.42	)	$	(0.20	)	$	(1.16	)	$	(0.49	)
Eliminate amounts per share excluded from FFO:
Depreciation and amortization expense, including amounts from consolidated Properties, unconsolidated affiliates, non-real estate assets and excluding amounts allocated to noncontrolling interests		0.32			0.36			0.66			0.75
Loss on impairment		0.07			0.20			0.73			0.32
Gain on depreciable property		—			(0.02	)		—			(0.02	)
FFO per diluted share	$	(0.03	)	$	0.34		$	0.23		$	0.56

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Three Months Ended
September 30, Nine Months Ended
September 30,
2019 2018 2019 2018
Diluted EPS attributable to common shareholders $ (0.52 ) $ (0.07 ) $ (1.01 ) $ (0.34 )
Eliminate amounts per share excluded from FFO:
Depreciation and amortization expense, including amounts from consolidated properties, unconsolidated affiliates, non-real estate assets and excluding amounts allocated to noncontrolling interests 0.38
0.40
1.13
1.20
Loss on impairment 0.68
0.08
1.00
0.43
Gain on depreciable property, net of taxes (0.09 ) (0.02 ) (0.11 ) (0.03 )
FFO per diluted share $ 0.45
$ 0.39
$ 1.01
$ 1.26

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 June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
FFO of the Operating Partnership	$	(5,172	)	$	68,545		$	45,759		$	112,575
Percentage allocable to common shareholders ⁽¹⁾		95.17	%		86.64	%		92.09	%		86.63	%
FFO allocable to common shareholders	$	(4,922	)	$	59,387		$	42,139		$	97,524

FFO allocable to Operating Partnership common unitholders, as adjusted	$	4,888		$	68,545		$	56,509		$	129,062
Percentage allocable to common shareholders ⁽¹⁾		95.17	%		86.64	%		92.09	%		86.63	%
FFO allocable to common shareholders, as adjusted	$	4,652		$	59,387		$	52,039		$	111,806

Three Months Ended
September 30, Nine Months Ended
September 30,
2019 2018 2019 2018
FFO allocable to Operating Partnership common unitholders $ 90,442
$ 77,434
$ 203,017
$ 252,481
Percentage allocable to common shareholders⁽¹⁾
86.64 % 86.58 % 86.63 % 86.37 %
FFO allocable to common shareholders $ 78,359
$ 67,042
$ 175,874
$ 218,068

FFO allocable to Operating Partnership common unitholders, as adjusted $ 67,754
$ 79,218
$ 196,816
$ 255,810
Percentage allocable to common shareholders ⁽¹⁾
86.64 % 86.58 % 86.63 % 86.37 %
FFO allocable to common shareholders, as adjusted $ 58,702
$ 68,587
$ 170,502
$ 220,943

(1)
~~(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~~outstanding 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 ~~September~~June 30, ~~2019,~~2020, a 0.5% increase or decrease in interest rates on variable-rate debt would decrease or increase annual cash flows by approximately ~~$4.7~~$6.6 million and increase or decrease annual interest expense, after the effect of capitalized interest, by approximately ~~$4.6~~$6.5 million.

Based on our proportionate share of total consolidated and unconsolidated debt at ~~September~~June 30, ~~2019,~~2020, a 0.5% increase in interest rates would decrease the fair value of debt by approximately ~~$47.5~~$28.4 million, while a 0.5% decrease in interest rates would increase the fair value of debt by approximately ~~$49.2~~$36.1 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~~The Company’s and the Operating ~~Partnership's~~Partnership’s disclosure controls and procedures are ~~effective~~designed to ~~ensure~~provide reasonable assurance that information ~~that the Company and the Operating Partnership are~~ required to ~~disclose~~be disclosed in ~~the~~our reports ~~we file~~filed or ~~submit~~submitted 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.

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 were not effective as a result of the material weakness described below.

Material Weakness in Internal Control over Financial Reporting

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s and the Operating Partnership’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of June 30, 2020, management of the Company and the Operating Partnership determined that there was a control deficiency that constituted a material weakness, as described below.

As a result of recent turnover, the Company and the Operating Partnership did not maintain a sufficient complement of personnel commensurate with their accounting and financial reporting requirements in accordance with U.S. GAAP and SEC regulations.

The control deficiency described above created a reasonable possibility that a material misstatement of the annual or interim financial statements would not be prevented or detected on a timely basis and therefore we concluded that the

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deficiency represents a material weakness in the Company’s and the Operating Partnership’s internal control over financial reporting and that the Company and the Operating Partnership did not maintain effective internal control over financial reporting as of June 30, 2020 based on criteria established in Internal Control-Integrated Framework issued by COSO.

Notwithstanding the identified material weakness, management believes that the Condensed Consolidated Financial Statements and related financial information included in this Form 10-Q fairly present, in all material respects, our balance sheets, statements of operations, comprehensive loss and cash flows as of and for the periods presented.

Remediation Plan

The Company and the Operating Partnership plan to remediate this material weakness by hiring additional personnel to enable them to meet their financial reporting requirements. The Company and the Operating Partnership may also utilize outside advisors to assist on a short-term basis.

Changes in Internal Control over Financial Reporting

~~In conjunction with~~

We have continued to address the ~~implementation~~effects of ~~ASC 842,~~ ~~Leases, which was adopted~~the COVID-19 pandemic on ~~January 1, 2019, we modified some~~our control structure, including modifications to business modeling, forecasting and estimations, lease modifications, and accounts receivable collectability, as well as for the consequences of reductions in headcount and remote working arrangements. We are continually monitoring and assessing the COVID-19 pandemic’s effect on our internal control processes ~~around lease accounting. As a lessee,~~in order to minimize the ~~guidance impacted the Company's condensed consolidated financial statements through the recognition of right-of-use ("ROU") assets~~impact to their design 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.effectiveness. There ~~have been~~were no other changes in the ~~Company's~~Company’s or the Operating ~~Partnership's~~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.

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PART II - OTHER INFORMATION

ITEM 1: Legal Proceedings

InLitigation

As previously disclosed, 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~~Pursuant to the settlement agreement ~~stated that~~ the Company ~~had to~~ set aside a common fund with a monetary and non-monetary value of ~~$90,000~~$90.0 million to be disbursed to class members in accordance with an agreed-upon formula that is based upon aggregate damages of ~~$60,000.~~$60.0 million. The Court granted final approval to the proposed settlement on August 22, 2019. ~~Class~~The class members ~~are~~were 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 extended from January 1, 2011 through the date of preliminary court approval. Class members who are past tenants and made a valid claim pursuant to the Court's order will receive payment of their claims in cash. Class members who are current tenants ~~will receive~~began receiving monthly credits against rents and future charges ~~beginning no earlier than January 1,~~during the three months ended June 30, 2020 and ~~continuing~~will continue 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)~~$27.0 million), any incentive award to the class representative (up to a maximum of ~~$50)~~$50 thousand), and class administration costs (which are expected to not exceed ~~$100)~~$100 thousand), have or will be funded by the common fund, which has been approved by the Court. Under the terms of the settlement agreement, the Company did 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~~$88.2 million in the three months ended March 31, 2019 related to the settlement agreement. ~~The~~During the three-month periods ended September 30, 2019 and December 31, 2019, the Company reduced the accrued liability by ~~$22,688 during the three months ended September 30, 2019,~~$26.4 million, a majority of which was related to past tenants that did not submit a claim pursuant to the terms of the settlement agreement with the remainder relating to tenants that either opted out of the ~~lawsuit. Subsequent~~lawsuit or waived their rights to ~~September 30, 2019,~~their respective settlement amounts. Additionally, the Company ~~paid $23,050 in~~reduced the accrued liability during the three months ended December 31, 2019 by $23.1 million related to attorney and administrative fees that were paid pursuant to the settlement agreement. During the three months and six months ended June 30, 2020, the Company reduced the accrued liability by $3.3 million, which was related to ~~the previously accrued litigation settlement payable (see~~ ~~Note 15~~).monthly credits against rents and other charges for current tenants. The Company also received document requests in the third quarter of 2019, in the form of subpoenas, from the Securities and Exchange Commission and the Department of Justice regarding the Wave Lengths Hair Salons of Florida, Inc. litigation and other related matters. The Company is ~~cooperating~~continuing to cooperate in these matters.

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~~were 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~~Those cases were 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. On September 26, 2019, the~~ ~~Merelles~~ ~~complaint was voluntarily dismissed.~~

Certain of the Company’s current and former directors and officers have been named as defendants in ~~five~~nine 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, September 5, 2019 and September 25, 2019, respectively, other shareholders filed three additional putative derivative complaints, each in the United States District Court for the District of Delaware, captioned as follows: Robert Cohen v. Stephen D. Lebovitz et al., 1:19-cv-01185-LPS (the “Cohen Derivative Action”); Travis Lore v. Stephen D. Lebovitz et al., 1:19-cv-01665-LPS (the “Lore Derivative Action”), andCity of Gainesville Cons. Police Officers’ and Firefighters Retirement Plan v. Stephen D. Lebovitz et al., 1:19-cv-01800 (the “Gainesville Derivative Action”), each 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 (the "Consolidated Derivative Action"). On July 25, 2019, the Court stayed proceedings in the Consolidated Derivative Action pending resolution of an eventual motion to dismiss in the Securities Class Action Litigation. On October 14, 2019, the parties to the Gainesville

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Derivative Action and the LoreDerivative Action filed a joint stipulation and proposed order confirming that each of those cases is subject to the consolidation order previously entered by the Court in the ConsolidatedDerivative Action and that further proceedings in those cases are stayed pending resolution of an eventual motion to dismiss in the Securities Class Action Litigation. On July 22, 2019, ~~another~~a 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 (the “ShebitzDerivative Action”); on January 10, 2020, a shareholder filed a putative derivative complaint captioned Chatman v. Lebovitz, et al.,2020-0011-JTL, in the Delaware Chancery Court (the “Chatman Derivative Action”); on February 12, 2020, a shareholder filed a putative derivative complaint captioned Kurup v. Lebovitz, et al.,2020-0070-JTL, in the Delaware Chancery Court (the “KurupDerivative Action”); on February 26, 2020, a shareholder filed a putative derivative complaint captioned Kemmer v. Lebovitz, et al.,1:20-cv-00052, in the United States District Court for the Eastern District of Tennessee (the “KemmerDerivative Action”) ; and on April 14, 2020, a shareholder filed a putative derivative complaint captioned Hebig v. Lebovitz, et al.,1:19-cv-00149-JRG-CHS , in the United States District Court for the Eastern District of Tennessee (the “HebigDerivative Action”) , each asserting substantially similar claims purportedly on behalf of the Company against similar defendants. On October 7, 2019, the Court stayed the ShebitzDerivative Action, pending resolution of an eventual motion to dismiss in the related Securities Class Action ~~Litigation.~~Litigation; the Company expects the

Chatman, Kurup, Kemmer , and HebigDerivative Actions to be stayed as well .

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~~Item 1A of our Annual Report on Form 10-K, as amended, for the year ended December 31, 2019. The risk factor set forth below updates, and should be read together with, such risk factors. Moreover, risk factors set forth in the Annual Report on Form 10-K, as amended, for the year ended December 31, ~~2018. There~~2019 could be heightened as a result of the impact of the COVID-19 pandemic.

The current pandemic of the novel coronavirus, or COVID-19 has, and could continue to, materially and adversely impact or disrupt our financial condition, results of operations, cash flows and performance, as could any future outbreak of another highly infectious or contagious disease.

Since being reported in December 2019, COVID-19 has spread globally, including to every state in the United States. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic, and on March 13, 2020, the United States declared a national emergency with respect to COVID-19.

The COVID-19 pandemic has had, and may continue to have, repercussions across regional and global economies and financial markets. The outbreak of COVID-19 in many countries, including the United States, has significantly adversely impacted global economic activity and has contributed to significant volatility and negative pressure in financial markets. The global impact of the outbreak has been rapidly evolving and, as cases of COVID-19 have continued to be identified in additional countries, many - including the United States - have reacted by instituting quarantines, mandating business and school closures and restricting travel.

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Certain states and cities, including where we own properties and where our corporate headquarters is located, have also reacted by instituting quarantines, restrictions on travel, “shelter - in - place” rules, restrictions on types of business that may continue to operate, and/or restrictions on the types of construction projects that may continue. The Company cannot predict if additional states and cities will implement similar restrictions or when restrictions currently in place will be lifted . As a result, the COVID-19 pandemic is negatively impacting almost every industry directly or indirectly, including the retail industr y in which the Company and our tenants operate.

A majority of our tenants have implemented temporary closures and/or shortened the operating hours of their stores and requested rent deferral or rent abatement during this pandemic or have failed to pay rent. In addition, state, local or industry-initiated efforts, such as tenant rent freezes, or governmental or court-imposed delays in the processing of landlord initiated commercial eviction and collection actions in various jurisdictions in light of the COVID-19 pandemic, may also affect our ability to collect rent or enforce remedies for the failure to pay rent. We believe our tenants do not have a contractual right to cease paying rent due to government-mandated closures and, subject to negotiated resolutions of rent deferral requests that we may enter into with certain tenants, we intend to enforce our rights under our lease agreements. However, COVID-19 and the related governmental orders present fairly novel situations for which the ultimate legal outcome cannot be assured, and it is possible future governmental action could impact our rights under the lease agreements. The extent of tenant requests and actions, and the resulting impact to the Company’s results of operations and cash flows, is uncertain and cannot be predicted.

The COVID-19 pandemic, or a future pandemic, could also have further material and adverse effects on our ability to successfully operate and on our financial condition, results of operations and cash flows due to, among other factors:

•

a complete or partial closure of, or other operational issues at, one or more of our properties resulting from government or tenant action;

•

the reduced economic activity severely impacts our tenants' businesses, financial condition and liquidity and may cause one or more of our tenants to be unable to meet their obligations to us in full, or at all, or to otherwise seek modifications of such obligations;

•

the reduced economic activity, as well as any lasting reduction in consumer activity at brick-and-mortar commercial establishments due to changed habits in response to the prolonged existence and threat of the COVID-19 pandemic, could result in a prolonged recession and could negatively impact consumer discretionary spending;

•

difficulty accessing debt and equity capital on attractive terms, or at all, and a severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our access to capital necessary to fund business operations or address maturing liabilities on a timely basis and our tenants' ability to fund their business operations and meet their obligations to us;

•

permitting, inspections and reviews by jurisdictional planning commissions and authorities is also likely to be delayed or postponed which could materially impact the timeline and budgets for completing redevelopments;

•

projects in our redevelopment pipeline may not be pursued or may be completed later or with higher costs than anticipated, potentially causing a loss that exceeds our investment in the project;

•

the financial impact of the COVID-19 pandemic could negatively impact our future compliance with financial covenants of our credit facility, indentures and other recourse and non-recourse debt agreements and result in a default and potentially an acceleration of indebtedness, which non-compliance could negatively impact our ability to make additional borrowings under our revolving credit facility and pay dividends;

•

any impairment in value of our tangible assets and intangible lease assets that could be recorded as a result of weaker economic conditions;

•

a deterioration in our or our tenants' ability to operate in affected areas or delays in the supply of products or services to us or our tenants from vendors that are needed for our or our tenants' efficient operations could adversely affect our operations and those of our tenants;

•

the ability to renew leases or re-lease vacant spaces on favorable terms, or at all; and

•

the potential negative impact on the health of our personnel, particularly if a significant number of them are impacted, could result in a deterioration in our ability to ensure business continuity during this disruption.

The extent to which the COVID-19 pandemic impacts our operations and those of our tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. Additional closures by our tenants of their stores and early terminations by our tenants of their leases could further reduce our cash flows, which could impact our ability to resume paying dividends to our stockholders at any point in the future.

The rapid development and fluidity of this situation precludes any prediction as to the full adverse impact of the COVID-19 pandemic. The COVID-19 pandemic presents material uncertainty and risk with respect to our financial condition, results of operations, cash flows and performance.

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We have determined that there is substantial doubt about o u r ability to continue as a going concern.

In accordance with the accounting guidance related to the presentation of financial statements, when preparing financial statements for each annual and interim reporting period, management evaluates whether there are conditions or events that, when considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. In making its assessment, management considered the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows and conditional and unconditional obligations due over the next twelve months.

The Operating Partnership received notices of default and reservation of rights letters from the administrative agent under the secured credit facility asserting that certain defaults and events of default have occurred and continue to exist as of June 30, 2020 by reason of the Operating Partnership’s failure to comply with certain restrictive covenants, including the liquidity covenant, in the secured credit facility. As of the date of this report, the lenders under the secured credit facility have not accelerated the outstanding amount due and payable on the loans or commenced foreclosure proceedings, but they may seek to exercise one or more of these remedies in the future.

Management has engaged Weil, Gotshal & Manges LLP and Moelis & Company LLC (the “Advisors”) to assist the Company in exploring several alternatives to reduce overall leverage and interest expense and to extend the maturity of its debt including (i) the senior secured credit facility, which includes a revolving facility with a balance of $675.9 million and term loan with a balance of $447.5 million as of June 30, 2020, that matures in July 2023 and (ii) the Notes with balances of $450.0 million, $300.0 million, and $625.0 million, as of June 30, 2020, that mature in December 2023, October 2024 and December 2026, respectively, as well as the cumulative unpaid dividends on the Company’s preferred stock and the special common units of limited partnership interest in the Operating Partnership. The Advisors commenced discussions in May 2020 with advisors to certain holders of the Notes and the credit committee of the senior secured credit facility. Management may pursue a comprehensive capital structure solution that will address the Company’s funded indebtedness and outstanding equity interests that may result in the reorganization of the Company.

The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, the condensed consolidated financial statements do not reflect any adjustments related to the recoverability of assets and satisfaction of liabilities that might be necessary should the Company be unable to continue as a going concern. Given the impact of the COVID-19 pandemic on the retail and broader markets, the ongoing weakness of the credit markets, and the Operating Partnership’s default of certain restrictive covenants, the Company believes that there is substantial doubt that it will continue to operate as a going concern within one year after the date these condensed consolidated financial statements are issued.

We identified a material weakness in internal control over financial reporting. We may not remediate this material weakness on a timely basis or may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal control over financial reporting, which may result in material misstatements of our financial statements or cause us to fail to meet our reporting obligations. As a result, stockholders could lose confidence in our financial and other public reporting, which would then be likely to negatively affect our business and the market price of our securities.

A material weakness in internal control over financial reporting was identified as of June 30, 2020. A material weakness is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. See Part I, Item 4 above for further details. We are planning to remediate the material weakness by hiring additional personnel to enable the Company and the Operating Partnership to meet their financial reporting requirements, and we may utilize outside advisors to assist on a short-term basis. These remediation measures may be time consuming and costly, and might place significant demands on our financial, accounting and operational resources. In addition, there is no assurance that we will be successful in hiring the necessary personnel in a timely manner, or at all.

Effective internal control over financial reporting is necessary for us to provide reliable financial reports and is important in helping to prevent mistakes in our financial statements and financial fraud. Any failure to implement required new or improved controls, or difficulties encountered in our implementation to successfully remediate our existing or any future material weaknesses in our internal control over financial reporting, or identification of any additional material weaknesses that may exist, may adversely affect the accuracy and timing of our financial reporting, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, we may be unable to prevent fraud, investors may lose confidence in our financial reporting, and the price of our securities may decline as a result.

Any testing conducted by us, or any testing conducted by our independent registered public accounting firm, may reveal additional deficiencies in our internal control over financial reporting that are deemed to be new material weaknesses

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or that may require prospective or retroactive changes to ~~such~~our financial statements or identify other areas for further attention or improvement. In addition, our reporting obligations as a public company could place a significant strain on our management, operational and financial resources and systems for the foreseeable future and may cause us to fail to timely achieve and maintain the adequacy of its internal control over financial reporting.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk ~~factors since~~that controls may become inadequate because of changes in conditions, or that the ~~filing~~degree of compliance with the policies and procedures may deteriorate. Because of its inherent limitations, internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. There is no assurance that the measures we are currently undertaking or may take in the future will be sufficient to maintain effective internal controls or to avoid potential future deficiencies in internal control, including material weaknesses.

Our common stock could be delisted from the NYSE if we fail to meet applicable continued listing requirements, which could have materially adverse effects on our business.

On February 5, 2020, we received notice from the New York Stock Exchange ("NYSE") that our common stock is no longer in compliance with NYSE continued listing criteria set forth in Section 802.01C of the Listed Company Manual of the NYSE, which require listed companies to maintain an average closing share price of at least $1.00 over a period of 30 consecutive trading days. We have until October 14, 2020, inclusive of extensions of the cure period provided by the NYSE in response to the COVID-19 pandemic, to regain compliance with the continued listing criteria. During this period, we expect our common stock to continue to trade on the NYSE, subject to the additional considerations discussed below, which will allow for flexibility in addressing this matter. On May 7, 2020, our shareholders voted to approve an amendment to our Amended and Restated Certificate of Incorporation, as amended, to effect a reverse stock split at a ratio between 1-for-5 and 1-for-25, and a proportionate reduction in the number of authorized shares of common stock, to be determined at the discretion of the board of directors for the purpose of complying with NYSE Listing Standards, subject to the board of directors’ discretion to abandon this amendment. Our board of directors has not yet taken action to effect the reverse stock split. We intend to actively evaluate and monitor the price of our ~~Annual Report.~~common stock between now and October 2020.

Our common stock could also be delisted if (i) our average market capitalization over a consecutive 30 trading-day period is less than $15 million, or (ii ) our commo n stoc k trade s a t a n “abnormall y low ” price .. I n eithe r case , our commo n stoc k woul d b e suspende d fro m tradin g o n th e NYSE immediately , an d th e NYS E woul d begi n th e proces s t o delis t ourcommo n stock , subjec t t o ourrigh t t o appea l unde r NYS E rules .. I f thi s wer e to occur , ther e i s n o assuranc e tha t an y appea l we undertak e i n thes e o r othe r circumstance s woul d b e successful , no r i s ther e an y assuranc e tha t we will continue to comply with the other NYSE continued listing standards. However, effective on March 20, 2020, the SEC granted the NYSE temporary relief until June 30, 2020 regarding the $15 million 30 trading day average minimum market cap threshold standard.

The threat of delisting and/or a delisting of our common stock could have adverse effects by, among other things:

•

Reducing the liquidity and market price of our common stock;

•

reducing the number of investors willing to hold or acquire our common stock, thereby further restricting our ability to obtain equity financing;

•

causing an event of default or noncompliance under certain of our debt facilities and other agreements; and

•

reducing our ability to retain, attract and motivate our directors, officers and employees.

As a result of the cumulative, unpaid dividends on our preferred stock we are no longer eligible to register the offer and sale of securities on SEC Form S-3, which will impair our capital raising activities and could result in the Company being required to repurchase a limited number of shares sold under our DRIP.

We are no longer eligible to use SEC Form S-3 to register offers and sales of our securities under the Securities Act, as a result of the existing dividend arrearage on our preferred stock, which will continue to accumulate following our board of directors’ decision in December 2019 to suspend such dividends. Historically, we have relied on shelf registration statements on Form S-3 for our public capital raising transactions, and also to register the offer and sale of shares of common stock under our DRIP. Our inability to use Form S-3 may harm our ability to raise capital in the future, as we will be required to use a registration statement on Form S-1 to register securities with the SEC, which may be expected to hinder our ability to act quickly in raising capital to take advantage of market conditions and to increase our cost of raising capital. Further, we inadvertently failed to suspend small monthly “cash option” investments in common stock under our DRIP during the months of March, April and May 2020, and as a result of this oversight, we issued a total of 6,134 shares of common stock that were not registered under the Securities Act for aggregate consideration of $1,346.94. The purchasers of these shares, issued pursuant to our DRIP when we were not eligible to issue shares on Form S-3, could bring claims against us for rescission and other damages under federal or state securities laws

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ITEM 2: Unregistered Sales of ~~Equity~~Equ ity Securities and Use of Proceeds

~~None.~~

Cash Option Investments Under DRIP Plan

While we had previously suspended quarterly dividend payments on our common stock during 2019, a very small amount of monthly “cash option” investments in shares continued pursuant to the terms of the Company’s DRIP. Due in part to impacts on the Company’s operations and staffing resulting from ongoing efforts to address the COVID-19 pandemic, we inadvertently failed to suspend the operation of these “cash option” investments during the months of March, April and May 2020, after we lost the ability to use the Form S-3 registration statement for the DRIP due to the existing dividend arrearage with respect to our preferred stock. We have now fully suspended the operation of our DRIP, including the cash option feature but, as a result of this oversight, we issued a total of 6,134 shares of common stock that were not registered under the Securities Act for aggregate consideration of $1,346.94 prior to such suspension. The purchasers of these shares, issued pursuant to our DRIP when we were not eligible to issue shares on Form S-3, could bring claims against us for rescission and other damages under federal or state securities laws.

Limitations on Payment of Dividends

See information presented under the heading “Equity” in the “Liquidity and Capital Resources” section of Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations in PART I of this report for a discussion of current limitations on the payment of dividends by the Company.

ITEM 3: Defaults Upon Senior Securities

Defaults on Indebtedness

See information presented in Note 8 – Mortgage and Other Indebtedness, Net~~None.~~

in the financial statements included in PART I of this report under the heading “Senior Unsecured Notes” for a discussion of certain defaults with respect to the Company’s senior unsecured notes and senior secured credit facility related to certain interest payments on the senior unsecured notes, and additional information presented under the heading “Financial Covenants and Restrictions” for a discussion of additional asserted defaults with respect to the Company’s senior secured credit facility.

Preferred Dividend and Special Common Unit Distribution Arrearages

Dividends on the Series D and the Series E preferred stock are cumulative and therefore will continue to accrue at an annual rate of $18.4375 per share and $16.5625 per share, respectively. As of June 30, 2020, the cumulative amount of unpaid dividends on the preferred stock totaled $33.7 million.

Distributions on the Series K and S special common units are cumulative and therefore will continue to accrue at an annual rate of $2.96875 per unit, $3.0288 per unit and $2.92875 per unit, respectively. Distributions on the Series L special common units were cumulative through and accrued at an annual rate of $3.0288 per unit. Pursuant to the terms of the Series L special common units, on June 1, 2020 the Series L special common units began receiving distributions at the same rate and on the same terms as the common units of limited partnership interest in the Operating Partnership. As of June 30, 2020, the cumulative amount of unpaid distributions on the special common units totaled $6.8 million.

ITEM 4: Mine Safety Disclosures

Not applicable.

ITEM 5: Other Information

None.

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ITEM 6: Exhibits

INDEX TO EXHIBITS

Exhibit Number		Description
10.1		Forbearance Agreement, dated as of June 30, 2020, by and among CBL & Associates Limited Partnership, each of the subsidiary guarantors party thereto, CBL & Associates Properties, Inc., and each of the beneficial owners and/or investment advisors or managers of discretionary funds, accounts or other entities for the holders or beneficial owners of the 2023 Notes. Incorporated by reference to Current Report on Form 8-K, dated June 30, 2020 and filed on July 1, 2020.*
~~Exhibit~~ ~~Number~~ 10.1.1		~~Description~~ Amendment to Forbearance Agreement, dated as of July 15, 2020, by and among CBL & Associates Limited Partnership, each of the subsidiary guarantors party thereto, CBL & Associates Properties, Inc., and each of the beneficial owners and/or investment advisors or managers of discretionary funds, accounts or other entities for the holders or beneficial owners of the 2023 Notes. Incorporated by reference to Current Report on Form 8-K, dated July 15, 2020 and filed on July 16, 2020.*
10.1.2		Second Amendment to Forbearance Agreement, dated as of July 22, 2020, by and among CBL & Associates Limited Partnership, each of the subsidiary guarantors party thereto, CBL & Associates Properties, Inc., and each of the beneficial owners and/or investment advisors or managers of discretionary funds, accounts or other entities for the holders or beneficial owners of the 2023 Notes.Incorporated by reference to Current Report on Form 8-K, dated July 22, 2020 and filed on July 23, 2020.*
10.2		Forbearance Agreement, dated as of July 15, 2020, by and among CBL & Associates Limited Partnership, each of the subsidiary guarantors party thereto, CBL & Associates Properties, Inc., and each of the beneficial owners and/or investment advisors or managers of discretionary funds, accounts or other entities for the holders or beneficial owners of the 2026 Notes. Incorporated by reference to Current Report on Form 8-K, dated July 15, 2020 and filed on July 16, 2020.*
10.2.1		Amendment to Forbearance Agreement, dated as of July 22, 2020, by and among CBL & Associates Limited Partnership, each of the subsidiary guarantors party thereto, CBL & Associates Properties, Inc., and each of the beneficial owners and/or investment advisors or managers of discretionary funds, accounts or other entities for the holders or beneficial owners of the 2026 Notes. Incorporated by reference to Current Report on Form 8-K, dated July 22, 2020 and filed on July 23, 2020.*
10.3		Forbearance Agreement, dated as of June 30, 2020, by and among CBL & Associates Limited Partnership, each of the subsidiary guarantors and pledgors party thereto, CBL & Associates Properties, Inc. and Wells Fargo Bank, National Association, as administrative agent.Incorporated by reference to Current Report on Form 8-K, dated June 30, 2020 and filed on July 1, 2020.*
10.3.1		Amendment to Forbearance Agreement, dated as of July 15, 2020, by and among CBL & Associates Limited Partnership, each of the subsidiary guarantors and pledgors party thereto, CBL & Associates Properties, Inc. and Wells Fargo Bank, National Association, as administrative agent. Incorporated by reference to Current Report on Form 8-K, dated July 15, 2020 and filed on July 16, 2020.*
10.3.2		Second Amendment to Forbearance Agreement, dated as of July 22, 2020, by and among CBL & Associates Limited Partnership, each of the subsidiary guarantors and pledgors party thereto, CBL & Associates Properties, Inc. and Wells Fargo Bank, National Association, as administrative agent.Incorporated by reference to Current Report on Form 8-K, dated July 22, 2020 and filed on July 23, 2020.*
10.3.3		Third Amendment to Forbearance Agreement, dated as of July 29, 2020, by and among CBL & Associates Limited Partnership, each of the subsidiary guarantors and pledgors party thereto, CBL & Associates Properties, Inc. and Wells Fargo Bank, National Association, as administrative agent.Incorporated by reference to Current Report on Form 8-K, dated July 29, 2020 and filed on July 30, 2020.*
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, 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

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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		Condensed 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 Document. (Filed herewith.)
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document. (Filed herewith.)
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document. (Filed herewith.)
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document. (Filed herewith.)
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document. (Filed herewith.)
104		Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*). (Filed herewith.)

*	Commission File No. 1-12494 and 333-182515-01.

Table of Contents

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.~~

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)

~~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: ~~November 12, 2019~~

August 17, 2020



ASSETS ⁽¹⁾	September 30, 2019			December 31, 2018
Real estate assets:
Land	$	741,060		$	793,944
Buildings and improvements	5,819,655			6,414,886
	6,560,715			7,208,830
Accumulated depreciation	(2,404,565		)	(2,493,082		)
	4,156,150			4,715,748
Held for sale	—			30,971
Developments in progress	63,891			38,807
Net investment in real estate assets	4,220,041			4,785,526
Cash and cash equivalents	34,565			25,138
Receivables:
Tenant, net of allowance for doubtful accounts of $2,337 in 2018	76,947			77,788
Other, net of allowance for doubtful accounts of $838 in 2018	6,577			7,511
Mortgage and other notes receivable	5,818			7,672
Investments in unconsolidated affiliates	279,934			283,553
Intangible lease assets and other assets	146,036			153,665
	$	4,769,918		$	5,340,853

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Mortgage and other indebtedness, net	$	3,699,007		$	4,043,180
Accounts payable and accrued liabilities	260,264			218,217
Liabilities related to assets held for sale	—			43,716
Total liabilities ⁽¹⁾	3,959,271			4,305,113
Commitments and contingencies (Note 8 and Note 12)
Redeemable noncontrolling interests	1,864			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
6.625% Series E Cumulative Redeemable Preferred Stock, 690,000 shares outstanding	7			7
Common stock, $.01 par value, 350,000,000 shares authorized, 173,469,264 and 172,656,458 issued and outstanding in 2019 and 2018, respectively	1,735			1,727
Additional paid-in capital	1,965,230			1,968,280
Dividends in excess of cumulative earnings	(1,194,620		)	(1,005,895		)
Total shareholders' equity	772,370			964,137
Noncontrolling interests	36,413			68,028
Total equity	808,783			1,032,165
	$	4,769,918		$	5,340,853

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,
	2019			2018			2019			2018
REVENUES:
Rental revenues	$	180,616		$	200,311		$	556,989		$	620,608
Management, development and leasing fees	2,216			2,658			7,325			8,022
Other	4,419			3,909			14,344			13,046
Total revenues	187,251			206,878			578,658			641,676

OPERATING EXPENSES:
Property operating	(27,344		)	(30,004		)	(82,856		)	(92,357		)
Depreciation and amortization	(64,168		)	(71,945		)	(198,438		)	(217,261		)
Real estate taxes	(18,699		)	(19,433		)	(57,766		)	(61,737		)
Maintenance and repairs	(10,253		)	(11,475		)	(34,327		)	(36,713		)
General and administrative	(12,467		)	(16,051		)	(48,901		)	(47,845		)
Loss on impairment	(135,688		)	(14,600		)	(202,121		)	(84,644		)
Litigation settlement	22,688			—			(65,462		)	—
Other	(7		)	(38		)	(41		)	(377		)
Total operating expenses	(245,938		)	(163,546		)	(689,912		)	(540,934		)

OTHER INCOME (EXPENSES):
Interest and other income	1,367			283			2,212			714
Interest expense	(50,515		)	(55,194		)	(156,995		)	(163,164		)
Gain on extinguishment of debt	—			—			71,722			—
Gain on investments/deconsolidation	11,174			—			11,174			387
Gain on sales of real estate assets	8,056			7,880			13,811			15,998
Income tax benefit (provision)	(1,670		)	(1,034		)	(2,622		)	1,846
Equity in earnings (losses) of unconsolidated affiliates	(1,759		)	1,762			3,421			9,869
Total other expenses	(33,347		)	(46,303		)	(57,277		)	(134,350		)
Net loss	(92,034		)	(2,971		)	(168,531		)	(33,608		)
Net (income) loss attributable to noncontrolling interests in:
Operating Partnership	13,904			1,628			27,116			8,978
Other consolidated subsidiaries	(763		)	(24		)	(631		)	369
Net loss attributable to the Company	(78,893		)	(1,367		)	(142,046		)	(24,261		)
Preferred dividends	(11,223		)	(11,223		)	(33,669		)	(33,669		)
Net loss attributable to common shareholders	$	(90,116	)	$	(12,590	)	$	(175,715	)	$	(57,930	)

Basic and diluted per share data attributable to common shareholders:
Net loss attributable to common shareholders	$	(0.52	)	$	(0.07	)	$	(1.01	)	$	(0.34	)
Weighted-average common and potential dilutive common shares outstanding	173,471			172,665			173,400			172,426



Net loss	(811		)	—		—		—			(78,893		)	(78,893		)	(12,330		)	(91,223		)
Dividends declared - preferred stock	—			—		—		—			(11,223		)	(11,223		)	—			(11,223		)
Issuances of 1,681 shares of common stock and restricted common stock	—			—		—		2			—			2			—			2
Cancellation of 4,310 shares of restricted common stock	—			—		—		(4		)	—			(4		)	—			(4		)
Performance stock units	—			—		—		313			—			313			—			313
Amortization of deferred compensation	—			—		—		591			—			591			—			591
Adjustment for noncontrolling interests	1,131			—		—		(2,221		)	—			(2,221		)	1,089			(1,132		)
Distributions to noncontrolling interests	(1,143		)	—		—		—			—			—			(2,857		)	(2,857		)
Deconsolidation of investment	—			—		—		—			—			—			(4,270		)	(4,270		)
Balance, September 30, 2019	$	1,864		$	25	$	1,735	$	1,965,230		$	(1,194,620	)	$	772,370		$	36,413		$	808,783



Net loss	(97		)	—	—		11,223			(145		)	(13,976		)	(2,898		)	24			(2,874		)
Distributions declared - common units ($0.209 per unit)	(1,143		)	—	—		—			(402		)	(40,111		)	(40,513		)	—			(40,513		)
Distributions declared - preferred units	—			—	—		(11,223		)	—			—			(11,223		)	—			(11,223		)
Issuances of common units	—			—	7		—			—			39			39			—			39
Cancellation of restricted common stock	—			—	(6	)	—			—			(13		)	(13		)	—			(13		)
Performance stock units	—			—	—		—			3			296			299			—			299
Forfeiture of performance stock units	—			—	—		—			(3		)	(247		)	(250		)	—			(250		)
Amortization of deferred compensation	—			—	—		—			8			828			836			—			836
Allocation of partners' capital	805			—	—		—			(15		)	(836		)	(851		)	—			(851		)
Adjustment to record redeemable interests at redemption value	(2,031		)	—	—		—			20			2,009			2,029			—			2,029
Distributions to noncontrolling interests	—			—	—		—			—			—			—			(2,486		)	(2,486		)
Balance, September 30, 2018	$	6,228		25,050	199,429		$	565,212		$	5,540		$	539,191		$	1,109,943		$	11,799		$	1,121,742



Net income (loss)	(811		)	—	—		11,223			(1,056		)	(102,153		)	(91,986		)	763			(91,223		)
Distributions declared - common units ($0.012 per unit) ⁽¹⁾	(1,143		)	—	—		—			—			(1,314		)	(1,314		)	—			(1,314		)
Distributions declared - preferred units	—			—	—		(11,223		)	—			—			(11,223		)	—			(11,223		)
Issuances of common units	—			—	2		—			—			39			39			—			39
Cancellation of restricted common stock	—			—	(4	)	—			—			(4		)	(4		)	—			(4		)
Performance stock units	—			—	—		—			4			309			313			—			313
Amortization of deferred compensation	—			—	—		—			6			585			591			—			591
Allocation of partners' capital	1,131			—	—		—			(14		)	(1,120		)	(1,134		)	—			(1,134		)
Distributions to noncontrolling interests	—			—	—		—			—			—			—			(1,581		)	(1,581		)
Deconsolidation of investment	—			—	—		—			—			—			—			(4,270		)	(4,270		)
Balance, September 30, 2019	$	1,864		25,050	200,228		$	565,212		$	2,388		$	233,339		$	800,939		$	8,134		$	809,073



	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
Tenant openings	(142		)
Executed leases	118
Balance as of September 30, 2019	$	202



	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
Completed performance obligation	—
Contract obligation	—
Balance as of September 30, 2019	$	261



		As of September 30, 2019		Expected Settlement Period
Description	Financial Statement Line Item	As of September 30, 2019		2019 ⁽¹⁾			2020			2021			2022			2023
Contract assets ⁽²⁾	Management, development and leasing fees	$	202	$	(19	)	$	(136	)	$	(43	)	$	—		$	(4	)
Contract liability ⁽³⁾	Other rents	261		(99		)	(54		)	(54		)	(54		)	—



	Three Months Ended September 30, 2019		Three Months Ended September 30, 2018		Nine Months Ended September 30, 2019		Nine Months Ended September 30, 2018
Rental revenues ⁽¹⁾	$	180,616	$	200,311	$	556,989	$	620,608
Revenues from contracts with customers (ASC 606):
Operating expense reimbursements ⁽²⁾	2,449		2,086		6,653		6,597
Management, development and leasing fees ⁽³⁾	2,216		2,658		7,325		8,022
Marketing revenues ⁽⁴⁾	1,056		1,162		3,148		3,385
	5,721		5,906		17,126		18,004

Other revenues	914		661		4,543		3,064
Total revenues ⁽⁵⁾	$	187,251	$	206,878	$	578,658	$	641,676



Performance obligation	Less than 5 years		5-20 years		Over 20 years		Total
Fixed operating expense reimbursements	$	25,698	$	48,088	$	48,283	$	122,069



	Three Months Ended September 30, 2019		Three Months Ended September 30, 2018		Nine Months Ended September 30, 2019		Nine Months Ended September 30, 2018
Fixed lease payments	$	149,582	$	166,927	$	460,584	$	513,356
Variable lease payments	31,034		33,384		96,405		107,252
Total rental revenues	$	180,616	$	200,311	$	556,989	$	620,608



	ROU Asset			Lease Liability
Balance as of January 1, 2019	$	4,160		$	4,074
Cash reduction	(365		)	(365		)
Noncash increase	172			266
Balance as of September 30, 2019	$	3,967		$	3,975



Year Ending December 31,	Operating Leases
2019 ⁽¹⁾	$	193
2020	567
2021	608
2022	332
2023	284
2024	263
Thereafter	12,019
Total undiscounted lease payments	$	14,266
Less imputed interest	(10,291		)
Lease Liability	$	3,975



			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	$	160,740	$	—	$	—	$	160,740	$	202,121



				Sales Price
Sales Date	Property	Property Type	Location	Gross		Net		Gain
April	Honey Creek Mall ⁽¹⁾	Malls	Terre Haute, IN	$	14,600	$	14,360	$	—
April	The Shoppes at Hickory Point	Malls	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
July	850 Greenbrier Circle	All Other	Chesapeake, VA	10,500		10,332		96
July	Kroger at Foothills Plaza	All Other	Maryville, TN	2,350		2,267		1,139
July	The Forum at Grandview	All Other	Madison, MS	31,750		31,606		47
July	Barnes & Noble parcel	All Other	High Point, NC	2,000		1,899		821
September	Dick's Sporting Goods at Hanes Mall	All Other	Winston-Salem, NC	10,000		9,649		2,907
				$	88,808	$	87,315	$	8,246



	September 30, 2019			December 31, 2018
ASSETS
Investment in real estate assets	$	2,135,627		$	2,097,088
Accumulated depreciation	(741,802		)	(674,275		)
	1,393,825			1,422,813
Developments in progress	27,309			12,569
Net investment in real estate assets	1,421,134			1,435,382
Other assets	150,597			188,521
Total assets	$	1,571,731		$	1,623,903
LIABILITIES
Mortgage and other indebtedness, net	$	1,252,003		$	1,319,949
Other liabilities	44,194			39,777
Total liabilities	1,296,197			1,359,726

OWNERS' EQUITY
The Company	173,340			191,050
Other investors	102,194			73,127
Total owners' equity	275,534			264,177
Total liabilities and owners' equity	$	1,571,731		$	1,623,903



	As of
	September 30, 2019		December 31, 2018
Noncontrolling interests:
Operating Partnership	$	28,279	$	55,917
Other consolidated subsidiaries	8,134		12,111
	$	36,413	$	68,028



	September 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	$	1,495,896	5.21%	$	1,783,097	5.33%
Senior unsecured notes due 2023 ⁽²⁾	447,775		5.25%	447,423		5.25%
Senior unsecured notes due 2024⁽³⁾	299,958		4.60%	299,953		4.60%
Senior unsecured notes due 2026 ⁽⁴⁾	617,260		5.95%	616,635		5.95%
Total fixed-rate debt	2,860,889		5.31%	3,147,108		5.37%



Date	Property	Interest Rate at Repayment Date	Scheduled Maturity Date	Principal Balance Repaid
April	Honey Creek Mall ⁽¹⁾	8.00%	July 2019	$	23,539



Transfer Date		Interest Rate at Repayment Date	Scheduled Maturity Date	Balance of Non-recourse Debt		Gain on Extinguishment of Debt
Transfer Date	Property	Interest Rate at Repayment Date	Scheduled Maturity Date	Balance of Non-recourse Debt		Gain on Extinguishment of Debt
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



2019 ⁽¹⁾	$	117,948
2020	246,342
2021	551,962
2022	469,036
2023	1,189,130
2024	404,496
Thereafter	747,740
	3,726,654
Unamortized discounts	(10,007		)
Unamortized deferred financing costs	(17,640		)
Total mortgage and other indebtedness, net	$	3,699,007



		As of September 30, 2019			As of December 31, 2018
	Maturity Date	Interest Rate	Balance		Interest Rate	Balance
Mortgages ⁽¹⁾	Dec 2016 - Jan 2047 ⁽²⁾	4.90% - 9.50%	$	3,604	4.00% - 9.50%	$	4,884
Other Notes Receivable	Sep 2021 - Apr 2026	4.00% - 5.00%	2,214		4.00% - 5.00%	2,788
			$	5,818		$	7,672



Three Months Ended September 30, 2019	Malls			All Other ⁽¹⁾			Total
Revenues⁽²⁾	$	171,514		$	15,737		$	187,251
Property operating expenses ⁽³⁾	(53,384		)	(2,912		)	(56,296		)
Interest expense	(20,866		)	(29,649		)	(50,515		)
Other expense	—			(7		)	(7		)
Gain on sales of real estate assets	3,292			4,764			8,056
Segment profit (loss)	$	100,556		$	(12,067	)	88,489
Depreciation and amortization expense							(64,168		)
General and administrative expense							(12,467		)
Litigation settlement							22,688
Interest and other income							1,367
Loss on impairment							(135,688		)
Gain on investments/deconsolidation							11,174
Income tax provision							(1,670		)
Equity in losses of unconsolidated affiliates							(1,759		)
Net loss							$	(92,034	)
Capital expenditures⁽⁴⁾	$	34,961		$	1,530		$	36,491



Three Months Ended September 30, 2018	Malls			All Other⁽¹⁾			Total
Revenues ⁽²⁾	$	188,440		$	18,438		$	206,878
Property operating expenses ⁽³⁾	(57,243		)	(3,669		)	(60,912		)
Interest expense	(24,665		)	(30,529		)	(55,194		)
Other expense	—			(38		)	(38		)
Gain on sales of real estate assets	92			7,788			7,880
Segment profit (loss)	$	106,624		$	(8,010	)	98,614
Depreciation and amortization expense							(71,945		)
General and administrative expense							(16,051		)
Interest and other income							283
Loss on impairment							(14,600		)
Income tax provision							(1,034		)
Equity in earnings of unconsolidated affiliates							1,762
Net loss							$	(2,971	)
Capital expenditures⁽⁴⁾	$	38,512		$	2,671		$	41,183



Nine Months Ended September 30, 2019	Malls			All Other ⁽¹⁾			Total
Revenues⁽²⁾	$	526,354		$	52,304		$	578,658
Property operating expenses ⁽³⁾	(164,164		)	(10,785		)	(174,949		)
Interest expense	(65,612		)	(91,383		)	(156,995		)
Other expense	—			(41		)	(41		)
Gain on sales of real estate assets	5,770			8,041			13,811
Segment profit (loss)	$	302,348		$	(41,864	)	260,484
Depreciation and amortization expense							(198,438		)
General and administrative expense							(48,901		)
Litigation settlement expense							(65,462		)
Interest and other income							2,212
Gain on extinguishment of debt							71,722
Loss on impairment							(202,121		)
Gain on investments/deconsolidation							11,174
Income tax provision							(2,622		)
Equity in earnings of unconsolidated affiliates							3,421
Net loss							$	(168,531	)
Capital expenditures⁽⁴⁾	$	94,545		$	3,058		$	97,603



Nine Months Ended September 30, 2018	Malls			All Other ⁽¹⁾			Total
Revenues⁽²⁾	$	585,097		$	56,579		$	641,676
Property operating expenses ⁽³⁾	(179,012		)	(11,795		)	(190,807		)
Interest expense	(76,401		)	(86,763		)	(163,164		)
Other expense	(84		)	(293		)	(377		)
Gain on sales of real estate assets	92			15,906			15,998
Segment profit (loss)	$	329,692		$	(26,366	)	303,326
Depreciation and amortization expense							(217,261		)
General and administrative expense							(47,845		)
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	)



	As of September 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⁾	9/30/2019		12/31/2018
West Melbourne I, LLC - Phase I ⁽²⁾	50%	$	40,002	50	%	$	20,001	Feb-2021	$	200	$	203



	Shares		Weighted-Average Grant Date Fair Value
Nonvested at January 1, 2019	875,497		$	7.99
Granted	855,681		$	2.23
Vested	(746,134	)	$	5.11
Forfeited	(12,024	)	$	5.98
Nonvested at September 30, 2019	973,020		$	5.16



	PSUs	Weighted-Average Grant Date Fair Value
Outstanding at January 1, 2019	910,911	$	4.67
2019 PSUs granted ⁽¹⁾	1,103,537	$	2.40
Outstanding at September 30, 2019 ⁽²⁾	2,014,448	$	3.42



	2019 PSUs			2018 PSUs			2017 PSUs
Grant date	February 11, 2019			February 12, 2018			February 7, 2017
Fair value per share on valuation date ⁽¹⁾	$	4.74		$	4.76		$	6.86
Risk-free interest rate ⁽²⁾	2.54		%	2.36		%	1.53		%
Expected share price volatility⁽³⁾	60.99		%	42.02		%	32.85		%

At June 30, 2020, the Company’s receivables include $9,129 related to receivables that have been deferred and are to be repaid over periods generally starting in late 2020 and extending for some portion of 2021. The Company granted abatements of $1,848 for the three and six months ended June 30, 2020. As of early August 2020, the Company estimates that it will defer $15,500 of rents that were billed for April, May and June 2020 based on agreements that have been executed or are in active negotiation. The Company continues to assess rent relief requests from its tenants but is unable to predict the resolution or impact of these discussions.

Accounting Guidance Not Yet Adopted

Description

Financial Statement Effect and Other Information

ASU 2020-04, Reference Rate Reform

On March 12, 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference LIBOR or other reference rates expected to be discontinued because of reference rate reform. This ASU is effective as of March 12, 2020 through December 31, 2022. The Company has not adopted any of the optional expedients or exceptions as of June 30, 2020, but will continue to evaluate the possible adoption of any such expedients or exceptions during the effective period as circumstances evolve.