CBL & Associates Properties(CBL) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis of CBL & Associates Properties, Inc Item 1. Condensed Consolidated Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements, including balance sheets, income, comprehensive income, equity, and cash flows, with detailed explanatory notes Condensed Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity as of June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | ASSETS | | | | Net investment in real estate assets | $1,794,294 | $1,871,492 | | Cash and cash equivalents | $100,325 | $40,791 | | Restricted cash | $104,171 | $112,938 | | Available-for-sale securities | $187,662 | $243,148 | | Total Assets | $2,603,007 | $2,747,191 | | LIABILITIES AND EQUITY | | | | Mortgage and other indebtedness, net | $2,139,776 | $2,212,680 | | Accounts payable and accrued liabilities | $185,718 | $221,647 | | Total Liabilities | $2,325,494 | $2,434,327 | | Total Shareholders' Equity | $289,387 | $323,546 | | Total Equity | $277,513 | $312,864 | - Total assets decreased by approximately $144 million from December 31, 2024, to June 30, 2025[12] - Total liabilities decreased by approximately $109 million from December 31, 2024, to June 30, 2025[12] Condensed Consolidated Statements of Operations This section details the company's revenues, expenses, and net income for the three and six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $140,905 | $129,665 | $282,673 | $258,782 | | Total expenses | $(105,359) | $(96,497) | $(226,682) | $(198,753) | | Net income | $2,158 | $4,291 | $10,545 | $3,817 | | Net income attributable to the Company | $2,759 | $4,744 | $11,548 | $4,794 | | Net income attributable to common shareholders | $2,567 | $4,484 | $10,779 | $4,275 | | Basic earnings per share | $0.08 | $0.14 | $0.35 | $0.14 | | Diluted earnings per share | $0.08 | $0.14 | $0.35 | $0.14 | - Total revenues increased by $11.24 million (8.7%) for the three months and $23.89 million (9.2%) for the six months ended June 30, 2025, compared to prior-year periods[16] - Net income attributable to common shareholders decreased by $1.92 million (42.7%) for the three months but increased by $6.50 million (152.1%) for the six months ended June 30, 2025[16] Condensed Consolidated Statements of Comprehensive Income This section presents the company's comprehensive income, including net income and other comprehensive income/loss, for the periods ended June 30, 2025 and 2024 Condensed Consolidated Statements of Comprehensive Income (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $2,158 | $4,291 | $10,545 | $3,817 | | Total other comprehensive (loss) income | $(319) | $(83) | $(794) | $33 | | Comprehensive income | $1,839 | $4,208 | $9,751 | $3,850 | | Comprehensive income attributable to the Company | $2,440 | $4,661 | $10,754 | $4,827 | | Comprehensive income attributable to common shareholders | $2,248 | $4,401 | $9,985 | $4,308 | - Total other comprehensive loss significantly increased for both the three and six months ended June 30, 2025, driven by unrealized losses on interest rate swaps and available-for-sale securities[18] Condensed Consolidated Statements of Equity This section outlines changes in the company's total shareholders' equity and total equity for the period ended June 30, 2025 Condensed Consolidated Statements of Equity (in thousands) | Metric | December 31, 2024 | June 30, 2025 | | :----------------------------------- | :---------------- | :------------ | | Total Shareholders' Equity | $323,546 | $289,387 | | Total Equity | $312,864 | $277,513 | - Total shareholders' equity decreased from $323.55 million at December 31, 2024, to $289.39 million at June 30, 2025, primarily due to dividends and other comprehensive losses[21] - Dividends declared for common stock totaled $37.12 million for the six months ended June 30, 2025, up from $25.54 million in the prior-year period[21][24] Condensed Consolidated Statements of Cash Flows This section details the company's cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $99,947 | $94,964 | | Net cash provided by investing activities | $98,055 | $12,882 | | Net cash used in financing activities | $(147,310) | $(89,684) | | Net change in cash, cash equivalents and restricted cash | $50,692 | $18,162 | | Cash, cash equivalents and restricted cash, end of period | $204,496 | $141,238 | - Net cash provided by investing activities significantly increased by $85.17 million for the six months ended June 30, 2025, driven by higher proceeds from real estate sales and security redemptions[24][185] - Net cash used in financing activities increased by $57.63 million for the six months ended June 30, 2025, primarily due to increased debt principal payments and a special dividend[24][186] Notes to Unaudited Condensed Consolidated Financial Statements This section provides detailed notes on the company's organization, accounting policies, revenue, leases, fair value, acquisitions, dispositions, affiliates, debt, segments, EPS, contingencies, share-based compensation, and subsequent events Note 1 – Organization and Basis of Presentation CBL & Associates Properties, Inc. operates as a self-managed REIT, focusing on retail properties across 20 states, primarily through its Operating Partnership - CBL & Associates Properties, Inc. operates as a self-managed REIT, focusing on various retail and other property types[26] Property Portfolio as of June 30, 2025 | Property Type | Consolidated Properties | Unconsolidated Properties | Total | | :-------------- | :---------------------- | :------------------------ | :---- | | Malls | 40 | 3 | 43 | | Outlet Centers | 2 | 3 | 5 | | Lifestyle Centers | 3 | 1 | 4 | | Open-Air Centers | 19 | 8 | 27 | | Other | 3 | 1 | 4 | | Total | 67 | 16 | 83 | Note 2 – Summary of Significant Accounting Policies This section outlines the company's significant accounting policies, including GAAP compliance, evaluation of new accounting standards, and accounts receivable collectability assessment - The company is evaluating a new FASB ASU on 'Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures,' effective for fiscal years beginning after December 15, 2026[33] - Accounts receivable collectability is assessed based on individual lease disputes, negotiation status, rent collection experience, tenant bankruptcies, and portfolio-level analysis[34][35][36] Note 3 – Revenues This section details the company's total revenues, disaggregated by source, and outlines outstanding performance obligations for fixed operating expense reimbursements Revenues Disaggregated by Source (in thousands) | Revenue Source | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Rental revenues | $136,453 | $124,071 | $273,813 | $248,098 | | Operating expense reimbursements | $1,747 | $1,960 | $3,689 | $4,220 | | Management, development and leasing fees | $1,357 | $1,817 | $2,674 | $3,722 | | Marketing revenues | $758 | $563 | $1,109 | $967 | | Other revenues | $590 | $1,254 | $1,388 | $1,775 | | Total revenues | $140,905 | $129,665 | $282,673 | $258,782 | - Outstanding performance obligations for fixed operating expense reimbursements total $97.77 million, with $19.75 million expected within 5 years, $44.13 million within 5-20 years, and $33.88 million over 20 years[41] Note 4 – Leases This section details the components of rental revenues, distinguishing between fixed and variable lease payments, and outlines undiscounted future fixed lease payments Components of Rental Revenues (in thousands) | Component | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Fixed lease payments | $107,552 | $97,833 | $225,073 | $196,137 | | Variable lease payments | $28,901 | $26,238 | $48,740 | $51,961 | | Total rental revenues | $136,453 | $124,071 | $273,813 | $248,098 | Undiscounted Future Fixed Lease Payments (in thousands) | Year Ending December 31, | Amount | | :----------------------- | :----- | | 2025 (July 1 - Dec 31) | $219,671 | | 2026 | $364,731 | | 2027 | $281,851 | | 2028 | $210,024 | | 2029 | $152,873 | | 2030 | $100,193 | | Thereafter | $295,090 | | Total | $1,624,433 | Note 5 – Fair Value Measurements This section categorizes financial assets and liabilities into a fair value hierarchy and details fair value measurements for debt, interest rate swaps, and available-for-sale securities - The estimated fair value of mortgage and other indebtedness was $2.04 billion as of June 30, 2025, calculated using Level 2 inputs[46] Fair Value of Interest Rate Swap (in thousands) | Asset | Fair Value at June 30, 2025 | Level 1 | Level 2 | Level 3 | | :-------------- | :-------------------------- | :------ | :------ | :------ | | Interest rate swap | $90 | — | $90 | — | Available-for-Sale U.S. Treasury Securities (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------- | :------------ | :---------------- | | Amortized cost | $187,764 | $242,881 | | Total unrealized (loss) gain | $(102) | $267 | | Fair value | $187,662 | $243,148 | - The Company recorded an impairment loss of $1.46 million during the three and six months ended June 30, 2025, related to the sale of 840 Greenbrier Circle[53] Note 6 – Acquisitions This section details the acquisition of four Macy's stores in January 2025 and the subsequent WPG acquisition of four enclosed malls in July 2025 - In January 2025, the Company acquired four Macy's stores for $6.16 million for future redevelopment[56] - Subsequent to June 30, 2025, the Company acquired four enclosed malls (Ashland Town Center, Mesa Mall, Paddock Mall, and Southgate Mall) for $178.9 million in the 'WPG acquisition'[56][123] Note 7 – Dispositions and Held-for-Sale This section outlines gains from real estate sales, including Imperial Valley Mall and Monroeville Mall, and the classification and subsequent sale of The Promenade D'Iberville - During the three months ended June 30, 2025, the Company realized a gain of $1.34 million primarily from the sale of an outparcel[58] - For the six months ended June 30, 2025, the Company realized a gain of $22.87 million from sales, with gross proceeds of $77.1 million used for debt reduction[58] Property Classified as Held-for-Sale (June 30, 2025) | Property | Location | Property Type | Total Assets | Total Liabilities | | :-------------------------- | :--------------- | :-------------------- | :----------- | :---------------- | | The Promenade D'Iberville | D'Iberville, MS | Open Air/Power Center | $33,134 | $2,413 | - Subsequent to June 30, 2025, The Promenade was sold for $83.1 million, with proceeds funding the WPG acquisition[58][122] Note 8 – Unconsolidated Affiliates and Noncontrolling Interests This section details the company's investments in unconsolidated affiliates, accounted for using the equity method, and significant activities related to these entities - As of June 30, 2025, the Company had investments in 23 unconsolidated affiliates, accounted for using the equity method due to substantive participating rights of other partners[62][63][64] - In March 2025, the Company transferred Alamance Crossing mall to the mortgage holder, satisfying $41.12 million in non-recourse debt[65] Condensed Combined Financial Statements - Unconsolidated Affiliates (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total assets | $867,879 | $896,682 | | Total liabilities | $758,217 | $816,789 | | Total owners' equity | $109,662 | $79,893 | | Total revenues (3 months ended June 30) | $43,636 | $63,875 | | Net income (3 months ended June 30) | $9,556 | $28,328 | | Total revenues (6 months ended June 30) | $88,838 | $127,872 | | Net income (6 months ended June 30) | $52,546 | $34,592 | Note 9 – Mortgage and Other Indebtedness, Net This section details the company's consolidated debt, including fixed and variable-rate components, weighted-average interest rates, and significant loan activities and extensions Mortgage and Other Indebtedness, Net (in thousands) | Debt Type | June 30, 2025 Amount | June 30, 2025 Weighted Average Interest Rate | December 31, 2024 Amount | December 31, 2024 Weighted Average Interest Rate | | :----------------------------------- | :------------------- | :--------------------------------------- | :------------------- | :--------------------------------------- | | Fixed-rate debt | $1,374,192 | 5.01% | $1,403,798 | 5.02% | | Variable-rate debt | $864,270 | 7.43% | $928,106 | 7.67% | | Total fixed-rate and variable-rate debt | $2,238,462 | 5.95% | $2,331,904 | 6.07% | | Unamortized deferred financing costs | $(6,619) | | $(8,688) | | | Debt discounts | $(92,067) | | $(110,536) | | | Total mortgage and other indebtedness, net | $2,139,776 | | $2,212,680 | | - In February 2025, proceeds from the sale of Imperial Valley Mall were used to pay down the secured term loan by $41.12 million[82] - Subsequent to June 30, 2025, a new $78.0 million, five-year non-recourse loan for Cross Creek Mall was closed at a fixed interest rate of 6.856%[83][121] - The Company uses interest rate swaps to hedge variable cash flows, with a notional amount of $32.0 million related to the open-air centers and outparcels loan, fixing the interest rate at 7.3975%[79][91] Note 10 – Segment Information This section presents the company's reportable segments (malls, lifestyle, outlet, and open-air centers) and their performance, evaluated based on Net Operating Income (NOI) - The Company's reportable segments include malls, lifestyle centers, outlet centers, and open-air centers, with performance evaluated based on Net Operating Income (NOI)[96][97][98][99][100] Segment Net Operating Income (NOI) (in thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Malls | $73,113 | $78,403 | $141,588 | $156,231 | | Outlet Centers | $5,124 | $5,259 | $10,641 | $10,805 | | Lifestyle Centers | $9,042 | $8,399 | $17,387 | $16,960 | | Open-Air Centers | $14,675 | $15,531 | $28,765 | $30,487 | | Total Reportable Segments NOI | $101,954 | $107,592 | $198,381 | $214,483 | | All Other segment net operating income | $9,054 | $11,582 | $18,532 | $22,103 | Note 11 – Earnings Per Share This section details the calculation of basic and diluted earnings per share (EPS) using the two-class method, including the impact of participating securities - EPS is calculated under the two-class method, considering unvested restricted stock awards as participating securities[106] Basic and Diluted EPS (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income attributable to common shareholders | $2,567 | $4,484 | $10,779 | $4,275 | | Weighted-average basic shares outstanding | 30,456 | 31,150 | 30,438 | 31,348 | | Basic earnings per share | $0.08 | $0.14 | $0.35 | $0.14 | | Weighted-average diluted shares outstanding | 30,742 | 31,156 | 30,726 | 31,351 | | Diluted earnings per share | $0.08 | $0.14 | $0.35 | $0.14 | Note 12 – Contingencies This section addresses the company's litigation, environmental contingencies, and guarantees of unconsolidated affiliates' debt, including recorded liabilities - The Company records litigation liabilities when an unfavorable outcome is probable and estimable, with current matters not expected to have a material adverse effect[110] - Environmental contingencies are reasonably possible but not material, with a master insurance policy providing coverage up to $40.0 million[111] Operating Partnership's Guarantees of Unconsolidated Affiliates' Debt (in thousands) | Unconsolidated Affiliate | Company's Ownership Interest | Outstanding Balance | Percentage Guaranteed by the Operating Partnership | Maximum Guaranteed Amount | Maturity Date | Obligation recorded to reflect guaranty (June 30, 2025) | | :----------------------- | :--------------------------- | :------------------ | :----------------------------------------------- | :------------------------ | :------------ | :------------------------------------------------------ | | Port Orange I, LLC | 50% | $41,574 | 50% | $20,787 | Feb-2026 | $208 | | Ambassador Infrastructure, LLC | 65% | $2,797 | 100% | $2,797 | Mar-2027 | $28 | | Total guaranty liability | | | | | | $236 | Note 13 – Share-Based Compensation This section details share-based compensation expense for restricted stock awards and Performance Stock Units (PSUs), including unrecognized compensation costs and recognition periods - Share-based compensation expense for restricted stock awards was $4.40 million for the six months ended June 30, 2025, compared to $4.08 million for the same period in 2024[114] - As of June 30, 2025, $8.91 million of unrecognized compensation cost for unvested restricted stock awards is expected to be recognized over a weighted-average period of 1.6 years[114] - Unrecognized compensation expense for Performance Stock Units (PSUs) was $11.25 million as of June 30, 2025, expected to be recognized over a weighted-average period of 2.3 years[116] Note 14 – Noncash Investing and Financing Activities This section details noncash investing and financing activities, primarily additions to real estate assets that were accrued but not yet paid Noncash Investing and Financing Activities (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Additions to real estate assets accrued but not yet paid | $11,792 | $10,339 | Note 15 – Subsequent Events This section outlines significant events occurring after June 30, 2025, including acquisitions, dispositions, loan modifications, and a dividend increase - In July 2025, a new $78.0 million, five-year non-recourse loan for Cross Creek Mall was closed at a fixed interest rate of 6.856%[121] - The Promenade was sold for $83.1 million in July 2025, with proceeds funding the WPG acquisition[122] - The WPG acquisition of four enclosed malls for $178.9 million was completed in July 2025[123] - The existing $332.96 million open-air centers and outparcels loan was modified and extended, increasing its principal balance by $110.0 million to $442.96 million and extending maturity through October 2030[123] - The board authorized a 12.5% increase in the regular common dividend to an annualized rate of $1.80 per share for Q3 2025, supported by incremental cash flow from the WPG acquisition[124] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition, operational results, strategic initiatives, liquidity, and capital resources Executive Overview This section outlines the company's strategic focus on improving occupancy, driving rent growth, diversifying property offerings, and recent balance sheet progress - The company's strategy focuses on improving occupancy, driving rent growth, and diversifying property offerings to include various retail and non-retail uses[132] - The $178.9 million WPG acquisition of four enclosed malls in July 2025 is a significant portfolio optimization step, utilizing non-core asset sale proceeds for stable market-dominant malls[132] - The board authorized a 12.5% increase in the regular common dividend to an annualized rate of $1.80 per share, supported by incremental cash flow from the WPG acquisition[133][124] - Recent balance sheet progress includes a new $78.0 million non-recourse loan for Cross Creek Mall at 6.856% fixed interest and an expansion/extension of the open-air centers and outparcels loan[134][123] Results of Operations This section analyzes the company's financial performance, detailing changes in revenues, expenses, and net income for the three and six months ended June 30, 2025 and 2024 - Properties consolidated in December 2024 include CoolSprings Galleria, Oak Park Mall, and West County Center[139] - Properties acquired in July 2025 (WPG acquisition) include Ashland Town Center, Mesa Mall, Paddock Mall, and Southgate Mall[139] - Significant dispositions since the prior-year period include Monroeville Mall, Annex at Monroeville, Imperial Valley Mall, 840 Greenbrier Circle, and The Promenade (sold July 2025)[142] - Non-core properties as of June 30, 2025, include Brookfield Square, Harford Mall, Laurel Park Place, Southpark Mall, and The Promenade[143] Comparison of the Three Months Ended June 30, 2025 to the Three Months Ended June 30, 2024 This section compares the company's financial performance for the three months ended June 30, 2025, to the prior-year period, highlighting changes in revenues, expenses, and interest - Total revenues increased by $11.24 million, with rental revenues up $12.38 million, primarily due to $21.0 million from property consolidations[144] - Total operating expenses increased by $8.86 million, driven by a $7.7 million increase in property operating expenses and a $13.2 million increase in depreciation and amortization from December 2024 consolidations[145][146] - Interest expense increased by $4.6 million, mainly due to higher debt discounts and interest from consolidated properties, partially offset by lower secured term loan interest[148] Comparison of the Six Months Ended June 30, 2025 to the Six Months Ended June 30, 2024 This section compares the company's financial performance for the six months ended June 30, 2025, to the prior-year period, detailing changes in revenues, expenses, interest, and real estate gains - Total revenues increased by $23.89 million, with rental revenues up $25.72 million, primarily due to $41.8 million from property consolidations[150] - Total operating expenses increased by $27.93 million, with property operating expenses up $18.08 million and depreciation/amortization up $8.54 million, mainly from consolidations[151][152] - Interest expense increased by $9.0 million, primarily due to higher debt discounts and interest from December 2024 consolidations[153][154] - A $22.9 million gain on real estate asset sales was recognized, significantly higher than the $3.7 million gain in the prior-year period[155] Non-GAAP Measure - Same-center Net Operating Income This section defines and presents Same-center Net Operating Income (NOI), a non-GAAP measure, and analyzes its changes for the three and six months ended June 30, 2025 - Same-center NOI is a non-GAAP measure reflecting trends in occupancy, rental rates, sales, and operating costs, excluding specific adjustments like lease termination income[158] - Properties under major redevelopment, repositioning, or debt restructuring are excluded from the same-center pool[159] Same-center NOI (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total same-center NOI | $104,869 | $105,409 | $204,996 | $207,890 | | % Change | -0.5% | | -1.4% | | - The decrease in same-center NOI was primarily due to a $3.2 million increase in operating expenses for the three-month period and a $6.9 million increase for the six-month period[163][164] Operational Review This section reviews key operational metrics, including seasonality, revenue sources by property type, tenant sales, occupancy rates, leasing activity, and average annual base rents - The shopping center business is seasonal, with highest sales and percentage rents typically occurring in the fourth quarter due to the holiday season[165] Revenue Sources by Property Type (Six Months Ended June 30) | Property Type | 2025 | 2024 | | :------------------ | :----- | :----- | | Malls | 71.0% | 71.8% | | Outlet Centers | 5.3% | 5.0% | | Lifestyle Centers | 7.6% | 7.1% | | Open-Air Centers | 11.1% | 10.7% | | All Other Properties | 5.0% | 5.4% | - Same-center tenant sales per square foot for malls, lifestyle, and outlet centers increased by 1.4% to $423 for the trailing twelve months ended June 30, 2025[167] Portfolio Occupancy as of June 30 | Metric | 2025 | 2024 | | :------------------------------------------ | :----- | :----- | | Total portfolio | 88.8% | 88.7% | | Total same-center malls, lifestyle centers and outlet centers | 87.3% | 87.2% | | Open-air centers | 93.6% | 94.9% | - Total leased square footage was 1,217,257 for the three months and 1,794,182 for the six months ended June 30, 2025[169] - Average annual base rents per square foot for the total portfolio increased to $26.70 for the six months ended June 30, 2025, from $26.01 in the prior-year period[170] Liquidity and Capital Resources This section details the company's liquidity position, including cash and securities, total debt, significant acquisitions and dispositions, and dividend payments - As of June 30, 2025, the company had $288.0 million in unrestricted cash and U.S. Treasury securities, and $76.0 million in restricted cash[175] - Total pro rata share of debt, excluding unamortized deferred financing costs and debt discounts, was $2.60 billion at June 30, 2025[175] - In January 2025, four Macy's stores were acquired for $6.2 million, and the $178.9 million WPG acquisition of four enclosed malls closed subsequent to June 30, 2025[178] - Sales of Monroeville Mall, Annex at Monroeville, and Imperial Valley Mall generated proceeds used for debt paydown; The Promenade was sold for $83.1 million in July 2025[179] - Common stock dividends of $0.40 per share were paid in Q1 and Q2 2025, plus a special cash dividend of $0.80 per share in Q1 2025; a 12.5% increase was authorized post-period[181] Cash Flows - Operating, Investing and Financing Activities This section analyzes the company's cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 Net Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :----------------------------------- | :----------------------------- | :----------------------------- | :----- | | Net cash provided by operating activities | $99,947 | $94,964 | $4,983 | | Net cash provided by investing activities | $98,055 | $12,882 | $85,173 | | Net cash used in financing activities | $(147,310) | $(89,684) | $(57,626) | | Net cash flows | $50,692 | $18,162 | $32,530 | - Cash provided by operating activities increased primarily due to the consolidation of CoolSprings Galleria, Oak Park Mall, and West County Center in December 2024[184] - Cash provided by investing activities significantly increased due to property sales and higher net redemptions of U.S. Treasury securities[185] - Cash used in financing activities increased due to higher principal payments on mortgage and other indebtedness and a special dividend payment in Q1 2025[186] Debt This section details the company's total pro rata share of outstanding debt, including fixed and variable-rate components, weighted-average interest rates, and recent loan activities Total Pro Rata Share of Debt (in thousands) | Debt Type | June 30, 2025 Total | December 31, 2024 Total | | :----------------------------------- | :------------------ | :-------------------- | | Fixed-rate debt | $1,716,125 | $1,793,467 | | Variable-rate debt | $882,739 | $943,692 | | Total fixed-rate and variable-rate debt | $2,598,864 | $2,737,159 | | Weighted Average Interest Rate | 5.93% | 6.03% | - As of June 30, 2025, $2.58 billion of outstanding debt was non-recourse, and $23.6 million was recourse[187] - The weighted-average remaining term of total consolidated and unconsolidated debt was 2.0 years at June 30, 2025, down from 2.4 years at December 31, 2024[191] - Variable-rate debt represented 34.0% of the total pro rata debt at June 30, 2025[192] Equity This section details common stock dividends paid and the board's authorization for a dividend increase, emphasizing future dividend considerations - Common stock dividends of $0.40 per share were paid in Q1 and Q2 2025, and a special dividend of $0.80 per share was paid in Q1 2025 to ensure REIT status[194] - Subsequent to June 30, 2025, the board authorized a 12.5% increase in the regular common dividend to an annualized rate of $1.80 per share for the quarter ending September 30, 2025[195] Capital Expenditures This section details total capital expenditures, excluding developments, redevelopments, and expansions, for the three and six months ended June 30, 2025 Capital Expenditures (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Tenant allowances | $3,327 | $4,070 | $9,870 | $6,052 | | Total maintenance capital expenditures | $8,723 | $6,347 | $14,911 | $11,764 | | Capitalized overhead | $214 | $429 | $594 | $481 | | Capitalized interest | $137 | $139 | $250 | $273 | | Total capital expenditures | $12,401 | $10,985 | $25,625 | $18,570 | - Total capital expenditures for the six months ended June 30, 2025, increased by $7.06 million compared to the prior-year period[196] Developments This section outlines properties under development, including project costs, costs to date, expected opening dates, and unleveraged yields Properties Under Development at June 30, 2025 (in thousands) | Property | Location | CBL Ownership Interest | Total Project Cost | Cost to Date | Expected Opening Date | Unleverage Yield | | :-------------------------------- | :--------------- | :--------------------- | :----------------- | :----------- | :-------------------- | :--------------- | | Mayfaire Town Center - hotel development | Wilmington, NC | 49% | $15,435 | $15,955 | Summer '25 | 11.0% | | Friendly Center - Cooper's Hawk | Greensboro, NC | 50% | $2,551 | $503 | Summer '25 | 10.2% | | Friendly Center - North Italia | Greensboro, NC | 50% | $2,550 | $504 | Winter '25 | 8.1% | | Total Properties Under Development | | | $20,536 | $16,962 | | | Off-Balance Sheet Arrangements This section describes the company's ownership interests in unconsolidated affiliates and the rationale for joint ventures and debt guarantees - The Company has ownership interests in 23 unconsolidated affiliates, accounted for using the equity method[201] - Joint ventures are formed to leverage third-party expertise, capitalize on property value, or develop non-retail uses on available land[204] - The Operating Partnership may guarantee joint venture debt to achieve lower funding costs, often receiving a fee or increased ownership from the joint venture partner[202] Critical Accounting Policies This section highlights the use of estimates and assumptions in financial statement preparation and confirms no material changes to critical accounting policies - Financial statement preparation requires management to make estimates and assumptions that affect the financial statements and disclosures[205] - There have been no material changes to the critical accounting policies and estimates during the six months ended June 30, 2025[206] Non-GAAP Measure - Funds from Operations This section defines Funds from Operations (FFO) as a non-GAAP measure, explains its calculation, and analyzes changes in FFO allocable to Operating Partnership common unitholders - FFO is a non-GAAP measure supplementing net income by excluding gains/losses on depreciable property sales, impairment losses, and adding back depreciation and amortization[207] - FFO allocable to Operating Partnership common unitholders reflects property performance regardless of common shareholders' and noncontrolling interests' ownership[209] FFO Allocable to Operating Partnership Common Unitholders, as Adjusted (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | FFO allocable to Operating Partnership common unitholders | $45,455 | $47,155 | $80,298 | $85,313 | | FFO allocable to Operating Partnership common unitholders, as adjusted | $57,271 | $54,004 | $103,435 | $101,321 | - The increase in FFO, as adjusted, was primarily driven by the consolidation of CoolSprings Galleria, Oak Park Mall, and West County Center, partially offset by property sales[216] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section discusses the company's exposure to market risks, primarily interest rate risk, and the impact of interest rate changes on annual interest expense and debt fair value - The Company uses interest rate swaps to manage its interest rate risk[219] - A 0.5% increase or decrease in interest rates on variable-rate debt would impact annual interest expense by approximately $4.4 million[219] - A 0.5% increase in interest rates would decrease debt fair value by approximately $14.9 million, while a 0.5% decrease would increase it by approximately $15.3 million[220] Item 4. Controls and Procedures This section confirms the effectiveness of the company's disclosure controls and procedures and reports no material changes in internal control over financial reporting - The Company's disclosure controls and procedures were evaluated and concluded to be effective as of June 30, 2025[221] - There have been no material changes in the Company's internal control over financial reporting during the most recent fiscal quarter[222] PART II – OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits Item 1. Legal Proceedings This section incorporates information on legal proceedings by reference from Note 12 of the condensed consolidated financial statements - Information on legal proceedings is incorporated by reference from Note 12 of the condensed consolidated financial statements[223] Item 1A. Risk Factors This section updates risk factors, highlighting the potential adverse impact of international trade disputes, including tariffs, on the company's business - International trade disputes, including U.S. trade tariffs and retaliatory tariffs, could adversely impact the company's business[225] - Tariffs could increase costs for tenants selling imported goods, potentially weakening real estate demand if costs cannot be passed to customers[225] - Trade disputes could also lead to inflationary pressures on redevelopment project materials and disrupt global supply chains[225] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This item is not applicable for the reporting period - This item is not applicable[226] Item 3. Defaults Upon Senior Securities This item is not applicable for the reporting period - This item is not applicable[227] Item 4. Mine Safety Disclosures This item is not applicable for the reporting period - This item is not applicable[228] Item 5. Other Information This section confirms that no directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter - None of the company's directors or officers adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[229] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO and XBRL documents - Exhibits include certifications by the CEO and CFO and various XBRL taxonomy extension documents[231] SIGNATURES The report is duly signed on behalf of CBL & Associates Properties, Inc. by Benjamin W. Jaenicke, Executive Vice President, Chief Financial Officer, and Treasurer, as of August 6, 2025 - The report was signed by Benjamin W. Jaenicke, Executive Vice President, Chief Financial Officer and Treasurer, on August 6, 2025[235]