[LETTERHEAD OF KIMCO REALTY CORPORATION]
FOR IMMEDIATE RELEASE
October 28, 2002
KIMCO REPORTS THIRD QUARTER OPERATING RESULTS
AND ANNOUNCES INCREASE IN COMMON STOCK DIVIDEND
NEW HYDE PARK, NY October 28, 2002-- Kimco Realty Corporation (NYSE: KIM), the
nation's largest owner and operator of neighborhood and community shopping
centers, today announced that third quarter net income for the period ended
September 30, 2002, increased 2.5 percent to $60.8 million from $59.3 million
for the same period last year. Third quarter net income per diluted common share
(EPS) was $0.53 versus $0.54 per diluted common share a year ago. Funds from
operations (FFO), a widely accepted supplemental measure of REIT performance,
rose 6.1 percent to $78.9 million, from $74.3 million for the same period last
year. On a diluted per common share basis, FFO matched the prior year amount of
$0.75. FFO for the third quarter 2002 excludes gains on sales of operating
properties of approximately $1.0 million or $0.01 per diluted common share.
For the nine months ended September 30, 2002, net income increased 4.6 percent
to $182.7 million from $174.7 million for the same period last year. Net income
per diluted common share was $1.60, equaling the results for the same period in
the previous year. Funds from operations rose 9.5 percent to $237.0 million for
the nine-month period from $216.5 million in the year earlier period. On a
diluted per common share basis, funds from operations increased 1.8 percent to
$2.25 from $2.21 reported a year ago. FFO for the nine months ended September
30, 2002 excludes gains on sales of operating properties of $1.5 million or
$0.01 per diluted common share and $3.0 million or $0.03 per diluted common
share for the same period last year.
Leasing activity in the Company's core portfolio of shopping centers was strong
during the third quarter, resulting in 126 new leases executed totaling 1.3
million square feet of gross leasable area, including the lease up of more than
500,000 square feet of vacancy created by retailer bankruptcies. As a result,
the Company experienced positive absorption of space of 467,000 square feet and
portfolio occupancy increased 0.9 percent to 85.9 percent. In addition, the
Company has transactions pending on approximately 1.7 million square feet of
space formerly occupied by Kmart.
Kimco Developers, Inc. (KDI), the Company's merchant building business recorded
pre-tax gains of $4.9 million from the sale of its Cedar Hill Crossing project,
in Cedar Hill, Texas, its Wakefield Crossing project in Raleigh, North Carolina
and a parcel at its project in San Antonio, Texas. KDI's merchant building
pipeline consists of 18 projects with potential gross leasable area in excess of
5.1 million square feet. During the quarter, the Company invested an additional
$31.9 million in these projects.
Kimco's management confirmed that the current First Call consensus estimate for
FFO per share in the fourth quarter of 2002 of $0.78 is achievable and that
consensus estimates for the full-year ending 2002 of $3.03 is also within its
range of guidance. Management estimates net income will be $0.55 per share for
the fourth quarter of 2002 and $2.15 per share for the full-year. Furthermore,
management provided guidance for FFO per share in 2003 of between $3.13 and
$3.23 per share, and estimates net income in 2003 will be between $2.21 and
$2.29 per share.
Dividend Increase
Kimco's Board of Directors approved a common stock dividend increase, raising
the quarterly dividend payable per common share to $0.54 from the current
quarterly level of $0.52 per common share. Kimco has raised its dividend for 11
consecutive years, from an initial annual rate of $0.78 per share (adjusted for
stock splits) in 1992 to the current annual rate of $2.16 per share. This level
of increase is consistent with the Company's objective of maintaining a
conservative dividend payout ratio while providing shareholders a growing source
of income. The Board declared the first quarterly dividend at the increased rate
payable on January 15, 2003 to shareholders of record on January 2, 2003.
Investment Activity
Kimco has continued to expand its shopping center investment portfolio. Since
June 30, 2002, the Company has acquired investment interests in 30 shopping
centers and three parcels of land for development, with an aggregate cost of
approximately $551.8 million. This amount includes the recently announced
Westlake property transaction. Highlights of the Company's investment activities
are as follows:
- Kimco acquired interests in 11 shopping centers totaling 3.0
million square feet of gross leasable area and three development
projects through its Canadian joint venture with RioCan REIT for
an aggregate cost of USD$211.3 million. Kimco's joint venture with
RioCan has grown to 30 properties in five provinces totaling 6.9
million square feet of gross leasable area. Kimco owns a 50%
interest in the 97.1 percent leased portfolio.
- Kimco Retail Opportunity Fund (KROP), an entity that Kimco manages
and owns a 20 percent interest, acquired four shopping centers for
an aggregate cost of $53.1 million. This portfolio now consists of
13 shopping centers totaling 1.3 million square feet.
- The Company acquired two shopping centers for the Kimco Income
REIT (KIR), a joint venture with institutional investors, which
Kimco manages and owns a 43.3 percent interest. The properties
were purchased for $113.8 million in separate transactions. KIR
also sold a property in Aurora, Illinois for $2.4 million. KIR now
consists of 67 shopping centers totaling 13.5 million square feet
in 21 states. The portfolio is approximately 97.4% leased.
- In separate transactions, Kimco's preferred equity business
acquired interests in five properties for an aggregate investment
of $17.1 million. Kimco's preferred equity program provides
capital for shopping center owners where Kimco generates a
preferred rate of return.
- Kimco purchased two grocery-anchored shopping centers located in
Northeast Mexico. Planigrupo, one of the largest retail leasing
and development companies in Mexico, will manage the properties.
Plaza Real Saltillo is a recently developed 174,000 square foot
shopping center, anchored by a 74,000 square foot HEB grocery
store located in Saltillo, Mexico. The property was acquired for
$22.9 million. Plaza Real Sendero Norte is a 109,000 square foot
shopping center anchored by a 98,000 square foot HEB grocery store
located in Monterrey, Mexico. Kimco purchased additional land for
the development of Phase II of this property. The completed
shopping center and additional land for development was acquired
for $12.8 million.
- A Kimco-led group has received approval from the bankruptcy court
to provide Ames Department Stores with a $100 million secured
revolving credit facility for capital to facilitate its
liquidation. Under the agreement, Kimco will earn fees and
interest at a fixed rate, and in addition, has the opportunity to
earn additional interest based on the disposition of real estate
assets by Ames. This new facility, which is collateralized by the
leased and fee owned real estate assets of Ames, will replace the
existing DIP financing provided by Kimco.
Kimco, a publicly-traded real estate investment trust, has specialized in
shopping center acquisitions, development and management for over 35 years.
Kimco owns and operates the nation's largest portfolio of neighborhood and
community shopping centers with interests in 569 properties comprising
approximately 79.0 million square feet of leasable space located throughout 41
states, Canada and Mexico. For further information refer to the Company's web
site at www.kimcorealty.com.
Safe Harbor Statement: The statements in this release state the Company's and
management's hopes, intentions, beliefs, expectations or projections of the
future and 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. Factors that could cause actual results to differ
materially from current expectations include general economic conditions, local
real estate conditions, increases in interest rates, increases in operating
costs and real estate taxes. Additional information concerning factors that
could cause actual results to differ materially from those forward-looking
statements is contained from time to time in the Company's SEC filings,
including but not limited to the Company's report on Form 10-K for the year
ended December 31, 2001. Copies of each filing may be obtained from the Company
or the SEC.
Contact:
Kimco Realty Corporation
Scott Onufrey
(516) 869-7190
sonufrey@kimcorealty.com
(continued next page)
Kimco Realty Corporation
Condensed Consolidated Statements of Income
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
---- ---- ---- ----
Real Estate Operations:
Revenues from rental property $ 111,101 $ 113,330 $ 340,629 $ 350,344
--------- --------- --------- ---------
Rental property expenses:
Rent 2,928 3,097 9,353 9,454
Real estate taxes 16,192 14,194 48,712 42,199
Operating and maintenance 11,125 10,072 35,015 35,998
--------- --------- --------- ---------
30,245 27,363 93,080 87,651
--------- --------- --------- ---------
80,856 85,967 247,549 262,693
Income from investment in retail store leases 154 857 671 2,684
--------- --------- --------- ---------
Net operating income 81,010 86,824 248,220 265,377
Equity in income of KIR 3,839 3,200 11,648 9,123
Equity in income of other real estate JV's, net 8,895 22,846 23,028 26,069
Minority interests in income of partnerships, net (262) (352) (738) (1,489)
Gain on sale of development properties 4,894 590 9,174 6,806
Management and other fee income 3,023 1,608 10,524 5,844
Depreciation and amortization (18,971) (18,368) (56,371) (54,969)
--------- --------- --------- ---------
Income from real estate operations 82,428 96,348 245,485 256,761
--------- --------- --------- ---------
Other Investments:
Interest, dividends and other investment income 8,136 2,685 29,516 15,577
Other income/(loss), net 2,371 (279) 6,257 520
---------S --------- --------- ---------
10,507 2,406 35,773 16,097
--------- --------- --------- ---------
Interest expense (22,296) (22,084) (66,337) (67,353)
General and administrative (7,933) (7,056) (23,123) (21,483)
Gain on sale of operating properties -- -- -- 3,040
--------- --------- --------- ---------
Income from continuing operations 62,706 69,614 191,798 187,062
before income taxes
Provision for income taxes (2,591) (10,521) (10,091) (13,138)
--------- --------- --------- ---------
Income from continuing operations 60,115 59,093 181,707 173,924
(continued next page)
Discontinued Operations:
Income/(loss) from operating properties (325) 157 (513) 732
disposed
Gain on disposition of operating properties 966 -- 1,512 --
--------- --------- --------- -----------
Income from discontinued operations 641 157 999 732
--------- --------- --------- -----------
Net income 60,756 59,250 182,706 174,656
Preferred dividends (4,609) (6,543) (13,828) (19,683)
--------- --------- --------- -----------
Net income available to common
shareholders $ 56,147 $ 52,707 $ 168,878 $ 154,973
========= ========= ========= ===========
Per common share:
Income from continuing operations:
- Basic $ 0.53 $ 0.55 $ 1.61 $ 1.61
========= ========= ========= ===========
- Diluted $ 0.53 $ 0.54(1) $ 1.59 $ 1.59(1)
========= ========= ========= ===========
Net income:
- Basic $ 0.54 $ 0.55 $ 1.62 $ 1.62
========= ========= ========= ===========
- Diluted $ 0.53 $ 0.54(1) $ 1.60 $ 1.60(1)
========= ========= ========= ===========
Note: Reclassifications: Certain amounts in the prior period have been
reclassified in order to conform with the current period's presentation.
(continued next page)
Kimco Realty Corporation
Funds From Operations
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
---- ---- ---- ----
Funds From Operations
Net income $ 60,756 $ 59,250 $ 182,706 $ 174,656
Depreciation and amortization 19,198 18,490 57,181 55,629
Depreciation and amortization - KIR 3,300 2,700 9,600 7,450
Depreciation and amortization -
other real estate joint ventures 1,200 450 2,850 1,500
Gain on sale of operating properties (966) -- (1,512) (3,040)
Preferred stock dividends (4,609) (6,543) (13,828) (19,683)
--------- --------- --------- ---------
Funds from operations $ 78,879 $ 74,347 $ 236,997 $ 216,512
========= ========= ========= =========
Per common share:
- Basic $ 0.75 $ 0.77 $ 2.27 $ 2.26
========= ========= ========= =========
- Diluted $ 0.75 $ 0.75(1) $ 2.25 $ 2.21(1)
========= ========= ========= =========
Weighted Average Share Information Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
---- ---- ---- ----
Weighted average shares -
- Basic 104,539 96,187 104,418 95,615
- Diluted 105,491 101,276(1) 105,464 100,589(1)
(1) Reflects the potential impact if the Class D Preferred Stock was converted
to common stock at the beginning of the period. Net income available to
common shareholders and FFO would be increased by $1,934 and $5,854 for
the three and nine months ended September 30, 2001, respectively, which
represents the dividends paid on the Class D Convertible Preferred Stock
for that period.
(continued next page)
Kimco Realty Corporation
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
September 30, December 31,
2002 2001
---- ----
Assets:
Operating real estate, net of accumulated
depreciation of $503,003 and $452,877, respectively $ 2,571,691 $ 2,543,956
Real estate under development 235,687 204,530
Investment and advances in KIR 178,379 170,641
Investments and advances in other real estate joint ventures 249,115 98,527
Mortgages and other financing receivables 142,626 53,611
Investment in retail store leases 8,643 9,885
Cash and cash equivalents 43,495 93,847
Marketable securities 65,268 82,997
Accounts and notes receivable 48,004 48,074
Other assets 145,699 78,711
----------- -----------
$ 3,688,607 $ 3,384,779
=========== ===========
Liabilities:
Notes payable $ 1,256,250 $ 1,035,250
Mortgages payable 278,742 286,929
Construction loans payable 19,201 5,900
Other liabilities, including minority interests in partnerships 226,346 166,616
----------- -----------
$ 1,780,539 $ 1,494,695
----------- -----------
Stockholders' Equity:
Preferred stock, $1.00 par value, authorized 5,000,000 shares Class A Preferred
Stock, $1.00 par value, authorized 345,000
shares issued and outstanding 300,000 shares 300 300
Aggregate liquidation preference $75,000
Class B Preferred Stock, $1.00 par value, authorized 230,000
shares issued and outstanding 200,000 shares 200 200
Aggregate liquidation preference $50,000
Class C Preferred Stock, $1.00 par value, authorized 460,000
shares issued and outstanding 400,000 shares 400 400
Aggregate liquidation preference $100,000
Class D Convertible Preferred Stock, $1.00 par value, authorized 700,000 shares
issued and outstanding 0 and
92,390 shares, respectively -- 92
Aggregate liquidation preference $0 and $23,098,
respectively
Common Stock, $.01 par value, authorized 200,000,000 shares
issued and outstanding 104,559,024 and
103,352,570 shares, respectively 1,046 1,034
Paid-in capital 1,984,086 1,976,442
Cumulative distributions in excess of net income (87,230) (93,131)
----------- -----------
1,898,802 1,885,337
Accumulated other comprehensive income 11,764 7,310
Notes receivable from officer stockholders (2,498) (2,563)
----------- -----------
1,908,068 1,890,084
----------- -----------
$ 3,688,607 $ 3,384,779
=========== ===========
Reclassifications:
Certain amounts in the prior period have been reclassified in order to conform
with the current period's presentation.
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