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Kimco Realty Announces Fourth Quarter and Full Year 2019 Results

January 30, 2020 GMT

JERICHO, N.Y.--(BUSINESS WIRE)--Jan 30, 2020--

Kimco Realty Corp. (NYSE:KIM) today reported results for the fourth quarter and year ended December 31, 2019. For the three months ended December 31, 2019, Kimco’s net income available to the company’s common shareholders was $0.22 per diluted share compared to $0.17 per diluted share for the same period in 2018. For the full year 2019, Kimco’s net income available to the company’s common shareholders was $0.80 per diluted share compared to $1.02 per diluted share for 2018.

Highlights - Fourth Quarter and Full Year 2019:

Financial Results

Fourth Quarter 2019

Net income available to the company’s common shareholders for the fourth quarter of 2019 was $92.8 million, or $0.22 per diluted share, compared to $73.6 million, or $0.17 per diluted share, for the fourth quarter 2018. The increase was due primarily to an $80.8 million reduction in property sales (Kimco’s pro-rata share) during the fourth quarter of 2019 compared to the same period in 2018. The lower level of property sales resulted in reduced impairment charges of $40.6 million. However, the reduction in impairment charges was offset by a decrease of $29.1 million in gains on the sales of operating properties. Depreciation expense also decreased by $6.2 million in the fourth quarter of 2019 compared to the fourth quarter of 2018, primarily due to the company’s disposition activity during 2019.

NAREIT Funds From Operations (FFO)* was $151.9 million, or $0.36 per diluted share, for the fourth quarter 2019 compared to $149.6 million, or $0.36 per diluted share, for the fourth quarter 2018. NAREIT FFO for the fourth quarter of 2019 included $3.4 million of transactional charges (net of transactional income) compared to $2.2 million of transactional income (net of transactional charges) in the fourth quarter of 2018.

*A reconciliation of net income available to the company’s common shareholders to NAREIT FFO, FFO as adjusted and same-property NOI is provided in the tables accompanying this press release.

FFO as adjusted available to common shareholders (FFO as adjusted)*, which excludes the effects of transactional income and charges, was $155.3 million, or $0.37 per diluted share, for the fourth quarter 2019 compared to $147.4 million, or $0.35 per diluted share, for the fourth quarter 2018.

Full Year 2019

Net income available to the company’s common shareholders was $340.0 million, or $0.80 per diluted share, for the full year 2019 compared to $439.6 million, or $1.02 per diluted share, for the full year 2018.

NAREIT FFO was $608.4 million, or $1.44 per diluted share, for the full year 2019 compared to $609.8 million, or $1.45 per diluted share, for the full year 2018. NAREIT FFO for 2019 included $11.7 million of transactional charges (net of transactional income) compared to $3.3 million for 2018.

FFO as adjusted was $620.1 million, or $1.47 per diluted share, for the full year 2019 compared to $613.0 million, or $1.45 per diluted share, for the full year 2018.

Operating Results

Investment Activity

During the fourth quarter, the company sold 12 properties totaling 1.9 million square feet for $153.0 million. Kimco’s share was $146.5 million. In addition, the company sold two wholly-owned land parcels for a total of $47.5 million.

For the full year 2019, the company sold 32 properties totaling 4.8 million square feet for $542.5 million, of which Kimco’s share was $375.2 million. During the same period, the company acquired three grocery-anchored parcels and increased its ownership interest in one existing property for a total of $34.0 million. The company’s total share of net operating property dispositions, net of these acquisitions, was $341.2 million. In addition, the company sold five wholly-owned land parcels in 2019 for a total of $50.8 million.

Capital Markets Activity

During the fourth quarter Kimco:

In 2019 Kimco also:

2020 Full Year Outlook

Net Income available to common shareholders (per diluted share):

$0.80 to $0.84

NAREIT FFO (per diluted share)*:

$1.46 to $1.50

*The tables accompanying this press release provide a reconciliation for this forward-looking non-GAAP measure

Pro-rata Operating Assumptions:

 

Same-property NOI:

1.50% to 2.00%

Transaction Activity:

  • Dispositions (Blended cap rates: 7.0% to 7.5%)
  • Acquisitions (Blended cap rates: 5.0% to 6.0%)

 

$200 million to $300 million

$100 million to $200 million

Total combined redevelopment & development investment:

$200 million to $250 million

Dividend Declarations

Kimco’s board of directors declared a quarterly cash dividend of $0.28 per common share, payable on April 15, 2020, to shareholders of record on April 2, 2020.

The board of directors also declared quarterly dividends with respect to each of the company’s Class L and Class M series of cumulative redeemable preferred shares. All dividends on the preferred shares will be paid on April 15, 2020, to shareholders of record on April 1, 2020.

Conference Call and Supplemental Materials

Kimco will hold its quarterly conference call on Thursday, January 30, 2020, at 10:00 a.m. Eastern Daylight Time (EDT). The call will include a review of the company’s fourth quarter and full year 2019 results as well as a discussion of the company’s strategy and expectations for the future. To participate, dial 1-888-317-6003 (Passcode: 2643804).

A replay will be available through April 30, 2020, by dialing 1-877-344-7529 (Passcode: 10137380). 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 Jericho, N.Y. that is one of North America’s largest publicly traded owners and operators of open-air shopping centers. As of December 31, 2019, the company owned interests in 409 U.S. shopping centers and mixed-use assets comprising 72.4 million square feet of gross leasable space primarily concentrated in the top major metropolitan markets. 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 60 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.

The company announces material information to its investors using the company’s investor relations website ( investors.kimcorealty.com ), SEC filings, press releases, public conference calls, and webcasts. The company also uses social media to communicate with its investors and the public, and the information the company posts on social media may be deemed material information. Therefore, the company encourages investors, the media, and others interested in the company to review the information that it posts on the company’s blog ( blog.kimcorealty.com ) and social media channels, including Facebook ( www.facebook.com/kimcorealty ), Twitter ( www.twitter.com/kimcorealty ), YouTube ( www.youtube.com/kimcorealty ) and LinkedIn ( www.linkedin.com/company/kimco-realty-corporation ). The list of social media channels that the company uses may be updated on its investor relations website from time to time.

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 and management’s ability to estimate the impact of such changes, (vi) the level and volatility of interest rates and management’s ability to estimate the impact thereof, (vii) risks related to the company’s international operations, (viii) the availability of suitable acquisition, disposition, development and redevelopment opportunities, and risks related to acquisitions not performing in accordance with our expectations, (ix) valuation and risks related to the company’s 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 and preferred stock and the company’s ability to pay dividends at current levels, (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, 2018, 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. The company disclaims any intention or obligation to update the forward-looking statements, whether as a result of new information, future events or otherwise.

Condensed Consolidated Balance Sheets
(in thousands, except share information)
(unaudited)
 
December 31, 2019December 31, 2018
Assets:
Real estate, net of accumulated depreciation and amortization
of $2,500,053 and $2,385,287, respectively

$

9,209,053

 

$

9,250,519

 

Real estate under development

 

220,170

 

 

241,384

 

Investments in and advances to real estate joint ventures

 

578,118

 

 

570,922

 

Other real estate investments

 

194,400

 

 

192,123

 

Cash and cash equivalents

 

123,947

 

 

143,581

 

Accounts and notes receivable, net

 

218,689

 

 

184,528

 

Operating lease right-of-use assets, net

 

99,125

 

 

-

 

Other assets

 

354,365

 

 

416,043

 

Total assets

$

10,997,867

 

$

10,999,100

 

 
Liabilities:
Notes payable, net

$

4,831,759

 

$

4,381,456

 

Mortgages and construction loan payable, net

 

484,008

 

 

492,416

 

Dividends payable

 

126,274

 

 

130,262

 

Operating lease liabilities

 

92,711

 

 

-

 

Other liabilities

 

516,265

 

 

560,231

 

Total liabilities

 

6,051,017

 

 

5,564,365

 

Redeemable noncontrolling interests

 

17,943

 

 

23,682

 

 
Stockholders' equity:
Preferred stock, $1.00 par value, authorized 7,054,000 shares;
undesignated 6,019,240 and 5,996,240 shares, respectively,
Issued and outstanding (in series) 19,580 and 42,580 shares, respectively;
Aggregate liquidation preference $489,500 and $1,064,500, respectively

 

20

 

 

43

 

 
Common stock, $.01 par value, authorized 750,000,000 shares; issued and
outstanding 431,814,951 and 421,388,879 shares, respectively

 

4,318

 

 

4,214

 

Paid-in capital

 

5,765,233

 

 

6,117,254

 

Cumulative distributions in excess of net income

 

(904,679

)

 

(787,707

)

Total stockholders' equity

 

4,864,892

 

 

5,333,804

 

Noncontrolling interests

 

64,015

 

 

77,249

 

Total equity

 

4,928,907

 

 

5,411,053

 

Total liabilities and equity

$

10,997,867

 

$

10,999,100

 

 
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
 
Three Months Ended December 31,Year Ended December 31,

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenues
Revenues from rental properties, net

$

291,809

 

$

281,804

 

$

1,142,334

 

$

1,149,603

 

Management and other fee income

 

4,321

 

 

2,397

 

 

16,550

 

 

15,159

 

Total revenues

 

296,130

 

 

284,201

 

 

1,158,884

 

 

1,164,762

 

Operating expenses
Rent

 

(2,859

)

 

(2,667

)

 

(11,311

)

 

(10,929

)

Real estate taxes

 

(39,788

)

 

(37,766

)

 

(153,659

)

 

(153,336

)

Operating and maintenance

 

(48,110

)

 

(40,373

)

 

(171,981

)

 

(164,294

)

General and administrative

 

(24,646

)

 

(20,022

)

 

(96,942

)

 

(87,797

)

Provision for doubtful accounts

 

-

 

 

(1,682

)

 

-

 

 

(6,253

)

Impairment charges

 

(7,508

)

 

(45,352

)

 

(48,743

)

 

(79,207

)

Depreciation and amortization

 

(68,439

)

 

(74,266

)

 

(277,879

)

 

(310,380

)

Total operating expenses

 

(191,350

)

 

(222,128

)

 

(760,515

)

 

(812,196

)

 
Gain on sale of properties/change in control of interests

 

31,836

 

 

49,379

 

 

79,218

 

 

229,840

 

Operating income

 

136,616

 

 

111,452

 

 

477,587

 

 

582,406

 

 
Other income/(expense)
Other income/(expense), net

 

2,927

 

 

(1,634

)

 

11,814

 

 

13,041

 

Interest expense

 

(45,757

)

 

(42,881

)

 

(177,395

)

 

(183,339

)

Early extinguishment of debt charges

 

-

 

 

-

 

 

-

 

 

(12,762

)

Income before income taxes, net, equity in income of joint ventures, net,
and equity in income from other real estate investments, net

 

93,786

 

 

66,937

 

 

312,006

 

 

399,346

 

 
(Provision)/benefit from income taxes, net

 

(263

)

 

(2,583

)

 

3,317

 

 

(1,600

)

Equity in income of joint ventures, net

 

13,202

 

 

19,131

 

 

72,162

 

 

71,617

 

Equity in income of other real estate investments, net

 

3,318

 

 

4,462

 

 

26,076

 

 

29,100

 

 
Net income

 

110,043

 

 

87,947

 

 

413,561

 

 

498,463

 

Net (income)/loss attributable to noncontrolling interests

 

(624

)

 

214

 

 

(2,956

)

 

(668

)

Net income attributable to the Company

 

109,419

 

 

88,161

 

 

410,605

 

 

497,795

 

Preferred stock redemption charges

 

(7,159

)

 

-

 

 

(18,528

)

 

-

 

Preferred dividends

 

(9,448

)

 

(14,534

)

 

(52,089

)

 

(58,191

)

Net income available to the Company's common shareholders

$

92,812

 

$

73,627

 

$

339,988

 

$

439,604

 

 
Per common share:
Net income available to the Company: (2)
Basic

$

0.22

 

$

0.17

 

$

0.80

 

$

1.02

 

Diluted

$

0.22

 

$

0.17

 

$

0.80

 

(1

)

$

1.02

 

(1

)

Weighted average shares:
Basic

 

422,467

 

 

419,258

 

 

420,370

 

 

420,641

 

Diluted

 

423,857

 

 

419,886

 

 

421,799

 

 

421,379

 

(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 net income and therefore have not been included. Adjusted for distributions on convertible units of $30 and $99 for the year ended December 31, 2019 and 2018, respectively.

(2)

Adjusted for earnings attributable from participating securities of ($661) and ($597) for the three months ended December 31, 2019 and 2018, respectively. Adjusted for earnings attributable from participating securities of ($2,599) and ($2,375) for the year ended December 31, 2019 and 2018, respectively. Adjusted for the change in carrying amount of redeemable noncontrolling interest of ($3,603) and ($7,521) for the three months and year ended December 31, 2018, respectively.
Reconciliation of Net Income Available to the Company's Common Shareholders to
FFO and FFO as Adjusted Available to the Company's Common Shareholders
(in thousands, except per share data)
(unaudited)
 
Three Months Ended December 31,Year Ended December 31,

 

2019

 

 

2018 (1

)

 

2019

 

 

2018 (1

)

Net income available to the Company's common shareholders

$

92,812

 

$

73,627

 

$

339,988

 

$

439,604

 

Gain on sale of properties/change in control of interests

 

(31,836

)

 

(49,369

)

 

(79,218

)

 

(236,058

)

Gain on sale of joint venture properties

 

(892

)

 

(12,446

)

 

(16,066

)

 

(18,549

)

Depreciation and amortization - real estate related

 

67,864

 

 

74,086

 

 

276,097

 

 

305,079

 

Depreciation and amortization - real estate jvs

 

10,910

 

 

10,717

 

 

40,954

 

 

43,483

 

Impairment charges (including real estate jvs)

 

11,504

 

 

52,101

 

 

55,945

 

 

86,072

 

Profit participation from other real estate investments, net

 

1,288

 

 

(129

)

 

(7,300

)

 

(10,595

)

Loss/(gain) on marketable securities

 

546

 

 

1,444

 

 

(829

)

 

3,487

 

Noncontrolling interests (2)

 

(303

)

 

(421

)

 

(1,193

)

 

(2,755

)

Funds from operations available to the Company's common shareholders

 

151,893

 

 

149,610

 

 

608,378

 

 

609,768

 

Transactional charges/(income), net

 

3,369

 

 

(2,195

)

 

11,738

 

 

3,275

 

Funds from operations available to the Company's common shareholders as adjusted

$

155,262

 

$

147,415

 

$

620,116

 

$

613,043

 

 
Weighted average shares outstanding for FFO calculations:
Basic

 

422,467

 

 

419,258

 

 

420,370

 

 

420,641

 

Units

 

777

 

 

837

 

 

826

 

 

835

 

Dilutive effect of equity awards

 

1,336

 

 

628

 

 

1,365

 

 

629

 

Diluted (3)

 

424,580

 

 

420,723

 

 

422,561

 

 

422,105

 

 
FFO per common share - basic

$

0.36

 

$

0.36

 

$

1.45

 

$

1.45

 

FFO per common share - diluted (3)

$

0.36

 

$

0.36

 

$

1.44

 

$

1.45

 

FFO as adjusted per common share - diluted (3)

$

0.37

 

$

0.35

 

$

1.47

 

$

1.45

 

(1)

Certain amounts have been reclassified in order to conform with NAREIT's clarification guidance adopted January 1, 2019.

(2)

Related to gains, impairments and depreciation on properties, where applicable.

(3)

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 $199 and $228 for the three months ended December 31, 2019 and 2018, respectively. Funds from operations would be increased by $868 and $916 for the year ended December 31, 2019 and 2018, respectively.

Funds From Operations (“FFO”) is a supplemental non-GAAP financial measure utilized to evaluate the operating performance of real estate companies. Effective January 1, 2019, the Company adopted the National Association of Real Estate Investment Trusts (“NAREIT”) Funds From Operations White Paper – 2018 Restatement (”“FFO White Paper - 2018 Restatement”″) which clarifies, where necessary, existing guidance and consolidates alerts and policy bulletins into a single document for ease of use. NAREIT defines FFO as net income/(loss) available to the Company’s common shareholders computed in accordance with generally accepted accounting principles in the United States (“GAAP”), excluding (i) depreciation and amortization related to real estate, (ii) gains or losses from sales of certain real estate assets, (iii) gains and losses from change in control, (iv) impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity and (v) after adjustments for unconsolidated partnerships and joint ventures calculated to reflect FFO on the same basis. Included in the FFO White Paper - 2018 Restatement is an option for the Company to make an election to include or exclude gains and losses on the sale of assets and impairments of assets incidental to its main business in the calculation of FFO. In conjunction with the adoption of the FFO White Paper - 2018 Restatement, the Company has elected to exclude gains/impairments on land parcels, gains/losses (realized or unrealized) from marketable securities and gains/impairments on preferred equity participations in NAREIT defined FFO.

The Company’s reconciliation of net income available to the Company’s common shareholders to FFO available to the Company’s common shareholders and FFO available to the Company’s common shareholders as adjusted, is reflected in the table above (in thousands, except per share data). In conjunction with the adoption of NAREIT’s FFO White Paper – 2018 Restatement, the Company has reclassified $3.4 million from transactional charges and $10.9 million from transactional income into FFO available to the Company’s common shareholders for the three and twelve months ended December 31, 2018, respectively, relating to incidental gains and losses on the sale of assets and mark-to-market changes in equity securities. This reclassification had no impact on FFO available to the Company’s common shareholders as adjusted for the three and twelve months ended December 31, 2018.

Reconciliation of Net Income Available to the Company's Common Shareholders
to Same Property NOI
(in thousands)
(unaudited)
 
Three Months Ended December 31,Year Ended December 31,

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net income available to the Company's common shareholders

$

92,812

 

$

73,627

 

$

339,988

 

$

439,604

 

Adjustments:
Management and other fee income

 

(4,321

)

 

(2,397

)

 

(16,550

)

 

(15,159

)

General and administrative

 

24,646

 

 

20,022

 

 

96,942

 

 

87,797

 

Impairment charges

 

7,508

 

 

45,352

 

 

48,743

 

 

79,207

 

Depreciation and amortization

 

68,439

 

 

74,266

 

 

277,879

 

 

310,380

 

Gain on sale of properties/change in control of interests

 

(31,836

)

 

(49,379

)

 

(79,218

)

 

(229,840

)

Interest and other expense, net

 

42,830

 

 

44,515

 

 

165,581

 

 

183,060

 

Provision/(benefit) from income taxes, net

 

263

 

 

2,583

 

 

(3,317

)

 

1,600

 

Equity in income of other real estate investments, net

 

(3,318

)

 

(4,462

)

 

(26,076

)

 

(29,100

)

Net income/(loss) attributable to noncontrolling interests

 

624

 

 

(214

)

 

2,956

 

 

668

 

Preferred stock redemption charges

 

7,159

 

 

-

 

 

18,528

 

 

-

 

Preferred dividends

 

9,448

 

 

14,534

 

 

52,089

 

 

58,191

 

Non same property net operating income

 

(21,396

)

 

(23,989

)

 

(103,464

)

 

(137,134

)

Non-operational expense from joint ventures, net

 

20,464

 

 

13,219

 

 

59,992

 

 

60,417

 

Same Property NOI

$

213,322

 

$

207,677

 

$

834,073

 

$

809,691

 

 
Certain reclassifications of prior year amounts have been made to conform with the current year presentation.
Reconciliation of Diluted Net Income Available to Common Shareholders Per Common Share
to Diluted Funds From Operations Available to Common Shareholders Per Common Share
(unaudited)
 
ActualProjected Range

 

2019

 

Full Year 2020
LowHigh
Diluted net income available to company's common shareholder
per common share

$

0.80

 

$

0.80

 

$

0.84

 

 
Depreciation and amortization - real estate related

 

0.65

 

 

0.61

 

 

0.65

 

 
Depreciation and amortization - real estate joint ventures,
net of noncontrolling interests

 

0.10

 

 

0.09

 

 

0.10

 

 
Gain on sale of properties/change in control of interests

 

(0.19

)

 

(0.03

)

 

(0.07

)

 
Gain on sale of joint venture properties

 

(0.04

)

 

(0.01

)

 

(0.02

)

 
Impairments charges (including real estate jvs)

 

0.14

 

 

-

 

 

-

 

 
Profit participation from other real estate investments, net

 

(0.02

)

 

-

 

 

-

 

 
FFO per diluted common share

$

1.44

 

$

1.46

 

$

1.50

 

 
Transactional charge, net

 

0.03

 

 

-

 

 

-

 

 
FFO as adjusted per diluted common share

$

1.47

 

$

1.46

 

$

1.50

 

 

Projections involve numerous assumptions such as rental income (including assumptions on percentage rent), interest rates, tenant defaults, occupancy rates, 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.

View source version on businesswire.com:https://www.businesswire.com/news/home/20200130005176/en/

CONTACT: David F. Bujnicki

Senior Vice President, Investor Relations and Strategy

Kimco Realty Corporation

1-866-831-4297

dbujnicki@kimcorealty.com

KEYWORD: UNITED STATES NORTH AMERICA NEW YORK

INDUSTRY KEYWORD: RESIDENTIAL BUILDING & REAL ESTATE COMMERCIAL BUILDING & REAL ESTATE CONSTRUCTION & PROPERTY BUILDING SYSTEMS REIT LANDSCAPE

SOURCE: Kimco Realty Corporation

Copyright Business Wire 2020.

PUB: 01/30/2020 07:30 AM/DISC: 01/30/2020 07:30 AM

http://www.businesswire.com/news/home/20200130005176/en