SHAREHOLDERS’ EQUITY AND PARTNERS' CAPITAL

Common Stock and Common Units

The Company's authorized common stock consists of 350,000,000 shares at $0.01 par value per share. The Company had 170,048,144 and 161,309,652 shares of common stock issued and outstanding as of December 31, 2013 and 2012, respectively.

Partners in the Operating Partnership hold their ownership through common and special common units of limited partnership interest, hereinafter referred to as "common units." A common unit and a share of CBL's common stock have essentially the same economic characteristics, as they effectively participate equally in the net income and distributions of the Operating Partnership. For each share of common stock issued by CBL, the Operating Partnership has issued a corresponding number of common units to CBL in exchange for the proceeds from the stock issuance. The Operating Partnership had 199,593,731 and 190,855,239 common units outstanding as of December 31, 2013 and 2012, respectively.

Each limited partner in the Operating Partnership has the right to exchange all or a portion of its common units for shares of CBL's common stock, or at CBL's election, their cash equivalent. When an exchange for common stock occurs, CBL assumes the limited partner's common units in the Operating Partnership. The number of shares of common stock received by a limited partner of the Operating Partnership upon exercise of its exchange rights will be equal, on a one-for-one basis, to the number of common units exchanged by the limited partner. If CBL elects to pay cash, the amount of cash paid by the Operating Partnership to redeem the limited partner's common units will be based on the five-day trailing average of the trading price at the time of exercise of the shares of common stock that would otherwise have been received by the limited partner in the exchange. Neither the common units nor the shares of common stock of CBL are subject to any right of mandatory redemption.

At-The-Market Equity Program

On March 1, 2013, the Company entered into separate controlled equity offering sales agreements (collectively, the "Sales Agreements") with a number of sales agents to sell shares of the Company's common stock, having an aggregate offering price of up to $300,000, from time to time in ATM equity offerings (as defined in Rule 415 of the Securities Act of 1933, as amended) or in negotiated transactions (the "ATM program"). In accordance with the Sales Agreements, the Company will set the parameters for the sales of shares, including the number of shares to be issued, the time period during which sales are to be made and any minimum price below which sales may not be made. The Sales Agreements provide that the sales agents will be entitled to compensation for their services at a mutually agreed commission rate not to exceed 2.0% of the gross proceeds from the sales of shares sold through the ATM program. For each share of common stock issued by the Company, the Operating Partnership issues a corresponding number of common units of limited partnership interest to the Company in exchange for the contribution of the proceeds from the stock issuance. The Company includes only share issuances that have settled in the calculation of shares outstanding at the end of each period.

The following table summarizes issuances of common stock sold through the ATM program since inception through December 31, 2013:



	Number of Shares Settled	Gross Proceeds		Net Proceeds		Weighted-average Sales Price
2013:
First quarter	1,889,105	$	44,459	$	43,904	$	23.53
Second quarter	6,530,193	167,034		165,692		25.58
Total	8,419,298	$	211,493	$	209,596	$	25.12

The proceeds from these sales were used to reduce the balances on the Company's credit facilities. Since the commencement of the ATM program, the Company has issued 8,419,298 shares of common stock and approximately $88,507 remains available that may be sold under this program. Actual future sales will depend on a variety of factors including but not limited to market conditions, the trading price of the Company's common stock and the Company's capital needs. The Company has no obligation to sell the remaining shares available under the ATM program.

Common Unit Activity

During 2013, no holders of common units exercised their conversion rights.

During 2012, holders of 12,690,628 common units of limited partnership interest in the Operating Partnership exercised their conversion rights. CBL elected to pay cash of $3,965 for 224,628 common units and to issue 12,466,000 shares of common stock in exchange for the remaining common units.

During the 2011, holders of 401,324 common units exercised their conversion rights. CBL elected to pay cash of $5,869 for these units in the first quarter of 2012.

Preferred Stock and Preferred Units

The Company's authorized preferred stock consists of 15,000,000 shares at $0.01 par value per share. A description of the Company's cumulative redeemable preferred stock is listed below. The Operating Partnership issues an equivalent number of preferred units to CBL in exchange for the contribution of the proceeds from CBL to the Operating Partnership when CBL issues preferred stock. The preferred units generally have the same terms and economic characteristics as the corresponding series of preferred stock.

In October 2012, CBL completed an underwritten public offering of 6,900,000 depositary shares, each representing 1/10^th of a share of its newly designated 6.625% Series E Preferred Stock at $25.00 per depositary share. CBL contributed net proceeds from the offering of $166,636, after deducting the underwriting discount and offering expenses to the Operating Partnership in exchange for 690,000 Series E Preferred Units of the Operating Partnership. A portion of the net proceeds from this offering were used to redeem all CBL's Series C Preferred Stock with an aggregate liquidation preference of $115,000 and $891 related to accrued and unpaid dividends for an aggregate redemption amount of $115,891. The remaining net proceeds of $50,745 were used to reduce outstanding balances on the Operating Partnership's credit facilities. The Series E Preferred Stock has a liquidation preference of $250.00 per share ($25.00 per depositary share). The dividends on the Series E Preferred Stock are cumulative, accrue from the date of issuance and are payable quarterly in arrears at a rate of $16.5625 per share ($1.65625 per depositary share) per annum. The Company may not redeem the Series E Preferred Stock before October 12, 2017, except in limited circumstances to preserve CBL's REIT status or in connection with a change of control. On or after October 12, 2017, the Company may, at its option, redeem the Series E Preferred Stock in whole at any time or in part from time to time by paying $25.00 per depositary share, plus any accrued and unpaid dividends up to, but not including, the date of redemption. The Series E Preferred Stock generally has no stated maturity and will not be subject to any sinking fund or mandatory redemption. The Series E Preferred Stock is not convertible into any of the Company's securities, except under certain circumstances in connection with a change of control. Owners of the depositary shares representing Series E Preferred Stock generally have no voting rights except under dividend default.

The Company had 18,150,000 depositary shares, each representing 1/10^thof a share of the Company's 7.375% Series D Preferred Stock with a par value of $0.01 per share, outstanding as of December 31, 2013 and 2012. The Series D Preferred Stock has a liquidation preference of $250.00 per share ($25.00 per depositary share). The dividends on the Series D Preferred Stock are cumulative, accrue from the date of issuance and are payable quarterly in arrears at a rate of $18.4375 per share ($1.84375 per depositary share) per annum. The Series D Preferred Stock has no stated maturity, is not subject to any sinking fund or mandatory redemption, and is not convertible into any other securities of the Company. The Company may redeem shares, in whole or in part, at any time for a cash redemption price of $250.00 per share ($25.00 per depositary share) plus accrued and unpaid dividends.

On November 5, 2012, the Company redeemed all 460,000 Series C Shares and all outstanding depositary shares, each representing 1/10^th of a Series C Share for $115,891. The Company recorded a charge to preferred dividends of $3,773 upon redemption to write off direct issuance costs related to the Series C Shares and underlying depositary shares.

Dividends - CBL

CBL paid first, second and third quarter 2013 cash dividends on its common stock of $0.23 per share on April 16^th, July 16^th and October 16^th 2013, respectively. On November 25, 2013, CBL's Board of Directors declared a fourth quarter cash dividend of $0.245 per share that was paid on January 15, 2014, to shareholders of record as of December 30, 2013. The dividend declared in the fourth quarter of 2013, totaling $41,662, is included in accounts payable and accrued liabilities at December 31, 2013. The total dividend included in accounts payable and accrued liabilities at December 31, 2012 was $35,485.

The allocations of dividends declared and paid for income tax purposes are as follows:



	Year Ended December 31,
	2013			2012				2011
Dividends declared:
Common stock	$	0.98		$	0.83			$	0.84
Series C preferred stock	$	—		$	14.53		⁽¹⁾	$	19.38
Series D preferred stock	$	18.44		$	18.44			$	18.44
Series E preferred stock	$	16.56		$	3.91		⁽²⁾	$	—

Allocations:
Common stock
Ordinary income	100.00		%	100.00		%		100.00		%
Capital gains 25% rate	—		%	—		%		—		%
Return of capital	—		%	—		%		—		%
Total	100.00		%	100.00		%		100.00		%

Preferred stock ⁽³⁾
Ordinary income	100.00		%	100.00		%		100.00		%
Capital gains 25% rate	—		%	—		%		—		%
Total	100.00		%	100.00		%		100.00		%


(1)	Represents the three regular quarterly dividends paid in 2012, prior to the redemption on November 5, 2012.


(2)	Represents dividends for the partial quarter covering October 5, 2012 through December 31, 2012.


(3)	The allocations for income tax purposes are the same for each series of preferred stock for each period presented.

Distributions - The Operating Partnership

The Operating Partnership paid first, second and third quarter 2013 cash distributions on its redeemable common units and common units of $0.7322 and $0.2374 per share, respectively, on April 16^th, July 16^th and October 16^th 2013, respectively. On November 25, 2013, the Operating Partnership declared a fourth quarter cash distribution on its redeemable common units and common units of $0.7322 of $0.2552 per share, respectively, that was paid on January 15, 2014. The distribution declared in the fourth quarter of 2013, totaling $8,861, is included in accounts payable and accrued liabilities at December 31, 2013. The total dividend included in accounts payable and accrued liabilities at December 31, 2012 was $8,205.