UNCONSOLIDATED AFFILIATES AND COST METHOD INVESTMENT

Unconsolidated Affiliates

At December 31, 2016, the Company had investments in the following 17 entities, which are accounted for using the equity method of accounting:



Joint Venture	Property Name	Company's Interest
Ambassador Infrastructure, LLC	Ambassador Town Center - Infrastructure Improvements	65.0%
Ambassador Town Center JV, LLC	Ambassador Town Center	65.0%
CBL/T-C, LLC	CoolSprings Galleria, Oak Park Mall and West County Center	50.0%
CBL-TRS Joint Venture, LLC	Friendly Center and The Shops at Friendly Center	50.0%
El Paso Outlet Outparcels, LLC	The Outlet Shoppes at El Paso (vacant land)	50.0%
Fremaux Town Center JV, LLC	Fremaux Town Center - Phases I and II	65.0%
G&I VIII CBL Triangle LLC	Triangle Town Center and Triangle Town Commons	10.0%
Governor’s Square IB	Governor’s Square Plaza	50.0%
Governor’s Square Company	Governor’s Square	47.5%
JG Gulf Coast Town Center LLC	Gulf Coast Town Center - Phase III	50.0%
Kentucky Oaks Mall Company	Kentucky Oaks Mall	50.0%
Mall of South Carolina L.P.	Coastal Grand	50.0%
Mall of South Carolina Outparcel L.P.	Coastal Grand Crossing and vacant land	50.0%
Port Orange I, LLC	The Pavilion at Port Orange - Phase I	50.0%
River Ridge Mall JV, LLC	River Ridge Mall	25.0%
West Melbourne I, LLC	Hammock Landing - Phases I and II	50.0%
York Town Center, LP	York Town Center	50.0%

Although the Company had majority ownership of certain joint ventures during 2016, 2015 and 2014, it evaluated the investments and concluded that the other partners or owners in these joint ventures had substantive participating rights, such as approvals of:


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


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


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


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


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


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


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

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

Activity - Unconsolidated Affiliates

CBL-TRS Joint Venture, LLC

In December 2016, CBL-TRS Joint Venture, LLC, sold four office buildings, located in Greensboro, NC, for a gross sales price of $26,000 and net proceeds of approximately $25,406, of which $12,703 represents each partner's share. The unconsolidated affiliate recognized a gain on sale of real estate assets of $51, of which each partner's share was approximately $25. The Company's share of the gain is included in Equity in Earnings of Unconsolidated Affiliates in the consolidated statements of operations.

G&I VIII CBL Triangle LLC

In December 2016, G&I VIII CBL Triangle LLC, sold Triangle Town Place, an associated center located in Raleigh, NC, for a gross sales price of $30,250 and net proceeds of approximately $29,802. Net proceeds from the sale were used to retire the outstanding principal balance of the $29,342 loan secured by the Property. See Loan Repayments below for additional information on this loan. The unconsolidated affiliate recognized a gain on sale of real estate assets of $2,820, of which the Company's share was approximately $282 and the joint venture partner's share was $2,538. The Company's share of the gain is included in Equity in Earnings of Unconsolidated Affiliates in the consolidated statements of operations.

G&I VIII CBL Triangle LLC is a 10/90 joint venture, formed in the first quarter of 2016, between the Company and DRA Advisors, which acquired Triangle Town Center, Triangle Town Commons and Triangle Town Place from an existing 50/50 joint venture, Triangle Town Member LLC, between the Company and The R.E. Jacobs Group for $174,000, including the assumption of the $171,092 loan, of which each selling partner's share was $85,546 as of the closing date. Triangle Town Member LLC recognized a gain on sale of real estate assets of $80,979 in connection with the sale of its interests to G&I VIII CBL Triangle LLC. Concurrent with the formation of the new joint venture, the new entity closed on a modification and restructuring of the $171,092 loan, of which the Company's share is $17,109. See information on the new loan under Financings below. The Company also made an equity contribution of $3,060 to the joint venture at closing. The Company continues to lease and manage the remaining Properties.

High Pointe Commons

In the third quarter of 2016, High Pointe Commons, LP and High Pointe Commons II-HAP, LP, two 50/50 subsidiaries of the Company, and their joint venture partner closed on the sale of High Pointe Commons, a community center located in Harrisburg, PA, for a gross sales price of $33,800 and net proceeds of $14,962, of which $7,481 represents each partner's share. The existing mortgages secured by the property, which had an aggregate balance of $17,388 at the time of closing, were paid off in conjunction with the sale. See Loan Repayments below for additional information on these loans. The unconsolidated affiliate recognized a gain on sale of real estate assets of $16,649, of which each partner's share was approximately $8,324. Additionally, the unconsolidated affiliates recorded a loss on extinguishment of debt of $393, of which each partner's share was approximately $197. The Company's share of the gain and share of the loss on extinguishment of debt is included in Equity in Earnings of Unconsolidated Affiliates in the consolidated statements of operations.

CBL-TRS Joint Venture II, LLC

In the second quarter of 2016, CBL-TRS Joint Venture II, LLC, sold Renaissance Center, a community center located in Durham, NC, for a gross sales price of $129,200 and net proceeds of $80,324, of which $40,162 represents each partner's share. In conjunction with the sale, the buyer assumed the $16,000 loan secured by the Property's second phase. The loan secured by the first phase, which had a principal balance of $31,484 as of closing, was retired. See Loan Repayments below for additional information on this loan. The unconsolidated affiliate recognized a gain on sale of real estate assets of $59,977, of which each partner's share was approximately $29,989. The Company's share of the gain is included in Equity in Earnings of Unconsolidated Affiliates in the consolidated statements of operations.

JG Gulf Coast Town Center LLC - Phases I and II

In the second quarter of 2016, the foreclosure process was completed and the mortgage lender received title to the mall in satisfaction of the non-recourse mortgage loan secured by Phases I and II of Gulf Coast Town Center in Ft. Myers, FL. Gulf Coast Town Center generated insufficient cash flow to cover the debt service on the mortgage, which had a balance of $190,800 (of which the Company's 50% share was $95,400) and a contractual maturity date of July 2017. In the third quarter of 2015, the lender on the loan began receiving the net operating cash flows of the property each month in lieu of scheduled monthly mortgage payments. The joint venture recognized a gain on extinguishment of debt of $63,294 upon the disposition of Gulf Coast. The Company recognized a gain on the net investment in Gulf Coast of $29,267 upon the disposition of the Property, which is included in Equity in Earnings of Unconsolidated Affiliates in the consolidated statements of operations.

River Ridge Mall JV, LLC

In the first quarter of 2016, the Company entered into a 25/75 joint venture, River Ridge Mall JV, LLC, ("River Ridge") with an unaffiliated partner. The Company contributed River Ridge Mall, located in Lynchburg, VA, to River Ridge and the partner contributed $33,500 of cash and an anchor parcel at River Ridge Mall that it already owned having a value of $7,000. The $33,500 of cash was distributed to the Company and, after closing costs, $32,819 was used to reduce outstanding balances on its lines of credit. Following the initial formation, all required future contributions will be funded on a pro rata basis.

The Company has accounted for the formation of River Ridge as the sale of a partial interest and recorded a loss on impairment of $9,594 in 2016, which includes a reserve of $2,100 for future capital expenditures. See Note 4 and Note 15 for more information. The Company continues to manage and lease the mall. The Company has the right to require its 75% partner to purchase its 25% interest in River Ridge if the Company ceases to manage the Property at the partner's election.

Other

An unconsolidated affiliate recognized a gain on sale of real estate assets of $501 related to the sale of an outparcel, of which each partner's share was approximately $251. The Company's share of the gain is included in Equity in Earnings of Unconsolidated Affiliates in the consolidated statements of operations.

Condensed Combined Financial Statements - Unconsolidated Affiliates

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



	December 31,
	2016			2015
ASSETS:
Investment in real estate assets	$	2,137,666		$	2,357,902
Accumulated depreciation	(564,612		)	(677,448		)
	1,573,054			1,680,454
Developments in progress	9,210			59,592
Net investment in real estate assets	1,582,264			1,740,046
Other assets	223,347			168,540
Total assets	$	1,805,611		$	1,908,586

LIABILITIES:
Mortgage and other indebtedness	$	1,266,046		$	1,546,272
Other liabilities	46,160			51,357
Total liabilities	1,312,206			1,597,629

OWNERS' EQUITY:
The Company	228,313			184,868
Other investors	265,092			126,089
Total owners' equity	493,405			310,957
Total liabilities and owners’ equity	$	1,805,611		$	1,908,586



	Year Ended December 31,
	2016			2015			2014
Total revenues	$	250,361		$	253,399		$	250,248
Depreciation and amortization	(83,640		)	(79,870		)	(79,059		)
Other operating expenses	(76,328		)	(75,875		)	(73,218		)
Income from operations	90,393			97,654			97,971
Interest and other income	1,352			1,337			1,358
Interest expense	(55,227		)	(75,485		)	(74,754		)
Gain on extinguishment of debt	62,901			—			—
Gain on sales of real estate assets	160,977			2,551			1,697
Net income	$	260,396		$	26,057		$	26,272

Financings - Unconsolidated Affiliates

2016 Financings

The following table presents the loan activity of the Company's unconsolidated affiliates in 2016:



Date	Property	Stated Interest Rate		Maturity Date ⁽¹⁾		Amount Financed or Extended
December	The Shops at Friendly Center ⁽²⁾	3.34%		April 2023		$	60,000
June	Fremaux Town Center ⁽³⁾	3.70%	⁽⁴⁾	June 2026		73,000
June	Ambassador Town Center ⁽⁵⁾	3.22%	⁽⁶⁾	June 2023		47,660
February	The Pavilion at Port Orange ⁽⁷⁾	LIBOR + 2.0%		February 2018	⁽⁸⁾	58,628
February	Hammock Landing - Phase I ⁽⁷⁾	LIBOR + 2.0%		February 2018	⁽⁸⁾	43,347		⁽⁹⁾
February	Hammock Landing - Phase II ⁽⁷⁾	LIBOR + 2.0%		February 2018	⁽⁸⁾	16,757
February	Triangle Town Center, Triangle Town Place, Triangle Town Commons ⁽¹⁰⁾	4.00%	⁽¹¹⁾	December 2018	⁽¹²⁾	171,092


(1)	Excludes any extension options.

(2)

CBL-TRS Joint Venture, LLC closed on a non-recourse loan, secured by The Shops at Friendly Center in Greensboro, NC. The new loan has a maturity date with a term of six years to coincide with the maturity date of the existing loan secured by Friendly Center. A portion of the net proceeds were used to retire a $37,640 fixed-rate loan that bore interest at 5.90% and was due to mature in January 2017.


(3)	Net proceeds from the non-recourse loan were used to retire the existing construction loans, secured by Phase I and Phase II of Fremaux Town Center, with an aggregate balance of $71,125.


(4)	The joint venture had an interest rate swap on a notional amount of $73,000, amortizing to $52,130 over the term of the swap, related to Fremaux Town Center to effectively fix the interest rate on the variable-rate loan. In October 2016, the joint venture made an election under the loan agreement to convert the loan from a variable-rate to a fixed-rate loan which bears interest at 3.70%.


(5)	The non-recourse loan was used to retire an existing construction loan with a principal balance of $41,885 and excess proceeds were utilized to fund remaining construction costs.


(6)	The joint venture has an interest rate swap on a notional amount of $47,660, amortizing to $38,866 over the term of the swap, related to Ambassador Town Center to effectively fix the interest rate on the variable-rate loan. Therefore, this amount is currently reflected as having a fixed rate.


(7)	The guaranty was reduced from 25% to 20% in conjunction with the refinancing. See Note 14 for more information.


(8)	The loan was modified and extended to February 2018 with a one-year extension option, at the joint venture's election, to February 2019.


(9)	The capacity was increased from $39,475 to fund an expansion.


(10)	The loan was amended and modified in conjunction with the sale of the Properties to a newly formed joint venture as described above.


(11)	The interest rate was reduced from 5.74% to 4.00% interest-only payments through the initial maturity date.

(12)

The loan was extended to December 2018 with two one-year extension options to December 2020. Under the terms of the loan agreement, the joint venture must pay the lender $5,000 to reduce the principal balance of the loan and an extension fee of 0.50% of the remaining outstanding loan balance if it exercises the first extension. If the joint venture elects to exercise the second extension, it must pay the lender $8,000 to reduce the principal balance of the loan and an extension fee of 0.75% of the remaining outstanding principal loan balance. Additionally, the interest rate would increase to 5.74% during the extension period.

2015 Financings

The following table presents the loan activity of the Company's unconsolidated affiliates in 2015:



Date	Property	Stated Interest Rate	Maturity Date ⁽¹⁾		Amount Financed or Extended
December	Hammock Landing - Phase I ⁽²⁾	LIBOR + 2.0%	February 2016	⁽³⁾	$	39,475
December	Hammock Landing - Phase II ⁽²⁾	LIBOR + 2.0%	February 2016	⁽³⁾	16,757
December	The Pavilion at Port Orange ⁽²⁾	LIBOR + 2.0%	February 2016	⁽³⁾	58,820
October	Oak Park Mall ⁽⁴⁾	3.97%	October 2025		276,000
July	Gulf Coast Town Center - Phase III ⁽⁵⁾	LIBOR + 2.0%	July 2017		5,352


(1)	Excludes any extension options.


(2)	The loan was amended and modified to extend its initial maturity date and interest rate.


(3)	In the first quarter of 2016, the loan was extended and modified as noted above.


(4)	CBL/T-C closed on a non-recourse loan, secured by Oak Park Mall in Overland Park, KS. Net proceeds were used to retire the outstanding borrowings of $275,700 under the previous loan which bore interest at 5.85% and had a December 2015 maturity date.


(5)	The loan was amended and modified to extend its maturity date. As part of the refinancing agreement, the loan is no longer guaranteed by the Operating Partnership.

All of the debt on the Properties owned by the unconsolidated affiliates listed above is non-recourse, except for Ambassador Infrastructure, Hammock Landing and The Pavilion at Port Orange. See Note 14 for a description of guarantees the Operating Partnership has issued related to certain unconsolidated affiliates.

2016 Loan Repayments

The Company's unconsolidated affiliates retired the following loans, secured by the related unconsolidated Properties, in 2016:



Date	Property	Interest Rate at Repayment Date	Scheduled Maturity Date	Principal Balance Repaid
December	The Shops at Friendly Center ⁽¹⁾	5.90%	January 2017	$	37,640
December	Triangle Town Place ⁽²⁾	4.00%	December 2018	29,342
September	Governor's Square Mall ⁽³⁾	8.23%	September 2016	14,089
September	High Pointe Commons - Phase I ⁽⁴⁾	5.74%	May 2017	12,401
September	High Pointe Commons - PetCo ⁽⁴⁾	3.20%	July 2017	19
September	High Pointe Commons - Phase II ⁽⁴⁾	6.10%	July 2017	4,968
July	Kentucky Oaks Mall ⁽⁵⁾	5.27%	January 2017	19,912
April	Renaissance Center - Phase I	5.61%	July 2016	31,484


(1)	The loan secured by the Property was retired using a portion of the net proceeds from a $60,000 fixed-rate loan. See above for more information.

(2)

Upon the sale of Triangle Town Place, a portion of the net proceeds was used to pay down the balance of a loan for the portion secured by Triangle Town Place. After the debt reduction associated with the sale of Triangle Town Center, the principal balance of the loan secured by Triangle Town Center and Triangle Town Commons as of December 31, 2016 is $141,126, of which the Company's share is $14,113.


(3)	The Company's share of the loan was $6,692.


(4)	The loan secured by the Property was paid off using proceeds from the sale of the Property in September 2016. See above for more information. The Company's share of the loan was 50%.


(5)	The Company's share of the loan was $9,956.

The Company's unconsolidated affiliates retired the following construction loans, secured by the related unconsolidated Properties, in 2016:



Date	Property	Interest Rate at Repayment Date	Scheduled Maturity Date	Principal Balance Repaid
June	Fremaux Town Center - Phase I ⁽¹⁾	2.44%	August 2016	$	40,530
June	Fremaux Town Center - Phase II ⁽¹⁾	2.44%	August 2016	30,595
June	Ambassador Town Center ⁽²⁾	2.24%	December 2017	41,885


(1)	The construction loan was retired using a portion of the net proceeds from a $73,000 fixed-rate non-recourse mortgage loan. See Financings above for more information.


(2)	The construction loan was retired using a portion of the net proceeds from a $47,660 fixed-rate non-recourse mortgage loan. Excess proceeds were utilized to fund remaining construction costs. See Financings above for more information.

Cost Method Investment

The Company owned a 6.2% noncontrolling interest in Jinsheng, an established mall operating and real estate development company located in Nanjing, China, which owned controlling interests in home furnishing shopping malls. In November 2016, the Company received $15,538 from Jinsheng for the redemption of its interest that had a carrying value of $5,325 and recorded a gain on investment of $10,136. The Company had previously recorded an other-than-temporary impairment of $5,306 related to this investment in 2009 upon the decline of China's real estate market. The Company accounted for its noncontrolling interest in Jinsheng using the cost method because the Company did not exercise significant influence over Jinsheng and there was no readily determinable market value of Jinsheng’s shares since they are not publicly traded. The noncontrolling interest was reflected as Investments in Unconsolidated Affiliates in the consolidated balance sheets as of December 31, 2015.