Exhibit 99.1
Kimco Realty Reports Record Funds from Operations
NEW HYDE PARK, N.Y.--(BUSINESS WIRE)--April 26, 2004--Kimco Realty
Corporation (NYSE: KIM)
Highlights:
-- Record FFO of $0.89 Per Share, $0.04 Above the Thomson First
Call Mean Estimate
-- Company Increasing 2004 FFO Guidance
-- Portfolio Occupancy Improves to 91.9 percent, 120 Basis Point
Increase for the Quarter, 280 Basis Point Increase for the
Year
Kimco Realty Corporation (NYSE: KIM) today announced income from
continuing operations for the first quarter ended March 31, 2004 of
$70.9 million compared to $61.4 million a year earlier, an increase of
15.5 percent. On a diluted per share basis, income from continuing
operations increased 18.5 percent to $0.64 from $0.54 reported in the
first quarter of 2003. Net income for the first quarter was $71.4
million compared to $71.0 million for the same period last year. On a
diluted per share basis, net income was $0.61 compared to $0.63
a year earlier.
Net income for the first quarter of 2004 and 2003 include gains
and losses from sales of operating properties and the early
extinguishment of debt. Included in net income for the quarter ended
March 31, 2004 are charges to adjust properties carrying values to net
realizable value of $4.2 million, or $0.04 per diluted common share,
and gains on dispositions of operating properties of $1.2 million, or
$0.01 per diluted common share. Included in net income for the quarter
ended March 31, 2003 are gains on early extinguishment of debt of $6.3
million, or $0.06 per diluted common share, and gains on sales of
operating properties of $3.3 million, or $0.03 per diluted common
share.
Kimco's first quarter funds from operations ("FFO"), a widely
accepted measure of REIT performance, rose 13.6 percent to $101.3
million from $89.2 million for the same period last year. On a diluted
per common share basis, first quarter FFO increased 6.0 percent to
$0.89 from $0.84 a year ago and was $0.04 above the Thomson First Call
mean estimate. FFO on a per share basis and on an absolute basis were
the highest reported for any quarter in the Company's history.
Previously reported FFO for first quarter 2003 was increased $6.3
million, or $0.06 per diluted common share to include gains on the
early extinguishment of debt. The Company's growth in FFO per share on
the previously reported first quarter 2003 per share amount of $0.78
would have been 14.1 percent, on a comparable basis.
Funds from operations excludes gains on dispositions of operating
properties and joint venture operating properties of approximately
$2.5 million, or $0.02 per share and $3.3 million, or $0.03 per share,
for the first quarter of 2004 and 2003, respectively. Losses on
properties held for sale or sold in the amount of $4.2 million, or
$0.04 per share during the first quarter have not been added back to
net income to determine FFO based on the Company's interpretation of
the Securities and Exchange Commission comments requiring asset
impairments be included in FFO.
FFO is a supplemental non-GAAP financial measure 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.
Kimco's consolidated property portfolio performance continued to
improve during the quarter. Revenues from rental property increased
17.1 percent to $139.9 million from $119.5 million and net operating
income increased 19.2 percent to $103.4 million from $86.7 million a
year earlier. Acquisition activities during 2003 and first quarter
2004 and occupancy increases in the portfolio were the primary drivers
of these increased operating results.
During the quarter, Kimco's parent portfolio occupancy increased
to 91.9 percent from 90.7 percent at December 31, 2003 and 89.1
percent a year earlier. The increase in occupancy was the result of
new leasing, acquisition activity and property sales. For the quarter,
Kimco signed 148 new leases in this portfolio totaling 1.2 million
square feet, an increase of 51 leases and approximately 300,000 square
feet over leasing activity in the first quarter of 2003.
Occupancy in the Company's operating joint ventures with
institutional investors remained strong during the quarter. Occupancy
in the Kimco Income REIT (KIR), which consists of 70 shopping centers
totaling 14.6 million square feet, was 97.3 percent. The Kimco Retail
Opportunity Portfolio (KROP), a joint venture with GE Real Estate that
consisted of 22 shopping centers totaling 3.4 million square feet at
quarter end, also maintained a high level of occupancy at 98.0
percent.
Investment Activity
During the quarter, Kimco acquired interests in six shopping
center properties and a parcel of land for development. The
properties, which total 1.7 million square feet of gross leasable
area, were acquired in separate transactions for an aggregate amount
of $256.6 million. Four of these acquisitions are designated for
Kimco's co-investment programs, further bolstering the Company's
management business.
In addition, Kimco continued to expand its preferred equity
program investing $18.4 million in four properties. Kimco's preferred
equity portfolio has grown to include 28 properties with an aggregate
commitment of approximately $89 million. Kimco anticipates closing on
approximately seven more preferred equity transactions aggregating
approximately $13.0 million of new investment during the second
quarter. The pending commitments include the Company's first
transaction in Mexico for this business.
Kimco recently transferred five properties to KROP from the
portfolio it acquired from Mid Atlantic Realty Trust (MART). KROP will
be acquiring 13 additional former MART properties during the coming
months.
Kimco's merchant building business, Kimco Developers Inc. (KDI),
completed sales of one shopping center and portions of four additional
projects generating proceeds of $49.3 million. These property sales
resulted in gains on sales of approximately $3.9 million, net of tax.
In addition, KDI invested approximately $30.9 million in its pipeline
of 28 existing shopping center developments.
Kimco and The Third Avenue Real Estate Value Fund Series recently
entered into a credit support agreement with Sterling Centrecorp Inc.
(TSX: SCF), a leading owner and manager of retail properties in
Canada. The agreement provides that Kimco and Third Avenue will
provide up to a maximum of Cdn$20.0 million and a minimum of Cdn$5.0
million of capital to assist Sterling in re-capitalizing their balance
sheet. In exchange for agreeing to provide the funding commitment,
Kimco and Third Avenue have been issued common shares and warrants in
Sterling.
During the quarter, Kimco sold four shopping center properties
from the parent portfolio generating proceeds of $11.4 million, KROP
sold two properties for proceeds of $20.1 million and the Company
terminated, or did not renew, four retail store leasehold positions.
In addition, Kimco sold three shopping centers from its Kimsouth
portfolio for proceeds of approximately $31.9 million. This portfolio,
which was acquired in November 2002, originally consisted of 37
shopping centers and currently has 19 properties remaining.
Earnings Guidance
As a result of the Company's strong operating performance and
improved outlook for 2004, Kimco's management increased its range of
guidance for FFO. Management now anticipates a range for FFO per share
of $3.47 - $3.52, increased from the previously provided range of
$3.41 - $3.46 for the year ending December 31, 2004.
Kimco, a publicly-traded real estate investment trust, has
specialized in shopping center acquisitions, development and
management for over 45 years. Kimco owns and operates the nation's
largest portfolio of neighborhood and community shopping centers with
interests in 695 properties comprising approximately 102.0 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, but are not limited to, (i) general
economic conditions, (ii) the inability of major tenants to continue
paying their rent obligations due to bankruptcy, insolvency or general
downturn in their business, (iii) local real estate conditions, (iv)
increases in interest rates, (v) 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, 2003. 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
March 31,
2004 2003
---- ----
Real Estate Operations:
- -----------------------
Revenues from rental property $139,927 $119,470
-------- ---------
Rental property expenses:
Rent 2,894 2,758
Real estate taxes 16,715 14,286
Operating and maintenance 16,939 15,712
-------- ---------
36,548 32,756
-------- ---------
Net operating income 103,379 86,714
Income from other real estate investments 6,171 4,900
Mortgage financing income 3,560 5,574
Management and other fee income 5,761 2,902
Depreciation and amortization (26,858) (19,009)
-------- ---------
92,013 81,081
Interest, dividends and other investment income 3,003 2,340
Other income, net 3,912 318
Interest expense (27,443) (22,961)
General and administrative expenses (10,231) (8,603)
Gain on early extinguishment of debt -- 2,921
-------- ---------
61,254 55,096
Provision for income taxes (2,103) (1,273)
Equity in income of real estate joint ventures, net 14,005 9,154
Minority interests in income of partnerships, net (2,229) (1,591)
-------- ---------
Income from continuing operations 70,927 61,386
-------- ---------
Discontinued Operations:
- ------------------------
Income/(loss) from discontinued operating
properties (523) 2,130
Gain on early extinguishment of debt -- 3,341
Loss on operating properties held for sale/sold (4,151) --
Gain on disposition of operating properties 1,237 3,280
-------- ---------
Income/ (loss) from discontinued operations (3,437) 8,751
-------- ---------
Gain on sale of development properties,
net of tax of $2,599 and $549, respectively (1) 3,899 824
-------- ---------
Net income 71,389 70,961
Preferred stock dividends (2,909) (4,609)
-------- ---------
Net income available to common shareholders $68,480 $66,352
======== =========
Per common share:
Income from continuing operations:
- Basic $0.65 $0.55
======== =========
- Diluted $0.64(2) $0.54
======== =========
Net income:
- Basic $0.62 $0.63
======== =========
- Diluted $0.61(2) $0.63
======== =========
Weighted average shares outstanding:
- Basic 110,805 104,711
======== =========
- Diluted 115,534(2) 105,782
======== =========
Income subject to income taxes $11,989 $5,021
(1) Included in the calculation of Income from continuing operations
per common 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 $1,502 for the three
months ended March 31, 2004 reflecting the distribution associated
with the units. For the period ended March 31, 2003, the impact of
the conversion would have an anti-dilutive effect on net income
and therefore has not been included.
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
March 31,
2004 2003
---- ----
Funds From Operations
Net income $71,389 $70,961
Gain on disposition of operating properties (1,237) (3,280)
Gain on disposition of joint venture
operating properties (1,223) --
Depreciation and amortization 26,992 19,894
Depreciation and amortization -
real estate joint ventures 8,248 6,200
Preferred stock dividends (2,909) (4,609)
--------- ---------
Funds from operations $101,260 $89,166(4)
========= =========
Per common share:
- Basic $0.91 $0.85
========= =========
- Diluted $0.89(3) $0.84(3)
========= =========
Weighted Average Share Information
Weighted average shares -
- Basic 110,805 104,711
=========== =========
- Diluted 115,534(3) 108,229(3)
=========== =========
(3) Reflects the potential impact if certain units were converted to
common stock at the beginning of the period. Funds from operations
would be increased by $1,502 and $1,423 for the three months ended
March 31, 2004 and 2003, respectively.
(4) 2003 FFO was increased from $82,904 to $89,166 for the three
months ended March 31, 2003 to include gains on early
extinguishment of debt of $6,262 in accordance with NAREIT
guidance.
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 share data)
March 31, December 31,
2004 2003
---- ----
Assets:
Operating real estate, net of accumulated
depreciation of $587,309 and $568,015,
respectively $ 3,463,510 $ 3,264,223
Investments and advances in real estate
joint ventures 460,144 487,394
Real estate under development 298,656 304,286
Other real estate investments 121,099 113,085
Mortgages and other financing receivables 103,630 101,691
Cash and cash equivalents 55,687 48,288
Marketable securities 46,283 45,677
Accounts and notes receivable 55,940 50,408
Other assets 162,192 188,873
-------------- ----------
$4,767,141 $4,603,925
============== ==========
Liabilities:
Notes payable $1,701,250 $1,686,250
Mortgages payable 454,687 375,914
Construction loans payable 91,524 92,784
Other liabilities 236,715 213,214
-------------- ----------
2,484,176 2,368,162
-------------- ----------
Minority interests in partnerships 124,100 99,917
-------------- ----------
Stockholders' Equity:
Preferred stock, $1.00 par value,
authorized 3,600,000 shares
Class F Preferred Stock, $1.00 par value,
authorized 700,000 shares
Issued and outstanding 700,000 shares 700 700
Aggregate liquidation preference $175,000
Common Stock, $.01 par value, authorized
200,000,000 shares
Issued and outstanding
111,052,341 and 110,623,967 shares, 1,111 1,106
respectively
Paid-in capital 2,159,152 2,147,286
Cumulative distributions in excess of net
income (24,935) (30,112)
-------------- ----------
2,136,028 2,118,980
Accumulated other comprehensive income 22,837 16,866
-------------- ----------
2,158,865 2,135,846
-------------- ----------
$4,767,141 $4,603,925
============== ==========
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 $2.33 $2.36
Projected depreciation and amortization 0.83 0.83
Projected depreciation and amortization
real estate joint ventures 0.33 0.35
Gain on disposition of operating properties (0.01) (0.01)
Gain on disposition of joint venture
operating properties (0.01) (0.01)
-------- ------
Projected FFO per diluted common share $3.47 $3.52
======== ======
Projections involve numerous assumptions such as rental income
(including assumptions on percentage rent), interest rates, tenant
defaults, occupancy rates, foreign currency exchange rates (such as
the US-Canadian rate), selling prices of properties held for
disposition, expenses (including salaries and employee costs),
insurance costs and numerous other factors. Not all of these factors
are determinable at this time and actual results may vary from the
projected results, and may be above or below the range indicated. The
above range represents management's estimate of results based upon
these assumptions as of the date of this press release.
CONTACT: Kimco Realty Corporation
Scott Onufrey, 516-869-7190
sonufrey@kimcorealty.com