Exhibit 99.1
Kimco Reports Strong Third Quarter Operating Results and
Announces 5.6 Percent Increase in Common Stock Dividend
NEW HYDE PARK, N.Y.--(BUSINESS WIRE)--Oct. 23, 2003--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, 2003,
increased 47.2 percent to $89.5 million from $60.8 million for the
same period last year. Third quarter net income per diluted common
share (EPS) increased 47.2 percent to $0.78 versus $0.53 per diluted
common share a year ago. Third quarter net income included gains on
sales of operating properties of approximately $28.1 million and was
reduced approximately $2.0 million for the cumulative effect of
adopting SFAS No. 150 "Accounting for Certain Financial Instruments
with Characteristics of both Liabilities and Equity."
Funds from operations (FFO), a widely accepted supplemental
measure of REIT performance, rose 14.8 percent to $90.6 million from
$78.9 million for the same period last year. On a diluted per common
share basis, FFO increased 9.3 percent to $0.82 from $0.75 in the
prior year. FFO for the third quarter 2003 and 2002 excludes gains on
sales of operating properties of approximately $28.1 million or $0.25
per diluted common share and approximately $1.0 million or $0.01 per
diluted common share, respectively. In addition, FFO for the third
quarter 2003 excludes the cumulative effect of adopting SFAS No. 150
of $2.0 million, or $0.02 per diluted common share. A complete
reconciliation containing adjustments from GAAP net income to FFO is
included in this release.
For the nine months ended September 30, 2003, net income increased
21.4 percent to $221.8 million from $182.7 million for the same period
last year. Net income per diluted common share was $1.88, a 17.5
percent increase from $1.60 for the same period a year ago. FFO rose
8.4 percent to $256.8 million for the nine-month period from $237.0
million in the year earlier period. On a diluted per common share
basis, FFO increased 5.8 percent to $2.38 from $2.25 reported a year
ago. FFO for the nine months ended September 30, 2003 and 2002
excludes gains on sales of operating properties of $30.5 million or
$0.28 per diluted common share and $1.5 million or $0.01 per diluted
common share, respectively. In addition, FFO for the nine months ended
September 30, 2003 excludes the cumulative effect of adopting SFAS No.
150 of $2.0 million, or $0.02 per diluted common share.
Year-to-date FFO has been adjusted to include a $7.8 million
non-cash adjustment associated with the original issuance costs of
Kimco's $225 million preferred stock that was redeemed earlier this
year and to include a $6.3 million non-cash adjustment for gains
related to the early extinguishment of debt. These adjustments were
made to conform with the NAREIT definition of FFO and in response to
the SEC's July 31, 2003 Staff Policy Statement that clarifies the
application of EITF Topic D-42 "The Effect on the Calculation of
Earnings per Share for the Redemption or Induced Conversion of
Preferred Stock." These adjustments to FFO do not change current or
previously reported net income or net income per diluted common share.
For the quarter, consolidated revenues from the Company's core
portfolio increased to $120.3 million from $107.3 million, an increase
of 12.1 percent. The increase in revenue was largely the result of a
year-over-year occupancy improvement of 350 basis points, property
acquisitions, and an increase in average rent from $8.10 per square
foot to $8.64 per square foot. Kimco's portfolio occupancy improved to
89.5 percent at September 30, 2003 from 86.0 percent at September 30,
2002. During the quarter, the Company signed 120 new leases in the
core portfolio totaling 820,000 square feet of leasable space.
Occupancy in Kimco's primary co-investment portfolios, the Kimco
Income REIT (KIR) and the Kimco Retail Opportunity Portfolio, remained
high at 97.8 percent and 96.1 percent, respectively.
Kimco Developers Inc. (KDI), the Company's merchant building
business, recognized net after tax gains on sales of $5.0 million as
compared to $2.9 million in the same quarter last year. KDI completed
the sale of shopping center projects in Burleson, Texas and
Hillsborough, New Jersey, as well as sales of three out parcels at
other sites. Kimco has retained management of both of the sold
shopping centers, which will continue to grow the Company's property
and asset management business. KDI recently acquired interests in
three new development projects at a cost of approximately $27.5
million. The Company's development pipeline consists of 25 projects
that will represent an investment of approximately $540 million upon
completion.
Dividend Increase
Kimco's Board of Directors approved a common stock dividend
increase, raising the quarterly dividend payable per common share by
5.6 percent to $0.57 per common share from the current quarterly level
of $0.54 per common share. Kimco has raised its dividend for 12
consecutive years, from an initial annual rate of $0.78 per share
(adjusted for stock splits) in 1992 to the current annual rate of
$2.28 per share, a compound annual growth rate of 9.4 percent. The
current 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, 2004
to shareholders of record on January 2, 2004.
Investment Activity
In addition to the previously announced $700 million acquisition
of Mid-Atlantic Realty Trust (MART) that closed on October 1, 2003,
Kimco recently acquired interests in seven shopping centers for
approximately $165 million. The properties, which were purchased as
part of the Company's co-investment strategy, are as follows:
-- Two shopping centers in Arizona, Ina Road Shopping Center
located in Marana and Valencia Road Shopping center located in
Tucson, were acquired for $14.5 million and $13.8 million,
respectively. Both shopping centers were former Kmart stores
where Lowes took assignment of Kmart's leases.
-- Novato Fair Shopping Center located in Novato, California.
This 128,585 square foot center, which was purchased for $21.9
million, is anchored by a Safeway supermarket and is 100
percent leased.
-- Centrum Shopping Center in Charlotte, North Carolina, was
acquired for $27.3 million. Centrum is a 270,000 square foot
shopping center that is 97 percent leased to 28 tenants.
-- Mashpaug Commons located in Providence, Rhode Island, is a
70,000 square foot grocery-anchored shopping center that was
acquired for $11.2 million.
-- Streets of Woodfield is a 630,000 square foot shopping center
located across from the Woodfield Mall. This shopping center
was acquired for $66.6 million.
-- Juarez Soriana Retail Center was purchased for $9.9 million
and is Kimco's third shopping center investment in Mexico.
Located near El Paso, Texas, this 145,000 square foot shopping
center is anchored by a Soriana grocery store. Organizacion
Soriana is Mexico's third largest retailer based on sales.
In addition to acquiring shopping centers, Kimco continued to grow
its preferred equity capital business. During the quarter, the Company
invested $12.8 million in five shopping centers where Kimco will earn
a preferred return on its investment as well as participation in
future profits.
Liquidity
Kimco's balance sheet remained strong with $107.0 million in cash
and cash equivalents in addition to the full amount of its $500
million credit facility available. This liquidity, combined with a new
$400 million interim credit facility, provided capital necessary to
complete the MART acquisition and for future investments. At September
30, Kimco's debt-to-market capitalization was .25:1 among the lowest
in the REIT industry.
Earnings Guidance
Kimco's management confirmed that the current First Call consensus
estimate for FFO per share in the fourth quarter of 2003 of $0.84 is
achievable and that consensus estimates for the full year ending 2003
of $3.22 is also within its range of guidance. Furthermore, management
provided guidance for FFO per share in 2004 of between $3.39 and $3.45
per share.
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 698 properties comprising approximately 100 million
square feet of leasable space located throughout 40 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, including
but not limited to the earning guidance provided, 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 Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
---- ---- ---- ----
Real Estate Operations:
- --------------------------------
Revenues from rental property $120,259 $107,290 $357,634 $326,354
-------- -------- -------- ---------
Rental property expenses:
Rent 2,787 2,633 8,358 8,469
Real estate taxes 16,452 15,437 46,751 45,905
Operating and maintenance 11,874 10,516 40,666 32,668
-------- -------- -------- --------
31,113 28,586 95,775 87,042
-------- -------- -------- --------
Net operating income 89,146 78,704 261,859 239,312
Equity in income of real estate
joint ventures, net 11,167 9,101 30,459 24,411
Minority interests in income of
partnerships, net (2,347) (262) (5,743) (738)
Income from other real estate
investments 5,998 5,578 15,807 13,690
Mortgage financing income 3,645 4,467 15,773 12,754
Management and other fee income 4,259 2,521 10,822 9,060
Depreciation and amortization (21,593) (17,931) (61,081) (53,260)
--------- -------- -------- --------
Income from real estate
operations 90,275 82,178 267,896 245,229
-------- -------- -------- ---------
Other Investments:
- -----------------
Interest, dividends and other
investment income 5,701 2,380 13,394 15,472
Other income / (loss), net 273 2,372 (828) 6,257
-------- -------- --------- --------
5,974 4,752 12,566 21,729
-------- -------- -------- ---------
Interest expense (26,419) (22,048) (74,020) (65,580)
General and administrative
expenses (11,234) (7,918) (28,726) (23,067)
Gain on early extinguishment
of debt -- -- 6,262 --
-------- -------- -------- ---------
Income from continuing operations
before income taxes 58,596 56,964 183,978 178,311
Provision for income taxes (1,171) (634) (3,686) (6,422)
--------- -------- -------- --------
Income from continuing
operations 57,425 56,330 180,292 171,889
Discontinued Operations:
- -------------------------
Income from discontinued
operating properties 1,027 523 3,851 3,800
Gain on disposition of
operating properties, net 28,053 966 30,465 1,512
------- ------ ------- --------
Income / (loss) from
discontinued operations 29,080 1,489 34,316 5,312
------- ------ ------- --------
Gain on sale of development
properties, net of tax of
$3,333, $1,957, $6,134 and
$3,669, respectively (1) 4,999 2,937 9,202 5,505
Cumulative effect of adoption
of SFAS 150 (2,048) -- (2,048) --
-------- ------ -------- --------
Net income 89,456 60,756 221,762 182,706
Original issuance costs
associated with the redemption
of preferred stock(1) -- -- (7,788) --
Preferred stock dividends (2,909) (4,609) (11,759) (13,828)
------- ------- -------- --------
Net income available to
common shareholders $86,547 $56,147 $202,215 $168,878
======= ======= ======== =========
Per common share:
Income from continuing operations:
- Basic $0.55 $0.52 $1.60 $1.57
======= ===== ===== =====
- Diluted $0.54(2) $0.52 $1.59(2) $1.55
========== ===== ======== =====
Net income:
- Basic $0.80 $0.54 $1.91 $1.62
======== ===== ===== =====
- Diluted $0.78(2) $0.53 $1.88(2) $1.60
=========== ===== ======== =====
Income subject to
income taxes $11,167 $8,988 $25,315 $28,369
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.
(2) Reflects the potential impact if certain units were converted to
common stock at the beginning of the period. Income from continuing
operations and net income available to common shareholders would be
increased by $1,423 and $4,269 for the three and nine months ended
September 30, 2003, respectively, reflecting the distributions
associated with these units.
Kimco Realty Corporation
Funds From Operations
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
---- ---- ---- ----
Funds From Operations(1)
Net income $89,456 $60,756 $221,762 $182,706
Depreciation and amortization 21,912 19,198 62,492 57,181
Depreciation and amortization -
real estate joint ventures 8,111 4,500 20,511 12,450
Gains on disposition of
operating properties, net (28,053) (966) (30,465) (1,512)
Cumulative effect of adoption of
SFAS 150 2,048 -- 2,048 --
Original issuance costs associated
with the redemption of
preferred stock -- -- (7,788) --
Preferred stock dividends (2,909) (4,609) (11,759) (13,828)
------- ------- -------- --------
Funds from operations(1) $90,565 $78,879 $256,801 $236,997
======= ======= ======== =========
Per common share:
- Basic $0.84 $0.75 $2.42 $2.27
========= ====== ============ =====
- Diluted $0.82(2) $0.75 $2.38(2) $2.25
========= ====== ============ =====
Weighted Average Share
Information Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
---- ---- ---- ----
Weighted average shares -
- Basic 107,909 104,539 105,945 104,418
- Diluted 112,236(2) 105,491 109,888(2) 105,464
(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, cumulative effect of accounting
changes, 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 would be
increased by $1,423 and $4,269 for the three and nine months ended
September 30, 2003, respectively, reflecting the distributions
associated with these units.
Kimco Realty Corporation
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
September 30, December 31,
2003 2002
---- ----
Assets:
Operating real estate, net of accumulated
depreciation of $551,525 and
$516,558, respectively $ 2,746,726 $ 2,669,648
Investments and advances in real estate
joint ventures 447,412 390,484
Real estate under development 262,575 234,953
Other real estate investments 109,308 99,542
Mortgages and other financing receivables 79,161 94,024
Cash and cash equivalents 106,960 35,962
Marketable securities 43,876 66,992
Accounts and notes receivable 61,163 55,012
Other assets 126,480 110,261
------------ ------------
$3,983,661 $3,756,878
============ ============
Liabilities:
Notes payable $1,312,250 $1,302,250
Mortgages payable 205,954 230,760
Construction loans payable 62,420 43,972
Other liabilities, including minority
interests in partnerships 302,185 272,568
------------ ------------
1,882,809 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
110,331,759, and 104,601,828 shares, 1,103 1,046
respectively
Paid-in capital 2,139,319 1,984,820
Cumulative distributions in excess of net
income (50,261) (85,367)
------------- -----------
2,090,861 1,901,399
Accumulated other comprehensive income 11,085 7,401
Notes receivable from officer stockholders (1,094) (1,472)
------------- ------------
2,100,852 1,907,328
------------ ------------
$3,983,661 $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