Exhibit 99.1
Kimco Reports Second Quarter Operating Results
and Expands Board of Directors
NEW HYDE PARK, N.Y.--(BUSINESS WIRE)--July 28, 2003--Kimco Realty
Corporation (NYSE: KIM), the nation's largest owner and operator of
neighborhood and community shopping centers, today announced that
second quarter net income increased 0.5 percent to $61.3 million from
$61.1 million for the same period last year. Second quarter net income
per diluted common share was $0.46 versus $0.54 per diluted common
share a year ago. Net income available to common shareholders was
reduced $0.07 per diluted common share related to a non-cash
adjustment for the original issuance costs of Kimco's $225 million
preferred stock that was redeemed during the quarter. Kimco partially
replaced the redeemed shares with a new series of preferred stock,
6.65% Class F Cumulative Preferred Stock. Together with other balance
sheet initiatives, the preferred stock redemption will result in
savings to the Company of approximately $4.5 million annually.
Funds from operations (FFO), a supplemental measure of REIT
performance, rose 7.2 percent to $84.9 million, from $79.2 million for
the same period last year. On a diluted per common share basis, FFO
increased 5.3 percent to $0.79 from $0.75 a year ago. FFO excludes a
net loss on dispositions of operating properties of $0.9 million or
less than $0.01 per diluted common share for the second quarter 2003
and a net gain on dispositions of operating properties of $0.5 million
or less than $0.01 per diluted common share for the second quarter
2002. The non-cash adjustment for the original issuance costs of the
redeemed preferred shares does not impact FFO. A complete
reconciliation containing adjustments from GAAP net income to FFO is
included in this release.
For the six months ended June 30, 2003, net income increased 8.5
percent to $132.3 million from $121.9 million for the same period last
year. Net income per diluted common share was $1.09 versus $1.07 a
year ago. Net income available to common shareholders for the six
months was also reduced $0.07 per diluted common share for the
original issuance costs associated with the redeemed preferred shares
as noted above. FFO rose 6.1 percent to $167.8 million for the
six-month period from $158.1 million in the year earlier period. On a
diluted per common share basis, FFO increased 4.7 percent to $1.57
from $1.50 reported a year ago. FFO for the six months ended June 30,
2003 excludes net gains on sales of operating properties of $2.4
million or $0.02 per diluted common share and $0.5 million or less
than $0.01 per diluted common share for the same period last year.
During the quarter Kimco signed a total of 112 leases aggregating
826,000 square feet of gross leasable area in the Company's parent
portfolio, including leases at three former Kmart locations. Occupancy
remained stable at 89.1 percent, which is consistent with occupancy
reported at March 31, 2003, notwithstanding the fact that Kmart
rejected seven leases in this portfolio during the quarter. The Home
Depot is now Kimco's largest tenant, providing approximately 3.0
percent of base rental revenue, on a combined portfolio basis.
Occupancy remained high in the Company's primary institutional joint
venture portfolios, the Kimco Income REIT (KIR) and the Kimco Retail
Opportunity Portfolio (KROP) at 97.9 percent and 95.6 percent,
respectively.
Investment Activity
In addition to the previously announced merger agreement reached
with Mid-Atlantic Realty Trust, Kimco acquired interests in 11
shopping center properties during the quarter. These properties total
approximately 2.1 million square feet of gross leasable area and were
acquired for an aggregate purchase price of approximately $253.4
million. Subsequent to quarter-end, the Company acquired four
additional properties for approximately $74.1 million. These
properties total 662,000 square feet of gross leasable area.
Year-to-date, Kimco has completed the acquisition of 25 shopping
centers totaling approximately $573.5 million.
Kimco also recently completed two preferred equity capital
transactions, investing $4.6 million in Preston Forest Shopping Center
in Dallas, Texas and $5.2 million in 7/400 Power Center in Vaughan, a
suburb of Toronto, Ontario. Kimco's preferred equity program currently
has approximately $48.6 million invested in 18 properties.
The Company sold six properties during the quarter generating cash
proceeds of approximately $58.8 million. In addition, Kimco sold a
property in July for approximately $1.6 million. The disposals
included three properties in the Company's Kimsouth portfolio.
Properties in the Kimsouth portfolio are being stabilized and sold
opportunistically. Kimco expects to sell approximately 10 additional
properties from this portfolio during the remainder of 2003.
Kimco's merchant building business, Kimco Developers Inc. (KDI),
sold three recently completed projects and six out-lots generating
$63.3 million in proceeds and gains on sales of $3.4 million, net of
taxes. The shopping centers sold were: Hamstra Square in Chandler,
Arizona; Gilbert Fiesta in Gilbert, Arizona; and Gateway Station in
Burleson, Texas. KDI acquired three new projects totaling $16.4
million to replenish the development pipeline. The projects acquired
are Maricopa Fiesta in Maricopa, Arizona; Lakes Crossing in Muskegon,
Michigan; and Hazel Dell Town Center in Vancouver, Washington.
Capital Activities
As previously announced, the Company undertook a number of
initiatives to maintain its balance sheet strength during the quarter.
Kimco issued 2,070,000 shares of Common Stock in a primary public
offering, which raised net proceeds of approximately $76.0 million.
The Company redeemed all $225 million of its outstanding preferred
stock, which had a weighted average dividend yield of approximately
8.19 percent and subsequently issued $175 million of cumulative
redeemable preferred at a yield of 6.65 percent. Additionally, Kimco
issued a seven-year $50.0 million medium-term note at a rate of 4.62
percent that matures in May 2010.
The Company also obtained a $500 million unsecured revolving
credit facility from a group of banks. This new credit facility, which
replaces the Company's expiring $250 million credit facility, bears
interest at a rate of LIBOR plus 55 basis points and is scheduled to
expire in June 2006. Kimco increased its facility in order to provide
additional flexibility prior to determining the permanent capital
structure or co-investment program for its acquisitions. These capital
activities have improved the Company's liquidity and debt-to-equity
ratios, and reduced the Company's fixed charges.
Board Appointment
Kimco also announced today that its Board of Directors increased
the size of its Board to eight members and elected Richard B. Saltzman
to join the Board. Mr. Saltzman was recently named President of Colony
Capital LLC. Colony is an international real estate investment
management firm that has invested in more than $8 billion of
commercial and residential property transactions since inception in
1991. Prior to joining Colony in May, Mr. Saltzman spent 24 years in
the investment banking business, primarily specializing in real estate
related businesses and investments. Most recently, he was a Managing
Director and Vice Chairman of Merrill Lynch's investment banking
division. As a member of the investment banking operating committee,
he oversaw the firm's global real estate, hospitality and restaurant
businesses. During Mr. Saltzman's tenure as head of Real Estate,
Merrill Lynch completed more than $300 billion of lead managed debt,
equity and strategic advisory business in that area.
Corporate Governance Initiatives
In addition to expanding the Company's Board of Directors to eight
members, consisting of five independent directors, the Company also
adopted a new Code of Business Conduct & Ethics for all Kimco
Associates, Officers and Directors. Furthermore, the Board approved
new Corporate Governance Guidelines and new charters for the Executive
Compensation Committee, Audit Committee and Nominating & Corporate
Governance Committee. A few of the enhancements in Kimco's corporate
governance include regular meetings of the independent directors
excluding Company management, exclusion of management from the
Executive Compensation Committee and annual Board evaluations.
Kimco's Corporate Governance Guidelines, Committee Charters and
Code of Business Conduct & Ethics will be posted shortly in the
investor relations section of their website at www.kimcorealty.com.
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 634 properties comprising approximately 94.0 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, 2002. Copies of
each filing may be obtained from the Company or the SEC.
Kimco Realty Corporation
Condensed Consolidated Statements of Income
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
---- ---- ---- ----
Real Estate Operations:
- -----------------------
Revenues from rental
property $118,335 $111,469 $241,665 $222,757
-------- -------- -------- --------
Rental property expenses:
Rent 2,788 2,933 5,570 5,836
Real estate taxes 15,645 15,715 30,532 30,721
Operating and maintenance 13,396 11,357 30,015 23,110
-------- -------- -------- --------
31,829 30,005 66,117 59,667
-------- -------- -------- --------
86,506 81,464 175,548 163,090
Equity in income of real
estate joint ventures, net 10,138 8,391 19,292 15,309
Minority interests in income
of partnerships, net (1,806) (268) (3,397) (476)
Income from other real estate
investments 4,909 3,651 9,809 8,112
Mortgage financing income 6,616 7,223 12,128 8,287
Management and other fee
income 3,661 3,640 6,563 6,539
Depreciation and
amortization (20,573) (18,032) (40,327) (36,105)
-------- -------- -------- --------
Income from real estate
operations 89,451 86,069 179,616 164,756
-------- -------- -------- --------
Other Investments:
- ------------------
Interest, dividends and
other investment income 5,291 5,965 7,693 13,092
Other income / (loss),
net (1,419) 13 (1,101) 3,885
-------- -------- -------- --------
3,872 5,978 6,592 16,977
-------- -------- -------- --------
Interest expense (24,877) (22,068) (47,600) (43,532)
General and administrative
expenses (8,900) (7,654) (17,515) (15,181)
Gain on early
extinguishment of debt -- -- 6,262 --
-------- -------- -------- --------
Income from continuing
operations before income
taxes 59,546 62,325 127,355 123,020
Provision for income
taxes (1,241) (2,150) (2,514) (5,788)
-------- -------- -------- --------
Income from continuing
operations 58,305 60,175 124,841 117,232
Discontinued Operations:
- ------------------------
Income from discontinued
operating properties 529 334 850 1,603
Gain/(loss) on disposition
of operating properties (867) 546 2,413 546
-------- -------- -------- --------
Income / (loss) from
discontinued operations (338) 880 3,263 2,149
-------- -------- -------- --------
Gain on sale of
development properties,
net of tax of $2,253,
$0, $2,802 and $1,712,
respectively (1) 3,379 -- 4,203 2,568
-------- -------- -------- --------
Net income 61,346 61,055 132,307 121,949
Original issuance costs
associated with the
redemption of preferred
stock (7,787) -- (7,787) --
Preferred dividends (4,241) (4,609) (8,850) (9,219)
-------- -------- -------- --------
Net income available to
common shareholders $ 49,318 $ 56,446 $115,670 $112,730
======== ======== ======== ========
Per common share:
Income from continuing
operations:
- Basic $ 0.47 $ 0.53 $ 1.07 $ 1.06
======== ======== ======== ========
- Diluted $ 0.47(2) $ 0.53 $ 1.06(2) $ 1.05
======== ======== ======== ========
Net income:
- Basic $ 0.47 $ 0.54 $ 1.10 $ 1.08
======== ======== ======== ========
- Diluted $ 0.46(2) $ 0.54 $ 1.09(2) $ 1.07
======== ======== ======== ========
Income subject to income
taxes $ 9,128 $ 5,744 $ 14,149 $ 19,381
Note: Reclassifications: Certain amounts in the prior period have
been reclassified in order to conform with the current period's
presentation.
(1) Included in the calculation of income from continuing operations
per share in accordance with SEC guidelines.
(2) Reflects the potential impact if certain units were converted to
common stock at the beginning of the period. Net income available
to common shareholders would be increased by $1,423 and $2,846 for
the three and six months ended June 30, 2003, respectively,
reflecting the distributions associated with the units.
Kimco Realty Corporation
Funds From Operations
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
---- ---- ---- ----
Funds From Operations(1)
Net income $ 61,346 $ 61,055 $132,307 $121,949
Loss/(gain) on
disposition of
operating properties 867 (546) (2,413) (546)
Depreciation and
amortization 20,686 19,138 40,580 37,984
Depreciation and
amortization - real estate
joint ventures 6,200 4,150 12,400 7,950
Gain of early extinguishment
of debt -- -- (6,262) --
Preferred stock dividends (4,241) (4,609) (8,850) (9,219)
-------- -------- -------- --------
Funds from operations(1) $ 84,858 $ 79,188 $167,762 $158,118
======== ======== ======== ========
Per common share:
- Basic $ 0.81 $ 0.76 $ 1.60 $ 1.52
======== ======== ======== ========
- Diluted $ 0.79(2) $ 0.75 $ 1.57(2) $ 1.50
======== ======== ======== ========
Weighted Average Share Three Months Ended Six Months Ended
Information June 30, June 30,
2003 2002 2003 2002
---- ---- ---- ----
Weighted average shares -
- Basic 105,179 104,413 104,946 104,356
- Diluted 109,213(2) 105,506 108,716(2) 105,437
(1) Most industry analysts and equity REITs, including the Company,
generally consider funds from operations ("FFO") to be an
appropriate supplemental measure of the performance of an equity
REIT. FFO is defined as net income applicable to common shares
before depreciation and amortization, extraordinary items, gains
or losses on sales of operating real estate, plus the pro-rata
amount of depreciation and amortization of unconsolidated joint
ventures determined on a consistent basis. Given the nature of the
Company's business as a real estate owner and operator, the
Company believes that FFO is helpful to investors as a measure of
its operational performance. FFO does not represent cash generated
from operating activities in accordance with generally accepted
accounting principles and therefore should not be considered an
alternative for net income as a measure of liquidity. In addition,
the comparability of the Company's FFO with the FFO reported by
other REITs may be affected by the differences that exist
regarding certain accounting policies relating to expenditures for
repairs and other recurring items.
(2) Reflects the potential impact if certain units were converted to
common stock at the beginning of the period. Net income available
to common shareholders would be increased by $1,423 and $2,846 for
the three and six months ended June 30, 2003, respectively,
reflecting the distributions associated with the units.
Kimco Realty Corporation
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
June 30, December 31,
2003 2002
---- ----
Assets:
Operating real estate, net of accumulated
depreciation of $548,204 and $516,558,
respectively $ 2,825,519 $ 2,669,648
Investments and advances in real estate
joint ventures 459,977 390,484
Real estate under development 265,492 234,953
Other real estate investments 96,651 99,542
Mortgages and other financing receivables 75,569 94,024
Cash and cash equivalents 57,949 35,962
Marketable securities 63,230 66,992
Accounts and notes receivable 54,185 55,012
Other assets 113,760 110,261
----------- -----------
$ 4,012,332 $ 3,756,878
=========== ===========
Liabilities:
Notes payable $ 1,502,250 $ 1,302,250
Mortgages payable 207,409 230,760
Construction loans payable 61,474 43,972
Other liabilities, including minority
interests in partnerships 283,319 272,568
----------- -----------
2,054,452 1,849,550
----------- -----------
Stockholders' Equity:
Preferred stock, $1.00 par value,
authorized 3,600,000 shares
Class A Preferred Stock, $1.00 par value,
authorized 345,000 shares issued and
outstanding 0 and 300,000 shares,
respectively -- 300
Aggregate liquidation preference $0 and
$75,000, respectively
Class B Preferred Stock, $1.00 par value,
authorized 230,000 shares issued and
outstanding 0 and 200,000 shares,
respectively -- 200
Aggregate liquidation preference $0 and
$50,000, respectively
Class C Preferred Stock, $1.00 par value,
authorized 460,000 shares issued and
outstanding 0 and 400,000 shares,
respectively -- 400
Aggregate liquidation preference $0 and
$100,000, respectively
Class F Preferred Stock, $1.00 par value,
authorized 700,000 shares issued and
outstanding 700,000 and 0 shares,
respectively 700 --
Aggregate liquidation preference $175,000
and $0, respectively
Common Stock, $.01 par value, authorized
200,000,000 shares issued and outstanding
107,299,018, and 104,601,828 shares,
respectively 1,073 1,046
Paid-in capital 2,019,699 1,984,820
Cumulative distributions in excess of net
income (76,774) (85,367)
----------- -----------
1,944,698 1,901,399
Accumulated other comprehensive income 14,478 7,401
Notes receivable from officer stockholders (1,296) (1,472)
----------- -----------
1,957,880 1,907,328
----------- -----------
$ 4,012,332 $ 3,756,878
=========== ===========
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