10-K 1 cbl-12312015x10k.htm 10-K 10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015
 
Or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____________ TO _______________
 
COMMISSION FILE NO. 1-12494 (CBL & ASSOCIATES PROPERTIES, INC.)
COMMISSION FILE NO. 333-182515-01 (CBL & ASSOCIATES LIMITED PARTNERSHIP)
______________
 
CBL & ASSOCIATES PROPERTIES, INC.
CBL & ASSOCIATES LIMITED PARTNERSHIP
(Exact Name of Registrant as Specified in Its Charter)
Delaware (CBL & Associates Properties, Inc.)
Delaware (CBL & Associates Limited Partnership)
(State or other jurisdiction of incorporation or organization)
 
62-1545718
62-1542285
(I.R.S. Employer Identification No.)
2030 Hamilton Place Blvd., Suite 500
Chattanooga, TN
(Address of principal executive offices)
 
37421
(Zip Code)
Registrant’s telephone number, including area code:  423.855.0001
Securities registered pursuant to Section 12(b) of the Act:
CBL & Associates Properties, Inc.:
Title of each Class
 
Name of each exchange on
which registered
Common Stock, $0.01 par value 
 
New York Stock Exchange
7.375% Series D Cumulative Redeemable Preferred Stock, $0.01 par value 
 
New York Stock Exchange
6.625% Series E Cumulative Redeemable Preferred Stock, $0.01 par value 
 
New York Stock Exchange

CBL & Associates Limited Partnership: None

Securities registered pursuant to Section 12(g) of the Act:
CBL & Associates Properties, Inc.: None
CBL & Associates Limited Partnership: None 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
CBL & Associates Properties, Inc.
 
 Yes x   
No o
CBL & Associates Limited Partnership
 
 Yes x   
No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
CBL & Associates Properties, Inc.
 
 Yes o  
No x
CBL & Associates Limited Partnership
 
 Yes o  
No x

 




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 x   
No o
CBL & Associates Limited Partnership
 
 Yes x   
No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).
CBL & Associates Properties, Inc.
 
 Yes x   
No o
CBL & Associates Limited Partnership
 
 Yes x   
No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
CBL & Associates Properties, Inc.
 Large accelerated filer x
Accelerated filer o
 Non-accelerated filer o 
Smaller Reporting Company o
CBL & Associates Limited Partnership
 Large accelerated filer o
Accelerated filer o
Non-accelerated filer x
Smaller Reporting Company o
                                                                                                                    
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
CBL & Associates Properties, Inc.
 
 Yes o  
No x
CBL & Associates Limited Partnership
 
 Yes o  
No x
                                        
The aggregate market value of the 166,972,786 shares of CBL & Associates Properties, Inc.'s common stock held by non-affiliates of the registrant as of June 30, 2015 was $2,704,959,133, based on the closing price of $16.20 per share on the New York Stock Exchange on June 30, 2015. (For this computation, the registrant has excluded the market value of all shares of its common stock reported as beneficially owned by executive officers and directors of the registrant; such exclusion shall not be deemed to constitute an admission that any such person is an “affiliate” of the registrant.)
 
As of February 22, 2016, 170,517,199 shares of common stock were outstanding.


DOCUMENTS INCORPORATED BY REFERENCE

Portions of CBL & Associates Properties, Inc.’s Proxy Statement for the 2016 Annual Meeting of Stockholders are incorporated by reference in Part III.



EXPLANATORY NOTE
This report combines the annual reports on Form 10-K for the year ended December 31, 2015 of CBL & Associates Properties, Inc. and CBL & Associates Limited Partnership. Unless stated otherwise or the context otherwise requires, references to the "Company" mean CBL & Associates Properties, Inc. and its subsidiaries. References to the "Operating Partnership" mean CBL & Associates Limited Partnership and its subsidiaries. The terms "we," "us" and "our" refer to the Company or the Company and the Operating Partnership collectively, as the context requires.
The Company is a real estate investment trust ("REIT") whose stock is traded on the New York Stock Exchange. The Company is the 100% owner of two qualified REIT subsidiaries, CBL Holdings I, Inc. and CBL Holdings II, Inc. At December 31, 2015, 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 84.3% limited partner interest for a combined interest held by the Company of 85.3%.
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 annual reports on Form 10-K for the Company and the Operating Partnership provides the following benefits:
enhances investors' understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner that management views and operates the business;
eliminates duplicative disclosure and provides a more streamlined and readable presentation, since a substantial portion of the disclosure applies to both the Company and the Operating Partnership; and
creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.
To help investors understand the differences between the Company and the Operating Partnership, this report provides separate 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 consolidated financial statements of the Company and those of the Operating Partnership. A single set of notes to 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 information for the Company and the Operating Partnership:
consolidated financial statements;
certain accompanying notes to consolidated financial statements, including Note 2- Summary of Significant Accounting Policies, Note 6 - Mortgage and Other Indebtedness, Note 7 - Shareholders' Equity and Partners' Capital and Note 8 - Redeemable Interests and Noncontrolling Interests;
selected financial data in Item 6 of this report;
controls and procedures in Item 9A of this report; and
certifications of the Chief Executive Officer and Chief Financial Officer included as Exhibits 31.1 through 32.4.



TABLE OF CONTENTS

 
 
Page Number
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




Cautionary Statement Regarding Forward-Looking Statements 
Certain statements included or incorporated by reference in this Annual Report on Form 10-K 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,” or similar expressions.  Any forward-looking statement speaks only as of the date on which it is made and is qualified in its entirety by reference to the factors discussed throughout this report. 
Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, forward-looking statements are not guarantees of future performance or results and we can give no assurance that these expectations will be attained.  It is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of known and unknown risks and uncertainties. In addition to the risk factors discussed in Part I, Item 1A of this report, such known risks and uncertainties include, without limitation:
general industry, economic and business conditions;
interest rate fluctuations;
costs and availability of capital 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;
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;
changes in our credit ratings; and
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.

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.

1



PART I
 
ITEM 1. BUSINESS 
Background
CBL & Associates Properties, Inc. (“CBL”) was organized on July 13, 1993, as a Delaware corporation, to acquire substantially all of the real estate properties owned by CBL & Associates, Inc., which was formed by Charles B. Lebovitz in 1978, and by certain of its related parties.  On November 3, 1993, CBL completed an initial public offering (the “Offering”). Simultaneously with the completion of the Offering, CBL & Associates, Inc., its shareholders and affiliates and certain senior officers of the Company (collectively, “CBL’s Predecessor”) transferred substantially all of their interests in its real estate properties to CBL & Associates Limited Partnership (the “Operating Partnership”) in exchange for common units of limited partner interest in the Operating Partnership. The interests in the Operating Partnership contain certain conversion rights that are more fully described in Note 7 to the consolidated financial statements. The terms “we,” “us” and “our” refer to the Company or the Company and the Operating Partnership collectively, as the context requires. 
The Company’s Business
We are a self-managed, self-administered, fully integrated REIT. We own, develop, acquire, lease, manage, and operate regional shopping malls, open-air and mixed-use centers, outlet centers, associated centers, community centers and office properties. Our Properties are located in 27 states, but are primarily in the southeastern and midwestern United States. We have elected to be taxed as a REIT for federal income tax purposes.
We conduct substantially all of our business through the Operating Partnership. We are the 100% owner of two qualified REIT subsidiaries, CBL Holdings I, Inc. and CBL Holdings II, Inc. CBL Holdings I, Inc. is the sole general partner of the Operating Partnership. At December 31, 2015, CBL Holdings I, Inc. owned a 1.0% general partner interest and CBL Holdings II, Inc. owned an 84.3% limited partner interest in the Operating Partnership, for a combined interest held by us of 85.3%.
As of December 31, 2015, we owned interests in the following Properties:
 
 
Malls (1)
 
Associated
Centers
 
Community
Centers
 
Office
Buildings (2)
 
Total
Consolidated Properties
 
72

 
21

 
6

 
8

 
107

Unconsolidated Properties (3)
 
10

 
4

 
4

 
5

 
23

Total
 
82

 
25

 
10

 
13

 
130

(1)
Category consists of regional malls, open-air centers and outlet centers (including one mixed-use center) (the "Malls").
(2)
Includes CBL's corporate office buildings.
(3)
The Operating Partnership accounts for these investments using the equity method because one or more of the other partners have substantive participating rights.
At December 31, 2015, we had interests in the following Properties under development ("Construction Properties"):
 
 
Consolidated
Properties
 
Unconsolidated
Properties
 
 
Malls
 
Malls
 
Community
Centers
Development
 

 

 
1

Expansions
 
1

 

 
1

Redevelopments
 
2

 
2

 

We also hold options to acquire certain development properties owned by third parties.
As of December 31, 2015, we owned mortgages on five Properties, each of which is collateralized by either a first mortgage, a second mortgage or by assignment of 100% of the ownership interests in the underlying real estate and related improvements (the “Mortgages”).
The Malls, Associated Centers, Community Centers, Office Buildings, Construction Properties and Mortgages are collectively referred to as the “Properties” and individually as a “Property.”

2



We conduct our property management and development activities through CBL & Associates Management, Inc. (the “Management Company”) to comply with certain requirements of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code").  The Operating Partnership owns 100% of the Management Company’s outstanding preferred stock and common stock.
The Management Company manages all but nine of the Properties. Governor’s Square and Governor’s Plaza in Clarksville, TN, Kentucky Oaks Mall in Paducah, KY and Fremaux Town Center in Slidell, LA are all owned by unconsolidated joint ventures and are managed by a property manager that is affiliated with the third party partner, which receives a fee for its services. The third party partner of each of these Properties controls the cash flow distributions, although our approval is required for certain major decisions.  The Outlet Shoppes at Oklahoma City in Oklahoma City, OK, The Outlet Shoppes at Gettysburg in Gettysburg, PA, The Outlet Shoppes at El Paso in El Paso, TX, The Outlet Shoppes at Atlanta in Woodstock, GA and The Outlet Shoppes of the Bluegrass in Simpsonville, KY are owned by consolidated joint ventures and managed by a property manager that is affiliated with the third party partner, which receives a fee for its services.
Revenues are primarily derived from leases with retail tenants and generally include fixed minimum rents, percentage rents based on tenants’ sales volumes and reimbursements from tenants for expenditures related to real estate taxes, insurance, common area maintenance and other recoverable operating expenses, as well as certain capital expenditures. We also generate revenues from management, leasing and development fees, sponsorships, sales of peripheral land at the Properties and from sales of operating real estate assets when it is determined that we can realize an appropriate value for the assets. Proceeds from such sales are generally used to retire related indebtedness or reduce outstanding balances on our credit facilities. 
The following terms used in this Annual Report on Form 10-K will have the meanings described below:
 GLA – refers to gross leasable area of retail space in square feet, including Anchors and Mall tenants.
Anchor – refers to a department store, other large retail store or theater greater than or equal to 50,000 square feet.
Junior Anchor - non-traditional department store, retail store or theater comprising more than 20,000 square feet and less than 50,000 square feet.
Freestanding – Property locations that are not attached to the primary complex of buildings that comprise the Mall shopping center.
Outparcel – land used for freestanding developments, such as retail stores, banks and restaurants, which are generally on the periphery of the Properties.
2024 Notes - $300 million of senior unsecured notes issued by the Operating Partnership in October 2014 that bear interest at 4.60% and mature on October 15, 2024.
2023 Notes - $450 million of senior unsecured notes issued by the Operating Partnership in November 2013 that bear interest at 5.25% and mature on December 1, 2023 and, collectively with the 2024 Notes, (the "Notes").

Significant Markets and Tenants 
Top Five Markets
Our top five markets, based on percentage of total revenues, were as follows for the year ended December 31, 2015
Market
 
Percentage
of Total
Revenues
St. Louis, MO
 
7.4%
Chattanooga, TN
 
4.0%
Lexington, KY
 
3.2%
Madison, WI
 
3.2%
Laredo, TX
 
2.6%
 

3



Top 25 Tenants
Our top 25 tenants based on percentage of total revenues were as follows for the year ended December 31, 2015:
 
Tenant
 
Number of
Stores
 
Square
Feet
 
Percentage of
Total
Annualized
Revenues
1
L Brands, Inc. (1)
 
162

 
 
860,953

 
 
3.44
%
 
2
Signet Jewelers Limited (2)
 
218

 
 
325,882

 
 
2.84
%
 
3
Ascena Retail Group, Inc. (3)
 
214

 
 
1,083,122

 
 
2.60
%
 
4
Foot Locker, Inc.
 
136

 
 
590,827

 
 
2.33
%
 
5
AE Outfitters Retail Company
 
80

 
 
493,051

 
 
1.99
%
 
6
Dick's Sporting Goods, Inc. (4)
 
28

 
 
1,524,370

 
 
1.69
%
 
7
Genesco Inc. (5)
 
192

 
 
306,878

 
 
1.69
%
 
8
The Gap, Inc.
 
69

 
 
764,807

 
 
1.69
%
 
9
Express Fashions
 
45

 
 
366,176

 
 
1.22
%
 
10
Abercrombie & Fitch, Co.
 
54

 
 
366,613

 
 
1.21
%
 
11
Luxottica Group, S.P.A. (6)
 
120

 
 
266,372

 
 
1.21
%
 
12
JC Penney Company, Inc. (7)
 
61

 
 
6,980,160

 
 
1.20
%
 
13
Forever 21 Retail, Inc.
 
25

 
 
466,386

 
 
1.17
%
 
14
Finish Line, Inc.
 
61

 
 
315,906

 
 
1.13
%
 
15
Charlotte Russe Holding, Inc.
 
55

 
 
353,959

 
 
1.08
%
 
16
The Buckle, Inc.
 
52

 
 
266,935

 
 
1.03
%
 
17
Best Buy Co., Inc. (8)
 
63

 
 
548,312

 
 
0.99
%
 
18
Aeropostale, Inc.
 
69

 
 
262,303

 
 
0.97
%
 
19
Claire's Stores, Inc.
 
112

 
 
140,054

 
 
0.82
%
 
20
New York & Company, Inc.
 
42

 
 
281,919

 
 
0.80
%
 
21
Shoe Show, Inc.
 
51

 
 
640,385

 
 
0.78
%
 
22
Barnes & Noble Inc.
 
20

 
 
604,028

 
 
0.77
%
 
23
The Children's Place Retail Stores, Inc.
 
61

 
 
265,624

 
 
0.77
%
 
24
Cinemark
 
10

 
 
524,772

 
 
0.75
%
 
25
H&M
 
27

 
 
552,089

 
 
0.74
%
 
 
 
 
2,027

 
 
19,151,883

 
 
34.91
%
 
 
 
 
 
 
 
 
 
 
 
 
(1)
L Brands, Inc. operates Victoria's Secret, PINK and Bath & Body Works.
(2)
Signet Jewelers Limited operates Kay Jewelers, Marks & Morgan, JB Robinson, Shaw's Jewelers, Osterman's Jewelers, LeRoy's Jewelers, Jared Jewelers, Belden Jewelers, Ultra Diamonds, Rogers Jewelers, Zales, Peoples and Piercing Pagoda.
(3)
Ascena Retail Group, Inc. operates Justice, Dressbarn, Maurices, Lane Bryant and Catherines. In September 2015, Ascena acquired Ann Inc. which operates Ann Taylor, LOFT, and Lou & Grey.
(4)
Dick's Sporting Goods, Inc. operates Dick's Sporting Goods, Golf Galaxy and Field & Stream stores.
(5)
Genesco Inc. operates Journey's, Underground by Journeys, Hat World, Lids, Hat Zone, and Cap Factory stores.
(6)
Luxottica Group, S.P.A. operates Lenscrafters, Sunglass Hut, and Pearle Vision.
(7)
JC Penney Co., Inc. owns 31 of these stores. The above chart includes one store that was closed as of December 31, 2015 but where JC Penney remains obligated for rent under the terms of the lease.
(8)
Best Buy Co., Inc. operates Best Buy and Best Buy Mobile.
Growth Strategy
Our objective is to achieve growth in funds from operations (see page 76 for a discussion of funds from operations) and reduce our overall cost of debt and equity by maximizing same-center net operating income ("NOI"), total earnings before income taxes, depreciation and amortization ("EBITDA") and cash flows through a variety of methods as further discussed below. 

4



Leasing, Management and Marketing 
Our objective is to maximize cash flows from our existing Properties through:
aggressive leasing that seeks to increase occupancy and facilitate an optimal merchandise mix,
originating and renewing leases at higher gross rents per square foot compared to the previous lease,
merchandising, marketing, sponsorship and promotional activities and
actively controlling operating costs.
Redevelopments  
Redevelopments represent situations where we capitalize on opportunities to add incremental square footage or increase the productivity of previously occupied space through aesthetic upgrades, retenanting and/or changing the use of the space. Many times, redevelopments result from acquiring possession of Anchor space (such as former Sears and JC Penney stores) and subdividing it into multiple spaces. The following presents the redevelopments we completed during 2015 and those under construction at December 31, 2015 (dollars in thousands):
 
 
 
 
 
 
 
 
CBL's Share of
 
 
 
 
Property
 
Location
 
CBL
Ownership
Interest
 
Total
Project
Square Feet
 
Total
Cost (1)
 
Cost to
Date (2)
 
Actual/
Expected
Opening Date
 
Initial
Unleveraged
Yield
Completed in 2015:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mall Redevelopments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brookfield Square - Sears Redevelopment
    (Blackfin Ameripub, Jason's Deli)
 
Brookfield, WI
 
100%
 
21,814

 
$
7,700

 
$
6,102

 
Fall-15
 
8.0%
Hickory Point Mall - JCP Redevelopment (Hobby
     Lobby)
 
Forsyth, IL
 
100%
 
60,000

 
2,764

 
2,224

 
July-15
 
10.7%
Janesville Mall - JCP Redevelopment (Dick's Sporting Goods/ULTA)
 
Janesville, WI
 
100%
 
149,522

 
11,091

 
9,428

 
September-15
 
8.4%
Meridian Mall - Gordmans
 
Lansing, MI
 
100%
 
50,000

 
7,193

 
6,043

 
July-15
 
10.3%
Northgate Mall - Streetscape/ULTA
 
Chattanooga, TN
 
100%
 
50,852

 
8,989

 
6,746

 
September-15
 
10.5%
Regency Mall - Sears (Dunham's Sports)
 
Racine, WI
 
100%
 
89,119

 
3,404

 
2,851

 
Fall-15
 
9.0%
Total Redevelopments Completed
 
 
 
 
 
421,307

 
$
41,141

 
$
33,394

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Currently under construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mall Redevelopments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CoolSprings Galleria - Sears Redevelopment
    (American Girl, Cheesecake Factory)
 
Nashville, TN
 
50%
 
182,163

 
$
32,816

 
$
22,701

 
May-15/
Summer-16
 
7.4%
Northpark Mall - Dunham's Sports
 
Joplin, MO
 
100%
 
80,524

 
3,362

 
713

 
Summer-16
 
9.5%
Oak Park Mall - Self Development
 
Overland Park, KS
 
50%
 
6,735

 
1,210

 
429

 
Summer-16
 
8.2%
Randolph Mall - JCP Redevelopment (Ross/ULTA)
 
Asheboro, NC
 
100%
 
33,796

 
4,372

 
2,252

 
Summer-16
 
7.8%
Total Redevelopments Under Construction
 
 
 
 
 
303,218

 
$
41,760

 
$
26,095

 
 
 
 
(1)
Total Cost is presented net of reimbursements to be received.
(2)
Cost to Date does not reflect reimbursements until they are received.
Renovations
Renovations usually include remodeling and upgrading existing facades, uniform signage, new entrances and floor coverings, updating interior décor, resurfacing parking lots and improving the lighting of interiors and parking lots. Renovations can result in attracting new retailers, increased rental rates, sales and occupancy levels and maintaining the Property's market dominance. Our 2015 renovation program included upgrades at five of our malls including Dakota Square Mall in Minot, ND; Janesville Mall in Janesville, WI; Laurel Park Place in Livonia, MI; Monroeville Mall in Pittsburgh, PA and Sunrise Mall in Brownsville, TX. Renovation expenditures for 2015 included certain capital expenditures related to the parking decks at West County Center. We invested $30.8 million in renovations in 2015. The total investment in the renovations that are scheduled for 2016 is projected to be $15.0 million, which includes approximately $7.0 million, at our share, of a $13.8 million renovation at CoolSprings Galleria in Nashville, TN as well as other eco-friendly green renovations.

5



Development of New Retail Properties and Expansions
In general, we seek development opportunities in middle-market trade areas that we believe are under-served by existing retail operations. These middle-markets must also have sufficient demographics to provide the opportunity to effectively maintain a competitive position. The following presents the new developments we opened during 2015 and those under construction at December 31, 2015 (dollars in thousands):
 
 
 
 
 
 
 
 
CBL's Share of
 
 
 
 
Property
 
Location
 
CBL
Ownership
Interest
 
Total
Project
Square Feet
 
Total
Cost (1)
 
Cost to
Date (2)
 
Actual/
Expected
Opening Date
 
Initial
Unleveraged
Yield
Completed in 2015:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Community Center:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Parkway Plaza
 
Fort Oglethorpe, GA
 
100%
 
134,050

 
$
17,325

 
$
16,564

 
March-15
 
9.0%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Currently under construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Community Center:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ambassador Town Center
 
Lafayette, LA
 
65%
 
431,070

 
$
40,724

 
$
25,130

 
Spring-16
 
8.8%
(1)
Total Cost is presented net of reimbursements to be received.
(2)
Cost to Date does not reflect reimbursements until they are received.
We can also generate additional revenues by expanding a Property through the addition of department stores, mall stores and large retail formats. An expansion also protects the Property's competitive position within its market. The following presents the expansions we completed during 2015 and those under construction at December 31, 2015 (dollars in thousands):
 
 
 
 
 
 
 
 
CBL's Share of
 
 
 
 
Property
 
Location
 
CBL
Ownership
Interest
 
Total
Project
Square Feet
 
Total
Cost (1)
 
Cost to
Date (2)
 
Actual/
Expected
Opening Date
 
Initial
Unleveraged
Yield
Completed in 2015:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mall/Outlet Center Expansions:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fremaux Town Center - Phase II
 
Slidell, LA
 
65%
 
281,032

 
$
24,684

 
$
21,848

 
October-15
 
9.7%
Mid Rivers Mall - Planet Fitness
 
St Peters, MO
 
100%
 
13,068

 
2,576

 
2,586

 
May-15
 
13.8%
The Outlet Shoppes at Atlanta - Parcel Development
 
Woodstock, GA
 
75%
 
9,600

 
2,657

 
2,897

 
May-15
 
9.3%
The Outlet Shoppes at Atlanta - Phase II
 
Woodstock, GA
 
75%
 
32,944

 
4,174

 
2,484

 
Fall-15
 
13.9%
The Outlet Shoppes of the Bluegrass - Phase II
 
Simpsonville, KY
 
65%
 
53,378

 
7,671

 
5,305

 
Fall-15
 
11.0%
Sunrise Mall - Dick's Sporting Goods
 
Brownsville, TX
 
100%
 
50,000

 
8,278

 
5,722

 
October-15
 
8.8%
 
 
 
 
 
 
440,022

 
50,040

 
40,842

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Community Center Expansions:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Hammock Landing - Academy Sports
 
West Melbourne, FL
 
50%
 
63,092

 
4,952

 
3,361

 
March-15
 
8.6%
Statesboro Crossing - Phase II (ULTA)
 
Statesboro, GA
 
50%
 
10,000

 
1,246

 
952

 
September-15
 
8.1%
 
 
 
 
 
 
73,092

 
6,198

 
4,313

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Expansions Opened
 
 
 
 
 
513,114

 
$
56,238

 
$
45,155

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Currently under construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mall Expansion:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Kirkwood Mall - Self Development (Panera Bread, Verizon, Caribou Coffee)
 
Bismarck, ND
 
100%
 
12,570

 
$
3,702

 
$
3,672

 
Fall-15/
Spring-16
 
10.5%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Community Center Expansion:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
High Pointe Commons - Petco
 
Harrisburg, PA
 
50%
 
12,885

 
1,055

 
47

 
Spring-16
 
10.5%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Expansions Under Development
 
 
 
 
 
25,455

 
$
4,757

 
$
3,719

 
 
 
 
(1)
Total Cost is presented net of reimbursements to be received.
(2)
Cost to Date does not reflect reimbursements until they are received.

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Shadow Development Pipeline
We are continually pursuing new development opportunities and have projects in various stages of pre-development. Our shadow pipeline consists of projects for Properties on which we have completed initial project analysis and design but which have not commenced construction as of December 31, 2015. The following presents our shadow development pipeline at December 31, 2015 (dollars in thousands):

Shadow Pipeline of Properties Under Development at December 31, 2015
 
 
(Dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CBL's Share of
 
 
 
 
Property
 
Location
 
CBL
Ownership
Interest
 
Total
Project
Square
Feet
 
Estimated
 Total
Cost (1)
 
Expected
Opening
Date
 
Initial
Unleveraged
Yield
Mall Expansions:
 
 
 
 
 
 
 
 
 
 
 
 
Dakota Square Mall - Expansion
 
Minot, ND
 
100%
 
24,000 - 26,000
 
$7,000 - $8,000
 
Fall-16
 
7% - 8%
Friendly Center - Shops
 
Greensboro, NC
 
50%
 
12,000 - 13,000
 
 2,500 - 3,000
 
Fall-16
 
8% - 9%
Hamilton Place - Theatre
 
Chattanooga, TN
 
100%
 
30,000 - 35,000
 
5,000 - 6,000
 
Fall-16
 
9% - 10%
Mayfaire Town Center - Phase I
 
Wilmington, NC
 
100%
 
65,000 - 70,000
 
19,000 - 21,000
 
Fall-16
 
8% - 9%
 
 
 
 
 
 
131,000 - 144,000
 
$33,500 - $38,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Community Center Expansion:
 
 
 
 
 
 
 
 
 
 
 
 
Hammock Landing - Expansion
 
West Melbourne, FL
 
50%
 
23,000 - 26,000
 
$2,250 - $2,750
 
Fall-16
 
10% - 11%
(1)
Total Cost is presented net of reimbursements to be received.
Acquisitions
We believe there is opportunity for growth through acquisitions of regional malls and other associated properties that complement our portfolio. We selectively acquire properties we believe can appreciate in value by increasing NOI through our development, leasing and management expertise.
Environmental Matters
A discussion of the current effects and potential future impacts on our business and Properties of compliance with federal, state and local environmental regulations is presented in Item 1A of this Annual Report on Form 10-K under the subheading “Risks Related to Real Estate Investments.”
Competition
The Properties compete with various shopping facilities in attracting retailers to lease space. In addition, retailers at our Properties face competition from discount shopping centers, outlet centers, wholesale clubs, direct mail, television shopping networks, the internet and other retail shopping developments. The extent of the retail competition varies from market to market. We work aggressively to attract customers through marketing promotions and campaigns. Many of our retailers have adopted an omni-channel approach which leverages sales through both on-line and in-store retailing channels.
Seasonality
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 rent income in the fourth quarter. Additionally, the Malls earn most of their “temporary” rents (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 our fiscal year.
Recent Developments
Acquisitions
In June 2015, we acquired Mayfaire Town Center and Community Center for $192.0 million in cash. We subsequently sold Mayfaire Community Center in December 2015 for $56.3 million. See Note 3 and Note 4 to the consolidated financial statements for additional information.

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Dispositions
We sold a mall, three associated centers and two community centers in 2015 for an aggregate gross sales price of $104.9 million. After loan repayment, commissions and closing costs, the sales generated an aggregate $103.5 million of net proceeds. See Note 4 to the consolidated financial statements for further information. We also sold two apartment complexes for an aggregate $29.0 million net sales price and received approximately $29.0 million from outparcel sales.
Impairment Losses
During the year ended December 31, 2015, we recorded a loss on impairment totaling $105.9 million. Of this total, $100.0 million relates to Chesterfield Mall, a Non-Core Property, $2.6 million is attributable to one Mall disposition, $1.9 million relates to the disposition of an Associated Center and $1.4 million is from the sale of two outparcels and a building at a formerly owned Mall. See Note 4 and Note 15 to the consolidated financial statements for additional information.
Financing and Capital Markets Activity    
We continue to progress in our strategy to build a high-quality unencumbered pool of Properties in addition to balancing our leverage structure. Highlights of financing and capital markets activity for the year ended December 31, 2015 include the following:
obtained an investment grade rating of BBB- from Standard & Poor's Rating Services ("S&P");
extended and modified our three unsecured credit facilities totaling $1.1 billion, reducing the borrowing spread to a rate of LIBOR plus 120 basis points and also reducing the annual facility fee to 25 basis points, based upon our current credit ratings, which represents an aggregate 25 basis points improvement over the rate on the previous facilities;
closed on a new four-year (including extensions) $350.0 million unsecured term loan, bearing interest at LIBOR plus 135 basis points, based upon our current credit ratings;
completed $314.5 million of new secured non-recourse financings at a weighted-average interest rate of 4.07%, representing a 178 basis point improvement over the interest rate borne by the maturing loans;
retired approximately $432 million of consolidated property-specific loans, adding more than $742 million of undepreciated book value to our unencumbered pool; and
sold one mall, three associated centers, two community centers, interests in two Class-A apartment complexes and outparcels to generate gross proceeds of over $150 million, which were used to reduce the balances on our lines of credit.
Equity
Common Stock and Common Units
Our authorized common stock consists of 350,000,000 shares at $0.01 par value per share. We had 170,490,948 and 170,260,273 shares of common stock issued and outstanding as of December 31, 2015 and 2014, respectively. The Operating Partnership had 199,748,131 and 199,532,908 common units outstanding as of December 31, 2015 and 2014, respectively.
Preferred Stock
Our authorized preferred stock consists of 15,000,000 shares at $0.01 par value per share. See Note 7 to the consolidated financial statements for a description of our outstanding cumulative redeemable preferred stock.
Financial Information About Segments
See Note 11 to the consolidated financial statements for information about our reportable segments.
Employees
CBL does not have any employees other than its statutory officers.  Our Management Company currently has 617 full-time and 127 part-time employees. None of our employees are represented by a union.
 Corporate Offices
Our principal executive offices are located at CBL Center, 2030 Hamilton Place Boulevard, Suite 500, Chattanooga, Tennessee, 37421 and our telephone number is (423) 855-0001.

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 Available Information
There is additional information about us on our web site at cblproperties.com. Electronic copies of our Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, as well as any amendments to those reports, are available free of charge by visiting the “investor relations” section of our web site. These reports are posted as soon as reasonably practical after they are electronically filed with, or furnished to, the Securities and Exchange Commission ("SEC"). The information on our web site is not, and should not be considered, a part of this Form 10-K. 
ITEM 1A. RISK FACTORS 
Set forth below are certain factors that may adversely affect our business, financial condition, results of operations and cash flows.  Any one or more of the following factors may cause our actual results for various financial reporting periods to differ materially from those expressed in any forward-looking statements made by us, or on our behalf. See “Cautionary Statement Regarding Forward-Looking Statements” contained herein on page 1
RISKS RELATED TO REAL ESTATE INVESTMENTS
Real property investments are subject to various risks, many of which are beyond our control, that could cause declines in the operating revenues and/or the underlying value of one or more of our Properties.
A number of factors may decrease the income generated by a retail shopping center property, including: 
national, regional and local economic climates, which may be negatively impacted by loss of jobs, production slowdowns, adverse weather conditions, natural disasters, acts of violence, war or terrorism, declines in residential real estate activity and other factors which tend to reduce consumer spending on retail goods;
adverse changes in levels of consumer spending, consumer confidence and seasonal spending (especially during the holiday season when many retailers generate a disproportionate amount of their annual profits);
local real estate conditions, such as an oversupply of, or reduction in demand for, retail space or retail goods, and the availability and creditworthiness of current and prospective tenants;
increased operating costs, such as increases in repairs and maintenance, real property taxes, utility rates and insurance premiums;
delays or cost increases associated with the opening of new or renovated properties, due to higher than estimated construction costs, cost overruns, delays in receiving zoning, occupancy or other governmental approvals, lack of availability of materials and labor, weather conditions, and similar factors which may be outside our ability to control;
perceptions by retailers or shoppers of the safety, convenience and attractiveness of the shopping center;
the willingness and ability of the shopping center’s owner to provide capable management and maintenance services; and
the convenience and quality of competing retail properties and other retailing options, such as the internet.
In addition, other factors may adversely affect the value of our Properties without affecting their current revenues, including:
adverse changes in governmental regulations, such as local zoning and land use laws, environmental regulations or local tax structures that could inhibit our ability to proceed with development, expansion or renovation activities that otherwise would be beneficial to our Properties;
potential environmental or other legal liabilities that reduce the amount of funds available to us for investment in our Properties;
any inability to obtain sufficient financing (including construction financing and permanent debt), or the inability to obtain such financing on commercially favorable terms, to fund repayment of maturing loans, new developments, acquisitions, and property expansions and renovations which otherwise would benefit our Properties; and
an environment of rising interest rates, which could negatively impact both the value of commercial real estate such as retail shopping centers and the overall retail climate.

9



Illiquidity of real estate investments could significantly affect our ability to respond to adverse changes in the performance of our Properties and harm our financial condition.
Substantially all of our total consolidated assets consist of investments in real properties. Because real estate investments are relatively illiquid, our ability to quickly sell one or more Properties in our portfolio in response to changing economic, financial and investment conditions is limited. The real estate market is affected by many factors, such as general economic conditions, availability of financing, interest rates and other factors, including supply and demand for space, that are beyond our control. We cannot predict whether we will be able to sell any Property for the price or on the terms we set, or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We also cannot predict the length of time needed to find a willing purchaser and to close the sale of a Property. In addition, current economic and capital market conditions might make it more difficult for us to sell Properties or might adversely affect the price we receive for Properties that we do sell, as prospective buyers might experience increased costs of debt financing or other difficulties in obtaining debt financing.
Moreover, there are some limitations under federal income tax laws applicable to REITs that limit our ability to sell assets. In addition, because our Properties are generally mortgaged to secure our debts, we may not be able to obtain a release of a lien on a mortgaged Property without the payment of the associated debt and/or a substantial prepayment penalty, which restricts our ability to dispose of a Property, even though the sale might otherwise be desirable. Furthermore, the number of prospective buyers interested in purchasing shopping centers is limited. Therefore, if we want to sell one or more of our Properties, we may not be able to dispose of it in the desired time period and may receive less consideration than we originally invested in the Property.
Before a Property can be sold, we may be required to make expenditures to correct defects or to make improvements. We cannot assure you that we will have funds available to correct those defects or to make those improvements, and if we cannot do so, we might not be able to sell the Property, or might be required to sell the Property on unfavorable terms. In acquiring a property, we might agree to provisions that materially restrict us from selling that property for a period of time or impose other restrictions, such as limitations on the amount of debt that can be placed or repaid on that property. These factors and any others that would impede our ability to respond to adverse changes in the performance of our Properties could adversely affect our financial condition and results of operations.
We may elect not to proceed with certain development, redevelopments or expansion projects once they have been undertaken, resulting in charges that could have a material adverse effect on our results of operations for the period in which the charge is taken.
We intend to pursue development, redevelopments and expansion activities as opportunities arise. In connection with any development, redevelopments or expansion, we will incur various risks, including the risk that development, redevelopments or expansion opportunities explored by us may be abandoned for various reasons including, but not limited to, credit disruptions that require the Company to conserve its cash until the capital markets stabilize or alternative credit or funding arrangements can be made. Developments, redevelopments or expansions also include the risk that construction costs of a project may exceed original estimates, possibly making the project unprofitable. Other risks include the risk that we may not be able to refinance construction loans which are generally with full recourse to us, the risk that occupancy rates and rents at a completed project will not meet projections and will be insufficient to make the project profitable, and the risk that we will not be able to obtain Anchor, mortgage lender and property partner approvals for certain expansion activities.
When we elect not to proceed with a development opportunity, the development costs ordinarily are charged against income for the then-current period. Any such charge could have a material adverse effect on our results of operations for the period in which the charge is taken.
Certain of our Properties are subject to ownership interests held by third parties, whose interests may conflict with ours and thereby constrain us from taking actions concerning these Properties which otherwise would be in the best interests of the Company and our stockholders.
We own partial interests in 17 malls, 8 associated centers, 7 community centers and 7 office buildings. Governor’s Square and Governor’s Plaza in Clarksville, TN, Kentucky Oaks Mall in Paducah, KY and Fremaux Town Center in Slidell, LA are all owned by unconsolidated joint ventures and are managed by a property manager that is affiliated with the third party partner, which receives a fee for its services. The third party partner of each of these Properties controls the cash flow distributions, although our approval is required for certain major decisions.  The Outlet Shoppes at Oklahoma City in Oklahoma City, OK, The Outlet Shoppes at Gettysburg in Gettysburg, PA, The Outlet Shoppes at El Paso in El Paso, TX, The Outlet Shoppes at Atlanta in Woodstock, GA and The Outlet Shoppes of the Bluegrass in Simpsonville, KY are owned by consolidated joint ventures and managed by a property manager that is affiliated with the third party partner, which receives a fee for its services.

10



Where we serve as managing general partner (or equivalent) of the entities that own our Properties, we may have certain fiduciary responsibilities to the other owners of those entities. In certain cases, the approval or consent of the other owners is required before we may sell, finance, expand or make other significant changes in the operations of such Properties. To the extent such approvals or consents are required, we may experience difficulty in, or may be prevented from, implementing our plans with respect to expansion, development, financing or other similar transactions with respect to such Properties.
With respect to those Properties for which we do not serve as managing general partner (or equivalent), we do not have day-to-day operational control or control over certain major decisions, including leasing and the timing and amount of distributions, which could result in decisions by the managing entity that do not fully reflect our interests. This includes decisions relating to the requirements that we must satisfy in order to maintain our status as a REIT for tax purposes. However, decisions relating to sales, expansion and disposition of all or substantially all of the assets and financings are subject to approval by the Operating Partnership.
Bankruptcy of joint venture partners could impose delays and costs on us with respect to the jointly owned retail Properties.
In addition to the possible effects on our joint ventures of a bankruptcy filing by us, the bankruptcy of one of the other investors in any of our jointly owned shopping centers could materially and adversely affect the relevant Property or Properties. Under the bankruptcy laws, we would be precluded from taking some actions affecting the estate of the other investor without prior approval of the bankruptcy court, which would, in most cases, entail prior notice to other parties and a hearing in the bankruptcy court. At a minimum, the requirement to obtain court approval may delay the actions we would or might want to take. If the relevant joint venture through which we have invested in a Property has incurred recourse obligations, the discharge in bankruptcy of one of the other investors might result in our ultimate liability for a greater portion of those obligations than we would otherwise bear. 
We may incur significant costs related to compliance with environmental laws, which could have a material adverse effect on our results of operations, cash flows and the funds available to us to pay dividends.
Under various federal, state and local laws, ordinances and regulations, a current or previous owner or operator of real estate may be liable for the costs of removal or remediation of petroleum, certain hazardous or toxic substances on, under or in such real estate. Such laws typically impose such liability without regard to whether the owner or operator knew of, or was responsible for, the presence of such substances. The costs of remediation or removal of such substances may be substantial. The presence of such substances, or the failure to promptly remove or remediate such substances, may adversely affect the owner's or operator's ability to lease or sell such real estate or to borrow using such real estate as collateral. Persons who arrange for the disposal or treatment of hazardous or toxic substances may also be liable for the costs of removal or remediation of such substances at the disposal or treatment facility, regardless of whether such facility is owned or operated by such person. Certain laws also impose requirements on conditions and activities that may affect the environment or the impact of the environment on human health. Failure to comply with such requirements could result in the imposition of monetary penalties (in addition to the costs to achieve compliance) and potential liabilities to third parties. Among other things, certain laws require abatement or removal of friable and certain non-friable asbestos-containing materials in the event of demolition or certain renovations or remodeling. Certain laws regarding asbestos-containing materials require building owners and lessees, among other things, to notify and train certain employees working in areas known or presumed to contain asbestos-containing materials. Certain laws also impose liability for release of asbestos-containing materials into the air and third parties may seek recovery from owners or operators of real properties for personal injury or property damage associated with asbestos-containing materials. In connection with the ownership and operation of properties, we may be potentially liable for all or a portion of such costs or claims.
All of our Properties (but not properties for which we hold an option to purchase but do not yet own) have been subject to Phase I environmental assessments or updates of existing Phase I environmental assessments. Such assessments generally consisted of a visual inspection of the Properties, review of federal and state environmental databases and certain information regarding historic uses of the Property and adjacent areas and the preparation and issuance of written reports. Some of the Properties contain, or contained, underground storage tanks used for storing petroleum products or wastes typically associated with automobile service or other operations conducted at the Properties. Certain Properties contain, or contained, dry-cleaning establishments utilizing solvents. Where believed to be warranted, samplings of building materials or subsurface investigations were undertaken. At certain Properties, where warranted by the conditions, we have developed and implemented an operations and maintenance program that establishes operating procedures with respect to asbestos-containing materials. The cost associated with the development and implementation of such programs was not material. We have also obtained environmental insurance coverage at certain of our Properties.
We believe that our Properties are in compliance in all material respects with all federal, state and local ordinances and regulations regarding the handling, discharge and emission of hazardous or toxic substances. As of December 31, 2015, we have recorded in our consolidated financial statements a liability of $2.9 million related to potential future asbestos abatement activities

11



at our Properties which are not expected to have a material impact on our financial condition or results of operations. We have not been notified by any governmental authority, and are not otherwise aware, of any material noncompliance, liability or claim relating to hazardous or toxic substances in connection with any of our present or former Properties. Therefore, we have not recorded any liability related to hazardous or toxic substances. Nevertheless, it is possible that the environmental assessments available to us do not reveal all potential environmental liabilities. It is also possible that subsequent investigations will identify material contamination, that adverse environmental conditions have arisen subsequent to the performance of the environmental assessments, or that there are material environmental liabilities of which management is unaware. Moreover, no assurances can be given that (i) future laws, ordinances or regulations will not impose any material environmental liability or (ii) the current environmental condition of the Properties has not been or will not be affected by tenants and occupants of the Properties, by the condition of properties in the vicinity of the Properties or by third parties unrelated to us, the Operating Partnership or the relevant Property's partnership.
Possible terrorist activity or other acts of violence could adversely affect our financial condition and results of operations.
Future terrorist attacks in the United States, and other acts of violence, including terrorism or war, might result in declining consumer confidence and spending, which could harm the demand for goods and services offered by our tenants and the values of our Properties, and might adversely affect an investment in our securities. A decrease in retail demand could make it difficult for us to renew or re-lease our Properties at lease rates equal to or above historical rates and, to the extent our tenants are affected, could adversely affect their ability to continue to meet obligations under their existing leases. Terrorist activities also could directly affect the value of our Properties through damage, destruction or loss. Furthermore, terrorist acts might result in increased volatility in national and international financial markets, which could limit our access to capital or increase our cost of obtaining capital.
RISKS RELATED TO OUR BUSINESS AND THE MARKET FOR OUR STOCK
Declines in economic conditions, including increased volatility in the capital and credit markets, could adversely affect our business, results of operations and financial condition.
An economic recession can result in extreme volatility and disruption of our capital and credit markets. The resulting economic environment may be affected by dramatic declines in the stock and housing markets, increases in foreclosures, unemployment and costs of living, as well as limited access to credit. This economic situation can, and most often will, impact consumer spending levels, which can result in decreased revenues for our tenants and related decreases in the values of our Properties. A sustained economic downward trend could impact our tenants' ability to meet their lease obligations due to poor operating results, lack of liquidity, bankruptcy or other reasons. Our ability to lease space and negotiate rents at advantageous rates could also be affected in this type of economic environment. Additionally, access to capital and credit markets could be disrupted over an extended period, which may make it difficult to obtain the financing we may need for future growth and/or to meet our debt service obligations as they mature. Any of these events could harm our business, results of operations and financial condition.
The market price of our common stock or other securities may fluctuate significantly.
The market price of our common stock or other securities may fluctuate significantly in response to many factors, including: 
actual or anticipated variations in our operating results, funds from operations, cash flows or liquidity;
changes in our earnings estimates or those of analysts;
changes in our dividend policy;
impairment charges affecting the carrying value of one or more of our Properties or other assets;
publication of research reports about us, the retail industry or the real estate industry generally;
increases in market interest rates that lead purchasers of our securities to seek higher dividend or interest rate yields;
changes in market valuations of similar companies;
adverse market reaction to the amount of our outstanding debt at any time, the amount of our maturing debt in the near and medium term and our ability to refinance such debt and the terms thereof or our plans to incur additional debt in the future;
additions or departures of key management personnel;
actions by institutional security holders;
proposed or adopted regulatory or legislative changes or developments;

12



speculation in the press or investment community;
changes in our credit ratings;
the occurrence of any of the other risk factors included in, or incorporated by reference in, this report; and
general market and economic conditions.
Many of the factors listed above are beyond our control. Those factors may cause the market price of our common stock or other securities to decline significantly, regardless of our financial performance and condition and prospects. It is impossible to provide any assurance that the market price of our common stock or other securities will not fall in the future, and it may be difficult for holders to sell such securities at prices they find attractive, or at all.
Competition could adversely affect the revenues generated by our Properties, resulting in a reduction in funds available for distribution to our stockholders.
There are numerous shopping facilities that compete with our Properties in attracting retailers to lease space. In addition, retailers at our Properties face competition for customers from: 
discount shopping centers;
outlet malls;
wholesale clubs;
direct mail;
television shopping networks; and
shopping via the internet.
Each of these competitive factors could adversely affect the amount of rents and tenant reimbursements that we are able to collect from our tenants, thereby reducing our revenues and the funds available for distribution to our stockholders.
We compete with many commercial developers, real estate companies and major retailers for prime development locations and for tenants. New regional malls or other retail shopping centers with more convenient locations or better rents may attract tenants or cause them to seek more favorable lease terms at, or prior to, renewal.
Increased operating expenses and decreased occupancy rates may not allow us to recover the majority of our common area maintenance (CAM) and other operating expenses from our tenants, which could adversely affect our financial position, results of operations and funds available for future distributions.
Energy costs, repairs, maintenance and capital improvements to common areas of our Properties, janitorial services, administrative, property and liability insurance costs and security costs are typically allocable to our Properties' tenants. Our lease agreements typically provide that the tenant is liable for a portion of the CAM and other operating expenses. While historically our lease agreements provided for variable CAM provisions, the majority of our current leases require an equal periodic tenant reimbursement amount for our cost recoveries which serves to fix our tenants' CAM contributions to us. In these cases, a tenant will pay a single specified rent amount, or a set expense reimbursement amount, subject to annual increases, regardless of the actual amount of operating expenses. The tenant's payment remains the same regardless of whether operating expenses increase or decrease, causing us to be responsible for any excess amounts or to benefit from any declines. As a result, the CAM and tenant reimbursements that we receive may or may not allow us to recover a substantial portion of these operating costs.
Additionally, in the event that our Properties are not fully occupied, we would be required to pay the portion of any operating, redevelopment or renovation expenses allocable to the vacant space(s) that would otherwise typically be paid by the residing tenant(s). Our cost recovery ratio was 101.7% for 2015.
The loss of one or more significant tenants, due to bankruptcies or as a result of consolidations in the retail industry, could adversely affect both the operating revenues and value of our Properties.
Regional malls are typically anchored by well-known department stores and other significant tenants who generate shopping traffic at the mall. A decision by an Anchor tenant or other significant tenant to cease operations at one or more Properties could have a material adverse effect on those Properties and, by extension, on our financial condition and results of operations. The closing of an Anchor or other significant tenant may allow other Anchors and/or tenants at an affected Property to terminate their leases, to seek rent relief and/or cease operating their stores or otherwise adversely affect occupancy at the Property. In addition, key tenants at one or more Properties might terminate their leases as a result of mergers, acquisitions, consolidations,

13



dispositions or bankruptcies in the retail industry. The bankruptcy and/or closure of one or more significant tenants, if we are not able to successfully re-tenant the affected space, could have a material adverse effect on both the operating revenues and underlying value of the Properties involved, reducing the likelihood that we would be able to sell the Properties if we decided to do so, or we may be required to incur redevelopment costs in order to successfully obtain new anchors or other significant tenants when such vacancies exist.
Our Properties may be subject to impairment charges which can adversely affect our financial results.
We monitor events or changes in circumstances that could indicate the carrying value of a long-lived asset may not be recoverable.  When indicators of potential impairment are present that suggest that the carrying amounts of a long-lived asset may not be recoverable, we assess the recoverability of the asset by determining whether the asset’s carrying value will be recovered through the estimated undiscounted future cash flows expected from our probability weighted use of the asset and its eventual disposition. In the event that such undiscounted future cash flows do not exceed the carrying value, we adjust the carrying value of the long-lived asset to its estimated fair value and recognize an impairment loss.  The estimated fair value is calculated based on the following information, in order of preference, depending upon availability:  (Level 1) recently quoted market prices, (Level 2) market prices for comparable properties, or (Level 3) the present value of future cash flows, including estimated salvage value. Certain of our long-lived assets may be carried at more than an amount that could be realized in a current disposition transaction.  Projections of expected future operating cash flows require that we estimate future market rental income amounts subsequent to expiration of current lease agreements, property operating expenses, the number of months it takes to re-lease the Property, and the number of years the Property is held for investment, among other factors. As these assumptions are subject to economic and market uncertainties, they are difficult to predict and are subject to future events that may alter the assumptions used or management’s estimates of future possible outcomes. Therefore, the future cash flows estimated in our impairment analyses may not be achieved. For the year ended December 31, 2015, we recorded a loss on impairment of real estate totaling $105.9 million. As described in Note 15 to the consolidated financial statements, $100.0 million relates to a Non-Core Mall, $2.6 million is attributable to one Mall disposition, $1.9 million relates to the disposition of an Associated Center and $1.4 million is from the sale of two outparcels and a building at a formerly owned Mall.
Inflation or deflation may adversely affect our financial condition and results of operations.
Increased inflation could have a pronounced negative impact on our mortgage and debt interest and general and administrative expenses, as these costs could increase at a rate higher than our rents. Also, inflation may adversely affect tenant leases with stated rent increases, which could be lower than the increase in inflation at any given time. Inflation could also have an adverse effect on consumer spending which could impact our tenants' sales and, in turn, our percentage rents, where applicable.
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.
Data security breaches or significant information technology (IT) disruptions could harm our business by disrupting our operations and compromising or corrupting confidential information, which could adversely impact our financial condition.
We face risks associated with security breaches, whether through cyber-attacks or cyber intrusions over the internet, malware, computer viruses, attachments to e-mails, persons inside our organization or persons with access to systems, and other significant disruptions of our IT networks and related systems. Our IT networks and related systems are essential to the operation of our business and our ability to perform day-to-day operations and, in some cases, may be critical to the operations of certain of our tenants. Although we make efforts to maintain the security and integrity of these types of IT networks and related systems, and we have implemented various measures to manage the risk of a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging. Even the most well protected information, networks, systems and facilities remain potentially vulnerable because the techniques used in such attempted security breaches evolve and generally are not recognized until launched against a target, and in some cases are designed not be detected and, in fact, may not be detected. Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, and thus it is impossible for us to entirely mitigate this risk.
Certain agreements with prior owners of Properties that we have acquired may inhibit our ability to enter into future sale or refinancing transactions affecting such Properties, which otherwise would be in the best interests of the Company and our stockholders.
Certain Properties that we originally acquired from third parties had unrealized gain attributable to the difference between the fair market value of such Properties and the third parties' adjusted tax basis in the Properties immediately prior to their

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contribution of such Properties to the Operating Partnership pursuant to our acquisition. For this reason, a taxable sale by us of any of such Properties, or a significant reduction in the debt encumbering such Properties, could result in adverse tax consequences to the third parties who contributed these Properties in exchange for interests in the Operating Partnership. Under the terms of these transactions, we have generally agreed that we either will not sell or refinance such an acquired Property for a number of years in any transaction that would trigger adverse tax consequences for the parties from whom we acquired such Property, or else we will reimburse such parties for all or a portion of the additional taxes they are required to pay as a result of the transaction. Accordingly, these agreements may cause us not to engage in future sale or refinancing transactions affecting such Properties which otherwise would be in the best interests of the Company and our stockholders, or may increase the costs to us of engaging in such transactions.
Uninsured losses could adversely affect our financial condition, and in the future our insurance may not include coverage for acts of terrorism.
We carry a comprehensive blanket policy for general liability, property casualty (including fire, earthquake and flood) and rental loss covering all of the Properties, with specifications and insured limits customarily carried for similar properties. However, even insured losses could result in a serious disruption to our business and delay our receipt of revenue. Furthermore, there are some types of losses, including lease and other contract claims, as well as some types of environmental losses, that generally are not insured or are not economically insurable. If an uninsured loss or a loss in excess of insured limits occurs, we could lose all or a portion of the capital we have invested in a Property, as well as the anticipated future revenues from the Property. If this happens, we, or the applicable Property's partnership, may still remain obligated for any mortgage debt or other financial obligations related to the Property.
The general liability and property casualty insurance policies on our Properties currently include coverage for losses resulting from acts of terrorism, whether foreign or domestic. While we believe that the Properties are adequately insured in accordance with industry standards, the cost of general liability and property casualty insurance policies that include coverage for acts of terrorism has risen significantly subsequent to September 11, 2001. The cost of coverage for acts of terrorism is currently mitigated by the Terrorism Risk Insurance Act (“TRIA”). In January 2015, Congress reinstated TRIA under the Terrorism Risk Insurance Program Reauthorization Act of 2015 ("TRIPRA") and extended the program through December 31, 2020. Under TRIPRA, the amount of terrorism-related insurance losses triggering the federal insurance threshold will be raised gradually from$100 million in 2014 to $200 million in 2020. Additionally, the bill increases insurers' co-payments for losses exceeding their deductibles, in annual steps, from 15% in 2014 to 20% in 2020. Each of these changes may have the effect of increasing the cost to insure against acts of terrorism for property owners, such as the Company, notwithstanding the other provisions of TRIPRA. Further, if TRIPRA is not continued beyond 2020 or is significantly modified, we may incur higher insurance costs and experience greater difficulty in obtaining insurance that covers terrorist-related damages. Our tenants may also have similar difficulties.
RISKS RELATED TO DEBT AND FINANCIAL MARKETS
A deterioration of the capital and credit markets could adversely affect our ability to access funds and the capital needed to refinance debt or obtain new debt.
We are significantly dependent upon external financing to fund the growth of our business and ensure that we meet our debt servicing requirements. Our access to financing depends on the willingness of lending institutions to grant credit to us and conditions in the capital markets in general. An economic recession may cause extreme volatility and disruption in the capital and credit markets. We rely upon our largest credit facilities as sources of funding for numerous transactions. Our access to these funds is dependent upon the ability of each of the participants to the credit facilities to meet their funding commitments. When markets are volatile, access to capital and credit markets could be disrupted over an extended period of time and many financial institutions may not have the available capital to meet their previous commitments. The failure of one or more significant participants to our credit facilities to meet their funding commitments could have an adverse effect on our financial condition and results of operations. This may make it difficult to obtain the financing we may need for future growth and/or to meet our debt service obligations as they mature. Although we have successfully obtained debt for refinancings of our maturing debt, acquisitions and the construction of new developments in the past, we cannot make any assurances as to whether we will be able to obtain debt in the future, or that the financing options available to us will be on favorable or acceptable terms.

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Our indebtedness is substantial and could impair our ability to obtain additional financing.
At December 31, 2015, our total share of consolidated and unconsolidated debt outstanding was approximately $5,407.2 million, which represented approximately 63.6% of our total market capitalization at that time. Our total share of consolidated and unconsolidated debt maturing in 2016, 2017 and 2018, giving effect to all maturity extensions that are available at our election, was approximately $627.1 million, $622.3 million and $745.9 million, respectively. Our leverage could have important consequences. For example, it could:
result in the acceleration of a significant amount of debt for non-compliance with the terms of such debt or, if such debt contains cross-default or cross-acceleration provisions, other debt;
result in the loss of assets due to foreclosure or sale on unfavorable terms, which could create taxable income without accompanying cash proceeds, which could hinder the Company's ability to meet the REIT distribution requirements imposed by the Internal Revenue Code;
materially impair our ability to borrow unused amounts under existing financing arrangements or to obtain additional financing or refinancing on favorable terms or at all;
require us to dedicate a substantial portion of our cash flow to paying principal and interest on our indebtedness, reducing the cash flow available to fund our business, to pay dividends, including those necessary to maintain our REIT qualification, or to use for other purposes;
increase our vulnerability to an economic downturn;
limit our ability to withstand competitive pressures; or
reduce our flexibility to respond to changing business and economic conditions.
If any of the foregoing occurs, our business, financial condition, liquidity, results of operations and prospects could be materially and adversely affected, and the trading price of our common stock or other securities could decline significantly.
Rising interest rates could both increase our borrowing costs, thereby adversely affecting our cash flows and the amounts available for distributions to our stockholders, and decrease our stock price, if investors seek higher yields through other investments.
An environment of rising interest rates could lead holders of our securities to seek higher yields through other investments, which could adversely affect the market price of our stock. One of the factors that may influence the price of our stock in public markets is the annual distribution rate we pay as compared with the yields on alternative investments. Numerous other factors, such as governmental regulatory action and tax laws, could have a significant impact on the future market price of our stock. In addition, increases in market interest rates could result in increased borrowing costs for us, which may adversely affect our cash flow and the amounts available for distributions to our stockholders.
As of December 31, 2015, our total share of consolidated and unconsolidated variable rate debt was $1,369.4 million. Increases in interest rates will increase our cash interest payments on the variable rate debt we have outstanding from time to time. If we do not have sufficient cash flow from operations, we might not be able to make all required payments of principal and interest on our debt, which could result in a default or have a material adverse effect on our financial condition and results of operations, and which might adversely affect our cash flow and our ability to make distributions to shareholders. These significant debt payment obligations might also require us to use a significant portion of our cash flow from operations to make interest and principal payments on our debt rather than for other purposes such as working capital, capital expenditures or distributions on our common equity.
Adverse changes in our credit ratings could negatively affect our borrowing costs and financing ability.
In May 2013, we received an investment grade rating of Baa3 with a stable outlook from Moody's Investors Service ("Moody’s") and an issuer default rating ("IDR") of BBB- with a stable outlook and a senior unsecured notes rating of BBB- from Fitch Ratings ("Fitch") in July 2013. In September 2015, we received a corporate rating of BBB- with a stable outlook from S&P. S&P also assigned a BBB- issue-level rating to the Operating Partnership's senior unsecured notes. However, there can be no assurance that we will be able to maintain these ratings. In 2013, we made a one-time irrevocable election to use our credit ratings to determine the interest rate on our three unsecured credit facilities. With this election and so long as we maintain our current credit ratings, borrowings under our three unsecured credit facilities, which were extended and modified in October 2015, bear interest at LIBOR plus 120 basis points. We also have two unsecured term loans that bear interest at LIBOR plus 135 and 150 basis points, respectively, based on our current credit ratings. If our credit ratings decline, our unsecured credit facilities would bear interest at LIBOR plus 155 basis points and the interest rate on our two unsecured term loans would bear interest at LIBOR

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plus 175 basis points and LIBOR plus 200 basis points, respectively, which would increase our borrowing costs. Additionally, a downgrade in our credit ratings may adversely impact our ability to obtain financing and limit our access to capital.
Our hedging arrangements might not be successful in limiting our risk exposure, and we might be required to incur expenses in connection with these arrangements or their termination that could harm our results of operations or financial condition.
From time to time, we use interest rate hedging arrangements to manage our exposure to interest rate volatility, but these arrangements might expose us to additional risks, such as requiring that we fund our contractual payment obligations under such arrangements in relatively large amounts or on short notice. Developing an effective interest rate risk strategy is complex, and no strategy can completely insulate us from risks associated with interest rate fluctuations. We cannot assure you that our hedging activities will have a positive impact on our results of operations or financial condition. We might be subject to additional costs, such as transaction fees or breakage costs, if we terminate these arrangements. In addition, although our interest rate risk management policy establishes minimum credit ratings for counterparties, this does not eliminate the risk that a counterparty might fail to honor its obligations.
The covenants in our credit facilities and in the Notes might adversely affect us.
Our credit facilities, as well as the terms of the Notes, require us to satisfy certain affirmative and negative covenants and to meet numerous financial tests, and also contain certain default and cross-default provisions as described in more detail in Note 6 to the consolidated financial statements. Our credit facilities also restrict our ability to enter into any transaction that could result in certain changes in our ownership or structure as described under the heading “Change of Control/Change in Management” in the agreements to the credit facilities.
The financial covenants under the unsecured credit facilities require, among other things, that our debt to total asset value ratio, as defined in the agreements to our unsecured credit facilities, be less than 60%, that our ratio of unencumbered asset value to unsecured indebtedness, as defined, be greater than 1.60, that our ratio of unencumbered NOI to unsecured interest expense, as defined, be greater than 1.75, and that our ratio of earnings before EBITDA to fixed charges (debt service), as defined, be greater than 1.50.
The financial covenants under the Notes also require, among other things, that our debt to total assets, as defined in the indenture governing the Notes, be less than 60%, that our ratio of secured debt to total assets, as defined, be less than 45% (40% on and after January 1, 2020), that our ratio of total unencumbered assets to unsecured indebtedness, as defined, be greater than 150%, that our ratio of consolidated income available for debt service to annual debt service charges, as defined, be greater than 1.50. Compliance with each of these ratios is dependent upon our financial performance. The debt to total asset value ratio is based, in part, on applying a capitalization rate to EBITDA as defined in the agreements to our credit facilities. Based on this calculation method, decreases in EBITDA would result in an increased debt to total asset value ratio, assuming overall debt levels remain constant.
If any future failure to comply with one or more of these covenants resulted in the loss of these credit facilities or a default under the Notes and we were unable to obtain suitable replacement financing, such loss could have a material, adverse impact on our financial position and results of operations.
RISKS RELATED TO THE OPERATING PARTNERSHIP'S NOTES
CBL has no significant operations and no material assets other than its indirect investment in the Operating Partnership; therefore, the limited guarantee of the Notes does not provide material additional credit support.
The limited guarantee provides that the Notes are guaranteed by CBL for any losses suffered by reason of fraud or willful misrepresentation by the Operating Partnership or its affiliates. However, CBL has no significant operations and no material assets other than its indirect investment in the Operating Partnership. Furthermore, the limited guarantee of the Notes is effectively subordinated to all existing and future liabilities and preferred equity of the Company's subsidiaries (including the Operating Partnership (except as to the Notes) and any entity the Company accounts for under the equity method of accounting) and any of the Company's secured debt, to the extent of the value of the assets securing any such indebtedness. Due to the narrow scope of the limited guarantee, the lack of significant operations or assets at CBL other than its indirect investment in the Operating Partnership and the structural subordination of the limited guarantee to the liabilities and any preferred equity of the Company's subsidiaries, the limited guarantee does not provide material additional credit support.
Our substantial indebtedness could materially and adversely affect us and the ability of the Operating Partnership to meet its debt service obligations under the Notes.
Our level of indebtedness and the limitations imposed on us by our debt agreements could have significant adverse consequences to holders of the Notes, including the following:

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our cash flow may be insufficient to meet our debt service obligations with respect to the Notes and our other indebtedness, which would enable the lenders and other debtholders to accelerate the maturity of their indebtedness, or be insufficient to fund other important business uses after meeting such obligations;
we may be unable to borrow additional funds as needed or on favorable terms;
we may be unable to refinance our indebtedness at maturity or earlier acceleration, if applicable, or the refinancing terms may be less favorable than the terms of our original indebtedness or otherwise be generally unfavorable;
because a significant portion of our debt bears interest at variable rates, increases in interest rates could materially increase our interest expense;
increases in interest rates could also materially increase our interest expense on future fixed rate debt;
we may be forced to dispose of one or more of our Properties, possibly on disadvantageous terms;
we may default on our other unsecured indebtedness;
we may default on our secured indebtedness and the lenders may foreclose on our Properties or our interests in the entities that own the Properties that secure such indebtedness and receive an assignment of rents and leases; and
we may violate restrictive covenants in our debt agreements, which would entitle the lenders and other debtholders to accelerate the maturity of their indebtedness.
If any one of these events were to occur, our business, financial condition, liquidity, results of operations and prospects, as well as the Operating Partnership's ability to satisfy its obligations with respect to the Notes, could be materially and adversely affected. Furthermore, foreclosures could create taxable income without accompanying cash proceeds, a circumstance which could hinder the Company's ability to meet the REIT distribution requirements imposed by the Internal Revenue Code.
The structural subordination of the Notes may limit the Operating Partnership's ability to meet its debt service obligations under the Notes.
The Notes are the Operating Partnership's unsecured and unsubordinated indebtedness and rank equally with the Operating Partnership's existing and future unsecured and unsubordinated indebtedness, and are effectively junior to all liabilities and any preferred equity of the Operating Partnership's subsidiaries and to all of the Operating Partnership's indebtedness that is secured by the Operating Partnership's assets, to the extent of the value of the assets securing such indebtedness. While the indenture governing the Notes limits our ability to incur additional secured indebtedness in the future, it will not prohibit us from incurring such indebtedness if we are in compliance with certain financial ratios and other requirements at the time of its incurrence. In the event of a bankruptcy, liquidation, dissolution, reorganization or similar proceeding with respect to us, the holders of any secured indebtedness will, subject to the automatic stay under section 362 of the Bankruptcy Code, be entitled to proceed directly against the collateral that secures the secured indebtedness. Therefore, such collateral generally will not be available for satisfaction of any amounts owed under our unsecured indebtedness, including the Notes, until such secured indebtedness is satisfied in full.
The Notes also are effectively subordinated to all liabilities, whether secured or unsecured, and any preferred equity of the subsidiaries of the Operating Partnership. In the event of a bankruptcy, liquidation, dissolution, reorganization or similar proceeding with respect to any such subsidiary, the Operating Partnership, as an equity owner of such subsidiary, and therefore holders of our debt, including the Notes, will be subject to the prior claims of such subsidiary's creditors, including trade creditors, and preferred equity holders. Furthermore, while the indenture governing the Notes limits the ability of our subsidiaries to incur additional unsecured indebtedness in the future, it does not prohibit our subsidiaries from incurring such indebtedness if such subsidiaries are in compliance with certain financial ratios and other requirements at the time of its incurrence.
We may not be able to generate sufficient cash flow to meet our debt service obligations.
Our ability to meet our debt service obligations on and to refinance our indebtedness and to fund our operations, working capital, acquisitions, capital expenditures and other important business uses, depends on our ability to generate sufficient cash flow in the future. To a certain extent, our cash flow is subject to general economic, industry, financial, competitive, operating, legislative, regulatory and other factors, many of which are beyond our control.
We cannot be certain that our business will generate sufficient cash flow from operations or that future sources of cash will be available to us in an amount sufficient to enable us to meet our debt service obligations on our indebtedness, including the Notes, or to fund our other important business uses. Additionally, if we incur additional indebtedness in connection with future acquisitions or development projects or for any other purpose, our debt service obligations could increase significantly and our ability to meet those obligations could depend, in large part, on the returns from such acquisitions or projects, as to which no assurance can be given.

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We may need to refinance all or a portion of our indebtedness, including the Notes, at or prior to maturity. Our ability to refinance our indebtedness or obtain additional financing will depend on, among other things:
•    our financial condition, liquidity, results of operations and prospects and market conditions at the time; and
•    restrictions in the agreements governing our indebtedness.
As a result, we may not be able to refinance any of our indebtedness, including the Notes, on favorable terms, or at all.
If we do not generate sufficient cash flow from operations, and additional borrowings or refinancings are not available to us, we may be unable to meet all of our debt service obligations, including payments on the Notes. As a result, we would be forced to take other actions to meet those obligations, such as selling Properties, raising equity or delaying capital expenditures, any of which could have a material adverse effect on us. Furthermore, we cannot be certain that we will be able to effect any of these actions on favorable terms, or at all.
Despite our substantial outstanding indebtedness, we may still incur significantly more indebtedness in the future, which would exacerbate any or all of the risks described above.
We may be able to incur substantial additional indebtedness in the future. Although the agreements governing our revolving credit facilities, term loans and certain other indebtedness do, and the indenture governing the Notes does, limit our ability to incur additional indebtedness, these restrictions are subject to a number of qualifications and exceptions and, under certain circumstances, debt incurred in compliance with these restrictions could be substantial. To the extent that we incur substantial additional indebtedness in the future, the risks associated with our substantial leverage described above, including our inability to meet our debt service obligations, would be exacerbated.
Federal and state statutes allow courts, under specific circumstances, to void guarantees and require holders of indebtedness and lenders to return payments received from guarantors.
Under the federal bankruptcy law and comparable provisions of state fraudulent transfer laws, a guarantee, such as the limited guarantee provided by CBL or any future guarantee of the Notes issued by any subsidiary of the Operating Partnership, could be voided and required to be returned to the guarantor, or to a fund for the benefit of the creditors of the guarantor, if, among other things, the guarantor, at the time it incurred the indebtedness evidenced by its guarantee (i) received less than reasonably equivalent value or fair consideration for the incurrence of the guarantee and (ii) one of the following was true with respect to the guarantor:
was insolvent or rendered insolvent by reason of the incurrence of the guarantee;
was engaged in a business or transaction for which the guarantor's remaining assets constituted unreasonably small capital; or
intended to incur, or believed that it would incur, debts beyond its ability to pay those debts as they mature.
In addition, any claims in respect of a guarantee could be subordinated to all other debts of that guarantor under principles of "equitable subordination," which generally require that the claimant must have engaged in some type of inequitable conduct, the misconduct must have resulted in injury to the creditors of the debtor or conferred an unfair advantage on the claimant, and equitable subordination must not be inconsistent with other provisions of the U.S. Bankruptcy Code.
The measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a guarantor would be considered insolvent if:
the sum of its debts, including contingent liabilities, was greater than the fair saleable value of all of its assets;
the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they became absolute and mature; or
it could not pay its debts as they become due.
The court might also void such guarantee, without regard to the above factors, if it found that a guarantor entered into its guarantee with actual or deemed intent to hinder, delay, or defraud its creditors.
A court would likely find that a guarantor did not receive reasonably equivalent value or fair consideration for its guarantee unless it benefited directly or indirectly from the issuance or incurrence of such indebtedness. This risk may be increased if any subsidiary of the Operating Partnership guarantees the Notes in the future, as no additional consideration would be received at the time such guarantee is issued. If a court voided such guarantee, holders of the indebtedness and lenders would no longer have a

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claim against such guarantor or the benefit of the assets of such guarantor constituting collateral that purportedly secured such guarantee. In addition, the court might direct holders of the indebtedness and lenders to repay any amounts already received from a guarantor.
The indenture governing the Notes contains restrictive covenants that may restrict our ability to expand or fully pursue certain of our business strategies.
The indenture governing the Notes contains financial and operating covenants that, among other things, restrict our ability to take specific actions, even if we believe them to be in our best interest, including, subject to various exceptions, restrictions on our ability to:
consummate a merger, consolidation or sale of all or substantially all of our assets; and
incur secured and unsecured indebtedness.
In addition, our revolving credit facilities, term loans and certain other debt agreements require us to meet specified financial ratios and the indenture governing the Notes requires us to maintain at all times a specified ratio of unencumbered assets to unsecured debt. These covenants may restrict our ability to expand or fully pursue our business strategies. Our ability to comply with these and other provisions of the indenture governing the Notes, our revolving credit facility and certain other debt agreements may be affected by changes in our operating and financial performance, changes in general business and economic conditions, adverse regulatory developments or other events beyond our control. The breach of any of these covenants could result in a default under our indebtedness, which could result in the acceleration of the maturity of such indebtedness. If any of our indebtedness is accelerated prior to maturity, we may not be able to repay such indebtedness or refinance such indebtedness on favorable terms, or at all.
There is no prior public market for the Notes, so if an active trading market does not develop or is not maintained for the Notes, holders of the Notes may not be able to resell them on favorable terms when desired, or at all.
Prior to the offering of each of the 2023 Notes and the 2024 Notes, there was no public market for such Notes and we cannot be certain that an active trading market will ever develop for the Notes or, if one develops, will be maintained. Furthermore, we do not intend to apply for listing of the Notes on any securities exchange or for quotation of the Notes on any automated dealer quotation system. The underwriters informed us that they intend to make a market in the Notes. However, the underwriters may cease their market making at any time without notice to or the consent of existing holders of the Notes. The lack of a trading market could adversely affect a holder's ability to sell the Notes when desired, or at all, and the price at which a holder may be able to sell the Notes. The liquidity of the trading market, if any, and future trading prices of the Notes will depend on many factors, including, among other things, prevailing interest rates, our financial condition, liquidity, results of operations and prospects, the market for similar securities and the overall securities market, and may be adversely affected by unfavorable changes in these factors. It is possible that the market for the Notes will be subject to disruptions which may have a negative effect on the holders of the Notes, regardless of our financial condition, liquidity, results of operations or prospects.
RISKS RELATED TO GEOGRAPHIC CONCENTRATIONS
Since our Properties are located principally in the Southeastern and Midwestern United States, our financial position, results of operations and funds available for distribution to shareholders are subject generally to economic conditions in these regions. 
Our Properties are located principally in the southeastern and midwestern United States. Our Properties located in the southeastern United States accounted for approximately 47.2% of our total revenues from all Properties for the year ended December 31, 2015 and currently include 39 malls, 14 associated centers, 8 community centers and 12 office buildings. Our Properties located in the midwestern United States accounted for approximately 30.1% of our total revenues from all Properties for the year ended December 31, 2015 and currently include 26 malls and 2 associated centers. Our results of operations and funds available for distribution to shareholders therefore will be subject generally to economic conditions in the southeastern and midwestern United States. While we already have Properties located in 8 states across the southwestern, northeastern and western regions, we will continue to look for opportunities to geographically diversify our portfolio in order to minimize dependency on any particular region; however, the expansion of the portfolio through both acquisitions and developments is contingent on many factors including consumer demand, competition and economic conditions.
Our financial position, results of operations and funds available for distribution to shareholders could be adversely affected by any economic downturn affecting the operating results at our Properties in the St. Louis, MO; Chattanooga, TN; Lexington, KY; Madison, WI; and Laredo, TX metropolitan areas, which are our five largest markets.
Our Properties located in the St. Louis, MO; Chattanooga, TN; Lexington, KY; Madison, WI; and Laredo, TX metropolitan areas accounted for approximately 7.4%, 4.0%, 3.2%, 3.2% and 2.6%, respectively, of our total revenues for the year ended

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December 31, 2015. No other market accounted for more than 2.5% of our total revenues for the year ended December 31, 2015. Our financial position and results of operations will therefore be affected by the results experienced at Properties located in these metropolitan areas.
RISKS RELATED TO INTERNATIONAL INVESTMENTS
Ownership interests in investments or joint ventures outside the United States present numerous risks that differ from those of our domestic investments.
International development and ownership activities yield additional risks that differ from those related to our domestic Properties and operations.  These additional risks include, but are not limited to: 
impact of adverse changes in exchange rates of foreign currencies;
difficulties in the repatriation of cash and earnings;
differences in managerial styles and customs;
changes in applicable laws and regulations in the United States that affect foreign operations;
changes in foreign political, legal and economic environments; and
differences in lending practices.
Our international activities are currently limited in their scope.  We have an investment in a mall operating and real estate development company in China that is immaterial to our consolidated financial position.  However, should our investments in international joint ventures or investments grow, these additional risks could increase in significance and adversely affect our results of operations.
RISKS RELATED TO DIVIDENDS
We may change the dividend policy for our common stock in the future.
Depending upon our liquidity needs, we reserve the right to pay any or all of a dividend in a combination of cash and shares of common stock, to the extent permitted by any applicable revenue procedures of the Internal Revenue Service ("IRS"). In the event that we pay a portion of our dividends in shares of our common stock pursuant to such procedures, taxable U.S. stockholders would be required to pay tax on the entire amount of the dividend, including the portion paid in shares of common stock, in which case such stockholders may have to use cash from other sources to pay such tax. If a U.S. stockholder sells the common stock it receives as a dividend in order to pay its taxes, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our common stock at the time of the sale. Furthermore, with respect to non-U.S. stockholders, we may be required to withhold federal tax with respect to our dividends, including dividends that are paid in common stock. In addition, if a significant number of our stockholders sell shares of our common stock in order to pay taxes owed on dividends, such sales would put downward pressure on the market price of our common stock.
The decision to declare and pay dividends on our common stock in the future, as well as the timing, amount and composition of any such future dividends, will be at the sole discretion of our Board of Directors and will depend on our earnings, taxable income, funds from operations, liquidity, financial condition, capital requirements, contractual prohibitions or other limitations under our indebtedness and preferred stock, the annual distribution requirements under the REIT provisions of the Internal Revenue Code, Delaware law and such other factors as our Board of Directors deems relevant. Any dividends payable will be determined by our Board of Directors based upon the circumstances at the time of declaration. Any change in our dividend policy could have a material adverse effect on the market price of our common stock.
Since we conduct substantially all of our operations through our Operating Partnership, our ability to pay dividends on our common and preferred stock depends on the distributions we receive from our Operating Partnership.
Because we conduct substantially all of our operations through our Operating Partnership, our ability to pay dividends on our common and preferred stock will depend almost entirely on payments and distributions we receive on our interests in our Operating Partnership. Additionally, the terms of some of the debt to which our Operating Partnership is a party may limit its ability to make some types of payments and other distributions to us. This in turn may limit our ability to make some types of payments, including payment of dividends to our stockholders, unless we meet certain financial tests. As a result, if our Operating Partnership fails to pay distributions to us, we generally will not be able to pay dividends to our stockholders for one or more dividend periods.

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RISKS RELATED TO FEDERAL INCOME TAX LAWS
We conduct a portion of our business through taxable REIT subsidiaries, which are subject to certain tax risks.
We have established several taxable REIT subsidiaries including our Management Company. Despite our qualification as a REIT, our taxable REIT subsidiaries must pay income tax on their taxable income. In addition, we must comply with various tests to continue to qualify as a REIT for federal income tax purposes, and our income from and investments in our taxable REIT subsidiaries generally do not constitute permissible income and investments for these tests. While we will attempt to ensure that our dealings with our taxable REIT subsidiaries will not adversely affect our REIT qualification, we cannot provide assurance that we will successfully achieve that result. Furthermore, we may be subject to a 100% penalty tax, or our taxable REIT subsidiaries may be denied deductions, to the extent our dealings with our taxable REIT subsidiaries are not deemed to be arm's length in nature.
If we fail to qualify as a REIT in any taxable year, our funds available for distribution to stockholders will be reduced.
We intend to continue to operate so as to qualify as a REIT under the Internal Revenue Code. Although we believe that we are organized and operate in such a manner, no assurance can be given that we currently qualify and in the future will continue to qualify as a REIT. Such qualification involves the application of highly technical and complex Internal Revenue Code provisions for which there are only limited judicial or administrative interpretations. The determination of various factual matters and circumstances not entirely within our control may affect our ability to qualify. In addition, no assurance can be given that legislation, new regulations, administrative interpretations or court decisions will not significantly change the tax laws with respect to qualification or its corresponding federal income tax consequences. Any such change could have a retroactive effect.
If in any taxable year we were to fail to qualify as a REIT, we would not be allowed a deduction for distributions to stockholders in computing our taxable income and we would be subject to federal income tax on our taxable income at regular corporate rates. Unless entitled to relief under certain statutory provisions, we also would be disqualified from treatment as a REIT for the four taxable years following the year during which qualification was lost. As a result, the funds available for distribution to our stockholders would be reduced for each of the years involved. This would likely have a significant adverse effect on the value of our securities and our ability to raise additional capital. In addition, we would no longer be required to make distributions to our stockholders. We currently intend to operate in a manner designed to qualify as a REIT. However, it is possible that future economic, market, legal, tax or other considerations may cause our Board of Directors, with the consent of a majority of our stockholders, to revoke the REIT election.
Any issuance or transfer of our capital stock to any person in excess of the applicable limits on ownership necessary to maintain our status as a REIT would be deemed void ab initio, and those shares would automatically be transferred to a non-affiliated charitable trust.
To maintain our status as a REIT under the Internal Revenue Code, not more than 50% in value of our outstanding capital stock may be owned, directly or indirectly, by five or fewer individuals (as defined in the Internal Revenue Code to include certain entities) at any time during the last half of a taxable year. Our certificate of incorporation generally prohibits ownership of more than 6% of the outstanding shares of our capital stock by any single stockholder determined by vote, value or number of shares (other than Charles Lebovitz, Executive Chairman of our Board of Directors and our former Chief Executive Officer, David Jacobs, Richard Jacobs and their affiliates under the Internal Revenue Code's attribution rules). The affirmative vote of 66 2/3% of our outstanding voting stock is required to amend this provision.
Our Board of Directors may, subject to certain conditions, waive the applicable ownership limit upon receipt of a ruling from the IRS or an opinion of counsel to the effect that such ownership will not jeopardize our status as a REIT. Absent any such waiver, however, any issuance or transfer of our capital stock to any person in excess of the applicable ownership limit or any issuance or transfer of shares of such stock which would cause us to be beneficially owned by fewer than 100 persons, will be null and void and the intended transferee will acquire no rights to the stock. Instead, such issuance or transfer with respect to that number of shares that would be owned by the transferee in excess of the ownership limit provision would be deemed void ab initio and those shares would automatically be transferred to a trust for the exclusive benefit of a charitable beneficiary to be designated by us, with a trustee designated by us, but who would not be affiliated with us or with the prohibited owner. Any acquisition of our capital stock and continued holding or ownership of our capital stock constitutes, under our certificate of incorporation, a continuous representation of compliance with the applicable ownership limit.

22



In order to maintain our status as a REIT and avoid the imposition of certain additional taxes under the Internal Revenue Code, we must satisfy minimum requirements for distributions to shareholders, which may limit the amount of cash we might otherwise have been able to retain for use in growing our business.
To maintain our status as a REIT under the Internal Revenue Code, we generally will be required each year to distribute to our stockholders at least 90% of our taxable income after certain adjustments. However, to the extent that we do not distribute all of our net capital gains or distribute at least 90% but less than 100% of our REIT taxable income, as adjusted, we will be subject to tax on the undistributed amount at regular corporate tax rates, as the case may be. In addition, we will be subject to a 4% nondeductible excise tax on the amount, if any, by which certain distributions paid by us during each calendar year are less than the sum of 85% of our ordinary income for such calendar year, 95% of our capital gain net income for the calendar year and any amount of such income that was not distributed in prior years. In the case of property acquisitions, including our initial formation, where individual Properties are contributed to our Operating Partnership for Operating Partnership units, we have assumed the tax basis and depreciation schedules of the entities contributing Properties. The relatively low tax basis of such contributed Properties may have the effect of increasing the cash amounts we are required to distribute as dividends, thereby potentially limiting the amount of cash we might otherwise have been able to retain for use in growing our business. This low tax basis may also have the effect of reducing or eliminating the portion of distributions made by us that are treated as a non-taxable return of capital.
Complying with REIT requirements might cause us to forego otherwise attractive opportunities.
In order to qualify as a REIT for U.S. federal income tax purposes, we must satisfy tests concerning, among other things, our sources of income, the nature of our assets, the amounts we distribute to our shareholders and the ownership of our stock. We may also be required to make distributions to our shareholders at disadvantageous times or when we do not have funds readily available for distribution. Thus, compliance with REIT requirements may cause us to forego opportunities we would otherwise pursue. In addition, the REIT provisions of the Internal Revenue Code impose a 100% tax on income from “prohibited transactions.” “Prohibited transactions” generally include sales of assets that constitute inventory or other property held for sale in the ordinary course of business, other than foreclosure property. This 100% tax could impact our desire to sell assets and other investments at otherwise opportune times if we believe such sales could be considered “prohibited transactions.”
Our holding company structure makes us dependent on distributions from the Operating Partnership.
Because we conduct our operations through the Operating Partnership, our ability to service our debt obligations and pay dividends to our shareholders is strictly dependent upon the earnings and cash flows of the Operating Partnership and the ability of the Operating Partnership to make distributions to us. Under the Delaware Revised Uniform Limited Partnership Act, the Operating Partnership is prohibited from making any distribution to us to the extent that at the time of the distribution, after giving effect to the distribution, all liabilities of the Operating Partnership (other than some non-recourse liabilities and some liabilities to the partners) exceed the fair value of the assets of the Operating Partnership. Additionally, the terms of some of the debt to which our Operating Partnership is a party may limit its ability to make some types of payments and other distributions to us. This in turn may limit our ability to make some types of payments, including payment of dividends on our outstanding capital stock, unless we meet certain financial tests or such payments or dividends are required to maintain our qualification as a REIT or to avoid the imposition of any federal income or excise tax on undistributed income. Any inability to make cash distributions from the Operating Partnership could jeopardize our ability to pay dividends on our outstanding shares of capital stock and to maintain qualification as a REIT.
RISKS RELATED TO OUR ORGANIZATIONAL STRUCTURE
The ownership limit described above, as well as certain provisions in our amended and restated certificate of incorporation, amended and restated bylaws, and certain provisions of Delaware law, may hinder any attempt to acquire us.
There are certain provisions of Delaware law, our amended and restated certificate of incorporation, our amended and restated bylaws, and other agreements to which we are a party that may have the effect of delaying, deferring or preventing a third party from making an acquisition proposal for us. These provisions may also inhibit a change in control that some, or a majority, of our stockholders might believe to be in their best interest or that could give our stockholders the opportunity to realize a premium over the then-prevailing market prices for their shares. These provisions and agreements are summarized as follows:
The Ownership Limit – As described above, to maintain our status as a REIT under the Internal Revenue Code, not more than 50% in value of our outstanding capital stock may be owned, directly or indirectly, by five or fewer individuals (as defined in the Internal Revenue Code to include certain entities) during the last half of a taxable year. Our amended and restated certificate of incorporation generally prohibits ownership of more than 6% of the outstanding shares of our capital stock by any single stockholder determined by value (other than Charles Lebovitz, David Jacobs, Richard Jacobs and their affiliates under the Internal Revenue Code's attribution rules). In addition to preserving our status as a REIT, the

23



ownership limit may have the effect of precluding an acquisition of control of us without the approval of our Board of Directors.
Supermajority Vote Required for Removal of Directors - Historically, our governing documents have provided that stockholders can only remove directors for cause and only by a vote of 75% of the outstanding voting stock. Recently, in light of a ruling by the Delaware Court of Chancery in a proceeding not involving the Company, the Board of Directors approved an amendment to our Bylaws to delete the “for cause” limitation on removal of the Company’s directors, and approved the submission of a similar amendment to our Amended and Restated Certificate of Incorporation for approval by shareholders at the Company’s 2016 annual meeting. As a result of such actions, shareholders will be able to remove directors with or without cause, but only by a vote of 75% of the outstanding voting stock. This provision makes it more difficult to change the composition of our Board of Directors and may have the effect of encouraging persons considering unsolicited tender offers or other unilateral takeover proposals to negotiate with our Board of Directors rather than pursue non-negotiated takeover attempts.
Advance Notice Requirements for Stockholder Proposals – Our amended and restated bylaws establish advance notice procedures with regard to stockholder proposals relating to the nomination of candidates for election as directors or new business to be brought before meetings of our stockholders. These procedures generally require advance written notice of any such proposals, containing prescribed information, to be given to our Secretary at our principal executive offices not less than 90 days nor more than 120 days prior to the meeting.
Vote Required to Amend Bylaws – A vote of 66  2/3% of our outstanding voting stock (in addition to any separate approval that may be required by the holders of any particular class of stock) is necessary for stockholders to amend our bylaws.
Delaware Anti-Takeover Statute – We are a Delaware corporation and are subject to Section 203 of the Delaware General Corporation Law. In general, Section 203 prevents an “interested stockholder” (defined generally as a person owning 15% or more of a company's outstanding voting stock) from engaging in a “business combination” (as defined in Section 203) with us for three years following the date that person becomes an interested stockholder unless:
(a)
before that person became an interested holder, our Board of Directors approved the transaction in which the interested holder became an interested stockholder or approved the business combination;
(b)
upon completion of the transaction that resulted in the interested stockholder becoming an interested stockholder, the interested stockholder owns 85% of our voting stock outstanding at the time the transaction commenced (excluding stock held by directors who are also officers and by employee stock plans that do not provide employees with the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer); or
(c)
following the transaction in which that person became an interested stockholder, the business combination is approved by our Board of Directors and authorized at a meeting of stockholders by the affirmative vote of the holders of at least two-thirds of our outstanding voting stock not owned by the interested stockholder.
Under Section 203, these restrictions also do not apply to certain business combinations proposed by an interested stockholder following the announcement or notification of certain extraordinary transactions involving us and a person who was not an interested stockholder during the previous three years or who became an interested stockholder with the approval of a majority of our directors, if that extraordinary transaction is approved or not opposed by a majority of the directors who were directors before any person became an interested stockholder in the previous three years or who were recommended for election or elected to succeed such directors by a majority of directors then in office.
Certain ownership interests held by members of our senior management may tend to create conflicts of interest between such individuals and the interests of the Company and our Operating Partnership. 
Tax Consequences of the Sale or Refinancing of Certain Properties – Since certain of our Properties had unrealized gain attributable to the difference between the fair market value and adjusted tax basis in such Properties immediately prior to their contribution to the Operating Partnership, a taxable sale of any such Properties, or a significant reduction in the debt encumbering such Properties, could cause adverse tax consequences to the members of our senior management who owned interests in our predecessor entities. As a result, members of our senior management might not favor a sale of a Property or a significant reduction in debt even though such a sale or reduction could be beneficial to us and the Operating Partnership. Our amended and restated bylaws provide that any decision relating to the potential sale of any Property that would result in a disproportionately higher taxable income for members of our senior management than for us and our stockholders, or that would result in a significant reduction in such Property's debt, must be made by a majority of the independent directors of the Board of Directors. The Operating Partnership is required, in the case of such a sale, to distribute to its partners, at a minimum, all of the net cash proceeds from such sale up to an amount reasonably believed necessary to enable members of our senior management to pay any income tax liability arising from such sale.

24



Interests in Other Entities; Policies of the Board of Directors – Certain Property tenants are affiliated with members of our senior management. Our amended and restated bylaws provide that any contract or transaction between us or the Operating Partnership and one or more of our directors or officers, or between us or the Operating Partnership and any other entity in which one or more of our directors or officers are directors or officers or have a financial interest, must be approved by our disinterested directors or stockholders after the material facts of the relationship or interest of the contract or transaction are disclosed or are known to them. Our code of business conduct and ethics also contains provisions governing the approval of certain transactions involving the Company and employees (or immediate family members of employees, as defined therein) that are not subject to the provision of the amended and restated bylaws described above. Such transactions are also subject to the Company's related party transactions policy in the manner and to the extent detailed in the proxy statement filed with the SEC for the Company's 2015 annual meeting. Nevertheless, these affiliations could create conflicts between the interests of these members of senior management and the interests of the Company, our shareholders and the Operating Partnership in relation to any transactions between us and any of these entities.
ITEM 1B. UNRESOLVED STAFF COMMENTS 
None. 
ITEM 2. PROPERTIES
Refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Item 7 for additional information pertaining to the Properties’ performance.
Malls
We owned a controlling interest in 72 Malls and non-controlling interests in 10 Malls as of December 31, 2015.  The Malls are primarily located in middle markets and generally have strong competitive positions because they are the only, or the dominant, regional mall in their respective trade areas. The Malls are generally anchored by two or more department stores and a wide variety of mall stores. Anchor tenants own or lease their stores and non-anchor stores lease their locations. Additional freestanding stores and restaurants that either own or lease their stores are typically located along the perimeter of the Malls' parking areas.
We classify our regional Malls into four 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. Fremaux Town Center, The Outlet Shoppes of the Bluegrass and The Outlet Shoppes at Atlanta were classified as Non-stabilized Malls as of December 31, 2015. The Outlet Shoppes of the Bluegrass, The Outlet Shoppes at Atlanta and The Outlet Shoppes at Oklahoma City were classified as Non-stabilized Malls as of December 31, 2014.
(3)
Non-core Malls - Malls where we have determined that the current format of the Property no longer represents the best use of the Property and we are in the process of evaluating alternative strategies for the Property, which may include major redevelopment or an alternative retail or non-retail format, or after evaluating alternative strategies for the Property, we have determined that the Property no longer meets our criteria for long-term investment. Similar criteria apply to the classification of an Associated Center, Community Center or Office Building as a Non-core Property. The steps taken to reposition Non-core Properties, 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 Non-core Properties. Therefore, traditional performance measures, such as occupancy percentages and leasing metrics, exclude Non-core Properties. Chesterfield Mall was classified as a Non-core Property as of December 31, 2015. Madison Square was classified as a Non-core Mall as of December 31, 2014. Additionally, Madison Plaza, an Associated Center adjacent to Madison Square, was classified as a Non-core Property as of December 31, 2014. Madison Square and Madison Plaza were sold in the second and third quarters of 2015, respectively.

25



(4)
Lender Malls - Properties for which we are working or intend to work with the lender on the terms of the loan secured by the related Property. As of December 31, 2015 and 2014, Gulf Coast Town Center and Triangle Town Center were classified as Lender Malls. Additionally, Triangle Town Place, an Associated Center adjacent to Triangle Town Center, was classified as a Lender Property as of December 31, 2015 and 2014. Lender Properties are excluded from our same-center pool because they are under cash management agreements with the respective servicers. As such, the respective servicer controls the cash flow of these Properties. See Note 19 to the consolidated financial statements for information on the modification and restructuring of the loan related to Triangle Town Center subsequent to December 31, 2015.
(5) Major redevelopment/Repositioning - Properties in major redevelopment or where we are considering alternatives to reposition the property. As of December 31, 2015, the Annex at Monroeville and CoolSprings Galleria were under significant redevelopment and Wausau Center was being considered for repositioning.
We own the land underlying each Mall in fee simple interest, except for Walnut Square, WestGate Mall, St. Clair Square, Brookfield Square, Bonita Lakes Mall, Meridian Mall, Stroud Mall, Wausau Center and EastGate Mall. We lease all or a portion of the land at each of these Malls subject to long-term ground leases.
The following table sets forth certain information for each of the Malls as of December 31, 2015:
Mall / Location
 
Year of Opening/
Acquisition
 
Year of
Most
Recent Expansion
 
Our
Ownership
 
Total
GLA
(1)
 
Total
Mall Store GLA(2)
 
Mall Store
Sales per
Square
Foot
(3)
 
Percentage
Mall
Store GLA
Leased
(4)
 
Anchors & Junior Anchors (5)
TIER 1
Sales ≥ $375 or more per square foot
Acadiana Mall
   Lafayette, LA
 
1979/2005
 
2004
 
100
%
 
991,309

 
299,046

 
$
404

 
97
%
 
Dillard's, JC Penney, Macy's, Sears
Coastal Grand (6)
   Myrtle Beach, SC
 
2004
 
2007
 
50
%
 
1,039,847

 
323,697

 
394

 
95
%
 
Bed Bath & Beyond, Belk, Cinemark, Dick's Sporting Goods, Dillard's, H&M, JC Penney, Sears
CoolSprings Galleria (6)
   Nashville, TN
 
1991
 
2015
 
50
%
 
1,141,685

 
429,610

 
543

 
96
%
 
Belk Men's & Kid's, Belk Women's & Home, Dillard's, H&M, JC Penney, Macy's
Cross Creek Mall
   Fayetteville, NC
 
1975/2003
 
2013
 
100
%
 
1,040,725

 
283,267

 
513

 
98
%
 
Belk, H&M, JC Penney, Macy's, Sears
Dakota Square Mall
   Minot, ND
 
1980/2012
 
2008
 
100
%
 
813,732

 
159,921

 
413

 
94
%
 
Barnes & Noble, Carmike Cinema, Herberger's, JC Penney, Scheels, Sears, Sleep Inn & Suites - Splashdown Dakota Super Slides, Target
Fayette Mall
   Lexington, KY
 
1971/2001
 
2014
 
100
%
 
1,190,985

 
492,708

 
561

 
92
%
 
Dick's Sporting Goods, Dillard's, H&M, JC Penney, Macy's
Friendly Center and
The Shops at Friendly (6)
   Greensboro, NC
 
1957/ 2006/ 2007
 
2014
 
50
%
 
1,137,636

 
491,070

 
474

 
97
%
 
Barnes & Noble, BB&T, Belk, Belk Home Store, The Grande Cinemas, Harris Teeter, Macy's, REI, Sears, Whole Foods
Governor's Square (6)
   Clarksville, TN
 
1986
 
1999
 
47.5
%
 
735,070

 
242,447

 
397

 
96
%
 
Belk, Best Buy, Carmike Cinema, Dick's Sporting Goods, Dillard's, JC Penney, Ross, Sears
Hamilton Place
   Chattanooga, TN
 
1987
 
1998
 
90
%
 
1,159,553

 
332,173

 
402

 
96
%
 
Barnes & Noble, Belk for Men, Kids & Home, Belk for Women, Dillard's for Men, Kids & Home, Dillard's for Women, Forever 21, JC Penney, Sears

26



Mall / Location
 
Year of Opening/
Acquisition
 
Year of
Most
Recent Expansion
 
Our
Ownership
 
Total
GLA
(1)
 
Total
Mall Store GLA(2)
 
Mall Store
Sales per
Square
Foot
(3)
 
Percentage
Mall
Store GLA
Leased
(4)
 
Anchors & Junior Anchors (5)
Hanes Mall
   Winston-Salem, NC
 
1975/2001
 
1990
 
100
%
 
1,504,116

 
502,990

 
380

 
94
%
 
Belk, Dillard's, Encore, H&M, JC Penney, Macy's, Sears
Harford Mall
   Bel Air, MD
 
1973/2003
 
2007
 
100
%
 
505,483

 
181,307

 
377

 
92
%
 
Encore, Macy's, Sears
Jefferson Mall
   Louisville, KY
 
1978/2001
 
1999
 
100
%
 
904,967

 
229,261

 
395

 
97
%
 
Dillard's, H&M, JC Penney, Macy's, Ross, Sears
Mall del Norte
   Laredo, TX
 
1977/2004
 
1993
 
100
%
 
1,167,364

 
382,539

 
533

 
95
%
 
Beall's, Cinemark, Dillard's, Foot Locker, Forever 21, H&M (7), JC Penney, Joe Brand, Macy's, Macy's Home Store, Sears
Mayfaire Town Center
   Wilmington, NC
 
2004/2015
 
N/A
 
100
%
 
589,332

 
289,994

 
379

 
89
%
 
Barnes & Noble, Belk, The Fresh Market, HH Gregg, Michaels, Regal Cinemas
Oak Park Mall (6)
   Overland Park, KS
 
1974/2005
 
1998
 
50
%
 
1,609,877

 
432,022

 
466

 
97
%
 
Academy Sports & Outdoors, Barnes & Noble, Dillard's for Women, Dillard's for Men, Children & Home, H&M, JC Penney, Macy's, Nordstrom, XXI Forever
The Outlet Shoppes at Atlanta
Woodstock, GA
 
2013
 
2015
 
75
%
 
400,136

 
375,329

 
375

*
93
%
 
Saks Fifth Ave OFF 5TH
The Outlet Shoppes
at El Paso
   El Paso, TX
 
2007/2012
 
2014
 
75
%
 
433,046

 
411,007

 
380

 
99
%
 
H&M
The Outlet Shoppes of the Bluegrass 
Simpsonville, KY
 
2014
 
2015
 
65
%
 
374,683

 
350,125

 
398

*
96
%
 
Saks Fifth Ave OFF 5TH
Park Plaza
   Little Rock, AR
 
1988/2004
 
N/A
 
100
%
 
540,166

 
236,416

 
388

 
94
%
 
Dillard's for Men & Children, Dillard's for Women & Home, XXI Forever
Post Oak Mall
   College Station, TX
 
1982
 
1985
 
100
%
 
774,932

 
287,407

 
386

 
84
%
 
Beall's, Dillard's Men & Home, Dillard's Women & Children, Encore, JC Penney, Macy's, Sears
St. Clair Square (8)
   Fairview Heights, IL
 
1974/1996
 
1993
 
100
%
 
1,081,103

 
303,848

 
386

 
97
%
 
Dillard's, JC Penney, Macy's, Sears
Sunrise Mall
   Brownsville, TX
 
1979/2003
 
2015
 
100
%
 
801,392

 
236,635

 
413

 
96
%
 
A'gaci, Beall's, Cinemark, Dick's Sporting Goods, Dillard's, JC Penney, Sears
Volusia Mall 
   Daytona Beach, FL
 
1974/2004
 
2013
 
100
%
 
1,100,069

 
229,346

 
402

 
99
%
 
Dillard's for Men & Home, Dillard's for Women, Dillard's for Children, H&M, JC Penney, Macy's, Sears
West County Center (6)
   Des Peres, MO
 
1969/2007
 
2002
 
50
%
 
1,204,730

 
414,799

 
497

 
97
%
 
Barnes & Noble, Dick's Sporting Goods, JC Penney, Macy's, Nordstrom, XXI Forever

27



Mall / Location
 
Year of Opening/
Acquisition
 
Year of
Most
Recent Expansion
 
Our
Ownership
 
Total
GLA
(1)
 
Total
Mall Store GLA(2)
 
Mall Store
Sales per
Square
Foot
(3)
 
Percentage
Mall
Store GLA
Leased
(4)
 
Anchors & Junior Anchors (5)
West Towne Mall
   Madison, WI
 
1970/2001
 
2013
 
100
%
 
830,528

 
273,056

 
522

 
96
%
 
Boston Store, Dick's Sporting Goods, Forever 21, JC Penney, Sears
Total Tier 1 Malls
 
 
 
 
 
 
 
23,072,466

 
8,190,020

 
$
444

 
95
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TIER 2
Sales ≥ $300 to < $375 per square foot
Arbor Place
Atlanta (Douglasville), GA
 
1999
 
 N/A
 
100
%
 
1,163,256

 
308,826

 
$
353

 
96
%
 
Bed Bath & Beyond, Belk, Dillard's, Forever 21, H&M, JC Penney, Macy's, Regal Cinemas, Sears
Asheville Mall
   Asheville, NC
 
1972/1998
 
2000
 
100
%
 
974,465

 
266,561

 
370

 
96
%
 
Barnes & Noble, Belk, Dillard's for Men, Children & Home, Dillard's for Women, H&M, JC Penney, Sears
Brookfield Square (9)
   Brookfield, WI
 
1967/2001
 
2008
 
100
%
 
1,008,297

 
268,223

 
344

 
99
%
 
Barnes & Noble, Boston Store, H&M, JC Penney, Sears
Burnsville Center
   Burnsville, MN
 
1977/1998
 
 N/A
 
100
%
 
1,046,207

 
382,387

 
340

 
95
%
 
Dick's Sporting Goods, Gordmans, H&M, JC Penney, Macy's, Sears
CherryVale Mall
   Rockford, IL
 
1973/2001
 
2007
 
100
%
 
850,253

 
330,668

 
345

 
95
%
 
Barnes & Noble, Bergner's, JC Penney, Macy's, Sears
East Towne Mall
   Madison, WI
 
1971/2001
 
2004
 
100
%
 
787,809

 
229,085

 
334

 
94
%
 
Barnes & Noble, Boston Store, Dick's Sporting Goods, Gordmans, JC Penney, Sears, Steinhafels
EastGate Mall (10)
   Cincinnati, OH
 
1980/2003
 
1995
 
100
%
 
858,783

 
278,071

 
370

 
85
%
 
Dillard's, JC Penney, Kohl's, Sears
Eastland Mall
   Bloomington, IL
 
1967/2005
 
N/A
 
100
%
 
760,833

 
221,178

 
313

 
96
%
 
Bergner's, JC Penney, Kohl's, Macy's, Sears
Frontier Mall
   Cheyenne, WY
 
1981
 
1997
 
100
%
 
524,239

 
179,369

 
356

 
92
%
 
Carmike Cinema, Dillard's for Women, Dillard's for Men, Kids & Home, JC Penney, Sears, Sports Authority
Greenbrier Mall
    Chesapeake, VA
 
1981/2004
 
2004
 
100
%
 
896,822

 
267,803

 
353

 
89
%
 
Dillard's, GameWorks, JC Penney, Macy's, Sears
Honey Creek Mall
   Terre Haute, IN
 
1968/2004
 
1981
 
100
%
 
677,322

 
185,807

 
353

 
93
%
 
Carson's, Encore, JC Penney, Macy's, Sears
Imperial Valley Mall
   El Centro, CA
 
2005
 
N/A
 
100
%
 
826,094

 
212,977

 
340

 
95
%
 
Cinemark, Dillard's, JC Penney, Kohl's, Macy's, Sears
Kirkwood Mall
   Bismarck, ND
 
1970/2012
 
2002
 
100
%
 
848,102

 
232,533

 
370

 
89
%
 
H&M (7), Herberger's, Keating Furniture, JC Penney, Scheels, Target
Laurel Park Place
   Livonia, MI
 
1989/2005
 
1994
 
100
%
 
492,222

 
193,412

 
346

 
99
%
 
Carson's, Von Maur
Layton Hills Mall
   Layton, UT
 
1980/2006
 
1998
 
100
%
 
597,648

 
209,943

 
354

 
99
%
 
Dick's Sporting Goods, JC Penney, Macy's

28



Mall / Location
 
Year of Opening/
Acquisition
 
Year of
Most
Recent Expansion
 
Our
Ownership
 
Total
GLA
(1)
 
Total
Mall Store GLA(2)
 
Mall Store
Sales per
Square
Foot
(3)
 
Percentage
Mall
Store GLA
Leased
(4)
 
Anchors & Junior Anchors (5)
Meridian Mall (11)
    Lansing, MI
 
1969/1998
 
2001
 
100
%
 
968,316

 
290,423

 
325

 
92
%
 
Bed Bath & Beyond, Dick's Sporting Goods, Gordmans, H&M, JC Penney, Macy's, Planet Fitness, Schuler Books & Music, Younkers for Her, Younkers Men, Kids & Home
Mid Rivers Mall
   St. Peters, MO
 
1987/2007
 
2015
 
100
%
 
1,087,246

 
277,927

 
312

 
91
%
 
Best Buy, Dick's Sporting Goods, Dillard's, JC Penney, Macy's, Planet Fitness, Sears, V-Stock, Wehrenberg Theaters
Midland Mall
   Midland, MI
 
1991/2001
 
N/A
 
100
%
 
470,974

 
134,024

 
324

 
95
%
 
Barnes & Noble, Dunham's Sports, JC Penney, Sears, Target, Younkers
Northgate Mall
   Chattanooga, TN
 
1972/2011
 
2014
 
100
%
 
789,169

 
181,166

 
326

 
96
%
 
Belk, Burlington, Carmike Cinema, former JC Penney, Michaels, Ross, Sears, T.J. Maxx
Northpark Mall
   Joplin, MO
 
1972/2004
 
1996
 
100
%
 
952,849

 
271,998

 
320

 
90
%
 
JC Penney, Jo-Ann Fabrics & Crafts, Macy's Men & Home, Macy's Women & Children, Regal Cinemas, Sears, former Shopko (12), Tilt, T.J. Maxx, V-Stock
Northwoods Mall
   North Charleston, SC
 
1972/2001
 
1995
 
100
%
 
772,737

 
269,618

 
368

 
95
%
 
Belk, Books-A-Million, Dillard's, JC Penney, Sears
Old Hickory Mall
   Jackson, TN
 
1967/2001
 
1994
 
100
%
 
538,991

 
161,896

 
349

 
83
%
 
Belk, JC Penney, Macy's, Sears
The Outlet Shoppes at Oklahoma City
Oklahoma City, OK
 
2011
 
2014
 
75
%
 
394,246

 
394,246

 
354

 
97
%
 
None
Parkdale Mall
   Beaumont, TX
 
1972/2001
 
2014
 
100
%
 
1,247,697

 
312,531

 
362

 
89
%
 
Ashley Furniture, Beall's, Dillard's, JC Penney, H&M, Hollywood Theater, Kaplan College, Macy's, Marshall's, Michaels, Sears, 2nd and Charles, former Steve & Barry's, XXI Forever
Parkway Place
   Huntsville, AL
 
1957/1998
 
2002
 
100
%
 
648,260

 
272,435

 
336

 
98
%
 
Belk, Dillard's
Pearland Town Center (13)
    Pearland, TX
 
2008
 
N/A
 
100
%
 
646,993

 
283,404

 
334

 
94
%
 
Barnes & Noble, Dillard's, Macy's, Sports Authority
Richland Mall
   Waco, TX
 
1980/2002
 
1996
 
100
%
 
681,752

 
200,527

 
359

 
94
%
 
Beall's, Dillard's for Men, Kids & Home, Dillard's for Women, JC Penney, Sears, XXI Forever
River Ridge Mall
   Lynchburg, VA
 
1980/2003
 
2000
 
100
%
 
764,368

 
197,216

 
323

 
90
%
 
Belk, JC Penney, Liberty University, Macy's, Regal Cinemas, T.J. Maxx
South County Center
   St. Louis, MO
 
1963/2007
 
2001
 
100
%
 
1,043,621

 
310,755

 
360

 
88
%
 
Dick's Sporting Goods, Dillard's, JC Penney, Macy's, Sears

29



Mall / Location
 
Year of Opening/
Acquisition
 
Year of
Most
Recent Expansion
 
Our
Ownership
 
Total
GLA
(1)
 
Total
Mall Store GLA(2)
 
Mall Store
Sales per
Square
Foot
(3)
 
Percentage
Mall
Store GLA
Leased
(4)
 
Anchors & Junior Anchors (5)
Southaven Towne Center
   Southaven, MS
 
2005
 
2013
 
100
%
 
567,640

 
184,545

 
305

 
92
%
 
Bed Bath & Beyond, Dillard's, Gordmans, HH Gregg, JC Penney
Southpark Mall
   Colonial Heights, VA
 
1989/2003
 
2007
 
100
%
 
672,975

 
229,715

 
359

 
92
%
 
Dick's Sporting Goods, JC Penney, Macy's, Regal Cinemas, Sears
Turtle Creek Mall
   Hattiesburg, MS
 
1994
 
1995
 
100
%
 
846,104

 
192,717

 
337

 
96
%
 
At Home. Belk, Dillard's, JC Penney, Sears, Southwest Theaters, Stein Mart
Valley View Mall
   Roanoke, VA
 
1985/2003
 
2007
 
100
%
 
844,515

 
285,497

 
366

 
98