In a conference call to discuss the earning, Kimco CEO Milton Cooper said that he "has never been so uncertain" about the future. He cited the war and economy as reasons for that uncertainty. However, he feels Kimco is well positioned in the marketplace to "improve and keep building. We should do well no matter what happens." He anticipates doing some "nice deals" in Mexico over the coming months. Next year, he expects Kimco could spend at least $600 million in acquistions.
For the nine months ended September 30, 2003, net income increased 21.4 % to $221.8 million from $182.7 million for the same period last year. Net income per diluted common share was $1.88, a 17.5% increase from $1.60 for the same period a year ago. FFO rose 8.4 % to $256.8 million for the nine-month period from $237.0 million in the year earlier period. On a diluted per common share basis, FFO increased 5.8 % to $2.38 from $2.25 reported a year ago. FFO for the nine months ended September 30, 2003 and 2002 excludes gains on sales of operating properties of $30.5 million or $0.28 per diluted common share and $1.5 million or $0.01 per diluted common share.
Year-to-date FFO has been adjusted to include a $7.8 million non-cash adjustment associated with the original issuance costs of Kimco's $225 million preferred stock that was redeemed earlier this year and to include a $6.3 million non-cash adjustment for gains related to the early extinguishment of debt.
For the quarter, consolidated revenues from the company's core portfolio increased to $120.3 million from $107.3 million, an increase of 12.1%. The increase in revenue was largely the result of a year-over-year occupancy improvement of 350 basis points, property acquisitions, and an increase in average rent from $8.10 per sf to $8.64 per square foot. Kimco's portfolio occupancy improved to 89.5% at September 30, 20003 from 86.0% at September 30, 2002. During the quarter, Kimco signed 120 new leases in the core portfolio totaling 820,000 square feet of leasable space. Occupancy in Kimco's primary co-investment portfolios, the Kimco Income REIT (KIR) and the Kimco Retail Opportunity Portfolio, remained at 97.8% and 96.1%.
Kimco's Board of Directors approved a common stock dividend increase, raising the quarterly dividend payable per common share by 5.6 % to $0.57 per common share from the current quarterly level of $0.54 per common share. Kimco has raised its dividend for 12 consecutive years, from an initial annual rate of $0.78 per share (adjusted for stock splits) in 1992 to the current annual rate of $2.28 per share, a compound annual growth rate of 9.4 %. The Board declared the first quarterly dividend at the increased rate payable on January 15, 2004 to shareholders of record on January 2, 2004.
In addition to the $700 million acquisition of Mid-Atlantic Realty Trust that closed on October 1, Kimco recently acquired interests in seven shopping centers for approximately $165 million. Kimco continued to grow its preferred equity capital business. During the quarter, the company invested $12.8 million in five shopping centers where Kimco will earn a preferred return on its investment as well as participation in future profits.
Kimco has interests in 698 properties comprising approximately 100 million sf of leasable space located throughout 40 states, Canada and Mexico.
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