Unconsolidated Affiliates, Redeemable Interests, Noncontrolling Interests and Cost Method Investments

Unconsolidated Affiliates

At March 31, 2014, the Company had investments in the following 17 entities, which are accounted for using the equity method of accounting:



Joint Venture	Property Name	Company's Interest
CBL/T-C, LLC	CoolSprings Galleria, Oak Park Mall and West County Center	50.0%
CBL-TRS Joint Venture, LLC	Friendly Center, The Shops at Friendly Center and a portfolio of four office buildings	50.0%
CBL-TRS Joint Venture II, LLC	Renaissance Center	50.0%
El Paso Outlet Outparcels, LLC	The Outlet Shoppes at El Paso (vacant land)	50.0%
Fremaux Town Center JV, LLC	Fremaux Town Center	65.0%
Governor’s Square IB	Governor’s Plaza	50.0%
Governor’s Square Company	Governor’s Square	47.5%
High Pointe Commons, LP	High Pointe Commons	50.0%
High Pointe Commons II-HAP, LP	High Pointe Commons - Christmas Tree Shop	50.0%
JG Gulf Coast Town Center LLC	Gulf Coast Town Center	50.0%
Kentucky Oaks Mall Company	Kentucky Oaks Mall	50.0%
Mall of South Carolina L.P.	Coastal Grand—Myrtle Beach	50.0%
Mall of South Carolina Outparcel L.P.	Coastal Grand—Myrtle Beach (Coastal Grand Crossing and vacant land)	50.0%
Port Orange I, LLC	The Pavilion at Port Orange Phase I and one office building	50.0%
Triangle Town Member LLC	Triangle Town Center, Triangle Town Commons and Triangle Town Place	50.0%
West Melbourne I, LLC	Hammock Landing Phases I and II	50.0%
York Town Center, LP	York Town Center	50.0%

Although the Company had majority ownership of certain joint ventures during 2014 and 2013, it evaluated the investments and concluded that the other partners or owners in these joint ventures had substantive participating rights, such as approvals of:


•	the pro forma for the development and construction of the project and any material deviations or modifications thereto;


•	the site plan and any material deviations or modifications thereto;


•	the conceptual design of the project and the initial plans and specifications for the project and any material deviations or modifications thereto;


•	any acquisition/construction loans or any permanent financings/refinancings;


•	the annual operating budgets and any material deviations or modifications thereto;


•	the initial leasing plan and leasing parameters and any material deviations or modifications thereto; and


•	any material acquisitions or dispositions with respect to the project.

As a result of the joint control over these joint ventures, the Company accounts for these investments using the equity method of accounting.

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



	As of
ASSETS	March 31, 2014			December 31, 2013
Investment in real estate assets	$	2,227,475		$	2,167,227
Accumulated depreciation	(570,764		)	(555,174		)
	1,656,711			1,612,053
Developments in progress	53,909			103,161
Net investment in real estate assets	1,710,620			1,715,214
Other assets	176,103			168,799
Total assets	$	1,886,723		$	1,884,013

LIABILITIES
Mortgage and other indebtedness	$	1,478,401		$	1,468,422
Other liabilities	41,133			48,203
Total liabilities	1,519,534			1,516,625

OWNERS' EQUITY
The Company	212,231			213,664
Other investors	154,958			153,724
Total owners' equity	367,189			367,388
Total liabilities and owners' equity	$	1,886,723		$	1,884,013



	Total for the Three Months Ended March 31,						Company's Share for the Three Months Ended March 31,
	2014			2013			2014			2013
Total revenues	$	61,821		$	60,719		$	31,952		$	31,670
Depreciation and amortization	(18,787		)	(19,148		)	(9,861		)	(9,948		)
Interest income	340			339			259			235
Interest expense	(18,558		)	(19,668		)	(9,491		)	(10,072		)
Operating expenses	(18,181		)	(18,752		)	(9,175		)	(9,266		)
Net income	$	6,635		$	3,490		$	3,684		$	2,619

2014 Financings

The following table presents the loan activity of the Company's unconsolidated affiliates since January 1, 2014:



Date	Property	Stated Interest Rate	Maturity Date ⁽¹⁾	Amount Financed or Extended
February	Fremaux Town Center - Phase I ⁽²⁾	LIBOR + 2.125%	March 2016	$	47,291


(1)	The construction loan has two one-year extension options, which are at the joint venture's election, for an outside maturity date of March 2018.


(2)	Fremaux Town Center JV, LLC ("Fremaux") amended and restated its March 2013 loan agreement to increase the capacity on its construction loan from $46,000 to $47,291 for additional development costs related to Fremaux Town Center. The Company has guaranteed 100% of the loan.

All of the debt on the properties owned by the unconsolidated affiliates is non-recourse, except for Fremaux, West Melbourne, Port Orange, and Gulf Coast Phase III. See Note 12 for a description of guarantees the Company has issued related to certain unconsolidated affiliates.

CBL/T-C, LLC

In accordance with the terms of the joint venture agreement, the Company elected to purchase TIAA-CREF's 12.0% interest in Pearland Town Center for $17,948. This amount represents the noncontrolling partner's equity contribution related to Pearland Town Center, which was accounted for as a financing obligation, plus accrued and unpaid preferred return at a rate of 8.0%. See Note 6 for further information.

Redeemable Interests

Redeemable common units of $28,427 and $28,756 at March 31, 2014 and December 31, 2013, respectively, include a partnership interest in the Operating Partnership for which the partnership agreement includes redemption provisions that may require the Operating Partnership to redeem the partnership interest for real property.

Redeemable noncontrolling interests of $6,454 and $5,883 at March 31, 2014 and December 31, 2013, respectively, include the aggregate noncontrolling ownership interest in consolidated subsidiaries that is held by third parties and for which the related partnership agreements contain redemption provisions at the holder's election that allow for redemption through cash and/or properties.

The redeemable noncontrolling interests in other consolidated subsidiaries includes the third party interest in the Company's subsidiary that provides security and maintenance services and also included, prior to their redemption by the Company in September 2013, the perpetual preferred joint venture units (“PJV units”) issued to the Westfield Group (“Westfield”) for its preferred interest in CW Joint Venture, LLC ("CWJV"), a Company-controlled entity, consisting of four of the Company's other consolidated subsidiaries. See Note 12 for additional information related to the PJV units. The 2013 activity related to the redeemable noncontrolling preferred joint venture interest represented by the PJV units that the Company redeemed in September 2013 is as follows:



	Three Months Ended March 31, 2013
Beginning Balance	$	423,834
Net income attributable to redeemable noncontrolling preferred joint venture interest	5,085
Distributions to redeemable noncontrolling preferred joint venture interest	(5,200		)
Ending Balance	$	423,719

Noncontrolling Interests of the Operating Partnership

Noncontrolling interests include the aggregate noncontrolling ownership interest in the Operating Partnership's consolidated subsidiaries that is held by third parties and for which the related partnership agreements either do not include redemption provisions or are subject to redemption provisions that do not require classification outside of permanent equity. Total noncontrolling interest was $18,208 and $19,179, as of March 31, 2014 and December 31, 2013, respectively.

Noncontrolling Interests of the Company

The noncontrolling interests of the Company include the third party interests discussed above as well as the aggregate noncontrolling partnership interest in the Operating Partnership that is not owned by the Company and for which each of the noncontrolling limited partners has the right to exchange all or a portion of its partnership interests for shares of the Company’s common stock or, at the Company’s election, their cash equivalent. As of March 31, 2014, the Company's total noncontrolling interests of $154,201 consisted of noncontrolling interests in the Operating Partnership and in other consolidated subsidiaries of $135,993 and $18,208, respectively. The Company's total noncontrolling interest at December 31, 2013 of $155,021 consisted of noncontrolling interests in the Operating Partnership and in other consolidated subsidiaries of $135,842 and $19,179, respectively.

Cost Method Investment

The Company owns a 6.2% noncontrolling interest in subsidiaries of Jinsheng, an established mall operating and real estate development company located in Nanjing, China. As of March 31, 2014, Jinsheng owned controlling interests in eight home furnishing shopping malls.

The Company accounts for its noncontrolling interest in Jinsheng using the cost method because the Company does not exercise significant influence over Jinsheng and there is no readily determinable market value of Jinsheng’s shares since they are not publicly traded. The carrying amount of this investment was $5,325 at March 31, 2014 and December 31, 2013. The noncontrolling interest is reflected as investment in unconsolidated affiliates in the accompanying condensed consolidated balance sheets.

Variable Interest Entities

Triangle Town Member LLC

The Company holds a 50% ownership interest in the joint venture Triangle Town Member, LLC. In 2013, the Company reconsidered the entity’s status, and determined that its investment in this joint venture represents an interest in a VIE. The entity is under joint control, and therefore the Company continues to account for it as an unconsolidated affiliate using the equity method of accounting as of March 31, 2014.

JG Gulf Coast Town Center LLC

The Company holds a 50% ownership interest in the joint venture JG Gulf Coast Town Center LLC. In 2013, the Company reconsidered the entity’s status, and determined that its investment in this joint venture represents an interest in a VIE. The entity is under joint control, and therefore the Company continues to account for it as an unconsolidated affiliate using the equity method of accounting as of March 31, 2014.

West Melbourne I, LLC

The Company holds a 50% ownership interest in the joint venture West Melbourne I, LLC. In 2013, the Company reconsidered the entity’s status, and determined that its investment in this joint venture represents an interest in a VIE. The entity is under joint control, and therefore the Company continues to account for it as an unconsolidated affiliate using the equity method of accounting as of March 31, 2014.

The Promenade D’Iberville, LLC

The Company holds an 85% ownership interest in the joint venture The Promenade D'Iberville, LLC. In 2013, the Company reconsidered the entity’s status, and determined that its investment in this joint venture represents an interest in a VIE. The Company is the primary beneficiary because of its power to direct the activities of the joint venture that most significantly impact the joint venture’s economic performance as well as the obligation to absorb losses or right to receive benefits from the VIE that could be significant. As a result, the joint venture is presented in the accompanying condensed consolidated financial statements as of March 31, 2014 on a consolidated basis, with the interests of the third party reflected as a noncontrolling interest.

Louisville Outlet Shoppes, LLC

In the second quarter of 2013, the Company entered into a joint venture, Louisville Outlet Shoppes, LLC, with a third party to develop, own and operate The Outlet Shoppes of the Bluegrass located in Simpsonville, KY. Construction began in June 2013 with completion expected in summer 2014. The Company holds a 65% ownership interest in the joint venture. The Company determined that its investment in this joint venture represents an interest in a VIE and that the Company is the primary beneficiary because of its power to direct activities of the joint venture that most significantly impact the joint venture's economic performance as well as the obligation to absorb losses or right to receive benefits from the VIE that could be significant. As a result, the joint venture is presented in the accompanying condensed consolidated financial statements as of March 31, 2014 on a consolidated basis, with the interests of the third party reflected as a noncontrolling interest.

Gettysburg Outlet Center Holding LLC

In the second quarter of 2012, the Company entered into a joint venture, Gettysburg Outlet Center Holding LLC, with a third party to develop, own and operate The Outlet Shoppes at Gettysburg. The Company holds a 50% ownership interest in this joint venture. The Company determined that its investment in this joint venture represents an interest in a VIE and that the Company is the primary beneficiary since it has the power to direct activities of the joint venture that most significantly impact the joint venture's economic performance as well as the obligation to absorb losses or right to receive benefits from the VIE that could be significant. As a result, the joint venture is presented in the accompanying condensed consolidated financial statements as of March 31, 2014 on a consolidated basis, with the interests of the third party reflected as a noncontrolling interest.

El Paso Outlet Center Holding, LLC

In the second quarter of 2012, the Company entered into a joint venture, El Paso Outlet Center Holding, LLC, with a third party to develop, own and operate The Outlet Shoppes at El Paso. The Company holds a 75% ownership interest in the joint venture. The Company determined that its investment in this joint venture represents an interest in a VIE and that the Company is the primary beneficiary since it has the power to direct the activities of the joint venture that most significantly impact the joint venture's economic performance as well as the obligation to absorb losses or right to receive benefits from the VIE that could be significant. As a result, the joint venture is presented in the accompanying condensed consolidated financial statements as of March 31, 2014 on a consolidated basis, with the interests of the third party reflected as a noncontrolling interest.