Kimco Realty Announces Fourth Quarter and Full Year 2015 Results
Company Expanded Core Holdings in Top 25 U.S. Markets, Reduced Joint Venture Ownership and Commenced Canadian Exit; Tenant Demand Drives Strong Leasing Results
NEW HYDE PARK, N.Y.--(BUSINESS WIRE)-- Kimco Realty Corp. (NYSE: KIM) today reported results for the fourth quarter and year ended December 31, 2015.
Highlights - Fourth Quarter and Full Year 2015
- Funds from Operations (FFO) as adjusted per diluted share increased 5.7% for the fourth quarter and 4.3% for the full year 2015 over the comparable 2014 periods;
- U.S. pro-rata occupancy ended the year at 95.8% - an increase of 10 basis points over the fourth quarter 2014, representing the highest level since the first quarter of 2008;
- Small shop occupancy improved 70 basis points over the fourth quarter 2014 to 88.7%, representing the highest small shop occupancy level in five years;
- Rent spreads for new U.S. leases were up 31.0% in the fourth quarter 2015 with overall U.S. rent spreads increasing 13.1% during the same period;
- Issued a new $500 million, seven-year unsecured bond with a coupon of 3.40% in the fourth quarter 2015;
- U.S. same-property net operating income (NOI) increased 3.1% for the full year 2015;
- U.S. gross transaction volume exceeded $2.8 billion in 2015 through the acquisition of 59 high-quality, core market properties totaling $2.1 billion and the sale of 95 properties for $762.9 million. This includes the reduction of 118 joint venture properties totaling $2.3 billion;
- Commenced exit from Canada in 2015 with the disposition of 27 Canadian properties for a gross price of $1.4 billion.
Financial Results
Net income available to common shareholders for the fourth quarter of 2015 was $360.0 million, or $0.87 per diluted share, compared to $38.2 million, or $0.09 per diluted share, for the fourth quarter 2014. Net income available to common shareholders during the fourth quarter 2015 included $320.5 million of gains on sales of operating properties and $6.5 million of impairments attributable to the sale or pending disposition of operating properties. This compares to $127.4 million of gains on the sales of operating properties and $153.9 million of impairments during the fourth quarter 2014. Both operating property impairments and gains on sales are excluded from the calculation of FFO.
For the full year 2015, net income available to common shareholders was $831.2 million, or $2.00 per diluted share, compared to $365.7 million, or $0.89 per diluted share, for the full year 2014. Net income available to common shareholders for the full year 2015 included $628.5 million of gains on sales of operating properties and $39.8 million of impairments attributable to the sale or pending disposition of operating properties. This compares to $383.4 million of gains on the sales of operating properties and $257.7 million of impairments for the full year 2014.
FFO, a widely accepted supplemental measure of REIT performance, was $143.2 million, or $0.35 per diluted share, for the fourth quarter 2015 compared to $156.7 million, or $0.38 per diluted share, for the fourth quarter 2014. During the fourth quarter 2015, FFO was reduced $9.9 million for transactional charges, net, including a previously disclosed $5.8 million charge for the redemption of the company’s 6.90% Class H Preferred Stock, compared to $12.1 million of transactional income, net, included in FFO during the fourth quarter of 2014.
For the full year 2015, FFO was $643.2 million, or $1.56 per diluted share, compared to $596.2 million, or $1.45 per diluted share, for the full year 2014.
FFO as adjusted, which excludes the effects of non-operating impairments as well as transactional income and charges, was $153.1 million, or $0.37 per diluted share, for the fourth quarter 2015 compared to $144.6 million, or $0.35 per diluted share, for the fourth quarter 2014.
For the full year 2015, FFO as adjusted was $603.4 million, or $1.46 per diluted share, compared to $576.9 million, or $1.40 per diluted share, for the same period in 2014.
A reconciliation of net income to FFO and FFO as adjusted is provided in the tables accompanying this press release.
U.S. Operating Results
- Pro-rata occupancy ended the quarter at 95.8%. This represents an increase of 10 basis points over the fourth quarter of 2014;
- Pro-rata occupancy for small shop space (under 10,000 square feet) was 88.7%, a 70-basis-point increase over the fourth quarter of 2014. Anchor tenant occupancy was 98.2%, a 10-basis-point decrease over the fourth quarter of 2014;
- Pro-rata rental-rate leasing spreads during the fourth quarter 2015 increased 13.1%, with rental rates for new leases up 31.0% and renewals/options increasing 7.9%. For the full year 2015, pro-rata rental-rate leasing spreads increased 11.1% with rental rates for new leases up 25.0% and renewals/options increasing 7.8%;
- Same-property net operating income (NOI) for the fourth quarter of 2015 increased 2.8%, which includes a 60-basis-point reduction attributable to the previously announced bankruptcies of Anna’s Linens and The Great Atlantic & Pacific Tea Company (A&P), compared to the same period in 2014;
- Full year 2015 same-property NOI increased 3.1%, compared to the same period in 2014, and includes a negative 30-basis-point impact from the bankruptcies of Anna’s Linens and A&P.
Investment Activity
The company has been executing on its simplification initiative, focusing on its U.S. shopping center portfolio to become more concentrated in core major metro markets. At the same time, the company continues to reduce its joint venture program and Canadian platform after successfully exiting Mexico and South America.
United States
- During the fourth quarter, the company acquired three U.S. shopping centers totaling $207.8 million, two of which are from existing joint ventures. The company’s pro-rata share of the purchase price was $193.9 million and includes the assumption of $111.2 million of mortgage debt;
- Also in the fourth quarter, Kimco sold ownership interests in 64 properties (15 wholly owned and 49 joint ventures) in the U.S., totaling 3.0 million square feet, for a gross sales price of $437.7 million. The company’s pro-rata share of the sales was $275.5 million;
- For the full year 2015, Kimco acquired interests in 59 retail properties (57 acquired from existing joint ventures) totaling 9.4 million square feet. The aggregate purchase price for these acquisitions was $2.1 billion, of which $1.4 billion was the company’s pro-rata share;
- During 2015, the company sold 95 U.S. shopping centers (34 wholly owned properties and 61 joint ventures), totaling 6.8 million square feet, for a gross sales price of $762.9 million. The company’s pro-rata share of the sales was $481.5 million.
Canada & Latin America
- In the fourth quarter of 2015, Kimco sold its interest in 23 Canadian shopping centers to RioCan based on a gross sales price of $1.2 billion, including the assumption of $404.9 million of existing mortgage debt. Kimco’s share of the sales price and debt was $581.5 million and $195.9 million, respectively;
- Also in the fourth quarter, Kimco sold its last remaining shopping center in South America, a wholly owned property in Chile, for $51.3 million, including the assignment of $32.0 million of debt;
- For the full year 2015, Kimco completed the sale of 27 properties in Canada, totaling approximately 6.9 million square feet, for a gross sales price of $1.4 billion. The company’s pro-rata share of the sales was $683.7 million;
- In 2015, the company sold its three remaining shopping centers in Mexico and its last property in South America for a total sales price of $65.3 million.
Capital Activity
- In October, the company issued a new $500 million, seven-year unsecured bond with a coupon of 3.40%. The proceeds were used for general corporate purposes, including the prefunding of near-term maturities that include the company’s $150 million 5.584% bond due November 2015, a $300 million 5.783% bond due March 2016 and $562 million of mortgage debt with a weighted average interest rate of 6.16% maturing during the remainder of 2015 and 2016, and to partially reduce borrowings under the company’s revolving credit facility maturing in March 2018.
- As previously announced, the company redeemed its 6.90% Class H Cumulative Redeemable Preferred Stock (and the related depositary shares) on November 25, 2015. In connection with this redemption, the company incurred a non-cash transaction charge to FFO of approximately $5.8 million in the fourth quarter of 2015.
2016 Guidance
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Kimco’s full year 2016 financial, operational and transaction guidance is as follows: |
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| FFO (per diluted share) | $1.54 - $1.62 | |||
| FFO as adjusted (per diluted share)* | $1.48 - $1.52 | |||
| Transactional Income, net | $24 million - $42 million | |||
| U.S. Portfolio Occupancy | 95.7% - 96.2% | |||
| U.S. Same-property NOI | +2.50% - +3.50% | |||
| Acquisitions (Kimco share) | $450 million - $550 million | |||
| Dispositions (Kimco share) | $825 million - $975 million | |||
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*Excludes Transactional Income, net |
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Dividend Declarations
Kimco’s board of directors declared a quarterly cash dividend of $0.255 per common share, payable on April 15, 2016, to shareholders of record on April 5, 2016, representing an ex-dividend date of April 1, 2016.
The board of directors also declared quarterly dividends with respect to the company’s various series of cumulative redeemable preferred shares (Class I, Class J and Class K). All dividends on the preferred shares will be paid on April 15, 2016, to shareholders of record on April 4, 2016, with an ex-dividend date of March 31, 2016.
Conference Call and Supplemental Materials
Kimco will hold its quarterly conference call on Wednesday, February 3, 2016, at 10:00 a.m. Eastern Standard Time (EST). The call will include a review of the company’s fourth quarter and full year 2015 results as well as a discussion of the company’s strategy and expectations for the future. To participate, dial 1-888-317-6003 (Passcode: 9938802).
A replay will be available through May 4, 2016, by dialing 1-877-344-7529 (Passcode: 10077220). 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 is North America’s largest publicly traded owner and operator of open-air shopping centers. As of December 31, 2015, the company owned interests in 564 U.S. shopping centers comprising 90 million square feet of leasable space across 38 states and Puerto Rico. 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 and management’s ability to estimate the impact thereof, (vii) risks related to the company’s 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 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 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 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, 2014, 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 BALANCE SHEETS | ||||||||
| (in thousands, except share information) | ||||||||
| (unaudited) | ||||||||
| December 31, | December 31, | |||||||
| 2015 | 2014 | |||||||
| Assets: | ||||||||
|
Operating real estate, net of accumulated depreciation of $2,115,320 and $1,955,406, respectively |
$ | 9,274,299 | $ | 7,930,489 | ||||
| Investments and advances in real estate joint ventures | 742,559 | 1,037,218 | ||||||
| Real estate under development | 179,190 | 132,331 | ||||||
| Other real estate investments | 215,836 | 266,157 | ||||||
| Mortgages and other financing receivables | 23,824 | 74,013 | ||||||
| Cash and cash equivalents | 189,534 | 187,322 | ||||||
| Marketable securities | 7,565 | 90,235 | ||||||
| Accounts and notes receivable | 175,252 | 172,386 | ||||||
| Other assets | 536,112 | 371,249 | ||||||
| Total assets | $ | 11,344,171 | $ | 10,261,400 | ||||
| Liabilities: | ||||||||
| Notes payable | $ | 3,761,328 | $ | 3,171,742 | ||||
| Mortgages payable | 1,614,982 | 1,424,228 | ||||||
| Dividends payable | 115,182 | 111,143 | ||||||
| Other liabilities | 584,019 | 561,042 | ||||||
| Total liabilities | 6,075,511 | 5,268,155 | ||||||
| Redeemable noncontrolling interests | 86,709 | 91,480 | ||||||
| Stockholders' equity: | ||||||||
| Preferred stock, $1.00 par value, authorized 6,029,100 and 5,959,100 shares, respectively, | ||||||||
| 32,000 and 102,000 shares issued and outstanding (in series), respectively | ||||||||
| Aggregate liquidation preference $800,000 and $975,000, respectively | 32 | 102 | ||||||
| Common stock, $.01 par value, authorized 750,000,000 shares | ||||||||
| issued and outstanding 413,430,756 and 411,819,818 shares, respectively | 4,134 | 4,118 | ||||||
| Paid-in capital | 5,608,881 | 5,732,021 | ||||||
| Cumulative distributions in excess of net income | (572,335 | ) | (1,006,578 | ) | ||||
| Accumulated other comprehensive income | 5,588 | 45,122 | ||||||
| Total stockholders' equity | 5,046,300 | 4,774,785 | ||||||
| Noncontrolling interests | 135,651 | 126,980 | ||||||
| Total equity | 5,181,951 | 4,901,765 | ||||||
| Total liabilities and equity | $ | 11,344,171 | $ | 10,261,400 | ||||
| Condensed Consolidated Statements of Income | ||||||||||||||||||||||||
| (in thousands, except share information) | ||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||
| Revenues from rental properties | $ | 296,501 | $ | 255,748 | $ | 1,144,474 | $ | 958,888 | ||||||||||||||||
| Management and other fee income | 4,369 | 8,764 | 22,295 | 35,009 | ||||||||||||||||||||
| Total revenues | 300,870 | 264,512 | 1,166,769 | 993,897 | ||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||
| Rent | 2,868 | 3,888 | 12,347 | 14,250 | ||||||||||||||||||||
| Real estate taxes | 37,807 | 33,129 | 147,150 | 124,670 | ||||||||||||||||||||
| Operating and maintenance | 40,054 | 34,078 | 144,980 | 119,697 | ||||||||||||||||||||
| General and administrative expenses | 33,413 | 27,675 | 122,735 | 122,201 | ||||||||||||||||||||
| Provision for doubtful accounts | 751 | 788 | 6,075 | 4,882 | ||||||||||||||||||||
| Impairment charges | 17,475 | 11,420 | 45,383 | 39,808 | ||||||||||||||||||||
| Depreciation and amortization | 86,095 | 72,767 | 344,527 | 258,074 | ||||||||||||||||||||
| Total operating expenses | 218,463 | 183,745 | 823,197 | 683,582 | ||||||||||||||||||||
| Operating income | 82,407 | 80,767 | 343,572 | 310,315 | ||||||||||||||||||||
| Other income/(expense) | ||||||||||||||||||||||||
| Mortgage financing income | 443 | 585 | 2,940 | 3,129 | ||||||||||||||||||||
| Interest, dividends and other investment income | 1,050 | 323 | 39,061 | 966 | ||||||||||||||||||||
| Other income/(expense), net | 2,134 | (4,238 | ) | 2,234 | (8,544 | ) | ||||||||||||||||||
| Interest expense | (56,152 | ) | (49,823 | ) | (218,891 | ) | (203,759 | ) | ||||||||||||||||
| 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 | 29,882 | 27,614 | 168,916 | 102,107 | ||||||||||||||||||||
| Provision for income taxes, net | (48,297 | ) | (7,735 | ) | (60,230 | ) | (22,438 | ) | ||||||||||||||||
| Equity in income of joint ventures, net | 349,587 | 9,487 | 480,395 | 159,560 | ||||||||||||||||||||
| Gain on change in control of interests, net | 3,091 | 23,462 | 149,234 | 107,235 | ||||||||||||||||||||
| Equity in income of other real estate investments, net | 4,854 | 21,638 | 36,090 | 38,042 | ||||||||||||||||||||
| Income from continuing operations | 339,117 | 74,466 | 774,405 | 384,506 | ||||||||||||||||||||
| Discontinued operations | ||||||||||||||||||||||||
| Income/(loss) from discontinued operating properties, net of tax | - | 5,618 | (15 | ) | 36,780 | |||||||||||||||||||
| Impairment/loss on operating properties, net of tax | - | (101,040 | ) | (60 | ) | (176,315 | ) | |||||||||||||||||
| Gain on disposition of operating properties, net of tax | - | 71,716 | - | 190,520 | ||||||||||||||||||||
| (Loss)/income from discontinued operations | - | (23,706 | ) | (75 | ) | 50,985 | ||||||||||||||||||
| Gain on sale of operating properties, net, net of tax (1) | 39,594 | - | 125,813 | 389 | ||||||||||||||||||||
| Net income | 378,711 | 50,760 | 900,143 | 435,880 | ||||||||||||||||||||
| Net loss/(income) attributable to noncontrolling interests (3) | 490 | 2,020 | (6,028 | ) | (11,879 | ) | ||||||||||||||||||
| Net income attributable to the Company | 379,201 | 52,780 | 894,115 | 424,001 | ||||||||||||||||||||
| Preferred stock redemption costs | (5,816 | ) | - | (5,816 | ) | - | ||||||||||||||||||
| Preferred stock dividends | (13,365 | ) | (14,573 | ) | (57,084 | ) | (58,294 | ) | ||||||||||||||||
| Net income available to the Company's common shareholders | $ | 360,020 | $ | 38,207 | $ | 831,215 | $ | 365,707 | ||||||||||||||||
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| Per common share: | ||||||||||||||||||||||||
| Income from continuing operations: (3) | ||||||||||||||||||||||||
| Basic | $ | 0.87 | $ | 0.14 | $ | 2.01 | $ | 0.77 | ||||||||||||||||
| Diluted | $ | 0.87 | (2 | ) | $ | 0.14 | (2 | ) | $ | 2.00 | (2 | ) | $ | 0.77 | (2 | ) | ||||||||
| Net income: (4) | ||||||||||||||||||||||||
| Basic | $ | 0.87 | $ | 0.09 | $ | 2.01 | $ | 0.89 | ||||||||||||||||
| Diluted | $ | 0.87 | (2 | ) | $ | 0.09 | (2 | ) | $ | 2.00 | (2 | ) | $ | 0.89 | (2 | ) | ||||||||
| Weighted average shares: | ||||||||||||||||||||||||
| Basic | 411,667 | 409,740 | 411,319 | 409,088 | ||||||||||||||||||||
| Diluted | 413,346 | 411,000 | 412,851 | 411,038 | ||||||||||||||||||||
|
(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 $490 and ($3,290) for the quarters ended December 31, 2015 and 2014 and ($6,028) and ($9,763) for the year ended December 31, 2015 and 2014, respectively. | |
|
(4) |
Adjusted for earnings attributable from participating securities of ($1,950) and ($459) for the quarters ended December 31, 2015 and 2014 and ($4,134) and ($1,749) for the year ended December 31, 2015 and 2014, respectively. | |
| 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, | |||||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
| Net income available to common shareholders | $ | 360,020 | $ | 38,207 | $ | 831,215 | $ | 365,707 | ||||||||||||||||
| Gain on disposition of operating property, net, net of tax and noncontrolling interests | (38,451 | ) | (71,152 | ) | (124,165 | ) | (189,572 | ) | ||||||||||||||||
| Gain on disposition of joint venture operating properties and change in control of interests | (282,021 | ) | (56,262 | ) | (504,356 | ) | (193,791 | ) | ||||||||||||||||
| Depreciation and amortization - real estate related | 82,732 | 70,878 | 333,840 | 263,885 | ||||||||||||||||||||
| Depr. and amort. - real estate jv's, net of noncontrolling interests | 14,360 | 21,113 | 66,937 | 92,343 | ||||||||||||||||||||
| Impairments of operating properties, net of tax and noncontrolling interests | 6,539 | 153,937 | 39,774 | 257,660 | ||||||||||||||||||||
| Funds from operations | 143,179 | 156,721 | 643,245 | 596,232 | ||||||||||||||||||||
| Transactional charges/(income), net | 9,892 | (12,079 | ) | (39,808 | ) | (19,341 | ) | |||||||||||||||||
| Funds from operations as adjusted | $ | 153,071 | $ | 144,642 | $ | 603,437 | $ | 576,891 | ||||||||||||||||
| Weighted average shares outstanding for FFO calculations: | ||||||||||||||||||||||||
| Basic | 411,667 | 409,740 | 411,319 | 409,088 | ||||||||||||||||||||
| Units | 860 | 1,531 | 791 | 1,536 | ||||||||||||||||||||
| Dilutive effect of equity awards | 1,481 | 3,171 | 1,414 | 3,139 | ||||||||||||||||||||
| Diluted | 414,008 | (1 | ) | 414,442 | (1 | ) | 413,524 | (1 | ) | 413,763 | (1 | ) | ||||||||||||
| FFO per common share - basic | $ | 0.35 | $ | 0.38 | $ | 1.56 | $ | 1.46 | ||||||||||||||||
| FFO per common share - diluted | $ | 0.35 | (1 | ) | $ | 0.38 | (1 | ) | $ | 1.56 | (1 | ) | $ | 1.45 | (1 | ) | ||||||||
| FFO as adjusted per common share - diluted | $ | 0.37 | (1 | ) | $ | 0.35 | (1 | ) | $ | 1.46 | (1 | ) | $ | 1.40 | (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 $217 and $795 for the three months ended December 31, 2015 and 2014, and $781 and $3,033 for the year ended December 31, 2015 and 2014, 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 change in control of interests 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 Income From Continuing Operations to | ||||||||||||||||||||||||
| Combined Same Property Net Operating Income "NOI" and | ||||||||||||||||||||||||
| U.S. Same Property NOI | ||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
| Income from continuing operations | $ | 339,117 | $ | 74,466 | $ | 774,405 | $ | 384,506 | ||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||
| Management and other fee income | (4,369 | ) | (8,764 | ) | (22,295 | ) | (35,009 | ) | ||||||||||||||||
| General and administrative expenses | 33,413 | 27,675 | 122,735 | 122,201 | ||||||||||||||||||||
| Impairment charges | 17,475 | 11,420 | 45,383 | 39,808 | ||||||||||||||||||||
| Depreciation and amortization | 86,095 | 72,767 | 344,527 | 258,074 | ||||||||||||||||||||
| Other expense, net | 52,525 | 53,153 | 174,656 | 208,208 | ||||||||||||||||||||
| (Benefit)/provision for income taxes, net | 48,297 | 7,735 | 60,230 | 22,438 | ||||||||||||||||||||
| Gain on change in control of interests, net | (3,091 | ) | (23,462 | ) | (149,234 | ) | (107,235 | ) | ||||||||||||||||
| Equity in income of other real estate investments, net | (4,854 | ) | (21,638 | ) | (36,090 | ) | (38,042 | ) | ||||||||||||||||
| Non same property net operating income | (28,483 | ) | (20,777 | ) | (142,606 | ) | (97,277 | ) | ||||||||||||||||
| Non-operational expense from joint ventures, net | (297,489 | ) | 61,987 | (245,379 | ) | 148,918 | ||||||||||||||||||
| Impact from foreign currency | - | (1,644 | ) | - | (6,120 | ) | ||||||||||||||||||
| Combined Same Property NOI | $ | 238,636 | $ | 232,918 | $ | 926,332 | $ | 900,470 | ||||||||||||||||
| Canadian Same Property NOI | (8,913 | ) | (9,416 | ) | (38,397 | ) | (39,188 | ) | ||||||||||||||||
| U.S. Same Property NOI | $ | 229,723 | $ | 223,502 | $ | 887,935 | $ | 861,282 | ||||||||||||||||
| Combined Same Property NOI and U.S. Same Property NOI are supplemental non-GAAP financial measures of real estate companies’ operating performance and should not be considered an alternative to net income in accordance with GAAP or as a measure of liquidity. Combined Same Property NOI and U.S. Same Property NOI are considered by management to be important performance measures of Kimco's operations, and management believes that these measures are frequently used by securities analysts and investors as measures of Kimco's operating performance as these measures include only the net operating income of properties that have been owned for the entire current and prior year reporting periods including those properties under redevelopment and exclude properties under development and pending stabilization. As such, Combined Same Property NOI and U.S. Same Property NOI assist in eliminating disparities in net income due to the development, acquisition or disposition of properties during the particular periods presented, and thus provide a more consistent performance measure for the comparison of the operating performance of Kimco's properties. | |
| Combined Same Property NOI (and U.S. Same Property NOI) is calculated using revenues from rental properties (excluding straight-line rents, lease termination fees and above/below market rents and includes charges for bad debt) less operating and maintenance expense, real estate taxes, rent expense and the impact for foreign currency, plus Kimco's proportionate share of Combined Same Property NOI from unconsolidated real estate joint ventures, calculated on the same basis. Combined Same Property NOI includes all properties that are owned for the entire current and prior year reporting periods and excludes properties under development and properties pending stabilization. Properties are deemed stabilized at the earlier of (i) reaching 90% leased or (ii) one year following their inclusion in operating real estate. U.S. Same Property NOI excludes the company’s Canadian properties which are included in Combined Same Property NOI. Kimco’s method of calculating Combined Same Property NOI and U.S. Same Property NOI may differ from methods used by other REITs and, accordingly, may not be comparable to such other REITs. | |
| Reconciliation of Projected Diluted Net Income Per Common Share | ||||||||
| to Projected Diluted Funds From Operations Per Common Share | ||||||||
| (unaudited) | ||||||||
| Actual | Projected Range | |||||||
| 2015 | Full Year 2016 | |||||||
|
Low |
High |
|||||||
|
Projected diluted net income available to common shareholder per share |
$ 2.00 | $ 0.70 | $ 0.78 | |||||
| Projected depreciation & amortization | 0.81 | 0.80 | 0.83 | |||||
|
|
||||||||
|
Projected depreciation & amortization real estate joint ventures, net of noncontrolling interests |
0.17 | 0.11 | 0.13 | |||||
| Gain on disposition of operating properties | (0.30) | (0.02) | (0.04) | |||||
|
Gain on disposition of joint venture operating properties, |
||||||||
|
net of noncontrolling interests, and change in control of interests |
(1.22) | (0.05) | (0.08) | |||||
|
Impairments of operating properties, net of tax and noncontrolling interests |
0.10 | - | - | |||||
| Projected FFO per diluted common share | $ 1.56 | $ 1.54 | $ 1.62 | |||||
| Transactional income, net | (0.10) | (0.06) | (0.10) | |||||
| Projected FFO, as adjusted per diluted common share | $ 1.46 | $ 1.48 | $ 1.52 | |||||
| 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. |
View source version on businesswire.com: http://www.businesswire.com/news/home/20160202006548/en/
Kimco Realty Corp.
David F. Bujnicki, 1-866-831-4297
Vice
President, Investor Relations and Corporate Communications
[email protected]
Source: Kimco Realty Corporation