Exhibit 99.1
Kimco Realty Reports Third Quarter Operating Results and 13th
Consecutive Annual Dividend Increase
NEW HYDE PARK, N.Y.--(BUSINESS WIRE)--Oct. 26, 2004--Kimco Realty
Corporation (NYSE:KIM):
Highlights:
-- Income From Continuing Operations Increased 16.0%, 13.0% Per
Share
-- Funds From Operations Increased 12.2%, 8.5% Per Share
-- Board of Directors Increases Quarterly Common Stock Dividend
7.0%
-- Management Increases 2004 and 2005 Earnings Guidance
-- Acquired 30 Property Interests Totaling $196.3 Million of
Gross Investment
-- Portfolio Occupancy Increased 50 Basis Points During the
Quarter to 92.9%
Kimco Realty Corporation (NYSE:KIM) today announced that income
from continuing operations, which includes gain on sale of development
properties, net, for the third quarter ended September 30, 2004 was
$71.7 million compared to $61.9 million a year earlier, an increase of
16.0 percent. On a diluted per share basis, income from continuing
operations increased 13.0 percent to $0.61 from $0.54 in the third
quarter of 2003. Net income for the quarter was $78.5 million compared
to $91.5 million a year earlier. The decline in net income was the
result of lower gains on sales of operating properties. Net income for
the current quarter included $6.8 million from discontinued operations
compared to $29.7 million from discontinued operations in the third
quarter of 2003. Discontinued operations include net gains on
dispositions of operating real estate of $5.5 million and $28.1
million in the third quarter of 2004 and 2003, respectively. Net
income per diluted common share for the quarter was $0.67 compared to
$0.81 a year earlier.
Kimco's third quarter funds from operations ("FFO"), a widely
accepted supplemental measure of REIT performance, rose 12.2 percent
to $101.6 million from $90.6 million for the same period last year. On
a diluted per common share basis, third quarter FFO increased 8.5
percent to $0.89 from $0.82 a year ago. Funds from operations excludes
gains on dispositions of operating properties net of minority
interests and joint venture properties of approximately $8.0 million,
or $0.07 per diluted common share in 2004 and $28.1 million, or
approximately $0.25 per diluted common share, in 2003.
For the nine months ended September 30, 2004, income from
continuing operations increased 14.8 percent to $211.4 million from
$184.1 million for the same period last year. Income from continuing
operations per diluted common share increased 17.0 percent to $1.79
from $1.53 a year ago. Net income for the nine months was $221.3
million, or $1.88 per diluted common share compared to $223.8 million,
or $1.90 per diluted common share a year earlier. Net income for the
period included $9.9 million from discontinued operations compared to
$39.7 million from discontinued operations a year ago. Discontinued
operations includes net gains on dispositions of operating real estate
of $7.4 million and $30.5 million for the nine-month period ended
September 30, 2004 and September 30, 2003, respectively.
Funds from operations rose 17.5 percent to $301.7 million for the
nine-month period from $256.8 million in the year earlier period. On a
diluted per common share basis, FFO for the nine-month period
increased 11.3 percent to $2.65 from $2.38, a year ago. Funds from
operations for the nine months ended September 30, 2004 excludes gains
on dispositions of operating properties net of minority interests and
joint venture properties of $14.9 million or approximately $0.13 per
diluted common share and $30.5 million or approximately $0.28 per
diluted common share for the same period last year. Funds from
operations for the nine-month period ended September 30, 2003 also
reflects a $7.8 million non-cash adjustment, or $0.07 per diluted
common share, associated with the original issuance costs of Kimco's
$225 million preferred stock that was redeemed during the second
quarter of 2003.
Funds from operations (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.
During the quarter, Kimco's parent portfolio occupancy increased
to 92.9 percent from 92.4 percent at June 30, 2004 and 89.5 percent a
year earlier. The increase in occupancy was the result of new leasing,
acquisition activity and property sales. For the quarter, Kimco signed
138 new leases in this portfolio totaling 676,000 square feet. Year to
date the Company has signed 414 new leases in this portfolio totaling
approximately 2.7 million square feet of gross leasable area.
Dividend Increase & Lead Director Named
Kimco's Board of Directors approved a common stock dividend
increase, raising the quarterly dividend payable per common share by
7.0 percent to $0.61 per common share from the current quarterly level
of $0.57 per common share. Kimco has raised its dividend for 13
consecutive years, from an initial annual rate of $0.78 per share
(adjusted for stock splits) in 1992 to the current annual rate of
$2.44 per share, a compound annual growth rate of 9.2 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 18, 2005
to shareholders of record on January 3, 2005. The Board of Directors
also appointed Richard G. Dooley, Lead Director. Mr. Dooley has been a
Director of the Company since 1991, Chairman of the Nominating and
Corporate Governance Committee of the Board of Directors and served as
Executive Vice President and Chief Investment Officer of Massachusetts
Mutual Life Insurance Company from 1978 to 1993.
Investment Activity
Kimco recently entered into a joint venture with DRA Advisors LLC
to acquire Price Legacy Corporation (NASDAQ: PLRE) in a transaction
valued at approximately $1.3 billion. Kimco will be a 15 percent
partner and manage the properties on behalf of the venture. Price
Legacy consists of approximately 33 shopping centers located primarily
in California, Florida and Arizona. The closing of this transaction is
subject to the approval of Price Legacy's stockholders and other
customary closing conditions for transactions of this type.
Separately, Kimco recently acquired interests in 26 properties,
one development project located in Sudbury Ontario and three
development projects located in Mexico for a total of $196.3 million
of gross investment. The shopping center acquisitions and development
activities are as follows:
Domestic Acquisitions
-- As previously announced, Kimco acquired from Kmart, 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
on a short-term lease. Kimco is working closely with another
national retailer to replace Kmart at the site.
-- Palm Aire Marketplace located in Pompano, Florida was acquired
for $20.4 million in a partnership with DRA Advisors. The
140,000 square foot property is 94.0 percent leased to 28
tenants.
-- Kimco acquired a 50 percent partnership interest in a 170,000
square foot former Kmart site in Valdosta, Georgia for
approximately $10.7 million. Lowes, a national home
improvement retailer, is open and operating in the former
Kmart space.
-- The Company acquired a portfolio of 11 properties located in
the New York Metropolitan area for approximately $84.5
million. Ten of the properties are leased to Duane Reade and
one is leased to Rite Aid, with leases that are substantially
below market and remaining terms that expire in approximately
nine years.
-- Additionally, Kimco, in its joint venture with GE Real Estate,
entered into a contract to acquire the RioNorte Shopping
Center, a 237,000 square foot shopping center in Laredo, Texas
for approximately $23.6 million. Closing on this transaction
is expected within the current quarter.
International Activities
-- As previously announced, Kimco closed on the third phase of
Sudbury Shopping Centre, a joint venture development between
Kimco, RioCan and Trinity Development Group. The total
development budget for this project is approximately $26.0
million to construct an additional 170,000 square feet of
gross leasable area.
-- Kimco entered into a joint venture with G. Accion to develop a
Wal-Mart anchored shopping center in Huehuetoca, Mexico. The
project, which will also include a McDonald's restaurant and
other local tenants, is expected to cost approximately $14.0
million upon completion in the second quarter of 2005.
-- The Company completed a joint venture agreement to develop a
125,000 square foot H-E-B anchored shopping center in San
Luis, Mexico. H-E-B, a Texas based grocery retailer with more
than 300 stores in Texas and Mexico, is expected to open for
operations in the fourth quarter of 2004. Total development
cost for this project is expected to be $12.7 million upon
completion.
-- Kimco acquired a 23.6 acre parcel of land for a $25.3 million
development project in Reynosa, Mexico. H-E-B and The Home
Depot will co-anchor this development.
-- The Company acquired a preferred equity interest in a 1.1
million square foot portfolio of six enclosed shopping centers
located in the province of Quebec, Canada for $9.6 million.
Five of the shopping centers are anchored by grocery stores
that generate sales between C$475 and C$725 per square foot.
Separately, Kimco invested $26.9 million in six additional
preferred equity transactions. Kimco's preferred equity portfolio has
grown to include 50 properties with an aggregate commitment of
approximately $142.0 million.
Kimco completed the transfer of six properties to its
co-investment programs representing approximately $106.8 million of
property value. Kimco will continue to manage the properties on behalf
of the ventures under long-term incentive management agreements. Kimco
currently has approximately $3.8 billion of assets under management in
these programs. Management and other fee income for the quarter
increased 41.1 percent to $6.0 million from $4.3 million, a year ago.
Kimco's merchant building business, Kimco Developers Inc. (KDI),
completed the sale of one shopping center and sold portions of two
additional projects generating proceeds of $34.1 million. These
property sales resulted in gains on sales of approximately $1.6
million, net of tax. Several pad sites and two shopping center
projects are currently under contract for sale in the fourth quarter
of 2004. In addition, KDI acquired three new projects for a total of
$23.8 million and invested approximately $22.3 million in its pipeline
of 24 existing shopping center developments.
Kimco continued to make strategic property sales, disposing of
five properties from the parent portfolio generating proceeds of $39.6
million, and three properties from the Kimco / GE joint venture
generating proceeds of $44.2 million. Additionally, Kimco sold three
shopping centers from its Kimsouth portfolio for proceeds of
approximately $19.0 million. The Kimsouth portfolio, which was
acquired in November 2002, originally consisted of 37 shopping centers
and currently has 14 properties remaining.
Increased Earnings Guidance
As a result of the Company's continued strong operating results,
Kimco's management increased its projection for FFO to $3.55 for the
full year ending December 31, 2004. This estimate is $0.02 above the
guidance management provided last quarter. Management also increased
its guidance for FFO for the year ending December 2005 to between
$3.77 and $3.83. Kimco's prior guidance for FFO in 2005 was between
$3.75 and $3.82.
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 718 properties comprising approximately
104.0 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 Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
-------- -------- -------- --------
Revenues from rental property $123,274 $117,409 $392,219 $350,038
-------- -------- -------- --------
Rental property expenses:
Rent 2,667 2,688 8,446 8,060
Real estate taxes 16,266 15,533 49,660 44,396
Operating and maintenance 12,461 11,590 42,637 39,549
-------- -------- -------- --------
31,394 29,811 100,743 92,005
-------- -------- -------- --------
Net operating income 91,880 87,598 291,476 258,033
Income from other real estate
investments 5,119 5,998 20,414 15,807
Mortgage financing income 3,179 3,713 9,637 15,963
Management and other fee income 6,008 4,259 18,836 10,822
Depreciation and amortization (24,304) (20,960) (76,961) (59,519)
-------- -------- -------- --------
81,882 80,608 263,402 241,106
Interest, dividends and other
investment income 8,595 5,633 13,170 13,204
Other income / (expense), net 4,974 263 13,216 (837)
Interest expense (25,845) (26,094) (81,447) (73,865)
General and administrative
expenses (11,034) (11,232) (31,660) (28,720)
Gain on early extinguishment of
debt -- -- -- 2,921
-------- -------- -------- --------
58,572 49,178 176,681 153,809
Benefit (provision) for income
taxes 24 (1,171) (5,395) (3,686)
Equity in income of real estate
joint ventures, net 13,864 11,167 39,792 30,459
Minority interests in income of
partnerships, net (2,312) (2,323) (7,059) (5,662)
-------- -------- -------- --------
Income from continuing
operations 70,148 56,851 204,019 174,920
-------- -------- -------- --------
Discontinued Operations:
- -----------------------
Income from discontinued
operating properties 1,319 1,601 2,473 5,882
Gain on early extinguishment of
debt -- -- -- 3,341
Loss on operating properties
held for sale/sold (913) -- (5,064) --
Gain on disposition of
operating properties 6,386 28,053 12,498 30,465
-------- -------- -------- --------
Income from discontinued
operations 6,792 29,654 9,907 39,688
-------- -------- -------- --------
Gain on sale of development
properties, net
of tax of $1,047, $3,333,
$4,935 and $6,134,
respectively (1) 1,571 4,999 7,404 9,202
-------- -------- -------- --------
Net income 78,511 91,504 221,330 223,810
Original issuance costs
associated with the
redemption of preferred
stock(1) -- -- -- (7,788)
Preferred stock dividends (2,909) (2,909) (8,728) (11,759)
--------- ------- -------- --------
Net income available to common
shareholders $ 75,602 $88,595 $212,602 $204,263
======== ======== ======== ========
Per common share:
Income from continuing
operations:
- Basic $ 0.62 $ 0.55 $ 1.82 $ 1.55
======== ======== ======== ========
- Diluted (2) $ 0.61 $ 0.54 $ 1.79 $ 1.53
======== ======== ======== ========
Net income:
- Basic $ 0.68 $ 0.82 $ 1.91 $ 1.93
======== ======== ======== ========
- Diluted (2) $ 0.67 $ 0.81 $ 1.88 $ 1.90
======== ======== ======== ========
Income subject to income
taxes $ 2,585 $11,167 $ 26,313 $ 25,315
Weighted Average Share Information Three Months Nine Months
Ended Ended
September 30, September 30,
For earnings per share
calculations: 2004 2003 2004 2003
-------- -------- -------- --------
Weighted average shares -
- Basic 111,526 107,909 111,151 105,945
======== ======== ======== ========
- Diluted(2) 113,621 109,853 113,259 107,484
======== ======== ======== ========
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 have not been included.
Kimco Realty Corporation
Funds From Operations
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
-------- -------- -------- --------
Funds From Operations(1)
Net income $ 78,511 $ 91,504 $221,330 $223,810
Gain on disposition of
operating properties,
net of minority interests (6,386) (28,053) (12,065) (30,465)
Gain on disposition of joint
venture operating
properties (1,637) -- (2,860) --
Depreciation and amortization 24,395 21,912 77,608 62,492
Depreciation and amortization -
real estate joint ventures 9,631 8,111 26,443 20,511
Redemption costs -- -- -- (7,788)
Preferred stock dividends (2,909) (2,909) (8,727) (11,759)
-------- -------- -------- --------
Funds from operations(1) $101,605 $ 90,565 $301,729 $256,801
======== ======== ======== ========
Per common share:
- Basic $ 0.91 $ 0.84 $ 2.71 $ 2.42
======== ======== ======== ========
- Diluted (2) $ 0.89 $ 0.82 $ 2.65 $ 2.38
======== ======== ======== ========
Weighted Average Share Three Months Ended Nine Months Ended
Information September 30, September 30,
2004 2003 2004 2003
-------- -------- -------- --------
Weighted average shares -
- Basic 111,526 107,909 111,151 105,945
======== ======== ======== ========
- Diluted (2) 116,004 112,236 115,642 109,888
======== ======== ======== ========
(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 on sales of
operating real estate, plus the pro-rata amount of depreciation
and amortization 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) 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
September 30, 2004 and 2003, respectively, and $4,506 and $4,269
for the nine months ended September 30, 2004 and 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,
2004 2003
-------------- --------------
Assets:
Operating real estate, net of
accumulated depreciation of
$615,380 and $568,015, respectively $ 2,910,689 $ 3,264,223
Investments and advances in real estate
joint ventures 498,764 487,394
Real estate under development 294,980 304,286
Other real estate investments 150,239 113,085
Mortgages and other financing
receivables 128,953 101,691
Cash and cash equivalents 134,031 48,288
Marketable securities 64,455 45,677
Accounts and notes receivable 51,503 50,408
Other assets 143,504 188,872
-------------- --------------
$ 4,377,118 $ 4,603,924
============== ==============
Liabilities:
Notes payable $ 1,377,250 $ 1,686,250
Mortgages payable 316,935 375,914
Construction loans payable 125,052 92,784
Other liabilities 244,039 213,213
-------------- --------------
2,063,276 2,368,161
-------------- --------------
Minority interests in partnerships 102,587 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 112,042,471
and 110,623,967 shares, respectively 1,120 1,106
Paid-in capital 2,188,533 2,147,286
Cumulative distributions in excess of
net income (8,068) (30,112)
-------------- --------------
2,182,285 2,118, 980
Accumulated other comprehensive income 28,970 16,866
-------------- --------------
2,211,255 2,135,846
-------------- --------------
$ 4,377,118 $ 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 Projected Range
Full Year Full Year 2005
2004 Low High
-------- -------- --------
Projected diluted earnings per common
share $ 2.49 $ 2.57 $ 2.63
Projected depreciation and amortization 0.88 0.84 0.84
Projected depreciation and amortization
real estate joint ventures, net of
minority
interests 0.31 0.36 0.36
Gain on disposition of operating
properties (0.10) -- --
Gain on disposition of joint venture
operating properties, net of minority
interests (0.03) -- --
-------- -------- --------
Projected FFO per diluted common share $ 3.55 $ 3.77 $ 3.83
======== ======== ========
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