CBL 10-K & 10-Q changes, risk factors and insider trading

An increasingly complex and shifting landscape related to reporting ESGsustainability factors and metrics may impose additional costs and expose us to new risks.

While cybersecurity attacks, to date, have not materially impacted our financial results, future cyberattacks, cyberintrusions or other disruptions of our information technology networks - including any loss of access to cloud computing services or other critical vendors - could disrupt our operations, compromise confidential information and adversely impact our financial condition.condition, and the cost of preventative measures - which may not be effective in all cases - continues to increase.

Substantially all our consolidated assets consist of investments in real estate properties. Because real estate investments are relatively illiquid, our ability to quickly sell one or more properties in our portfolio in response to changing economic, financial and investment conditions is limited. The real estate market is affected by many factors, such as general economic conditions, availability of financing, interest rates and other factors, including supply and demand for space, that are beyond our control. We cannot predict whether we will be able to sell any property for the price or on the terms we set, or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We also cannot predict the length of time needed to find a willing purchaser and to close the sale of a property. In addition, currentprevailing economic and capital market conditions might make it more difficult for us to sell properties or might adversely affect the price we receive for properties that we do sell, as prospective buyers might experience increased costs of debt financing or other difficulties in obtaining debt financing.

We own partial interests in 4 malls, 5 outlet centers, 1 lifestyle center, 1211 open-air centers, 2 office buildings, a hotelbuildings and a2 hotel development.hotels. Of those interests, 2 malls, 3 outlet centers, 32 open-air centers, a hotelcenters and a2 hotel developmenthotels are all owned by unconsolidated joint ventures and are managed by a property manager that is affiliated with the third-party partner, which receives a fee for its services. The third-party partner of each of these properties controls the cash flow distributions, although our approval is required for certain major decisions. We have interests in two outlet centers that are owned by consolidated joint ventures and managed by a property manager that is affiliated with the third-party partner, which receives a fee for its services.

Energy costs, repairs, maintenance and capital improvements to common areas of our properties, janitorial services, administrative, property and liability insurance costs and security costs are typically allocable to our properties’ tenants. Our lease agreements typically provide that the tenant is responsible for a portion of the common area maintenance ("CAM") and other operating expenses. The majority of our current leases require an equal periodic tenant reimbursement amount for our cost recoveries, which serves to fix our tenants’ CAM contributions to us. In these cases, a tenant will pay a fixed amount, or a set expense reimbursement amount, subject to annual increases, regardless of the actual amount of operating expenses. The tenant’s payment remains the same regardless of whether operating expenses increase or decrease, causing us to be responsible for any excess amounts or to benefit from any declines. As a result, the CAM and tenant reimbursements that we receive may or may not allow us to recover a substantial portion of these operating costs.

We may become subject to laws or regulations related to climate change, which could cause our business, results of operations and financial condition to be impacted adversely. The federal government has enacted, and someSome of the states and localities in which we operate may enact,enact certain climate change laws and regulations or have begun regulating carbon footprints and greenhouse gas emissions. Although these laws and regulations have not had any known material adverse effects on our business to date, they could result in substantial costs, including compliance costs, increased energy costs, retrofit costs and construction costs, including monitoring and reporting costs, and capital expenditures for environmental control facilities and other new equipment. We have implemented strategies to support our continued effort to reduce energy and water consumption, greenhouse gas emissions and waste production across our portfolio. We cannot predict how future laws and regulations, or future interpretations of current laws and regulations, related to climate change will affect our business, results of operations and financial condition. Additionally, the potential physical impacts of climate change on our operations are highly uncertain, and would be particular to the geographic circumstances in areas in which we operate. These may include changes to global weather patterns, which could include local changes in rainfall and storm patterns and intensities, water shortages, changing sea levels and changing temperature averages or extremes. These impacts may adversely affect our properties, our business, financial condition and results of operations.

An increasingly complex and shifting landscape related to reporting ESGsustainability factors and metrics may impose additional costs and expose us to new risks.

InvestorsCertain investors and other stakeholders have become more focused on understanding how companies address a variety of ESGsustainability factors.factors in their businesses. As they evaluate investment decisions, many investors look not only at company disclosures but also to ESGsustainability rating systems that have been developed by third parties to allow ESGsuch comparisons among companies. Although we participate in a number of these ratings systems, we do not participate in all such systems. The criteria used in these ratings systems may conflict and change frequently, and we cannot predict how these third parties will score us, nor can we have any assurance that they score us accurately or other companies accurately or that other companies have provided them with accurate data. We supplement our participation in ratings systems with published disclosures of our ESGsustainability initiatives and activities, but some investors may desire other disclosures that we do not provide. Failure to participate in certain of the third-party ratings systems, failure to score well in those ratings systems or failure to provide certain ESGtypes of sustainability disclosures could result in reputational harm when investors compare us to other companies, and could cause certain investors to be unwilling to invest in our stock which could adversely impact our stock price.

Clauses in leases with certain tenants in our properties may include inducements, such as reduced rent and tenant allowance payments or other clauses such as co-tenancy or sales-based kick-out provisions, which can reduce our rents and Funds From Operations (“FFO”), and adversely impact our financial condition and results of operationoperations and the value of our properties. This impact could be exacerbated by the loss of one or more significant tenants, due to lease rejections in bankruptcies or as a result of consolidations in the retail industry.

As new technologies emerge, the relationship among customers, retailers, and shopping centers are evolving on a rapid basis and we may not be able to adapt to such new technologies and relationships on a timely basis. Our relative size may limit the capital and resources we are willing to allocate to invest in strategic technology to enhance the mall experience, which may make our properties relatively less desirable to anchors, mall tenants, and consumers. Additionally,Tenants aalso smallmore but increasing number of tenantscommonly utilize ourtheir propertiesphysical as showrooms orstores as part of an omni-channel strategy (allowing customers to shop seamlessly through various sales channels). As a result, customers may make purchases through other sales channels during or immediately after visiting our properties, with such sales not being captured currently in our tenant sales figures or monetized in our minimum or overage rents.

We have experienced adverse security incidents. All incidents experienced to date have been minor in scope and impact, were resolved quickly, had no material impact on the Company’s reputation, financial performance, customer or vendor relationships, and management believes they have posed no material risk of potential litigation or regulatory investigations or actions. We expect unauthorized parties to continue to attempt to gain access to our systems or information, and/or those of our business partners and service providers. These risks may also be intensified by factors such as an increased volume and complexity of cyberattacks during periods of heightened geopolitical tensions and emerging technological innovations, such as the use of AI tools and quantum computing, that may enable malicious actors to develop more advanced social engineering attacks, circumvent security controls, evade detection and remove forensic evidence. Cyberattacks targeting our infrastructure could result in a full or partial disruption of our operations, as well as those of our tenants.

Future litigation could have a material adverse effect on our business, financial condition and results of operation.operations.

All the properties in our portfolio are required to comply with the Americans with Disabilities Act (the “ADA”). Compliance with the ADA requirements could require removal of access barriers, and non-compliance could result in the imposition of fines by the United States government, awards of damages to private litigants, or both. While the tenants to whom our portfolio is leased are obligated to comply with ADA provisions,provisions within their leased premises, if required changes within their leased premises involve greater expenditures than anticipated, or if the changes must be made on a more accelerated basis than anticipated, the ability of tenants to cover costs could be adversely affected. Furthermore, we are required to comply with ADA requirements within the common areas of the properties in our portfolio and we may not be able to pass on to our tenants any costs necessary to remediate any common area ADA issues. In addition, we are required to operate the properties in compliance with fire and safety regulations, building codes and other land use regulations, as they may be adopted by governmental agencies and bodies and become applicable to our portfolio. We may be required to make substantial capital expenditures to comply with, and we may be restricted in our ability to renovate or redevelop the properties subject to, those requirements and to comply with the provisions of the ADA. The resulting expenditures and restrictions could have a material adverse effect on our financial condition and operating results.

At December 31, 2024,2025, our pro-rata share of consolidated and unconsolidated debt outstanding, excluding debt discounts and deferred financing costs, was approximately $2,737.2$2,622.6 million. At December 31, 2024,2025, our total share of consolidated and unconsolidated debt, excluding debt discounts and deferred financing costs, maturing in 2025,2026, 20262027 and 20272028 giving effect to all maturity extensions, is approximately $132.2$670.2 million, $727.3$649.5 million and $729.9$289.1 million, respectively. Of the $670.2 million that is maturing in 2026, $48.3 million is related to a loan secured by a property that was placed in receivership in connection with the foreclosure process. Additionally, we have $90.5$9.7 million of debt, at our share, which matured prior to December 31, 2024, which includes two loans totaling $49.4 million2025, for which we areanticipate in discussions withreturning the lender regarding a modification/extension and a $41.1 million loan secured by a property that was placed into receivership in connection withto the foreclosure process.lender. See Note 7 and Note 8 to the consolidated financial statements for additional information.

Our properties are located principally in the southeastern and midwestern United States. Our properties located in the southeastern United States accounted for approximately 50.3%51.4% of our total pro-rata share of revenues from all properties for the year ended December 31, 20242025 and currently include 1820 malls, 43 lifestyle centers, 2 outlet centers, 1817 open-air centers, 32 office buildings, a hotelbuildings and a2 hotel development.hotels. Our properties located in the midwestern United States accounted for approximately 21.8%24.7% of our total pro-rata share of revenues from all properties for the year ended December 31, 20242025 and currently include 15 malls and 2 open-air centers. Further, our properties located in our five largest metropolitan area markets – Chattanooga, TN; St. Louis, MO; Nashville, TN; Lexington, KY; Laredo, TX; and Fayetteville,Kansas NCCity, KS – accounted for approximately 6.8%,6.7%, 4.4%,6.5%, 4.3%,5.0%, 4.0%4.3% and 3.6%,4.2%, respectively, of our total pro-rata share of revenues for the year ended December 31, 2024.2025. No other market accounted for more than 3.5%3.7% of our total pro-rata share of revenues for the year ended December 31, 2024.2025.

Our results of operations and funds available for distribution to shareholders therefore will be impacted generally by economic conditions in the southeastern and midwestern United States, and particularly by the results experienced at properties located in our five largest market areas. While we have properties located in fivesix states across the southwestern, northeastern and western regions, we will continue to look for opportunities to geographically diversify our portfolio in order to minimize dependency on any particular region; however, the expansion of the portfolio through both acquisitions and developments is contingent on many factors including consumer demand, competition and economic conditions.

As a partnership, the Operating Partnership is not subject to federal income tax on its income. Instead, each of its partners, including us, is allocated, and may be required to pay tax with respect to, such partner's share of its income. We cannot assure you that the IRS will not challenge the status of the Operating Partnership or any other subsidiary partnership or limited liability company in which we own an interest as a disregarded entity or partnership for federal income tax purposes, or that a court would not sustain such a challenge. If the IRS were successful in treating the Operating Partnership or any such other subsidiary as an entity taxable as a corporation for federal income tax purposes, we could fail to meet (and if the Operating Partnership were subject to such treatment, would fail to meet) the gross income tests and certain of the asset tests applicable to REITs and, accordingly, we would likely cease to qualify as a REIT. Also, the failure of the Operating Partnership or any subsidiary partnerships or limited liability company to qualify as a disregarded entity or partnership for applicable income tax purposes could cause it to become subject to federal and state corporate income tax, which would reduce significantly the amount of cash available for debt service and for distribution to its partners or members, including us.

We are a self-managed, self-administered, fully integrated REIT that is engaged in the ownership, development, acquisition, leasing, management and operation of regional shopping malls, outlet centers, lifestyle centers, open-air centers and other properties. As of December 31, 2024,2025, we own interests in 8786 properties, consisting of 4547 malls, 2725 open-air centers, five outlet centers, fivefour lifestyle centers and five other properties, including single-tenant and multi-tenant outparcels. As of December 31, 2024,2025, our shopping centers are located in 2122 states, and are primarily in the southeastern and midwestern United States. We have elected to be taxed as a REIT for federal income tax purposes.

Rental revenues were $20.1$65.1 million lowerhigher;

Gain on deconsolidation was $11.6$33.9 million higher;

Equity in earnings was $7.9$30.3 million lowerhigher; and

Gain on extinguishmentsales of debtreal estate assets was $4.1$57.6 million lower.higher.

Our focus is on continuing to execute our strategy to improve occupancy, drive rent growth and transform the offerings available at our properties to include a targeted mix of retail, service, dining, entertainment and other non-retail uses, primarily through the re-tenanting of former anchor locations as well as diversification of in-line tenancy. This operational strategy is also supported by our balance sheet strategy of reducing overall debt, extending our debt maturity schedule and lowering our overall cost of borrowings to limit maturity risk, as well as improving net cash flow and enhancing enterprise value. WhileIn July 2025, we closed on the industryacquisition of four enclosed malls: Ashland Town Center in Ashland, KY, Mesa Mall in Grand Junction, CO, Paddock Mall in Ocala, FL, and ourSouthgate Company continue to face challenges, some of which may not beMall in ourMissoula, control,MT. weThe believeacquisition thatrepresents significant progress in the strategies in place to improve occupancy, diversify our tenant mix and redevelop our properties will continue to contribute to stabilizationexecution of our portfolio optimization strategy as we utilize proceeds from sales of non-core assets and revenuesopen-air centers, such as the sales of two open-air centers, The Promenade and Fremaux Town Center, to invest in futurehigher years.cash flow yielding opportunities.

Properties that were in operation for the entire year during both 20242025 and 20232024 are referred to as the “20242025 Comparable Properties.” Since January 2023,2024, we have opened, deconsolidatedconsolidated, deconsolidated, acquired and disposed of the following properties:

We consider properties undergoing major redevelopmentredevelopment, orproperties being considered for repositioningrepositioning, properties where we intend to renegotiate the terms of the debt secured by the related property or return the property to the lender as non-core. As of December 31, 2024,2025, Brookfield Square, Harford Mall, Laurel Park Place and Southpark Mall waswere designated as non-core.

Revenues (in thousands)

Operating Expenses (in thousands)

Depreciation and amortization expense decreasedincreased primarily due to the addition of tangible assets and intangible lease assets recognized upon the consolidation of three malls in December 2024, as well as the acquisition of four malls in July 2025, which resulted in an increase of $61.7 million during the current year. The increase was partially offset by tenant improvement and intangible in-place lease assets recognized upon the adoption of fresh start accounting on November 1, 2021 becoming fully depreciated or amortized since the prior-yearprior period.year. TheAlso, dispositions and deconsolidations of properties accounted for $4.2an $11.5 million ofdecrease in the decreasecurrent during 2024year as compared to the prior-yearprior period.year.

Interest and other income increaseddecreased $2.5 million during the year ended December 31, 20242025 as compared to the prior-yearprior periodyear primarily due to holding U.S. Treasury securities that carrycarried higherlower interest rates in the current-yearcurrent period and cash held in interest-bearing accounts.year.

Interest expense decreasedincreased $18.4$21.5 million during the year ended December 31, 20242025 as compared to the prior-yearprior period.year. The decreaseincrease was primarily due to $11.9 million lesshigher accretion of property-level debt discounts asand certain discounts became fully accreted since the prior-year period. Also, the decrease inproperty-level interest expense associated with the consolidation of three malls in December 2024. The increase was impactedpartially offset by thelower paydowninterest ofexpense on the secured term loan due to paydowns and principal amortization that has occurred since the retirementprior ofyear, as well as a lower variable interest rate in the loancurrent secured by Brookfield Square Anchor Redevelopment.year.

We are a self-managed, self-administered, fully integrated REIT that is engaged in the ownership, development, acquisition, leasing, management and operation of regional shopping malls, outlet centers, lifestyle centers, open-air centers and other properties. See Note 1 to the condensed consolidated financial statements for information on our property interests as of MarchJune 31,30, 2026. We have elected to be taxed as a REIT for federal income tax purposes.

Items increasing net income for the three months ended MarchJune 31,30, 2026 compared to the prior-year period:

Gain on sales of real estate assets was $20.1$12.3 million lowerhigher; and PropertyLoss operatingon expenseimpairment was $2.4$1.5 million higher.lower.

Our focus is on continuing to execute our strategy to improve occupancy, drive rent growth and transform the offerings available at our properties to include a targeted mix of retail, service, dining, entertainment and other non-retail uses, primarily through the re-tenanting of former anchor locations as well as diversification of in-line tenancy. This operational strategy is also supported by our balance sheet strategy of reducing overall debt, extending our debt maturity schedule and lowering our overall cost of borrowings to limit maturity risk, as well as improving net cash flow and enhancing enterprise value. During the first quarterhalf of 2026, we reduced our debt balance and extended our debt maturity schedule through refinancings, such as the refinancing of the $634.0 million secured term loan with two new loans, which extended the maturity date five years. Additionally, we acquired Gateway Mall in Lincoln, NE for approximately $43.8 million and sold Hammock Landing for $78.5 million consistent with our strategic focus on growing our mall portfolio and increasing cash flow through capital recycling.

Properties that were in operation for the entire year during 2025 and the threesix months ended MarchJune 31,30, 2026 are referred to as the "Comparable Properties." Since January 2025, we have acquired, deconsolidated and disposed of the following properties:

We consider properties undergoing major redevelopment, properties being considered for repositioning, properties where we intend to renegotiate the terms of the debt secured by the related property or return the property to the lender as non-core. As of MarchJune 31,30, 2026, Arbor Place, Brookfield Square, Eastland Mall, Harford Mall, Jefferson Mall, Laurel Park Place, Old Hickory Mall, Parkdale Mall, Parkdale Crossing, Southpark Mall, The Outlet Shoppes at Gettysburg and York Galleria were designated as non-core.

Comparison of the Three Months Ended MarchJune 31,30, 2026 to the Three Months Ended MarchJune 31,30, 2025

Rental revenues increased primarily due to the acquisition of four malls in July 2025 and one mall in March 2026, which resulted in an increase of $10.0$11.6 million during the current-year period. The increase was partially offset by $6.6$6.4 million of rental revenues associated with properties sold or deconsolidated since the prior-year period. Also, rental revenues at the comparable properties increased $1.9$0.9 million compared to the prior-year period.

Property operating expenses increased primarily due to the acquisition of four malls in July 2025 and one mall in March 2026, which resulted in an increase of $2.3$2.6 million during the current-year period. Also, property operating expenses increased at the comparable properties compared to the prior-year period primarily due to insurancehigher property repair and maintenance expense and payroll related costs. The increase was partially offset by a reduction of $1.8$1.4 million of total property operating expenses associated with properties sold or deconsolidated since the prior-year period.

General and administrative expense decreased $2.1$2.5 million primarily due to lower compensation and stock-based compensation expense in the current-year period as compared to the prior-year period.

Interest expense decreased $4.3$5.6 million during the threesix months ended MarchJune 31,30, 2026 as compared to the prior-year period. The decrease was primarily due to lower interest expense on the secured term loan due to pay downs since the prior-year period, as well as refinancing the secured term loan during the current-year period. Also, the decrease was due to property-level debt discounts becoming fully accreted orupon deconsolidatedmaturity of the related loans, as well as a deconsolidation, since the prior-year period. The decrease was partially offset due to theadditional modifiedinterest 2032 non-recourse bank loan. The outstanding balance ofon the 2032 non-recourse bank loanloan, as it was increasedmodified sinceto increase the prior-yearloan periodbalance into conjunction withfinance the acquisition of four malls in July 2025.2025, as well as an increase in default interest expense.

For the threesix months ended MarchJune 31,30, 2026, we recorded a $35.3$41.3 million gain on deconsolidation related to Jefferson Mall.Mall and The propertyOutlet wasShoppes at Gettysburg. The properties were deconsolidated due to a loss of control when itthey waswere placed into receivership in connection with the foreclosure process.

During the threesix months ended MarchJune 31,30, 2026, we recognized $1.4$15.0 million of gain on sales of real estate assets related to the sale of aneight outparcel.outparcels. During the threesix months ended MarchJune 31,30, 2025, we recognized $21.5a $22.9 million of gain on sales of real estate assets related to the sales of Imperial Valley Mall, Monroeville Mall, Annex at Monroeville, three outparcels associated with the Monroeville Mall properties andproperties, a land parcel associated with Imperial Valley Mall.Mall and an outparcel.

Equity in earnings increased $3.4$19.2 million during the threesix months ended MarchJune 31,30, 2026 as compared to the prior-year period. The increase was primarily due to recognizingthe equitysale inof earningsHammock on a distribution where our investment is below zero.Landing.

We include a property in our same-center pool when we have owned all or a portion of the property since January 1 of the preceding calendar year and it has been in operation for both the entire preceding calendar year and current year-to-date period. New properties are excluded from same-center NOI until they meet these criteria. Properties excluded from the same-center pool that would otherwise meet these criteria are categorized as excluded properties. We exclude properties which are under major redevelopment or are being considered for repositioning, and where we are working or intend to work with the lender on a restructure of the terms of the loan secured by the property or convey the secured property to the lender (“Excluded Properties”). As of MarchJune 31,30, 2026, Arbor Place, Brookfield Square, Eastland Mall, Harford Mall, Jefferson Mall, Laurel Park Place, Old Hickory Mall, Parkdale Mall, Parkdale Crossing, Southpark Mall, The Outlet Shoppes at Gettysburg and York Galleria were classified as Excluded Properties.

A reconciliation of our same-center NOI to net income for the three and six months ended MarchJune 31,30, 2026 and 2025 is as follows (in thousands):

Same-center NOI increased 2.1%1.5% for the three months ended MarchJune 31,30, 2026 as compared to the prior-year period. The $2.0$1.4 million increase for the three months ended MarchJune 31,30, 2026 compared to the same period in 2025 primarily consisted of a $1.8$1.6 million increase in revenuesrevenues, andpartially offset by a $0.2 million decreaseincrease in operating expenses. Rental revenues were $1.6 million higher primarily due to higher minimum rents and percentage rents in the current-year period. The increase in rental revenues was partially offset by an unfavorable variance in the estimate for uncollectable revenues during the current-year period as compared to the prior-year period. Property operatingOperating expenses decreasedincreased in the current-year period primarily due to lowerhigher realproperty estaterepair taxes,and maintenance expense and payroll related costs, which was partially offset by higherlower propertyreal operatingestate expenses primarily due to insurance related costs.taxes.

The following is a summary of the total square feet of leases signed in the three and six months ended MarchJune 31,30, 2026 and 2025:

Average annual base rents per square foot are based on contractual rents in effect as of MarchJune 31,30, 2026 and 2025, including the impact of any rent concessions. Average annual base rents per square foot for comparable small shop space of less than 10,000 square feet were as follows for each property type:

Results from new and renewal leasing of comparable small shop space of less than 10,000 square feet during the three and six months ended MarchJune 31,30, 2026 for spaces that were previously occupied, based on the contractual terms of the related leases inclusive of the impact of any rent concessions, are set forth below. Rent concessions typically consist of periods of free rent. The impact of such concessions was not material for the period presented below.

As of MarchJune 31,30, 2026, we had $283.0$302.4 million available in unrestricted cash and U.S. Treasury securities, as well as unrestricted cash of $22.5$20.3 million, at our share, associated with unconsolidated joint ventures. Our total pro rata share of debt, excluding unamortized deferred financing costs and debt discounts, at MarchJune 31,30, 2026 was $2,582.8$2,533.5 million. We had $88.6$94.4 million in restricted cash at MarchJune 31,30, 2026 related to cash held in escrow accounts for insurance, real estate taxes, capital expenditures and tenant allowances as required by the terms of certain mortgage notes payable, as well as amounts related to cash management agreements with lenders of certain property-level mortgage indebtedness, which are designated for debt service and operating expense obligations. We also had restricted cash of $1.4$6.9 million related to the properties that secure the 2032 non-recourse bank loan of which we may receive a portion via distributions quarterly in accordance with the provisions of the 2032 non-recourse bank loan.

During the threesix months ended MarchJune 31,30, 2026, we continued to reinvest the cash from maturing U.S. Treasury securities into new U.S. Treasury securities. We designated our U.S. Treasury securities as available-for-sale. As of MarchJune 31,30, 2026, our U.S. Treasury securities have maturities through MarchMay 2027. Subsequent to MarchJune 31,30, 2026, we redeemed and purchased additional U.S. Treasury securities. See Note 15 for more information.

During the threesix months ended MarchJune 31,30, 2026, we sold anHammock outparcel,Landing and eight outparcels, which generated gross proceeds of $1.5$61.4 million.million at our share.

In January 2026, the $48.6 million loan secured by Jefferson Mall entered default. In February 2026, the property was placed into receivership and we deconsolidated the property in conjunction with the property entering receivership. In May 2026, the $9.7 million loan, at our share, secured by The Outlet Shoppes at Gettysburg was placed into receivership and we deconsolidated the property due to a loss of control. For the six months ended June 30, 2026, we recognized gain on deconsolidation of $41.3 million. We anticipate returning the properties to the lender. See Note 8.