UNCONSOLIDATED AFFILIATES AND COST METHOD INVESTMENTS

Unconsolidated Affiliates

At December 31, 2014, 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	65.0	%
Governor’s Square IB	Governor’s Plaza	50.0	%
Governor’s Square Company	Governor’s Square	47.5	%
High Pointe Commons, LP	High Pointe Commons	50.0	%
High Pointe Commons II-HAP, LP	High Pointe Commons - Christmas Tree Shop	50.0	%
JG Gulf Coast Town Center LLC	Gulf Coast Town Center	50.0	%
Kentucky Oaks Mall Company	Kentucky Oaks Mall	50.0	%
Mall of South Carolina L.P.	Coastal Grand—Myrtle Beach	50.0	%
Mall of South Carolina Outparcel L.P.	Coastal Grand—Myrtle Beach (Coastal Grand Crossing and vacant land)	50.0	%
Port Orange I, LLC	The Pavilion at Port Orange Phase I and one office building	50.0	%
Triangle Town Member LLC	Triangle Town Center, Triangle Town Commons and Triangle Town Place	50.0	%
West Melbourne I, LLC	Hammock Landing Phases I and II	50.0	%
York Town Center, LP	York Town Center	50.0	%

Although the Company had majority ownership of certain joint ventures during 2014, 2013 and 2012, it evaluated the investments and concluded that the other partners or owners in these joint ventures had substantive participating rights, such as approvals of:


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


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


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


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


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


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


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

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

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



	December 31,
	2014			2013
ASSETS:
Investment in real estate assets	$	2,266,252		$	2,167,227
Accumulated depreciation	(619,558		)	(555,174		)
	1,646,694			1,612,053
Developments in progress	75,877			103,161
Net investment in real estate assets	1,722,571			1,715,214
Other assets	170,554			168,799
Total assets	$	1,893,125		$	1,884,013

LIABILITIES:
Mortgage and other indebtedness	$	1,512,826		$	1,468,422
Other liabilities	42,517			48,203
Total liabilities	1,555,343			1,516,625

OWNERS' EQUITY:
The Company	198,261			213,664
Other investors	139,521			153,724
Total owners' equity	337,782			367,388
Total liabilities and owners’ equity	$	1,893,125		$	1,884,013



	Year Ended December 31,
	2014			2013			2012
Total revenues	$	250,248		$	243,215		$	251,628
Depreciation and amortization	(79,059		)	(76,323		)	(82,534		)
Other operating expenses	(73,218		)	(72,166		)	(76,567		)
Income from operations	97,971			94,726			92,527
Interest income	1,358			1,359			1,365
Interest expense	(74,754		)	(76,934		)	(84,421		)
Gain on sales of real estate assets	1,697			102			2,063
Net income	$	26,272		$	19,253		$	11,534

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 construction loan had an outstanding balance of $715 at December 31, 2014. 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. The infrastructure construction loan had an outstanding balance of $725 at December 31, 2014. 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 will be reduced to LIBOR + 2.00% once Academy Sports is open and paying contractual rent. See Note 14 for information on the Operating Partnership's guaranty of this loan and future guaranty reductions.


(6)	The construction loan has two one-year extension options, which are 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. See Note 14 for further information on future guarantee reductions.


(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-Myrtle Beach 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. See Note 10 for additional information. Excess proceeds were distributed 50/50 to the Company and its partner and the Company's share of excess proceeds was used to reduce 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.

2013 Financings

The following table presents the loan activity of the Company's unconsolidated affiliates in 2013:



Date	Property	Stated Interest Rate	Maturity Date ⁽¹⁾		Amount Financed or Extended
December	The Pavilion at Port Orange - Phase I⁽²⁾	LIBOR + 2.0%	November 2015	⁽³⁾	$	62,600
December	Hammock Landing - Phase I ⁽⁴⁾	LIBOR + 2.0%	November 2015	⁽³⁾	41,068
December	Hammock Landing - Phase II ⁽⁵⁾	LIBOR + 2.25%	November 2015	⁽³⁾	10,757
March	Renaissance Center - Phase II ⁽⁶⁾	3.49%	April 2023		16,000
March	Friendly Center⁽⁷⁾	3.48%	April 2023		100,000
March	Fremaux Town Center - Phase I ⁽⁸⁾	LIBOR + 2.125%	March 2016		46,000


(1)	Excludes any extension options.


(2)	The construction loan was extended and modified to reduce the capacity from $64,950 to $62,600, reduce the interest rate from a variable-rate of LIBOR + 3.5% to a variable-rate of LIBOR + 2.0% and extend the maturity date. The Operating Partnership has guaranteed 25% of the construction loan.


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


(4)	The loan was amended and restated to extend the maturity date and reduce the interest rate from a variable-rate of LIBOR + 3.5% to a variable-rate of LIBOR + 2.0%. The Operating Partnership has guaranteed 25% of the loan.

(5)

A construction loan to build a Carmike Cinema has two one-year extension options, which are at the joint venture's election, for an outside maturity date of November 2017. The Operating Partnership's guaranty was reduced from 100% to 25% in the third quarter of 2014 when the Carmike Cinema became operational. See the table above for information on the extension and modification of the Phase II loan in November 2014.


(6)	Net proceeds from the loan were used to retire a $15,700 loan that was scheduled to mature in April 2013.


(7)	Net proceeds from the loan were used to retire four loans, scheduled to mature in April 2013 and with an aggregate balance of $100,000, that were secured by Friendly Center, Friendly Center Office Building, First National Bank Building, Green Valley Office Building, First Citizens Bank Building, Wachovia Office Building and Bank of America Building.


(8)	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. The Operating Partnership had guaranteed 100% of the construction loan. The loan was amended and restated in February 2014 and August 2014, as described above.

All of the debt on the Properties owned by the unconsolidated affiliates listed above is non-recourse, except for Ambassador, Ambassador Infrastructure, West Melbourne, Port Orange, Gulf Coast - Phase III and Fremaux. 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.

Fremaux Town Center JV, LLC

In January 2013, the Company formed a 65/35 joint venture, Fremaux, to develop, own and operate Fremaux Town Center, a community center development located in Slidell, LA. Construction began in March 2013 and phase one opened in spring 2014. The partners contributed aggregate initial equity of $20,500, of which the Company's contribution was $18,450. Following the initial formation of Fremaux, all required future contributions will be funded on a 65/35 pro rata basis. Phase two is currently under construction with completion expected in fall 2015.

Imperial Valley Mall L.P, Imperial Valley Peripheral L.P., Imperial Valley Commons L.P.

In December 2012, the Company acquired the remaining 40.0% interests in Imperial Valley Mall L.P. and Imperial Valley Peripheral L.P., which owns vacant land adjacent to Imperial Valley Mall in El Centro, CA, from its joint venture partner. The results of operations of Imperial Valley Mall L.P. and Imperial Valley Peripheral L.P. through the acquisition date are included in the table above using the equity method of accounting. From the date of acquisition, the results of operations of Imperial Valley Mall L.P. and Imperial Valley Peripheral L.P. are accounted for on a consolidated basis. The Company also acquired the joint venture partner's 40.0% interest in Imperial Valley Commons L.P., a VIE that owns land adjacent to Imperial Valley Mall. Imperial Valley Commons L.P. was consolidated as a VIE as of December 31, 2013 and continues to be accounted for on a consolidated basis as a wholly-owned entity as of December 31, 2014. See Note 3 for further information.

El Paso Outlet Outparcels, LLC

In April 2012, the Company acquired a 50.0% interest in a joint venture, El Paso Outlet Outparcels, LLC, simultaneously with the acquisition of a 75.0% interest in The Outlet Shoppes at El Paso (see Note 3). The Company's investment was $3,864. The remaining 50.0% interest is owned by affiliates of Horizon Group Properties. El Paso Outlet Outparcels, LLC owns land adjacent to The Outlet Shoppes at El Paso. The terms of the joint venture agreement provide that voting rights, capital contributions and distributions of cash flows will be on a pari passu basis in accordance with the ownership percentages.

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.

Prior to May 2013, the Company also held a secured convertible promissory note secured by 16,565,534 Series 2 Ordinary Shares of Jinsheng (which equated to a 2.275% ownership interest). The secured note was non-interest bearing and was amended by the Company and Jinsheng to extend to May 30, 2013 the Company's right to convert the outstanding amount of the secured note into 16,565,534 Series A-2 Preferred Shares of Jinsheng. The Company exercised its right to demand payment of the note and received payment from Jinsheng in May 2013.

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, 2014 and 2013. The secured note was reflected as investment in unconsolidated affiliates in the accompanying consolidated balance sheets as of December 31, 2013, prior to its 2014 redemption.