Katie A. Reinsmidt – Senior Vice President, Investor Relations and Corporate Investments Stephen D. Lebovitz – President and Chief Executive Officer Farzana K. Mitchell – Executive Vice President and Chief Financial Officer.

Todd M. Thomas – KeyBanc Capital Markets, Inc. Christy McElroy – Citigroup Global Markets Inc. Craig R. Schmidt – Bank of America Merrill Lynch Haendel E. St. Juste – Morgan Stanley & Co. LLC Andrew L. Rosivach – Goldman Sachs & Co. Carol L. Kemple – J.J.B. Hilliard, W.L. Lyons LLC Rich C. Moore – RBC Capital Markets Asset Management Ben J.

Yang – Evercore Partners (Securities) D. J. Busch – Green Street Advisors Michael W. Mueller – JPMorgan Securities LLC.

Ladies and gentlemen, thank you for standing by. And welcome to the CBL & Associates Properties’ First Quarter 2014 Conference Call. During the presentation, all participants will be in a listen-only-mode. Afterwards, we will conduct a question-and-answer session.

(Operator Instructions) As a reminder, this conference is being recorded Tuesday, April 29, 2014. I would now like to turn the conference over to Katie Reinsmidt, Senior Vice President, Investor Relations and Corporate Investments. Please go ahead..

Thank you and good morning. We appreciate your participation in the CBL & Associates Properties Inc., conference to discuss first quarter results. Joining me today are Stephen Lebovitz, President and CEO and Farzana Mitchell, Executive Vice President and CFO.

I will begin by quickly reading our Safe Harbor disclosures and we will then turn it over to Stephen for his remarks. This conference call contains forward-looking statements within the meanings of the federal securities laws. Such statements are inherently subject to risks and uncertainties.

Future events and actual results, financial and otherwise, may differ materially from the events and results discussed in the forward-looking statements. We direct you to the company’s various filings with the Securities and Exchange Commission, including without limitation, the Company’s most recent Annual Report on Form 10-K.

During our discussion today, references made to per share amounts are based on a fully diluted converted share basis. During this call, the Company may discuss non-GAAP financial measures as defined by SEC Regulation G.

A reconciliation of each non-GAAP financial measure to the comparable GAAP financial measure will be included in today’s earnings release that is furnished on Form 8-K along with a transcript of today’s comments and additional supplemental schedules.

This call will also be available for replay on the Internet through a link on our website at cblproperties.com..

Thank you, Katie and good morning. Before, we begin reviewing our first quarter results. I wanted to thank everyone who participated in our special update call earlier this month.

Where we outline the following goals and objectives, position our portfolio to produce sustained same center NOI growth of 2% to 4% increasing from the current range of 1% to 2%.

Increased percentage of mall NOI generated from Tier I and Tier II assets from 78% for 2013 to more than 90% over the next several years through divestitures of lower productivity assets and investments in higher growth assets.

Proactively take advantage of opportunities to upgrade both mall shop and anchor retailer through value-added redevelopment, and ongoing re-tenanting. Maintain and enhance to strength and flexibility to the balance sheet including growing the quality and size of the unencumbered asset tool and further improving key financial metrics.

The feedback we’ve received from investors and support of our strategy has been positive. And we’re committed to executing our plan as expeditiously as possible. Even though it is only been a few weeks since our call we wanted to provide an update of the latest advancements in our assets recycling efforts.

We are pleased to demonstrate progress with a binding contract for the sale of Lakeshore Mall, which we anticipate closing in May. We want to point out that including pending transactions we’re disposed of one dozen of the lowest productivity malls from our portfolio over the past several years.

Additionally we’ve entered into a non-binding contract for the sale of a small associated center; consistent with our plan to dispose of non-core assets. For the other three malls we’re marketing we’re negotiating with potential buyers, but are now yet at the contract stage.

These discussions include several parties for all three malls as well as for individual malls. We’re also making progress in our discussions for the seven malls that we’re working to sell in a privately marketed transaction.

We’ll update the market regularly on our progress and I want to reiterate our commitment to the successful execution of this plan. We’re confident that this process will better position CBL for future growth. I’ll now spend a few minutes reviewing our operational performance for the quarter.

In general we were pleased with our results as they reflect the positive impact of our strategic initiatives and our in line with our expectations and guidance. Same-center NOI accelerated despite the industry-wide headwinds from bankruptcies weather and sales.

Store closures have been higher this year than in the recent past with notable announcements from Coldwater Creek, Sbarro, Radio Shack and others. We are addressing the anticipated short-term impact by proactively releasing the space with expanding retailers.

For example of the 21 Sbarro locations we anticipate closing we have NOIs outer solid prospects for approximately two-thirds. We delivered strong leasing results in the first quarter with approximately 550,000 square feet of leases executed in the mall portfolio.

Average leasing spreads were up 9.5%, increases on newly leases were strong at 37.5% and renewals leases increased 2.4%. Renewal spreads in the first quarter are typically are lowered than the rest of the year as we complete a higher percentage of portfolio deals.

However, taking a broader view we have demonstrated consistent improvement over the past several years. In 2011, we reported renewal leasing spreads of 1.1% improving to 4.7% in 2012, and 5.9% in 2013. We are focused on continuing this trend in 2014.

Occupancy in the same-center mall pool improved 10 basis points with overall occupancy in the portfolio increasing 30 basis points to 92.5% rolling 12 months sales declined approximately 3% to $351 per square foot, as expected results were negatively impacted by the short in calendar in January, the impact of harsh winter weather and a late Easter holiday.

In addition to our North East and Midwest properties many of our malls in the South and South West were also meaningfully impacted by the sever weather. Retailers also remained highly promotional reducing prices for their merchandise and making it difficult to meet comp numbers.

Certain categories experienced growth such as athletic foot wear, eye wear and jewelry, but we saw a continued weakness in children’s, juniors and lady specialty apparel. Across the portfolio we have been proactively adding stronger names such as H&M, J. Crew, Oakley, Vera Bradley and Michael Kors as well as a number of restaurant concepts.

April sales have been encouraging as the better weather and Easter holiday engaged shoppers. We expect more positive sales reports over the next few months to counteract the difficult start to the year. I’ll now turn the call back over to Katie to provide an overview of our redevelopment and development pipeline..

Thank you, Stephen. We have a robust pipeline of redevelopments, expansions and new development where we need today, these projects aligned with our objected to upgrade our portfolios through investments and higher grade assets. First, I will review our current anchor redevelopment program before discussing our new redevelopment pipeline.

A College Square Mall, Morristown, Tennessee, we just completed the redevelopment of the former Sears into to T.J.Maxx in LongHorn Steakhouse, opening the project earlier this month to 10% initial un-leveraged return. The new stores have enjoyed a terrifically reception from the market and its helped spur additional leasing activity.

Burlington is under construction at our Northgate Mall Chattanooga, Tennessee. The new 63,000 square feet store is taking space formerly occupied by a Balcombe store in short space. And it is expected to open later this year.

Nordstrom Rack is under construction at West Towne Crossing, our associated center next to West Towne Mall in Madison, Wisconsin. The 31,000 square feet store replaces of form of Gander Mountain and it’s scheduled to open in the fall.

The next 14 day it’s under construction at our Monroeville Mall in Pittsburgh, Pennsylvania and remaining portion of the formal department stores space. The new store will open later this year.

We commenced construction on the series we development at Fayette Mall in Lexington, Kentucky, The Cheesecake Factory in H&M key stone retailers along with Michael Kors, [indiscernible] in the portfolio at first lots of time.

Construction in the Series E development in the CoolSprings Galleria, which includes Asheville first American Girl as well as Balcombe and H&M we’re commenced later this year, with the opening schedule for 2015. We’re making progress on releasing the three JCPenney least with JCPenney locations that are expected to close next month.

We’re moving forward with NOI’s from retailers on two locations and we’re working with department store to replace at third location. We have two expansions on a constructions at our outlook centers in Oklahoma and El Paso, there is 35,000 square feet extension at the Outlet Shoppes in Oklahoma City is underway with new retailers February 21.

A grand opening and scheduled for August. At the Outlet Shoppes at El Paso, we’ve broken ground on the 45,000 square feet expansion with H&M, Love Culture and Kate Spade, the grand opening in scheduled for late summer.

On the new development front construction is nearing completion that our outlet center in Louisville, Kentucky, with grand opening schedule for July, the center is 96% at least are committed with premier outlet brands including North based Banana Republic, Brooks Brothers, Chico's, Nike and Saks Fifth Avenue office.

We celebrated the grand opening of the first space of Fremaux Town Center in Slidell, Louisiana in March. The project opened over 95% leased with anchors including T.J.Maxx, Michael’s, Kohl’s and Dick’s. Construction on Phase II, which will be anchored by Dillard’s where we can shortly within opening schedule for October 2015.

Finally construction started this month on our latest community center project Parkway Plaza, a 134,000 square feet project in the Fort Oglethorpe, Georgia. At the opening in spring 2015, the 16 acres site will deliver several retailers that are new to the area, including anchor stores Hobby Lobby, Marshalls, and Petco.

I’ll now turn the call over to Farzana, to provide an update on financings as well as review of our financial performance..

Thank you Katie and good morning everyone. We’re pleased with the progress we’re making to enhance our financial metrics and provide further flexibility in our balance sheet. In January, we completed the early pay off of the $122 million loan secured by St. Clair Square in Fairview Heights, Illinois. Adding a strong asset to unencumbered pool.

Additionally, the foreclosure of Citadel Mall was completed, reducing secured debt by over $68 million. We recorded a gain of $43.9 million on the extinguishment of debt partially offset by prepayment fee of $1.2 million for the early retirement of the secured loan at St. Clair Square mall.

We ended the quarter with more than $918 million available on our lines of credit. Our financial covenants remained very sound with the fixed coverage ratio of 2.2 times as of March 31, 2014 compared with 2.1 times last year. Our bond covenants are well in excess of the minimum required and we expect continued improvement over time.

The secured debt to gross book value ratio was 39.7% at quarter end. As Stephen mentioned in his opening comments, our operating results was strong for the first quarter, despite various factors such as higher operating expenses related to severe weather conditions and pressure on retail sales.

Adjusted FFO was $0.52 per share compared with $0.53 per share a year ago. Major variances impacting FFO as compared with the prior year period include, higher base trends, net of the decline and percentage rents contributed $0.02 to the quarter.

A $0.05 dilutive impact from the equity rates through the ATM program in the second quarter of 2013 and the after sales completed last call. And a penny negative impact from higher bad debt, utility and snow removal expense, net of a favorable insurance reserve adjustments.

G&A as a percentage of total revenue was 5.7 percent for the quarter compared with 5.2% in the prior year period. Our cost recovery ratio for the first quarter declined to 93.2% from 95.4% in the prior year period as a result of higher operating expenses including utility and snow removal expense.

First quarter portfolio same-center NOI improved by 1.5% with the mall category increasing 1.6%. The leasing upgrades and expansions to our higher growth properties we have made over the past year were evident this quarter with minimum rents increasing $4 million on a same-center basis.

We also recorded a favorable insurance reserve adjustment of $1.1 million during the quarter following a review of our outstanding claims. However, this growth was partially offset by $3.8 million of weather and bankruptcy related items including a decline in percentage rents and an increase in bad debt, utilities and snow removal expense.

We are reaffirming adjusted FFO guidance for 2014 in the range of $2.22 to $2.26 per share. Our FFO guidance assumes same-center NOI growth in a range of 1% to 2%, flat to positive 25 basis point increase in occupancy throughout the year, and a sale of lake shore mall.

Our guidance does not include the impact of any future sales, bond issuances or acquisition. I will now turn the call over to Steven for concluding remarks. .

Thank you, Farzana. Thank you again for joining us this morning. While we are still in the early stages we are excited about the transformation of CBL into a more focused higher growth company.

Our results this quarter are indicative of the stability of our properties and we look forward to reporting continued progress on our strategic initiatives as the year unfolds. We are now happy to answer any questions you may have..

Operator:.

:.

Hi, thanks good morning, Jordan Sadler is also with me as well. Just first question on store closures and bankruptcies that you mentioned. I was just wondering if you could talk about what CBLs exposure is to cold water creek. And then also we heard recently Wet Seal is looking to close roughly 15 stores this year maybe another group next year.

And I was wondering if you had discussions with them and what you’re hearing particularly since you’ve signed a portfolio deal with them.

I guess not too long ago and what I believe was a temporary basis?.

Hi, thanks good morning, Jordan Sadler is also with me as well. Just first question on store closures and bankruptcies that you mentioned. I was just wondering if you could talk about what CBLs exposure is to cold water creek. And then also we heard recently Wet Seal is looking to close roughly 15 stores this year maybe another group next year.

And I was wondering if you had discussions with them and what you’re hearing particularly since you’ve signed a portfolio deal with them.

I guess not too long ago and what I believe was a temporary basis?.

Sure, just taking Wet Seal, we have not had discussions with Wet Seal as at this point, as far as closing any additional stores. There has been some correspondence with them about their R&D division, and then possibly doing something with that. We only have three stores with R&D and there in three of our top five malls.

So those we feel like would be readily releasable. And as far as Wet Seal in general they had been making a good recovery, but then their sales had a decrease towards the tail-end of last year. So we are watching them carefully and we’ll continue to see where that goes. I think your other question was Brookstone..

Coldwater.

Coldwater I’m sorry, okay.

So we have a 16 Coldwater Creek stores in the portfolio, total annual revenues are roughly $2.8 million again we feel like they are in good locations, in good malls we’ve got prospect that we are working on for a number of them and we feel very good about our ability to successfully release those locations with – there will be some down time, but with minimal down time..

Okay and then second – a question regarding the retail environment, clearly it’s changing and some of your peers are working together and investing in new ventures and partnerships, even it was the nominal dollar amounts, just help promote and improve the mall experience such as De Live [ph] for example, I know CBL is not involved with that partnerships specifically, but I’m just wondering if you can talk about what CBL is doing in this areas as them the mall business and environment evolves?.

Okay and then second – a question regarding the retail environment, clearly it’s changing and some of your peers are working together and investing in new ventures and partnerships, even it was the nominal dollar amounts, just help promote and improve the mall experience such as De Live [ph] for example, I know CBL is not involved with that partnerships specifically, but I’m just wondering if you can talk about what CBL is doing in this areas as them the mall business and environment evolves?.

Yeah, we actually have talked to De Live, we talked to them last year at the same time that other peers were doing so and they were only rolling the service in Chicago, San Francisco and LA and we didn’t have any malls in the market.

So we didn’t participate at any of the test sites at that time, but we are talking to them about this year about doing that.

We think that makes a lot of sense, it’s a great idea and it’s interesting to see how the customers reacted in terms of the added convenience of having people help them with the contour [ph] services, it’s still remains to be seen how much demand there is for same day delivery, but it does seem like just the convenience of it, is a factor that is something that the customer are looking for and it’s all part of enhancing the shopping experience.

And it’s something that honestly we spend time every day talking and thinking about what can we do to enhance to customer experience, whether it’s better stores, renovating our property which is something that we do on a regular basis, providing different types of retailer, adding more food, restaurants, opening stores like Dave and Busters and entertainment related uses that bring in different traffic.

So it’s all part of this experience American Girl, which we are doing our third in Asheville, CoolSprings coming to the expansion there is again type of retailer that provides a different experience for the customer so that’s a big part of it.

And also on the initiatives that our peers are doing we’re talking and watching those very closely and are involved in everything that they are as well..

Okay, that’s helpful.

Last question I was wondering if you could provide a cap rate on the Lakeshore mall transaction or put some context around that sale perhaps how the deal was negotiated?.

Okay, that’s helpful.

Last question I was wondering if you could provide a cap rate on the Lakeshore mall transaction or put some context around that sale perhaps how the deal was negotiated?.

Sure, it’s actually a 1031 buyer we can't give you the exact cap rate but I’ll tell you it’s low double-digits and it’s given the offset and it’s a sales level we feel like it’s very favorable pricing from our point of view..

Okay, thank you..

Okay, thank you..

Thanks..

Thank you, and our next question is from the line of Christy McElroy with Citi. Please go ahead your line is open..

Hi, good morning guys. Just a follow-up on the cap rate question to me disclose the cap rate on the purchase of the stake of (indiscernible).

And can you also provide some color on how we should we thinking about the impact of the P&L, I think I saw that the partner had an preferred return?.

Hi Christy, good morning..

Good morning..

This was a negotiated deal with the joint venture of a Teachers when we did the major joint venture with them few years ago. And the 12% interest that Teachers repurchase, was treated in our balance sheet as debt, and we just we had the option to buy it back and control that asset. And that’s what we had always planned to do.

And we have now repurchased it, controlled it we believe Houston market is a strong market and this property we expect it to get it into the Tier 2 overtime. So, on the cap rate question it was the blended cap rate at that time, so I don’t think it’s relevant to this 12% purchase, that did have an 8% preferred return which we paid them off..

Okay, and can you also discuss your decision to transfer gulf coast and Triangle Town into non-core bucket, there seem assets that you’d want to own longer term is not for the debt.

And how many more falls in your portfolio or you sort of falling to the same bucket where you are trying to work with the lender or servicer maybe renegotiate the loan or hand back to keys..

The decision to move them into non core primarily as you mentioned it is because of the debt issue, it is a debt and the equity in the project is pretty close and also our debt service coverage ratio its slightly above 10, so we are – our goal is really to restructure the debt if we can favorably do so over time, but if we cannot this will be another asset that we’ll be discussing with a lender if the favorable discussion on restructure does not come to provision.

So that’s the reason for it to be in the non-core..

Okay. And then just particularly in you top 10 list, it looks like you lost four limited stores, 7-foot lockers and five H&M stores.

Can you talk a little bit about those retailers and their long-term strategy within your malls?.

Yes, those were all just because of the sales of the properties that we get over the past year, so there weren’t any changes and in fact foot-locker is one of the best performing retailers in our malls, their expanding it and renovating the stores. We are doing new deals with them.

Foot action which is one of their divisions is read hard in terms of its performance. So their performance is very encouraging and we enjoy good relationships with all the retailers that you mentioned and there is no slowing down of the program with them..

It’s Michael Berman, I just wanted to come back just on working on the assets with the loans, if you go back to the strategic review you talked about one way of exiting some of the assets you don’t want to own to improve the core portfolio and have higher growth is handing back the keys.

It sounds like on Gulf Coast and Triangle those are assets that are good assets you would want to own that or within decent sales productivity, but you just have too much debt on them and are trying to renegotiate.

I guess, what we are trying to separate is how many more assets fit into that category, how many more of your assets that you want to own long-term have too much debt where you are going to have to try to renegotiate.

I know you’ve been working on Gulf Coast for a number of months already, but how many more assets fit into that category versus how many fit into the where they have too much picked on them, we could hand back the keys and we solve our strategic goals?.

Yes, Michael. Thank you for asking that, so we can clarify, we spend a lot of time and careful deliberation going through the properties that we put in the different buckets for the strategic review including the malls that we move to non-core like Gulf Coast and Triangle and that’s the list that we provided.

Beyond that there are properties that are in the disposition portfolio of the 21 malls that depending on how their performance is over the next couple of years, there could be an issue with the debt, but as of right now we don’t see that happening there’s solid positive cash flow.

So, I don’t think you need to consider adding anymore properties to that non-core, non-performing bucket at this time..

Well, thank you. In the case of Gulf Coast the debt is too much, but its sound like asset you would want a own long-term I just note there was more assets like that….

No, no. I mean we’ve got – I mean those are like you said that is high and the equity value is minimal and we need to work out structure at lender, but we definitely like to include does in the portfolio going-forward, there are good properties, good markets, but we have to have success and renegotiating the terms of the debt..

Right, in those assets if you can and they would effectively in the keys back but there is any other assets that where you’re about….

No, there is not..

I just no more – right – and so everything else that you potentially could hand back with actually you’re not going to try, there is no other work out, you’re trying to do if you have limited equity in our assets or no equity in our asset, though all those to be handed back..

That is correct..

And that is how many more malls that you plan on handing back.

Just where we are?.

The once we’ve listed..

So, that’s it. So that all – in that…..

Right, back in the bucket and we have – the once we know we’re working on and we’ll either handed back our restructure is in the bucket we’ve listed..

Right, then all the other 21 are actual asset sales its fall in Tier II and Tier III. .

That’s correct..

Okay. Sorry, it’s a little flow..

All right..

Thank you. And our next question is from the line of Craig Schmidt with Bank of America. Please go ahead your line is open..

Yes, there was a lifting the initially yield at Oklahoma City and El Paso. I just wonder that better leasing done at the malls at some other thing..

Yes, Craig. Good morning. It was actually a combination primarily was the cost came in lower than we originally budgeted bigger project. So, it’s easier to move the needle and it was primarily cost driven..

Okay, and then just looking at the sales performance in the per square foot business, it look like Tier I it was down 41 versus the 32 I think overall I guess I would have expected that in better is that explain by weather or another factor..

Yes, Craig, they were actually when we look at to Tier I malls, there were several considerations that impact the sales there.

Probably the biggest one was that with the delay in Easter, we have several malls in that portfolio that are on the broader and Easter is big or as big as Christmas for those market, so it had a disproportionate impact on them. The second factor is a couple of them are in a military market, where we had deployments occurring, so those impacted them.

Third is weather and everyone is blaming the weather, but with the malls we had a couple that were had severe ice storms and snowstorms.

And then the ones in the South are hardly ever impacted by winter weather like this year and what happens is that people just stay home, they’re afraid of getting stuck, they don’t have the snow removal equipment and so we lost the lot of days even if the malls were open, when people were just staying in home and not coming to the mall.

So its really just a combination of different factors that impacted Tier-1, I will say that we think its more of a blip and not something that will happen over time and that the Tier-1 resolves over time, we’ll continue to perform stronger than the other Tiers..

Okay, the good new is Easter was a little show in second quarter..

Yes, absolutely. .

Okay. Thank you..

Thanks Craig..

Thank you. And our next question is from the line of Haendel St. Juste with Morgan Stanley. Please go ahead your line is open..

Hi, thanks for taking my question..

Sure. Good morning..

Good morning, first question is on the same store NOI growth for the quarter up 1.6, which is better than any quarter last year when you were also getting occupancy in reporting positive leasing spreads, but the occupancy and uptick in leasing didn’t seem a flow through to NOI last year.

So just curious as to what’s different this quarter and has there been any change to the same store pool..

Can you repeat your question; again I’ve lost the last part of what you said..

Sure, I was pointing to the same store NOI growth in the quarter up 1.6 we saw last year where you are unable to get meaningful – much of any same store NOI growth when you were benefiting from occupancy upticks and positive leasing spreads.

So I was just curious as to what’s different in first quarter this year and were there any change to the same store pool..

Well there – a couple – I’m going to ask you – answer in several different components that impacted, obviously those lease spreads had a very positive impact in the first quarter. So all of the leasing activity we had last year had partially impact last year, but now we getting the full year impact or full quarter impact.

That’s number one, that’s a driving at both from the renewal spreads as well as the new lease up spreads. Secondly, our same kind pool of course did change. So the Tennessee that with last year debt did know for example of the outlet center of Oklahoma City is in the pool this year.

So that’s contributing, so we had some new projects that are in now in then same kind of pool that’s driving the results as well..

Okay and questions on your leasing strategy. In recent quarters you held back space as we more productive retailer versus back filling immediately other.

I was wonder if you had a rethink or reassessment of this strategy given well I guess a somewhat limited recent benefit and wondering also the long-term how you think about that strategy for your pro forma smaller more productive portfolio once you sell off that $1 billion to bill in the quarter, that’s you talked about..

Yes, good morning. We have not deviated from the strategy of replacing and upgrading with stronger retailers over time. And what we did see this quarter is the impact of the opening of some of those stores that were under construction last year.

So we had 580 new stores that opened in 2013 and now there in places in there they are producing rent in revenue for 2014.

We have another four under construction this year so at those malls there is a drag and that’s an impact and without that our NOI growth would be even better, but we still feel like over time its right strategy to pursue for the properties.

We’ve added boxes at a number of the centers and again it’s taking up difficult spaces in the end zones or entrances. There is downtime, but once they get opened, it produces as stronger center overall. So we feel like throughout strategy and we are committed to continuing it..

One more if I may just maybe I missed this, but I’m just curious that two further opportunities for refinancing on the balance sheet Farzana..

Yes. We would be refinanceing the joint venture properties, we are currently working on coastal grant that is coming up. And we should be ready to refinance that at the maturity date. So that’s the one joint venture property next year we’ll have more joint venture properties to refinance.

However, we do have maturing debt that we’ll be paying off from our lines of credit..

Thank you. .

Thank you and our next question is from the line Andrew Rosivach with Goldman Sachs. Please go ahead, your line is open. .

Good morning, guys. I just wanted something kind of high level, when you guys do strategy there, I think the biggest push back I got from my clients was including the stuff you would like to sell, there is arguably 50 B malls, 60 B malls in the U.S that are currently for sale.

And we think of the list of who has been buyers, call it Rouse, call it Staubach, call it Starwood. People are having a hard time lining up the demand that’s on the other side of the supply.

And I know you are in the midst of the negotiations and I certainly don't want to get to sensitive points, but can you provide any color as to the depth of the market either public players or private players that are really seriously bidding on your assets?.

Yes. Good morning Andrew. what I can provide is more anecdotal color, because obviously we can’t talk about specific buyers and who we are talking to and all that..

Of course, right yes..

The buyer pool that we’re accessing or going to is primarily private buyers. So it’s not the public companies and its buyers that have teamed up with private equity or international funding sources. And they feel like given the yields that are available for these assets, it’s very a attractive financial opportunity for them.

And that they see stability in the assets going forward. Not a lot of upside, not a lot of downside and that’s the same reason we are selling, because we don’t see the growth.

So we are – I hear you, there are lot of malls out there for sale and our peers are certainly joining in the party, but we’ve got good discussions going on, we feel like there is an adequate depth to the market in terms of who we are talking to. Like I said.

And certain groups are interested in individual malls, the buyer on Lakeshore is a regional buyer, it’s a 1031, it’s a small enough transaction that someone like that can make it work. And there are other parties that are looking to do portfolio deals. And we’ve got relationships with a lot of these people that over the years we’ve developed.

And like I said, we’ve sold a dozen malls over the past several years. And I don’t think we get any credit for that, but we’ve sold malls that for the most part have sales 250 or under and we’ve done over $700 million of dispositions in the past four years.

So its been a big part of our business and because of that we developed these relationships with both the brokers and the buyers and we are confident that we are going to be able to execute the plan that we outlines in our strategic call a couple of weeks ago..

You don’t get any credit if your strip mall rate you would have traded up last year when you sold those malls, but I’m also just curious, it seems like you have in the last 90 days, you have these three malls for sale and you sold those malls last year.

Is the timing of these deals closing any longer or shorter relative to the deals that you have done in recent years..

Unfortunately it takes time, and you have to go through a process and you have got educate people about the markets, get comfortable, I mean there is issues like JCPenney and Sears that people have to get comfortable with and the buyers aren’t, I mean they are thorough and they do a good job and they are smart and they want to do a good transaction.

So these deals have when they make their offers they put a lot of thought into the numbers and then there is due diligence. So it just takes time, it frustrates us like crazy.

We wish it could happen overnight as well, but again anything that happens this year with the three malls, given that the likelihood of closing would be third or even fourth quarter.

Its not going to have much of a dilutive effect impact on us, which why we didn’t include anything in guidance, but we are – we feel confident that we will be able to get these projects under contracts, these properties under contracts and also and then move on to the next ratchet. .

If we knew the kind of – if there is resolution that JCPenney was a going concern, would it make it easier to transact these malls?.

You know the JCPenny issues cuts both ways, because we are buyers that want to take back the department store spaces like JCPenney and redevelop it, and they view that as that they need to have an opportunity and they are looking to add value to properties.

So yes it would help and there is nothing we view out there as the sense that they are not a viable ongoing concern, but like we said in the call we expect them to close more stores in next year and that uncertainty is something that we got to deal with..

Is also any part of this financing contingencies where people are interested, but it’s subject to financing and that’s been kind of in owners process from the buyer side?.

Actually no, the buyers that we have been working with haven’t submitted that they are subject to financing we’ve tried to avoid that, because that can add a lot of time and uncertainty is the process. So, from our point of view we’ll trade off a few dollars for having more certainty of execution..

Understood. Thank you very much..

All right, Andrew. Thank you..

Thank you. And our next question is from the line of Carol Kemple with Hilliard Lyons. Please go ahead, your line is open..

Good morning.

Can you all give any color to how traffic in sales have been in your mall so far in April compared to last year?.

Sure. Good morning Carol. April has been great.

April it feels like the shopper is back, the holiday, the weather, its because of fewer so the traffic has been very good, retailers have informally reported but we look at impulse items, food courts and other food users and just the traffic that we’re hearing from our mall managers everything is positive. And we’re excited about that..

Okay, and I think earlier you mentioned one of the reasons for your sales decline was due to shorten calendar in January.

What exactly does that mean?.

January of this year had four weeks of selling compared to five weeks of selling in 2013. So it happens every six years and this was the year. So on a comparable basis there it was down to be a decrease its because of fewer selling days..

Okay, great. Thank you..

You’re welcome..

Thank you. And our next question is from the line of Rich Moore with RBC Capital Markets. Please go ahead, your line is open..

Hi, good morning guys..

Hi, Rich..

Good morning..

Good morning, the impairment you guys took this quarter was that Lakeshore or was that New York Stroud Randolph Group?.

Hi, Rich, good morning. It was two projects it was Chapel Hill and Lakeshore..

Okay, great, thank you.

And then follow-up for a second on Andrew’s question, I’m curious what the process for listing the additional assets you want to sell out of the 21 it’s sounds like you have three listed and seven that you are working privately and may be another 10 or 11 that haven’t been listed and meanwhile you’ve got Glimcher therefore example that’s got half the company listed and I’m curious should you have a reading listed to or how you are going about this I guess..

They only want to sell three or four so there are listing a branch in that’s the strategy and I think that is the best way they feel like they can execute that. Ours is a little different because we want to sell the 21 and we feel like we need to clear what we have out there and make progress before we flood the market with more.

So there is strategy does it more sequentially, but the benefit of having the private off market decisions as we can talk malls that are on the list without going to the formal listing process. So it does allows us to hopefully find a way to move this process long faster we’ve actually gotten a lot of reversed inquiries that came about from our call.

It was basically free advertising and we gotten calls from all over the place from people interested in certain parts of the country or certain assets. So it’s been a helpful process just to help us move things a long and we’re – so we are – we are moving ahead with it. And we feel good about the progress were making and will continue to push it..

Okay. So the Steve those seven that is in the private discussion.

Is that a special situation or is that like the next seven that are your going to put out there?.

We will see it’s a combination that we feel like its kind of good package that with some synergies and some just characteristics that makes sense to get one buyer..

Okay. Good, great, thanks. And then the recovery ratio if you could quick recovery ratio was strong this quarter and as on call it was down last quarter. As well I am wondering if what exactly that is.

Is that more bad debt or there is something else in that?.

Yes, Rich. Several things snow removal expense was higher we had high utility expenses this quarter a bad debt was a little bit higher although we had a good offset by our insurance claim adjustments that we made.

So if you take all of that in to consideration that is what really cost the recovery to drop a little bit and we do have fixed CAM so therefore we can’t passthrough some of these higher expenses although we do have annual increases and fixed CAM to make up for it like sometimes the quarterly numbers can be distorted..

Okay, great. Thanks, Farzana. Thank you, guys..

Okay, Rich. Thank you..

You’re welcome..

Thank you. And our next question is from the line of Ben Yang with Evercore. Please go ahead. Your line is open..

Ben J. Yang – Evercore Partners (Securities):.

:.

That mall has sales of 220 a foot, so I don’t think we ever expected it to have a single-digit cap rate and when we talked about during the call, it was blend of all the property.

So we developed our pricing expectation the range that we gave to be conservative and like I said we are not trying to squeeze the last penny out of this, but we haven’t also made any big change with our cap rate expectation just to try to move the stuff. So I mean hopefully that kind of gives you a sense of where we are thinking on this..

Okay, fair enough.

And obviously just curious, you talked about the higher winter related costs, obviously percentage rents, but were those costs baked into your prior guidance or are there any maybe positive surprises that offset some of these call at negative surprises hoping you guys essentially maintain your full year forecast?.

Yes, when we made our special presentation Ben, when we showed you the bridge, we had baked in some of the higher expenses and the offsets and therefore most of it is accounted for we also included the non-store closures and back filling all of that with the tenant that we are working with.

So the range that we’ve provided of the bankruptcy and fallout enclosure of $18 million to $19 million, that’s still the range we are working with, so unless something crazy happens we’ll come back and readjust our guidance and take a look at it again, but the positive, the negative were still in the same range..

Okay, and then maybe just final question I know it’s small investment, but I’m just kind of curious what’s the thought process behind spending any time in capital developing the small community centers like Parkway Plaza, just seems like you guys have a lot on it right already?.

Yes, I mean first of all it’s in our back yard in Chattanooga, so it’s really close and convenient from that point of view and it’s over the years it’s been a good source for us to generate equity through the development and the eventual sale of these assets.

And also most of these projects that we do are through assignments from retailers and the relationships with the retailers is a core competency for our business, and if they are signing us project opportunities so we can make a more then as long as they have a general fit with our strategy geographically or with our properties then we feel like make sense and that was the thinking behind this one..

That driven by the retailers I mean that is quite merchant build or guys thinking it’s a long-term wholes for the company..

No, and to them what we sell we’ve likely done in the past, we most to community centers, we build and stabilized and then we sell and allows us to retype of the capital..

Got it. Thank you..

Okay thanks..

You’re welcome..

Thank you. And our next question is from the line of D. J. Busch with Green Street Advisors. Please go ahead. Your line is open. .

Thank you.

Just looking out of the present of the NOI by the better different Tiers understand there was a mix change just removing Gulf Coast and trying a lot of the Tier II but its look like NOI drop considerably as percent of the portfolio I think somewhere from 50% down to 45%, understand it some of the if you got mix what was the growth in NOI or can you gives us little color on the NOI changes in the different Tiers and why it look like the Tier II may decelerated?.

Hey D.J. its actually it changed the way that we report on that page that were reporting percent of total mall NOI and last quarter we reported a percent a total same center-mall NOI. .

Okay.

So there was a material change if there was a – if the reporting was kind of like-for-like?.

Yes, exactly. So last quarter of non-core was zero because it not included in same center and this quarter its 3% because now were reporting it on total. And that was request actually I think a couple of analyst asked to see about way rather than the same center..

Okay. And then we are students just going through one year early marks the as the selling in associates and I am just to be clear due own the mall taxes that is associate center is there one of the one that maybe candidate for sale..

Yes. it is an associate center next to a mall that we haven’t but its really a unique situation where the part that were selling to part a building next to it and its trying to do redevelopment.

So its that they came to us and approach buying and its very small dollars and there is actually still another associate center that with the mall that is more kind of stable long-term that is brought redevelopment opportunity if we sold the mall we would sold the associate center with that..

Okay, so there is no change in your thought process as far the operationally synergies that you get with – owning the associated center with your malls?.

Right, that’s correct and as we sell a mall then we would typically sell these associated center with that, but as long as we keep the mall then we feel like there is a lot of benefits to holding them together..

Okay. Great, thank you..

Thank you..

Thank you. And our next question is from the line of Michael Mueller with JPMorgan. Please go ahead, your line is open..

Hi, just thinking about this whole portfolio transition from an earnings perspective.

I mean when you come out the other side say two or three years from now, your current guidance is end of 220, do you think you will be able to kind of hold the line on that rough earnings level or do you think you will have some dilution from it once you to come out the other side?.

We feel like we’ll be at that level and hopefully even beyond with the reinvestment opportunities and we’ve been conservative with our reinvestment assumption, there will be short-term dilution based on the timing of the sales and how much we do at anyone time but once we get through it all, the $0.16 to $0.21 dilution will make up for that and we look to grow beyond that.

that’s the whole reason we are going though this..

Okay, and when you talked at that beginning I think you used the term accelerated our expedited, I mean is that even more accelerated from the call a few weeks ago or is that just on the similar timeframe..

No similar timeframe, but again we said in the call that we want to – if we can accelerate it we will and our goal is to do it sooner than the timeframe that we mentioned in the call, so nothing has changed since the call a couple of weeks ago..

Okay. That was it Thanks..

Thank you..

Thank you. And there are no further questions in queue. I will turn the call back to Ms. Reinsmidt..

Well thank you all for joining us today. We look forward seeing many of you all at ITSC [ph] and at NAREIT as well. Thanks..

Thank you. Ladies and gentlemen that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines..