-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AjPdK2RHilynElCevTlJExLKIStzxrAWZC+qn+40NDAZwtTEGJmj0woD8bpaj5uJ eq616Oy4vhlWan295Wk0og== 0001157523-04-006864.txt : 20040728 0001157523-04-006864.hdr.sgml : 20040728 20040727070238 ACCESSION NUMBER: 0001157523-04-006864 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040727 ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20040727 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KIMCO REALTY CORP CENTRAL INDEX KEY: 0000879101 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 132744380 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10899 FILM NUMBER: 04932107 BUSINESS ADDRESS: STREET 1: 3333 NEW HYDE PARK RD STREET 2: PO BOX 5020 CITY: NEW HYDE PARK STATE: NY ZIP: 11042 BUSINESS PHONE: 5168699000 MAIL ADDRESS: STREET 1: 3333 NEW HYDE PARK ROAD STREET 2: PO BOX 5020 CITY: NEW HYDE PARKQ STATE: NY ZIP: 11042 8-K 1 a4687980.txt KIMCO REALTY CORP. 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): July 27, 2004 Kimco Realty Corporation (Exact Name of Registrant as Specified in Charter) Maryland 1-10899 13-2744380 -------------- ------------ ------------------- (State or Other Jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) Identification No.) 3333 New Hyde Park Road New Hyde Park, New York 11042-0020 (Address of Principal Executive Offices) -------------------- (516) 869-9000 (Registrant's telephone number, including area code) -------------------- ITEM 9. REGULATION FD DISCLOSURE The information contained in this Item 9 of the Current Report on Form 8-K of Kimco Realty Corporation (the "Company") is being furnished pursuant to "Item 12 - Results of Operations and Financial Condition" and "Item 9 - Regulation FD Disclosure" of Form 8-K in accordance with SEC Release Nos. 33-8216 and 34-47583. On July 27, 2004, the Company announced its Second quarter operating results. A copy of the Company's press release is an exhibit to this Current Report on Form 8-K and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. The information in this Current Report on Form 8-K, including the exhibit, shall not be deemed to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. Exhibits 99.1 Press Release dated July 27, 2004 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: July 27, 2004 KIMCO REALTY CORPORATION (registrant) By: /s/ Michael V. Pappagallo ----------------------------------------- Name: Michael V. Pappagallo Its: Vice President and Chief Financial Officer EXHIBIT INDEX EXHIBIT NO. DOCUMENT DESCRIPTION 99.1 Press Release dated July 27, 2004 EX-99.1 2 a4687980ex991.txt PRESS RELEASE 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 -----END PRIVACY-ENHANCED MESSAGE-----