EXHIBIT 99.1
Kimco Realty Reports Strong Operating Results
NEW HYDE PARK, N.Y.--(BUSINESS WIRE)--July 27, 2004--Highlights:
-- Net Income Per Share Increases 32.6 Percent to $0.61
-- FFO Per Share Increases to $0.87, Up 10.1 Percent on a
Comparable Basis
-- Company Increases 2004 FFO Guidance and Establishes 2005 FFO
Guidance
-- Strengthens Balance Sheet Retiring $400 million Interim Credit
Facility from MART Acquisition
Kimco Realty Corporation (NYSE: KIM) today announced net income
for the second quarter ended June 30, 2004 of $71.4 million compared
to $61.3 million a year earlier, an increase of 16.4 percent. On a
diluted per share basis, net income increased 32.6 percent to $0.61
from $0.46 reported in the second quarter of 2003. Net income per
diluted common share in the year earlier period includes a $7.8
million non-cash charge, or $0.07 per share related to the redemption
of preferred stock.
Kimco's second quarter funds from operations ("FFO"), a widely
accepted supplemental measure of REIT performance, rose 28.3 percent
to $98.9 million from $77.1 million for the same period last year. On
a diluted per common share basis, second quarter FFO increased 20.8
percent to $0.87 from $0.72 a year ago. Funds from operations excludes
gains on dispositions of operating properties net of minority
interests of approximately $4.4 million, or $0.04 per share in 2004
and losses of $0.9 million, or approximately $0.01 per share, for
2003.
Previously reported FFO for second quarter 2003 was decreased $7.8
million, or $0.07 per diluted common share to include a non-cash
adjustment associated with the original issuance costs of preferred
stock redeemed by the Company in 2003. The Company's growth in FFO per
share on the previously reported second quarter 2003 per share amount
of $0.79 would have been 10.1 percent, on a comparable basis.
For the six months ended June 30, 2004, net income increased 7.9
percent to $142.8 million from $132.3 million for the same period last
year. Net income per diluted common share increased 11.0 percent to
$1.21 from $1.09 a year ago. Funds from operations rose 20.4 percent
to $200.1 million for the six-month period from $166.2 million in the
year earlier period. On a diluted per common share basis, FFO
increased 12.8 percent to $1.76 from $1.56 reported a year ago. Funds
from operations for the six months ended June 30, 2004 excludes gains
on dispositions of operating properties net of minority interests and
joint venture properties of $6.9 million or approximately $0.06 per
diluted common share and $2.4 million or approximately $0.02 per
diluted common share for the same period last year.
Previously reported FFO for the year earlier period was also
reduced $0.07 per diluted common share for the original issuance costs
associated with the redeemed preferred shares as noted above and
increased by $6.3 million of gains on the early extinguishment of
debt, or approximately $0.06 per diluted common share. The Company's
growth in FFO per share on the previously reported six-month period
ended June 30, 2003 per share amount of $1.57 would have been 12.1
percent, on a comparable basis.
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 continued to perform well
during the quarter. Revenues from rental property increased 14.3
percent to $131.0 million from $114.6 million and net operating income
increased 15.5 percent to $97.4 million from $84.4 million a year
earlier. Acquisition activities during 2003 and the first half of 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 92.4 percent from 91.9 percent at March 31, 2004 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
128 new leases in this portfolio totaling 793,000 square feet. Year to
date the Company has signed 276 new leases totaling more than 2.0
million square feet of gross leasable area.
Investment Activity
Kimco recently acquired interests in six shopping center
properties, including a Canadian shopping center, purchased a
partner's interest in one shopping center and entered into four
international joint development agreements, three in Mexico and one
in Canada. The shopping center acquisitions and new development
activity is as follows:
Domestic Acquisitions
-- Rivergate Station Shopping Center located in Madison,
Tennessee, was purchased for approximately $20.6 million. This
217,000 square foot shopping center is 92.0 percent leased to
24 tenants including Circuit City and TJ Maxx.
-- Manchester Shopping Center located in Manchester, Vermont, was
acquired for approximately $9.0 million. This
supermarket-anchored center is 96 percent leased to 14
tenants.
-- The Center at Copperfield located in Houston, Texas, was
acquired for $22.4 million. Tenants at this 144,000 square
foot shopping center include Best Buy, Barnes & Noble,
PETsMART and Linens 'n Things. The property is currently 100
percent leased.
-- Valley View located in Roanoke, Virginia, was acquired for
approximately $11.2 million. Dick's Sporting Goods and Circuit
City anchor this 100 percent leased shopping center.
-- Kimco acquired the Mission Bell shopping center in Tampa,
Florida, for approximately $16.8 million. This 168,000 square
foot shopping center is a redevelopment project currently
anchored by Kmart.
-- The Company acquired its partner's 50.0 percent interest in
Costco Plaza located in Tempe, Arizona, for $12.5 million and
now owns a 100 percent interest in the property.
International Acquisitions
-- Clarkson Crossing located in Mississauga, Ontario, was
acquired for approximately $32.3 million. Canadian Tire
anchors this 196,000 square foot shopping center, which is
100 percent leased. Kimco's interest was acquired in its 50/50
joint venture with RioCan REIT. Kimco's joint venture with
RioCan now consists of 33 shopping centers totaling 7.6
million square feet of gross leasable area.
-- Kimco closed on the third phase of Sudbury Shopping Centre, a
joint venture development between Kimco, RioCan and Trinity
Development Group. In addition, the venture has two other
development projects in process; Dufferin & Steeles in Toronto
is anchored by Loblaws and Winners with Home Depot as a shadow
anchor. The third development is a 105,000 square foot
grocery anchored shopping center located in Brampton, Ontario.
-- Kimco entered into an agreement with FRISA Corporation, one of
Mexico's largest commercial real estate developers, to fund
up to MXN$50.0 million (approximately USD $5.0 million)
for the joint development of a Wal-Mart anchored center in
Cancun, Mexico.
-- Kimco entered into a joint venture with G. Accion to develop a
Wal-Mart anchored shopping center in Huehuetoca, Mexico.
-- The Company is finalizing a joint venture agreement to develop
a 125,000 square foot HEB anchored shopping center in San
Luis, Mexico.
In addition, Kimco continued to expand its preferred equity
program investing $29.7 million in seven transactions. Kimco's
preferred equity portfolio has grown to include 40 properties with an
aggregate commitment of approximately $120 million.
Kimco completed the transfer of 26 former Mid Atlantic Realty
Trust (MART) properties to its co-investment programs. Upon completing
the property transfers during the quarter, Kimco retired the $400
million interim credit facility it used to acquire the MART portfolio
in October 2003. The Company's transfer activity was as follows:
-- The Company transferred 15 former MART properties to the
Kimco / GE investment program during the quarter and one
subsequent to quarter-end. The properties transferred
represent approximately $178.8 million of real estate assets.
-- Eight former MART properties and four additional properties
were transferred to a new joint venture with institutional
investors called the Kimco Income Fund I. Kimco owns a 15
percent interest in this fund, which has a gross asset value
of approximately $269.0 million.
-- Kimco transferred two former MART properties to a joint
venture with LaSalle Investment Management, three additional
MART properties are expected to be transferred to this venture
during the third quarter.
-- One additional property acquired by Kimco earlier this year,
Towson Marketplace in Towson, Maryland, was transferred to a
separate joint venture with an institutional partner.
Kimco currently has approximately $4.0 billion of assets under
management in the Company's co-investment programs. As a result of
Kimco's efforts to build its management business, management and other
fee income for the quarter increased 93.1 percent to $7.1 million from
$3.7 million, a year ago.
Kimco's merchant building business, Kimco Developers Inc. (KDI),
completed the sale of two shopping centers and sold portions of ten
additional projects generating proceeds of $47.4 million. These
property sales resulted in gains on sales of approximately $1.9
million, net of tax. In addition, KDI invested approximately $43.3
million in its pipeline of 24 existing shopping center developments.
Kimco continued to make strategic property sales, disposing of six
properties from the parent portfolio generating proceeds of $26.5
million, and the Kimco Income REIT (KIR) sold one property for
proceeds of $19.5 million. Separately, Kimco sold four shopping
centers from its Kimsouth portfolio for proceeds of approximately
$32.5 million and an additional property after quarter end was sold
for $14.3 million. This portfolio, which was acquired in November
2002, originally consisted of 37 shopping centers and currently has 14
properties remaining.
Earnings Guidance
As a result of the Company's continued strong operating results,
Kimco's management is comfortable that the Company will meet the
current First Call mean estimate of $3.53 for FFO in 2004. This
estimate is $0.01 above the high end of the range of guidance
management provided last quarter. Management also provided an initial
range of guidance for 2005 FFO of between $3.75 and $3.82 for the year
ending December 31, 2005. The current First Call mean estimate for
Kimco's 2005 FFO is $3.74.
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 one of the
nation's largest portfolios of neighborhood and community shopping
centers with interests in 699 properties comprising approximately
102.0 million square feet of leasable space located throughout 42
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
Condensed Consolidated Statements of Income
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
---------- ---------- ---------- ----------
Real Estate Operations:
- -----------------------
Revenues from rental
property $ 131,026 $ 114,645 $ 270,378 $ 233,871
---------- ---------- ---------- ----------
Rental property expenses:
Rent 2,965 2,695 5,791 5,384
Real estate taxes 17,046 15,024 33,627 29,294
Operating and
maintenance 13,582 12,545 30,491 28,233
---------- ---------- ---------- ----------
33,593 30,264 69,909 62,911
---------- ---------- ---------- ----------
Net operating income 97,433 84,381 200,469 170,960
Income from other real
estate investments 9,124 4,909 15,295 9,809
Mortgage financing income 2,898 6,676 6,458 12,250
Management and other fee
income 7,068 3,661 12,829 6,563
Depreciation and
amortization (26,182) (19,790) (52,973) (38,770)
---------- ---------- ---------- ----------
90,341 79,837 182,078 160,812
Other Investments:
- ------------------
Interest, dividends and
other investment
income 1,572 5,231 4,575 7,571
Other income/(expense),
net 4,385 (1,419) 8,295 (1,101)
Interest expense (28,381) (24,810) (55,824) (47,771)
General and
administrative expenses (10,395) (8,886) (20,626) (17,489)
Gain on early
extinguishment of debt -- -- -- 2,921
---------- ---------- ---------- ----------
57,522 49,953 118,498 104,943
Provision for income
taxes (3,316) (1,241) (5,419) (2,514)
Equity in income of real
estate joint ventures, net 11,924 10,138 25,928 19,292
Minority interests in
income of partnerships,
net (3,001) (1,806) (5,230) (3,396)
---------- ---------- ---------- ----------
Income from continuing
operations 63,129 57,044 133,777 118,325
---------- ---------- ---------- ----------
Discontinued Operations:
- ------------------------
Income from discontinued
operating
properties 1,493 1,790 1,248 4,025
Gain on early
extinguishment of debt -- -- -- 3,341
Loss on operating
properties held for
sale/sold -- -- (4,151) --
Gain/(loss) on
disposition of
operating properties 4,875 (867) 6,112 2,413
---------- ---------- ---------- ----------
Income from discontinued
operations 6,368 923 3,209 9,779
---------- ---------- ---------- ----------
Gain on sale of
development properties,
net of tax of $1,289,
$2,253, $3,888 and
$2,802,
respectively(1) 1,933 3,379 5,833 4,203
---------- ---------- ---------- ----------
Net income 71,430 61,346 142,819 132,307
Original issuance costs
associated with the
redemption of
preferred stock -- (7,787) -- (7,787)
Preferred dividends (2,909) (4,241) (5,819) (8,850)
---------- ---------- ---------- ----------
Net income available to
common shareholders $ 68,521 $ 49,318 $ 137,000 $ 115,670
========== ========== ========== ==========
Per common share:
Income from continuing
operations:
- Basic $ 0.56 $ 0.46 $ 1.21 $ 1.01
========== ========== ========== ==========
- Diluted(2) $ 0.55 $ 0.45 $ 1.18 $ 1.00
========== ========== ========== ==========
Net income:
- Basic $ 0.62 $ 0.47 $ 1.23 $ 1.10
========== ========== ========== ==========
- Diluted(2) $ 0.61 $ 0.46 $ 1.21 $ 1.09
========== ========== ========== ==========
Income subject to
income taxes $ 11,739 $ 9,128 $ 23,728 $ 14,149
Weighted Average Share Three Months Ended Six Months Ended
Information June 30, June 30,
For earnings per share
calculations: 2004 2003 2004 2003
--------- --------- --------- ---------
Weighted average shares -
- Basic 111,118 105,179 110,961 104,946
========= ========= ========= =========
- Diluted(2) 113,092 106,830 113,075 106,302
========= ========= ========= =========
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) The potential impact if certain units were converted to common
stock at the beginning of the period would have an anti-dilutive
effect on net income and therefore has not been included.
Kimco Realty Corporation
Funds From Operations
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
---------- ---------- ---------- ----------
Funds From
Operations(1)
Net income $ 71,430 $ 61,346 $ 142,819 $ 132,307
(Gain)/loss on
disposition of
operating
properties,
net of
minority
interests (4,442) 867 (5,679) (2,413)
Gain on
disposition of
joint venture
operating
properties -- -- (1,223) --
Depreciation
and
amortization 26,221 20,686 53,213 40,580
Depreciation
and
amortization -
real estate
JV's, net of
minority
interests 8,564 6,200 16,812 12,400
Original
issuance costs
associated
with the
redemption of
preferred
stock -- (7,787) -- (7,787)
Preferred stock
dividends (2,909) (4,241) (5,818) (8,850)
---------- ---------- ---------- ----------
Funds from
operations(1) $ 98,864 $ 77,071 (2) $ 200,124 $ 166,237 (2)
========== ========== ========== ==========
Per common
share:
- Basic $ 0.89 $ 0.73 $ 1.80 $ 1.58
========== ========== ========== ==========
- Diluted(3) $ 0.87 $ 0.72 $ 1.76 $ 1.56
========== ========== ========== ==========
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
------------------- -------------------
Weighted
Average Share
Information
For funds from
operations
calculations:
Weighted
average
shares -
- Basic 111,118 105,179 110,961 104,946
========== ========== ========== ==========
- Diluted(3) 115,475 109,213 115,458 108,716
========== ========== ========== ==========
(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 and gains and losses on
sales of unconsolidated joint ventures, net of minority interests,
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) 2003 FFO was decreased from $84,858 to $77,071 for the three
months ended June 30, 2003 and from $167,762 to $166,237 for the
six months ended June 30, 2003 to include gains on early
extinguishment of debt of $6,262 and $7,787 of original issuance
costs associated with the redemption of preferred stock in
accordance with NAREIT guidance.
(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
June 30, 2004 and 2003, respectively and $3,004 and $2,846 for the
six months ended June 30, 2004 and 2003, respectively.
Kimco Realty Corporation
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
June 30, December 31,
2004 2003
------------ ------------
Assets:
Operating real estate, net of accumulated
depreciation of $600,537 and $568,015,
respectively $ 3,011,337 $ 3,264,223
Investments and advances in real estate
joint ventures 494,012 487,394
Real estate under development 290,256 304,286
Other real estate investments 129,195 113,085
Mortgages and other financing receivables 109,491 101,691
Cash and cash equivalents 55,346 48,288
Marketable securities 45,610 45,677
Accounts and notes receivable 48,342 50,408
Other assets 138,099 188,872
------------ ------------
$ 4,321,688 $ 4,603,924
============ ============
Liabilities:
Notes payable $ 1,362,250 $ 1,686,250
Mortgages payable 369,525 375,914
Construction loans payable 107,197 92,784
Other liabilities 215,344 213,213
------------ ------------
2,054,316 2,368,161
------------ ------------
Minority interests in partnerships 97,311 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
111,214,468 and 110,623,967, respectively 1,112 1,106
Paid-in capital 2,164,454 2,147,286
Cumulative distributions in excess of net
income (19,806) (30,112)
------------ ------------
2,146,460 2,118,980
Accumulated other comprehensive income 23,601 16,866
------------ ------------
2,170,061 2,135,846
------------ ------------
$ 4,321,688 $ 4,603,924
============ ============
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
Projected Full Year
Full Year 2005
2004 Low High
--------- -------------
Projected diluted earnings per common share 2.42 $2.55 $2.62
Projected depreciation and amortization 0.87 0.84 0.84
Projected depreciation and amortization
real estate joint ventures, net of minority
interests 0.33 0.36 0.36
Gain on disposition of operating properties (0.08) -- --
Gain on disposition of joint venture
operating properties, net of minority
interests (0.01) -- --
--------- -------------
Projected FFO per diluted common share $3.53 $3.75 $3.82
========= =============
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