CBL & ASSOCIATES PROPERTIES INC

Results of Operations

Properties that were in operation for the entire year during 2025 and the nine months ended September 30, 2026 are referred to as the "Comparable Properties." Since January 2025, we have opened, acquired, deconsolidated and disposed of the following properties:

Properties Opened

(1)

The property is owned by a joint venture that is accounted for using the equity method of accounting and is included in equity in earnings of unconsolidated affiliates in the accompanying condensed consolidated statements of operations.

Acquisitions

Deconsolidations

Dispositions

(1)

The property was owned by a joint venture that was accounted for using the equity method of accounting and was included in equity in earnings of unconsolidated affiliates in the accompanying condensed consolidated statements of operations.

We consider properties undergoing major redevelopment, properties being considered for repositioning, properties where we intend to renegotiate the terms of the debt secured by the related property or return the property to the lender as non-core. As of September 30, 2026, Arbor Place, Brookfield Square, Eastland Mall, Harford Mall, Jefferson Mall, Laurel Park Place, Old Hickory Mall, Parkdale Mall, Parkdale Crossing, Southpark Mall, The Outlet Shoppes at Gettysburg, Volusia Mall and York Galleria were designated as non-core.

Comparison of the Three Months Ended September 30, 2026 to the Three Months Ended September 30, 2025

Rental revenues increased partially due to the acquisition of four malls in July 2025 and one mall in March 2026, which resulted in an increase of $5.7 million during the current period. Also, rental revenues at the comparable properties increased $5.8 million compared to the prior period. The increase was partially offset by $2.8 million of rental revenues associated with properties sold or deconsolidated since the prior period.

Operating Expenses

Total property operating expenses increased during the current period primarily due to higher real estate tax and maintenance and repair expenses. The acquisition of four malls in July 2025 and one mall in March 2026 resulted in an increase of $2.8 million during the current period, which was partially offset by $2.1 million related to properties sold or deconsolidated since the prior period.

Depreciation and amortization expense decreased primarily due to tenant improvement and intangible in-place lease assets recognized upon consolidation of three malls in December 2024, as well as the adoption of fresh start accounting on November 1, 2021, becoming fully depreciated or amortized since the prior period. The decrease was partially offset by the addition of tangible assets and intangible lease assets recognized upon the acquisition of four malls in July 2025 and one mall in March 2026, which resulted in an increase of $1.5 million during the current period.

General and administrative expense decreased primarily due to lower stock-based compensation expense in the current period as compared to the prior period, as well as lower professional fees expense in the current period.

During the three months ended September 30, 2025, we recorded loss on impairment of $1.7 million related to a land parcel we sold for less than its carrying value.

Other Income and Expenses

Interest and other income increased $5.2 million in the current period primarily related to excess proceeds received at one of our properties related to bonds issued by the community improvement district where the property is located.

Interest expense increased $21.3 million during the three months ended September 30, 2026 as compared to the prior period. The increase was primarily due to an increase in non-cash default interest expense on loans past their maturity date, including one loan for which non-cash default interest expense was retroactive to November 1, 2020, pursuant to the terms of a prior forbearance agreement entered into in connection with our emergence from bankruptcy on November 1, 2021. The accrued non-cash default interest is expected to be resolved when the respective property is either sold or conveyed to the lender in satisfaction of the debt. Also, the increase is attributable to property loan interest expense due to refinancings with higher interest rates as compared to the prior period. The increase was partially offset by property-level debt discounts becoming fully accreted upon maturity of the related loans or when the related loan was deconsolidated since the prior period.

For the three months ended September 30, 2025, we recorded a $33.9 million gain on deconsolidation related to Southpark Mall. The property was deconsolidated due to a loss of control when it was placed into receivership in connection with the foreclosure process.

Equity in earnings increased $15.5 million during the three months ended September 30, 2026 as compared to the prior period. The increase was primarily due to the sale of York Town Center during the current period.

During the three months ended September 30, 2026, we recognized $5.4 million of gain on sales of real estate assets primarily related to the sale of an outparcel. During the three months ended September 30, 2025, we recognized $51.2 million of gain on sales of real estate assets primarily related to the sales of The Promenade and a land parcel.

Comparison of the Nine Months Ended September 30, 2026 to the Nine Months Ended September 30, 2025

Rental revenues increased primarily due to the acquisition of four malls in July 2025 and one mall in March 2026, which resulted in an increase of $27.3 million during the current period. Also, rental revenues at the comparable properties increased $8.5 million compared to the prior period. The increase was partially offset by $16.1 million of rental revenues associated with properties sold or deconsolidated since the prior period.

Operating Expenses

Total property operating expenses increased primarily due to the acquisition of four malls in July 2025 and one mall in March 2026, which resulted in an increase of $10.2 million during the current period. Also, property operating expenses increased at the comparable properties compared to the prior period primarily due to higher property repair and maintenance expense, payroll and insurance related costs. The increase was partially offset by $7.9 million of total property operating expenses associated with properties sold or deconsolidated since the prior period.

Depreciation and amortization expense decreased primarily due to tenant improvement and intangible in-place lease assets recognized upon consolidation of three malls in December 2024, as well as the adoption of fresh start accounting on November 1, 2021, becoming fully depreciated or amortized since the prior period. Also, dispositions accounted for a $3.5 million decrease in the current period as compared to the prior period. The decrease was partially offset by the addition of tangible assets and intangible lease assets recognized upon the acquisition of four malls in July 2025 and one mall in March 2026, which resulted in an increase of $10.8 million during the current period.

General and administrative expense decreased primarily due to lower stock-based compensation expense in the current period as compared to the prior period, as well as lower professional fees expense in the current period.

During the nine months ended September 30, 2025, we recorded loss on impairment of $3.2 million related to the sales of 840 Greenbrier Circle and a land parcel, which were sold for less than their carrying values.

Other Income and Expenses

Interest and other income increased $5.0 million in the current period primarily related to excess proceeds received at one of our properties related to bonds issued by the community improvement district where the property is located.

Interest expense increased $15.8 million during the nine months ended September 30, 2026 as compared to the prior period. The increase was primarily due to an increase in non-cash default interest expense on loans past their maturity date, including one loan for which non-cash default interest expense was retroactive to November 1, 2020, pursuant to the terms of a prior forbearance agreement entered into in connection with our emergence from bankruptcy on November 1, 2021. The accrued non-cash default interest is expected to be resolved when the respective property is either sold or conveyed to the lender in satisfaction of the debt. Also, the increase is attributable to additional interest on the 2032 non-recourse bank loan, as it was modified to increase the loan balance to finance the acquisition of four malls in July 2025. The increase was partially offset due to property-level debt discounts becoming fully accreted upon maturity of the related loans or when the related loan was deconsolidated since the prior period, as well as refinancing the prior secured term loan with the secured mall loan due 2031 and the secured lifestyle centers loan due 2032.

For the nine months ended September 30, 2026, we recorded a $41.2 million gain on deconsolidation related to Jefferson Mall and The Outlet Shoppes at Gettysburg. The properties were deconsolidated due to a loss of control when they were placed into receivership in connection with the foreclosure process. For the nine months ended September 30, 2025, we recorded a $33.9 million gain on deconsolidation related to Southpark Mall. The property was deconsolidated due to a loss of control when it was placed into receivership in connection with the foreclosure process.

Equity in earnings increased $34.8 million during the nine months ended September 30, 2026 as compared to the prior period. The increase was primarily due to the sales of Hammock Landing and York Town Center.

During the nine months ended September 30, 2026, we recognized $20.4 million of gain on sales of real estate assets related to the sale of nine outparcels. During the nine months ended September 30, 2025, we recognized $74.1 million of gain on sales of real estate assets related to the sales of The Promenade, Imperial Valley Mall, Monroeville Mall, Annex at Monroeville, three outparcels associated with the Monroeville Mall properties, a land parcel associated with Imperial Valley Mall, an outparcel and a land parcel.

Non-GAAP Measure