EX-99.1 2 kr7664ex991.txt EXHIBIT 99.1 Exhibit 99.1 KIMCO REALTY REPORTS RECORD OPERATING RESULTS, THIRD QUARTER FFO PER SHARE INCREASES 12.0 PERCENT TO $0.56 Highlights: - FFO Increased 19.2 Percent to $138.6 Million - FFO Per Share Increased 12.0 Percent to $0.56 - Net Income Increased 7.1 Percent to $91.4 Million, or $0.36 Per Share - Occupancy Increased to 95.0 Percent - Increased Earnings Guidance for 2006 and Established Earnings Guidance for 2007 NEW HYDE PARK, N.Y., Oct. 30 /PRNewswire-FirstCall/ -- Kimco Realty Corporation (NYSE: KIM) today announced net income for the third quarter ended September 30, 2006 of $91.4 million compared to $85.3 million a year earlier, an increase of 7.1 percent. On a per share basis, net income for the quarter was $0.36 equal to the amount reported in the third quarter of 2005. All prior period per share 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 19.2 percent to $138.6 million from $116.3 million for the same period last year. On a per share basis, third quarter FFO increased 12.0 percent to $0.56 from $0.50 a year ago. Quarterly FFO excludes gains on dispositions of operating properties net of minority interests and joint venture properties of approximately $5.4 million, or $0.02 per share, in 2006 and approximately $5.6 million, or $0.02 per share, in 2005. For the nine months ended September 30, 2006, net income increased 15.8 percent to $296.4 million from $256.0 million for the same period last year. Net income per share increased 11.2 percent to $1.19 from $1.07 a year ago. FFO rose 17.6 percent to $396.5 million for the nine-month period ended September 30, 2006 from $337.2 million in the year earlier period. On a per share basis, FFO increased 12.4 percent to $1.63 from $1.45 reported a year ago. FFO for the nine months ended September 30, 2006 excludes gains on dispositions and transfers of operating properties net of minority interests and joint venture properties of approximately $43.5 million or $0.18 per share and approximately $26.3 million or $0.11 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, occupancy in the Company's core holdings increased to 95.0 percent from 94.8 percent at June 30, 2006 and 94.2 percent a year earlier. Kimco's occupancy is the highest level in Company history. For the quarter, Kimco signed 131 new leases in the portfolio totaling 485,417 square feet and 103 lease renewals totaling 271,365 square feet. Year to date the Company has signed 361 new leases in this portfolio totaling approximately 1.3 million square feet and 315 lease renewals totaling 1.3 million square feet. The average increase in base rent for new leases signed for same space leases was 22.9 percent and 17.6 percent for the quarter and twelve months ended September 30, 2006, respectively. Investment Activity Pan Pacific Merger Kimco anticipates completing its merger with Pan Pacific Retail Properties on October 31, 2006. Pan Pacific shareholders will be entitled to receive the $70 per share merger consideration in the form of $60 cash and $10 in newly issued Kimco common stock. Kimco will also assume Pan Pacific's senior unsecured notes totaling $630 million. In conjunction with Kimco's strategy to grow its investment management business, the Company will be completing, its previously announced arrangement with Prudential Real Estate Investors to own and operate the Pan Pacific portfolio in which Kimco will maintain a 15 percent ownership interest and clients of Prudential will maintain an 85 percent ownership interest. Prudential, on behalf of institutional investors in three of its portfolios, will invest approximately $1.1 billion in the venture. Kimco will manage the portfolio and earn traditional fees, including leasing commissions, property management fees and construction management fees from the portfolio. U.S. Acquisitions - Kimco, in its co-investment program with UBS Wealth Management, has recently acquired interests in 15 shopping center properties totaling $525.8 million, including the previously announced acquisition of Airport Plaza for $95.1 million. The property acquisitions included a $158 million portfolio consisting of ten shopping centers located throughout Florida, nine of which are anchored by a Publix supermarket. The properties total 722,000 of gross leasable area and are approximately 97.2 percent leased. The venture acquired The Shops at Kildeer, a 100 percent leased shopping center located in Kildeer, Illinois, a growing suburb of Chicago. The Shops at Kildeer was acquired for approximately $47.4 million. The venture also acquired Riverwalk Marketplace in Duluth, Georgia, for $20.4 million. Riverwalk Marketplace is a recently constructed 78,000 square foot shopping center anchored by a 68,000 square foot Whole Foods grocery store. In addition, two properties were purchased from existing Kimco joint ventures with other partners for the UBS Wealth Management program. Dulles Town Crossing, a 100 percent leased 737,500 square foot shopping center located in Sterling, Virginia, was acquired for $109.0 million and 280 Metro Center, located in Colma, California, also 100 percent leased and totaling 214,000 square feet was acquired for $96.0 million. - The Company's co-investment program with GE Pension Trust, acquired Cypress Towne Center, located in Cypress, Texas, for $39.0 million. Cypress Towne Center is a 196,000 square foot shopping center shadow anchored by Target and developed by Kimco Developers, Inc. This recently completed center is 96.0 percent leased to 19 tenants including TJ Maxx, Ross Dress For Less, Pier 1 Imports and Petsmart. - Kimco has completed the acquisition of six additional properties included in the previously announced Puerto Rico portfolio acquisition of seven shopping centers totaling $448 million. The Company expects to acquire the final property during the fourth quarter. - As previously announced, Kimco has agreed to acquire a high quality portfolio of 19 shopping centers for a total of approximately $920 million in conjunction with GE Real Estate's pending transaction with Crow Holdings. The properties, which are 98.5 percent leased, total approximately 3.6 million square feet of gross leasable area located in major markets across the country, including New York, San Francisco, and Washington, D.C. This portfolio is also targeted for the Company's co- investment program. U.S. Preferred Equity Investments During the quarter, Kimco invested approximately $26.2 million in seven preferred equity transactions that consisted of 14 properties. In addition, the Company invested $4.7 million in two separate preferred equity transactions subsequent to quarter end. The significant investments during the quarter were: - A $10.1 million investment in a portfolio of eight properties located in the Boston metro area totaling 752,990 square feet. - A $5.1 million investment in a mixed use building in downtown New York City. - A $3.0 million investment in an 80,000 square foot shopping center located in Shreveport, Louisiana. Mexico Investments Since the second quarter, Kimco has closed on three new development projects in Mexico. Upon completion, the total cost of these projects will be approximately $87.0 million. A summary of the new development activity is as follows: - Plaza San Juan del Rio, located in Queretaro, Mexico, is a 223,000 square foot development that includes an existing ground leased WalMart shopping center. Kimco will develop an additional 138,000 square feet in the second phase of development. Total cost for this acquisition and development will be approximately $17.0 million. - Plaza Progresso located in Mexicali, Mexico, is a development consisting of 421,000 square feet of retail space, to be anchored by WalMart, Cinepolis and Dorians. Total cost upon completion of this project will be approximately $29.0 million. - Multiplaza Miguel Aleman, located in Monterrey, Mexico, is a 386,000 square foot shopping center development that will be anchored by a 97,000 square foot HEB Supermarket. Upon completion the project will cost approximately $41.0 million. In addition, Kimco provided a $5.3 million participating mortgage secured by Pabellon Shopping Plaza located in Guadalajara, Mexico, and transferred a recently completed HEB anchored development in Monterrey to Kimco's Mexican joint venture with GE Real Estate. In Mexico, Kimco currently owns interests in 11 stabilized shopping centers totaling 2.0 million square feet and has 11 shopping center projects under development that will total 4.3 million square feet upon completion. Five of the development projects are substantially complete and will be open and operating by year end. The Company, through its joint venture with American Industries, acquired a 186,000 square foot multi-tenant industrial facility anchored by International Paper for $8.0 million. Kimco owns a 50 percent interest in the venture that now owns a portfolio of 60 industrial properties. Canadian Investments As previously announced, during the quarter Kimco funded a $45.1 million preferred equity interest in the $183 million Faubourg Boisbriand Retail Development, a new development project that will consist of 1.2 million square feet. In partnership with other institutional investors, Kimco is redeveloping the former General Motors plant located in Montreal, Quebec. Anchor retailers will include Costco, Sobey's, Zellers and Home Outfitters. The Company also recently acquired two additional self storage properties totaling $4.1 million in its preferred equity joint venture with Apple Self Storage. The Apple / Kimco joint venture currently owns and operates 12 self storage facilities in Eastern Canada. In addition, Kimco has agreed to extend and increase an existing secured financing arrangement with Whiterock REIT in Canada to CDN$45.0 million from CDN$12.0 million, in order to enable them to complete approximately CDN$100.0 miilion of acquisitions in their pipeline. U.S. Development Activities During the quarter, Kimco's merchant development business, Kimco Developers, Inc. (KDI), sold one completed project and portions of three additional projects, as well as realizing proceeds from three earn-out contracts, for gross proceeds of approximately $62.5 million. In aggregate, these sales resulted in a gain on sale of $6.4 million, net of taxes. In addition, KDI acquired a 39 acre parcel for development in Frisco, Texas, a Northern Suburb of Dallas, for approximately $13.6 million. When completed, this ground up development project will be a 275,000 square foot retail center. 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 $2.18 - $2.20 for the full year ending December 31, 2006. This estimate is a $0.02 increase from the range of guidance management provided last quarter. Management also provided initial guidance for FFO per share for the year ending December 31, 2007 between $2.37 and $2.47. 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 1,138 properties comprising approximately 149.5 million square feet of leasable space located throughout 44 states, Puerto Rico, 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, 2005. Copies of each filing may be obtained from the Company or the SEC. Contact: Kimco Realty Corporation Scott Onufrey (516) 869-7190 Kimco Realty Corporation Condensed Consolidated Statements of Income (In thousands, except per share data) (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30, ---------------------------- ---------------------------- 2006 2005 2006 2005 ------------ ------------ ------------ ------------ Revenues from rental property $ 153,789 $ 128,311 $ 446,078 $ 381,507 ------------ ------------ ------------ ------------ Rental property expenses: Rent 2,978 2,558 8,835 7,671 Real estate taxes 19,821 16,471 57,145 48,502 Operating and maintenance 18,664 13,576 53,938 44,253 ------------ ------------ ------------ ------------ 41,463 32,605 119,918 100,426 ------------ ------------ ------------ ------------ Net operating income 112,326 95,706 326,160 281,081 Income from other real estate investments 27,192 13,085 60,939 41,098 Mortgage financing income 2,847 3,303 15,758 9,873 Management and other fee income 9,819 6,946 29,554 22,076 Depreciation and amortization (36,842) (25,902) (101,714) (77,496) ------------ ------------ ------------ ------------ 115,342 93,138 330,697 276,632 Interest, dividends and other investment income 14,109 9,134 38,453 17,607 Other income / (expense), net (159) (1,810) 8,740 9,346 Interest expense (45,384) (33,652) (127,297) (92,287) General and administrative expenses (22,624) (14,084) (55,923) (38,834) ------------ ------------ ------------ ------------ 61,284 52,726 194,670 172,464 Benefit/(provision) for income taxes (2,454) 935 (775) (3,892) Equity in income of real estate joint ventures, net 29,286 18,052 72,798 57,140 Minority interests in income, net (5,746) (3,612) (19,561) (10,582) Gain on sale of development properties net of tax of $4,262, $2,433, $9,893 and $9,575, respectively 6,394 8,121 14,840 18,835 ------------ ------------ ------------ ------------ Income from continuing operations 88,764 76,222 261,972 233,965 ------------ ------------ ------------ ------------ Discontinued Operations: Income from discontinued operating properties 1,394 3,526 3,998 7,482 Minority interest in income from discontinued operating properties (7) (51) (1,522) (129) Loss on operating properties held for sale/sold -- -- (813) (2,615) Gain on disposition of operating properties 1,276 4,964 31,331 14,425 ------------ ------------ ------------ ------------ Income from discontinued operations 2,663 8,439 32,994 19,163 ------------ ------------ ------------ ------------ Gain on transfer of operating properties(1) -- -- 1,394 2,301 Loss on transfer of operating properties(1) -- -- -- (150) Gain on sale of operating properties(1) -- 682 -- 682 ------------ ------------ ------------ ------------ -- 682 1,394 2,833 ------------ ------------ ------------ ------------ Net income 91,427 85,343 296,360 255,961 Preferred stock dividends (2,909) (2,909) (8,728) (8,728) ============ ============ ============ ============ Net income available to common shareholders $ 88,518 $ 82,434 $ 287,632 $ 247,233 ============ ============ ============ ============ Per common share: Income from continuing operations: - Basic $ 0.36 $ 0.33 $ 1.08 $ 1.01 ============ ============ ============ ============ - Diluted $ 0.35(3) $ 0.32(3) $ 1.05(2) $ 0.99(3) ============ ============ ============ ============ Net income: - Basic $ 0.37 $ 0.36 $ 1.21 $ 1.09 ============ ============ ============ ============ - Diluted $ 0.36(3) $ 0.36(3) $ 1.19(2) $ 1.07(3) ============ ============ ============ ============
Weighted Average Share Information
Three Months Ended Nine Months Ended September 30, September 30, ---------------------------- ---------------------------- For earnings per share calculations: 2006 2005 2006 2005 ---------------------------------------- ------------ ------------ ------------ ------------ Weighted average shares - - Basic 241,002 227,017 236,789 226,310 ============ ============ ============ ============ - Diluted 246,146(3) 231,733(3) 242,385(2) 230,585(3) ============ ============ ============ ============
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 $747 for the nine months ended September 30, 2006. (3) 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) (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30, ------------------------- ------------------------- 2006 2005 2006 2005 ----------- ----------- ----------- ----------- Funds From Operations(1) Net income $ 91,427 $ 85,343 $ 296,360 $ 255,961 Gain on disposition of operating properties, net of minority interests (1,283) (5,646) (31,072) (17,408) Gain on disposition of joint venture operating properties (4,120) -- (12,442) (8,930) Depreciation and amortization 36,934 26,671 102,228 80,563 Depreciation and amortization - real estate joint ventures 18,550 12,807 50,168 35,786 Preferred stock dividends (2,909) (2,909) (8,728) (8,728) ----------- ----------- ----------- ----------- Funds from operations(1) $ 138,599 $ 116,266 $ 396,514 $ 337,244 =========== =========== =========== =========== Per common share: - Basic $ 0.58 $ 0.51 $ 1.67 $ 1.49 =========== =========== =========== =========== - Diluted (2) $ 0.56 $ 0.50 $ 1.63 $ 1.45 =========== =========== =========== ===========
Weighted Average Share Information
Three Months Ended Nine Months Ended September 30, September 30, ------------------------- ------------------------- For funds from operations per share calculations: 2006 2005 2006 2005 ---------------------------------- ----------- ----------- ----------- ----------- Weighted average shares - - Basic 241,002 227,017 236,789 226,310 =========== =========== =========== =========== - Diluted (2) 252,622 236,499 247,546 235,352 =========== =========== =========== ===========
(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 $2,544 and $1,739 for the three months ended September 30, 2006 and 2005, respectively, and $6,733 and $4,954 for the nine months ended September 30, 2006 and 2005, respectively, reflecting the distributions associated with these units. Kimco Realty Corporation Condensed Consolidated Balance Sheets (In thousands, except share data) (Unaudited) September 30, December 31, 2006 2005 ------------- ------------ Assets: Operating real estate, net of accumulated depreciation of $798,418 and $740,127, respectively $ 3,963,461 $ 3,209,158 Investments and advances in real estate joint ventures 880,682 735,648 Real estate under development 911,267 611,121 Other real estate investments 443,841 283,035 Mortgages and other financing receivables 157,213 132,675 Cash and cash equivalents 102,795 76,273 Marketable securities 191,844 206,452 Accounts and notes receivable 75,763 64,329 Other assets 396,940 215,945 ------------- ------------- $ 7,123,806 $ 5,534,636 ============= ============= Liabilities: Notes payable $ 2,583,912 $ 2,147,405 Mortgages payable 494,961 315,336 Construction loans payable 273,750 228,455 Dividends payable 89,803 78,169 Other liabilities 396,556 255,213 ------------- ------------- 3,838,982 3,024,578 ------------- ------------- Minority interests 367,699 122,844 ------------- ------------- 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 241,918,360 shares; 2,414 2,281 outstanding 241,371,780 shares at September 30, 2006; Issued and outstanding 228,059,056 shares at December 31, 2005 Paid-in capital 2,761,250 2,255,332 Retained earnings 101,830 59,855 ------------- ------------- 2,866,194 2,318,168 Accumulated other comprehensive income 50,931 69,046 ------------- ------------- 2,917,125 2,387,214 ------------- ------------- $ 7,123,806 $ 5,534,636 ============= ============= Kimco Realty Corporation Reconciliation of Projected Diluted Net Income Per Common Share to Projected Funds From Operations Per Common Share (Unaudited)
Projected Projected Range Full Year 2006 Full Year 2007 ------------------------- ------------------------- Low High Low High ----------- ----------- ----------- ----------- Projected diluted earnings per common share $ 1.54 $ 1.59 $ 1.62 $ 1.79 Projected depreciation and amortization 0.56 0.56 0.56 0.57 Projected depreciation and amortization from real estate joint ventures, net of minority interests 0.28 0.28 0.29 0.31 Gain on disposition of operating properties (0.14) (0.16) (0.05) (0.10) Gain on disposition of joint venture operating properties (0.06) (0.07) (0.05) (0.10) ----------- ----------- ----------- ----------- Projected FFO per diluted common share $ 2.18 $ 2.20 $ 2.37 $ 2.47 =========== =========== =========== ===========
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- 10/30/2006 /CONTACT: Scott Onufrey of Kimco Realty Corporation, +1-516-869-7190/