CBL & ASSOCIATES PROPERTIES INC

(Dollars in thousands, except per share data)

Note 1 – Organization and Basis of Presentation

CBL & Associates Properties, Inc. (“CBL”), a Delaware corporation, is a self-managed, self-administered, fully integrated real estate investment trust (“REIT”) that is engaged in the ownership, development, acquisition, leasing, management and operation of regional shopping malls, outlet centers, lifestyle centers, open-air centers, office buildings and other properties, including single-tenant and multi-tenant parcels. Its properties are located in 22 states, but are primarily in the southeastern and midwestern United States.

CBL conducts substantially all its business through CBL & Associates Limited Partnership (the “Operating Partnership”), which is a variable interest entity ("VIE"). The Operating Partnership consolidates the financial statements of all entities in which it has a controlling financial interest or where it is the primary beneficiary of a VIE.

As of September 30, 2025, the Operating Partnership owned interests in the following properties:

(1)

Included in “All Other” for purposes of segment reporting.

(2)

CBL'stwo consolidated corporate office buildings are included in the Other category.

(3)

The Operating Partnership accounts for these investments using the equity method.

CBL is the 100% owner oftwo qualified REIT subsidiaries, CBL Holdings I, Inc. and CBL Holdings II, Inc. As of September 30, 2025, CBL Holdings I, Inc., the sole general partner of the Operating Partnership, owned a 1.00% general partner interest in the Operating Partnership and CBL Holdings II, Inc. owned a 98.98% limited partner interest for a combined interest held by CBL of 99.98%. As of September 30, 2025, third parties owned a 0.02% limited partner interest in the Operating Partnership.

As used herein, the term "Company" includes CBL & Associates Properties, Inc. and its subsidiaries, including CBL & Associates Limited Partnership and its subsidiaries, unless the context indicates otherwise. The term "Operating Partnership" refers to CBL & Associates Limited Partnership and its subsidiaries.

The Operating Partnership conducts the Company's property management and development activities through its wholly owned subsidiary, CBL & Associates Management, Inc. (the “Management Company"), to comply with certain requirements of the Internal Revenue Code.

The accompanying condensed consolidated financial statements are unaudited; however, they have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all the disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting solely of normal recurring matters) necessary for a fair presentation of the financial statements for these interim periods have been included. All intercompany transactions have been eliminated. The results for the interim period ended September 30, 2025 are not necessarily indicative of the results to be obtained for the full fiscal year.

Note 2 – Summary of Significant Acco unting Policies

Accounting Guidance Not Yet Adopted

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU"), "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures," to improve the disclosures about a public business entity's expenses by providing more detailed information about the types of expenses in commonly presented expense captions. The standard will be effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning December 15, 2027. The Company is currently evaluating the impact that the adoption of this new standard will have on its condensed consolidated financial statements.

Accounts Receivable

Receivables include amounts billed and currently due from tenants pursuant to lease agreements and receivables attributable to straight-line rents associated with those lease agreements. Individual leases where the collection of rents is in dispute are assessed for collectability based on management’s best estimate of collection considering the anticipated outcome of the dispute. Individual leases that are not in dispute are assessed for collectability and upon the determination that the collection of rents over the remaining lease term is not probable, accounts receivable is reduced as an adjustment to rental revenues. Revenue from leases where collection is deemed to be less than probable is recorded on a cash basis until collectability is determined to be probable. Further, management assesses whether operating lease receivables, at a portfolio level, are appropriately valued based upon an analysis of balances outstanding, historical collection levels and current economic trends. An allowance for the uncollectable portion of the portfolio is recorded as an adjustment to rental revenues.

Management’s collection assessment took into consideration the type of retailer, billing disputes, lease negotiation status and executed deferral or abatement agreements, as well as recent rent collection experience and tenant bankruptcies based on the best information available to management at the time of evaluation.

Note 3 –Revenues

The following table presents the Company's revenues disaggregated by revenue source for thethree and nine months ended September 30, 2025 and 2024:

(1)

Included in All Other segment.

(2)

Sales taxes are excluded from revenues.

See Note 10 for information on the Company's segments.

Revenues from Contracts with Customers

Outstanding Performance Obligations

The Company has outstanding performance obligations related to certain noncancelable contracts with customers for which it will receive fixed operating expense reimbursements for providing certain maintenance and other services as described above. As of September 30, 2025, the Company expects to recognize these amounts as revenue over the following periods:

The Company evaluates its performance obligations each period and makes adjustments to reflect any known additions or cancellations. Performance obligations related to variable consideration, which is based on sales, are constrained.

Note 4 – Leases

The components of rental revenues for thethree and nine months ended September 30, 2025 and 2024 are as follows:

The undiscounted future fixed lease payments to be received under the Company's operating leases as of September 30, 2025, are as follows:

(1)

Reflects rental payments for the period October 1, 2025 to December 31, 2025.

Note 5 – Fair Value Measurements

The Company has categorized its financial assets and financial liabilities that are recorded at fair value into a hierarchy in accordance with Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosure, ("ASC 820") based on whether the inputs to valuation techniques are observable or unobservable. The fair value hierarchy contains three levels of inputs that may be used to measure fair value as follows:

The asset or liability's fair value within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Under ASC 820, fair value measurements are determined based on the assumptions that market participants would use in pricing the asset or liability in an orderly transaction at the measurement date and under current market conditions. Valuation techniques used maximize the use of observable inputs and minimize the use of unobservable inputs and consider assumptions such as inherent risk, transfer restrictions and risk of nonperformance.

The carrying values of cash and cash equivalents, receivables, accounts payable and accrued liabilities are reasonable estimates of their fair values because of the short-term nature of these financial instruments. The estimated fair value of mortgage and other indebtedness was $2,095,476 and $2,110,154 as of September 30, 2025 and December 31, 2024, respectively. The fair value of mortgage and other indebtedness was calculated using Level 2 inputs by discounting future cash flows for mortgage and other indebtedness using estimated market rates at which similar loans would be made currently.

Fair Value Measurements on a Recurring Basis

The Company uses interest rate swaps to manage its interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows. This analysis reflects the contractual terms of the interest rate swap, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. To comply with the provisions of ASC 820, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of the Company's derivative contracts for the effect of nonperformance risk, it has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees. In accordance with ASU 2011-04, the FASB’s fair value measurement guidance, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. Although the Company has determined that the majority of the inputs used to value its interest rate swap fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its interest rate swap utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. The Company has determined that the significance of the impact of the credit valuation adjustments made to its derivative contract, which determination was based on the fair value of the individual contract, was not significant to the overall valuation. As a result, the Company's interest rate swap held as of September 30, 2025 and December 31, 2024 was classified as Level 2 of the fair value hierarchy.

The following table sets forth information regarding the Company's interest rate swap that was designated as a cash flow hedge of interest rate risk for thenine months ended September 30, 2025. See Note 9 for more information.

During the nine months ended September 30, 2025, the Company has continued to reinvest the cash from maturing U.S. Treasury securities into new U.S. Treasury securities. The Company designated the U.S. Treasury securities as available-for-sale (“AFS”). The table below sets forth information regarding the Company’s AFS securities that were measured at fair value for thenine months ended September 30, 2025 and for the year ended December 31, 2024:

(1)

The U.S. Treasury securities held as of September 30, 2025 have maturities through July 2026.

(2)

U.S. Treasury securities have a long history with no credit losses. Additionally, the Company notes that U.S. Treasury securities are explicitly fully guaranteed by a sovereign entity that can print its own currency and that the sovereign entity’s currency is routinely held by central banks and other major financial institutions, is used in international commerce, and commonly viewed as a reserve currency, all of which qualitatively indicate that historical credit loss information should be minimally affected by current conditions and reasonable and supportable forecasts. Therefore, the Company did not record expected credit losses for its U.S. Treasury securities for the nine months ended September 30, 2025, nor for the year ended December 31, 2024.

(3)

Fair value was calculated using Level 1 inputs.

Fair Value Measurements on a Nonrecurring Basis

The Company measures the fair value of certain long-lived assets on a nonrecurring basis, through quarterly impairment testing or when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The Company’s evaluation of the recoverability of long-lived assets involves the comparison of undiscounted future cash flows expected to be generated by each property over the Company’s expected remaining holding period to the respective carrying amount. The determination of whether the carrying value is recoverable also requires management to make estimates related to probability weighted scenarios impacting undiscounted cash flow models. The Company considers both quantitative and qualitative factors in its impairment analysis of long-lived assets. Significant quantitative factors include historical and forecasted information for each property such as net operating income, occupancy statistics and sales levels. Significant qualitative factors used include market conditions, age and condition of the property and tenant mix. The quantitative and qualitative factors impact the selection of the terminal capitalization rate which is used in both an undiscounted and discounted cash flow model and the discount rate used in a discounted cash flow model. Due to the significant unobservable estimates and assumptions used in the valuation of long-lived assets that experience impairment, the Company classifies such long-lived assets under Level 3 in the fair value hierarchy. Level 3 inputs primarily consist of sales and market data, independent valuations and discounted cash flow models.

Long-lived Assets Measured at Fair Value in 2025

During the three months ended September 30, 2025, the Company sold a land parcel (September 2025) for $7,463, which was less than its carrying value and recorded an impairment of $1,736. During the nine months ended September 30, 2025, the Company sold 840 Greenbrier Circle (June 2025) for $3,500 and a land parcel (September 2025) for $7,463, which were less than their carrying values and recorded impairments totaling $3,193.

During the three and nine months ended September 30, 2025, the Company adjusted the negative equity in Southpark Mall tozero upon deconsolidation, which represented the estimated fair value of the Company's investment in the property. See Note 8 for more information.

Long-lived Assets Measured at Fair Value in 2024

During the nine months ended September 30, 2024, the Company sold an outparcel for less than its carrying value and recorded an impairment of $836.

Note 6 - Acquisitions

The Company's acquisitions are accounted for as acquisitions of assets under ASC 805-50. The Company includes the results of operations of real estate assets acquired in the condensed consolidated statements of operations from the date of the related acquisition.

2025 Acquisitions

In January 2025, the Company acquired four Macy's stores for $6,156, which included land, buildings and improvements, for future redevelopment at the respective properties.

In July 2025, the Company acquired four enclosed malls. The purchase price was approximately $179,742 including acquisition costs. Additionally, the Company received a credit at closing related to a net working capital deficit of $2,727 assumed by the Company. The acquired 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. The Company funded the transaction using cash from sales of real estate assets and funds from the modification of an existing loan (see Note 9 for more information).

The Company engaged valuation experts to assist management in determining the fair value of the acquired assets and liabilities related to the acquisition of the malls. The most subjective and judgmental assumptions used include the projected cash flows, capitalization and discount rates. Multiple appraisal methodologies were used to value the acquired assets and liabilities, which included the cost approach, the sales comparison approach and the income capitalization approach. All estimates, assumptions, valuations and financial projections are inherently subject to significant uncertainties and the resolution of contingencies beyond the Company’s control. Accordingly, the Company cannot assure that the estimates, assumptions, valuations or financial projections will be realized and actual results could vary materially.

The following table summarizes the amounts of identified assets acquired and liabilities assumed at the acquisition date:

(1)

The weighted average amortization period of the acquired intangible assets and liabilities is 8.1 years for in-place leases,4.5 years for above-market leases,12.3 years for deferred lease costs and 16.2 years for below-market leases.

Note 7 – Dispositions and Held-for-Sale

Dispositions

Based on its analysis, the Company determined that the dispositions described below do not meet the criteria for classification as discontinued operations and are not considered to be significant disposals based on its quantitative and qualitative evaluation. Thus, the results of operations of the properties described below, as well as any related gains or losses, are included in net income (loss) for all periods presented, as applicable.

2025 Dispositions

During the three months ended September 30, 2025, the Company realized a gain of $51,228 primarily related to the sale of The Promenade (July 2025) and a land parcel (September 2025). During thenine months ended September 30, 2025, the Company realized a gain of $74,099 primarily related to the sales of The Promenade (July 2025), Imperial Valley Mall (February 2025), Annex at Monroeville (January 2025), Monroeville Mall (January 2025), three outparcels associated with the Monroeville Mall properties (January 2025), a land parcel associated with Imperial Valley Mall (February 2025), an outparcel (April 2025) anda land parcel (September 2025). For thethree and nine months ended September 30, 2025, gross proceeds from sales of real estate assets were $92,663 and $169,763, respectively, which were primarily used to partially paydown the secured term loan by $41,116 and the 2032 non-recourse bank loan (previously referred to as the "open-air centers and outparcels loan") by $7,107, and to fund approximately $83,100 towards the acquisition of the four malls in July 2025. See Note 9 for more information. The Company recorded loss on impairment related to the sales of 840 Greenbrier Circle and a land parcel. See Note 5 for more information.

2024 Dispositions

During the three months ended September 30, 2024, the Company realized a gain of $12,816 related to the sales of Layton Hills Mall, Layton Hills Convenience Center, Layton Hills Plaza,10 outparcels, of which 9 outparcels were associated with the Layton Hills properties, anda land parcel. During thenine months ended September 30, 2024, the Company realized a gain of $16,487 related to the sales of Layton Hills Mall, Layton Hills Convenience Center, Layton Hills Plaza,10 outparcels, of which 9 outparcels were associated with the Layton Hills properties, a land parcel and an anchor parcel. In addition, the Company recorded a loss on impairment related to an outparcel that was sold. See Note 5 for more information. For the three and nine months ended September 30, 2024, gross proceeds from sales of real estate assets were $66,463 and $74,208, respectively, which were used to partially paydown the secured term loan and the 2032 non-recourse bank loan (previously referred to as the "open-air centers and outparcels loan"). See Note 9 for more information.

Held-for-Sale

As of September 30, 2025, there wereno properties that met the criteria to be classified as held-for-sale.

The following properties were classified as held-for-sale as of December 31, 2024:

(1)

Included within accounts payable and accrued liabilities on the condensed consolidated balance sheets.