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Kimco Realty Announces Fourth Quarter and Full Year 2018 Results

January 31, 2019

NEW HYDE PARK, N.Y.--(BUSINESS WIRE)--Jan 31, 2019--Kimco Realty Corp. (NYSE:KIM) today reported results for the fourth quarter and year ended December 31, 2018.

Highlights - Fourth Quarter and Full Year 2018:

Reported net income available to the company’s common shareholders of $73.6 million, or $0.17 per diluted share, and $439.6 million, or $1.02 per diluted share, for the fourth quarter and full year 2018, respectively. Increased same-property net operating income (“NOI”) by 2.6% during the fourth quarter compared to the same period in 2017 and 2.9% for the full year 2018. Set a record high for pro-rata small shop occupancy, ending the year at 91.1%. Generated new leasing spreads of 12.2% during the fourth quarter. Rental rates for new leases increased by more than 10% for the 20 th consecutive quarter over the prior rent for the comparable space. Completed and opened three Signature Series™ development projects totaling $317.4 million during 2018. Sold 68 properties and eight land parcels for $913.9 million in 2018.

Financial Results

Net income available to common shareholders for the fourth quarter of 2018 was $73.6 million, or $0.17 per diluted share, compared to $73.5 million, or $0.17 per diluted share, for the fourth quarter 2017.

For the full year 2018, net income available to common shareholders was $439.6 million, or $1.02 per diluted share, compared to $372.5 million, or $0.87 per diluted share, for the full year 2017. The increase was primarily due to:

$57.8 million of higher gains on the sales of operating properties, net of impairments, and $46.9 million of lower depreciation expense on operating properties

offset by:

$27.2 million of lower NOI compared to the same period in 2017, primarily due to the $913.9 million of dispositions completed during 2018.

NAREIT Funds From Operations (“FFO”) was $146.2 million, or $0.35 per diluted share, for the fourth quarter 2018 compared to $160.1 million, or $0.38 per diluted share, for the fourth quarter 2017. NAREIT FFO for the fourth quarter of 2018 included $1.2 million of transactional charges (net of transactional income) compared to $6.3 million in the fourth quarter of 2017.

For the full year 2018, NAREIT FFO was $620.7 million, or $1.47 per diluted share, compared to $655.6 million, or $1.55 per diluted share, for the full year 2017. NAREIT FFO for 2018 included $7.7 million of transactional income (net of transactional charges) compared to $11.3 million for 2017.

FFO as adjusted available to common shareholders (“FFO as adjusted”), which excludes the effects of non-operating impairments, as well as transactional income and charges, was $147.4 million, or $0.35 per diluted share, for the fourth quarter 2018 compared to $166.4 million, or $0.39 per diluted share, for the fourth quarter 2017. For the full year 2018, FFO as adjusted was $613.0 million, or $1.45 per diluted share, compared to $644.2 million, or $1.52 per diluted share, for the full year 2017.

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.

Operating Results

Pro-rata occupancy ended the quarter at 95.8%, flat compared to the third quarter of 2018 and representing a 20-basis-point decrease compared to the fourth quarter of 2017. Fourth quarter 2018 occupancy was reduced 20 basis points due to the bankruptcies of Toys R Us and Sears. Pro-rata small shop occupancy ended the quarter at 91.1%, representing an increase of 30 basis points sequentially and an expansion of 150 basis points over the same period in 2017. Pro-rata anchor occupancy ended the quarter at 97.4%, representing a 20-basis-point sequential decrease and a 70-basis-point reduction over the fourth quarter of 2017. The sequential and year-over-year decreases were attributable to the aforementioned Toys R Us and Sears bankruptcies. Pro-rata rental-rate leasing spreads increased 7.0% during the fourth quarter 2018, with rental rates for new leases up 12.2% and renewals/options up 5.6%. Generated a 2.6% increase in same-property NOI for the fourth quarter 2018 over the comparable period in 2017. For the year ended December 31, 2018, same-property NOI grew 2.9% compared to the same period in 2017.

Investment Activity

During the fourth quarter of 2018, Kimco sold 16 properties and two land parcels totaling 1.9 million square feet for $357.1 million. Kimco’s share of the sales price was $228.4 million. For the full year 2018, the company sold 68 properties and eight land parcels totaling 8.2 million square feet for $1.1 billion. Kimco’s share of the sales price was $913.9 million.

During 2018, Kimco completed three Signature Series ground-up development projects totaling $317.4 million: Grand Parkway Marketplace Phase II in Houston; Dania Pointe Phase I in Fort Lauderdale; and Lincoln Square, a mixed-use project in Philadelphia.

In addition, the company completed 28 redevelopment projects during 2018 totaling $89.7 million with a blended return of 10.9%.

Capital Markets Activity

During 2018, Kimco:

Repurchased 5.1 million common shares for $75.1 million at a weighted average share price of $14.72 under the company’s $300.0 million share repurchase program authorized through February 2020. Redeemed $300.0 million of 6.875% Senior Notes due October 2019 and repurchased $15.1 million of 3.2% Senior Notes due May 2021. Repaid $204.8 million of consolidated mortgage debt with a weighted average interest rate of 4.11%.

Kimco ended the year with $100 million outstanding on its $2.25 billion revolving credit facility. The company has no debt maturing in 2019 in its consolidated portfolio, and as of December 31, 2018, it had a weighted average maturity of 10.5 years with a weighted average interest rate of 3.62%.

* Includes the negative impact of ($0.03) per diluted share related to the implementation of ASU 2016-02 that requires companies to expense certain previously capitalized internal leasing & legal costs. Reconciliations are provided for these forward-looking non-GAAP metrics (NAREIT FFO and FFO as adjusted) in the tables accompanying this press release.

Dividend Declarations

Kimco’s board of directors declared a quarterly cash dividend of $0.28 per common share, payable on April 15, 2019, to shareholders of record on April 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 April 15, 2019, to shareholders of record on April 1, 2019.

Conference Call and Supplemental Materials

Kimco will hold its quarterly conference call on Thursday, January 31, 2019, at 10:00 a.m. Eastern Time (ET). The call will include a review of the company’s fourth quarter and full year 2018 results as well as a discussion of the company’s strategy and expectations for the future. To participate, dial 1-888-317-6003 (Passcode: 5454441).

A replay will be available through May 1, 2019, by dialing 1-877-344-7529 (Passcode: 10126460). 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, 2018, the company owned interests in 437 U.S. shopping centers comprising 76 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.

Safe Harbor Statement

The statements in this news release state the company’s and management’s intentions, beliefs, expectations or projections of the future and are forward-looking statements. It is important to note that the company’s actual results could differ materially from those projected in such forward-looking statements. Factors which may cause actual results to differ materially from current expectations include, but are not limited to, (i) general adverse economic and local real estate conditions, (ii) the inability of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or a general downturn in their business, (iii) financing risks, such as the inability to obtain equity, debt or other sources of financing or refinancing on favorable terms to the company, (iv) the company’s ability to raise capital by selling its assets, (v) changes in governmental laws and regulations and management’s ability to estimate the impact of such changes, (vi) the level and volatility of interest rates and 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, 2017, 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.

View source version on businesswire.com:https://www.businesswire.com/news/home/20190131005164/en/

CONTACT: David F. Bujnicki

Senior Vice President, Investor Relations and Strategy

Kimco Realty Corp.

1-866-831-4297

dbujnicki@kimcorealty.com

KEYWORD: UNITED STATES NORTH AMERICA CANADA NEW YORK

INDUSTRY KEYWORD: REIT CONSTRUCTION & PROPERTY COMMERCIAL BUILDING & REAL ESTATE

SOURCE: Kimco Realty Corporation

Copyright Business Wire 2019.

PUB: 01/31/2019 07:30 AM/DISC: 01/31/2019 07:30 AM

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