CBL & Associates Properties (CBL) Q4 2006 earnings summary

Executive summary

• Revenue increased to $1.002 billion in 2006 from $907.5 million in 2005; income from operations was $416.1 million versus $402.4 million. Net income fell to $117.5 million from $162.5 million.

• Portfolio growth included five new developments and eight property expansions opened in 2006, totaling 1.5 million square feet.

• Operating Partnership FFO was $390.1 million, essentially level with $390.0 million in 2005; excluding $30.3 million of one-time Galileo America fees and gains in 2005, FFO increased 8.5%.

Financial highlights

• Total revenues were $1.002 billion, up from $907.5 million; rental revenue and tenant reimbursements rose $106.0 million, including $91.2 million from newer properties and $14.8 million from comparable properties.

• Income from operations increased to $416.1 million from $402.4 million, while interest expense rose to $257.1 million from $208.2 million.

• Net income available to common shareholders was $86.9 million, down from $131.9 million; diluted EPS was $1.33 versus $2.03.

• Gains on real estate sales were $14.5 million, versus $53.6 million in 2005, which included $44.2 million from the Galileo America interest redemption and $21.6 million from selling management contracts.

Outlook and guidance

• Approximately 3.1 million square feet of developments and expansions, representing $507.4 million of net investment, were scheduled to open during 2007–08.

• Planned 2007 investment included four mall renovations estimated at $47.9 million and redevelopments at two malls estimated at $30.7 million, funded by operating cash flow and credit facilities.

• Management expected to retire or refinance $91.8 million of debt scheduled to mature in 2007; suitable financing and returns would govern future development and acquisitions.