Press Release

CHATTANOOGA, Tenn.--(BUSINESS WIRE)-- CBL & Associates Properties, Inc. (NYSE:CBL):

• Same-center sales per square foot increased 4.2% to $371 per square foot for the twelve months ended September 30, 2015 over the prior-year period.
• Average gross rent per square foot for stabilized mall leases signed in the third quarter 2015 increased 11.1% over the prior gross rent per square foot.
• FFO per diluted share, as adjusted, was $0.56 for the third quarter 2015, compared with $0.55 in the prior-year period.
• Same-center NOI for the third quarter was flat in the Total Portfolio compared with the prior-year period.
• Total portfolio occupancy was 92.4% as of September 30, 2015 compared with 93.7% as of September 30, 2014.

CBL & Associates Properties, Inc. (NYSE:CBL) announced results for the third quarter ended September 30, 2015. A description of each non-GAAP financial measure and the related reconciliation to the comparable GAAP measure is located at the end of this news release.

CBL's President and Chief Executive Officer Stephen Lebovitz commented, "Recent key financing transactions, including recasting our unsecured credit facilities, entering into a new unsecured term loan and refinancing two secured loans, have substantially reduced our cost of borrowing and extended our maturity schedule. Improving our balance sheet remains a key strategic priority for us.

"Based on operational performance during the quarter, we are on track to achieve the mid-to-high end of our FFO guidance and the low-end of our same-center NOI range. Occupancy improved notably during the quarter as we took advantage of the strong retail demand for our malls. While vacancies resulting from bankruptcies earlier in the year have created challenges in 2015, our releasing progress positions us well for growth in 2016 and beyond. Strong sales growth also continued this quarter, and we expect a favorable holiday season for our retailers and our properties."

FFO allocable to common shareholders, as adjusted, for the third quarter 2015 was $95.0 million, or $0.56 per diluted share, compared with $93.0 million, or $0.55 per diluted share, for the third quarter 2014. FFO allocable to the Operating Partnership common unitholders, as adjusted, for the third quarter 2015 was $111.3 million compared with $109.1 million for the third quarter 2014.

Net income attributable to common shareholders for the third quarter 2015 was $26.3 million, or $0.15 per diluted share, compared with net income of $38.1 million, or $0.22 per diluted share, for the third quarter 2014. The decline in net income is primarily a result of the $18.3 million gain on extinguishment of debt recorded in the third quarter 2014.

Percentage change in same-center Net Operating Income ("NOI")⁽¹⁾:

MAJOR VARIANCES IMPACTING SAME-CENTER NOI RESULTS FOR THE QUARTER ENDED SEPTEMBER 30, 2015

• Same-center revenues increased $2.1 million, offset by a $2.1 million increase in expenses.
• Minimum rents increased $0.2 million during the quarter and other rents increased $0.4 million as a result of increases in sponsorship and branding revenue.
• Percentage rents increased by $0.7 million due to positive sales growth.
• Tenant reimbursement increased by $0.8 million, offset by a $1.8 million variance in real estate tax expense and a $0.4 million increase in maintenance and repair expense.

PORTFOLIO OPERATIONAL RESULTS

Occupancy:

New and Renewal Leasing Activity of Same Small Shop Space Less Than 10,000 Square Feet:

Same-Center Sales Per Square Foot for Mall Tenants 10,000 Square Feet or Less:

DEVELOPMENT

On October 15, 2015, CBL and its joint venture partner, Stirling Properties, celebrated the Grand Opening of Phase II of Fremaux Town Center in Slidell, Louisiana. This second phase adds 283,000 square feet to the existing shopping center and is anchored by Dillard's, which joins existing anchors Dick's Sporting Goods, Kohl's, Michael's and TJMaxx. The 633,000-square-foot shopping center also features retail shops including ULTA, Victoria's Secret, LOFT, Forever 21 RED, Francesca's and Zales. Fremaux Town Center is located on more than 80 acres at the southwest corner of Interstate 10 and Fremaux Avenue in Slidell. With its interstate location, high-visibility and superior stores, Fremaux Town Center is the dominant retail destination in the market.

SHARE REPURCHASE PROGRAM

As of September 30, 2015, CBL had not repurchased any shares of common stock under its $200 million share repurchase authorization.

FINANCINGS

In October, CBL announced the extension and modification of its three credit facilities, providing total availability of $1.1 billion including one $100 million and two $500 million unsecured credit facilities. Outstanding balances on all three lines of credit will bear interest at a rate equal to LIBOR plus 120 basis points, based on the Company's current credit ratings. The reduction in interest rate spread from the previous rate represents a 20 basis point improvement for the facilities. In addition, the annual facility fee for the aggregate $1.1 billion lines of credit was reduced by 5 basis points to 25 basis points, based on the Company's current credit ratings.

The maturity date of the first $500 million facility was extended through October 2019, with an option to extend to October 2020. The maturity date of the second $500 million facility was extended to October 2020. The maturity date of the $100 million facility was extended to October 2019, with an option to extend to October 2020.

CBL also entered into a new $350 million unsecured term loan, maturing in October 2017, with two one-year extension options for a final maturity of October 2019. The term loan bears interest at LIBOR plus 135 basis points, based on the Company's current credit ratings.

CBL recently announced that it had 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 compared with the interest rate borne by the maturing loans.

In October 2015, CBL entered into a new $276.0 million ($138.0 million at CBL's share) loan secured by Oak Park Mall, its super-regional shopping center in Kansas City (Overland Park), KS, owned in a 50/50 joint venture. The new 10-year non-recourse loan bears interest at a fixed interest rate of 3.97%. Proceeds from the loan were primarily used to repay the $275.7 million maturing loan, which bore an interest rate of 5.85% and had a December 2015 maturity.

In September 2015, CBL entered into a new $38.5 million ($19.2 million at CBL's share) loan secured by The Outlet Shoppes at Gettysburg, its outlet center located in Gettysburg, PA, owned in a 50/50 joint venture. The new 10-year non-recourse loan bears interest at a fixed interest rate of 4.804%. Proceeds from the loan were used to repay a $38.3 million maturing loan, which bore an interest rate of 5.87% and had a maturity date of February 2016.

Gulf Coast Town Center in Fort Myers, FL (owned in a 50/50 joint venture) was placed into receivership during the quarter. Foreclosure proceedings have commenced, and it is possible foreclosure will occur prior to year-end.

CBL is in discussions with the lender to potentially restructure the existing $27.8 million non-recourse loan secured by Hickory Point Mall in Forsyth, IL.

CBL and its prospective joint venture partner have entered into discussions with the lender to potentially restructure the existing non-recourse $171.8 million loan secured by Triangle Town Center and Triangle Town Place in Raleigh, NC (owned in a 50/50 joint venture). If successful in restructuring the loan, CBL expects to enter into a new 10/90 joint venture with the institutional partner.

OUTLOOK AND GUIDANCE

Based on its current outlook, the Company is reiterating guidance for FFO, as adjusted, in the range of $2.25 - $2.32 per diluted share. CBL anticipates achieving same-center NOI growth near the low-end of its previously issued range of 0 - 2% in 2015.

The guidance also assumes the following:

• $3.0 million to $4.0 million of outparcel sales;
• Full-year G&A expense of $57 - $59 million (net of litigation expense, which is excluded from adjusted FFO);
• No additional unannounced acquisition or disposition activity;
• No unannounced capital markets activity;
• Year-end portfolio occupancy in the range of 92.7% - 93.2%.

INVESTOR CONFERENCE CALL AND WEBCAST

CBL & Associates Properties, Inc. will conduct a conference call on Thursday, October 29, 2015, at 11:00 a.m. ET. The number to call for this interactive teleconference is (888) 317-6003 or (412) 317-6061 and entering the confirmation number, 7305997. A replay of the conference call will be available through November 5, 2015, by dialing (877) 344-7529 or (412) 317-0088 and entering the confirmation number, 10071247. A transcript of the Company's prepared remarks will be furnished on a Form 8-K following the conference call.

To receive the CBL & Associates Properties, Inc., third quarter earnings release and supplemental information please visit the Investing section of our website at cblproperties.com or contact Investor Relations at 423-490-8312.

The Company will also provide an online webcast and rebroadcast of its 2015 third quarter earnings release conference call. The live broadcast of the quarterly conference call will be available online at cblproperties.com on Thursday, October 29, 2015 beginning at 11:00 a.m. ET. The online replay will follow shortly after the call.

ABOUT CBL & ASSOCIATES PROPERTIES, INC.

CBL is one of the largest and most active owners and developers of malls and shopping centers in the United States. CBL owns, holds interests in or manages 148 properties, including 91 regional malls/open-air centers. The properties are located in 30 states and total 84.8 million square feet including 7.1 million square feet of non-owned shopping centers managed for third parties. Headquartered in Chattanooga, TN, CBL has regional offices in Boston (Waltham), MA, Dallas (Irving), TX, and St. Louis, MO. Additional information can be found at cblproperties.com.

NON-GAAP FINANCIAL MEASURES

Funds From Operations

FFO is a widely used measure of the operating performance of real estate companies that supplements net income (loss) determined in accordance with GAAP. The National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as net income (loss) (computed in accordance with GAAP) excluding gains or losses on sales of depreciable operating properties and impairment losses of depreciable properties, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures and noncontrolling interests. Adjustments for unconsolidated partnerships and joint ventures and noncontrolling interests are calculated on the same basis. We define FFO as defined above by NAREIT less dividends on preferred stock of the Company or distributions on preferred units of the Operating Partnership, as applicable. The Company's method of calculating FFO may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.

The Company believes that FFO provides an additional indicator of the operating performance of its properties without giving effect to real estate depreciation and amortization, which assumes the value of real estate assets declines predictably over time. Since values of well-maintained real estate assets have historically risen with market conditions, the Company believes that FFO enhances investors' understanding of its operating performance. The use of FFO as an indicator of financial performance is influenced not only by the operations of the Company's properties and interest rates, but also by its capital structure. The Company presents both FFO allocable to Operating Partnership common unitholders and FFO allocable to common shareholders, as it believes that both are useful performance measures. The Company believes FFO allocable to Operating Partnership common unitholders is a useful performance measure since it conducts substantially all of its business through its Operating Partnership and, therefore, it reflects the performance of the properties in absolute terms regardless of the ratio of ownership interests of the Company's common shareholders and the noncontrolling interest in the Operating Partnership. The Company believes FFO allocable to its common shareholders is a useful performance measure because it is the performance measure that is most directly comparable to net income (loss) attributable to its common shareholders.

In the reconciliation of net income attributable to the Company's common shareholders to FFO allocable to Operating Partnership common unitholders, located in this earnings release, the Company makes an adjustment to add back noncontrolling interest in income (loss) of its Operating Partnership in order to arrive at FFO of the Operating Partnership common unitholders. The Company then applies a percentage to FFO of the Operating Partnership common unitholders to arrive at FFO allocable to its common shareholders. The percentage is computed by taking the weighted average number of common shares outstanding for the period and dividing it by the sum of the weighted average number of common shares and the weighted average number of Operating Partnership units outstanding during the period.

FFO does not represent cash flows from operations as defined by accounting principles generally accepted in the United States, is not necessarily indicative of cash available to fund all cash flow needs and should not be considered as an alternative to net income (loss) for purposes of evaluating the Company's operating performance or to cash flow as a measure of liquidity.

As described above, during the third quarter 2015, the Company recognized $0.3 million of expense related to a litigation settlement. Additionally, during the nine months ended September 30, 2015, the Company recognized a $16.6 million gain on investment related to the sale of marketable securities, a $0.3 million gain on extinguishment of debt and received income of $1.3 million, net of related expense, as a partial settlement of ongoing litigation. During third quarter 2014, the Company recognized an $18.3 million gain on extinguishment of debt and $1.5 million of non-cash default interest expense in connection with the conveyance of Chapel Hill Mall to the lender. During the nine months ended September 30, 2014, the Company recognized a partial litigation settlement of $0.8 million and a net gain on extinguishment of debt of $59.4 million primarily related to the foreclosure of Citadel Mall and conveyance of Chapel Hill Mall to their respective lenders in the first and third quarters of 2014, respectively. Considering the significance and nature of these items, the Company believes it is important to identify their impact on its FFO measures for readers to have a complete understanding of the Company's results of operations. Therefore, the Company has also presented adjusted FFO measures excluding these items from the applicable periods.

Same-center Net Operating Income

NOI is a supplemental measure of the operating performance of the Company's shopping centers and other properties. The Company defines NOI as property operating revenues (rental revenues, tenant reimbursements and other income) less property operating expenses (property operating, real estate taxes and maintenance and repairs).

The Company computes NOI based on the Operating Partnership's pro rata share of both consolidated and unconsolidated properties. We believe that presenting NOI and same-center NOI (described below) based on our Operating Partnership's pro rata share of both consolidated and unconsolidated Properties is useful since we conduct substantially all of our business through our Operating Partnership and, therefore, it reflects the performance of the Properties in absolute terms regardless of the ratio of ownership interests of our common shareholders and the noncontrolling interest in the Operating Partnership. The Company's definition of NOI may be different than that used by other companies and, accordingly, the Company's NOI may not be comparable to that of other companies.

Since NOI includes only those revenues and expenses related to the operations of its shopping center and other properties, the Company believes that same-center NOI provides a measure that reflects trends in occupancy rates, rental rates and operating costs and the impact of those trends on the Company's results of operations. The Company's calculation of same-center NOI also excludes lease termination income, straight-line rent adjustments, and amortization of above and below market lease intangibles in order to enhance the comparability of results from one period to another, as these items can be impacted by one-time events that may distort same-center NOI trends and may result in same-center NOI that is not indicative of the ongoing operations of the Company's shopping center and other properties. A reconciliation of same-center NOI to net income is located at the end of this earnings release.

Pro Rata Share of Debt

The Company presents debt based on its pro rata ownership share (including the Company's pro rata share of unconsolidated affiliates and excluding noncontrolling interests' share of consolidated properties) because it believes this provides investors a clearer understanding of the Company's total debt obligations which affect the Company's liquidity. A reconciliation of the Company's pro rata share of debt to the amount of debt on the Company's consolidated balance sheet is located at the end of this earnings release.

Information included herein contains "forward-looking statements"within the meaning of the federal securities laws.Such statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated.Future events and actual events, financial and otherwise, may differ materially from the events and results discussed in the forward-looking statements.The reader is directed to the Company's various filings with the Securities and Exchange Commission, including without limitation the Company's Annual Report on Form 10-K, and the Management's Discussion and Analysis of Financial Condition and Results of Operations" included therein, for a discussion of such risks and uncertainties.

The Company's reconciliation of net income attributable to common shareholders to FFO allocable to Operating Partnership common unitholders is as follows:

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CBL & Associates Properties, Inc.
Katie Reinsmidt, 423-490-8301
Senior Vice President - Investor Relations/Corporate Investments
katie.reinsmidt@cblproperties.com

Source: CBL & Associates Properties, Inc.