CBL & Associates Properties Reports Results for Fourth Quarter and Full-Year 2016

CHATTANOOGA, Tenn.--(BUSINESS WIRE)--CBL & Associates Properties, Inc. (NYSE: CBL) announced results for the fourth quarter and year ended December 31, 2016. A description of each non-GAAP financial measure and the related reconciliation to the comparable GAAP financial measure is located at the end of this news release.

	Three Months Ended December 31,							Year Ended December 31,
	2016		2015			%		2016		2015		%
Net income (loss) attributable to common shareholders per diluted share	$	0.34	$	(0.20	)	270.0	%	$	0.75	$	0.34	120.6	%
Funds from Operations ("FFO") per diluted share	$	0.72	$	0.71		1.4	%	$	2.69	$	2.41	11.6	%
FFO, as adjusted, per diluted share ^(1)	$	0.68	$	0.71		(4.2	)%	$	2.41	$	2.32	3.9	%
^(1) For a reconciliation of FFO to FFO, as adjusted, for the periods presented, please refer to the footnotes to the Company's reconciliation of net income (loss) attributable to common shareholders to FFO allocable to Operating Partnership common unitholders on page 9 of this earnings release.

HIGHLIGHTS:

• Same-center NOI increased 0.3% for the fourth quarter and 2.3% for the year ended December 31, 2016, over the prior-year periods.
• 2016 FFO per diluted share, as adjusted, decreased 4.2% to $0.68 in the fourth quarter 2016 and increased 3.9% to $2.41 for 2016, compared with the prior-year periods.
• Average gross rent per square foot increased 11.5% for stabilized mall leases signed in the fourth quarter 2016 and 7.6% for the full-year 2016 over the prior rate.
• Total portfolio occupancy at December 31, 2016 was 94.8%, representing an increase of 120 basis points from the prior year-end.
• Same-center sales per square foot for 2016 were $376, compared with $382 for 2015.
• In 2016, CBL completed the disposition of interests in eight malls, five community centers and five office buildings, generating gross proceeds of more than $369 million.
• In 2016, CBL completed more than $1.0 billion in financing activity, including closing a $400 million unsecured notes offering.

"2016 was an excellent year for CBL. Operationally we generated improved growth from our higher-quality portfolio with a same-center NOI increase of 2.3% and a 120 basis point improvement in occupancy. The progress we've made on our disposition program and focus on reducing debt has resulted in a balance sheet that is stronger and more flexible than ever. We meaningfully reduced shorter-term, floating rate debt through a well-executed 10-year unsecured bond offering in December and applied asset sales proceeds and cash flow to debt reduction, ending the year with our lowest debt balance in ten years.

"2017 represents a year of reinvention for the CBL portfolio as we embark on a number of transformational redevelopment projects at some of our best assets. With our track record of executing profitably on anchor redevelopments, we are excited about the opportunity to transform our properties to meet changing consumer preferences and attract high-quality in-demand uses, all while delivering enhanced returns to our shareholders."

Net income attributable to common shareholders for the fourth quarter 2016 was $57.6 million, or $0.34 per diluted share, compared with a net loss of $33.5 million, or $0.20 per diluted share for the fourth quarter 2015.

Net income attributable to common shareholders for 2016 was $128.0 million, or $0.75 per diluted share, compared with net income of $58.5 million, or $0.34 per diluted share for 2015.

FFO allocable to common shareholders, as adjusted, for the fourth quarter of 2016 was $116.6 million, or $0.68 per diluted share, compared with $120.4 million, or $0.71 per diluted share, for the fourth quarter of 2015. FFO allocable to the Operating Partnership common unitholders, as adjusted, for the fourth quarter of 2016 was $135.9 million compared with $141.0 million for the fourth quarter of 2015.

FFO allocable to common shareholders, as adjusted, for 2016 was $411.0 million, or $2.41 per diluted share, compared with $395.1 million, or $2.32 per diluted share, for 2015. FFO allocable to the Operating Partnership common unitholders, as adjusted, for 2016 was $480.8 million compared with $462.9 million for 2015.

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

	Three Months Ended December 31,		Year Ended December 31,
	2016		2016
Portfolio same-center NOI	0.3	%	2.3	%
Mall same-center NOI	0.0	%	2.1	%
^(1) CBL's definition of same-center NOI excludes the impact of lease termination fees and certain non-cash items of straight line rents, write-offs of landlord inducements, and net amortization of acquired above and below market leases.

MAJOR ITEMS IMPACTING SAME-CENTER NOI RESULTS FOR 2016

• Revenues for 2016 grew $17.3 million as compared with 2015. Major items included:
  • a $13.6 million increase in minimum rents;
  • a $1.0 million increase in percentage rents;
  • a $3.2 million increase in other rent and other income resulting primarily from increases in specialty leasing; and
  • a $0.5 million decline in tenant reimbursements.

• Same-center expenses for 2016 were $0.9 million higher in 2016 compared with 2015. Major items included:
  • a $1.4 million increase in maintenance and repair expenses primarily driven by higher maintenance and snow removal expenses;
  • a $2.5 million decline in operating expenses, primarily due to lower utility and central energy expenses and marketing and advertising expenses compared with the prior year, partially offset by an increase in seasonal expense; and
  • an increase of $2.0 million in real estate tax expenses.

PORTFOLIO OPERATIONAL RESULTS
Occupancy:

	As of December 31,
	2016		2015
Portfolio occupancy	94.8	%	93.6	%
Mall portfolio	94.1	%	93.1	%
Same-center malls	94.2	%	93.7	%
Stabilized malls	94.2	%	93.3	%
Non-stabilized malls ^(1)	92.8	%	91.3	%
Associated centers	96.9	%	94.6	%
Community centers	98.2	%	97.1	%
^(1) Represents occupancy for The Outlet Shoppes at Atlanta and The Outlet Shoppes of the Bluegrass as of December 31, 2016 and Fremaux Town Center, The Outlet Shoppes at Atlanta and The Outlet Shoppes of the Bluegrass as of December 31, 2015.

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

% Change in Average Gross Rent Per Square Foot
	Three Months Ended December 31,		Year Ended December 31,
	2016		2016
Stabilized Malls	11.5	%	7.6	%
New leases	46.3	%	28.2	%
Renewal leases	2.2	%	1.2	%

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

	Year Ended December 31,
	2016		2015		% Change
Stabilized mall same-center sales per square foot	$	376	$	382	(1.6	)%

ANCHOR TRANSACTIONS

In January, CBL closed on a sale-leaseback transaction for five Sears department stores and two Sears Auto Centers located at CBL malls, providing CBL with control of these locations for future redevelopment.

CBL acquired the locations for a total consideration of $72.5 million. Sears will continue to operate the department stores under new 10-year leases. Under the terms of the leases, CBL will receive aggregate initial base rent of approximately $5.075 million, with Sears also responsible for paying common area maintenance charges, taxes, insurance and utilities. CBL will have the right to terminate each Sears lease at any time (except November through January), with six months advance notice.

Additionally in January, CBL closed on the acquisition of three Macy's stores located at Jefferson Mall in Louisville, KY; Parkdale Mall in Beaumont, TX and Eastland Mall in Bloomington, IL, for future redevelopment. CBL acquired the locations for $5.0 million.

FINANCING ACTIVITY

During 2016, CBL completed more than $1.0 billion in financing activity including:

• In December CBL's majority-owned operating partnership subsidiary, CBL & Associates Limited Partnership, closed a $400 million offering of 5.95% Senior Notes Due 2026 (the “notes”) under its existing shelf registration statement. The notes mature on December 15, 2026. Net proceeds from the offering were used to reduce amounts outstanding under the unsecured revolving credit facilities and for general business purposes.
• During the fourth quarter, CBL closed on a $60.0 million ($30.0 million at CBL's share) non-recourse loan secured by The Shops at Friendly Center in Greensboro, NC, which is owned in a 50/50 joint venture. The new loan has a term of six-years to coincide with the maturity date of the existing loan secured by The Friendly Center, and has a fixed interest rate of 3.34%. Proceeds were used to retire the maturing $37.6 million loan ($18.8 million at CBL's share), which had a fixed interest rate of 5.9%, with excess proceeds used to reduce outstanding balances on the Company's lines of credit.
• In June, CBL closed three separate non-recourse secured loans with an aggregate borrowing amount of $227.7 million. The loans have a weighted average interest rate of 3.9% and a weighted average term of 9 years. The loans included a $47.7 million 7-year loan secured by Ambassador Town Center in Lafayette, LA, bearing a fixed rate of 3.22%; a 10-year non-recourse $73.0 million loan secured by Fremaux Town Center in Slidell, LA, bearing a fixed interest rate of 3.69% and a 10-year non-recourse $107.0 million loan secured by Hamilton Place in Chattanooga, TN, bearing a fixed interest rate of 4.36%.
• Additionally, in June the foreclosure of Gulf Coast Town Center in Fort Myers, FL (owned in a 50/50 joint venture) was completed, reducing debt by $95.4 million, at CBL's share.

CBL also completed four loan restructures in 2016, representing an aggregate loan balance of $162 million. The loans were restructured at a weighted average interest rate of 4.75%, representing a 188 basis point improvement over the prior weighted average rate.

• In December, CBL closed on a restructure of the existing $46.7 million loan secured by Cary Towne Center in Cary, NC. The term of the loan was extended two years with an additional two-year extension available at the Company's option for a final maturity of March 2021 and the interest rate reduced from 8.5% to 4.0%, interest only (retroactive to August 2016). Excess cash flow generated from the property will be used to fund a proposed redevelopment. More details of the project will be announced once finalized.
• In December, CBL closed on a restructure of the existing $70.8 million loan secured by Greenbrier Mall in Chesapeake, VA. The term was extended three years with an additional one-year extension available at the Company's option for a final maturity of December 2020. The interest rate was reduced from $5.91% to 5.0%, interest only.
• In April, CBL closed on a restructure of the existing $27.4 million non-recourse loan secured by Hickory Point Mall in Forsyth, IL. The term of the loan was extended three years, with an additional one-year extension available at the Company's option, for a final maturity of December 2019. The interest rate was maintained at 5.85%, with future amortization payments eliminated.
• In February, CBL closed on a restructure of the existing $171.09 million ($17.1 million at CBL's share) loan secured by Triangle Town Center in Raleigh, NC. The term was extended two years with two additional one-year extensions available at the Company's option, for a final maturity date of December 2020. The interest rate was reduced to 4.0% from 5.74%.

Subsequent to the end of the fourth quarter, CBL retired loans secured by Hamilton Corner in Chattanooga, TN; The Plaza at Fayette Mall in Lexington, KY and The Plaza at St. Clair Square in Fairview Heights, IL. The aggregate balance retired was $70.1 million. The properties were added to CBL's unencumbered pool. CBL's consolidated unencumbered pool of properties currently represents nearly 53% of 2016 total consolidated NOI.

CBL currently has three properties in receivership with an aggregate loan balance of $189.6 million: Chesterfield Mall in Chesterfield, MO; Midland Mall in Midland, MI and Wausau Center in Wausau, WI. Foreclosure proceedings are in process and are expected to be finalized in early 2017.

DISPOSITIONS

During 2016, CBL completed dispositions of properties generating gross proceeds of $369.8 million and net proceeds of $225.7 million.

Status/Timing	Property	Location	CBL's Ownership		CBL's Share of Consideration		CBL's Share of Debt		CBL's Share of Equity
Closed/December	Randolph Mall; Regency Mall; Walnut Square	Asheboro, NC; Racine, WI; Dalton, GA	100	%	$	32.3	$	0.0	$	32.3
Closed/December	Regency Mall Outparcels	Racine, WI	100	%		5.3		—		5.3
Closed/July	Fashion Square/The Lakes Mall	Saginaw, MI/Muskegon, MI	100	%		66.5		38.2		28.3
Closed/May	Bonita Lakes Mall & Crossing	Meridian, MI	100	%		27.9		—		27.9
Closed/March	River Ridge Mall ^(1)	Lynchburg, VA	100% → 25%			33.5		—		33.5
Closed/February	Triangle Town Center, Place and Commons ^(1)	Raleigh, NC	50% → 10%			69.6		68.4		1.2
Total Malls:						235.1		106.6		128.5
Closed/December	Friendly Center Office, Wachovia Office, First Citizens Bank, & Bank of America	Greensboro, NC	50	%		13.0		—		13.0
Closed/December	Triangle Town Place	Raleigh, NC	10	%		3.0		2.9		0.1
Closed/December	Cobblestone Village	Palm Coast, FL	100	%		8.5		—		8.5
Closed/December	Atlanta Self Development	Woodstock, GA	65	%		4.0		2.1		1.9
Closed/September	High Pointe Commons	Harrisburg, PA	50	%		16.9		8.7		8.2
Closed/September	Oak Branch Business Center	Greensboro, NC	100	%		2.4		—		2.4
Closed/April	Renaissance Center	Durham, NC	50	%		64.6		23.8		40.8
Closed/April	The Crossings at Marshall's Creek	Middle Smithfield, PA	100	%		22.3		—		22.3
Total Community Center and Office:						134.7		37.5		97.2
Total Disposition Activity:					$	369.8	$	144.1	$	225.7
^(1) Joint Venture amounts are reflected net of retained interest.

Additionally, in January 2017, CBL closed on the sale of two wholly-owned office buildings in Newport News, VA for $6.25 million.

OUTLOOK AND GUIDANCE

The Company is providing 2017 FFO guidance in the range of $2.26 - $2.33 per share. CBL is assuming same-center NOI growth of 0.0% - 1.5% in 2017.

The guidance also assumes the following:

• $8.0 million to $12.0 million of outparcel sales gains;
• flat year-end total portfolio occupancy as well as stabilized mall occupancy;
• G&A expense in the range of $62.0 - $64.0 million for the full year;
• no unannounced capital markets or disposition activity.

	Low			High
Expected diluted earnings per common share	$	0.70		$	0.77
Adjust to fully converted shares from common shares	(0.10		)	(0.11		)
Expected earnings per diluted, fully converted common share	0.60			0.66
Add: depreciation and amortization	1.56			1.56
Add: noncontrolling interest in earnings of Operating Partnership	0.10			0.11
Expected FFO per diluted, fully converted common share	$	2.26		$	2.33

INVESTOR CONFERENCE CALL AND WEBCAST

CBL & Associates Properties, Inc. will conduct a conference call at 11:00 a.m. ET on Thursday, February 2, 2017, to discuss its fourth quarter and full year results. The number to call for this interactive teleconference is [phone] or [phone] and enter the confirmation number 5940738. A replay of the conference call will be available through February 9, 2017, by dialing [phone] or [phone] and entering the confirmation number 10097491. A transcript of the Company's prepared remarks will be furnished on a Form 8-K following the conference call.

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

The Company will also provide an online webcast and rebroadcast of its 2016 fourth quarter and full year earnings release conference call. The live broadcast of the quarterly conference call will be available online at cblproperties.com on Thursday, February 2, 2017 beginning at 11:00 a.m. ET. The online replay will follow shortly after the call and continue for three months.

ABOUT CBL & ASSOCIATES PROPERTIES, INC.

Headquartered in Chattanooga, TN, CBL is one of the largest and most active owners and developers of malls and shopping centers in the United States. CBL owns, holds interests in or manages 128 properties, including 84 regional malls/open-air centers. The properties are located in 29 states and total 79.1 million square feet including 7.0 million square feet of non-owned shopping centers managed for third parties. Additional information can be found at cblproperties.com.

NON-GAAP FINANCIAL MEASURES
Funds From Operations

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

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

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

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

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 on page 9 of this earnings release for a description of these adjustments.

Same-center Net Operating Income

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

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

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

Pro Rata Share of Debt

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

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

CBL & Associates Properties, Inc. Consolidated Statements of Operations (Unaudited; in thousands, except per share amounts)
	Three Months Ended December 31,						Year Ended December 31,
	2016			2015			2016			2015
REVENUES:
Minimum rents	$	168,276		$	178,378		$	670,565		$	684,309
Percentage rents	7,213			7,645			17,803			18,063
Other rents	9,363			8,186			23,110			21,934
Tenant reimbursements	67,487			73,461			280,438			288,279
Management, development and leasing fees	4,100			2,758			14,925			10,953
Other	2,054			7,202			21,416			31,480
Total revenues	258,493			277,630			1,028,257			1,055,018
OPERATING EXPENSES:
Property operating	32,956			33,401			137,760			141,030
Depreciation and amortization	72,188			77,519			292,693			299,069
Real estate taxes	21,756			21,886			90,110			90,799
Maintenance and repairs	14,012			12,413			53,586			51,516
General and administrative	16,467			15,678			63,332			62,118
Loss on impairment	86			102,280			116,822			105,945
Other	13			5,766			20,326			26,957
Total operating expenses	157,478			268,943			774,629			777,434
Income from operations	101,015			8,687			253,628			277,584
Interest and other income	462			225			1,524			6,467
Interest expense	(53,608		)	(54,981		)	(216,318		)	(229,343		)
Gain on extinguishment of debt	—			—			—			256
Gain on investments	7,534			—			7,534			16,560
Equity in earnings of unconsolidated affiliates	10,316			5,988			117,533			18,200
Income tax benefit (provision)	(911		)	(937		)	2,063			(2,941		)
Income (loss) from continuing operations before gain on sales of real estate assets	64,808			(41,018		)	165,964			86,783
Gain on sales of real estate assets	15,064			14,065			29,567			32,232
Net income (loss)	79,872			(26,953		)	195,531			119,015
Net (income) loss attributable to noncontrolling interests in:
Operating Partnership	(9,481		)	5,612			(21,537		)	(10,171		)
Other consolidated subsidiaries	(1,561		)	(916		)	(1,112		)	(5,473		)
Net income (loss) attributable to the Company	68,830			(22,257		)	172,882			103,371
Preferred dividends	(11,223		)	(11,223		)	(44,892		)	(44,892		)
Net income (loss) attributable to common shareholders	$	57,607		$	(33,480	)	$	127,990		$	58,479
Basic per share data attributable to common shareholders:
Net income (loss) attributable to common shareholders	$	0.34		$	(0.20	)	$	0.75		$	0.34
Weighted-average common shares outstanding	170,793			170,495			170,762			170,476
Diluted per share data attributable to common shareholders:
Net income (loss) attributable to common shareholders	$	0.34		$	(0.20	)	$	0.75		$	0.34
Weighted-average common and potential dilutive common shares outstanding	171,089			170,495			170,836			170,499

The Company's reconciliation of net income (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 December 31,						Year Ended December 31,
	2016			2015			2016			2015
Net income (loss) attributable to common shareholders	$	57,607		$	(33,480	)	$	127,990		$	58,479
Noncontrolling interest in income (loss) of Operating Partnership	9,481			(5,612		)	21,537			10,171
Depreciation and amortization expense of:
Consolidated properties	72,188			77,519			292,693			299,069
Unconsolidated affiliates	9,516			9,122			38,606			40,476
Non-real estate assets	(757		)	(799		)	(3,154		)	(3,083		)
Noncontrolling interests' share of depreciation and amortization	(2,075		)	(2,109		)	(8,760		)	(9,045		)
Loss on impairment, net of tax	37			102,280			115,027			105,945
Gain on depreciable property, net of tax	(1,535		)	(5,899		)	(45,741		)	(20,944		)
FFO allocable to Operating Partnership common unitholders	144,462			141,022			538,198			481,068
Litigation settlements, net of related expenses ^(1)	259			—			2,567			(1,329		)
Nonrecurring professional fees expense ^(1)	477			—			2,258			—
Gain on investments, net of tax ^(2)	(7,034		)	—			(7,034		)	(16,560		)
Equity in earnings from disposals of unconsolidated affiliates ^(3)	(3,758		)	—			(58,243		)	—
Non cash default interest expense	1,466			—			2,840			—
Gain on extinguishment of debt	—			—			—			(256		)
Loss on extinguishment of debt from unconsolidated affiliates	—			—			197			—
FFO allocable to Operating Partnership common unitholders, as adjusted	$	135,872		$	141,022		$	480,783		$	462,923
FFO per diluted share	$	0.72		$	0.71		$	2.69		$	2.41
FFO, as adjusted, per diluted share	$	0.68		$	0.71		$	2.41		$	2.32
Weighted average common and potential dilutive common shares outstanding with Operating Partnership units fully converted	199,381			199,753			199,838			199,757
^(1) Litigation settlement is included in Interest and Other Income in the Consolidated Statements of Operations. Litigation expense, including settlements paid, is included in General and Administrative expense in the Consolidated Statements of Operations. Nonrecurring professional fees expense is included in General and Administrative expense in the Consolidated Statements of Operations.
^(2) For the three months and the year ended December 31, 2016, includes a gain of $10,136 related to the redemption of the Company’s 2007 investment in a Chinese real estate company, less related taxes of $500, partially offset by a $2,602 loss related to the Company’s exit from its consolidated joint venture that provided security and maintenance services to third parties. For the year ended December 31, 2015, includes a $16,560 gain related to the sale of marketable securities.
^(3) For the three months and the year ended December 31, 2016, includes $3,758 related to the sale of four office buildings. For the year ended December 31, 2016, includes $28,146 related to the foreclosure of the loan secured by Gulf Coast Town Center and $26,373 related to the sale of our 50% interest in Triangle Town Center.

The reconciliation of diluted EPS to FFO per diluted share is as follows:
	Three Months Ended December 31,						Year Ended December 31,
	2016			2015			2016			2015
Diluted EPS attributable to common shareholders	$	0.34		$	(0.20	)	$	0.75		$	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	0.40			0.42			1.60			1.64
Loss on impairment, net of tax	—			0.52			0.57			0.53
Gain on depreciable property, net of tax	(0.02		)	(0.03		)	(0.23		)	(0.10		)
FFO per diluted share	$	0.72		$	0.71		$	2.69		$	2.41

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

	Three Months Ended December 31,						Year Ended December 31,
	2016			2015			2016			2015
FFO allocable to Operating Partnership common unitholders	$	144,462		$	141,022		$	538,198		$	481,068
Percentage allocable to common shareholders^(1)	85.79		%	85.35		%	85.48		%	85.35		%
FFO allocable to common shareholders	$	123,934		$	120,362		$	460,052		$	410,592
FFO allocable to Operating Partnership common unitholders, as adjusted	$	135,872		$	141,022		$	480,783		462,923
Percentage allocable to common shareholders ^(1)	85.79		%	85.35		%	85.48		%	85.35		%
FFO allocable to common shareholders, as adjusted	$	116,565		$	120,362		$	410,973		$	395,105
^(1) Represents the weighted average number of common shares outstanding for the period divided by the sum of the weighted average number of common shares and the weighted average number of Operating Partnership units outstanding during the period. See the reconciliation of shares and Operating Partnership units outstanding on page 14.

	Three Months Ended December 31,						Year Ended December 31,
	2016			2015			2016			2015
SUPPLEMENTAL FFO INFORMATION:
Lease termination fees	$	9		$	276		$	2,211		$	4,659
Lease termination fees per share	$	—		$	—		$	0.01		$	0.02
Straight-line rental income (including write-offs)	$	(1,175	)	$	1,232		$	(985	)	$	4,207
Straight-line rental income (including write-offs) per share	$	(0.01	)	$	0.01		$	—		$	0.02
Gains on outparcel sales	$	13,269		$	5,779		$	21,621		$	8,929
Gains on outparcel sales per share	$	0.07		$	0.03		$	0.11		$	0.04
Net amortization of acquired above- and below-market leases	$	301		$	1,316		$	3,066		$	3,197
Net amortization of acquired above- and below-market leases per share	$	—		$	0.01		$	0.02		$	0.02
Net amortization of debt premiums and discounts	$	519		$	404		$	2,519		$	1,841
Net amortization of debt premiums and discounts per share	$	—		$	—		$	0.01		$	0.01
Income tax benefit (provision)	$	(911	)	$	(937	)	$	2,063		$	(2,941	)
Income tax benefit (provision) per share	$	—		$	—		$	0.01		$	(0.01	)
Abandoned projects expense	$	(12	)	$	(190	)	$	(56	)	$	(2,373	)
Abandoned projects expense per share	$	—		$	—		$	—		$	(0.01	)
Gain (loss) on extinguishment of debt	$	—		$	—		$	(197	)	$	256
Gain (loss) on extinguishment of debt per share	$	—		$	—		$	—		$	—
Non cash default interest expense	$	(1,466	)	$	—		$	(2,840	)	$	—
Non cash default interest expense per share	$	(0.01	)	$	—		$	(0.01	)	$	—
Gain on investments, net of tax	$	7,034		$	—		$	7,034		$	16,560
Gain on investments, net of tax per share	$	0.04		$	—		$	0.04		$	0.08
Equity in earnings from disposals of unconsolidated affiliates	$	3,758		$	—		$	58,243		$	—
Equity in earnings from disposals of unconsolidated affiliates per share	$	0.02		$	—		$	0.29		$	—
Interest capitalized	$	690		$	1,027		$	2,302		$	4,168
Interest capitalized per share	$	—		$	0.01		$	0.01		$	0.02
Litigation settlements, net of related expenses	$	(259	)	$	—		$	(2,567	)	$	1,329
Litigation settlements, net of related expenses per share	$	—		$	—		$	(0.01	)	$	0.01
Nonrecurring professional fees expense	$	(477	)	$	—		$	(2,258	)	$	—
Nonrecurring professional fees expense per share	$	—		$	—		$	(0.01	)	$	—
							As of December 31,
							2016			2015
Straight-line rent receivable							$	67,086		$	67,477

Same-center Net Operating Income (Dollars in thousands)
	Three Months Ended December 31,						Year Ended December 31,
	2016			2015			2016			2015
Net income (loss)	$	79,872		$	(26,953	)	$	195,531		$	119,015
Adjustments:
Depreciation and amortization		72,188			77,519			292,693			299,069
Depreciation and amortization from unconsolidated affiliates		9,516			9,122			38,606			40,476
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries		(2,075	)		(2,109	)		(8,760	)		(9,045	)
Interest expense		53,608			54,981			216,318			229,343
Interest expense from unconsolidated affiliates		6,296			6,591			26,083			35,464
Noncontrolling interests' share of interest expense in other consolidated subsidiaries		(1,689	)		(1,670	)		(6,815	)		(6,760	)
Abandoned projects expense		12			190			56			2,373
Gain on sales of real estate assets		(15,064	)		(14,109	)		(29,567	)		(32,276	)
Gain on sales of real estate assets of unconsolidated affiliates		(4,090	)		(234	)		(97,430	)		(1,964	)
Gain on investments		(7,534	)		—			(7,534	)		(16,560	)
Gain on extinguishment of debt		—			—			—			(256	)
Loss on extinguishment of debt from unconsolidated affiliates		—			—			197			—
Loss on impairment		86			102,280			116,822			105,945
Income tax (benefit) provision		911			937			(2,063	)		2,941
Lease termination fees		(9	)		(277	)		(2,211	)		(4,660	)
Straight-line rent and above- and below-market lease amortization		874			(2,547	)		(2,081	)		(7,403	)
Net income attributable to noncontrolling interest in other consolidated subsidiaries		(1,561	)		(916	)		(1,112	)		(5,473	)
General and administrative expenses		16,467			15,678			63,332			62,118
Management fees and non-property level revenues		(3,349	)		(2,044	)		(17,026	)		(24,958	)
Operating Partnership's share of property NOI		204,459			216,439			775,039			787,389
Non-comparable NOI		(12,058	)		(24,625	)		(58,967	)		(87,716	)
Total same-center NOI ^(1)	$	192,401		$	191,814		$	716,072		$	699,673
Total same-center NOI percentage change		0.3	%					2.3	%
Malls	$	176,858		$	176,819		$	656,158		$	642,682
Associated centers		8,762			8,644			33,338			32,001
Community centers		5,067			4,549			19,603			17,686
Offices and other		1,714			1,802			6,973			7,304
Total same-center NOI ^(1)	$	192,401		$	191,814		$	716,072		$	699,673
Percentage Change:
Malls		0.0	%					2.1	%
Associated centers		1.4	%					4.2	%
Community centers		11.4	%					10.8	%
Offices and other		(4.9	)%					(4.5	)%
Total same-center NOI ^(1)		0.3	%					2.3	%
^(1) CBL defines NOI as property operating revenues (rental revenues, tenant reimbursements and other income), less property operating expenses (property operating, real estate taxes and maintenance and repairs). Same-center NOI excludes lease termination income, straight-line rent adjustments, amortization of above and below market lease intangibles and write-offs of landlord inducement assets. We include a property in our same-center pool when we own all or a portion of the property as of December 31, 2016, and we owned it and it was in operation for both the entire preceding calendar year and the current year-to-date reporting period ending December 31, 2016. New properties are excluded from same-center NOI, until they meet this criteria. The only properties excluded from the same-center pool that would otherwise meet this criteria are properties which are either being considered for repositioning, minority interest properties in which we own an interest of 25% or less, or where we intend to renegotiate the terms of the debt secured by the property or return the property to the lender.

Company's Share of Consolidated and Unconsolidated Debt (Dollars in thousands)
	As of December 31, 2016
	Fixed Rate			Variable Rate			Total per Debt Schedule			Unamortized Deferred Financing Costs			Total
Consolidated debt	$	3,594,379		$	888,770		$	4,483,149		$	(17,855	)	$	4,465,294
Noncontrolling interests' share of consolidated debt	(109,162		)	(7,504		)	(116,666		)	945			(115,721		)
Company's share of unconsolidated affiliates' debt	530,062			73,263			603,325			(2,806		)	600,519
Company's share of consolidated and unconsolidated debt	$	4,015,279		$	954,529		$	4,969,808		$	(19,716	)	$	4,950,092
Weighted average interest rate	5.30		%	2.18		%	4.70		%
	As of December 31, 2015
	Fixed Rate			Variable Rate			Total per Debt Schedule			Unamortized Deferred Financing Costs			Total
Consolidated debt	$	3,485,308		$	1,241,379		$	4,726,687		$	(16,059	)	$	4,710,628
Noncontrolling interests' share of consolidated debt	(111,754		)	(6,981		)	(118,735		)	855			(117,880		)
Company's share of unconsolidated affiliates' debt	664,249			134,970			799,219			(1,486		)	797,733
Company's share of consolidated and unconsolidated debt	$	4,037,803		$	1,369,368		$	5,407,171		$	(16,690	)	$	5,390,481
Weighted average interest rate	5.41		%	1.81		%	4.50		%

Debt-To-Total-Market Capitalization Ratio as of December 31, 2016 (In thousands, except stock price)
	Shares Outstanding	Stock Price ^(1)		Value
Common stock and Operating Partnership units	199,085	$	11.50	$	2,289,478
7.375% Series D Cumulative Redeemable Preferred Stock	1,815	250.00		453,750
6.625% Series E Cumulative Redeemable Preferred Stock	690	250.00		172,500
Total market equity				2,915,728
Company's share of total debt, excluding unamortized deferred financing costs				4,969,808
Total market capitalization				$	7,885,536
Debt-to-total-market capitalization ratio				63.0		%
(1) Stock price for common stock and Operating Partnership units equals the closing price of the common stock on December 30, 2016. The stock prices for the preferred stocks represent the liquidation preference of each respective series.

Reconciliation of Shares and Operating Partnership Units Outstanding (In thousands)
	Three Months Ended December 31,						Year Ended December 31,
2016:	Basic			Diluted			Basic			Diluted
Weighted average shares - EPS		170,793			171,089			170,762			170,836
Weighted average Operating Partnership units		28,292			28,292			29,002			29,002
Weighted average shares - FFO		199,085			199,381			199,764			199,838
2015:
Weighted average shares - EPS		170,495			170,495			170,476			170,499
Weighted average Operating Partnership units		29,258			29,258			29,258			29,258
Weighted average shares - FFO		199,753			199,753			199,734			199,757
Dividend Payout Ratio
	Three Months Ended December 31,						Year Ended December 31,
	2016			2015			2016			2015
Weighted average cash dividend per share	$	0.27283		$	0.27279		$	1.09121		$	1.09116
FFO as adjusted, per diluted fully converted share	$	0.68		$	0.71		$	2.41		$	2.32
Dividend payout ratio		40.1	%		38.4	%		45.3	%		47.0	%

Consolidated Balance Sheets (Unaudited; in thousands, except share data)
	As of December 31,
	2016			2015
ASSETS
Real estate assets:
Land	$	831,979		$	876,668
Buildings and improvements	6,942,452			7,287,862
	7,774,431			8,164,530
Accumulated depreciation	(2,427,108		)	(2,382,568		)
	5,347,323			5,781,962
Held for sale	5,861			—
Developments in progress	167,355			75,991
Net investment in real estate assets	5,520,539			5,857,953
Cash and cash equivalents	18,951			36,892
Receivables:
Tenant, net of allowance for doubtful accounts of $1,910 and $1,923 in 2016 and 2015, respectively	94,676			87,286
Other, net of allowance for doubtful accounts of $838 and $1,276 in 2016 and 2015, respectively	6,227			17,958
Mortgage and other notes receivable	16,803			18,238
Investments in unconsolidated affiliates	266,872			276,383
Intangible lease assets and other assets	180,572			185,281
	$	6,104,640		$	6,479,991
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Mortgage and other indebtedness	$	4,465,294		$	4,710,628
Accounts payable and accrued liabilities	280,498			344,434
Total liabilities	4,745,792			5,055,062
Commitments and contingencies
Redeemable noncontrolling interests	17,996			25,330
Shareholders' equity:
Preferred stock, $.01 par value, 15,000,000 shares authorized:
7.375% Series D Cumulative Redeemable Preferred Stock, 1,815,000 shares outstanding	18			18
6.625% Series E Cumulative Redeemable Preferred Stock, 690,000 shares outstanding	7			7
Common stock, $.01 par value, 350,000,000 shares authorized, 170,792,645 and 170,490,948 issued and outstanding in 2016 and 2015, respectively	1,708			1,705
Additional paid-in capital	1,969,059			1,970,333
Accumulated other comprehensive income	—			1,935
Dividends in excess of cumulative earnings	(742,078		)	(689,028		)
Total shareholders' equity	1,228,714			1,284,970
Noncontrolling interests	112,138			114,629
Total equity	1,340,852			1,399,599
	$	6,104,640		$	6,479,991