Kimco Realty Corporation (KIM)

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Kimco Realty (KIM)

Q4 2011 Earnings Call

February 09, 2012 10:00 am ET


David F. Bujnicki - Senior Director of Investor Relations

David B. Henry - Vice Chairman, Chief Executive Officer, President, Chief Investment Officer, Director and Member of Executive Committee

Scott G. Onufrey - Vice President and Managing Director of Kimco Realty Advisors

Glenn G. Cohen - Chief Financial Officer, Executive Vice President and Treasurer

Michael V. Pappagallo - Chief Operating Officer and Executive Vice President

Milton Cooper - Executive Chairman and Chairman of Executive Committee


Paul Morgan - Morgan Stanley, Research Division

Quentin Velleley - Citigroup Inc, Research Division

Craig R. Schmidt - BofA Merrill Lynch, Research Division

Jonathan Habermann - Goldman Sachs Group Inc., Research Division

Christy McElroy - UBS Investment Bank, Research Division

Alexander David Goldfarb - Sandler O'Neill + Partners, L.P., Research Division

Jeffrey J. Donnelly - Wells Fargo Securities, LLC, Research Division

Nathan Isbee - Stifel, Nicolaus & Co., Inc., Research Division

Richard C. Moore - RBC Capital Markets, LLC, Research Division

Cedrik Lachance - Green Street Advisors, Inc., Research Division

Vincent Chao - Deutsche Bank AG, Research Division

Michael W. Mueller - JP Morgan Chase & Co, Research Division

Michael Bilerman - Citigroup Inc, Research Division

Todd Lukasik - Morningstar Inc., Research Division



Good morning, ladies and gentlemen, and welcome to Kimco's Fourth Quarter Earnings Conference Call. Please be aware, today's conference is being recorded. [Operator Instructions] At this time, it is my pleasure to introduce your speaker today, Dave Bujnicki. Please proceed, Mr. Bujnicki.

David F. Bujnicki

Thanks, Cynthia. Thank you all for joining Kimco's Fourth Quarter 2011 Earnings Call. With me on the call this morning is Milton Cooper, Executive Chairman; Dave Henry, President and Chief Executive Officer; Mike Pappagallo, Chief Operating Officer; Glenn Cohen, Chief Financial Officer, as well as other key executives, who will be available to address questions at the conclusion of our prepared remarks.

As a reminder, statements made during the course of this call represent the company and management's hopes, intentions, beliefs, expectations or projections of the future, which are forward-looking statements. It is important to note that the company’s actual results could differ materially from those projected in such forward-looking statements. Information concerning factors that could cause actual results to differ materially from those forward-looking statements is contained in the company's SEC filings.

During this presentation, management may make reference to certain non-GAAP financial measures that we believe help investors to better understand Kimco's operating results. Examples include, but are not limited to, funds from operations and net operating income. Reconciliations of these non-GAAP financial measures are available on our website.

Finally, during the Q&A portion of the call, we request that you respect the limit of one question, so that all of our callers have the opportunity to speak with management. Feel free to return to the queue, if you have additional questions.

With that, I'll now turn the call over to Dave Henry.

David B. Henry

Good morning. Thanks for calling in today. I'm a little under the weather, so I'm going to ask Scott Onufrey to read my prepared remarks, but I will be available for any easy questions after that.

Scott G. Onufrey

We are very pleased with our fourth quarter and full year results, and we believe they represent continued solid and steady progress on our key goals and objectives. Our earnings release contains the detailed numbers for the quarter, but I would like to highlight certain areas and provide further updated information on others. Overall, and step-by-step, our retail portfolio continues to strengthen as evidenced by the key metrics or, as we like to say, our vital signs. Seven straight quarters of positive same-store NOI growth, positive leasing spreads of 4.9% and a 30 basis point increase on our occupant -- in our occupancy, altogether present a strong and improving picture.

The economy and our retailers are both showing tentative signs of shrugging off the anemic recovery and focusing on growth. With virtually no new development in our retail sector, sustained population growth and improving GDP numbers, we are beginning to see an increase in effective rents, particularly in our strong core markets, such as Long Island, South Florida, Baltimore, Washington, Puerto Rico and Canada. We also continue to make good progress in reducing our non-retail portfolio.

From $1.2 billion in early 2009, we now stand at $495 million, representing less than 4.5% of our total assets. Our largest remaining single investment, the InTown Suites portfolio is attracting increasing levels of interest as we have now broadened the marketing efforts with our partner's permission and as hotel properties are again beginning -- being aggressively pursued by investors. There are several parties which have conducted extensive due diligence, and we are confident that we will be able to sell the portfolio in the near term.

At the property level, InTown continues to perform very well with RevPAR increasing substantially. We also have a significant number of other non-retail properties under contract, which will further reduce the amount of the remaining non-retail portfolio.

Under Mike Pappagallo's leadership, we are also making strong progress on our recycling initiatives. In 2011, we sold 31 nonstrategic retail properties, while at the same time, we bought 17 high-quality shopping centers, virtually all in our core markets. We are committed to continuing to sell our nonstrategic shopping centers, which will upgrade our portfolio and permit us to concentrate on superior properties in our core markets.

Internationally, our Canadian portfolio is maintaining its very high occupancy and benefiting from strong retailer expansion, highlighted by targets commitment to open 24 -- 25 stores in Canada, each quarter beginning in March 2013. The Canadian economy remains strong with 2% GDP growth forecast for 2012, continued low interest rates and moderate unemployment levels. We are pleased that we are able to buy a high-quality grocery-anchored center in December in the Greater Vancouver market, and we hope to close on another attractive grocery anchored center in Edmonton shortly.

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