CBL & Associates Properties, Inc.

Company Overview

Business Model: CBL & Associates Properties, Inc. is a self-managed, self-administered, fully integrated real estate investment trust (REIT). The Company's core business involves the ownership, development, acquisition, leasing, management, and operation of a diverse portfolio of regional shopping malls, outlet centers, lifestyle centers, open-air centers, and other properties, including office buildings, outparcels, and hotels. Substantially all business operations are conducted through CBL & Associates Limited Partnership. Revenue is primarily generated from leases with retail tenants, including fixed minimum rents, percentage rents based on sales volumes, and reimbursements for real estate taxes, insurance, common area maintenance, and other operating expenses. Additional revenue streams include management, leasing, and development fees, sponsorships, and sales of peripheral land and operating real estate assets.

Market Position: The Company operates a diverse portfolio of properties predominantly located in strong mid-tier markets within the southeastern and midwestern United States. Its malls, outlet centers, and lifestyle centers generally hold dominant competitive positions as the primary regional properties in their respective trade areas. Approximately 30% of the Company's 2025 same-center net operating income was generated by non-enclosed mall assets. The Company faces competition from various shopping facilities, online retail alternatives, discount centers, and other retail formats, and actively employs marketing and social media strategies to attract customers.

Recent Strategic Developments:

• Acquisitions: In July 2025, the Company acquired four enclosed malls—Ashland Town Center (Ashland, KY), Mesa Mall (Grand Junction, CO), Paddock Mall (Ocala, FL), and Southgate Mall (Missoula, MT)—for approximately $179.7 million, including transaction costs. In January 2025, four Macy's stores were acquired for $6.2 million for future redevelopment. In December 2024, the Company acquired its partner's 50% joint venture interests in CBL/T-C, LLC, which includes CoolSprings Galleria, Oak Park Mall, and West County Center, for $25.0 million.
• Dispositions: During 2025, the Company sold six properties, six outparcels, three land parcels, and two anchor parcels, generating gross proceeds of $240.7 million (Company's share). Net proceeds were utilized to reduce debt and fund acquisitions. In 2024, sales of Layton Hills Mall, Layton Hills Convenience Center, Layton Hills Plaza, and other parcels generated gross proceeds of $81.7 million.
• Redevelopment & Densification: The Company is focused on increasing the productivity and value of its properties through re-tenanting, changing the use of space (especially former department stores), and aesthetic upgrades. It actively evaluates unused parking fields and available land for non-retail densification projects to enhance property value and drive traffic.
• Balance Sheet Optimization: Strategic initiatives include reducing overall debt, extending debt maturity schedules, minimizing exposure to floating rate debt and recourse loans, and lowering borrowing costs to improve free cash flow and enhance enterprise value.
• Corporate Responsibility: The Company's Corporate Responsibility efforts are guided by a dedicated Steering Committee, with oversight from the Nominating/Corporate Governance Committee of the board of directors, focusing on Sustainability, Social Governance, and Corporate Governance.

Geographic Footprint: The Company's properties are located in 22 states, with a primary concentration in the southeastern and midwestern United States.

• Top Five Markets (by percentage of total revenues, year ended December 31, 2025):
  • Chattanooga, TN: 6.7%
  • St. Louis, MO: 6.5%
  • Nashville, TN: 5.0%
  • Lexington, KY: 4.3%
  • Kansas City, KS: 4.2%
• The southeastern United States accounted for approximately 51.4% of the Company's total pro-rata share of revenues in 2025, while the midwestern United States accounted for approximately 24.7%.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin (Segment NOI to Total Revenue): 71.67%
• Operating Margin (Calculated Operating Income to Total Revenue): 23.61%
• Net Margin (Net Income to Total Revenue): 23.26%

Investment in Growth:

• Capital Expenditures: $58.2 million
• Strategic Investments:
  • Acquisitions of real estate assets: $186.0 million
  • Developments in progress: $10.5 million
  • Redevelopment projects completed (CBL's share): $5.1 million (Friendly Center - Cooper's Hawk, Friendly Center - North Italia)

Business Segment Analysis

Malls

Financial Performance:

• Revenue: $478.4 million (+7.26% YoY)
• Operating Margin: 63.54%
• Key Growth Drivers: Consolidation of three malls in December 2024 and the acquisition of four malls in July 2025 significantly contributed to revenue growth.

Product Portfolio: Consists of enclosed large regional shopping centers, typically anchored by two or more anchors or junior anchors, complemented by a wide variety of in-line retail stores, restaurants, and non-retail tenants.

Market Dynamics: These properties generally maintain strong competitive positions as the sole or dominant regional shopping destinations within their respective trade areas.

Outlet Centers

Financial Performance:

• Revenue: $35.4 million (+2.13% YoY)
• Operating Margin: 62.01%
• Key Growth Drivers: Performance is driven by the Company's overall strategy to improve occupancy, drive rent growth, and enhance tenant offerings.

Product Portfolio: Comprises open-air centers, typically anchored by one or more discount or off-price junior anchors, alongside a diverse selection of brand name off-price or discount in-line stores.

Market Dynamics: These centers generally hold strong competitive positions as the dominant regional properties in their trade areas.

Lifestyle Centers

Financial Performance:

• Revenue: $50.9 million (+1.99% YoY)
• Operating Margin: 71.64%
• Key Growth Drivers: Growth is supported by the Company's focus on improving occupancy, increasing rental rates, and diversifying tenant offerings.

Product Portfolio: Features large open-air centers, often anchored by traditional department stores, grocers, or other non-traditional anchors and junior anchors, offering a wide array of in-line and retail stores, restaurants, and non-retail tenants.

Market Dynamics: These properties are strategically positioned as dominant regional centers within their markets.

Open-Air Centers

Financial Performance:

• Revenue: $65.2 million (-6.76% YoY)
• Operating Margin: 79.90%
• Key Growth Drivers: Operational performance is influenced by the Company's broader strategy to enhance occupancy and tenant mix.

Product Portfolio: Typically anchored by a combination of supermarkets, value-priced stores, big-box retailers, or traditional department stores, offering necessities, value-oriented, and convenience merchandise.

Market Dynamics: Many of these centers are situated adjacent to properties within the malls reporting segment, benefiting from co-location.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: The Company repurchased 573,998 shares of common stock for $18.1 million in 2025, following 1,522,860 shares for $36.5 million in 2024. A new $25.0 million share repurchase program was authorized in November 2025, set to expire on November 5, 2026.
• Dividend Payments: In 2025, the Company paid common stock dividends of $0.40 per share in the first and second quarters, and $0.45 per share in the third and fourth quarters. A special dividend of $0.80 per share was paid in cash during the first quarter of 2025. Total dividend payments to common shareholders in 2025 were $77.1 million.
• Future Capital Return Commitments: A regular cash dividend of $0.45 per share has been declared for the first quarter of 2026.

Balance Sheet Position:

• Cash and Equivalents: $42.3 million as of December 31, 2025.
• Total Debt: The Company's pro rata share of consolidated and unconsolidated debt (excluding debt discounts and deferred financing costs) was $2,622.6 million as of December 31, 2025.
• Net Cash Position: -$2,580.3 million (Net Debt) as of December 31, 2025.
• Debt Maturity Profile:
  • 2026: $670.2 million (Company's pro rata share, assuming all extension options elected)
  • 2027: $649.5 million (Company's pro rata share)
  • 2028: $289.1 million (Company's pro rata share)
  • The weighted-average remaining term of total debt was 2.6 years as of December 31, 2025.
  • Variable-rate debt constituted 28.7% of total pro rata debt as of December 31, 2025.

Cash Flow Generation:

• Operating Cash Flow: $249.7 million in 2025, an increase from $202.2 million in 2024, primarily due to mall consolidations and acquisitions, partially offset by property sales.

Operational Excellence

Production & Service Model: The Company operates as a self-managed, self-administered, and fully integrated REIT. Its operational philosophy centers on maximizing long-term value by generating increasing net operating income (NOI) and improving free cash flow. This is achieved through strategies such as incorporating contractual rent increases, negotiating higher rental rates upon lease maturity, actively pursuing new tenants to maintain and grow occupancy, enhancing tenant mix to align with consumer demand, and controlling operating expenses. The Company also generates ancillary revenues through temporary leases, license agreements, advertising, and sponsorships. Property management and development activities are conducted through its wholly-owned subsidiary, CBL & Associates Management, Inc.

Supply Chain Architecture: Key Suppliers & Partners: The Company relies on third-party vendors, including cloud providers, for critical services such as network infrastructure, system data management, security, and data integrity. Facility Network:

• Corporate Offices: The Company's principal executive offices are located at CBL Center, Chattanooga, Tennessee.

Operational Metrics:

• Total portfolio occupancy: 90.0% as of December 31, 2025.
• Same-center malls, lifestyle centers, and outlet centers in-line store occupancy: 88.6% as of December 31, 2025.
• Open-air centers occupancy: 95.0% as of December 31, 2025.
• All Other Properties occupancy: 90.9% as of December 31, 2025.
• Same-center sales per square foot (malls, lifestyle centers, and outlet centers): $437 for the trailing twelve months ended December 31, 2025, representing a 2.8% increase year-over-year.
• Mall in-line tenant occupancy costs: 10.6% of sales for 2025.

Market Access & Customer Relationships

Go-to-Market Strategy: The Company's strategy focuses on attracting customers through marketing promotions and social media campaigns. It acknowledges that many of its retailers have adopted an omni-channel approach, leveraging both digital and traditional retailing channels.

Customer Portfolio: Enterprise Customers: The Company's top 25 tenants, based on their percentage of total revenues for the year ended December 31, 2025, include:

• Victoria's Secret & Co.: 2.67% of total revenues (46 stores, 379,689 square feet)
• Signet Group, PLC: 2.60% of total revenues (107 stores, 156,889 square feet)
• American Eagle Outfitters, Inc.: 2.45% of total revenues (59 stores, 361,167 square feet)
• Pentland Group: 2.25% of total revenues (62 stores, 362,211 square feet)
• Dick's Sporting Goods, Inc.: 2.16% of total revenues (22 stores, 1,432,702 square feet) Customer Concentration: No single tenant accounted for more than 5.0% of the Company’s total revenues for the year ended December 31, 2025.

Geographic Revenue Distribution: The Company's revenue distribution by geographic region is primarily concentrated in the southeastern and midwestern United States, as detailed in the Company Overview.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The shopping center business is inherently seasonal, with tenants typically achieving peak sales during the fourth quarter due to the holiday season. This seasonality generally leads to higher percentage rent income and temporary rents in the fourth quarter, making quarterly results not necessarily indicative of annual performance. The industry is experiencing rapid evolution due to emerging technologies, influencing customer, retailer, and shopping center relationships. The increasing popularity of digital and mobile technologies has accelerated the shift towards web-based shopping, potentially impacting physical store sales and occupancy levels.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors: The Company competes with various other shopping facilities, including other REITs, investment banking firms, and private and institutional investors, particularly for attractive investment opportunities and highly productive retail properties. Competitive Threats: Key competitive threats include online shopping alternatives, discount shopping centers, outlet centers, wholesale clubs, direct mail, and television shopping networks. The rise of pure online retail and omni-channel strategies by tenants may lead to store closures or underreporting of sales at physical properties. Competitive Response Strategy: The Company's strategy involves aggressively attracting customers through marketing promotions and social media campaigns, and adapting its business model to evolving consumer purchasing habits.

Risk Assessment Framework

Strategic & Market Risks

• Market Dynamics: The Company is exposed to risks from adverse changes in national, regional, and local economic conditions, including capital and credit market volatility, shifts in consumer confidence and spending, job losses, inflation, and international trade disputes. The inability to lease space on favorable terms or the loss of significant tenants due to bankruptcies or consolidations could materially impact financial performance. Increased operating costs and adverse changes in governmental regulations also pose risks.
• Technology Disruption: The Company's use of artificial intelligence (AI) in business processes introduces technological and legal risks, including the potential for inaccurate or misleading outputs, data leakage, and misuse by malicious actors. The rapidly evolving AI regulatory environment may necessitate changes in business practices and incur additional compliance costs.
• Climate Change: Potential future laws and regulations related to climate change could result in substantial costs for compliance, increased energy expenses, retrofit costs, and construction expenditures. Physical impacts of climate change, such as changes in weather patterns, water shortages, and temperature extremes, could adversely affect properties and operations.
• Social Unrest: Social, political, and economic instability, including protests, demonstrations, and civil disturbances in regions where properties are located, could lead to property damage, operational disruptions, and increased security costs.
• Public Health Emergencies: Future pandemics or similar threats could materially and adversely impact financial condition, results of operations, and cash flows by reducing customer willingness to visit properties, affecting tenants' ability to pay rent, disrupting supply chains, and limiting access to capital.

Operational & Execution Risks

• Supply Chain Vulnerabilities: Reliance on third-party vendors, including cloud providers, for critical IT infrastructure and data management exposes the Company to risks of service interruption, delays, or loss of information if these vendors experience outages, financial difficulties, or security breaches.

Financial & Regulatory Risks

• Market & Financial Risks: Substantial indebtedness, with many assets encumbered by property-level debt, could impair the Company's ability to obtain additional financing. Rising interest rates could increase borrowing costs and reduce cash flows available for distributions. Covenants in debt agreements impose restrictions on business operations, and failure to comply could result in default.
• Regulatory & Compliance Risks: Compliance with the Americans with Disabilities Act (ADA), fire and safety regulations, building codes, and other land use regulations may require significant expenditures. The complex and evolving landscape of sustainability reporting also imposes additional costs and risks.
• Tax Risks: As a REIT, the Company must satisfy minimum distribution requirements, which may limit cash available for business growth. An "ownership change" following its emergence from bankruptcy in 2021 may substantially limit the ability to use net operating loss carryforwards and other tax attributes to offset future taxable income. Partnership tax audit rules could also have an adverse effect.

Geopolitical & External Risks

• Geopolitical Exposure: International trade disputes, including tariffs, could increase costs for tenants, weaken demand for real estate, and impact construction costs and global supply chains.
• Terrorism Risk: Future terrorist activity or other acts of violence could lead to declining consumer confidence and spending, harm property values, and increase financial market volatility. While insurance coverage for terrorism is maintained, its future availability or cost is uncertain, particularly if the Terrorism Risk Insurance Program Reauthorization Act of 2015 is not continued or is modified beyond 2027.

Innovation & Technology Leadership

Research & Development Focus: The Company utilizes artificial intelligence (AI) in certain internal business processes. Intellectual Property Portfolio: Not explicitly detailed in the filing. Technology Partnerships: Not explicitly detailed in the filing.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: Not explicitly detailed in the filing. Board Composition: The board of directors includes independent directors Marjorie L. Bowen, David J. Contis, Robert G. Gifford, and Michael A. Torres, all of whom qualify as "audit committee financial experts." The Nominating/Corporate Governance Committee oversees the Company's Corporate Responsibility efforts.

Human Capital Strategy

Workforce Composition: As of December 31, 2025, the Company's Management Company had 408 full-time and 92 part-time employees. The workforce is 21% racially diverse, 53% female, 4% military veterans, and 3% self-identify as disabled, spanning multiple generations.

Talent Management: Acquisition & Retention: The Company benefits from low voluntary employee turnover (7% in 2025, 6% in 2024), reflecting a stable and engaged workforce. Compensation programs include salaries, variable incentive bonuses, and equity-based awards, supported by annual performance evaluations and compensation analyses to address pay gaps. Comprehensive employment benefits and training programs are offered. Diversity & Development: The Company provides learning and development opportunities, including conferences, leadership programs, and mandatory cybersecurity and ethics training. In 2025, the CBL Employee Learning Reimbursement Program was launched. Recruitment efforts include a partnership with Transition Overwatch, targeting Veterans. Culture & Engagement: An employee engagement assessment in 2025 yielded a 77% response rate, with 93% of employees rating it as a great place to work, earning CBL Great Place to Work Certification™. Employee-led programs like CBL Community, CBL Cares, CBL Fit, and CBL Social foster an inclusive environment, community involvement, wellness, and team engagement.

Environmental & Social Impact

Environmental Commitments: Climate Strategy: The Company has implemented strategies aimed at reducing energy and water consumption, greenhouse gas emissions, and waste production across its portfolio. Supply Chain Sustainability: Not explicitly detailed in the filing.

Social Impact Initiatives:

• Community Investment: Through its CBL Cares program, the Company's team volunteered 1,109 hours with non-profit organizations in 2025. Combined with corporate donations and matching gifts, total support valued at nearly $177,000 was provided to community organizations.

Business Cyclicality & Seasonality

Demand Patterns: The shopping center business is seasonal, with the fourth quarter typically experiencing the highest levels of tenant sales due to the holiday season. This generally results in higher percentage rent income and temporary rents during that period. Consequently, occupancy levels and revenue production are usually highest in the fourth quarter of each year, meaning quarterly results may not be indicative of full fiscal year performance. Planning & Forecasting: Not explicitly detailed in the filing.

Regulatory Environment & Compliance

Regulatory Framework: The Company's properties are subject to compliance with the Americans with Disabilities Act (ADA), fire and safety regulations, building codes, and other land use regulations. Trade & Export Controls: Not explicitly detailed in the filing. Legal Proceedings: The Company is involved in various litigation matters arising in the ordinary course of business, most of which are expected to be covered by liability insurance. Management assesses potential losses, and based on current expectations, these matters are not anticipated to have a material adverse effect on the Company's liquidity, results of operations, business, or financial condition. Environmental contingencies are also evaluated, with maximum potential exposure to loss not expected to be material, supported by a master insurance policy providing coverage into 2027.

Tax Strategy & Considerations

Tax Profile: The Company operates as a REIT, generally exempt from federal corporate income taxes, but is subject to certain state and local taxes. Its taxable REIT subsidiaries pay income tax on their taxable income. Tax Reform Impact: The Company experienced an "ownership change" under Sections 382 and 383 of the Internal Revenue Code upon its emergence from bankruptcy on November 1, 2021. This event may substantially limit the Company's ability to use certain tax attributes, such as net operating loss carryforwards and other deductions, to offset future taxable income. The five-year recognition period for certain built-in losses expires on November 1, 2026.

Insurance & Risk Transfer

Risk Management Framework: The Company maintains a comprehensive blanket insurance policy covering general liability, property casualty (including fire, earthquake, flood, and wind), and rental loss. Cybersecurity insurance is also maintained. Environmental insurance coverage is in place for certain properties, with limits of $40.0 million per occurrence and in aggregate, extending into 2027. Risk Transfer Mechanisms: The Company utilizes derivative financial instruments, primarily interest rate swaps, to hedge a portion of its interest rate risk associated with variable-rate debt, aiming to stabilize interest expense and manage exposure to rate movements. Uninsured Losses: Certain types of losses, such as lease and other contract claims or some environmental losses, are generally uninsured or not economically insurable. Losses exceeding insured limits could occur, potentially impacting the Company's financial condition.