Kimco Realty Announces First Quarter 2014 Operating Results – Reports a 6.3% Increase in FFO as Adjusted per Diluted Share; Advances Portfolio Simplification and Transformation Efforts
NEW HYDE PARK, New York, 2014-5-9 — /EPR Retail News/ — Kimco Realty Corp. (NYSE: KIM) today reported results for the first quarter ended March 31, 2014.
Highlights for the First Quarter 2014 and Subsequent Activity:
• Reported funds from operations (FFO) of $0.34 per diluted share for the first quarter of 2014, compared to $0.33 per diluted share for the same period in 2013;
• FFO as adjusted was $0.34 per diluted share for the first quarter of 2014 compared to $0.32 per diluted share for the same period in 2013, representing a 6.3% increase;
• U.S. same-property net operating income (NOI) increased 2.0% over the prior year, which includes an approximately 40-basis-point negative impact from snow-related costs;
• Recognized positive rental-rate leasing spreads in the U.S. of 8.8%, with rental rates for new leases up 50.7% and rental rates for renewals/options increasing 4.6%;
• Pro-rata occupancy increased 100 basis points in the U.S. shopping center portfolio to 94.7%, and 90 basis points in the combined shopping center portfolio to 94.5%, compared to the first quarter of 2013;
• Continued to transform the consolidated U.S. retail portfolio: Acquired 26 retail properties (including a 24-property portfolio primarily in the Greater Boston area) for a gross price of $392.8 million; and
• Continued to simplify the company’s business model by reducing the number of properties in joint ventures and its exposure to Latin America: Purchased 15 Kimco-managed joint venture properties from partners for a total price of $501.2 million; disposed of six joint venture properties for a gross sales price of $40.5 million; and sold a nine-property retail portfolio in Mexico for a gross sales price of $222 million.
Net income available to common shareholders for the first quarter of 2014 was $72.4 million, or $0.18 per diluted share, compared to $53.2 million, or $0.13 per diluted share, for the first quarter of 2013. Net income available to common shareholders during the first quarter of 2014 included $32.8 million of gains on sales of operating properties and $12.8 million of impairments attributable to the sale or pending disposition of operating properties. This compares to $16.3 million of gains on the sales of operating properties and $4.3 million of impairments during the first quarter of 2013. Both operating property impairments and gains on sales are excluded from the calculation of FFO.
FFO, a widely accepted supplemental measure of REIT performance, was $138.4 million, or $0.34 per diluted share, for the first quarter of 2014 compared to $134.9 million, or $0.33 per diluted share, for the first quarter of 2013.
FFO as adjusted, which excludes the effects of non-operating impairments and transactional income and expenses, was $140.8 million, or $0.34 per diluted share, for the first quarter of 2014 compared to $132.2 million, or $0.32 per diluted share, for the first quarter of 2013.
A reconciliation of net income to FFO and FFO as adjusted is provided in the tables accompanying this press release.
Shopping Center Operating Results
First quarter 2014 shopping center portfolio operating results:
U.S. Shopping Center Portfolio
• Pro-rata occupancy was 94.7%, an increase of 100 basis points over the first quarter of 2013;
• U.S. same-property NOI increased 2.0%, which includes a five-basis-point positive impact from the inclusion of redevelopments and an approximately 40-basis-point negative impact from snow-related costs across the portfolio, compared to the same period in 2013; and
• Pro-rata rental-rate leasing spreads increased 8.8%; rental rates on new leases increased 50.7%, and rental rates for renewals/options increased 4.6%.
Kimco reports same-property NOI on a cash basis, excluding lease termination fees and including charges for bad debts.
In addition, the U.S. shopping center portfolio’s pro-rata occupancy for anchor space (10,000 square feet and greater) was 97.6%, an 80 basis point increase from the first quarter of 2013. Kimco’s pro-rata occupancy for small shop space increased 160 basis points to 85.6% in the first quarter of 2014,
compared to the same period in 2013.
Combined Shopping Center Portfolio (includes U.S., Canada and Latin America)
• Pro-rata occupancy was 94.5%, an increase of 90 basis points over the first quarter of 2013;
• Combined same-property NOI increased 1.5% over same period in 2013 (2.5% when excluding
the impact of foreign currency); and
• Total leases executed in the combined portfolio: 625 new leases, renewals and options totaling 3.8 million square feet.