CBL & ASSOCIATES PROPERTIES INC

Results of Operations

Properties that were in operation for the entire year during 2025 and the three months ended March 31, 2026 are referred to as the "Comparable Properties." Since January 2025, we have acquired, deconsolidated and disposed of the following properties:

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 March 31, 2026, Arbor Place, Brookfield Square, Eastland Mall, Harford Mall, Jefferson Mall, Laurel Park Place, Old Hickory Mall, Southpark Mall, The Outlet Shoppes at Gettysburg and York Galleria were designated as non-core.

Comparison of the Three Months Ended March 31, 2026 to the Three Months Ended March 31, 2025

Revenues

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 $10.0 million during the current-year period. The increase was partially offset by $6.6 million of rental revenues associated with properties sold since the prior-year period. Also, rental revenues at the comparable properties increased $1.9 million compared to the prior-year period.

Operating Expenses

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 $2.3 million during the current-year period. Also, property operating expenses increased at the comparable properties compared to the prior-year period due to insurance related costs. The increase was partially offset by a reduction of $1.8 million of total property operating expenses associated with properties sold since the prior-year period.

Real estate taxes decreased primarily due to refunds received in the current 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-year period. Also, dispositions accounted for a $1.8 million decrease in the current-year period as compared to the prior-year 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 $4.3 million during the current-year period.

General and administrative expense decreased $2.1 million primarily due to lower compensation and stock-based compensation expense in the current-year period as compared to the prior-year period.

Other Income and Expenses

Interest expense decreased $4.3 million during the three months ended March 31, 2026 as compared to the prior-year period. The decrease was primarily due to lower interest expense on the secured term loan due to pay downs since the prior-year period, as well as refinancing the secured term loan during the current-year period. Also, the decrease was due to property-level debt discounts becoming fully accreted or deconsolidated since the prior-year period. The decrease was partially offset due to the modified 2032 non-recourse bank loan. The outstanding balance of the 2032 non-recourse bank loan was increased since the prior-year period in conjunction with the acquisition of four malls in July 2025.

For the three months ended March 31, 2026, we recorded a $35.3 million gain on deconsolidation related to Jefferson Mall. The property was deconsolidated due to a loss of control when it was placed into receivership in connection with the foreclosure process.

During the three months ended March 31, 2026, we recognized $1.4 million of gain on sales of real estate assets related to the sale of an outparcel. During the three months ended March 31, 2025, we recognized $21.5 million of gain on sales of real estate assets related to the sales of Imperial Valley Mall, Monroeville Mall, Annex at Monroeville, three outparcels associated with the Monroeville Mall properties and a land parcel associated with Imperial Valley Mall.

Equity in earnings increased $3.4 million during the three months ended March 31, 2026 as compared to the prior-year period. The increase was due to recognizing equity in earnings on a distribution where our investment is below zero.

Non-GAAP Measure