Kimco Realty Corp. (KIM) reported a 7.5% increase in fourth quarter revenues from rental properties. Revenues for the reported quarter increased to $211.8 million from $196.99 million in the year-ago quarter. For full year 2009, revenues from rental properties climbed to $786.89 million from $758.70 million in 2008. 

The company reported an increase in fourth quarter 2009 FFO (fund from operations) to $119.5 million or 31 cents per share from $10.5 million or 4 cents in the year-ago period. Fund from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income. The rise in FFO for the quarter reflected significantly lower impairment charges as well as revenue growth. 

Kimco recognized non-cash impairment charges, net of related tax benefits, of $0.7 million in the reported quarter as against $111.8 million in the year-ago quarter. Excluding the charges, FFO for the quarter came in at 31 cents per share compared to 46 cents in the fourth quarter of 2008. Overall occupancy in Kimco’s combined shopping center portfolio was 92.8 % at the end of the quarter. In the U.S. portfolio, occupancy was 92.4% as on Dec 31, 2009. 

For full year 2009, FFO came in at $287.1 million or 82 cents per share compared to $522.9 million or $2.02 in 2008. The year-over-year decline in FFO was attributable to the reduction in transaction activity of approximately $153 million and decrease in recurring income from Kimco’s structured investments and non-retail investments of approximately $35 million. For fiscal 2009, Kimco recognized non-cash impairment charges, net of tax, of $179.2 million compared to $121.5 million in 2008. Excluding impairment charges, FFO for fiscal 2009 was $466.3 million or $1.33 per share compared to $644.3 million or $2.49 per share in 2008. 

The fourth quarter of 2009 saw the company recognizing $23 million of income related to its structured investments and other non-retail assets of which $17 million were recurring and the balance transactional. Kimco had 287 properties in investment management funds with 14 institutional partners at the end of 2009. The company realized fee income of $12.1 million from its investment management business in the fourth quarter of 2009, including $7.8 million in management fees, $1.3 million in transaction-based fees and $3.0 million in other ongoing fees. 

During the year, Kimco executed a total of 2,334 leases spanning 8.4 million square feet out of which 1,123 were new leases (3.2 million square feet) and 1,211 were lease renewals (5.2 million square feet). During 2009, Kimco executed 700 new leases spanning 2.5 million square feet coupled with 1,016 lease renewals for 4.8 million square feet in its U.S. portfolio. About 421 new leases totaling 1.5 million square feet were executed in the U.S. portfolio during the quarter. Same-property net operating income (NOI) for the reported quarter fell 1.1 % from the year-ago quarter. 

The average increase in contractual base rent on a cash basis for new leases in the U.S. portfolio came in at 1.8%. Same space new leases included the re-tenanting of 21 bankrupt junior anchors (15 former Linens N Things and six former Circuit City). However, the leasing spread on new leases stands at 9.5 %, excluding these 21 leases. Same-property NOI fell 2.7% for full year 2009 compared to 2008. During the year, Kimco successfully tapped the capital markets sourcing approximately $2 billion in debt and equity for its balance sheet. The company declared a quarterly cash dividend of 16 cents per share, payable on Apr 15, 2010 to stockholders of record on April 5, 2010. 

During the year, Kimco completed two equity offerings generating net proceeds in excess of $1.1 billion. The company also reduced its consolidated net debt to EBITDA ratio by 1.3x from the end of 2008. 

At year-end 2009, Kimco owned equity interests in 1,478 retail properties comprising 152 million square feet of leasable space across 45 U.S. states, Puerto Rico, Canada, Mexico and South America. Furthermore, the company had interests in 125 retail properties spanning 16.4 million square feet in Canada. Kimco expects funds from operations between $1.07 and $1.15 per share in fiscal 2010. The guidance excludes any estimate for impairments.
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