CBL & ASSOCIATES PROPERTIES INC

Results of Operations

Properties that were in operation for the entire year during 2025 and the six months ended June 30, 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 June 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 and York Galleria were designated as non-core.

Comparison of the Three Months Ended June 30, 2026 to the Three Months Ended June 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 $11.6 million during the current-year period. The increase was partially offset by $6.4 million of rental revenues associated with properties sold or deconsolidated since the prior-year period. Also, rental revenues at the comparable properties increased $0.9 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 $2.6 million during the current-year period. Also, property operating expenses increased at the comparable properties compared to the prior-year period primarily due to higher property repair and maintenance expense and payroll related costs. The increase was partially offset by a reduction of $1.4 million of property operating expenses associated with properties sold or deconsolidated since the prior-year 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 $1.2 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 $5.0 million during the current-year period.

During the three months ended June 30, 2025, we sold 840 Greenbrier Circle for less than its carrying value and recorded an impairment of $1.5 million.

Other Income and Expenses

Interest expense decreased $1.2 million during the three months ended June 30, 2026 as compared to the prior-year period. The decrease was primarily due to property-level debt discounts becoming fully accreted upon maturity of the related loans, as well as a deconsolidation, since the prior-year period. The decrease was partially offset due 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, as well as an increase in default interest expense.

For the three months ended June 30, 2026, we recorded a $5.9 million gain on deconsolidation related to The Outlet Shoppes at Gettysburg. 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 June 30, 2026, we recognized $13.6 million of gain on sales of real estate assets related to the sale of seven outparcels. During the three months ended June 30, 2025, we recognized $1.3 million of gain on sales of real estate assets primarily related to the sale of an outparcel.

Equity in earnings increased $15.9 million during the three months ended June 30, 2026 as compared to the prior-year period. The increase was primarily due to the sale of Hammock Landing during the current-year period.

Comparison of the Six Months Ended June 30, 2026 to the Six Months Ended June 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 $21.6 million during the current-year period. The increase was partially offset by $13.3 million of rental revenues associated with properties sold or deconsolidated since the prior-year period. Also, rental revenues at the comparable properties increased $3.0 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 $4.9 million during the current-year period. Also, property operating expenses increased at the comparable properties compared to the prior-year period primarily due to higher property repair and maintenance expense, payroll and insurance related costs. The increase was partially offset by a reduction of $3.2 million of property operating expenses associated with properties sold or deconsolidated since the prior-year 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 $3.0 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 $9.3 million during the current-year period.

Real estate taxes decreased primarily due to refunds received in the current period.

General and administrative expense decreased $2.5 million primarily due to lower stock-based compensation expense in the current-year period as compared to the prior-year period.

During the six months ended June 30, 2025, we sold 840 Greenbrier Circle for less than its carrying value and recorded an impairment of $1.5 million.

Other Income and Expenses

Interest expense decreased $5.6 million during the six months ended June 30, 2026 as compared to the prior-year period. The decrease was primarily due to property-level debt discounts becoming fully accreted upon maturity of the related loans, as well as a deconsolidation, since the prior-year period. The decrease was partially offset due 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, as well as an increase in default interest expense.

For the six months ended June 30, 2026, we recorded a $41.3 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.

During the six months ended June 30, 2026, we recognized $15.0 million of gain on sales of real estate assets related to the sale of eight outparcels. During the six months ended June 30, 2025, we recognized a $22.9 million 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, a land parcel associated with Imperial Valley Mall and an outparcel.

Equity in earnings increased $19.2 million during the six months ended June 30, 2026 as compared to the prior-year period. The increase was primarily due to the sale of Hammock Landing.

Non-GAAP Measure