EX-99.1 2 kr3828ex991.txt EXHIBIT 99.1 Exhibit 99.1 KIMCO REALTY REPORTS RECORD OPERATING RESULTS, THIRD QUARTER FFO INCREASES 13.6 PERCENT TO $0.50 PER SHARE; MANAGEMENT INCREASES EARNINGS GUIDANCE Highlights: - FFO Increased 14.4 Percent to $116.3 Million - FFO Per Share Increased 13.6 Percent to $0.50 - Net Income Increased 8.7 Percent to $85.3 Million - Net Income Per Share Increased 9.1 Percent to $0.36 - Company Increases 2005 Earnings Guidance: Anticipates 10.7 Percent Growth in FFO Per Share - Increases 2006 FFO Guidance NEW HYDE PARK, N.Y., Oct. 25 /PRNewswire-FirstCall/ -- Kimco Realty Corporation (NYSE: KIM) today announced net income for the third quarter ended September 30, 2005 of $85.3 million compared to $78.5 million a year earlier, an increase of 8.7 percent. On a per share basis, net income increased 9.1 percent to $0.36 from $0.33 reported in the third quarter of 2004. All prior period amounts presented have been adjusted to reflect the Company's 2-for-1 stock split that was effective August 8, 2005. Kimco's third quarter funds from operations ("FFO"), a widely accepted supplemental measure of REIT performance, rose 14.4 percent to $116.3 million from $101.6 million for the same period last year. On a per share basis, third quarter FFO increased 13.6 percent to $0.50 from $0.44 a year ago. Quarterly FFO excludes gains on dispositions of operating properties net of minority interests and joint venture properties of approximately $5.6 million, or $0.02 per share, in 2005 and approximately $8.0 million, or $0.03 per share, in 2004. For the nine months ended September 30, 2005, net income increased 15.6 percent to $256.0 million from $221.3 million for the same period last year. Net income per share increased 13.8 percent to $1.07 from $0.94 a year ago. Funds from operations rose 11.8 percent to $337.2 million for the nine-month period ended September 30, 2005 from $301.7 million in the year earlier period. On a per share basis, FFO increased 9.8 percent to $1.45 from $1.32 reported a year ago. Funds from operations for the nine months ended September 30, 2005 excludes gains on dispositions and transfers of operating properties net of minority interests and joint venture properties of approximately $26.3 million or $0.11 per share and approximately $14.9 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 94.2 percent from 94.1 percent at June 30, 2005 and 92.9 percent a year earlier. Kimco's occupancy is the highest level in Company history. For the quarter, Kimco signed 128 new leases in the portfolio totaling 690,500 square feet and 65 lease renewals totaling 415,300 square feet. Year to date the Company has signed 334 new leases in this portfolio totaling approximately 1.8 million square feet and 254 lease renewals totaling 1.7 million square feet. The average increase in base rent for new leases signed for same space leases was 11.4 percent and 10.6 percent for the quarter and nine months ended September 30, 2005, respectively. Occupancy in the Company's combined operating portfolio encompassing approximately 108.5 million square feet of gross leasable area was 94.8 percent, 90 basis points higher than a year ago. Investment Activity Kimco has acquired property interests totaling $544 million for the Company's core portfolio, co-investment programs and international portfolios since the end of the second quarter. A summary of the significant investments is as follows: - Kimco acquired all the shares of GDE Properties Corporation, a private entity that owned a portfolio of three supermarket anchored properties located in Southern and Central California for approximately $104.5 million. The properties are Marigold Center, Laband Village and Plaza di Northridge. Marigold Center, located in San Luis Obispo, California, contains 175,000 square feet of gross leasable area and is anchored by Vons, Michaels and Sav-on Drug. Laband Village located in Chino Hills, California, is a 73,000 square foot neighborhood shopping center anchored by Stater Bros. Market, the largest privately owned supermarket chain in Southern California. Plaza di Northridge in Northridge, California, is a 160,000 square foot, 100 percent leased shopping center anchored by Gelson's supermarket, Linens-N-Things and DSW. These properties will remain in Kimco's parent portfolio. - Kimco acquired four shopping centers for the Company's co-investment programs totaling $146 million. Stafford Marketplace, a 332,000 square foot shopping center located in Stafford, Virginia, was purchased for approximately $80.0 million. This shopping center is anchored by Shoppers Food Warehouse, TJ Maxx, Pier 1 Imports, Borders and several other national tenants. Yorkshire Plaza located in Aurora, Illinois, was also acquired for approximately $29.7 million. Yorkshire Plaza is 362,000 square feet and anchored by Best Buy, Value City, Pier I Imports and Sportsmart. The Company also acquired Greeley Commons in Greeley, Colorado, and North Quincy Plaza in Quincy, Massachusetts. Greeley Commons is a 139,000 square foot shopping center anchored by Bed Bath & Beyond, Michaels, Petco and Circuit City and is currently 100 percent leased. North Quincy Plaza is an 80,510 square foot in-fill neighborhood center anchored by Victory Supermarket and Brooks Pharmacy. These properties were acquired for an aggregate cost of approximately $36.0 million. - In addition, Kimco formed a new joint venture with a new institutional partner and transferred a previously acquired portfolio of 45 net leased properties to the venture. Kimco is also under contract to purchase Doc Stone Market located in Stafford, Virginia, for this venture. Doc Stone Market is a 100,000 square foot center anchored by Giant Food, Petco and Staples, valued at approximately $17.2 million. - In Mexico, Kimco formed a strategic joint venture with American Industries, a leading real estate owner and operator in Mexico. Kimco invested approximately $55 million to acquire a 50 percent interest in American Industries' portfolio of 57 net leased industrial, warehouse and distribution facilities. The portfolio has a gross value of approximately $277 million and the tenant leases are triple net, U.S. Dollar denominated obligations of U.S. and multi-national tenants. - Also in Mexico, Kimco invested $2.6 million to acquire an interest in a development to be anchored by Walmart. The project will be a 105,000 square foot multi-tenant shopping center located in the city of Tuxtepec in the State of Oaxaca. Kimco now has an ownership interest in 70 properties in Mexico with a gross real estate value of approximately $475 million. In addition, Kimco made several opportunistic investments through its Kimco Select Investment and Retail Property Solutions business lines. Kimco's Retail Property Solutions team participated in the successful recapitalization and emergence from bankruptcy of Frank's Nursery and Crafts, which has been renamed FNC Realty. At emergence, FNC Realty consisted of 55 properties of which, eight were subsequently sold. The remaining properties are being leased, redeveloped or marketed for sale by Kimco. Kimco Select invested approximately $14 million to purchase an interest in One City Center, an office building located in Houston, Texas. The building is predominantly leased to credit tenants with long term leases and was purchased well below replacement cost. Kimco Select, through a joint venture, also purchased a 90 percent interest in a first mortgage receivable with a principal amount due of $46.7 million at a significant discount. The Company also agreed to provide up to $33 million of construction financing for a 388,412 square foot Target-anchored retail center in Richland Township, Pennsylvania. In addition to receiving interest income from the loan, Kimco will receive an ownership position in the completed project. Kimco's preferred equity investment program continued to provide a meaningful contribution to FFO and growth in the Company's invested assets. During the quarter, two preferred equity investments were redeemed and Kimco realized profit participation of approximately $4.4 million. Five new preferred equity investments were initiated during the quarter totaling approximately $21.4 million of new investment, including one Canadian property in Kamloops, British Columbia, and domestically in properties in San Marcos, Texas; Sarasota, Florida; Lansing, Illinois; and Hamilton, New Jersey. Kimco's merchant building business, Kimco Developers Inc. (KDI), completed the sale of one shopping center and sold portions of five additional projects generating proceeds of $59.6 million. These property sales resulted in gains on sales of approximately $8.1 million, net of tax. Several pad sites and one additional shopping center are currently under contract for sale in the fourth quarter of 2005. In addition, KDI acquired land for six new projects for a total of $67.9 million and invested an additional $87.6 million in its pipeline of 31 shopping center developments. Increased Earnings Guidance As a result of the Company's continued strong operating results, Kimco's management increased its projection for FFO per share to $1.96 for the full year ending December 31, 2005. This estimate is $0.02 per share above the high end of the range of guidance management provided last quarter. Management also increased guidance for FFO per share for the year ending December 2006 to between $2.09 and $2.14, which represents growth in FFO of between 7.0 percent and 9.0 percent. Management's increase was from prior guidance for 2006 of between $2.07 per share to $2.10 per share. 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 946 properties comprising approximately 127.0 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. Contact: Kimco Realty Corporation Scott Onufrey (516) 869-7190 sonufrey@kimcorealty.com Kimco Realty Corporation Condensed Consolidated Statements of Income (In thousands, except per share data)
Three Months Ended Nine Months Ended September 30, September 30, --------------------------- --------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ Revenues from rental property $ 130,441 $ 120,330 $ 388,177 $ 386,366 ------------ ------------ ------------ ------------ Rental property expenses: Rent 2,618 2,662 7,851 8,441 Real estate taxes 16,715 15,796 49,270 48,508 Operating and maintenance 14,013 12,100 45,681 41,462 ------------ ------------ ------------ ------------ 33,346 30,558 102,802 98,411 ------------ ------------ ------------ ------------ Net operating income 97,095 89,772 285,375 287,955 Income from other real estate investments 13,432 5,119 41,961 20,414 Mortgage financing income 3,303 3,179 9,873 9,637 Management and other fee income 6,946 6,008 22,076 18,836 Depreciation and amortization (26,627) (23,623) (79,364) (75,301) ------------ ------------ ------------ ------------ 94,149 80,455 279,921 261,541 Interest, dividends and other investment income 9,141 8,595 17,594 13,170 Other income/ (expense), net (1,810) 4,790 9,346 10,994 Interest expense (33,890) (25,740) (93,027) (81,134) General and administrative expenses (14,084) (11,034) (38,837) (31,652) ------------ ------------ ------------ ------------ 53,506 57,066 174,997 172,919 Benefit/(provision) for income taxes 860 24 (4,073) (5,395) Equity in income of real estate joint ventures, net 18,052 13,864 57,140 39,792 Minority interests in income, net (3,663) (2,312) (10,711) (7,059) Gain on sale of development properties net of tax of $2,443, $1,047, $9,575 and $4,935, respectively 8,121 1,571 18,835 7,404 ------------ ------------ ------------ ------------ Income from continuing operations 76,876 70,213 236,188 207,661 ------------ ------------ ------------ ------------ Discontinued Operations: Income from discontinued operating properties 2,821 2,825 5,130 6,235 Loss on operating properties held for sale/sold -- (913) (2,615) (5,064) Gain on disposition of operating properties 4,964 6,386 14,425 12,498 ------------ ------------ ------------ ------------ Income from discontinued operations 7,785 8,298 16,940 13,669 ------------ ------------ ------------ ------------ Gain on transfer of operating properties(1) -- -- 2,301 -- Loss on transfer of operating properties(1) -- -- (150) -- Gain on disposition of operating properties(1) 682 -- 682 -- ------------ ------------ ------------ ------------ 682 -- 2,833 -- ------------ ------------ ------------ ------------ Net income 85,343 78,511 255,961 221,330 Preferred stock dividends (2,909) (2,909) (8,728) (8,728) ------------ ------------ ------------ ------------ Net income available to common shareholders $ 82,434 $ 75,602 $ 247,233 $ 212,602 ============ ============ ============ ============ Per common share: Income from continuing operations: - Basic $ 0.33 $ 0.30 $ 1.02 $ 0.89 ============ ============ ============ ============ - Diluted(2) $ 0.32 $ 0.30 $ 1.00 $ 0.88 ============ ============ ============ ============ Net income: - Basic $ 0.36 $ 0.34 $ 1.09 $ 0.96 ============ ============ ============ ============ - Diluted(2) $ 0.36 $ 0.33 $ 1.07 $ 0.94 ============ ============ ============ ============ Income subject to income taxes $ 11,053 $ 2,585 $ 35,553 $ 26,313
Weighted Average Share Information
Three Months Ended Nine Months Ended September 30, September 30, For earnings per --------------------------- --------------------------- share calculations: 2005 2004 2005 2004 -------------------------------- ------------ ------------ ------------ ------------ Weighted average shares - - Basic 227,017 223,052 226,310 222,302 ============ ============ ============ ============ - Diluted(2) 231,733 227,242 230,585 226,518 ============ ============ ============ ============
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 Nine Months Ended September 30, September 30, --------------------------- --------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ Funds From Operations(1) Net income $ 85,343 $ 78,511 $ 255,961 $ 221,330 Gain on disposition of operating properties, net of minority interests (5,646) (6,386) (17,408) (12,065) Gain on disposition of joint venture operating properties -- (1,637) (8,930) (2,860) Depreciation and amortization 26,671 24,395 80,563 77,608 Depreciation and amortization - real estate joint ventures 12,807 9,631 35,786 26,444 Preferred stock dividends (2,909) (2,909) (8,728) (8,728) ------------ ------------ ------------ ------------ Funds from operations(1) $ 116,266 $ 101,605 $ 337,244 $ 301,729 ============ ============ ============ ============ Per common share: - Basic $ 0.51 $ 0.46 $ 1.49 $ 1.36 ============ ============ ============ ============ - Diluted(2) $ 0.50 $ 0.44 $ 1.45 $ 1.32 ============ ============ ============ ============
Weighted Average Share Information
Three Months Ended Nine Months Ended September 30, September 30, --------------------------- --------------------------- For funds from operations per share calculations: 2005 2004 2005 2004 -------------------------------- ------------ ------------ ------------ ------------ Weighted average shares - - Basic 227,017 223,052 226,310 222,302 ============ ============ ============ ============ - Diluted(2) 236,499 232,009 235,352 231,284 ============ ============ ============ ============
(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 $1,739 and $1,502 for the three months ended September 30, 2005 and 2004, respectively, and $4,953 and $4,506 for the nine months ended September 30, 2005 and 2004, respectively, reflecting the distributions associated with these units. Kimco Realty Corporation Condensed Consolidated Balance Sheets (In thousands, except share data)
September 30, December 31, 2005 2004 ------------- ------------- Assets: Operating real estate, net of accumulated depreciation of $723,818 and $634,642, respectively $ 3,072,729 $ 3,095,360 Investments and advances in real estate joint ventures 666,088 595,175 Real estate under development 479,914 362,220 Other real estate investments 252,856 188,536 Mortgages and other financing receivables 145,034 140,717 Cash and cash equivalents 69,940 38,220 Marketable securities 204,996 123,771 Accounts and notes receivable 64,034 52,182 Other assets 212,885 153,416 ------------- ------------- $ 5,168,476 $ 4,749,597 ============= ============= Liabilities: Notes payable $ 1,836,475 $ 1,608,925 Mortgages payable 310,084 353,071 Construction loans payable 210,570 156,626 Dividends payable 77,903 71,489 Other liabilities 264,496 216,195 ------------- ------------- 2,699,528 2,406,306 ------------- ------------- Minority interests 124,174 106,891 ------------- ------------- 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 227,252,825 and 224,852,812 shares, respectively 2,273 2,249 Paid-in capital 2,241,995 2,199,419 Retained earnings/(cumulative distributions in excess of net income) 30,357 (3,749) ------------- ------------- 2,275,325 2,198,619 Accumulated other comprehensive income 69,449 37,781 ------------- ------------- 2,344,774 2,236,400 ------------- ------------- $ 5,168,476 $ 4,749,597 ============= =============
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 2006 Full Year ------------------------- 2005 Low High ----------- ----------- ----------- Projected diluted earnings per common share $ 1.43 $ 1.51 $ 1.57 Projected depreciation and amortization 0.45 0.46 0.48 Projected depreciation and amortization real estate joint ventures, net of minority interests 0.21 0.22 0.24 Gain on disposition of operating properties (0.09) (0.07) (0.10) Gain on disposition of joint venture operating properties, net of minority interests (0.04) (0.03) (0.05) ----------- ----------- ----------- Projected FFO per diluted common share $ 1.96 $ 2.09 $ 2.14 =========== =========== ===========
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. SOURCE Kimco Realty Corporation -0- 10/25/2005 /CONTACT: Scott Onufrey of Kimco Realty Corporation, +1-516-869-7190, sonufrey@kimcorealty.com / /Web site: http://www.kimcorealty.com /