Kimco Realty Reports Record Operating Results for 2002
NEW HYDE PARK, N.Y.--(BUSINESS WIRE)--Feb. 13, 2003--
Achieves Full Year FFO Per Diluted Common Share of $3.03;
Fourth Quarter FFO Per Diluted Common Share Increases to $0.78
Kimco Realty Corporation (NYSE: KIM), the nation's largest owner
and operator of neighborhood and community shopping centers, today
announced that fourth quarter net income for the period ended December
31, 2002, increased 1.7 percent to $63.0 million from $61.9 million
for the same period last year. Fourth quarter net income per diluted
common share (EPS) was $0.56, unchanged from a year ago. Funds from
operations (FFO), a widely accepted supplemental measure of REIT
performance, rose 4.2 percent to $82.7 million, from $79.4 million for
the same period last year. On a diluted per common share basis, FFO
increased 1.3 percent to $0.78 from $0.77 for the same period last
year. FFO for the fourth quarter excludes gains on dispositions of
operating properties, gains on early extinguishment of debt and
adjustments to property carrying values, which total a net amount of
approximately $0.5 million, or less than $0.01 per diluted common
share.
For the twelve months ended December 31, 2002, net income
increased 3.9 percent to $245.7 million from $236.5 million for the
same period last year. Net income per diluted common share remained
unchanged at $2.16 from the same period in the previous year. Funds
from operations rose 8.0 percent to $319.7 million for the
twelve-month period from $295.9 million in the year earlier period. On
a diluted per common share basis, FFO increased 1.3 percent to $3.03
from $2.99 reported a year ago. FFO for the year excludes gains on
dispositions of operating properties, gains on early extinguishment of
debt and adjustments to property carrying values, which total a net
amount of approximately $2.0 million, or $0.02 per diluted common
share. FFO for 2001 excludes gains on dispositions of operating
properties of $3.0 million, or $0.03 per diluted common share. A
complete reconciliation containing adjustments from GAAP net income to
FFO is included in this release.
During the quarter, Kimco increased the occupancy of its parent
shopping center portfolio to 87.8 percent from 86.0 percent at
September 30, 2002 and from a low of 85.3 percent at June 30, 2002.
The increase in occupancy was the result of new leasing, property
acquisitions and property sales. For the quarter, Kimco signed 118 new
leases totaling 1.4 million square feet bringing the full year total
leases signed in the parent portfolio to 380 or 3.9 million square
feet. Average base rent on these new leases is approximately $7.18 per
square foot.
In addition to the leases signed during the year in the Company's
parent portfolio, 59 leases were signed totaling 461,000 square feet
in the Kimco Income REIT (KIR) and 184 leases totaling 1.5 million
square feet in the Company's merchant building business, Kimco
Developers, Inc. (KDI). For the Company's entire property portfolio,
which is comprised of interests in approximately 90 million square
feet, the Company signed 623 new leases totaling 5.9 million square
feet.
Kimco continues to have success leasing and disposing of vacancies
that resulted from the Kmart bankruptcy. During the fourth quarter,
the Company executed eight leases and sold seven former Kmart sites.
During the year, the Company made significant progress repositioning
29 of the 31 leases rejected by Kmart. As previously announced,
management does not anticipate the recent store closing announcement
by Kmart will have a material impact on the Company's expected 2003
operating results.
Investment Activities
During the year ended 2002, Kimco acquired interests in 107
shopping centers with an aggregate cost of approximately $1.4 billion.
Highlights of the Company's 2002 investment activities is as follows:
-- Kimco's parent portfolio acquired interests in 50 shopping
centers valued at approximately $726.3 million. This portfolio
includes the Company's international investment activity,
which consisted of acquiring 24 shopping centers and four
development projects in its Canadian joint venture with RioCan
REIT, and acquiring two grocery-anchored shopping centers
located in Mexico. The total property value of the
international investments acquired is approximately $471.5
million. When completed, the developments will add an
additional $78 million in value to the portfolio.
-- Kimco, together with Prometheus Southeast Retail Trust,
completed the merger and privatization of Konover Property
Trust, which has been renamed Kimsouth Realty, Inc. Kimsouth
consisted of 36 shopping centers valued at approximately
$280.9 million at closing.
-- Sixteen properties valued at approximately $187.7 million were
acquired in the Company's Kimco Retail Opportunity Portfolio
(KROP).
-- During 2002, KIR acquired five shopping centers for an
aggregate purchase price of approximately $213.5 million and
on February 4, 2003 acquired a shopping center in Seattle,
Washington for approximately $88.4 million.
-- KDI invested approximately $148.6 million in existing
development projects and new development properties acquired.
KDI had property sales aggregating approximately $128 million
and generating net pre-tax gains for Kimco of approximately
$15.9 million for the year.
In addition to shopping center acquisitions, during 2002 Kimco
continued to invest in the Company's complementary business lines as
follows:
-- Kimco originated approximately $141 million in financing
receivables secured by retail real estate. The Company
provides capital to retailers where the underwritten value of
the real estate is significantly greater than principal amount
of the loan. Commitments were made to retailers including
Ames, Frank's Nursery, Gottschalks and Shopko.
-- A Kimco-led venture has sold or reached agreements on 49 of
the 54 Kmart sites for which it acquired the asset designation
rights to in June 2002. The venture's initial investment was
approximately $43 million.
-- Kimco provided preferred equity capital of approximately $25
million in nine real estate investments, including five
grocery anchored centers. This program provides capital to
real estate owners and developers.
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 606 properties comprising approximately 90.0 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.
Kimco Realty Corporation
Consolidated Statements of Income
(In thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2002 2001 2002 2001
-------- -------- -------- --------
Real Estate Operations:
- ----------------------
Revenues
from rental property $115,891 $110,270 $450,829 $450,408
-------- -------- -------- --------
Rental property expenses:
Rent 3,104 3,258 12,392 12,649
Real estate taxes 16,151 14,391 62,991 55,717
Operating and maintenance 12,857 10,273 47,214 45,759
-------- -------- -------- --------
32,112 27,922 122,597 114,125
-------- -------- -------- --------
83,779 82,348 328,232 336,283
Equity in income of real estate
joint ventures, net 12,623 6,866 35,569 20,217
Minority interests in income of
partnerships, net (1,691) (193) (2,430) (1,682)
Income from other real estate
investments 2,348 13,194 16,038 38,113
Mortgage financing income 6,674 1,011 19,424 2,318
Gain on sale of development
properties 6,705 6,611 15,879 13,418
Management and other fee income 3,668 1,953 14,193 7,797
Depreciation and amortization (19,138) (18,030) (74,223) (71,717)
-------- -------- -------- --------
Income from real estate
operations 94,968 93,760 352,682 344,747
-------- -------- -------- --------
Other Investments:
- -----------------
Interest, dividends and
other investment income 3,080 3,018 18,557 17,286
Other income / (loss), net (3,725) (2,310) 2,532 (2,184)
-------- -------- -------- --------
(645) 708 21,089 15,102
-------- -------- -------- --------
Interest expense (21,211) (21,639) (86,896) (88,592)
General and administrative
expenses (8,792) (7,205) (31,904) (28,680)
Gain on early extinguishment
of debt 19,033 -- 19,033 --
Adjustment of property
carrying values (12,530) -- (12,530) --
Gain on disposition of
operating properties -- -- -- 3,040
-------- -------- -------- --------
Income from continuing
operations before income
taxes 70,823 65,624 261,474 245,617
Provision for income taxes (2,812) (6,238) (12,904) (19,376)
-------- -------- -------- --------
Income from continuing
operations 68,011 59,386 248,570 226,241
Discontinued Operations:
- -----------------------
Income/(loss) from
discontinued operating
properties (including
adjustment of property
carrying values of
($20,500) in 2002 and
gain on early extinguishment
of debt of $3,222 in 2002) (16,315) 2,496 (15,680) 10,297
Gain on disposition of
operating properties,
net 11,266 -- 12,778 --
-------- -------- -------- --------
Income/(loss) from
discontinued operations (5,049) 2,496 (2,902) 10,297
-------- -------- -------- --------
Net income 62,962 61,882 245,668 236,538
Preferred dividends (4,609) (4,871) (18,437) (24,553)
-------- -------- -------- --------
Net income available to
common shareholders $ 58,353 $ 57,011 $227,231 $211,985
======== ======== ======== ========
Per common share:
Income from continuing
operations:
- Basic $ 0.61 $ 0.55 $ 2.20 $ 2.09
======== ======== ======== ========
- Diluted $ 0.60(1) $ 0.53(2) $ 2.19(1) $ 2.05(2)
======== ======== ======== ========
Net income:
- Basic $ 0.56 $ 0.58 $ 2.18 $ 2.20
======== ======== ======== ========
- Diluted $ 0.56(1) $ 0.56(2) $ 2.16(1) $ 2.16(2)
======== ======== ======== ========
Weighted average shares
outstanding:
- Basic 104,578 98,399 104,458 96,317
======== ======== ======== ========
- Diluted 107,463(1)102,831(2)105,969(1)101,163(2)
======== ======== ======== ========
Income subject to income
taxes $ 8,108 $ 15,829 $ 36,477 $ 48,439
Note: Reclassifications: Certain amounts in the prior period have
been reclassified in order to conform with the current period's
presentation.
Kimco Realty Corporation
Funds From Operations
(In thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2002 2001 2002 2001
-------- -------- -------- --------
Funds From Operations
Net income $ 62,962 $ 61,882 $245,668 $236,538
Gain on disposition of
operating properties (11,266) -- (12,778) (3,040)
Depreciation and
amortization 19,492 18,579 76,674 74,209
Depreciation and
amortization - real estate
joint ventures 5,329 3,768 17,779 12,718
Gain on early extinguishment
of debt (22,255) -- (22,255) --
Adjustment of property
carrying values 33,030 -- 33,030 --
Preferred stock dividends (4,609) (4,871) (18,437) (24,553)
-------- -------- -------- --------
Funds from operations $ 82,683 $ 79,358 $319,681 $295,872
======== ======== ======== ========
Per common share:
- Basic $ 0.79 $ 0.81 $ 3.06 $ 3.07
======== ======== ======== ========
- Diluted $ 0.78(1) $ 0.77(2)$ 3.03(1) $ 2.99(2)
======== ======== ======== ========
Weighted Average Share Three Months Ended Year Ended
Information December 31, December 31,
2002 2001 2002 2001
-------- -------- -------- --------
Weighted average shares -
- Basic 104,578 98,399 104,458 96,317
======== ======== ======== ========
- Diluted 107,463(1)102,831(2)105,969(1)101,163(2)
======== ======== ======== ========
(1) Reflects the potential impact if certain units were converted to
common stock at the beginning of the period. Net income available
to common shareholders and FFO would be increased by $1,423 for
the three months and year ended December 31, 2002 reflecting the
distributions associated with the units.
(2) 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 $261 and $6,115 for the three months and year ended December
31, 2001, respectively, which represent the dividends paid on the
Class D Convertible Preferred Stock for the applicable periods.
Kimco Realty Corporation
Consolidated Balance Sheets
(In thousands, except per share data)
December 31, December 31,
2002 2001
----------- -----------
Assets:
Operating real estate, net of
accumulated depreciation of $516,558
and $452,878, respectively $ 2,669,648 $ 2,543,956
Investments and advances in real estate
joint ventures 412,672 272,920
Real estate under development 212,765 204,530
Other real estate investments 99,542 7,613
Mortgages and other financing
receivables 94,024 53,611
Cash and cash equivalents 35,962 93,847
Marketable securities 66,992 82,997
Accounts and notes receivable 55,012 48,074
Deferred charges and prepaid expenses 50,149 38,031
Other assets 60,112 39,200
----------- -----------
$ 3,756,878 $ 3,384,779
=========== ===========
Liabilities:
Notes payable $ 1,302,250 $ 1,035,250
Mortgages payable 230,760 286,929
Construction loans payable 43,972 5,900
Accounts payable and accrued expenses 94,784 68,323
Dividends payable 59,646 57,345
Other liabilities 24,198 32,573
----------- -----------
1,755,610 1,486,320
----------- -----------
Minority interests in partnerships 93,940 8,375
----------- -----------
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
104,601,828 and 103,352,570 shares,
respectively 1,046 1,034
Paid-in capital 1,984,820 1,976,442
Cumulative distributions in excess of net
income (85,367) (93,131)
----------- -----------
1,901,399 1,885,337
Accumulated other comprehensive income 7,401 7,310
Notes receivable from officer
stockholders (1,472) (2,563)
----------- -----------
1,907,328 1,890,084
----------- -----------
$ 3,756,878 $ 3,384,779
=========== ===========
Reclassifications:
Certain amounts in the prior period have been reclassified in
order to conform with the current period's presentation.
CONTACT: Kimco Realty Corporation
Scott Onufrey, 516/869-7190
sonufrey@kimcorealty.com