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Kimco Realty Announces Fourth Quarter and Full Year 2013 Operating Results; Reports a 5.6% Increase in FFO as Adjusted in 2013; Portfolio Metrics Strong with Occupancy Reaching a Five-Year High

February 5, 2014

NEW HYDE PARK, N.Y. --(BUSINESS WIRE)-- Kimco Realty Corp. (NYSE:KIM) today reported results for the fourth quarter and year ended December 31, 2013 . Highlights for the Fourth Quarter and Full Year 2013: Reported funds from operations (FFO) of $0.33 per diluted share for the fourth quarter of 2013 and $1.35 per diluted share for the full year 2013, representing increases of 6.5% and 8.0%, respectively, over the same periods in 2012; U.S. same-property net operating income (NOI) increased 4.1% for the fourth quarter and 3.8% for the full year 2013; Pro-rata occupancy increased 100 basis points in the U.S. shopping center portfolio to 94.9%, and 70 basis points in the combined shopping center portfolio to 94.5%, compared to the fourth quarter of 2012, representing the highest occupancy levels since the third quarter of 2008; Continued to transform consolidated U.S. retail portfolio during 2013: Acquired 18 high-quality retail properties, primarily in the company’s key territories, for a gross price of $348.9 million , while disposing of 23 non-core, wholly owned properties for a gross price of $152.2 million ; Continued to simplify the business model in 2013 by reducing exposure to Latin America and reducing the number of joint venture properties: Monetized 112 Latin American properties for a gross amount of $1.1 billion ; disposed of 12 U.S. retail joint venture properties for a gross sales price of $197.5 million ; and purchased five joint venture properties for a total price of $291.4 million ; and Significantly expanded the redevelopment pipeline in 2013: Increased the overall redevelopment pipeline to a total of 262 projects with a gross cost of approximately $778 million . Financial Results Net income available to common shareholders for the fourth quarter of 2013 was $47.0 million , or $0.11 per diluted share, compared to $59.2 million , or $0.14 per diluted share, for the fourth quarter of 2012. Net income available to common shareholders during the fourth quarter of 2013 included $22.0 million of gains on sales of operating properties and $20.7 million of impairments attributable to the sale or pending disposition of operating properties. This compares to $53.9 million of gains on the sales of operating properties and $26.4 million of impairments during the fourth quarter of 2012. Both operating property impairments and gains on sales are excluded from the calculation of FFO. For the full year 2013, net income available to common shareholders was $178.0 million , or $0.43 per diluted share, compared to $172.7 million , or $0.42 per diluted share, for the full year 2012. Net income available to common shareholders for the full year 2013 included $159.3 million of gains on sales of operating properties and $165.8 million of impairments attributable to the sale or pending disposition of operating properties. This compares to $112.8 million of gains on the sales of operating properties and $59.5 million of impairments during the fourth quarter of 2012. FFO, a widely accepted supplemental measure of REIT performance, was $134.7 million , or $0.33 per diluted share, for the fourth quarter of 2013 compared to $127.2 million , or $0.31 per diluted share, for the fourth quarter of 2012. For the full year 2013, FFO was $552.5 million , or $1.35 per diluted share, compared to $510.4 million , or $1.25 per diluted share, for the same period last year, representing an 8.0% increase on a diluted per share basis. FFO as adjusted (recurring), which excludes the effects of non-operating impairments and transactional income and expenses, was $134.8 million , or $0.33 per diluted share, for the fourth quarter of 2013 compared to $134.8 million , or $0.33 per diluted share, for the fourth quarter of 2012. FFO as adjusted for the fourth quarter of 2013 was flat year over year primarily due to the disposition of Kimco’s investment in the American Industries industrial portfolio as well as the InTown Suites extended stay portfolio during 2013. For the full year 2013, FFO as adjusted was $543.7 million , or $1.33 per diluted share, compared to $514.2 million , or $1.26 per diluted share, for the same period in 2012, representing a 5.6% increase on a diluted per share basis. A reconciliation of net income to FFO and FFO as adjusted is provided in the tables accompanying this press release. Shopping Center Operating Results Fourth quarter 2013 shopping center portfolio operating results: U.S. Shopping Center Portfolio Pro-rata occupancy was 94.9%, an increase of 50 basis points sequentially and 100 basis points over the fourth quarter of 2012; U.S. same-property NOI increased 4.1%, which includes a 30 basis point positive impact from the inclusion of redevelopments, compared to the same period in 2012; and Pro-rata U.S. cash-basis leasing spreads increased 5.9%; new leases increased 8.2%, and renewals/options increased 5.2%. The U.S. shopping center portfolio’s pro-rata occupancy for anchor space (10,000 square feet and greater) and small shop space (less than 10,000 square feet) both increased by 50 basis points sequentially and 100 basis points from the fourth quarter of 2012; the pro-rata occupancy for anchor space and small shop space at December 31, 2013 was 97.9% and 85.2%, respectively. In addition, the U.S. same-property NOI for the full year 2013 increased 3.8%, with no impact from the inclusion of redevelopments. Combined Shopping Center Portfolio (includes U.S., Canada and Latin America ) Pro-rata occupancy was 94.5%, an increase of 50 basis points sequentially and 70 basis points over the fourth quarter of 2012; Combined same-property NOI increased 3.4% over same period in 2012 (4.1% when excluding foreign currency), representing the fifteenth consecutive quarterly increase; and Total leases executed in the combined portfolio: 618 new leases, renewals and options totaling 2.3 million square feet (a 21% increase in the total square footage signed compared to the fourth quarter of 2012). For the full year 2013, combined same-property NOI was 3.5% (3.8% when excluding foreign currency). Kimco reports same-property NOI on a cash basis, excluding lease termination fees and including charges for bad debts. Investment Activity Acquisitions: As previously announced, during the fourth quarter Kimco purchased 14 retail properties in the U.S. for its wholly owned portfolio, totaling more than 1.5 million square feet, for a gross purchase price of $247.5 million , including $39.8 million of mortgage debt. During 2013, the company continued its portfolio transformation by acquiring 23 high-quality U.S. retail properties, including five from existing joint ventures, comprising 3.1 million square feet, for an aggregate gross purchase price of $640.3 million , including $235.9 million of mortgage debt. These properties, primarily located in the company’s core long-term markets, have an average occupancy of 96.9% (pro-rata) and are supported by excellent demographics, including an average household income of $99,000 within a three-mile radius. Also during 2013, Kimco increased its ownership interest in three institutional joint ventures through the acquisition of additional equity interests totaling $153.0 million: Kimco Income Fund (KIF) joint venture from 15.2% to 39.5%; the Kimco Income REIT (KIR) joint venture from 45.0% to 48.6%; and the Kimstone joint venture (formerly the Kimco-UBS joint venture) from 18.0% to 33.3%. Subsequent to year end, the company continued its communicated strategy of reducing the number of properties in joint ventures by acquiring three grocery-anchored shopping centers, totaling 316,000 square feet, for its own portfolio from an institutional joint venture. Kimco acquired the remaining 89% ownership interest in the Greenbrier Shopping Center , York Road Plaza and Shrewsbury Square Shopping Center , all of which are located in the greater Baltimore area, a key territory for the company, for a gross purchase price of $93.2 million , including $23.3 million of mortgage debt. Dispositions: United States As previously announced in the fourth quarter of 2013, Kimco sold ownership interests in 14 properties (eight wholly owned and six unconsolidated joint ventures) in the U.S. totaling 2.2 million square feet for a gross sales price of $192.3 million , including $62.4 million of mortgage debt. Kimco’s share of the proceeds from these sales was $93.6 million . Kimco remains committed to actively identifying and disposing of non-core retail properties. For the full year 2013, the company sold 35 U.S. shopping centers (23 wholly owned properties and 12 unconsolidated properties) totaling 4.0 million square feet for a gross sales price of $349.7 million , including $94.5 million of mortgage debt. The properties had a pro-rata occupancy of 86.9% and an annual base rent of $9.22 per square foot, which is 29% below the portfolio average. The company’s share of the proceeds from these sales was $194.0 million . Mexico and South America ( Latin America ) In the fourth quarter of 2013, Kimco continued its progress in reducing exposure to Latin America by selling five unencumbered properties and one outparcel from the Latin America portfolio, including the company’s only two Brazilian properties, totaling 463,000 square feet for a gross sales price of $40.1 million . The company’s share of the proceeds from these sales was $29.9 million . For the full year 2013, Kimco sold 112 properties from its Latin America portfolio totaling approximately 16.0 million square feet for a gross sales price of $1.1 billion , including $381.3 million of mortgage debt. The company’s share of the proceeds from these sales was $360.3 million . Redevelopments: During the fourth quarter, Kimco completed seven redevelopment projects totaling approximately $15 million , while adding five projects with a gross cost of approximately $16 million to its redevelopment pipeline. During 2013, the company moved 35 projects with a gross cost of approximately $109 million from the planning stage into active redevelopment status, while increasing the overall redevelopment pipeline to a total of 262 projects with a gross cost of approximately $778 million . Dividend Declarations Kimco’s board of directors declared a quarterly cash dividend of $0.225 per common share, payable on April 15, 2014 , to shareholders of record on April 3, 2014 , with an ex-dividend date of April 1, 2014 . This dividend represents a 7.1% increase over the previous dividend paid for the comparable period in 2013. The board of directors also declared quarterly dividends for the company’s preferred shares as follows: For the Class H depositary shares, each representing 1/100 of a share of 6.90% Class H cumulative redeemable preferred shares, a quarterly dividend of $0.43125 per preferred depositary share will be paid on April 15, 2014 , to shareholders of record on April 2, 2014 , with an ex-dividend date of March 31, 2014 ; For the Class I depositary shares, each representing 1/1000 of a share of 6.00% Class I cumulative redeemable preferred shares, a quarterly dividend of $0.37500 per preferred depositary share will be paid on April 15, 2014 , to shareholders of record on April 2, 2014 , with an ex-dividend date of March 31, 2014 . For the Class J depositary shares, each representing 1/1000 of a share of 5.50% Class J cumulative redeemable preferred shares, a quarterly dividend of $0.34375 per preferred depositary share will be paid on April 15, 2014 , to shareholders of record on April 2, 2014 , with an ex-dividend date of March 31, 2014 . For the Class K depositary shares, each representing 1/1000 of a share of 5.625% Class K cumulative redeemable preferred shares, a quarterly dividend of $0.35156 per preferred depositary share will be paid on April 15, 2014 , to shareholders of record on April 2, 2014 , with an ex-dividend date of March 31, 2014 . 2014 Guidance The company affirms its 2014 full-year guidance range for FFO as adjusted, which does not include any estimate for transactional activities or non-operating impairments, of $1.36 - $1.40 per diluted share. Estimated 2014 shopping center operating metrics for the combined portfolio are as follows: Combined portfolio occupancy: +50 to +75 basis points Combined same-property NOI: +2.5% to +3.5% Conference Call and Supplemental Materials Kimco will hold its quarterly conference call on Thursday, February 6, 2014 , at 10:00 a.m. Eastern Standard Time (EST). The call will include a review of the company’s fourth quarter and full year 2013 results as well as a discussion of the company’s strategy and expectations for the future. To participate, dial 1-888-317-6003 (Passcode: 6206276). A replay will be available through 9:00 a.m. EDT on March 10, 2014 , by dialing 1-877-344-7529 (Passcode: 10037461). Access to the live call and replay will be available through the company's website at investors.kimcorealty.com . About Kimco Kimco Realty Corp. (NYSE:KIM) is a real estate investment trust (REIT) headquartered in New Hyde Park, N.Y. , that owns and operates North America’s largest portfolio of neighborhood and community shopping centers. As of December 31, 2013 , the company owned interests in 852 shopping centers comprising 125 million square feet of leasable space across 42 states, Puerto Rico , Canada , Mexico and South America . Publicly traded on the NYSE since 1991, and included in the S&P 500 Index, the company has specialized in shopping center acquisitions, development and management for more than 50 years. For further information, please visit www.kimcorealty.com , the company’s blog at blog.kimcorealty.com , or follow Kimco on Twitter at www.twitter.com/kimcorealty . Safe Harbor Statement The statements in this news release state the company's and management's 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 which may cause actual results to differ materially from current expectations include, but are not limited to (i) general adverse economic and local real estate conditions, (ii) the inability of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or a general downturn in their business, (iii) financing risks, such as the inability to obtain equity, debt or other sources of financing or refinancing on favorable terms to the company, (iv) the company’s ability to raise capital by selling its assets, (v) changes in governmental laws and regulations, (vi) the level and volatility of interest rates and foreign currency exchange rates, (vii) risks related to our international operations, (viii) the availability of suitable acquisition and disposition opportunities, and risks related to acquisitions not performing in accordance with our expectations, (ix) valuation and risks related to our joint venture and preferred equity investments, (x) valuation of marketable securities and other investments, (xi) increases in operating costs, (xii) changes in the dividend policy for the company’s common stock, (xiii) the reduction in the company’s income in the event of multiple lease terminations by tenants or a failure by multiple tenants to occupy their premises in a shopping center, (xiv) impairment charges and (xv) unanticipated changes in the company’s intention or ability to prepay certain debt prior to maturity and/or hold certain securities until maturity. 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 Securities and Exchange Commission (SEC) filings. Copies of each filing may be obtained from the company or the SEC . The company refers you to the documents filed by the company from time to time with the SEC , specifically the section titled "Risk Factors" in the company's Annual Report on Form 10-K for the year ended December 31, 2012 , as may be updated or supplemented in the company’s Quarterly Reports on Form 10-Q and the company’s other filings with the SEC , which discuss these and other factors that could adversely affect the company's results. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except share information) (unaudited) Three Months Ended Year Ended December 31 , December 31 , 2013 2012 2013 2012 Revenues Revenues from rental properties $ 238,055 $ 216,896 $ 910,356 $ 836,881 Management and other fee income 9,565 10,469 36,317 37,522 Total revenues 247,620 227,365 946,673 874,403 Operating expenses Rent 3,335 3,300 13,347 12,745 Real estate taxes 30,776 28,364 117,563 110,747 Operating and maintenance 34,561 34,671 115,151 107,204 General and administrative expenses 31,663 28,986 127,913 123,925 Provision for doubtful accounts 1,050 (247 ) 8,256 6,022 Impairment charges 2,845 9,962 91,404 10,289 Depreciation and amortization 65,492 60,520 247,537 236,923 Total operating expenses 169,722 165,556 721,171 607,855 Operating income 77,898 61,809 225,502 266,548 Other income/(expense) Mortgage financing income 963 1,421 4,304 7,504 Interest, dividends and other investment income 7,435 1,033 16,999 2,041 Other income/(expense), net 2,417 (1,799 ) (533 ) (7,687 ) Interest expense (51,317 ) (55,486 ) (213,911 ) (225,710 ) Income from other real estate investments 678 763 2,306 2,451 Income from continuing operations before income taxes, equity in income of joint ventures, gain on change in control of interests and equity in income from other real estate investments 38,074 7,741 34,667 45,147 Provision for income taxes, net (6,788 ) (3,707 ) (34,520 ) (16,922 ) Equity in income of joint ventures, net 28,898 23,308 208,689 112,896 Gain on change in control of interests, net - 1,399 21,711 15,555 Equity in income of other real estate investments, net 1,225 18,057 31,136 53,397 Income from continuing operations 61,409 46,798 261,683 210,073 Discontinued operations Income from discontinued operating properties, net of tax 2,914 4,301 18,224 21,082 Impairment/loss on operating properties sold, net of tax (20,442 ) (8,466 ) (83,900 ) (38,432 ) Gain on disposition of operating properties 16,151 48,783 43,914 83,253 (Loss)/income from discontinued operations (1,377 ) 44,618 (21,762 ) 65,903 Gain on sale of operating properties, net of tax (1) 352 239 1,432 4,299 Net income 60,384 91,655 241,353 280,275 Net loss/(income) attributable to noncontrolling interests (3) 1,224 (3,274 ) (5,072 ) (14,202 ) Net income attributable to the Company 61,608 88,381 236,281 266,073 Preferred stock redemption costs - (15,490 ) - (21,703 ) Preferred stock dividends (14,573 ) (13,660 ) (58,294 ) (71,697 ) Net income available to the Company's common shareholders $ 47,035 $ 59,231 $ 177,987 $ 172,673 Per common share: Income from continuing operations: (3) Basic $ 0.10 $ 0.04 $ 0.47 $ 0.27 Diluted $ 0.10 (2) $ 0.04 (2) $ 0.47 (2) $ 0.27 (2) Net income: (4) Basic $ 0.11 $ 0.14 $ 0.43 $ 0.42 Diluted $ 0.11 (2) $ 0.14 (2) $ 0.43 (2) $ 0.42 (2) Weighted average shares: Basic 408,139 406,345 407,631 405,997 Diluted 408,995 406,837 408,614 406,689 (1) Included in the calculation of income from continuing operations per common 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. The impact of the conversion would have an anti-dilutive effect on net income and therefore have not been included. (3) Includes the net income attributable to noncontrolling interests related to continued operations of ( $4,961 ) and ( $2,749 ) for the quarters ended December 31, 2013 and 2012, and ( $13,373 ) and ( $11,069 ) for the year ended December 31, 2013 and 2012, respectively. (4) Includes earnings attributable to unvested restricted shares of $358 and $329 for the quarters ended December 31, 2013 and 2012 and $1,360 and $1,221 for the year ended December 31, 2013 and 2012, respectively. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share information) (unaudited) December 31 , December 31 , 2013 2012 Assets: Operating real estate, net of accumulated depreciation of $1,878,681 and $1,745,462 , respectively $ 7,146,845 $ 7,104,562 Investments and advances in real estate joint ventures 1,257,010 1,428,155 Real estate under development 97,818 97,263 Other real estate investments 274,641 317,557 Mortgages and other financing receivables 30,243 70,704 Cash and cash equivalents 148,768 141,875 Marketable securities 62,766 36,541 Accounts and notes receivable 164,326 171,540 Other assets 481,213 383,037 Total assets $ 9,663,630 $ 9,751,234 Liabilities: Notes payable $ 3,186,047 $ 3,192,127 Mortgages payable 1,035,354 1,003,190 Dividends payable 104,496 96,518 Other liabilities 482,054 445,843 Total liabilities 4,807,951 4,737,678 Redeemable noncontrolling interests 86,153 81,076 Stockholders' equity: Preferred stock, $1.00 par value, authorized 5,961,200 shares 102,000 shares issued and outstanding (in series) Aggregate liquidation preference $975,000 102 102 Common stock, $.01 par value, authorized 750,000,000 shares issued and outstanding 409,731,058 and 407,782,102 shares, respectively 4,097 4,078 Paid-in capital 5,689,258 5,651,170 Cumulative distributions in excess of net income (996,058 ) (824,008 ) Accumulated other comprehensive income (64,982 ) (66,182 ) Total stockholders' equity 4,632,417 4,765,160 Noncontrolling interests 137,109 167,320 Total equity 4,769,526 4,932,480 Total liabilities and equity $ 9,663,630 $ 9,751,234 RECONCILIATION OF NET INCOME AVAILABLE TO COMMON SHAREHOLDERS TO FUNDS FROM OPERATIONS - "FFO" (in thousands, except per share data) (unaudited) Three Months Ended Year Ended December 31 , December 31 , 2013 2012 2013 2012 Net income available to common shareholders $ 47,035 $ 59,231 $ 177,987 $ 172,673 Gain on disposition of operating property, net of noncontrolling interests (16,503 ) (49,023 ) (45,330 ) (84,828 ) Gain on disposition of joint venture operating properties (5,530 ) (4,914 ) (113,937 ) (27,927 ) Depreciation and amortization - real estate related 64,511 63,246 250,253 257,278 Depr. and amort. - real estate jv's, net of noncontrolling interests 24,448 32,228 117,743 133,734 Impairments of operating properties, net of tax and noncontrolling interests 20,707 26,440 165,825 59,510 Funds from operations 134,668 127,208 552,541 510,440 Transactional charges/(income), net 132 7,560 (8,831 ) 3,761 Funds from operations as adjusted $ 134,800 $ 134,768 $ 543,710 $ 514,201 Weighted average shares outstanding for FFO calculations: Basic 408,139 406,345 407,631 405,997 Units 1,522 1,522 1,523 1,455 Dilutive effect of equity awards 2,414 1,829 2,541 2,106 Diluted 412,075 (1) 409,696 (1) 411,695 (1 ) 409,558 (1) FFO per common share - basic $ 0.33 $ 0.31 $ 1.36 $ 1.26 FFO per common share - diluted $ 0.33 (1) $ 0.31 (1) $ 1.35 (1 ) $ 1.25 (1) FFO as adjusted per common share - diluted $ 0.33 (1) $ 0.33 (1) $ 1.33 (1 ) $ 1.26 (1) (1) 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 $661 and $572 for the three months ended December 31, 2013 and 2012, and $2,516 and $2,127 for the year ended December 31, 2013 and 2012, respectively. FFO is a widely accepted supplemental measure of REIT performance with the standards established by the National Association of Real Estate Investment Trusts (NAREIT). Given the company’s business as a real estate owner and operator, Kimco believes that FFO and FFO as adjusted is helpful to investors as a measure of its operating performance. NAREIT defines FFO as net income/(loss) attributable to common shareholders computed in accordance with generally accepted accounting principles, excluding (i) gains or losses from sales of operating real estate assets and (ii) extraordinary items, plus (iii) depreciation and amortization of operating properties and (iv) impairment of depreciable real estate and in substance real estate equity investments. Included in these items are also the company’s share of unconsolidated real estate joint ventures and partnerships. FFO as adjusted excludes the effects of non-operating impairments, transactional income and expenses. Reconciliation of Projected Diluted Net Income Per Common Share to Projected Diluted Funds From Operations Per Common Share (unaudited) Actual Projected Range 2013 Full Year 2014 Low High Projected diluted net income available to common shareholder per share $ 0.43 $ 0.50 $ 0.54 Projected depreciation & amortization 0.61 0.65 0.67 Projected depreciation & amortization real estate joint ventures, net of noncontrolling interests 0.29 0.23 0.25 Gain on disposition of operating properties (0.11 ) (0.01 ) (0.03 ) Gain on disposition of joint venture operating properties, net of noncontrolling interests (0.27 ) (0.01 ) (0.03 ) Impairments of operating properties, net of tax and noncontrolling interests 0.40 - - Projected FFO per diluted common share $ 1.35 $ 1.36 $ 1.40 Transactional income, net (0.02 ) - - Projected FFO, as adjusted per diluted common share $ 1.33 $ 1.36 $ 1.40 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. Kimco Realty Corporation David F. Bujnicki , 1-866-831-4297 Vice President, Investor Relations and Corporate Communications Source: Kimco Realty Corporation


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