CBL & ASSOCIATES PROPERTIES INC

Same-center Net Operating Income

NOI is a supplemental non-GAAP measure of the operating performance of our shopping centers and other properties. We define NOI as property operating revenues (rental revenues and other income) less property operating expenses (property operating, real estate taxes and maintenance and repairs).

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

Since NOI includes only those revenues and expenses related to the operations of our shopping center properties, we believe that same-center NOI provides a measure that reflects trends in occupancy rates, rental rates, sales at our properties and operating costs and the impact of those trends on our results of operations. Our calculation of same-center NOI excludes lease termination income, straight-line rent adjustments, amortization of above and below market lease intangibles and write-offs of landlord inducement assets in order to enhance the comparability of results from one period to another.

We include a property in our same-center pool when we have owned all or a portion of the property since January 1 of the preceding calendar year and it has been in operation for both the entire preceding calendar year and current year-to-date period. New properties are excluded from same-center NOI until they meet these criteria. Properties excluded from the same-center pool that would otherwise meet these criteria are categorized as excluded properties. We exclude properties which are under major redevelopment or are being considered for repositioning, and where we are working or intend to work with the lender on a restructure of the terms of the loan secured by the property or convey the secured property to the lender (“Excluded Properties”). As of September 30, 2025, Brookfield Square, Harford Mall, Laurel Park Place, and Southpark Mall were classified as Excluded Properties. Fremaux Town Center also was considered an Excluded Property because it was in the process of being sold.

Due to the exclusions noted above, same-center NOI should only be used as a supplemental measure of our performance and not as an alternative to GAAP operating income (loss) or net income (loss).

A reconciliation of our same-center NOI to net income for the three and nine months ended September 30, 2025 and 2024 is as follows (in thousands):

(1)

Adjustments are based on our Operating Partnership's pro rata ownership share, including our share of unconsolidated affiliates and excluding noncontrolling interests' share of consolidated properties.

Same-center NOI increased 1.1% for the three months ended September 30, 2025 as compared to the prior-year period. The $1.1 million increase for the three months ended September 30, 2025 compared to the same period in 2024 primarily consisted of a $0.7 million increase in revenues and a $0.4 million decrease in operating expenses. Rental revenues were $0.3 million higher primarily due to higher minimum rents and percentage rents in the current-year period. The increase in rental revenues was partially offset by an unfavorable variance in the estimate for uncollectable revenues during the current-year period as compared to the prior-year period. Property operating expenses decreased in the current-year period primarily due to lower real estate taxes in the current-year period, which was partially offset by higher property operating expenses related to utilities and maintenance.

Same-center NOI decreased 0.6% for the nine months ended September 30, 2025 as compared to the prior-year period. The $1.7 million decrease for the nine months ended September 30, 2025 compared to the same period in 2024 primarily consisted of a $4.7 million increase in revenues offset by a $6.4 million increase in operating expenses. Rental revenues were $4.2 million higher primarily due to higher minimum rents and tenant reimbursements in the current-year period. The increase in rental revenues was partially offset by lower percentage rents and an unfavorable variance in the estimate for uncollectable revenues during the current-year period as compared to the prior-year period. Property operating expenses increased in the current-year period primarily due to higher property operating expenses related to utilities and maintenance, which was partially offset by lower real estate taxes in the current-year period.

Operational Review

The shopping center business is, to some extent, seasonal in nature with tenants typically achieving the highest levels of sales during the fourth quarter due to the holiday season, which generally results in higher percentage rents in the fourth quarter. Additionally, malls, lifestyle centers and outlet centers earn a large portion of their rents from short-term tenants during the holiday period. Thus, occupancy levels and revenue production are generally the highest in the fourth quarter of each year. Results of operations realized in any one quarter may not be indicative of the results likely to be experienced over the course of the fiscal year.

We derive the majority of our revenues from the malls, lifestyle centers and outlet centers. The sources of our revenues by property type were as follows:

Inline and Adjacent Freestanding Tenant Store Sales

Inline and adjacent freestanding tenant store sales include reporting mall, lifestyle center and outlet center tenants of 10,000 square feet or less and exclude license agreements, which are retail leases that are temporary or short-term in nature and generally last more than three months but less than twelve months. The following is a comparison of our same-center tenant sales per square foot for mall, lifestyle center and outlet center tenants of 10,000 square feet or less (Excluded Properties are not included in sales metrics):

Occupancy

Our portfolio occupancy is summarized in the following table (Excluded Properties are not included in occupancy metrics):

Leasing

The following is a summary of the total square feet of leases signed in the three and nine months ended September 30, 2025 and 2024:

Average annual base rents per square foot are based on contractual rents in effect as of September 30, 2025 and 2024, including the impact of any rent concessions. Average annual base rents per square foot for comparable small shop space of less than 10,000 square feet were as follows for each property type:

(1)

Excluded Properties are not included.

Results from new and renewal leasing of comparable small shop space of less than 10,000 square feet during the nine months ended September 30, 2025 for spaces that were previously occupied, based on the contractual terms of the related leases inclusive of the impact of any rent concessions, are set forth below. Rent concessions typically consist of periods of free rent. The impact of such concessions was not material for the period presented below.

(1)

Includes malls, lifestyle centers, outlet centers, open-air centers and other.

(2)

The change is primarily driven by malls.

New and renewal leasing activity of comparable small shop space of less than 10,000 square feet based on the lease commencement date is as follows:

Liquidity and Capital Resources

As of September 30, 2025, we had $313.0 million available in unrestricted cash and U.S. Treasury securities. Our total pro rata share of debt, excluding unamortized deferred financing costs and debt discounts, at September 30, 2025 was $2,679.4 million. We had $88.0 million in restricted cash at September 30, 2025 related to cash held in escrow accounts for insurance, real estate taxes, capital expenditures and tenant allowances as required by the terms of certain mortgage notes payable, as well as amounts related to cash management agreements with lenders of certain property-level mortgage indebtedness, which are designated for debt service and operating expense obligations. We also had restricted cash of $21.4 million related to the properties that secure the corporate term loan and the 2032 non-recourse bank loan (previously referred to as the "open-air centers and outparcels loan") of which we may receive a portion via distributions semiannually and quarterly in accordance with the provisions of the term loan and the 2032 non-recourse bank loan, respectively.

During the nine months ended September 30, 2025, we continued to reinvest the cash from maturing U.S. Treasury securities into new U.S. Treasury securities. We designated our U.S. Treasury securities as available-for-sale. As of September 30, 2025, our U.S. Treasury securities have maturities through July 2026. Subsequent to September 30, 2025, we redeemed and purchased additional U.S. Treasury securities. See Note 15 for more information.

In January 2025, we acquired four Macy's stores for $6.2 million, which include land, buildings and improvements, for future redevelopment at the respective properties. In July 2025, we closed on the acquisition of four malls for $179.7 million including transaction costs. The malls include Ashland Town Center in Ashland, KY, Mesa Mall in Grand Junction, CO, Paddock Mall in Ocala, FL, and Southgate Mall in Missoula, MT. See Note 6 for more information.

During the nine months ended September 30, 2025, we sold five properties, six outparcels and three land parcels, which generated gross proceeds of $172.3 million at our share. Net proceeds from those sales were used to pay down the 2032 non-recourse bank loan (previously referred to as the "open-air centers and outparcels loan"), pay down the secured term loan and fund the acquisition of the four malls acquired in July 2025. Subsequent to September 2025, the Company sold its interest in Fremaux Town Center to its joint venture partner. See Note 15 for more information.

During the nine months ended September 30, 2025, we exercised the extension option on the loan secured by Fayette Mall, entered short-term loan extensions for the loans secured by The Outlet Shoppes at Laredo and York Town Center and closed on new loans secured by Cross Creek Mall and The Pavilion at Port Orange. Additionally, we modified the loans secured by Coastal Grand Mall and Coastal Grand Crossing and the 2032 non-recourse bank loan (previously referred to as the "open-air centers and outparcels loan"), which extended the maturity dates, increased the interest rates and increased the principal balance on the 2032 non-recourse bank loan by $110.0 million to fund the acquisition of four malls. In March 2025, the Alamance Crossing East foreclosure process was completed. Alamance Crossing East had an outstanding loan balance of $41.1 million prior to completion of the foreclosure process. In July 2025, Southpark Mall entered default and the property was placed into receivership. As of September 30, 2025, the loan secured by Southpark Mall had an outstanding balance of $48.3 million. Subsequent to September 30, 2025, we were notified by the lender that the loan secured by The Outlet Shoppes at Gettysburg was in maturity default and we are in discussions with the lender regarding a loan modification. See Note 15. Also, subsequent to September 30, 2025, we exercised the extension option on two loans, sold our joint venture interest in an encumbered property and sold an encumbered parcel. See Note 15 for more information.

We paid common stock dividends of $0.40 per share in each of the first and second quarters of 2025 and $0.45 per share in the third quarter of 2025. Additionally, our board of directors declared a special dividend of $0.80 per share of common stock, which was paid in cash during the first quarter of 2025. The special dividend was made to ensure that we meet the minimum requirement to maintain our status as a REIT. Subsequent to September 30, 2025, our board of directors declared a regular cash dividend of $0.45 per share for the quarter ending December 31, 2025 and authorized a new $25.0 million share repurchase program. See Note 15 for more information.

As of September 30, 2025, our total share of consolidated, unconsolidated and other outstanding debt, excluding debt discounts and deferred financing costs, maturing during 2025, assuming all extension options are elected, is $10.6 million.

Cash Flows - Operating, Investing and Financing Activities

There was $162.0 million of cash, cash equivalents and restricted cash as of September 30, 2025, an increase of $20.5 million from September 30, 2024. Of this amount, $52.6 million was unrestricted cash and cash equivalents as of September 30, 2025. Also, at September 30, 2025, we had $260.4 million in U.S. Treasuries with maturities through July 2026.

Our net cash flows are summarized as follows (in thousands):

Cash Provided By Operating Activities

Cash provided by operating activities increased primarily due to the consolidation of three malls in December 2024, as well as the acquisition of four malls in July 2025. The increase was partially offset by the sales of The Promenade, 840 Greenbrier Circle, Layton Hills properties, the Monroeville properties and Imperial Valley Mall since the prior-year period.

Cash (Used In) Provided By Investing Activities

Cash used in investing activities increased primarily due to the acquisition of four malls in July 2025, as well as a higher amount of additions of real estate assets and a lower amount of net redemptions of U.S. Treasury securities during the current-year period. The increase was partially offset by net proceeds from the sales of the Layton Hills properties, the Monroeville properties, Imperial Valley Mall, The Promenade and 840 Greenbrier Circle since the prior-year period.

Cash Used In Financing Activities

Cash used in financing activities decreased primarily due to proceeds from new financings in the current-year period and a lower amount of repurchases of common stock as compared to the prior-year period. The decrease was partially offset by an increase in principal payments and the payment of a first quarter 2025 special dividend during the current-year period as compared to the prior-year period.

Debt

The following tables summarize debt based on our pro rata ownership share, including our pro rata share of unconsolidated affiliates and excluding noncontrolling interests’ share of consolidated properties. Prior to consideration of unamortized deferred financing costs or debt discounts, of our $2,679.4 million outstanding debt at September 30, 2025, $2,676.6 million constituted non-recourse debt obligations and $2.8 million constituted recourse debt obligations. We believe the tables below provide investors and lenders a clearer understanding of our total debt obligations and liquidity (in thousands):

(1)

Represents the outstanding loan balance for properties in receivership. Receivership properties are deconsolidated due to a loss of control when the property is placed into receivership in connection with the foreclosure process.

(2)

Weighted-average interest rate excludes amortization of deferred financing costs.

(3)

This loan was previously referred to as the "open-air centers and outparcels loan." The loan was modified in July 2025. The interest rate is now a fixed 7.70% for $367,956 of the outstanding loan balance through July 2030, with the remaining loan balance bearing a variable interest rate based on the 30-day SOFR plus 4.10%. The full principal balance will convert to a variable rate after July 2030. The Operating Partnership has an interest rate swap on a notional amount of $32,000 related to the variable portion of the loan to effectively fix the interest rate at 7.3975%.

(4)

In conjunction with the acquisition of the Company's partner's 50% joint venture interests in CoolSprings Galleria, Oak Park Mall and West County Center and the implementation of fresh start accounting upon emergence from bankruptcy, the Company estimated the fair value of its mortgage notes with the assistance of a third-party valuation advisor. This resulted in recognizing a debt discount, which is accreted over the term of the respective debt using the effective interest method.

The weighted-average remaining term of our total share of consolidated and unconsolidated debt, excluding debt discounts and deferred financing costs, was 2.6 years and 2.4 years at September 30, 2025 and December 31, 2024, respectively. The weighted-average remaining term of our pro rata share of fixed-rate debt, excluding debt discounts and deferred financing costs, was 3.3 years and 3.0 years at September 30, 2025 and December 31, 2024, respectively.

As of September 30, 2025 and December 31, 2024, our total share of consolidated and unconsolidated variable-rate debt, excluding debt discounts and deferred financing costs, represented 28.3% and 34.5%, respectively, of our total pro rata share of debt, excluding debt discounts and deferred financing costs.

See Note 8 to the condensed consolidated financial statements for information concerning activity related to unconsolidated affiliates. Subsequent to September 30, 2025, we were notified by the lender that the loan secured by The Outlet Shoppes at Gettysburg was in maturity default and we are in discussions with the lender regarding a loan modification. See Note 15. Also, subsequent to September 30, 2025, we exercised the extension option on one loan, sold our joint venture interest in an encumbered property and sold an encumbered outparcel. See Note 15 for more information.

Equity

We paid common stock dividends of $0.40 per share in each of the first and second quarters of 2025 and $0.45 per share in the third quarter of 2025. Additionally, our board of directors declared a special dividend of $0.80 per share of common stock, which was paid in cash during the first quarter of 2025. The special dividend was made to ensure that we meet the minimum requirement to maintain our status as a REIT. The decision to declare and pay dividends on any outstanding shares of our common stock, as well as the timing, amount and composition of any such future dividends, will be at the sole discretion of our board of directors and will depend on our earnings, taxable income, FFO, liquidity, financial condition, capital requirements, contractual prohibitions or other limitations under our then-current indebtedness, the annual distribution requirements under the REIT provisions of the Internal Revenue Code, Delaware law and such other factors as our board of directors deems relevant. Any dividends payable will be determined by our board of directors based upon the circumstances at the time of declaration. Our actual results of operations will be affected by a number of factors, including the revenues received from our properties, our operating expenses, interest expense, capital expenditures and the ability of the anchors and tenants at our properties to meet their obligations for payment of rents and tenant reimbursements.

Subsequent to September 30, 2025, our board of directors declared a regular cash dividend of $0.45 per share for the quarter ending December 31, 2025 and authorized a new $25.0 million share repurchase program. See Note 15 for more information.

Capital Expenditures

The following table, which excludes expenditures for developments, redevelopments and expansions, summarizes our capital expenditures, including our share of unconsolidated affiliates' capital expenditures, for the three and nine months ended September 30, 2025 compared to the same period in 2024 (in thousands):

(1)

Tenant allowances primarily relate to new leases. Tenant allowances related to renewal leases were not material for the periods presented.

Annual capital expenditures budgets are prepared for each of our properties that are intended to provide for all necessary recurring and non-recurring capital expenditures. We believe that property operating cash flows, which include reimbursements from tenants for certain expenses, and readily available cash on hand will provide the necessary funding for these expenditures.

Developments

Properties Opened During the Nine Months Ended September 30, 2025

(Dollars in thousands)

Properties Under Development at September 30, 2025

(Dollars in thousands)

(1)

Total Cost is presented net of reimbursements to be received.

(2)

Cost to Date does not reflect reimbursements until they are received.

Off-Balance Sheet Arrangements

Unconsolidated Affiliates

We have ownership interests in 24 unconsolidated affiliates as of September 30, 2025 that are described in Note 8 to the condensed consolidated financial statements. The unconsolidated affiliates are accounted for using the equity method of accounting and are reflected in the condensed consolidated balance sheets as investments in unconsolidated affiliates.

The following are circumstances when we may consider entering into a joint venture with a third party:

•

Third parties may approach us with opportunities in which they have obtained land and performed some pre-development activities, but they may not have sufficient access to the capital resources or the development and leasing expertise to bring the project to fruition. We enter into such arrangements when we determine such a project is viable and we can achieve a satisfactory return on our investment. We typically earn development fees from the joint venture and provide management and leasing services to the property for a fee once the property is placed in operation.

•

We determine that we may have the opportunity to capitalize on the value we have created in a property by selling an interest in the property to a third party. This provides us with an additional source of capital that can be used to develop or acquire additional real estate assets that we believe will provide greater potential for growth. When we retain an interest in an asset rather than selling a 100% interest, it is typically because this allows us to continue to manage the property, which provides us the ability to earn fees for management, leasing, development and financing services provided to the joint venture.

•

We also pursue opportunities to contribute available land at our properties into joint venture partnerships for development of primarily non-retail uses such as hotels, office, self-storage and multifamily. We typically partner with developers who have expertise in the non-retail property types.

Guarantees

We may guarantee the debt of a joint venture primarily because it allows the joint venture to obtain funding at a lower cost than could be obtained otherwise. This results in a higher return for the joint venture on its investment, and a higher return on our investment in the joint venture. We may receive a fee from the joint venture for providing the guaranty. Additionally, when we issue a guaranty, the terms of the joint venture agreement typically provide that we may receive indemnification from the joint venture or have the ability to increase our ownership interest.

See Note 12 to the condensed consolidated financial statements for information related to our guarantees of unconsolidated affiliates' debt as of September 30, 2025 and December 31, 2024.

Critical Accounting Policies

Our discussion and analysis of financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the financial statements and disclosures. Some of these estimates and assumptions require application of difficult, subjective, and/or complex judgment about the effect of matters that are inherently uncertain and that may change in subsequent periods. We evaluate our estimates and assumptions on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Our Annual Report on Form 10-K for the year ended December 31, 2024 contains a discussion of our critical accounting policies and estimates in the Management's Discussion and Analysis of Financial Condition and Results of Operations section. There have been no material changes to these policies and estimates during the nine months ended September 30, 2025. Our significant accounting policies are disclosed in Note 2 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Non-GAAP Measure