SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]For the Fiscal Year Ended December 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]For the transition period from _________ to __________ Commission File No. 1-12494 CBL & ASSOCIATES PROPERTIES, INC. ________________________________________________________ (Exact name of registrant as specified in its charter) Delaware 62-1545718 _______________________________ _____________________ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) One Park Place 6148 Lee Highway Chattanooga, Tennessee 37421 _______________________________ _____________________ (Address of principal (Zip Code) executive offices) Registrant's telephone number, including area code: (423) 855-0001 Securities registered pursuant to Section 12(b) of the Act: Name of each Exchange Title of Each Class on which Registered _______________________________ _____________________ Common Stock, $.01 par New York Stock Exchange value per share Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the Registrant (1) has filed all Reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ______ ______ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] The aggregate market value of the voting stock held by non-affiliates of the Registrant was approximately $596,361,906 based on the closing price on the New York Stock Exchange for such stock on March 24, 1997. As of March 24, 1997, there were 23,974,348 shares of the Registrant's Common Stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE Part II incorporates certain information by reference from the Registrant's 1996 Annual Report to Shareholders (the "Annual Report"). With the exception of the sections of the Annual Report specifically incorporated by reference herein, the Annual Report is not deemed to be filed as part of this Form 10-K. Part III incorporates certain information by reference to the Registrant's definitive proxy statement filed on March 25, 1997 in respect to the Annual Meeting of Stockholders to be held on May 1, 1997.
FORM 10-K TABLE OF CONTENTS Item No. Page ________ _____ PART I Item 1 Business . . . . . . . . . . . . . . . . . . . . . . 3 Item 2 Properties . . . . . . . . . . . . . . . . . . . . . 13 Item 3 Legal Proceedings. . . . . . . . . . . . . . . . . 32 Item 4 Submission of Matters to a Vote of Security Holders 32 PART II Item 5 Market for Registrant's Common Equity and Related Shareholder Matters. . . . . . . . . . . . . . . . 32 Item 6 Selected Financial Data. . . . . . . . . . . . . . 33 Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations. . . . . . . . 33 Item 8 Financial Statements and Supplementary Data. . . . 34 Item 9 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. . . . . . . . 34 PART III Item 10 Directors and Executive Officers of the Registrant 34 Item 11 Executive Compensation. . . . . . . . . . . . . . 34 Item 12 Security Ownership of Certain Beneficial Owners and Management. . . . . . . . . . . . . . . . . . 34 Item 13 Certain Relationships and Related Transactions. . 34 PART IV Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K . . . . . . . . . . . . . . . 35
PART I ITEM 1. BUSINESS. FORMATION OF THE REIT CBL & Associates Properties, Inc. (the "Company") was incorporated on July 13, 1993 under the laws of the State of Delaware to acquire an interest in substantially all of the real estate properties owned by CBL & Associates, Inc. and its affiliates ("CBL") and to provide a public vehicle for the expansion of CBL's shopping center business. The Company is a self-managed, self-administered, fully-integrated real estate company which is engaged in the ownership, operation, marketing, management, leasing, expansion, development, redevelopment, acquisition and financing of regional malls and community and neighborhood centers. The Company conducts all of its business through CBL & Associates Limited Partnership, a Delaware limited partnership (the "Operating Partnership"). To comply with certain technical requirements of the Internal Revenue Code of 1986, as amended (the "Code"), the Operating Partnership carries out the Company's property management and development activities through CBL & Associates Management, Inc. (the "Management Company"). On November 3, 1993, the Company completed initial public offerings, inside and outside the United States (the "Offerings"), of 15,400,000 shares of its common stock, par value $.01 per share (the "Common Stock"). Simultaneously with the completion of the Offerings, CBL transferred to the Operating Partnership substantially all of CBL's interests in its real estate properties and its management and development operations in exchange for an aggregate 35.4% limited partner interest in the Operating Partnership. CBL also acquired an additional 4.9% limited partner interest in the Operating Partnership for a cash payment of $24.4 million. Each of the partnership interests in the Operating Partnership may, at the election of its respective holder, be exchanged for shares of Common Stock of the Company, subject to certain limitations imposed by the Code. Following the Offerings, the Company owned a 59.7% general partner interest in the Operating Partnership. The Offerings and the application of proceeds therefrom, including the Operating Partnership's acquisition of certain property interests, and the contribution by CBL of property interests to the Operating Partnership, are referred to herein as the "Formation." In December, 1993, CBL exercised its right under the Operating Partnership's partnership agreement to exchange a 4.7% limited partner interest in the Operating Partnership for 1,221,744 shares of Common Stock. In October 1994, the Operating Partnership exercised its option to acquire from CBL the former Phar-Mor space at Valley Crossing in Hickory, North Carolina for a value of $3,575,400. The Operating Partnership issued a .5377% limited partnership interest (190,688 share equivalents) to CBL in return for the former Phar-Mor space. In September, 1995, the Company completed a follow-on offering of 4,163,500 shares of its Common Stock at $20.625 per share. CBL purchased 150,000 of these shares. The net proceeds of $80.7 million were used to repay floating rate indebtedness on the Company's revolving lines of credit. In August, 1996, the Company exercised its option to acquire from CBL a parcel of land for the recently constructed Just for Feet on the periphery of Hamilton Place Mall in Chattanooga, Tennessee for a value of $780,053. The Operating Partnership issued a .0798% limited partner interest (34,246 share equivalents) to CBL in return for the parcel. After giving effect to the above transactions and at December 31, 1996, CBL held a 30.97% limited partner interest in the Operating Partnership, and the Company held a 69.03% general partner interest in the Operating Partnership. In addition, CBL held approximately 1.5 million of the outstanding shares of Common Stock for a total ownership share of 36.01%. Subsequent to the end of the 1996 year, in January, 1997, the Company completed a spot offering of 3,000,000 shares of its Common Stock at $26.125 per share. CBL purchased 55,000 of those shares as part of the offering. The net proceeds of $74.3 million, were used to repay variable rate indebtedness incurred in the Company's development and acquisition program. After giving effect to the above transactions, CBL holds a 28.18% limited partner interest in the Operating Partnership, and the Company holds a 71.82% general partner interest in the Operating Partnership. In addition, CBL holds approximately 1.6 million of the outstanding shares of Common Stock for a total ownership share of 32.95%. GENERAL The Company owns interests in a portfolio of properties, consisting of 18 enclosed regional malls (the "Malls"), of which three are joint venture investments, eight associated centers (the "Associated Centers"), each of which is part of a regional shopping mall complex, and 75 independent community shopping centers (the "Community Centers"). Additionally, the Company owns one mall, two associated centers, two power centers, and four community shopping centers currently under construction (the "Construction Properties"). The Company also owns options to acquire certain shopping center development sites (the "Development Properties"). The Company also holds mortgages (the "Mortgages") on six community and neighborhood shopping centers owned by non-CBL affiliates. The Mortgages were granted in connection with sales by CBL of certain properties previously developed by CBL. The Company also owns an interest in a three-story office building in Chattanooga, Tennessee, a portion of which serves as the Company's headquarters (the "Office Building"). The Malls, Associated Centers, Community Centers, Construction Properties, Development Properties, Mortgages and Office Building are collectively referred to herein as the "Properties" and individually as a "Property." The Company and the Operating Partnership generally own a 100% interest in the Properties. In all but one of the Properties where the Company and the Operating Partnership own less than a 100% interest the Operating Partnership is the sole general partner or managing general partner of the property partnership which owns such Properties. In one Mall, an affiliate of the Operating Partnership is a non-managing general partner. For a full description of the Properties, see Item 2 "Properties." The Company's executive offices are located at One Park Place, 6148 Lee Highway, Chattanooga, Tennessee 37421. The telephone number at this address is (423) 855-0001. MANAGEMENT AND OPERATION OF PROPERTIES MANAGEMENT COMPANY The Company is self-managed and self-administered. To comply with certain technical requirements of the Code, the Operating Partnership carries out the Company's property management and development activities through the Management Company. The Operating Partnership holds 100% of the preferred stock and 5% of the common stock of the Management Company. The remaining 95% of the common stock is held by Charles Lebovitz, his family and his associates. Substantially all of CBL's asset management, property management and leasing and development operations, including CBL's executive, property, financial, legal and administrative personnel, were transferred to the Management Company as part of the Formation. The Management Company manages all of the Properties (except for Governor's Square see below) pursuant to a management agreement that may be terminated at any time by the Operating Partnership upon 30 days written notice. In addition, the Management Company manages certain properties owned by CBL that were not transferred to the Company in the Formation as well as certain shopping centers owned by non-CBL affiliates. Through its ownership of the Management Company's preferred stock, the Operating Partnership enjoys substantially all of the economic benefits of the Management Company's business. Pursuant to requirements set forth in the Management Company's Amended and Restated Certificate of Incorporation, a majority of the Management Company's board of directors are required to be independent of CBL. From November 1993 to the current date, the board of directors of the Management Company consist of the same individuals as the Company's board of directors including the four independent directors. ON-SITE MANAGEMENT The on-site property management functions at the Malls include leasing, management, data processing, rent collection, project bookkeeping, marketing, and promotion. Each Mall, for itself and its Associated Centers, has an on-site property manager who oversees the on-site staff and an on-site marketing director who oversees the marketing program for that mall. District managers, most of whom are located at the Company's headquarters, oversee the leasing and operations at a majority of the Community Centers. The on-site Mall managers are experienced managers with training in mall management. Virtually all operating activities are supported by a computer software system which is designed to provide management with operating data necessary to make informed business decisions on a timely basis. During 1994, the Company implemented a new management information system which included hardware and software. The system was developed to more efficiently assist management in efforts to maintain management quality and tenant relations while minimizing operating expenses. Retail sales analysis, leasing information, budget controls, accounts receivable/payable, operating expense variance reports and income analysis are continually available to management. Management also has available an information system that facilitates the development and monitoring of budgets and other relevant information. An affiliate of the Management Company also leases certain equipment, such as furniture, computers and vehicles, to partnerships that own title to the Properties (the "Property Partnerships") for use at the Malls. During 1996, security, maintenance and cleaning services at most of the Malls were provided by a company (ERMC, L.P.) in which certain executive officers of the Company had an interest at year end. In February, 1997, substantially all of the assets of ERMC, L.P. were sold to a third party not affiliated with CBL or any of the Company's executive officers. Management pursues periodic preventative maintenance programs, which encompass paving, roofing, HVAC and general improvements to the Properties' common areas. The on-site property managers oversee all such work in accordance with approved budgets. GOVERNOR'S SQUARE Governor's Square is the only Property in the Company's portfolio in which the Company is not the sole general partner or managing general partner. Governor's Square is owned by a Property Partnership, the managing general partner of which is a non-CBL affiliate which owns a 47.5% interest in the Mall. Although the managing general partner of this partnership controls the timing of distributions of cash flow, the Company's approval is required for certain major decisions, including permanent financing, refinancing and sale of all or substantially all of the partnership's assets. Property management services, including accounting, auditing, maintenance, promotional programs, leasing, collection and insurance, are performed by a property manager affiliated with the non-CBL managing general partner for which such property manager receives a fee. EMPLOYEES The Company, through the Management Company, currently employs approximately 266 full time and 160 part time persons. None of these employees is currently represented by any union. Prior to the Formation, substantially all of the employees were employed by CBL. The Company does not have any employees other than its statutory officers. ENVIRONMENTAL MATTERS Under various federal, state and local laws and regulations, a current or previous owner or operator of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances on such real estate. Such laws typically impose such liability without regard to whether the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. The costs of remediation or removal of such substances may be substantial, and the presence of such substances, or the failure to promptly remediate such substances, may adversely affect the owner's or operator's ability to sell such real estate or to borrow using such real estate as collateral. Persons who arrange for the disposal or treatment of hazardous or toxic substances may also be liable for the costs of removal or remediation of such substances at the disposal or treatment facility, regardless of whether such facility is owned or operated by such person. Certain laws require abatement or removal of friable and certain non-friable asbestos-containing materials ("ACMs") in the event of demolition or certain renovations or remodeling. Certain laws regarding ACMs require building owners and lessees, among other things, to notify and train certain employees working in areas known or presumed to contain ACMs. Certain laws also impose liability for release of ACMs into the air and third parties may seek recovery from owners or operators of real properties for personal injury or property damage associated with ACMs. In connection with its ownership and operations of the Properties, the Company, the Operating Partnership or the relevant Property Partnership, as the case may be, may be potentially liable for such costs or claims. All of the Properties, except for Development Property land options, have been subject to Phase I environmental assessments or updates of existing Phase I environmental assessments within approximately the last four years. Such assessments were intended to evaluate the environmental condition of, and potential environmental liabilities associated with, the Properties. The Phase I assessments generally consisted of an investigation of environmental conditions at the Properties, including a preliminary investigation of the sites and identification of publicly known conditions concerning properties in the vicinity of the sites, limited screening and sampling for the presence of ACMs, an investigation as to the presence of polychlorinated biphenyls ("PCBs") and above ground and underground storage tanks presently or formerly at the sites and the preparation and issuance of written reports. Where believed to be warranted, soil samplings or other subsurface investigations were undertaken. Some of the Properties contain, or at one time contained, underground storage tanks ("UST's") used to store heating oil for on-site consumption or petroleum products or wastes typically related to the auto service or other operations conducted at such Properties. Certain Properties contain, or at one time contained dry cleaning establishments utilizing solvents. Certain adjacent Properties also contain or contained USTs. The Company, as a result of the Phase I surveys, has no reason to believe that these conditions have had a material adverse impact on the Properties. Nevertheless, there can be no assurance that the Properties have not been adversely affected by such USTs or dry cleaning establishments or that the Company would not be responsible for remediating contamination associated with those conditions. The Phase I assessments included a limited survey for friable ACMs which revealed the presence of friable ACMs at a limited number of the Properties, primarily in the form of pipe insulation and ceiling tiles. Earlier inspections revealed non-friable ACMs at certain of the Properties, primarily in the form of mastic adhesive bonding in floor tiles. At certain Properties, where warranted by the conditions, the Company has developed and implemented an operations and maintenance program that establishes operating procedures with respect to ACMs. The costs associated with the development and implementation for such programs was not material. The Company intends to obtain or review environmental site assessments prior to exercising any Development Property land options. None of the environmental assessments conducted to date has revealed any environmental condition which management believes would have a significant material adverse effect on the Company's business, assets or results of operations, nor is management otherwise aware of any such condition. Nevertheless, it is possible that these assessments do not reveal all potential environmental liabilities, that adverse environmental conditions have arisen subsequent to the performance of the environmental assessments, or that there are material environmental liabilities of which management is unaware. Moreover, no assurances can be given that (i) future laws, ordinances or regulations will not impose any material environmental liability or (ii) the current environmental condition of the Properties has not been or will not be affected by tenants and occupants of the Properties, by the condition of properties in the vicinity of the Properties or by third parties unrelated to the Company, the Operating Partnership or the relevant Property Partnership. The Company believes that the Properties are in compliance in all material respects with federal, state and local ordinances and regulations regarding the handling, discharge and emission of hazardous or toxic substances. Neither the Company nor the Operating Partnership has been notified by any governmental authority, or is otherwise aware, of any material noncompliance, liability or claim relating to hazardous or toxic substances in connection with any of its present or former properties. The Company has not recorded in its financial statements any material liability in connection with environmental matters. INSURANCE The Operating Partnership carries comprehensive liability, fire, extended coverage and rental loss insurance covering all the Properties, with policy specifications and insured limits customarily carried for similar properties. Management believes that the Properties are adequately insured in accordance with industry standards. THE COMPANY'S STRATEGY FOR GROWTH Management believes that per share growth in the Company's Funds from Operations is one of the key factors in enhancing shareholder value. It is the objective of the Company's management to achieve growth in Funds from Operations through the aggressive management of the Company's existing Properties, the expansion and renovation of existing Properties, the development of new properties, and select acquisitions. Funds from Operations can also be affected by external factors, such as inflation, fluctuations in interest rates or changes in general economic conditions, which are beyond the control of the Company's management. "Funds from Operations" is defined by the Company as net income (loss) before property depreciation, other non-cash items (consisting of the effect of straightlining of rents), gains or losses on sales of real estate and gains or losses on investments in marketable securities. Funds from Operations also includes the Company's share of Funds from Operations from unconsolidated affiliates but minority investors' interests are excluded from Funds from Operations. The Company complies with the National Association of Real Estate Investment Trust's ("NAREIT") revised definition of Funds from Operations by not adding back to income from operations depreciation and amortization of finance costs and non-real estate assets. The Company continues to exclude outparcel sales and the effect of straight-line rents from its Funds from Operations calculation, even though the revised definition allows their inclusion. Funds from Operations does not represent cash flow from operations as defined by generally accepted accounting principles ("GAAP") and is not necessarily indicative of cash available to fund all cash flow needs and should not be considered an alternative to net income (loss) for purposes of evaluating the Company's operating performance or to cash flow as a measure of liquidity. Specifically, the Company has implemented its objective of growing its Funds from Operations and will continue to do so by: | Maximizing the cash flow from its existing portfolio of regional malls, community centers, and other retail complexes through aggressive leasing, management, and marketing, including: an active leasing strategy which seeks to increase occupancy. At December 31, 1996, the occupancy at the Stabilized Malls, New Malls, Associated Centers, and Community Centers was 89.0%, 87.7%, 99.6%, and 97.2%, respectively, as compared to occupancies of 89.8%, 81.1%, 99.0%, and 96.8%, respectively, at December 31, 1995; expanded merchandising, marketing and promotional activities, with the goal of enhancing tenant sales and thereby increasing percentage rents. Mall shop sales per square foot for the year ended December 31, 1996 were 1.5% higher at the Stabilized Malls than for the year ended December 31, 1995; increased base rents as tenant leases expire, renegotiation of leases and negotiation of terminations of leases of under performing retailers. At December 31, 1996 average base rents per square foot at the Malls, Associated Centers, and Community Centers was $19.64, $8.59, and $6.94, respectively, as compared to average base rents per square foot of $18.72, $8.37, and $6.66, respectively, at December 31, 1995; control of operating costs. Occupancy costs as a percentage of sales at the Malls decreased to 11.5% for the year ended December 31, 1996 as compared to 12.3% for the year ended December 31, 1995. | Expanding and renovating existing properties to maintain their competitive position. Most of the Malls were designed to allow for expansion and growth through the addition of new department stores or other large retail stores as anchors ("Anchors"). Fourteen of the 18 Malls have undergone expansion or renovation since their opening, and all of the Malls have been either built or renovated in the last 10 years or are in the process of being renovated. Four of the Malls had available Anchor pads at December 31, 1996, two of which are now Dillard stores which opened in March, 1997. Eighteen existing Anchors at 10 Malls have expansion potential at their existing stores. During 1996, the Company completed the renovation of Pemberton Square Mall in Vicksburg, Mississippi and Twin Peaks Mall in Longmont, Colorado. The Company plans to renovate and expand Foothills Mall in Maryville, Tennessee in 1997 and Hamilton Place in Chattanooga, Tennessee in 1998. In the community center portfolio, the Company expanded four Food Lion stores totaling approximately 24,800 square feet in 1996, and one other community center was renovated. Renovations and expansions are planned for seven community centers in 1997 as well as a 24,000 square foot expansion for Barnes & Noble. | Developing new retail properties with profitable returns on capital, leading to growth for the future.
In 1996, the Company opened one Mall redevelopment and expansion, two free standing buildings on the periphery of two Malls and four community centers. Summary information concerning these properties is set forth below. SUMMARY INFORMATION CONCERNING PROPERTIES OPENED DURING THE YEAR ENDED DECEMBER 31, 1996 <TABLE> Anchor Non- Name of Center/ Total GLA Anchor Percentage Location GLA(1) (2) GLA Leased(3) Anchors <S> <C> <C> <C> <C> <C> MALLS Westgate Mall 1,100,059 833,643 266,416 85% Belk, Dillards, Spartanburg, SC(5) J.B. White, JCPenney, Regal Cinemas, Sears, Uptons Just for Feet 15,000 15,000 0 100% Just for Feet Chattanooga, TN Barnes & Noble 25,920 25,920 0 100% Barnes & Noble High Point, NC --------- --------- --------- Total Malls................. 1,140,979 874,563 0 --------- --------- --------- COMMUNITY CENTERS Lowe's Plaza 101,287 101,287 0 100% Lowe's Adrian, MI(4) Devonshire Place 104,517 104,517 0 100% Hannaford Bros. Cary, NC Borders, Kinetix Kingston Overlook 116,926 116,926 0 100% HomePlace Knoxville, TN Baby Superstore Michael's(6) LaGrange Commons 59,799 44,799 15,000 85% A & P LaGrange, NY Chester Square 54,664 54,664 0 100% Hannaford Bros. Chester, VA(4) --------- --------- --------- Total Community Centers..... 437,193 422,193 15,000 --------- --------- --------- TOTAL PROPERTIES GLA........ 1,578,172 1,296,756 281,000 --------- --------- --------- LESS EXISTING GLA(5)........ 676,030 493,675 182,355 --------- --------- --------- TOTAL PROPERTIES OPENINGS... 902,142 803,081 99,061 ========= ========= ========= </TABLE> (1) Includes total square footage of Anchors (whether owned or leased by the Anchor) and mall stores or shops. (2) Includes total square footage of Anchors (whether owned or leased by the Anchor). (3) Percentage leased for Westgate Mall does not include Anchor GLA. For the community centers, percentage leased includes leased Anchor and GLA. (4) Center sold during 1996. (5) At Westgate Mall there was existing GLA of 676,030, consisting of Anchor GLA of 493,675 and mall store GLA of 182,355. (6) Michael's is leased and will open in July, 1997.
The Company currently has one mall, two associated centers, two power centers, and four community centers under construction. These properties will add approximately 3,128,000 square feet to the Company's portfolio and are all scheduled to open during 1997 or early 1998. SUMMARY INFORMATION CONCERNING CONSTRUCTION PROPERTIES AS OF MARCH 15, 1997 <TABLE> Ownership by Company Anchor Non- Annualized and Percentage Name of Center/ Total GLA Anchor Base Operating Pre- Projected Location GLA (1) (2) GLA Rent (3) Partnership Leased(4) Opening Anchors - ------------------- ---------- --------- ------- ----------- ----------- ---------- ----------- --------------- <S> <C> <C> <C> <C> <C> <C> <C> <C> MALLS Bonita Lakes Mall 633,140 449,427 183,713 $ 1,822,000 100% 48% October 1997 Dillards(5), Meridian, MS McRae's(5), ---------- --------- ------- ------------ JCPenney, Sears(5), Goody's POWER CENTERS Springhurst Town 808,159 594,159 214,000 $ 2,608,636 100% 80% July 1997/ Meijer(5), Center June 1998 Target(5), Louisville, KY Kohls', Party Source, Cinemark, Gap Old Navy, TJ Maxx Cortlandt Town 769,163 576,816 231,343 6,304,830 100% 83% October 1997/ Home Depot(5), Center June 1998 HomePlace, Cortland, NY Wal*Mart, ---------- --------- ------- ------------ Barnes & Noble, The Wiz, A & P, United Artist Total Power Centers........... 1,577,322 1,170,975 445,343 $ 8,913,466 ---------- --------- ------- ------------ ASSOCIATED CENTER Bonita Lakes 74,000 50,000 24,000 $ 168,200 100% 29% October 1997 Books A Million Crossing Meridian, MS The Terrace 157,923 157,923 0 1,596,875 100% 100% March 1997/ Circuit City(5)(6), Chattanooga, TN April 1997 HomePlace(6), Barnes & Noble, Gap Old Navy, Staples ---------- --------- ------- ------------ Total Associated Centers............ 231,923 207,923 24,000 $ 1,765,075 COMMUNITY CENTERS Massard Crossing 290,717 260,057 30,660 $ 757,748 100% 100% March 1997 Wal*Mart(5), Fort Smith, AR Goody's, TJ-Maxx Salem Crossing 289,305 251,892 37,413 569,168 100% 98% April 1997/ Hannaford Bros., Virginia Beach, VA May 1997 Wal*Mart(5) Northpark Center 62,500 62,500 0 337,500 100% 100% March 1997 Hannaford Bros. Richmond, VA Strawbridge Market 43,570 43,570 0 533,732 100% 100% August 1997 Regal Cinema Place Virginia Beach, VA ---------- --------- ------- ------------ Total Community Centers ........... 686,092 618,019 68,073 $ 2,198,148 ---------- --------- ------- ------------ Total Construction Properties......... 3,128,477 2,446,344 721,129 $14,698,689 ========== ========= ======= ============ </TABLE> _________________________ ( 1) Includes total square footage of Anchors (whether owned or leased by the Anchor) and mall stores or shops. ( 2) Includes total square footage of Anchors (whether owned or leased by the Anchor) ( 3) Represents initial base rents from leases executed prior to March 5, 1997. ( 4) Percentage leased for malls does not include Anchor GLA. For the community, associated, and power centers percentage leased includes non-Anchor GLA and leased Anchor GLA. ( 5) Owned by Tenant. ( 6) Circuit City and Home Place were open prior to March 15, 1997 In addition to the Construction Properties, the Company is pursuing the development of a number of sites which the Company believes are viable for future development as malls and community and neighborhood shopping centers. Regional mall development sites are being pursued in Alabama, Georgia, and Kansas and community shopping center sites are being pursued in Alabama, Florida, Georgia, New York, North Carolina, Tennessee and Virginia. In general, the Company seeks out development opportunities in middle-market trade areas that it believes are under-serviced by existing retail facilities, have demonstrated improving demographic trends or otherwise afford an opportunity for effective market penetration and competitive presence. | Acquiring existing retail properties where cash flow can be enhanced by improved management, leasing, redevelopment and expansion. Management believes that an opportunity for growth exists through the acquisition of shopping centers that meet the Company's investment criteria and targeted returns. In general, the Company seeks to acquire well-located shopping centers in middle-market geographic areas consistent with management's experience where management believes significant value can be created through its development, leasing and management expertise. In November, 1996 the Company purchased St. Clair Square located in Fairview Heights, Illinois, an approximate 1,044,000 square foot super regional mall for $86.4 million. St. Clair Square is anchored by Dillard's, Famous-Barr, JCPenney and Sears and is currently 97.7% leased. The acquisition was funded by a $66.0 million acquisition loan with the balance funded from the Company's credit lines. In December, 1996, the Company completed the acquisition of a controlling interest in Foothills Mall, an approximate 472,000 square foot regional mall located in Maryville, Tennessee. The Company received a 95% partnership interest in the center in exchange for extending the term of the mortgage for an additional five years. The Company had already owned the space occupied by JCPenney prior to the acquisition. In January, 1997 the Company purchased Sutton Plaza, a community center located in Mount Olive, New Jersey for $5.7 million. The approximate 122,000 square foot community center is 100% leased and is anchored by A&P and Ames.
| Strengthening our balance sheet through selective dispositions of five of our community centers. Summary information concerning these dispositions is set forth below. SUMMARY INFORMATION CONCERNING DISPOSITIONS FOR THE YEAR ENDED DECEMBER 31, 1996 (DOLLARS IN THOUSANDS) <TABLE> Name of Total Gross Sales Center/Location GLA Price Cost Gain on Sale Anchors - ------------------- --------- ----------- ---------- ------------- ------------- <S> <C> <C> <C> <C> <C> Lowe's Plaza 125,357 $ 8,000 $ 5,877 $ 2,123(1) Lowe's Benton Harbor, MI Lowe's Plaza 101,287 7,519 6,328 1,191 Lowe's Adrian, MI Hannaford Bros. 63,113 5,624 4,283 1,341 Hannaford Bros. West Broad, VA Chester Plaza 54,664 2,792 2,303 489 Hannaford Bros. Chester, VA Lakeshore Crossing 123,948 7,435 5,009 2,426 Lowe's Gainesville, GA --------- ----------- ---------- ------------ 468,369 $ 31,370 $ 23,800 $ 7,570 ========= =========== ========== ============ </TABLE> (1) Disposition was structured as a like-kind exchange pursuant to Section 1031 of the code. COMPETITION There are numerous shopping facilities that compete with the Properties in attracting retailers to lease space. In addition, retailers at the Properties face continued competition from discount shopping centers, outlet malls, wholesale clubs, direct mail, telemarketing, television shopping networks and shopping via the Internet. Competition could adversely affect the Company's revenues and funds available for distribution to shareholders. QUALIFICATION AS A REAL ESTATE INVESTMENT TRUST The Company has elected to be taxed as real estate investment trust under the Code, commencing with its taxable year ended December 31, 1993, and will seek to maintain such status. As a qualified real estate investment trust, the Company generally will not be subject to Federal income tax to the extent it distributes at least 95% of its real estate investment trust taxable income to its shareholders. If the Company fails to qualify as a real estate investment trust in any taxable year, the Company will be subject to Federal income tax (including any applicable alternative minimum tax) on its taxable income at regular corporate rates.
ITEM 2. PROPERTIES. MALLS Each of the Malls is an enclosed regional shopping complex. Each Mall generally has at least three Anchors which own or lease their stores and numerous Mall Stores, most of which are national or regional retailers, located along enclosed malls connecting the Anchors. At most of the Malls, additional freestanding restaurants and retail stores are located on the periphery of the Mall complex. These freestanding stores are, in most cases, owned by their occupants. Seven of the Mall complexes include one or more Associated Centers. The total GLA of the 18 Malls is approximately 12.5 million square feet or an average GLA of approximately 693,000 square feet per Mall. The Company classifies its regional malls into two categories - Stabilized Malls which have completed their initial lease-up and New Malls which are in the initial lease-up phase. Currently, Oak Hollow Mall in High Point, North Carolina, Turtle Creek Mall in Hattiesburg, Mississippi, and Westgate Mall in Spartanburg, South Carolina are characterized as New Malls. The Stabilized Mall occupancy was 89.0% at December 31, 1996 (94% including leased Anchor GLA). The Company wholly owns all but five of its Malls and manages all but one of them. In the years ended December 31, 1994, 1995 and 1996, Mall revenues represented approximately 72.0%, 72.5% and 72.8%, respectively, of total revenues from the Company's Properties. Stabilized Mall Store occupancy decreased from 89.8% at December 31, 1995, to 89.0% at December 31, 1996. St. Clair Square and Foothills Mall, which were acquired during 1996, were included in the Stabilized Mall category at December 31, 1996. If such malls had not been included, occupancy would have been 89.7% in the Stabilized Mall category. In the years ended December 31, 1994, 1995 and 1996, average Stabilized Mall Store sales per square foot were approximately $226, $237 and $240, respectively (computed using a monthly weighted average). Average Stabilized Mall Store sales per square foot increased by 1.5% for the year ended December 31, 1996 as compared to the year ended December 31, 1995. Average base rent per square foot at the Mall Stores increased from $18.72 at December 31, 1995 to $19.64 at December 31, 1996. Occupancy costs as a percentage of sales for tenants in the Stabilized Malls (excluding St. Clair Square and Foothills Mall which the Company did not own for the entire 1996 year) were 12.2%, 12.3% and 11.7% for the years 1994, 1995, and 1996, respectively. The Malls are generally located in middle-markets. Management believes that the Malls have strong competitive positions because they generally are the only or largest enclosed malls within their respective trade areas. Trade areas have been identified by management based upon a number of sources of information, including the location of other malls, publicly available population information, customer surveys, surveys of customer automobile license plates as well as ZIP codes and third-party market studies. The two largest revenue-producing Malls are Hamilton Place and CoolSprings Galleria. Hamilton Place is located on a 187-acre site in Chattanooga, Tennessee and represented, as of December 31, 1996, 5.67% of the Properties' total GLA, 6.38% of total Mall Store GLA and 9.8% of total revenues from the Company's Properties. CoolSprings Galleria is located on a 148-acre site in metropolitan Nashville, Tennessee and represented, as of December 31, 1996, 5.6% of the Properties' total GLA, 6.51% of total Mall Store GLA and 8.92% of total revenues from the Company's Properties. Fourteen of the eighteen Malls have undergone an expansion or remodeling since their opening, and all of the Malls have either been built or renovated in the last 10 years or are in the process of being renovated with the exception of Hamilton Place which is scheduled for renovation in 1998. Four of the Malls have available Anchor pads providing expansion potential totaling approximately 358,000 buildable square feet at December 31, 1996. The Company constructed a Dillard's on two of the available anchor pads at Twin Peaks Mall and Frontier Mall which opened in March, 1997 leaving approximately 205,700 buildable square feet. Eighteen existing Anchors at ten Malls have aggregate expansion potential at their existing stores of approximately 473,000 buildable square feet. With the exception of Westgate Mall and St. Clair Square which were acquired by the Company in March 1995 and November, 1996 respectively, each of the Malls was developed by the Company. The land underlying the Malls is owned in fee in all cases, except for Walnut Square, Westgate Mall, and St. Clair Square, which are each subject to long-term ground leases for all or a portion of the land underlying these malls. The table on the following page sets forth certain information for each of the Malls as of December 31, 1996.
<TABLE> Ownership Mall by Store Percentage Year of Company Total Sales Mall Opening/ and Mall Per Store Fee or Name of Mall/ Recent Operating Total Store Square GLA Anchor Ground Location Expansion Partnership GLA(1) GLA(2) Foot(3) Leased(4) Anchors Vacancies Lease - ------------------ ---------- ----------- --------- --------- ------- --------- ------------- ---------- ------- <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> NEW MALLS Oak Hollow Mall 1995/N/A 75% 829,194 252,366 $209 86% Goody's, None Fee High Point, NC JCPenney, Belk- Beck, Sears, Dillard's Turtle Creek Mall 1994/1995 100% 844,668 221,574 243 93% JCPenney, Sears, None Fee Hattiesburg, MS Dillard's, Gayfers, Goody's McRae's Westgate Mall 1975/1996 100% 1,100,57 276,461 309 85% Belk-Hudson, None Fee/ Spartanburg, SC --------- ------- --- JCPenney, Ground Dillard's, Sears, Lease(5) Upton's, JB White Total New Malls 2,774,437 750,401 87% ========= ======= === STABILIZED MALLS College Square 1988/1993 100% 460,463 157,594 $206 82% JCPenney, Sears, None Fee Morristown, TN Wal*Mart, Goody's, Proffitt's CoolSprings Galleria 1991/1994 100% 1,130,597 375,582 264 90% Castner-Knott, None Fee Cheyenne, WY Dillard's, Sears, JCPenney, Parisian Foothills Mall 1983(6)/N/A 95% 472,220 175,524 180 69% Sears, None Fee Maryville, TN JCPenney(7), Proffitt's, Proffitt's II Frontier Mall 1981/1983 100% 438,004 202,417 189 86% Fashion Bar(8), None(8) Fee Cheyenne, WY JCPenney, Joslins, Sears Georgia Square 1981/N/A 100% 680,135 258,581 217 92% Belk, JCPenney, None Fee Athens, GA Macy's, Sears Governor's Square 1986/1994 48% 692,320 271,319 222 94% JCPenney, Parks- None Fee Clarksville, TN Belk, Sears Dillard's, Goody's Hamilton Place 1987/1992 90% 1,159,636 367,988 331 97% Belk, Parisian, None Fee Chattanooga, TN Proffitt's I, Proffitt's II, Sears, JCPenney Lakeshore Mall 1992/N/A 100% 408,534 153,053 193 81% Kmart, Belk- None Fee Sebring, FL Lindsey, JCPenney, Beall's (9) Madison Square 1984/1985 50% 933,845 300,025 283 96% Castner Knott, None Fee Huntsville, AL JCPenney, McRae's, Parisian, Sears Pemberton Square 1985/1990 100% 353,300 135,065 185 82% JCPenney, None Fee Vicksburg, MS McRae's, Wal*Mart, Goody's Plaza Del Sol 1979/1990 51% 245,685 89,504 152 99% Beall Bros.(9), None Fee Del Rio, TX JCPenney, Kmart Post Oak Mall 1982/1985 100% 776,823 318,642 228 84% Beall Bros.(9), None Fee College Station, TX Dillard's, Foley's, Service Merchandise, Sears, JCPenney St. Clair Square 1974(10)/N/A 100% 1,044,599 315,656 341 94% Famous Barr, None Fee/ Fairview Heights, IL Sears, JCPenney, Ground Dillard's Lease(11) Twin Peaks Mall 1985/1987 100% 448,685 202,197 170 81% JCPenney(12), None(12) Fee Longmont, CO Joslins, Sears Walnut Square 1980/1992 100% 450,385 171,192 181 96% Belk, JCPenney, None Ground Dalton, GA --------- --------- ---- ---- Proffitt's, Sears, Lease(13) Goody's TOTAL STABILIZED MALLS 9,695,231 3,494,348 $240 89% ========= ========= ==== ==== </TABLE>
(1) Includes the total square footage of the Anchors (whether owned or leased by the Anchor) and Mall Stores. Does not include future expansion areas. (2) Does not include Anchors. (3) Totals represent weighted averages. (4) Includes tenants paying rent for executed leases as of December 31, 1996. (5) The Company is the lessee under several ground leases for approximately 53% of the underlying land. The leases extend through October 31, 2084, including six ten-year renewal options. Rental amount is $130,000 per year. In addition to base rent, the landlord receives 20% of the percentage rents collected. The Company has a right of first refusal to purchase the fee. (6) Originally opened in 1983 and controlling interest acquired by the Company in December 1996. (7) A lease with Goody's was executed and they opened in March, 1997. (8) Fashion Bar's lease expired January 31, 1997 and is currently vacant. A new anchor Dillard's opened in March, 1997. (9) Beall Bros. operating in Texas is unrelated to Beall's operating in Florida. (10) Originally opened in 1974, last renovation completed in 1994, and acquired by the Company in November, 1996. (11) The Company is the lessee under a ground lease for 20 acres which extends through January 31, 2073, including 14 five-year renewal options and one four-year renewal option. Rental amount is $40,000 per year. In addition to base rent, the landlord receives .25% of Dillard's sales in excess of $16,200,000. (12) An additional anchor Dillard's opened in March, 1997. (13) The Company is the lessee under several ground leases which extend through March 14, 2078, including six ten-year renewal options and one eight-year renewal option. Rental amount is $149,450 per year. In addition to base rent, the landlord receives 20% of the percentage rents collected. The Company has a right of first refusal to purchase the fee. ANCHORS. Anchors are a critical factor in a Mall's success because of the public's identification with a property typically focuses on its Anchors. Mall Anchors generally are department stores whose merchandise appeals to a broad range of shoppers. Although the Malls derive a smaller percentage of their operating income from Anchor stores than from Mall Stores, strong Anchors play an important part in generating customer traffic and making the Malls desirable locations for Mall Store tenants. Anchors either own their stores together with the land under them and sometimes with adjacent parking areas, or enter into long-term leases with respect to their stores at rental rates that are significantly lower than the rents charged to tenants of Mall Stores. Anchors which lease their stores account for approximately 12.0% of the total revenues from the Company's Properties. Each Anchor which owns its own store has entered into a reciprocal easement agreement with the Company covering, among other things, operating covenants, reciprocal easements, property operations, initial construction and future expansions. The Malls have a total of 84 Anchors. No Anchor Stores at any of the Malls were vacant as of December 31, 1996. The Fashion Bar lease at Cheyenne, Wyoming, expired January 31, 1997 and is currently vacant . The following table indicates all Mall Anchors and sets forth the aggregate number of square feet owned or leased by Anchors in the Malls as of December 31, 1996.
Mall Anchor Summary Information <TABLE> GLA GLA Total Number Owned Leased Occupied of Anchor by by by Name Stores Anchor Anchor Anchor(1) - ----------------------- --------- ---------- ---------- ---------- <S> <C> <C> <C> <C> JCPenney............... 18 424,471 1,080,335 1,504,806 Sears.................. 15 987,843 651,466 1,639,309 Proffitt's Proffitt's...... 6 492,654 0 492,654 McRae's........ 3 283,559 0 283,559 Parisian....... 3 207,520 133,000 340,520 --------- ---------- ---------- ---------- Subtotal..... 12 983,733 133,000 1,116,733 Dillard's.............. 7 846,350 169,504 1,015,854 Belk Belk........... 4 0 457,888 457,888 Belk-Lindsey... 1 0 61,029 61,029 Belk-Hudson.... 1 0 152,890 152,890 Parks-Belk..... 1 0 122,367 122,367 -------- ---------- ---------- ---------- Subtotal..... 7 0 794,174 794,174 Mercantile Stores Castner Knott.. 2 326,004 30,000 356,004 J.B. White..... 1 150,000 0 150,000 Gayfers........ 1 127,800 0 127,800 Joslins........ 2 152,914 2,500 155,414 -------- ---------- ---------- ---------- Subtotal..... 6 756,718 32,500 789,218 The May Company Foley's........ 1 103,888 0 103,888 Famous Barr.... 1 0 236,489 236,489 -------- ---------- ---------- ---------- Subtotal..... 2 103,888 236,489 340,377 Wal*Mart............... 2 0 214,653 214,653 Goody's................ 6 0 190,795 190,795 Kmart.................. 2 0 173,940 173,940 Macy's................. 1 115,623 0 115,623 Uptons................. 1 0 69,993 69,993 Beall Bros. (Texas).... 2 0 61,916 61,916 Beall's (Florida)...... 1 0 45,844 45,844 Fashion Bar, Inc....... 1 0 24,750 24,750 Service Merchandise.... 1 0 40,804 40,804 -------- ----------- --------- ---------- TOTAL.......... 84 4,218,626 3,920,163 8,138,789 ======== =========== ========= ========== </TABLE> (1) Includes all square footage owned by or leased to such Anchor including TBA (tire, battery and automotive) facilities and storage square footage. (2) Proffitt's occupies two Anchor spaces at Foothills Mall and three at Hamilton Place Mall. MALL STORES. The Malls have approximately 1,492 Mall Stores. National or regional chains (excluding individually franchised stores) lease approximately 81.52% of the occupied Mall Store GLA. Although Mall Stores occupy only 34.1% of total Mall GLA, for the year ended December 31, 1996, the Malls derived approximately 88.0% of their revenue from Mall Stores. Among the companies with the largest representation among Mall Stores are: The Limited Stores, Inc./Intimate Brands (The Limited, Limited Too, Express, Lerner New York, Lane Bryant, Structure, Victoria Secret, and Bath and Body Works) and Woolworth Corporation (Footlocker, Lady Footlocker, Kinney Shoes, Champs Sports Stores, Afterthoughts Boutique and San Francisco Music Box). As of December 31, 1996, The Limited Stores, Inc.'s/Intimate Brands 65 stores accounted for 10.9% of total leased GLA and 8.37% of total revenues from the Company's Properties. No single Mall Store retailer accounted for more than 11.0% of total leased GLA and no single Mall Store retailer accounted for more than 8.37% of total revenues from the Company's Properties.
The following table sets forth certain information for executed renewal leases with current tenants or leases of previously at the Malls during the year ended December 31, 1996. <TABLE> Prior Lease New Lease Increase Increase Total Base and Initial Year Per New Lease Per Number Square Percentage Rent Base Rent Square Average Square of leases Feet per Square Foot per Square Foot Foot Base Rent Foot - ----------- -------- ----------------- ----------------- --------- ---------- --------- <S> <C> <C> <C> <C> <C> <C> 178 372,328 $16.20 $17.92 $1.71 $18.32 $2.12 </TABLE> The following table sets forth the total Mall Store GLA, the total square footage of leased Mall Store GLA, the percentage of Mall Store GLA leased, the average base rent per square foot of Mall Store GLA and average Mall Store sales per square foot as of the end of each of the past five years. STABILIZED MALL STORE SUMMARY INFORMATION <TABLE> Total Percentage Average Average Mall Total Mall Store of Mall Store Base Rent Store Sales At Mall Store Leased GLA per Square per Square December 31, GLA GLA Leased (1) Foot (2) Foot (3) - -------------------- ------------- ------------ --------------- ------------- ------------- <S> <C> <C> <C> <C> <C> 1992................ 2,563,308 2,172,979 84.8% $15.67 $205 1993................ 2,576,047 2,268,790 88.1 16.12 217 1994................ 2,576,047 2,284,987 88.7 16.55 226 1995................ 3,003,334 2,697,969 89.8 18.28 237 1996................ 3,452,997 3,073,190 89.0 19.03 240 </TABLE> (1) Mall Store occupancy includes tenants with executed leases who are paying rent. (2) Average base rent per square foot is based on Mall Store GLA occupied as of the last day of the indicated period for the preceding twelve-month period. (3) Calculated for the preceding twelve-month period. LEASE EXPIRATIONS. The following table shows the scheduled lease expirations for the Malls (assuming that none of the tenants exercise renewal options) for the year ending December 31, 1997 and for the next nine years for the Mall Stores. MALL LEASE EXPIRATION <TABLE> Percentage of Total Approximate Represented by Annualized Mall Store Expiring Leases Number of Base Rent GLA of ------------------------------ Year Ending Leases of Expiring Expiring Annualized Leased Mall December 31, Expiring Leases* Leases Base Rent Store GLA - -------------------- ------------- ------------ --------------- ------------- -------------- <S> <C> <C> <C> <C> <C> 1997................ 252 $7,027,648 351,970 10.21% 9.63% 1998................ 156 4,982,897 269,193 7.24 7.36 1999................ 155 5,024,921 255,451 7.30 6.99 2000................ 146 5,084,560 319,525 7.39 8.74 2001................ 146 6,052,840 306,069 8.79 8.37 2002................ 126 5,713,431 268,391 8.30 7.34 2003................ 109 4,992,322 248,069 7.25 6.79 2004................ 126 5,572,033 248,351 8.09 6.79 2005................ 145 7,591,693 355,712 11.03 9.73 2006................ 66 5,471,840 272,766 7.95 7.46 </TABLE> * Total annualized base rent for all leases executed as of December 31, 1996 includes rent for space that is leased but not yet occupied but excludes (i) percentage rents, (ii) additional payments by tenants for common area maintenance, real estate taxes and other expense reimbursements and (iii) contractual rent escalations and cost of living increases due after December 31, 1996. COST OF OCCUPANCY. Management believes that in order to maximize the Company's Funds from Operations, tenants in Mall Stores must be able to operate profitably. A major factor contributing to tenant profitability is the tenant's cost of occupancy. The following table summarizes for Stabilized Mall Store tenants the occupancy costs under their leases as a percentage of total Mall Store sales for the last three years. <TABLE> For the Year Ended December 31, (1) --------------------------------- 1994 1995 1996 --------- --------- --------- <S> <C> <C> <C> Mall Store sales (in thousands)(2)....... $422,499 $526,107 $515,121 Minimum rents............................ 8.7% 8.6% 7.9% Percentage rents......................... 0.4 0.5 0.3 Expense recoveries....................... 3.1 3.2 3.3 --------- --------- --------- Mall tenant occupancy costs.............. 12.2% 12.3% 11.5% - -------------------- </TABLE> (1) Excludes Malls not open for full reporting period. (2) Consistent with industry practice, sales are based on reports by retailers (excluding theaters) leasing Mall Store GLA and occupying space for the reporting period. Represents 100% of sales for these Malls. In certain cases, the Company and the Operating Partnership will own less than 100% interest in these Malls. (3) Represents real estate tax and common area maintenance charges. At December 31, 1996 the Company had investments in three malls in joint ventures with third parties, all of which are reflected using the equity method of accounting. The Company's investment in Brownwood Associates (Heartland Mall in Brownwood, Texas) was transferred to the lender in April, 1995. The effect of this transfer on the financial statements was not material. Condensed combined results of operations for the unconsolidated affiliates are presented in the following table. <TABLE> Total for the Year Company's Share for the Year Ended Ended December 31, December 31, --------------------------- --------------------------- (dollars in thousands) 1996 1995 1996 1995 ------------ ------------ ------------ ------------ <S> <C> <C> <C> <C> Revenues......................... $ 21,014 $ 20,729 $ 10,318 $ 10,186 Depreciation & Amortization...... 2,592 2,583 1,268 1,264 Interest Expense................. 8,278 8,709 4,061 4,273 Other Operating Expenses......... 6,389 6,462 3,159 3,199 ------------ ------------ ------------ ------------ Net Income Before Extraordinary Item............. 3,755 2,975 1,830 1,450 Extraordinary Item............... 1,727 0 820 0 ------------ ------------ ------------ ------------ Income After Extraordinary Item.. $ 2,028 $ 2,975 $ 1,010 $ 1,450 ------------ ------------ ------------ ------------ </TABLE>
ASSOCIATED CENTERS The eight Associated Centers are each part of a Mall complex and generally have one or two Anchor tenants and various smaller tenants. Anchor tenants in these centers include such retailers as Service Merchandise, Target, Toys "R" Us, and TJ Maxx, which are category dominant retailers that benefit from the regional draw of the Malls. The Associated Centers also increase the draw to the total Mall complex. Total leasable GLA of the eight Associated Centers is approximately 0.5 million square feet, including Anchors, or an average of approximately 62,000 square feet per center. As of December 31, 1996, 99.6% of total leasable GLA at the Associated Centers was occupied. In the years ended December 31, 1994, 1995, and 1996, revenues from the Associated Centers represented approximately 3.9%, 3.5% and 3.3%, respectively, of total revenues from the Company's Properties. In the years ended December 31, 1994, 1995 and 1996, average tenant sales per square foot at the Associated Centers were approximately $214, $215 and $207, respectively. Average base rent per square foot at the Associated Centers increased from $8.37 at December 31, 1995 to $8.59 at December 31, 1996. Each of the Associated Centers was developed by the Company. All of the land underlying the Associated Centers is owned in fee. LEASE EXPIRATIONS. The following table shows for the Associated Centers (assuming that none of the tenants exercise renewal options) the scheduled lease expirations for the year ending December 31, 1997 and for the next nine years. ASSOCIATED CENTER LEASE EXPIRATION <TABLE> Percentage of Total Approximate Represented by Annualized Mall Store Expiring Leases Number of Base Rent GLA of ------------------------------ Year Ending Leases of Expiring Expiring Annualized Leased Mall December 31, Expiring Leases* Leases Base Rent Store GLA - -------------------- ------------- ------------ --------------- ------------- -------------- <S> <C> <C> <C> <C> <C> 1997................ 14 $ 315,782 32,085 8.07% 4.35% 1998................ 10 239,759 24,448 6.13 3.32 1999................ 24 581,939 45,582 14.87 6.19 2000................ 9 451,720 57,898 11.55 7.86 2001................ 5 92,553 5,050 2.37 0.69 2002................ 2 186,000 28,757 4.75 3.90 2003................ 2 279,810 33,903 7.15 4.60 2004................ 3 68,296 121,139 1.75 16.44 2005................ 5 422,879 50,404 10.81 6.84 2006................ 3 518,864 91,660 13.26 12.44 </TABLE> * Total annualized base rent for all leases executed as of December 31, 1996 includes 12 months of rent for space that is newly leased but not yet occupied but excludes (i) percentage rents, (ii) additional payments by tenants for common area maintenance, real estate taxes and other expenses reimbursements and (iii) contractual rent escalations and cost of living increases due after December 31, 1996.
The following table sets forth certain information for executed renewal leases with current tenants or leases of previously occupied space with new tenants at the Associated Centers during the year ending December 31, 1996. <TABLE> Prior Lease New Lease Increase Increase Total Base and Initial Year Per New Lease Per Number Square Percentage Rent Base Rent Square Average Square of leases Feet per Square Foot per Square Foot Foot Base Rent Foot - ----------- -------- ----------------- ----------------- --------- ---------- --------- <S> <C> <C> <C> <C> <C> <C> 13 43,223 $10.91 $11.46 $0.56 $12.05 $1.14 </TABLE> The following table sets forth certain information for each of the Associated Centers as of December 31, 1996: <TABLE> Ownership by Year of Company Opening/ and Total Percentage Name of Mall/ Recent Operating Total Leasable GLA Location Expansion Partnership GLA(1) GLA(2) Leased(3) Anchors - --------------------- ----------- ------------ ---------- ----------- ----------- ------------------------ <S> <C> <C> <C> <C> <C> <C> CoolSprings Crossing.. 1992 100% 340,596 40,513 100% Target, Nashville, TN Service Merchandise, Toys "R" Us, Uptons, Carmike Cinemas Foothills Plaza....... 1983/1988 100% 204,400(4) 94,400(4) 97.9%(4) Goody's(5), Food Lion, Maryville, TN Eckerd(6), Carmike Cinemas Frontier Square....... 1985 100% 161,615 16,615 100% Dan's County Market, Cheyenne, WY Target Georgia Square Plaza.. 1984 100% 15,393 15,393 100% General Cinema Athens, GA Hamilton Corner 1990 90% 88,298 88,298 100% Michael's, Goody's, Chattanooga, TN Fresh Market Hamilton Crossing..... 1987/1994 92% 171,370 78,257 100% Service Merchandise, Chattanooga, TN Toys "R" Us, TJ Maxx Madison Plaza......... 1984(7) 75% 153,085 98,690 100% Food World, TJ Maxx, Huntsville, AL Service Merchandise Pemberton Plaza....... 1986 100% 65,918 14,972 100% Kroger Vicksburg, MS ---------- ----------- ----------- TOTAL ASSOCIATED CENTERS........... 1,200,675 447,138 99% ========== =========== =========== </TABLE> (1) Includes the total square footage of the Anchors (whether owned or leased by the Anchor) and shops. Does not include future expansion areas. (2) Includes leasable Anchors. (3) Includes tenants paying rent on executed leases on December 31, 1996. Calculation includes leased Anchors. (4) Total GLA includes and Total Leasable GLA and Percentage GLA Leased exclude a vacant former Hills Department Store (80,000 square feet of GLA), which is owned by senior management of the Company. The Company has a ten-year option (with approximately seven years remaining) to acquire this property for a fixed acquisition price of $3,800,000. Carmike Cinemas is subject to a ground lease (30,000 square feet of GLA). (5) Goody's lease was terminated in March 1997 to allow them to move into Foothills Mall. (6) Eckerd has closed its store but is continuing to meet its financial obligations under its lease. (7) Center was renovated during 1995.
COMMUNITY CENTERS In addition to Mall development, the Company's development activities focus on Community Center projects. Community Centers pose fewer development risks than Malls because they have shorter development timetables and lower up-front costs. Community Centers also afford the Company the opportunity to meet the needs of retailers for whom a "convenience" type of location is more appropriate and the needs of customers whose trade areas cannot support a regional mall. The Company's Community Center developments in the 1980's were generally anchored by supermarkets, and, in certain cases, by drug stores. Management's current focus has expanded to include the development of larger centers, anchored by mass merchandisers and department stores, while continuing the development of smaller centers anchored by supermarkets and drug stores. Recently completed Community Centers include centers in Adrian, Michigan; Cary, North Carolina; LaGrange, New York; Knoxville, Tennessee; and Chester, Virginia. Anchors at these new centers include, Lowe's Home Improvement, Hannaford Brothers, A&P, and HomePlace. The Community Centers in Adrian, Michigan and Chester, Virginia were sold by the Company in 1996. See "Summary Information Concerning Dispositions for the Year ended December 31, 1996". Community Centers range in size from 25,000 square feet to in excess of 286,000 square feet. Anchors in Community Centers generally lease their store space and occupy 60-85% of a center's GLA. The number of stores in a Community Center ranges up to sixteen with an average of seven stores per center. Total GLA of the 75 Community Centers is approximately 6.2 million square feet, or an average of approximately 84,000 square feet per center. As of December 31, 1996, 97.2% of total leasable GLA at the Community Centers was leased. In the years ended December 31, 1994, 1995 and 1996, revenues from the Community Centers represented approximately 21.0%, 21.2% and 21.4%, respectively, of total revenues from the Company's Properties. Occupancy at the Community Centers increased from 96.8% at December 31, 1995 to 97.2% at December 31, 1996. Average base rent per square foot at the Community Centers increased from $6.66 at December 31, 1995, to $6.94 at December 31, 1996. As of December 31, 1996, Food Lion, a major regional supermarket operator with headquarters in North Carolina served as an anchor tenant in 37 of the Company's Community Centers and in one Associated Center. For the year ended December 31, 1996, Food Lion accounted for approximately 5.01% of the revenues generated by the Company's Properties. With the exception of Suburban Plaza and Sutton Plaza, which were acquired by the Company in March, 1995 and January, 1997 respectively, each of the Community Centers was developed by the Company.
The following table summarizes the percentage of total leasable GLA leased, average base rent per square foot (excluding percentage rent) and tenant sales per square foot at the Community Centers for each of the last five years. COMMUNITY CENTER SUMMARY INFORMATION <TABLE> Average Percentage Base Rent Tenant Year Ended GLA Per Square Sales Per December 31, Leased (1) Foot (2) Square Foot (3) - --------------------------- ----------- ---------- --------------- <S> <C> <C> <C> 1992...................... 94.1% $ 6.10 $ 206 1993...................... 95.0 6.44 205 1994...................... 96.5 6.64 200 1995...................... 96.8 6.66 202 1996...................... 97.2 6.94 210 </TABLE> ______________________ (1) Percentage leased includes tenants who have executed leases and are paying rent as of the specified date. (2) Average base rent per square foot is based on GLA occupied as of the last day of the indicated period. (3) Consistent with industry practice, sales are based on reports by retailers (excluding theaters) leasing GLA and occupying space for the 12 months ending on the last day of the indicated period. LEASE EXPIRATIONS. The following table shows the scheduled lease expirations for the Community Centers (assuming that none of the tenants exercise renewal options) for the year ending December 31, 1997, and for the next nine years. COMMUNITY CENTER LEASE EXPIRATION <TABLE> Percentage of Total Represented by Annualized Approximate Expiring Leases Number of Base Rent GLA of ------------------------------ Year Ending Leases of Expiring Expiring Annualized Leased Mall December 31, Expiring Leases* Leases Base Rent Store GLA - -------------------- ------------- ------------ --------------- ------------- -------------- <S> <C> <C> <C> <C> <C> 1997................ 95 $1,446,159 238,768 5.82% 6.16% 1998................ 108 1,648,039 286,200 6.63 7.38 1999................ 73 1,488,103 257,656 5.99 6.64 2000................ 34 1,041,314 176,745 4.19 4.56 2001................ 51 1,332,043 155,961 5.36 4.02 2002................ 18 568,140 77,320 2.29 1.99 2003................ 6 326,844 43,296 1.32 1.12 2004................ 12 541,875 87,032 2.18 2.24 2005................ 12 1,095,879 250,172 4.41 6.45 2006................ 12 913,905 138,831 3.68 3.58 </TABLE> _______________________ * Total annualized base rent for all leases executed as of December 31, 1996 includes 12 months of rent for space that is newly leased but not yet occupied but excludes (i) percentage rents, (ii) additional payments by tenants for common area maintenance, real estate taxes and other expenses reimbursements and (iii) contractual rent escalations and cost of living increases for periods after December 31, 1996. The following table sets forth certain information for executed renewal leases of previously occupied space with new tenants at the Community Centers during the year ending December 31, 1996. <TABLE> Prior Lease New Lease Increase Increase Total Base and Initial Year Per New Lease Per Number Square Percentage Rent Base Rent Square Average Square of leases Feet per Square Foot per Square Foot Foot Base Rent Foot - ----------- -------- ----------------- ----------------- --------- ---------- --------- <S> <C> <C> <C> <C> <C> <C> 158 403,489 $6.80 $6.69 $(0.11) $6.79 $(0.01) </TABLE> The following table sets forth certain information regarding the Community Centers as of December 31, 1996 except for Sutton Plaza which was acquired in January, 1997. <TABLE> Year of Ownership Opening/ By Company Sq Ft Name Of Most And Total Percentage of Fee or Number Community Center Resent Operating Total Leasable GLA Anchor Ground of /Location Expansion Partnership GLA(1) GLA(2) Leased(3) Anchors Vacancies Lease Stores - ----------------- --------- ----------- ------- --------- ----------- ------------------ ---------- ------- ------ <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> Anderson Plaza 1983/1994 100% 46,258 46,258 100% Food Lion, Eckerd None Fee 4 Greenwood, SC Bartow Village 1990 100% 40,520 40,520 98% Food Lion, Family Dollar None Fee 4 Bartow, FL Beach Crossing 1984 100% 45,790 45,790 96% Food Lion(4), Revco Drug 21,000 Fee 6 Myrtle Beach, SC Bennington Place 1994 100% 42,712 42,712 97% Food Lion None Fee 3 Roanoke, VA BJ's Plaza 1991 100% 104,233 104,233 100% BJ's Wholesale Club None Ground 1 Portland, ME Lease(5) Briarcliff Square 1989 100% 41,778 41,778 100% Food Lion None Fee 9 Oak Ridge, TN Buena Vista Plaza 1989/1994 100% 143,820 10,000 100% Wal*Mart, Winn Dixie None Fee 4 Columbus, GA Bulloch Plaza 1986 100% 34,400 34,400 100% Food Lion, Rite Aid None Fee 4 Statesboro, GA Capital Crossing 1995 100% 83,700 83,700 100% Hannaford Bros., Staples None Fee 2 Raleigh, NC Cedar Bluff Crossing 1986/1994 100% 53,050 53,050 94% Food Lion None Fee 11 Knoxville, TN Cedar Plaza 1988 100% 95,000 50,000 100% Quality Stores, None None Fee 5 Cedar Springs, MI Great Day Foods Centerview Plaza 1986/1994 100% 43,720 43,720 100% Food Lion, Eckerd None Fee 6 China Grove, NC Chestnut Hills 1982 100% 68,364 68,364 95% JCPenney None Fee 9 Murray, KY Clark's Pond 1995 100% 134,920 134,920 100% Home Quarters None Fee 1 Portland, ME Warehouse Colleton Square 1986 100% 31,000 31,000 100% Food Lion None Fee 5 Walterboro, SC Collins Park Common 1989 100% 37,400 37,400 87% Food Lion None Ground 4 Plant City, FL Lease(6) Conway Plaza 1985 100% 33,000 33,000 96% Food Lion(7) 21,000 Ground 6 Conway, SC Lease(8) Cosby Station 1984/1991 100% 77,811 77,811 100% Publix None Fee 9 Douglasville, GA County Park Plaza 1982 100% 47,325 47,325 71% Bi-Lo 28,875(9) Fee 2 Scottsboro, AL Devonshire Place 1996 100% 104,517 104,517 100% Hannaford Bros., Kinetix, None Ground 4 Cary, NC Borders Books Lease(10) Dorchester Crossing 1985 100% 40,007 40,007 96% Food Lion None Fee 6 Charleston, SC East Ridge Crossing 1988 100% 54,000 54,000 98% Food Lion, Revco None Fee 11 Chattanooga, TN East Towne Crossing 1989/1990 100% 158,751 70,011 100% Home Depot, Regal None Fee 8 Knoxville, TN Cinemas, Food Lion 58 Crossing 1988 100% 49,984 49,984 100% Food Lion, Revco None Fee 9 Chattanooga, TN Garden City Plaza 1984/1991 100% 188,446 76,246 95% Wal*Mart, JCPenney None Fee 14 Garden City, KS Genesis Square 1990/1996 100% 35,000 35,000 100% Food Lion None Fee 4 Crossville, TN Girvin Plaza 1990 100% 56,297 20,375 100% Winn Dixie None Fee 8 Jacksonville, FL Greenport Towne Cen 1994 100% 191,622 75,525 100% Wal*Mart, Price-Chopper None Fee 2 Hudson, NY Hampton Plaza 1990 100% 44,624 44,624 92% Food Lion None Fee 6 Tampa, FL Henderson Square 1995 100% 268,327 164,329 100% JCPenney, Legget's, None Fee 13 Henderson, NC Goody's, Wal*Mart Hollins Plantation Plaza Roanoke, VA 1985 100% 40,640 40,640 100% Food Lion, Revco Drug None Fee 5 Jasper Square 1986/1990 100% 95,950 50,550 100% Lowe's, Goody's None Fee 7 Jasper, AL Jean Ribaut 1977/1993 100% 223,497 223,497 100% Belk, Kmart, Bi-Lo None Fee 17 Beaufort, SC Karns Corner 1987/1996 100% 35,000 35,000 100% Food Lion None Fee 4 Knoxville, TN Keystone Crossing 1989 100% 40,400 40,400 96% Food Lion None Fee 4 Tampa, FL Kingston Overlook 1996 100% 96,885 96,885 100% Baby Superstore, None Fee/ 1 Knoxville, TN(20) Home Place, Ground Michael's(20) Lease(11) Lady's Island 1983/1993 100% 60,687 60,687 100% Winn Dixie, Eckerd None Fee 9 Beaufort, SC LaGrange Commons 1996 100% 59,799 59799 A & P Food Store None Fee 3 LaGrange, NY Lakeshore Crossing 1994 100% 8,000 8,000 100% None Fee 5 Gainesville, GA Longview Crossing 1988 100% 29,800 29,800 96% Food Lion None Ground 3 Hickory, NC Lease(12) Lowe's Plaza 1993 100% 125,351 125,351 100% Lowe's None Fee 1 Joplin, MO Lunenburg Crossing 1994 100% 198,115 25,515 100% Wal*Mart, Shop'n Save None Fee 8 Lunenburg, MA North Creek Plaza 1983 100% 28,500 28,500 100% Food Lion None Fee 2 Greenwood, SC North Haven Crossin 1993 100% 104,612 104,612 100% Sports Authority, Office None Fee 6 North Haven, CT Max, Barnes & Noble Northridge Plaza 1984/1988 100% 129,570 79,570 99% Winn Dixie, Eckerd None Fee 17 Hilton Head, SC Northwoods Plaza 1983/1992 100% 32,705 32,705 100% Food Lion None Fee 2 Albemarle, NC Oaks Crossing 1990/1993 100% 144,978 27,280 92% Wal*Mart, Rite Aid, None Fee 10 Otsego, MI Food City Orange Plaza 1983 100% 46,875 46,875 76% Food World (13) 24,900 Fee 8 Roanoke, VA Park Village 1990 100% 48,570 48,570 83% Food Lion, Family Dollar None Fee 6 Lakeland, FL Perimeter Place 1985/1988 100% 156,945 54,525 10% Home Depot, Drugs For Less None Fee 17 Chattanooga, TN Rawlinson Place 1987 100% 35,750 35,750 85% Food Lion None Fee 5 Rock Hill, SC Rhett at Remount 1983/1994 100% 42,628 42,628 100% Food Lion, Eckerd None Fee 3 Charleston, SC Sattler Square 1989 100% 132,746 94,760 96% Quality Stores, Perry None Fee 13 Big Rapids, MI Drugs, Denny's Value Land Supermarket Seacoast Shopping 1991 100% 208,690 91,690 89% Wal*Mart None Fee 12 Seabrook, NH Shaw's supermarket Shenandoah Crossing 1988 100% 28,600 28,600 100% Food Lion None Fee 2 Roanoke, VA Signal Hills Villag 1987/1989 100% 24,100 24,100 58% (14) None Ground 5 Statesville, NC Lease(15) Southgate Crossing 1985 100% 40,100 40,100 85% Food Lion(4) 25,000 Ground 2 Bristol, TN Lease(16) Sparta Crossing 1989 100% 29,800 29,800 92% Food Lion None Fee 2 Sparta, TN Springs Crossing 1987/1996 100% 42,920 42,920 100% Food Lion, Rite Aid None Ground 4 Hickory, NC Lease (17) Statesboro Square 1986 100% 41,000 41,000 100% Food Lion(7) 25,000 Fee 6 Statesboro, GA Stone East Plaza 1983 100% 45,259 45,259 91% Food Lion(16) None Fee 9 Kingsport, TN Suburban Plaza 1995 100% 124,109 124,109 100% Toys "R" Us None Fee 23 Knoxville, TN Surry Square 1985 100% 32,900 32,900 96% Food Lion(4), 21,000 Fee 3 Elkin, NC Revco Drug Sutton Plaza 1972(19) 100% 122,027 122,027 100% A & P, Ames None Fee 14 Mt. Olive, NJ 34th St. Crossing 1989 100% 51,120 51,120 97%Food Lion, Family Dollar None Fee 11 St. Petersburg, FL Townshire Shopping 1988 100% 72,440 72,440 100% Blinn College None Space 4 Bryan, TX Lease(18) Tyler Square 1987 100% 48,370 48,370 100% Food Lion, Revco Drug None Fee 8 Radford, VA University Crossing 1986 100% 101,964 20,053 81% Wal*Mart None Fee 7 Pueblo, CO Uvalde Plaza 1987/1992 75% 111,160 34,000 100% Wal*Mart, C.R. Anthony None Fee 7 Uvalde, TX Valley Commons 1988/1994 100% 45,580 45,580 100% Food Lion None Fee 11 Salem, VA Valley Crossing 1988/1991 100% 186,077 186,077 100% Goody's, TJ Maxx, None Fee 20 Hickory, NC Office Depot, Circuit City, Belk Outlet Store The Village at Wexford 1990 100% 102,450 72,450 98% Quality Stores(21), None Fee 8 Cadillac, MI Glen's Supermarket, Village Square 1990/1993 100% 163,294 27,050 96% Wal*Mart, None Fee 10 Houghton Lake, MI Glen's Supermarket, Perry Drug Store Wildwood Plaza 1985/1994 100% 39,580 39,580 100% Food Lion None Fee 4 Salem, VA Willow Springs Plaza 1991/1994 100% 224,344 121,956 100% Home Depot, Office Max, None Fee 10 Nashua, NH JCPenney Home Store ---------- ----------- ------ TOTAL COMMUNITY CENTERS 6,200,263 4,493,679 97% ========== =========== ====== </TABLE>
(1) Includes the total square footage of the Anchors (whether owned by others or leased by the Anchor) and shops. Does not include future expansion areas. (2) Includes leasable Anchors. (3) Includes tenants paying rent on executed leases on December 31, 1996. Calculation includes leased Anchors. (4) Tenant has closed its store but is continuing to meet its financial obligation and is sub-leasing the space. (5) Ground Lease term extends to 2051 including four 10-year extensions. Lessee has an option to purchase and a right of first refusal to purchase the fee. (6) Ground Lease term extends to 2049 including three 10-year extensions. Lessor receives a share of percentage rents during initial term and extensions. Lessee has an option to purchase and a right of first refusal to purchase the fee. (7) Represents a Food Lion which has closed its store but is continuing to meet its financial obligations under its lease. (8) Ground Lease term extends to 2055 including two 20-year extensions. During extension periods, lessor receives a share of percentage rents. Lessee has a right of first refusal to purchase the fee. Lessor receives a share of sale proceeds upon sale of the center to a third party. (9) Bi-Lo is closed but continues to meet its financial obligations under its lease. (10) Ground lease extends to 2097 including 12 five year options. Lessor receives no additional rent. (11) Grounds lease for a portion of the land extends to 2046 including 4 ten year options. Lessor receives 20% of percentage rentals. (12) Ground Lease term extends to 2049 including three 10-year extensions. Lessor receives a share of percentage rents during initial term and extensions. Lessee has a right of first refusal to purchase the fee. (13) Represents a Food World which has closed its store but is continuing to meet its financial obligations under its lease and is sub-leasing the space. (14) Signal Hills Village is part of Signal Hills Crossing, a Property on which the Company holds a Mortgage. (15) Ground Lease term extends to 2084. Rent for entire term has been prepaid. Lessee has an option to purchase the fee under certain circumstances. (16) Ground Lease term extends to 2055 including one 20-year extension. Commencing in 2005, rental will be the greater of base rent or a share of the revenue from the center. Lessee has a right of first refusal to purchase the fee. (17) Ground Lease term extends to 2048 including three 10-year extensions. Lessor receives a share of percentage rents during initial term and extensions. Lessee has a right of first refusal to purchase the fee. (18) Represents a space lease for this center. Lease term expires in 1999 with one 10-year extension option available. (19) Sutton Place opened in 1972 and was acquired by the Company in January, 1997. (20) The remaining 23,000 square feet are still under development the tenant Michael's, will open in July 1997 occupying 100% of this space. (21) Quality Stores has an option to purchase its 56,850 square foot store commencing in 1996 for a price based upon capitalizing minimum annual rent being paid at the time of exercise at a rate of 8.33%. MORTGAGES The Company owns certain Mortgages which were granted prior to the IPO in connection with sales by the Company's predecessor of properties which it had previously developed. The Company also holds fee mortgages on six community centers, which mortgages had, as of December 31, 1996, an aggregate outstanding principal of $12.3 million. Such mortgages entitle the Company to receive substantially all of such properties' current cash flow in the form of periodic debt service payments. The encumbered properties all opened between 1981 and 1984 and have no Anchor vacancies. In the years ended December 31, 1994, 1995, and 1996, revenues from the Mortgages represented approximately 2.4%, 2.2%, and 2.0%, respectively, of total revenues from the Company's Properties.
The following table sets forth certain additional information regarding the Mortgages as of December 31, 1996. <TABLE> Mortgage Information Center Information ------------------------------------------ --------------------------------------- Annual Principal Annual Total Percentage Number Name of Center/ Interest Balance as Debt Maturity Total Leasable GLA of Location Rate of 12/31/96 Service Date GLA(1) GLA Leased(2) Anchors Stores - -------------------- --------- ----------- ------- ---------- -------- -------- ---------- --------- ------ <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> MALL COMMUNITY CENTERS BI-LO South......... 9.50 $ 1,608 $ 175 Dec-1996(3) 48,075 48,075 100% BI-LO, 7 Cleveland, TN Rite-Aid Gaston Square....... 11.00 1,637 179 Oct-97 33,640 33,640 100 Food Lion, 4 Gastonia, NC Eckerd Inlet Crossing...... 11.00 1,942 327 Oct-97 55,248 55,248 100 Food Lion, 13 Myrtle Beach, SC Revco Drug Olde Brainerd Centre............ 9.50 2,792 245 Dec-2006 57,293 57,293 100 BI-LO, 7 Chattanooga, TN Revco Drug Signal Hills Crossing.......... 11.00 2,306 244 Oct-1997 44,220 44,220 100 Food Lion, 6 Statesville, NC Revco Drug Soddy Daisy Plaza... 9.50 1,982 163 Dec-2006 100,095 47,325 100 Wal*Mart, 5 Soddy Daisy, TN BI-LO, Revco Drug ----------- ------- -------- -------- ---------- ------ TOTAL COMMUNITY... $12,267 $1,333 338,571 285,801 100% 42 =========== ======= ======== ======== ========== ====== Centers Subject to Mortgages _________________________ (1) Includes Anchors. (2) Includes all leases executed on or before December 31, 1996. Leased GLA includes non-Anchor GLA and leased Anchor GLA. (3) The mortgage is on a month-to-month extension pending execution of extension agreements. </TABLE> OFFICE BUILDING The Company owns a 95% interest in a 49,082 square foot office building in Chattanooga, Tennessee in which the Company's headquarters are located. The Company occupies 26,613 square feet or 54% of the total square footage of the Office Building. The Office Building is 100% occupied.
TOP 25 TENANTS The following table sets forth the Company's top 25 tenants based upon a percentage of total revenues from the Company's Properties in 1996. <TABLE> % OF NUMBER OF SQUARE RANK TENANT REVENUES STORES FEET - ---- --------------------------------- ---------- --------- ---------- <S> <C> <C> <C> <C> 1 The Limited, Inc................. 7.12% 50 400,694 2 Food Lion........................ 5.43% 38 1,037,807 3 Woolworth Corp................... 2.44% 44 106,257 4 IC Penney Co., Inc............... 2.33% 17 1,156,946 5 Belk Atlanta Group Office........ 1.97% 9 774,018 6 Goody's Family Clothing, Inc..... 1.95% 11 371,823 7 Intimate Brands.................. 1.25% 15 62,197 8 The Shoe Show.................... 1.25% 15 69,928 9 Carmike Cinema................... 1.23% 8 157,119 10 The Regis Corporation............ 1.18% 39 42,475 11 The Gap, Inc..................... 1.16% 8 49,297 12 Regal Cinemas, Inc............... 1.11% 4 105,871 13 Walden Books..................... 1.09% 15 49,449 14 Camelot Music, Inc............... 1.03% 11 44,834 15 County Seat...................... 1.02% 13 51,390 16 Lowe's Companies, Inc............ 0.91% 2 246,499 17 Footstar......................... 0.89% 11 41,552 18 The May Department Stores........ 0.89% 18 290,165 19 Parisian, Inc.................... 0.88% 1 133,000 20 Sears, Roebuck and Co............ 0.86% 6 568,411 21 U.S. Shoe Corporation............ 0.85% 13 41,735 22 Tandy Corporation................ 0.78% 20 49,678 23 Ruby Tuesday, Inc................ 0.72% 7 34,341 24 Consolidated Stores Corporation.. 0.67% 12 41,553 25 American Eagle Outfitters........ 0.64% 7 27,906 ---------- --------- ---------- </TABLE> MORTGAGE DEBT AND RATIO TO TOTAL MARKET CAPITALIZATION As of December 31, 1996, the Operating Partnership's proportionate share of indebtedness of all Properties (whether or not consolidated for financial statement reporting purposes including the Construction Properties) was approximately $612.5 million. The Company's total market capitalization (the aggregate market value of the Company's outstanding shares of Common Stock, assuming the full exchange of the limited partnership interests in the Operating Partnership for Common Stock, plus the $612.5 million total debt of the Operating Partnership) as of December 31, 1996 was $1.4 billion. Accordingly, the Company's debt to total market capitalization ratio as of December 31, 1996 was 43.8%. The debt to total market capitalization ratio, which is based upon the Company's proportionate share of consolidated and unconsolidated indebtedness and market values of equity, differs from debt-to-book capitalization ratios, which are based upon consolidated indebtedness and book values.
The following table sets forth certain information regarding the mortgages and secured lines of credit encumbering the Properties. MORTGAGE DEBT (Dollars in thousands; numbers may not add due to rounding) MORTGAGE LOANS OUTSTANDING IN WHOLE OR IN PART AT DECEMBER 31, 1996 <TABLE> Ownership Earliest Share of Estimated Date at Company Principal Balloon Which and Annual Balance Annual Annual Payment Loans Center Pledged Operating Interest as of Interest Debt Maturity Due on Can Be as Collateral Partnership Rate 12/31/96(1) Payment (2) Service Date Maturity Prepaid(3) - ------------------------ ----------- -------- ----------- ----------- ------- ---------- --------- ------------ <S> <C> <C> <C> <C> <C> <C> <C> <C> MALLS: College Square.......... 100% 10.000% $ 13,824 $ 1,382 $ 1,548 Jan-2003 $ 13,393 --(4) Coolsprings Galleria.... 100% 8.290% 68,987 5,719 6,636 Sep-2010 -- Oct-2000(5) Frontier Mall........... 100% 10.000% 8,611 861 2,220 Dec-2001 -- --(6) Governor's Square....... 48% 8.230% 36,685 3,020 3,476 Sep-2016 14,454 Sep-2001(7) Hamilton Place......(15) 90% 9.250% 60,359 5,583 6,526 Dec-1997 59,461 Jan-1995(8) Madison Square.......... 50% 9.250% 49,412 4,571 4,936 Mar-2002 46,482 Feb-1997(10) Oak Hollow Mall......... 75% 7.310% 53,336 3,899 4,709 Feb-2008 39,567 Feb-2002(12) Plaza del Sol.......(13) 51% 9.500%(14) 2,572 244 244 Nov-1997 1,729 -- St. Clair Square....(41) 100% 7.180% 66,000 4,739 4,739 Nov-1999 66,000 -- Turtle Creek Mall....... 100% 7.400% 34,712 2,569 2,966 Mar-2006 26,992 Mar-1999(16) Walnut Square.......(17) 100% 10.125% 957 97 140 Feb-2008 -- --(18) Walnut Square........... 100% 10.000%(9) 389 29 39 Mar-1996 389 --(9) Westgate Mall.......(11) 100% 7.210%(52) 38,502 2,776 2,776 Jul-1997 38,502 -- --------- Malls Subtotal: 434,346 ASSOCIATED CENTERS: Georgia Square Plaza.... 100% 9.000% 479 43 141 Jan-2001 -- Feb-1997(8) Hamilton Corner......... 90% 10.125% 3,589 363 471 Aug-2011 -- --(20) Hamilton Crossing....... 92% 9.250% 5,228 484 565 Dec- 1997 5,190 Jan-1995(21) Madison Plaza........... 75% 10.125% 2,850 289 537 Feb-2004 -- --(22) --------- Associated Centers Subtotal: 12,146 COMMUNITY CENTERS: Bartow Village.......... 100% 9.750% 1,715 $167 $ 228 Aug-2000 $1,458 Sept-1997(23) Bennington Place........ 100% 10.250% 611 63 83 Aug-2010 -- Jul-2000(24) BJ's Plaza.............. 100% 10.400% 3,609 375 476 Dec-2011 -- (19) Briarcliff Square....... 100% 10.375% 1,765 183 226 Feb-2013(25) -- Feb-1998(26) Bulloch Plaza........... 100% 10.000% 1,027 103 162 Jan-2007 -- Dec-1996(24) Cedar Bluff Crossing.... 100% 10.625% 1,492 158 230 Jan-2008 -- Jan-2008(27) Centerview Plaza........ 100% 10.000% 1,418 142 191 Jan-2010(28) -- Jan-1999(24) Colleton Square......... 100% 9.375% 1,102 103 143 Aug-2010(29) -- Aug-1998(24) Collins Park Commons.... 100% 10.250% 1,491 153 202 Oct-2010 -- Sept-2000(24) Cosby Station........... 100% 8.500% 4,477 381 490 Sep-2014 -- Sep-2001(30) East Ridge Crossing..... 100% 10.125% 1,523 154 324 May-2003 -- Jan-9001(31) Fifty-Eight Crossing.... 100% 10.125% 1,468 149 312 May-2003 -- Jan-2001(31) Genesis Square.......... 100% 10.250% 1,133 116 147 Aug-2010 -- Jul-2000(32) Greenport Towne Center.. 100% 9.000% 4,681 421 529 Sep-2014 -- --(33) Hampton Plaza........... 100% 10.000% 2,170 217 256 Nov-2000 1,992 Nov-1997(34) Henderson Square....(35) 100% 7.500%(35) 7,267 545 750 Apr-2014 -- May-2005(35) Hollins Plantation Plaza................. 100% 10.000% 1,272 127 211 (36) Jun-2007 -- Jun-1997(37) Jean Ribaut............. 100% 8.750% 4,206 368 477 Oct-1998 4,019 --(38) Karns Corner............ 100% 10.250% 1,051 108 146 Jan-2010 (39) Feb-1999(24) Keystone Crossing....... 100% 9.625% 2,402 231 278 Aug-2000 2,207 Sept-1997(40) Longview Crossing....... 100% 10.250% 485 50 66 Aug-2010 -- Aug-2000(24) Lowe's Plaza............ 100% 9.125% 5,363 489 625 Oct-2013 -- Oct-2003(43) North Haven Crossing.... 100% 9.550% 8,667 828 1,225 Oct-2008 -- Oct-1998(44) Northwoods Plaza........ 100% 9.750% 1,362 133 171 Jun-2012 -- --(45) Perimeter Place......... 100% 10.625% 1,805 192 278 Jan-2008 -- Jan-2008(27) Seacoast Shopping Center................ 100% 9.750% 6,079 593 721 Sep-2002 5,110 Oct-1997(46) Shenandoah Crossing..... 100% 10.250% 610 63 83 Aug-2010 -- Aug-2000(24) Sparta Crossing......... 100% 10.250% 932 96 127 Aug-2010 -- Jul-2000(47) Suburban Plaza.......... 100% 8.500% 5,325 453 615 May-1999 5,325 -- (48) 34th St. Crossing...(49) 100% 10.625% 1,703 181 234 Dec-201 0 -- Dec-2000(50) Tyler Square............ 100% 9.750% 2,021 197 251 Oct-2012(51) -- Nov-1994(26) Uvalde Plaza............ 75% 10.625% 867 92 133 Feb-2008 -- Feb-2008(27) Valley Commons.......... 100% 10.250% 1,049 108 142 Oct-2010 -- Oct-2000(24) Willow Springs Plaza.... 100% 9.750% 6,182 603 934 Aug-2007 601 Aug-1997(47) --------- Community Centers Subtotal: 88,330 CONSTRUCTION PROPERTIES: The Terrace........... 100% 7.100% 6,898 490 490 May-1998 6,898 -- Springhurst Towne Center................ 100% 7.140% 2,856 204 204 Nov-1998 2,856 -- Bonita Lakes Mall....... 100% 7.230% 3,852 279 279 Oct-1998 3,852 -- Cortland Towne Center... 100% 7.250% 12,787 2,776 2,776 Nov-1998 12,787 -- --------- Construction Properties Subtotal: 26,393 OTHER: Park Place.............. 95% 10.000% 2,147 215 459 Apr-2003 -- --(8) Credit Lines............ 100% 6.81%(54) 115,595(54) 7,867 7,867 Various 115,595 -- --------- Total: $ 678,959 </TABLE> Operating Partnership's Share of Total: $612,550(55) (1) The amount listed includes 100% of the loan amount even though the Company and the Operating Partnership may own less than 100% of the property. (2) Interest has been computed by multiplying the annual interest rate by the outstanding principal balance as of December 31, 1996. (3) Unless otherwise noted, loans are prepayable at any time. (4) Prepayment premium is greater of 1% or yield maintenance for any prepayment prior to January, 1998; thereafter, the prepayment premium is 5%, decreasing by .5% per year to a minimum of 3%; there is no prepayment premium after July 15, 2002. (5) Prepayment premium is the greater of 1% or yield maintenance after October 1, 2000. (6) Prepayment premium is based on yield maintenance (not less than 1%) for any prepayment prior to January, 1997; thereafter, the prepayment premium is 5%, decreasing by 1% per year to a minimum of 1%; there is no prepayment premium during the last 120 days of the loan term. (7) Prepayment premium is based on the greater of yield maintenance or 2%. (8) Prepayment premium is the greater of 1% or yield maintenance. (9) Interest is floating at 1 1/2% over prime priced at December 31, 1996. The maturity date is 90 days after notice. (10) Prepayment premium is based on yield maintenance; there is no prepayment premium after October 1, 2001. (11) Permanent loan of $52,000,000 at a rate of 6.95% closed in March, 1997. (12) Prepayment premium is the greater of 1% or yield maintenance. (13) The loan can be extended for 3 one year periods, the extension fee is 1/4 point for each extension. (14) Interest is floating at 1% over prime priced at December 31, 1996. (15) Permanent loan of $75,000,000 at a rate of 7% closed in March, 1997. (16) Prepayment premium is the greater of 1% or yield maintenance. (17) The loan is secured by a first mortgage lien on the land and improvements comprising the Goody's anchor store and no other property. (18) Prepayment premium is the greater of 1% or yield maintenance; there is no prepayment premium after November 1, 2007. (19) Prepayment premium is based on yield maintenance. (20) Prepayment premium is the greater of 1% or yield maintenance; there is no prepayment premium during the last 120 days of the loan term. (21) Prepayment premium is the greater of 1% or yield maintenance; there is no prepayment premium after June 1, 1997. (22) Prepayment premium is the greater of 1% or yield maintenance; there is no prepayment premium after November 1, 2003. (23) Prepayment premium is 5%, decreasing to 3% after September, 1998 and to 1% after September, 1999; there is no prepayment premium during the last 90 days of the loan term. (24) Prepayment premium is 5%, decreasing by 1% per year to a minimum of 2% there is no prepayment premium during the last 120 days of the loan term. (25) Lender has option to accelerate loan between March 1, 2001 and February 28, 2002; March 1, 2006 and February 28, 2007; and March 1, 2011 and February 28, 2012. (26) Prepayment premium is 7%, decreasing by 1% per year to a minimum of 3%. (27) Loan may not be prepaid. (28) Lender may accelerate the loan after September, 2006 upon expiration of the primary term of the lease of either Food Lion or Eckerds, unless both leases have been extended beyond January 1, 2010. (29) Lender may accelerate loan on July 1, 2007 unless Food Lion exercises an extension option. (30) Prepayment premium of 7% decreasing by 1% per year to a minimum of 2%; there is no prepayment premium during the last six months of the loan term. (31) Prepayment premium is 5%, decreasing 1% per year to a minimum of 1%; there is no prepayment premium during the last two years of the loan term. (32) Prepayment premium is 5% from July 1, 2000 to June 30, 2001; thereafter decreasing by 1% per year to a minimum of 2%; there is no prepayment premium after May 1, 2010. (33) Prepayment premium is the greater of 10% or 1/12 of the annual yield difference before Oct-2014. Thereafter the prepayment premium is 1%. (34) The interest rate is floating at 190 basis points over LIBOR. Priced at December 3, 1996. The maximum Loan is $7,000,000, with no extensions. (35) Loan may be prepaid after the 9 years. The prepayment premium is the greater of 1% or yield maintenance. (36) Annual debt service is reduced to $152,004 (payable monthly) after June 1, 2004. (37) Prepayment premium is 5%, decreasing by 1% per year to a minimum of 1%; there is no prepayment premium during the last year of the loan term. (38) Prepayment premium is the greater of 1% or yield maintenance. (39) Lender may accelerate loan after January 1, 2008 unless Food Lion exercises an extension option beyond January 1, 2008. (40) Prepayment premium is 5%, which is reduced to 3% after September, 1998 and to 1% after September, 1999; there is no loan prepayment premium during the last 90 days of the loan term. (41) The interest rate is floating at 150 Basis points over LIBOR. Loan may be extended for 2 years with 90 days written notice prior to maturity date. Extension fee equal to 1/4% of the outstanding balance. (42) The interest rate is floating at 50 Basis points over LIBOR. Priced at December 31, 1996. The maximum loan amount is $25,000,000. (43) Prepayment premium is 5%, decreasing by .5% per year to a minimum of 1%; there is no loan prepayment premium during the last 180 days of the loan term. (44) Prepayment premium is the greater of 2% or yield maintenance before October, 1998, afterwards it is the greater of 1% or yield maintenance. (45) Prepayment premium is based on yield maintenance; there is no loan prepayment premium during the last 120 days of the loan term. (46) Prepayment premium is the greater of 1% or yield maintenance; there is no loan prepayment premium during the last three months of the loan term. (47) Prepayment premium is 5% from August 1, 2000 to July 30, 2001; thereafter decreasing to 1% per year to a minimum of 2%; there is no prepayment premium after May 1, 2010. (48) Interest only through May, 1997. Annual debt service of $728,976 on the maximum loan amount of $7,000,000 begins June, 1997. (49) The note is secured by rent payable by the Food Lion Anchor store. (50) Prepayment premium is 5%, decreasing by 1% per year to a minimum of 2%. There is no loan prepayment premium during the last 90 days of the loan term. (51) Lender has option to accelerate loan between October 1, 1996 and September 30, 1997; October 1, 2001 and September 30, 2002; October 1, 2006 and September 30, 2007; and October 1, 2011 and September 30, 2012. (52) The interest rate is floating at 175 basis points over LIBOR. Priced at December 31, 1996. The maximum loan amount is $42,000,000. (53) The loan can be extended for 3 one year periods with a fee of 1/4 point. Principal payments during the second extension are $100,000 each quarter and $150,000 per quarter during the third extension. (54) Interest rates on the credit lines are at various spreads over LIBOR whose weighted average interest rate is 6.81% with various maturities through 1999. (55) Represents non-recourse indebtedness on Properties and reflects the less than 100% ownership of the Company and the Operating Partnership with respect to certain Properties subject to such indebtedness. ITEM 3. LEGAL PROCEEDINGS. The Company and the Operating Partnership are not currently involved in any material litigation nor, to management's knowledge, is any material litigation currently threatened against the Company, the Operating Partnership, the Property Partnerships or the Properties, other than litigation arising in the ordinary course of business, most of which is expected to be covered by liability insurance. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. No matter was submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS. (a) MARKET INFORMATION The principal United States market in which the Common Stock is traded is the New York Stock Exchange.
The following table sets forth the high and low sales prices for the Common Stock for each quarter of the Company's two most recent fiscal years. <TABLE> 1995 Quarter Ended High Low ----------------------- ------- ------- <C> <S> <S> March 31............... $21.125 $18.875 June 30................ 20.250 19.125 September 30........... 22.000 19.875 December 31............ 22.000 20.125 1996 Quarter Ended High Low ----------------------- ------- ------- March 31............... $22.000 $20.375 June 30................ 22.875 19.750 September 30........... 23.500 21.500 December 31............ 25.875 22.750 </TABLE> (b) HOLDERS The approximate number of shareholders of record of the Common Stock was 322 as of March 24, 1997. (c) DIVIDENDS The following table sets forth the frequency and amounts of dividends declared and paid for each quarter of the Company's two most recent fiscal years. <TABLE> Quarter Ended 1995 1996 ----------------------- ------- ------- <S> <C> <C> March 31............... $0.3975 $0.4200 June 30................ 0.3975 0.4200 September 30........... 0.3975 0.4200 December 31............ 0.3975 0.4200 </TABLE> Future dividend distributions are subject to the Company's actual results of operations, economic conditions and such other factors as the Board of Directors of the Company deems relevant. The Company's actual results of operations will be affected by a number of factors, including the revenues received from the Properties, the operating expenses of the Company, the Operating Partnership and the Property Partnerships, interest expense, the ability of the anchors and tenants at the Properties to meet their obligations and unanticipated capital expenditures. ITEM 6. SELECTED FINANCIAL DATA. Information set forth under the caption "Selected Financial Data" on page 1 of the Company's 1996 Annual Report to Shareholders is incorporated herein by reference. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Information set forth under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" on page 14 of the Company's 1996 Annual Report to Shareholders is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. Consolidated Financial Statements of the Company and Report of Independent Public Accountants on page 22 and 35, respectively, of the Company's 1996 Annual Report to Shareholders is incorporated herein by reference. Reference is made to Item 14(a) of this report for the schedules to the Company's Consolidated Financial Statements. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. Incorporated herein by reference from the Company's definitive proxy statement filed on March 25, 1997 with the Securities and Exchange Commission (the "Commission") with respect to its Annual Meeting of Stockholders to be held on May 1, 1997. ITEM 11. EXECUTIVE COMPENSATION. Incorporated herein by reference from the Company's definitive proxy statement filed on March 25, 1997 with the Commission with respect to its Annual Meeting of Stockholders to be held on May 1, 1997. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. Incorporated herein by reference from the Company's definitive proxy statement filed on March 25, 1997 with the Commission with respect to its Annual Meeting of Stockholders to be held on May 1, 1997. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. Incorporated herein by reference from the Company's definitive proxy statement filed on March 25, 1997 with the Commission with respect to its Annual Meeting of Stockholders to be held on May 1, 1997.
PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K. (1) Financial Statements Incorporated herein by reference from page 22 of the Company's 1996 Annual Report to Shareholders. (2) Financial Statement Schedules Report of Independent Public Accountants Schedule III Real Estate and Accumulated Depreciation Schedule IV Mortgage Loans on Real Estate Financial Statement Schedules not listed herein are either not required or the information required to be included therein is included in the Company's Consolidated Financial Statements which are incorporated herein by reference from page 22 of the Company's 1996 Annual Report to Shareholders. (3) Exhibits Exhibit Number Description - -------- ------------------------------------------------- 3.1 Amended and Restated Certificate of Incorporation of the Company(a) 3.2 Amended and Restated Bylaws of the Company(a) 4 See Amended and Restated Certificate of Incorporation of the Company, relating to the Common Stock(a) 10.1 Partnership Agreement of the Operating Partnership(a) 10.2 Property Management Agreement between the Operating Partnership and the Management Company(a) 10.3 Property Management Agreement relating to Retained Properties(a) 10.4.1 CBL & Associates Properties, Inc. 1993 Stock Incentive Plan(a)
10.4.2 Non-Qualified Stock Option Agreement, dated May 10, 1994, for Charles B. Lebovitz 10.4.3 Non-Qualified Stock Option Agreement, dated May 10, 1994, for James L. Wolford 10.4.4 Non-Qualified Stock Option Agreement, dated May 10, 1994, for John N. Foy 10.4.5 Non-Qualified Stock Option Agreement, dated May 10, 1994, for Jay Wiston 10.4.6 Non-Qualified Stock Option Agreement, dated May 10, 1994, for Ben S. Landress 10.4.7 Non-Qualified Stock Option Agreement, dated May 10, 1994, for Stephen D. Lebovitz 10.4.8 Stock Restriction Agreement, dated December 28, 1994, for Charles B. Lebovitz 10.4.9 Stock Restriction Agreement, dated December 2, 1994, for John N. Foy 10.4.10 Stock Restriction Agreement, dated December 2, 1994, for Jay Wiston 10.4.11 Stock Restriction Agreement, dated December 2, 1994, for Ben S. Landress 10.4.12 Stock Restriction Agreement, dated December 2, 1994, for Stephen D. Lebovitz 10.5 Purchase Agreement relating to Frontier Mall(b) 10.6.1 Purchase Agreement relating to Georgia Square (JMB)(b) 10.6.2 Purchase Agreement Relating to Georgia Square (JCPenney)(b) 10.7 Purchase Agreement relating to Post Oak Mall(b) 10.8 Indemnification Agreements between the Company and the Management Company and their officers and directors(a) 10.9.1 Employment Agreement for Charles B. Lebovitz(a) 10.9.2 Employment Agreement for James L. Wolford(a) 10.9.3 Employment Agreement for John N. Foy(a) 10.9.4 Employment Agreement for Jay Wiston(a) 10.9.5 Employment Agreement for Ben S. Landress(a) 10.9.6 Employment Agreement for Stephen D. Lebovitz(a) 10.10 Subscription Agreement relating to purchase of the Common Stock and Preferred Stock of the Management Company(a) 10.11 Option Agreement relating to certain Retained Properties(a) 10.12 Option Agreement relating to Outparcels(a) 10.13.1 Property Partnership Agreement relating to Hamilton Place(a) 10.13.2 Property Partnership Agreement relating to CoolSprings Galleria(a) 10.14.1 Acquisition Option Agreement relating to Hamilton Place(a) 10.14.2 Acquisition Option Agreement relating to the Hamilton Place Centers(a) 10.14.3 Acquisition Option Agreement relating to the Office Building(a) 10.15 Revolving Credit Agreement between the Operating Partnership and First Tennessee Bank, National Association, dated as of March 2, 1994(c) 10.16 Revolving Credit Agreement, dated July 28, 1994, between the Operating Partnership and Wells Fargo Advisors Funding, Inc., NationsBank of Georgia, N.A. and First Bank National Association(d) 10.17 Revolving Credit Agreement, dated October 14, 1994, between the Operating Partnership and American National Bank and Trust Company of Chattanooga(e) 10.18 Revolving Credit Agreement, dated November 2, 1994, between the Operating Partnership and First Tennessee Bank National Association(e) 10.19 Promissory Note Agreement between the Operating Partnership and Union Bank of Switzerland dated May 5, 1995(f) 10.20 Amended and Restated Loan Agreement between the Operating Partnership and First Tennessee Bank National Association dated July 12, 1995(g) 10.21 Second Amendment to Credit Agreement between the Operating Partnership and Wells Fargo Realty Advisors Funding, Inc. dated July 5, 1995(g) 10.22 Consolidation, Amendment, Renewal, and Restatement of Notes between the Galleria Associates, L.P. and The Northwestern Mutual Life Insurance Company(h) 10.23 Promissory Note Agreement between High Point Development Limited Partnership and The Northwestern Mutual Life Insurance Company dated January 26, 1996(i)
10.24 Promissory Note Agreement between Turtle Creek Limited Partnership and Connecticut General Life Insurance Company dated February 14, 1996(i) 10.25 Amended and Restated Credit Agreement between the Operating Partnership and Wells Fargo Bank N.A. etal dated September 26, 1996. (j) 10.26 Promissory Note Agreement between the Operating Partnership and Compass Bank dated September 17, 1996. (j) 10.27 Promissory Note Agreement between St Clair Square Limited Partnership and Wells Fargo National Bank dated, December 11, 1996. 10.28 Promissory Note Agreement between Lebcon Associates and Principal Mutual Life Insurance Company dated, March 18, 1997. 10.29 Promissory Note Agreement between Westgate Mall Limited Partnership and Principal Mutual Life Insurance Company dated, February 16, 1997. 10.30 Amended and Restated Credit Agreement between the Operating Partnership and First Tennessee Bank etal dated February 24, 1997. 13 Company's 1996 Annual Report to Shareholders 21 Subsidiaries of the Company 23 Consent of Arthur Andersen LLP 24 Powers of Attorney (a) Incorporated by reference to Post-Effective Amendment No. 1 to the Company's Registration Statement on Form S-11 (No. 33-67372), as filed with the Commission on January 27, 1994. (b) Incorporated by reference to Amendment No. 2 to the Company's Registration Statement on Form S-11 (No. 33-67372), as filed with the Commission on October 26, 1993. (c) Incorporated herein by reference to the Company's Annual Report in Form 10-K for the fiscal year ended December 31, 1993.
(d) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994. (e) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1994. (f) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995. (g) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1995. (h) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1995. (i) Incorporated by reference to the Company's Annual Report in Form 10-K for the fiscal year ended December 31, 1995. (j) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1996. A management contract or compensatory plan or arrangement required to be filed pursuant to Item 14(c) of this report. (4) Reports on Form 8-K The outline from the Company's February 5, 1997 conference call with analysts regarding earnings (Item 5) was filed on February 5, 1997. Information on the acquisition of St. Clair Square in Fairview Heights, IL was filed on December 9, 1996. Information on the retirement of James. L Wolford Executive Vice President was filed on January 15, 1997. Information on the acqusition of St Clair Square in Fairview Heights, IL was filed as an 8-KA on January 15, 1997.
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CBL & ASSOCIATES PROPERTIES, INC. (Registrant) BY: Charles B. Lebovitz Chairman of the Board, President and Chief Executive Officer Dated: March 27, 1997 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signature Title Date _________________ Chairman of the Board, March 28, 1997 Charles B. Lebovitz Board, President and Chief Executive Officer(Principal Executive Officer) ____________________ John N. Foy Director, Executive March 28, 1997 Vice President, Chief Financial Officer and Secretary (Principal Financial Officer and Principal Accounting Officer) ____________________ Stephen D. Lebovitz Director, Senior March 28, 1997 Vice President and Treasurer ____________________ Claude M. Ballard Director March 28, 1997 ____________________ Leo Fields Director March 28, 1997 ____________________ William J. Poorvu Director March 28, 1997
____________________ Winston W. Walker Director March 28, 1997 ____________________ *By: Charles B. Lebovitz Attorney-in-Fact March 28, 1997
INDEX TO FINANCIAL STATEMENT SCHEDULES Report of Independent Public Accountants. . . . . . . . 42 Schedule III-Real Estate and Accumulated Depreciation . . . . . . . . . . . . . . . 43 Schedule IV- Mortgage Loans on Real Estate. . . . . . . 50
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors of CBL & Associates Properties, Inc.: We have audited in accordance with generally accepted auditing standards, the consolidated financial statements included in CBL & Associates Properties, Inc. annual report to shareholders incorporated by reference in this Form 10-K, and have issued our report thereon dated February 4, 1997. Our audit was made for the purpose of forming an opinion on those consolidated statements taken as a whole. The schedules listed in the accompanying index are the responsibility of the management of CBL & Associates Properties, Inc. and are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic consolidated financial statements. These schedules have been subjected to the auditing procedures applied in the audit of the basic consolidated financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to the basic consolidated financial statements taken as a whole. ARTHUR ANDERSEN LLP Chattanooga, Tennessee, February 4, 1997
H CBL & ASSOCIATES PROPERTIES, INC. SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION DECEMBER 31, 1996 <TABLE> (Dollars in Thousands) Gross Amounts at To The Company Costs Close Of Period -------------------- Capitalized Disposals --------------------------- Buildings Subsequent of Buildings Accumulated Date of Encumbrances And to Land And And Depreciation Construction Description (B) Land Improvements Acquisition Buildings Land Improvements Total(C) (D) / <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> Purchase Malls College Square $13,824 $2,954 $17,787 $3,073 $27 $2,927 $20,860 $23,787 $4,601 1987-1988 Morristown, TN Coolsprings Galleria 68,987 13,527 86,755 18,863 ---- 13,527 105,618 119,145 10,053 1989-1991 Nashville, TN Foothills Mall ---- 4,537 15,226 ---- ---- 4,537 15,226 19,763 ---- 1996 Maryville, TN Foothills Mall JCP ---- ---- 2,650 ---- ---- ---- 2,650 2,650 817 1983 Maryville, TN Frontier Mall 8,611 2,681 15,858 3,251 ---- 2,681 19,109 21,790 2,694 1984-1985 Cheyenne, WY Georgia Square (E ---- 2,982 31,071 3,262 ---- 2,983 34,332 37,315 4,689 1982 Athens, GA Hamilton Place 60,359 2,880 42,211 9,510 729 2,932 50,940 53,872 11,074 1986-1987 Chattanooga, TN Lakeshore Mall ---- 1,443 28,819 739 ---- 1,443 29,558 31,001 3,797 1991-1992 Sebring, FL Oak Hollow Mall 53,336 4,344 52,904 3,661 ---- 4,344 56,565 60,909 2,424 1994-1995 High Point, NC Pemberton Square ---- 1,191 14,305 3,279 186 581 18,008 18,589 4,222 1986 Vicksburg, MS Post Oak Mall (E) ---- 3,936 48,948 928 ---- 3,936 49,876 53,812 11,604 1984-1985 College Station, TX St. Clair Square 66,000 11,028 75,581 ---- ---- 11,028 75,581 86,609 204 1996 Fairview Heights, IL Turtle Creek Mall 34,713 2,345 26,418 6,677 ---- 3,535 31,905 35,440 2,638 1993-1995 Hattiesburg, MS Twin Peaks Mall ---- 1,873 22,022 10,248 65 1,768 32,310 34,078 7,669 1984 Longmont, CO Walnut Square (E) 1,347 50 15,138 4,442 ---- 50 19,580 19,630 7,013 1984-1985 Dalton, GA Westgate Mall 38,503 2,150 23,257 32,280 ---- 2,150 55,537 57,687 1,193 1995 Spartanburg, SC Associated Centers Coolsprings Xing (E) ---- 2,803 14,985 34 ---- 2,804 15,018 17,822 1,483 1991-1993 Nashville, TN Foothills Plaza (E) ---- 132 2,123 225 ---- 141 2,339 2,480 782 1984-1988 Maryville, TN Foothills Plaza Exp ---- 137 1,960 178 ---- 148 2,127 2,275 428 1984-1988 Maryville, TN Frontier Square ---- 346 684 63 86 260 747 1,007 195 1985 Cheyenne, WY Georgia Square Plaza 479 100 1,082 14 ---- 100 1,096 1,196 466 1984 Athens, GA Hamilton Corner 3,589 960 3,670 624 226 734 4,294 5,028 701 1986-1987 Chattanooga, TN Hamilton Crossing 5,228 3,318 4,387 421 1,370 1,948 4,808 6,756 1,185 1987 Chattanooga, TN Madison Plaza 2,850 473 2,888 115 ---- 473 3,003 3,476 255 1984 Huntsville, AL Pemberton Plaza ---- ---- 662 116 ---- ---- 778 778 186 1986 Vicksburg, MS Community Centers 34th St Crossing 1,703 1,102 2,743 39 ---- 1,023 2,861 3,884 532 1989 St. Petersburg, FL 58 Crossing 1,468 839 2,360 5 96 743 2,365 3,108 493 1988 Chattanooga, TN Anderson Plaza ---- 198 1,316 1,562 ---- 198 2,878 3,076 325 1983 Greenwood, SC Bartow Village 1,716 224 2,010 221 ---- 224 2,231 2,455 338 1989 Bartow, FL Beach Crossing ---- 725 1,749 122 107 623 1,866 2,489 402 1984 Myrtle Beach, SC Bennington Place 611 256 1,754 618 ---- 175 2,453 2,628 528 1988 Roanoke, VA BJ'S Plaza 3,609 170 4,735 ---- ---- 170 4,735 4,905 631 1991 Portland, ME Briarcliff Square 1,765 299 1,936 65 32 267 2,001 2,268 372 1989 Oak Ridge, TN Buena Vista Plaza ---- 830 1,476 (805) 20 604 877 1,481 186 1988-1989 Columbus, GA Bullock Plaza 1,027 98 1,493 ---- ---- 98 1,493 1,591 394 1986 Statesboro, GA Capital Crossing ---- 1,908 756 2,242 ---- 2,544 2,362 4,906 51 1995 Raleigh, NC Cedar Bluff Crossin 1,492 412 2,128 796 ---- 412 2,924 3,336 564 1987 Knoxville, TN Cedar Plaza ---- 206 1,845 89 ---- 206 1,934 2,140 384 1988 Cedar Springs, MI Centerview Plaza 1,418 246 1,584 691 ---- 197 2,324 2,521 485 1986 China Grove, NC Chestnut Hills (E) ---- 600 1,775 105 ---- 600 1,880 2,480 246 1992 Murray, KY Colleton Square 1,102 190 1,349 20 34 156 1,369 1,525 349 1986 Walterboro, SC Collins Park Common 1,491 25 1,858 3 ---- 25 1,861 1,886 345 1989 Plant City, FL Conway Plaza ---- 110 1,071 897 110 ---- 1,968 1,968 501 1984 Conway, SC Cosby Station 4,477 999 4,516 474 ---- 999 4,990 5,989 303 1993-1994 Douglasville, GA County Park Plaza ---- 196 1,500 93 56 140 1,593 1,733 276 1980 Scottsboro, AL Devonshire Place ---- 520 5,738 ---- ---- 520 5,738 6,258 29 1995-1996 Cary, NC Dorchester Crossing ---- 493 1,483 236 50 443 1,719 2,162 485 1985 Charleston, SC East Ridge Crossing 1,523 832 2,494 74 101 731 2,568 3,299 528 1988 Chattanooga, TN East Towne Xing (E) ---- 867 2,765 584 71 786 3,359 4,145 583 1989 Knoxville, TN Garden City Plaza (E) ---- 1,056 2,569 139 29 580 3,155 3,735 940 1984 Garden City, KS Genesis Square 1,134 227 1,435 939 ---- 223 2,378 2,601 213 1990 Crossville, TN Girvin Plaza ---- 898 1,998 99 142 756 2,097 2,853 325 1989-1990 Jacksonville, FL Greenport Towne Ctr 4,681 659 6,161 132 ---- 659 6,293 6,952 428 1993-1994 Hudson, NY Hampton Plaza 2,170 973 2,689 14 ---- 965 2,711 3,676 426 1989-1990 Tampa, FL Henderson Square 7,267 428 8,074 68 ---- 432 8,138 8,570 384 1994-1995 Henderson, NC Hollins Plantation 1,272 229 1,845 232 ---- 198 2,108 2,306 581 1985 Roanoke, VA Home Quarters Warehouse ---- 2,739 ---- 59 ---- 2,738 60 2,798 6 1994 South Portland, ME Jasper Square (E) ---- 235 1,423 592 ---- 235 2,015 2,250 494 1986 Jasper, AL Jean Ribaut Square 4,206 505 4,007 1,311 ---- 505 5,318 5,823 1,281 1983-1984 Beaufort, SC Jean Ribaut K-Mart ---- 317 2,065 654 ---- 340 2,696 3,036 324 1983-1984 Beaufort, SC Karns Corner 1,051 206 1,360 772 ---- 206 2,132 2,338 366 1987 Knoxville, TN Keystone Crossing 2,402 938 2,216 44 113 825 2,260 3,085 526 1989 Tampa, FL Kingston Overlook ---- 1,693 5,664 ---- ---- 1,693 5,664 7,357 ---- 1996 Knoxville, TN Lady's Island (E) ---- 300 2,323 237 ---- 300 2,560 2,860 284 1992 Beaufort, SC Lagrange Commons ---- 835 5,765 ---- ---- 835 5,765 6,600 17 1995-1996 Lagrange, NY Lakeshore Station ---- 200 401 10 ---- 200 411 611 29 1993-1994 Gainesville, GA Longview Crossing 485 ---- 1,308 ---- ---- ---- 1,308 1,308 269 1988 Hickory, NC Lowe's Plaza 5,363 1,427 4,440 (28) ---- 1,427 4,412 5,839 359 1992-1993 Joplin, MO Lunenburg Crossing ---- 1,020 2,308 (26) ---- 1,019 2,283 3,302 133 1993-1994 Lunenburg, MA North Creek Plaza ---- 98 1,201 38 ---- 97 1,240 1,337 146 1983 Greenwood, SC North Haven Crossin 8,667 3,229 8,061 1 ---- 3,229 8,062 11,291 722 1992-1993 North Haven, CT Northridge Plaza (E ---- 1,087 2,970 1,996 ---- 1,244 4,809 6,053 1,303 1984 Hilton Head, SC Northwoods Plaza 1,362 496 1,403 86 ---- 496 1,489 1,985 174 1995-1996 Albemarle, NC Oaks Crossing ---- 571 2,885 (1,146) 253 655 1,402 2,057 510 1988 Otsego, MI Orange Plaza ---- 395 2,111 4 ---- 395 2,115 2,510 255 1992 Roanoke, VA Park Village ---- 586 2,874 46 ---- 520 2,986 3,506 379 1990 Lakeland, FL Perimeter Place 1,805 764 2,049 290 ---- 770 2,333 3,103 628 1985 Chattanooga, TN Rawlinson Place ---- 279 1,573 46 ---- 292 1,606 1,898 372 1987 Rock Hill, SC Rhett At Remount ---- 67 1,877 848 ---- 67 2,725 2,792 420 1992 Charleston, SC Sattler Square (E) ---- 792 4,155 128 ---- 705 4,370 5,075 818 1988-1989 Big Rapids, MI Seacoast Shopping 6,079 1,374 4,164 2,558 179 1,195 6,722 7,917 862 1991 Seabrook, NH Shenandoah Crossing 610 122 1,382 7 ---- 115 1,396 1,511 295 1988 Roanoke, FL Signal Village ---- ---- 579 425 ---- ---- 1,004 1,004 210 1983-1984 Statesville, NC Southgate Crossing ---- ---- 1,002 ---- ---- ---- 1,002 1,002 257 1984-1985 Bristol, TN Sparta Crossing 932 180 1,463 29 ---- 145 1,527 1,672 275 1989 Sparta, TN Springs Crossing ---- ---- 1,422 908 ---- ---- 2,330 2,330 324 1987 Hickory, NC Statesboro Square (E) ---- 237 1,643 135 ---- 227 1,788 2,015 476 1986 Statesboro, GA Stone East Plaza (E ---- 266 1,635 51 49 217 1,686 1,903 557 1987 Kingsport, TN Suburban Center 5,325 3,223 3,796 1,228 ---- 3,223 5,024 8,247 185 1995 Knoxville, TN Surry Square ---- ---- 1,402 ---- ---- ---- 1,402 1,402 377 1985 Elkin, NC Tyler Square 2,021 196 2,021 (57) ---- 103 2,057 2,160 508 1986 Radford, VA Wal*Mart Plaza North ---- 545 1,216 (38) ---- 377 1,346 1,723 380 1985 Pueblo, CO Uvalde Plaza 867 574 1,506 (167) ---- 319 1,594 1,913 430 1987 Uvalde, TX Valley Commons 1,049 342 1,819 576 ---- 342 2,395 2,737 447 1988 Salem, FL Valley Crossing (E) ---- 2,390 6,471 3,843 37 3,034 9,633 12,667 1,382 1988 Hickory, NC Village At Wexford ---- 555 3,009 3 ---- 501 3,066 3,567 527 1989-1990 Cadillac, MI Village Square ---- 750 3,591 (340) 608 142 3,251 3,393 587 1989-1990 Houghton Lake, MI Wildwood Plaza ---- 429 1,082 1,103 72 357 2,185 2,542 495 1985 Salem, VA Willow Springs Plaza 6,182 2,917 6,107 4,985 ---- 2,917 11,092 14,009 1,142 1991 Nashua, NH Office Buildings Park Place 2,147 ---- 3,590 709 ---- 231 4,068 4,299 1,209 1984 Chattanooga, TN Disposals Chester Plaza ---- 774 1,524 ---- 2,298 ---- ---- ---- ---- 1995-1996 Iron Bridge, VA (F) Lakeshore Crossing ---- 1,723 3,446 (26) 5,143 ---- ---- ---- ---- 1993-1994 Gainesville, GA (F) Lowe's' Plaza ---- 1,154 4,690 13 5,857 ---- ---- ---- ---- 1993-1994 Benton Harbor, M (F) W Broad St Hannaford ---- 2,407 1,867 37 4,311 ---- ---- ---- ---- 1995 Richmond, VA (F) Lowe's Plaza --- 1,192 5,136 --- 6,328 --- --- --- --- 1991-1992 Adrian, MI (F) Other CBL & Associates, LP ---- ---- ---- ---- ---- ---- ---- ---- 775 ---- Westchester Mall ---- 7,000 10,000 ---- ---- 7,000 10,000 17,000 21 1996 Cortlandt, NY Developments in Progress, Consisting of Construction and Development Property 141,990 2,840 ---- 97,401 2,093 ---- 98,148 98,148 ---- ---- TOTALS $590,295 $132,974 $768,598 $231,102 $30,878 $119,965 $981,831 $1101796 $114,536 Schedule III (A) Initial cost represents the total cost capitalized including carrying cost at the end of the first fiscal year in which the property opened or was acquired. (B) Encumbrances represent the mortgage notes payable balances at December 31, 1996. (C) The aggregate cost of land and buildings and improvements for federal income tax purposes is approximately $935 million at December 31, 1996. (D) Depreciation for all properties is computed over the useful life which is generally forty years. (E) Property is pledged as collateral on the secured lines of credit used for development properties. (F) Lowes - Benton Harbor, Michigan, Lowes - Adrian, Michigan, West Broad St. Sam's - Richmond, Virginia, Chester Plaza - Iron Bridge, Virginia, Lakeshore Crossing - Gainesville, Georgia were sold during 1996. </TABLE> CBL & ASSOCIATES PROPERTIES, INC. REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION DECEMBER 31, 1996 The changes in real estate assets and accumulated depreciation for the years ending December 31, 1996, December 31, 1995, and December 31, 1994 (dollars in thousands): <TABLE> 1996 1995 1994 ------------ ------------ ------------ REAL ESTATE ASSETS: <S> <C> <C> <C> Balance at beginning of period $ 848,756 $ 747,228 $ 628,954 Additions during the period: Additions and improvements 165,035 75,533 115,872 Acquisitions of property 123,372 32,301 3,638 (Deductions) during the period: Cost of sales (34,720) (5,701) (1,236) Write-off of development projects (646) (605) Outparcel land transferred to CBL -- -- -- ------------ ------------ ------------ Balance at end of period $1,101,797 $ 848,756 $ 747,228 ============ ============ ============ ACCUMULATED DEPRECIATION: Balance at beginning of period $ 89,818 $ 67,503 $ 50,635 Accumulated Depreciation on properties sold (423) -- -- Depreciation Expense 25,141 22,315 16,868 ------------ ------------ ------------ Balance at end of period $ 114,536 $ 89,818 $ 67,503 ============ ============ ============ </TABLE>
Schedule IV CBL & ASSOCIATES PROPERTIES, INC. MORTGAGE LOANS ON REAL ESTATE AT DECEMBER 31, 1996 (dollars in thousands) <TABLE> Carrying Mortgages Monthly Balloon Face Amount Subject to Final Payment Payment Amount of Delinquent Interest Maturity Amount at Prior of Mortgage Principal Name of Center/Location Rate Date (1) Maturity Leins Mortgage (2) or Interest - ----------------------- -------- -------- ------- --------- ------ --------- --------- ----------- <S> <C> <C> <C> <C> <C> <C> <C> <C> COMMUNITY CENTERS Bi-Lo South 9.50% 12/96(3) $ 15 $ 1,598 None $ 1,608(3) $ 1,608 $ 0 Cleveland, TN Gaston Square 11.00% 10/97 15 1,621 None 1,637 1,637 0 Gastonia, NC Inlet Crossing 11.00% 10/97 27 1,942 None 1,942 1,942 0 Myrtle Beach, SC Olde Brainerd Centre 9.50% 12/06 20 2,746 None 2,792(3) 2,792 0 Chattanooga, TN Signal Hills Plaza 11.00% 10/97 20 2,267 None 2,306 2,306 0 Statesville, NC Soddy Daisy Plaza 9.50% 12/06 14 1,859 None 1,982(3) 1,982 0 Soddy Daisy, TN Other 10.00% 07/98- 2,591 2,591 0 09/03 ------- --------- ------ --------- --------- ----------- $111 $12,033 $14,858 $14,858 $ 0 ======= ========= ====== ========= ========= ============ (1) Equal monthly installments comprised of principal and interest unless otherwise noted. (2) The aggregate carrying value for federal income tax purposes is approximately $14,858 at December 31, 1996. (3) Mortgage has been extended on a month to month basis at the same terms while renegotiating mortgage extension. </TABLE> CBL & ASSOCIATES PROPERTIES, INC, <TABLE> Year Ended Year Ended Year Ended December 31, December 31, December 31, 1996 1995 1994 ------------ ------------ ------------ <S> <C> <C> <C> Beginning Balance $ 34,262 $ 32,651 $ 29,471 Additions 3,697 2,006 3,344 Other Reductions 19,908 0 0 Payments (3,193) 395 164 ------------ ------------ ------------ Ending Balance $ 14,858 $ 34,262 $ 32,651 ============ ============ ============ </TABLE>
Exhibit Number Description - -------- ------------------------------------------------- 3.1 Amended and Restated Certificate of Incorporation of the Company(a) 3.2 Amended and Restated Bylaws of the Company(a) 4 See Amended and Restated Certificate of Incorporation of the Company, relating to the Common Stock(a) 10.1 Partnership Agreement of the Operating Partnership(a) 10.2 Property Management Agreement between the Operating Partnership and the Management Company(a) 10.3 Property Management Agreement relating to Retained Properties(a) 10.4.1 CBL & Associates Properties, Inc. 1993 Stock Incentive Plan(a)
10.24 Promissory Note Agreement between Turtle Creek Limited Partnership and Connecticut General Life Insurance Company dated February 14, 1996(i) 10.25 Amended and Restated Credit Agreement between the Operating Partnership and Wells Fargo Bank N.A. etal dated September 26, 1996. (j) 10.26 Promissory Note Agreement between the Operating Partnership and Compass Bank dated September 17, 1996. (j) 10.27 Promissory Note Agreement between St Clair Square Limited Partnership and Wells Fargo National Bank dated, December 11, 1996. 10.28 Promissory Note Agreement between Lebcon Associates and Principal Mutual Life Insurance Company dated, March 18, 1997. 10.29 Promissory Note Agreement between Westgate Mall Limited Partnership and Principal Mutual Life Insurance Company dated, February 16, 1997. 10.30 Amended and Restated Credit Agreement between the Operating Partnership and First Tennessee Bank etal dated February 24, 1997. 13 Company's 1996 Annual Report to Shareholders 21 Subsidiaries of the Company 23 Consent of Arthur Andersen LLP 24 Powers of Attorney 27 Financial Data Schedule (a) Incorporated by reference to Post-Effective Amendment No. 1 to the Company's Registration Statement on Form S-11 (No. 33-67372), as filed with the Commission on January 27, 1994. (b) Incorporated by reference to Amendment No. 2 to the Company's Registration Statement on Form S-11 (No. 33-67372), as filed with the Commission on October 26, 1993. (c) Incorporated herein by reference to the Company's Annual Report in Form 10-K for the fiscal year ended December 31, 1993. (d) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994. (e) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1994. (f) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995. (g) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1995. (h) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1995. (i) Incorporated by reference to the Company's Annual Report in Form 10-K for the fiscal year ended December 31, 1995. (j) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1996. A management contract or compensatory plan or arrangement required to be filed pursuant to Item 14(c) of this report.