UNCONSOLIDATED AFFILIATES AND COST METHOD INVESTMENTS

Unconsolidated Affiliates

At December 31, 2015, the Company had investments in the following 19 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, The Shops at Friendly Center and a portfolio of four office buildings	50.0	%
CBL-TRS Joint Venture II, LLC	Renaissance Center	50.0	%
El Paso Outlet Outparcels, LLC	The Outlet Shoppes at El Paso (vacant land)	50.0	%
Fremaux Town Center JV, LLC	Fremaux Town Center Phases I and II	65.0	%
Governor’s Square IB	Governor’s Plaza	50.0	%
Governor’s Square Company	Governor’s Square	47.5	%
High Pointe Commons, LP	High Pointe Commons	50.0	%
High Pointe Commons II-HAP, LP	High Pointe Commons - Christmas Tree Shop	50.0	%
JG Gulf Coast Town Center LLC	Gulf Coast Town Center Phase I, II and 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 and one office building	50.0	%
Triangle Town Member LLC	Triangle Town Center, Triangle Town Commons and Triangle Town Place	50.0	%
West Melbourne I, LLC	Hammock Landing Phases I and II	50.0	%
York Town Center, LP	York Town Center	50.0	%

Although the Company had majority ownership of certain joint ventures during 2015, 2014 and 2013, it evaluated the investments and concluded that the other partners or owners in these joint ventures had substantive participating rights, such as approvals of:


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


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


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


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


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


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


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

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

Gulf Coast Town Center

In the third quarter of 2015, the lender of the non-recourse mortgage loan secured by Phases I and II of Gulf Coast Town Center in Ft. Myers, FL sent a formal notice of default and initiated foreclosure proceedings. Gulf Coast Town Center generates insufficient cash flow to cover the debt service on the mortgage, which had a balance of $190,800 (of which the Company's 50.0% share was $95,400) at December 31, 2015 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.

Renaissance Center

In December 2015, the Company and its 50/50 joint venture partner entered into a binding agreement to sell Renaissance Center, a community center located in Durham, NC, for a gross sales price of $129,200 of which $64,600 represents each partner's share. The sale is expected to close in the second quarter of 2016, subject to customary closing conditions, the assumption of the $16,000 loan secured by the Property's second phase and defeasance of the loan secured by the first phase, which had a balance of $31,678 as of December 31, 2015.

Triangle Town Center and Triangle Town Commons

Subsequent to December 31, 2015, the Company's 50.0% interest was sold to a newly formed joint venture. See Note 19 for more information.

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



	December 31,
	2015			2014
ASSETS:
Investment in real estate assets	$	2,357,902		$	2,266,252
Accumulated depreciation	(677,448		)	(619,558		)
	1,680,454			1,646,694
Developments in progress	59,592			75,877
Net investment in real estate assets	1,740,046			1,722,571
Other assets ⁽¹⁾	168,540			166,391
Total assets	$	1,908,586		$	1,888,962

LIABILITIES:
Mortgage and other indebtedness ⁽¹⁾	$	1,546,272		$	1,508,663
Other liabilities	51,357			42,517
Total liabilities	1,597,629			1,551,180

OWNERS' EQUITY:
The Company	184,868			198,261
Other investors	126,089			139,521
Total owners' equity	310,957			337,782
Total liabilities and owners’ equity	$	1,908,586		$	1,888,962

(1) In accordance with the adoption in the fourth quarter of 2015 of ASU 2015-03 and ASU 2015-15, unamortized deferred financing costs were reclassified from other assets to mortgage and other indebtedness. These reclassifications consisted of $2,884 and $4,163 as of December 31, 2015 and 2014, respectively.



	Year Ended December 31,
	2015			2014			2013
Total revenues	$	253,399		$	250,248		$	243,215
Depreciation and amortization	(79,870		)	(79,059		)	(76,323		)
Other operating expenses	(75,875		)	(73,218		)	(72,166		)
Income from operations	97,654			97,971			94,726
Interest and other income	1,337			1,358			1,359
Interest expense	(75,485		)	(74,754		)	(76,934		)
Gain on sales of real estate assets	2,551			1,697			102
Net income	$	26,057		$	26,272		$	19,253

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 + 2.00%	February 2016	⁽³⁾	$	39,475
December	Hammock Landing - Phase II ⁽²⁾	LIBOR + 2.00%	February 2016	⁽³⁾	16,757
December	The Pavilion at Port Orange ⁽²⁾	LIBOR + 2.00%	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 + 2.00%	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)	Subsequent to December 31, 2015, the loan was extended to February 2018 with a one-year extension option. See Note 19 for more information.


(4)	CBL/T-C, a 50% owned subsidiary of the Company, 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. See Note 14 for more information.

See Note 19 for information related to an unconsolidated affiliate's mortgage loan, which was modified and restructured subsequent to December 31, 2015.

2014 Financings

The following table presents the loan activity of the Company's unconsolidated affiliates in 2014:



Date	Property	Stated Interest Rate	Maturity Date ⁽¹⁾		Amount Financed or Extended
December	Ambassador Town Center ⁽²⁾	LIBOR + 1.80%	December 2017	⁽³⁾	$	48,200
December	Ambassador Town Center - Infrastructure Improvements ⁽⁴⁾	LIBOR + 2.00%	December 2017	⁽³⁾	11,700
November	Hammock Landing - Phase II ⁽⁵⁾	LIBOR + 2.25%	November 2015	⁽⁶⁾	16,757
August	Fremaux Town Center - Phase I ⁽⁷⁾	LIBOR + 2.00%	August 2016	⁽⁸⁾	47,291
August	Fremaux Town Center - Phase II ⁽⁹⁾	LIBOR + 2.00%	August 2016	⁽⁸⁾	32,100
July	Coastal Grand - Myrtle Beach ⁽¹⁰⁾	4.09%	August 2024		126,000
February	Fremaux Town Center - Phase I ⁽¹¹⁾	LIBOR + 2.125%	March 2016		47,291


(1)	Excludes any extension options.

(2)

The unconsolidated 65/35 joint venture closed on a construction loan for the development of Ambassador Town Center, a community center located in Lafayette, LA. The Operating Partnership has guaranteed 100% of the loan. See Note 14 for information on the Operating Partnership's guaranty of this loan and future guaranty reductions. The interest rate will be reduced to LIBOR + 1.60% once certain debt service and operational metrics are met.


(3)	The loan has two one-year extension options, which are at the joint venture's election, for an outside maturity date of December 2019.

(4)

The unconsolidated 65/35 joint venture was formed to construct certain infrastructure improvements related to the development of Ambassador Town Center. The Operating Partnership has guaranteed 100% of the loan. See Note 14 for information on the Operating Partnership's guaranty of this loan and future guaranty reductions. Under a PILOT program, in lieu of ad valorem taxes, Ambassador and other contributing landowners will make annual PILOT payments to Ambassador Infrastructure, which will be used to repay the infrastructure construction loan.

(5)

The $10,757 construction loan was amended and restated to increase the loan by $6,000 to finance the construction of Academy Sports. The interest rate was reduced to LIBOR + 2.00% in the fourth quarter of 2015 as Academy Sports is open and paying contractual rent. See Note 14 for information on the Operating Partnership's guaranty of this loan. The loan was subsequently amended and modified in 2015. See above.


(6)	The construction loan had two one-year extension options, which were at the joint venture's election, for an outside maturity date of November 2017.


(7)	Fremaux amended and modified its Phase I construction loan to change the maturity date and interest rate. Additionally, the Operating Partnership's guarantee of the loan was reduced from 100% to 50% of the outstanding principal loan amount. In the second quarter of 2015, the guaranty was reduced from 50% to 15%. See Note 14 for further information.


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


(9)	The Operating Partnership's guaranty of the construction loan was reduced in the fourth quarter of 2014 from 100% to 50% upon the land closing with Dillard's. See Note 14 for further information on future guaranty reductions.

(10)

Two subsidiaries of Mall of South Carolina L.P. and Mall of South Carolina Outparcel L.P., closed on a non-recourse loan, secured by Coastal Grand in Myrtle Beach, SC. Net proceeds were used to retire the outstanding borrowings under the previous loan, which had a balance of $75,238 as well as to pay off $18,000 of subordinated notes to the Company and its joint venture partner, each of which held $9,000. Excess proceeds were distributed 50/50 to the Company and its partner and the Company's share of excess proceeds was used to reduce outstanding balances on its lines of credit.

(11)

Fremaux amended and restated its March 2013 loan agreement to increase the capacity on its construction loan from $46,000 to $47,291 for additional development costs related to Fremaux Town Center. The Operating Partnership had guaranteed 100% of the loan. The construction loan had two one-year extension options, which were at the joint venture's election, for an outside maturity date of March 2018. See footnote 7 and footnote 8 above for information on the extension and modification of the Phase I loan in August 2014.

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

Ambassador Town Center JV, LLC

In December 2014, the Company formed a 65/35 joint venture, Ambassador, to develop, own and operate Ambassador Town Center, a community center development located in Lafayette, LA. Construction began in early 2015 and is expected to be complete in spring 2016. The partners contributed aggregate initial equity of $14,800, of which the Company's contribution was $13,320. Following the initial formation of Ambassador, all required future contributions will be funded on a 65/35 pro rata basis.

CBL/T-C, LLC

CBL/T-C, LLC ("CBL/T-C") and TIAA-CREF each own a 50% interest with respect to the CoolSprings Galleria, Oak Park Mall and West County Center Properties. The terms of the joint venture agreement provide that, with respect to these Properties, voting rights, capital contributions and distributions of cash flows will be on a pari passu basis in accordance with ownership percentages. As of December 31, 2013, the Company and TIAA-CREF owned 88% and 12% interests, respectively, in Pearland Town Center. The Company accounted for the formation of CBL/T-C as the sale of a partial interest in the combined CoolSprings Galleria, Oak Park Mall and West County Center Properties and recognized a gain on sale of real estate of $54,327 in 2011, which included the impact of a reserve for future capital expenditures that the Company must fund related to parking decks at West County Center in the amount of $26,439. The Company recorded its investment in CBL/T-C under the equity method of accounting at $116,397, which represented its combined remaining 50% cost basis in the CoolSprings Galleria, Oak Park Mall and West County Center Properties. The Company determined that CBL/T-C's interest in Pearland Town Center represented an interest in a VIE and accounted for the Pearland Town Center Property separately from the combined CoolSprings Galleria, Oak Park Mall and West County Center Properties. The Company determined that, because it had the option to acquire TIAA-CREF's interest in Pearland Town Center in the future, it did not qualify as a partial sale and therefore, accounted for the $18,264 contributed by TIAA-CREF attributable to Pearland Town Center as a financing. This amount was included in mortgage and other indebtedness in the accompanying consolidated balance sheets as of December 31, 2013. Under the financing method, the Company continued to account for Pearland Town Center on a consolidated basis. In accordance with the terms of the joint venture agreement, the Company elected to purchase TIAA-CREF's 12% interest in Pearland Town Center in the first quarter of 2014 for $17,948. This amount represented the noncontrolling partner's unreturned equity contribution related to Pearland Town Center, which was accounted for as a financing obligation, plus accrued and unpaid preferred return at a rate of 8%. See Note 6 for more information.

Cost Method Investments

The Company owns a 6.2% noncontrolling interest in subsidiaries of Jinsheng Group (“Jinsheng”), an established mall operating and real estate development company located in Nanjing, China. Jinsheng owns controlling interests in home furnishing shopping malls.

The Company accounts for its noncontrolling interest in Jinsheng using the cost method because the Company does not exercise significant influence over Jinsheng and there is no readily determinable market value of Jinsheng’s shares since they are not publicly traded. The noncontrolling interest is reflected as investment in unconsolidated affiliates in the accompanying consolidated balance sheets as of December 31, 2015 and 2014.