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, 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 classified as Excluded Properties.

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, 2026 and 2025 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.

(2)

We have reclassified amounts from management fees and non-property level revenues to the identified line items to conform to the current-year presentation. The current-year presentation is based on effective ownership percentages in certain unconsolidated joint ventures while the prior period was based on stated ownership percentages. The difference between the effective ownership and stated ownership percentages is due to differences in capital contributions between joint venture partners and related preferred returns.

(3)

We calculate same-center NOI based on stated ownership percentages.

Same-center NOI increased 3.8% for the three months ended September 30, 2026 as compared to the prior period. The $3.5 million increase for the three months ended September 30, 2026 compared to the same period in 2025 primarily consisted of a $6.1 million increase in revenues, partially offset by a $2.6 million increase in operating expenses. Rental revenues were $6.4 million higher primarily due to higher occupancy, increased rents and higher percentage rents in the current period, as well as a favorable variance in the estimate for uncollectable revenues during the current period as compared to the prior period. Operating expenses increased in the current period primarily due to higher repair and maintenance expense and real estate taxes, which were lower in the prior period due to tax refunds received in the prior period.

Same-center NOI increased 2.6% for the nine months ended September 30, 2026 as compared to the prior period. The $7.4 million increase for the nine months ended September 30, 2026 compared to the same period in 2025 primarily consisted of a $9.5 million increase in revenues, partially offset by a $2.1 million increase in operating expenses. Rental revenues were $9.5 million higher primarily due to higher occupancy, increased rents and higher percentage rents in the current period, as well as a favorable variance in the estimate for uncollectable revenues during the current period as compared to the prior period. Operating expenses increased in the current period primarily due to higher property operating expenses primarily associated with property repair and maintenance expense, payroll and insurance related costs, which was partially offset by lower real estate taxes in the current 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. 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, 2026 and 2025:

Average annual base rents per square foot are based on contractual rents in effect as of September 30, 2026 and 2025, 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 three and nine months ended September 30, 2026 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, 2026, we had $350.9 million available in unrestricted cash and U.S. Treasury securities, as well as unrestricted cash of $15.8 million, at our share, associated with unconsolidated joint ventures. Our total pro rata share of debt, excluding unamortized deferred financing costs and debt discounts, at September 30, 2026 was $2,504.0 million. We had $98.1 million in restricted cash at September 30, 2026 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 $4.6 million related to the properties that secure the 2032 non-recourse bank loan of which we may receive a portion via distributions quarterly in accordance with the provisions of the 2032 non-recourse bank loan.

During the nine months ended September 30, 2026, 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, 2026, our U.S. Treasury securities have maturities through September 2027. Subsequent to September 30, 2026, we redeemed and purchased additional U.S. Treasury securities. See Note 15 for more information.

During the nine months ended September 30, 2026, we sold Hammock Landing, York Town Center and 10 outparcels, which generated gross proceeds of $95.8 million at our share. Subsequent to September 30, 2026, we sold Old Hickory Mall. See Note 15 for more information.

In January 2026, the $48.6 million loan secured by Jefferson Mall entered default. In February 2026, the property was placed into receivership and we deconsolidated the property in conjunction with the property entering receivership. In May 2026, the $9.7 million loan, at our share, secured by The Outlet Shoppes at Gettysburg was placed into receivership and we deconsolidated the property due to a loss of control. For the nine months ended September 30, 2026, we recognized gain on deconsolidation of $41.2 million. We anticipate returning the properties to the respective lenders. See Note 8.

In March 2026, we entered into a $425.0 million non-recourse loan (the "secured mall loan due 2031") that has a five-year term, maturing in April 2031, and a fixed interest rate of 7.40%. We used proceeds from redeemed U.S. Treasury securities and proceeds from the secured mall loan due 2031 to retire our existing $634.0 million secured term loan. The secured mall loan is secured by a pool of primarily mall properties that previously served as collateral for the secured term loan, which includes CherryVale Mall, Frontier Mall, Hanes Mall, Kirkwood Mall, Mall del Norte, Post Oak Mall, Richland Mall, Sunrise Mall, Turtle Creek Mall, Valley View Mall, West Towne Mall, Westmoreland Mall and Westmoreland Crossing.

In March 2026, we entered into a $176.1 million variable‑rate, non‑recourse loan (the "secured lifestyle centers loan due 2032") that has a five‑year term, includes two one‑year extension options, and is interest‑only with a variable interest rate of SOFR plus 410 basis points. The secured lifestyle centers loan due 2032 is secured by Mayfaire Town Center, Pearland Town Center, Southaven Town Center and East Towne Mall, all of which served as collateral under the prior secured term loan. Also, the secured lifestyle centers loan due 2032 is subject to customary cross-default provisions with our 2032 non-recourse bank loan.

In March 2026, we acquired Gateway Mall in Lincoln, NE for a purchase price of approximately $43.8 million including acquisition costs. The acquisition of Gateway Mall was financed through a $21.0 million non‑recourse, five‑year loan, which carries a fixed interest rate of 6.46%.

In March 2026, the loan secured by Parkdale Mall and Parkdale Crossing entered maturity default. We are in discussions with the lender and intend to cooperate with the foreclosure or conveyance of the properties in satisfaction of the debt.

In April 2026, we closed on a $43.0 million non-recourse, five-year loan secured by Northwoods Mall, which bears a fixed interest rate of 9.12%. Proceeds from the new loan were used to retire the previous loan. Under the previous loan, cash flows were being swept by the lender.

In April 2026, we closed on a $6.6 million non-recourse, five-year loan secured by Coastal Grand Mall - Dick's Sporting Goods, which bears a fixed interest rate of 6.17%. Proceeds from the new loan were used to retire the previous loan.

In May 2026, the loan secured by Arbor Place entered maturity default. We intend to cooperate with the foreclosure or conveyance of the property in satisfaction of the debt.

In May 2026, we closed on a $97.5 million non-recourse, five-year loan secured by Fayette Mall, which bears a fixed interest rate of 7.25%. Proceeds from the new loan were used to retire the previous loan.

In May 2026, we entered into a $71.9 million non-recourse, five-year loan secured by Hamilton Place, which bears a fixed interest rate of 6.85%. Proceeds from the new loan were used to retire the previous loan.

In May 2026, the loan secured by Volusia Mall was modified, which extends the maturity date through October 2026. Subsequent to September 30, 2026, the loan secured by Volusia Mall was modified to extend the loan through January 2027. See Note 15.

In June 2026, we were notified by the lender that the loan secured by The Outlet Shoppes at Laredo was in default. In August 2026, the loan was extended through November 2026.

Subsequent to September 30, 2026, we closed on a $135.0 million non-recourse, five-year loan secured by West County Center. See Note 15 for more information.

We paid regular quarterly dividends of $0.45 per share for the first quarter of 2026 and $0.625 per share for the second and third quarters of 2026. Additionally, our board of directors declared a special dividend of $0.175 per share of common stock, which was paid in cash in the second quarter of 2026. The special dividend was made as a result of improved cash flows following the refinancing of the prior secured term loan with the secured mall loan due 2031 and the secured lifestyle centers loan due 2032. Subsequent to September 30, 2026, our board of directors authorized the repurchase of up to $25.0 million of our common stock. See Note 15 for more information.

As of September 30, 2026, our total share of consolidated, unconsolidated and other outstanding debt, excluding debt discounts and deferred financing costs, that has matured and remains outstanding in 2026 or is maturing during 2026, assuming all extension options are elected, is $422.1 million. Of the $422.1 million, $106.6 million relates to three property loans that are in receivership. Subsequent to September 30, 2026, the loan secured by Volusia Mall was extended and the loan secured by West County Center was paid off with proceeds from a new loan. See Note 15 for more information.

Cash Flows - Operating, Investing and Financing Activities

There was $163.7 million of cash, cash equivalents and restricted cash as of September 30, 2026, an increase of $1.7 million from September 30, 2025. Of this amount, $61.0 million was unrestricted cash and cash equivalents as of September 30, 2026. Also, at September 30, 2026, we had $289.9 million in U.S. Treasuries with maturities through September 2027.

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

Cash Provided By Operating Activities

Cash provided by operating activities increased primarily due to distributions we received from unconsolidated affiliates related to the sales of Hammock Landing and York Town Center during 2026. Also, the acquisition of four malls in July 2025 and one mall in March 2026 increased rental revenues in the current period, as well as an increase at the comparable properties. The increase was partially offset by property operating expenses due to higher property repair and maintenance expense, payroll and insurance related costs, as well as higher interest expense 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.

Cash Used In Investing Activities

Cash used in investing activities decreased primarily due to a higher volume of acquisitions in the prior period. Also, the decrease is attributable to a higher amount of net redemptions of U.S. Treasury securities and distributions from unconsolidated affiliates during the current period. The decrease was partially offset by significantly less proceeds from sales of real estate assets as compared to the prior period.

Cash Used In Financing Activities

Cash used in financing activities increased primarily due to a higher amount of principal payments on loans, net of proceeds received on new loans, as well as an increase in debt issuance costs during the current period. The increase was partially offset by a decrease in dividends paid during the current 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 $2,504.0 million outstanding debt at September 30, 2026, $2,503.0 million constituted non-recourse debt obligations and $1.0 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)

The interest rate is 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 3.4 years and 2.6 years at September 30, 2026 and December 31, 2025, respectively. The weighted-average remaining term of our pro rata share of fixed-rate debt, excluding debt discounts and deferred financing costs, was 3.4 years and 3.2 years at September 30, 2026 and December 31, 2025, respectively.

As of September 30, 2026 and December 31, 2025, our total share of consolidated and unconsolidated variable-rate debt, excluding debt discounts and deferred financing costs, represented 11.0% and 28.7%, 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.

Equity

We paid regular quarterly dividends of $0.45 per share for the first quarter of 2026 and $0.625 per share for the second and third quarters of 2026. Additionally, our board of directors declared a special dividend of $0.175 per share of common stock, which was paid in cash in the second quarter of 2026. The special dividend was made as a result of improved cash flows following the refinancing of the prior secured term loan with the secured mall loan due 2031 and the secured lifestyle centers loan due 2032. 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, 2026, our board of directors declared a regular cash dividend of $0.625 per share for the quarter ending December 31, 2026 and authorized the repurchase of up to $25.0 million of our common stock. See Note 15 for more information.

Upon our emergence from bankruptcy on November 1, 2021, we experienced an “ownership change” under Sections 382 and 383 of the Internal Revenue Code, which can limit our ability to use certain tax attributes—including net operating loss (“NOL”) carryforwards and other deductions—to offset future taxable income. In addition, because we had built-in losses in our assets at that time, certain taxable income deductions realized during the five-year recognition period following the ownership change (the “2021 Recognition Period”) were subject to limitation.

The 2021 Recognition Period expired on November 1, 2026, and our ability to recognize certain deductions is no longer limited because of the 2021 ownership change. As a result, we have greater flexibility to manage the composition of our portfolio, including by selling assets or conveying assets to lenders to satisfy related loans. Recognizing tax losses on dispositions may reduce our taxable income and cause a greater portion of distributions paid to shareholders after December 31, 2026 to be treated as a return of capital, for U.S. federal income tax purposes. A return of capital is generally not taxed when received. Instead, it reduces a shareholder’s tax basis in our stock, which defers tax until that basis is recovered.

The expiration of the 2021 Recognition Period does not remove all limitations. Our NOLs and other tax attributes that arose before November 1, 2021 generally remain subject to the annual limitation under Section 382, and built-in losses disallowed during the recognition period may carry forward and remain subject to applicable limitations.

We remain subject to Sections 382 and 383 and could experience another ownership change in the future. If we experience an ownership change, our ability to use future tax deductions, net operating loss carryforwards and other tax attributes to offset future taxable income may be subject to limitations.

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, 2026 compared to the same period in 2025 (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.

Off-Balance Sheet Arrangements

Unconsolidated Affiliates

We have ownership interests in 23 unconsolidated affiliates as of September 30, 2026 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.

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, 2025 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, 2026. 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, 2025.

Non-GAAP Measure