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Kimco Realty Announces Fourth Quarter And Full Year 2012 Operating Results; Reports A 10 Percent Increase In FFO As Adjusted Of $0.33 Per Diluted Share For The Fourth Quarter 2012

Stocks in this article: KIM

The company refers you to the documents filed by the company from time to time with the Securities and Exchange Commission, specifically the section titled "Risk Factors" in the company's Annual Report on Form 10-K for the year ended December 31, 2011, as may be updated or supplemented in the company’s Form 10-Q filings, which discuss these and other factors that could adversely affect the company's results.

 

Condensed Consolidated Statements of Income

(unaudited)

(in thousands, except share information)

 
Three Months Ended Year Ended
December 31, December 31,
  2012     2011     2012     2011  

Revenues

Revenues from rental properties $ 229,073 $ 212,463 $ 884,782 $ 825,737
Management and other fee income   10,469     8,494     37,522     35,320  
 
Total revenues   239,542     220,957     922,304     861,057  
 

Operating expenses

Rent 3,304 3,318 12,761 13,863
Real estate taxes 29,594 26,695 115,282 108,782
Operating and maintenance 37,943 31,499 118,787 114,101
General and administrative expenses 29,166 28,689 124,480 118,873
Provision for doubtful accounts 80 3,234 6,880 7,723
Impairment charges 18,463 5,320 37,111 13,077
Depreciation and amortization   64,070     58,307     249,493     231,712  
Total operating expenses   182,620     157,062     664,794     608,131  
 

Operating income

56,922 63,895 257,510 252,926
 

Other income/(expense)

Mortgage financing income 1,421 1,546 7,504 7,273
Interest, dividends and other investment income 1,060 2,394 2,170 16,567
Other expense, net (1,802 ) (2,583 ) (7,971 ) (4,680 )
Interest expense (56,043 ) (57,076 ) (227,595 ) (223,526 )
Income from other real estate investments 763 762 2,451 3,824
Gain on sale of development properties - 12,074 - 12,074
 

Income from continuing operations before income taxes, equity in income of

joint ventures, gains on change in control of interests, and equity in income

               

from other real estate investments

2,321 21,012 34,069 64,458
 

Benefit/(provision) for income taxes, net

802 (6,968 ) (3,939 ) (21,330 )
Equity in income of joint ventures, net 23,308 14,227 112,896 63,467
Gains on change in control of interests 1,399 - 15,555 569
Equity in income of other real estate investments, net 18,057 16,690 53,397 51,813
         
Income from continuing operations   45,887  

44,961

    211,978     158,977  
 

Discontinued operations

Income from discontinued operating properties, net of tax 112 4,909 3,084 23,021
Impairment/loss on operating properties sold, net of tax (3,366 ) (8,424 ) (22,339 ) (17,343 )
Gain on disposition of operating properties   48,783     8,605     83,253     17,327  
Income from discontinued operations   45,529     5,090     63,998     23,005  

Gain on sale of operating properties, net of tax (1)

  239     108     4,299     108  
Net income 91,655 50,159 280,275 182,090
 
Net income attributable to noncontrolling interests (3) (3,274 ) (3,762 ) (14,202 ) (13,039 )
         
Net income attributable to the Company 88,381 46,397 266,073 169,051
 
Preferred stock redemption costs (15,490 ) - (21,703 ) -
Preferred stock dividends   (13,660 )   (14,841 )   (71,697 )   (59,363 )
 
Net income available to the Company's common shareholders $ 59,231   $ 31,556   $ 172,673   $ 109,688  

Per common share:

Income from continuing operations: (3)
Basic $ 0.03   $ 0.07   $ 0.27   $ 0.22  
Diluted $ 0.03   (2) $ 0.07   (2) $ 0.27   (2) $ 0.21   (2)
Net income: (4)
Basic $ 0.14   $ 0.08   $ 0.42   $ 0.27  
Diluted $ 0.14   (2) $ 0.08   (2) $ 0.42   (2) $ 0.27   (2)
 

Weighted average shares:

Basic   406,345     406,554     405,997     406,530  
Diluted   406,837     407,341     406,689     407,669  
 
(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 ($2,961) and ($2,568) for the quarters ended December 31, 2012 and 2011, respectively. Additionally, the net income attributable to noncontrolling interests related to continued operations of ($12,470) and ($11,661) for the years ended December 31, 2012 and 2011, respectively.
(4) Includes earnings attributable to unvested restricted shares of $329 and $158 for the quarters ended December 31, 2012 and 2011, respectively. Additionally the earnings attributable to unvested restricted shares of $1,221 and $608 for the year ended December 31, 2012 and 2011, respectively.
 

 
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands, except share information)
   
December 31, December 31,
2012 2011
Assets:

Operating real estate, net of accumulated depreciation of $1,745,462 and $1,693,090, respectively

$ 7,104,562 $ 6,898,445
Investments and advances in real estate joint ventures 1,428,155 1,404,214
Real estate under development 97,263 179,722
Other real estate investments 317,557 344,131
Mortgages and other financing receivables 70,704 102,972
Cash and cash equivalents 141,875 112,882
Marketable securities 36,541 33,540
Accounts and notes receivable 161,113 164,053
Other assets   383,037     388,803  
Total assets $ 9,740,807   $ 9,628,762  
 
Liabilities:
Notes payable $ 3,192,127 $ 2,983,886
Mortgages payable 1,003,190 1,085,371
Construction loans payable - 45,128
Dividends payable 96,518 92,159
Other liabilities   435,416     447,001  
Total liabilities   4,727,251     4,653,545  
Redeemable noncontrolling interests   81,076     95,074  
 
Stockholders' equity:

Preferred stock, $1.00 par value, authorized 5,961,200 and 5,146,000 shares, respectively

102,000 and 984,000 shares issued (in series), respectively,
104,400 and 954,000 shares outstanding (in series), respectively
Aggregate liquidation preference $975,000 and $810,000, respectively 102 954

Common stock, $.01 par value, authorized 750,000,000 shares issued and outstanding 407,782,102 and 406,937,830 shares, respectively

4,078 4,069
Paid-in capital 5,651,170 5,492,022
Cumulative distributions in excess of net income   (824,008 )   (702,999 )
4,831,342 4,794,046
Accumulated other comprehensive income   (66,182 )   (107,660 )
Total stockholders' equity 4,765,160 4,686,386
Noncontrolling interests   167,320     193,757  
Total equity   4,932,480     4,880,143  
Total liabilities and equity $ 9,740,807   $ 9,628,762  
 

 
Reconciliation of Net Income Available to Common Shareholders
To Funds From Operations - "FFO"
(unaudited)
(in thousands, except per share data)
 
Three Months Ended Year Ended
December 31, December 31,
  2012     2011     2012     2011  
Net income available to common shareholders $ 59,231 $ 31,556 $ 172,673 $ 109,688
Gain on disposition of operating property, net of noncontrolling interests (49,023 ) (11,398 ) (84,828 ) (19,444 )
Gain on disposition of joint venture operating properties (4,914 ) (819 ) (27,927 ) (4,050 )
Depreciation and amortization - real estate related 63,246 60,561 257,278 246,746
Depr. and amort. - real estate jv's, net of noncontrolling interests 32,228 34,529 133,734 138,482
Remeasurement of derivative instrument - - - 4,287
Impairments of operating properties, net of tax and noncontrolling interests   26,440     21,014     59,510     42,043  
Funds from operations 127,208 135,443 510,440 517,752
Transactional charges / (income), net   7,560     (11,932 )   3,761     (27,972 )
Funds from operations as adjusted $ 134,768   $ 123,511   $ 514,201   $ 489,780  
 
Weighted average shares outstanding for FFO calculations:
Basic   406,345     406,554     405,997     406,530  
Units 1,522 1,532 1,455 1,528
Dilutive effect of equity awards   1,829     787     2,106     1,140  
Diluted   409,696   (1)   408,873   (1)   409,558   (1)   409,198   (1)
 
FFO per common share - basic $ 0.31   $ 0.33   $ 1.26   $ 1.27  
FFO per common share - diluted $ 0.31   (1) $ 0.33   (1) $ 1.25   (1) $ 1.27   (1)
FFO as adjusted per common share - diluted $ 0.33   (1) $ 0.30   (1) $ 1.26   (1) $ 1.20   (1)
 

(1) 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 funds from operations and therefore have not been included. Funds from operations would be increased by $572 and $264 for the three months ended December 31, 2012 and 2011, respectively and $2,127 and $1,017 for the year ended December 31, 2012 and 2011, 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
2012 Full Year 2013

Low

High

Projected diluted net income available to common shareholder per share

$ 0.42 $ 0.37 $ 0.41
 
Projected depreciation & amortization 0.63 0.62 0.64
 

Projected depreciation & amortization real estate joint ventures, net of noncontrolling interests

0.33 0.31 0.33
 
Gain on disposition of operating properties (0.21 ) (0.01 ) (0.03 )
 

Gain on disposition of joint venture operating properties, net of noncontrolling interests

(0.07 ) (0.01 ) (0.02 )
 

Impairments of operating properties, net of tax and noncontrolling interests

0.15 - -
     
Projected FFO per diluted common share $ 1.25 $ 1.28 $ 1.33
 
Transactional income, net (0.04 ) - -
 
Preferred stock redemption charge 0.05 - -
 
Non-operating impairments recognized, net of tax -
     
Projected FFO, as adjusted per diluted common share $ 1.26   $ 1.28   $ 1.33  
 
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.
 




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