CBL & ASSOCIATES PROPERTIES INC - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the Fiscal Year Ended December 31, 1999

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ______ to ______

Commission File No. 1-12494

CBL & ASSOCIATES PROPERTIES, INC.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)

Delaware 62-1545718
- ------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)

6148 Lee Highway, Suite 300
Chattanooga, Tennessee 37421
- --------------------------------------- ----------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (423) 855-0001

Securities registered pursuant to Section 12(b) of the Act:

Name of each Exchange
Title of Each Class on which Registered
- ------------------- -------------------
Common Stock, $.01 par New York Stock Exchange
value per share
9% Series A Cumulative New York Stock Exchange
Redeemable Preferred
Stock, par value $.01 per share,

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Registrant (1) has filed all Reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The aggregate market value of the voting stock held by non-affiliates of
the Registrant was approximately $531,789,880 based on the closing price on the
New York Stock Exchange for such stock on March 21, 2000.

As of March 21, 2000, there were 24,806,525 shares of the Registrant's
Common Stock outstanding and 2,875,000 shares of 9% Series A Cumulative
Redeemable Preferred Stock.

DOCUMENTS INCORPORATED BY REFERENCE

Part III incorporates certain information by reference to the Registrant's
definitive proxy statement filed on March 24, 2000 in respect to the Annual
Meeting of Stockholders to be held on May 3, 2000.

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FORM 10-K

TABLE OF CONTENTS

Item No. Page
- ------- ----
PART I

Item 1 Business....................................................... 3
Item 2 Properties..................................................... 15
Item 3 Legal Proceedings.............................................. 37
Item 4 Submission of Matters to a Vote of Security Holders............ 37

PART II

Item 5 Market for Registrant's Common Equity and Related
Shareholder Matters............................................ 37
Item 6 Selected Financial Data........................................ 39
Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations............................ 40
Item 7A Quantitative and Qualitative Disclosures about Market Risk..... 53
Item 8 Financial Statements and Supplementary Data.................... 53
Item 9 Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure............................ 53

PART III

Item 10 Directors and Executive Officers of the Registrant............. 53
Item 11 Executive Compensation......................................... 53
Item 12 Security Ownership of Certain Beneficial Owners
and Management................................................. 53
Item 13 Certain Relationships and Related Transactions................. 53

PART IV

Item 14 Exhibits, Financial Statement Schedules and
Reports on Form 8-K............................................ 54

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Cautionary Statement Relevant to Forward-Looking Information or the Purpose of
the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of
1995

This Annual Report on Form 10-K contains forward-looking statements, such as
information relating to the Company's growth strategy, projects under
construction, liquidity and capital resources, compliance with environmental
laws and regulations, and the year 2000 compliance of the Company's computer
systems. Such statements are subject to certain risks and uncertainties which
could cause actual results to differ materially, including, but not limited to,
those set forth below. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date hereof. The
Company undertakes no obligation to publicly revise these forward-looking
statements to reflect events or circumstances occurring after the date hereof or
to reflect the occurrence of unanticipated events.

PART I

ITEM 1. BUSINESS.

Formation of the Company

CBL & Associates Properties, Inc. (the "Company") is a self-managed,
self-administered, fully-integrated real estate company which is engaged in the
ownership, operation, marketing, management, leasing, expansion, development,
redevelopment, acquisition and financing of regional malls and community and
neighborhood centers. The Company was incorporated on July 13, 1993 under the
laws of the State of Delaware to acquire an interest in substantially all of the
real estate properties owned by CBL & Associates, Inc. and its affiliates
("CBL") and to provide a public vehicle for the expansion of CBL's shopping
center business.

The Company conducts substantially all of its business through CBL & Associates
Limited Partnership, a Delaware Limited Partnership (the "Operating
Partnership"), in which the Company owns an indirect 67.7% interest and of which
the Company's wholly-owned subsidiary is the sole general partner. To comply
with certain technical requirements of the Internal Revenue Code of 1986, as
amended (the "Code") applicable to Real Estate Investment Trusts' ("REIT's"),
the Company's property management and development activities, sales of
peripheral land and maintenance and security operations are carried out through
CBL & Associates Management, Inc. (the "Management Company").

On November 3, 1993, the Company completed the initial public offering (the
"Offering") of 15,400,000 shares of its common stock, par value $.01 per share
(the "Common Stock"). Simultaneously with the completion of the Offering, CBL
transferred to the Operating Partnership substantially all of CBL's interests in
its real estate properties and its management and development operations in
exchange for an interest in the Operating Partnership. CBL also acquired an
additional interest in the Operating Partnership for a cash payment. Each of the
partnership interests in the Operating Partnership may, at the election of its
respective holder, be exchanged for shares of Common Stock of the Company,
subject to certain limitations imposed by the Code.

The Offering and the application of proceeds therefrom, including the Operating
Partnership's acquisition of certain property interests, and the contribution by
CBL of property interests to the Operating Partnership, are referred to herein
as the "Formation."

In September 1995, the Company completed a follow-on offering of 4,163,500
shares of its Common Stock at $20.625 per share. CBL purchased 150,000 of these
shares.

In January 1997, the Company completed a follow-on offering of 3,000,000 shares
of its Common Stock at $26.125 per share. CBL purchased 55,000 of these shares.

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In June 1998, the Company completed a public offering of 2,875,000 shares of 9%
Series A Cumulative Redeemable Preferred Stock (the "Series A Preferred Stock")
at a price to the public of $25.00 per share. The net proceeds of $70 million
were used to repay variable rate indebtedness incurred in the Company's
development and acquisition programs.

In October 1999 the Company acquired a tract of land in Muskegon, Michigan
for the development of a regional mall thereon. As a part of the acquisition, a
third party contributed a portion of the land to the Operating Partnership
receiving in return a limited partner interest in the Operating Partnership with
a value of $1,927,000 on the date of contribution.

After giving effect to the above transactions at December 31, 1999, CBL
(including interest held by former executive) holds a 25.6% limited partner
interest in the Operating Partnership, the Company holds a 67.7% general and
limited partner interest in the Operating Partnership and third parties hold a
6.7% limited partner interest. In addition, CBL holds approximately 1.8 million
of the outstanding shares of Common Stock for a total ownership share of 30.6%.

General

The Company owns interests in a portfolio of properties, which as of December
31, 1999 consisted of 30 enclosed regional malls (the "Malls"), 15 associated
centers (the "Associated Centers"), each of which is part of a regional shopping
mall complex, and 82 independent community and neighborhood shopping centers
(the "Community Centers"). Except for eleven Malls, three Associated Centers and
three Community Centers which were acquired from third parties, each of these
properties were developed by CBL or the Company.

Additionally, as of December 31, 1999 the Company owned one regional Mall, one
Associated Center and three neighborhood shopping centers currently under
construction (the "Construction Properties"). The Company also owned as of
December 31, 1999 options to acquire certain shopping center development sites
(the "Development Properties").

The Company also owned, as of December 31, 1999, mortgages (the "Mortgages") on
community and neighborhood shopping centers owned by non-CBL affiliates. The
Mortgages were granted in connection with sales by CBL of certain properties
previously developed by CBL. The Company also owns an interest in a three-story
office building in Chattanooga, Tennessee, a portion of which serves as the
Company's headquarters (the "Office Building"). The Malls, Associated Centers,
Community Centers, Construction Properties, Development Properties, Mortgages
and Office Building are collectively referred to herein as the "Properties" and
individually as a "Property".

As of December 31, 1999 the Company had also entered into standby purchase
agreements with third-party developers for the construction, development and
potential ownership of two community centers in Texas (the "Co-Development
Projects"). The developers have utilized these standby purchase agreements as
additional security for their lenders to fund the construction of the
Co-Development Projects. The standby purchase agreements for each of the
Co-Development Projects require the Company to purchase the related
Co-Development Project upon such Co-Development Project meeting certain
completion requirements and rental levels. In return for its commitment to
purchase a Co-Development Project pursuant to a standby purchase agreement, the
Company receives a fee as well as a participation interest in each
Co-Development Project. The outstanding amount of standby purchase agreements at
December 31, 1999 is $60.7 million.

The Company and the Operating Partnership generally own a 100% interest in the
Properties. With two exceptions, where the Company and the Operating Partnership
own less than a 100% interest in a Property, the Operating Partnership is the
sole general partner, managing general partner or managing member of the
property partnership or limited liability company which owns such Property (each
a "Property Partnership"). For one Mall and its Associated Center, affiliates of
the Operating Partnership are non-managing general partners in the two Property
Partnerships owning those Properties.

For a full description of the Properties, see Item 2 -- "Properties."

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The Company's executive offices are located at 6148 Lee Highway, Suite 300,
Chattanooga, Tennessee 37421-6511. The telephone number at this address is (423)
855-0001.

Management and Operation of Properties

Management Company

The Company is self-managed and self-administered. To comply with certain
technical requirements of the Code, the Company's property management and
development activities, sales of peripheral land and maintenance and security
operations are carried out through the Management Company.

The Operating Partnership holds 100% of the preferred stock and 5% of the
common stock of the Management Company. The remaining 95% of the common stock is
held by Charles Lebovitz, his family and his associates. Substantially all of
CBL's asset management, property management and leasing and development
operations, including CBL's executive, property, financial, legal and
administrative personnel, were transferred to the Management Company as part of
the Formation. The Management Company manages all of the Properties (except for
Governor's Square and Governor's Plaza in Clarksville, Tennessee -- see below)
under a management agreement that may be terminated at any time by the Operating
Partnership upon 30 days written notice. In addition, the Management Company
manages certain properties owned by CBL that were not transferred to the Company
in the Formation as well as certain shopping centers owned by non-CBL
affiliates. Through its ownership of the Management Company's preferred stock,
the Operating Partnership enjoys substantially all of the economic benefits of
the Management Company's business. Requirements set forth in the Management
Company's Amended and Restated Certificate of Incorporation, state that a
majority of the Management Company's board of directors are required to be
independent of CBL. From November 1993 to the current date, the board of
directors of the Management Company has consisted of the same individuals as the
Company's board of directors, including the four independent directors.

On-Site Management

The on-site property management functions at the Malls include leasing,
management, data processing, rent collection, project bookkeeping, budgeting,
marketing, and promotion. Each Mall, for itself and its Associated Centers, has
an on-site property manager who oversees the on-site staff and an on-site
marketing director who oversees the marketing program for that Mall. District
managers, most of whom are located at the Company's headquarters, oversee the
leasing and operations at a majority of the Community Centers. The on-site Mall
managers are experienced managers with training in mall management.

Virtually all operating activities of the Company are supported by a
computer software system which is designed to provide management with operating
data necessary to make informed business decisions on a timely basis. The
Company has a program of on-going upgrades to hardware and software that support
the accounting and management information system. Subsequent to the year end the
Company also completed an upgrade and revision to the Company's web site used to
publish integrated information on the world wide web. These systems were
developed to more efficiently assist management in efforts to martket the
properties, maintain management quality, enhance investor relations and
communications and enhance tenant relations while minimizing operating expenses.
Retail sales analysis, leasing information, budget controls, accounts
receivable/payable, operating expense variance reports and income analysis are
continually available to management. Through these systems management also has
available information that facilitates the development and monitoring of budgets
and other relevant information. See Item 7. Management's Discussion and Analysis
of Financial Condition and Results of Operations - Year 2000.

Management pursues periodic preventative property maintenance programs,
which encompass paving, roofing, HVAC and general improvements to the
Properties' common areas. The on-site property managers oversee all such work in
accordance with approved budgets with the coordination of, and reporting to
home office management.

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Governor's Square

Governor's Square and Governor's Plaza are the only Properties in the
Company's portfolio in which the Company is not the sole general partner or
managing general partner. Governor's Square is owned by a Property Partnership,
the managing general partner of which is a non-CBL affiliate which owns a 47.5%
interest in the Mall. The Company is a non-managing general partner of
Governor's Plaza. Although the managing general partner of this partnership
controls the timing of distributions of cash flow, the Company's approval is
required for certain major decisions, including permanent financing, refinancing
and sale of all or substantially all of the partnership's assets. Property
management services, including accounting, auditing, maintenance, promotional
programs, leasing, collection and insurance, are performed by a property manager
affiliated with the non-CBL managing general partner for which such property
manager receives a fee.

Employees

The Company, through the Management Company, currently employs
approximately 376 full time and 143 part time persons. None of these employees
is currently represented by any union. The Company does not have any employees
other than its statutory officers.

Environmental Matters

Under various federal, state and local laws, ordinances and regulations, a
current or previous owner or operator of real estate may be liable for the costs
of removal or remediation of petroleum, certain hazardous or toxic substances
on, under or in such real estate. Such laws typically impose such liability
without regard to whether the owner or operator knew of, or was responsible for,
the presence of such substances. The costs of remediation or removal of such
substances may be substantial, and the presence of such substances, or the
failure to promptly remediate such substances, may adversely affect the owner's
or operator's ability to sell such real estate or to borrow using such real
estate as collateral. Persons who arrange for the disposal or treatment of
hazardous or toxic substances may also be liable for the costs of removal or
remediation of such substances at the disposal or treatment facility, regardless
of whether such facility is owned or operated by such person. Certain laws also
impose requirements on conditions and activities that may affect the environment
or the impact of the environment on human health. Failure to comply with such
requirements could result in the imposition of monetary penalties (in addition
to the costs to achieve compliance) and potential liabilities to third parties.
Among other things, certain laws require abatement or removal of friable and
certain non-friable asbestos-containing materials ("ACMs") in the event of
demolition or certain renovations or remodeling. Certain laws regarding ACMs
require building owners and lessees, among other things, to notify and train
certain employees working in areas known or presumed to contain ACMs. Certain
laws also impose liability for release of ACMs into the air and third parties
may seek recovery from owners or operators of real properties for personal
injury or property damage associated with ACMs. In connection with its ownership
and operation of the Properties, the Company, the Operating Partnership or the
relevant Property Partnership, as the case may be, may be potentially liable for
such costs or claims.

All of the Properties (excluding properties upon which the Company holds an
option to purchase but does not yet own) have been subject to Phase I
environmental assessments or updates of existing Phase I environmental
assessments by independent environmental consultants. Such assessments generally
consisted of a visual inspection of the Properties, review of federal and state
environmental databases and certain information regarding historic uses of the
Property and adjacent areas and the preparation and issuance of written reports.
Some of the Properties contain, or contained, underground storage tanks ("UST"s)
used for storing petroleum products or wastes typically associated with
automobile service or other operations conducted at the Properties. Parkway
Place was acquired in December 1998 and all of the existing building will be
demolished over time as the mall is redeveloped. Approximately 350 square feet
of ground in the vicinity of a former auto service center has been identified as
being contaminated with Total Petroleum Hydrocarbons and is scheduled to be
remediated during the demolition process. Certain Properties contain, or
contained, dry-cleaning establishments utilizing solvents. Where believed to be
warranted, samples of building materials or subsurface investigations were, or,
with respect to one
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Property, will be undertaken. At certain Properties, where warranted by the
conditions, the Company has developed and implemented an operations and
maintenance program that establishes operating procedures with respect to ACMs.
The costs associated with the development and implementation for such programs
were not material.

Although there can be no assurances that such environmental liability does
not exist, other than Parkway Place in Huntsville, Alabama, none of the
environmental assessments have identified and the Company is not aware of any
environmental liability with respect to the properties in which the Company or
the Operating Partnership has or had an interest (whether as an owner or
operator) that the Company believes would have a material adverse effect on the
Company's financial condition, results of operations or cash flows.
Nevertheless, it is possible that the environmental assessments available to the
Company do not reveal all potential environmental liabilities, that subsequent
investigations will identify material contamination, that adverse environmental
conditions have arisen subsequent to the performance of the environmental
assessments, or that there are material environmental liabilities of which
management is unaware. Moreover, no assurances can be given that (i) future
laws, ordinances or regulations will not impose any material environmental
liability or (ii) the current environmental condition of the Properties has not
been or will not be affected by tenants and occupants of the Properties, by the
condition of properties in the vicinity of the Properties or by third parties
unrelated to the Company, the Operating Partnership or the relevant Property
Partnership. The existence of any such environmental liability could have an
adverse effect on the Company's results of operations, cash flow and the funds
available to the Company to pay dividends.

The Company has not recorded in its financial statements any material
liability in connection with environmental matters.

General Risks of the Company's Business

General Factors Affecting Investments in Shopping Center Properties and
Effect of Economic and Real Estate Conditions

A shopping center's revenues and value may be adversely affected by a
number of factors, including: the national and regional economic climates; local
real estate conditions (such as an oversupply of retail space); perceptions by
retailers or shoppers of the safety, convenience and attractiveness of the
shopping center; and the willingness and ability of the shopping center's owner
to provide capable management and maintenance services. In addition, other
factors may adversely affect a shopping center's value without affecting its
current revenues, including: changes in governmental regulations, zoning or tax
laws; potential environmental or other legal liabilities; availability of
financing; and changes in interest rate levels. There are numerous shopping
facilities that compete with the Properties in attracting retailers to lease
space. In addition, retailers at the Properties face continued competition from
discount shopping centers, outlet malls, wholesale clubs, direct mail,
telemarketing, television shopping networks and shopping via the Internet.
Competition could adversely affect the Operating Partnership's revenues and
funds available for distribution to partners, which in turn will affect the
Company's revenues and funds available for distribution to stockholders.

Geographic Concentration

The Properties are located principally in the southeastern United States in
Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South
Carolina, Tennessee and Virginia. Twenty Malls, fourteen Associated Centers,
sixty-four Community Centers and the Office Building are located in these
states. The Company's results of operations and funds available for distribution
to stockholders therefore will be subject generally to economic conditions in
the southeastern United States. As of December 31, 1999, the Properties located
in the southeastern United States accounted for 62.9% of the Company's total
assets, and provided 66.5% of the Company's total revenues for the year ended
December 31, 1999.

Third Party Interests In Certain Properties

The Operating Partnership owns partial interests in seven Malls, five
Associated Centers, one Community Center, the Office Building and one Mall under
development. The Operating Partnership or an affiliate of the Company is the
managing general

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partner of the Property Partnerships that own such Properties, except for the
Governor's Square Mall and its Associated Center, Governor's Plaza, in which
affiliates of the Operating Partnership are non-managing general partners.

Where the Operating Partnership serves as managing general partner of
Property Partnerships, it may have certain fiduciary responsibilities to the
other partners in those partnerships. In certain cases, the approval or consent
of the other partners is required before the Operating Partnership may sell,
finance, expand or make other significant changes in the operations of such
Properties. To the extent such approvals or consents are required, the Operating
Partnership may experience difficulty in, or may be prevented from implementing
its plans with respect to expansion, development, financing or other similar
transactions with respect to such Properties.

With respect to Governor's Square and Governor's Plaza, the Operating
Partnership does not have day-to-day operational control or control over certain
major decisions, including the timing and amount of distributions and decisions
relating to sales, expansions and financings, which could result in decisions by
the managing general partner that do not fully reflect the interests of the
Company, including decisions relating to the standards that the Company is
required to satisfy in order to maintain its status as a real estate investment
trust for tax purposes.

Dependence on Significant Properties

Hamilton Place in Chattanooga, Tennessee and Burnsville Center in
Minneapolis (Burnsville), Minnesota accounted for approximately 5.4% and 5.2%,
respectively, of total revenues of the Company for the period ended December 31,
1999. The Company's financial position and results of operations will therefore
be disproportionately affected by the results experienced at these Properties.

Dependence on Key Tenants

As of December 31, 1999, The Limited Inc. Stores (including Intimate
Brands, Inc.) maintained 130 stores in Company properties and in the year ended
December 31, 1999 accounted for approximately 7.6% of total revenues of the
Company. As of December 31, 1999, the Venator Group, Inc. (Champs Sports,
Footlocker, Kinney Shoes, etc.) had 90 stores and in the year ended December 31,
1999, accounted for 2.1% of the total revenues of the Company. As of December
31, 1999, Food Lion served as an anchor tenant in 37 of the Community Centers
and for the year then ended accounted for approximately 2.7% of total revenues
of the Company. Food Lion is a publicly traded North Carolina- based operator of
supermarkets. The loss or bankruptcy of any of these or other key tenants could
negatively affect the Company's financial position and results of operations.
The Company's Strategy for Growth

Management believes that per share growth in the Company's Funds from
Operations, as defined below, is one of the key factors in enhancing shareholder
value. Management also believes that Funds from Operations is a widely used
measure of the operating performance of REITs, and its consistent determination
provides a relevant basis for comparison among REITs. It is the objective of the
Company's management to achieve growth in Funds from Operations through the
aggressive management of the Company's existing Properties, the expansion and
renovation of existing Properties, the development of new properties, and select
acquisitions. Funds from Operations can also be affected by external factors,
such as inflation, fluctuations in interest rates or changes in general economic
conditions, which are beyond the control of the Company's management.

"Funds from Operations" is defined by the Company as net income (loss)
before property depreciation, other non-cash items, gains or losses on sales of
real estate assets and gains or losses on investments in marketable securities.
The National Association of Real Estate Investment Trusts ("NAREIT") has amended
the definition of Funds from Operations so that the write-off of development
costs will no longer be added back in the calculation (to be effective beginning
January 2000). The Company will comply with the amended definition. The cost of
interest rate caps and finance costs on the Company's lines of credit are
amortized and included in interest expense and, therefore, reduces Funds from

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Operations. Funds from Operations also includes the Company's share of Funds
from Operations in unconsolidated properties and excludes minority interests'
share of Funds from Operations in consolidated properties. The Company excludes
outparcel sales from its Funds from Operations calculation, even though the
NAREIT definition allows their inclusion. Funds from Operations does not
represent cash flow from operations as defined by generally accepted accounting
principals ("GAAP") and is not necessarily indicative of cash available from
operations to fund all cash flow needs and should not be considered an
alternative to net income (loss) for purposes of evaluating the Company's
operating performance or to cash flows as a measure of liquidity.

The Company classifies its regional malls into two categories - stabilized
malls ("Stabilized Malls") which have completed their initial lease-up and new
malls ("New Malls") which are in their initial lease-up phase or are being
redeveloped. At year end the New Mall category was comprised of Springdale Mall
in Mobile, Alabama which was acquired in September 1997 and which is being
redeveloped and retenanted; Bonita Lakes Mall in Meridian, Mississippi which
opened in October 1997; Parkway Place Mall in Huntsville, Alabama which was
acquired in December, 1998 and which is being redeveloped and Arbor Place in
Atlanta (Douglasville), Georgia, which opened in October 1999.

Specifically, the Company has implemented its objective of growing its
Funds from Operations and will continue to do so by:

- - Maximizing the cash flow from its existing portfolio of Malls, Associated
Centers and Community Centers, and other retail complexes through
aggressive leasing, management, and marketing, including:

- an active leasing strategy which seeks to increase occupancy. At
December 31, 1999, the occupancy at the Stabilized Malls, New
Malls, Associated Centers, and Community Centers was 94.5%, 88.0%,
93.2%, and 97.7%, respectively, as compared to occupancies of
93.7%, 92.7%, 90.7%, and 97.0%, respectively, at December 31,
1998;

- expanded merchandising, marketing and promotional activities, with
the goal of enhancing tenant sales and thereby increasing
percentage rents. Mall store sales per square foot for the year
ended December 31, 1999 were 5.0% higher at the Stabilized Malls
than for the year ended December 31, 1998;

- increased base rents as tenant leases expire, renegotiation of
leases and negotiation of terminations of leases of under
performing retailers. At December 31, 1999 average base rents
per square foot at the Malls, Associated Centers, and Community
Centers was $20.68, $9.78, and $8.32, respectively, as compared
to average base rents per square foot of $19.82, $9.68, and
$8.22, respectively, at December 31, 1998;

- control of operating costs. Occupancy costs as a percentage of
sales at the Stabilized Malls remained relatively stable at 11.5%
(excluding acquisition malls from year of acquisition)for the year
ended December 31, 1999 as compared to 11.1% for the year ended
December 31, 1998.

- - Expanding and renovating existing properties to maintain their competitive
position.

- Most of the Malls were designed to allow for expansion and growth
through the addition of new department stores or other large
retail stores as anchors ("Anchors"). Twenty-four of the thirty
Malls have undergone expansion or renovation since their opening,
and all of the non-acquired Malls have been either built or
renovated in the last 10 years. Two of the Malls had available
Anchor pads at December 31, 1999. Twenty existing Anchors at
eleven Malls have expansion potential at their existing stores.
During 1999, the Company renovated College Square in Morristown,
Tennessee, Governor's Square in Clarksville,

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Tennessee and Rivergate Mall in Nashville, Tennessee and expanded
Lakeshore Mall in Sebring, Florida adding Sears as the fifth
department store.

- In the Community Center and Associated Center portfolios, the
Company renovated six Community Centers, began expansion of one
Community center and renovated two Associated Center in 1999. In
2000, the Company plans to renovate at least four Community
Centers.

- - Developing new retail properties with profitable returns on capital,
leading to growth in the future.

- During 1999, the Company began the expansion of Asheville Mall
in Asheville, North Carolina and plans to renovate it in 2000.

- In 1999, the Company opened one Mall, one Associated Center, three
Community Centers and one expansion center. Summary information
concerning these properties is set forth below.

Summary Information Concerning Properties
Opened During the Year Ended December 31, 1999

Anchor Non-
Name of Center/ Total GLA Anchor Percentage Opening
Location GLA(1) (2) GLA Leased(3) Date Anchors
- ----------------------------- ---------- -------- -------- ---------- ------------ --------------------

Malls
- -----
Arbor Place Mall............ 1,035,000 655,000 380,000 88% Oct-1999 Dillard's, Parisian(6),
Atlanta (Douglasville), GA Sears(6), Bed Bath &
Body, Border's
Books, Old Navy,
Upton's(4)

Mall Expansion
- --------------
Lakeshore Mall.............. 92,000 92,000 0 100% Jul-1999 Sears (6)
(Sears Addition)
Sebring, FL

Associated Centers
- ------------------
The Landing at Arbor Place.. 163,000 102,000 61,000 69% July-1999 Toys' "R" Us(6),
Atlanta (Douglasville), GA Circuit City(6),
Michael's

Community Centers
- -----------------
Fiddlers Run(5)............. 203,000 166,000 37,000 99% Apr-1999 Belk, JCPenney,
Morganton, NC Goody's, Food Lion

Sand Lake Corners........... 558,000 496,000 62,000 97% Jul-1999 Lowe's (6), Bealls,
Orlando, FL Wal*Mart(6)

Regal Cinema(7)............. 83,000 83,000 0 100% Nov-1999 Regal Cinema
Jacksonville, FL
---------- -------- --------

Total Properties Opened.... 2,134,000 1,594,000 540,000
========== ======== ========

( 1) Gross Leasable Area ("GLA") includes total square footage of Anchors
(whether owned or leased by the Anchor) and Mall stores or shops.
( 2) Includes total square footage of Anchors (whether owned or leased by the
Anchor)
( 3) Percentage leased and committed for Malls does not include Anchor GLA.
For the Community Centers, Associated Centers and power centers, percentage
leased and committed includes non-Anchor GLA and leased Anchor GLA.
( 4) Store is vacant but they continue to meet their financial obligation.
Subsequent to December 31, 1999, Dekor, Inc. assumed the lease and will
open for business in late 2000 or early 2001.
( 5) Sold by the Company in February 2000.
( 6) Owned by Anchor.
( 7) Sold by the Company in July 1999.

-10-

- The Company currently has one Mall, one Mall expansion, one
Associated Center, one Community Center expansion and
three Community Centers under construction. These
properties will add approximately 2,200,000 square feet to
the Company's portfolio at opening and are all scheduled to
open during 1999.

Summary Information Concerning Construction Properties
As of March 18, 2000

Ownership
by Company Percentage
Anchor Non- and Pre-Leased
Name of Center/ Total GLA Anchor Operating and Projected
Location GLA(1) (2) GLA Partnership Committed(3) Opening Anchors
- ------------------------ -------- -------- -------- ----------- ------------- ------------ -------------

Malls
- -----
The Lakes Mall.......... 610,000 398,000 212,000 90% 23% Aug-2001 Sears(4),
Muskegon, MI Younkers(4),
JCPenney(4)
Expansions
- ----------
Asheville Mall......... 171,000 84,000 87,000 100% 60% Nov-2000 Dillard's(4)
Asheville, NC Belk's(4)

Sand Lake Corners....... 38,000 24,000 14,000 100% 71% May-2000 Staples
Orlando, FL

Sutton Plaza(5)......... 28,000 28,000 0 100% N/A Feb-2000 A & P Food
Mt. Olive, NJ Market

Associated Centers
- ------------------
Gunbarrel Pointe........ 282,000 257,000 25,000 100% 91% Oct-2000 Target(4),
Chattanooga, TN Goody's,
Kohl's
Community Centers
- -----------------
Chesterfield Crossing(6) 435,000 394,000 41,000 100% 73% Aug-2000 Home Depot(4),
Richmond, VA Wal*Mart(4)

Coastal Way............. 233,000 199,000 34,000 100% 55% Aug-2000 Belk, Sears(4)
Spring Hill, FL

Creekwood Crossing...... 381,000 324,000 57,000 100% 75% Apr-2001 Lowe's (4),
Bradenton, FL Kmart, Bealls
-------- -------- --------
Total Construction
Properties............. 2,183,000 1,710,000 473,000
======== ========= ========

( 1)Includes total square footage of Anchors (whether owned or leased by
the Anchor).
( 2)Includes total square footage of Anchors (whether owned or leased by the
Anchor).
( 3)Percentage leased and committed for Malls does not include Anchor GLA.
For the Community Centers, Associated Centers and power centers,
percentage leased and committed includes non-Anchor GLA and leased Anchor
GLA.
( 4)Owned by Tenant.
( 5)The Company opened the expansion in February, 2000.
( 6)Wal*Mart opened in February 2000 and Home Depot will open in May 2000.

-11-

- In addition to the Construction Properties as of March 18, 2000,
the Company was pursuing the development of a number of sites
which the Company believes are viable for future development as
malls and community and neighborhood shopping centers. Regional
mall development sites were being pursued in Georgia, Mississippi
and South Carolina and a redevelopment of Parkway Place in
Huntsville, Alabama and Community shopping center sites were being
pursued in Georgia, Florida, Massachusetts, Pennsylvania and
Virginia.

- In general, the Company seeks out development opportunities in
middle-market trade areas that it believes are under-serviced by
existing retail facilities, have demonstrated improving demographic
trends or otherwise afford an opportunity for effective market
penetration and competitive presence.

- - Acquiring existing retail properties where cash flow can be enhanced by
improved management, leasing, redevelopment and expansion.

- Management believes that an opportunity for growth exists through
the acquisition of shopping centers that meet the Company's
investment criteria and targeted returns. In general, the Company
seeks to acquire well-located shopping centers in middle-market
geographic areas consistent with management's experience where
management believes significant value can be created through its
development, leasing and management expertise.

- In July 1999, the Company acquired York Galleria in York,
Pennsylvania. The purchase price was funded from a mortgage loan in
the amount of $51.1 million and in part from $30 million in
proceeds from the Company's dispositions of two department stores
and two free-standing community centers.

Risks Associated with the Company's Growth Strategy

In connection with the implementation of this growth strategy, the Company
and the Operating Partnership will incur various risks including the risk that
development or expansion opportunities explored by the Company and the Operating
Partnership may be abandoned; the risk that construction costs of a project may
exceed original estimates, possibly making the project not profitable; the risk
that the Company and the Operating Partnership may not be able to refinance
construction loans which are generally with full recourse to the Company and the
Operating Partnership; the risk that occupancy rates and rents at a completed
project will not meet projections, and will therefore be insufficient to make
the project profitable; and the need for anchor, mortgage lender and property
partner approvals for certain expansion activities. In the event of an
unsuccessful development project, the Company's and the Operating Partnership's
loss could exceed its investment in the project.

The Company has in the past elected not to proceed with certain development
projects and anticipates that it will do so again from time to time in the
future. If the Company elects not to proceed with a development opportunity, the
development costs associated therewith ordinarily will be charged against income
for the then-current period. Any such charge could have a material adverse
effect on the Company's results of operations for the period in which the charge
is taken.

-12-

Competition

There are numerous shopping facilities that compete with the Properties in
attracting retailers to lease space. The Malls are generally located in
middle-markets. Management believes that the Malls have strong competitive
positions because they generally are the only or largest enclosed malls within
their respective trade areas. In addition, retailers at the Properties face
continued competition from discount shopping centers, outlet malls, wholesale
clubs, direct mail, telemarketing, television shopping networks and shopping via
the Internet. Competition could adversely affect the Operating Partnership's
revenues and funds available for distributions to partners, which in turn will
affect the Company's revenues and funds available for distribution to
stockholders.

Seasonality

The Company's business is somewhat seasonal in nature with tenant sales
achieving the highest levels during the fourth quarter because of the holiday
season. The Malls earn most of their "temporary" rents (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 entire year.

Qualification as a Real Estate Investment Trust

The Company has elected to be taxed as real estate investment trust under
the Code, commencing with its taxable year ended December 31, 1993, and will
seek to maintain such status. As a qualified real estate investment trust, the
Company generally will not be subject to Federal income tax to the extent it
distributes at least 95% of its current year real estate investment trust
taxable income to its shareholders. Beginning on January 1, 2001 (the Company's
first taxable year beginning after December 31, 2000), this percentage is
reduced to 90%. If the Company fails to qualify as a real estate investment
trust in any taxable year, the Company will be subject to Federal income tax
(including any applicable alternative minimum tax) on its taxable income at
regular corporate rates.

Insurance

The Operating Partnership carries comprehensive liability, fire, extended
coverage and rental loss insurance covering all the Properties, with policy
specifications and insured limits customarily carried for similar properties.
Management believes that the Properties are adequately insured in accordance
with industry standards.

ITEM 2. PROPERTIES.

Malls

Each of the Malls is an enclosed regional shopping complex. Each Mall
generally has at least three Anchors which own or lease their stores and
numerous non-anchor stores with GLA less than 30,000 square feet ("Mall
Stores"), most of which are national or regional retailers, located along
enclosed malls connecting the Anchors. At most of the Malls, additional
freestanding restaurants and retail stores are located on the periphery of the
Mall complex. These freestanding stores are, in most cases, owned by their
occupants. Thirteen of the Mall complexes include one or more Associated
Centers.

The total GLA of the 30 Malls is approximately 22.4 million square feet or
an average GLA of approximately 748,000 square feet per Mall. Mall Store GLA is
7,932,000 square feet including leased free-standing buildings at December 31,
1999. The Company wholly owns all but seven of its Malls and manages all but one
of them.
-13-

In the years ended December 31, 1997, 1998 and 1999, Mall revenues
represented approximately 72.9%, 74.9% and 76.9%, respectively, of total
revenues from the Company's Properties.

Occupancy of mall stores in the Stabilized Malls ("Stabilized Mall Stores")
increased from 93.6% at December 31, 1998, to 94.5% at December 31, 1999.

In the years ended December 31, 1997, 1998 and 1999, average Stabilized
Mall Store sales per square foot were approximately $263, $272 and $285,
respectively (computed using a monthly weighted average). Average Stabilized
Mall Store sales per square foot increased by 5.0% for the year ended December
31, 1999 as compared to the year ended December 31, 1998.

Average base rent per square foot at the Mall Stores increased from $19.82
at December 31, 1998 to $20.68 at December 31, 1999.

Occupancy costs as a percentage of sales for tenants in the Stabilized
Malls (excluding acquisition malls from the year of acquisition) were 11.2%,
11.1% and 11.5% for the years ended December 31, 1997, 1998, and 1999,
respectively.

The Malls are generally located in middle-markets. Management believes that
the Malls have strong competitive positions because they generally are the only,
or the dominant enclosed malls within their respective trade areas. Trade areas
have been identified by management based upon a number of sources of
information, including the location of other malls, publicly available
population information, customer surveys, surveys of customer automobile license
plates, as well as ZIP codes and third-party market studies.

The two largest revenue-producing Malls are Hamilton Place and Burnsville
Center. Hamilton Place is located on a 187-acre site in Chattanooga, Tennessee
and represented, as of December 31, 1999, 3.4% of the Properties' total GLA,
3.6% of total Mall Store GLA and 5.4% of total revenues from the Company's
Properties. Burnsville Center is located in the Suburbs of Minneapolis,
Minnesota in Burnsville and represented, as of December 31, 1999, 3.1% of the
Properties' total GLA, 3.9% of total Mall Store GLA and 5.2% of total revenues
from the Company's Properties.

Twenty-four of the thirty Malls have undergone an expansion or remodeling
since their opening, and all but four of the Malls have either been built,
renovated or expanded in the last 10 years one of which, Parkway Place in
Huntsville, Alabama is scheduled for demolition and redevelopment. In 1999, the
Company renovated Governor's Square in Clarksville, Tennessee, College Square in
Morristown, Tennessee and Rivergate Mall in Nashville, Tennessee. The Company
expanded Lakeshore Mall in Sebring, Florida, adding Sears as the fifth
department store. The Company is expanding Asheville Mall in Asheville, North
Carolina and plans on renovating it in 2000. Three of the Malls have available
Anchor pads providing expansion potential totaling approximately 405,700
buildable square feet at December 31, 1999. Twenty existing Anchors at eleven
Malls have aggregate expansion potential at their existing stores of
approximately 473,000 buildable square feet.

The land underlying the Malls is owned in fee simple in all cases, except
for Walnut Square, WestGate Mall, St. Clair Square, Bonita Lakes Mall, Meridian
Mall and Stroud Mall which are each subject to long-term ground leases for all
or a portion of the land underlying these Malls.

The table on the following page sets forth certain information for each of
the Malls as of December 31, 1999.

-14-

Mall
Year Ownership by Total Store Percentage Fee
Most Company and Mall Sales per Mall Store Simple or
Year of Recent Operating Total Store Square GLA Anchor Ground
Name of Mall/Location Opening Expansion Partnership GLA(1) GLA(2) Foot(3) Leased(4) Anchors Vacancies Lease
- --------------------- ------- --------- ------------ --------- --------- --------- --------- ------------------ --------- -------

New Malls
Arbor Place.......(5) 1999 N/A 100% 1,035,320 380,000 N/A 88% Dillard's, Parisian, Upton's Fee
Atlanta Sears, Upton's(9)
(Douglasville),GA
Bonita Lakes Mall.(5) 1997 N/A 100% 641,047 192,620 $253 100% Goody's, Dillard's, None Ground
Meridian, MS JCPenney, Sears, Lease(6)
McRae's
Parkway City Mall.(5) 1957/ 1957 50% 414,540 187,825 207 92% McRae's, Parisian None Fee
Huntsville, AL 1998
Springdale Mall...... 1960/ 1998 100% 954,237 354,301 215 72% Dillard's, None Fee
Mobile, AL 1997 --------- -------- ---- Burlington Coat,
McRae's, Goody's
Total New Malls....... 3,045,144 1,114,746 88%
========= ========= ====
Stabilized Malls
Asheville Mall....... 1972/ 1994 100% 816,755 253,420 $321 100% Dillard's, Montgomery None Fee
Asheville, NC 1998 Ward, JCPenney, Sears,
Belk
Burnsville Center.... 1977/ N/A 100% 1,069,887 408,844 301 97% Mervyn's, Dayton's, None Fee
Burnsville, MN 1998 JCPenney, Sears
College Square....(5) 1988 1993 100% 459,473 156,604 228 95% JCPenney, Sears, None Fee
Morristown, TN Wal*MArt, Goody's,
CoolSprings Proffitt's
Galleria.......(5) 1991 1994 100% 1,129,764 374,749 337 98% Proffitt's, Dillard's, None Fee
Nashville, TN Sears, JCPenney,
Parisian
Foothills Mall....(5) 1983/ 1997 95% 476,768 180,072 194 95% Sears, JCPenney, None Fee
Maryville, TN 1996 Goody's, Proffitt's I,
Proffitt's II
Frontier Mall.....(5) 1981 1997 100% 523,004 205,717 210 94% Dillard's I, JCPenney, None Fee
Cheyenne, WY Dillard's II, Sears
Georgia Square....(5) 1981 N/A 100% 677,906 256,352 247 93% Belk, JCPenney, None Fee
Athens, GA Rich's, Sears
Governor's Square.(5) 1986 1999 48% 690,437 269,966 269 94% JCPenney, Parks-Belk, None Fee
Clarksville, TN Sears, Dillard's,
Goody's
Hamilton Place....(5) 1987 1998 90% 1,166,060 375,128 362 97% Dillard's, Parisian, None Fee
Chattanooga, TN Proffitt's I, Sears,
Proffitt's II,
JCPenney
Hickory Hollow Mall.. 1978/ 1991 100% 1,125,946 455,757 266 88% JCPenney, Sears, None Fee
Nashville, TN 1998 Proffitt's,Dillard's,
Janesville Mall...... 1973/ 1998 100% 609,364 161,535 305 78% JCPenney, Kohl's, None Fee
Janesville, WS 1998 Boston Store, Sears
Lakeshore Mall....(5) 1992 1999 100% 500,890 153,062 208 86% Kmart, Belk-Lindsey, None Fee
Sebring, FL Sears, JCPenney,
Beall's (10)
Madison Square....(5) 1984 1985 50% 934,161 301,326 313 96% Dillard's, JCPenney, None Fee
Huntsville, AL McRae's, Parisian,
Sears
Meridian Mall........ 1969/ 1987 100% 794,461 463,292 314 98% JCPenney, Mervyn's, None(15) Fee/
Lansing, MI 1998 Dayton Hudson, Ground
Jacobson's(15) Lease(8)
Oak Hollow Mall...(5) 1995 N/A 75% 802,239 251,411 227 94% Goody's, Sears, None Fee
High Point, NC JCPenney Belk-Beck,
Dillard's

-15-

Mall
Year Ownership by Total Store Percentage Fee
Most Company and Mall Sales per Mall Store Simple or
Year of Recent Operating Total Store Square GLA Anchor Ground
Name of Mall/Location Opening Expansion Partnership GLA(1) GLA(2) Foot(3) Leased(4) Anchors Vacancies Lease
- --------------------- ------- --------- ------------ --------- --------- --------- --------- ------------------ --------- -------
College Square....(5) 1988 1993 100% 459,473 156,604 228 95% JCPenney, Sears, None Fee
Morristown, TN Proffitt's, Wal*Mart
Pemberton Square..(5) 1985 1999 100% 351,920 133,685 167 84% JCPenney, McRae's, None Fee
Vicksburg, MS Dillard's, Goody's
Plaza del Sol Mall(5) 1979 1996 51% 261,507 105,326 177 100% Beall Bros(10), None Fee
Del Rio, TX Kmart, JCPenney
Post Oak Mall.....(5) 1982 1985 100% 776,823 318,166 248 94% Beall Bros.(10), Sears None Fee
College Station, TX Foley's, Dillard's I,
JCPenney, Dillard's II
Rivergate Mall....... 1971/ 1998 100% 1,073,970 390,324 306 92% Sears, Dillard's, None Fee
Nashville, TN 1998 JCPenney, Proffitt's
St. Clair Square..... 1974/ 1993 100% 1,044,502 315,559 355 100% Famous Barr, Sears, None Fee/
Fairview Heights, IL 1996 JCPenney, Dillard's Ground
Lease(11)
Stroud Mall.......... 1977/ 1994 100% 427,194 177,011 313 98% JCPenney, Sears, None Ground
Stroudsburg, PA 1998 The Bon-Ton Lease(12)
Turtle Creek Mall.(5) 1994 1995 100% 846,234 223,140 302 100% JCPenney, Sears, None Fee
Hattiesburg, MS McRae's I, Goody's,
McRae's II, Dillard's
Twin Peaks Mall...(5) 1985 1997 100% 556,153 242,683 244 88% JCPenney, Dillard's I, None Fee
Longmont, CO Dillard's II, Sears
Walnut Square.....(5) 1980 1992 100% 450,385 171,192 214 99% Belk, JCPenney, Sears None Ground
Dalton, GA R=Proffitt's, Goody's Lease(13)
WestGate Mall........ 1975/ 1996 100% 1,100,513 320,600 290 96% Belk-Hudson, JCPenney, Upton's Fee/
Spartanburg, SC 1995 Dillard's, Sears, Ground
Upton's(14),Proffitt's Lease(7)
York Galleria........ 1998/ N/A 100% 766,972 229,755 279 93% Boscov's, JCPenney, None Fee
York, PA 1999 Sears, The Bon-Ton
---------- ------- --- --
Total Stabilized Malls.. .................... 19,433,287 6,894,674 $285 94%
========== ========= ==== ==

-16-

( 1) Includes the total square footage of the Anchors (whether owned or
leased by the Anchor) and Mall Stores. Does not include future expansion
areas.
( 2) Does not include Anchors.
( 3) Totals represent weighted averages.
( 4) Includes tenants paying rent for executed leases as of December 31, 1999.
( 5) Developed by the Company.
( 6) Company is the lessee under a ground lease for 82 acres which extends
through June 30, 2035. The average annual base rent is $37.656 increasing
by 6% per year.
( 7) The Company is the lessee under several ground leases for approximately
53% of the underlying land. The leases extend through October 31, 2084,
including six ten-year renewal options. Rental amount is $130,000 per year.
In addition to base rent, the landlord receives 20% of the percentage rents
collected. The Company has a right of first refusal to purchase the fee.
( 8) The Company is the lessee under several ground leases in effect through
March 2067 with extension options. Fixed rent is $18,700 per year and 3% to
4% of all rents.
( 9) Upton's is vacant as of December 31, 1999, but continues to meet their
financial obligations. As of the date of this report Dekor has assumed the
lease obligation and will open in late 2000 or early 2001.
(10) Beall Bros. operating in Texas is unrelated to Beall's operating in
Florida.
(11) The Company is the lessee under a ground lease for 20 acres which extends
through January 31, 2073, including 14 five-year renewal options and one
four-year renewal option. Rental amount is $40,000 per year. In addition to
base rent, the landlord receives .25% of Dillard's sales in excess of
$16,200,000.
(12) The Company is the lessee under a ground lease which extends through July
2089. The current rental amount is $50,000 with an additional $100,000 paid
every 10 years.
(13) The Company is the lessee under several ground leases which extend through
March 14, 2078, including six ten-year renewal options and one eight-year
renewal option. Rental amount is $149,450 per year. In addition to base
rent, the landlord receives 20% of the percentage rents collected. The
Company has a right of first refusal to purchase the fee.
(14) Upton's is vacant but continues to meet their financial obligation.
(15) There is a vacant former Service Merchandise which the Company purchased
and leased to Jacobson's and which will open in late 2000.

Anchors. Anchors are a critical factor in a Mall's success because the
public's identification with a property typically focuses on its Anchors. Mall
Anchors generally are department stores whose merchandise appeals to a broad
range of shoppers. Although the Malls derive a smaller percentage of their
operating income from Anchor stores than from Mall Stores, strong Anchors play
an important part in generating customer traffic and making the Malls desirable
locations for Mall Store tenants.

Anchors either own their stores together with the land under them,
sometimes with adjacent parking areas, or enter into long-term leases with
respect to their stores at rental rates that are significantly lower than the
rents charged to tenants of Mall Stores. Anchors account for approximately 7.5%
of the total revenues from the Company's Properties. Each Anchor which owns its
own store has entered into a reciprocal easement agreement with the Company
covering, among other things, operating covenants, reciprocal easements,
property operations, initial construction and future expansions.

During 1999, the Company sold three leased department stores at Pemberton
Square in Vicksburg, Mississippi, Hamilton Place Mall in Chattanooga, Tennessee
and Asheville Mall in Ashville, North Carolina.

The Malls have a total of 133 Anchors. Upton's at Arbor Place in
Atlanta(Douglasville), Georgia and WestGate Mall in Spartanburg, South Carolina
are vacant. The following table indicates all Mall Anchors and sets forth the
aggregate number of squareFeet owned or leased by Anchors in the Malls as of
December 31, 1999.

-17-

Mall Anchor Summary Information
As of December 31, 1999

GLA GLA Total
Number Owned Leased Occupied
of Anchor by by by
Name Store Anchor Anchor Anchor(1)
- --------------------------- ---------- ------------ ------------ ----------

JCPenney.................... 27 1,015,865 1,586,868 2,602,733
Sears....................... 25 1,806,455 1,166,093 2,972,548
Dillard's................... 21 2,598,259 285,204 2,883,463
Sak's
Proffitt's.............. 10 1,203,750 0 1,203,750
McRae's................. 7 511,359 243,000 754,359
Parisian................ 5 351,756 209,541 561,297
---------- ------------ ------------ ----------
Subtotal............ 22 2,066,865 452,541 2,519,406
Belk
Belk.................... 4 0 426,991 426,991
Belk-Lindsey............ 1 0 61,029 61,029
Belk-Hudson............. 1 0 156,648 156,648
Parks-Belk.............. 1 0 122,367 122,367
---------- ------------ ------------ ----------
Subtotal............ 7 0 767,035 767,035
The May Company
Foley's................. 1 103,888 0 103,888
Famous Barr............. 1 0 236,489 236,489
---------- ------------ ------------ ----------
Subtotal............ 2 103,888 236,489 340,377
Goody's..................... 9 0 292,749 292,749
Montgomery Ward............. 1 0 92,484 92,484
Dayton-Hudson............... 2 323,326 0 323,326
The Bon Ton ................ 2 131,915 87,024 218,939
Wal*Mart.................... 1 0 112,541 112,541
Kmart....................... 2 0 173,940 173,940
Mervyn's.................... 2 124,919 74,889 199,808
Boscov's.................... 1 150,000 0 150,000
Burlington Coat............. 1 0 153,345 153,345
Rich's...................... 1 115,623 0 115,623
Boston Store................ 1 0 96,000 96,000
Kohl's...................... 1 0 88,691 88,691
Upton's..................... 2 0 149,993 149,993
Beall Bros. (Texas)......... 2 0 61,916 61,916
Beall's (Florida)........... 1 0 45,844 45,844
---------- ------------ ------------ ----------
Total............... 133 8,437,115 5,923,646 14,360,761
========== ============ ============ ==========

(1) Includes all square footage owned by or leased to such Anchor including
tire, battery and automotive facilities and storage square footage.

Mall Stores. The Malls have approximately 4,465 Mall Stores. National or
regional chains (excluding individually franchised stores) lease approximately
84% of the occupied Mall Store GLA. Although Mall Stores occupy only 35.3% of
total Mall GLA, the Malls derived approximately 86.9% of their revenue from Mall
Stores for the year ended December 31, 1999.

Among the companies with the largest representation among Mall Stores are:
The Limited, Inc./Intimate Brands, Inc. stores (The Limited, Limited Too,
Express, Lerner New York, Lane Bryant, Structure, Victoria Secret, and Bath and
Body Works) and Venator Group, Inc. (Footlocker, Lady Footlocker, Kinney Shoes
and Champs Sports Stores). As of December 31, 1999, The Limited, Inc.'s and
Intimate Brands, Inc.'s 130 stores accounted for 8.5% of total mall leased GLA
and 7.6% of total revenues from the Company's Properties. As of December 31,
1999 Venator Group, Inc. accounted for 2.6% of total mall leased GLA and 2.1% of
total revenues. No single Mall Store retailer accounted for more than 8.5% of

-18-

total leased GLA and no single Mall Store retailer accounted for more than 7.6%
of total revenues from the Company's Properties.

The following table sets forth certain information for executed renewal
leases with current tenants or leases of previously occupied space with new
tenants at the Malls during the year ended December 31, 1999.

Prior Lease New Lease Increase Increase
Total Base and Initial Year per New Lease per
Number Square Percentage Rent Base Rent Square Average Square
of Leases Feet per Square Foot per Square Foot Foot Base Rent Foot
------------ ------------ ---------------- --------------- ------------ ----------- ------------

341 737,809 $21.56 $24.23 $2.67 $24.91 $3.35

The following table sets forth the total Mall Store GLA, the total square
footage of leased Mall Store GLA, the percentage of Mall Store GLA leased, the
average base rent per square foot of Mall Store GLA and average Mall Store sales
per square foot as of the end of each of the past five years.

Stabilized Mall Store Summary Information

Total Percentage Average Average Mall
Total Mall Store of Mall Store Base Rent Store Sales
At Mall Store Leased GLA per Square per Square
December 31, GLA GLA Leased(1) Foot(2) Foot(3)
- --------------------- ------------ ----------- ------------- ----------- -------------

1995................ 3,003,334 2,697,969 89.8% $18.28 $237
1996................ 3,452,997 3,073,190 89.0 19.03 240
1997................ 3,503,490 3,214,176 91.7 18.98 263
1998................. 7,166,498 6,707,283 93.6 19.82 273
1999................. 7,429,503 6,956,451 93.6 20.68 285

(1) Mall Store occupancy includes tenants with executed leases who are paying
rent.
(2) Average base rent per square foot is based on Mall Store GLA occupied as of
the last day of the indicated period for the preceding twelve-month period.
(3) Calculated for the preceding twelve-month period.

Lease Expirations. The following table shows the scheduled lease
expirations for the Malls (assuming that none of the tenants exercise renewal
options) for the year ending December 31, 2000 and for the next nine years for
the Mall Stores.

Mall Lease Expiration

Percentage of Total
Approximate Represented by
Mall Store Expiring Leases
Number of Annualized Base GLA of Base Rent ------------------------------
Year Ending Leases Rent of Expiring Expiring Per Square Annualized Leased Mall
December 31, Expiring Leaes(1) Leases Foot Base Rent Store GLA
- --------------------- -------------- ---------------- ------------- ----------- ----------- ------------

2000................ 395 13,390,575 771,830 $ 20.03 9.5% 11.2%
2001................ 282 11,025,136 520,190 21.19 7.7 7.4
2002................ 304 14,035,435 649,549 21.61 9.8 9.3
2003................ 277 13,663,114 718,930 19.00 9.5 10.2
2004................ 314 16,233,476 701,897 23.13 11.3 10.0
2005................ 278 17,646,670 815,759 21.63 12.3 11.6
2006................ 172 9,377,742 429,598 21.83 6.6 6.1
2007................ 162 12,159,290 575,606 21.12 8.5 8.2
2008................ 177 12,045,150 558,537 21.57 8.4 8.0
2009................ 183 11,588,122 469,144 24.70 8.1 6.7

-19-

(1) Total annualized base rent for all leases executed as of December 31, 1999
includes rent for space that is leased but not yet occupied but excludes
(i) percentage rents, (ii) additional payments by tenants for common area
maintenance, real estate taxes and other expense reimbursements and (iii)
contractual rent escalations and cost of living increases due after
December 31, 1999.

Cost of Occupancy. Management believes that in order to maximize the
Company's Funds from Operations, tenants in Mall Stores must be able to operate
profitably. A major factor contributing to tenant profitability is the tenant's
cost of occupancy.

The following table summarizes for Stabilized Mall Store tenants the
occupancy costs under their leases as a percentage of total Mall Store sales for
the last three years.

FOR THE YEAR ENDED
DECEMBER 31, (1)
--------------------------
1997 1998 1999
------ -------- --------

Mall Store sales $666.5 $1,105.5 $1,426.3
(in millions)(2) ====== ======== ========

Minimum rents 7.7% 7.7% 7.8%
Percentage rents 0.4 0.3 0.4
Expense recoveries (3) 3.1 3.1 3.3
------ -------- --------
Mall tenant occupancy costs 11.2% 11.1% 11.5%
====== ======== ========

(1) Excludes Malls not owned or open for full reporting period.
(2) Consistent with industry practice, sales are based on reports by retailers
(excluding theaters) leasing Mall Store GLA and occupying space for the
reporting period. Represents 100% of sales for these Malls. In certain
cases, the Company and the Operating Partnership will own less than 100%
interest in these Malls.
(3) Represents real estate tax and common area maintenance charges.

At December 31, 1999, the Company had investments in four malls in joint
ventures with third parties, all of which are reflected using the equity method
of accounting. Condensed combined results of operations for the four
unconsolidated affiliates are presented in the following table (in thousands).

Company's Share
Total for the Year for the Year
Ended Ended
December 31, December 31,
------------------- -------------------
1999 1998 1999 1998
------- -------- -------- --------

Revenues $26,859 $21,863 $13,227 $10,752
Depreciation & Amortization 3,253 2,836 1,619 1,390
Interest Expense 8,756 7,935 4,303 3,899
Other Operating Expenses 8,399 6,745 4,042 3,337
------- -------- -------- --------
Net Income 6,451 4,347 3,263 2,126
======= ======== ======== ========

Associated Centers

The fiftteen Associated Centers are each part of a Mall complex and
generally have one or two Anchor tenants and various smaller tenants. Anchor
tenants in these centers include such retailers as Books-A-Million, Target, Toys
"R" Us, TJ Maxx, and Goody's, which are category dominant retailers that benefit
from the regional draw of the Malls. The Associated Centers also increase the
draw to the total Mall complex.

-20-

Total leasable GLA of the fifteen Associated Centers is approximately 2.3
million square feet, including Anchors, or an average of approximately 150,000
square feet per center. As of December 31, 1999, 93.2% of total leasable GLA at
the Associated Centers was occupied.

In the years ended December 31, 1997, 1998, and 1999, revenues from the
Associated Centers represented approximately 3.8%, 3.9% and 3.7%, respectively,
of total revenues from the Company's Properties.

In the years ended December 31, 1997, 1998 and 1999, average tenant sales
per square foot at the Associated Centers were approximately $189, $172 and
$184, respectively.

Average base rent per square foot at the Associated Centers increased from
$9.68 at December 31, 1998 to $9.78 at December 31, 1999.

Each of the Associated Centers was developed by the Company, except for
WestGate Crossing, Village at Rivergate and Courtyard at Hickory Hollow which
were acquired in August 1997, July 1998 and July 1998, respectively. All of the
land underlying the Associated Centers is owned in fee simple except for
Bonita Crossing.

Lease Expirations. The following table shows for the Associated Centers
(assuming that none of the tenants exercise renewal options) the scheduled lease
expirations for the year ending December 31, 2000 and for the next nine years.

ASSOCIATED CENTER LEASE EXPIRATION

Percentage of Total
Approximate Base Represented by
Mall Store Rent Expiring Leases
Number of Annualized Base GLA of per --------------------------
Leases Rent of Expiring Expiring Square Annualized Leased Mall
December 31, Expiring Leases(1) Leases Foot Base Rent Store GLA
- -------------- --------- ---------------- ------------- ---------- ------------ -----------

2000........... 23 $ 714,782 59,167 $12.08 7.77% 7.31%
2001........... 17 635,901 66,556 9.55 6.91 8.22
2002........... 18 776,354 58,714 13.22 8.44 7.25
2003........... 17 953,153 100,760 9.46 10.36 12.45
2004........... 17 1,002,859 121,592 8.25 10.90 15.02
2005........... 7 807,104 94,083 8.58 8.77 11.62
2006........... 4 275,091 21,386 12.86 2.99 2.64
2007........... 4 536,315 41,396 12.96 5.83 5.11
2008........... 2 224,500 14,000 16.04 2.44 1.73
2009........... 9 1,140,881 75,347 15.14 12.40 9.31

(1) Total annualized base rent for all leases executed as of December 31, 1999
includes 12 months of rent for space that is newly leased but not yet
occupied and base rent on ground leases with no square footage but excludes
(i) percentage rents, (ii) additional payments by tenants for common area
maintenance, real estate taxes and other expense reimbursements and (iii)
contractual rent escalations and cost of living increases due after
December 31, 1999.

-21-

The following table sets forth certain information for executed renewal
leases with current tenants or leases of previously occupied space with new
tenants at the Associated Centers during the year ended December 31, 1999.

Prior Lease New Lease Increase Increase
Total Base and Initial Year per New Lease per
Number Square Percentage Rent Base Rent Square Average Square
of Leases Feet per Square Foot per Square Foot Foot Base Rent Foot
- ----------- ------------ ---------------- --------------- ------------ ----------- ------------

31 94,171 $10.35 $11.10 $0.75 $11.28 $0.93

The following table sets forth certain information for each of the
Associated Centers as of December 31, 1999.

Ownership
Year of by Company
Name of Opening/Most and Total Percentage
Associated Recent Operating Total Leasable GLA
Center/Location Expansion Partnership GLA(1) GLA(2) Leased(3) Anchors
- ---------------------- -------------- --------------- --------- ------------ -------------- --------------------

Bonita Crossing......(10) 1997/1999 100% 122,150 122,150 100% Books-A-Million,
Meridian, MS TJ Maxx, Office Max
CoolSprings Crossing..... 1992 100% 353,369 53,286 100% Target(7),
Nashville, TN Service Merchandise,
Toys "R" Us,
Uptons(7),
Carmike Cinemas,
Lifeway Books
Courtyard at Hickory
Hollow ................. 1979(9) 100% 77,460 77,460 100% Carmike Cinemas,
Nashville, TN Just For Feet
Foothills Plaza.......... 1983/1986 100% 191,216(4) 71,216 51% Eckerd(6),
Maryville, TN Carmike Cinemas
Frontier Square.......... 1985 100% 161,615 16,615 100% Buttrey Food & Drug,
Cheyenne, WY Target
Georgia Square Plaza..... 1984 100% 15,393 15,393 100% Carmike Cinema
Athens, GA
Governor's Square Plaza.. 1985(5) 49% 180,018 57,820 100% Office Max, Premier
Clarksville, TN Medical Group, Target
Hamilton Corner.......... 1990 90% 88,298 88,298 99% Michael's, Goody's,
Chattanooga, TN Fresh Market
Hamilton Crossing........ 1987/1994 92% 185,370 92,257 98% Service Merchandise(7),
Chattanooga, TN Toys "R" Us, TJ
Maxx, Lifeway Books
The Landing.............. 1999 100% 163,164 85,507 93% Toys "R" Us, Circuit
Atlanta(Douglasville),GA City, Michael's
Madison Plaza............ 1984 75% 153,085 98,690 98% Food World, TJ Maxx,
Huntsville, AL Service Merchandise
Pemberton Plaza.......... 1986 100% 77,998 26,947 96% Kroger
Vicksburg, MS
The Terrace.............. 1997 92% 155,987 116,715 100% Barnes & Noble,
Chattanooga, TN Home
Place, Old Navy,
Staples, Circuit City
Village at Rivergate..... 1981(9) 100% 166,366 166,366 100% Target, Just For Feet
Nashville, TN
WestGate Crossing........ 1985/1999(8) 100% 151,489 151,489 85% Goody's, Toys "R" Us
Spartanburg, SC
Total Associated --------- --------- --------
Centers............ 2,122,977 1,240,207 93%
========= ========= ========

-22-

(1) Includes the total square footage of the Anchors (whether owned or leased
by the Anchor) and shops. Does not include future expansion areas.
(2) Includes leasable Anchors.
(3) Includes tenants with executed leases at December 31, 1999. Calculation
includes leased Anchors.
(4) Carmike Cinemas is subject to a ground lease (40,000 square feet of GLA).
Total GLA includes, but total Total leasable GLA and percentatge lease
exclude a furniture store of 80,000 square feet owned by others.
(5) Originally opened in 1985, and was acquired by the Company in June 1997.
(6) Eckerd has closed its store but is continuing to meet its financial
obligations under its lease and is subleased to Dollar General.
(7) Owned by tenant.
(8) Originally opened in 1985, and was acquired by the Company in August 1997.
(9) Acquired by the Company in July 1998.
(10)The land is ground leased through June 2015 with options to extend through
June 2035. The annual rent is $14,355 increasing by 6% each year.

Community and Power Centers

In addition to Mall development, the Company's development activities focus
on Community Centers, and power centers. Community Centers pose fewer
development risks than Malls because they have shorter development timetables
and lower up-front costs. Community Centers also afford the Company the
opportunity to meet the needs of retailers for whom a "convenience" type of
location is more appropriate and the needs of customers whose trade areas cannot
support a regional mall. Power centers are larger than other Community Centers,
with several large anchor stores which draw shoppers from a wider geographic
area.

The Company's Community Center developments in the 1980's were generally
anchored by supermarkets, and, in certain cases, by drug stores. Management's
current focus has expanded to include the development of larger centers,
anchored by mass merchandisers and department stores, while continuing the
development of smaller centers anchored by supermarkets and drug stores.
Recently completed Community Centers include centers in Morganton, North
Carolina and Orlando, Florida. Anchors at these new centers include, JCPenney,
Belk, Goody's, Wal*Mart and Lowe's. During 1999 the Company sold a free-standing
center, Northpark Center in Richmond, Virginia and Regal Cinema in Jacksonville,
Florida, a free-standing center under development. Subsequent to December 31,
1999, the Company sold University Crossing in Pueblo, Colorado in exchange for a
purchase money mortgage. and sold the recently completed Fiddler's Run in
Morganton, North Carolina in a like-kind exchange of properties under section
1031 of the Code.

Community Centers, other than power centers, range in size from 25,000
square feet to in excess of 286,000 square feet. Anchors in Community Centers
generally lease their store space and occupy 60-85% of a center's GLA. The
number of stores in a Community Center ranges from one to sixteen with an
average of seven stores per center.

The Company's two power centers, which were completed and opened in 1997
and 1998, average 786,000 square feet and have an average of nine major anchor
stores and additional small shop space ranging from 38,000 square feet to
136,000 square feet. The projects include expansion areas for additional major
retailers. These power centers are included in the Community Center
classification in this report.

Total GLA of the 82 Community Centers is approximately 9.2 million square
feet, or an average of approximately 113,000 square feet per center. Excluding
power centers the average is 90,000 square feet per center. As of December 31,
1999, 97.7% of total leasable GLA at the Community Centers was leased.

In the years ended December 31, 1997, 1998 and 1999, revenues from the
Community Centers represented approximately 21.2%, 19.6% and 17.8%,
respectively, of total revenues from the Company's Properties.

Occupancy at the Community Centers increased from 97.0% at December 31,
1998 to 97.7% at December 31, 1999.

Average base rent per square foot at the Community Centers increased from
$8.22 at December 31, 1998, to $8.32 at December 31, 1999.

-23-

As of December 31, 1999, Food Lion, a major regional supermarket operator
with headquarters in North Carolina served as an anchor tenant in 37 of the
Company's Community Centers. For the year ended December 31, 1999, Food Lion
accounted for approximately 2.7% of the revenues generated by the Company's
Properties.

With the exception of Suburban Plaza, Sutton Plaza and Lions Head Village,
which were acquired by the Company in March 1995, January 1997 and July 1998,
respectively, each of the Community Centers was developed by the Company.

The following table summarizes the percentage of total leasable GLA leased,
average base rent per square foot (excluding percentage rent) and tenant sales
per square foot at the Community Centers for each of the last five years.

Community Center Summary Information

Average
Percentage Base Rent Tenant
Year Ended GLA Per Square Sales Per
December 31, Leased(1) Foot(2) Square Foot(3)
- ---------------------------------- ----------- ---------- --------------

1995.............................. 96.8% 6.66 202
1996.............................. 97.2% 6.94 210
1997.............................. 97.6% 7.42 221
1998.............................. 97.0% 8.22 220
1999.............................. 97.7% 8.32 214

(1) Percentage leased includes tenants who have executed leases and are paying
rent as of the specified date.
(2) Average base rent per square foot is based on GLA occupied as of the last
day of the indicated period.
(3) Consistent with industry practice, sales are based on reports by retailers
(excluding theaters) leasing GLA and occupying space for the 12 months
ending on the last day of the indicated period.

Lease Expirations. The following table shows the scheduled lease expirations for
the Community Centers (assuming that none of the tenants exercise renewal
options) for the year ending December 31, 2000, and for the next nine years.

Community Center Lease Expiration

Percentage of
Total Represented
Annualized Approximate by Expiring Leases
Number of Base Rent GLA of Base Rent -----------------------
Year Ended Leases of Expiring Expiring Per Annualized Leased
December 31, Expiring Leases(1) Leases Square Foot Base Rent GLA
- --------------------- ----------- ---------- ----------- ----------- ----------- ----------

2000................. 89 $1,887,866 241,504 $ 7.82 3.85% 4.12%
2001................. 94 2,257,523 299,128 7.55 4.60 5.10
2002................. 136 3,922,398 471,722 8.32 7.99 8.04
2003................. 93 3,588,222 528,119 6.79 7.31 9.00
2004................. 109 3,774,040 387,656 9.74 7.69 6.61
2005................. 32 2,215,174 270,561 8.19 4.51 4.61
2006................. 16 1,643,250 255,550 6.43 3.35 4.36
2007................. 15 1,446,140 172,893 8.36 2.95 2.95
2008................. 20 2,512,073 250,418 10.03 5.12 4.27
2009................. 23 3,946,525 424,981 9.29 8.04 7.25

(1) Total annualized base rent for all leases executed as of December 31, 1999
includes 12 months of rent for space that is newly leased but not yet
occupied and base rent on ground leases with no square footage but excludes
(i) percentage rents, (ii) additional payments by tenants for common area
maintenance, real estate taxes and other expense reimbursements and (iii)
contractual rent escalations and cost of living increases for periods after
December 31, 1999.

-24-

The following table sets forth certain information for executed renewal
leases with current tenants or leases of previously occupied space with new
tenants at the Community Centers during the year ended December 31, 1999.

Prior Lease New Lease
Total Base and Initial Year Increase New Lease Increase
Number Square Percentage Rent Base Rent per Square Average per Square
of Leases Feet per Square Foot per Square Foot Foot Base Rent Foot
- ------------ ------------ --------------- --------------- ------------ ------------ -----------

197 460,978 $8.44 $9.03 $1.59 $9.39 $0.95

The following table sets forth certain information for each of the
Company's Community Centers at December 31, 1999.

-25-

Ownership
Year of by Company Square
Opening/ and Total Percentage Feet Fee or Number
Name of Most Recent Operating Total Leasable GLA of Anchor Ground of
Community Center Expansion Partnership GLA(1) GLA(2) Leased(3) Anchors Vacancies Lease Stores
- -------------------- ------------- ------------ ------- --------- ----------- ----------------- ----------- --------- -------

Anderson Plaza 1983/1994 100% 46,258 46,258 100% Food Lion, Eckerd None Fee 3
Greenwood, SC
Bartow Village 1990 100% 40,520 40,520 100% Food Lion, Family None Fee 4
Bartow, FL Dollar
Beach Crossing 1984 100% 45,790 45,790 88% Food Lion(4), CVS None Fee 6
Myrtle Beach, SC
Bennington Place 1994 100% 42,712 42,712 100% Food Lion None Fee 3
Roanoke, VA
BJ's Plaza 1991 100% 104,233 104,233 100% BJ's Wholesale Club None Ground 1
Portland, ME Lease(5)
Briarcliff Square 1989 100% 41,778 41,778 93% Food Lion None Fee 10
Oak Ridge, TN
Buena Vista Plaza 1989/1997 100% 151,320 17,500 100% Wal*Mart, Winn Dixie None Fee 7
Columbus, GA
Bulloch Plaza 1986 100% 34,400 34,400 100% Food Lion None Fee 3
Statesboro, GA
Capital Crossing 1995 100% 83,700 83,700 100% Hannaford Bros., Staples None Fee 2
Raleigh, NC
Cedar Bluff Crossing 1987/1996 100% 53,050 53,050 100% Food Lion None Fee 12
Knoxville, TN
Cedar Plaza 1988 100% 95,000 50,000 100% Quality Stores, None Fee 5
Cedar Springs, MI
Centerview Plaza 1986/1994 100% 43,720 43,720 100% Food Lion, Eckerd None Fee 6
China Grove, NC
Chester Square 1997 100% 10,000 10,000 88% Hannaford Brothers None Fee 3
Richmond, VA
Chestnut Hills 1982 100% 68,364 68,364 96% JCPenney None Fee 10
Murray, KY
-26-

Ownership
Year of by Company Square
Opening/ and Total Percentage Feet Fee or Number
Name of Most Recent Operating Total Leasable GLA of Anchor Ground of
Community Center Expansion Partnership GLA(1) GLA(2) Leased(3) Anchors Vacancies Lease Stores
- -------------------- ------------- ------------ ------- --------- ----------- ----------------- ----------- --------- -------

Colleton Square 1986 100% 31,000 31,000 96% Food Lion(4) None Fee 5
Walterboro, SC
Collins Park Commons 1989 100% 37,400 37,400 100% Food Lion(7) 29,000 Ground 4
Plant City, FL Lease(6)
Conway Plaza 1985 100% 33,000 33,000 100% Food Lion(7) 21,000 Ground 6
Conway, SC Lease(8)
Cosby Station 1994/1995 100% 77,811 77,811 100% Publix None Fee 9
Douglasville, GA
Courtlandt Towne 1997/1998 100% 763,260 630,017 92% Marshalls, Wal*Mart, None Fee 28
Center Home Depot, Home
Cortlandt, NY Place, A & P Food
Store, Seaman Furniture,
Barnes & Noble,
Office Max, PetsMart
County Park Plaza 1982 100% 60,750 60,750 100% Bi-Lo None Fee 3
Scottsboro, AL
Devonshire Place 1996 100% 104,414 104,414 100% Hannaford Bros., Kinetix, None Ground 4
Cary, NC Borders Books Lease(10)
Dorchester Crossing 1985/1997 100% 45,278 45,278 100% Food Lion None Fee 6
Charleston, SC
East Ridge Crossing 1988 100% 54,000 54,000 100% Food Lion None Fee 13
Chattanooga, TN
East Towne Crossing 1989/1990 100% 158,751 70,011 100% Home Depot, Regal None Fee 8
Knoxville, TN Cinemas, Food Lion
58 Crossing 1988 100% 49,984 49,984 100% Food Lion, CVS None Fee 9
Chattanooga, TN
Fiddler's Run(22) 1999 100% 203,000 203,000 99% Belk, JCPenney, None Fee 20
Morganton, NC Goody's, Food Lion
Garden City Plaza 1984/1991 100% 188,446 76,246 96% Sears, JCPenney None Fee 15
Garden City, KS
-27-

Ownership
Year of by Company Square
Opening/ and Total Percentage Feet Fee or Number
Name of Most Recent Operating Total Leasable GLA of Anchor Ground of
Community Center Expansion Partnership GLA(1) GLA(2) Leased(3) Anchors Vacancies Lease Stores
- -------------------- ------------- ------------ ------- --------- ----------- ----------------- ----------- --------- -------
Genesis Square 1990/1996 100% 35,344 35,344 100% Food Lion None Fee 4
Crossville, TN
Girvin Plaza 1990 100% 85,564 40,997 100% Winn Dixie None Fee 8
Jacksonville, FL
Greenport Towne Centre 1994 100% 191,622 75,525 100% Wal*Mart, None Fee 3
Hudson, NY Price-Chopper
Hampton Plaza 1990 100% 44,624 44,624 100% Food Lion(4) None Fee 8
Tampa, FL
Henderson Square 1995 100% 268,327 164,329 100% JCPenney, Belk,
Henderson, NC Leggett's, Goody's, None Fee 14
Wal*Mart
Hollins Plantation Plaza 1985 100% 45,920 45,920 100% Food Lion, CVS None Fee 5
Roanoke, VA
Home Depot 1995 100% 134,920 134,920 100% Home Depot None Fee 1
Portland, ME
Jasper Square 1986/1990 100% 95,950 50,550 100% Lowe's, Goody's None Fee 7
Jasper, AL
Jean Ribaut 1977/1993 100% 223,497 223,497 97% Belk, Kmart, Bi-Lo None Fee 17
Beaufort, SC
Karns Corner 1987/1996 100% 35,000 35,000 100% Food Lion None Fee 4
Knoxville, TN
Keystone Crossing 1989 100% 40,400 40,400 100% Food Lion None Fee 5
Tampa, FL
Kingston Overlook 1996/1997 100% 119,350 119,350 100% Baby Superstore, None Fee/ 3
Knoxville, TN Home Place, Ground
Michael's Lease(11)
Lady's Island 1983/1993 100% 60,687 60,687 100% Winn Dixie, Eckerd None Fee 9
Beaufort, SC
LaGrange Commons 1996 100% 59,799 59,799 93% A & P Food Store None Fee 6
LaGrange, NY
Lakeshore Station 1994 100% 8,000 8,000 100% None Fee 5
Gainesville, GA
-28-

Ownership
Year of by Company Square
Opening/ and Total Percentage Feet Fee or Number
Name of Most Recent Operating Total Leasable GLA of Anchor Ground of
Community Center Expansion Partnership GLA(1) GLA(2) Leased(3) Anchors Vacancies Lease Stores
- -------------------- ------------- ------------ ------- --------- ----------- ----------------- ----------- --------- -------
Lions Head Village 1980(21) 100% 93,290 93,290 86% Steinmart None Fee 15
Nashville, TN
Longview Crossing 1988 100% 29,800 29,800 96% Food Lion None Ground 3
Hickory, NC Lease(12)
Lunenburg Crossing 1994 100% 198,115 25,515 92% Wal*Mart, Shop'n Save None Fee 7
Lunenburg, MA
Massard Crossing 1997 100% 290,717 88,410 100% Wal*Mart, TJ Maxx None Fee 14
Ft. Smith, AR Goody's
North Creek Plaza 1983 100% 28,500 28,500 100% Food Lion None Fee 2
Greenwood, SC
North Haven Crossing 1993 100% 104,612 104,612 100% Sports Authority, Office None Fee 6
North Haven, CT Max, Barnes & Noble
Northridge Plaza 1984/1988 100% 129,570 79,570 99% Winn Dixie, Eckerd None Fee 18
Hilton Head, SC
Northwoods Plaza 1983/1992 100% 32,705 32,705 91% Food Lion None Fee 2
Albemarle, NC
Oaks Crossing 1990/1993 100% 144,998 27,300 100% Wal*Mart, Rite Aid None Fee 11
Otsego, MI
Orange Plaza 1983 100% 46,875 46,875 100% Food World (13) 24,900 Fee 9
Roanoke, VA
Park Village 1990 100% 48,505 48,505 97% Food Lion, Family None Fee 8
Lakeland, FL Dollar
Perimeter Place 1985/1988 100% 156,945 54,525 95% Home Depot, Fred's, 24,000 Fee 16
Chattanooga, TN Drugs For Less(9)
Rawlinson Place 1987 100% 35,750 35,750 91% Food Lion(7) 25,000 Fee 7
Rock Hill, SC
Rhett at Remount 1983/1994 100% 42,628 42,628 100% Food Lion, Eckerd None Fee 3
Charleston, SC

-29-

Ownership
Year of by Company Square
Opening/ and Total Percentage Feet Fee or Number
Name of Most Recent Operating Total Leasable GLA of Anchor Ground of
Community Center Expansion Partnership GLA(1) GLA(2) Leased(3) Anchors Vacancies Lease Stores
- -------------------- ------------- ------------ ------- --------- ----------- ----------------- ----------- --------- -------
Salem Crossing 1997 100% 289,348 92,420 100% Hannaford Brothers, None Fee 16
Virginia Beach, VA Wal*Mart
Sand Lake Corners 1999 100% 558,630 155,250 96.9% Lowe's, Bealls, None Fee 26
Orlando, FL Wal*Mart
Sattler Square 1989 100% 132,746 94,760 100% Quality Stores, Perry None Fee 14
Big Rapids, MI Drugs
Seacoast Shopping 1991 100% 208,690 91,690 98% Wal*Mart None Fee 14
Center Shaw's Supermarket
Seabrook, NH
Shenandoah Crossing 1988 100% 28,600 28,600 100% Food Lion(7) 25,000 Fee 2
Roanoke, VA
Signal Hills Village 1987/1989 100% 24,100 24,100 95% (14) None Ground 6
Statesville, NC Lease(15)
Southgate Crossing 1985 100% 40,100 40,100 85% Food Lion(7) 25,000 Ground 3
Bristol, TN Lease(16)
Sparta Crossing 1989 100% 31,400 31,400 100% Food Lion None Fee 2
Sparta, TN
Springhurst Towne Center 1997 100% 810,539 422,539 100% Cinemark, Kohl's, None Fee 19
Louisville, KY Books A Million,
Party Source, TJ Maxx,
Meijer, Old Navy,
Target, Fashion Shop
Springs Crossing 1987/1996 100% 42,920 42,920 100% Food Lion, Rite Aid None Ground 4
Hickory, NC Lease(17)
Statesboro Square 1986 100% 41,000 41,000 100% Food Lion(4) 25,000 Fee 6
Statesboro, GA
Sterling Creek 1998 100% 65,500 65,500 100% Hannaford Bros. None Fee 1
Portsmouth, VA
Stone East Plaza 1983 100% 45,259 45,259 100% Food Lion(4) None Fee 10
Kingsport, TN

-30-

Ownership
Year of by Company Square
Opening/ and Total Percentage Feet Fee or Number
Name of Most Recent Operating Total Leasable GLA of Anchor Ground of
Community Center Expansion Partnership GLA(1) GLA(2) Leased(3) Anchors Vacancies Lease Stores
- -------------------- ------------- ------------ ------- --------- ----------- ----------------- ----------- --------- -------
Strawbridge Market 1997 100% 43,764 43,764 100% Regal Cinema None Fee 1
Place
Virginia Beach, VA
Suburban Plaza 1995 100% 129,111 129,111 95% Toys "R" Us None Fee 20
Knoxville, TN Barnes & Noble
Sutton Plaza 1972(18) 100% 122,007 122,007 100% A & P Food Store, None Fee 14
Mt. Olive, NJ Ames
34th St. Crossing 1989 100% 51,120 51,120 94% Food Lion, Family None Fee 11
St. Petersburg, FL Dollar
Tyler Square 1987 100% 48,370 48,370 100% Food Lion, CVS None Fee 8
Radford, VA
University Crossing(22) 1986 100% 101,964 20,053 62% Wal*Mart 81,911 Fee 7
Pueblo, CO (20)
Uvalde Plaza 1987/1992 75% 111,160 34,000 100% Wal*Mart, Beall's None Fee 8
Uvalde, TX
Valley Commons 1988/1994 100% 45,580 45,580 100% Food Lion None Fee 10
Salem, VA
Valley Crossing 1988/1991 100% 186,077 186,077 100% Goody's, TJ Maxx, None Fee 21
Hickory, NC Office Depot,
Circuit City,
Factory Card Outlet
The Village at Wexford 1990 100% 102,450 72,450 100% Quality Stores(19), None Fee 8
Cadillac, MI
Village Square 1990/1993 100% 163,294 27,050 85% Wal*Mart, None Fee 11
Houghton Lake, MI Fashion Bug
Wildwood Plaza 1985/1994 100% 39,580 39,580 100% Food Lion None Fee 4
Salem, VA
Willow Springs Plaza 1991/1994 100% 224,910 130,910 100% Home Depot, Office Max, None Fee 10
Nashua, NH _________ _________ ____ JCPenney Home Store
Total Community Centers 9,188,166 6,157,461 98%
========= ========= ====

-31-

(1) Includes the total square footage of the Anchors (whether owned by others
or leased by the Anchor) and shops. Does not include future expansion
areas.
(2) Includes leasable Anchors.
(3) Includes tenants paying rent on executed leases on December 31, 1999.
Calculation includes leased Anchors.
(4) Tenant has closed its store but is continuing to meet its financial
obligation and is sub-leasing the space.
(5) Ground Lease term extends to 2051 including four 10-year extensions. Lessee
has an option to purchase and a right of first refusal to purchase the fee.
(6) Ground Lease term extends to 2049 including three 10-year extensions.
Lessor receives a share of percentage rents during initial term and
extensions. Lessee has an option to purchase and a right of first refusal
to purchase the fee.
(7) Represents a tenant which has closed its store but is continuing to meet
its financial obligations under its lease.
(8) Ground Lease term extends to 2055 including two 20-year extensions. During
extension periods, lessor receives a share of percentage rents. Lessee has
a right of first refusal to purchase the fee. Lessor receives a share of
sale proceeds upon sale of the center to a third party only if sale occurs
while fee is subordinated to a mortage.
(9) Fred's closed subsequent to December 31, 1999.
(10) Ground lease extends to 2097 including 12 five year options. Lessor
receives no additional rent.
(11) Ground lease for an out-parcel extends to 2046 including 4 ten year
options. Lessor receives 20% of percentage rentals.
(12) Ground Lease term extends to 2049 including three 10-year extensions.
Lessor receives a share of percentage rents during initial term and
extensions. Lessee has a right of first refusal to purchase the fee.
(13) Represents a Food World which has closed its store but is continuing to
meet its financial obligations under its lease and is sub-leasing the
space.
(14) Signal Hills Village is part of Signal Hills Crossing, a Property on which
the Company holds a Mortgage.
(15) Ground Lease term extends to 2084. Rent for entire term has been prepaid.
Lessee has an option to purchase the fee under certain circumstances.
(16) Ground Lease term extends to 2055 including one 20-year extension.
Commencing in 2005, rental will be the greater of base rent or a share of
the revenue from the center. Lessee has a right of first refusal to
purchase the fee.
(17) Ground Lease term extends to 2048 including three 10-year extensions.
Lessor receives a share of percentage rents during initial term and
extensions. Lessee has a right of first refusal to purchase the fee.
(18) Sutton Place opened in 1972 and was acquired by the Company in January
1997.
(19) Quality Stores has an option to purchase its 56,850 square foot store
commencing in 1996 for a price based upon capitalizing minimum annual rent
being paid at the time of exercise at a rate of 8.33%.
(20) Wal*Mart who owns their store has closed.
(21) Lionshead opened in 1980 and was acquired by the Company in July 1998.
(22) The Company sold the center subsequent to December 31, 1999.

Mortgages

The Company owns certain Mortgages which were granted prior to the Offering
in connection with sales by CBL of properties which it had previously developed.

The Company holds fee mortgages on six community centers, which mortgages
had, as of December 31, 1999, an aggregate outstanding principal balance of $7.2
million. Such mortgages entitle the Company to receive substantially all of such
properties' current cash flow in the form of periodic debt service payments. The
encumbered properties all opened between 1981 and 1984 and have one Anchor
vacancy.

In the years ended December 31, 1997, 1998, and 1999, revenues from the
Mortgages represented approximately 2.0%, 0.7%, and 0.6%, respectively, of total
revenues from the Company's Properties.

-32-

The following table sets forth certain additional information regarding the
Mortgages as of December 31, 1999.

Mortgage Information Center Information
-------------------- ------------------
Annual Principal Annual Total Percentage Number
Name of Center/ Interest Balance as Debt Maturity Total Leasable GLA of
Location Rate of 12/31/97 Service Date GLA(1) GLA Leased(2) Anchors Stores
- ------------------- --------- ----------- --------- --------- -------- --------- ----------- ----------- -------

BI-LO SOUTH 9.50% $1,486 $175 DEC-2006 56,557 56,557 100% BI-LO, 7

BI-LO South............ 9.5$% 1,349 $ 175 Dec-2006 56,557 56,557 100% BI-LO, 7
Cleveland, TN Rite-Aid

Gaston Square..........11.00 1,659 179 Dec-99(3) 33,640 33,640 100 Food Lion, 4
Gastonia, NC Eckerd

Inlet Crossing.........11.00 1,576 327 Dec-99(3) 55,248 55,248 100 Food Lion, 13
Myrtle Beach, SC CVS

Olde Brainerd Centre... 9.50 38 38 Dec-2006 57,293 57,293 100 Bi-LO 7
Chattanooga, TN

Signal Hills Crossing..11.00 2,421 244 Dec-99(3) 44,220 44,220 100 Food 6
Statesville, NC Lion(4),
CVS

Soddy Daisy Plaza...... 9.50 202 48 Dec-2006 100,095 47,325 100 Wal*Mart, 5
Soddy Daisy, TN Bi-Lo,
CVS
----------- --------- -------- --------- ----------- -------
Total................ $7,245 $1,011 347,053 294,283 100% 42
=========== ========= ======== ========= =========== =======

(1) Includes Anchors.
(2) Includes all leases executed on or before December 31, 1999. Leased GLA
includes non-Anchor GLA and leased Anchor GLA.
(3) The mortgage is on a month-to-month extension pending execution of
extension agreement.
(4) Tenant has closed but is continuing to meet its financial obligation.

Office Building

The Company owns a 95% interest in a 49,082 square foot office building in
Chattanooga, Tennessee in which the Company's headquarters are located. The
Company occupies 34,470 square feet or 70% of the total square footage of the
Office Building. The Office Building is 100% occupied.

-33-

Top 25 Tenants

The following table sets forth the Company's top 25 tenants based upon a
percentage of total revenues from the Company's Properties in 1999.

% of Number of Square
Rank Tenant Revenues Stores Feet
---- ---------------------------------------- -------- --------- ----------

1 The Limited, Inc........................ 6.03% 88 709,501
2 Food Lion............................... 2.68% 37 1,028,223
3 Venator Group, Inc...................... 2.10% 55 182,571
4 JCPenney................................ 2.07% 32 2,796,942
5 Gap Inc., The........................... 2.03% 26 72,058
6 Intimate Brands, Inc.................... 1.58% 42 168,112
7 Goody's Family Clothing, Inc. .......... 1.51% 17 570,823
8 Regal Cinemas, Inc...................... 1.09% 6 221,135
9 Shoe Show, The.......................... 1.08% 26 126,385
10 Sales, Inc.............................. 1.02% 22 2,368,264
11 Barnes & Noble, Inc..................... 0.96% 12 142,905
12 Sears, Roebuck, & Co.................... 0.94% 27 2,821,579
13 Consolidated Stores Corporation......... 0.90% 26 91,294
14 Regis Corporation, The.................. 0.88% 59 65,589
15 Claire's Boutique, Inc.................. 0.86% 56 58,182
16 American Eagle Outfitters............... 0.81% 18 77,443
17 United Artist........................... 0.81% 7 167,696
18 Carmike Cinema.......................... 0.79% 12 260,972
19 Camelot - Transworld Entertainment...... 0.77% 17 70,664
20 Homeplace Stores Two, Inc............... 0.71% 3 159,465
21 Belk Atlanta Group Office............... 0.67% 8 680,267
22 Kirkland's.............................. 0.67% 15 66,668
23 Eddie Bauer............................. 0.65% 10 63,616
24 Tandy Corporation....................... 0.65% 34 80,426
25 Great Atlantic and Pacific.............. 0.62% 3 140,410

Mortgage Debt and Ratio to Total Market Capitalization

As of December 31, 1999, the Operating Partnership's proportionate share of
indebtedness of all Properties (whether or not consolidated for financial
statement reporting purposes, including the Construction Properties) was
approximately $1.385 billion. The Company's total market capitalization (the
aggregate market value of the Company's outstanding shares of Common and
Preferred Stock, assuming the full exchange of the limited partnership interests
in the Operating Partnership for Common Stock, plus the $1.385 billion total
debt of the Operating Partnership) as of December 31, 1999 was $2.2 billion.
Accordingly, the Company's debt to total market capitalization ratio as of
December 31, 1999 was 63.0%. The debt to total market capitalization ratio,
which is based upon the Company's proportionate share of consolidated and
unconsolidated indebtedness and market values of equity, differs from
debt-to-book capitalization ratios, which are based upon consolidated
indebtedness and book values.
-34-

The following table sets forth certain information regarding the mortgages
and secured lines of credit encumbering the Properties.

MORTGAGE DEBT
(Dollars in thousands)
Mortgage Loans Outstanding in
Whole or in Part at December 31, 1999

Ownership
Share of Estimated Earliest
Company Balloon Date at
and Principal Annual Annual Payment Which Loans
Operating Annual Balance as of Interest Debt Maturity Due on Can Be
Center Pledged as Collatal Partnership Interest Rate 12/31/99(1) Payment(2) Service Date Maturity Prepaid(3)
- ---------------------------- ------------ ------------- ------------ ------------- --------- ----------- ----------- ------------

Malls:
Arbor Place................ 100% 7.310%(4) $93,944 $6,867 $6,867 Jun-2001 $93,944 --
Asheville Mall............. 100% 7.180%(4) 51,000 3,662 3,662 Dec-2000 51,000 --
Bonita Lakes Mall.......... 100% 6.820% 29,446 2,008 2,503 Oct-2009 22,539 Oct-2003(15)
Burnsville Center.......... 100% 6.560%(4) 60,750 3,864 3,864 Jan-2001 60,750 --
College Square............. 100% 6.750% 15,432 1,042 1,548 Jan-2003 13,393 -- (5)
Coolsprings Galleria....... 100% 8.290% 65,874 5,461 6,636 Oct-2010 -- Oct-2000(6)
Frontier Mall.............. 100% 10.000% 3,879 388 2,220 Dec-2001 -- -- (7)
Governor's Square.......... 48% 8.230% 35,137 2,892 3,476 Sep-2016 14,454 Sep-2001(8)
Hamilton Place............. 90% 7.000% 71,642 5,015 6,361 Mar-2007 59,160 -- (9)
Hickory Hollow Mall........ 100% 6.770% 94,997 6,431 7,723 Aug-2008 81,019 --
Janesville Mall............ 100% 8.375% 16,504 1,382 1,382 Apr-2016 -- --
Madison Square............. 50% 9.250% 48,153 4,454 4,936 Mar-2002 46,482 Feb-1997(10)
Meridian Mall.............. 100% 7.150%(4) 80,000 5,720 5,720 Aug-2000 80,000 --
Oak Hollow Mall............ 75% 7.310% 50,627 3,701 4,709 Feb-2008 39,567 Feb-2002(11)
Parkway Place.............. 50% 8.230% 9,055 671 671 Jun-2000 9,055 --
Plaza del Sol..........(12) 51% 9.500%(13) 391 37 428 Dec-2000 -- --
RiverGate Mall............. 100% 6.770% 76,776 5,198 6,241 Aug-2008 65,479 --
Springdale Mall............ 100% 7.320% 21,950 1,607 1,351 Nov-2000 19,950 --
St. Clair Square........... 100% 7.000% 74,244 5,197 6,361 Apr-2009 58,975 --(14)
Stroud Mall ............... 100% 7.500%(4) 32,550 2,441 2,441 Apr-2000 32,550 --
Turtle Creek Mall.......... 100% 7.400% 33,381 2,470 2,966 Mar-2006 26,992 Mar-1999(15)
Walnut Square..........(16) 100% 10.125% 795 81 140 Feb-2008 -- --(17)
Walnut Square.............. 100% 10.000%(18) 389 38 38 Jun-2008 389 -- (18)
WestGate Mall.............. 100% 6.950% 48,238 3,353 4,819 Feb-2017 44,819 Feb-2002(19)
York Galleria.............. 100% 7.750% 51,000 3,960 3,960 Jun-2001 51,000 --
-----------
Malls Subtotal: 1,066,254
-----------
Associated Centers:
Bonita Lakes Crossing...... 100% 6.820% 9,227 629 784 Oct-2009 -- Oct-2003(15)
Courtyard At Hickory Hollow 100% 6.770% 4,423 299 359 Aug-2008 3,772 --
Georgia Square Plaza....... 100% 9.000% 145 13 141 Jan-2001 -- Feb-1997(9)
Hamilton Corner............ 90% 10.125% 3,215 326 471 Aug-2011 -- --(21)
Madison Plaza.............. 75% 10.125% 1,939 196 537 Feb-2004 -- --(22)
The Landing At Arbor Place. 100% 7.315%(4) 11,529 842 842 Jun-2001 11,529 --
The Terrace................ 92% 7.300% 10,405 760 1,047 Sep-2002 9,618 --(20)
Village at Rivergate....... 100% 6.770% 3,627 246 295 Aug-2008 3,093 --
-----------
Associated Centers Subtotal: 44,510
-----------
Community Centers:
Bennington Place........... 100% 10.250% 539 55 83 Aug-2010 -- Jul-2000(23)
BJ's Plaza................. 100% 10.400% 3,256 339 476 Dec-2011 -- --(20)
Briarcliff Square.......... 100% 10.375% 1,617 168 226 Feb-2013(24) -- Feb-1998(25)
Cedar Bluff Crossing....... 100% 10.625% 1,234 131 230 Aug-2007 -- Jan-2008(26)
Centerview Plaza........... 100% 10.000% 1,234 123 191 Jan-2010 -- Jan-1999(23)
Colleton Square............ 100% 9.375% 964 90 143 Aug-2010(28) -- Aug-1998(23)
Collins Park Commons....... 100% 10.250% 1,319 135 202 Oct-2010 -- Sept-2000(23)
Cortlandt Town Center....... 100% 6.900% 52,868 3,648 4,539 Aug-2008 42,342 Aug-2003(15)
Cosby Station.............. 100% 8.500% 4,106 349 490 Sep-2014 -- Sep-2001(29)
East Ridge Crossing........ 100% 10.125% 930 94 324 May-2003 -- Jan-2001(30)
Fiddler's Run.............. 100% 7.370%(4) 12,900 951 951 Aug-2000 12,900 --
Fifty-Eight Crossing....... 100% 10.125% 897 91 312 May-2003 -- Jan-2001(30)
Genesis Square............. 100% 10.250% 1,000 103 147 Aug-2010 -- Jul-2000(31)
Greenport Towne Center..... 100% 9.000% 4,312 388 529 Sep-2014 -- --(32)
Henderson Square........... 100% 7.500% 6,579 493 750 Apr-2014 -- May-2005(33)
Jean Ribaut................ 100% 7.375% 3,825 282 477 Nov-2013 4,019 --(27)

-35-

Ownership
Share of Estimated Earliest
Company Balloon Date at
and Principal Annual Annual Payment Which Loans
Operating Annual Balance as of Interest Debt Maturity Due on Can Be
Center Pledged as Collatal Partnership Interest Rate 12/31/99(1) Payment(2) Service Date Maturity Prepaid(3)
- ---------------------------- ------------ ------------- ------------ ------------- -------- --------- ------------ ------------
Karns Corner............... 100% 10.250% 916 $ 94 $ 146 Jan-2010(34) -- Feb-1999(23)
Longview Crossing.......... 100% 10.250% 428 44 66 Aug-2010 -- Aug-2000(23)
North Haven Crossing....... 100% 9.550% 7,292 696 1,225 Oct-2008 -- Oct-1998(35)
Northwoods Plaza........... 100% 9.750% 1,231 120 171 Jun-2012 -- --(36)
Perimeter Place............ 100% 10.625% 1,503 160 278 Jan-2008 -- Jan-2008(26)
Sand Lake Corners.......... 100% 7.330%(4) 14,782 1,084 1,084 Jun-2000 14,782 --
Seacoast Shopping Center... 100% 9.750% 5,632 549 721 Sep-2002 5,110 Oct-1997(37)
Shenandoah Crossing........ 100% 10.250% 538 55 83 Aug-2010 -- Aug-2000(23)
Sparta Crossing............ 100% 10.250% 822 84 127 Aug-2010 -- Jul-2000(38)
Springhurst Towne Center... 100% 6.650% 23,189 1,542 2,179 Aug-2004 19,714 Aug-2004(41)
Suburban Plaza............. 100% 7.875% 8,735 665 870 Nov-2009 5,960 -(42)
Sutton Plaza............... 100% 7.430%(4) 6,682 496 496 Aug-2002 6,682 --
34th St. Crossing......(39) 100% 10.625% 1,516 161 234 Dec-2010 -- Dec-2000(40)
Uvalde Plaza............... 75% 10.625% 719 76 133 Feb-2008 -- Feb-2008(26)
Valley Commons............. 100% 10.250% 928 95 142 Oct-2010 -- Oct-2000(23)
Willow Springs Plaza....... 100% 9.750% 5,031 491 934 Aug-2007 601 Aug-1997(37)
-----------
Community Centers Subtotal: 177,524
-----------
Construction Properties:
Chesterfield Crossing...... 100% 7.078%(4) 2,150 152 152 Dec-2002 2,150 --
Gunbarrel Pointe........... 100% 7.125%(4) 3,146 307 307 Jan-2002 3,146 --
Coastal Way................ 100% 7.726% 2,627 186 186 Dec-2002 2,627 --
-----------
Construction Property Subtotal: 7,923
-----------
Other:
Park Place................. 95% 10.000% 1,296 130 459 Apr-2003 -- --(9)

Credit Lines............... 100% 7.19%(42) 156,187(43) 11,216 11,216 Various 156,000 --
-----------
Total: 1,452,398
===========
Operating Partnership's Share of Total: $ 1,384,496 (44)

(1) The amount listed includes 100% of the loan amount even though the Company
and the Operating Partnership may own less than 100% of the property.
(2) Interest has been computed by multiplying the annual interest rate by the
outstanding principal balance as of December 31, 1999.
(3) Unless otherwise noted, loans are prepayable at any time.
(4) The interest rate is floating at various spreads over LIBOR priced at the
rates in effect at December 31, 1999.
(5) Prepayment premium is greater of 1% or modified yield maintenance.
(6) Prepayment premium is the greater of 1% or yield maintenance after October
1, 2000.
(7) Prepayment premium is based on yield maintenance (not less than 1%) for any
prepayment prior to January, 1997; thereafter, the prepayment premium is
5%, decreasing by 1% per year to a minimum of 1%; there is no prepayment
premium during the last 120 days of the loan term.
(8) Prepayment premium is based on the greater of yield maintenance or 2%.
(9) Prepayment premium is the greater of 1% or yield maintenance.
(10) Prepayment premium is based on yield maintenance; there is no prepayment
premium after October 1, 2001.
(11) Prepayment premium is the greater of 1% or yield maintenance.
(12) This loan can be extended for 2 one year periods, the extension fee is 1/4
point for each extension.
(13) Interest is floating at 1% over prime priced at December 31, 1999.
(14) Prepayment premium is the greater of 1% or yield maintenance, none last 120
days.
(15) Prepayment premium is the greater of 1% or yield maintenance.
(16) The loan is secured by a first mortgage lien on the land and improvements
comprising the Goody's anchor store and no other property.
(17) Prepayment premium is the greater of 1% or yield maintenance; there is no
prepayment premium after November 1, 2007.
(18) Interest is floating at 1 1/2% over prime priced at December 31, 1999. The
maturity date is 90 days after notice.
(19) Loan is closed to prepayment for the term. Lender shall adjust the interest
rate every 5th year of the loan. If borrower does not except the new rate
loan may be prepaid at that time without prepayment penalty.
(20) Prepayment penalty is based on yield maintenance.
(21) Prepayment premium is the greater of 1% or yield maintenance; there is no
prepayment premium during the last 120 days of the loan term.
(22) Prepayment premium is the greater of 1% or yield maintenance; there is no
prepayment premium after November 1, 2003.
(23) Prepayment premium is 5%, decreasing by 1% per year to a minimum of 2%
there is no prepayment premium during the last 120 days of the loan term.
(24) Lender has option to accelerate loan between March 1, 2001 and February 28,
2002; March 1, 2006 and February 28, 2007; and March 1, 2011 and February
28, 2012.
(25) Prepayment premium is 7%, decreasing by 1% per year to a minimum of 3%.
(26) Loan may not be prepaid.
(27) Open at 2 1/2% declining 1/2 of 1% per year beginning December 1999 to a
minimum of 1%.
(28) Lender may accelerate loan on July 1, 2007 unless Food Lion exercises an
extension option.
-35-

(29) Prepayment premium of 7% decreasing by 1% per year to a minimum of 2%;
there is no prepayment premium during the last six months of the loan term.
(30)Prepayment premium is 5%, decreasing 1% per year to a minimum of 1%; there
is no prepayment premium during the last two years of the loan term.
(31) Prepayment premium is 5% from July 1, 2000 to June 30, 2001; thereafter
decreasing by 1% per year to a minimum of 2%; there is no prepayment
premium after May 1, 2010.
(32) Prepayment premium is the greater of 10% or 1/12 of the annual yield
difference before October 2014. Thereafter the prepayment premium is 1%.
(33) Loan may be prepaid after 9 years. The prepayment premium is the greater of
1% or yield maintenance.
(34) Lender may accelerate loan after January 1, 2008 unless Food Lion exercises
an extension option beyond January 1, 2008.
(35) Prepayment premium is the greater of 2% or yield maintenance before
October, 1998, afterwards it is the greater of 1% or yield maintenance.
(36) Prepayment premium is based on yield maintenance; there is no loan
prepayment premium during the last 120 days of the loan term.
(37) Prepayment premium is the greater of 1% or yield maintenance; there is no
loan prepayment premium during the last 90 days of the term.
(38) Prepayment premium is 5% from August 1, 2000 to July 30, 2001; thereafter
decreasing by 1% per year to a minimum of 2%; there is no prepayment
premium after May 1, 2010.
(39) The note is secured by rent payable by the Food Lion Anchor store.
(40) Prepayment premium is 5%, decreasing by 1% per year to a minimum of 2%.
There is no loan prepayment premium during the last 90 days of the loan
term.
(41) The loan has a rate reset option in August of 2004, 2009 and 2014. The loan
can be prepaid in these years if the Company elects not to accept the rate
reset. The prepayment premium is the greater of 1% or yield maintenance.
(42) Prepayments penalty is 7.875% until November 2001 then yield maintenance,
none last 120 days.
(43) Interest rates on the credit lines are at various spreads over LIBOR whose
weighted average interest rate is 7.19% with various maturities through
2001. The principal balance includes term loans of $187.
(44) Represents non-recourse indebtedness on Properties and reflects the less
than 100% ownership of the Company and the Operating Partnership with
respect to certain Properties subject to such indebtedness.

ITEM 3. LEGAL PROCEEDINGS.

The Company and the Operating Partnership are not currently involved in any
material litigation nor, to management's knowledge, is any material litigation
currently threatened against the Company, the Operating Partnership, the
Property Partnerships or the Properties, other than litigation arising in the
ordinary course of business, most of which is expected to be covered under
liability insurance policies held by the Company or the Operating Partnership.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS.

(a) Market Information

The principal United States market in which the Common Stock is traded is
the New York Stock Exchange.

The following table sets forth the high and low sales prices for the Common
Stock for each quarter of the Company's two most recent fiscal years.

1998 Quarter Ended High Low
-------------------------------- ---------- ----------

March 31........................ $ 25.3125 $ 24.2500
June 30......................... 24.8750 23.3750
September 30.................... 26.8750 23.6250
December 31..................... 26.6875 24.4375

1999 Quarter Ended High Low
-------------------------------- ---------- ----------

March 31........................ $ 25.9375 $ 22.1250
June 30......................... 26.3750 22.6875
September 30.................... 27.0000 22.8125
December 31..................... 24.7500 19.4375

-37-

(b) Holders

The approximate number of shareholders of record of the Common Stock
was 650 as of March 20, 2000.

(c) Dividends

The following table sets forth the frequency and amounts of dividends
declared and paid for each quarter of the Company's two most recent
fiscal years.

Quarter Ended 1999 1998
------------------------------- -------- --------

March 31........................ $ 0.4875 $ 0.4650
June 30......................... 0.4875 0.4650
September 30.................... 0.4875 0.4650
December 31..................... 0.4875 0.4650

Future dividend distributions are subject to the Company's actual
results of operations, economic conditions and such other factors as the Board
of Directors of the Company deems relevant. The Company's actual results of
operations will be affected by a number of factors, including the revenues
received from the Properties, the operating expenses of the Company, the
Operating Partnership and the Property Partnerships, interest expense, the
ability of the anchors and tenants at the Properties to meet their obligations
and unanticipated capital expenditures.

-38-

ITEM 6. SELECTED FINANCIAL DATA.

The following table sets forth selected financial data of the Company,
which should be read in conjunction with the financial statements and notes
thereto.

Year Ended December 31,
-----------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------

TOTAL REVENUES $317,603 $254,640 $177,604 $146,805 $131,727
TOTAL EXPENSES 250,139 203,001 135,200 111,012 104,128
-------- -------- -------- -------- --------
INCOME FROM OPERATIONS 67,464 51,639 42,404 35,793 27,599
GAIN ON SALES OF REAL ESTATE ASSETS 8,357 4,183 6,040 13,614 2,213
EQUITY IN EARNINGS OF
UNCONSOLIDATED AFFILIATES 3,263 2,379 1,916 1,831 1,450
MINORITY INTEREST IN EARNINGS:
Operating Partnership (23,264) (16,258) (13,819) (15,468) (10,527)
Shopping center properties (1,225) (645) (508) (527) (386)
-------- -------- -------- -------- --------
INCOME BEFORE EXTRAORDINARY ITEM 54,595 41,298 36,033 35,243 20,349
EXTRAORDINARY LOSS ON
EXTINGUISHMENT OF DEBT - (799) (1,092) (820) (326)
-------- -------- -------- -------- --------
NET INCOME 54,595 40,499 34,941 34,423 20,023
PREFERRED DIVIDENDS (6,468) (3,234) - - -
-------- -------- -------- -------- --------
NET INCOME AVAILABLE TO COMMON
SHAREHOLDERS $48,127 $37,265 $34,941 $34,423 $20,023
======== ======== ======== ======== ========
BASIC EARNINGS PER COMMON SHARE:
Income before extraordinary item $ 1.95 $ 1.58 $ 1.51 $ 1.69 $ 1.14
======== ======== ======== ======== ========
Net income $ 1.95 $ 1.55 $ 1.46 $ 1.65 $ 1.12
======== ======== ======== ======== ========
Weighted average common shares outstanding 24,647 24,079 23,895 20,890 17,827
======== ======== ======== ======== ========
DILUTED EARNINGS PER COMMON SHARE:
Income before extraordinary item $ 1.94 $ 1.56 $ 1.49 $ 1.68 $ 1.14
======== ======== ======== ======== ========
Net income $ 1.94 $ 1.53 $ 1.45 $ 1.64 $ 1.12
======== ======== ======== ======== ========
Weighted average shares and potential 24,834 24,340 24,151 21,022 17,856
dilutive common shares outstanding ======== ======== ======== ======== ========
Dividends declared per share $ 1.95 $ 1.86 $ 1.77 $ 1.68 $ 1.59

1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- --------
BALANCE SHEET DATA:
Net investment in real estate assets $1,960,554 $1,805,788 $1,142,324 $987,260 $758,938
Total assets 2,018,838 1,855,347 1,245,025 1,025,925 814,168
Total debt 1,360,753 1,208,204 741,413 590,295 392,754
Minority interest 170,750 168,040 123,897 114,425 113,692
Shareholders' equity 419,887 415,782 330,853 272,804 270,892
OTHER DATA:
Cash flows provided by (used in):
Operating activities $114,196 $89,123 $60,852 $54,789 $28,977
Investing activities (212,140) (571,332) (245,884) (218,016) (99,690)
Financing activities 99,191 484,912 183,858 164,496 71,689
Funds From Operations (FFO) (1)
of the Operating Partnership 117,947 93,614 76,514 63,044 52,212
FFO applicable to the Company 79,495 65,026 54,833 43,498 34,218

1) Please refer to Management's Discussion and Analysis of Financial Condition and Results of Operations
for the definition of FFO. FFO does not represent cash flow from operations as defined by generally
accepted accounting principles (GAAP) and is not necessarily indicative of the cash available to fund
all cash requirements.

-39-

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.

The following discussion and analysis of the financial condition
and results of operations should be read in conjunction with CBL & Associates
Properties, Inc. Consolidated Financial Statements and Notes thereto.

Information included herein may contain "forward-looking
statements" within the meaning of the federal securities laws. Such statements
are inherently subject to risks and uncertainties, many of which cannot be
predicted with accuracy and some of which might not even be anticipated. Future
events and actual results, financial and otherwise, may differ materially from
the events and results discussed in the forward-looking statements. We direct
you to the Company's other filings with the Securities and Exchange Commission,
including without limitation the Company's Annual Report on Form 10-K for a
discussion of such risks and uncertainties.

GENERAL BACKGROUND

On November 3, 1993, CBL & Associates Properties, Inc. (the
"Company") completed an initial public offering of 15,400,000 shares of common
stock priced at $19.50 per share (the "Offerings"). In connection with the
Offerings, CBL & Associates, Inc. and its affiliates contributed their interests
in properties to CBL & Associates Limited Partnership (the "Operating
Partnership"). The Company is the 100% owner of two qualified REIT subsidiaries,
CBL Holdings I, Inc. and CBL Holdings II, Inc., which are the sole general
partner and majority owner, respectively, of the Operating Partnership. As a
result, the CBL & Associates Properties, Inc. Consolidated Financial Statements
and Notes thereto reflect the consolidated financial results of the Operating
Partnership, which includes at December 31, 1999, the operations of a portfolio
of properties consisting of twenty-six regional malls, fourteen associated
centers, two power centers, eighty community centers, an office building, joint
venture investments in four regional malls and one associated center, and income
from six mortgages (the"Properties"). The Operating Partnership currently has
under construction one mall, one associated center, three community centers and
two expansions and owns options to acquire certain shopping center development
sites. The consolidated financial statements also include the results of CBL &
Associates Management, Inc. (the "Management Company").

The Company classifies its regional malls into two categories -
stabilized malls which have completed their initial lease-up and new malls which
are in their initial lease-up phase. The new mall category is presently
comprised of Springdale Mall in Mobile, Alabama, which was acquired in September
1997 and is being redeveloped and retenanted; Bonita Lakes Mall in Meridian,
Mississippi, which opened in October 1997; Parkway Place in Huntsville, Alabama,
which was acquired in December 1998 and is being redeveloped and Arbor Place
Mall in Atlanta (Douglasville), Georgia, which was opened in October 1999.

In July 1999, the Company acquired York Galleria in York,
Pennsylvania. The purchase price of $68.5 million was funded from a mortgage
loan in the amount of $51.1 million and in part from $30 million in proceeds
from the Company's disposition of two department stores and two free-standing
community centers. A portion of such proceeds were allocated to a like-kind
exchange of properties under section 1031 of the Internal Revenue Code of 1986
as amended. The $12.6 million balance of the proceeds from the dispositions was
used to pay down the Company's credit lines.

-40-

CBL & Associates Properties, Inc.
Management's Discussion and Analysis of Financial Condition
and Results of Operations

RESULTS OF OPERATIONS

SALES
Mall shop sales, for those tenants who have reported, in the twenty-six
stabilized malls in the Company's portfolio, increased by 5.0% on a comparable
per square foot basis as shown below:

Year Ended December 31,
-----------------------------
1999 1998
------- -------

Sales per square foot $285.00 $271.50

Total sales volume in the mall portfolio, including new malls, increased 10.8%
to $1.666 billion in 1999 from $1.504 billion in 1998.

Occupancy costs as a percentage of sales for the years ended December 31, 1999,
1998 and 1997 for the stabilized malls (acquisition malls are excluded from
the year of acquisition) were 11.5%, 11.1% and 11.2%, respectively.

OCCUPANCY
Occupancy for the Company's overall portfolio increased, with a breakdown by
asset category, as follows:

At December 31,
----------------------
1999 1998
----- -----

Stabilized malls 94.5% 93.7%
New malls 88.0 92.7
Associated centers 93.2 90.7
Community centers 97.7 97.0
----- -----
Total portfolio 95.3% 94.8%
===== =====

AVERAGE BASE RENTS
Average base rents for the Company's three portfolio categories:

At December 31,
---------------------------------
Percentage
1999 1998 Increase
------ ------- ----------

Malls.......................... $20.68 $19.82 4.3%
Associated centers............. 9.78 9.68 1.0
Community centers.............. 8.32 8.22 1.2

-41-

CBL & Associates Properties, Inc.
Management's Discussion and Analysis of Financial Condition
and Results of Operations

LEASE ROLLOVERS
On spaces previously occupied, the Company achieved the following results from
rollover leasing for the year ended December 31, 1999 over and above the base
and percentage rent paid by the previous tenant:

Per Square Per Square
Foot Rent Foot Rent Percentage
---------- ---------- ----------

Malls......................... $21.56 $24.91 15.5%
Associated centers............ 10.35 11.28 9.0
Community centers............. 8.44 9.39 11.3

(1) - Rental achieved for spaces previously occupied at the end
of the lease including percentage rent.
(2) - Average base rent over the term of the lease.

In 1999 and 1998, respectively, revenues from the malls represented 76.9% and
74.9% of total revenues from the properties; revenues from associated centers
represented 3.7% and 3.9%; revenues from community centers represented 17.8% and
19.6%; and revenues from mortgages and the office building represented 1.6% and
1.6%. Accordingly, revenues and results of operations are disproportionately
impacted by the malls' achievements.

The shopping center business is somewhat seasonal in nature with tenant sales
achieving the highest levels during the fourth quarter because of the holiday
season. The malls earn most of their "temporary" rents (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 entire year.

COMPARISON OF RESULTS OF OPERATIONS FOR 1999 TO THE RESULTS OF OPERATIONS
FOR 1998

Total revenues in 1999 increased by $63.0 million, or 24.7%, to $317.6 million
as compared to $254.6 million in 1998. Of this increase, minimum rents increased
by $36.4 million, or 21.8%, to $203.0 million as compared to $166.6 million in
1998, percentage rents increased by $2.6 million, or 54.8%, to $7.4 million as
compared to $4.8 million in 1998, other rents increased by $1.4 million, or
35.8%, to $5.4 million as compared to $4.0 million in 1998 and tenant,
reimbursements increased by $15.9 million, or 21.6%, to $89.8 million as
compared to $73.8 million in 1998.

Approximately $11.3 million of the increase in revenues resulted from the five
new centers opened and acquired during 1999, and $35.9 million of the increase
in revenues resulted from the ten new centers opened and acquired during the
past twenty-four months. The centers opened in 1998 and contributing to 1999
increases are Sterling Creek Commons in Portsmouth, Virginia and
641,000-square-feet of expansions. The centers acquired in 1998 and contributing
to 1999 increases are Stroud Mall in Stroudsburg, Pennsylvania, Hickory Hollow
Mall, RiverGate Mall, Courtyard at Hickory Hollow, Village at RiverGate and
Lionshead Village, all in Nashville, Tennessee, Meridian Mall in Lansing,
Michigan and Janesville Mall in Janesville, Wisconsin. The five new centers
opened and acquired in 1999 are fully described in the Developments,
Acquisitions and Expansions section of the annual report. Improved occupancies
and operations and increased rents in the Company's operating portfolio
generated approximately $12.4

-42-

CBL & Associates Properties, Inc.
Management's Discussion and Analysis of Financial Condition
and Results of Operations

million of the increased revenues, with the largest increases from Hamilton
Place in Chattanooga, Tennessee and St. Clair Square in Fairview Heights,
Illinois. New revenues of $3.4 million were from the one-time fees earned in the
Company's Co-Development program.

Management, development and leasing fees increased in 1999 by $5.1 million,
or 188.9%, to $7.8 million as compared to $2.7 million in 1998. Most of the
increase was due to one-time fees totaling $3.4 million earned in the
Co-Development program. The balance of the increase was provided from the
Company's managed properties and development operations. Interest and other
income increased in 1999 by $1.5 million, or 55.0%, to $4.2 million as compared
to $2.7 million in 1998. This increase resulted primarily from the fifteen new
centers opened and acquired over the past twenty-four months.

Property operating expenses, including real estate taxes and maintenance and
repairs, increased in 1999 by $16.0 million, or 20.0%, to $96.2 million as
compared to $80.2 million in 1998. This increase is primarily the result of the
fifteen new centers opened and acquired over the past twenty-four months. The
Company's cost recovery ratio increased to 93.3% in 1999 as compared 92.1% in
1998.

Depreciation and amortization increased in 1999 by $10.0 million, or 23.0%, to
$53.5 million as compared to $43.5 million in 1998. This increase resulted
primarily from depreciation and amortization on the fifteen new centers opened
and acquired over the past twenty-four months.

Interest expense increased in 1999 by $15.2 million, or 22.5%, to $82.5 million
as compared to $67.3 million in 1998. This increase is primarily due to
increased interest expense on the fifteen new centers opened and acquired over
the past twenty-four months.

General and administrative expenses increased in 1999 by $4.4 million, or 36.9%,
to $16.2 million as compared to $11.8 million in 1998. This increase was due to
increases in state tax expense, payroll and general overhead.

Gain on sales of real estate assets was $8.4 million in 1999 as compared to $4.2
million in 1998. The majority of the gain in 1999 is from outparcel and pad
sales at centers under development in 1999, Chesterfield Crossing in
Chesterfield, Virginia, Arbor Place mall and The Landing at Arbor Place in
Atlanta (Douglasville), Georgia and Sand Lake Corners in Orlando, Florida. The
gain on sales in 1999 also includes gain on the sale of two centers, North Park
Plaza in Richmond, Virginia and a free-standing Regal Cinema in Jacksonville,
Florida.

COMPARISON OF RESULTS OF OPERATIONS FOR 1998 TO THE RESULTS OF OPERATIONS
FOR 1997

Total revenues in 1998 increased by $77.0 million, or 43.4%, to $254.6 million
as compared to $177.6 million in 1997. Of this increase, minimum rents increased
by $51.0 million, or 44.1%, to $166.6 million as compared to $115.6 million in
1997, percentage rents increased by $1.1 million, or 29.8%, to $4.8 million as
compared to $3.7 million in 1997, other rents increased by $2.1 million, or
105.6%, to $4.0 million as compared to $1.9 million in 1997 and tenant
reimbursements increased by $22.5 million, or 43.9%, to $73.8 million as
compared to $51.3 million in 1997.

Approximately $17.5 million of the increase in revenues resulted from the twelve
new centers opened during the period from January 1997 to December 1998 and
$54.1 million of the increase resulted from the fourteen new centers

-43-

CBL & Associates Properties, Inc.
Management's Discussion and Analysis of Financial Condition
and Results of Operations

acquired during the same period. The centers that were opened in 1998 are
Cortlandt Towne Center Phase II in Cortlandt, New York, Springhurst Town Center
Phase II in Louisville, Kentucky, and Sterling Creek Commons in Portsmouth,
Virginia. The centers acquired in 1998 are Asheville Mall in Asheville, North
Carolina, Burnsville Center in Minneapolis (Burnsville), Minnesota, Stroud Mall
in Stroudsburg, Pennsylvania, Hickory Hollow Mall, RiverGate Mall, Courtyard at
Hickory Hollow, Village at RiverGate and Lionshead Village, all in Nashville,
Tennessee, Meridian Mall in Lansing, Michigan and Janesville Mall in Janesville,
Wisconsin. Improved occupancies and operations, expansions to existing
properties, and increased rents in the Company's operating portfolio generated
approximately $5.4 million of the increased revenues with the largest increases
from Hamilton Place in Chattanooga, Tennessee and WestGate Mall in Spartanburg,
South Carolina.

Management, development and leasing fees increased in 1998 by $0.3 million, or
12.5%, to $2.7 million as compared to $2.4 million in 1997. Our managed
properties continue to provide the majority of this revenue augmented by an
increase in development fees. Interest and other income was $2.7 million in both
1998 and 1997.

Property operating expenses, including real estate taxes and maintenance and
repairs, increased in 1998 by $24.5 million, or 44.0%, to $80.2 million as
compared to $55.7 million in 1997. This increase is primarily the result of the
twelve new centers opened and the acquisition of fourteen properties over the
past twenty-four months. The Company's cost recovery ratio remained stable at
92.1% in 1998 as compared 92.2% to in 1997.

Depreciation and amortization increased in 1998 by $11.2 million, or 34.8%, to
$43.5 million as compared to $32.3 million in 1997. This increase resulted
primarily from depreciation and amortization on the twelve new centers opened
and the acquisition of fourteen properties over the past twenty-four months.

Interest expense increased in 1998 by $29.5 million, or 78.0%, to $67.3 million
as compared to $37.8 million in 1997. This increase is primarily due to
increased interest expense on the twelve new centers opened and the acquisition
of fourteen properties over the past twenty-four months, partially offset by the
repayment of variable rate debt with proceeds from the preferred offering in
June 1998.

General and administrative expenses increased in 1998 by $2.8 million, or 30.8%,
to $11.8 million as compared to $9.0 million in 1997. This increase was due to
increases in reserves for state tax expense and increases in general overhead.

Gain on sales of real estate assets was $4.2 million in 1998 as compared to $6.0
million in 1997. The majority of the gain in 1998 is from outparcel and pad
sales at the development centers Springhurst Towne Center in Louisville,
Kentucky and Sand Lake Corners in Orlando, Florida. The gain on sales in 1998
also includes a $0.2 million gain on the sale of one existing center, Surrey
Square in Elkin, North Carolina.

The extraordinary loss in 1998 of $0.8 million was from the refinancing of the
loan on College Square Mall in Morristown, Tennessee. The Company reduced the
interest rate from 10% to 6.75% and extended the term to fifteen years.

LIQUIDITY AND CAPITAL RESOURCES

The principal uses of the Company's liquidity and capital resources have
historically been for property development, acquisitions, expansion and
renovation programs, and debt repayment. To maintain its qualification as a real
estate investment trust under the Internal Revenue Code, the Company currently
is required to distribute to its shareholders at least 95% of its "Real Estate
Investment Trust Taxable Income" as defined in the Code. Beginning on January 1,
2001 (the Company's first taxable year beginning after December 31, 2000), this
percentage is reduced to 90%.

-44-

CBL & Associates Properties, Inc.
Management's Discussion and Analysis of Financial Condition
and Results of Operations

As of February 29, 2000, the Company had $46.5 million available in unfunded
construction loans to be used for completion of construction projects and
replenishment of working capital previously used for construction. Additionally,
as of February 29, 2000, the Company had obtained revolving credit lines and
term loans totaling $230 million of which $54.0 million was available. Also, as
a publicly traded company, the Company has access to capital through both the
public equity and debt markets. The Company has filed a shelf registration
statement authorizing shares of the Company's common stock, preferred stock, and
warrants to purchase shares of the

Company's common stock with an aggregate public offering price of up to $350
million, with $278 million available as of February 29, 2000. The Company
anticipates that the combination of these sources will, for the foreseeable
future, provide adequate liquidity to enable it to continue its capital programs
substantially as in the past and make distributions to its shareholders in
accordance with the Code's requirements applicable to real estate investment
trusts.

Management expects to refinance the majority of the mortgage notes payable
maturing over the next five years with replacement loans.

The Company's current capital structure includes property specific mortgages,
which are generally non-recourse, revolving lines of credit, common stock,
preferred stock and a minority interest in the Operating Partnership. The
minority interest in the Operating Partnership represents the 25.6% ownership
interest in the Operating Partnership held by certain of the Company's current
and former executive and senior officers which may be exchanged for
approximately 9.4 million shares of common stock. Additionally, these current
and former executive and senior officers and the Company's directors own
approximately 1.8 million shares of the outstanding common stock of the Company,
for a combined total interest in the Operating Partnership of approximately
30.6%. Ownership interests issued to fund acquisitions in 1998 and 1999 may be
exchanged for approximately 2.4 million shares of common stock which represents
a 6.65% interest in the Operating Partnership. Assuming the exchange of all
limited partnership interests in the Operating Partnership for common stock,
there would be approximately 36.7 million shares of common stock outstanding
with a market value of approximately $757.7 million at December 31, 1999 (based
on the closing price of its common stock of $20.625 per share on December 31,
1999). The Company's total market equity at year end was $811.4 million
including 2.9 million shares of preferred stock (based on the closing price of
its preferred stock of $18.69 per share on December 31, 1999). The Company's
current and former executive and senior officers' ownership interests had a
market value of approximately $231.6 million at December 31, 1999.

Mortgage debt consists of debt on certain consolidated properties as well as
debt on four properties in which the Company owns non-controlling interests,
accounted for under the equity method of accounting. At December 31, 1999, the
Company's share of funded mortgage debt on its consolidated properties (adjusted
for minority investors' interests in seven properties) was $737.7 million and
its pro rata share of mortgage debt on unconsolidated properties (accounted for
under the equity method) was $40.8 million for total fixed rate debt obligations
of $778.5 million with a weighted average interest rate of 7.4%. Consolidated
and unconsolidated variable rate debt accounted for $606.0 million with a
weighted average interest rate of 6.8%. Total debt obligations amounted to
$1.385 billion. Variable rate debt accounted for approximately 43.8% of the
Company's total debt and 27.6% of its total capitalization. Through the
execution of interest rate swap agreements, the Company has fixed the interest
rates on $414.0 million of variable rate debt on operating properties at a
weighted average interest rate of 6.8%. Of the Company's remaining variable rate
debt of $192.0 million, interest rate caps in place of $150.0 million leave
$42.0 million of debt subject to variable rates on construction properties and
no debt subject to variable rates on operating properties. There were no fees
charged to the Company related to these swap agreements.

-45-

CBL & Associates Properties, Inc.
Management's Discussion and Analysis of Financial Condition
and Results of Operations

The Company's interest rate swap and cap agreements in place at
December 31, 1999 are as follows:

Fixed
Amount Swap/ LIBOR Effective Expiration
(in millions) Cap Component Date Date
------------- ------ --------- --------- ----------

$65 swap 5.72% 01/05/98 01/07/2000
81 swap 5.54% 02/04/98 02/04/2000
50 swap 5.70% 06/11/98 06/12/2001
38 swap 5.73% 06/26/98 06/26/2001
80 swap 5.49% 08/27/98 09/01/2001
50 swap 5.98% 11/04/99 11/04/2000
50 swap 5.98% 11/04/99 11/06/2000
100 cap 7.50% 01/05/99 01/05/2000
50 cap 6.50% 09/27/99 09/27/2000

Subsequent to year end, the Company executed new interest rate swap agreements
totaling $175 million at a weighted average LIBOR interest rate of 6.49% and a
commitment for a long term permanent loan for $74.0 million, leaving the Company
with no interest rate exposure on operating properties.

The Company's credit facilities have a weighted average interest rate of 7.1% at
December 31, 1999. Each of the credit facilities includes covenants that require
the Company to maintain minimum net worth levels, maintain interest and debt
coverage ratios, maintain total obligations to capitalized value ratios and
maintain limitations on variable rate debt. The credit facilities also require
that the Company's senior management continue to consist of certain individuals
and to maintain certain levels of minority ownership in the Operating
Partnership. The First Tennessee Bank credit facility provides that if the
Company completes an offering of its securities, not less than 75% of the net
proceeds of any such offering will be applied for the benefit of the Operating
Partnership.

The following table sets forth the Company's credit facilities at February 29,
2000 (in millions):

Current
Credit Facility Amount Balance Maturity
- ----------------------- ------ ------- --------------

SunTrust $ 10 $ 10 April 2001
SouthTrust 20 20 March 2001
First Tennessee 80 61 June 2001
Wells Fargo 120 85 September 2001

In March 1999, the Company closed a $75 million permanent loan on St. Clair
Square in Fairview Heights, Illinois at an interest rate of 7.0% and in November
1999 the Company closed an $8.7 million refinancing loan on Suburban Plaza in
Knoxville, Tennessee at an interest rate of 7.875% . The proceeds of these loans
were used to repay existing variable rate indebtedness.

Based on the debt (including construction projects) and the market value of
equity described above, the Company's debt to total market capitalization (debt
plus market value equity) ratio was 63.0% at December 31, 1999, as compared to
54.7% at December 31, 1998.

-46-

CBL & Associates Properties, Inc.
Management's Discussion and Analysis of Financial Condition
and Results of Operations

DEVELOPMENT, EXPANSIONS AND ACQUISITIONS

During 1999, the Company opened and acquired approximately 2,767,000 square feet
of new retail properties consisting of the following:

Project Name Location Total GLA Anchors
- ------------ -------- --------- -------

OPENINGS
Arbor Place Atlanta (Douglasville), Georgia 1,035,000 Dillards, Parisian, Sears,
Bed Bath & Beyond, Borders
Books, Old Navy
The Landing at Arbor Place Atlanta (Douglasville), Georgia 163,000 Circuit City, Michaels,
Toys R Us
Sand Lake Corners Orlando, Florida 423,000 Bealls, Lowes, Wal*Mart
Lakeshore Mall(Sears Addition) Sebring, Florida 92,000 Sears
Fiddler's Run Morganton, North Carolina 203,000 Belk, JCPenney, Goody's,
Food Lion
Regal Cinema Jacksonville, Florida 84,000 Regal (Sold)

ACQUISITIONS
York Galleria York, Pennsylvania 767,000 The Bon-Ton, Boscov's,
JCPenney, Sears

As of February 29, 2000, the Company had approximately 2,155,000 square feet
under construction consisting of:

Project Name Location Total GLA Opening Date
- ------------ -------- --------- ------------

Sand Lake Corners(Expansion) Orlando, Florida 38,000 April 2000
Chesterfield Crossing Richmond, Virginia 440,000 August 2000
Coastal Way Shopping Center Spring Hill, Florida 233,000 August 2000
Gunbarrel Pointe Chattanooga, Tennessee 282,000 October 2000
Asheville Mall Expansion Asheville, North Carolina 171,000 November 2000
Creekwood Crossing Bradenton, Florida 381,000 April 2001
The Lakes Mall Muskegon, Michigan 610,000 August 2001

The Company has also entered into a number of option agreements for the
development of future regional malls and community centers. Except for these
projects and as further described below, the Company currently has no other
capital commitments.

It is management's expectation that the Company will continue to have access to
the capital resources necessary to expand and grow its business. Future
development and acquisition activities will be undertaken by the Company as
suitable opportunities arise. Such activities are not expected to be undertaken
unless adequate sources of financing are available and a satisfactory budget
with targeted returns on investment has been internally approved.

-47-

CBL & Associates Properties, Inc.
Management's Discussion and Analysis of Financial Condition
and Results of Operations

The Company will fund its major development, expansion and acquisition activity
with its traditional sources of construction and permanent debt financing as
well as from other debt and equity financings, including public financings, and
its credit facilities.

OTHER CAPITAL EXPENDITURES

Management prepares an annual capital expenditures budget for each property
which is intended to provide for all necessary recurring capital improvements
and maintenance items. Management believes that its annual operating reserve for
maintenance and recurring capital improvements as well as reimbursements from
tenants will provide the necessary funding for such requirements. The Company
intends to distribute approximately 55% to 90% of its funds from operations with
the remaining 10% to 45% to be held as a reserve for capital expenditures and
continued growth opportunities.

Major tenant finish costs for currently vacant space are expected to be funded
with working capital, operating reserves, or revolving lines of credit, and a
return on the funds so invested is expected to be earned.

For the year ended December 31, 1999, revenue generating capital expenditures,
or tenant allowances for improvements, were $9.6 million. These capital
expenditures generate a return by increased rents from these tenants over the
term of their leases. Revenue enhancing capital expenditures, or remodeling and
renovation costs, were $6.2 million, the majority of which was for the
renovation of RiverGate Mall and The Village at RiverGate in Nashville,
Tennessee and College Square Mall in Morristown, Tennessee. Revenue neutral
capital expenditures, such as parking lot and roof repairs, which are recovered
from the tenants, were $15.4 million in 1999.

The Company believes that the Properties, with the exception of Parkway Place
Mall in Huntsville, Alabama, are in compliance in all material respects with all
federal, state and local ordinances and regulations regarding the handling,
discharge and emission of hazardous or toxic substances. Parkway Place was
acquired in December 1998 and all of the existing building will be demolished
over time as the mall is redeveloped. Approximately 350 square feet of ground in
the vicinity of a former auto service center has been identified as being
contaminated with total petroleum hydrocarbons and this is scheduled to be
remediated during the demolition process. The Company has not been notified by
any governmental authority, and is not otherwise aware, of any material
noncompliance, liability or claim relating to hazardous or toxic substances in
connection with any of its present or former properties. The Company has not
recorded in its financial statements any material liability in connection with
environmental matters.

CASH FLOWS

Cash flows provided by operating activities for 1999 increased by $25.1 million,
or 28.1%, to $114.2 million from $89.1 million in 1998. This increase was
primarily due to the cash provided from the operations of fifteen new centers
opened and acquired in the last twenty-four months. Cash flows used in investing
activities for 1999 decreased by $359.2 million, or 62.9 %, to $212.1 million
compared to $571.3 million in 1998. This decrease was primarily due to the
smaller number of acquisitions in 1999 compared to the number of acquisitions in
1998. Cash flows provided by financing activities for 1999 decreased by $385.7
million, or 79.5%, to $99.2 million from $484.9 million in 1998. This increase
is primarily due to decreased borrowings related to the acquisition programs.

-48-

CBL & Associates Properties, Inc.
Management's Discussion and Analysis of Financial Condition
and Results of Operations

IMPACT OF INFLATION

In the last three years, inflation has not had a significant impact on the
Company because of the relatively low inflation rate. Substantially all tenant
leases do, however, contain provisions designed to protect the Company from the
impact of inflation. Such provisions include clauses enabling the Company to
receive percentage rentals based on tenants' gross sales, which generally
increase as prices rise, and/or escalation clauses, which generally increase
rental rates during the terms of the leases. In addition, many of the leases are
for terms of less than ten years which may enable the Company to replace
existing leases with new leases at higher base and/or percentage rentals if
rents from the existing leases are below the then-existing market rate. Most of
the leases require the tenants to pay their share of operating expenses,
including common area maintenance, real estate taxes and insurance, thereby
reducing the Company's exposure to increases in costs and operating expenses
resulting from inflation.

Year 2000

The Year 2000 problem results from the use of a two digit year date instead of a
four digit date in the programs that operate computers, information processing
technology and systems and other devices (i.e. non-information processing
systems such as elevators, utility monitoring systems and time clocks that use
computer chips). Systems with a Year 2000 problem have programs that were
written to assume that the first two digits for any date used in the program
would always be "19". Unless corrected, this assumption may have resulted in
problems when the century date occurred. On that date, these computer programs
could have misinterpreted the date January 1, 2000 as January 1, 1900. This
could cause systems to incorrectly process critical financial and operational
information, generate erroneous information or fail altogether. The Year 2000
issue affects almost all companies and organizations.

THE COMPANY'S STATE OF READINESS FOR YEAR 2000 - The Company had completed a
program to identify both its information and non-information processing
applications that were not year 2000 compliant. The Company had corrected or
replaced all non-compliant systems and applications including embedded systems,
by the end of 1999. The Company initiated communications with its significant
suppliers and tenants to determine the extent to which the Company was
vulnerable to the failure of such parties to correct their year 2000 compliance
issues. In addition, the Company formed a Year 2000 Committee that includes
senior personnel from most areas of the Company.

COSTS TO ADDRESS THE COMPANY'S YEAR 2000 ISSUE - As the Company's Year 2000
compliance issues have already been addressed, which costs were not material,
and the Company has not experienced any Year 2000 problems with its operations,
suppliers or vendors, the Company does not expect to incur any significant
additional costs regarding the compliance of all non-compliant information
processing systems and non-information processing systems including embedded
systems.

RISKS RELATING TO THE YEAR 2000 ISSUE AND CONTINGENCY PLANS - Although the
Company is not currently aware of any specific significant Year 2000 issues
involving third-parties, the Company believes that its most significant
potential risk relating to the Year 2000 issue is in regard to third parties
such as tenants, vendors, banking services and utility providers. With respect
to tenants, a failure of their information systems could delay the payment of
rents or even impair their ability to operate. These tenant problems are likely
to be isolated and would likely not impact the operations of any particular
shopping center or the Company as a whole. The Company will continue to evaluate
these areas and develop additional contingency plans, as appropriate. Therefore,
although the Company believes that its Year 2000 issues have been addressed,
that suitable remediation and/or contingency procedures are in place and that
the new year is three months old and as of the filing date of this report the
Company has not experienced any effects of the Year 2000 issue in its
operations, vendors or tenants, there can be no assurance that Year 2000 issues
will not have a material adverse effect on the Company's results of operations
or financial condition.

-49-

CBL & Associates Properties, Inc.
Management's Discussion and Analysis of Financial Condition
and Results of Operations

NEW ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities". SFAS No. 133 establishes accounting and
reporting standards requiring that every derivative instrument (including
certain derivative instruments embedded in other contracts) be recorded in the
balance sheet as either an asset or liability measured at its fair value.
SFAS No. 133 requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows a derivative's gains and losses to
offset related results on the hedged item in the income statement, and requires
that a company must formally document, designate, and assess the effectiveness
of transactions that receive hedge accounting.

SFAS No. 133 is effective for fiscal years beginning after June 15, 2000. A
company may also implement SFAS No. 133 as of the beginning of any fiscal
quarter after issuance (that is, fiscal quarters beginning June 16, 1998 and
thereafter). SFAS No. 133 cannot be applied retroactively. SFAS No. 133 must be
applied to (a) derivative instruments and (b) certain derivative instruments
embedded in hybrid contracts. For certain derivative instruments embedded in
hybrid contracts at the date of initial application, a company shall
choose to either (a) recognize as an asset or liability in the statement of
financial position all embedded derivative instruments that are required to be
separated from their host contracts or (b) select either January 1, 1998 or
January 1, 1999 as a transition date for embedded derivative. If the company
chooses to select a transition date, it shall recognize as separate assets and
liabilities only those derivatives embedded in hybrid instruments issued,
acquired, or substantively modified by the entity on or after the selected
transition date.

The Company has not yet quantified the impact of adopting SFAS No. 133 on
its financial statements and has not determined the timing or method of adoption
of SFAS No. 133. However, SFAS No. 133 could increase volatility in earnings and
other comprehensive income.

Funds from Operations

Management believes that funds from operations ("FFO") provides an additional
indicator of the financial performance of the Properties. FFO is defined by the
Company as net income (loss) before property depreciation, other non-cash items
(consisting of the write-off of costs associated with development projects not
being pursued), gains or losses on sales of real estate assets and gains or
losses on investments in marketable securities. The costs of interest rate caps
and finance costs on the Company's lines of credit are amortized and included in
interest expense and, therefore, reduce FFO. FFO also includes the Company's
share of FFO in unconsolidated properties and excludes minority interests' share
of FFO in consolidated properties.

The use of FFO as an indicator of financial performance is influenced not only
by the operations of the Properties, but also by the capital structure of the
Operating Partnership and the Company. Accordingly, management expects that FFO
will be one of the significant factors considered by the Board of Directors in
determining the amount of cash distributions the Operating Partnership will make
to its partners (including the Company). Management also believes that FFO is a
widely used measure of the operating performance of REITs and provides a
relevant basis for comparison among Companies. FFO does not represent cash flow
from operations as, defined by generally accepted accounting principles
("GAAP"), is not necessarily indicative of cash from operations available to
fund all cash flow needs and should not be considered as an alternative to net
income for purposes of evaluating the Company's operating performance or to cash
flows as a measure of liquidity.

-50-

CBL & Associates Properties, Inc.
Management's Discussion and Analysis of Financial Condition
and Results of Operations

In 1999, FFO increased by $24.3 million, or 26.0%, to $117.9 million as compared
to $93.6 million in 1998. The increase in FFO was primarily attributable to the
continuing increase in revenues and income from operations from new developments
and acquisitions and increases in occupancy levels and rent per square foot in
the Company's stabilized portfolio.

Beginning with the first quarter of 1998 the Company amended its calculation of
FFO to include straight-line rents in accordance with the National Association
of Real Estate Investment Trusts ("NAREIT") definition of FFO. The Company has
restated prior years' FFO to conform with the revised calculation. The Company
will continue to exclude outparcel sales (which would have added $8.4 million,
or $0.23 per shares, in 1999) from its FFO calculation, even though the NAREIT
definition allows their inclusion.

Beginning on January 1, 2000 NAREIT has amended the definition of FFO to limit
extraordinary items of income included in FFO to extraordinary items as defined
by GAAP.

-51-

CBL & Associates Properties, Inc.
Management's Discussion and Analysis of Financial Condition
and Results of Operations

The Company's calculation of FFO is as follows (in thousands):

Three Months Ended Year Ended
December 31, December 31,
------------------------------- -------------------------------
1999 1998 1999 1998
-------------- -------------- -------------- -------------

Income from operations............................ $ 17,765 $ 14,810 $ 67,464 $ 51,639
ADD:
Depreciation and amortization
from consolidated properties................. 14,676 13,013 53,551 43,547
Income from operations of
unconsolidated affiliates . ................. 844 690 3,263 2,379
Depreciation and amortization from
unconsolidated affiliates.................... 368 370 1,619 1,427
Write-off of development costs
charged to net income......................... 704 - 1,674 122

SUBTRACT:
Minority investors' share of income
from operations.............................. (284) (236) (1,225) (645)
Minority investors' share of depreciation
and amortization.............................. (212) (226) (920) (875)
Depreciation and amortization of non-real
estate assets and finance costs.............. (276) (300) (1,011) (746)
Preferred dividends...............................
-------------- -------------- -------------- -------------
TOTAL FUNDS FROM OPERATIONS....................... $31,968 $26,504 $ 117,947 $93,614
-------------- -------------- -------------- -------------

-52-

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company has managed the market risk for its variable rate debt with
derivative financial instruments. The derivative instruments are described in
the Liquidity and Capital Resources section in Item 7 above and in Note 8 to the
Financial Statements.

The fair value of the Company's long term debt is estimated based on
discounted cash flows at interest rates that management believes reflects the
risks associated with long term debt of similar risk and duration.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Reference is made to the Index to Financial statements contained in
Item 14 on page 56.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.

None.
PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

Incorporated herein by reference from the Company's definitive proxy
statement filed on March 24, 2000 with the Securities and Exchange Commission
(the "Commission") with respect to its Annual Meeting of Stockholders to be held
on May 3, 2000.

ITEM 11. EXECUTIVE COMPENSATION.

Incorporated herein by reference from the Company's definitive proxy
statement filed on March 24, 2000 with the Commission with respect to its Annual
Meeting of Stockholders to be held on May 3, 2000.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.

Incorporated herein by reference from the Company's definitive proxy
statement filed on March 24, 2000 with the Commission with respect to its Annual
Meeting of Stockholders to be held on May 3, 2000.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Incorporated herein by reference from the Company's definitive proxy
statement filed on March 24, 2000 with the Commission with respect to its Annual
Meeting of Stockholders to be held on May 3, 2000.

-53-

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
8-K.

(1) Financial Statements Page
Number

Report of Independent Public Accountants 63

CBL & Associates Properties, Inc. Consolidated Balance Sheets 64
as of December 31, 1999 and 1998.

CBL & Associates Properties, Inc. Consolidated Statements of 65
Operations for the Years Ended December 31, 1999, 1998 and 1997

CBL & Associates Properties, Inc. Consolidated Statements of 66
Shareholders' Equity for the Years Ended December 31, 1999,
1998 and 1997

CBL & Associates Properties, Inc. Consolidated Statements of 67
Cash Flows for the Years Ended December 31, 1999, 1998 and 1997

Notes to Financial Statements 68

(2) Financial Statement Schedules

Schedule II Allowance For Credit Losses 82
Schedule III Real Estate and Accumulated Depreciation 83
Schedule IV Mortgage Loans on Real Estate 91

Financial Statement Schedules not listed herein are either not required
or are not present in amounts sufficient to require submission of the schedule
or the information required to be included therein is included in the Company's
Consolidated Financial Statements in item 14 or are reported elsewhere.

(3) Exhibits

Exhibit
Number Description
- ------ -----------
3.1 -- Amended and Restated Certificate of Incorporation of the Company(a)

3.2 -- Certificate of Amendment to the Amended & Restated Certificate of
Incorporation of the Company (b)

-54-

3.3 -- Amended and Restated Bylaws of the Company(a)

4 -- See Amended and Restated Certificate of Incorporation of the Company,
relating to the Common Stock(a)

10.1 -- Partnership Agreement of the Operating Partnership(a) 10.2 -- Property
Management Agreement between the Operating Partnership and the
Management Company(a)

10.3 -- Property Management Agreement relating to Retained Properties(a)

10.4.1 -- CBL & Associates Properties, Inc. 1993 Stock Incentive Plan(a)+

10.4.2 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for Charles
B. Lebovitz+

10.4.3 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for James L.
Wolford+

10.4.4 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for John N.
Foy+

10.4.5 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for Jay
Wiston+

10.4.6 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for Ben S.
Landress+

10.4.7 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for Stephen
D. Lebovitz+

10.4.8 -- Stock Restriction Agreement, dated December 28, 1994, for Charles B.
Lebovitz+

10.4.9 -- Stock Restriction Agreement, dated December 2, 1994, for John N. Foy+

10.4.10 -- Stock Restriction Agreement, dated December 2, 1994, for Jay Wiston+

10.4.11 -- Stock Restriction Agreement, dated December 2, 1994, for Ben S.
Landress+

10.4.12 -- Stock Restriction Agreement, dated December 2, 1994, for Stephen D.
Lebovitz+

10.5 -- Purchase Agreement relating to Frontier Mall(c)

10.6.1 -- Purchase Agreement relating to Georgia Square (JMB)(c)

-55-

10.6.2 -- Purchase Agreement Relating to Georgia Square (JCPenney)(c)

10.7 -- Purchase Agreement relating to Post Oak Mall(c)

10.8 -- Indemnification Agreements between the Company and the Management
Company and their officers and directors(a)

10.9.1 -- Employment Agreement for Charles B. Lebovitz(a)+

10.9.2 -- Employment Agreement for James L. Wolford(a)+

10.9.3 -- Employment Agreement for John N. Foy(a)+

10.9.4 -- Employment Agreement for Jay Wiston(a)+

10.9.5 -- Employment Agreement for Ben S. Landress(a)+

10.9.6 -- Employment Agreement for Stephen D. Lebovitz(a)+

10.10-- Subscription Agreement relating to purchase of the Common Stock and
Preferred Stock of the Management Company(a)

10.11 -- Option Agreement relating to certain Retained Properties(a)

10.12 -- Option Agreement relating to Outparcels(a)

10.13.1 -- Property Partnership Agreement relating to Hamilton Place(a)

10.13.2 -- Property Partnership Agreement relating to CoolSprings Galleria(a)

10.14.1 -- Acquisition Option Agreement relating to Hamilton Place(a)

10.14.2 -- Acquisition Option Agreement relating to the Hamilton Place
Centers(a)

10.14.3 -- Acquisition Option Agreement relating to the Office Building(a)

10.15-- Revolving Credit Agreement between the Operating Partnership and First
Tennessee Bank, National Association, dated as of March 2, 1994(d)

-56-

10.16-- Revolving Credit Agreement, dated July 28, 1994, between the Operating
Partnership and Wells Fargo Advisors Funding, Inc., NationsBank of Georgia,
N.A. and First Bank National Association(e)

10.17-- Revolving Credit Agreement, dated October 14, 1994, between the
Operating Partnership and American National Bank and Trust Company of
Chattanooga(f)

10.18-- Revolving Credit Agreement, dated November 2, 1994, between the
Operating Partnership and First Tennessee Bank National Association(f)

10.19-- Promissory Note Agreement between the Operating Partnership and Union
Bank of Switzerland dated May 5, 1995(g)

10.20-- Amended and Restated Loan Agreement between the Operating Partnership
and First Tennessee Bank National Association dated July 12, 1995(h)

10.21-- Second Amendment to Credit Agreement between the Operating Partnership
and Wells Fargo Realty Advisors Funding, Inc. dated July 5, 1995(h)

10.22-- Consolidation, Amendment, Renewal, and Restatement of Notes between the
Galleria Associates, L.P. and The Northwestern Mutual Life Insurance
Company(i)
10.23-- Promissory Note Agreement between High Point Development Limited
Partnership and The Northwestern Mutual Life Insurance Company dated
January 26, 1996(j)

10.24-- Promissory Note Agreement between Turtle Creek Limited Partnership and
Connecticut General Life Insurance Company dated February 14, 1996(j)

10.25-- Amended and Restated Credit Agreement between the Operating Partnership
and Wells Fargo Bank N.A. etal dated September 26, 1996. (k)

10.26-- Promissory Note Agreement between the Operating Partnership and Compass
Bank dated September 17, 1996. (k)

10.27-- Promissory Note Agreement between St Clair Square Limited Partnership
and Wells Fargo National Bank dated, December 11, 1996.(l)

10.28-- Promissory Note Agreement between Lebcon Associates and Principal
Mutual Life Insurance Company dated, March 18, 1997.(l)

-57-

10.29-- Promissory Note Agreement between Westgate Mall Limited Partnership and
Principal Mutual Life Insurance Company dated, February 16, 1997.(l)

10.30-- Amended and Restated Credit Agreement between the Operating Partnership
and First Tennessee Bank etal dated February 24, 1997.(l)

10.31-- Amended and Restated Credit Agreement between the Operating Partnership
and First Tennessee Bank etal dated July 29, 1997.(m)

10.32-- Second Amended and Restated Credit Agreement between the Operating
Partnership and Wells Fargo Bank N.A. etal dated June 5, 1997 Effective
April 1,1997.(m)

10.33-- First Amendment to Second Amended and Restated Credit Agreement between
the Operating Partnership and Wells Fargo Bank N.A. etal dated November 11,
1997.(m)

10.34-- Loan Agreement between Asheville LLC and Wells Fargo Bank N.A. dated
February 17, 1998(m)

10.35-- Loan Agreement between Burnsville Minnesota LLC and U.S. Bank National
Association dated January 30, 1998(m)

10.36-- Modification No. One to the Amended and Restated Agreement of Limited
Partnership of CBL & Associates Limited Partnership Dated March 31,
1997.(m)

10.37-- Modification No. Two to the Amended and Restated Agreement of Limited
Partnership of CBL & Associates Limited Partnership Dated February 19,
1998.(m)

10.38 -- Loan agreement with South Trust Bank dated January 15 , 1998. (n)

10.39-- Loan agreement between Rivergate Mall Limited Partnership, The Village
at Rivergate Limited Partnership, Hickory Hollow Mall Limited Partnership,
and The Courtyard at Hickory Hollow Limited Partnership and Midland Loan
Services, Inc. Dated July 1, 1998.(o)

10.40-- Second Amended and Restated Agreement of Limited Partnership of CBL &
Associates Limited Partnership dated June 30, 1998 (p)

10.41-- Amended and restated Loan Agreement between CBL & Associates Properties
, Inc. and First Tennessee Bank National Association Dated June 12, 1998
(p)

10.42-- First Amendment To Third Amended And Restated Credit Agreement and
Third Amended And Restated Credit Agreement between CBL & Associates
Properties, Inc. and Wells Fargo Bank, National Association, dated August
4, 1998 (p)

-58-

10.43-- Promissory Note with Teachers Insurance and Annuity Association of
American and St. Clair Square Limited Partnership Bank dated March 11, 1999
(q)

10.43-- Promissory Note with Wells Fargo Bank National Associates and Parham
Road Limited Partnership (York Galleria) dated July 1, 1999 (r)

10.44-- Agreement of Purchase and Sale By and Between YGL Partners and CBL &
Associates Limited Partnership assigned to Parham Road Limited Partnership
(York Galleria) dated February 2, 1999 (r)

21 -- Subsidiaries of the Company

23 -- Consent of Arthur Andersen LLP

24 -- Power of Attorney

(a) Incorporated by reference to Post-Effective Amendment No. 1 to the
Company's Registration Statement on Form S-11 (No. 33-67372), as filed
with the Commission on January 27, 1994.

(b) Incorporated by reference to Exhibit B to the Company's Definitive
Schedule 14A, Dated April 1, 1996.

(c) Incorporated by reference to Amendment No. 2 to the Company's Registration
Statement on Form S-11 (No. 33-67372), as filed with the Commission on
October 26, 1993.

(d) Incorporated herein by reference to the Company's Annual Report in Form
10-K for the fiscal year ended December 31, 1993.

(e) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1994.

(f) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1994.

(g) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1995.

(h) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1995.

(i) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1995.

(j) Incorporated by reference to the Company's Annual Report in Form 10-K for
the fiscal year ended December 31, 1995.

(k) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1996.

-59-

(l) Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996.

(m) Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1997.

(n) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1998.

(o) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1998.

(p) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1998.

(q) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1999.

(r) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1999.

+ A management contract or compensatory plan or arrangement required to be
filed pursuant to Item 14(c) of this report.

(4) Reports on Form 8-K

The outline from the Company's February 3, 2000 conference call with
analysts regarding earnings (Item 5) was filed on February 3, 2000.

-60-

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

CBL & ASSOCIATES PROPERTIES, INC.
(Registrant)

/s/ Charles B. Lebovitz
------------------------------------

By: Charles B. Lebovitz
Chairman of the Board,
and Chief Executive Officer

Dated: March 29, 2000

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

Signature Title Date
- --------- ----- ----

/s/ Charles B. Lebovitz Chairman of the Board, and Chief March 29, 2000
- ----------------------- Executive Officer (Principal
Charles B. Lebovitz Executive Officer)

/s/ John N. Foy Vice Chairman of the Board, Chief March 29, 2000
- ----------------------- Financial Officer and Treasurer
John N. Foy (Principal Financial Officer and
Principal Accounting Officer)

/s/ Stephen D. Lebovitz* Director, President and Secretary March 29, 2000
- ------------------------
Stephen D. Lebovitz

/s/ Claude M. Ballard* Director March 29, 2000
- ------------------------
Claude M. Ballard

/s/ Leo Fields* Director March 29, 2000
- ------------------------
Leo Fields

/s/ William J. Poorvu* Director March 29, 2000
- ------------------------
William J. Poorvu

/s/ Winston W. Walker* Director March 29, 2000
- ------------------------
Winston W. Walker

*By /s/ Charles B. Lebovitz Attorney-in-Fact March 29, 2000
- --------------------------
Charles B. Lebovitz

-61-

INDEX TO FINANCIAL STATEMENTS

Report of Independent Public Accountants 63

CBL & Associates Properties, Inc. Consolidated Balance 64
Sheet as of December 31, 1999 and 1998

CBL & Associates Properties, Inc. Consolidated Statements of 65
Operations for the Years Ended December 31, 1999,
1998 and 1997

CBL & Associates Properties, Inc. Consolidated Statements of 66
Shareholders' Equity for the Years Ended December 31, 1999,
1998 and 1997

CBL & Associates Properties, Inc. Consolidated Statements of 67
Cash Flows for the Years Ended December 31, 1999, 1998 and
1997

Notes to Financial Statements 68

Schedule II Allowance For Credit Losses 82

Schedule III Real Estate and Accumulated Depreciation 83

Schedule IV Mortgage Loans on Real Estate 91

-62-

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of CBL & Associates Properties, Inc.:

We have audited the accompanying consolidated balance sheets of CBL & ASSOCIATES
PROPERTIES, INC. (a Delaware corporation) and subsidiary as of December 31, 1999
and 1998, and the related consolidated statements of operations, shareholders'
equity and cash flows for each of the three years in the period ended December
31, 1999. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of CBL & Associates Properties,
Inc. and subsidiary as of December 31, 1999 and 1998, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1999, in conformity with generally accepted accounting principles.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The schedules listed in the index to financial
statements are presented for the purpose of complying with the Securities and
Exchange Commission's rules and are not part of the basic financial statements.
These schedules have been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, fairly state in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.

ARTHUR ANDERSEN LLP

Chattanooga, Tennessee
February 2, 2000

-63-

CBL & Associates Properties, Inc.
Consolidated Balance Sheets
(In thousands, except share and per share data)
- -------------------------------------------------------------------------------

December 31,
---------------------------
1999 1998
---------- ----------

ASSETS
REAL ESTATE ASSETS:
Land $284,881 $265,521
Buildings and improvements 1,834,020 1,609,831
---------- ----------
2,118,901 1,875,352
Less: accumulated depreciation (223,548) (177,055)
---------- ----------
1,895,353 1,698,297
Developments in progress 65,201 107,491
---------- ----------
Net investment in real estate assets 1,960,554 1,805,788
CASH AND CASH EQUIVALENTS 7,074 5,827
RECEIVABLES:
Tenant, net of allowance for doubtful accounts of
$1,854 in 1999 and $1,950 in 1998 21,557 17,337
Other 1,536 2,076
MORTGAGE NOTES RECEIVABLE 9,385 9,118
OTHER ASSETS 18,732 15,201
---------- ----------
$2,018,838 $1,855,347
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY

MORTGAGE AND OTHER NOTES PAYABLE $1,360,753 $1,208,204
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 64,236 62,466
---------- ----------
Total liabilities 1,424,989 1,270,670
---------- ----------
COMMITMENTS AND CONTINGENCIES (NOTES 4 AND 14)
DISTRIBUTIONS AND LOSSES IN EXCESS OF
INVESTMENT IN UNCONSOLIDATED AFFILIATES 3,212 855
---------- ----------
MINORITY INTERESTS 170,750 168,040
---------- ----------
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value, 5,000,000 shares authorized, 29 29
2,875,000 shares issued and outstanding in 1999 and 1998
(Note 7)
Common stock, $.01 par value, 95,000,000 shares authorized, 248 246
24,755,793 and 24,590,936 shares issued and outstanding
in 1999 and 1998, respectively
Additional paid-in capital 455,875 452,252
Accumulated deficit (36,265) (36,235)
Deferred compensation - (510)
---------- ----------
Total shareholders' equity 419,887 415,782
---------- ----------
$2,018,838 $1,855,347
========== ==========

-64-

CBL & Associates Properties, Inc.

Consolidated Statements of Operations
(In thousands, except per share data)

- ------------------------------------------------------------------------------

Year Ended December 31,
-----------------------------------------
1999 1998 1997
--------- -------- --------

REVENUES:
Rentals:
Minimum $203,022 $166,630 $115,640
Percentage 7,356 4,751 3,660
Other 5,442 4,007 1,949
Tenant reimbursements 89,774 73,837 51,302
Management, development and leasing fees 7,818 2,711 2,378
Interest and other 4,191 2,704 2,675
--------- -------- --------
Total revenues 317,603 254,640 177,604
--------- -------- --------
EXPENSES:
Property operating 50,832 41,942 30,585
Depreciation and amortization 53,551 43,547 32,308
Real estate taxes 27,580 23,360 14,859
Maintenance and repairs 17,783 14,860 10,239
General and administrative 16,214 11,841 9,049
Interest 82,505 67,329 37,830
Other 1,674 122 330
--------- -------- --------
Total expenses 250,139 203,001 135,200
--------- -------- --------
INCOME FROM OPERATIONS 67,464 51,639 42,404
GAIN ON SALES OF REAL ESTATE ASSETS 8,357 4,183 6,040
EQUITY IN EARNINGS OF UNCONSOLIDATED AFFILIATES 3,263 2,379 1,916
MINORITY INTEREST IN EARNINGS:
Operating Partnership (23,264) (16,258) (13,819)
Shopping center properties (1,225) (645) (508)
--------- -------- --------
INCOME BEFORE EXTRAORDINARY ITEM 54,595 41,298 36,033
EXTRAORDINARY LOSS ON EXTINGUISHMENT OF DEBT - (799) (1,092)
--------- -------- --------
NET INCOME 54,595 40,499 34,941
PREFERRED DIVIDENDS (6,468) (3,234) -
--------- -------- --------
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $48,127 $37,265 $34,941
========= ======== ========
BASIC EARNINGS PER COMMON SHARE:
Income before extraordinary item $ 1.95 $ 1.58 $ 1.51
Extraordinary loss on extinguishment of debt - (0.03) (0.05)
--------- -------- --------
Net income $ 1.95 $ 1.55 $ 1.46
========= ======== ========
Weighted average common shares outstanding 24,647 24,079 23,895
========= ======== ========
DILUTED EARNINGS PER COMMON SHARE:
Income before extraordinary item $ 1.94 $ 1.56 $ 1.49
Extraordinary loss on extinguishment of debt - (0.03) (0.05)
--------- -------- --------
Net income $ 1.94 $ 1.53 $ 1.45
========= ======== ========
Weighted average shares and potential dilutive 24,834 24,340 24,151
common shares outstanding ========= ======== ========

The accompanying notes are an integral part of these statements.

-65-

CBL & Associates Properties, Inc.

Consolidated Statements of Shareholders' Equity
(In thousands, except share and per share data)

- -------------------------------------------------------------------------------

Additional
Preferred Common Paid-in Accumulated Deferred
Stock Stock Capital Deficit Compensation Total
--------- ------- ---------- ----------- ------------ ---------

BALANCE, December 31, 1996 - $210 $293,824 $(20,855) $(375) $272,804
Net income - - - 34,941 - 34,941
Dividends, $1.77 per common share - - - (42,519) - (42,519)
Issuance of 42,573 shares of common - - 1,047 - (459) 588
stock
Issuance of 3,000,000 shares of common -
stock through a public offering 30 74,242 - - 74,272
Minority interest in Operating - - (10,680) - - (10,680)
Partnership
Exercise of stock options - 1 1,108 - - 1,109
Amortization of deferred compensation - - - - 338 338
--------- ------- ---------- ----------- ------------ ---------
BALANCE, December 31, 1997 - 241 359,541 (28,433) (496) 330,853

Net income - - - 40,499 - 40,499
Dividends, $1.86 per common share - - - (45,067) - (45,067)
Dividends, $2.25 per preferred share - - - (3,234) - (3,234)
Issuance of 439,623 shares of common - 4 6,726 - (649) 6,081
stock
Issuance of 2,875,000 shares of 29 - 69,758 - - 69,787
preferred stock through a public
offering
Minority interest in Operating - - 14,436 - - 14,436
Partnership
Exercise of stock options - 1 1,791 - - 1,792
Amortization of deferred compensation - - - - 635 635
--------- ------- ---------- ----------- ------------ ---------
BALANCE, December 31, 1998 29 246 452,252 (36,235) (510) 415,782
Net income - - - 54,595 - 54,595
Dividends, $1.95 per common share - - - (48,157) - (48,157)
Dividends, $2.25 per preferred share - - - (6,468) - (6,468)
Issuance of 93,661 shares of common - 1 2,154 - - 2,155
stock
Exercise of stock options - 1 1,469 - - 1,470
Amortization of deferred compensation - - - - 510 510
--------- ------- ---------- ----------- ------------ ---------
BALANCE, December 31, 1999 $29 $248 $455,875 $(36,265) $0 $419,887
========= ======= ========== =========== ============ =========

The accompanying notes are an integral part of these statements.

-66-

CBL & Associates Properties, Inc.

Consolidated Statements of Cash Flows
(In thousands)
- -------------------------------------------------------------------------------------------------------------------

Year Ended December 31,
--------------------------------------------
1999 1998 1997
---------- --------- ---------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 54,595 $ 40,499 $ 34,941
Adjustments to reconcile net income to net cash provided by
operating activities:
Minority interest in earnings 24,489 16,903 14,327
Depreciation 44,245 36,948 29,091
Amortization 10,485 7,774 3,934
Extraordinary loss on extinguishment of debt - 799 1,092
Gain on sales of real estate assets (8,357) (4,183) (6,040)
Equity in earnings of unconsolidated affiliates (3,263) (2,379) (1,916)
Issuance of stock under incentive plan 914 287 331
Amortization of deferred compensation 510 635 338
Write-off of development projects 1,674 122 330
Distributions from unconsolidated affiliates 10,547 3,862 2,192
Distributions to minority investors (23,645) (18,543) (16,868)
Changes in assets and liabilities:
Tenant and other receivables (3,680) (4,395) (1,639)
Other assets (1,211) (4,275) (330)
Accounts payable and accrued liabilities 6,893 15,069 1,069
---------- --------- ---------
Net cash provided by operating activities 114,196 89,123 60,852
---------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to real estate assets (147,894) (110,991) (139,746)
Acquisitions of real estate assets (69,027) (503,820) (36,429)
Capitalized interest (6,749) (5,175) (9,218)
Other capital expenditures (29,830) (21,652) (15,681)
Deposits in escrow - 66,108 (66,108)
Proceeds from sales of real estate assets 50,373 9,596 19,341
Additions to mortgage notes receivable (1,690) (1,619) (3,461)
Payments received on mortgage notes receivable 1,423 3,403 6,771
Additional investments in and advances to unconsolidated (4,927) (5,012) (491)
affiliates
Additions to other assets (3,820) (2,170) (862)
---------- --------- ---------
Net cash used in investing activities (212,141) (571,332) (245,884)
---------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from mortgage and other notes payable 237,716 642,788 316,813
Principal payments on mortgage and other notes payable (85,167) (175,997) (165,694)
Additions to deferred financing costs (2,075) (2,665) (1,174)
Proceeds from issuance of common stock 1,241 334 74,530
Proceeds from issuance of preferred stock - 69,855 -
Purchase of minority interest - (3,012) -
Proceeds from exercise of stock options 1,470 1,792 1,109
Prepayment penalties on extinguishment of debt - (676) (1,049)
Dividends paid (53,993) (47,507) (40,677)
---------- --------- ---------
Net cash provided by financing activities 99,192 484,912 183,858
---------- --------- ---------
NET CHANGE IN CASH AND CASH EQUIVALENTS 1,247 2,703 (1,174)
CASH AND CASH EQUIVALENTS, beginning of period 5,827 3,124 4,298
---------- --------- ---------
CASH AND CASH EQUIVALENTS, end of period $ 7,074 $ 5,827 $ 3,124
========== ========= =========
SUPPLEMENTAL INFORMATION:
Cash paid during the period for interest, net of $ 81,181 $ 67,599 $ 37,791
amounts capitalized ========== ========= =========

The accompanying notes are an integral part of these statements.

-67-

CBL & ASSOCIATES PROPERTIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION

CBL & Associates Properties, Inc. (the "Company"), a Delaware corporation, is
engaged in the development, acquisition and operation of regional shopping malls
and community centers, primarily in the southeast and select markets in
northeast and midwest regions of the United States. The Company is the 100%
owner of two qualified REIT subsidiaries, CBL Holdings I, Inc. and CBL Holdings
II, Inc., which are the sole general partner and majority owner, respectively,
of the Operating Partnership. As a result, the Company conducts its business
through the Operating Partnership, which at December 31, 1999, owns controlling
interests in a portfolio of properties consisting of twenty-six regional malls,
fourteen associated centers, each of which is part of a regional shopping mall
complex, two power centers, eighty community centers and one office building.
Additionally, the Operating Partnership owns noncontrolling interests in four
regional malls and one associated center. The Operating Partnership has one
mall, one associated center and three community centers currently under
construction and has options to acquire certain development properties owned by
third parties. At December 31, 1999, CBL Holdings I, Inc. owned a 2.6% general
partnership interest and CBL Holdings II, Inc. owned a 65.1% limited partnership
interest in the Operating Partnership for a combined interest held by the
Company of 67.7%.

The minority interest in the Operating Partnership is held primarily by CBL &
Associates, Inc. and its affiliates (collectively "CBL") who contributed their
interests in certain real estate properties and joint ventures to the Operating
Partnership in exchange for a limited partnership interest in connection with
the formation of the Operating Partnership in November 1993. At December 31,
1999, CBL owns a 25.6% limited partnership interest in the Operating Partnership
(Note 10).

To comply with certain technical requirements of the Internal Revenue Code of
1986, as amended (the "Code"), the Operating Partnership carries out the
Company's property management and development activities through CBL &
Associates Management, Inc. (the "Management Company"). The Operating
Partnership holds 100% of the preferred stock and 5% of the common stock of the
Management Company, with CBL holding the remaining 95% of the common stock.
Through the ownership of the preferred stock, the Operating Partnership receives
substantially all of the cash flow, and therefore enjoys substantially all of
the economic benefits of the Management Company's operations. Due to the
Company's ability, as sole general partner, to control the Operating Partnership
and Operating Partnership's rights to substantially all of the economic benefits
of the Management Company, the accounts of each entity are included in the
accompanying consolidated financial statements. The Company, the Operating
Partnership and the Management Company are referred to collectively as the
"Company".

All significant intercompany balances and transactions have been eliminated in
the consolidated presentation.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Real Estate Assets

Costs directly related to the development of real estate assets, including
overhead costs directly attributable to property development, are capitalized.
Interest costs incurred during the development and construction period are
capitalized.

Ordinary repairs and maintenance are expensed as incurred. Major replacements
and betterments are capitalized and depreciated over their estimated useful
lives. Depreciation is computed on a straight-line basis generally over forty
years for buildings and improvements and seven to ten years for equipment and
fixtures. Tenant improvements are capitalized and depreciated on a straight-line
basis over the life of the related lease.

-68-

CBL & ASSOCIATES PROPERTIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Long-Lived Assets

The Company periodically evaluates the carrying value of long-lived assets to be
held and used when events or changes in circumstances warrant such a review. The
carrying value of a long-lived asset is considered impaired when the projected
undiscounted future cash flow of such asset is less than its carrying value.
Management believes that no material impairment existed at December 31, 1999,
and accordingly, no loss was recognized. Cash and Cash Equivalents

Cash and cash equivalents include all cash and cash equivalent investments with
original maturities of three months or less, primarily consisting of demand
deposits in banks.

Deferred Financing Costs

Deferred financing costs are included in other assets in the accompanying
consolidated balance sheets and include fees and costs incurred to obtain
long-term financing and are being amortized over the terms of the respective
mortgage notes payable. Unamortized deferred financing costs are written off
when mortgage notes payable are retired before the maturity date.

Revenue Recognition

Rental revenue attributable to operating leases is recognized on a straight-line
basis over the initial term of the related leases. Certain tenants are required
to pay additional rent if sales volume exceeds specified amounts. The Company
recognizes this additional rent as revenue when such amounts become
determinable. A substantial portion of the Company's rental income is derived
from various national and regional retail companies.

Tenant Reimbursements

The Company receives reimbursements from tenants for certain costs as provided
in the lease agreements. These costs consist of real estate taxes, common area
maintenance and other recoverable costs. Tenant reimbursements are recognized as
revenue in the period the costs are incurred.

Management, Development and Leasing Fees

Management fees are charged as a percentage of rentals and are recognized as
revenue as they are earned. Leasing fees are charged for newly executed leases.
These fees are recognized as revenues as they are earned. Development fees are
recognized as revenue on a pro rata basis over the development period.

Gain on Sales of Real Estate Assets

Gain on sales of real estate assets are recognized at the time title to the
asset is transferred to the buyer, subject to the adequacy of the buyer's
initial and continuing investment and the assumption by the buyer of all future
ownership risks of the property.

Income Taxes

The Company is qualified as a real estate investment trust under Section 856
through 860 of the Code and applicable treasury regulations. In order to
maintain qualification as a real estate investment trust, the Company is
currently required to distribute at least 95% of its taxable income to
shareholders and meet certain other asset and income tests as well as other
requirements. Beginning January 1, 2001, (the Company's first taxable beginning
after December 31, 2000) this percentage will decrease to 90%. As a real estate
investment trust, the Company will generally not be liable for federal

-69-

CBL & ASSOCIATES PROPERTIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

corporate income taxes. Thus, no provision for federal income taxes has been
included in the accompanying consolidated financial statements. If the Company
fails to qualify as a real estate investment trust in any taxable year, the
Company will be subject to federal income tax on its taxable income at regular
corporate tax rates. Even if the Company maintains its qualification for
taxation as a real estate investment trust, the Company may be subject to
certain state and local taxes on its income and property and to federal income
and excise taxes on its undistributed income. State income taxes were not
significant in 1999, 1998 and 1997.

Derivative Financial Instruments

Interest rate cap and swap agreements, which are principally used by the Company
in the management of interest rate exposure, are accounted for on an accrual
basis. Amounts to be paid or received under interest rate cap and swap
agreements are recorded in interest expense in the period in which they accrue.
See Note 8 for additional information.

Concentration of Credit Risk

The Company's tenants consist of national, regional and local retailers.
Financial instruments which subject the Company to concentrations of credit risk
consist primarily of tenant leases. The Company does not obtain collateral or
other security to support financial instruments subject to credit risk but
monitors the credit standing of tenants.

Earnings Per Common Share

Basic earnings per share ("EPS") excludes dilution and is computed by
dividing earnings available to common shareholders by the weighted-average
number of unrestricted common shares outstanding for the period. Diluted EPS
assumes the issuance of common stock for all potentially dilutive equivalent
shares outstanding. The limited partners' rights to convert their minority
interest in the Operating Partnership into shares of common stock are not
dilutive (Note 10). The difference in basic and diluted EPS is due to the
assumed conversion of outstanding stock options and restricted stock resulting
in 187,000, 261,000 and 256,000 potential dilutive common shares in 1999, 1998
and 1997, respectively.

Stock-Based Compensation

The Company accounts for its stock-based compensation plans under
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" (APB No. 25). Effective in 1996, the Company adopted the disclosure
option of Statement of Financial Accounting Standards ("SFAS") No. 123,
"Accounting for Stock-Based Compensation." SFAS No. 123 requires companies that
do not choose to account for stock-based compensation as prescribed by the
statement to disclose the pro forma effects on net income and earnings per share
as if SFAS No. 123 had been adopted. Additionally, certain other disclosures are
required with respect to stock-based compensation and the assumptions used to
determine the pro forma effects of SFAS No. 123. See Note 12 for the required
disclosures.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reported period. Actual
results could differ from those estimates.

-70-

CBL & ASSOCIATES PROPERTIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. UNCONSOLIDATED AFFILIATES

The Company has investments in five partnerships and joint ventures, all of
which are reflected on the equity method of accounting in the accompanying
consolidated financial statements and consist of the following at December 31,
1999:
Company's
Partnership Property Name Interest

Governor's Square IB Governor's Plaza 49.0%
Governor's Square Company Governor's Square 47.5%
Madison Square Associates, Ltd. Madison Square 50.0%
Mall Shopping Center Company Plaza del Sol 50.6%
Parkway Place L.P. Parkway City Mall 50.0%

Condensed combined financial statement information of the partnerships and
joint ventures is presented as follows (in thousands):

December 31,
------------------------------
1999 1998
----------- -----------

ASSETS:
Net investment in real estate assets $ 75,185 $ 72,962
Other assets 3,066 4,041
----------- -----------
Total assets 78,251 77,003
=========== ===========
LIABILITIES:
Mortgage notes payable 92,733 85,568
Other liabilities 1,946 1,636
----------- -----------
Total liabilities 94,679 87,204
----------- -----------
OWNERS' DEFICIT:
Company (3,212) (855)
Other investors (13,216) (9,346)
----------- -----------
Total owners' deficit (16,428) (10,201)
----------- -----------
Total liabilities and owners' deficit $ 78,251 $ 77,003
=========== ===========

Year Ended December 31,
-------------------------------------------------
1999 1998 1997
----------- ----------- -----------

Revenues $ 26,859 $ 22,530 $ 21,684
Depreciation expense 3,253 2,913 2,724
Other operating expenses 8,398 6,849 7,131
Interest expense 8,757 7,935 7,935
----------- ----------- -----------
Net income $ 6,451 $ 4,833 $ 3,894
=========== =========== ===========
Company's share of:
Net income $ 3,263 $ 2,379 $ 1,916
=========== =========== ===========

-71-

CBL & ASSOCIATES PROPERTIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In general, contributions and distributions of capital or cash flows
and allocations of income and expense are made on a pro rata basis in
proportion to the equity interest held by each general or limited
partner.

4. MORTGAGE AND OTHER NOTES PAYABLE

Mortgage and other notes payable consist of the following at December
31, 1999 and 1998 (in thousands):

1999 1998
--------------- ---------------

Permanent loans $ 1,196,829 $ 1,017,038
Construction loans 7,924 40,286
Lines of credit 156,000 150,880
--------------- ---------------
$ 1,360,753 $ 1,208,204
=============== ===============

Permanent Loans

Permanent loans consist of loans secured by properties held by the Company at
December 31, 1999 with an asset carrying amount of $1,681,682,000. At December
31, 1999, permanent loans totaling $759,455,000 bear interest at fixed rates
ranging from 6.65% to 10.63%. Permanent loans totaling $437,374,000 bear
interest at variable interest rates indexed to the prime lending rate or LIBOR
(6.36% to 6.95% at December 31, 1999). Permanent loans mature at various dates
from 2000 through 2016.

Construction Loans

At December 31, 1999, the Company had construction loans on three properties.
The total commitment under the construction loans is $33,905,000 of which
$7,924,000 is outstanding at December 31, 1999. The construction loans mature in
2002 and bear interest at variable interest rates indexed to the prime lending
rate or LIBOR (7.08% to 7.73% at December 31, 1999).

Lines of Credit

The Company maintains line of credit agreements with banks for construction,
acquisition and working capital purposes. At December 31, 1999, the Company had
$230,000,000 available under its line of credit agreements, of which
$156,000,000 was outstanding. The lines expire at various dates in 2001 and bear
interest at variable rates indexed to the prime lending rate or LIBOR
(weighted average interest rate 7.1% at December 31, 1999). At December 31,
1999, outstanding letters of credit issued under a separate line of credit
agreement, not reflected in the accompanying consolidated balance sheet, total
approximately $2,431,000. The line of credit agreements contain, among other
restrictions, certain restrictive covenants including the maintenance of certain
coverage ratios and a minimum net worth and limitations on distributions.

-72-

CBL & ASSOCIATES PROPERTIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Debt Maturities

As of December 31, 1999, the scheduled principal payments on all mortgage and
other notes payable, including construction loans and lines of credit, are as
follows (in thousands):

2000 $ 239,347
2001 264,671
2002 143,285
2003 91,810
2004 39,235
Thereafter 582,405
---------------
$ 1,360,753
===============

5. MORTGAGE NOTES RECEIVABLE

Substantially all mortgage notes receivable are collateralized by wrap-around
mortgages which are first mortgages on the underlying real estate and related
improvements. Interest rates on these notes range from 8.0% to 11.0% at December
31, 1999.

6. MINIMUM RENTS

Tenant leases are usually for five to twenty year periods and generally provide
for renewals and annual rentals which are subject to upward adjustments based on
tenant sales volume. Future minimum rents are scheduled to be received under
noncancellable tenant leases at December 31, 1999, as follows (in thousands):

2000 $ 207,473
2001 193,988
2002 176,881
2003 159,168
2004 141,183
Thereafter 703,447

No single tenant collectively accounts for more than 10% of the Company's total
revenue.

7. SHAREHOLDER'S EQUITY

In January 1997, the Company completed a spot offering of 3,000,000 shares of
its common stock at $26.125 per share. The net proceeds of $74.3 million were
used to repay variable rate indebtedness incurred in the Company's development
and acquisition programs.

In June 1998, the Company completed a public offering of 2,875,000 shares of 9%
Series A Cumulative Redeemable Preferred Stock (the "Series A Preferred Stock")
at a price to the public of $25.00 per share, including 715,875 shares purchased
by an affiliate of Wells Fargo Bank. The net proceeds of $69.8 million were used
to repay variable rate indebtedness incurred in the Company's development and
acquisition programs. The dividends on the Series A Preferred Stock are
cumulative and accrue from the date of issue and are payable quarterly in
arrears commencing on September 30, 1998 at a rate of $2.25 per share per annum.
The Series A Preferred Stock has no stated maturity, is not subject to any
sinking fund or mandatory redemption and is not redeemable prior to July 1,
2003. On or after July 1,2003 the Company may redeem the Series A Preferred
Stock, in whole or in part, at any time for a cash redemption price of $25.00
per share, plus dividends accrued and unpaid.

-73-

CBL & ASSOCIATES PROPERTIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8. DERIVATIVE FINANCIAL INSTRUMENTS

The Company has only limited involvement with derivative financial instruments
and does not use them for trading purposes. They are used to manage well defined
interest rate risks.

Under interest rate swap agreements, the Company agrees with other parties to
exchange, at specified intervals, the difference between fixed rate and variable
rate interest amounts calculated by reference to an agreed-upon notional amount.
Under these agreements, the Company receives interest payments at a rate equal
to LIBOR (5.82% at December 31, 1999) and pays interest at fixed rates shown
below.

The Company has the following interest rate swaps in place at December 31, 1999,
totaling $414 million:

Notional Fixed LIBOR Effective Expiration
Amount Component Date Date
-------- ----------- --------- ----------

$65 5.72% 01/05/98 01/07/2000
81 5.54% 02/04/98 02/04/2000
50 5.70% 06/11/98 06/12/2001
38 5.73% 06/26/98 06/26/2001
80 5.49% 08/27/98 09/01/2001
50 5.98% 11/04/99 11/04/2000
50 5.98% 11/04/99 11/06/2000

The Company has a $100 million interest rate cap on LIBOR based variable rate
debt at 7.5% terminating January 5, 2000 and a $50 million interest rate cap on
LIBOR based variable rate debt at 6.5% terminating September 27, 2000.

Subsequent to December 31, 1999, the Company executed new interest rate swap
agreements totaling $175 million at a weighted average interest rate of
6.49% and a commitment for a long term permanent loan for $74.0 million.

The Company is exposed to credit losses in the event of nonperformance by the
counterparties to its interest rate swap and cap agreements and nonderivative
financial assets but has no off-balance sheet credit risk of accounting loss.
The Company anticipates, however, that counterparties will be able to fully
satisfy their obligations under the contracts. The Company does not obtain
collateral or other security to support financial instruments subject to credit
risk but monitors the credit standing of counterparties.

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities". SFAS No. 133
establishes accounting and reporting standards requiring that every derivative
instrument (including certain derivative instruments embedded in other
contracts) be recorded in the balance sheet as either an asset or liability
measured at its fair value. SFAS No. 133 requires that changes in the
derivative's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. Special accounting for qualifying hedges
allows a derivative's gains and losses to offset related results on the hedged
item in the income statement, and requires that a company must formally
document, designate, and assess the effectiveness of transactions that receive
hedge accounting.

SFAS No. 133 is effective for fiscal years beginning after June 15, 2000. A
company may also implement SFAS No. 133 as of the beginning of any fiscal
quarter after issuance (that is, fiscal quarters beginning June 16, 1998 and
thereafter). SFAS No. 133 cannot be applied retroactively. SFAS No. 133 must be
applied to (a) derivative instruments and (b) certain derivative instruments
embedded in hybrid contracts. For certain derivative instruments embedded in
hybrid contracts at the date of initial application, a company shall choose to
either (a) recognize as an asset or liability in the statement of financial
position all embedded derivative

-74-

CBL & ASSOCIATES PROPERTIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

instruments that are required to be separated from their host contracts or (b)
select either January 1, 1998 or January 1, 1999 as a transition date for
embedded derivatives. If the company chooses to select a transition date, it
shall recognize as separate assets and liabilities only those derivatives
embedded in hybrid instruments issued, acquired, or substantively modified by
the entity on or after the selected transition date.

The Company has not yet quantified the impact of adopting SFAS No. 133 on its
financial statements and has not determined the timing or method of adoption of
SFAS No. 133. However, SFAS No. 133 could increase volatility in earnings and
other comprehensive income.

9. FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying values of cash and cash equivalents, receivables, accounts payable
and accrued liabilities are reasonable estimates of their fair values because of
the short maturity of these financial instruments. Based on the interest rates
for similar financial instruments, the carrying value of mortgage notes
receivable is a reasonable estimation of fair value. The carrying value of
mortgage and other notes payable, based on borrowing rates currently available
to the Company, is a reasonable estimation of fair value at December 31, 1999
and 1998. The fair value of the interest rate swap and cap agreements, which
represents the cash requirement if the existing agreements had been settled at
year end, was not significant at December 31, 1999 and 1998.

10. CONVERSION RIGHTS

Pursuant to the Operating Partnership agreement, the limited partners were
granted rights to convert their partnership interests in the Operating
Partnership into shares of common stock, subject to certain limits, and to sell
to the Company after November 3, 1996 part or all of their partnership interest
in the Operating Partnership in exchange for shares of common stock or their
cash equivalent at the Company's election, as defined.

The Operating Partnership acquired properties from CBL in exchange for 63,904
and 67,850 limited partnership units in the Operating Partnership during 1998
and 1997, respectively. During 1998, the Operating Partnership issued 2,749,888
limited partnership units in the Operating Partnership valued at $68.3 million
to third parties in exchange for seven properties.

In July 1998, the Company purchased 122,008 limited partnership units valued at
$3.0 million from a former executive and minority investor in the Operating
Partnership. Also during 1998, a third party converted 388,022 limited
partnership units to common stock.

In October, 1999 the Company issued 79,715 limited partnership units valued at
$1,928,000 to a third party in exchange for land.

At December 31, 1999 and 1998, there remained outstanding rights to convert
CBL's minority interest in the Operating Partnership to 9,417,752 shares of
common stock. At December 31, 1999, there remained outstanding rights to convert
third parties' minority interests in the Operating Partnership to 2,441,581
shares of common stock.

11. 401(K) PROFIT SHARING PLAN

The Management Company maintains a 401(k) profit sharing plan, which is
qualified under Section 401(a) and Section 401(k) of the Code, to cover
employees of the Management Company. All employees who have attained the age of
21 and have completed at least one year of service are eligible to participate
in the plan. The plan provides for employer matching contributions on behalf of
each participant equal to 50% of the portion of such participant's contribution
which does not exceed 2.5% of such participant's compensation for the plan
year. Additionally, the Management Company has the discretion to make additional
profit-sharing contributions not related to participant elective contributions.
Total contributions by the Management Company were not significant for 1999,
1998, and 1997.

-75-

CBL & ASSOCIATES PROPERTIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12. STOCK INCENTIVE PLAN

The Company maintains the CBL & Associates Properties, Inc. 1993 Stock Incentive
Plan, as amended (the "Plan") which permits the issuance of stock options and
common stock to selected officers, employees and directors of the Company, up to
2,800,000 shares of common stock. The Plan is administered by the Compensation
Committee of the Board of Directors (the "Committee").

Stock options issued under the Plan allow for the purchase of common stock at
the fair market value of the stock at the date of grant. Stock options granted
to officers and employees under the Plan vest and become exercisable in
installments on each of the first five anniversaries of the date of grant and
expire ten years after the date of grant. Stock options granted to directors are
fully vested upon grant, but may not be sold, pledged or otherwise transferred
in any manner during the director's term or for one year thereafter.

The Company accounts for its stock-based compensation plans under APB No. 25,
under which no compensation expense has been recognized for stock options
granted as all employee options have been granted with an exercise price equal
to the fair value of the Company's common stock on the date of grant. For SFAS
No. 123 purposes, the fair value of each employee option grant has been
estimated as of the date of grant using the Black-Sholes option pricing model
and the following weighted average assumptions for 1999, 1998 and 1997,
respectively:

1999 1998 1997
--------- --------- ---------

Risk-free interest rate 5.25% 5.90% 6.73%
Dividend yield 8.33% 8.09% 7.87%
Expected volatility 16.00% 16.00% 16.00%
Expected life 7.2 years 7.2 years 7.0 years

Using these assumptions, the fair value of the employee stock options granted in
1999, 1998 and 1997 is $468,000, $468,000 and $860,000, respectively, which
would be amortized as compensation expense over the vesting period of the
options. Had compensation cost for the plan been determined in accordance with
SFAS No. 123, utilizing the assumptions detailed above, the Company's pro forma
net income and net income per share would have been as follows for the years
ended December 31, 1999, 1998, and 1997, respectively:

1999 1998 1997
-------- --------- ---------

Net income available to common
shareholders (in thousands):
As reported $ 48,127 $ 37,265 $ 34,941
Pro forma 47,458 36,692 34,442
Net income per share:
Basic as reported $ 1.95 $ 1.55 $ 1.46
Pro forma basic 1.93 1.52 1.44

Diluted as reported 1.94 1.53 1.45
Pro forma diluted 1.91 1.51 1.43

The pro forma effect on net income in this disclosure is not representative of
the pro forma effect on net income in future years because it does not take into
consideration pro forma compensation expense related to grants made prior to
1995.

-76-

CBL & ASSOCIATES PROPERTIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A summary of the Company's stock option activity for 1999, 1998 and 1997 is as
follows:

Weighted-
Average
Exercise
Shares Option Price Price
---------- ------------------- ---------

Outstanding at December 31, 1996 1,398,600 $19.5625 - $25.6250 19.99
Granted 539,000 $23.6250 23.63
Exercised (55,600) $19.5625 - $20.5000 19.95
Lapsed (190,400) $19.5625 - $23.6250 20.26

Outstanding at December 31, 1997 1,691,600 $19.5625 - $25.6250 21.11
Granted 319,000 $24.0940 - $25.5938 24.10
Exercised (87,350) $19.5625 - $25.6250 20.52

Outstanding at December 31, 1998 1,923,250 $19.5625 - $25.6250 21.64
Granted 382,500 $20.7200 - $24.5625 24.49
Exercised (71,200) $19.5625 - $23.6250 20.63
Lapsed (27,500) $19.6250 - $24.0940 22.40

Outstanding at December 31, 1999 2,207,050 $19.5625 - $25.6250 22.16

The weighted-average fair value of options granted during 1999, 1998, and 1997
was $1.22, $1.49 and $1.84, respectively.

Options outstanding at December 31, 1999 have a weighted-average remaining
contractual life of 7.0 years. Of the options outstanding at December 31, 1999,
1,044,750 are currently exercisable with a weighted-average exercise price of
$21.02 per share.

Under the Plan, common stock may be awarded either alone, in addition to, or in
tandem with other stock awards granted under the Plan. The Committee has the
authority to determine eligible persons to whom common stock will be awarded,
the number of shares to be awarded and the duration of the vesting period, as
defined.

During 1999, the Company issued 38,989 shares of common stock under the Plan
with a weighted-average grant-date fair value of $23.44 per share, of which
6,533 shares of common stock were immediately vested. The remaining 32,456
shares of common stock vest at various dates from 2000 to 2006.

During 1998, the Company issued 37,333 shares of common stock under the Plan
with a weighted-average grant-date fair value of $25.19 per share, of which
10,789 shares of common stock were immediately vested. The remaining 26,544
shares of common stock vest at various dates from 1999 to 2003.

During 1997, the Company issued 31,745 shares of common stock under the Plan
with a weighted-average grant-date fair value of $24.86 per share, of which
13,483 shares of common stock were immediately vested. The remaining 18,262
shares of common stock vest at various dates from 1998 to 1999.

13. RELATED PARTY TRANSACTIONS

CBL and certain officers of the Company have a significant minority interest in
the construction company that has been engaged by the Company in the building of
substantially all of the properties.

The Management Company provides management and leasing services to affiliated
partnerships and joint ventures not controlled by the Company. Revenue
recognized for these services amounted to $1,086,000 in 1999, $1,034,000 in
1998, and $837,000 in 1997.

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CBL & ASSOCIATES PROPERTIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A company that provides security, maintenance, cleaning services and background
music for certain of the real estate properties was majority owned by certain
officers of the Company during a portion of 1997. The company was sold to an
independent third party in 1997. Expenses related to these services were not
significant in 1997.

14. COMMITMENTS AND CONTINGENCIES

The Company is currently involved in certain litigation arising in the ordinary
course of business. In the opinion of management, the pending litigation will
not materially affect the financial statements of the Company. Additionally,
based on environmental studies completed to date on the real estate properties,
management believes exposure related to environmental cleanup will be immaterial
to the consolidated financial position and consolidated results of operations of
the Company.

The Company has entered into standby purchase agreements with third-party
developers (the "Developers") for the construction, development and potential
ownership of two community centers in Texas (the "Co-Development Projects"). The
Developers have utilized these standby purchase agreements to assist in
obtaining financing to fund the construction of the Co-Development Projects. The
standby purchase agreements, which expire in 2000, are dependent upon certain
completion requirements, rental levels, the inability of the Developers to
obtain adequate permanent financing and the inability to sell the Co-Development
Project before the Company has to fund its equity contribution or purchase the
Co-Development Project. In return for its commitment to purchase a
Co-Development Project pursuant to a standby purchase agreement, the Company
receives a fee as well as a participation interest in each Co-Development
Project. The outstanding amount of standby purchase agreements at December 31,
1999 is $60.7 million.

15. DIVIDENDS

The allocations of dividends declared and paid for income tax purposes are as
follows:

Year Ended December 31,
--------------------------------------
1999 1998 1997
------------ ------------ ------------

Dividends per common share $ 1.95 $ 1.86 $ 1.77
Allocations:
Ordinary income 88.00% 86.86% 81.54%
Capital gain 20% 0.00% 0.30% 0.00%
Capital gain 25% 0.00% 0.30% 0.00%
Capital gain 28% 0.00% 0.00% 0.04%
Return of capital 12.00% 12.54% 18.42%
------------ ------------ ------------
Total 100.00% 100.00% 100.00%
============ ============ ============

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CBL & ASSOCIATES PROPERTIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

16. SEGMENT INFORMATION

Management of the Company measures performance and allocates resources according
to property type, which are determined based on differences such as nature of
tenants, capital requirements, economic risks and leasing terms. Rent income and
tenant reimbursements from tenant leases provide the majority of revenues from
all segments. Information on management's reportable segments is presented as
follows (in thousands):

Mall Associated Community
YEAR ENDED DECEMBER 31, 1999 Properties Properties Properties All Other Total
- ------------------------------------- ---------- ---------- ---------- --------- ----------

Revenues $234,207 $12,288 $60,223 $10,885 $ 317,603
Property operating expenses (1) (83,672) (2,404) (11,311) 1,192 (96,195)
Interest expense (62,678) (2,693) (12,540) (4,594) (82,505)
Gain(loss) on sales of real estate (1,273) - 1,208 8,422 8,357
assets ---------- ---------- ---------- --------- ----------
Segment profit $86,584 $7,191 $37,580 $15,905 147,260
========== ========== ========== =========
Depreciation and amortization (53,551)
General and administrative and other (17,888)
Equity in earnings and minority
interest adjustment (21,226)
----------
Income before extraordinary item $ 54,595
==========
Total assets $1,400,793 $103,424 $451,165 $63,456 $2,018,838
Capital expenditures $142,789 $7,426 $25,003 $26,040 $ 201,258

YEAR ENDED DECEMBER 31, 1998
- -------------------------------------
Revenues $185,305 $10,063 $53,890 $5,382 $ 254,640
Property operating expenses (1) (66,250) (1,870) (10,740) (1,302) (80,162)
Interest expense (49,616) (1,771) (11,957) (3,985) (67,329)
Gain on sales of real estate assets 42 - 151 3,990 4,183
---------- ---------- ---------- --------- ----------
Segment profit $69,481 $6,422 $31,344 $4,085 111,332
========== ========== ========== =========
Depreciation and amortization (43,547)
General and administrative and other (11,963)
Equity in earnings and minority
interest adjustment (14,524)
----------
Income before extraordinary item $ 41,298
==========
Total assets $1,249,204 $81,570 $412,228 $112,345 $1,855,347
Capital expenditures $577,492 $21,193 $33,695 $62,498 $ 694,878

YEAR ENDED DECEMBER 31, 1997
- -------------------------------------
Revenues $122,450 $7,170 $43,509 $4,475 $ 177,604
Property operating expenses (1) (43,924) (1,389) (9,336) (1,034) (55,683)
Interest Expense (30,550) (1,070) (8,679) 2,469 (37,830)
Gain on sales of real estate assets 4 - 2,347 3,689 6,040
---------- ---------- ---------- --------- ----------
Segment profit $47,980 $4,711 $27,841 $9,599 90,131
========== ========== ========== =========
Depreciation and amortization (32,308)
General and administrative and other (9,379)
Equity in earnings and minority
interest adjustment (12,411)
----------
Income before extraordinary item $ 36,033
==========
Total assets $747,215 $61,298 $385,644 $50,868 $1,245,025
Capital expenditures $70,937 $14,253 $78,012 $22,967 $ 186,169

(1) Property operating expense includes property operating, real estate taxes
and maintenance and repairs.

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CBL & ASSOCIATES PROPERTIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

17. OPERATING PARTNERSHIP

Condensed consolidated financial statement information for the Operating
Partnership is presented as follows (in thousands):

December 31,
-----------------------------------------------
1999 1998 1997
---------- ---------- ----------

ASSETS:
Net investment in real estate assets $1,960,554 $1,805,788 $1,142,324
Other assets 57,940 49,219 102,578
---------- ---------- ----------
Total assets $2,018,494 $1,855,007 $1,244,902
========== ========== ==========
LIABILITIES:
Mortgage and other notes payable $1,360,753 $1,208,204 $741,413
Other liabilities 52,168 51,031 31,318
---------- ---------- ----------
Total liabilities 1,412,921 1,259,235 772,731
Distributions and losses in excess of investment in 2,920 799 6,884
unconsolidated affiliates
Minority interest 1,226 489 310
OWNERS' EQUITY 601,427 594,484 464,977
---------- ---------- ----------
Total liabilities and owners' equity $2,018,494 $1,855,007 $1,244,902
========== ========== ==========

Year Ended December 31,
-----------------------------------------------
1999 1998 1997
---------- ---------- ----------
Revenues $317,603 $254,640 $177,604
Depreciation and amortization expense 53,551 43,547 32,308
Other operating expenses 195,882 159,101 102,495
---------- ---------- ----------
Operating income 68,170 51,992 42,801
Gain on sales of real estate assets 8,357 4,183 6,040
Equity in earnings of unconsolidated affiliates 3,263 2,379 1,916
Minority investor' interest (1,225) (645) (508)
---------- ---------- ----------
Income before extraordinary item 78,565 57,909 50,249
Extraordinary loss on extinguishment of debt - (799) (1,092)
---------- ---------- ----------
Net income $78,565 $57,110 $49,157
========== ========== ==========

18. RECLASSIFICATIONS

Certain reclassifications have been made to prior years' financial information
to conform with the 1999 presentation.

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CBL & ASSOCIATES PROPERTIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

19. QUARTERLY INFORMATION (UNAUDITED)
(In thousands, except per share amounts)

First Second Third Fourth
Quarter Quarter Quarter Quarter Total(1)
---------- -------- -------- --------- ----------

1999
Total revenues $ 74,548 $ 74,191 $ 81,722 $ 87,142 $ 317,603
Income from operations 15,033 15,737 18,929 17,765 67,464
Income before extraordinary item 13,746 14,556 14,197 12,096 54,595
Net income available to common
shareholders 12,129 12,939 12,580 10,479 48,127
Basic per share data:

Income before extraordinary item $ 0.49 $ 0.53 $ 0.51 $ 0.42 $ 1.95
Net income $ 0.49 $ 0.53 $ 0.51 $ 0.42 $ 1.95
Diluted per share data:

Income before extraordinary item $ 0.49 $ 0.52 $ 0.50 $ 0.42
$ 1.94
Net income $ 0.49 $ 0.52 $ 0.50 $ 0.42 $ 1.94

1998
Total revenues $ 55,056 $ 57,399 $ 67,713 $ 74,472 $ 254,640
Income from operations 12,313 11,839 12,677 14,810 51,639
Income before extraordinary item 10,599 9,148 9,996 11,555 41,298
Net income available to common
shareholders 10,599 9,148 7,703 9,815 37,265
Basic per share data:

Income before extraordinary item $ 0.44 $ 0.38 $ 0.35 $ 0.41 $ 1.58
Net income $ 0.44 $ 0.38 $ 0.32 $ 0.41 $ 1.55
Diluted per share data:

Income before extraordinary item $ 0.44 $ 0.38 $ 0.34 $ 0.41 $ 1.56
Net income $ 0.44 $ 0.38 $ 0.32 $ 0.40 $ 1.53

(1) The sum of quarterly earnings per share amounts may differ from annual
earnings per share due to rounding.

-81-

CBL & Associates Properties, Inc.
Schedule II Allowance for Credit Losses (in thousands)

Balance of Provision Bad Debts Balance of
Year Ended Allowance at For Credit Charged Against Allowance at
December 31, Beginning of Year Loss Allowance End of Year
- ------------------------------------- ----------------- ----------- --------------- ---------------

1997.................................... $ 450 $ 1,027 $ (177) 1,300
1998.................................... 1,300 941 (291) 1,950
1999.................................... 1,950 341 (437) 1,854

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CBL & ASSOCIATES PROPERTIES, INC. SCHEDULE III
REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
(Dollars in Thousands)

Gross Amounts at Which Carried at Close
Initial Cost (A) of Period
------------------------- -------------------------------------
Costs
Capitalized
Subsequent Accumu-
Buildings to Buildings lated Date of
(B) and Acquisition/ and Depre- Construction
Description Encumbrances Land Improvements Improvements Land Improvements Total(C) ciation(D) /Purchase
------------ ------- ------------ ------------ -------- ------------- --------- ----------- ------------

MALLS
Arbor Place............... $ 93,944 $ 7,637 $ 95,330 $ -- $ 7,637 $ 95,330 $ 102,967 $ 840 1999
Douglasville, GA
Asheville Mall............ 51,000 7,139 58,747 (6,464) 6,675 52,747 59,422 3,023 1998
Asheville, NC
Bonita Lakes Mall......... 29,446 4,924 31,933 4,455 4,924 36,388 41,312 3,110 1997
Meridian, MS
Burnsville Center......... 60,750 12,804 69,167 2,700 12,804 71,867 84,671 3,446 1998
Burnsville, MN
College Square............ 15,432 2,954 17,787 8,676 2,927 26,490 29,417 6,579 1987-1988
Morristown, TN
CoolSprings Galleria...... 65,874 13,527 86,755 21,056 13,527 107,811 121,338 20,600 1989-1991
Nashville, TN
Foothills Mall............ -- 4,537 15,226 5,700 4,536 20,927 25,463 3,244 1996
Maryville, TN
Foothills JCP (E)......... -- -- 2650 -- -- 2,650 2,650 1,016 1983
Maryville, TN
Frontier Mall............. 3,726 2,681 15,858 7,987 2,681 23,845 26,526 6,528 1984-1985
Cheyenne, WY
Georgia Square (E)....... -- 2,982 31,071 6,238 2,959 37,332 40,291 9,589 1982
Athens, GA
Hamilton Place............ 71,642 2,880 42,211 11,933 2,439 54,585 57,024 13,410 1986-1987
Chattanooga, TN
Hickory Hollow Mall....... 94,997 13,813 111,431 814 13,813 112,245 126,058 4,267 1998
Nashville, TN
Janesville Mall........... 16,504 8,074 26,008 (1,283) 8,074 24,725 32,799 1,010 1998
Janesville, WI
Lakeshore Mall............ -- 1,443 28,819 3,274 1,274 32,262 33,536 5,974 1991-1992
Sebring, FL
Meridian Mall............. 80,000 529 103,678 2,555 529 106,233 106,762 3,542 1998
Lansing, MI
Oak Hollow Mall........... 50,627 4,344 52,904 2,346 4,344 55,250 59,594 7,826 1994-1995
High Point, NC
Pemberton Square.......... -- 1,191 14,305 810 244 16,062 16,306 4,959 1986
Vicksburg, MS
Post Oak Mall (E)......... -- 3,936 48,948 (10,864) 3,608 38,412 42,020 7,644 1984-1985
College Station, TX
Rivergate Mall............ 76,776 17,896 86,767 9,915 17,896 96,682 114,578 3,686 1998
Nashville, TN
Springdale Mall........... 21,950 19,538 6,676 5,516 19,538 12,192 31,730 527 1997
Mobile, AL
St. Clair Square..........
Fairview Heights, MI
-83-

CBL & ASSOCIATES PROPERTIES, INC. SCHEDULE III
REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
(Dollars in Thousands)

Gross Amounts at Which Carried at Close
Initial Cost (A) of Period
------------------------- -------------------------------------
Costs
Capitalized
Subsequent Accumu-
Buildings to Buildings lated Date of
(B) and Acquisition/ and Depre- Construction
Description Encumbrances Land Improvements Improvements Land Improvements Total(C) ciation(D) /Purchase
------------ ------- ------------ ------------ -------- ------------- --------- ----------- ------------
Stroud Mall............... 32,550 14,711 23,936 764 14,711 24,700 39,411 1,028 1998
Stroudsburg, PA
Turtle Creek Mall......... 33,381 2,345 26,418 7,469 3,535 32,697 36,232 6,567 1993-1995
Hattiesburg, MS
Twin Peaks (E)............ -- 1,873 22,022 15,046 1,828 37,113 38,941 11,236 1984
Longmont, CO
Walnut Square (E)......... 1,184 50 15,138 5,013 50 20,151 20,201 8,593 1984-1985
Dalton, GA
Westgate Mall............. 48,238 2,150 23,257 34,404 1,742 58,069 59,811 6,819 1995
Spartanburg, SC
York Galleria............. 51,100 5,757 63,316 -- 5,757 63,316 69,073 662 1999
York, PA

ASSOCIATED CENTERS
Bonita Crossing........... 9,227 794 4,786 6,170 794 10,956 11,750 521 1997
Meridian, MS
Coolsprings Crossing (E).. -- 2,803 14,985 1,779 3,554 16,013 19,567 2,930 1991-1993
Nashville, TN
Courtyard at Hickory...... 4,423 3,314 2,761 10 3,314 2,771 6,085 104 1998
Nashville, TN
Foothills Plaza Expansion. -- 137 1,960 153 148 2,102 2,250 568 1984-1988
Maryville, TN
Foothills Plaza (E)....... -- 132 2,123 467 141 2,581 2,722 974 1984-1988
Maryville, TN
Frontier Square........... -- 346 684 78 260 848 1,108 260 1985
Cheyenne, WY
General Cinema............ 145 100 1,082 14 100 1,096 1,196 548 1984
Athens, GA
Hamilton Corner........... 3,215 960 3,670 420 734 4,316 5,050 1,130 1986-1987
Chattanooga, TN
Hamilton Crossing......... -- 4,014 5,906 (806) 2,644 6,470 9,114 1,725 1987
Chattanooga, TN
Hamilton Place Outparcel.. -- 322 408 57 322 465 787 15 1998
Chattanooga, TN
Madison Plaza............. 1,939 473 2,888 174 473 3,062 3,535 478 1984
Huntsville, AL
Pemberton Plaza........... -- -- 662 896 -- 1,558 1,558 302 1986
Vicksburg, MS
The Landing @ Arbor....... 11,529 4,993 14,330 -- 4,993 14,330 19,323 89 1999
Douglasville, GA
The Terrace............... 10,405 4,166 9,729 1 4,166 9,730 13,896 682 1997
Chattanooga, TN

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CBL & ASSOCIATES PROPERTIES, INC. SCHEDULE III
REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
(Dollars in Thousands)

Gross Amounts at Which Carried at Close
Initial Cost (A) of Period
------------------------- -------------------------------------
Costs
Capitalized
Subsequent Accumu-
Buildings to Buildings lated Date of
(B) and Acquisition/ and Depre- Construction
Description Encumbrances Land Improvements Improvements Land Improvements Total(C) ciation(D) /Purchase
------------ ------- ------------ ------------ -------- ------------- --------- ----------- ------------
Village at Rivergate...... 3,626 2,641 2,808 399 2,641 3,207 5,848 117 1998
Nashville, TN
Westgate Crossing......... -- 1,082 3,422 1,742 1,082 5,164 6,246 474 1997
Spartanburg, SC

COMMUNITY CENTERS
Anderson Plaza............ -- 198 1,316 1,561 198 2,877 3,075 613 1983
Greenwood, SC
Bartow Plaza.............. -- 224 2,010 230 224 2,240 2,464 511 1989
Bartow, FL
Beach Crossing............ -- 725 1,749 30 623 1,881 2,504 550 1984
Myrtle Beach, SC
Bennington................ 539 256 1,754 658 175 2,493 2,668 768 1988
Roanoke, VA
BJ's Wholesale............ 3,256 170 4,735 9 170 4,744 4,914 987 1991
Portland, ME
Briarcliff Sq............. 1,617 299 1,936 40 267 2,008 2,275 525 1989
Oak Ridge, TN
Buena Vista Plaza......... -- 980 1,943 (825) 754 1,344 2,098 275 1988-1989
Columbus, GA
Bullock Plaza............. -- 98 1,493 18 98 1,511 1,609 507 1986
Statesboro, GA
Capital Crossing.......... -- 1,908 756 2,264 2,544 2,384 4,928 229 1995
Raleigh, NC
Cedar Springs, MI......... -- 206 1,845 129 206 1,974 2,180 534 1988
Cedar Springs, MI
Cedar Bluff............... 1,234 412 2,128 883 412 3,011 3,423 857 1987
Knoxville, TN
Centerview Plaza.......... 1,234 246 1,584 714 197 2,347 2,544 715 1986
China Grove, NC
Chester Plaza............. 0 165 720 10 165 730 895 43 1997
Chester, VA
Chestnut Hills (E)........ -- 600 1,775 138 600 1,913 2,513 374 1992
Murray, KY
Colleton Square........... 964 190 1,349 9 156 1,392 1,548 449 1986
Walterboro, SC
Collins Park Commons...... 1,319 25 1,858 16 25 1,874 1,899 489 1989
Plant City, FL
Conway Plaza..............
Conway, SC
-85-

CBL & ASSOCIATES PROPERTIES, INC. SCHEDULE III
REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
(Dollars in Thousands)

Gross Amounts at Which Carried at Close
Initial Cost (A) of Period
------------------------- -------------------------------------
Costs
Capitalized
Subsequent Accumu-
Buildings to Buildings lated Date of
(B) and Acquisition/ and Depre- Construction
Description Encumbrances Land Improvements Improvements Land Improvements Total(C) ciation(D) /Purchase
------------ ------- ------------ ------------ -------- ------------- --------- ----------- ------------
Cortlandt Towne Center.... 52,868 15,112 79,895 (914) 15,112 80,809 95,921 4,037 1996
Cortlandt, NY
Cosby Station............. 4,106 999 4,516 634 999 5,150 6,149 731 1993-1994
Douglasville, GA
County Park Plaza......... -- 196 1,500 379 140 1,935 2,075 433 1980
Scottsboro, AL
Devonshire Place.......... -- 371 3,449 2,489 520 5,789 6,309 519 1995-1996
Cary, NC
Dorchester Crossing....... -- 493 1,483 370 443 1,903 2,346 625 1985
Charleston, SC
East Ridge Crossing....... 930 832 2,494 1,491 731 4,086 4,817 779 1988
East Ridge, TN
Eastowne Crossing (E)..... -- 867 2,765 1,852 786 4,698 5,484 898 1989
Knoxville, TN
Fiddler's Run............. 12,900 1,319 13,793 - 1,319 13,793 15,112 337 1999
Morganton, NC
Fifty Eight Crossing...... 897 839 2,360 (55) 743 2,401 3,144 678 1988
Chattanooga, TN
Garden City Plaza (E)..... -- 1,056 2,569 622 580 3,667 4,247 1,248 1984
Garden City, KS
Genesis Square............ 1,000 227 1,435 974 223 2,413 2,636 463 1990
Crossville, TN
Girvin Plaza.............. -- 898 1,998 1,001 702 3,195 3,897 445 1989-1990
Jacksonville, FL
Greenport Towne Cent...... 4,312 659 6,161 262 659 6,423 7,082 906 1993-1994
Hudson, NY
Hampton Plaza............. -- 973 2,689 44 965 2,741 3,706 628 1989-1990
Tampa, FL
Henderson Square.......... 6,579 428 8,074 83 261 8,324 8,585 1,024 1994-1995
Henderson, NC
Hollins Plantation........ -- 229 1,845 1,114 197 2,991 3,188 907 1985
Roanoke, VA
Home Depot................ -- 2,739 -- 59 2,738 60 2,798 15 1994
Portland, ME
Jasper Square (E)......... -- 235 1,423 1,440 235 2,863 3,098 666 1986
Jasper, AL
Jean Ribaut Square........ 3,825 505 4,007 1,386 505 5,393 5,898 1,695 1983
Beaufort, SC
Jean Ribaut Kmart......... -- 317 2,065 687 340 2,729 3,069 528 1983-1984
Beaufort, SC
Karnes Corner............. 916 206 1,360 796 206 2,156 2,362 583 1987
Knoxville, TN
Keystone Plaza............ -- 938 2,216 (16) 825 2,313 3,138 705 1989
Tampa, FL

-86-

CBL & ASSOCIATES PROPERTIES, INC. SCHEDULE III
REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
(Dollars in Thousands)

Gross Amounts at Which Carried at Close
Initial Cost (A) of Period
------------------------- -------------------------------------
Costs
Capitalized
Subsequent Accumu-
Buildings to Buildings lated Date of
(B) and Acquisition/ and Depre- Construction
Description Encumbrances Land Improvements Improvements Land Improvements Total(C) ciation(D) /Purchase
------------ ------- ------------ ------------ -------- ------------- --------- ----------- ------------
Kingston Overlook......... -- 1,693 5,664 1,983 2,105 7,235 9,340 545 1996
Knoxville, TN
Lady's Island (E)......... -- 300 2,323 311 296 2,638 2,934 481 1992
Beaufort, SC
LaGrange Commons.......... -- 835 5,765 592 835 6,357 7,192 495 1995-1996
LaGrange, NY
Lakeshore Station......... -- 200 401 6 200 407 607 57 1993-1994
Gainesville, GA
Lionshead Village......... -- 3,674 4,153 73 3,674 4,226 7,900 162 1998
Nashville, TN
Longview Crossing......... 428 -- 1,308 39 -- 1,347 1,347 368 1988
Longview, NC
Lunenburg Crossing........ -- 1,020 2,308 (26) 1,019 2,283 3,302 304 1993-1994
Lunenburg, MA
Massard Crossing.......... -- 843 5,726 (209) 843 5,517 6,360 397 1997
Fort Smith, AR
North Haven Crossing...... 7,293 3,229 8,061 4 3,229 8,065 11,294 1,328 1992-1993
North Haven, CT
Northcreek Plaza.......... -- 98 1,201 46 97 1,248 1,345 240 1983
Greenwood, SC
Northridge Plaza (E)...... -- 1,087 2,970 2,003 1,244 4,816 6,060 1,663 1984
Hilton Head, SC
Northwoods Plaza.......... 1,231 496 1,403 96 496 1,499 1,995 288 1995
Albermarle, NC
Oaks Crossing............. -- 571 2,885 (1,341) 655 1,460 2,115 678 1988
Otsego, MI
Orange Plaza.............. -- 395 2,111 122 395 2,233 2,628 422 1992
Roanoke, VA
Park Village.............. -- 586 2874 79 520 3,019 3,539 612 1990
Lakeland, FL
Park Place................ 1,296 -- 3,590 797 231 4,156 4,387 1,528 1984
Chattanooga, TN
Perimeter Place........... 1,503 764 2,049 330 770 2,373 3,143 868 1985
Chattanooga, TN
Rawlinson Place........... -- 279 1,573 55 292 1,615 1,907 495 1987
Rock Hill, SC
Rhett @ Remount........... -- 67 1,877 883 67 2,760 2,827 835 1992
Charleston, SC
34th St Crossing.......... 1,516 1,102 2,743 85 1,023 2,907 3,930 754 1989
St. Petersburg, FL
Salem Crossing............ -- 2,385 7,564 (791) 2,385 6,773 9,158 471 1997
Virginia Beach, VA
Sand Lake Corners 14,782 3,182 15,952 - 3,182 15,952 19,134 176 1998-1999
Orlando, FL
Sattler Square (E)........
Big Rapids, MI
-87-

CBL & ASSOCIATES PROPERTIES, INC. SCHEDULE III
REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
(Dollars in Thousands)

Gross Amounts at Which Carried at Close
Initial Cost (A) of Period
------------------------- -------------------------------------
Costs
Capitalized
Subsequent Accumu-
Buildings to Buildings lated Date of
(B) and Acquisition/ and Depre- Construction
Description Encumbrances Land Improvements Improvements Land Improvements Total(C) ciation(D) /Purchase
------------ ------- ------------ ------------ -------- ------------- --------- ----------- ------------
Seacoast Shopping Center.. 5,632 1,374 4,164 2,483 1,195 6,826 8,021 1,388 1991
Seabrook, NH
Shenandoah................ 538 122 1,382 74 115 1,463 1,578 400 1988
Roanoke, VA
Signal Hills Village...... -- -- 579 479 -- 1,058 1,058 289 1983-1984
Statesville, NC
Southgate Crossing........ -- -- 1,002 10 -- 1,012 1,012 329 1984-1985
Bristol, TN
Sparta Crossing........... 822 180 1,463 910 145 2,408 2,553 494 1989
Sparta, TN
SpringhurstTowne Ce....... 23,137 7,424 30672 6,051 7,463 36,684 44,147 1,877 1997
Louisville, KY
Springs Crossing.......... -- -- 1,422 932 -- 2,354 2,354 571 1987
Hickory, NC
Statesboro Square......... -- 237 1,643 135 227 1,788 2,015 610 1986
Statesboro, GA
Sterling Creek Commons.... -- 732 3,048 (3) 732 3,045 3,777 102 1998
Portsmouth, VA
Stone East Plaza (E)...... -- 266 1,635 258 217 1,942 2,159 697 1987
Kingsport, TN
Strawbridge MK Place...... -- 1,969 2,492 -- 1,969 2,492 4,461 187 1997
Strawbridge, VA
Suburban Plaza............ 8,735 3,223 3,796 3,188 3,223 6,984 10,207 985 1995
Knoxville, TN
Sutton Plaza.............. 6,682 1,042 4,671 30 1,042 4,701 5,743 356 1997
Mt. Olive, NJ
Townshire Center.......... -- -- -- 27 -- 27 27 4 1997
Bryan, TX
Tyler Square.............. -- 196 2,021 1342 149 3,410 3,559 695 1986
Radford, VA
University Crossing....... -- 545 1,216 (27) 377 1,357 1,734 494 1985
Pueblo, CO
Uvalde Plaza.............. 719 574 1,506 (227) 319 1,534 1,853 478 1987
Uvalde, TX
Valley Crossing (E)....... -- 2,390 6,471 5,476 3,034 11,303 14,337 2,331 1988
Hickory, NC
Valley Commons............ 928 342 1,819 626 342 2,445 2,787 672 1988
Salem, VA
Village @ Wexford......... -- 555 3,009 64 501 3,127 3,628 759 1989-1990
Cadillac, MI
Village Square............ -- 750 3,591 (911) 142 3,288 3,430 837 1989-1990
Houghton Lake, MI

-88-

CBL & ASSOCIATES PROPERTIES, INC. SCHEDULE III
REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
(Dollars in Thousands)

Gross Amounts at Which Carried at Close
Initial Cost (A) of Period
------------------------- -------------------------------------
Costs
Capitalized
Subsequent Accumu-
Buildings to Buildings lated Date of
(B) and Acquisition/ and Depre- Construction
Description Encumbrances Land Improvements Improvements Land Improvements Total(C) ciation(D) /Purchase
------------ ------- ------------ ------------ -------- ------------- --------- ----------- ------------
Wildwood Plaza............ -- 429 1,082 1,051 357 2,205 2,562 708 1985
Salem, VA
Willow Springs .......... 5,031 2,917 6,107 5,002 2,917 11,109 14,026 1,977 1991
Nashua, NH

DISPOSITIONS
Northpark Center.......... -- 1,465 1,581 (3,046) -- -- -- -- 1997
Richmond, VA

OTHER
High Point, NC - Land..... -- -- -- 2,764 893 1,871 2,764 306 1995
Willowbrook Land.......... -- 4,543 -- -- 4,543 -- 4,543 -- 1999
Houston, TX
Developments in Progress
Consisting of Construction
and Development
Properties.............(F) 164,110 2,955 -- (2,727) 228 -- 228 1,029
------------ ------- ------------ ------------ -------- ------------- --------- -----------
TOTALS $1,360,753 $292,098 $1,621,290 $203,685 $284,881 $1,834,020 $2,118,901 $223,548

-89-

(A) Initial cost represents the total cost capitalized including carrying
cost at the end of the first fiscal year in which the property opened
or was acquired.
(B) Encumbrances represent the mortgage notes payable balance at
December 31,1999.
(C) The aggregate cost of land and buildings and improvements for federal
income tax purposes is approximately $2.008 billion.
(D) Depreciation for all properties is computed over the useful life which
is generally forty years.
(E) Property is pledged as collateral on the secured lines of credit used
for development properties.
(F) Includes non-property mortgages and credit line mortgages.

CBL & ASSOCIATES PROPERTIES, INC.

REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION

The changes in real estate assets and accumulated depreciation for the years
ending December 31, 1999, 1998, and 1997 (dollars in thousands).

1999 1998 1997
---------- ---------- ----------

REAL ESTATE ASSETS:
Balance at beginning of period $1,982,843 $1,287,965 $1,101,797
Additions during the period:
Additions and improvements 180,094 130,728 163,808
Acquisitions of real estate assets 69,027 499,795 36,431
Acquisitions of real estate assets with -- 69,889 --
limited partnership interest
Deductions during the period:
Cost of sales (46,188) (5,412) (13,741)
Write-off of development projects (1,674) (122) (330)
---------- ---------- ----------
Balance at end of period $2,184,102 $1,982,843 $1,287,965
========== ========== ==========
ACCUMULATED DEPRECIATION:
Balance at beginning of period $177,055 $145,641 $114,536
Accumulated depreciation on properties (6,640) (11,324) (777)
sold
Depreciation expense 53,133 42,738 31,882
---------- ---------- ----------
Balance at end of period $223,548 $177,055 $145,641
========== ========== ==========

-90-

Schedule IV

CBL & ASSOCIATES PROPERTIES, INC.
MORTGAGE LOANS ON REAL ESTATE
AT DECEMBER 31, 1999
(Dollars in thousands)

Principal
Amount of
Carrying Mortgages
Monthly Balloon Face Amount Subject to
Final Payment Payment Amount of Delinquent
Interest Maturity Amount at Prior of Mortgage Principal
Name of Center/Location Rate Date (1) Maturity Liens Mortgage (2) or Interest
- ----------------------------- -------- ---------- --------- --------- ------- --------- --------- -----------

COMMUNITY CENTERS
Bi-Lo South 9.50% 12/06 $22 $87 None $1,349 $1,349 $0
Cleveland, Tennessee

Gaston Square 11.00% 12/99(3) 15 1,659 None 1,659 1,659 0
Gastonia, North Carolina

Inlet Crossing 11.00% 12/99(3) 27 1,576 None 1,576 1,576 60
Myrtle Beach,
South Carolina

Olde Brainerd Centre 9.50% 12/06 4 0 None 38 38 0
Chattanooga, Tennessee

Signal Hills Plaza 11.00% 12/99(3) 20 2,421 None 2,421 2,421 132
Statesville, North
Carolina

Soddy Daisy Plaza 9.50% 12/06 4 0 None 202 202 0
Soddy Daisy, Tennessee

Other 10.00% 02/00-
09/07 0 2,140 2,140 2,140 0
--------- --------- --------- --------- -----------
$92 $7,883 $9,385 $9,385 $192
========= ========= ========= ========= ===========

(1) Equal monthly installments comprised of principal and interest unless
otherwise noted.
(2) The aggregate carrying value for federal income tax purposes is
approximately $9,385 at December 31, 1999.
(3) Mortgage has been extended on a month to month basis at the same terms
while renegotiating mortgage extension.

CBL & ASSOCIATES PROPERTIES, INC.
------------------------------------------------------
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
1999 1998 1997
------------ ------------ ------------

Beginning Balance $9,118 $11,678 $14,858
Additions 1,690 1,620 3,591
Payments (1,423) (4,180) (6,771)
------------ ------------ ------------
Ending Balance $9,385 $9,118 $11,678
============ ============ ============

-91-

EXHIBIT INDEX

Exhibit
Number Description Page

3.1 -- Amended and Restated Certificate of Incorporation of the
Company(a)

3.2 -- Certificate of Amendment to the Amended & Restated
Certificate of Incorporation of the Company (b)

3.3 -- Amended and Restated Bylaws of the Company(a)

4 -- See Amended and Restated Certificate of Incorporation
of the Company, relating to the Common Stock(a)

10.1 -- Partnership Agreement of the Operating Partnership(a)

10.2 -- Property Management Agreement between the Operating
Partnership and the Management Company(a)

10.3 -- Property Management Agreement relating to Retained
Properties(a)

10.4.1 -- CBL & Associates Properties, Inc. 1993 Stock Incentive
Plan(a)+

10.4.2 -- Non-Qualified Stock Option Agreement, dated
May 10, 1994, for Charles B. Lebovitz+

10.4.3 -- Non-Qualified Stock Option Agreement, dated
May 10, 1994, for James L. Wolford+

10.4.4 -- Non-Qualified Stock Option Agreement, dated
May 10, 1994, for John N. Foy+

10.4.5 -- Non-Qualified Stock Option Agreement, dated
May 10, 1994, for Jay Wiston+

10.4.6 -- Non-Qualified Stock Option Agreement, dated
May 10, 1994, for Ben S. Landress+

10.4.7 -- Non-Qualified Stock Option Agreement, dated
May 10, 1994, for Stephen D. Lebovitz+

10.4.8 -- Stock Restriction Agreement, dated December 28, 1994,
for Charles B. Lebovitz+

10.4.9 -- Stock Restriction Agreement, dated December 2, 1994,
for John N. Foy+

10.4.10-- Stock Restriction Agreement, dated December 2, 1994,
for Jay Wiston+

10.4.11-- Stock Restriction Agreement, dated December 2, 1994,
for Ben S. Landress+

10.4.12-- Stock Restriction Agreement, dated December 2, 1994,
for Stephen D. Lebovitz+

-92-

10.5 -- Purchase Agreement relating to Frontier Mall(c)

10.6.1 -- Purchase Agreement relating to Georgia Square (JMB)(c)

10.6.2 -- Purchase Agreement Relating to Georgia Square
(JCPenney)(c)

10.7 -- Purchase Agreement relating to Post Oak Mall(c)

10.8 -- Indemnification Agreements between the Company and the
Management Company and their officers and directors(a)

10.9.1 -- Employment Agreement for Charles B. Lebovitz(a)+

10.9.2 -- Employment Agreement for James L. Wolford(a)+

10.9.3 -- Employment Agreement for John N. Foy(a)+

10.9.4 -- Employment Agreement for Jay Wiston(a)+

10.9.5 -- Employment Agreement for Ben S. Landress(a)+

10.9.6 -- Employment Agreement for Stephen D. Lebovitz(a)+

10.10 -- Subscription Agreement relating to purchase of the
Common Stock and Preferred Stock of the Management
Company(a)

10.11 -- Option Agreement relating to certain Retained
Properties(a)

10.12 -- Option Agreement relating to Outparcels(a)

10.13.1-- Property Partnership Agreement relating to Hamilton
Place(a)

10.13.2-- Property Partnership Agreement relating to CoolSprings
Galleria(a)

10.14.1-- Acquisition Option Agreement relating to Hamilton
Place(a)

10.14.2-- Acquisition Option Agreement relating to the Hamilton
Place Centers(a)

10.14.3-- Acquisition Option Agreement relating to the Office
Building(a)

10.15 -- Revolving Credit Agreement between the Operating
Partnership and First Tennessee Bank, National
Association, dated as of March 2, 1994(d)

10.16 -- Revolving Credit Agreement, dated July 28, 1994,
between the Operating Partnership and Wells Fargo
Advisors Funding, Inc., NationsBank of Georgia, N.A.
and First Bank National Association(e)

10.17 -- Revolving Credit Agreement, dated October 14, 1994,
between the Operating Partnership and American
National Bank and Trust Company of Chattanooga(f)

-93-

10.18 -- Revolving Credit Agreement, dated November 2, 1994,
between the Operating Partnership and First Tennessee
Bank National Association(f)

10.19 -- Promissory Note Agreement between the Operating
Partnership and Union Bank of Switzerland dated May
5, 1995(g)

10.20 -- Amended and Restated Loan Agreement between the
Operating Partnership and First Tennessee Bank
National Association dated July 12, 1995(h)

10.21 -- Second Amendment to Credit Agreement between the
Operating Partnership and Wells Fargo Realty
Advisors Funding, Inc. dated July 5, 1995(h)

10.22 -- Consolidation, Amendment, Renewal, and Restatement of
Notes between the Galleria Associates, L.P. and The
Northwestern Mutual Life Insurance Company(i)

10.23 -- Promissory Note Agreement between High Point Development
Limited Partnership and The Northwestern Mutual Life
Insurance Company dated January 26, 1996(j)

10.24 -- Promissory Note Agreement between Turtle Creek Limited
Partnership and Connecticut General Life Insurance
Company dated February 14, 1996(j)

10.25 -- Amended and Restated Credit Agreement between the
Operating Partnership and Wells Fargo Bank N.A. etal
dated September 26, 1996. (k)

10.26 -- Promissory Note Agreement between the Operating
Partnership and Compass Bank dated September 17,
1996. (k)

10.27 -- Promissory Note Agreement between St Clair Square
Limited Partnership and and Wells Fargo National
Bank dated, December 11, 1996.(l)

10.28 -- Promissory Note Agreement between Lebcon Associates
and Principal Mutual Life Insurance Company dated,
March 18, 1997.(l)

10.29 -- Promissory Note Agreement between Westgate Mall
Limited Partnership and and Principal Mutual Life
Insurance Company dated, February 16, 1997.(l)

10.30 -- Amended and Restated Credit Agreement between the
Operating Partnership and First Tennessee Bank etal
dated February 24, 1997.(l)

10.31 -- Amended and Restated Credit Agreement between the
Operating Partnership and First Tennessee Bank
etal dated July 29, 1997.(m)

-94-

10.32 -- Second Amended and Restated Credit Agreement between
the Operating Partnership and Wells Fargo Bank N.A.
etal dated June 5, 1997 (m) Effective April 1, 1997.

10.33 -- First Amendment to Second Amended and Restated Credit
Agreement between the Operating Partnership and Wells
Fargo Bank N.A. etal dated November 11, 1997.(m)

10.34 -- Loan Agreement between Asheville LLC and Wells Fargo
Bank N.A. dated February 17, 1998.(m)

10.35 -- Loan Agreement between Burnsville Minnesota LLC and U.S.
Bank National Association dated January 30, 1998.(m)

10.36 -- Modification No. One to the Amended and Restated
Agreement of Limited Partnership of CBL & Associates
Limited Partnership Dated March 31, 1997.(m)

10.37 -- Modification No. Two to the Amended and Restated
Agreement of Limited Partnership of CBL & Associates
Limited Partnership Dated February 19, 1998.(m)

10.38 -- Loan agreement with South Trust Bank dated
January 15, 1998. (n)

10.39 -- Loan agreement between Rivergate Mall Limited
Partnership, The Village at Rivergate Limited
Partnership, Hickory Hollow Mall Limited Partnership,
and The Courtyard at Hickory Hollow Limited Partnership
and Midland Loan Services, Inc. Dated July 1, 1998.(o)

10.40 -- Second Amended and Restated Agreement of Limited
Partnership of CBL & Associates Limited Partnership
dated June 30, 1998 (p)

10.41 -- Amended and restated Loan Agreement between CBL &
Associates Properties , Inc. and First Tennessee
Bank National Association Dated June 12, 1998 (p)

10.42 -- First Amendment To Third Amended And Restated Credit
Agreement and Third Amended And Restated Credit
Agreement between CBL & Associates Properties,
Inc. and Wells Fargo Bank, National Association,
dated August 4, 1998 (p)

10.43 -- Promissory Note with Teachers Insurance and Annuity
Association of American and St. Clair Square Limited
Partnership Bank dated March 11, 1999 (q)

10.43 -- Promissory Note with Wells Fargo Bank National
Associates and Parham Road Limited Partnership
(York Galleria) dated July 1, 1999 (r)

10.44 -- Agreement of Purchase and Sale By and Between YGL
Partners and CBL & Associates Limited Partnership
assigned to Parham Road Limited Partnership (York
Galleria) dated February 2, 1999 (r)

21 -- Subsidiaries of the Company 97

23 -- Consent of Arthur Andersen LLP 101

24 -- Power of Attorney 102

-95-

(a) Incorporated by reference to Post-Effective Amendment No. 1 to the
Company's Registration Statement on Form S-11 (No. 33-67372), as filed
with the Commission on January 27, 1994.

(b) Incorporated by reference to Exhibit B to the Company's Definitive
Schedule 14A, Dated April 1, 1996.

(c) Incorporated by reference to Amendment No. 2 to the Company's Registration
Statement on Form S-11 (No. 33-67372), as filed with the Commission on
October 26, 1993.

(d) Incorporated herein by reference to the Company's Annual Report in Form
10-K for the fiscal year ended December 31, 1993.

(e) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1994.

(f) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1994.

(g) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1995.

(h) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1995.

(i) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1995.

(j) Incorporated by reference to the Company's Annual Report in Form 10-K for
the fiscal year ended December 31, 1995.

(k) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1996.

(l) Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996.

(m) Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1997.

(n) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1998.

(o) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1998.

(p) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1998.

(q) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1999.

(r) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1999.

+ A management contract or compensatory plan or arrangement required to be
filed pursuant to Item 14(c) of this report.

-96-

EXHIBIT 21

SUBSIDIARIES OF THE COMPANY

STATE OF
INCORPORATION OR
SUBSIDIARY FORMATION
- ------------------------------------------------------- ------------------

Albemarle Partners Limited Partnership North Carolina
APWM, LLC Georgia
Arbor Place GP, Inc. Georgia
Arbor Place Limited Partnership Georgia
Asheville, LLC North Carolina
BJ/Portland Limited Partnership Maine
Bonita Lakes Mall Limited Partnership Mississippi
Brownwood Associates, L.P. Texas
Bursnville Minnesota, LLC Minnesota
Cadillac Associates Limited Partnership Tennessee
Capital Crossing Limited Partnership North Carolina
Cary Limited Partnership North Carolina
CBL & Associates Limited Partnership Delaware
CBL & Associates Management, Inc. Delaware
CBL/34th Street St. Petersburg Limited Partnership Florida
CBL/Bartow Limited Partnership Florida
CBL/Brushy Creek Limited Partnership Florida
CBL/Buena Vista Limited Partnership Georgia
CBL/Cedar Bluff Crossing Limited Partnership Tennessee
CBL/Foothills Plaza, L.P. Tennessee
CBL/GP, Inc. Wyoming
CBL/GP II, Inc. Wyoming
CBL/GP III, Inc. Mississippi
CBL/GP IV, Inc. Connecticut
CBL/GP V, Inc. Tennessee
CBL/GP VI, Inc. Tennessee
CBL/GP Cary, Inc. North Carolina
CBL/GP Langley, Inc. Virginia
CBL/Karns Corner Limited Partnership Tennessee
CBL/Low Limited Partnership Wyoming
CBL Morristown, LTD. Tennessee
CBL/Nashua Limited Partnership New Hampshire
CBL/North Haven, Inc. Connecticut
CBL/Perimeter Place Limited Partnership Tennessee
CBL/Plant City Limited Partnership Florida
CBL/Plantation Plaza, L.P. Virginia
CBL/Rawlinson Place Limited Partnership Tennessee
CBL/Springs Crossing Limited Partnership Tennessee
CBL/Suburban, Inc. Tennessee
CBL/Tampa Keystone Limited Partnership Florida

-97-

STATE OF
INCORPORATION OR
SUBSIDIARY FORMATION
- ------------------------------------------------------- ------------------
CBL Terrace Limited Partnership Tennessee
CBL/Uvalde, Ltd. Texas
Chester Square Limited Partnership Virginia
Chesterfield Crossing, LLC Virginia
College Station Partners, Ltd. Texas
CoolSprings Crossing Limited Partnership Tennessee
Cortlandt Town Center, Inc. New York
Cortlandt Town Center Limited Partnership New York
Cosby Station Limited Partnership Georgia
Coastal Way LLC Florida
Courtyard at Hickory Hollow Limited Partnership Delaware
Creekwood Gateway, LLC Florida
Crossville Associates Limited Partnership Tennessee
Development Options, Inc. Wyoming
East Ridge Partners, L.P. Tennessee
East Towne Crossing Limited Partnership Tennessee
Elkin Partners, Ltd. Tennessee
Fiddler's Run Limited Partnership North Carolina
Foothills Mall, Inc. Tennessee
Fifty-Eight Partners, L.P. Tennessee
Frontier Mall Associates Limited Partnership Wyoming
Georgia Square Associates, Ltd. Georgia
Georgia Square Partnership Georgia
Governor's Square Company Ohio
Green Cove Mall Limited Partnership Alabama
Greenville Plaza GP, Inc. North Carolina
Greenville Plaza Limited Partnership North Carolina
Gunbarrel Commons, LLC Tennessee
Henderson Square Limited Partnership North Carolina
Hickory Hollow Courtyard, Inc. Delaware
Hickory Hollow Mall, Inc. Delaware
Hickory Hollow Mall Limited Partnership Delaware
High Point Development Limited Partnership North Carolina
High Point Development Limited Partnership II North Carolina
Hudson Plaza Limited Partnership New York
Houston Willowbrook LLC Texas
Jarnigan Road Limited Partnership Tennessee
Janesville Mall Limited Partnership Wisconsin
Janesville Wisconsin, Inc. Wisconsin
Joplin-Low Limited Partnership Missouri
Kiln Creek Limited Partnership Virginia

-98-

STATE OF
INCORPORATION OR
SUBSIDIARY FORMATION
- ------------------------------------------------------- ------------------
Kingston Overlook Limited Partnership Tennessee
LaGrange Commons Limited Partnership New York
Lakeshore Gainesville Limited Partnership Georgia
Lakeshore/Sebring Limited Partnership Florida
Langley Square Limited Partnership Virginia
Leaseco, Inc. New York
Lebcon Associates Tennessee
Lebcon I, Ltd. Tennessee
Lee Partners Tennessee
Lee Warehouse Limited Partnership Tennessee
Lion's Head Limited Partnership Tennessee
Longview Associates Limited Partnership North Carolina
Lunenburg Crossing Limited Partnership Massachusetts
Madison Plaza Associates, Ltd. Alabama
Madison Square Associates, Ltd. Alabama
Mall Shopping Center Company, L.P. Texas
Maryville Department Stores, Ltd. Tennessee
Maryville Partners, L.P. Tennessee
Meridian Mall Company, Inc. Michigan
Meridian Mall Limited Partnership Michigan
Montgomery Partners, L.P. Tennessee
Massard Crossing Limited Partnership Arkansas
Naugatuck Limited Partnership Connecticut
NewLease Corp. Tennessee
North Haven Crossing Limited Partnership Connecticut
Oak Ridge Associates Limited Partnership Tennessee
Park Village Limited Partnership Florida
Parkway Place, Inc. Alabama
Parkway Place Limited Parntership Alabama
Parham Limited Partnership Virginia
Portland/HQ Limited Partnership Maine
Post Oak Mall Associates Limited Partnership Texas
RC Jacksonville, LLC Florida
RC Strawbridge Limited Partnership Virginia
Rivergate Mall, Inc. Delaware
Rivergate Mall Limited Partnership Delaware
Salem Crossing Limited Partnership Virginia
Sand Lake Corners, LC Florida
Sand Lake Corners Limited Partnership Florida
Scottsboro Associates, Ltd. Alabama
Seacoast Shopping Center Limited Partnership New Hampshire

-99-

STATE OF
INCORPORATION OR
SUBSIDIARY FORMATION
- ------------------------------------------------------- ------------------
Shared Appreciation I, LTD. Tennessee
Shopping Center Finance Corp. Wyoming
Springdale/Mobile Limited Partnership Alabama
Springdale/Mobile Limited Partnership II Alabama
Springhurst Limited Partnership Kentucky
St. Clair Square GP, Inc. Illinois
St. Clair Square Limited Partnership Illinois
Sterling Creek Commons Limited Partnership Virginia
Stone East Partners, Ltd. Tennessee
Stoney Brook Landing LLC Kentucky
Stroud Mall LLC Pennsylvania
Suburban Plaza Limited Partnership Tennessee
Sutton Plaza GP, Inc. New Jersey
Sutton Plaza Limited Partnership New Jersey
The Marketplace at Mill Creek, LLC Georgia
The Lakes Mall, LLC Michigan
The Galleria Associates, L.P. Tennessee
Turtle Creek Limited Partnership Mississippi
Twin Peaks Mall Associates, Ltd. Colorado
Valley Crossing Associates Limited Partnership North Carolina
Vicksburg Mall Associates, Ltd. Mississippi
Village at Rivergate, Inc. Delaware
Village at Rivergate Limited Partnership Delaware
Walnut Square Associates Limited Partnership Wyoming
West Broad Street Limited Partnership Virginia
Westgate Crossing Limited Partnership North Carolina
Westgate Mall Limited Partnership South Carolina

-100-

Exhibit 23

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation
of our report included in this Form 10-K, into CBL & Associates Properties,
Inc.'s previously filed Registration Statements on Form S-3 (File No. 333-
47041) and Form S-8 (File No. 33-73376).

ARTHUR ANDERSEN LLP

Chattanooga, Tennessee
March 27, 2000

-101-

Exhibit 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Charles B. Lebovitz, John N. Foy and
Stephen D. Lebovitz and each of them, with full power to act without the other,
his true and lawful attorney-in-fact and agent, with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign the Annual Report of CBL & Associates Properties, Inc. on
Form 10-K for the fiscal year ended December 31, 1999, including one or more
amendments to such Form 10-K, which amendments may make such changes as such
person deems appropriate, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary fully to all intents and purposes as he might or could
do in person thereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them, or their or his substitutes or substitute, may
lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has executed this Power-of-Attorney
on the date set opposite his respective name.

Signature Title Date

/s/ Charles B. Lebovitz Chairman of the Board March 28, 2000
- ------------------------ and Chief
Charles B. Lebovitz Executive Officer
(Principal Executive Officer)

/s/ John N. Foy Vice Chairman of the Board, March 28, 2000
- ------------------------ Chief Financial Officer and
John N. Foy Treasurer (Principal Financial
Officer and Principal Accounting
Officer)

/s/ Stephen D. Lebovitz Director, President March 28, 2000
- ------------------------ and Secretary
Stephen D. Lebovitz

/s/ Claude M.Ballard Director March 28, 2000
- ------------------------
Claude M. Ballard

/s/ Leo Fields Director March 28, 2000
- ------------------------
Leo Fields

/s/ William J.Poorvu Director March 28, 2000
- ------------------------
William J. Poorvu

/s/ Winston W. Walker Director March 28, 2000
- ------------------------
Winston W. Walker

-102-