CBL & Associates Properties (CBL) Q4 2007 earnings summary

Executive summary

• 2007 was described as an unusually disappointing year: FFO declined after 13 years of growth, pressured by delayed tenant openings, flat stabilized-mall sales, inflation and higher interest costs.

• Cautious optimism for 2008 reflected 2007 portfolio enhancements, scheduled development openings and fourth-quarter acquisitions, balanced against slower consumer spending and retailer growth plans.

Financial highlights

• FY 2007 revenue was $1,040.6M vs. $995.5M in 2006; operating income was $425.0M vs. $414.1M.

• Net income was $89.1M vs. $117.5M; net income available to common shareholders was $59.4M vs. $86.9M, and diluted EPS was $0.90 vs. $1.33.

• Operating Partnership FFO fell to $361.5M from $390.1M; FFO allocable to common shareholders was $203.6M vs. $215.8M. 2007 FFO included an $18.5M securities impairment.

• Rental revenue and tenant reimbursements rose $43.7M: $29.8M from new properties and $13.9M from comparable properties.

Outlook and guidance

• 2008 outlook was cautiously optimistic, supported by 2007 expansions and enhancements, scheduled new developments and acquired-property contributions.

• Retailers were off to a slower start in 2008 and some reduced 2009 growth plans; a guarded operating approach was planned.

• Refinancing or extension of 2008 maturities was anticipated; development and acquisition activity was contingent on financing availability and approved investment returns.