Exhibit 99.1
Kimco Realty Reports First Quarter Operating Results;
Record Funds From Operations
NEW HYDE PARK, N.Y.--(BUSINESS WIRE)--April 25, 2005--
Highlights:
-- Net Income Increased 21.6% to $86.8 million
-- Net Income Per Share Increased 19.7% to $0.73
-- Funds From Operations Increased 7.2% to $108.5 million
-- Funds From Operations Per Share Increased 5.6% to a Record
Level of $0.94
-- $135 million of New Investment Activity
-- Redevelopment and Capital Projects Pipeline Increased to $230
million
Kimco Realty Corporation (NYSE: KIM) today announced net income
for the first quarter ended March 31, 2005 increased 21.6 percent to
$86.8 million from $71.4 million a year ago. On a per share basis, net
income increased 19.7 percent to $0.73 from $0.61 in the first quarter
of 2004. Income from continuing operations for the first quarter
increased to $84.3 million compared to $73.9 million a year earlier,
representing a 14.1 percent improvement. On a per share basis, income
from continuing operations increased 12.7 percent to $0.71 from $0.63
in the year earlier period.
Kimco's first quarter funds from operations ("FFO"), a widely
accepted supplemental measure of REIT performance, rose 7.2 percent to
$108.5 million from $101.3 million for the same period last year. On a
diluted per common share basis, first quarter FFO increased 5.6
percent to $0.94 from $0.89 a year ago. FFO on a per share basis and
on an absolute basis were the highest reported for any quarter in the
Company's history.
Excluded from FFO for the quarter ended March 31, 2005 are net
gains on dispositions of operating properties and property transfers
of $4.0 million, or $0.03 per share. Also excluded are the Company's
prorata portion of gains on sales of properties included in equity in
income of real estate joint ventures of $8.3 million, or approximately
$0.07 per share. Funds from operations for the prior year excludes net
gains on dispositions of operating properties and joint venture
operating properties of approximately $2.5 million, or $0.02 per
share.
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 parent portfolio occupancy remained high at 93.4 percent.
For the quarter, Kimco signed 102 new leases in this portfolio
totaling 567,000 square feet. Sixty-two of these new leases were for
spaces where the company replaced a prior tenant from a year ago. The
average increase in contractual base rent on these same space leases
was approximately 8.0 percent. The remaining leases signed resulted in
new base rental income of $4.5 million. These leases were for new
expansions, properties that were acquired, or units that were
previously non-rent producing in the previous twelve months. The
Company also had 104 tenant renewals, or option exercises totaling
957,000 square feet resulting in an average rent increase of 8.2
percent.
The Company has also accelerated its redevelopment plans on a
significant number of properties. Kimco has 30 existing major capital
projects, including three developments, underway in the parent
portfolio representing approximately $230 million of new investment
and 36 projects that are in preliminary stages of redevelopment.
Redevelopments are also a focus in the joint venture programs, where
15 projects are in active redevelopment totaling approximately $45
million of new investment and 22 projects in preliminary stages of
redevelopment. Kimco is increasing investment in these portfolios to
create value and generate superior investment returns for
shareholders.
Management has also identified a number of properties in this
portfolio for potential disposition. During the quarter, the Company
disposed of two operating shopping centers and a vacant parcel of land
totaling $17.8 million and an additional property subsequent to
quarter end.
Investment Activity
Kimco recently acquired interests in five U.S. shopping center
properties for an aggregate investment of approximately $49.0 million.
Curlew Crossing Shopping Center located in Clearwater, Florida was
acquired for $17.7 million. Home Depot, Staples and JoAnn Stores, Inc.
anchor this 207,000 square foot shopping center. Poway City Centre, a
122,000 square foot shopping center located in Southern California,
was acquired for $19.5 million. Steinmart, Office Depot and Home
Goods, a subsidiary of TJX Companies, Inc., anchor this shopping
center. Kimco also acquired an interest in a Kmart location in
Hillsborough, New Jersey for approximately $4.0 million where Kmart is
paying a rent that is substantially below market. Finally, the Company
acquired a $3.0 million fully leased out-parcel adjacent to the
Company's existing Rivergate Station shopping center in Madison,
Tennessee.
Kimco continued to increase the Company's co-investment and asset
management business, where the Company now manages approximately $5.0
billion of assets. During the quarter, Kimco completed an asset
management agreement and joint venture with the UBS Wealth Management
- - North American Property Fund to acquire, own and operate a portfolio
of high quality neighborhood and community shopping centers. Five
recently acquired properties were transferred to the program during
the quarter at an aggregate cost of approximately $77.0 million. Kimco
will maintain a 20.0 percent economic interest and retain management
of the properties.
Kimco also transferred three properties to the Kimco / GE
co-investment program totaling $54.1 million, including one property
from the Kimsouth portfolio. This venture now owns 39 shopping center
properties totaling 5.7 million square feet of gross leasable area.
The average occupancy in this portfolio is approximately 94.8 percent.
The Kimco Income REIT (KIR) acquired a property adjacent to an
existing KIR property for approximately $4.6 million and sold one
shopping center for $40.8 million. In addition, KIR sold a former
Kmart store to Target for $2.3 million for a new Target location,
which will revitalize the property. KIR consists of 69 shopping
centers totaling 14.2 million square feet and is 97.1 percent
occupied.
Kimco also sold two properties from the PL Retail LLC venture,
which owns 32 properties, for proceeds of $35.0 million and four
properties from Kimsouth LLC for approximately $55.7 million. Kimsouth
has eight properties remaining.
The Company continued to expand its preferred equity program
investing $16.9 million in eight transactions. Kimco's preferred
equity portfolio has grown to include 83 properties with an aggregate
investment of approximately $180 million. Kimco anticipates closing on
approximately seven more preferred equity transactions totaling $22.0
million of new investment during the second quarter.
Kimco's merchant building business, Kimco Developers Inc. (KDI),
completed sales of two shopping centers and portions of five
additional projects generating proceeds of $85.8 million. These
property sales resulted in gains on sales of approximately $5.2
million, net of tax. In addition, KDI acquired five new projects for
development for $25.6 million and invested approximately $48 million
in its pipeline of 25 shopping center developments.
In Mexico, Kimco recently closed on two new shopping development
projects; a Home Depot anchored shopping center in Pachuca, Mexico and
a Wal-Mart anchored shopping center in Acapulco, Mexico. In addition,
the Company transferred 50 percent of its interest in the Huehuetoca,
Mexico, development project to its joint venture with GE Real Estate
in Mexico. Kimco also participated in the successful public tender
offer for all of the outstanding shares of G. Accion, one of Mexico's
largest commercial real estate owners. Kimco now owns approximately
19.6 percent of the Company.
Kimco Select Investments, the Company's opportunity fund
investment subsidiary, invested approximately $26.0 million in other
real estate related securities during the quarter.
Canadian Bond Issuance
As previously announced, Kimco North Trust III, a wholly-owned
entity of Kimco Realty Corporation, recently completed the issuance of
$150 million Canadian denominated senior unsecured notes. The notes
bear interest at 4.45 percent and mature on April 21, 2010. Kimco
Realty Corporation has provided a fully and unconditional guarantee of
the notes, which were rated A- and Baa1 by Standard & Poor's and
Moody's Investors Service, respectively. This represents the first
time a U.S. REIT has raised debt capital in the Canadian market. The
proceeds will be used by Kimco North Trust III to pay down outstanding
indebtedness under existing credit facilities, to fund long-term
investments in Canadian real estate and for general corporate
purposes.
Earnings Guidance
As a result of the Company's strong operating performance, Kimco's
management raised the lower end of its range of guidance for FFO from
$3.77 to $3.78. Management now anticipates a range for FFO per share
of $3.78 - $3.83 for the year ending December 31, 2005.
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 781 properties comprising approximately 114.0 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, 2004. 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)
(unaudited)
Three Months Ended
March 31,
2005 2004
-------- --------
Revenues from rental property $132,043 $139,137
-------- --------
Rental property expenses:
Rent 2,574 2,820
Real estate taxes 16,395 16,281
Operating and maintenance 18,000 16,377
------ ------
36,969 35,478
------ -------
95,074 103,659
Income from other real estate investments 16,608 6,171
Mortgage financing income 3,105 3,560
Management and other fee income 7,653 5,761
Depreciation and amortization (26,031) (26,352)
------- --------
96,409 92,799
Interest, dividends and other investment income 4,040 3,003
Other income/(expense), net (947) 1,910
Interest expense (28,640) (27,228)
General and administrative expenses (12,004) (10,228)
------- -------
58,858 60,256
Provision for income taxes (2,637) (2,103)
Equity in income of real estate joint ventures,
net 24,381 14,005
Minority interests in income, net (3,136) (2,199)
Gain on sale of development properties,
net of tax of $3,479 and $2,599, respectively 5,219 3,899
------ ------
Income from continuing operations 82,685 73,858
------ ------
Discontinued Operations:
- ------------------------
Income from discontinued operating
properties 104 445
Loss on operating properties held for sale/sold -- (4,151)
Gain on disposition of operating properties 2,396 1,237
-------- -------
Income/ (loss) from discontinued operations 2,500 (2,469)
-------- -------
Gain on transfer of operating properties (1) 1,595 --
-------- -------
Net income 86,780 71,389
Preferred stock dividends (2,909) (2,909)
-------- -------
Net income available to common shareholders $83,871 $68,480
======== ========
Per common share:
Income from continuing operations:
- Basic $0.72 $0.64
======== ==========
- Diluted $0.71(2) $0.63(2)
======== ==========
Net income:
- Basic $0.74 $0.62
======== ==========
- Diluted $0.73(2) $0.61(2)
========= ==========
Weighted average shares outstanding:
- Basic 112,730 110,805
======= ==========
- Diluted 117,155(2)113,150(2)
========= ==========
Income subject to income taxes $15,308 $11,989
(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 $1,607 for the three
months ended March 31, 2005 reflecting the distribution associated
with the units. For the period ended March 31, 2004, 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)
(unaudited)
Three Months Ended
March 31,
2005 2004
-------- ----------
Funds From Operations
Net income $86,780 $71,389
Gain on disposition of operating properties,
net of minority interests (3,991) (1,237)
Gain on disposition of joint venture
operating properties (8,288) (1,223)
Depreciation and amortization 26,183 26,992
Depreciation and amortization -
real estate joint ventures 10,760 8,248
Preferred stock dividends (2,909) (2,909)
-------- --------
Funds from operations $108,535 $101,260
======== =========
Per common share:
- Basic $0.96 $0.91
======== =========
- Diluted (3) $0.94 $0.89
======== =========
Weighted Average Share Information for FFO Calculations
Weighted average shares:
- Basic 112,730 110,805
======= =======
- Diluted(3) 117,155 115,534
======= =======
(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 $1,607 and $1,502 for the three months ended
March 31, 2005 and 2004, respectively.
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 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
Condensed Consolidated Balance Sheets
(In thousands, except share data)
(unaudited)
March 31, December 31,
2005 2004
---------- -----------
Assets:
Operating real estate, net of accumulated
depreciation of $686,447 and $634,642, $ 3,046,718 $3,095,360
respectively
Investments and advances in real estate joint
ventures 609,244 595,175
Real estate under development 371,917 362,220
Other real estate investments 190,862 188,536
Mortgages and other financing receivables 141,189 140,717
Cash and cash equivalents 96,141 38,220
Marketable securities 171,971 123,771
Accounts and notes receivable 57,366 52,182
Other assets 153,214 153,416
---------- -----------
$4,838,622 $4,749,597
========== ===========
Liabilities:
Notes payable $1,618,743 $1,608,925
Mortgages payable 345,990 353,071
Construction loans payable 176,819 156,626
Dividends payable 71,892 71,489
Other liabilities 230,568 216,195
---------- -----------
2,444,012 2,406,306
---------- -----------
Minority interests 112,539 106,891
---------- -----------
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 113,087,015 and
112,426,406 shares, respectively 1,131 1,124
Paid-in capital 2,221,404 2,200,544
Retained earnings / (Cumulative distributions
in excess of net income) 11,131 (3,749)
---------- -----------
2,234,366 2,198,619
Accumulated other comprehensive income 47,705 37,781
---------- -----------
2,282,071 2,236,400
---------- -----------
$4,838,622 $4,749,597
========== ===========
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
Unaudited
Projected Range
Full Year 2005
Low High
----- ------
Projected diluted earnings per common share $2.69 $2.74
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/transfer of operating
properties (0.04) (0.04)
Gain on disposition of joint venture
operating properties, net of minority
interests (0.07) (0.07)
----- ------
Projected FFO per diluted common share $3.78 $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