Exhibit 99.1
Kimco Realty Reports Fourth Quarter and
Full Year Operating Results for 2003
NEW HYDE PARK, N.Y.--(BUSINESS WIRE)--Feb. 11, 2004--
Achieves Record Full Year FFO Per Diluted Common Share of $3.23;
Fourth Quarter FFO Per Diluted Common Share Increases to $0.85
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, 2003, increased 33.5 percent to $84.1 million from $63.0 million
for the same period last year. Fourth quarter net income per diluted
common share was $0.72, an increase of 28.6 percent from $0.56 a year
ago.
Funds from operations (FFO) rose 33.9 percent to $96.3 million,
from $71.9 million for the same period last year. On a diluted per
common share basis, FFO increased 25.0 percent to $0.85 from $0.68 for
the same period last year. Previously reported FFO for the fourth
quarter and year ended 2002 has been reduced by approximately $10.8
million, or $0.10 per diluted common share to reflect clarifications
with The National Association of Real Estate Investment Trusts'
(NAREIT) definition of FFO. The prior year adjustments are
attributable to the inclusion in FFO of gains from the early
extinguishment of debt and non-cash adjustments to asset carrying
values. The Company's growth in FFO per share on the previously
reported fourth quarter 2002 per share amount of $0.78 would have been
10.3 percent on a comparable basis.
Funds from operations continues to exclude gains and losses from
sales of operating properties. For the fourth quarter 2003, FFO
excludes gains on dispositions of operating properties of
approximately $20.4 million, or $0.18 per diluted common share. FFO
for the fourth quarter 2002 excludes gains on dispositions of
approximately $11.3 million, or $0.10 per diluted common share.
FFO is a supplemental non-GAAP financial measurement used as a
standard in the real estate industry to measure and compare the
operating performance of real estate companies. A complete
reconciliation containing adjustments from GAAP net income to FFO is
included in this release.
For the year ended December 31, 2003, net income increased 25.3
percent to $307.9 million from $245.7 million for the same period last
year. Net income per diluted common share increased to $2.62 from
$2.16 for the same period in the previous year. Funds from operations
rose 14.3 percent to $353.1 million for the year ended 2003 from
$308.9 million in the year earlier period. On a diluted per common
share basis, FFO increased 10.2 percent to $3.23 from $2.93 a year
ago. Full year 2002 FFO has also been adjusted for NAREIT's definition
as noted above. Prior to taking into account the adjustments, Kimco's
FFO per share growth would have been 5.0 percent on a comparable
basis.
Funds from operations for the full year 2003 excludes gains on
dispositions of operating properties of approximately $50.8 million,
or $0.46 per diluted common share. For the full year 2002, FFO
excludes gains on dispositions of operating properties of $12.8
million, or $0.12 per diluted common share.
During the quarter, Kimco increased the occupancy of its parent
shopping center portfolio to 90.7 percent from 89.5 percent at
September 30, 2003 and 87.8 percent a year ago. For the quarter, Kimco
signed 98 new leases totaling 723,000 square feet bringing the full
year total leases signed in the parent portfolio to 427 or 3.3 million
square feet, an increase of 12 percent above the 380 leases signed in
the parent portfolio during 2002.
In addition to the leases signed during the year in the Company's
parent portfolio, 71 new leases were signed totaling 477,000 square
feet in the Kimco Income REIT (KIR), 164 leases totaling 883,000
square feet in the Company's merchant building business, Kimco
Developers, Inc. (KDI), and 28 new leases totaling 117,000 square feet
were signed in the Kimco Retail Opportunity Portfolio (KROP). For the
Company's entire property portfolio, which is comprised of interests
in approximately 103 million square feet, the Company signed 690 new
leases totaling 4.8 million square feet.
Investment Activity
During the quarter, Kimco acquired interests in seven shopping
centers in the U.S. aggregating $71.2 million in addition to the 52
properties the Company acquired in the previously announced $700
million Mid-Atlantic transaction. Company wide, Kimco completed
approximately $1.5 billion in shopping center acquisitions totaling
12.4 million square feet during 2003. Subsequent to year end, Kimco
acquired interests in three additional shopping centers and a parcel
of land for an additional $91.7 million.
Kimco acquired its third shopping center investment in Mexico for
$9.9 million during the fourth quarter. Also during the quarter, the
Company formed a 50/50 joint venture with G.E. Real Estate to acquire
additional shopping centers in Mexico. Kimco transferred two
previously acquired shopping centers located in Monterrey and
Saltillo, Mexico, to the venture. Kimco and G.E Real Estate intend to
selectively grow the portfolio of shopping centers in Mexico over the
next few years.
The Company recently completed five new preferred equity
investments, providing $22.7 million of capital to shopping center
developers and owners. During the quarter, two investments were
prepaid generating an internal rate of return in excess of 20.0
percent. Since January 2003, Kimco has completed 16 preferred equity
transactions totaling $53.1 million bringing the Company's existing
portfolio up to 21 preferred equity transactions representing
approximately $84.6 million of investment.
Shopping Center Dispositions
Kimco, as part of its stated strategy for the MART portfolio, sold
the Harford Mall and Annex for approximately $71.0 million in
December. In addition, Kimco sold five properties during the quarter
from its parent portfolio in separate transactions for a total of
$71.1 million. Since January 2003, Kimco has sold $264.4 million of
properties from the parent portfolio, primarily reinvesting the
proceeds in new investments.
Kimsouth, a joint portfolio investment that the Company is
liquidating, sold five shopping centers during the quarter. Aggregate
sales price of the properties was $39.7 million bringing total sales
for the year to $83.3 million from 14 property sales. Subsequent to
year end, Kimsouth sold two additional properties from this portfolio
for proceeds of $21.4 million.
Kimco Developers Inc. (KDI)
KDI, the Company's merchant building subsidiary, recognized gains
on sales of development properties during the quarter of $1.3 million,
net of tax. KDI sold portions of three ongoing development projects;
Gateway Station in Burleson, Texas; Forum at Olympia Parkway in San
Antonio, Texas and Four Peaks Plaza in Fountain Hills, Arizona. In
addition, KDI recognized a gain on the sale of Riggs Marketplace,
which had been structured as a participating financing. For the year,
KDI sold properties of approximately $126.6 million.
KDI also invested an aggregate amount of $30.9 million in four new
projects during the quarter. The projects are as follows:
-- Cypress Town Center in Cypress, Texas
-- South Towne Center in Burleson, Texas
-- Lake Worth Town Crossing in Lake Worth, Florida
-- Shoppes at Amelia Concourse in Nassau County, Florida
For the year, KDI commenced 12 new development projects totaling
$80.2 million of investment plus an additional $128.7 million of
investment in its development pipeline.
Earnings Guidance
Kimco's management increased its earnings guidance for FFO per
share in 2004 to between $3.41 and $3.46 per share, from the
previously issued range of $3.39 to $3.45.
Kimco, a publicly-traded real estate investment trust, has
specialized in shopping center acquisitions, development and
management for over 40 years. Kimco owns and operates the nation's
largest portfolio of neighborhood and community shopping centers with
interests in 699 properties comprising approximately 103 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
Consolidated Statements of Income
(in thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2003 2002 2003 2002
-------- -------- -------- --------
Real Estate
Operations:
- ------------
Revenues from
rental property $126,575 $111,355 $479,664 $432,777
-------- -------- -------- --------
Rental property
expenses:
Rent 2,882 2,830 11,240 11,300
Real estate
taxes 15,882 15,673 61,276 60,248
Operating and
maintenance 13,739 12,105 53,979 44,525
-------- -------- -------- --------
32,503 30,608 126,495 116,073
-------- -------- -------- --------
Net Operating
Income 94,072 80,747 353,169 316,704
Income from other
real estate
investments 7,021 2,348 22,828 16,038
Mortgage financing
income 2,814 6,658 18,587 19,412
Management and
other fee income 4,493 3,009 15,315 12,069
Depreciation and
amortization (25,990) (18,289) (86,237) (70,894)
--------- --------- --------- ---------
82,410 74,473 323,662 293,329
-------- -------- -------- --------
Interest, dividends
and other
investment income 6,070 3,096 19,464 18,565
Other income/
(expense), net (2,965) (3,725) (3,792) 2,532
--------- --------- --------- --------
3,105 (629) 15,672 21,097
-------- --------- -------- --------
Interest expense (28,844) (20,814) (102,709) (85,323)
General and
administrative
expenses (9,933) (8,539) (38,657) (31,605)
Gain on early
extinguishment of
debt -- 19,033 2,921 19,033
Adjustment of
property carrying
values -- (11,000) -- (11,000)
-------- --------- -------- ---------
46,738 52,524 200,889 205,531
Benefit/(Provision)
for income taxes 2,170 (130) (1,516) (6,552)
Equity in income of
real estate joint
ventures, net 11,817 13,282 42,276 37,693
Minority interests
in income of
partnerships, net (2,125) (1,691) (7,868) (2,430)
--------- --------- --------- ---------
Income from
continuing
operations 58,600 63,985 233,781 234,242
Discontinued
Operations:
- ------------
Income from
discontinued
operating
properties 4,401 2,496 10,023 7,928
Gain on early
extinguishment
of debt 3,419 3,222 6,760 3,222
Adjustment of
property
carrying values (4,016) (22,030) (4,016) (22,030)
Gain on
disposition of
operating
properties 17,192 11,266 47,657 12,778
-------- -------- -------- --------
Income/(Loss)
from
discontinued
operations 20,996 (5,046) 60,424 1,898
-------- --------- -------- --------
Gain on sale of
operating
properties(1) 3,177 -- 3,177 --
Gain on sale of
development
properties, net of
tax of $864,
$2,682, $6,998 and
$6,352,
respectively (1) 1,296 4,023 10,497 9,528
-------- -------- -------- --------
Net income 84,069 62,962 307,879 245,668
Original issuance
costs associated
with the
redemption of
preferred stock -- -- (7,788) --
Preferred stock
dividends (2,909) (4,609) (14,669) (18,437)
--------- --------- --------- ---------
Net income
available to
common
shareholders $ 81,160 $ 58,353 $285,422 $227,231
======== ======== ======== ========
Per common share:
Income from
continuing
operations:
- Basic $ 0.54 $ 0.61 $ 2.10 $ 2.16
======== ======== ======== ========
- Diluted $ 0.53 $ 0.60(2) $ 2.07 $ 2.14(2)
======== ======== ======== ========
Net income:
- Basic $ 0.73 $ 0.56 $ 2.67 $ 2.18
======== ======== ======== ========
- Diluted $ 0.72 $ 0.56(2) $ 2.62 $ 2.16(2)
======== ======== ======== ========
Weighted average
share information:
- Basic 110,497 104,578 107,092 104,458
======== ======== ======== ========
- Diluted 112,582 107,463(2) 108,770 105,969(2)
======== ======== ======== ========
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,
2003 2002 2003 2002
-------- -------- -------- --------
Funds From
Operations
Net income $ 84,069 $ 62,962 $307,879 $245,668
Gain on
disposition of
operating
properties (20,369) (11,266) (50,834) (12,778)
Depreciation and
amortization 26,575 19,492 89,068 76,674
Depreciation and
amortization -
real estate joint
ventures 8,945 5,329 29,456 17,779
Redemption costs -- -- (7,788) --
Preferred stock
dividends (2,909) (4,609) (14,669) (18,437)
--------- --------- --------- ---------
Funds from
operations $ 96,311 $ 71,908(3) $353,112 $308,906(3)
======== =========== ======== ===========
Per common share:
- Basic $ 0.87 $ 0.69 $ 3.30 $ 2.96
======== ======== ======== ========
- Diluted $ 0.85(2) $ 0.68(2,3) $ 3.23(2) $ 2.93(2,3)
======== ======== ======== ========
Weighted Average
Share Information
for FFO
calculations Three Months Ended Year Ended
December 31, December 31,
2003 2002 2003 2002
-------- -------- -------- --------
Weighted average
shares for FFO
calculations -
- Basic 110,497 104,578 107,092 104,458
======== ======== ======== ========
- Diluted 114,965(2) 107,463(2) 111,168(2) 105,969(2)
======== ======== ======== ========
(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. FFO would be
increased by $1,502 and $5,771 for the three months and year ended
December 31, 2003, respectively, and net income available to
common shareholders and FFO would be increased by $1,423 for both
the three months and year ended December 31, 2002, reflecting the
distributions associated with the units.
(3) 2002 FFO was reduced from $3.03 to $2.93 for the year ended
December 31, 2002 and from $0.78 to $0.68 for the three months
ended December 31, 2002 to include gains on early extinguishment
of debt of $22,255 and adjustments to property carrying values of
($33,030).
NOTE: 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.
Kimco Realty Corporation
Consolidated Balance Sheets
(in thousands, except per share data)
December 31, December 31,
2003 2002
----------- -----------
Assets:
Operating real estate, net of accumulated
depreciation of $568,015 and $516,558,
respectively $ 3,264,223 $ 2,669,648
Investments and advances in real estate
joint ventures 487,394 390,484
Real estate under development 304,286 234,953
Other real estate investments 113,085 99,542
Mortgages and other financing receivables 95,019 94,024
Cash and cash equivalents 48,288 35,962
Marketable securities 45,677 66,992
Accounts and notes receivable 57,080 56,484
Deferred charges and prepaid expenses 66,095 50,149
Other assets 122,778 60,112
----------- -----------
$ 4,603,925 $ 3,758,350
=========== ===========
Liabilities:
Notes payable $ 1,686,250 $ 1,302,250
Mortgages payable 375,914 230,760
Construction loans payable 92,784 43,972
Accounts payable and accrued expenses 92,239 94,784
Dividends payable 65,969 59,646
Other liabilities 55,006 24,198
----------- -----------
2,368,162 1,755,610
----------- -----------
Minority interests in partnerships 99,917 93,940
----------- -----------
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, -- 300
respectively
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, -- 200
respectively
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, -- 400
respectively
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, 700 --
respectively
Aggregate liquidation preference $175,000
and $0, respectively
Common Stock, $.01 par value, authorized
200,000,000 shares issued and
outstanding 110,623,967 and 104,601,828 1,106 1,046
shares, respectively
Paid-in capital 2,147,286 1,984,820
Cumulative distributions in excess of net
income (30,112) (85,367)
------------ ------------
2,118,980 1,901,399
Accumulated other comprehensive income 16,866 7,401
----------- -----------
2,135,846 1,908,800
----------- -----------
$ 4,603,925 $ 3,758,350
=========== ===========
Reclassifications:
Certain amounts in the prior period have been reclassified in order to
conform with the current period's presentation.
Kimco Realty Corporation
Reconciliation of Projected Diluted Net Income Per Common Share to
Projected Funds From Operations Per Common Share
Projected Range
Full Year 2004
Low High
----- -----
Projected diluted earnings per common share $2.28 $2.31
Projected depreciation and amortization 0.80 0.80
Projected depreciation and amortization
real estate joint ventures 0.33 0.35
----- -----
Projected FFO per diluted common share $3.41 $3.46
===== =====
CONTACT: Kimco Realty Corporation
Scott Onufrey, 516-869-7190
sonufrey@kimcorealty.com