-----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, AgY7Dmc5qM4liH7oc/eeyM0tKt0oKXY7ZVK0gsLMWsfK6BVAUsqH68vU31Jowr4K OAaszD/kJD1pi1Hp2v3hwg== 0001157523-05-001148.txt : 20050208 0001157523-05-001148.hdr.sgml : 20050208 20050208074428 ACCESSION NUMBER: 0001157523-05-001148 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050208 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20050208 DATE AS OF CHANGE: 20050208 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: 05582123 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 a4817040.txt KIMCO REALTY CORPORATION 8-K UNITED STATES 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) February 8, 2005 Kimco Realty Corporation (Exact Name of Registrant as Specified in its 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 Suite 100 New Hyde Park, NY 11042 ----------------------------- ---------- (Address of Principal (Zip Code) Executive Offices) Registrant's telephone number, including area code: (212) 869-9000 No Change (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02. Results of Operations and Financial Condition The information contained in this Item 2.02 of the Current Report on Form 8-K of Kimco Realty Corporation (the "Company") is being furnished pursuant to "Item 2.02 - Results of Operations and Financial Condition" and "Item 7.01 - Regulation FD Disclosure" of Form 8-K. On February 8, 2005, Kimco Realty Corporation issued a press release announcing its financial results for the quarter and year ending December 31, 2004. A copy of the press release is furnished as Exhibit 99.1 to this report. 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. 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. KIMCO REALTY CORPORATION By: /s/ Michael V. Pappagallo ------------------------------ Name: Michael V. Pappagallo Title: Chief Financial Officer Dated: February 8, 2005 EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 99.1 Press Release, dated February 8, 2005 issued by Kimco Realty Corporation EX-99.1 2 a4817040ex991.txt EXHIBIT 99.1 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 -----END PRIVACY-ENHANCED MESSAGE-----