Exhibit 99.1
KIMCO REALTY REPORTS AN 11.5 PERCENT INCREASE IN FFO PER SHARE;
ANNOUNCES DIVIDEND INCREASE AND STOCK SPLIT
Highlights:
- Net Income Per Share Increased 14.8 Percent to $0.70
- FFO Per Share Increased 11.5 Percent to $0.97
- Company Increases 2005 FFO Guidance and Establishes Preliminary 2006
FFO Guidance
- Portfolio Occupancy Increases to a Record High Level of 94.1 Percent
- Board of Directors Announces 2 for 1 Stock Split and an 8.2 Percent
Dividend Increase
NEW HYDE PARK, N.Y., July 26 /PRNewswire-FirstCall/ -- Kimco Realty
Corporation (NYSE: KIM) today announced net income for the second quarter ended
June 30, 2005 of $83.8 million compared to $71.4 million a year earlier, an
increase of 17.4 percent. On a per share basis, net income increased 14.8
percent to $0.70 from $0.61 reported in the second quarter of 2004.
Kimco's second quarter funds from operations ("FFO"), a widely accepted
supplemental measure of REIT performance, rose 13.7 percent to $112.4 million
from $98.9 million for the same period last year. On a per share basis, second
quarter FFO increased 11.5 percent to $0.97 from $0.87 a year ago. Quarterly FFO
excludes gains on dispositions and transfers of operating properties net of
minority interests and joint venture properties of approximately $8.4 million,
or $0.07 per share, in 2005 and approximately $4.4 million, or $0.04 per share,
in 2004.
For the six months ended June 30, 2005, net income increased 19.5 percent
to $170.6 million from $142.8 million for the same period last year. Net income
per share increased 18.2 percent to $1.43 from $1.21 a year ago. Funds from
operations rose 10.4 percent to $221.0 million for the six-month period ended
June 30, 2005 from $200.1 million in the year earlier period. On a per share
basis, FFO increased 8.5 percent to $1.91 from $1.76 reported a year ago. Funds
from operations for the six months ended June 30, 2005 excludes gains on
dispositions and transfers of operating properties net of minority interests and
joint venture properties of approximately $20.7 million or $0.18 per share and
approximately $6.9 million or $0.06 per share for the same period last year.
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 94.1
percent from 93.4 percent at March 31, 2005 and 92.4 percent a year earlier. The
increase in occupancy, to a historic high for Kimco as a public company, was the
result of new leasing, acquisition activity and property sales. For the quarter,
Kimco signed 105 new leases in the portfolio totaling 610,000 square feet and 85
renewals totaling 374,000 square feet. Year to date the Company has signed 207
new leases in this portfolio totaling approximately 1.2 million square feet and
189 renewals totaling 1.3 million square feet. The average increase in base rent
for new leases signed for same space leases was 13.2 percent and 10.2 percent
for the quarter and six-months ended June 30, 2005, respectively. Occupancy in
the Company's combined operating portfolio encompassing approximately 107
million square feet of gross leasable area increased to 94.8 percent from 94.3
percent in the prior quarter.
Stock Split and Dividend Increase
Kimco's Board of Directors declared a two-for-one split of the Company's
common stock to be effected in the form of a stock dividend payable on August
23, 2005 to shareholders of record on August 8, 2005. The Board, in taking this
action, indicated a desire to increase the number of shares outstanding and
thereby broaden the base of investors in the Company's common stock. The board
also approved a quarterly dividend increase of 8.2 percent, raising the
pre-split quarterly dividend payable per common share to $0.66 from the current
quarterly level of $0.61 per common share. Historically, the Board has increased
the dividend following the third quarter meeting; however, given the Company's
strong operating results and positive outlook, the Board accelerated the timing
of this year's increase. As a result, the Company's fourth quarter dividend
payment will be 15.8 percent greater than a year ago. In addition, the Board
declared the fourth quarter dividend payable at the increased split adjusted
rate of $0.33 per common share payable on October 17, 2005 to shareholders of
record on October 5, 2005.
Investment Activity
During the quarter, the Company acquired interests in properties with a
gross value of $276.8 million. Significant transactions included the following:
-- The Company acquired a 25 percent interest in the Fremont Hub shopping
center located in Fremont, California. The $123.2 million property is
the dominant shopping center in the Fremont central business district.
Several national retailers including Target, Safeway, Bed, Bath &
Beyond, Marshall's, and Borders anchor the project. The center is
currently undergoing a major redevelopment and renovation which is
approximately 75 percent complete. Prior to acquiring this interest,
Kimco managed the property on behalf of a partnership where the
Company held a small ownership percentage. This transaction increases
Kimco's ownership interest to 32.8 percent.
-- As previously announced, the Company acquired a portfolio of 45 net
leased properties for approximately $85.3 million primarily located in
Fredricksburg, Richmond, and Stafford, Virginia. A 122,000 square foot
shopping center in Poway, California, was acquired for $19.5 million
and a 50 percent interest in a Kmart anchored property in
Hillsborough, New Jersey, was acquired for $4.0 million.
-- In Mexico, the Company invested $38.1 million in five properties,
including four retail development projects located in Alcapulco,
Pachuca (2) and Saltillo. Anchor tenants for the new developments will
be Walmart (2), Home Depot and H-E-B supermarket.
-- In Canada, Kimco in a joint venture with Capital Automotive REIT,
invested $5.1 million in two properties leased to auto dealerships in
the Toronto area.
Subsequent to quarter end, the Company acquired an additional shopping
center located in Lakeland, Florida, for approximately $8.0 million. In
addition, Kimco currently has pending shopping center acquisitions in excess of
$200 million.
In the Company's preferred equity program, Kimco invested approximately
$24.2 million in 16 properties. Kimco invested $8.4 million in two neighborhood
centers totaling 200,000 square feet in Southlake and Austin, Texas. The Company
invested $2.6 million in three neighborhood centers totaling 200,000 square feet
in Ridgeland, a suburb of Jackson, Mississippi. In Montreal, Canada, the Kimco
preferred equity program invested $3.4 million in two self storage properties
with its operating partner, Apple Self Storage. As previously announced during
the quarter, the Company invested $7.5 million of preferred equity in eight self
storage properties in Dallas, Texas, and Columbus, Ohio. Kimco currently has
preferred equity interests in approximately 74 operating properties and 18
properties under development with total investments of approximately $175.0
million.
In Kimco's co-investment programs, the Company transferred Temple Town
Center, a 275,000 square foot shopping center located in Temple, Texas, to its
joint venture with UBS Wealth Management, and Ingleside Shopping Center, a
113,000 square foot center located in Baltimore, Maryland, was transferred to
its joint venture with GE Real Estate. In addition, the Company transferred a 50
percent interest in a shopping center located in Reynosa, Mexico, to GE Real
Estate in July. Kimco will continue to manage the investments on behalf of the
ventures. Kimco currently has approximately $5.0 billion of assets under
management in the Company's co-investment programs.
The Company also sold 19 properties during the quarter for a gross selling
price of $138.4 million. Seven operating properties were sold from the Company's
parent portfolio resulting in gains of approximately $7.0 million. Two land
parcels and ten properties from the Company's co-investment programs were also
sold during the quarter. Additionally, a portion of a property in La Mirada,
California, was sold from the Parent portfolio for $9.4 million subsequent to
quarter end.
Development Activities
Kimco's merchant building business, Kimco Developers Inc. (KDI), completed
the sale of two shopping centers. Hope Valley Farms, located in Durham, North
Carolina, was sold for $18.5 million and Tomball Crossings, located in Houston,
Texas, was sold for $22.6 million. In addition, KDI sold portions of ten
additional projects generating gross proceeds of $22.4 million. In aggregate,
these property sales resulted in gains on sales of approximately $5.5 million,
net of tax. Two additional pad sites were sold after quarter end for
approximately $6.5 million.
During the quarter, Kimco, together with Vestar Development Company,
purchased approximately 59 acres of land for $23.0 million in Tustin,
California, within the former Tustin Marine Air Base. This new development, The
District at Tustin Legacy, will ultimately comprise 1.1 million square feet of
retail shops in an attractive lifestyle and power center format. Retailers that
have committed to the project include Target, Lowe's, Costco, Whole Foods, TJ
Maxx, and others. In addition, KDI recently invested approximately $49.0 million
to acquire five other land parcels for development and approximately $31.3
million in its pipeline of existing shopping center developments.
Capital Activities
The Company has finalized an $850 million unsecured revolving credit
facility from a group of banks led by JP Morgan Chase. This new credit facility,
which replaces the Company's $500 million unsecured credit facility, bears
interest at a rate of LIBOR plus 45 basis points and is scheduled to expire in
July 2008. Kimco increased its facility in order to provide continued
flexibility prior to determining the permanent capital structure or
co-investment program for its acquisitions. Kimco also established a MXP500
million unsecured Mexican Peso denominated credit facility that bears interest
at a rate of 100 basis points above the benchmark for the Mexican interbank
money market (TIIE) and is scheduled to expire in May 2008. This facility will
allow the Company to finance its growth in Mexico in a cost-efficient manner.
During the quarter Kimco completed the issuance of medium-term notes from
its shelf registration totaling $200 million due June 1, 2014 at an interest
rate of 4.82 percent. The notes were issued at par. The proceeds from the
issuance will be used to reduce indebtedness under the Company's existing
revolving credit facilities, to fund future capital needs and general corporate
purposes. 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 represented
the first time a U.S. REIT had raised debt capital in the Canadian market. The
proceeds were 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 continued strong operating results, Kimco's
management increased its range of guidance for full year 2005 FFO per share to
$3.85 - $3.88 on a pre-split basis ($1.92 - $1.94, post-split) from the prior
guidance range of $3.78 - $3.83 ($1.89 - $1.92, post-split). Management also
provided an initial range of guidance for 2006 FFO per share on a pre-split
basis of $4.14 - $4.20 ($2.07 - $2.10, post-split) for the year ending December
31, 2006. The current First Call mean analyst estimate for Kimco's 2006 FFO is
$4.14 ($2.07 post-split).
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 829 properties comprising
approximately 116.0 million square feet of leasable space located throughout 43
states, Canada and Mexico. For further information refer to the Company's web
site at http://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)
Three Months Six Months
Ended Ended
June 30, June 30,
---------------------------- ----------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Revenues from rental property $ 128,137 $ 128,535 $ 259,094 $ 267,326
------------ ------------ ------------ ------------
Rental property expenses:
Rent 2,663 2,959 5,233 5,779
Real estate taxes 16,550 16,693 32,784 32,918
Operating and maintenance 13,949 13,240 31,853 29,516
------------ ------------ ------------ ------------
33,162 32,892 69,870 68,213
------------ ------------ ------------ ------------
Net operating income 94,975 95,643 189,224 199,113
Income from other real estate
investments 11,921 9,124 28,529 15,295
Mortgage financing income 3,465 2,898 6,570 6,458
Management and other fee income 7,477 7,068 15,130 12,829
Depreciation and amortization (27,254) (25,542) (52,847) (51,800)
------------ ------------ ------------ ------------
90,584 89,191 186,606 181,895
Other Investments:
Interest, dividends
and other investment income 4,412 1,572 8,452 4,575
Other income, net 12,093 4,400 11,156 6,204
Interest expense (30,497) (28,165) (59,137) (55,393)
General and administrative
expenses (12,750) (10,392) (24,754) (20,620)
------------ ------------ ------------ ------------
63,842 56,606 122,323 116,661
Provision for income taxes (2,296) (3,316) (4,933) (5,419)
Equity in income of real estate
joint ventures, net 14,707 11,924 39,088 25,928
Minority interests in income of
partnerships, net (3,912) (2,548) (7,048) (4,747)
Gain on sale of development
properties, net of tax of
$3,664, $1,289, $7,143 and
$3,888, respectively 5,495 1,933 10,714 5,833
------------ ------------ ------------ ------------
Income from continuing
operations 77,836 64,599 160,144 138,256
------------ ------------ ------------ ------------
Discontinued Operations:
Income from discontinued
operating properties 995 1,956 1,476 2,602
Loss on operating properties
held for sale/sold (2,615) -- (2,615) (4,151)
Gain on disposition of
operating properties 7,065 4,875 9,461 6,112
------------ ------------ ------------ ------------
Income from discontinued
operations 5,445 6,831 8,322 4,563
------------ ------------ ------------ ------------
Gain on transfer of operating
properties(1) 706 -- 2,301 --
Loss on transfer of operating
properties(1) (150) -- (150) --
------------ ------------ ------------ ------------
556 -- 2,151 --
------------ ------------ ------------ ------------
Net income 83,837 71,430 170,617 142,819
Preferred dividends (2,909) (2,909) (5,819) (5,819)
------------ ------------ ------------ ------------
Net income available to
common shareholders $ 80,928 $ 68,521 $ 164,798 $ 137,000
============ ============ ============ ============
Per common share:
Income from continuing
operations:
- Basic $ 0.67 $ 0.56 $ 1.39 $ 1.19
============ ============ ============ ============
- Diluted(2) $ 0.65 $ 0.55 $ 1.36 $ 1.17
============ ============ ============ ============
Net income:
- Basic $ 0.71 $ 0.62 $ 1.46 $ 1.23
============ ============ ============ ============
- Diluted(2) $ 0.70 $ 0.61 $ 1.43 $ 1.21
============ ============ ============ ============
Weighted Average Share Information Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- - ----------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
For earnings per share
calculations:
Weighted average shares -
- Basic 113,217 111,118 112,975 110,961
============ ============ ============ ============
- Diluted(2) 115,273 113,092 117,404 113,075
============ ============ ============ ============
Income subject to
income taxes $ 13,300 $ 11,739 $ 31,500 $ 23,728
============ ============ ============ ============
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) Reflects the potential impact if certain units were converted to
common stock at the beginning of the period. Net income would be
increased by $3,214 for the six months ended June 30, 2005. For the
three month periods ended June 30, 2005 and 2004 and the six months
ended June 30, 2004 the impact of the conversion 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,
---------------------------- ----------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Funds From Operations(1)
Net income $ 83,837 $ 71,430 $ 170,617 $ 142,819
Gain on disposition of
operating properties,
net of minority
interests (7,771) (4,442) (11,762) (5,679)
Gain on disposition of
joint venture operating
properties (642) -- (8,930) (1,223)
Depreciation and
amortization 27,709 26,221 53,892 53,213
Depreciation and
amortization -
real estate JV's,
net of minority
interests 12,219 8,564 22,979 16,812
Preferred stock
dividends (2,909) (2,909) (5,819) (5,818)
------------ ------------ ------------ ------------
Funds from
operations(1) $ 112,443 $ 98,864 $ 220,977 $ 200,124
============ ============ ============ ============
Per common share:
- Basic $ 0.99 $ 0.89 $ 1.96 $ 1.80
============ ============ ============ ============
- Diluted(2) $ 0.97 $ 0.87 $ 1.91 $ 1.76
============ ============ ============ ============
Weighted Average Share Information Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- ----------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
For funds from operations
Weighted average shares -
- Basic 113,217 111,118 112,975 110,961
============ ============ ============ ============
- Diluted(2) 117,656 115,475 117,404 115,458
============ ============ ============ ============
(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 on sales of operating real estate, plus the
pro-rata amount of depreciation and amortization and gains 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) 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 June 30, 2005 and
2004, respectively, and $3,214 and $3,004 for the six months ended June 30,
2005 and 2004, respectively.
Kimco Realty Corporation
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
June 30, December 31,
2005 2004
------------ ------------
Assets:
Operating real estate, net of
accumulated depreciation of
$703,005, and $634,642, respectively $ 3,135,111 $ 3,095,360
Investments and advances in real
estate joint ventures 622,849 595,175
Real estate under development 400,898 362,220
Other real estate investments 217,429 188,536
Mortgages and other financing
receivables 142,803 140,717
Cash and cash equivalents 47,377 38,220
Marketable securities 190,485 123,771
Accounts and notes receivable 59,305 52,182
Other assets 173,565 153,416
------------ ------------
$ 4,989,822 $ 4,749,597
============ ============
Liabilities:
Notes payable $ 1,758,286 $ 1,608,925
Mortgages payable 312,167 353,071
Construction loans payable 196,073 156,626
Dividends Payable 72,052 71,489
Other liabilities 223,547 216,195
------------ ------------
2,562,125 2,406,306
------------ ------------
Minority interests in partnerships 114,122 106,891
------------ ------------
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 300,000,000 shares
Issued and outstanding 113,348,366
and 112,426,406, respectively 1,133 1,124
Paid-in capital 2,231,589 2,200,544
Retained earnings/
(Cumulative distributions in
excess of net income) 22,916 (3,749)
------------ ------------
2,256,338 2,198,619
Accumulated other comprehensive income 57,237 37,781
------------ ------------
2,313,575 2,236,400
------------ ------------
$ 4,989,822 $ 4,749,597
============ ============
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 Range
Full Year 2005 Full Year 2006
------------------------ ------------------------
Low High Low High
---------- ---------- ---------- ----------
Projected diluted
earnings per common share $ 2.79 $ 2.82 $ 2.84 $ 2.90
Projected depreciation
and amortization 0.90 0.90 0.94 0.94
Projected depreciation
and amortization from
real estate joint
ventures, net of
minority interests 0.39 0.39 0.45 0.45
Gain on
disposition/transfer of
operating properties (0.15) (0.15) (0.05) (0.05)
Gain on disposition of
joint venture
operating properties,
net of minority interests (0.08) (0.08) (0.04) (0.04)
---------- ---------- ---------- ----------
Projected FFO per diluted
common share $ 3.85 $ 3.88 $ 4.14 $ 4.20
========== ========== ========== ==========
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
SOURCE Kimco Realty Corporation
-0- 07/25/2005
/CONTACT: Scott Onufrey of Kimco Realty Corporation, +1-516-869-7190,
sonufrey@kimcorealty.com/
/Web site: http://www.kimcorealty.com /