Unconsolidated Affiliates and Noncontrolling Interests

Unconsolidated Affiliates

At September 30, 2017, 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%
Shoppes at Eagle Point, LLC	The Shoppes at Eagle Point	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 2017 and 2016, 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

River Ridge Mall JV, LLC

In August 2017, the Company sold its 25% interest in River Ridge Mall JV, LLC to its joint venture partner for $9,000 in cash. In the second quarter of 2017, the Company recorded a $5,843 loss on investment related to the sale of its interest and recorded an additional $354 loss on investment upon the sale closing in August 2017. The Company's property management agreement with River Ridge Mall JV, LLC ended September 30, 2017.

Shoppes at Eagle Point, LLC

The Company formed a 50/50 unconsolidated joint venture, Shoppes at Eagle Point, LLC, to develop, own and operate a community center development located in Cookeville, TN. In September 2017, the land was acquired and construction began, with completion of the first phase expected in October 2018. The partners contributed aggregate initial equity of $1,031. See Note 16 for more information on the construction loan secured by this development, which closed subsequent to September 30, 2017.

Condensed Combined Financial Statements - Unconsolidated Affiliates

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



ASSETS	September 30, 2017			December 31, 2016
Investment in real estate assets	$	2,093,950		$	2,137,666
Accumulated depreciation	(607,685		)	(564,612		)
	1,486,265			1,573,054
Developments in progress	29,209			9,210
Net investment in real estate assets	1,515,474			1,582,264
Other assets	204,686			223,347
Total assets	$	1,720,160		$	1,805,611

LIABILITIES
Mortgage and other indebtedness, net	$	1,251,994		$	1,266,046
Other liabilities	46,538			46,160
Total liabilities	1,298,532			1,312,206

OWNERS' EQUITY
The Company	216,107			228,313
Other investors	205,521			265,092
Total owners' equity	421,628			493,405
Total liabilities and owners' equity	$	1,720,160		$	1,805,611



	Total for the Three Months Ended September 30,
	2017			2016
Total revenues	$	57,395		$	59,104
Depreciation and amortization	(20,151		)	(20,227		)
Interest income	356			295
Interest expense	(12,907		)	(14,281		)
Operating expenses	(17,431		)	(18,216		)
Gain on extinguishment of debt	—			(393		)
Income from continuing operations before gain on sales of real estate assets	7,262			6,282
Gain on sales of real estate assets	606			16,854
Net income ⁽¹⁾	$	7,868		$	23,136


(1)	The Company's pro rata share of net income is $4,706 and $10,478 for the three months ended September 30, 2017 and 2016, respectively.



	Total for the Nine Months Ended September 30,
	2017			2016
Total revenues	$	175,250		$	186,162
Depreciation and amortization	(60,276		)	(63,085		)
Interest income	1,186			963
Interest expense	(38,891		)	(41,951		)
Operating expenses	(52,818		)	(56,621		)
Gain on extinguishment of debt	—			62,901
Income from continuing operations before gain on sales of real estate assets	24,451			88,369
Gain on sales of real estate assets	529			158,190
Net income ⁽¹⁾	$	24,980		$	246,559


(1)	The Company's pro rata share of net income is $16,404 and $107,217 for the nine months ended September 30, 2017 and 2016, respectively.

2017 Financing

The Company's unconsolidated affiliate had the following loan activity, in 2017:



Date	Property	Stated Interest Rate	Maturity Date	Amount Extended
August	Ambassador Town Center - Infrastructure Improvements ⁽¹⁾	LIBOR + 2.0%	August 2020	$	11,035

(1)

In August 2017, the loan was amended and modified to extend the maturity date. The loan requires annual principal payments of $430, $555 and $690 in 2018, 2019 and 2020, respectively. The Operating Partnership has guaranteed 100% of the loan. See Note 12. The unconsolidated affiliate has an interest rate swap on the notional amount of the loan, amortizing to $9,360 over the term of the swap, to effectively fix the interest rate to 3.74%.

2017 Loan Repayment

The loan, secured by the related unconsolidated property, was retired in 2017:



Date	Property	Interest Rate at Repayment Date	Scheduled Maturity Date	Principal Balance Repaid ⁽¹⁾
July	Gulf Coast Town Center - Phase III ⁽¹⁾	3.13%	July 2017	$	4,118


(1)	The Company loaned the unconsolidated affiliate, JG Gulf Coast Town Center, LLC, the amount necessary to retire the loan and received a mortgage note receivable in return. See Note 8 for more information.

All of the debt on the properties owned by the unconsolidated affiliates listed above is non-recourse, except for debt secured by Ambassador Infrastructure, Hammock Landing and The Pavilion at Port Orange. See Note 12 for a description of guarantees the Company has issued related to certain unconsolidated affiliates.

Redeemable Interests of the Operating Partnership

Redeemable common units of $13,076 and $17,996 at September 30, 2017 and December 31, 2016, respectively, include a partnership interest in the Operating Partnership for which the partnership agreement includes redemption provisions that may require the Operating Partnership to redeem the partnership interest for real property.

Noncontrolling Interests of the Operating Partnership

Noncontrolling interests include the aggregate noncontrolling ownership interest in the Operating Partnership's consolidated subsidiaries that is held by third parties and for which the related partnership agreements either do not include redemption provisions or are subject to redemption provisions that do not require classification outside of permanent equity. Total noncontrolling interests were $10,626 and $12,103, as of September 30, 2017 and December 31, 2016, respectively.

Noncontrolling Interests of the Company

The noncontrolling interests of the Company include the third party interests discussed above as well as the aggregate noncontrolling partnership interest in the Operating Partnership that is not owned by the Company and for which each of the noncontrolling limited partners has the right to exchange all or a portion of its partnership interests for shares of the Company’s common stock or, at the Company’s election, their cash equivalent. As of September 30, 2017, the Company's total noncontrolling interests of $98,565 consisted of noncontrolling interests in the Operating Partnership and in other consolidated subsidiaries of $87,939 and $10,626, respectively. The Company's total noncontrolling interests at December 31, 2016 of $112,138 consisted of noncontrolling interests in the Operating Partnership and in other consolidated subsidiaries of $100,035 and $12,103, respectively.

In September 2017, the Operating Partnership elected to pay $63 to one holder of 7,084 common units in the Operating Partnership upon the exercise of the holder's conversion rights.

In April 2017, the Operating Partnership elected to pay $59 to one holder of 6,424 common units in the Operating Partnership upon the exercise of the holder's conversion rights. In June 2017, the Operating Partnership elected to pay $471 to two holders of 59,480 common units in the Operating Partnership upon the exercise of their conversion rights.

Variable Interest Entities

In accordance with the guidance in ASU 2015-02 and ASU 2016-17, as discussed in Note 2, the Operating Partnership and certain of its subsidiaries are deemed to have the characteristics of a VIE primarily because the limited partners of these entities do not collectively possess substantive kick-out or participating rights. The Company adopted ASU 2015-02 as of January 1, 2016 and ASU 2016-17 was adopted as of January 1, 2017 on a modified retrospective basis. The adoption of ASU 2016-17 did not change any of the Company's consolidation conclusions made under ASU 2015-02 and did not change amounts within the condensed consolidated financial statements.

The Company consolidates the Operating Partnership, which is a VIE, for which the Company is the primary beneficiary. The Company, through the Operating Partnership, consolidates all VIEs for which it is the primary beneficiary. Generally, a VIE is a legal entity in which the equity investors do not have the characteristics of a controlling financial interest or the equity investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. A limited partnership is considered a VIE when the majority of the limited partners unrelated to the general partner possess neither the right to remove the general partner without cause, nor certain rights to participate in the decisions that most significantly affect the financial results of the partnership. In determining whether the Company is the primary beneficiary of a VIE, the Company considers qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities; the amount and characteristics of the Company's investment; the obligation or likelihood for the Company or other investors to provide financial support; and the similarity with and significance to the Company's business activities and the business activities of the other investors.

The table below lists the Company's consolidated VIEs as of September 30, 2017:



Consolidated VIEs:		Property Name
Atlanta Outlet Outparcels, LLC		The Outlet Shoppes at Atlanta (vacant land)
Atlanta Outlet JV, LLC		The Outlet Shoppes at Atlanta
CBL Terrace LP		The Terrace
El Paso Outlet Center Holding, LLC		The Outlet Shoppes at El Paso
El Paso Outlet Center II, LLC		The Outlet Shoppes at El Paso - Phase II
Gettysburg Outlet Center Holding, LLC		The Outlet Shoppes at Gettysburg
Gettysburg Outlet Center, LLC		The Outlet Shoppes at Gettysburg (vacant land)
High Point Development LP II		Oak Hollow - Barnes & Noble
Jarnigan Road LP		CBL Center, CBL Center II, The Shoppes at Hamilton Place and Regal Cinema
Laredo Outlet JV, LLC		The Outlet Shoppes at Laredo
Lebcon Associates		Hamilton Place and outparcel, Hamilton Corner, Hamilton Place - Sears Parcel
Lebcon I, Ltd		Hamilton Crossing and Hamilton Crossing - Expansion
Lee Partners		One Park Place



Consolidated VIEs:		Property Name
Louisville Outlet Outparcels, LLC		The Outlet Shoppes of the Bluegrass (vacant land)
Louisville Outlet Shoppes, LLC		The Outlet Shoppes of the Bluegrass
Madison Grandview Forum, LLC		The Forum at Grandview
The Promenade at D'Iberville		The Promenade
Statesboro Crossing, LLC		Statesboro Crossing

The table below lists the Company's unconsolidated VIEs as of September 30, 2017:



Unconsolidated VIEs:	Investment in Real Estate Joint Ventures and Partnerships		Maximum Risk of Loss
Ambassador Infrastructure, LLC ⁽¹⁾	$	—	$	11,035
Shoppes at Eagle Point, LLC⁽²⁾	14,754		14,754
G&I VIII CBL Triangle LLC	1,464		1,464


(1)	The debt is guaranteed by the Operating Partnership at 100%. See Note 12 for more information.

(2)

The Company formed a 50/50 joint venture, Shoppes at Eagle Point, LLC, to develop, own and operate The Shoppes at Eagle Point in Cookeville, TN. See more information above. The Company began construction in September 2017 and closed on a construction loan subsequent to September 30, 2017. See Note 16. The Company determined that the unconsolidated affiliate represents an interest in a VIE based upon the criteria noted above.

Variable Interest Entities - Reconsideration Events

Woodstock GA, Investments, LLC

In the first quarter of 2017, the Company divested its interests in the 75/25 consolidated joint venture and was relieved of its funding obligation related to the loan secured by the vacant land owned by the joint venture. See Note 3 and Note 6 for more information.

Foothills Mall Associates

The Company held a 95% interest in this consolidated joint venture, which represented an interest in a VIE. The property was sold in the second quarter of 2017. See Note 4 for more information.

Village at Orchard Hills, LLC

The joint venture completed the sale of its outparcels, distributed the cash in the second quarter of 2017 and no longer has any assets.