UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported)
February
2, 2017
Kimco
Realty Corporation
(Exact
Name of Registrant as Specified in its Charter)
Maryland |
1-10899 |
13-2744380 |
(State or Other Jurisdiction Of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
3333 New Hyde Park Road Suite 100 New Hyde Park, NY |
11042 |
|
(Address of Principal Executive Offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (516) 869-9000
No
Change
(Former
Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition
On February 2, 2017, Kimco Realty Corporation issued a press release announcing its financial results for the quarter and year ended December 31, 2016. A copy of the press release is furnished as Exhibit 99.1 to this Current Reports.
The information in this Current Report, including the exhibit, is furnished under Item 2.02 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. The information in this Current Report on Form 8-K, including the exhibit, shall not be deemed to be incorporated by reference into any filing of the Company whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
99.1 Press Release, dated February 2, 2017 issued by Kimco Realty Corporation
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
KIMCO REALTY CORPORATION |
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By: |
/s/ Glenn G. Cohen |
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Name: |
Glenn G. Cohen |
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Title: |
Chief Financial Officer |
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February 2, 2017 |
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EXHIBIT INDEX
Exhibits |
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99.1 |
Press Release regarding results for the quarter ended December 31, 2016 |
Exhibit 99.1
Kimco Realty Announces Fourth Quarter and Full Year 2016 Results
Company advances 2020 Vision focused on ownership of high-quality properties in core U.S. markets
NEW HYDE PARK, N.Y.--(BUSINESS WIRE)--February 2, 2017--Kimco Realty Corp. (NYSE: KIM) today reported results for the fourth quarter and year ended December 31, 2016.
Highlights - Fourth Quarter and Full Year 2016:
Financial Results
Net income available to common shareholders for the fourth quarter of 2016 was $66.7 million, or $0.16 per diluted share, compared to $360.0 million, or $0.87 per diluted share, for the fourth quarter 2015. The decrease was primarily due to $345.5 million* of lower gains on sales of operating properties and $15.6 million* of higher impairments attributable to the sale or pending disposition of operating properties in 2016. Both gains on sales and operating property impairments are excluded from the calculation of Funds From Operations available to common shareholders (NAREIT FFO).
For the full year 2016, net income available to common shareholders was $332.6 million, or $0.79 per diluted share, compared to $831.2 million, or $2.00 per diluted share, for the full year 2015. The change was attributable to $379.0 million* of lower gains on sales of operating properties and $49.9 million* of higher impairments attributable to the sale or pending disposition of operating properties in 2016.
NAREIT FFO, a widely accepted supplemental measure of REIT performance, was $163.0 million, or $0.38 per diluted share, for the fourth quarter 2016 compared to $143.2 million, or $0.35 per diluted share, for the fourth quarter 2015. NAREIT FFO for the fourth quarter of 2016 included $2.6 million of transactional income (net of transactional charges). This compares to ($9.9) million of transactional charges (net of transactional income) in the fourth quarter of 2015.
For the full year 2016, NAREIT FFO was $555.7 million, or $1.32 per diluted share, compared to $643.2 million, or $1.56 per diluted share, for the full year 2015. NAREIT FFO for 2016 included ($73.7) million of transactional charges (net of transactional income) primarily attributable to charges incurred for the prepayment of debt and the merging of the company’s taxable REIT subsidiary, Kimco Realty Services, Inc., into Kimco (TRS Merger) which totaled $109.2 million. This compares to $39.8 million of transactional income (net of transactional charges) recognized in 2015 NAREIT FFO.
*Amounts shown before any impact from taxes and non-controlling interests
FFO as adjusted, which excludes the effects of non-operating impairments as well as transactional income and charges, was $160.4 million, or $0.38 per diluted share, for the fourth quarter 2016 compared to $153.1 million, or $0.37 per diluted share, for the fourth quarter 2015.
For the full year 2016, FFO as adjusted was $629.4 million, or $1.50 per diluted share, compared to $603.4 million, or $1.46 per diluted share, for the full year 2015.
A reconciliation of net income available to common shareholders to NAREIT FFO and FFO as adjusted is provided in the tables accompanying this press release.
Operating Results
A reconciliation of income from continuing operations to U.S. same-property NOI is provided in the tables accompanying this press release.
Investment Activity
The fourth quarter and year-to-date transactions, as previously announced, highlight the company’s 2020 Vision focused on the ownership of high-quality assets in core U.S. markets. Portfolio transformation activities included the principal exit from Canada, the departure from secondary markets, and the reduction of joint venture ownership interests.
Acquisitions: As previously announced, fourth quarter acquisitions totaled $88.7 million and 353,000 square feet. Kimco’s share of the total gross purchase price was $68.1 million and included the following transactions:
For the full year 2016, Kimco acquired interests in 15 shopping centers totaling 2.4 million square feet, including eight acquired from existing joint venture partners. The aggregate gross purchase price for these acquisitions was $625.3 million, including $210.2 million of debt. Kimco’s share of the purchase price totaled $457.1 million.
Subsequent to year-end, the company acquired Plaza Del Prado, a 142,000-square-foot, grocery-anchored shopping center located in the Chicago-Naperville-Elgin MSA for a gross sales price of $38.0 million. In addition to the Jewel-Osco grocery store, Plaza Del Prado features other national retailers, including Starbucks, McDonalds, Chase Bank and Petco. The center is located in Glenview, Illinois, an affluent suburb in Chicago’s North Shore, supported by a population of approximately 83,000 with an average household income of $126,000 within a three-mile radius. At the time of acquisition, the shopping center was 87.6% occupied, offering some near-term lease up opportunities.
Dispositions: Fourth quarter dispositions totaled $134.4 million and 966,000 square feet for six U.S. shopping centers. Kimco’s share of the sales price was $63.7 million. Additionally, the company sold two land parcels in the fourth quarter for a gross sales price of $5.3 million. Kimco’s share of the sales price was $1.8 million.
For the full year 2016, the company’s share of shopping center dispositions totaled $982.4 million from the sale of interests in 34 Canadian properties for USD $571.5 million and 31 U.S. properties for $410.9 million.
Capital Activity
In November, the company issued a new $400 million, seven-year unsecured bond with a coupon of 2.70% and a new $350 million, 30-year unsecured bond with a coupon of 4.125%. The proceeds were used for general corporate purposes, including (i) repayment of $400 million on the company’s $650 unsecured term loan, (ii) toward the repayment of $505.6 million of mortgage debt (weighted average interest rate of 5.6%) maturing in 2017, along with any associated prepayment penalties, and (iii) temporarily reducing borrowings under the company’s revolving credit facility.
In February 2017, the company closed on a new $2.25 billion unsecured revolving credit facility with an initial maturity date of March 17, 2021 with two additional six-month extension options. The new credit facility replaces the company’s previous $1.75 billion unsecured revolving credit facility that was scheduled to mature in March of 2018. The new facility is priced at LIBOR plus 87.5 basis points plus a facility fee of 15 basis points per annum, for a total drawn cost of LIBOR plus 102.5 basis points.
2017 Guidance
Kimco’s full year 2017 outlook for Net Income, NAREIT FFO and FFO as adjusted is as follows:
Net Income (per diluted share) | $0.64 to $0.67 | |||
NAREIT FFO (per diluted share) | $1.50 to $1.54 | |||
FFO as adjusted (per diluted share) ** | $1.50 to $1.54 |
**Excludes transactional income/(charges), net
The Company’s full year 2017 operational assumptions (Kimco’s share) are as follows:
Portfolio Occupancy | 95.8% to 96.2% | |||
Same-Property NOI (including redevelopments) | +2.0% to +3.0% | |||
Operating Property Acquisitions |
$300 million to $400 million
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Operating Property Dispositions |
$250 million to $350 million
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Reconciliations to be provided for these forward-looking non-GAAP metrics (NAREIT FFO and FFO as adjusted).
Dividend Declarations
Kimco’s board of directors declared a quarterly cash dividend of $0.27 per common share, payable on April 17, 2017, to shareholders of record on April 5, 2017, representing an ex-dividend date of April 3, 2017.
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 17, 2017, to shareholders of record on April 4, 2017, with an ex-dividend date of March 31, 2017.
Conference Call and Supplemental Materials
Kimco will hold its quarterly conference call on Friday, February 3, 2017, at 10:00 a.m. Eastern Standard Time (EST). The call will include a review of the company’s fourth quarter and full year 2016 results as well as a discussion of the company’s strategy and expectations for the future. To participate, dial 1-888-317-6003 (Passcode: 9974446).
A replay will be available through May 3, 2017, by dialing 1-877-344-7529 (Passcode: 10096539). 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 one of North America’s largest publicly traded owners and operators of open-air shopping centers. As of December 31, 2016, the company owned interests in 524 U.S. shopping centers comprising 85 million square feet of leasable space across 34 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, 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 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, 2015, 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.
Non-GAAP Financial Measures
NAREIT FFO: A supplemental non-GAAP measure utilized to evaluate the operating performance of real estate companies. The National Association of Real Estate Investment Trusts (“NAREIT”) defines funds from operations (“NAREIT FFO”) as net income/(loss) attributable to common shareholders computed in accordance with generally accepted accounting principles in the United States (“GAAP”), excluding (i) gains or losses from sales of operating real estate assets and change in control of interests, plus (ii) depreciation and amortization of operating properties and (iii) impairment of depreciable real estate and in substance real estate equity investments and (iv) after adjustments for unconsolidated partnerships and joint ventures calculated to reflect NAREIT FFO on the same basis.
The company considers NAREIT FFO an important supplemental measure of our operating performance and believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present NAREIT FFO when reporting results. Comparison of our presentation of NAREIT FFO to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in the application of the NAREIT definition used by such REITs.
FFO as Adjusted: A supplemental non-GAAP measure that the company believes is more reflective of its core operating performance and provides investors and analysts an additional measure to compare the company’s performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. FFO as adjusted is generally calculated by the Company as NAREIT FFO excluding certain transactional income and expenses and non-operating impairments which management believes are not reflective of the results within the company’s operating real estate portfolio.
U.S. Same-Property NOI: A supplemental non-GAAP measure 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. The company considers U.S. same-property NOI as an important operating performance measure because it is frequently used by securities analysts and investors to measure only the net operating income of U.S. properties that have been owned by the company for the entire current and prior year reporting periods including those properties under redevelopment. It excludes properties under development and pending stabilization; properties are deemed stabilized at the earlier of (i) reaching 90% leased or (ii) one year following a projects inclusion in operating real estate. U.S. same-property NOI assists in eliminating disparities in net income due to the development, acquisition or disposition of properties during the particular period presented, and thus provides a more consistent performance measure for the comparison of the Company's properties.
U.S. same-property NOI is calculated using revenues from rental properties (excluding straight-line rent adjustments, lease termination fees, amortization of above/below market rents and includes charges for bad debt) less operating and maintenance expense, real estate taxes and rent expense plus the company’s proportionate share of U.S. same-property NOI from U.S. unconsolidated real estate joint ventures, calculated on the same basis. The company’s method of calculating U.S. same-property NOI may differ from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
Condensed Consolidated Balance Sheets | ||||||||
(in thousands, except share information) | ||||||||
(unaudited) | ||||||||
December 31, | December 31, | |||||||
2016 | 2015 | |||||||
Assets: | ||||||||
Operating real estate, net of accumulated depreciation of $2,278,292 and 2,115,320, respectively |
$ | 9,394,755 | $ | 9,274,299 | ||||
Investments and advances in real estate joint ventures | 504,209 | 742,559 | ||||||
Real estate under development | 335,028 | 179,190 | ||||||
Other real estate investments | 209,146 | 215,836 | ||||||
Mortgages and other financing receivables | 23,197 | 23,824 | ||||||
Cash and cash equivalents | 142,486 | 189,534 | ||||||
Marketable securities | 8,101 | 7,565 | ||||||
Accounts and notes receivable, net | 181,823 | 175,252 | ||||||
Other assets | 431,855 | 536,112 | ||||||
Total assets | $ | 11,230,600 | $ | 11,344,171 | ||||
Liabilities: | ||||||||
Notes payable | $ | 3,927,251 | $ | 3,761,328 | ||||
Mortgages payable | 1,139,117 | 1,614,982 | ||||||
Dividends payable | 124,517 | 115,182 | ||||||
Other liabilities | 549,888 | 584,019 | ||||||
Total liabilities | 5,740,773 | 6,075,511 | ||||||
Redeemable noncontrolling interests | 86,953 | 86,709 | ||||||
Stockholders' equity: | ||||||||
Preferred stock, $1.00 par value, authorized 6,029,100 shares, 32,000 shares issued and outstanding (in series), |
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Aggregate liquidation preference $800,000 | 32 | 32 | ||||||
Common stock, $.01 par value, authorized 750,000,000 shares issued and outstanding 425,034,113 and 413,430,756 shares, respectively |
4,250 | 4,134 | ||||||
Paid-in capital | 5,922,958 | 5,608,881 | ||||||
Cumulative distributions in excess of net income | (676,867 | ) | (572,335 | ) | ||||
Accumulated other comprehensive income | 5,766 | 5,588 | ||||||
Total stockholders' equity | 5,256,139 | 5,046,300 | ||||||
Noncontrolling interests | 146,735 | 135,651 | ||||||
Total equity | 5,402,874 | 5,181,951 | ||||||
Total liabilities and equity | $ | 11,230,600 | $ | 11,344,171 | ||||
Condensed Consolidated Statements of Income | ||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||||||
Revenues | ||||||||||||||||||||
Revenues from rental properties | $ | 292,909 | $ | 296,501 | $ | 1,152,401 | $ | 1,144,474 | ||||||||||||
Management and other fee income | 4,117 | 4,369 | 18,391 | 22,295 | ||||||||||||||||
Total revenues | 297,026 | 300,870 | 1,170,792 | 1,166,769 | ||||||||||||||||
Operating expenses | ||||||||||||||||||||
Rent | 2,719 | 2,868 | 10,993 | 12,347 | ||||||||||||||||
Real estate taxes | 38,649 | 37,807 | 146,615 | 147,150 | ||||||||||||||||
Operating and maintenance | 40,544 | 40,054 | 140,910 | 144,980 | ||||||||||||||||
General and administrative expenses | 27,462 | 33,413 | 117,302 | 122,735 | ||||||||||||||||
Provision for doubtful accounts | (189 | ) | 751 | 5,563 | 6,075 | |||||||||||||||
Impairment charges | 25,140 | 17,475 | 93,266 | 45,383 | ||||||||||||||||
Depreciation and amortization | 90,884 | 86,095 | 355,320 | 344,527 | ||||||||||||||||
Total operating expenses | 225,209 | 218,463 | 869,969 | 823,197 | ||||||||||||||||
Operating income | 71,817 | 82,407 | 300,823 | 343,572 | ||||||||||||||||
Other income/(expense) | ||||||||||||||||||||
Mortgage financing income | 402 | 443 | 1,634 | 2,940 | ||||||||||||||||
Interest, dividends and other investment income | 651 | 1,050 | 1,478 | 39,061 | ||||||||||||||||
Other income, net | 1,196 | 2,134 | 2,313 | 2,234 | ||||||||||||||||
Interest expense | (43,067 | ) | (56,152 | ) | (192,549 | ) | (218,891 | ) | ||||||||||||
Early extinguishment of debt charges | - | - | (45,674 | ) | - | |||||||||||||||
Income from continuing operations before income taxes, equity in income of joint ventures, gain on change in control of interests and equity in income of other real estate investments |
30,999 | 29,882 | 68,025 | 168,916 | ||||||||||||||||
Benefit/(provision) for income taxes, net | 747 | (48,297 | ) | (72,545 | ) | (60,230 | ) | |||||||||||||
Equity in income of joint ventures, net | 28,559 | 349,587 | 218,714 | 480,395 | ||||||||||||||||
Gain on change in control of interests, net | 4,290 | 3,091 | 57,386 | 149,234 | ||||||||||||||||
Equity in income of other real estate investments, net | 5,241 | 4,854 | 27,773 | 36,090 | ||||||||||||||||
Income from continuing operations | 69,836 | 339,117 | 299,353 | 774,405 | ||||||||||||||||
Discontinued operations | ||||||||||||||||||||
Loss from discontinued operating properties, net of tax | - | - | - | (15 | ) | |||||||||||||||
Impairment/loss on operating properties, net of tax | - | - | - | (60 | ) | |||||||||||||||
Loss from discontinued operations | - | - | - | (75 | ) | |||||||||||||||
Gain on sale of operating properties, net of tax (1) | 10,850 | 39,594 | 86,785 | 125,813 | ||||||||||||||||
Net income | 80,686 | 378,711 | 386,138 | 900,143 | ||||||||||||||||
Net (income)/loss attributable to noncontrolling interests | (2,413 | ) | 490 | (7,288 | ) | (6,028 | ) | |||||||||||||
Net income attributable to the Company | 78,273 | 379,201 | 378,850 | 894,115 | ||||||||||||||||
Preferred stock redemption costs | - | (5,816 | ) | - | (5,816 | ) | ||||||||||||||
Preferred stock dividends | (11,555 | ) | (13,365 | ) | (46,220 | ) | (57,084 | ) | ||||||||||||
Net income available to the Company's common shareholders | $ | 66,718 | $ | 360,020 | $ | 332,630 | $ | 831,215 | ||||||||||||
Per common share: | ||||||||||||||||||||
Income from continuing operations | ||||||||||||||||||||
Basic | $ | 0.16 | $ | 0.87 | $ | 0.79 | $ | 2.01 | ||||||||||||
Diluted | $ | 0.16 | (2) | $ | 0.87 | (2) | $ | 0.79 | (2) | $ | 2.00 | (2) | ||||||||
Net income: (3) | ||||||||||||||||||||
Basic | $ | 0.16 | $ | 0.87 | $ | 0.79 | $ | 2.01 | ||||||||||||
Diluted | $ | 0.16 | (2) | $ | 0.87 | (2) | $ | 0.79 | (2) | $ | 2.00 | (2) | ||||||||
Weighted average shares: | ||||||||||||||||||||
Basic | 423,087 | 411,667 | 418,402 | 411,319 | ||||||||||||||||
Diluted | 424,249 | 413,346 | 419,709 | 412,851 |
(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) | Adjusted for earnings attributable from participating securities of ($524) and ($1,950) for the three months ended December 31, 2016 and 2015, and ($2,018) and ($4,134) for the year ended December 31, 2016 and 2015, respectively. | |
Reconciliation of Net Income Available to Common Shareholders to | ||||||||||||||||||||
FFO and FFO as Adjusted | ||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||||||
Net income available to common shareholders | $ | 66,718 | $ | 360,020 | $ | 332,630 | $ | 831,215 | ||||||||||||
Gain on disposition of operating property | (10,950 | ) | (43,347 | ) | (92,824 | ) | (131,844 | ) | ||||||||||||
Gain on disposition of joint venture operating properties and change in control of interests | (14,880 | ) | (327,933 | ) | (217,819 | ) | (557,744 | ) | ||||||||||||
Depreciation and amortization - real estate related | 89,476 | 82,732 | 347,315 | 333,840 | ||||||||||||||||
Depreciation and amortization - real estate jv's | 9,477 | 14,552 | 45,098 | 68,556 | ||||||||||||||||
Impairments of operating properties | 24,125 | 8,545 | 101,928 | 52,021 | ||||||||||||||||
(Benefit)/provision for income taxes (2) | (1,227 | ) | 51,849 | 39,570 | 53,792 | |||||||||||||||
Noncontrolling interests (2) | 245 | (3,239 | ) | (182 | ) | (6,591 | ) | |||||||||||||
Funds from operations available to common shareholders | 162,984 | 143,179 | 555,716 | 643,245 | ||||||||||||||||
Transactional (income)/charges, net | (2,565 | ) | 9,892 | 73,689 | (39,808 | ) | ||||||||||||||
Funds from operations available to common shareholders as adjusted | $ | 160,419 | $ | 153,071 | $ | 629,405 | $ | 603,437 | ||||||||||||
Weighted average shares outstanding for FFO calculations: | ||||||||||||||||||||
Basic | 423,087 | 411,667 | 418,402 | 411,319 | ||||||||||||||||
Units | 841 | 860 | 853 | 791 | ||||||||||||||||
Dilutive effect of equity awards | 1,162 | 1,481 | 1,307 | 1,414 | ||||||||||||||||
Diluted | 425,090 | (1) | 414,008 | (1) | 420,562 | (1) | 413,524 | (1) | ||||||||||||
FFO per common share - basic | $ | 0.39 | $ | 0.35 | $ | 1.33 | $ | 1.56 | ||||||||||||
FFO per common share - diluted | $ | 0.38 | (1) | $ | 0.35 | (1) | $ | 1.32 | (1) | $ | 1.56 | (1) | ||||||||
FFO as adjusted per common share - diluted | $ | 0.38 | (1) | $ | 0.37 | (1) | $ | 1.50 | (1) | $ | 1.46 | (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 $229 and $217 for the three months ended December 31, 2016 and 2015, and $881 and $781 for the year ended December 31, 2016 and 2015, respectively |
(2) Related to gains, impairments and depreciation on operating properties, where applicable. |
Funds from operations is a supplemental non-GAAP measure utilized to evaluate the operating performance of real estate companies. The National Association of Real Estate Investment Trusts (“NAREIT”) defines funds from operations as net income/(loss) attributable to common shareholders computed in accordance with generally accepted accounting principles in the United States (“GAAP”), excluding (i) gains or losses from sales of operating real estate assets and change in control of interests, plus (ii) depreciation and amortization of operating properties and (iii) impairment of depreciable real estate and in substance real estate equity investments and (iv) after adjustments for unconsolidated partnerships and joint ventures calculated to reflect funds from operations on the same basis. |
Reconciliation of Income From Continuing Operations to | ||||||||||||||||
U.S. Same Property NOI | ||||||||||||||||
(in thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three Months Ended |
Year Ended |
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December 31, |
December 31, |
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2016 | 2015 | 2016 | 2015 | |||||||||||||
Income from continuing operations | $ | 69,836 | $ | 339,117 | $ | 299,353 | $ | 774,405 | ||||||||
Adjustments: | ||||||||||||||||
Management and other fee income | (4,117 | ) | (4,369 | ) | (18,391 | ) | (22,295 | ) | ||||||||
General and administrative expenses | 27,462 | 33,413 | 117,302 | 122,735 | ||||||||||||
Impairment charges | 25,140 | 17,475 | 93,266 | 45,383 | ||||||||||||
Depreciation and amortization | 90,884 | 86,095 | 355,320 | 344,527 | ||||||||||||
Other expense, net | 40,818 | 52,525 | 232,798 | 174,656 | ||||||||||||
(Benefit)/provision for income taxes, net | (747 | ) | 48,297 | 72,545 | 60,230 | |||||||||||
Gain on change in control of interests, net | (4,290 | ) | (3,091 | ) | (57,386 | ) | (149,234 | ) | ||||||||
Equity in income of other real estate investments, net | (5,241 | ) | (4,854 | ) | (27,773 | ) | (36,090 | ) | ||||||||
Non same property net operating income | (16,194 | ) | (41,218 | ) | (88,070 | ) | (173,189 | ) | ||||||||
Non-operational (income)/expense from joint ventures, net | 8,474 | (297,488 | ) | (58,563 | ) | (245,380 | ) | |||||||||
U.S. Same Property NOI | $ | 232,025 | $ | 225,902 | $ | 920,401 | $ | 895,748 |
U.S. Same Property NOI is a supplemental non-GAAP financial measure 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. U.S. Same Property NOI is considered by management to be important performance measure of Kimco's operations, and management believes that this measure is frequently used by securities analysts and investors as a measure of Kimco's operating performance as this measure includes 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, U.S. Same Property NOI assists in eliminating disparities in net income due to the development, acquisition or disposition of properties during the particular periods presented, and thus provides a more consistent performance measure for the comparison of the operating performance of Kimco's properties. |
U.S. Same Property NOI is calculated using revenues from rental properties (excluding straight-line rent adjustments, lease termination fees and above/below market rents and includes charges for bad debt) less operating and maintenance expense, real estate taxes and rent expense, plus Kimco's proportionate share of U.S. Same Property NOI from unconsolidated real estate joint ventures, calculated on the same basis. U.S. 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. Kimco’s method of calculating 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 Diluted Net Income Per Common Share | ||||||||||||
to Diluted Funds From Operations Per Common Share | ||||||||||||
(unaudited) | ||||||||||||
Actual | Projected Range | |||||||||||
2016 | Full Year 2017 | |||||||||||
Low |
High |
|||||||||||
Diluted net income available to common shareholder per share |
$ | 0.79 | $ | 0.64 | $ | 0.67 | ||||||
Depreciation & amortization | 0.83 | 0.80 | 0.83 | |||||||||
Depreciation & amortization real estate joint ventures, net of noncontrolling interests |
0.11 | 0.09 | 0.11 | |||||||||
Gain on disposition of operating properties | (0.22 | ) | (0.02 | ) | (0.05 | ) | ||||||
Gain on disposition of joint venture operating properties, net of noncontrolling interests, and change in control of interests |
(0.52 | ) | (0.01 | ) | (0.02 | ) | ||||||
Impairments of operating properties | 0.24 | - | - | |||||||||
Provision/(benefit) for income taxes | 0.09 | - | - | |||||||||
FFO per diluted common share | $ | 1.32 | $ | 1.50 | $ | 1.54 | ||||||
Transactional charges, net | 0.18 | - | - | |||||||||
FFO, as adjusted per diluted common share | $ | 1.50 | $ | 1.50 | $ | 1.54 |
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.
CONTACT:
Kimco Realty Corp.
David F. Bujnicki, 1-866-831-4297
Senior
Vice President, Investor Relations and Strategy
dbujnicki@kimcorealty.com