SECURITIES AND EXCHANGE COMMISSION
                                                                    
                             Washington, D.C. 20549
                                                                    
                                    FORM 10-Q
                                                                    
          QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                                                                    
                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2005
                                                                    
                           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 incorporation              (I.R.S. Employer
             or organization)                            Identification Number)
                                                   
        2030 Hamilton Place Blvd., Suite 500, Chattanooga, TN 37421-6000
           (Address of principal executive office, including zip code)
                                                                  
        Registrant's telephone number, including area code (423) 855-0001
                                         
                                       N/A
              (Former name, former address and former fiscal year,
                         if changed since last report)
                                   

                                                                    
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 twelve (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 ninety (90) days.
 
                       YES      |X|            NO       |_|
 
Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2).

                       YES      |X|            NO       |_|

Indicate by check mark whether the  registrant is a shell company (as defined in
Exchange Act Rule 12b-2).

                       YES      |_|            NO       |X|

As of November 4, 2005, there were 63,743,459  shares of common stock, par value
$0.01 per share, outstanding.

                                                                    



                                       1



                        CBL & Associates Properties, Inc.



PART I - FINANCIAL INFORMATION

ITEM 1:   Financial Statements................................................3
          Consolidated Balance Sheets.........................................4
          Consolidated Statements of Operations...............................5
          Consolidated Statements of Cash Flows...............................6
          Notes to Unaudited Consolidated Financial Statements................8
ITEM 2:  Management's Discussion and Analysis of Financial Condition
           and Results of Operations.........................................20
ITEM 3:  Quantitative and Qualitative Disclosures About Market Risk..........37
ITEM 4:  Controls and Procedures.............................................37


   PART II - OTHER INFORMATION...............................................38


ITEM 1:     Legal Proceedings................................................38
ITEM 2:     Unregistered Sales of Equity Securities and Use of Proceeds......38
ITEM 3:     Defaults Upon Senior Securities..................................38
ITEM 4:     Submission of Matters to a Vote of Security Holders..............38
ITEM 5:     Other Information................................................38
ITEM 6:     Exhibits.........................................................38


   SIGNATURE.................................................................40



                                       2



                        CBL & Associates Properties, Inc.



ITEM 1:   Financial Statements

     The accompanying  financial  statements are unaudited;  however,  they have
been prepared in accordance with accounting principles generally accepted in the
United States of America for interim  financial  information  and in conjunction
with the  rules and  regulations  of the  Securities  and  Exchange  Commission.
Accordingly,  they do not include all of the disclosures  required by accounting
principles  generally  accepted  in the United  States of America  for  complete
financial statements. In the opinion of management,  all adjustments (consisting
solely of normal  recurring  matters)  necessary for a fair  presentation of the
financial  statements for these interim periods have been included.  The results
for the interim periods ended September 30, 2005, are not necessarily indicative
of the results to be obtained for the full fiscal year.

     These  financial  statements  should  be read  in  conjunction  with  CBL &
Associates  Properties,  Inc.'s audited  financial  statements and notes thereto
included in the CBL & Associates Properties, Inc. Annual Report on Form 10-K for
the year ended December 31, 2004.

                                       3




                        CBL & Associates Properties, Inc.

                           Consolidated Balance Sheets
                        (In thousands, except share data)
                                   (Unaudited)



                                                                                 September 30,           December 31,
                                                                                    2005                    2004
                                                                              -----------------        ---------------
ASSETS
Real estate assets:
                                                                                                           
  Land..............................................................          $       702,250          $     659,782
  Buildings and improvements........................................                5,066,292              4,670,462
                                                                              -----------------        ---------------
                                                                                    5,768,542              5,330,244
    Less accumulated depreciation...................................                (683,390)              (575,464)
                                                                              -----------------        ---------------
                                                                                    5,085,152              4,754,780
  Real estate assets held for sale, net.............................                        -                 61,607
  Developments in progress..........................................                  216,318                 78,393
                                                                              -----------------        ---------------
    Net investment in real estate assets............................                5,301,470              4,894,780
Cash and cash equivalents...........................................                   36,802                 25,766
Receivables:
  Tenant, net of allowance for doubtful accounts of $3,439 in
     2005 and $3,237 in 2004........................................                   41,232                 38,409
  Other.............................................................                    3,915                 13,706
Mortgage and other notes receivable.................................                   18,104                 27,804
Investments in unconsolidated affiliates............................                   80,059                 84,782
Other assets........................................................                  140,507                119,253
                                                                              -----------------        ---------------
                                                                              $     5,622,089          $   5,204,500
                                                                              =================        ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgage and other notes payable....................................          $     3,664,086          $   3,359,466
Mortgage notes payable on real estate assets held for sale..........                        -                 12,213
Accounts payable and accrued liabilities............................                  247,273                212,064
                                                                              -----------------        ---------------
  Total liabilities.................................................                3,911,359              3,583,743
                                                                              -----------------        ---------------
Commitments and contingencies (Notes 2, 3, and 8) ..................
Minority interests..................................................                  606,179                566,606
Shareholders' equity:
  Preferred stock, $.01 par value, 15,000,000 shares authorized:
  8.75% Series B Cumulative Redeemable Preferred Stock,
        2,000,000 shares outstanding in 2005 and 2004...............                       20                     20
  7.75% Series C Cumulative Redeemable Preferred Stock,
         460,000 shares outstanding in 2005 and 2004................                        5                      5
  7.375% Series D Cumulative Redeemable Preferred Stock,
         700,000 shares outstanding in 2005 and 2004................                        7                      7
  Common stock, $.01 par value, 180,000,000 shares authorized,
         63,557,518 and 62,667,104 shares issued and outstanding
         in 2005 and 2004, respectively.............................                      636                    626
  Additional paid - in capital......................................                1,052,988              1,025,479
  Deferred compensation.............................................                  (9,691)                (3,081)
  Other comprehensive income........................................                      310                      -
  Retained earnings.................................................                   60,276                 31,095
                                                                              -----------------        ---------------
    Total shareholders' equity......................................                1,104,551              1,054,151
                                                                              -----------------        ---------------
                                                                              $     5,622,089          $   5,204,500
                                                                              =================        ===============

The accompanying notes are an integral part of these balance sheets.




                                       4


                        CBL & Associates Properties, Inc.

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



                                                                          Three Months Ended           Nine Months Ended
                                                                             September 30,               September 30,
                                                                      ---------------------------   -------------------------- 
                                                                          2005           2004         2005          2004
                                                                      --------------  -----------   -----------  -------------
REVENUES:
                                                                                                              
Minimum rents.........................................................     $136,676     $ 120,859    $ 394,485      $ 342,796
Percentage rents......................................................        3,114         2,290       12,972         10,447
Other rents...........................................................        2,400         2,084        8,320          7,326
Tenant reimbursements.................................................       65,498        60,032      184,598        158,551
Management, development and leasing fees..............................       11,109         2,868       17,927          6,379
Other.................................................................        5,372         5,503       15,768         15,799
                                                                      --------------  -----------   -----------  -------------
  Total revenues......................................................      224,169       193,636      634,070        541,298
                                                                      --------------  -----------   -----------  -------------
EXPENSES:
Property operating....................................................       35,513        31,642       95,539         85,637
Depreciation and amortization.........................................       46,038        37,901      130,663        103,335
Real estate taxes.....................................................       16,283        15,407       47,626         42,582
Maintenance and repairs...............................................       12,402        11,283       36,673         31,650
General and administrative............................................       10,221         8,280       28,641         24,505
Loss on impairment of real estate assets..............................            -             -          262              -
Other.................................................................        3,769         5,681       10,256         13,636
                                                                      --------------  -----------   -----------  -------------
  Total expenses......................................................      124,226       110,194      349,660        301,345
                                                                      --------------  -----------   -----------  -------------
Income from operations................................................       99,943        83,442      284,410        239,953
Interest income.......................................................        1,937           836        6,214          2,422
Interest expense......................................................     (52,646)      (46,042)    (151,822)      (129,274)
Loss on extinguishment of debt........................................         (44)             -        (928)              -
Gain on sales of real estate assets...................................       46,485         1,522       53,581         26,302
Gain on sales of management contracts.................................       21,619             -       21,619              -
Equity in earnings of unconsolidated affiliates.......................          995         1,407        6,769          6,953
Minority interest in earnings:
  Operating partnership...............................................     (49,455)      (16,624)     (87,176)       (59,498)
  Shopping center properties..........................................      (1,086)         (974)      (3,661)        (4,034)
                                                                      --------------  -----------   -----------  -------------
Income before discontinued operations.................................       67,748        23,567      129,006         82,824
Operating income (loss) of discontinued operations....................         (15)           288          251          1,240
Gain (loss) on discontinued operations................................            2           325         (84)            845
                                                                      --------------  -----------   -----------  -------------
Net income............................................................       67,735        24,180      129,173         84,909
Preferred dividends...................................................      (7,642)       (4,416)     (22,926)       (13,248)
                                                                      --------------  -----------   -----------  -------------
Net income available to common shareholders...........................     $ 60,093      $ 19,764     $106,247       $ 71,661
                                                                      ==============  ===========   ===========  =============
Basic per share data:
    Income before discontinued operations,
        net of preferred dividends....................................     $  0.95       $  0.31      $  1.69         $  1.14
    Discontinued operations...........................................           -          0.01            -            0.03
                                                                      --------------  -----------   -----------  -------------
    Net income available to common shareholders.......................     $  0.95       $  0.32      $  1.69         $  1.17
                                                                      ==============  ===========   ===========  =============
    Weighted average common shares outstanding......................        62,940        61,540       62,693          61,130
Diluted per share data:
    Income before discontinued operations,
       net of preferred dividends.....................................     $  0.92       $  0.30      $  1.63         $  1.09
    Discontinued operations...........................................           -          0.01         0.01            0.04
                                                                      --------------  -----------   -----------  -------------
    Net income available to common shareholders.......................     $  0.92       $  0.31      $  1.64         $  1.13
                                                                      ==============  ===========   ===========  =============
Weighted average common and potential
       dilutive common shares outstanding.............................      65,253        63,966       64,973          63,554

The accompanying notes are an integral part of these statements.



                                       5



                        CBL & Associates Properties, Inc.

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

                                                                                              Nine Months Ended
                                                                                                September 30,
                                                                                      ----------------------------------
                                                                                            2005              2004
                                                                                      ----------------   ---------------  
CASH FLOWS FROM OPERATING ACTIVITIES:
                                                                                                              
Net income....................................................................               $129,173           $84,909
Adjustments to reconcile net income to net cash provided by operating activities:
  Depreciation................................................................                 85,836            71,826
  Amortization ...............................................................                 50,522            37,252
  Amortization of debt premiums...............................................                (5,506)           (3,601)
  Amortization of above and below market leases...............................                (4,551)           (2,275)
  Gain on sales of real estate assets.........................................               (53,581)          (26,613)
  (Gain) loss on disposal of discontinued operations..........................                     84             (845)
  Gain on sale of management contracts........................................               (21,619)                 -
  Issuance of stock under incentive plan......................................                    851             1,422
  Abandoned development projects..............................................                    474             3,314
  Amortization of deferred compensation.......................................                  1,273               342
  Accrual of deferred compensation............................................                    660               454
  Accelerated vesting of stock-based compensation.............................                    736                 -
  Loss on extinguishment of debt..............................................                    928                 -
  Equity in earnings of unconsolidated affiliates.............................                (6,769)                 -
  Distributions from unconsolidated affiliates................................                  5,637                 -
  Loss on impairment of real estate assets....................................                    262                 -
  Minority interest in earnings...............................................                 90,837            63,532
Changes in:
  Tenant and other receivables................................................                  6,247           (1,971)
  Other assets................................................................                (4,549)           (7,905)
  Accounts payable and accrued liabilities....................................                (6,419)             9,401
                                                                                      ----------------   ---------------  
          Net cash provided by operating activities...........................                270,526           229,242
                                                                                      ----------------   ---------------  
CASH FLOWS FROM INVESTING ACTIVITIES:
    Additions to real estate assets...........................................              (168,305)          (89,343)
    Acquisitions of real estate assets and other assets.......................              (178,993)         (379,129)
    Other capital expenditures................................................               (76,473)          (57,600)
    Capitalized interest......................................................                (4,620)           (3,219)
    Additions to other assets.................................................                (4,805)           (1,614)
    Reduction of cash in escrow ..............................................                      -            78,476
    Proceeds from sales of real estate assets.................................                 62,871           117,748
    Proceeds from sale of management contracts................................                 21,619                 -
    Additions to mortgage notes receivable....................................                  (859)           (9,529)
    Payments received on mortgage notes receivable............................                 13,186            10,582
    Additional investments in and advances to unconsolidated affiliates.......               (19,203)          (19,619)
    Distributions in excess of equity in earnings of unconsolidated affiliates                 12,047            26,840
                                                                                      ----------------   ---------------  
          Net cash used in investing activities...............................              (343,535)         (326,407)
                                                                                      ----------------   ---------------  
CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from mortgage and other notes payable............................                395,460           518,981
    Principal payments on mortgage and other notes payable....................              (145,644)         (278,973)
    Additions to deferred financing costs.....................................                (3,175)           (5,468)
    Proceeds from issuance of common stock....................................                    415               334
    Costs related to issuance of preferred stock..............................                  (193)                 -
    Proceeds from exercise of stock options...................................                  8,006            12,766
    Prepayment fees on extinguishment of debt.................................                (1,977)                 -
    Purchase of minority interest in the Operating Partnership................                (1,137)           (5,450)
    Distributions to minority interests.......................................               (67,433)          (58,297)
    Dividends paid to holders of preferred stock..............................               (23,572)          (13,248)
    Dividends paid to common shareholders.....................................               (76,705)          (66,574)
                                                                                      ----------------   ---------------  
          Net cash provided by financing activities...........................                 84,045           104,071
                                                                                      ----------------   ---------------  
NET CHANGE IN CASH AND CASH EQUIVALENTS.......................................                 11,036             6,906
CASH AND CASH EQUIVALENTS, beginning of period                                                 25,766            20,332
                                                                                      ----------------   ---------------  
CASH AND CASH EQUIVALENTS, end of period......................................               $ 36,802           $27,238
                                                                                      ----------------   ---------------  
SUPPLEMENTAL INFORMATION:
  Cash paid for interest, net of amounts capitalized..........................               $138,035          $126,450
                                                                                      ----------------   ---------------  

The accompanying notes are an integral part of these statements.


                                       6



                        CBL & Associates Properties, Inc.

              Notes to Unaudited Consolidated Financial Statements
                      (In thousands, except per share data)

Note 1 - Organization and Basis of Presentation

     CBL & Associates  Properties,  Inc. ("CBL"), a Delaware  corporation,  is a
self-managed,  self-administered,  fully integrated real estate investment trust
("REIT") that is engaged in the ownership,  development,  acquisition,  leasing,
management and operation of regional shopping malls and community centers. CBL's
shopping  center  properties  are  located in 24 states,  but  primarily  in the
southeastern and midwestern United States.

     CBL conducts  substantially  all of its  business  through CBL & Associates
Limited  Partnership (the "Operating  Partnership").  At September 30, 2005, the
Operating  Partnership  owned  controlling  interests in 67 regional  malls,  26
associated  centers (each adjacent to a regional shopping mall), seven community
centers and three office buildings.  The Operating Partnership  consolidates the
financial  statements  of all entities in which it has a  controlling  financial
interest.  The Operating  Partnership  owned  non-controlling  interests in five
regional malls and two associated  centers.  Because major decisions such as the
acquisition,  sale  or  refinancing  of  principal  partnership  assets  must be
approved by one or more of the other partners,  the Operating  Partnership  does
not control these partnerships and, accordingly,  accounts for these investments
using the equity method.  The Operating  Partnership  had four mall  expansions,
three open-air shopping centers, one associated center, one community center and
one community  center  expansion  under  construction at September 30, 2005. The
Operating   Partnership  also  holds  options  to  acquire  certain  development
properties owned by third parties.

     CBL is the 100% owner of two qualified REIT  subsidiaries,  CBL Holdings I,
Inc. and CBL Holdings II, Inc. At September 30, 2005,  CBL Holdings I, Inc., the
sole general partner of the Operating Partnership,  owned a 1.6% general partner
interest in the Operating  Partnership  and CBL Holdings II, Inc.  owned a 53.5%
limited partner interest for a combined interest held by CBL of 55.1%.

     The minority interest in the Operating Partnership is held primarily by CBL
& Associates,  Inc. and its affiliates (collectively "CBL's Predecessor") and by
affiliates of The Richard E. Jacobs Group,  Inc.  ("Jacobs").  CBL's Predecessor
contributed their interests in certain real estate properties and joint ventures
to the Operating Partnership in exchange for a limited partner interest when the
Operating  Partnership  was formed in November 1993.  Jacobs  contributed  their
interests in certain real estate  properties and joint ventures to the Operating
Partnership  in  exchange  for  limited  partner  interests  when the  Operating
Partnership  acquired the  majority of Jacobs'  interests  in 23  properties  in
January 2001 and the balance of such  interests in February  2002.  At September
30, 2005, CBL's Predecessor owned a 15.2% limited partner interest, Jacobs owned
a 20.6% limited partner  interest and third parties owned a 9.1% limited partner
interest in the Operating Partnership.  CBL's Predecessor also owned 5.7 million
shares  of CBL's  common  stock at  September  30,  2005,  for a total  combined
effective interest of 20.1% in the Operating Partnership.

     The  Operating   Partnership   conducts  CBL's   property   management  and
development   activities  through  CBL  &  Associates   Management,   Inc.  (the
"Management  Company")  to comply  with  certain  requirements  of the  Internal
Revenue Code of 1986, as amended (the "Code").  The Operating  Partnership  owns
100% of both of the Management Company's preferred stock and common stock.

     CBL, the Operating  Partnership and the Management Company are collectively
referred to herein as "the Company".

                                       7


     At the  Company's  Annual  Meeting  of  Shareholders  on May 9,  2005,  the
Company's  shareholders  approved an increase  in the  authorized  shares of the
common  stock  under  the  Company's   amended  and  restated   certificate   of
incorporation to 180,000,000 shares from 95,000,000 shares. On May 10, 2005, the
Company's Board of Directors approved a two-for-one stock split of the Company's
common  stock,  which was effected in the form of a stock  dividend.  The record
date for the stock split was June 1, 2005,  and the  distribution  date was June
15, 2005. The Company  retained the current par value of $0.01 per share for all
shares of common stock. All references to numbers of common shares and per share
data in the  accompanying  consolidated  financial  statements and notes thereto
have  been  adjusted  to  reflect  the  stock  split  on  a  retroactive  basis.
Shareholders' equity reflects the stock split through a reclassification of $313
from Additional  Paid-In Capital to Common Stock, which represents the par value
of  the  additional  shares  resulting  from  the  stock  split.  The  Operating
Partnership  currently  has common  units and  special  common  units of limited
partner  interest  outstanding  that may be  exchanged by their  holders,  under
certain circumstances,  for shares of common stock on a one-for-one basis. These
common units and special common units were also split on a two-for-one  basis so
that they continue to be exchangeable on a one-for-one  basis into shares of the
Company's common stock.

Note 2 - Joint Ventures

Investment in Unconsolidated Affiliates
---------------------------------------
     At September  30, 2005,  the Company had  investments  in the  following 11
partnerships and joint ventures, which are accounted for using the equity method
of accounting:



                                                                                        Company's
Joint Venture                               Property Name                               Interest
-------------------------------------------------------------------------------------------------------
                                                                                      
Governor's Square IB                        Governor's Plaza                              50.0%
Governor's Square Company                   Governor's Square                             47.5%
Imperial Valley Mall L.P.                   Imperial Valley Mall                          60.0%
Imperial Valley Peripheral L.P.             Imperial Valley Mall       (vacant land)      60.0%
Imperial Valley Commons L.P.                Imperial Valley Commons                       60.0%
Kentucky Oaks Mall Company                  Kentucky Oaks Mall                            50.0%
Mall of South Carolina L.P.                 Coastal Grand-Myrtle Beach                    50.0%
Mall of South Outparcel L.P.                Coastal Grand-Myrtle Beach (vacant land)      50.0%
Mall Shopping Center Company                Plaza del Sol                                 50.6%
Parkway Place L.P.                          Parkway Place                                 45.0%
High Pointe Commons, LP                     High Pointe Commons                           50.0%



     Condensed combined financial  statement  information for the unconsolidated
affiliates is as follows:


                                                                                  Company's Share for the
                                               Total for the Three Months             Three Months
                                                  Ended September 30,               Ended September 30,
                                            -------------------------------    ------------------------------
                                                  2005             2004             2005             2004
                                            ---------------  --------------    -------------   --------------
                                                                                           
Revenues                                          $24,656          $26,006          $8,638          $7,288
Depreciation and amortization                      (7,127)          (7,120)         (2,207)         (1,862)
Interest expense                                   (7,164)          (6,492)         (3,009)         (1,658)
Other operating expenses                           (7,686)          (6,557)         (2,686)         (1,883)
Discontinued operations                                69            1,431               6             143
Gain (loss) on sales of real estate
  assets                                              188           (1,111)            253            (621)
                                            ---------------  --------------    -------------   --------------
Net income                                        $ 2,936          $ 6,157           $ 995          $1,407
                                            ===============  ==============    =============   ==============


                                       8



                                                                                  Company's Share for the
                                               Total for the Nine Months                Nine Months
                                                  Ended September 30,               Ended September 30,
                                            -------------------------------    ------------------------------
                                                  2005             2004             2005             2004
                                            ---------------  --------------    -------------   --------------
                                                                                            
Revenues                                          $99,597          $78,970         $27,385          $21,104
Depreciation and amortization                    (24,935)         (18,702)         (6,127)           (4,605)
Interest expense                                 (28,273)         (18,880)         (9,069)           (4,734)
Other operating expenses                         (27,794)         (20,144)         (8,267)           (5,572)
Discontinued operations                               499            1,646              42              164
Gain on sales of real estate assets                 4,674            2,478           2,805              596
                                            ---------------  --------------    -------------   --------------
Net income                                        $23,768          $25,368          $6,769          $ 6,953
                                            ===============  ==============    =============   ==============


     The third phase of the  Company's  joint venture  transaction  with Galileo
America,  Inc. closed on January 5, 2005, when the Company sold its interests in
two power centers,  one community  center and one community  center expansion to
the joint venture,  Galileo America LLC ("Galileo America"),  for $58,600, which
consisted of $42,529 in cash, the joint venture's assumption of $12,141 of debt,
$3,596  representing the Company's interest in Galileo America and closing costs
of $334.  The real  estate  assets and  related  mortgage  notes  payable of the
properties  in the third phase were  reflected as held for sale as of January 1,
2004,  the date that it was  determined  these  assets  met the  criteria  to be
reflected as held for sale. The Company did not record any depreciation  expense
on these assets during the nine months ended  September  30, 2005 and 2004.  The
Company  recognized  a loss on  impairment  of real  estate  assets of $1,947 in
December 2004 and an additional loss on impairment of real estate assets of $262
during the nine  months  ended  September  30,  2005  related to the  properties
included in the third phase.

     On August 10, 2005, the Company  transferred its 8.4% ownership interest in
Galileo America to Galileo America in exchange for Galileo America's interest in
two  community  centers:  Springdale  Center in  Mobile,  AL,  and  Wilkes-Barre
Township Marketplace in Wilkes-Barre Township, PA. The two properties had a fair
value of $60,000.  The Company recognized a gain of $42,022 on the redemption of
its interest in Galileo  America,  which represents the excess of the fair value
of the two properties  over the carrying  amount of the Company's  investment in
Galileo America of $17,978.  The Company has the right to put the two properties
to Galileo  America for $60,000 in cash at any time for one year  following  the
redemption, as well as additional property at Springdale Center that the Company
currently  holds in a ground lease for $3,000 in cash.  The Company also entered
into an agreement to provide  advisory  services to Galileo America for a period
of three years in exchange for $1,000 per year.

     The Company sold its management and advisory contracts with Galileo America
to New Plan Excel Realty Trust, Inc. ("New Plan") for $22,000 in cash and, after
reductions  for closing  costs,  recognized  a gain of $21,619  during the three
months ended  September  30, 2005.  The Company also  transferred  its remaining
obligations of $3,818 under the master lease agreement to New Plan by paying New
Plan a cash payment of $1,925.  The Company  recognized a gain of $1,893  during
the three months ended  September 30, 2005, as a result of the settlement of the
remaining master lease liability.

     New Plan  retained  the  Company to manage  nine  properties  that  Galileo
America  had  recently  acquired  from a  third  party  for a term  of 17  years
beginning  on the third  anniversary  of the  closing and will pay the Company a
management  fee of $1,000 per year. At anytime after November 22, 2007, New Plan
may terminate  the agreement by paying the Company a termination  fee of $7,000.
The  Company  will  recognize  management  fee  income  beginning  on the  third
anniversary  of  the  closing  as it  provides  services  under  the  management
contract.  If and when New Plan should  terminate the management  agreement with
the Company, the Company will recognize the $7,000 termination fee as gain.

     Separately, Galileo America entered into an agreement to acquire New Plan's
interest in a portfolio of  properties.  Under the terms of its  agreement  with
Galileo  America,  the Company  received an acquisition fee of $8,000 related to
that  transaction,  which was recognized as management  fee revenues  during the
three months ended September 30, 2005.

                                       9


     As a result of the disposition of its ownership interest in Galileo America
and the sale of the  related  management  and  advisory  contracts,  the Company
recorded  additional  compensation  expense of $1,301 in the three  months ended
September  30, 2005 related to the  severance of affected  personnel,  including
$736 related to the accelerated  vesting of stock-based  compensation awards for
certain of the affected personnel.

Other 
-----
     In  September  2005,   Imperial  Valley  Mall  L.P.  obtained  a  ten-year,
non-recourse  mortgage note payable of $60,000 that has a fixed interest rate of
4.985% and  matures in  September  2015.  The  proceeds of the loan were used to
retire the outstanding  borrowings of $58,265 under the  construction  loan that
was incurred to develop Imperial Valley Mall.

     In April 2005,  the Company  formed a joint  venture with Jacobs to develop
Gulf Coast Town  Center in Lee County  (Ft.  Myers/Naples),  Florida.  Under the
terms of the joint venture agreement,  the Company initially contributed $40,335
for a 50%  interest  in the joint  venture,  the  proceeds of which were used to
refund the aggregate  acquisition and development costs incurred with respect to
the project that were previously  paid by Jacobs.  The Company will also provide
any additional equity necessary to fund the development of the property, as well
as to fund up to an  aggregate  of $30,000 of  operating  deficits  of the joint
venture.  The Company  will  receive a preferred  return of 11% on its  invested
capital in the joint venture and will,  after payment of such  preferred  return
and repayment of the Company's  invested  capital,  share equally with Jacobs in
the joint venture's profits.

     The joint  venture  arrangement  provides the Company with the right to put
its 50%  ownership  interest  to Jacobs if  certain  approvals  of  tenants  and
government  entities  that are required  for the  continued  development  of the
project  are  not  obtained  by the  second  anniversary  of the  joint  venture
agreement.  The put right  provides  that Jacobs will acquire the  Company's 50%
ownership  interest for an amount equal to the total unreturned equity funded by
the Company plus any accrued and unpaid preferred return on that equity.

     Based on its evaluation of the provisions of Financial Accounting Standards
Board  Interpretation  No. 46(R),  Consolidation of Variable  Interest  Entities
("FIN 46(R)"),  the Company has determined  that the joint venture is a variable
interest  entity in which it is the primary  beneficiary.  Therefore,  the joint
venture is included in the Company's consolidated financial statements

Note 3 - Mortgage and Other Notes Payable

     Mortgage and other notes  payable  consisted of the  following at September
30, 2005 and December 31, 2004, respectively:



                                                           September 30, 2005                 December 31, 2004          
                                                     -------------------------------   ------------------------------   
                                                                        Weighted                          Weighted
                                                                         Average                          Average
                                                                        Interest                          Interest
                                                        Amount           Rate(1)          Amount          Rate(1)
                                                     ---------------  --------------   -------------   -------------
   Fixed-rate debt:                                
                                                                                                  
      Non-recourse loans on operating properties      $  2,710,984        6.30%        $  2,688,186         6.38%
   Variable-rate debt:                             
      Recourse term loans on operating properties          189,150        4.68%             207,500         3.45%
      Construction loans                                    57,667        5.20%              14,593         3.94%
      Lines of credit                                      706,285        4.82%             461,400         3.37%
                                                    ---------------                    -------------
      Total variable-rate debt                             953,102        4.81%             683,493         3.41%
                                                    ---------------                    -------------
   Total                                              $  3,664,086        5.91%        $  3,371,679         5.78%
                                                    ===============                    =============
                                             
(1)  Weighted-average  interest rate including the effect of debt premiums,  but
     excluding amortization of deferred financing costs.



                                       10


     During the three months ended  September 30, 2005, the Company  retired two
mortgage notes payable totaling $52,635,  including unamortized debt premiums of
$1,329. The Company recognized a loss on extinguishment of debt in the amount of
$44,  which  consisted  of a  prepayment  fee of  $1,125  and the  write-off  of
unamortized  deferred  financing  costs of $248,  offset by the write-off of the
unamortized debt premium of $1,329.

Unsecured Line of Credit
------------------------
     During  September 2005, the Company  increased the  availability  under its
unsecured credit facility from $400,000 to $500,000.  This credit facility bears
interest at the London  Interbank  Offered Rate ("LIBOR") plus a margin of 90 to
145 basis points based on the Company's  leverage,  as defined in the agreement.
The credit  facility  matures in August  2006 and has three  one-year  extension
options,  which are at the  Company's  election.  At  September  30,  2005,  the
outstanding  borrowings of $256,000  under the unsecured  credit  facility had a
weighted average interest rate of 4.9125%.

Secured Lines of Credit
-----------------------
     The  Company  has  four   secured   lines  of  credit  that  are  used  for
construction,  acquisition, and working capital purposes. Each of these lines is
secured by  mortgages  on certain of the  Company's  operating  properties.  The
following summarizes certain information about the secured lines of credit as of
September 30, 2005:


      Total             Total          Maturity
    Available        Outstanding         Date
----------------------------------------------------
                                
   $  373,000         $  368,150     February 2006
      100,000             52,135       June 2007
       20,000             20,000      March 2007
       10,000             10,000      April 2007
-------------------------------------
   $  503,000         $  450,285
=====================================


     Borrowings  under  the  secured  lines of  credit  had a  weighted  average
interest rate of 4.76% at September 30, 2005.

Letters of Credit
-----------------
     At September 30, 2005, the Company had  additional  secured lines of credit
with a total  commitment of $27,123 that can only be used for issuing letters of
credit.  The total outstanding  amount under these lines of credit was $8,263 at
September 30, 2005.

Covenants and Restrictions
--------------------------
     Twenty  malls,  five  associated  centers,  two  community  centers and the
corporate  office  building  are  owned by  special  purpose  entities  that are
included in the Company's consolidated  financial statements.  The sole business
purpose of the special purpose entities is to own and operate these  properties,
each of which is encumbered by a commercial-mortgage-backed-securities loan. The
real  estate  and other  assets  owned by these  special  purpose  entities  are
restricted  under the loan  agreements  in that they are not available to settle
other debts of the Company. However, so long as the loans are not under an event
of  default,  as  defined  in the loan  agreements,  the cash  flows  from these
properties, after payments of debt service, operating expenses and reserves, are
available for distribution to the Company.

     The weighted average remaining term of the Company's  consolidated debt was
3.9 years at  September  30, 2005 and 4.7 years at  December  31,  2004.  Of the
$925,256 of debt that will mature  before  September  30, 2006,  the Company has
extension  options that will extend the  maturity  date of $813,300 of that debt


                                       11


beyond  September  30,  2006.  The two mortgage  notes  payable  comprising  the
remaining  $111,956  were  included  in  the  refinancing  transaction  that  is
discussed in Note 13 - Subsequent Events.

Note 4 - Acquisitions

     Effective June 1, 2005, the Company  acquired a 70% joint venture  interest
in Laurel Park Place,  a regional mall in Livonia,  MI, for a purchase  price of
$80,363.  The purchase  price  consisted of $2,828 in cash,  the  assumption  of
$50,654 of  nonrecourse  debt that bears  interest at a stated rate of 8.50% and
matures in December  2012 and the  issuance of 571,700  Series L Special  Common
Units  ("L-SCUs")  in the  Operating  Partnership  with a fair  value of $26,881
($47.02  per  special  common  unit).  The  Company  recorded a debt  premium of
$10,552,  computed using an estimated  market interest rate of 5.00%,  since the
debt  assumed was at an  above-market  interest  rate  compared to similar  debt
instruments at the date of acquisition.

     The L-SCUs  receive a minimum  distribution  of $3.03 per unit per year. If
the  distribution  on the common units  exceeds  $3.03 per unit per year for any
period,  then the L-SCUs will receive a distribution equal to the amount paid on
the  common  units.  Upon the  earlier  to occur  of June 1,  2020,  or when the
distribution  on the common units  exceeds  $3.03 per unit for four  consecutive
calendar  quarters,  the L-SCUs will thereafter  receive a distribution equal to
the amount paid on the common units.

     The Company may elect to acquire the remaining  30%  ownership  interest in
the joint venture,  or a portion thereof,  at anytime  following the acquisition
date for a purchase  price of  $14,000,  which will be paid  either  through the
issuance  of  common  units  of  limited  partner   interest  in  the  Operating
Partnership or with cash, at the Company's  election.  If the Company  exercises
its right to acquire the  remaining  30% joint  venture  interest,  or a portion
thereof, prior to December 2012 through the issuance of common units, the common
units issued will not be entitled to receive  distributions until after December
2012.  If the Company does not exercise its right to acquire the  remaining  30%
joint venture interest, then the joint venture partner owning that interest will
receive a preferred  return equal to the greater of 12% or the 10-year  treasury
rate plus 800 basis points on the portion of its joint venture interest that has
not yet been  acquired by the Company.  The Company  receives all of the profits
and losses of this joint  venture and is  responsible  for all of its debt.  The
$14,000 value of the minority  partner's  interest has been recorded in Accounts
Payable and Accrued Liabilities.

     On  July  14,  2005,  the  Company   acquired  The  Mall  of  Acadiana,   a
super-regional  mall in  Lafayette,  LA, for a cash  purchase  price,  including
transaction  costs,  of $175,204.  The Company  also entered into 10-year  lease
agreements  for 13.4  acres of land  adjacent  to The  Mall of  Acadiana,  which
provide the Company the right to purchase the land for a cash purchase  price of
$3,327  during the first year of the lease term,  $3,510  during the second year
and  amounts  increasing  by 10%  per  year  for  each  year of the  lease  term
thereafter. After the first year, the seller may put the land to the Company for
a price  equal to the amounts set forth in the  previous  sentence.  The Company
also obtained a ten-year option to acquire  another  adjacent 14.9 acre tract of
land for a cash  purchase  price of $3,245  during  the first six  months of the
option, which increases to $3,407 during the second six months of the option and
to $3,570 during the remaining nine years of the option.

     The  results of  operations  of Laurel  Park Place and The Mall of Acadiana
have  been  included  in  the  consolidated  financial  statements  since  their
respective dates of acquisition.  Pro forma financial information reflecting the
acquisitions  has not been provided because the acquisitions are not material in
the aggregate.  The following table  summarizes the estimated fair values of the
assets acquired and liabilities assumed as of the respective acquisition dates:

                                       12



Land                                                           $  35,573
Buildings and improvements                                       237,198
Above-market leases                                               12,107
In-place leases                                                   10,475
                                                            --------------
   Total assets                                                  295,353
Mortgage note payables assumed                                   (50,654)
Premiums on mortgage note payables assumed                       (10,552)
Below-market leases                                              (15,233)
                                                            --------------
Net assets acquired                                           $  218,914
                                                            ==============

Note 5 - Segment Information

     The Company  measures  performance  and  allocates  resources  according to
property  type,  which is determined  based on certain  criteria such as type of
tenants,  capital  requirements,  economic risks,  leasing terms, and short- and
long-term  returns on  capital.  Rental  income and tenant  reimbursements  from
tenant leases provide the majority of revenues from all segments. Information on
the Company's reportable segments is presented as follows:


                                                         Associated      Community
Three Months Ended September 30, 2005        Malls         Centers        Centers           All Other       Total
--------------------------------------   ------------    ------------   ------------       -----------   -----------
                                                                                                 
Revenues                                 $  196,589       $  8,357        $  3,625          $ 15,598     $  224,169
Property operating expenses (1)             (63,112)        (1,965)         (1,223)            2,102        (64,198)
Interest expense                            (45,201)        (1,168)           (738)           (5,539)       (52,646)
Other expense                                    --             --              --            (3,769)        (3,769)
Gain on sales of real estate assets           1,180             --           2,408                15          3,603
                                         ------------    ------------   ------------       -----------   -----------
Segment profit and loss                  $   89,456       $  5,224        $  4,072          $  8,407        107,159
                                         ============    ============   ============       ===========
Depreciation and amortization expense                                                                       (46,038)
General and administrative expense                                                                          (10,221)
Interest income                                                                                               1,937
Loss on extinguishment of debt                                                                                  (44)
Gain on sale of real estate assets                                                                           42,882
Gain on sale of management contracts                                                                         21,619
Equity in earnings of unconsolidated
      affiliates                                                                                                995
Minority interest in earnings                                                                               (50,541)
                                                                                                         ----------- 
Income before discontinued operations                                                                    $   67,748
                                                                                                         =========== 
Capital expenditures (2)                 $  247,596       $  5,002        $ 73,070          $ 41,222     $  366,890





                                                         Associated      Community
Three Months Ended September 30, 2004        Malls         Centers        Centers           All Other       Total
--------------------------------------   ------------    ------------   ------------       -----------   -----------
                                                                                                 
Revenues                                 $  173,188       $  7,387        $  4,819          $  8,242     $  193,636
Property operating expenses (1)             (58,344)        (1,582)         (1,113)            2,707        (58,332)
Interest expense                            (41,273)        (1,215)           (783)           (2,771)       (46,042)
Other expense                                    --             --              --            (5,681)        (5,681)
Gain (loss) on sales of real estate
   assets                                      (178)           327           1,369                 4          1,522
                                         ------------    ------------   ------------       -----------   -----------
Segment profit and loss                  $   73,393       $  4,917        $  4,292          $  2,501         85,103
                                         ============    ============   ============       ===========
Depreciation and amortization expense                                                                       (37,901)
General and administrative expense                                                                           (8,280)
Interest income                                                                                                 836
Equity in earnings of unconsolidated
   affiliates                                                                                                 1,407
Minority interest in earnings                                                                               (17,598)
                                                                                                         ----------- 
Income before discontinued operations                                                                    $   23,567
                                                                                                         =========== 
Capital expenditures (2)                 $  265,087       $ 36,366        $  5,399          $  5,289     $  312,141



                                       13



                                                         Associated      Community
Nine Months Ended September 30, 2005         Malls         Centers        Centers           All Other       Total
--------------------------------------   ------------    ------------   ------------       -----------   -----------
                                                                                                 
Revenues                                 $  570,492       $ 25,124        $  7,857          $ 30,597     $  634,070
Property operating expenses (1)            (181,830)        (5,917)         (2,209)           10,118       (179,838)
Interest expense                           (133,538)        (3,517)         (2,155)          (12,612)      (151,822)
Other expense                                    --             --              --           (10,256)       (10,256)
Gain on sales of real estate assets           1,200             --           4,084             5,415         10,699
                                         ------------    ------------   ------------       -----------   -----------
Segment profit and loss                  $  256,324       $ 15,690        $  7,577          $ 23,262        302,853
                                         ============    ============   ============       ===========
Depreciation and amortization expense                                                                      (130,663)
General and administrative expense                                                                          (28,641)
Loss on impairment of real estate
assets                                                                                                         (262)
Interest income                                                                                               6,214
Loss on extinguishment of debt                                                                                 (928)
Gain on sale of real estate assets                                                                           42,882
Gain on sale of management contracts                                                                         21,619
Equity in earnings of unconsolidated
      affiliates                                                                                              6,769
Minority interest in earnings                                                                               (90,837)
                                                                                                         ----------- 
Income before discontinued operations                                                                    $  129,006
                                                                                                         =========== 
Total assets                             $4,938,584       $270,593        $145,346          $267,566     $5,622,089
Capital expenditures (2)                 $  428,586       $ 15,127        $ 74,177          $121,453     $  639,343




                                                         Associated      Community
Nine Months Ended September 30, 2004         Malls         Centers        Centers           All Other       Total
--------------------------------------   ------------    ------------   ------------       -----------   -----------
                                                                                                 
Revenues                                 $  487,231       $ 21,874        $ 11,732          $ 20,461     $  541,298
Property operating expenses (1)            (163,079)        (4,667)         (3,365)           11,242       (159,869)
Interest expense                           (117,944)        (3,611)         (2,301)           (5,418)      (129,274)
Other expense                                    --             --              --           (13,636)       (13,636)
Gain on sales of real estate assets             848            327          24,933               194         26,302
                                         ------------    ------------   ------------       -----------   -----------
Segment profit and loss                  $  207,056       $ 13,923        $ 30,999          $ 12,843        264,821
                                         ============    ============   ============       ===========
Depreciation and amortization expense                                                                      (103,335)
General and administrative expense                                                                          (24,505)
Interest income                                                                                               2,422
Equity in earnings of unconsolidated
   affiliates                                                                                                 6,953
Minority interest in earnings                                                                               (63,532)
                                                                                                         ----------- 
Income before discontinued operations                                                                    $   82,824
                                                                                                         =========== 
Total assets                             $4,383,552       $244,366        $157,466          $132,552     $4,917,936
Capital expenditures (2)                 $  788,742       $ 36,799        $ 11,004          $ 46,342     $  882,887

(1)  Property  operating  expenses include  property  operating  expenses,  real
     estate taxes and maintenance and repairs.

(2)  Amounts  include  acquisitions  of real estate  assets and  investments  in
     unconsolidated affiliates. Developments in progress are included in the All
     Other category.



Note 6- Earnings Per Share

     Basic  earnings  per share  ("EPS")  is  computed  by  dividing  net income
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 potential dilutive common shares  outstanding.  The limited
partners' rights to convert their minority interest in the Operating Partnership
into shares of common  stock are not  dilutive.  The  following  summarizes  the
impact of potential  dilutive common shares on the  denominator  used to compute
earnings per share:

                                       14



                                                 Three Months Ended September 30,  Nine Months Ended September 30,
                                                 --------------------------------  ------------------------------
                                                      2005             2004             2005             2004
                                                 ---------------  ---------------  ---------------  -------------
                                                                                                 
Weighted average shares outstanding                      63,423           61,908           62,994         61,418
Effect of nonvested stock awards                           (483)            (368)            (301)          (288)
                                                 ---------------  ---------------  ---------------  -------------
Denominator - basic earnings per share                   62,940           61,540           62,693         61,130
Effect of  dilutive  stock  options,  nonvested
   stock  awards and deemed  shares  related to
   deferred compensation plans                            2,313            2,426            2,280          2,424
                                                 ---------------  ---------------  ---------------  -------------
Denominator - diluted earnings per share                 65,253           63,966           64,973         63,554
                                                 ===============  ===============  ===============  =============


Note 7- Comprehensive Income

     Comprehensive  income includes all changes in  shareholders'  equity during
the  period,  except  those  resulting  from  investments  by  shareholders  and
distributions to shareholders. Comprehensive income includes other comprehensive
income in the three  months and nine months  ended  September  30, 2005 of $310,
which represents unrealized gain on marketable securities that are classified as
available for sale.  Comprehensive  income was equal to net income for the three
months and nine months ended September 30, 2004.


Note 8- Contingencies

     The Company is currently  involved in certain litigation that arises in the
ordinary  course  of  business.  It is  management's  opinion  that the  pending
litigation  will not  materially  affect the  financial  position  or results of
operations of the Company.

     Based on environmental  studies completed to date,  management believes any
potential  exposure related to environmental  cleanup will not materially affect
the Company's financial position or results of operations.

     The  Company  has  guaranteed  50% of the debt of Parkway  Place  L.P.,  an
unconsolidated  affiliate in which the Company owns a 45%  interest,  which owns
Parkway Place in Huntsville,  AL. The total amount  outstanding at September 30,
2005,  was $53,200,  of which the Company has guaranteed  $26,600.  The guaranty
will expire when the related debt matures in June 2008.

     The  Company  had  guaranteed  100% of the  construction  debt  incurred by
Imperial Valley Mall L.P., an unconsolidated affiliate in which the Company owns
a 60% interest,  to develop  Imperial  Valley Mall.  The  construction  loan was
refinanced during the three months ended September 30, 2005, and the Company was
released from its guaranty.

     The Company has issued  various  bonds that it would have to satisfy in the
event of non-performance. At September 30, 2005, the total amount outstanding on
these bonds was $18,094.

Note 9 - Stock-Based Compensation

     As  noted  in Note 2 -  Joint  Ventures,  the  Company  recognized  $736 of
compensation   expense  related  to  the  accelerated   vesting  of  stock-based
compensation  awards for certain personnel that were affected by the disposition
of the Company's ownership interest in Galileo America. This amount included the
accelerated  amortization  of $256 in deferred  compensation  plus an additional
$480 of compensation  expense,  which represents the excess of the fair value of
the unvested awards as of the new  measurement  date over the intrinsic value of
the awards as of their respective grant dates.

     Historically,  the Company accounted for its stock-based compensation plans
under the recognition and measurement  principles of Accounting Principles Board
Opinion  No. 25  "Accounting  for Stock  Issued to  Employees"  (APB No. 25) and
related Interpretations. Effective January 1, 2003, the Company elected to begin


                                       15


recording the expense  associated  with stock  options  granted after January 1,
2003, on a prospective  basis in accordance  with the fair value and  transition
provisions  of SFAS No.  123,  "Accounting  for Stock  Based  Compensation",  as
amended by SFAS No. 148,  "Accounting for Stock-Based  Compensation - Transition
and  Disclosure - An Amendment of FASB  Statement  No. 123." The Company has not
granted  any  stock  options  since  January  1,  2003.   The  Company   records
compensation  expense for awards of common  stock based on the fair value of the
common stock on the date of grant and the related vesting period, if any.

     No stock-based  compensation expense related to stock options granted prior
to January 1, 2003,  other than as discussed  above,  has been  reflected in net
income since all options  granted had an exercise  price equal to the fair value
of the  Company's  common  stock on the date of  grant.  Therefore,  stock-based
compensation  expense included in net income available to common shareholders in
the three months ended  September  30, 2005 and 2004,  and the nine months ended
September 30, 2005 and 2004, is less than that which would have been  recognized
if the fair value  method had been applied to all  stock-based  awards since the
effective date of SFAS No. 123. The following  table  illustrates  the effect on
net income and  earnings  per share if the  Company  had  applied the fair value
recognition provisions of SFAS No. 123 to all outstanding and unvested awards in
each period:


                                                                   Three Months                   Nine Months
                                                                Ended September 30,           Ended September 30,
                                                               --------------------------    -------------------------
                                                                  2005           2004          2005             2004
                                                               -----------    -----------    ----------      ---------  
                                                                                                       
Net income available to common shareholders, as reported        $ 60,093        $ 19,764      $106,247        $ 71,661
Stock-based  compensation  expense  included in reported
     net income available to common shareholders                   1,936             514         3,872           1,799
Total stock-based compensation expense determined under 
     fair value method                                            (2,033)          (641)        (4,194)         (2,181)
                                                               -----------    -----------    ----------     ----------  
Pro forma net income available to common shareholders           $ 59,996        $ 19,637      $105,925        $ 71,279
                                                               ===========    ===========    ==========     ==========
Net income available to common shareholders per share:
   Basic, as reported                                           $   0.95        $   0.32       $  1.69        $   1.17
                                                               ===========    ===========    ==========     ==========
   Basic, pro forma                                             $   0.95        $   0.32       $  1.69        $   1.17
                                                               ===========    ===========    ==========     ==========
   Diluted, as reported                                         $   0.92        $   0.31       $  1.64        $   1.13
                                                               ===========    ===========    ==========     ==========
   Diluted, pro forma                                           $   0.92        $   0.31       $  1.63        $   1.12
                                                               ===========    ===========    ==========     ==========



Note 10 - Noncash Investing and Financing Activities

     The Company's  noncash  investing and financing  activities were as follows
for the nine months ended September 30, 2005 and 2004:


                                                                         Nine Months Ended
                                                                           September 30,
                                                                      -------------------------
                                                                          2005        2004
                                                                      -------------------------
                                                                                     
Debt assumed to acquire property interests, including premiums           $  61,206   $ 281,892
                                                                      =========================
Debt consolidated from application of FASB Interpretation No. 46         $      --   $  38,147
                                                                      =========================
Minority interest issued in acquisitions of real estate assets           $  40,881   $  46,212
                                                                      =========================
Debt assumed by buyer on sales of real estate assets                     $  12,141   $      --
                                                                      =========================
Additions to real estate assets accrued but not yet paid                 $  25,253   $   9,606
                                                                      =========================

                                                                     
Note 11 - Discontinued Operations                                    
                                                                  
     In March 2005,  the Company  sold five  community  centers for an aggregate
sales price of $12,100.  The Company previously  recognized an aggregate loss on
impairment of real estate assets of $617 on these community  centers in December
2004 and  recognized  an  additional  loss on impairment of $32 during the three
months ended March 31, 2005. Total revenues for these community  centers were $0
and $478 for the three months ended  September 30, 2005 and 2004,  respectively,
and $420 and $1,462  for the nine  months  ended  September  30,  2005 and 2004,
respectively.  All prior  periods  presented  have been  restated to reflect the
operations of these community centers as discontinued operations.

                                       16


Note 12 - Recent Accounting Pronouncements

     In December  2004, the FASB released its final revised  standard,  SFAS No.
123 (Revised  2004),  "Share-Based  Payment."  SFAS No.  123(R)  requires that a
public  entity  measure the cost of equity  based  service  awards  based on the
grant-date fair value of the award. That cost will be recognized over the period
during  which an employee is  required  to provide  service in exchange  for the
award or the vesting  period.  No  compensation  cost is  recognized  for equity
instruments  for which employees do not render the requisite  service.  In April
2005, the Securities and Exchange  Commission  amended  Regulation S-X to modify
the  effective  date so that SFAS No. 123(R) can be adopted  beginning  with the
first interim  reporting period of the next fiscal year beginning after June 15,
2005 instead of the first  interim  period  beginning  after June 15, 2005.  The
Company   previously  adopted  the  fair  value  provisions  of  SFAS  No.  123,
"Accounting  for  Stock  Based  Compensation",  as  amended  by  SFAS  No.  148,
"Accounting  for  Stock-Based  Compensation  -  Transition  and  Disclosure - An
Amendment of FASB Statement No. 123" effective January 1, 2003. The Company does
not expect  the  adoption  of this  standard  to have a  material  effect on its
financial position or results of operations.

     In  December  2004,  FASB issued SFAS No.  153,  "Exchange  of  Nonmonetary
Assets,  an amendment of APB Opinion No. 29," which addresses the measurement of
exchanges of  nonmonetary  assets.  SFAS No. 153  eliminates  the  exception for
nonmonetary  exchanges  of  similar  productive  assets and  replaces  it with a
general exception for exchange of nonmonetary assets that do not have commercial
substance.  It  also  specifies  that  a  nonmonetary  exchange  has  commercial
substance  if the  future  cash  flows of the  entity  are  expected  to  change
significantly as a result of the exchange.  SFAS No. 153 is effective  beginning
July 1, 2005. The adoption of SFAS No. 153 did not have a material impact on the
Company's financial position, results of operations or cash flows.

     In June 2005, the FASB issued Emerging Issues Task Force ("EITF") Issue No.
04-05,  "Determining  Whether a General  Partner,  or the General  Partners as a
Group,  Controls  a Limited  Partnership  or  Similar  Entity  When the  Limited
Partners  Have Certain  Rights."  EITF Issue No. 04-05  provides a framework for
determining  whether a general  partner  controls,  and  should  consolidate,  a
limited partnership or a similar entity. EITF Issue No. 04-05 is effective after
June  29,  2005,  for  all  newly  formed  limited   partnerships  and  for  any
pre-existing limited partnerships that modify their partnership agreements after
that date.  General  partners of all other limited  partnerships are required to
apply the consensus no later than the beginning of the first reporting period in
fiscal years beginning after December 15, 2005. The Company does not expect that
the  adoption  of EITF  Issue  No.  04-05  will  have a  material  impact on its
financial position, results of operations or cash flows.
 
     In June 2005, the FASB issued FSP 78-9-1,  "Interaction  of AICPA Statement
of  Position  78-9 and EITF Issue No.  04-05."  The EITF  acknowledged  that the
consensus in EITF Issue No. 04-05 conflicts with certain aspects of Statement of
Position ("SOP") 78-9, "Accounting for Investments in Real Estate Ventures." The
EITF agreed that the  assessment  of whether a general  partner,  or the general
partners as a group, controls a limited partnership should be consistent for all
limited  partnerships,  irrespective  of the  industry  within which the limited
partnership operates.  Accordingly,  the guidance in SOP 78-9 was amended in FSP
78-9-1 to be consistent with the guidance in EITF Issue No. 04-05. The effective
dates  for  this FSP are the same as those  mentioned  above in EITF  Issue  No.
04-05.  The Company  does not expect that the adoption of FSP 78-9-1 will have a
material impact on its financial position, results of operations or cash flows.

Note 13 - Subsequent Events

Special One-Time Dividend For Common Stock
------------------------------------------
     On October 5, 2005,  the  Company's  Board of Directors  declared a special
one-time cash dividend for the  Company's  common stock of $0.09 per share.  The
dividend  is  payable on  January  16,  2006,  to  shareholders  of record as of
December 30, 2005. The special  dividend was declared as a result of the taxable
gains generated from the sale of the Company's management and advisory contracts
with Galileo America that is discussed in Note 2 - Joint Ventures.

                                       17


Acquisitions
------------
     On October 17, 2005,  the Company  entered into  definitive  agreements  to
acquire a portfolio of three malls.  The purchase  price will consist of cash of
$93,830,  the  assumption  of  long-term,  fixed-rate  debt of $368,250  and the
issuance  of  Series  K  Special  Common  Units   ("K-SCUs")  of  the  Operating
Partnership.  The K-SCUs will receive a dividend at a rate of 6.0%, or $2.85 per
K-SCU,  for the first year following the close of the  transaction and 6.25%, or
$2.96875 per K-SCU, thereafter. When the quarterly distribution on the Operating
Partnership's  common units exceeds the quarterly  K-SCU  distribution  for four
consecutive quarters,  the K-SCUs will receive  distributions  thereafter at the
rate equal to that paid on the Operating Partnership's common units. At any time
following the first  anniversary  of the closing date, the holders of the K-SCUs
may exchange them, on a one-for-one  basis,  for shares of the Company's  common
stock or, at the Company's election, their cash equivalent.

     On November 7, 2005,  the Company  purchased  Layton Hills Mall, a regional
mall in Layton (Salt Lake City), UT, for a cash purchase price of $121,400.

Mortgage Notes Payable
----------------------
     In October  2005,  the Company  obtained  four new mortgage  notes  payable
totaling  $392,000,  which are  ten-year,  non-recourse  loans having a weighted
average  interest rate of 5.02%.  In connection  with obtaining these new loans,
the Company retired four loans totaling $179,471.  As a result of the retirement
of these four loans, the Company will recognize a loss on extinguishment of debt
of $5,364 in October  2005,  which  includes  prepayment  fees of $4,548 and the
write-off of unamortized deferred financings costs of $816.

Settlement of Deferred Compensation Agreement
---------------------------------------------
     On October  24,  2005,  the  Company  and one of its  officers  amended the
deferred  compensation  agreement  between them to change the final  termination
date of the  agreement  from  January 2, 2005 to  September  30, 2005 and to not
extend  the  agreement  any  further.  As a  result  of the  termination  of the
agreement, the Company issued 174,403 shares of common stock to the officer. The
Company had accrued all compensation  expense related to the agreement as it was
earned during the term of the agreement.

Joint Venture
-------------
     On October 24, 2005,  the Company  entered  into a definitive  agreement to
form a 50/50  joint  venture  with  Jacobs to own  Triangle  Town Center and its
associated and lifestyle centers, Triangle Town Place and Triangle Town Commons,
in Raleigh,  NC. The  Company  will  assume  management,  leasing and any future
development responsibilities of the properties.

     The joint  venture  property  is valued at  $283,500.  Concurrent  with its
formation,  the  joint  venture  will  enter  into a new  ten-year,  fixed  rate
non-recourse loan of $200,000,  secured by the collective centers.  The proceeds
from the loan will be used to  retire an  existing  construction  loan  totaling
approximately $121,000 with the balance to be paid to Jacobs as a partial return
of Jacobs'  equity.  The Company will make an initial  capital  contribution  of
$2,250 to the joint venture.  The joint venture equity will be equalized between
Jacobs and the Company through future  contributions  by the Company and through
property cash flow distributions.

     Under the terms of the joint venture agreement,  the Company is required to
fund any additional equity necessary for capital expenditures,  including future
development  or expansion of the  property,  and any  operating  deficits of the
joint venture.  The Company has guaranteed funding of such items up to a maximum
of $50,000.  The joint  venture's  profits will be allocated 50/50 to Jacobs and


                                       18


the Company. The Company will receive a preferred return on its invested capital
in the joint  venture  and will,  after  payment  of such  preferred  return and
repayment of the  Company's  invested  capital,  and repayment of the balance of
Jacobs' equity, share equally with Jacobs in the joint venture's cash flows.

     The Company is currently  evaluating  the  provisions  of FIN 46(R) as they
pertain to this transaction.

Share Repurchase Plan
---------------------
     On November 1, 2005, the Company  announced that its Board of Directors had
approved a plan to  repurchase  up to $60,000 of the  Company's  common stock by
December 31, 2006. Any stock  repurchases will be made from time to time through
open  market   purchases,   in  accordance  with  the  Securities  and  Exchange
Commission's  safe harbors,  and will be funded through the Company's  available
cash and lines of credit.  The timing and price of any stock repurchases will be
determined  by the market  value in effect  from time to time for the  Company's
common stock.  The Company is not  obligated to  repurchase  any shares of stock
under the plan, and the Company may terminate the stock  repurchase  plan at any
time.

ITEM 2: Management's  Discussion and Analysis of Financial Condition and Results
of Operations

     The following discussion and analysis of financial condition and results of
operations  should  be read  in  conjunction  with  the  consolidated  financial
statements and  accompanying  notes that are included in this Form 10-Q. In this
discussion,  the terms  "we",  "us",  "our",  and the  "Company"  refer to CBL &
Associates Properties, Inc. and its subsidiaries.

     Certain  statements made in this section or elsewhere in this report may be
deemed "forward looking statements" within the meaning of the federal securities
laws.  Although we believe the  expectations  reflected  in any  forward-looking
statements  are based on reasonable  assumptions,  we can give no assurance that
these expectations will be attained,  and it is possible that actual results may
differ materially from those indicated by these  forward-looking  statements due
to a variety of risks and uncertainties.  Such risks and uncertainties  include,
without limitation, general industry, economic and business conditions, interest
rate fluctuations,  costs of capital and capital  requirements,  availability of
real estate  properties,  inability  to  consummate  acquisition  opportunities,
competition  from other companies and retail  formats,  changes in retail rental
rates in the Company's markets,  shifts in customer demands, tenant bankruptcies
or store  closings,  changes  in  vacancy  rates at our  properties,  changes in
operating  expenses,  changes in applicable  laws,  rules and  regulations,  the
ability to obtain  suitable  equity  and/or  debt  financing  and the  continued
availability  of financing in the amounts and on the terms  necessary to support
our  future  business.  We  disclaim  any  obligation  to update  or revise  any
forward-looking  statements to reflect  actual results or changes in the factors
affecting the forward-looking information.

EXECUTIVE OVERVIEW

     We are a  self-managed,  self-administered,  fully  integrated  real estate
investment  trust  ("REIT")  that  is  engaged  in the  ownership,  development,
acquisition,  leasing,  management and operation of regional  shopping malls and
community centers.  Our shopping center properties are located in 24 states, but
primarily in the southeastern and midwestern United States.

     As of September  30, 2005,  we owned  controlling  interests in 67 regional
malls, 26 associated  centers (each adjacent to a regional shopping mall), seven
community  centers and three office  buildings.  We  consolidate  the  financial
statements of all entities in which we have a controlling financial interest. As
of September 30, 2005, we owned non-controlling interests in five regional malls
and two associated  centers.  Because major  decisions such as the  acquisition,
sale or  refinancing  of principal  partnership  or joint venture assets must be
approved  by one or  more  of  the  other  partners,  we do  not  control  these


                                       19


partnerships and joint ventures and, accordingly,  account for these investments
using the equity method.  We had four mall expansions,  three open-air  shopping
centers,  one associated  center,  one community center and one community center
expansion  under  construction  at September  30, 2005.  We also hold options to
acquire certain development properties owned by third parties.

     The majority of our revenues is derived from leases with retail tenants and
generally includes base minimum rents,  percentage rents based on tenants' sales
volumes and  reimbursements  from tenants for expenditures,  including  property
operating  expenses,  real estate taxes and maintenance and repairs,  as well as
certain capital expenditures.  We also generate revenues from sales of outparcel
land at the properties and from sales of operating real estate assets when it is
determined  that we can realize the maximum  value of the assets.  Proceeds from
such sales are generally used to reduce borrowings on our credit facilities.

RESULTS OF OPERATIONS

     The following  significant  transactions  impact both the comparison of the
results of  operations  for the three  months  ended  September  30, 2005 to the
results of  operations  for the three  months ended  September  30, 2004 and the
comparison of the results of operations for the nine months ended  September 30,
2005 to the results of operations for the nine months ended September 30, 2004:

     |X|  The  acquisition  of ten  malls  and two  associated  centers  and the
          opening of two malls,  one associated  center and one community center
          since  January  1,  2004   (collectively   referred  to  as  the  "New
          Properties").  We do  not  consider  a  property  to  be  one  of  the
          Comparable Properties (defined below) until the property has been open
          for one complete calendar year. The New Properties are as follows:




          Project Name                                  Location                            Date Acquired / Opened
          -------------------------------------------   -----------------------------      ------------------------
          Acquisitions:
          -------------      
                                                                                          
          Honey Creek Mall                              Terre Haute, IN                     March 2004
          Volusia Mall                                  Daytona Beach, FL                   March 2004
          Greenbrier Mall                               Chesapeake, VA                      April 2004
          Chapel Hill Mall                              Akron, OH                           May 2004
          Chapel Hill Suburban                          Akron, OH                           May 2004
          Park Plaza Mall                               Little Rock, AK                     June 2004
          Monroeville Mall                              Monroeville, PA                     July 2004
          Monroeville Annex                             Monroeville, PA                     July 2004
          Northpark Mall                                Joplin, MO                          November 2004
          Mall del Norte                                Laredo, TX                          November 2004
          Laurel Park Place                             Livonia, MI                         June 2005
          The Mall of Acadiana                          Lafayette, LA                       July 2005

          Developments:
          -------------
          Coastal Grand-Myrtle Beach (50/50 joint       Myrtle Beach, SC                    March 2004
            venture)
          The Shoppes at Panama City                    Panama City, FL                     March 2004
          Imperial Valley Mall (60/40 joint venture)    El Centro, CA                       March 2005
          Chicopee Marketplace                          Chicopee, MA                        September 2005



     |X|  In January  2005,  two power  centers,  one  community  center and one
          community  center expansion were sold to Galileo America LLC ("Galileo
          America"). Since we had a continuing involvement with these properties
          through our  ownership  interest in Galileo  America and the agreement
          under  which we were the  exclusive  manager  of the  properties,  the
          results  of  operations  of these  properties  were not  reflected  in
          discontinued  operations.  Therefore, the three months ended September
          30, 2005, do not include a significant amount of revenues and expenses
          related to these properties,  whereas the three months ended September
          30, 2004  include a full period of revenues  and  expenses  related to
          these properties.



                                       20


          In August 2005,  Galileo America redeemed our 8.4% ownership  interest
          by  distributing  two community  centers to us:  Springdale  Center in
          Mobile,  AL, and  Wilkes-Barre  Township  Marketplace in  Wilkes-Barre
          Township,  PA. We also sold our management and advisory contracts with
          Galileo  America  to a third  party.  See  Note 2 to the  consolidated
          financial   statements  for  a  more  thorough   discussion  of  these
          transactions.

     |X|  Properties  that were in operation as of January 1, 2004 and September
          30, 2005 are referred to as the "Comparable Properties."

COMPARISON  OF THE THREE  MONTHS  ENDED  SEPTEMBER  30, 2005 TO THE THREE MONTHS
ENDED SEPTEMBER 30, 2004

Revenues

     The $30.5 million increase in revenues resulted primarily from increases of
$16.5  million  attributable  to the New  Properties  and $8.3  million from the
Comparable  Properties.  The increase in revenues from the Comparable Properties
was attributable to our achieving higher occupancy  combined with an increase in
average base rents from new and renewal leasing  activity,  percentage rents and
specialty income.

     Our cost recovery ratio  decreased  slightly to 102.0% for the three months
ended  September  30,  2005,  compared  to  102.9%  for the three  months  ended
September 30, 2004.

     The increase in revenues  was offset  slightly by a decrease in revenues of
$2.4 million  related to the  properties  that were sold to the Galileo  America
joint venture in January 2005.

     Management,  development and leasing fees increased $8.2 million, primarily
as a result of an $8.0 million  acquisition  fee that was received  from Galileo
America in connection  with its  acquisition of a portfolio of properties from a
third party.

     Other  revenues  decreased  $0.1  million  as a result  of a  reduction  in
revenues of our taxable REIT subsidiary.

Expenses

     The $5.9 million increase in property  operating  expenses,  including real
estate  taxes and  maintenance  and repairs,  resulted  from an increase of $3.8
million  attributable to the New Properties and $2.7 million from the Comparable
Properties.   These  increases  were  offset  by  a  decrease  of  $0.6  million
attributable  to the  properties  that were sold to the  Galileo  America  joint
venture in January 2005.

     The $8.1 million increase in depreciation and amortization expense resulted
from increases of $7.7 million from the New Properties and $0.4 million from the
Comparable Properties. The increase attributable to the Comparable Properties is
due  to  ongoing  capital  expenditures  for  renovations,   expansions,  tenant
allowances and deferred maintenance.

     General and  administrative  expenses increased $1.9 million primarily as a
result of $1.3 million of compensation expense related to the severance packages
for  individuals  affected by the sale of our management and advisory  contracts
with Galileo  America.  The  remainder  of the increase is primarily  related to
annual increases in salaries and benefits of existing personnel, the addition of
new personnel to support our growth and professional fees.

                                       21


     Other expense  decreased  $1.9 million due to a decrease of $1.3 million in
write-offs of abandoned  development  projects and a decrease of $0.6 million in
the operating expenses of our taxable REIT subsidiary.

Other Income and Expenses

     The increase in interest  income of $1.1  million  results  primarily  from
interest  income on  advances  that were  made to the  joint  venture  that owns
Imperial Valley Mall for the purpose of funding development costs.

     Interest expense  increased by $6.6 million primarily due to the additional
debt associated with the New Properties and an increase in the weighted  average
interest rate of our variable-rate  debt as compared to the comparable period of
the prior year.

Gain on Sales

     Gain on sales of real estate  assets of $46.5  million in the three  months
ended  September  30,  2005  includes  $42.9  million  of gains  related  to the
redemption of our ownership  interest in Galileo America,  $1.3 million from the
recognition of deferred gain related to properties  that were previously sold to
Galileo America and $2.3 million of gains on the sales of three outparcels.  The
gain on sales of $1.5 million in the three months ended  September  30, 2004 was
primarily related to a gain of $1.3 million on a center that was sold to Galileo
America.  The  remaining  $0.2  million  of net gain  relates  to sales of three
outparcels that were at consolidated properties.

     The gain on sales of management  contracts of $21.6 million  represents the
gain on the sale of our management and advisory  contracts with Galileo  America
to a third party.

Equity in Earnings of Unconsolidated Affiliates

     Equity in earnings of  unconsolidated  affiliates  decreased  $0.4  million
primarily  because  of the  disposition  of our  ownership  interest  in Galileo
America  in August  2005.  Although  our  equity  earnings  of nine of our other
unconsolidated  affiliates  increased,  this was equally offset by reductions in
our equity in earnings of Coastal  Grand-Myrtle  Beach and Imperial Valley Mall.
The reduction related to Coastal  Grand-Myrtle Beach is due to the mortgage loan
that was placed on that property in September 2004, which is at a fixed interest
rate that is higher than the previous  variable rate loan. The reduction related
to Imperial  Valley Mall is primarily a result of the  interest  expense on that
property.  Interest costs on the debt incurred to develop  Imperial  Valley Mall
are now being expensed since the property  opened in March 2005,  whereas in the
prior year period the interest costs were being  capitalized as the property was
still under construction.

Discontinued Operations

     Discontinued  operations  in the three  months  ended  September  30,  2005
represent  the true up of estimated  expenses to actual  amounts for  properties
sold during previous periods.  Discontinued operations in the three months ended
September  30, 2004  represent  the  results of  operations  for five  community
centers  located in Michigan that were sold during the first quarter of 2005 and
the sale of one  community  center  during the three months ended  September 30,
2004.

                                       22


COMPARISON OF THE NINE MONTHS ENDED  SEPTEMBER 30, 2005 TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2004

Revenues

     The $92.8 million increase in revenues resulted primarily from increases of
$65.0  million  attributable  to the New  Properties  and $23.3 million from the
Comparable  Properties.  The increase in revenues from the Comparable Properties
was attributable to our achieving higher occupancy  combined with an increase in
average base rents from new and renewal leasing  activity,  percentage rents and
specialty income.

     Our cost  recovery  ratio  improved  to 102.6%  for the nine  months  ended
September  30, 2005,  compared to 99.2% for the nine months ended  September 30,
2004. This increase was driven by (i) an increase in total  portfolio  occupancy
to 93.3% at September  30, 2005  compared to 92.2% at September  30, 2004,  (ii)
increased  profitability  related to utility  reimbursements from tenants at the
New  Properties  and  certain  existing  malls  due  to  the  implementation  of
efficiency  optimizing  utility systems and (iii) a $9.6 million  improvement in
bad debt expenses and other  charges  against  revenues,  as we recognized a net
$2.8  million in the nine months  ended  September  30, 2005 for  recoveries  of
accounts  receivable that were previously  written off,  compared with total bad
debt  expense and other  charges  against  revenues of $6.8  million in the nine
months ended September 30, 2004.

     The increase in revenues  was offset  slightly by a decrease in revenues of
$7.0 million  related to properties  that were sold to the Galileo America joint
venture in January 2005.

     Management, development and leasing fees increased $11.5 million, primarily
as a result of an $8.0 million  acquisition  fee that was received  from Galileo
America in connection  with its  acquisition of a portfolio of properties from a
third party.  The remainder of the increase was  attributable  to the higher fee
income  received  from  Galileo  America  during  2005  through  the date of the
disposition of our ownership interest compared to the fees received from Galileo
America during the comparable period of the prior year.

Expenses

     The $20.0 million increase in property operating  expenses,  including real
estate taxes and  maintenance  and repairs,  resulted  from an increase of $19.7
million  attributable to the New Properties and $2.3 million from the Comparable
Properties,  which was offset by decreases  of $2.0 million from the  properties
that were sold to the Galileo America joint venture in January 2005.

     The  $27.3  million  increase  in  depreciation  and  amortization  expense
resulted  from  increases  of $21.2  million  from the New  Properties  and $6.1
million  from  the  Comparable  Properties.  The  increase  attributable  to the
Comparable  Properties is due to ongoing capital  expenditures  for renovations,
expansions, tenant allowances and deferred maintenance.

     General and  administrative  expenses increased $4.1 million as a result of
$1.3  million of  compensation  expense  related to the  severance  packages for
individuals  affected by the sale of our management and advisory  contracts with
Galileo  America,  as well as an additional  $2.8 million  related  primarily to
annual increases in salaries and benefits of existing personnel, the addition of
new personnel to support our growth and professional fees.

     Other expense  decreased  $3.4 million due to a decrease of $2.8 million in
write-offs of abandoned  development  projects and a decrease of $0.6 million in
the operating expenses of our taxable REIT subsidiary.

                                       23


Other Income and Expenses

     The increase in interest  income of $3.8  million  results  primarily  from
interest  income on  advances  that were  made to the  joint  venture  that owns
Imperial Valley Mall for the purpose of funding development costs.

     Interest expense increased by $22.5 million primarily due to the additional
debt  associated  with the New Properties as well as an increase in the weighted
average  interest rate of our  variable-rate  debt as compared to the comparable
period of the prior year.

Gain on Sales

     Gain on sales of real  estate  assets of $53.6  million in the nine  months
ended  September  30,  2005  includes  $44.2  million  of gains  related  to the
redemption of our ownership  interest in Galileo America,  $1.0 million from the
recognition of deferred gain related to properties  that were previously sold to
Galileo  America and $8.4 million of gains on the sales of ten  outparcels.  The
gain on sales of $26.3  million in the nine  months  ended  September  30,  2004
resulted primarily from the sale of community centers to Galileo America.

     The gain on sales of management  contracts of $21.6 million  represents the
gain on the sale of our management and advisory  contracts with Galileo  America
to a third party.

Equity in Earnings of Unconsolidated Affiliates

     Equity in earnings of  unconsolidated  affiliates  decreased  $0.2 million.
Although  Coastal  Grand-Myrtle  Beach and Imperial  Valley Mall opened in March
2004 and March  2005,  respectively,  our  equity in the  earnings  of these two
properties  was flat  compared to the prior year.  This was due to the  mortgage
loan that was placed on Coastal  Grand-Myrtle  Beach in September 2004, which is
at a fixed  interest  rate that is higher than the previous  variable rate loan.
Additionally,  interest  costs on the debt incurred to develop  Imperial  Valley
Mall are now being expensed since the property opened in March 2005,  whereas in
the prior year period the interest costs were being  capitalized as the property
was still under construction.

Discontinued Operations

     Discontinued  operations  in the nine months ended  September  30, 2005 are
related to five community centers located throughout  Michigan that were sold in
March 2005.  Discontinued operations in the nine months ended September 30, 2004
represent the results of operations for the same five properties and the true up
of estimated  expenses to actual  amounts for  properties  sold during  previous
periods.

Operational Review

     The shopping  center  business is, to some extent,  seasonal in nature with
tenants  achieving the highest levels of sales during the fourth quarter because
of the holiday season.  Additionally,  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
fiscal year.

     We  classify  our  regional  malls  into two  categories  - malls that have
completed their initial  lease-up are referred to as stabilized  malls and malls
that are in their  initial  lease-up  phase  and  have not been  open for  three
calendar years are referred to as non-stabilized malls. The non-stabilized malls


                                       24


currently include Parkway Place in Huntsville, AL, which opened in October 2002;
Coastal  Grand-Myrtle Beach in Myrtle Beach, SC, which opened in March 2004; and
Imperial Valley Mall in El Centro, CA, which opened in March 2005.

     We derive a significant  amount of our revenues  from the mall  properties.
The sources of our revenues by property type were as follows:


                                              Nine Months Ended September 30,
                                              ---------------------------------
                                                    2005             2004
                                              ----------------- ---------------
                                                                
Malls                                               89.5%           90.7%
Associated centers                                   4.0%            4.0%
Community centers *                                  1.2%            2.2%
Mortgages, office building and other                 5.3%            3.1%


*    Excludes the community  centers that were sold to the Galileo America joint
     venture



Sales and Occupancy Costs

     Mall store sales (for those  tenants who occupy  10,000 square feet or less
and have reported sales) increased by 2.3% on a comparable per square foot basis
to $320.72 per square foot for the trailing  twelve  months ended  September 30,
2005,  from  $313.48  per  square  foot for the  trailing  twelve  months  ended
September 30, 2004.

     Occupancy  costs as a  percentage  of sales for the  stabilized  malls were
13.5%  and  13.7%  for the nine  months  ended  September  30,  2005  and  2004,
respectively.

Occupancy

     The occupancy of the portfolio was as follows:


                                                        At September 30,
                                              -------------------------------------
                                                    2005               2004
                                              ------------------ ------------------
                                                                   
Total portfolio occupancy                        93.3%                 92.4%
Total mall portfolio                             93.2%                 92.7%
     Stabilized malls                            93.4%                 92.7%
     Non-stabilized malls                        88.0%                 91.3%
Associated centers                               94.5%                 90.4%
Community centers*                               92.8%                 93.2%

*    Excludes the community  centers that were sold to the Galileo America joint
     venture




   Leasing

         Average annual base rents per square foot were as follows for each
property type:



                                                        At September 30,
                                              -------------------------------------
                                                    2005               2004
                                              ------------------ ------------------
                                                                    
Stabilized malls                                    $25.85             $24.79
Non-stabilized malls                                 27.46              26.62
Associated centers                                   10.16               9.56
Community centers *                                   9.00               7.98
Other                                                19.33              18.89

*    Excludes the community  centers that were sold to the Galileo America joint
     venture.



     The  following  table shows the positive  results we achieved in increasing
the initial and average base rents  through new and renewal  leasing  during the
second  quarter of 2005 for small shop spaces less than 20,000  square feet that
were previously occupied, excluding junior anchors:

                                       25



                                             Base Rent  
                                                Per       Initial Base                 Average Base
                                            Square Foot      Rent Per                    Rent Per
                                            Prior Lease    Square Foot     % Change     Square Foot     % Change
                            Square Feet         (1)       New Lease (2)    Initial     New Lease (3)     Average
                            ------------   -------------  --------------  ----------  ----------------  ----------
Quarter:
                                                                                           
Stabilized Malls               465,697         $28.23         $28.89          2.3%         $29.70           5.2%
Associated centers              36,568          12.10          14.58         20.5%          15.03          24.2%
Community centers (4)            7,500          19.45          19.88          2.2%          19.93           2.5%
Other                            1,335          13.24          14.19          7.2%          14.19           7.2%
                            ------------   -------------  --------------  ----------  ----------------  ----------
                               511,100         $26.91         $27.70          2.9%         $28.47           5.8%
                            ============   =============  ==============  ==========  ================  ==========

Year-To-Date:
Stabilized Malls             1,626,359         $25.57         $26.73          4.5%         $27.41           7.2%
Associated centers              85,901          13.11          16.27         24.1%          16.66          27.1%
Community centers (4)           46,000          16.15          16.33          1.1%          16.36           1.3%
Other                            4,422          18.54          21.28         14.8%          21.72          17.2%
                            ------------   -------------  --------------  ----------  ----------------  ----------
                             1,762,682         $24.70         $25.94          5.0%         $26.58           7.6%
                            ============   =============  ==============  ==========  ================  ==========

(1)  Represents the rent that was in place at the end of the lease term.
(2)  Represents the rent in place at beginning of the lease terms.
(3)  Average base rent over the term of the new lease.
(4)  Excludes the community  centers that were sold to the Galileo America joint
     venture.




LIQUIDITY AND CAPITAL RESOURCES

     There was $36.8  million of cash and cash  equivalents  as of September 30,
2005,  an increase of $11.0  million from  December  31,  2004.  Cash flows from
operations  are used to fund  short-term  liquidity  and  capital  needs such as
tenant construction  allowances,  capital expenditures and payments of dividends
and  distributions.  For longer-term  liquidity needs such as acquisitions,  new
developments, renovations and expansions, we typically rely on property specific
mortgages  (which are  generally  non-recourse),  construction  and term  loans,
revolving  lines  of  credit,  common  stock,  preferred  stock,  joint  venture
investments and a minority interest in the Operating Partnership.

Cash Flows

     Cash  provided  by  operating  activities  during  the  nine  months  ended
September  30, 2005,  increased by $41.3  million to $270.5  million from $229.2
million during the nine months ended September 30, 2004, which was primarily due
to the  incremental  operations of the New Properties  plus  improvements in the
operations of the Comparable Properties.

Debt

     During the nine months ended September 30, 2005, we borrowed $395.5 million
under  mortgage  and other  notes  payable  and paid  $145.6  million  to reduce
outstanding  borrowings under mortgage and other notes payable.  We also assumed
$50.6 million and recorded a debt premium of $10.6 million,  in connection  with
the acquisition of Laurel Park Place.

     The following  tables  summarize debt based on our pro rata ownership share
(including  our pro  rata  share  of  unconsolidated  affiliates  and  excluding
minority investors' share of shopping center properties) because we believe this
provides  investors a clearer  understanding  of our total debt  obligations and
liquidity (in thousands):

                                       26



                                                                                                                  Weighted
                                                                                                                  Average
                                                                   Minority      Unconsolidated                   Interest
                                                  Consolidated     Interests       Affiliates       Total         Rate(1)
                                                  ------------- ---------------- --------------- ------------- ---------------
September 30, 2005:
Fixed-rate debt:
                                                                                                    
     Non-recourse loans on operating properties    $  2,710,984     $ (52,168)     $  116,637    $2,775,453      6.27%
                                                  ------------- ---------------- --------------- ------------- 
Variable-rate debt:
     Recourse term loans on operating properties        189,150            --          26,600       215,750      4.79%
     Construction loans                                  57,667            --              --        57,667      5.20%
     Lines of credit                                    706,285            --              --       706,285      4.82%
                                                  ------------- ---------------- --------------- ------------- 
     Total variable-rate debt                           953,102            --          26,600       979,702      4.81%
                                                  ------------- ---------------- --------------- ------------- 
Total                                              $  3,664,086     $ (52,168)     $  143,237    $3,755,155      5.89%
                                                  ============= ================ =============== ============= 



                                                                                                                  Weighted
                                                                                                                  Average
                                                                   Minority      Unconsolidated                   Interest
                                                  Consolidated     Interests       Affiliates       Total         Rate(1)
                                                  ------------- ---------------- --------------- ------------- ---------------
December 31, 2004:
Fixed-rate debt:
                                                                                                    
     Non-recourse loans on operating properties    $  2,688,186     $ (52,914)     $  104,114    $2,739,386      6.35%
                                                  ------------- ---------------- --------------- ------------- 
Variable-rate debt:
     Recourse term loans on operating properties        207,500            --          29,415       236,915      3.40%
     Construction loans                                  14,593            --          39,493        54,086      4.05%
     Lines of credit                                    461,400            --              --       461,400      3.37%
                                                  ------------- ---------------- --------------- ------------- 
     Total variable-rate debt                           683,493            --          68,908       752,401      3.44%
                                                  ------------- ---------------- --------------- ------------- 
Total                                              $  3,371,679     $ (52,914)     $  173,022    $3,491,787      5.72%
                                                  ============= ================ =============== ============= 

(1)  Weighted average  interest rate including the effect of debt premiums,  but
     excluding amortization of deferred financing costs.




     In  February  2005,  we amended  one of our secured  credit  facilities  to
increase  the total  availability  from $80.0  million to $100.0  million and to
extend the  maturity by one year to June 2007.  The  interest  rate  remained at
LIBOR plus 1.00%.

     In  September  2005,  we obtained a ten-year,  non-recourse  mortgage  note
payable of $60.0  million on Imperial  Valley  Mall,  one of our  unconsolidated
affiliates,  that has a fixed  interest  rate of 4.985% and matures in September
2015. The proceeds of the loan were used to retire the outstanding borrowings of
$58.3 million under the construction  loan that was incurred to develop Imperial
Valley Mall.

     During the three months ended  September  30, 2005, we retired two mortgage
notes payable  totaling $52.6 million,  including  unamortized  debt premiums of
$1.3 million.  We recognized a loss on  extinguishment  of debt in the amount of
less than $0.1 million,  which consisted of a prepayment fee of $1.1 million and
the write-off of unamortized deferred financing costs of $0.2 million, offset by
the write-off of the unamortized debt premium of $1.3 million.

     In October  2005,  we obtained  four new mortgage  notes  payable  totaling
$392.0 million, which are ten-year, non-recourse loans having a weighted average
interest rate of 5.02%. In connection with obtaining these new loans, we retired
four loans totaling $179.5 million.  As a result of the retirement of these four
loans,  we will  recognize a loss on  extinguishment  of debt of $5.4 million in
October 2005,  which includes  prepayment fees of $4.6 million and the write-off
of unamortized deferred financings costs of $0.8 million.

     We have four secured credit  facilities  with total  availability of $503.0
million,  of which $450.3 million was  outstanding as of September 30, 2005. The
secured credit  facilities  bear interest at rate of LIBOR plus a margin ranging
from 90 to 100 basis points.

     During  September 2005, we increased the  availability  under our unsecured
credit facility from $400.0 million to $500.0  million,  of which $256.0 million
was  outstanding as of September 30, 2005. The unsecured  credit  facility bears
interest at LIBOR plus a margin of 90 to 145 basis points based on our leverage.

                                       27


     We also have secured and unsecured lines of credit with total  availability
of $27.1  million  that can only be used to issue  letters of credit.  There was
$8.3 million outstanding under these lines at September 30, 2005.

     The  secured  and  unsecured  credit   facilities   contain,   among  other
restrictions,  certain financial  covenants including the maintenance of certain
coverage ratios,  minimum net worth  requirements,  and limitations on cash flow
distributions.   We  were  in  compliance  with  all  financial   covenants  and
restrictions  under our credit  facilities at September 30, 2005.  Additionally,
certain property-specific mortgage notes payable require the maintenance of debt
service coverage ratios. At September 30, 2005, the properties  subject to these
mortgage notes payable were in compliance with the applicable ratios.

     We expect to refinance  the  majority of mortgage  and other notes  payable
maturing over the next five years with replacement  loans. Based on our pro rata
share of total debt, there is $925.3 million of debt that is scheduled to mature
before September 30, 2006. There are extension options in place that will extend
the maturity of $813.3  million of this debt beyond  September 30, 2006. The two
mortgage notes payable  comprising the remaining $112.0 million were included in
the October 2005 refinancing transaction that is discussed above.

Equity

     At our Annual  Meeting of  Shareholders  on May 9, 2005,  our  shareholders
approved  an  increase in the  authorized  shares of the common  stock under our
amended and restated  certificate of  incorporation  to 180,000,000  shares from
95,000,000  shares.  On  May  10,  2005,  the  Board  of  Directors  approved  a
two-for-one stock split of our common stock, which was effected in the form of a
stock  dividend.  The record date for the stock split was June 1, 2005,  and the
distribution  date was June 15, 2005. We retained the current par value of $0.01
per share for all shares of common stock.  The Operating  Partnership  currently
has  common  units  and  special  common  units  of  limited  partner   interest
outstanding that may be exchanged by their holders, under certain circumstances,
for  shares of common  stock on a  one-for-one  basis.  These  common  units and
special  common  units  were  also  split on a  two-for-one  basis so that  they
continue to be  exchangeable  on a  one-for-one  basis into shares of our common
stock.  All  references  to numbers  of common  shares and per share data in the
accompanying  consolidated  financial  statements,  the notes  thereto  and this
quarterly  report have been adjusted to reflect the stock split on a retroactive
basis.  Shareholders' equity reflects the stock split through a reclassification
of  $0.3  million  from  Additional  Paid-In  Capital  to  Common  Stock,  which
represents the par value of the additional shares resulting from the split.

     On October 5, 2005, our Board of Directors declared a special one-time cash
dividend  for our common  stock of $0.09 per share.  The  dividend is payable on
January 16, 2006, to shareholders of record as of December 30, 2005. The special
dividend was declared as a result of the taxable gains  generated  from the sale
of our management and advisory  contracts with Galileo America that is discussed
in Note 2 - Joint Ventures to the consolidated financial statements.

     On November 1, 2005, we announced  that our Board of Directors had approved
a plan to  repurchase  up to $60.0  million of our common  stock by December 31,
2006. Any stock  repurchases  will be made from time to time through open market
purchases, in accordance with Securities and Exchange Commission's safe harbors,
and will be funded  through our available  cash and lines of credit.  The timing
and price of any stock  repurchases  will be  determined  by the market value in
effect  from  time to time  for  our  common  stock.  We are  not  obligated  to
repurchase  any shares of stock under the plan,  and we may  terminate the stock
repurchase plan at any time. The stock repurchase plan was adopted to provide us
the  opportunity  to  repurchase  shares  relatively  equivalent to the Series K
Special  Common  Units  ("K-SCUs")  that will be issued in  connection  with the
acquisition  of the  three-mall  portfolio  that is  discussed in Note 13 to the
consolidated financial statements.

                                       28


     On October 24, 2005, we amended the deferred compensation  agreement we had
with one of our officers to change the final  termination  date of the agreement
from January 2, 2005 to September  30, 2005 and to not extend the  agreement any
further.  As a result of the  termination  of the  agreement,  we issued 174,403
shares of common stock to the officer.  We had accrued all compensation  expense
related to the agreement as it was earned during the term of the agreement.

     During the nine months ended  September  30, 2005, we received $8.4 million
in proceeds  from  issuances  of common  stock  related to exercises of employee
stock options and our dividend reinvestment plan.

     During the nine months  ended  September  30,  2005,  we paid  dividends of
$100.3 million to holders of our common stock and our preferred  stock,  as well
as $67.4  million in  distributions  to the minority  interest  investors in our
Operating Partnership and certain shopping center properties.

     As a publicly  traded  company,  we have access to capital through both the
public  equity  and  debt  markets.  We have  an  effective  shelf  registration
statement  authorizing  us to publicly issue shares of preferred  stock,  common
stock and warrants to purchase  shares of common stock with an aggregate  public
offering  price up to $562.0  million,  of which $272.0 million was available at
September 30, 2005.

     We anticipate that the combination of equity and debt sources will, for the
foreseeable future,  provide adequate liquidity to continue our capital programs
substantially  as in the past  and make  distributions  to our  shareholders  in
accordance with the requirements applicable to real estate investment trusts.

     Our   policy   is   to   maintain   a   conservative   debt-to-total-market
capitalization  ratio in order to enhance  our access to the  broadest  range of
capital  markets,  both  public  and  private.  Based  on  our  share  of  total
consolidated  and  unconsolidated  debt  and the  market  value of  equity,  our
debt-to-total-market capitalization (debt plus market value equity) ratio was as
follows at September 30, 2005 (in thousands, except stock prices):


                                                         Shares  
                                                       Outstanding      Stock Price (1)          Value
                                                    ------------------  -----------------   -----------------
                                                                                             
Common stock and operating partnership units              115,338            $ 40.99           $4,727,705
8.75% Series B Cumulative Redeemable Preferred Stock        2,000            $ 50.00              100,000
7.75% Series C Cumulative Redeemable Preferred Stock          460           $ 250.00              115,000
7.375% Series D Cumulative Redeemable Preferred
Stock                                                         700           $ 250.00              175,000
                                                                                            -----------------
Total market equity                                                                             5,117,705
Company's share of total debt                                                                   3,755,155
                                                                                            -----------------
Total market capitalization                                                                    $8,872,860
                                                                                            =================
Debt-to-total-market capitalization ratio                                                           42.3%
                                                                                            =================

(1)  Stock price for common  stock and  operating  partnership  units equals the
     closing  price of the common stock on September  30, 2005.  The stock price
     for the  preferred  stock  represents  the  liquidation  preference of each
     respective series of preferred stock.



     As of  September  30,  2005,  our  variable  rate  debt of  $979.7  million
represents  11.0% of our total market  capitalization  and 26.1% of our share of
total consolidated and unconsolidated debt.

Capital Expenditures

     We expect to continue to have access to the capital resources  necessary to
expand and develop our business.  Future development and acquisition  activities
will be undertaken as suitable  opportunities  arise. We do not expect to pursue
these  opportunities  unless  adequate  sources of funding are  available  and a
satisfactory  budget with  targeted  returns on investment  has been  internally
approved.



                                       29


         An annual capital expenditures budget is prepared for each property
that is intended to provide for all necessary recurring and non-recurring
capital expenditures. We believe that property operating cash flows, which
include reimbursements from tenants for certain expenses, will provide the
necessary funding for these expenditures.

         The following development projects are under construction (dollars in
thousands):


                                                                                  Our Share
                                                                                   of Costs
                                                                                   Incurred
                                                          Project    Our Share      as of
                                                          Square      Of Total     September        Projected       Initial
             Property                   Location           Feet        Costs       30, 2005       Opening Date       Yield
---------------------------------   ------------------ ----------- ------------ -------------  ----------------  -----------
Mall Expansions:
----------------
                                                                                                   
Fayette Mall                        Lexington, KY         140,000       $22,961       $14,525     October-05         11%
Burnsville Center                   Burnsville, MN        145,000        24,612         9,249    Sep-05/Apr-06       9%
Stroud Mall                         Stroudsburg, PA         4,513         1,326           640     November-05        9%
Hanes Mall-Dick's Sporting Goods    Winston-Salem, NC      66,000        10,150           918       July-06          10%


Open-Air Centers:
-----------------
Southaven Towne Center              Southaven, MS         437,600        43,238        32,850     October-05         10%
Gulf Coast Town Center Phase I      Ft. Myers, FL         445,000        72,075        56,532     October-05         9%
Lakeview Point                      Stillwater, OK        205,000        20,307         4,647      Fall 2006         9%
                                                                                                Fourth Quarter
Gulf Coast Town Center Phase II     Ft. Myers, FL         743,000        94,047           886        2006            9%

Associated Center:
------------------
The Plaza at Fayette                Lexington, KY          76,000        25,140        11,688      Fall 2006         9%

Community Center:
-----------------
Cobblestone Village at Royal Palm   Royal Palm, FL        225,000        10,029         9,086     December-05        9%

Community Center Expansion:
---------------------------
Fashion Square                      Orange Park, FL        18,000         3,278         1,650     December-05       10%
                                                      -------------  ------------   -----------
                                                        2,505,113      $327,163      $142,671
                                                      =============  ============   ===========  

(a)  Amounts  shown are 100% of the cost and cost to date as CBL is funding  the
     cost at this time.



     There is a  construction  loan in place  for the costs of  Southaven  Towne
Center and Gulf Coast Towne Center.  There is a  construction  loan in place for
$9.0 million of the  construction  costs of The Plaza at Fayette.  The remaining
construction  costs  will be funded  with  operating  cash  flows and the credit
facilities.

     We have entered into a number of option  agreements for the  development of
future regional malls,  open-air centers and community  centers.  Except for the
projects  discussed under  Developments and Expansions above, we do not have any
other material capital commitments.

Acquisitions

     Effective June 1, 2005, we acquired a 70% joint venture  interest in Laurel
Park  Place,  a regional  mall in  Livonia,  MI,  for a purchase  price of $80.4
million. The purchase price consisted of $2.8 million in cash, the assumption of
$50.7 million of nonrecourse  debt that bears interest at a stated rate of 8.50%
and matures in December 2012 and the issuance of 571,700 special common units in
the Operating Partnership with a fair value of $26.9 million ($50.48 per special
common unit).  We recorded a debt premium of $10.6  million,  computed  using an
estimated  market  interest  rate of  5.00%,  since the debt  assumed  was at an
above-market  interest rate compared to similar debt  instruments at the date of
acquisition.  See Note 4 to the accompanying  consolidated  financial statements
for more information related to the purchase of Laurel Park Place.

                                       30


     On July 14, 2005, we purchased The Mall of Acadiana,  a super-regional mall
in Lafayette,  LA, for a cash purchase price of $175.0 million.  We also entered
into 10-year  lease  agreements  for 13.4 acres of land  adjacent to The Mall of
Acadiana,  which  provide us the right to purchase the land for a cash  purchase
price of $3.3  million  during the first year of the lease  term,  $3.5  million
during the second year and amounts  increasing  by 10% per year for each year of
the lease term thereafter.  After the first year, the seller may put the land to
us for a  price  equal  to the  amounts  set  forth  in the  previous  sentence.
Additionally,  we obtained a ten-year  option to acquire  another  adjacent 14.9
acres tract of land for a cash purchase  price of $3.2 million  during the first
six months of the option,  which increases to $3.4 million during the second six
months of the option and to $3.6 million  during the remaining nine years of the
option.

     On October 17, 2005,  we entered into  definitive  agreements  to acquire a
portfolio  of three  malls.  The  purchase  price will  consist of cash of $93.8
million, the assumption of long-term,  fixed-rate debt of $368.3 million and the
issuance  of  Series  K  Special  Common  Units   ("K-SCUs")  of  our  operating
partnership.  The K-SCUs will receive a dividend at a rate of 6.0%, or $2.85 per
K-SCU,  for the first year following the close of the  transaction and 6.25%, or
$2.96875  per K-SCU,  thereafter.  See Note 13 -  Subsequent  Events for further
discussion of this transaction.

     On October 24, 2005, we entered into a definitive agreement to form a 50/50
joint venture with affiliates of The Richard E. Jacobs Group, Inc. ("Jacobs") to
own Triangle Town Center and its associated and lifestyle centers, Triangle Town
Place and Triangle  Town  Commons,  in Raleigh,  NC. We will assume  management,
leasing and any future development responsibilities of the properties.

     The joint venture property is valued at $283.5 million. Concurrent with its
formation,  the  joint  venture  will  enter  into a new  ten-year,  fixed  rate
non-recourse  loan of $200.0  million,  secured by the collective  centers.  The
proceeds  from the loan  will be used to retire an  existing  construction  loan
totaling approximately $121.0 million with the balance to be paid to Jacobs as a
partial return of Jacobs' equity.  We will make an initial capital  contribution
of $2.3 million to the joint venture. The joint venture equity will be equalized
between Jacobs and us through our future contributions and through property cash
flow distributions.

     On November 7, 2005,  we purchased  Layton  Hills Mall, a regional  mall in
Layton (Salt Lake City), UT, for a cash purchase price of $121.4 million.

Dispositions

     We  received a total of $62.9  million in cash  proceeds  from the sales of
real estate  assets during the nine months ended  September 30, 2005.  The third
phase of the joint venture transaction with Galileo America,  which is discussed
in Note 2 to the unaudited consolidated financial statements,  closed on January
5, 2005 and  generated  net cash  proceeds of $42.5  million.  We received  $8.2
million in cash  proceeds and took a note  receivable  for $2.6 million from the
sale of five  community  centers that are located in Michigan.  We also received
$12.2 million in cash proceeds from the sales of ten outparcels.

     We  received  $21.6  million  in net  cash  proceeds  from  the sale of our
management  and advisory  contracts  with Galileo  America.  We also received an
acquisition fee of $8.0 million as a result of Galileo  America's  purchase of a
portfolio of properties from New Plan Excel Realty Trust, Inc. See Note 2 to the
accompanying  consolidated  financial statements for a more detailed description
of these transactions.

Other Capital Expenditures

     Including our share of unconsolidated  affiliates' capital expenditures and
excluding  minority  investor's  share of capital  expenditures,  we spent $34.3
million during the nine months ended  September 30, 2005 for tenant  allowances,
which  generate  increased  rents from tenants  over the terms of their  leases.
Deferred  maintenance  expenditures were $21.1 million for the nine months ended
September 30, 2005 and included $8.8 million for roof repairs and  replacements,
$7.6  million for  resurfacing  and  improved  lighting of parking lots and $4.7


                                       31


million  for other  capital  expenditures.  Renovation  expenditures  were $22.1
million for the nine months ended September 30, 2005.

     Deferred maintenance expenditures are generally billed to tenants as common
area  maintenance  expense,  and most are recovered over a 5- to 15-year period.
Renovation  expenditures  are primarily for remodeling and upgrades of malls, of
which approximately 30% is recovered from tenants over a 5- to 15-year period.

CRITICAL ACCOUNTING POLICIES

     Our  significant  accounting  policies  are  disclosed  in  Note  2 to  the
consolidated  financial  statements  included in the Company's  Annual Report on
Form  10-K for the year  ended  December  31,  2004.  The  following  discussion
describes our most critical accounting  policies,  which are those that are both
important  to the  presentation  of  our  financial  condition  and  results  of
operations and that require significant judgment or use of complex estimates.

Revenue Recognition

     Minimum  rental   revenue  from   operating   leases  is  recognized  on  a
straight-line  basis over the initial terms,  including  rent  holidays,  of the
related  leases.  Certain  tenants are required to pay percentage  rent if their
sales volumes exceed thresholds specified in their lease agreements.  Percentage
rent is recognized as revenue when the  thresholds  are achieved and the amounts
become determinable.

     We receive  reimbursements  from tenants for real estate taxes,  insurance,
common area maintenance,  utilities and other recoverable  operating expenses as
provided  in the lease  agreements.  Tenant  reimbursements  are  recognized  as
revenue  in the period the  related  operating  expenses  are  incurred.  Tenant
reimbursements  related to certain  capital  expenditures  are billed to tenants
over periods of 5 to 15 years and are recognized as revenue when billed.

     We receive management,  leasing and development fees from third parties and
unconsolidated  affiliates.  Management  fees are  charged  as a  percentage  of
revenues (as defined in the management  agreement) and are recognized as revenue
when earned. Development fees are recognized as revenue on a pro rata basis over
the development  period.  Leasing fees are charged for newly executed leases and
lease  renewals  and are  recognized  as revenue when  earned.  Development  and
leasing fees  received from  unconsolidated  affiliates  during the  development
period are  recognized  as revenue  to the extent of the  third-party  partners'
ownership interest. Fees to the extent of our ownership interest are recorded as
a reduction to our investment in the unconsolidated affiliate.

     Gains on sales of real estate assets are  recognized  when it is determined
that  the  sale  has  been  consummated,  the  buyer's  initial  and  continuing
investment  is  adequate,  our  receivable,  if any,  is not  subject  to future
subordination,  and the  buyer  has  assumed  the usual  risks  and  rewards  of
ownership of the asset. When we have an ownership interest in the buyer, gain is
recognized to the extent of the third party partner's ownership interest and the
portion of the gain attributable to our ownership interest is deferred.

Real Estate Assets

     We  capitalize  predevelopment  project  costs paid to third  parties.  All
previously  capitalized  predevelopment  costs are expensed when it is no longer
probable  that the project  will be  completed.  Once  development  of a project
commences,  all direct  costs  incurred  to  construct  the  project,  including
interest and real estate taxes, are capitalized.  Additionally,  certain general
and administrative  expenses are allocated to the projects and capitalized based


                                       32


on the amount of time  applicable  personnel  work on the  development  project.
Ordinary  repairs and maintenance are expensed as incurred.  Major  replacements
and  improvements  are capitalized and depreciated  over their estimated  useful
lives.

     All acquired real estate assets are accounted for using the purchase method
of accounting  and  accordingly,  the results of operations  are included in the
consolidated  statements of operations from the respective dates of acquisition.
The purchase  price is allocated to (i)  tangible  assets,  consisting  of land,
buildings  and  improvements,  and tenant  improvements,  (ii) and  identifiable
intangible  assets generally  consisting of above- and  below-market  leases and
in-place  leases.  We use estimates of fair value based on estimated cash flows,
using  appropriate  discount rates, and other valuation  methods to allocate the
purchase  price to the acquired  tangible  and  intangible  assets.  Liabilities
assumed  generally  consist of mortgage debt on the real estate assets acquired.
Assumed debt with a stated  interest rate that is  significantly  different from
market  interest  rates is recorded at its fair value based on estimated  market
interest rates at the date of acquisition.

     Depreciation is computed on a  straight-line  basis over estimated lives of
40 years for  buildings,  10 to 20 years for  certain  improvements  and 7 to 10
years for  equipment and  fixtures.  Tenant  improvements  are  capitalized  and
depreciated  on a  straight-line  basis  over  the  term of the  related  lease.
Lease-related  intangibles from acquisitions of real estate assets are amortized
over the remaining terms of the related leases.  Any difference between the face
value of the debt assumed and its fair value is  amortized  to interest  expense
over the remaining term of the debt using the effective interest method.

Carrying Value of Long-Lived Assets

     We periodically  evaluate  long-lived assets to determine if there has been
any  impairment in their  carrying  values and record  impairment  losses if the
undiscounted  cash flows estimated to be generated by those assets are less than
the assets' carrying amounts or if there are other indicators of impairment.  If
it is  determined  that an impairment  has  occurred,  the excess of the asset's
carrying value over its estimated fair value will be charged to operations.  See
Note 2 to the unaudited  consolidated  financial statements for a description of
the loss on  impairment  of real estate assets of $0.3 million that was recorded
in the nine months ended September 30, 2005. There were no impairment charges in
the three months ended  September  30, 2005 and 2004 or in the nine months ended
September 30, 2004.

RECENT ACCOUNTING PRONOUNCEMENTS

     In December  2004, the FASB released its final revised  standard,  SFAS No.
123 (Revised  2004),  "Share-Based  Payment."  SFAS No.  123(R)  requires that a
public  entity  measure the cost of equity  based  service  awards  based on the
grant-date fair value of the award. That cost will be recognized over the period
during  which an employee is  required  to provide  service in exchange  for the
award or the vesting  period.  No  compensation  cost is  recognized  for equity
instruments  for which employees do not render the requisite  service.  In April
2005, the Securities and Exchange  Commission  amended  Regulation S-X to modify
the  effective  date so that SFAS No. 123(R) can be adopted  beginning  with the
first interim  reporting period of the next fiscal year beginning after June 15,
2005 instead of the first  interim  period  beginning  after June 15, 2005.  The
Company   previously  adopted  the  fair  value  provisions  of  SFAS  No.  123,
"Accounting  for  Stock  Based  Compensation",  as  amended  by  SFAS  No.  148,
"Accounting  for  Stock-Based  Compensation  -  Transition  and  Disclosure - An
Amendment of FASB Statement No. 123" effective January 1, 2003. The Company does
not expect  the  adoption  of this  standard  to have a  material  effect on its
financial position or results of operations.

     In  December  2004,  FASB issued SFAS No.  153,  "Exchange  of  Nonmonetary
Assets,  an amendment of APB Opinion No. 29," which addresses the measurement of
exchanges of  nonmonetary  assets.  SFAS No. 153  eliminates  the  exception for
nonmonetary  exchanges  of  similar  productive  assets and  replaces  it with a
general exception for exchange of nonmonetary assets that do not have commercial
substance.  It  also  specifies  that  a  nonmonetary  exchange  has  commercial
substance  if the  future  cash  flows of the  entity  are  expected  to  change


                                       33


significantly as a result of the exchange.  SFAS No. 153 is effective  beginning
July 1, 2005. The adoption of SFAS No. 153 did not have a material impact on our
financial position, results of operations or cash flows.

     In June 2005, the FASB issued Emerging Issues Task Force ("EITF") Issue No.
04-05,  "Determining  Whether a General  Partner,  or the General  Partners as a
Group,  Controls  a Limited  Partnership  or  Similar  Entity  When the  Limited
Partners  Have Certain  Rights."  EITF Issue No. 04-05  provides a framework for
determining  whether a general  partner  controls,  and  should  consolidate,  a
limited partnership or a similar entity. EITF Issue No. 04-05 is effective after
June  29,  2005,  for  all  newly  formed  limited   partnerships  and  for  any
pre-existing limited partnerships that modify their partnership agreements after
that date.  General  partners of all other limited  partnerships are required to
apply the consensus no later than the beginning of the first reporting period in
fiscal  years  beginning  after  December  15,  2005.  We do not expect that the
adoption of EITF Issue No.  04-05 will have a material  impact on our  financial
position, results of operations or cash flows.
 
     In June 2005, the FASB issued FSP 78-9-1,  "Interaction  of AICPA Statement
of  Position  78-9 and EITF Issue No.  04-05."  The EITF  acknowledged  that the
consensus in EITF Issue No. 04-05 conflicts with certain aspects of Statement of
Position ("SOP") 78-9, "Accounting for Investments in Real Estate Ventures." The
EITF agreed that the  assessment  of whether a general  partner,  or the general
partners as a group, controls a limited partnership should be consistent for all
limited  partnerships,  irrespective  of the  industry  within which the limited
partnership operates.  Accordingly,  the guidance in SOP 78-9 was amended in FSP
78-9-1 to be consistent with the guidance in EITF Issue No. 04-05. The effective
dates  for  this FSP are the same as those  mentioned  above in EITF  Issue  No.
04-05.  We do not expect  that the  adoption  of FSP 78-9-1 will have a material
impact on our financial position, results of operations or cash flows.

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.  These  provisions  include clauses enabling the Company to
receive  percentage rent based on tenant's 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 rents if rents of the existing
leases are below the then  existing  market  rate.  Most of the  leases  require
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.

FUNDS FROM OPERATIONS

     Funds From  Operations  ("FFO") is a widely used  measure of the  operating
performance of real estate companies that  supplements net income  determined in
accordance with generally accepted accounting principles ("GAAP").  The National
Association  of Real  Estate  Investment  Trusts  ("NAREIT")  defines FFO as net
income  (computed in accordance with GAAP) excluding gains or losses on sales of
operating properties, plus depreciation and amortization,  and after adjustments
for   unconsolidated   partnerships   and  joint   ventures.   Adjustments   for
unconsolidated partnerships and joint ventures are calculated on the same basis.
We define  FFO  available  for  distribution  as  defined  above by NAREIT  less
dividends on preferred  stock.  Our method of  calculating  FFO may be different
from methods used by other REITs and, accordingly, may not be comparable to such
other REITs.

     We believe  that FFO  provides an  additional  indicator  of the  operating
performance of our properties without giving effect to real estate  depreciation
and  amortization,  which  assumes  the  value of real  estate  assets  declines
predictably over time. Since values of  well-maintained  real estate assets have
historically  risen  with  market  conditions,  we  believe  that  FFO  enhances
investors'  understanding  of our  operating  performance.  The use of FFO as an

                                       34


indicator of financial  performance  is influenced not only by the operations of
our properties and interest rates, but also by our capital structure.

     FFO does not represent cash flows from  operations as defined by accounting
principles   generally  accepted  in  the  United  States,  is  not  necessarily
indicative  of cash  available  to fund all cash flow  needs and  should  not be
considered  as an  alternative  to net income for  purposes  of  evaluating  our
operating performance or to cash flow as a measure of liquidity.

     FFO increased 52.1% for the three months ended September 30, 2005 to $114.4
million  compared to $75.2  million for the same period in 2004.  FFO  increased
33.9% for the nine months ended September 30, 2005 to $286.1 million compared to
$213.6 million for the same period in 2004. The New Properties  generated  65.1%
and  68.4% of the  growth  in FFO in the  three-month  and  nine-month  periods,
respectively.  Consistently  high portfolio  occupancy,  recoveries of operating
expenses,  increases in rental rates from  renewal and  replacement  leasing and
lower expenses related to bad debt and other charges against revenues  accounted
for  the  remaining  34.9%  and  31.6%  growth  in FFO in  the  three-month  and
nine-month periods, respectively.






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


                                                               Three Months Ended              Nine Months Ended
                                                                  September 30,                  September 30,
                                                              --------------------------    --------------------------
                                                                  2005           2004           2005          2004
                                                              ------------   -----------    -----------   ------------

                                                                                                     
Net income available to common shareholders                     $ 60,093        $19,764      $106,247        $71,661
Depreciation and amortization from:
    Consolidated properties                                       46,038         37,901       130,663        103,335
    Unconsolidated affiliates                                      2,207          1,862         6,127          4,605
    Discontinued operations                                           --            125            --            470
Minority interest in earnings of operating partnership            49,455         16,624        87,176         59,498
Minority investors' share of depreciation and
     amortization in shopping center properties                     (311)          (302)         (962)          (899)
(Gain) loss on disposal of:
    Operating real estate assets                                (42,882)          (200)      (42,708)       (23,765)
    Discontinued operations                                          (2)          (325)            84          (845)
Depreciation and amortization of non-real estate assets            (188)          (214)         (553)          (427)
                                                              ------------   -----------    -----------   ------------
Funds from operations                                           $114,410        $75,235      $286,074       $213,633
                                                              ============   ===========    ===========   ============
Diluted weighted average shares and potential dilutive
    common shares with operating partnership
    units fully converted                                        117,050        115,674       116,477        114,322


ITEM 3:  Quantitative and Qualitative Disclosures About Market Risk

     We are exposed to interest rate risk on our debt obligations and derivative
financial  instruments.  We may elect to use derivative financial instruments to
manage our  exposure  to changes in  interest  rates,  but will not use them for
speculative  purposes.  Our interest rate risk  management  policy requires that
derivative  instruments  be used for  hedging  purposes  only  and that  they be
entered  into only  with  major  financial  institutions  based on their  credit
ratings and other factors.

     Based  on  our  proportionate  share  of  consolidated  and  unconsolidated
variable  rate debt at  September  30,  2005,  a 0.5%  increase  or  decrease in
interest rates on this variable-rate debt would decrease or increase annual cash
flows by  approximately  $4.9  million  and,  after the  effect  of  capitalized
interest, annual earnings by approximately $4.6 million.

     Based on our proportionate  share of total  consolidated and unconsolidated
debt at September 30, 2005, a 0.5% increase in interest rates would decrease the
fair value of debt by  approximately  $52.3  million,  while a 0.5%  decrease in
interest  rates would  increase  the fair value of debt by  approximately  $53.7
million.

                                       35


     We did not have any derivative financial instruments during the nine months
ended September 30, 2005 or at September 30, 2004.

ITEM 4:  Controls and Procedures

     Because  of its  inherent  limitations,  internal  control  over  financial
reporting  may not prevent or detect  misstatements.  Also,  projections  of any
evaluation of its  effectiveness  to future periods are subject to the risk that
controls may become  inadequate  because of changes in  conditions,  or that the
degree of compliance with the policies or procedures may deteriorate.

     As of  the  end  of  the  period  covered  by  this  quarterly  report,  an
evaluation,  under  Rule  13a-15  of the  Securities  Exchange  Act of 1934  was
performed  under  the  supervision  of our  Chief  Executive  Officer  and Chief
Financial  Officer  and  with  the  participation  of  our  management,  of  the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the
Chief  Executive   Officer  and  Chief  Financial  Officer  concluded  that  our
disclosure  controls and  procedures  are  effective.  No change in our internal
control over  financial  reporting  occurred  during the period  covered by this
quarterly report that materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.


                           PART II - OTHER INFORMATION

ITEM 1:   Legal Proceedings

          None

ITEM 2:   Unregistered Sales of Equity Securities and Use of Proceeds

          The following table presents  information  with respect to repurchases
          of common stock made by us during the three months ended September 30,
          2005:


                                                                                            Maximum Number of
                                                        Average        Total Number of     Shares that May Yet
                                    Total Number         Price       Shares Purchased as      Be Purchased
                                      of Shares        Paid per       Part of a Publicly           Under the
          Period                    Purchased (1)      Share (2)           Announced Plan         Plan
          ------                    -------------      ---------     ---------------------  ---------------------

                                                                                           
          July 1-31, 2005                 --                --                  --                     --

          August 1-31, 2005             2,741          $ 41.855                 --                     --

          September 1-30, 2005            --                --                  --                     --
                                   ---------------- ---------------- --------------------- ---------------------
          Total                         2,741          $ 41.855                 --                     --
                                   ================ ================ ===================== =====================


          (1)    Represents shares surrendered to the Company by
                 employees to satisfy federal and state income tax
                 withholding requirements related to the vesting of
                 shares of restricted stock issued under the CBL &
                 Associates Properties, Inc. 1993 Stock Incentive Plan.

          (2)    Represents the market value of the common stock on the
                 vesting date for the shares of restricted stock, which
                 was used to determine the number of shares required to
                 be surrendered to satisfy income tax withholding
                 requirements.



                                       36


ITEM 3:   Defaults Upon Senior Securities

          None

ITEM 4:   Submission of Matters to a Vote of Security Holders

          None

ITEM 5:   Other Information

          None

ITEM 6:   Exhibits

10.5.4    Deferred Compensation Arrangement dated January 1, 1997, for Eric P.
          Snyder,  as previously  amended.  Incorporated  herein by reference to
          Exhibit  10.5.4 to the  Company's  Annual  Report on Form 10-K for the
          fiscal year ended December 31, 2002.+

10.5.10   Letter  amending  Deferred  Compensation  Arrangement  for Eric P.
          Snyder,  dated October 24, 2005.  Incorporated  herein by reference to
          Exhibit 10.5.10 to the Company's  Current Report on Form 8-K, filed on
          October 28, 2005.+

10.12.1   First  Amendment  to  Unsecured  Credit  Agreement by and among the
          Operating  Partnership and Wells Fargo Bank, N.A., et al., dated as of
          September 21, 2005

10.17.3   Second  Amendment to Sixth  Amended and Restated  Credit  Agreement
          between the  Operating  Partnership  and Wells  Fargo  Bank,  National
          Association, et al., dated September 21, 2005.

31.1      Certification  pursuant to Securities  Exchange Act Rule  13a-14(a) by
          the Chief Executive Officer, as adopted pursuant to Section 302 of the
          Sarbanes-Oxley Act of 2002.

31.2      Certification  pursuant to Securities  Exchange Act Rule  13a-14(a) by
          the Chief Financial Officer, as adopted pursuant to Section 302 of the
          Sarbanes-Oxley Act of 2002.

32.1      Certification  pursuant to Securities  Exchange Act Rule  13a-14(b) by
          the Chief Executive Officer, as adopted pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002.

32.2      Certification  pursuant to Securities  Exchange Act Rule  13a-14(b) by
          the Chief Financial  Officer as adopted pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002.

+         A management contract or compensatory plan or arrangement  required to
          be filed pursuant to Item 15(b) of this report.


                                       37



                                    SIGNATURE



     Pursuant to the  requirements  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.

                                            /s/ John N. Foy
                        --------------------------------------------------------
                                              John N. Foy
                        Vice Chairman of the Board, Chief Financial Officer and
                                               Treasurer
                                (Authorized Officer of the Registrant,
                                     Principal Financial Officer)

Date: November 9, 2005


                                       38



                                                           INDEX TO EXHIBITS
          Exhibit
           Number             Description

10.5.4    Deferred Compensation Arrangement dated January 1, 1997, for Eric P.
          Snyder,  as previously  amended.  Incorporated  herein by reference to
          Exhibit  10.5.4 to the  Company's  Annual  Report on Form 10-K for the
          fiscal year ended December 31, 2002.+

10.5.10   Letter  amending  Deferred  Compensation  Arrangement  for Eric P.
          Snyder,  dated October 24, 2005.  Incorporated  herein by reference to
          Exhibit 10.5.10 to the Company's  Current Report on Form 8-K, filed on
          October 28, 2005.+

10.12.1   First  Amendment  to  Unsecured  Credit  Agreement by and among the
          Operating  Partnership and Wells Fargo Bank, N.A., et al., dated as of
          September 21, 2005

10.17.3   Second  Amendment to Sixth  Amended and Restated  Credit  Agreement
          between the  Operating  Partnership  and Wells  Fargo  Bank,  National
          Association, et al., dated September 21, 2005.

31.1      Certification  pursuant to Securities  Exchange Act Rule  13a-14(a) by
          the Chief Executive Officer, as adopted pursuant to Section 302 of the
          Sarbanes-Oxley Act of 2002.

31.2      Certification  pursuant to Securities  Exchange Act Rule  13a-14(a) by
          the Chief Financial Officer, as adopted pursuant to Section 302 of the
          Sarbanes-Oxley Act of 2002.

32.1      Certification  pursuant to Securities  Exchange Act Rule  13a-14(b) by
          the Chief Executive Officer, as adopted pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002.

32.2      Certification  pursuant to Securities  Exchange Act Rule  13a-14(b) by
          the Chief Financial  Officer as adopted pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002.

+         A management contract or compensatory plan or arrangement  required to
          be filed pursuant to Item 15(b) of this report.


                                       39