StockSelector.com
  Research, Select, & Monitor Wednesday, October 23, 2019 7:41:22 AM ET  
Trade Ideas The Market Industries Stocks Portfolio

 
Ticker Lookup
Kimco Realty Corporation$21.39$.16.75%

  Quote | Ranking | Chart | Valuations | Sentiment | Industry | News | Earnings | Analysts | More...

Your Target?

 Kimco Realty Announces Second Quarter 2019 Results
   Thursday, July 25, 2019 7:30:00 AM ET

Portfolio Occupancy Matches All-Time High Level

Updates 2019 Outlook

NEW HYDE PARK, N.Y.--(BUSINESS WIRE)--Kimco Realty Corp. (NYSE:KIM) today reported results for its second quarter ended June 30, 2019. For the three months ended June 30, 2019 and 2018, net income available to the company’s common shareholders was $0.20 per diluted share and $0.36 per diluted share, respectively.

  • Increased pro-rata occupancy to a record-tying 96.2%.
  • Generated new leasing spreads of 37.0%, representing the 22nd consecutive quarter in which spreads on new leases increased by double digits.
  • Grew same-property net operating income (“NOI”) by 2.5% during the second quarter compared to the same period in 2018.
  • Sold three properties and one land parcel totaling 875,000 square feet for $103.7 million. Kimco’s share was $65.8 million.


“With our pro-rata occupancy at an all-time high, impressive spreads on new leases and positive same-property NOI, our strong operating results continue to reflect the successful execution of our 2020 Vision strategy, along with the quality, strength and resiliency of our portfolio,” said Conor Flynn, Kimco’s Chief Executive Officer. “We also remain focused on our value-creation initiatives designed to drive long-term cash flow growth for our shareholders. An excellent example is the success we’re seeing at Phase One of Pentagon Centre, where in just one month, we’re seeing strong demand that has enabled us to lease over 45 percent of the residential units, well exceeding our expectations.”

Net income available to the company’s common shareholders for the second quarter of 2019 was $86.5 million, or $0.20 per diluted share, compared to $150.9 million, or $0.36 per diluted share, for the second quarter of 2018. The change was primarily due to the sale of over $1.0 billion of properties since 2018 through the first six months of 2019. The result of the sales was $70.4 million of lower gains on sale of properties, net of impairments, partially offset by $10.0 million of lower depreciation expense.

NAREIT Funds From Operations (“FFO”)* was $151.2 million, or $0.36 per diluted share, for the second quarter of 2019 compared to $158.6 million, or $0.38 per diluted share, for the second quarter of 2018. NAREIT FFO for the second quarter of 2019 included $1.0 million of transactional income (net of transactional charges) compared to $2.8 million in the second quarter of 2018.

FFO as adjusted available to common shareholders (“FFO as adjusted”)*, which excludes the effects of transactional income and charges, was $150.2 million, or $0.36 per diluted share, for the second quarter of 2019 compared to $155.7 million, or $0.37 per diluted share, for the second 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.

  • Pro-rata occupancy ended the second quarter at 96.2%, representing a 20-basis-point sequential increase and an expansion of 20 basis points over the same period in 2018.
  • Pro-rata anchor occupancy ended the second quarter at 98.2%, representing a 40-basis-point sequential increase and a year-over-year expansion of 10 basis points.
  • Pro-rata small shop occupancy ended the second quarter at 90.5%, representing a 30-basis-point increase year-over-year and a sequential decrease of 10 basis points. Second quarter 2019 small shop occupancy includes a 20-basis-point reduction from the vacancy of 18 Payless, Inc. stores.
  • Pro-rata rental-rate leasing spreads increased 7.9% during the second quarter 2019, with rental rates for new leases up 37.0% and renewals/options up 4.1%.
  • Generated 2.5% growth in same-property NOI for the second quarter of 2019 over the comparable period in 2018 driven by a 3.0% increase in minimum rent.

During the second quarter, the company sold three properties and one land parcel totaling 875,000 square feet for $103.7 million. Kimco’s share of the sales price was $65.8 million.

Year to date, the company’s dispositions included 12 properties and one land parcel, totaling 1.9 million square feet, for a gross sales price of $226.1 million. Kimco’s share of the sales price was $161.1 million. The blended cap rate for the property sales is in line with the company’s expected range of 7.25%-7.75%. Currently, the company has approximately $145.3 million of properties under contract expected to close during 2019. Kimco’s share of the sales would be $86.6 million.

The company is increasing its 2019 guidance range for Net Income and the operational assumption for Same-property NOI:

Guidance (per diluted share)

Current

Previous

Net income available to the company’s common shareholders:

$0.82 to $0.88

$0.77 to $0.82

NAREIT FFO* & FFO as adjusted*:

Unchanged

$1.44 to $1.48

* Reconciliations are provided for these forward-looking non-GAAP metrics (NAREIT FFO and FFO as adjusted) in the tables accompanying this press release.

Operational Assumptions (Kimco’s pro-rata share)

Current

Previous

Same-property NOI (excluding redevelopments):

2.00% to 2.70%

1.75% to 2.50%

Net dispositions:

Unchanged

$200 million to $300 million

Blended disposition cap rates:

Unchanged

7.25% to 7.75%

Combined redevelopment & development investment:

Unchanged

$275 million to $350 million

Kimco’s board of directors declared a quarterly cash dividend of $0.28 per common share, payable on October 15, 2019, to shareholders of record on October 2, 2019.

The board of directors also declared quarterly dividends with respect to each of the company’s Class I, Class J, Class K, Class L and Class M series of cumulative redeemable preferred shares. All dividends on the preferred shares will be paid on October 15, 2019, to shareholders of record on October 1, 2019.

Kimco will hold its quarterly conference call on Thursday, July 25, 2019, at 10:00 a.m. Eastern Daylight Time (EDT). The call will include a review of the company’s second quarter 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: 8735026).

A replay will be available through Friday, October 25, 2019, by dialing 1-877-344-7529 (Passcode: 10131592). Access to the live call and replay will be available through the company's website at investors.kimcorealty.com .

Kimco Realty Corp. (NYSE: KIM) is a real estate investment trust (REIT) headquartered in New Hyde Park, N.Y., that is one of North America’s largest publicly traded owners and operators of open-air shopping centers. As of June 30, 2019, the company owned interests in 428 U.S. shopping centers comprising 75 million square feet of 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.

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 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, 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 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)

 

June 30,

December 31,

2019

2018

Assets:
Real estate, net of accumulated depreciation and amortization of $2,426,924 and $2,385,287, respectively

$

9,164,375

 

$

9,250,519

 

Real estate under development

 

304,624

 

 

241,384

 

Investments in and advances to real estate joint ventures

 

584,983

 

 

570,922

 

Other real estate investments

 

191,834

 

 

192,123

 

Cash and cash equivalents

 

113,991

 

 

143,581

 

Accounts and notes receivable, net

 

182,369

 

 

184,528

 

Operating lease right-of-use assets, net

 

99,997

 

 

-

 

Other assets

 

398,730

 

 

416,043

 

Total assets

$

11,040,903

 

$

10,999,100

 

 
Liabilities:
Notes payable, net

$

4,420,370

 

$

4,381,456

 

Mortgages and construction loan payable, net

 

485,132

 

 

492,416

 

Dividends payable

 

130,460

 

 

130,262

 

Operating lease liabilities

 

93,233

 

 

-

 

Other liabilities

 

520,557

 

 

560,231

 

Total liabilities

 

5,649,752

 

 

5,564,365

 

Redeemable noncontrolling interests

 

23,690

 

 

23,682

 

 
Stockholders' equity:
Preferred stock, $1.00 par value, authorized 5,996,240 shares; issued and outstanding (in series) 42,580 shares; Aggregate liquidation preference $1,064,500

 

43

 

 

43

 

Common stock, $.01 par value, authorized 750,000,000 shares; issued and outstanding 422,094,230 and 421,388,879 shares, respectively

 

4,221

 

 

4,214

 

Paid-in capital

 

6,125,572

 

 

6,117,254

 

Cumulative distributions in excess of net income

 

(835,934

)

 

(787,707

)

Total stockholders' equity

 

5,293,902

 

 

5,333,804

 

Noncontrolling interests

 

73,559

 

 

77,249

 

Total equity

 

5,367,461

 

 

5,411,053

 

Total liabilities and equity

$

11,040,903

 

$

10,999,100

 

Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

2019

 

2018

 

 

2019

 

2018

Revenues
Revenues from rental properties, net

$

280,710

 

$

289,383

 

$

571,344

 

$

589,100

 

Management and other fee income

 

4,163

 

 

4,020

 

 

8,539

 

 

8,381

 

Total revenues

 

284,873

 

 

293,403

 

 

579,883

 

 

597,481

 

Operating expenses
Rent

 

(2,924

)

 

(2,742

)

 

(5,616

)

 

(5,560

)

Real estate taxes

 

(37,005

)

 

(37,274

)

 

(76,352

)

 

(77,708

)

Operating and maintenance

 

(43,217

)

 

(41,325

)

 

(84,113

)

 

(84,656

)

General and administrative

 

(22,633

)

 

(24,029

)

 

(48,464

)

 

(46,427

)

Provision for doubtful accounts

 

-

 

 

(1,051

)

 

-

 

 

(3,182

)

Impairment charges

 

(17,451

)

 

(22,873

)

 

(21,626

)

 

(30,519

)

Depreciation and amortization

 

(69,005

)

 

(79,760

)

 

(140,566

)

 

(161,142

)

Total operating expenses

 

(192,235

)

 

(209,054

)

 

(376,737

)

 

(409,194

)

 
Gain on sale of properties/change in control of interests

 

14,762

 

 

95,240

 

 

38,357

 

 

152,211

 

Operating income

 

107,400

 

 

179,589

 

 

241,503

 

 

340,498

 

 
Other income/(expense)
Other income, net

 

1,938

 

 

3,277

 

 

4,560

 

 

9,456

 

Interest expense

 

(44,097

)

 

(46,434

)

 

(88,492

)

 

(96,377

)

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

 

65,241

 

 

136,432

 

 

157,571

 

 

253,577

 

 
Benefit/(provision) for income taxes, net

 

344

 

 

720

 

 

(286

)

 

668

 

Equity in income of joint ventures, net

 

22,533

 

 

19,040

 

 

41,287

 

 

35,953

 

Equity in income of other real estate investments, net

 

13,269

 

 

9,617

 

 

19,493

 

 

19,593

 

 
Net income

 

101,387

 

 

165,809

 

 

218,065

 

 

309,791

 

Net income attributable to noncontrolling interests

 

(360

)

 

(423

)

 

(869

)

 

(315

)

Net income attributable to the Company

 

101,027

 

 

165,386

 

 

217,196

 

 

309,476

 

Preferred dividends

 

(14,534

)

 

(14,534

)

 

(29,068

)

 

(29,123

)

Net income available to the Company's common shareholders

$

86,493

 

$

150,852

 

$

188,128

 

$

280,353

 

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

$

0.20

 

$

0.36

 

$

0.45

 

$

0.66

 

Diluted

$

0.20

 

(1)

$

0.36

 

(1)

$

0.44

 

(1)

$

0.66

 

(1)

Weighted average shares:
Basic

 

419,697

 

 

420,731

 

 

419,581

 

 

422,060

 

Diluted

 

420,646

 

 

421,928

 

 

420,798

 

 

423,236

 

(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 $0 and $282 for the three months ended June 30, 2019 and 2018, respectively. Adjusted for distributions on convertible units of $20 and $521 for the six months ended June 30, 2019 and 2018, respectively.

(2) Adjusted for earnings attributable from participating securities of ($660) and ($863) for the three months ended June 30, 2019 and 2018, respectively. Adjusted for earnings attributable from participating securities of ($1,285) and ($1,472) for the six months ended June 30, 2019 and 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 June 30,

 

Six Months Ended June 30,

2019

 

2018 (1)

 

2019

 

2018 (1)

Net income available to the Company's common shareholders

$

86,493

 

$

150,852

 

$

188,128

 

$

280,353

 

Gain on sale of properties/change in control of interests

 

(14,762

)

 

(96,788

)

 

(38,357

)

 

(154,212

)

Gain on sale of joint venture properties

 

(8,496

)

 

(1,510

)

 

(13,186

)

 

(3,549

)

Depreciation and amortization - real estate related

 

68,723

 

 

77,250

 

 

139,983

 

 

156,242

 

Depreciation and amortization - real estate jv's

 

10,115

 

 

11,611

 

 

20,276

 

 

20,895

 

Impairment charges

 

18,247

 

 

22,920

 

 

24,655

 

 

30,634

 

Profit participation from other real estate investments, net

 

(8,754

)

 

(5,253

)

 

(9,784

)

 

(9,981

)

(Gain)/loss on marketable securities

 

(71

)

 

(24

)

 

(1,574

)

 

1,486

 

Noncontrolling interests (2)

 

(333

)

 

(507

)

 

(581

)

 

(1,924

)

Funds from operations available to the Company's common shareholders

 

151,162

 

 

158,551

 

 

309,560

 

 

319,944

 

Transactional income, net

 

(1,000

)

 

(2,822

)

 

(2,000

)

 

(6,403

)

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

$

150,162

 

$

155,729

 

$

307,560

 

$

313,541

 

 
Weighted average shares outstanding for FFO calculations:
Basic

 

419,697

 

 

420,731

 

 

419,581

 

 

422,060

 

Units

 

835

 

 

935

 

 

825

 

 

927

 

Dilutive effect of equity awards

 

949

 

 

350

 

 

1,166

 

 

352

 

Diluted (3)

 

421,481

 

 

422,016

 

 

421,572

 

 

423,339

 

 
FFO per common share - basic

$

0.36

 

$

0.38

 

$

0.74

 

$

0.76

 

FFO per common share - diluted (3)

$

0.36

 

$

0.38

 

$

0.74

 

$

0.76

 

FFO as adjusted per common share - diluted (3)

$

0.36

 

$

0.37

 

$

0.73

 

$

0.74

 

(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 $228 and $261 for the three months ended June 30, 2019 and 2018, respectively. Funds from operations would be increased by $446 and $525 for the six months ended June 30, 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 $6.7 million and $10.2 million from transactional income into FFO available to the Company’s common shareholders for the three and six months ended June 30, 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 six months ended June 30, 2018.

Reconciliation of Net Income Available to the Company's Common Shareholders
to Same Property NOI
(in thousands)
(unaudited)

Three Months Ended June 30,

 

Six Months Ended June 30,

2019

 

2018

 

2019

 

2018

Net income available to the Company's common shareholders

$

86,493

 

$

150,852

 

$

188,128

 

$

280,353

 

Adjustments:
Management and other fee income

 

(4,163

)

 

(4,020

)

 

(8,539

)

 

(8,381

)

General and administrative

 

22,633

 

 

24,029

 

 

48,464

 

 

46,427

 

Impairment charges

 

17,451

 

 

22,873

 

 

21,626

 

 

30,519

 

Depreciation and amortization

 

69,005

 

 

79,760

 

 

140,566

 

 

161,142

 

Gain on sale of properties/change in control of interests

 

(14,762

)

 

(95,240

)

 

(38,357

)

 

(152,211

)

Interest and other expense, net

 

42,159

 

 

43,157

 

 

83,932

 

 

86,921

 

(Benefit)/Provision for income taxes, net

 

(344

)

 

(720

)

 

286

 

 

(668

)

Equity in income of other real estate investments, net

 

(13,269

)

 

(9,617

)

 

(19,493

)

 

(19,593

)

Net income attributable to noncontrolling interests

 

360

 

 

423

 

 

869

 

 

315

 

Preferred dividends

 

14,534

 

 

14,534

 

 

29,068

 

 

29,123

 

Non same property net operating income

 

(17,757

)

 

(33,914

)

 

(45,067

)

 

(70,367

)

Non-operational expense from joint ventures, net

 

10,125

 

 

15,136

 

 

24,918

 

 

29,508

 

Same Property NOI

$

212,465

 

$

207,253

 

$

426,401

 

$

413,088

 

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)

Projected Range

Full Year 2019

 

 
Diluted net income available to company's common shareholder per common share

$

0.82

 

$

0.88

 

 
Depreciation and amortization - real estate related

 

0.66

 

 

0.69

 

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

 

0.09

 

 

0.10

 

 
Gain on sale of properties/change in control of interests

 

(0.12

)

 

(0.16

)

 
Gain on sale of joint venture properties

 

(0.04

)

 

(0.05

)

 
Impairments charges

 

0.06

 

 

0.06

 

 
Profit participation from other real estate investments, net

 

(0.03

)

 

(0.03

)

 
Noncontrolling interests

 

-

 

 

(0.01

)

 
FFO per diluted common share

$

1.44

 

$

1.48

 

 
Transactional (income)/expense, net

 

-

 

 

-

 

 
FFO as adjusted per diluted common share

$

1.44

 

$

1.48

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.

David F. Bujnicki
Senior Vice President, Investor Relations and Strategy
Kimco Realty Corp.
1-866-831-4297
dbujnicki@kimcorealty.com

Source: Kimco Realty Corporation



Register |  Password |  Feedback |  Copyright |  Usage Agreement |  Privacy Policy |  Advertising |  About Us |  Contact Us |  FAQ 

Past performance is not indicative of future results

StockSelector.com, the StockSelector.com logo, and News Selects are trademarks of StockSelector.com.
Copyright © 1998 - 2019 StockSelector.com. All rights reserved.