Exhibit 99.1
Kimco Realty Reports Strong Fourth Quarter and
Full Year Operating Results
NEW HYDE PARK, N.Y.--(BUSINESS WIRE)--Feb. 8, 2005--Kimco Realty
Corporation (NYSE: KIM)
Highlights:
-- Income From Continuing Operations Increased 14.5% for the Year
-- Funds From Operations Increased 14.8% for the Year
-- Funds From Operations Per Share Increased 9.9% for the year to
$3.55
-- Portfolio Occupancy Increased 70 Basis Points During the
Quarter and 290 Basis Points for the Year to 93.6%
Kimco Realty Corporation (NYSE: KIM) today announced that income
from continuing operations for the fourth quarter ended December 31,
2004 was $71.1 million compared to $62.7 million a year earlier, an
increase of 13.3 percent. Fourth quarter 2003 income from continuing
operations included a gain on the sale of a portion of an operating
property of $3.3 million. On a diluted per common share basis, income
from continuing operations increased 11.3 percent to $0.59 from $0.53
in the fourth quarter of 2003. Net income for the quarter was $75.8
million compared to $84.1 million a year earlier. Net income for the
current quarter included $4.7 million from discontinued operations
compared to $21.3 million from discontinued operations in the fourth
quarter of 2003. Net income included net gains on dispositions of
operating real estate of $3.3 million and $16.4 million in the fourth
quarter of 2004 and 2003, respectively, and a gain of $3.4 million on
the early extinguishment of debt in 2003. Net income per diluted
common share for the quarter was $0.64 compared to $0.72 a year
earlier.
Kimco's fourth quarter funds from operations ("FFO"), a widely
accepted supplemental measure of REIT performance, rose 7.6 percent to
$103.6 million from $96.3 million for the same period last year. On a
diluted per common share basis, fourth quarter FFO increased 5.9
percent to $0.90 from $0.85 a year ago. Funds from operations excludes
gains on dispositions of operating properties net of minority
interests and joint venture properties of approximately $4.5 million,
or $0.04 per diluted common share in 2004 and $20.4 million, or
approximately $0.18 per diluted common share, in 2003.
For the year ended December 31, 2004, income from continuing
operations increased 14.5 percent to $281.6 million from $245.9
million for the same period last year. Income from continuing
operations per diluted common share increased 16.1 percent to $2.38
from $2.05 a year ago. Net income for the year ended December 31, 2004
was $297.1 million or $2.51 per diluted common share compared to
$307.9 million, or $2.62 per diluted common share a year earlier. Net
income included net gains on dispositions of operating real estate of
$10.8 million and $46.8 million for the year ended December 31, 2004
and December 31, 2003, respectively, and gains of $6.8 million on the
early extinguishment of debt in 2003.
Funds from operations rose 14.8 percent to $405.3 million for the
year ended December 31, 2004 from $353.1 million in the year earlier
period. On a diluted per common share basis, FFO for the year ended
December 31, 2004 increased 9.9 percent to $3.55 from $3.23 a year
ago. Funds from operations for the year ended December 31, 2004
excludes gains on dispositions of operating properties net of minority
interests and joint venture properties of $19.4 million or
approximately $0.17 per diluted common share and $50.8 million or
approximately $0.46 per diluted common share for the same period last
year.
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 93.6 percent from 92.9 percent at September 30, 2004 and 90.7
percent a year earlier. The increase in occupancy was the result of
new leasing, acquisition activity and property sales. For the quarter,
Kimco signed 101 new leases in this portfolio totaling 540,000 square
feet. For the full year the Company signed 515 new leases in this
portfolio, a 20 percent increase from 2003, totaling approximately 3.2
million square feet of gross leasable area.
Fourth Quarter Investment Summary
During the fourth quarter, Kimco acquired interests in $1.5
billion of shopping center properties. In the parent portfolio the
Company acquired 13 properties totaling 962,000 square feet of gross
leasable area aggregating approximately $118.1 million. In the
Company's co-investment programs, Kimco acquired interests in 37
shopping centers for approximately $1.3 billion. This total includes
the recent acquisition of Price Legacy Corporation in which Kimco has
a 15.0 percent interest and manages the portfolio. Kimco also sold six
properties for $38.9 million, recognizing net gains on sales of $3.3
million. Kimco continues to identify properties in the portfolio for
sale amid strong market demand for shopping center properties.
The Company's preferred equity program had a strong fourth quarter
for new transactions. Kimco invested $55.7 million in 21 properties
during the quarter under this program. Two preferred equity
investments were repaid during the quarter generating $10.0 million of
proceeds, including a profit participation above the Company's
original investment.
Retail Property Solutions, the Company's business of providing
capital and services to retailers, led an $18.5 million financing
package to Tidymans LLC, an independent grocery store operator in the
Pacific Northwest. Kimco also participated in a $8.0 million credit
facility for Priceless Kids, a children's clothing store operator. Two
of Kimco's prior loans to retailers totaling $9.4 million were repaid
at par in December.
Kimco Select Investments invested approximately $19.5 million in
real estate related securities and $32.0 million in a sale leaseback
during the quarter. In addition, the Company exercised 2.5 million
warrants to acquire an equal number of RioCan REIT units at a price of
CAD$11.02. At the exercise price, RioCan's dividend represents an 11.4
percent yield and the recent closing price on the Toronto Stock
Exchange was CAD$19.13 per unit. The Company also purchased CAD$4.4
million of convertible debentures issued by Sterling Centrecorp as
part of a balance sheet recapitalization. This represents Kimco's
second convertible debenture transaction with Sterling, raising
Kimco's total investment to CAD$8.9 million.
Kimco's merchant building business, Kimco Developers Inc. (KDI),
completed the sale of two shopping centers and sold portions of eight
additional projects generating proceeds of $39.4 million. These
property sales resulted in gains on sales of approximately $5.0
million, net of tax. One shopping center and an out-parcel were sold
subsequently to year-end for gross proceeds of approximately $24.4
million. In addition, KDI acquired five new projects during the fourth
quarter for a total of $49.0 million.
For the year, Kimco completed transactions in excess of $3.0
billion. Summary highlights of these activities are as follows:
-- Kimco acquired interests in 73 shopping centers representing
12.6 million square feet totaling $1.9 billion of investment.
-- Properties transferred to the Company's co-investment programs
were $702.6 million for the year. Kimco's focus on growing
these programs resulted in a 66.0 percent increase in
management fee income in the current year.
-- The Company completed 22 preferred equity transactions
totaling $121.0 million of investment and interests in 48
properties.
-- Kimco's development business sold projects totaling $169.4
million, while acquiring interests in six new projects for
$59.9 and invested an additional $145.3 million in ongoing
development projects.
Earnings Guidance
Management maintained its projected range for FFO of $3.77 to
$3.83 per diluted common share for the year ending December 31, 2005.
A reconciliation of management's projections from earnings per diluted
common share to FFO per diluted common share is included in this
release.
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 774 properties comprising approximately 113 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 Year Ended
December 31, December 31,
2004 2003 2004 2003
--------- -------- ------- ---------
Revenues from rental property $124,706 $124,969 $516,967 $473,047
--------- -------- ------- ---------
Rental property expenses:
Rent 2,598 2,782 11,044 10,843
Real estate taxes 17,356 15,706 66,762 59,856
Operating and maintenance 13,225 13,417 55,463 52,523
--------- -------- ------- ---------
33,179 31,905 133,269 123,222
--------- -------- ------- ---------
Net operating income 91,527 93,064 383,698 349,825
Income from other real estate
investments 9,712 7,021 30,127 22,828
Mortgage financing income 5,395 2,905 15,032 18,869
Management and other fee income 6,608 4,493 25,445 15,315
Depreciation and amortization (25,181) (25,529)(101,773) (84,699)
--------- -------- ------- ---------
88,061 81,954 352,529 322,138
Interest, dividends and other
investment income 5,586 5,978 18,756 19,182
Other income / (expense), net (871) (3,049) 10,414 (3,887)
Interest expense (26,280) (28,732)(107,726)(102,597)
General and administrative
expenses (12,952) (9,768) (44,611) (38,486)
Gain on early extinguishment
of debt -- -- -- 2,921
Adjustment of property carrying
values (2,965) -- (2,965) --
--------- -------- ------- ---------
50,579 46,383 226,397 199,271
Benefit (provision) for income
taxes 1,476 2,170 (3,919) (1,516)
Equity in income of real estate
joint ventures, net 16,593 11,817 56,385 42,276
Minority interests in income of
partnerships, net (2,601) (2,119) (9,660) (7,781)
Gain on sale of development
properties, net of tax of
($535), $864, $4,401 and
$6,998, respectively 5,030 1,296 12,434 10,497
--------- -------- ------- ---------
Income from continuing
operations 71,077 59,547 281,637 242,747
--------- -------- ------- ---------
Discontinued Operations:
- ------------------------------------
Income from discontinued operating
properties 1,405 4,750 4,741 11,554
Gain on early extinguishment of
debt -- 3,419 -- 6,760
Loss on operating properties held
for sale/sold -- (4,016) (5,064) (4,016)
Gain on disposition of operating
properties 3,325 17,192 15,823 47,657
------- -------- ------- ---------
Income from discontinued operations 4,730 21,345 15,500 61,955
------- -------- ------- ---------
Gain on sale of operating
properties(1) -- 3,177 -- 3,177
------- -------- ------- ---------
Net income 75,807 84,069 297,137 307,879
Original issuance costs associated
with the redemption of preferred
stock -- -- -- (7,788)
Preferred stock dividends (2,909) (2,909) (11,638) (14,669)
------- -------- ------- ---------
Net income available to common
shareholders $72,898 $81,160 $285,499 $285,422
======= ======== ======= =========
Per common share:
Income from continuing operations:
- Basic $0.61 $0.54 $2.42 $2.09
======= ======== ======= =========
- Diluted (2) $0.59 $0.53 $2.38 $2.05
======= ======== ======= =========
Net income:
- Basic $0.65 $0.73 $2.56 $2.67
======= ======== ======= =========
- Diluted (2) $0.64 $0.72 $2.51 $2.62
======= ======== ======= =========
Income (loss) subject to income
taxes $1,400 $(3,987) $27,713 $21,328
Weighted Average Share Information Three Months Ended Year Ended
December 31, December 31,
For earnings per share calculations: 2004 2003 2004 2003
-------- ------- ------- --------
Weighted average shares -
- Basic 112,259 110,497 111,430 107,092
======== ======= ======= ========
- Diluted(2) 114,628 112,582 113,572 108,770
======== ======= ======= ========
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 Year Ended
December 31, December 31,
2004 2003 2004 2003
-------- ------- -------- ---------
Funds From Operations(1)
Net income $75,807 $84,069 $297,137 $307,879
Gain on disposition of operating
properties, net of minority
interests (3,325)(20,369) (15,390) (50,834)
Gain on disposition of joint
venture operating properties (1,186) -- (4,045) --
Depreciation and amortization 25,264 26,575 102,872 89,068
Depreciation and amortization -
real estate joint ventures 9,957 8,945 36,400 29,456
Redemption costs -- -- -- (7,788)
Preferred stock dividends (2,909) (2,909) (11,638) (14,669)
-------- ------- -------- ---------
Funds from operations(1) $103,608 $96,311 $405,336 $353,112
======== ======= ======== =========
Per common share:
- Basic $0.92 $0.87 $3.64 $3.30
======== ======= ======== =========
- Diluted (2) $0.90 $0.85 $3.55 $3.23
======== ======= ======== =========
Weighted Average Share Information Three Months Ended Year Ended
December 31, December 31,
2004 2003 2004 2003
-------- -------- ------- --------
Weighted average shares -
- Basic 112,259 110,497 111,430 107,092
======== ======== ======= ========
- Diluted (2) 117,011 114,965 115,955 111,168
======== ======== ======= ========
(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 $1,607 and $1,502 for the three months ended
December 31, 2004 and 2003, respectively, and $6,113 and $5,771 for
the year ended December 31, 2004 and 2003, respectively, reflecting
the distributions associated with these units.
Kimco Realty Corporation
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
December 31, December 31,
2004 2003
------------ ------------
Assets:
Operating real estate, net of accumulated
depreciation of $634,642 and $568,988,
respectively $3,095,360 $3,301,391
Investments and advances in
real estate joint ventures 595,175 487,394
Real estate under development 362,220 304,286
Other real estate investments 188,536 113,085
Mortgages and other financing receivables 140,717 101,691
Cash and cash equivalents 38,220 48,288
Marketable securities 123,771 45,677
Accounts and notes receivable 52,182 50,408
Other assets 153,416 188,872
------------ ------------
$4,749,597 $4,641,092
============ ============
Liabilities:
Notes payable $1,608,925 $1,686,250
Mortgages payable 353,071 375,914
Construction loans payable 156,626 92,784
Other liabilities 287,684 250,381
------------ ------------
2,406,306 2,405,329
------------ ------------
Minority interests in partnerships 106,891 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 Aggregate
liquidation preference $175,000 700 700
Common Stock, $.01 par value, authorized
200,000,000 shares Issued and outstanding
112,426,406 and 110,623,967 shares,
respectively 1,124 1,106
Paid-in capital 2,200,544 2,147,286
Cumulative distributions in excess of net
income (3,749) (30,112)
------------ ------------
2,198,619 2,118,980
Accumulated other comprehensive income 37,781 16,866
------------ ------------
2,236,400 2,135,846
------------ ------------
$4,749,597 $4,641,092
============ ============
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 2005
Low High
-------- --------
Projected diluted earnings per common share $2.60 $2.66
Projected depreciation and amortization 0.84 0.84
Projected depreciation and amortization
real estate joint ventures, net of minority
interests 0.36 0.36
Gain on disposition of operating properties (0.02) (0.02)
Gain on disposition of joint venture
operating properties, net of minority
interests (0.01) (0.01)
-------- --------
Projected FFO per diluted common share $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