Real estate investment trust Kilroy Realty Corp. (KRC) reported Monday a year-over-year increase in funds from operations for the fourth quarter as revenues grew amid increased occupancy. The company's rental income increased, while tenant reimbursements decreased. Both funds from operations per share and quarterly revenues topped analysts' expectation.
The Los Angeles, California-based company reported funds from operations of $29.49 million or $0.54 per share for the fourth quarter, higher than $17.68 million or $0.39 per share in the prior-year quarter.
On average, 13 analysts polled by Thomson Reuters expected earnings of $0.53 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Net income for the quarter was $1.54 million or $0.02 per share, compared to a net loss of $3.01 million or $0.08 per share in the year-ago quarter.
Revenues from continuing operations for the quarter increased to $82.94 million from $67.38 million in the same quarter last year, and topped eight Wall Street analysts' consensus estimate of $79.05 million.
Rental income increased to $76.41 million from $60.69 million in the prior-year quarter, while tenant reimbursements declined to $5.91 million from $6.18 million in the year-ago quarter.
At the end of the fourth quarter, the company's stabilized portfolio totaled 14.0 million square feet and was 89.1 percent occupied, up from 82.8 percent at the end of the fiscal year 2010.
Total expenses for the quarter rose to $59.72 million from $57.65 million in the corresponding quarter last year. Total expenses include property expenses of $15.66 million, up from $12.10 million in the year-ago quarter, and depreciation and amortization expenses of $29.10 million, higher than $21.02 million last year.
"We made substantial progress on a number of fronts during 2010. We signed leases on close to 2.0 million square feet of space, increasing our stabilized occupancy by more than six percentage points. We expanded our geographic footprint and asset base with strategic acquisitions, many LEED certified, in high potential, high value West Coast markets," President and CEO John Kilroy, Jr. said in a statement.
For fiscal 2010, the company reported FFO of $106.64 million or $2.05 per share, lower than $107.16 million or $2.60 per share in the prior year. Analysts expected the company to report earnings of $2.04 per share for fiscal 2010.
Net income for the year plunged to $4.51 million or $0.07 per share from $21.79 million or $0.53 per share in the year ago.
Revenues from continuing operations for the quarter increased to $301.98 million from $279.43 million in the previous year. The Street was looking for full-year 2010 revenues of $298.98 million.
"Looking forward, our focus will remain on a strong leasing program, a conservatively managed balance sheet, and an opportunistic growth program that may include acquisitions or development, depending upon market conditions and tenant demand," Kilroy, Jr. added.
KRC closed Monday's trading session at $38.14, up $0.59 or 1.57 percent on a volume of 0.70 million shares.
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