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Tr an sfor ming & C r e a t i n g V a l u e
R E A L T Y
2 014 A n n u a l R e p o r t
R E A L T Y
Kimco Realty Corporation (NYSE: KIM) is a real estate investment trust (REIT) head-
Kimco Realty Corporation (NYSE: KIM) is a real estate investment trust
(REIT) headquartered in New Hyde Park, N.Y., that is North America’s
quartered in New Hyde Park, N.Y., that owns and operates North America’s largest
largest publicly traded owner and operator of neighborhood and
publicly traded portfolio of neighborhood and community shopping centers. As of
community shopping centers. As of December 31, 2014, the company
December 31, 2013, the company owned interests in 852 shopping centers com-
owned interests in 754 shopping centers comprising 110 million square
prising 125 million square feet of leasable space across 42 U.S. states, Puerto Rico,
feet of leasable space across 39 U.S. states, Puerto Rico, Canada,
Mexico and Chile.
Canada, Mexico and South America.
L E T T ER FRO M T HE CH A IR M A N
2
2 014 O PER AT IN G RE V IE W
F O R M 10 - K
4
21
SH A R EH O L D ER I N F O R M AT I O N 14 8
CO RPOR AT E DIREC TORY
I BC
on the cover: Tri-City Plaza, Largo, FL, before and after redevelopment
K I M C O ’ S P A T H S T O G R O W T H
Joint Venture Acquisition
Dulles Town Crossing, Sterling, VA
Our growth strategy, summed up in three letters and one symbol: TSR+,
continues to transform our business and create additional shareholder value.
T R A N S F O R M
Trading up to higher-quality properties in top markets pg. 4
S I M P L I F Y
Focusing on retail real estate in the U.S. pg. 9
R E D E V E L O P
Getting the most value out of our strongly situated shopping centers pg. 12
P L U S
Taking advantage of opportunistic retail investments pg. 17
These four parallel paths to growth all lead to the other TSR:
T O T A L S H A R E H O L D E R R E T U R N
1
CH A IR M A N ’S L E T T ER
Kimco had an excellent year in terms of financial results, occupancy gains, and
executing on our “Transform, Simplify, Redevelop, Plus” strategy, designed to
generate Total Shareholder Return.
Dear Fellow Shareholders and Associates:
Kimco has always been about people. So much of
And now Conor. I am thrilled with the Board’s selection
Kimco’ s rich history and success is due to the vision,
of Conor to succeed Dave. Kimco is part of Conor’s
leadership and work ethic of key individuals who
DNA as he follows in his father’s footsteps. Conor’s
have joined with me to make Kimco what it is today;
father, Mike, has been a Kimco officer, advisor and
namely, the premier owner of retail shopping centers
friend of mine for many, many years. And Conor
in the United States. From time to time over the years,
brings the same energy and passion for our business
I have extolled the virtues of some of these individ-
that his father brought. He is bright, analytical and
uals who have played such a large role at Kimco.
articulate. Conor is a wonderful motivator and has an
Marty Kimmel, Mike Flynn and David Samber immedi-
innate leadership ability that is both rare and refresh-
ately come to mind, but there are many others. With
ing. I believe the company will thrive under his leader-
Dave Henry’s announced retirement and Conor Fly-
ship, and I look forward to joining him as he takes
nn’s appointment by the Board of Directors to suc-
Kimco to higher and higher levels.
ceed Dave as our next CEO, I thought it appropriate
to focus my remarks on these two unique individuals.
In addition to Conor, Kimco is blessed with a group of
talented professionals that are smart, dedicated and
Dave’s retirement is bittersweet for me. On the one
committed to Kimco’s future success. Conor has
hand, I am saddened that Dave’s smile, upbeat per-
assembled a young team that is limited only by their
sonality and calm demeanor will no longer be part of
own imagination. At the same time, Conor is also
our day at Kimco. In his 14 years at Kimco, Dave has
surrounded by some very seasoned and respected
been a trusted partner, mentor and friend, and was
managers and advisors, including Glenn Cohen, our
instrumental in guiding our transformation over the
CFO, Bruce Rubenstein, our General Counsel, and a
last few years. He will be sorely missed. On the
slate of regional presidents who are second to none,
other hand, I smile with thoughts that Dave will now
and who each manage portfolios that could easily
finally have the time that he has rightfully earned to
stand alone as separate companies.
do all the things in life that he enjoys, but has put off
for so long. He leaves us with wonderful memories of
Finally, no letter of mine would be complete without a
his time here, and we wish him nothing but the best.
word about our portfolio. A particularly unique source
And we look forward to his continued assistance and
of value creation in our business has excited me from
advice as we call upon him to serve from time to time
the very beginning of my career, and still does today.
in the future.
By their nature, shopping centers require a very high
2
ratio of land to total value. The typical shopping cen-
more value and a better asset for the long term. Let
ter is comprised of a one-story building and five times
me be specific: in Pentagon Plaza just outside
as much land as the square footage of the building’s
Washington, DC, a 750-apartment project is under
footprint. The land component often exceeds the
consideration. And in Boca Raton, we are looking at
parking requirements, and thus, becomes an addi-
300 residential units to complement our shopping
tional asset. In a growing economy, land is one of the
center. We are also considering a smaller residential
best and least risky long-term investments. It is irre-
project in Columbia, Maryland, which we believe will
placeable, indestructible, and a natural hedge against
further enhance our existing retail center. In another
inflation. And as the land increases in value, it allows
instance, in the Bronx, in a shopping center that lies
the center’s extra land to be set aside, or land banked,
in the shadows of Yankee Stadium, adjacent to the
as I like to say, for additional investment opportuni-
Bronx County Courthouse and Bronx Municipal
ties. In the meantime, the revenue generated from the
Building and in one of the densest parts of New York
improvements covers the real estate taxes and other
City, we built, with a partner, on excess land that we
carrying costs.
own behind the retail center, a five-story, 67,000-
square-foot office building. Our ability to unlock addi-
Today, the opportunities that land banking affords us
tional value in our current portfolio will play an
can take many forms, including the expansion of
important part in our future growth. And given the
existing centers, development of outparcels, sales to
size of our portfolio and the length of ownership of
third parties, and possibly mixed-use development.
many of our properties, some of which have been
As markets change and evolve, it is incumbent upon
owned for more than 50 years, I am confident that we
us to make sure that we are maximizing each asset’s
will continue to find value-creation opportunities
value, in order to maximize total shareholder return.
within our portfolio.
In addition to our redevelopment projects spear-
headed by Conor, we have, on occasion, drawn
Joe Namath, the iconic New York Jets quarterback of
down from our land bank to unlock additional value
the late sixties once wrote a book titled, “I Can’t Wait
with a mixed-use concept. Where the opportunities
Until Tomorrow…’Cause I Get Better-Looking Every
for mixed-use projects exist, we are careful to make
Day.” While I can’t say the same about myself, I can
sure that any non-retail component enhances the
say the same about Kimco and its future. We have
primary retail component; it is this synergy that
great people, great assets and great opportunities
increases the overall asset’s value.
ahead of us. We get better every day.
So, for example, in two quality centers in Washington,
DC and Boca Raton, Florida, we are working with
best-in-class developers to build residential develop-
ments on excess land that we believe will create more
demand for our centers’ tenants, and overall, create
M I L T O N C O O P E R
Executive Chairman
3
2 014 O PER AT IN G RE V IE W
Our results reflect our best efforts to reposition the portfolio to a vibrant collection of
high-quality, high-growth assets located in dense, core major metropolitan markets
with the highest growth in population, wages and employment.
Dear Fellow Shareholders and Associates:
These are momentous times at Kimco on so
occupancy(1) is 88.0 percent, a 280 basis point
many fronts. The company’s Transform, Simplify,
increase since 4Q 2013. We are targeting small
Redevelop, Plus (TSR+) strategy has been a
shop occupancy to reach 90 percent by 2016.
resounding success. Our 2014 financial perfor-
mance exceeded our high expectations. And
Transforming our portfolio
while Dave Henry will be greatly missed following
Simply put, the reason for our excellent perfor-
his retirement at the end of the year, the appoint-
mance in 2014 is that our transformation efforts
ment of Conor Flynn as CEO to succeed Dave,
have produced a portfolio of high-quality proper-
and our other executive promotions, have been
ties in strong markets that benefit from positive
enthusiastically received both within and outside
macro-economic factors and are more resilient to
the company.
economic downturns.
Overall, Kimco had an excellent year in 2014 in
In 2014, we purchased interests in 60 retail proper-
terms of financial results, operating performance,
ties, including 33 acquired from existing joint ven-
and executing on our TSR+ strategy. This strategy,
tures, based on a gross purchase price of $1.4
which is designed to drive Total Shareholder Return
billion. In keeping with our overall transformation
(TSR), produced a TSR of 32.4 percent in 2014.
strategy, we are concentrating our acquisition
Funds from operations (FFO) as adjusted (exclud-
Kimco has scale, physical presence, long standing
ing transaction gains and losses) grew to $576.9
relationships and properties with strong demo-
million, or $1.40 per diluted share, a 5.3 percent
graphics. In these markets, we seek larger proper-
per share increase in 2014. Same-site net operat-
ties with potential for additional redevelopment
efforts on core major metropolitan areas where
ing income (NOI) in our portfolio was up 3.3
and future value creation.
percent for 2014, excluding the impact of foreign-
currency. U.S. same-site NOI has shown strong,
Transforming our U.S. portfolio also means exiting
consistent growth for 19 consecutive quarters and
non-core properties located in secondary and ter-
was up by 3.3 percent for the full year 2014.
Occupancy(1) in our portfolio reached 95.8 percent,
tiary markets, and becoming more urban-focused
over time. That’s why we sold 91 U.S. shopping
up 130 basis points from 4Q 2013. In the U.S.,
occupancy(1) was 95.7 percent, an increase of 80
centers totaling 9.6 million square feet, for a gross
sales price of $1.0 billion, in 2014. We now have
basis points. We take pride in our 16 straight quar-
about 17 percent fewer U.S. properties than we
ters of solid positive leasing spreads for both new
did at the end of 2010, but they are higher quality,
leases and renewals, and in the fact that our efforts
in small shop space leasing have been gaining sig-
nificant traction. As small local and national ten-
ants begin to grow again, current small shop
as evidenced by our 330 basis point improvement
in occupancy(1) and 17.8 percent higher annualized
base rent (ABR) per square foot (1).
4
(1) Pro-rata share
Since 2010, U.S. rent per
square foot(1) increased by17.8%
$13.74
$12.99
$12.58
$11.91
$11.66
2010
2011
2012
2013
2014
(1) Pro-rata share
U P G R A D I N G O U R P O R T F O L I O
top:
Joint Venture Acquisition
Webster Square, Nashua, NH
bottom right:
Joint Venture Acquisition
Towson Place, Towson, MD
5
T R A N S F O R M
• Acquire high-quality assets
• Exit non-core markets and lower-quality, “at risk” assets
We acquired 142 U.S. shopping centers
for a purchase price of
$3.3 billion
We completed the sales of 234 U.S. shopping
centers for a gross sales price of
$2.2 billion
Since September 2010
6
Occupancy(1) is
96%
Rent per square foot(1) is
60% Higher
Average Household Income is
38% Higher
Population is
11% Greater
(1) Pro-rata share
Recent Boston Portfolio Acquisition
Memorial Plaza, Cambridge, MA
7
S I M P L I F Y I N G O U R B U S I N E S S
top: Joint Venture Acquisition
Stanford Ranch, Roseville, CA
bottom right:
Joint Venture Acquisition
Woodbury Center, Harriman, NY
8
All told, we reduced the number of properties in our joint venture portfolio by 29 percent
in the past 15 months and 47 percent since we initiated this strategy in 2010.
Keeping it simple
Simplifying our business model is part of our
include minimal due diligence costs and time to
deliberate approach to becoming a more
close; quick execution; less cost to assume mort-
focused company. In 2014, we sold 41 properties
gage debt on the properties; no brokerage com-
in Latin America, totaling approximately 7.5 mil-
missions; and no additional overhead required.
lion square feet, for a gross sales price of $622.3
million. With the consummation of these sales,
In 2014, we acquired 33 joint venture properties
the company has substantially liquidated its port-
for a gross price of $994.9 million. And it’s a trend
folio in Mexico and South America.
we are continuing in 2015 with the acquisition of
Blackstone’s interest in the 39-property Kimstone
We are also reducing the number of partners and
portfolio. The portfolio comprises 5.6 million
properties that are part of joint ventures by either
square feet, is approximately 96 percent occu-
selectively buying out partner interests and
pied, and consists of a mix of well-located, gro-
acquiring properties owned by the joint ventures,
cery-anchored shopping centers and dominant
or through the outright sale of these assets.
power centers in areas with strong demographics
and high barriers to entry. All told, we reduced
Simplifying our portfolio by acquiring joint ven-
the number of properties in our joint venture
ture properties managed and leased by Kimco
portfolio by 29 percent in the past 15 months and
for many years is beneficial to both the company
47 percent since we initiated this strategy in 2010.
and our joint venture partners. The benefits
J O I N T V EN T U R E P O R TF O L I O
2 010 -1Q 2 015
Properties
551
$12.3B
Gross
Investment
293
$7.9B
47%
reduction in number
of properties
2010
83.4M
1Q 2015*
45.7M
Gross SF
36%
reduction in gross
investment
*Projected as of March 31, 2015
9
29%
Reduction in
joint venture properties
in the past
15 months
S I M P L I F Y
• Monetize Latin American assets
• Reduce joint venture platform
(number of partners and properties)
Joint Venture Acquisition
Stafford Marketplace, Stafford, VA
10
Sold 41
properties
in Latin America
for a gross price of
$622.3
million
in 2014
Acquired 33
joint venture properties
for a gross price of
$994.9
million
in 2014
11
Redevelopment yields strong returns on invested capital, produces higher residual net asset
values, and creates operational efficiencies with modern technological advancements.
Adding value through redevelopment
Aggressively pursuing redevelopment opportunities
a potential multi-family component and multiple
within our portfolio is one way we leverage our proven
retail/restaurant outparcels. Dania Pointe will
operational excellence to create value and increase
become the most dominant retail center and devel-
earnings over time. That’s why we will demolish and
opment in Broward County and is already enjoying
rebuild; divide anchor spaces and create new store-
extremely strong tenant interest. Phase I will be
fronts; make room for and build stand-alone stores; and
developed on a total of 35 acres and construction will
add attractive new facades, shopper amenities and
commence in mid-2016. Phase II will be developed
landscaping to existing properties. At the end of 2014,
on the remaining 60 acres and construction is
we had a redevelopment and value creation pipeline of
expected to commence in 2017.
$1.2 billion, which should generate an incremental NOI
of approximately $100 million and will add over $625
The center will pull from a 10+ mile trade area with
million in net asset value over a five-year period.
over 1.1 million people and more than 570,000
employees. Over 270,000 cars drive past the site daily
One of these redevelopment opportunities is the ide-
on I-95 with another 90,000 cars per day driving along
ally located Pompano Beach Shopping Center in
I-595 just to the north of Dania Pointe. The Fort
Pompano Beach, Florida. We took advantage of an
Lauderdale Airport is just 3 miles northeast of the project.
opportunity and terminated our Kmart lease early to
Within 5 miles to the east is the Port Everglades Cruise
redevelop the property which is along the major retail
Port with more than 80,000 passengers per week.
corridor in Pompano Beach. Build-to-suit leases were
then secured with Whole Foods (45,000 SF) and Sports
Dania Pointe is adjacent to our 900,000 square foot,
Authority (35,000 SF). In addition, a vacant outparcel
100 percent leased Oakwood Plaza shopping center.
restaurant was demolished and a new PDQ restaurant
was built in its place. All three tenants recently opened
As Milton described in his letter, another way we’re
for business generating a return on investment (ROI) of
continuing to increase value is to add mixed-use
11 percent and incremental value of $9.4 million.
opportunities where appropriate. This approach
Taking advantage of development
opportunities
produces the highest and best use for existing real
estate, benefits the surrounding community and
increases the value of the primary retail component of
For the first time in many years, we are also seeing
the project. We look to mitigate risk by either ground
some limited and select opportunities for ground-up
leasing the mixed-use component or working with
development. This includes our Dania Pointe devel-
best-in-class developers. Mixed-use redevelopment
opment located in Dania Beach (Ft. Lauderdale),
creates value for shareholders while retaining the own-
Florida, which comprises 95 acres located along I-95
ership of the fee position. In addition to Dania Pointe
with excellent visibility. Dania Pointe will likely consist
and some of the mixed-use projects mentioned by
of over 1 million square feet of retail, a hotel,
Milton, of particular note is our unique asset in
Cupertino, California.
12
I N C R E A S I N G P R O P E R T Y V A L U E S
Incremental Value Creation:
$8.9 million
• Redeveloping 90% of the shopping center to improve traffic
and pedestrian circulation
• Adding seven junior anchor and two anchor tenants, as well
as 38,000 square feet of small shop space
Redevelopment in Progress
Tri-City Plaza, Largo, FL
• Executed leases with LA Fitness, Sports Authority, Ross Dress
for Less and Petco
13
R E D E V E L O P
• Evaluate highest and best property use to drive value creation
• Focus on dense, core major metros and highly productive centers
before
after
Recently Completed Redevelopment
Pompano Beach Shopping Center,
Pompano Beach, FL
14
We are investing
$1.2 billion*
to increase the appeal, quality, and value
of our shopping centers.
We completed 34 projects in 2014,
at a cost of $68 million with an
ROI of 12.4%
*As of December 31, 2014
15
before
after
C O R P O R A T E R E S P O N S I B I L I T Y P R O G R A M
Kimco is focused on building a thriving and
We’re honored that our work in this
sustainable business – one that succeeds by
important area has been singled out for
delivering long-term value for stakeholders.
recognition. Kimco was named to the S&P
We take pride in how we conduct business,
500 Climate Disclosure Leadership Index
including the positive contribution we make
(CDLI) by the nonprofit CDP, a leading
to our communities and our initiatives to
global environmental disclosure system, for
safeguard the environment.
the depth and quality of information we
disclosed to investors and the global
marketplace this year. We were also named
a Green Star Company by the Global Real
Estate Sustainability Benchmark (GRESB).
In 2014, we produced our inaugural
corporate responsibility report, based on
the Global Reporting Initiative’s G-4
Guidelines. The report spells out our key
corporate responsibility program priorities
which are to:
• Openly engage our key stakeholders.
above: Community connection, employees are
encouraged to volunteer in their communities
as a means of multiplying their impact.
• Lead by example in our operations.
• Positively influence our tenants and
partners.
top left: Improved lighting quality
and increased efficiency
• Enhance our communities.
• Build and retain a quality team.
16
We are proud that our TSR+ strategy delivered a TSR, total shareholder return,
of 32.4% for 2014.
Cupertino Village, located directly across from the
fully applied for 25 years with retailers such as Gold
planned Apple Campus 2, which is expected to be
Circle, Woolco, Venture Stores, Hechinger, Montgomery
completed in 2016, is undergoing a major redevelop-
Ward, Shopko, Ames, and Save Mart. The Plus business
ment that will add new buildings, parking, landscaping
has also been involved in many smaller, lower-profile
and high-tech touches befitting a neighbor of Apple.
sale/leasebacks and other investments. The company,
The center, to be completed by mid-2015, will make
however, is committed to keeping the size of the Plus
Cupertino Village an even more attractive shopping
business modest in relation to our total size.
destination for city residents and the 14,000 Apple
employees expected to work next door.
How we put the Plus in TSR+
(cid:49)(cid:87)(cid:84)(cid:2)(cid:386)(cid:80)(cid:67)(cid:80)(cid:69)(cid:75)(cid:67)(cid:78)(cid:2)(cid:82)(cid:75)(cid:69)(cid:86)(cid:87)(cid:84)(cid:71)(cid:2)(cid:75)(cid:85)(cid:2)(cid:71)(cid:90)(cid:69)(cid:71)(cid:78)(cid:78)(cid:71)(cid:80)(cid:86)
Our consolidated market cap at year end was $16.1 bil-
lion, and our ratios of consolidated net debt to EBITDA
Working with the Kimco regional teams, Milton and
as adjusted; debt to equity and fixed charge coverage
Ray Edwards, Vice President, Retailer Services, con-
collectively demonstrate a strong balance sheet profile.
tinue to find value creation opportunities through
We completed 2014 with over $1.6 billion of immediate
investments with retailers who own large portions of
liquidity, positioning us to be able to take advantage of
their real estate. We call this the “Plus” in TSR+. Our
opportunities that arise.
50 years of retail property experience and financial
acumen have resulted in a solid track record of unlock-
We also benefited from recurring retail earnings
ing real estate value for retailers. We believe the cur-
growth, which grew by 4 percent in 2014. Recurring
rent economic environment, coupled with our strong
retail earnings had a 5 percent compound annual
retail relationships, will yield profitable investment
growth rate (CAGR) from 2010 to 2014. Our dividend
opportunities as we help real estate rich retailers
grew at a CAGR of 9 percent from 2010 to 2014. We
unlock the value in those assets. We work directly with
also maintain excellent dividend coverage, as illustrated
retailers on sale leasebacks, bankruptcy transactions,
by an FFO payout ratio of 62 percent.
repositioning underperforming retail locations, and
retail real estate financing.
Kimco is positioned to access capital at all times and in
multiple forms. We continue to lower our cost of capital
As an example of the Plus at work, in 2014, we
by replacing higher rate maturing debt at lower rates.
announced that we would be participating in a consor-
In 2014, we issued a new seven-year unsecured note
tium to purchase grocery chain Safeway Inc. This trans-
totaling $500 million at 3.20 percent. The proceeds
action, which closed in the beginning of 2015, builds on
were used to repay $294.6 million of unsecured notes at
the momentum of our Albertsons and SUPERVALU
a blended rate of 5.20 percent and $97.6 million of
investments and fits with our strategy of creating addi-
mortgage debt with a weighted average interest rate of
tional value through opportunistic investments with real
6.14 percent, which matured in 2014.
estate rich retailers. It’s a strategy that we have success-
17
P L U S
• Create value via opportunistic retail activities
• Work directly with retailers on sale leasebacks, bankruptcy,
retail real estate financing
TOTA L SH A R E H O LD E R R E T U R N
1 YEAR
12/31/13 - 12/31/14
5 YEAR
12/31/09 - 12/31/14
SINCE IPO
11/29/91 - 12/31/14
32.4%
18.0%
13.5%
111115.4%
15.4%
14.2%
10.8%
9.8%
1111113.7%
13.7%
11110.0%
10.0%
DJIA
S&P
500
KIM
DJIA
S&P
500
KIM
DJIA
S&P
500
KIM
Recent Acquisition
Crossroads Plaza, Cary, NC
18
FUNDS FROM OPER ATIONS
A S A DJ US T E D ( Pe r S h a r e)
$1.40
-$1.44
$1.40
$1.33
$1.26
$1.20
2011
2011
2
2012
2012
2
2013
200 313
2
22015*
2014 2015*
2014
D I V I DE N D
( Pe r C o m m o n S h a r e)
$0.96
$$0$0$0$0$$$ .90000
$0$0$00..8.8. 444
$$$
$0$0$00.77.7.776666
$0$0$0$ 7.722
2011
2011
20201212
2012
20201313
2013
2
2001515**
2014 2015*
2014
*Per company estimates
19
Anaheim Plaza, Anaheim, CA
B U I L D I N G O N S U C C E S S
In early 2015, we refinanced our $400 million unse-
ment grade credit ratings in the upper 10 percent level
cured term loan, scheduled to mature in April 2015,
of all U.S. REITs. Our unsecured debt ratings are as fol-
with a new $650 million unsecured term loan sched-
lows: S&P: BBB+; Moody’s: Baa1; and Fitch: BBB+.
uled to mature in 2020, with lower pricing provided
by a consortium of banks. In addition, we established
Looking ahead
a $500 million “At the Market” equity program which
provides us an attractive, alternative low-cost way to
source capital and greater flexibility in managing our
balance sheet.
We are preserving our strong liquidity position, and
during 2014, renewed our $1.75 billion unsecured
revolving credit facility with better pricing. This line is
scheduled to mature in March 2019.
We maintained strong balance sheet metrics in 2014,
with Net Debt to EBITDA as adjusted of 5.5x, within
our stated goal of 5.5x-6.0x range, and a fixed charge
coverage of 3.2x. Finally, we maintain strong invest-
We believe our results in 2014 demonstrate the effec-
tiveness of our TSR+ strategy. We could not have
achieved these results without the outstanding people
of Kimco, who we believe are quite simply the best in
the business. We look forward to leveraging our strat-
egy to build on our successes and continue to drive
Total Shareholder Return. In 2015, our emphasis will
be on creating additional value within our existing
portfolio through redevelopment, expansions and
select new developments. We are excited about
these plans, and to echo Milton, we have great
people, great assets and great opportunities ahead
of us. We get better every day.
D A V I D B . H E N R Y
C O N O R C . F L Y N N
G L E N N G . C O H E N
Vice Chairman,
President, Chief Operating Officer
Executive Vice President,
Chief Executive Officer
& Chief Investment Officer
Chief Financial Officer & Treasurer
20
F O R M 10 - K
21
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(cid:59)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2014
OR
(cid:133)
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 1-10899
Kimco Realty Corporation
(Exact name of registrant as specified in its charter)
Maryland
(State or other jurisdiction of incorporation or organization)
13-2744380
(I.R.S. Employer Identification No.)
3333 New Hyde Park Road, New Hyde Park, NY 11042-0020
(Address of principal executive offices)
(Zip Code)
(516) 869-9000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, par value $.01 per share.
Title of each class
Depositary Shares, each representing one-hundredth of a share of 6.90% Class H Cumulative Redeemable
Preferred Stock, par value $1.00 per share.
Depositary Shares, each representing one-thousandth of a share of 6.00% Class I Cumulative Redeemable
Preferred Stock, par value $1.00 per share.
Depositary Shares, each representing one-thousandth of a share of 5.50% Class J Cumulative Redeemable
Preferred Stock, par value $1.00 per share.
Name of each exchange on
which registered
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
Depositary Shares, each representing one-thousandth of a share of 5.625% Class K Cumulative Redeemable
Preferred Stock, par value $1.00 per share.
New York Stock Exchange
Securities registered pursuant to section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes (cid:59) No (cid:133)
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes (cid:133) No (cid:59)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes (cid:59) No (cid:133)
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files). Yes (cid:59) No (cid:133)
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K. (cid:59)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
(Do not check if a smaller reporting company.)
(cid:59)
(cid:133)
Accelerated filer
Smaller reporting company
(cid:133)
(cid:133)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes (cid:133) No (cid:59)
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was approximately
$9.1 billion based upon the closing price on the New York Stock Exchange for such equity on June 30, 2014.
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
Part III incorporates certain information by reference to the Registrant’s definitive proxy statement to be filed with respect to the Annual
412,577,958 shares as of February 25, 2015.
DOCUMENTS INCORPORATED BY REFERENCE
Meeting of Stockholders expected to be held on May 5, 2015.
Index to Exhibits begins on page 44.
TABLE OF CONTENTS
PART I
Form 10-K
Report
Page
Item No.
1.
1A.
1B.
2.
3.
4.
5.
6.
7.
Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mine Safety Disclosures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART II
Market for Registrant’s Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . .
7A.
Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.
9.
9A.
9B.
10.
11.
12.
13.
14.
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure . . . .
Controls and Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART III
Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certain Relationships and Related Transactions, and Director Independence. . . . . . . . . . . . . . . .
Principal Accounting Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART IV
15.
Exhibits, Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
43
2
3
6
13
13
14
14
15
18
19
39
40
40
40
41
42
42
42
42
42
FORWARD-LOOKING STATEMENTS
This annual report on Form 10-K (“Form 10-K”), together with other statements and information publicly
disseminated by Kimco Realty Corporation (the “Company”) contains certain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes
this statement for purposes of complying with the safe harbor provisions. Forward-looking statements, which are
based on certain assumptions and describe the Company’s future plans, strategies and expectations, are generally
identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “will,” “target,”
“forecast” or similar expressions. You should not rely on forward-looking statements since they involve known and
unknown risks, uncertainties and other factors which are, in some cases, beyond the Company’s control and could
materially affect actual results, performances or achievements. 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 managements’ 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, (xv) unanticipated changes in
the Company’s intention or ability to prepay certain debt prior to maturity and/or hold certain securities until maturity
and (xvi) the risks and uncertainties identified under Item 1A, “Risk Factors” and elsewhere in this Form 10-K and in
the Company’s other filings with the SEC. Accordingly, there is no assurance that the Company’s expectations will be
realized. The Company disclaims any intention or obligation to update the forward-looking statements, whether as a
result of new information, future events or otherwise. You are advised to refer to any further disclosures the Company
makes or related subjects in the Company’s reports on Form 10-Q and Form 8-K that the Company files with the
Securities and Exchange Commission (“SEC”).
Item 1. Business
Background
PART I
Kimco Realty Corporation, a Maryland corporation, is one of the nation’s largest owners and operators of
neighborhood and community shopping centers. The terms “Kimco,” the “Company,” “we,” “our” and “us” each
refer to Kimco Realty Corporation and our subsidiaries, unless the context indicates otherwise. The Company is a
self-administered real estate investment trust (“REIT”) and has owned and operated neighborhood and community
shopping centers for more than 50 years. The Company has not engaged, nor does it expect to retain, any REIT
advisors in connection with the operation of its properties. As of December 31, 2014, the Company had interests
in 754 shopping center properties (the “Combined Shopping Center Portfolio”), aggregating 109.5 million square
feet of gross leasable area (“GLA”), and 533 other property interests, primarily through the Company’s preferred
equity investments and other real estate investments, totaling 11.7 million square feet of GLA, for a grand total of
1,287 properties aggregating 121.2 million square feet of GLA, located in 41 states, Puerto Rico, Canada, Mexico and
Chile. The Company’s ownership interests in real estate consist of its consolidated portfolio and portfolios where
the Company owns an economic interest, such as properties in the Company’s investment real estate management
programs, where the Company partners with institutional investors and also retains management. The Company
believes its portfolio of neighborhood and community shopping center properties is the largest (measured by GLA)
currently held by any publicly traded REIT.
The Company’s executive offices are located at 3333 New Hyde Park Road, New Hyde Park, New York
11042-0020 and its telephone number is (516) 869-9000. Nearly all operating functions, including leasing, legal,
construction, data processing, maintenance, finance and accounting are administered by the Company from its
executive offices in New Hyde Park, New York and supported by the Company’s regional offices. As of December 31,
2014, a total of 580 persons were employed by the Company.
3
The Company’s Web site is located at http://www.kimcorealty.com. The information contained on our Web site
does not constitute part of this Form 10-K. On the Company’s Web site you can obtain, free of charge, a copy of
our Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports
filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act of 1934, as amended, as soon as reasonably
practicable, after we file such material electronically with, or furnish it to, the SEC. The public may read and copy any
materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The
public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
The SEC also maintains an Internet site that contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC at http://www.sec.gov.
The Company began operations through its predecessor, The Kimco Corporation, which was organized in 1966
upon the contribution of several shopping center properties owned by its principal stockholders. In 1973, these
principals formed the Company as a Delaware corporation, and, in 1985, the operations of The Kimco Corporation
were merged into the Company. The Company completed its initial public stock offering (the “IPO”) in November
1991, and, commencing with its taxable year which began January 1, 1992, elected to qualify as a REIT in accordance
with Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”). If, as the Company
believes, it is organized and operates in such a manner so as to qualify and remain qualified as a REIT under the Code,
the Company generally will not be subject to federal income tax, provided that distributions to its stockholders equal
at least the amount of its REIT taxable income, as defined under the Code. In 1994, the Company reorganized as a
Maryland corporation. In March 2006, the Company was added to the S & P 500 Index, an index containing the stock
of 500 Large Cap companies, most of which are U.S. corporations. The Company’s common stock, Class H Depositary
Shares, Class I Depositary Shares, Class J Depositary Shares and Class K Depositary Shares are traded on the New York
Stock Exchange (“NYSE”) under the trading symbols “KIM”, “KIMprH”, “KIMprI”, “KIMprJ” and “KIMprK”, respectively.
The Company’s initial growth resulted primarily from ground-up development and the construction of shopping
centers. Subsequently, the Company revised its growth strategy to focus on the acquisition of existing shopping centers
and continued its expansion across the nation. The Company implemented its investment real estate management
format through the establishment of various institutional joint venture programs, in which the Company has
noncontrolling interests. The Company earns management fees, acquisition fees, disposition fees as well as promoted
interests based on achieving certain performance metrics. The Company continued its geographic expansion with
investments in Canada, Mexico, Chile, Brazil and Peru; however during 2013, based upon a perceived change in market
conditions, the Company began its efforts to exit its investments in Mexico and South America. By the fourth quarter
of 2014, the Company had substantially liquidated its investments in Mexico, Brazil and Peru. The Company’s revenues
and equity in income (including gains on sales and impairment losses) from its foreign investments in U.S. dollar
equivalents and their respective local currencies are as follows (in millions):
2014
2013
2012
Revenues (consolidated in USD):
Mexico. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Peru . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Chile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
29.4 $
- $
0.1 $
8.1 $
49.5 $
3.2 $
0.4 $
9.2 $
Revenues (consolidated):
Mexico (Mexican Pesos “MXN”) . . . . . . . . . . . . . . . . . . . . . . . . .
Brazil (Brazilian Real) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Peru (Peruvian Nuevo Sol) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chile (Chilean Pesos “CLP”) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
382.3
-
0.4
4,485.9
673.8
6.8
1.2
4,464.7
Equity in income (unconsolidated joint ventures, including
preferred equity investments in USD):
Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Mexico (2014 includes the release of cumulative foreign
currency translation adjustment “CTA”) . . . . . . . . . . . . . . . . . $
Chile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
49.3 $
46.6 $
(3.7) $
(0.1) $
98.1 $
4.2 $
Equity in income (unconsolidated joint ventures, including
preferred equity investments in local currencies):
Canada (Canadian dollars) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mexico (MXN). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chile (CLP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
54.6
(550.8)
(55.3)
48.0
232.3
2,141.2
47.3
3.8
0.4
7.4
626.5
7.2
1.1
3,648.0
45.7
15.0
0.4
46.0
152.8
194.2
The Company, through its taxable REIT subsidiaries (“TRS”), as permitted by the Tax Relief Extension Act of
1999, has previously engaged in various retail real estate related opportunities, including (i) ground-up development
of neighborhood and community shopping centers and the subsequent sale thereof upon completion and (ii) retail
real estate management and disposition services, which primarily focused on leasing and disposition strategies for
real estate property interests of both healthy and distressed retailers. The Company may consider other investments
through its TRS should suitable opportunities arise.
In addition, the Company has capitalized on its established expertise in retail real estate by establishing other
ventures in which the Company owns a smaller equity interest and provides management, leasing and operational
support for those properties. The Company has also provided preferred equity capital in the past to real estate
entrepreneurs and, from time to time, provides real estate capital and management services to both healthy and
distressed retailers. The Company has also made selective investments in secondary market opportunities where a
security or other investment is, in management’s judgment, priced below the value of the underlying assets, however
these investments are subject to volatility within the equity and debt markets.
Operating and Investment Strategy
The Company’s strategy is to be the premier owner and operator of neighborhood and community shopping
centers through investments primarily in the U.S. To achieve this strategy the Company is (i) striving to transform the
quality of its portfolio by disposing of lesser quality assets and acquiring larger higher quality properties in key markets
identified by the Company, (ii) simplifying its business by exiting Mexico and South America and reducing the number
of joint venture investments and (iii) pursuing redevelopment opportunities within its portfolio to increase overall
value and certain development opportunities for long-term investment. The Company has an active capital recycling
program and during the second quarter of 2014, the Company implemented a plan to accelerate the disposition of
certain U.S. properties. This plan effectively shortened the Company’s anticipated hold period for these properties
and as such caused the Company to recognize impairment charges on certain consolidated operating properties
to reflect their estimated fair values. If the Company accepts sales prices for these assets that are less than their net
carrying values, the Company would be required to take additional impairment charges. In order to execute the
Company’s strategy, the Company intends to continue to strengthen its balance sheet by pursuing deleveraging
efforts over time, providing it the necessary flexibility to invest opportunistically and selectively, primarily focusing on
neighborhood and community shopping centers. The Company also has an institutional management business with
domestic and foreign institutional partners for the purpose of investing in neighborhood and community shopping
centers. In an effort to further its simplification strategy, the Company is actively pursuing opportunities to reduce its
institutional management business through partner buy-outs, property acquisitions from institutional joint ventures
and/or third party property sales.
The Company’s investment objective is to increase cash flow, current income and, consequently, the value of
its existing portfolio of properties and to seek continued growth in desirable demographic areas with successful
retailers through (i) the retail re-tenanting, renovation and expansion of its existing centers and (ii) the selective
acquisition of established income-producing real estate properties and properties requiring significant re-tenanting
and redevelopment, primarily in neighborhood and community shopping centers in geographic regions in which the
Company presently operates. The Company may consider investments in other real estate sectors and in geographic
markets where it does not presently operate should suitable opportunities arise.
The Company’s neighborhood and community shopping center properties are designed to attract local area
customers and are typically anchored by a supermarket, a discount department store, a home improvement center
or a drugstore tenant offering day-to-day necessities rather than high-priced luxury items. The Company may either
purchase or lease income-producing properties in the future and may also participate with other entities in property
ownership through partnerships, joint ventures or similar types of co-ownership. Equity investments may be subject
to existing mortgage financing and/or other indebtedness. Financing or other indebtedness may be incurred
simultaneously or subsequently in connection with such investments. Any such financing or indebtedness would have
priority over the Company’s equity interest in such property. The Company may make loans to joint ventures in which
it may or may not participate.
The Company seeks to reduce its operating and leasing risks through diversification achieved by the geographic
distribution of its properties and a large tenant base. As of December 31, 2014, no single neighborhood and
community shopping center accounted for more than 1.8% of the Company’s annualized base rental revenues,
including the proportionate share of base rental revenues from properties in which the Company has less than a
100% economic interest, or more than 1.4% of the Company’s total shopping center GLA. At December 31, 2014, the
5
Company’s five largest tenants were TJX Companies, The Home Depot, Wal-Mart, Kohl’s and Bed Bath & Beyond
which represented 3.3%, 2.4%, 1.8%, 1.8% and 1.8%, respectively, of the Company’s annualized base rental revenues,
including the proportionate share of base rental revenues from properties in which the Company has less than a 100%
economic interest.
As one of the original participants in the growth of the shopping center industry and one of the nation’s largest
owners and operators of neighborhood and community shopping centers, the Company has established close
relationships with a large number of major national and regional retailers and maintains a broad network of industry
contacts. Management is associated with and/or actively participates in many shopping center and REIT industry
organizations. Notwithstanding these relationships, there are numerous regional and local commercial developers,
real estate companies, financial institutions and other investors who compete with the Company for the acquisition
of properties and other investment opportunities and in seeking tenants who will lease space in the Company’s
properties.
Item 1A. Risk Factors
We are subject to certain business and legal risks including, but not limited to, the following:
Loss of our tax status as a real estate investment trust or changes in federal tax laws, regulations, administrative
interpretations or court decisions relating to real estate investment trusts could have significant adverse
consequences to us and the value of our securities.
We have elected to be taxed as a REIT for federal income tax purposes under the Code. We believe that we have
operated so as to qualify as a REIT under the Code and that our current organization and method of operation comply
with the rules and regulations promulgated under the Code to enable us to continue to qualify as a REIT. However,
there can be no assurance that we have qualified or will continue to qualify as a REIT for federal income tax purposes.
Qualification as a REIT involves the application of highly technical and complex Code provisions, for which
there are only limited judicial and administrative interpretations. The determination of various factual matters and
circumstances not entirely within our control may affect our ability to qualify as a REIT. New legislation, regulations,
administrative interpretations or court decisions could significantly change the tax laws with respect to qualification as
a REIT, the federal income tax consequences of such qualification or the desirability of an investment in a REIT relative
to other investments.
In order to qualify as a REIT, we must satisfy a number of requirements, including requirements regarding the
composition of our assets and a requirement that at least 95% of our gross income in any year be derived from
qualifying sources, such as “rents from real property.” Also, we must make distributions to stockholders aggregating
annually at least 90% of our REIT taxable income, excluding net capital gains. Furthermore, we own a direct or indirect
interest in certain subsidiary REITs which elected to be taxed as REITs for federal income tax purposes under the Code.
Provided that each subsidiary REIT qualifies as a REIT, our interest in such subsidiary REIT will be treated as a qualifying
real estate asset for purposes of the REIT asset tests. To qualify as a REIT, the subsidiary REIT must independently
satisfy all of the REIT qualification requirements. The failure of a subsidiary REIT to qualify as a REIT could have an
adverse effect on our ability to comply with the REIT income and asset tests, and thus our ability to qualify as a REIT.
If we lose our REIT status, we will face serious tax consequences that will substantially reduce the funds available
to pay dividends to stockholders for each of the years involved because:
(cid:120)(cid:3) we would not be allowed a deduction for distributions to stockholders in computing our taxable income
and we would be subject to federal income tax at regular corporate rates;
(cid:120)(cid:3) we could be subject to the federal alternative minimum tax and possibly increased state and local taxes;
(cid:120)(cid:3) unless we were entitled to relief under statutory provisions, we could not elect to be taxed as a REIT for four
taxable years following the year during which we were disqualified; and
(cid:120)(cid:3) we would not be required to make distributions to stockholders.
As a result of all these factors, our failure to qualify as a REIT or changes in federal tax laws with respect to
qualification as a REIT or the tax consequences of such qualification could also impair our ability to expand our business
or raise capital and materially adversely affect the value of our securities.
6
To maintain our REIT status, we may be forced to borrow funds on a short-term basis during unfavorable
market conditions.
To qualify as a REIT, we generally must distribute to our stockholders at least 90% of our REIT taxable income
each year, excluding capital gains, and we will be subject to regular corporate income taxes to the extent that we
distribute less than 100% of our net taxable income each year. In addition, we will be subject to a 4% nondeductible
excise tax on the amount, if any, by which distributions paid by us in any calendar year are less than the sum of 85%
of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years.
While we have historically satisfied these distribution requirements by making cash distributions to our stockholders,
a REIT is permitted to satisfy these requirements by making distributions of cash or other property, including, in
limited circumstances, its own stock. Assuming we continue to satisfy these distributions requirements with cash, we
may need to borrow funds to meet the REIT distribution requirements even if the then prevailing market conditions
are not favorable for these borrowings. These borrowing needs could result from differences in timing between the
actual receipt of cash and inclusion of income for federal income tax purposes, or the effect of non-deductible capital
expenditures, the creation of reserves or required debt or amortization payments.
Adverse global market and economic conditions may impede our ability to generate sufficient income and
maintain our properties.
The economic performance and value of our properties is subject to all of the risks associated with owning and
operating real estate, including:
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
changes in the national, regional and local economic climate;
local conditions, including an oversupply of, or a reduction in demand for, space in properties like those
that we own;
trends toward smaller store sizes as retailers reduce inventory and new prototypes;
increasing use by customers of e-commerce and online store sites;
the attractiveness of our properties to tenants;
the ability of tenants to pay rent, particularly anchor tenants with leases in multiple locations;
tenants who may declare bankruptcy and/or close stores;
competition from other available properties to attract and retain tenants;
changes in market rental rates;
the need to periodically pay for costs to repair, renovate and re-let space;
changes in operating costs, including costs for maintenance, insurance and real estate taxes;
the expenses of owning and operating properties, which are not necessarily reduced when circumstances
such as market factors and competition cause a reduction in income from the properties;
changes in laws and governmental regulations, including those governing usage, zoning, the environment
and taxes;
(cid:120)(cid:3) acts of terrorism and war, acts of God and physical and weather-related damage to our properties; and
(cid:120)(cid:3)
the potential risk of functional obsolescence of properties over time.
Competition may limit our ability to purchase new properties or generate sufficient income from tenants and
may decrease the occupancy and rental rates for our properties.
Our properties consist primarily of community and neighborhood shopping centers and other retail properties.
Our performance, therefore, is generally linked to economic conditions in the market for retail space. In the future, the
market for retail space could be adversely affected by:
the adverse financial condition of some large retailing companies;
the impact of internet sales on the demand for retail space;
(cid:120)(cid:3) weakness in the national, regional and local economies;
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3) ongoing consolidation in the retail sector; and
(cid:120)(cid:3)
the excess amount of retail space in a number of markets.
In addition, numerous commercial developers and real estate companies compete with us in seeking tenants
for our existing properties and properties for acquisition. New regional malls, open-air lifestyle centers or other retail
shopping centers with more convenient locations or better rents may attract tenants or cause them to seek more
favorable lease terms at or prior to renewal. Retailers at our properties may face increasing competition from other
retailers, e-commerce, outlet malls, discount shopping clubs, catalog companies, direct mail, telemarketing or home
7
shopping networks, all of which could (i) reduce rents payable to us; (ii) reduce our ability to attract and retain tenants
at our properties; or (iii) lead to increased vacancy rates at our properties. We may fail to anticipate the effects of
changes in consumer buying practices, particularly of growing online sales and the resulting retailing practices and
space needs of our tenants or a general downturn in our tenants’ businesses, which may cause tenants to close stores
or default in payment of rent.
Our performance depends on our ability to collect rent from tenants, our tenants’ financial condition and our
tenants maintaining leases for our properties.
At any time our tenants, particularly small local stores, may experience a downturn in their business that may
significantly weaken their financial condition. As a result, our tenants may delay a number of lease commencements,
decline to extend or renew leases upon expiration, fail to make rental payments when due, close stores or declare
bankruptcy. Any of these actions could result in the termination of tenants’ leases and the loss of rental income
attributable to these tenants’ leases. In the event of a default by a tenant, we may experience delays and costs in
enforcing our rights as landlord under the terms of the leases.
In addition, multiple lease terminations by tenants or a failure by multiple tenants to occupy their premises in
a shopping center could result in lease terminations or significant reductions in rent by other tenants in the same
shopping centers under the terms of some leases. In that event, we may be unable to re-lease the vacated space
at attractive rents or at all, and our rental payments from our continuing tenants could significantly decrease. The
occurrence of any of the situations described above, particularly if it involves a substantial tenant with leases in multiple
locations, could have a material adverse effect on our financial condition, results of operations and cash flows.
A tenant that files for bankruptcy protection may not continue to pay us rent. A bankruptcy filing by, or relating
to, one of our tenants or a lease guarantor would bar all efforts by us to collect pre-bankruptcy debts from the tenant
or the lease guarantor, or their property, unless the bankruptcy court permits us to do so. A tenant or lease guarantor
bankruptcy could delay our efforts to collect past due balances under the relevant leases and could ultimately preclude
collection of these sums. If a lease is rejected by a tenant in bankruptcy, we would have only a general unsecured claim
for damages. As a result, it is likely that we would recover substantially less than the full value of any unsecured claims
we hold, if at all.
We may be unable to sell our real estate property investments when appropriate or on terms favorable to us.
Real estate property investments are illiquid and generally cannot be disposed of quickly. In addition, the federal
tax code restricts a REIT’s ability to dispose of properties that are not applicable to other types of real estate companies.
Therefore, we may not be able to vary our portfolio in response to economic or other conditions promptly or on terms
favorable to us within a time frame that we would need.
We may acquire or develop properties or acquire other real estate related companies, and this may create risks.
We may acquire or develop properties or acquire other real estate related companies when we believe that an
acquisition or ground-up development is consistent with our business strategies. We may not succeed in consummating
desired acquisitions or in completing developments on time or within budget. When we do pursue a project or
acquisition, we may not succeed in leasing newly developed or acquired properties at rents sufficient to cover the
costs of acquisition or development and operations. Difficulties in integrating acquisitions may prove costly or time-
consuming and could divert management’s attention from other activities. Acquisitions or developments in new
markets or industries where we do not have the same level of market knowledge may result in poorer than anticipated
performance. We may also abandon acquisition or development opportunities that management has begun pursuing
and consequently fail to recover expenses already incurred and will have devoted management’s time to a matter
not consummated. Furthermore, our acquisitions of new properties or companies will expose us to the liabilities of
those properties or companies, some of which we may not be aware of at the time of the acquisition. In addition,
development of our existing properties presents similar risks.
Newly acquired or re-developed properties may have characteristics or deficiencies currently unknown to us
that affect their value or revenue potential. It is also possible that the operating performance of these properties
may decline under our management. As we acquire additional properties, we will be subject to risks associated with
managing new properties, including lease-up and tenant retention. In addition, our ability to manage our growth
effectively will require us to successfully integrate our new acquisitions into our existing management structure. We
may not succeed with this integration or effectively manage additional properties, particularly in secondary markets.
Also, newly acquired properties may not perform as expected.
8
We face competition in pursuing acquisition or development opportunities that could increase our costs.
We face competition in the acquisition, development, operation and sale of real property from others engaged in
real estate investment that could increase our costs associated with purchasing and maintaining assets. Some of these
competitors may have greater financial resources than we do. This could result in competition for the acquisition of
properties for tenants who lease or consider leasing space in our existing and subsequently acquired properties and
for other real estate investment opportunities.
We do not have exclusive control over our joint venture and preferred equity investments, such that we are
unable to ensure that our objectives will be pursued.
We have invested in some properties as a co-venturer or partner, instead of owning directly. In these investments,
we do not have exclusive control over the development, financing, leasing, management and other aspects of these
investments. As a result, the co-venturer or partner might have interests or goals that are inconsistent with ours, take
action contrary to our interests or otherwise impede our objectives. These investments involve risks and uncertainties.
The co-venturer or partner may fail to provide capital or fulfill its obligations, which may result in certain liabilities to us
for guarantees and other commitments, conflicts arising between us and our partners and the difficulty of managing
and resolving such conflicts, and the difficulty of managing or otherwise monitoring such business arrangements. The
co-venturer or partner also might become insolvent or bankrupt, which may result in significant losses to us.
Although our joint venture arrangements may allow us to share risks with our joint-venture partners, these
arrangements may also decrease our ability to manage risk. Joint ventures implicate additional risks, such as:
(cid:120)(cid:3) potentially inferior financial capacity, diverging business goals and strategies and the need for our venture
partner’s continued cooperation;
(cid:120)(cid:3) our inability to take actions with respect to the joint venture activities that we believe are favorable to us if
our joint venture partner does not agree;
(cid:120)(cid:3) our inability to control the legal entity that has title to the real estate associated with the joint venture;
(cid:120)(cid:3) our lenders may not be easily able to sell our joint venture assets and investments or may view them less
favorably as collateral, which could negatively affect our liquidity and capital resources;
(cid:120)(cid:3) our joint venture partners can take actions that we may not be able to anticipate or prevent, which could
result in negative impacts on our debt and equity; and
(cid:120)(cid:3) our joint venture partners’ business decisions or other actions or omissions may result in harm to our
reputation or adversely affect the value of our investments.
Our joint venture and preferred equity investments generally own real estate properties for which the economic
performance and value is subject to all the risks associated with owning and operating real estate as described above.
We intend to continue to sell our non-strategic assets and may not be able to recover our investments, which
may result in significant losses to us.
There can be no assurance that we will be able to recover the current carrying amount of all of our non-strategic
properties and investments and those of our unconsolidated joint ventures in the future. Our failure to do so would
require us to recognize impairment charges for the period in which we reached that conclusion, which could materially
and adversely affect our business, financial condition, operating results and cash flows.
We have significant international operations, which may be affected by economic, political and other risks
associated with international operations, and this could adversely affect our business.
The risks we face in international business operations include, but are not limited to:
currency risks, including currency fluctuations;
(cid:120)(cid:3)
(cid:120)(cid:3) unexpected changes in legislative and regulatory requirements, including changes in applicable laws and
regulations in the United States that affect foreign operations;
(cid:120)(cid:3) potential adverse tax burdens;
(cid:120)(cid:3) burdens of complying with different accounting and permitting standards, labor laws and a wide variety of
foreign laws;
(cid:120)(cid:3) obstacles to the repatriation of earnings and cash;
regional, national and local political uncertainty;
(cid:120)(cid:3)
(cid:120)(cid:3) economic slowdown and/or downturn in foreign markets;
9
(cid:120)(cid:3) difficulties in staffing and managing international operations;
(cid:120)(cid:3) difficulty in administering and enforcing corporate policies, which may be different than the normal business
practices of local cultures; and
reduced protection for intellectual property in some countries.
(cid:120)(cid:3)
Each of these risks might impact our cash flow or impair our ability to borrow funds, which ultimately could
adversely affect our business, financial condition, operating results and cash flows.
Currency fluctuations between local currency and the U.S. dollar during the period in which the Company held its
investment result in a cumulative translation adjustment (“CTA”), which is recorded as a component of Accumulated
other comprehensive income (“AOCI”) on the Company’s Consolidated Balance Sheets. The CTA amounts are subject
to future changes resulting from ongoing fluctuations in the respective foreign currency exchange rates. Changes in
exchange rates are impacted by many factors that cannot be forecasted with reliable accuracy. Any change could have
a favorable or unfavorable impact on the Company’s CTA balance. The Company’s aggregate CTA net gain balance at
December 31, 2014, is $0.3 million, this amount consists of unrealized gains in Canada aggregating $15.2 million, offset
by unrealized losses in Chile aggregating $14.9 million.
Under U.S. GAAP, the Company is required to release CTA balances into earnings when the Company has
substantially liquidated its investment in a foreign entity. During 2013, the Company began selling properties within
its Latin American portfolio and during the fourth quarter 2014 the Company substantially liquidated its investment
in Mexico and Peru and recognized a loss from foreign currency translation in the amount of $140.1 million before
noncontrolling interest of $5.8 million. The Company may, in the near term, substantially liquidate its investment in Chile
which will require the then unrealized loss on foreign currency translation to be recognized as a charge against earnings.
In order to fully develop our international operations, we must overcome cultural and language barriers and
assimilate different business practices. In addition, we are required to create compensation programs, employment
policies and other administrative programs that comply with laws of multiple countries. We also must communicate and
monitor standards and directives in our international locations. Our failure to successfully manage our geographically
diverse operations could impair our ability to react quickly to changing business and market conditions and to enforce
compliance with standards and procedures. Since a portion of our revenues are generated internationally, we must
devote an appropriate level of resources to managing our international operations.
Our future success will be influenced by our ability to anticipate and effectively manage these and other risks
associated with our international operations. Any of these factors could, however, materially adversely affect our
international operations and, consequently, our financial condition, results of operations and cash flows.
We cannot predict the impact of laws and regulations affecting our international operations nor the potential
that we may face regulatory sanctions.
Our international operations include properties in Canada, Mexico and Chile and are subject to a variety of United
States and foreign laws and regulations, including the United States Foreign Corrupt Practices Act (“FCPA”). We have
policies and procedures designed to promote compliance with the FCPA and other anti-corruption laws, but we cannot
assure you that we will continue to be found to be operating in compliance with, or be able to detect violations of, any
such laws or regulations. In addition, we cannot predict the nature, scope or effect of future regulatory requirements
to which our international operations might be subject, the manner in which existing laws might be administered or
interpreted, or the potential that we may face regulatory sanctions.
We cannot assure you that our employees will adhere to our Code of Conduct or any other of our policies,
applicable anti-corruption laws, including the FCPA, or other legal requirements. Failure to comply or violations of
any applicable policies, anti-corruption laws, or other legal requirements may subject us to legal, regulatory or other
sanctions, including criminal and civil penalties and other remedial measures. We have received a subpoena from
the Enforcement Division of the SEC in connection with the SEC’s investigation, In the Matter of Wal-Mart Stores,
Inc. (FW-3678), that the SEC Staff is currently conducting with respect to possible violations of the FCPA. We are
cooperating with the SEC investigation and a parallel investigation by the U.S. Department of Justice (“DOJ”). See
“Item 3. Legal Proceedings,” below. The DOJ and the SEC have a broad range of civil and criminal sanctions under
the FCPA and other laws and regulations, which they may seek to impose against corporations and individuals in
appropriate circumstances including, but not limited to, injunctive relief, disgorgement, fines, penalties and
modifications to business practices and compliance programs. Any of these remedial measures, if applicable to us,
could have a material adverse impact on our business, results of operations, financial condition and liquidity.
10
We face risks relating to cybersecurity attacks, loss of confidential information and other business disruptions.
Our business is at risk from and may be impacted by cybersecurity attacks, including attempts to gain unauthorized
access to our confidential data and other electronic security breaches. Such cyber-attacks can range from individual
attempts to gain unauthorized access to our information technology systems to more sophisticated security threats.
While we employ a number of measures to prevent, detect and mitigate these threats including password protection,
backup servers and annual penetration testing, there is no guarantee such efforts will be successful in preventing a
cyber-attack. Cybersecurity incidents could compromise the confidential information of our tenants, employees and
third party vendors and disrupt and effect the efficiency of our business operations.
We may be unable to obtain financing through the debt and equities market, which would have a material
adverse effect on our growth strategy, our results of operations and our financial condition.
We cannot assure you that we will be able to access the capital and credit markets to obtain additional debt or
equity financing or that we will be able to obtain financing on terms favorable to us. The inability to obtain financing
on a timely basis could have negative effects on our business, such as:
(cid:120)(cid:3) we could have great difficulty acquiring or developing properties, which would materially adversely affect
our business strategy;
(cid:120)(cid:3) our liquidity could be adversely affected;
(cid:120)(cid:3) we may be unable to repay or refinance our indebtedness;
(cid:120)(cid:3) we may need to make higher interest and principal payments or sell some of our assets on terms unfavorable
to us to fund our indebtedness; or
(cid:120)(cid:3) we may need to issue additional capital stock, which could further dilute the ownership of our
existing shareholders.
Adverse changes in our credit ratings could impair our ability to obtain additional debt and equity financing on
terms favorable to us, if at all, and could significantly reduce the market price of our publicly traded securities.
We are subject to financial covenants that may restrict our operating and acquisition activities.
Our revolving credit facility, term loan and the indentures under which our senior unsecured debt is issued contain
certain financial and operating covenants, including, among other things, certain coverage ratios and limitations on
our ability to incur debt, make dividend payments, sell all or substantially all of our assets and engage in mergers and
consolidations and certain acquisitions. These covenants may restrict our ability to pursue certain business initiatives or
certain acquisition transactions that might otherwise be advantageous. In addition, failure to meet any of the financial
covenants could cause an event of default under our revolving credit facility, term loan and the indentures and/or
accelerate some or all of our indebtedness, which would have a material adverse effect on us.
Changes in market conditions could adversely affect the market price of our publicly traded securities.
The market price of our publicly traded securities depends on various market conditions, which may change
from time-to-time. Among the market conditions that may affect the market price of our publicly traded securities are
the following:
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
the extent of institutional investor interest in us;
the reputation of REITs generally and the reputation of REITs with portfolios similar to ours;
the attractiveness of the securities of REITs in comparison to securities issued by other entities, including
securities issued by other real estate companies;
(cid:120)(cid:3) our financial condition and performance;
(cid:120)(cid:3)
(cid:120)(cid:3) an increase in market interest rates, which may lead prospective investors to demand a higher distribution
the market’s perception of our growth potential, potential future cash dividends and risk profile;
rate in relation to the price paid for our shares; and
(cid:120)(cid:3) general economic and financial market conditions.
We may change the dividend policy for our common stock in the future.
The decision to declare and pay dividends on our common stock in the future, as well as the timing, amount and
composition of any such future dividends, will be at the sole discretion of our Board of Directors and will depend on
our earnings, operating cash flows, liquidity, financial condition, capital requirements, contractual prohibitions or other
11
limitations under our indebtedness including preferred stock, the annual distribution requirements under the REIT
provisions of the Code, state law and such other factors as our Board of Directors deems relevant or are requirements
under the Code or state or federal laws. Any change in our dividend policy could have a material adverse effect on the
market price of our common stock.
We may not be able to recover our investments in marketable securities mortgage receivables or other
investments, which may result in significant losses to us.
Our investments in marketable securities are subject to specific risks relating to the particular issuer of the
securities, including the financial condition and business outlook of the issuer, which may result in significant losses to
us. Marketable securities are generally unsecured and may also be subordinated to other obligations of the issuer. As
a result, investments in marketable securities are subject to risks of:
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
limited liquidity in the secondary trading market;
substantial market price volatility, resulting from changes in prevailing interest rates;
subordination to the prior claims of banks and other senior lenders to the issuer;
the possibility that earnings of the issuer may be insufficient to meet its debt service and distribution
obligations; and
the declining creditworthiness and potential for insolvency of the issuer during periods of rising interest
rates and economic downturn.
These risks may adversely affect the value of outstanding marketable securities and the ability of the issuers to
make distribution payments.
In the event of a default by a borrower, it may be necessary for us to foreclose our mortgage or engage in costly
negotiations. Delays in liquidating defaulted mortgage loans and repossessing and selling the underlying properties
could reduce our investment returns. Furthermore, in the event of default, the actual value of the property securing
the mortgage may decrease. A decline in real estate values will adversely affect the value of our loans and the value of
the mortgages securing our loans.
Our mortgage receivables may be or become subordinated to mechanics’ or materialmen’s liens or property tax
liens. In these instances we may need to protect a particular investment by making payments to maintain the current
status of a prior lien or discharge it entirely. Where that occurs, the total amount we recover may be less than our
total investment, resulting in a loss. In the event of a major loan default or several loan defaults resulting in losses, our
investments in mortgage receivables would be materially and adversely affected.
The economic performance and value of our other investments, which we do not control and are in retail
operations, are subject to risks associated with owning and operating retail businesses, including:
changes in the national, regional and local economic climate;
the adverse financial condition of some large retailing companies;
increasing use by customers of e-commerce and online store sites; and
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3) ongoing consolidation in the retail sector.
A decline in the value of our other investments may require us to recognize an other-than-temporary impairment
(“OTTI”) against such assets. When the fair value of an investment is determined to be less than its amortized cost at
the balance sheet date, we assess whether the decline is temporary or other-than-temporary. If we intend to sell an
impaired asset, or it is more likely than not that we will be required to sell the impaired asset before any anticipated
recovery, then we must recognize an OTTI through charges to earnings equal to the entire difference between the
assets amortized cost and its fair value at the balance sheet date. When an OTTI is recognized through earnings, a new
cost basis is established for the asset and the new cost basis may not be adjusted through earnings for subsequent
recoveries in fair value.
We may be subject to liability under environmental laws, ordinances and regulations.
Under various federal, state, and local laws, ordinances and regulations, we may be considered an owner or
operator of real property and may be responsible for paying for the disposal or treatment of hazardous or toxic
substances released on or in our property, as well as certain other potential costs relating to hazardous or toxic
substances (including governmental fines and injuries to persons and property). This liability may be imposed whether
or not we knew about, or were responsible for, the presence of hazardous or toxic substances.
12
Item 1B. Unresolved Staff Comments
None
Item 2. Properties
Real Estate Portfolio. As of December 31, 2014, the Company had interests in 754 shopping center properties
(the “Combined Shopping Center Portfolio”) aggregating 109.5 million square feet of gross leasable area (“GLA”)
and 533 other property interests, primarily through the Company’s preferred equity investments and other real estate
investments, totaling 11.7 million square feet of GLA, for a grand total of 1,287 properties aggregating 121.2 million
square feet of GLA, located in 41 states, Puerto Rico, Canada, Mexico and Chile. The Company’s portfolio includes
noncontrolling interests. Neighborhood and community shopping centers comprise the primary focus of the Company’s
current portfolio. As of December 31, 2014, the Company’s Combined Shopping Center Portfolio was 95.6% leased.
The Company’s neighborhood and community shopping center properties, which are generally owned and
operated through subsidiaries or joint ventures, had an average size of 145,226 square feet as of December 31, 2014.
The Company generally retains its shopping centers for long-term investment and consequently pursues a program
of regular physical maintenance together with major renovations and refurbishing to preserve and increase the value
of its properties. This includes renovating existing facades, installing uniform signage, resurfacing parking lots and
enhancing parking lot lighting. During 2014, the Company capitalized $22.2 million in connection with these property
improvements and expensed to operations $33.8 million.
The Company’s management believes its experience in the real estate industry and its relationships with numerous
national and regional tenants gives it an advantage in an industry where ownership is fragmented among a large
number of property owners. The Company’s neighborhood and community shopping centers are usually “anchored”
by a national or regional discount department store, supermarket or drugstore. As one of the original participants in
the growth of the shopping center industry and one of the nation’s largest owners and operators of shopping centers,
the Company has established close relationships with a large number of major national and regional retailers. Some
of the major national and regional companies that are tenants in the Company’s shopping center properties include
TJX Companies, The Home Depot, Wal-Mart, Kohl’s, Bed Bath & Beyond, Royal Ahold, Petsmart, Ross Stores, Best Buy
and Safeway.
A substantial portion of the Company’s income consists of rent received under long-term leases. Most of the
leases provide for the payment of fixed-base rentals monthly in advance and for the payment by tenants of an allocable
share of the real estate taxes, insurance, utilities and common area maintenance expenses incurred in operating the
shopping centers. Although many of the leases require the Company to make roof and structural repairs as needed, a
number of tenant leases place that responsibility on the tenant, and the Company’s standard small store lease provides
for roof repairs to be reimbursed by the tenant as part of common area maintenance.
Minimum base rental revenues and operating expense reimbursements accounted for 98% and other revenues,
including percentage rents, accounted for 2% of the Company’s total revenues from rental property for the year ended
December 31, 2014. The Company’s management believes that the base rent per leased square foot for many of the
Company’s existing leases is generally lower than the prevailing market-rate base rents in the geographic regions
where the Company operates, reflecting the potential for future growth.
Approximately 31.2% of the Company’s leases of consolidated properties also contain provisions requiring
the payment of additional rent calculated as a percentage of tenants’ gross sales above predetermined thresholds.
Percentage rents accounted for less than 1% of the Company’s revenues from rental property for the year ended
December 31, 2014. Additionally, a majority of the Company’s leases have provisions requiring contractual rent
increases. The Company’s leases may also include escalation clauses, which provide for increases based upon changes
in the consumer price index or similar inflation indices.
As of December 31, 2014, the Company’s consolidated operating portfolio, comprised of 57.6 million square feet
of GLA, was 95.7% leased. The U.S. properties make up the majority of the Company’s consolidated operating portfolio
consisting of 57.2 million of the total 57.6 million square feet. For the period January 1, 2014 to December 31, 2014, the
Company increased the average base rent per leased square foot, which includes the impact of tenant concessions,
in its U.S. consolidated portfolio of neighborhood and community shopping centers from $12.61 to $13.50, an increase
of $0.89. This increase primarily consists of (i) a $0.34 increase relating to acquisitions, (ii) a $0.31 increase relating to
dispositions, and (iii) an $0.24 increase relating to new leases signed net of leases vacated and rent step-ups within
the portfolio.
13
The Company has a total of 5,569 leases in the U.S. consolidated operating portfolio. The following table sets
forth the aggregate lease expirations for each of the next ten years, assuming no renewal options are exercised. For
purposes of the table, the Total Annual Base Rent Expiring represents annualized rental revenue, for each lease that
expires during the respective year. Amounts in thousands except for number of lease data:
Year Ending
December 31,
(1)
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Number of Leases
Expiring
Square Feet
Expiring
Total Annual Base
Rent Expiring
% of Gross
Annual Rent
232
600
784
873
774
724
398
219
213
210
224
106
687
3,167
6,134
7,432
6,241
6,123
4,531
2,602
2,290
2,343
3,228
1,530
$
$
$
$
$
$
$
$
$
$
$
$
12,846
47,336
80,059
100,813
89,340
84,778
58,196
34,624
32,082
33,567
45,236
18,974
1.8%
6.5%
11.0%
13.8%
12.2%
11.6%
8.0%
4.7%
4.4%
4.6%
6.2%
2.6%
(1)
Leases currently under month to month lease or in process of renewal
During 2014, the Company executed 872 leases totaling over 6.6 million square feet in the Company’s consolidated
operating portfolio comprised of 354 new leases and 518 renewals and options. The leasing costs associated with
these leases are estimated to aggregate $45.4 million or $23.73 per square foot. These costs include $35.9 million of
tenant improvements and $9.5 million of leasing commissions. The average rent per square foot on new leases was
$16.68 and on renewals and options was $12.78. The Company will seek to obtain rents that are higher than amounts
within its expiring leases, however, there are many variables and uncertainties which can significantly affect the leasing
market at any time; as such, the Company cannot guarantee that future leases will continue to be signed for rents that
are equal to or higher than current amounts.
Ground-Leased Properties. The Company has interests in 49 consolidated shopping center properties and
interests in 24 shopping center properties in unconsolidated joint ventures that are subject to long-term ground leases
where a third party owns and has leased the underlying land to the Company (or an affiliated joint venture) to construct
and/or operate a shopping center. The Company or the joint venture pays rent for the use of the land and generally is
responsible for all costs and expenses associated with the building and improvements. At the end of these long-term
leases, unless extended, the land together with all improvements revert to the landowner.
More specific information with respect to each of the Company’s property interests is set forth in Exhibit 99.1,
which is incorporated herein by reference.
Item 3. Legal Proceedings
The Company is not presently involved in any litigation nor, to its knowledge, is any litigation threatened against
the Company or its subsidiaries that, in management’s opinion, would result in any material adverse effect on the
Company’s ownership, management or operation of its properties taken as a whole, or which is not covered by the
Company’s liability insurance.
On January 28, 2013, the Company received a subpoena from the Enforcement Division of the SEC in connection
with an investigation, In the Matter of Wal-Mart Stores, Inc. (FW-3678), that the SEC Staff is currently conducting with
respect to possible violations of the Foreign Corrupt Practices Act. The Company is responding to the subpoena and
intends to cooperate fully with the SEC in this matter. The U.S. Department of Justice (“DOJ”) is conducting a parallel
investigation, and the Company is cooperating with the DOJ investigation. At this point, we are unable to predict the
duration, scope or result of the SEC or DOJ investigation.
Item 4. Mine Safety Disclosures
Not applicable.
14
PART II
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
Market Information There were no common stock offerings completed by the Company during the three-year
period ended December 31, 2014.
The table below sets forth, for the quarterly periods indicated, the high and low sales prices per share reported
on the NYSE Composite Tape and declared dividends per share for the Company’s common stock. The Company’s
common stock is traded on the NYSE under the trading symbol “KIM”.
Period
2013:
First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014:
First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock Price
High
Low
Dividends
$
$
$
$
$
$
$
$
22.49
25.09
23.24
21.83
22.70
23.63
23.82
26.04
$
$
$
$
$
$
$
$
19.41
20.25
19.68
19.22
19.61
21.41
21.54
21.56
$
$
$
$
$
$
$
$
0.21
0.21
0.21
0.225(a)
0.225
0.225
0.225
0.24(b)
(a) Paid on January 15, 2014, to stockholders of record on January 2, 2014.
(b) Paid on January 15, 2015, to stockholders of record on January 2, 2015.
Holders The number of holders of record of the Company’s common stock, par value $0.01 per share, was 2,521
as of January 31, 2015.
Dividends Since the IPO, the Company has paid regular quarterly cash dividends to its stockholders. While
the Company intends to continue paying regular quarterly cash dividends, future dividend declarations will be paid
at the discretion of the Board of Directors and will depend on the actual cash flows of the Company, its financial
condition, capital requirements, the annual distribution requirements under the REIT provisions of the Code and
such other factors as the Board of Directors deems relevant. The Company’s Board of Directors will continue to
evaluate the Company’s dividend policy on a quarterly basis as they monitor sources of capital and evaluate operating
fundamentals. The Company is required by the Code to distribute at least 90% of its REIT taxable income. The actual
cash flow available to pay dividends will be affected by a number of factors, including the revenues received from rental
properties, the operating expenses of the Company, the interest expense on its borrowings, the ability of lessees
to meet their obligations to the Company, the ability to refinance near-term debt maturities and any unanticipated
capital expenditures.
The Company has determined that the $0.90 dividend per common share paid during 2014 represented 36%
ordinary income, a 36% return of capital and 28% capital gain to its stockholders. The $0.84 dividend per common share
paid during 2013 represented 46% ordinary income, a 36% return of capital and 18% capital gain to its stockholders.
In addition to its common stock offerings, the Company has capitalized the growth in its business through
the issuance of unsecured fixed and floating-rate medium-term notes, underwritten bonds, unsecured bank debt,
mortgage debt and construction loans, convertible preferred stock and perpetual preferred stock. Borrowings under
the Company’s revolving credit facility have also been an interim source of funds to both finance the purchase of
properties and other investments and meet any short-term working capital requirements. The various instruments
15
governing the Company’s issuance of its unsecured public debt, bank debt, mortgage debt and preferred stock
impose certain restrictions on the Company with regard to dividends, voting, liquidation and other preferential rights
available to the holders of such instruments. See “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” and Footnotes 12, 13 and 16 of the Notes to Consolidated Financial Statements included in this
Form 10-K.
The Company does not believe that the preferential rights available to the holders of its Class H Preferred Stock,
Class I Preferred Stock, Class J Preferred Stock and Class K Preferred Stock, the financial covenants contained in its
public bond indentures, as amended, its term loan, or its revolving credit agreements will have an adverse impact
on the Company’s ability to pay dividends in the normal course to its common stockholders or to distribute amounts
necessary to maintain its qualification as a REIT.
The Company maintains a dividend reinvestment and direct stock purchase plan (the “Plan”) pursuant to which
common and preferred stockholders and other interested investors may elect to automatically reinvest their dividends
to purchase shares of the Company’s common stock or, through optional cash payments, purchase shares of the
Company’s common stock. The Company may, from time-to-time, either (i) purchase shares of its common stock in
the open market or (ii) issue new shares of its common stock for the purpose of fulfilling its obligations under the Plan.
Issuer Purchases of Equity Securities During the year ended December 31, 2014, the Company repurchased
128,147 shares in connection with common shares surrendered or deemed surrendered to the Company to satisfy
statutory minimum tax withholding obligations in connection with the vesting of restricted stock awards under the
Company’s equity-based compensation plans. The Company expended approximately $2.8 million to repurchase
these shares.
Period
January 1, 2014 - January 31, 2014 . . . . .
February 1, 2014 - February 28, 2014 . . . .
March 1, 2014 - March 31, 2014 . . . . . .
April 1, 2014 - April 30, 2014 . . . . . . .
May 1, 2014 - May 31, 2014 . . . . . . . .
June 1, 2014 - June 30, 2014 . . . . . . .
July 1, 2014 - July 31, 2014 . . . . . . . .
August 1, 2014 - August 31, 2014. . . . . .
September 1, 2014 - December 31, 2014. . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total
Number of
Shares
Purchased
2,329
83,826
39,678
-
557
302
789
666
-
128,147
Average
Price
Paid per
Share
$
$
$
$
$
$
$
$
$
$
20.01
21.37
22.01
-
22.73
23.40
23.51
22.37
-
22.13
Total Number of
Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs
Approximate Dollar
Value of Shares
that May Yet Be
Purchased Under the
Plans or Programs
(in millions)
-
-
-
-
-
-
-
-
-
-
$
$
-
-
-
-
-
-
-
-
-
-
16
Total Stockholder Return Performance The following performance chart compares, over the five years ended
December 31, 2014, the cumulative total stockholder return on the Company’s common stock with the cumulative total
return of the S&P 500 Index and the cumulative total return of the NAREIT Equity REIT Total Return Index (the “NAREIT
Equity Index”) prepared and published by the National Association of Real Estate Investment Trusts (“NAREIT”). Equity
real estate investment trusts are defined as those which derive more than 75% of their income from equity investments
in real estate assets. The NAREIT Equity Index includes all tax qualified equity real estate investment trusts listed on
the New York Stock Exchange, American Stock Exchange or the NASDAQ National Market System. Stockholder return
performance, presented quarterly for the five years ended December 31, 2014, is not necessarily indicative of future
results. All stockholder return performance assumes the reinvestment of dividends. The information in this paragraph
and the following performance chart are deemed to be furnished, not filed.
Historical Total Return Analysis
(December 2009 to December 2014)
250
200
)
$
(
s
r
a
l
l
o
D
150
100
50
0
KIM: 126.71%
NAREIT: 118.10%
S&P 500: 104.95%
Source: NAREIT, Bloomberg
Kimco
S&P 500
NAREIT Equity
17
Item 6. Selected Financial Data
The following table sets forth selected, historical, consolidated financial data for the Company and should be
read in conjunction with the Consolidated Financial Statements of the Company and Notes thereto and Management’s
Discussion and Analysis of Financial Condition and Results of Operations included in this Form 10-K.
The Company believes that the book value of its real estate assets, which reflects the historical costs of such real
estate assets less accumulated depreciation, is not indicative of the current market value of its properties. Historical
operating results are not necessarily indicative of future operating performance.
Operating Data:
Revenues from rental properties (1) . . . . . . . . . $
Interest expense (3) . . . . . . . . . . . . . . . . . . . . . . $
Early extinguishment of debt charges . . . . . . . $
Depreciation and amortization (3) . . . . . . . . . . $
Gain on sale of development properties. . . . . $
Gain on sale of operating properties,
net of tax (3) . . . . . . . . . . . . . . . . . . . . . . . . . . $
Provision for income taxes, net (4) . . . . . . . . . . $
Impairment charges (5) . . . . . . . . . . . . . . . . . . . $
Income from continuing operations (6) . . . . . . $
Income per common share, from
continuing operations:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Weighted average number of shares of
common stock:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends declared per
2014
Year ended December 31, (2)
2012
2013
(in thousands, except per share information)
2011
2010
958,888 $
203,759 $
- $
258,074 $
- $
825,210 $
212,240 $
- $
224,713 $
- $
755,851 $
223,736 $
- $
214,827 $
- $
698,211 $
219,599 $
- $
197,956 $
12,074 $
389 $
22,438 $
39,808 $
375,133 $
1,432 $
32,654 $
32,247 $
276,884 $
4,299 $
15,603 $
10,289 $
172,760 $
108 $
24,928 $
13,077 $
100,059 $
673,367
219,766
10,811
188,706
2,080
2,377
6,279
32,661
65,091
0.77 $
0.77 $
0.53 $
0.53 $
0.19 $
0.19 $
0.10 $
0.10 $
0.03
0.03
409,088
411,038
407,631
408,614
405,997
406,689
406,530
407,669
405,827
406,201
common share . . . . . . . . . . . . . . . . . . . . . . . . $
0.915 $
0.855 $
0.78 $
0.73 $
0.66
2014
2013
December 31,
2012
(in thousands)
2011
2010
Balance Sheet Data:
Real estate, before accumulated
depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,018,226 $ 9,123,344 $ 8,947,287 $ 8,771,257 $ 8,592,760
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,285,728 $ 9,663,630 $ 9,751,234 $ 9,628,762 $ 9,833,875
4,620,298 $ 4,221,401 $ 4,195,317 $ 4,114,385 $ 4,058,987
Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
4,774,785 $ 4,632,417 $ 4,765,160 $ 4,686,386 $ 4,935,842
Total stockholders’ equity . . . . . . . . . . . . . . . . . $
Cash flow provided by operations . . . . . . . . . . $
Cash flow provided by/(used for)
629,343 $
570,035 $
479,054 $
448,613 $
479,935
investing activities . . . . . . . . . . . . . . . . . . . . . $
Cash flow used for financing activities. . . . . . . $
126,705 $
(717,494) $
72,235 $
(635,377) $
(51,000) $
(399,061) $
(20,760) $
(440,125) $
37,904
(514,743)
(1) Does not include revenues (i) from rental property relating to unconsolidated joint ventures, (ii) relating to the investment in
retail store leases and (iii) from properties included in discontinued operations.
(2) All years have been adjusted to reflect the impact of operating properties sold during the years ended December 31, 2014,
2013, 2012, 2011 and 2010, which are reflected in discontinued operations in the Consolidated Statements of Income.
(3) Does not include amounts reflected in discontinued operations.
(4) Does not include amounts reflected in discontinued operations. Amounts include income taxes related to gain on
transfer/sale of operating properties.
(5) Amounts exclude noncontrolling interests and amounts reflected in discontinued operations.
(6) Amounts
include gain on transfer/sale of operating properties, net of tax and net
income attributable to
noncontrolling interests.
18
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes
thereto included in this Form 10-K. Historical results and percentage relationships set forth in the Consolidated
Statements of Income contained in the Consolidated Financial Statements, including trends, should not be taken as
indicative of future operations.
Executive Summary
Kimco Realty Corporation is one of the nation’s largest publicly-traded owners and operators of neighborhood
and community shopping centers. As of December 31, 2014, the Company had interests in 754 shopping center
properties (the “Combined Shopping Center Portfolio”), aggregating 109.5 million square feet of gross leasable area
(“GLA”) and 533 other property interests, primarily through the Company’s preferred equity investments and other
real estate investments, totaling 11.7 million square feet of GLA, for a grand total of 1,287 properties aggregating
121.2 million square feet of GLA, located in 41 states, Puerto Rico, Canada, Mexico, and Chile.
The executive officers are engaged in the day-to-day management and operation of real estate exclusively with
the Company, with nearly all operating functions, including leasing, asset management, maintenance, construction,
legal, finance and accounting, administered by the Company.
The Company’s strategy is to be the premier owner and operator of neighborhood and community shopping
centers through investments primarily in the U.S. To achieve this strategy the Company is (i) striving to transform the
quality of its portfolio by disposing of lesser quality assets and acquiring larger higher quality properties in key markets
identified by the Company, (ii) simplifying its business by exiting Mexico and South America and reducing the number
of joint venture investments and (iii) pursuing redevelopment opportunities within its portfolio to increase overall value
and certain development opportunities for long-term investment. The Company has an active capital recycling program
and during the second quarter of 2014, the Company implemented a plan to accelerate the disposition of certain non-
strategic U.S. properties. This plan effectively shortened the Company’s anticipated hold period for these properties
and as such caused the Company to recognize impairment charges on certain consolidated operating properties. If
the Company accepts sales prices for these assets that are less than their net carrying values, the Company would be
required to take additional impairment charges. In order to execute the Company’s strategy, the Company intends to
continue to strengthen its balance sheet by pursuing deleveraging efforts over time, providing it the necessary flexibility
to invest opportunistically and selectively, primarily focusing on neighborhood and community shopping centers in
the U.S. The Company also has an institutional management business with domestic and foreign institutional partners
for the purpose of investing in neighborhood and community shopping centers. In an effort to further its simplification
strategy, the Company is actively pursuing opportunities to reduce its institutional management business through
partner buy-outs, property acquisitions from institutional joint ventures and/or third party property sales.
The following highlights the Company’s significant transactions, events and results that occurred during the year
ended December 31, 2014:
Portfolio Information:
(cid:120)(cid:3) Net income available to common shareholders increased by $187.7 million to $365.7 million for the year
ended December 31, 2014, as compared to $178.0 million for the corresponding period in 2013.
(cid:120)(cid:3) Funds from operations (“FFO”) increased from $1.35 per diluted share for the year ended December 31,
2013, to $1.45 per diluted share for the year ended December 31, 2014 (see additional disclosure on FFO
beginning on page 36).
(cid:120)(cid:3) FFO as adjusted increased from $1.33 per diluted share for the year ended December 31, 2013, to $1.40 per
diluted share for the year ended December 31, 2014 (see additional disclosure on FFO beginning on page 36).
(cid:120)(cid:3) Combined Same Property net operating income (“NOI”) increased 2.5% for the year ended December 31,
2014, as compared to the corresponding period in 2013; excluding the negative impact of foreign currency
fluctuation, this increase would have been 3.3% (see additional disclosure on NOI beginning on page 38).
19
(cid:120)(cid:3) Occupancy rose from 94.6% at December 31, 2013, to 95.6% at December 31, 2014 in the Combined
Shopping Center Portfolio.
(cid:120)(cid:3) Occupancy rose from 94.9% at December 31, 2013, to 95.7% at December 31, 2014 for the U.S. combined
shopping center portfolio.
(cid:120)(cid:3) Generated U.S. cash-basis leasing spreads of 8.8%; new leases increased 19.5% and renewals/options
increased 6.3%.
(cid:120)(cid:3) Executed 2,124 leases, renewals and options totaling approximately 9.8 million square feet in the Combined
Shopping Center Portfolio.
Acquisition Activity (see Footnotes 3 and 7 of the Notes to Consolidated Financial Statements included in this
Form 10-K):
(cid:120)(cid:3) Acquired 63 shopping center properties and five outparcels comprising an aggregate 7.1 million square
feet of GLA, for an aggregate purchase price of $1.4 billion including the assumption of $702.6 million
of non-recourse mortgage debt encumbering 53 of the properties. The Company acquired 34 of these
properties for an aggregate sales price of $1.0 billion from joint ventures in which the Company held
noncontrolling ownership interests. The Company evaluated these transactions pursuant to the Financial
Accounting Statements Boards (“FASB”) Consolidation guidance. As such, the Company recognized an
aggregate gain of $107.2 million from the fair value adjustment associated with its original ownership due
to a change in control.
(cid:120)(cid:3) Additionally, during the year ended December 31, 2014, the Company acquired $53.5 million in land related
to three development projects which will be held as long-term investments. The Company anticipates
completing these projects over the next four years.
U.S. Disposition Activity (see Footnotes 4, 5, and 6 of the Notes to Consolidated Financial Statements included in this
Form 10-K):
(cid:120)(cid:3) During 2014, the Company disposed of 63 operating properties, in separate transactions, for an aggregate
sales price of $535.8 million. These transactions, which are included in Discontinued Operations, resulted
in an aggregate gain of $166.6 million, before income taxes of $8.7 million, and aggregate impairment
charges of $60.4 million, before income tax benefits of $2.0 million.
Latin America Disposition Activity (see Footnotes 4, 5, 6 and 7 of Notes to the Consolidated Financial Statements
included in this Form 10-K):
(cid:120)(cid:3) During 2014, the Company sold 27 consolidated properties in its Latin American portfolio for an aggregate
sales price of $297.7 million. These transactions, which are included in Discontinued Operations, resulted
in an aggregate gain of $33.4 million, after income taxes of $3.3 million and aggregate impairment charges
of $24.7 million.
(cid:120)(cid:3) During 2014, joint ventures in which the Company held noncontrolling interests sold 14 operating properties
located throughout Mexico for $324.5 million. These transactions resulted in an aggregate net gain to the
Company of $40.0 million, after income tax, and aggregate impairment charges of $0.9 million.
(cid:120)(cid:3) These transactions contributed to the Company’s substantial liquidation of its investment in Mexico and
Peru during the fourth quarter, which resulted in the release of a cumulative foreign currency translation loss
of $134.4 million, after noncontrolling interests of $5.8 million. This loss has been recorded on the Company’s
Consolidated Statements of Income as follows: (i) $92.9 million is included in Impairment/loss on operating
properties, net of tax, within Discontinued operations (ii) $47.3 million is included in Equity in income of
joint ventures, net and (iii) $5.8 million is included in Net income attributable to noncontrolling interest.
Capital Activity (for additional details see Liquidity and Capital Resources below):
(cid:120)(cid:3) During March 2014, the Company established a new $1.75 billion unsecured revolving credit facility (the
“Credit Facility”) with a group of banks, which is scheduled to expire in March 2018, with two additional
six-month options to extend the maturity date, at the Company’s discretion, to March 2019. The Credit
Facility, which can be increased to $2.25 billion through an accordion feature, accrues interest at a rate of
LIBOR plus 92.5 basis points on drawn funds.
20
(cid:120)(cid:3) During 2014, the Company issued $500.0 million of 7-year Senior Unsecured Notes at an interest rate of
3.20% payable semi-annually in arrears which are scheduled to mature in May 2021. Net proceeds were used
for general corporate purposes including reducing borrowings under the Credit Facility and repayment of
maturing debt.
(cid:120)(cid:3) Also during 2014, the Company repaid (i) its $100.0 million 5.95% senior unsecured notes, which matured
in June 2014 and (ii) its remaining $194.6 million 4.82% senior unsecured notes, which also matured in
June 2014.
(cid:120)(cid:3) The Company repaid its 1.0 billion Mexican peso (“MXN”) (USD $76.3 million) term loan which was scheduled
to mature in March 2018, and bore interest at a rate equal to TIIE (Equilibrium Interbank Interest Rate) plus
1.35% during September 2014.
Critical Accounting Policies
The Consolidated Financial Statements of the Company include the accounts of the Company, its wholly-owned
subsidiaries and all entities in which the Company has a controlling interest, including where the Company has been
determined to be a primary beneficiary of a variable interest entity in accordance with the consolidation guidance
of the FASB Accounting Standards Codification (“ASC”). The Company applies these provisions to each of its joint
venture investments to determine whether the cost, equity or consolidation method of accounting is appropriate. The
preparation of financial statements in conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions in certain circumstances that affect amounts reported
in the accompanying Consolidated Financial Statements and related notes. In preparing these financial statements,
management has made its best estimates and assumptions that affect the reported amounts of assets and liabilities.
These estimates are based on, but not limited to, historical results, industry standards and current economic conditions,
giving due consideration to materiality. The most significant assumptions and estimates relate to revenue recognition
and the recoverability of trade accounts receivable, depreciable lives, valuation of real estate and intangible assets
and liabilities, valuation of joint venture investments and other investments, realizability of deferred tax assets and
uncertain tax positions. Application of these assumptions requires the exercise of judgment as to future uncertainties,
and, as a result, actual results could materially differ from these estimates.
The Company is required to make subjective assessments as to whether there are impairments in the value of
its real estate properties, investments in joint ventures, marketable securities and other investments. The Company’s
reported net earnings are directly affected by management’s estimate of impairments and/or valuation allowances.
Revenue Recognition and Accounts Receivable
Base rental revenues from rental property are recognized on a straight-line basis over the terms of the related
leases. Certain of these leases also provide for percentage rents based upon the level of sales achieved by the lessee.
These percentage rents are recorded once the required sales level is achieved. Operating expense reimbursements
are recognized as earned. Rental income may also include payments received in connection with lease termination
agreements. In addition, leases typically provide for reimbursement to the Company of common area maintenance,
real estate taxes and other operating expenses.
The Company makes estimates of the uncollectability of its accounts receivable related to base rents, straight-
line rent, expense reimbursements and other revenues. The Company analyzes accounts receivable and historical bad
debt levels, customer credit-worthiness and current economic trends when evaluating the adequacy of the allowance
for doubtful accounts. In addition, tenants in bankruptcy are analyzed and estimates are made in connection with
the expected recovery of pre-petition and post-petition claims. The Company’s reported net earnings are directly
affected by management’s estimate of the collectability of accounts receivable.
Real Estate
The Company’s investments in real estate properties are stated at cost, less accumulated depreciation and
amortization. Expenditures for maintenance and repairs are charged to operations as incurred. Significant renovations
and replacements, which improve and extend the life of the asset, are capitalized.
Upon acquisition of real estate operating properties, the Company estimates the fair value of acquired tangible
assets (consisting of land, building, building improvements and tenant improvements) and identified intangible assets
and liabilities (consisting of above and below-market leases, in-place leases and tenant relationships, where applicable),
assumed debt and redeemable units issued at the date of acquisition, based on evaluation of information and estimates
available at that date. Fair value is determined based on an exit price approach, which contemplates the price that
21
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. If, up to one year from the acquisition date, information regarding fair value of the assets
acquired and liabilities assumed is received and estimates are refined, appropriate adjustments, if material, are made
to the purchase price allocation on a retrospective basis. The Company expenses transaction costs associated with
business combinations in the period incurred.
Depreciation and amortization are provided on the straight-line method over the estimated useful lives of the
assets, as follows:
Buildings and building improvements
Fixtures, leasehold and tenant improvements
15 to 50 years
Terms of leases or useful
(including certain identified intangible assets)
lives, whichever is shorter
The Company is required to make subjective assessments as to the useful lives of its properties for purposes
of determining the amount of depreciation to reflect on an annual basis with respect to those properties. These
assessments have a direct impact on the Company’s net earnings.
On a continuous basis, management assesses whether there are any indicators, including property operating
performance, changes in anticipated holding period and general market conditions, that the value of the real estate
properties (including any related amortizable intangible assets or liabilities) may be impaired. A property value is
considered impaired only if management’s estimate of current and projected operating cash flows (undiscounted and
unleveraged) of the property over its anticipated hold period is less than the net carrying value of the property. Such
cash flow projections consider factors such as expected future operating income, trends and prospects, as well as the
effects of demand, competition and other factors. To the extent impairment has occurred, the carrying value of the
property would be adjusted to reflect the estimated fair value of the property.
When a real estate asset is identified by management as held-for-sale, the Company ceases depreciation of the
asset and estimates the sales price of such asset net of selling costs. If, in management’s opinion, the net sales price of
the asset is less than the net book value of such asset, an adjustment to the carrying value would be recorded to reflect
the estimated fair value of the property.
Investments in Unconsolidated Joint Ventures
The Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting
as the Company exercises significant influence, but does not control, these entities. These investments are recorded
initially at cost and are subsequently adjusted for cash contributions and distributions. Earnings for each investment
are recognized in accordance with each respective investment agreement and, where applicable, are based upon an
allocation of the investment’s net assets at book value as if the investment was hypothetically liquidated at the end of
each reporting period.
The Company’s joint ventures and other real estate investments primarily consist of co-investments with
institutional and other joint venture partners in neighborhood and community shopping center properties, consistent
with its core business. These joint ventures typically obtain non-recourse third-party financing on their property
investments, thus contractually limiting the Company’s exposure to losses to the amount of its equity investment, and,
due to the lender’s exposure to losses, a lender typically will require a minimum level of equity in order to mitigate
its risk. The Company’s exposure to losses associated with its unconsolidated joint ventures is primarily limited to
its carrying value in these investments. The Company, on a limited selective basis, obtained unsecured financing for
certain joint ventures. These unsecured financings are guaranteed by the Company with guarantees from the joint
venture partners for their proportionate amounts of any guaranty payment the Company is obligated to make.
On a continuous basis, management assesses whether there are any indicators, including property operating
performance and general market conditions, that the value of the Company’s investments in unconsolidated joint
ventures may be impaired. An investment’s value is impaired only if management’s estimate of the fair value of
the investment is less than the carrying value of the investment and such difference is deemed to be other-than-
temporary. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of
the investment over the estimated fair value of the investment.
The Company’s estimated fair values are based upon a discounted cash flow model for each joint venture that
includes all estimated cash inflows and outflows over a specified holding period and, where applicable, any estimated
debt premiums. Capitalization rates, discount rates and credit spreads utilized in these models are based upon rates
that the Company believes to be within a reasonable range of current market rates.
22
Realizability of Deferred Tax Assets and Uncertain Tax Positions
The Company is subject to federal, state and local income taxes on the income from its activities relating to its
TRS activities and subject to local taxes on certain non-U.S. investments. The Company accounts for income taxes
using the asset and liability method, which requires that deferred tax assets and liabilities be recognized based on
future tax consequences of temporary differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply in the years in which temporary differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period when the changes
are enacted.
A reduction of the carrying amounts of deferred tax assets by a valuation allowance is required, if based on
the evidence available, it is more likely than not (a likelihood of more than 50 percent) that some portion or all of the
deferred tax assets will not be realized. The valuation allowance should be sufficient to reduce the deferred tax asset
to the amount that is more likely than not to be realized.
The Company considers all available evidence, both positive and negative, to determine whether, based on
the weight of that evidence, a valuation allowance is needed. Information about an enterprise’s current financial
position and its results of operations for the current and preceding years is supplemented by all currently available
information about future years. The Company must use judgment in considering the relative impact of negative and
positive evidence.
The Company believes, when evaluating deferred tax assets within its taxable REIT subsidiaries, special
consideration should be given to the unique relationship between the Company as a REIT and its taxable REIT
subsidiaries. This relationship exists primarily to protect the REIT’s qualification under the Code by permitting, within
certain limits, the REIT to engage in certain business activities in which the REIT cannot directly participate. As such,
the REIT controls which and when investments are held in, or distributed or sold from, its taxable REIT subsidiaries. This
relationship distinguishes a REIT and taxable REIT subsidiary from an enterprise that operates as a single, consolidated
corporate taxpayer.
The Company primarily utilizes a twenty year projection of pre-tax book income and taxable income as positive
evidence to overcome any negative evidence. Although items of income and expense utilized in the projection are
objectively verifiable there is also significant judgment used in determining the duration and timing of events that would
impact the projection. Based upon the Company’s analysis of positive and negative evidence the Company will make
a determination of the need for a valuation allowance against its deferred tax assets. If future income projections do
not occur as forecasted, the Company will reevaluate the need for a valuation allowance. In addition, the Company can
employ additional strategies to realize its deferred tax assets, including transferring a greater portion of its property
management business to the TRS, sale of certain built-in gain assets, and reducing intercompany debt.
The Company recognizes and measures benefits for uncertain tax positions, which requires significant judgment
from management. Although the Company believes it has adequately reserved for any uncertain tax positions, no
assurance can be given that the final tax outcome of these matters will not be different. The Company adjusts these
reserves in light of changing facts and circumstances, such as the closing of a tax audit or the refinement of an estimate.
Changes in the recognition or measurement of uncertain tax positions could result in material increases or decreases
in the Company’s income tax expense in the period in which a change is made, which could have a material impact
on operating results (see Footnote 21 of the Notes to Consolidated Financial Statements included in this Form 10-K).
Results of Operations
Comparison 2014 to 2013
2014
Revenues from rental properties (1) . . . . . . . . . . . . . .
Rental property expenses: (2)
Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating and maintenance . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization (3) . . . . . . . . . . . . . . .
$
$
$
$
23
2013
(amounts in millions)
$
825.2
$
958.9
Increase
% change
133.7
16.2%
14.3
124.7
119.7
258.7
258.1
$
$
$
13.3
108.7
99.4
221.4
224.7
$
$
$
1.0
16.0
20.3
37.3
33.4
7.5%
14.7%
20.4%
16.8%
14.9%
(1)
(2)
Revenues from rental property increased primarily from the combined effect of (i) the acquisition of operating properties
during 2014 and 2013, providing incremental revenues for the year ended December 31, 2014, of $110.1 million, as compared
to the corresponding period in 2013 and (ii) an overall increase in the consolidated shopping center portfolio occupancy to
95.7% at December 31, 2014, as compared to 94.0% at December 31, 2013, the completion of certain redevelopment projects,
tenant buyouts and net growth in the current portfolio, providing incremental revenues for the year ended December 31,
2014, of $23.6 million, as compared to the corresponding period in 2013.
Rental property expenses include (i) rent expense relating to ground lease payments for which the Company is the lessee,
(ii) real estate tax expense for consolidated properties for which the Company has a controlling ownership interest and
(iii) operating and maintenance expense, which consists of property related costs including repairs and maintenance
costs, roof repair, landscaping, parking lot repair, snow removal, utilities, property insurance costs, security and various
other property related expenses. Rental property expenses increased for the year ended December 31, 2014, as compared
to the corresponding period in 2013, primarily due to acquisitions of properties during 2014 and 2013, resulting in (i) an
increase in real estate taxes of $16.0 million, (ii) an increase in repairs and maintenance costs of $6.8 million, (iii) an increase
in snow removal costs of $3.4 million, (iv) an increase in property services of $3.7 million, (v) an increase in utilities expense of
$1.8 million and (vi) an increase in insurance expense of $3.9 million, due to an increase in insurance claims.
(3) Depreciation and amortization increased for the year ended December 31, 2014, as compared to the corresponding period
in 2013, primarily due to operating property acquisitions during 2014 and 2013.
General and administrative costs include employee-related expenses (salaries, bonuses, equity awards, benefits,
severance costs and payroll taxes), professional fees, office rent, travel expense, and other company-specific expenses.
General and administrative expenses decreased $5.3 million to $122.2 million for the year ended December 31, 2014,
as compared to $127.5 million for the corresponding period in 2013. This decrease is primarily due to a decrease in
professional fees of $3.4 million in connection with the Company’s response to a subpoena from the Enforcement
Division of the SEC and a parallel investigation by the DOJ, in connection with the investigation of Wal-Mart Stores, Inc.
with respect to the Foreign Corrupt Practices Act (see Item 3) and a decrease in personnel related costs of $1.8 million
for the year ended December 31, 2014, as compared to the corresponding period in 2013.
During the year ended December 31, 2014, the Company recognized impairment charges of $217.8 million, of which
$178.0 million, before income tax benefits of $1.7 million, is included in discontinued operations. These impairment
charges consist of (i) $118.4 million related to adjustments to property carrying values, (ii) the release of a cumulative
foreign currency translation loss of $92.9 million relating to the substantial liquidation of the Company’s investment
in Mexico, (iii) $4.8 million related to a cost method investment and (iv) $1.6 million related to a preferred equity
investment. The adjustments to property carrying values were recognized in connection with the Company’s efforts to
market certain properties and management’s assessment as to the likelihood and timing of such potential transactions
and the anticipated hold period for such properties. During the second quarter ended June 30, 2014, the Company
implemented a plan to accelerate its disposition of certain properties. This plan effectively shortened the Company’s
anticipated hold period for these properties and as a result the Company recognized impairment charges on various
operating properties. Certain of the calculations to determine fair value utilized unobservable inputs and as such are
classified as Level 3 of the fair value hierarchy. For additional disclosure, see Footnote 15 of the Notes to Consolidated
Financial Statements included in this Form 10-K.
During the year ended December 31, 2013, the Company recognized impairment charges of $190.2 million of
which $158.0 million, before noncontrolling interests and income tax, is included in discontinued operations. These
impairment charges consist of (i) $175.6 million related to adjustments to property carrying values, (ii) $10.4 million
related to a cost method investment, (iii) $1.0 million related to certain joint venture investments and (iv) $3.2 million
related to a preferred equity investment. Certain of the calculations to determine fair value utilized unobservable
inputs and as such are classified as Level 3 of the fair value hierarchy. For additional disclosure, see Footnote 15 of the
Notes to Consolidated Financial Statements included in this Form 10-K.
Interest, dividends and other investment income decreased $15.8 million to $1.0 million for the year ended
December 31, 2014, as compared to $16.8 million for the corresponding period in 2013. This decrease is primarily
due to (i) a decrease in realized gains of $12.1 million resulting from the sale of certain marketable securities during
the year ended December 31, 2013, (ii) a decrease in excess cash distributions related to cost method investments of
$2.8 million for the year ended December 31, 2013 and (iii) a decrease in dividend income of $1.2 million resulting from
the sale of certain marketable securities during the year ended December 31, 2013.
24
Other (expense)/income, net changed $9.7 million to an expense of $8.5 million for the year ended December 31,
2014, as compared to income of $1.2 million for the corresponding period in 2013. This change is primarily due to a
decrease in gains from land sales of $8.0 million and an increase in acquisition related costs of $1.4 million related to an
increase in acquisitions during 2014 as compared to 2013.
Interest expense decreased $8.4 million to $203.8 million for the year ended December 31, 2014, as compared to
$212.2 million for the year ended December 31, 2013. This decrease is primarily related to lower implied interest rates
and reduced borrowing levels during 2014, as compared to 2013.
Provision for income taxes, net decreased $10.3 million to $22.4 million for the year ended December 31, 2014, as
compared to $32.7 million for the corresponding period in 2013. This change is primarily due to (i) a decrease in foreign
tax expense of $9.5 million primarily relating to the sale of certain unconsolidated properties during 2013 within the
Company’s Latin American portfolio which were subject to foreign taxes at a consolidated reporting entity level offset
by an increase in other foreign uncertain tax positions of $5.5 million, (ii) a decrease in tax provision of $9.1 million
relating to a change in control gain recognized during the year ended December 31, 2013, (iii) a decrease in tax provision
of $3.4 million related to gains on land sales during 2013, and (iv) a decrease in tax provision of $2.4 million related to
gains on sale of certain marketable securities during 2013, partially offset by (v) a partial release of the deferred tax
valuation allowance of $8.7 million during the year ended December 31, 2013 related to the Company’s FNC Realty
Corp. (“FNC”) portfolio based on the Company’s estimated future earnings of FNC and (vi) a decrease in tax benefit of
$4.3 million relating to equity losses recognized in connection with the Company’s Albertson’s investment.
Equity in income of joint ventures, net decreased $49.1 million to $159.6 million for the year ended December 31,
2014, as compared to $208.7 million for the corresponding period in 2013. This decrease is primarily the result of
(i) the release of a cumulative foreign currency translation loss of $47.3 million relating to the substantial liquidation
of the Company’s investment in Mexico, (ii) a decrease in gains of $21.7 million resulting from the sale of properties
within various joint venture investments and interests in joint ventures primarily located in Latin America during 2013,
(iii) a decrease in equity in income of $1.4 million due to the sale of the InTown portfolio in 2013 and (iv) a decrease
of equity in income of $7.5 million related to the sale of various joint ventures within the Company’s Latin American
portfolio during 2014, partially offset by (v) an increase in equity in income of $15.6 million primarily resulting from a
cash distribution received in excess of the Company’s carrying basis during 2014, and (vi) a decrease in impairment
charges of $8.2 million relating to various joint venture properties primarily located in Mexico taken during the year
ended 2013, as compared to 2014.
During 2014, the Company acquired 34 properties from joint ventures in which the Company had noncontrolling
interests. The Company recorded an aggregate net gain on change in control of interests of $107.2 million related to
the fair value adjustment associated with its original ownership of these properties.
During 2013, the Company acquired four properties from joint ventures in which the Company had noncontrolling
interests. The Company recorded an aggregate net gain on change in control of interests of $21.7 million related to the
fair value adjustment associated with its original ownership of these properties.
Equity in income from other real estate investments, net increased $6.9 million to $38.0 million for the year ended
December 31, 2014, as compared to $31.1 million for the corresponding period in 2013. This increase is primarily due
to an increase of $10.7 million in equity in income, resulting from lower net losses in the Albertson’s joint venture
during the year ended December 31, 2014, as compared to the corresponding period in 2013, partially offset by a
decrease of $5.8 million in earnings from the Company’s Preferred Equity Program primarily resulting from the sale of
the Company’s interests in certain preferred equity investments during 2014 and 2013.
During 2014, the Company disposed of 90 operating properties, in separate transactions, for an aggregate sales
price of $833.5 million, including 27 operating properties in Latin America. These transactions, which are included in
Discontinued Operations on the Company’s Consolidated Statements of Income, resulted in (i) an aggregate gain
of $203.3 million, before income taxes of $12.0 million (ii) the release of a cumulative foreign currency translation
loss of $92.9 million relating to the substantial liquidation of the Company’s investment in Mexico and (iii) aggregate
impairment charges of $85.1 million before income tax benefits of $1.7 million.
During 2013, the Company disposed of 36 operating properties and three out-parcels in separate transactions,
for an aggregate sales price of $279.5 million. These transactions, which are included in Discontinued operations in
the Company’s Consolidated Statements of Income, resulted in an aggregate gain of $25.4 million and impairment
charges of $61.9 million, before income tax.
25
Additionally, during 2013, the Company sold eight properties in its Latin American portfolio for an aggregate
sales price of $115.4 million. These transactions, which are included in Discontinued operations in the Company’s
Consolidated Statements of Income, resulted in an aggregate gain of $23.3 million, before income taxes, and
aggregate impairment charges of $26.9 million (including the release of a cumulative foreign currency translation loss
of $7.8 million associated with the sale of the Company’s interest in two properties within Brazil, which represents a full
liquidation of the Company’s investment in Brazil), before income taxes.
Net income attributable to the Company increased $187.7 million to $424.0 million for the year ended
December 31, 2014, as compared to $236.3 million for the corresponding period in 2013. On a diluted per share
basis, net income attributable to the Company was $0.89 for 2014, as compared to net income of $0.43 for 2013.
These changes are primarily attributable to (i) incremental earnings due to the acquisition of operating properties
during 2014 and 2013 and increased profitability from the Company’s operating properties, (ii) an increase in gains on
sale of operating properties, (iii) an increase in gain on change in control of interests, (iv) a decrease in tax provision
relating to decreased gains on sales from joint venture properties during 2014, and (v) an increase in equity in income
of other real estate investments, net, partially offset by, (vi), a decrease in equity in income of joint ventures, net,
including the release of a cumulative foreign currency translation loss relating to the substantial liquidation of the
Company’s Mexican Portfolio (vii) a decrease in interest, dividends and other investment income, (viii) a decrease in
other income/(expense), net and (ix) an increase in impairment charges, including the release of a cumulative foreign
currency translation loss relating to the substantial liquidation of the Company’s Mexican Portfolio, during the year
ended December 31, 2014, as compared to the corresponding period in 2013.
Results of Operations
Comparison 2013 to 2012
2013
Revenues from rental properties (1) . . . . . . . . . . . . . . .
Rental property expenses: (2)
Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating and maintenance . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization (3) . . . . . . . . . . . . . . . .
$
$
$
$
2012
(amounts in millions)
$
755.9
$
825.2
13.3
108.7
99.4
221.4
224.7
$
$
$
12.7
101.8
92.4
206.9
214.8
$
$
$
Increase % change
69.3
0.6
6.9
7.0
14.5
9.9
9.2%
4.7%
6.8%
7.6%
7.0%
4.6%
(1)
(2)
Revenues from rental properties increased primarily from the combined effect of (i) the acquisition of operating properties
during 2013 and 2012, providing incremental revenues for the year ended December 31, 2013 of $46.5 million, as compared
to the corresponding period in 2012, (ii) an overall increase in the consolidated shopping center portfolio occupancy to
94.0% at December 31, 2013, as compared to 93.4% at December 31, 2012 and the completion of certain development and
redevelopment projects, tenant buyouts and net growth in the current portfolio, providing incremental revenues for the year
ended December 31, 2013, of $22.7 million, as compared to the corresponding period in 2012, and (iii) an increase in revenues
relating to the Company’s Latin America portfolio of $0.1 million for the year ended December 31, 2013, as compared to the
corresponding period in 2012.
Rental property expenses include (i) rent expense relating to ground lease payments for which the Company is the lessee;
(ii) real estate tax expense for consolidated properties for which the Company has a controlling ownership interest and
(iii) operating and maintenance expense, which consists of property related costs including repairs and maintenance costs,
roof repair, landscaping, parking lot repair, snow removal, utilities, property insurance costs, security and various other
property related expenses. Rental property expenses increased for the year ended December 31, 2013, as compared to the
corresponding period in 2012, primarily due to acquisitions of properties during 2013 and 2012 resulting in (i) an increase
in real estate taxes of $6.9 million, (ii) an increase in repairs and maintenance costs of $5.0 million, (iii) an increase in snow
removal costs of $2.1 million, (iv) an increase in property services of $1.6 million and (v) an increase in utilities expense of
$1.3 million, partially offset by (vi) a decrease in insurance expense of $3.0 million due to a decrease in insurance claims.
(3) Depreciation and amortization increased for the year ended December 31, 2013, as compared to the corresponding period
in 2012, primarily due to (i) operating property acquisitions during 2013 and 2012 and (ii) expensing of unamortized tenant
costs related to tenant vacancies prior to their lease expiration, partially offset by (iii) certain operating property dispositions
during 2013 and 2012.
26
General and administrative costs include employee-related expenses (salaries, bonuses, equity awards, benefits,
severance costs and payroll taxes), professional fees, office rent, travel expense, and other company-specific expenses.
General and administrative expenses increased $4.0 million to $127.5 million for the year ended December 31, 2013,
as compared to $123.5 million for the corresponding period in 2012. This increase is primarily a result of an increase
in professional fees related to the Company’s response to a subpoena from the Enforcement Division of the SEC and
a parallel investigation by the DOJ, in connection with the investigation of Wal-Mart Stores, Inc. with respect to the
Foreign Corrupt Practices Act (see Item 3).
During the year ended December 31, 2013, the Company recognized impairment charges of $190.2 million of
which $158.0 million, before noncontrolling interests and income tax, is included in Discontinued operations. These
impairment charges consist of (i) $175.6 million related to adjustments to property carrying values, (ii) $10.4 million
related to a cost method investment, (iii) $1.0 million related to certain joint venture investments and (iv) $3.2 million
related to a preferred equity investment. Certain of the calculations to determine fair value utilized unobservable
inputs and as such are classified as Level 3 of the fair value hierarchy. For additional disclosure, see Footnote 15 of the
Notes to Consolidated Financial Statements included in this Form 10-K.
During the year ended December 31, 2012, the Company recognized impairment charges related to adjustments
to property carrying values of $59.6 million, of which $49.3 million, before income taxes and noncontrolling interests, is
included in Discontinued operations. The Company’s estimated fair values for these assets were primarily based upon
(i) estimated sales prices from third party offers relating to property carrying values and joint venture investments. The
Company does not have access to the unobservable inputs used by the third parties to determine these estimated
fair values. The discounted cash flows model includes all estimated cash inflows and outflows over a specified holding
period. These cash flows were comprised of unobservable inputs which include forecasted revenues and expenses
based upon market conditions and expectations for growth. Based on these inputs the Company determined that
its valuation of these investments was classified within Level 3 of the fair value hierarchy. The property carrying value
impairment charges resulted from the Company’s efforts to market certain assets and management’s assessment as
to the likelihood and timing of such potential transactions.
Mortgage financing income decreased $3.2 million to $4.3 million for the year ended December 31, 2013, as
compared to $7.5 million for the corresponding period in 2012. This decrease is primarily due to a decrease in interest
income resulting from the repayment of certain mortgage receivables during 2013 and 2012.
Interest, dividends and other investment income increased $14.8 million to $16.8 million for the year ended
December 31, 2013, as compared to $2.0 million for the corresponding period in 2012. This increase is primarily due to
an increase in realized gains of $12.1 million resulting from the sale of certain marketable securities during 2013 and an
increase in cash distributions received in excess of basis related to cost method investments of $2.2 million for the year
ended December 31, 2013, as compared to the corresponding period in 2012.
Other (expense)/income, net changed $8.1 million to $1.2 million of income for the year ended December 31,
2013, as compared to $6.9 million of an expense for the year ended December 31, 2012. This change is primarily due to
(i) increases in gains on land sales of $8.2 million for year ended December 31, 2013, as compared to the corresponding
period in 2012 and (ii) an increase in gains on foreign currency of $1.5 million relating to changes in foreign currency
exchange rates, partially offset by (iii) an increase in other corporate expenses of $1.9 million for the year ended
December 31, 2013, as compared to the corresponding period in 2012.
Interest expense decreased $11.5 million to $212.2 million for the year ended December 31, 2013, as compared
to $223.7 million for the year ended December 31, 2012. This decrease is primarily related to lower interest rates on
borrowings during 2013, as compared to 2012.
Provision for income taxes, net increased $17.1 million to $32.7 million for the year ended December 31, 2013, as
compared to $15.6 million for the corresponding period in 2012. This increase is primarily due to (i) an increase in foreign
taxes of $23.6 million primarily relating to the sale of the Company’s joint venture interest in a portfolio of 84 operating
properties in Mexico, (ii) an increase in income tax expense of $9.1 million relating to a change in control gain resulting
from the purchase of a partner’s noncontrolling joint venture interest, (iii) a tax provision of $6.0 million resulting from
incremental earnings due to increased profitability from properties within the Company’s taxable REIT subsidiaries and
(iv) a tax provision of $2.4 million related to gains on sale of certain marketable securities, partially offset by (v) a partial
release of the deferred tax valuation allowance of $8.7 million related to FNC based on the Company’s estimated
future earnings of FNC, (vi) an increase in income tax benefit of $7.9 million related to impairments taken during 2013,
as compared to the 2012, and (vii) a decrease in tax provision of $9.4 million relating to a decrease in equity in income
recognized in connection with the Albertson’s investment.
27
Equity in income of joint ventures, net increased $95.8 million to $208.7 million for the year ended December 31,
2013, as compared to $112.9 million for the corresponding period in 2012. This increase is primarily the result of (i) an
increase in gains of $120.7 million resulting from the sale of properties within various joint venture investments, primarily
located in Mexico during 2013, as compared to 2012, (ii) an increase in equity in income from three joint ventures of
$4.0 million due to the Company’s increase in ownership percentage and (iii) incremental earnings due to increased
profitability from properties within the Company’s joint venture program, partially offset by (iv) an increase in impairment
charges of $18.4 million recognized against certain joint venture investment properties primarily located in Mexico,
resulting from pending property sales, taken during 2013, as compared to 2012, (v) the recognition of $7.5 million in
income on the sale of certain air rights at a property within one of the Company’s joint venture investments in Canada
during 2012 and (vi) a decrease in equity in income of $2.6 million from the Company’s InTown Suites investment during
2013, as compared to 2012, resulting from the sale of this investment in 2013.
During June 2013, the Company sold its unconsolidated investment in the InTown portfolio for a sales price of
$735.0 million which included the assignment of $609.2 million in debt. This transaction resulted in a deferred gain
to the Company of $21.7 million. The Company maintains its guarantee on a portion of the debt ($139.7 million as of
December 31, 2013) assumed by the buyer. The guarantee is collateralized by the buyer’s ownership interest in the
portfolio. The Company is entitled to a guarantee fee, for the initial term of the loan, which is scheduled to mature in
December 2015. The guarantee fee is calculated based upon the difference between LIBOR plus 1.15% and 5.0% per
annum multiplied by the outstanding amount of the loan. Additionally, the Company has entered into a commitment
to provide financing up to the outstanding amount of the guaranteed portion of the loan for five years past the date of
maturity. This commitment can be in the form of extensions with the current lender, a new lender or financing directly
from the Company to the buyer. Due to this continued involvement, the Company deferred its gain until such time that
the guarantee and commitment expire. On February 24, 2015, the outstanding debt balance of $139.7 million was fully
repaid and as such, the Company was relieved of its related commitments and guarantee.
During 2013, the Company acquired four properties from joint ventures in which the Company had noncontrolling
interests. The Company recorded an aggregate net gain on change in control of interests of $21.7 million related to the
fair value adjustment associated with its original ownership of these properties. During 2012, the Company acquired
four properties from joint ventures in which the Company had noncontrolling interests. The Company recorded an
aggregate gain on change in control of interests of $15.6 million related to the fair value adjustment associated with
its original ownership.
Equity in income from other real estate investments, net decreased $22.3 million to $31.1 million for the year ended
December 31, 2013, as compared to $53.4 million for the corresponding period in 2012. This decrease is primarily due
to a decrease of $23.5 million in equity in income from the Albertson’s joint venture primarily due to start-up costs
associated with the purchase of additional Albertson’s stores from SuperValu Inc. during 2013, as compared to 2012.
During 2013, the Company disposed of 36 operating properties and three out-parcels in separate transactions,
for an aggregate sales price of $279.5 million. These transactions, which are included in Discontinued operations in
the Company’s Consolidated Statements of Income, resulted in an aggregate gain of $25.4 million and impairment
charges of $61.9 million, before income taxes.
Additionally, during 2013, the Company sold eight properties in its Latin American portfolio for an aggregate
sales price of $115.4 million. These transactions, which are included in Discontinued operations in the Company’s
Consolidated Statements of Income, resulted in an aggregate gain of $23.3 million, before income taxes, and
aggregate impairment charges of $26.9 million (including the release of a cumulative foreign currency translation loss
of $7.8 million associated with the sale of the Company’s interest in two properties within Brazil, which represents a full
liquidation of the Company’s investment in Brazil), before income taxes and noncontrolling interests.
During 2012, the Company disposed of 62 operating properties and two outparcels, in separate transactions,
for an aggregate sales price of $418.9 million. These transactions resulted in an aggregate gain of $85.9 million
and impairment charges of $22.5 million, before income taxes, which is included in Discontinued operations in the
Company’s Consolidated Statements of Income.
During 2012, the Company sold a previously consolidated operating property to a newly formed unconsolidated
joint venture in which the Company has a 20% noncontrolling interest for a sales price of $55.5 million. This transaction
resulted in a pre-tax gain of $10.0 million, of which the Company deferred $2.0 million due to its continued involvement.
This gain has been recorded as Gain on sale of operating properties, net of tax in the Company’s Consolidated
Statements of Income.
28
Net income attributable to the Company decreased $29.8 million to $236.3 million for the year ended December 31,
2013, as compared to $266.1 million for the corresponding period in 2012. On a diluted per share basis, net income
attributable to the Company was $0.43 for 2013, as compared to net income of $0.42 for 2012. These changes are
primarily attributable to (i) additional incremental earnings due to increased profitability from the Company’s operating
properties and the acquisition of operating properties during 2013 and 2012, (ii) an increase in equity in income of joint
ventures, net primarily due to gains on sales of operating properties sold within various joint venture portfolios during
2013 and (iii) an increase in gains on sale of marketable securities during 2013, partially offset by (iv) an increase in
impairment charges recognized during the year ended December 31, 2013, as compared to the corresponding period
in 2012 and (v) a decrease in gains on sale of operating properties. The 2012 diluted per share results were decreased
by a reduction in net income available to common shareholders of $21.7 million resulting from the deduction of original
issuance costs associated with the redemption of the Company’s 6.65% Class F Cumulative Redeemable Preferred
Stock and 7.75% Class G Cumulative Redeemable Preferred Stock.
Liquidity and Capital Resources
The Company’s capital resources include accessing the public debt and equity capital markets, mortgage and
construction loan financing, borrowings under term loans and immediate access to an unsecured revolving credit
facility with bank commitments of $1.75 billion.
The Company’s cash flow activities are summarized as follows (in millions):
Year Ended December 31,
2013
2014
2012
Net cash flow provided by operating activities . . . . . . . . . . . . . . .
Net cash flow provided by/(used for) investing activities . . . . . . .
Net cash flow used for financing activities . . . . . . . . . . . . . . . . . . .
$
$
$
629.3
126.7
(717.5)
$
$
$
570.0
72.2
(635.4)
$
$
$
479.1
(51.0)
(399.1)
Operating Activities
The Company anticipates that cash on hand, borrowings under its revolving credit facility, issuance of equity and
public debt, as well as other debt and equity alternatives, will provide the necessary capital required by the Company.
Net cash flow provided by operating activities for the year ended December 31, 2014, was primarily attributable to
(i) cash flow from the diverse portfolio of rental properties, (ii) the acquisition of operating properties during 2014 and
2013, (iii) new leasing, expansion and re-tenanting of core portfolio properties and (iv) operational distributions from
the Company’s joint venture programs.
Cash flow provided by operating activities for the year ended December 31, 2014, was $629.3 million, as compared
to $570.0 million for the comparable period in 2013. The change of $59.3 million is primarily attributable to (i) higher
operational income from operating properties including properties acquired during 2014 and 2013 and (ii) changes
in other operating assets and liabilities due to timing of payments, partially offset by (iii) changes in accounts payable
and accrued expenses due to timing of payments and (iv) decreased operational distributions from joint ventures and
other real estate investments.
Investing Activities
Cash flows provided by investing activities for the year ended December 31, 2014, was $126.7 million, as compared
to cash flows provided by investing activities of $72.2 million for the comparable period in 2013. This increase of
$54.5 million resulted primarily from (i) an increase in proceeds from the sale of operating properties of $226.9 million,
(ii) a decrease in investments and advances to real estate joint ventures of $202.7 million, (iii) a decrease in investment in
marketable securities of $22.1 million, (iv) a decrease in investment in other investments of $21.4 million and (v) a decrease
in investment in other real estate investments of $19.2 million, partially offset by, (vi) a decrease in reimbursements of
investments and advances to real estate joint ventures of $217.6 million, (vii) an increase in acquisitions of real estate
under development of $65.7 million, (viii) an increase in investment/collection, net in mortgage loans receivable of
$59.4 million, (ix) an increase in acquisition of operating real estate of $30.5 million, (x) a decrease in proceeds from
sale/repayments of marketable securities of $22.6 million, (xi) an increase in improvements to operating real estate
of $24.5 million, (xii) a decrease in reimbursements of investments and advances to other real estate investments of
$13.8 million, and (xiii) a decrease in reimbursements of other investments of $9.2 million.
29
Acquisitions of Operating Real Estate
During the years ended December 31, 2014 and 2013, the Company expended $384.8 million, towards the
acquisition of operating real estate properties. The Company’s strategy is to continue to transform its operating
portfolio through its capital recycling program by acquiring what the Company believes are high quality U.S. retail
properties and disposing of lesser quality assets. The Company anticipates acquiring approximately $1.1 billion to
$1.3 billion of operating properties during 2015. The Company intends to fund these acquisitions with proceeds from
property dispositions, cash flow from operating activities, assumption of mortgage debt, if applicable, increased
borrowings through the Company’s term loan and availability under the Company’s revolving line of credit.
Improvements to Operating Real Estate
During the years ended December 31, 2014 and 2013, the Company expended $131.8 million and $107.3 million,
respectively, towards improvements to operating real estate. These amounts are made up of the following (in thousands):
Redevelopment/renovations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tenant improvements/tenant allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year Ended December 31,
2014
2013
$
$
86,639
40,060
5,096
131,795
$
$
39,531
57,473
10,273
107,277
Additionally, during the years ended December 31, 2014 and 2013, the Company capitalized interest of $2.4 million
and $1.3 million, respectively, and capitalized payroll of $3.4 million and $1.6 million, respectively, in connection with
the Company’s improvements to its operating real estate.
During the years ended December 31, 2014 and 2013, the Company capitalized personnel costs of $15.5 million
and $15.2 million, respectively, to deferred leasing costs and $0.6 million and $1.3 million, respectively, to software
development costs.
The Company has an ongoing program to redevelop and re-tenant its properties to maintain or enhance its
competitive position in the marketplace. The Company is actively pursuing redevelopment opportunities within its
operating portfolio which it believes will increase the overall value by bringing in new tenants and improving the
assets’ value. The Company has identified three categories of redevelopment, (i) large scale redevelopment, which
involves building new square footage, (ii) value creation redevelopment, which includes the subdivision of large anchor
spaces into multiple tenant layouts, and (iii) creation of out-parcels and pads which are located in the front of the
shopping center properties. The Company anticipates its capital commitment toward these redevelopment projects
and re-tenanting efforts during 2015 will be approximately $200 million to $250 million. The funding of these capital
requirements will be provided by cash flow from operating activities and availability under the Company’s revolving
line of credit.
Ground-Up Development
The Company is engaged in certain ground-up development projects, which will be held as long-term investments
by the Company. As of December 31, 2014, the Company had in progress a total of four ground-up development
projects located in the U.S. The Company anticipates its capital commitment toward these development projects
during 2015 will be approximately $50 million to $100 million. The funding of these capital requirements will be provided
by cash flow from operating activities and availability under the Company’s revolving line of credit.
Investments and Advances to Real Estate Joint Ventures
During the year ended December 31, 2014, the Company expended $93.8 million for investments and advances
to real estate joint ventures, primarily related to the repayment of mortgage debt and received $222.6 million from
reimbursements of investments and advances to real estate joint ventures, including refinancing of debt and sales of
properties (see Footnote 7 of the Notes to Consolidated Financial Statements included in this Form 10-K).
30
Financing Activities
Cash flow used for financing activities for the year ended December 31, 2014, was $717.5 million, as compared to
$635.4 million for the comparable period in 2013. This change of $82.1 million resulted primarily from (i) a decrease in
proceeds from unsecured term loan/notes of $121.6 million, (ii) an increase in principal payments of $70.7 million, (iii) an
increase in repayments/borrowings, net under the Company’s unsecured revolving credit facility of $36.6 million, (iv) an
increase in dividends paid of $27.5 million, (v) a decrease in proceeds from mortgage loan financing of $20.3 million
and (vi) a decrease in proceeds from issuance of stock of $6.3 million, partially offset by, (vii) a decrease in repayments
under unsecured term loan/notes of $175.9 million and (viii) a decrease in redemption of noncontrolling interests of
$28.8 million.
The Company continually evaluates its debt maturities, and, based on management’s current assessment, believes
it has viable financing and refinancing alternatives that will not materially adversely impact its expected financial results.
The Company continues to pursue borrowing opportunities with large commercial U.S. and global banks, select life
insurance companies and certain regional and local banks. The Company has noticed a continuing trend that although
pricing remains dependent on specific deal terms, generally spreads for non-recourse mortgage financing have been
stable. The unsecured debt markets are functioning well and credit spreads are at manageable levels. The Company
continues to assess 2015 and beyond to ensure the Company is prepared if credit market conditions weaken.
Debt maturities for 2015 consist of: $483.1 million of consolidated debt; $525.7 million of unconsolidated joint
venture debt; and $58.7 million of preferred equity debt, assuming the utilization of extension options where available.
The 2015 consolidated debt maturities are anticipated to be extended, refinanced or repaid with operating cash flows
and borrowings from the Company’s credit facility (which at December 31, 2014, had $1.65 billion available). The 2015
unconsolidated joint venture and preferred equity debt maturities are anticipated to be extended or repaid through
debt refinancing and partner capital contributions, as deemed appropriate.
The Company intends to maintain strong debt service coverage and fixed charge coverage ratios as part of its
commitment to maintain its investment-grade debt ratings. The Company may, from time-to-time, seek to obtain funds
through additional common and preferred equity offerings, unsecured debt financings and/or mortgage/construction
loan financings and other capital alternatives.
Since the completion of the Company’s IPO in 1991, the Company has utilized the public debt and equity markets
as its principal source of capital for its expansion needs. Since the IPO, the Company has completed additional
offerings of its public unsecured debt and equity, raising in the aggregate over $9.8 billion. Proceeds from public
capital market activities have been used for the purposes of, among other things, repaying indebtedness, acquiring
interests in neighborhood and community shopping centers, funding ground-up development projects, expanding
and improving properties in the portfolio and other investments.
During March 2014, the Company established a new $1.75 billion unsecured revolving credit facility (the “Credit
Facility”) with a group of banks, which is scheduled to expire in March 2018 with two additional six-month options to
extend the maturity date, at the Company’s discretion, to March 2019. This Credit Facility replaced the Company’s
then existing $1.75 billion unsecured revolving credit facility which was scheduled to mature in October 2015. The
Credit Facility, which can be increased to $2.25 billion through an accordion feature, accrues interest at a rate of
LIBOR plus 92.5 basis points on drawn funds. In addition, the Credit Facility includes a $500 million sub-limit which
provides the Company the opportunity to borrow in alternative currencies including Canadian dollars, British Pounds
Sterling, Japanese Yen or Euros. Pursuant to the terms of the Credit Facility, the Company, among other things, is
subject to covenants requiring the maintenance of (i) maximum leverage ratios on both unsecured and secured debt
and (ii) minimum interest and fixed coverage ratios. As of December 31, 2014, the Credit Facility had a balance of
$100.0 million outstanding and $1.0 million appropriated for letters of credit.
Pursuant to the terms of the Credit Facility, the Company, among other things, is subject to maintenance of
various covenants. The Company is currently in compliance with these covenants. The financial covenants for the
Credit Facility are as follows:
Covenant
Total Indebtedness to Gross Asset Value (“GAV”) . . . . . . . . . . . . . . . . . . . . . . .
Total Priority Indebtedness to GAV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unencumbered Asset Net Operating Income to Total Unsecured
Must Be
<60%
<35%
As of 12/31/14
35%
10%
Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed Charge Total Adjusted EBITDA to Total Debt Service. . . . . . . . . . . . . . .
>1.75x
>1.50x
4.26x
3.34x
31
For a full description of the Credit Facility’s covenants refer to the Credit Agreement dated as of March 17, 2014,
filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated March 20, 2014.
The Company had a 1.0 billion Mexican peso (“MXN”) term loan which was scheduled to mature in March 2018
and bore interest at a rate equal to TIIE (Equilibrium Interbank Interest Rate) plus 1.35%. During September 2014, the
Company repaid the MXN 1.0 billion (USD $76.3 million) term loan.
As of December 31, 2014, the Company had a $400.0 million unsecured term loan with a consortium of banks,
which accrued interest at LIBOR plus 105 basis points (1.21% as of December 31, 2014). This term loan was scheduled to
mature in April 2014, with three additional one-year options to extend the maturity date, at the Company’s discretion,
to April 17, 2017. During January 2014, the Company exercised its option to extend the maturity date to April 17, 2015.
During January 2015, the Company entered into a new $650.0 million unsecured term loan credit facility which is
scheduled to mature in January 2017, with three one-year extension options at the Company’s discretion to January
2020, and accrues interest at a spread (currently 0.95%) to LIBOR or at the Company’s option at a base rate as defined
per the agreement. The proceeds from the new $650 million term loan were used to repay the $400.0 million term loan
and general corporate purposes. Pursuant to the terms of the term loan credit agreement, the Company, among other
things, is subject to covenants requiring the maintenance of (i) maximum indebtedness ratios and (ii) minimum interest
and fixed charge coverage ratios. The term loan covenants are similar to the Credit Facility covenants described above.
During April 2012, the Company filed a shelf registration statement on Form S-3, which is effective for a term
of three years, for the future unlimited offerings, from time-to-time, of debt securities, preferred stock, depositary
shares, common stock and common stock warrants. The Company, pursuant to this shelf registration statement may,
from time-to-time, offer for sale its senior unsecured debt for any general corporate purposes, including (i) funding
specific liquidity requirements in its business, including property acquisitions, development and redevelopment costs
and (ii) managing the Company’s debt maturities. (See Footnote 12 of the Notes to Consolidated Financial Statements
included in this Form 10-K.)
The Company’s supplemental indenture governing its medium term notes (“MTN”) and senior notes contains the
following covenants, all of which the Company is compliant with:
Covenant
Consolidated Indebtedness to Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Secured Indebtedness to Total Assets . . . . . . . . . . . . . . . . . . . .
Consolidated Income Available for Debt Service to Maximum Annual
Must Be
<60%
<40%
As of 12/31/14
39%
12%
Service Charge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
>1.50x
Unencumbered Total Asset Value to Consolidated
Unsecured Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
>1.50x
5.7x
2.7x
For a full description of the various indenture covenants refer to the Indenture dated September 1,
1993; the First Supplemental Indenture dated August 4, 1994; the Second Supplemental Indenture dated April 7,
1995; the Third Supplemental Indenture dated June 2, 2006; the Fourth Supplemental Indenture dated April 26, 2007;
the Fifth Supplemental Indenture dated as of September 24, 2009; the Sixth Supplemental Indenture dated as of
May 23, 2013; the Seventh Supplemental Indenture dated as of April 24, 2014; the Indenture dated April 21, 2005; the
First Supplemental Indenture dated June 2, 2006; the Second Supplemental Indenture dated August 16, 2006; the
Third Supplemental Indenture dated April 13, 2010; the Fourth Supplemental Indenture dated July 22, 2013; the First
Supplemental Indenture dated October 31, 2006; and the Fifth Supplemental Indenture dated as of October 31, 2006,
as filed with the SEC. See the Exhibits Index for specific filing information.
During April 2014, the Company issued $500.0 million of 7-year Senior Unsecured Notes at an interest rate of 3.20%
payable semi-annually in arrears which are scheduled to mature in May 2021. The Company used the net proceeds from
the offering of $495.4 million, after deducting the underwriting discount and offering expenses, for general corporate
purposes including reducing borrowings under the Credit Facility and repayment of maturing debt. In connection with
this issuance, the Company entered into a seventh supplemental indenture which, among other things, revised, for all
securities created on or after the date of the seventh supplemental indenture, the definition of Unencumbered Total
Asset Value, used to determine compliance with certain covenants within the indenture.
During 2014, the Company repaid (i) its $100.0 million 5.95% senior unsecured notes, which matured in June 2014,
and (ii) its remaining $194.6 million 4.82% senior unsecured notes, which also matured in June 2014.
32
Additionally, during 2014, the Company (i) assumed $742.0 million of individual non-recourse mortgage debt
relating to the acquisition of 53 operating properties, including an increase of $39.4 million associated with fair value
debt adjustments (ii) paid off $328.0 million of mortgage debt that encumbered 21 properties and (iii) obtained
$15.7 million of individual non-recourse debt relating to one operating property.
In addition to the public equity and debt markets as capital sources, the Company may, from time-to-time, obtain
mortgage financing on selected properties and construction loans to partially fund the capital needs of its ground-
up development projects. As of December 31, 2014, the Company had over 370 unencumbered property interests in
its portfolio.
In connection with its intention to continue to qualify as a REIT for federal income tax purposes, the Company
expects to continue paying regular dividends to its stockholders. These dividends will be paid from operating cash
flows. The Company’s Board of Directors will continue to evaluate the Company’s dividend policy on a quarterly basis
as they monitor sources of capital and evaluate the impact of the economy and capital markets availability on operating
fundamentals. Since cash used to pay dividends reduces amounts available for capital investment, the Company
generally intends to maintain a conservative dividend payout ratio, reserving such amounts as it considers necessary
for the expansion and renovation of shopping centers in its portfolio, debt reduction, the acquisition of interests in
new properties and other investments as suitable opportunities arise and such other factors as the Board of Directors
considers appropriate. Cash dividends paid were $427.9 million in 2014, $400.4 million in 2013 and $382.7 million in 2012.
Although the Company receives substantially all of its rental payments on a monthly basis, it generally intends to
continue paying dividends quarterly. Amounts accumulated in advance of each quarterly distribution will be invested
by the Company in short-term money market or other suitable instruments. On October 28, 2014, the Board of Directors
declared a quarterly cash dividend per common share of $0.24 payable to shareholders of record on January 2, 2015,
which was paid on January 15, 2015. Additionally, on February 4, 2015, the Company’s Board of Directors declared
a quarterly cash dividend of $0.24 per common share payable to shareholders of record on April 6, 2015, which is
scheduled to be paid on April 15, 2015.
The Company is subject to taxes on its activities in Canada, Mexico, and Chile. In general, under local country
law applicable to the structures the Company has in place and applicable treaties, the repatriation of cash to the
Company from its subsidiaries and joint ventures in Canada and Mexico generally are not subject to withholding tax.
The Company does not anticipate the need to repatriate foreign funds from Chile to provide for its cash flow needs
in the U.S. and, as such, no significant withholding or transaction taxes are expected in the foreseeable future. The
Company will be subject to withholding taxes in Chile on the distribution of any proceeds from sale transactions. The
Company is subject to and also includes in its tax provision non-U.S. income taxes on certain investments located in
jurisdictions outside the U.S. These investments are held by the Company at the REIT level and not in the Company’s
taxable REIT subsidiary. Accordingly, the Company does not expect a U.S. income tax impact associated with the
repatriation of undistributed earnings from the Company’s foreign subsidiaries.
Contractual Obligations and Other Commitments
The Company has debt obligations relating to its revolving credit facility, term loan, MTNs, senior notes and
mortgages with maturities ranging from less than one year to 20 years. As of December 31, 2014, the Company’s total
debt had a weighted average term to maturity of 3.7 years. In addition, the Company has non-cancelable operating
leases pertaining to its shopping center portfolio. As of December 31, 2014, the Company has 49 shopping center
properties that are subject to long-term ground leases where a third party owns and has leased the underlying land
to the Company to construct and/or operate a shopping center. In addition, the Company has 9 non-cancelable
operating leases pertaining to its retail store lease portfolio. The following table summarizes the Company’s debt
maturities (excluding extension options and fair market value of debt adjustments aggregating $40.1 million) and
obligations under non-cancelable operating leases as of December 31, 2014 (in millions):
Contractual Obligations:
Long-Term Debt-Principal (1) (3) . . .
Long-Term Debt-Interest (2) . . . . . .
Operating Leases:
Ground Leases . . . . . . . . . . . . . . .
Retail Store Leases. . . . . . . . . . . .
$
$
$
$
Payments due by period
2015
2016
2017
2018
2019
Thereafter
907.2 $
196.9 $
663.4 $
158.6 $
748.5 $
120.4 $
602.2 $
83.1 $
310.0 $
74.0 $
1,348.9 $
123.2 $
Total
4,580.2
756.2
13.2 $
2.1 $
12.5 $
2.1 $
11.6 $
1.6 $
10.3 $
1.1 $
10.4 $
0.4 $
164.8 $
0.4 $
222.8
7.7
(1) Maturities utilized do not reflect extension options, which range from one to five years.
33
(2)
For loans which have interest at floating rates, future interest expense was calculated using the rate as of December 31, 2014.
(3) During January 2015, the Company repaid its $400.0 million term loan which was scheduled to mature in 2015 with a new
$650.0 million unsecured term loan that is scheduled to mature in 2017, with three one-year extension options, and bears
interest at a rate equal to LIBOR plus 0.95%.
The Company has accrued $4.6 million of non-current uncertain tax benefits and related interest under the
provisions of the authoritative guidance that addresses accounting for income taxes, which are included in Other
liabilities on the Company’s Consolidated Balance Sheets at December 31, 2014. These amounts are not included
in the table above because a reasonably reliable estimate regarding the timing of settlements with the relevant tax
authorities, if any, cannot be made.
The Company has $250.0 million of medium term notes, $100.0 million of unsecured notes and $134.7 million of
secured debt scheduled to mature in 2015. The Company anticipates satisfying these maturities with a combination
of operating cash flows, its unsecured revolving credit facility, exercise of extension options, where available, and new
debt issuances.
The Company has issued letters of credit in connection with completion and repayment guarantees for loans
encumbering certain of the Company’s redevelopment projects and guarantee of payment related to the Company’s
insurance program. As of December 31, 2014, these letters of credit aggregate $24.9 million.
On a select basis, the Company has provided guarantees on interest bearing debt held within real estate joint
ventures. The Company is often provided with a back-stop guarantee from its partners. The Company had the following
outstanding guarantees as of December 31, 2014 (amounts in millions):
Name of Joint Venture
InTown Suites Management, Inc. . . .
Amount of
Guarantee
139.7
$
Victoriaville . . . . . . . . . . . . . . . . . . . . .
Anthem K-12, LP . . . . . . . . . . . . . . . . .
$
$
Interest
rate
LIBOR plus
1.15%
3.92%
Maturity, with
extensions
2015
2020
2.1
42.2
Various (2)
Various (2)
Terms
(1)
Jointly and severally
with partner
Jointly and severally
with partner
Type of debt
Unsecured
credit facility
Promissory note
Promissory note
(1) During June 2013, the Company sold its unconsolidated investment in the InTown portfolio. The Company continues
to maintain its guarantee of a portion of the debt assumed by the buyer ($139.7 million as of December 31, 2014). The
guarantee is collateralized by the buyer’s ownership interest in the portfolio. Additionally, the Company has a commitment
to provide financing up to the outstanding amount of the guaranteed portion of the loan for five years past the date of
maturity. This commitment can be in the form of extensions with the current lender or a new lender or financing directly from
the Company to the buyer. On February 24, 2015, the outstanding debt balance of $139.7 million was fully repaid and as such,
the Company was relieved of its related commitments and guarantee.
(2) As of December 31, 2014, the interest rates range from 3.62% to 4.97% and maturity dates with extensions range from 2015
to 2022.
In connection with the construction of its development/redevelopment projects and related infrastructure, certain
public agencies require posting of performance and surety bonds to guarantee that the Company’s obligations are
satisfied. These bonds expire upon the completion of the improvements and infrastructure. As of December 31, 2014,
the Company had $22.0 million in performance and surety bonds outstanding.
Off-Balance Sheet Arrangements
Unconsolidated Real Estate Joint Ventures
The Company has investments in various unconsolidated real estate joint ventures with varying structures.
These joint ventures primarily operate shopping center properties or are established for development projects. Such
arrangements are generally with third-party institutional investors, local developers and individuals. The properties
owned by the joint ventures are primarily financed with individual non-recourse mortgage loans, however, the Company,
on a selective basis, has obtained unsecured financing for certain joint ventures. These unsecured financings are
34
guaranteed by the Company with guarantees from the joint venture partners for their proportionate amounts of any
guaranty payment the Company is obligated to make (see guarantee table above). Non-recourse mortgage debt is
generally defined as debt whereby the lenders’ sole recourse with respect to borrower defaults is limited to the value
of the property collateralized by the mortgage. The lender generally does not have recourse against any other assets
owned by the borrower or any of the constituent members of the borrower, except for certain specified exceptions
listed in the particular loan documents (see Footnote 7 of the Notes to Consolidated Financial Statements included in
this Form 10-K). These investments include the following joint ventures:
Venture
KimPru (a) . . . . . . . . . .
RioCan Venture (b) . . .
KIR (c) . . . . . . . . . . . . . .
BIG Shopping
Centers (d) . . . . . . .
Kimstone (e)(g) . . . . . .
CPP (f) . . . . . . . . . . . . .
Kimco
Ownership
Interest
15.0%
50.0%
48.6%
50.1%
33.3%
55.0%
Non-
Recourse
Mortgage
Payable
(in millions)
920.4
642.6
866.4
Total GLA
(in
thousands)
10,573 $
9,307 $
11,519 $
Number of
Properties
60
45
54
6
39
7
1,029 $
5,595 $
2,425 $
144.6
704.4
112.1
Number of
Encumbered
Properties
Average
Interest
Rate
39
28
46
6
38
2
5.53%
4.29%
5.04%
5.52%
4.45%
5.05%
Weighted
Average
Term
(months)
23.0
39.9
61.9
22.0
28.7
10.1
(a)
Represents the Company’s joint ventures with Prudential Real Estate Investors.
(b) Represents the Company’s joint ventures with RioCan Real Estate Investment Trust.
Represents the Company’s joint ventures with certain institutional investors.
(c)
(d) Represents the Company’s remaining joint venture with BIG Shopping Centers (TLV:BIG), an Israeli public company (see
Footnote 7 of the Notes to Consolidated Financial Statements included in this Form 10-K).
Represents the Company’s joint ventures with Blackstone.
Represents the Company’s joint ventures with The Canadian Pension Plan Investment Board (CPPIB).
(e)
(f)
(g) On February 2, 2015, the Company purchased the remaining 66.7% interest in the 39-property Kimstone portfolio for a gross
purchase price of $1.4 billion, including the assumption of $638.0 million in mortgage debt (see Footnote 26 of the Notes to
Consolidated Financial Statements included in this Form 10-K).
The Company has various other unconsolidated real estate joint ventures with varying structures. As of
December 31, 2014, these other unconsolidated joint ventures had individual non-recourse mortgage loans
aggregating $1.2 billion. The aggregate debt as of December 31, 2014, of all of the Company’s unconsolidated real
estate joint ventures is $4.6 billion, of which the Company’s proportionate share of this debt is $1.8 billion. As of
December 31, 2014, these loans had scheduled maturities ranging from one month to 19 years and bear interest at
rates ranging from 1.92% to 8.39%. Approximately $525.7 million of the aggregate outstanding loan balance matures
in 2015, of which the Company’s proportionate share is $206.0 million. These maturing loans are anticipated to be
repaid with operating cash flows, debt refinancing and partner capital contributions, as deemed appropriate (see
Footnote 7 of the Notes to Consolidated Financial Statements included in this Form 10-K).
35
Other Real Estate Investments
The Company previously provided capital to owners and developers of real estate properties through its
Preferred Equity program. The Company accounts for its preferred equity investments under the equity method
of accounting. As of December 31, 2014, the Company’s net investment under the Preferred Equity Program was
$229.1 million relating to 443 properties, including 385 net leased properties. As of December 31, 2014, these preferred
equity investment properties had individual non-recourse mortgage loans aggregating $717.0 million. These loans had
scheduled maturities ranging from three months to 19 years and bear interest at rates ranging from 3.4% to 10.47%.
Due to the Company’s preferred position in these investments, the Company’s share of each investment is subject to
fluctuation and is dependent upon property cash flows. The Company’s maximum exposure to losses associated with
its preferred equity investments is primarily limited to its invested capital.
At December 31, 2014, the Company had a 90% equity participation interest in an existing leveraged lease of
11 properties, which is reported as a net investment in leveraged lease in accordance with the FASB’s Lease guidance.
The properties are leased under a long-term bond-type net lease whose primary term expires in 2016, with the lessee
having certain renewal option rights. These 11 properties were encumbered by third-party non-recourse debt of
$11.2 million that is scheduled to fully amortize during the primary term of the lease from a portion of the periodic net
rents receivable under the net lease. As an equity participant in the leveraged lease, the Company has no recourse
obligation for principal or interest payments on the debt, which is collateralized by a first mortgage lien on the
properties and collateral assignment of the lease. Accordingly, this debt has been offset against the related net rental
receivable under the lease.
Funds From Operations
Funds From Operations (“FFO”) 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
FFO as net income/(loss) attributable to common shareholders computed in accordance with generally accepted
accounting principles (“GAAP”), excluding (i) gains or losses from sales of operating real estate assets and (ii)
extraordinary items, plus (iii) depreciation and amortization of operating properties and (iv) impairment of depreciable
real estate and in substance real estate equity investments and (v) after adjustments for unconsolidated partnerships
and joint ventures calculated to reflect funds from operations on the same basis.
The Company presents FFO as it considers it 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 FFO when reporting results. Comparison of our presentation of 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.
The Company also presents FFO as adjusted as an additional supplemental measure as it believes it is more
reflective of the Company’s core operating performance. The Company believes FFO as adjusted provides investors
and analysts an additional measure in comparing 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 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.
FFO is a supplemental non-GAAP financial measure of real estate companies’ operating performances, which
does not represent cash generated from operating activities in accordance with GAAP and therefore should not be
considered an alternative for net income as a measure of liquidity. Our method of calculating FFO and FFO as adjusted
may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
36
The Company’s reconciliation of net income available to common shareholders to FFO and FFO as adjusted for
the three months and years ended December 31, 2014 and 2013 is as follows (in thousands, except per share data):
Net income available to common shareholders . . . .
Gain on disposition of operating properties,
Three Months Ended
December 31,
2014
2013
$
38,207
$
47,035
$
Year Ended
December 31,
2014
365,707
2013
177,987
$
net of tax and noncontrolling interests . . . . . . . . .
(71,152)
(16,503)
(189,572)
(45,330)
Gain on disposition of joint venture operating
properties and change in control of interests . . .
(56,262)
(5,530)
(193,791)
(113,937)
Depreciation and amortization -
real estate related . . . . . . . . . . . . . . . . . . . . . . . . . .
70,878
64,511
263,885
250,253
Depreciation and amortization -
real estate joint ventures,
net of noncontrolling interests . . . . . . . . . . . . . . . .
Impairments of operating properties,
net of tax and noncontrolling interests . . . . . . . . .
FFO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transactional (income)/charges:
Profit participation from other real
21,113
24,448
92,343
117,743
153,937 (2)
156,721
20,707
134,668
257,660
596,232
165,825
552,541
estate investments . . . . . . . . . . . . . . . . . . . . . . .
(13,627)
(474)
(16,426)
(13,650)
Transactional losses from other real
estate investments . . . . . . . . . . . . . . . . . . . . . . .
Loss/(gains) from land sales, net of tax . . . . . . . . .
Acquisition costs, net of tax . . . . . . . . . . . . . . . . . .
Deferred tax asset valuation allowance release. . .
Severance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions in excess of Company’s
investment basis . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on sale of marketable securities . . . . . . . . . .
Impairments on other investments, net of tax
and noncontrolling interest . . . . . . . . . . . . . . . .
Other income, net . . . . . . . . . . . . . . . . . . . . . . . . . .
Total transactional charges/(income), net . . . . .
FFO as adjusted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average shares outstanding for
FFO calculations:
-
436
2,172
-
-
(2,168)
-
3,091
(1,775)
2,296
-
2,225
(167)
(5,339)
3,497
(2,550)
7,033
-
2,869
3,091
(3,448)
5,623
(9,126)
2,225
(17,691)
-
(2,213)
(10,668)
1,621
(513)
(12,079)
$ 144,642
455
(180)
132
$ 134,800
6,494
(2,567)
(19,341)
$ 576,891
20,754
(1,419)
(8,831)
$ 543,710
Basic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dilutive effect of equity awards . . . . . . . . . . . . . . .
Diluted (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
409,740
1,531
3,171
414,442 (1)
408,139
1,522
2,414
412,075 (1)
409,088
1,536
3,139
413,763 (1)
407,631
1,523
2,541
411,695 (1)
FFO per common share – basic. . . . . . . . . . . . . . . . .
FFO per common share – diluted (1) . . . . . . . . . . . .
FFO as adjusted per common share – basic . . . . . .
FFO as adjusted per common share – diluted (1) . .
$
$
$
$
0.38
$
0.38 (1) $
$
0.35
0.35 (1) $
0.33
$
0.33 (1) $
$
0.33
0.33 (1) $
1.46
$
1.45 (1) $
$
1.41
1.40 (1) $
1.36
1.35 (1)
1.33
1.33 (1)
(1)
(2)
Reflects the potential impact if certain units were converted to common stock at the beginning of the period. FFO would be
increased by $795 and $641 for the three months ended December 31, 2014 and 2013, and $3,033 and $2,516 for the years
ended December 31, 2014 and 2013, respectively.
Includes cumulative foreign currency translation loss of $134.3 million due to the substantial liquidation of the Company’s
Mexican Portfolio.
37
Combined Same Property Net Operating Income
Combined Same Property Net Operating Income (“Combined 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. Combined Same Property NOI is considered by
management to be an important performance measure of the Company’s operations and management believes that
it is helpful to investors as a measure of the Company’s operating performance because it 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 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. As such, Combined 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.
Combined Same Property NOI is calculated using revenues from rental properties (excluding straight-line rents,
lease termination fees, 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 Combined Same Property
NOI from unconsolidated real estate joint ventures, calculated on the same basis. Our method of calculating Combined
Same Property NOI may differ from methods used by other REITs and, accordingly, may not be comparable to such
other REITs.
The following is a reconciliation of the Company’s Income from continuing operations to Combined Same
Property NOI and U.S. Same Property Net Operating Income “U.S. Same Property NOI” (in thousands):
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . $
Adjustments:
Management and other fee income . . . . . . . . . . . . . . . . . . . .
General and administrative expenses . . . . . . . . . . . . . . . . . . .
Impairment charges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization. . . . . . . . . . . . . . . . . . . . . . . . .
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes, net . . . . . . . . . . . . . . . . . . . . . . . .
Gain on change in control of interests, net. . . . . . . . . . . . . . .
Equity in income of other real estate investments, net . . . . .
Non same property net operating income . . . . . . . . . . . . . . .
Non-operational expense from joint ventures, net . . . . . . . .
Combined Same Property NOI . . . . . . . . . . . . . . . . . . . . . . . . . .
Impact from foreign currency . . . . . . . . . . . . . . . . . . . . . . . . . .
Combined Same Property NOI, before foreign
currency impact. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Canadian Same Property NOI, before foreign
currency impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. Same Property NOI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Three Months Ended
December 31,
2014
2013
74,474 $
56,705 $
Year Ended
December 31,
2014
384,506 $
2013
288,454
(8,764)
27,675
11,420
72,767
53,153
7,727
(23,462)
(21,638)
(22,557)
61,988
232,783
-
(9,565)
31,543
609
59,571
39,569
6,333
-
(1,225)
(12,021)
54,227
225,746
(1,907)
(35,009)
122,201
39,808
258,074
208,208
22,438
(107,235)
(38,042)
(83,755)
148,918
920,112
-
(36,317)
127,470
32,247
224,713
189,894
32,654
(21,711)
(31,136)
(80,373)
171,503
897,398
(6,672)
232,783
223,839
920,112
890,726
(23,316)
209,467 $
(23,060)
200,779 $
(94,940)
825,172 $
(92,286)
798,440
Combined Same Property NOI, before foreign currency impact increased by $8.9 million or 4.0% for the
three months ended December 31, 2014, as compared to the corresponding period in 2013. Combined Same
Property NOI increased by $7.0 million or 3.1% for the three months ended December 31, 2014, as compared to the
corresponding period in 2013. This increase is primarily the result of (i) an increase of $6.6 million related to lease-up
and rent commencements in the portfolio and (ii) an increase of $2.3 million in other property income, partially offset
by (iii) the impact from changes in foreign currency exchange rates of $1.9 million.
38
Combined Same Property NOI, before foreign currency impact increased by $29.4 million or 3.3% for the year
ended December 31, 2014, as compared to the corresponding period in 2013. Combined Same Property NOI increased
by $22.7 million or 2.5% for the year ended December 31, 2014, as compared to the corresponding period in 2013.
This increase is primarily the result of (i) an increase of $25.8 million related to lease-up and rent commencements in the
portfolio and (ii) an increase of $3.6 million in other property income, partially offset by (iii) the impact from changes in
foreign currency exchange rates of $6.7 million.
Effects of Inflation
Many of the Company’s leases contain provisions designed to mitigate the adverse impact of inflation. Such
provisions include clauses enabling the Company to receive payment of additional rent calculated as a percentage of
tenants’ gross sales above pre-determined thresholds, which generally increase as prices rise, and/or escalation clauses,
which generally increase rental rates during the terms of the leases. Such escalation clauses often include increases
based upon changes in the consumer price index or similar inflation indices. In addition, many of the Company’s leases
are for terms of less than 10 years, which permits the Company to seek to increase rents to market rates upon renewal.
Most of the Company’s leases require the tenant to pay an allocable share of operating expenses, including common
area maintenance costs, real estate taxes and insurance, thereby reducing the Company’s exposure to increases in
costs and operating expenses resulting from inflation. The Company periodically evaluates its exposure to short-
term interest rates and foreign currency exchange rates and will, from time-to-time, enter into interest rate protection
agreements and/or foreign currency hedge agreements which mitigate, but do not eliminate, the effect of changes in
interest rates on its floating-rate debt and fluctuations in foreign currency exchange rates.
New Accounting Pronouncements
See Footnote 1 of the Notes to Consolidated Financial Statements included in this Form 10-K.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The Company’s primary market risk exposures are interest rate risk and foreign currency exchange rate risk. The
following table presents the Company’s aggregate fixed rate and variable rate domestic and foreign debt obligations
outstanding as of December 31, 2014, with corresponding weighted-average interest rates sorted by maturity date.
The table does not include extension options where available. Amounts include fair value purchase price allocation
adjustments for assumed debt. The information is presented in U.S. dollar equivalents, which is the Company’s
reporting currency. The instruments’ actual cash flows are denominated in U.S. dollars, Canadian dollars (CAD), and
Chilean Pesos (CLP) as indicated by geographic description ($USD equivalent in millions).
2015
2016
2017
2018
2019
Thereafter
Total
Fair Value
U.S. Dollar Denominated
Secured Debt
Fixed Rate . . . . . . . . . . . . . . . . . . . $
Average Interest Rate . . . . . . . . .
134.7
$
357.7
$
469.3
$
5.17%
6.24%
5.86%
Variable Rate. . . . . . . . . . . . . . . . . $
Average Interest Rate . . . . . . . . .
$
6.0
0.08%
$
-
-
$
1.9
4.00%
$
$
35.8
4.80%
36.0
2.51%
$
$
-
-
-
-
350.0
$
1,347.5
$
1,399.9
5.19%
5.69%
$
-
-
$
43.9
2.24%
43.6
Unsecured Debt
Fixed Rate . . . . . . . . . . . . . . . . . . . $
Average Interest Rate . . . . . . . . .
350.0
$
300.0
$
290.9
$
300.0
$
300.0
$
850.0
$
2,390.9
$
2,517.3
5.29%
5.78%
5.70%
4.30%
6.88%
3.17%
4.72%
Variable Rate. . . . . . . . . . . . . . . . . $
Average Interest Rate . . . . . . . . .
400.0
$
1.21%
CAD Denominated
Unsecured Debt
Fixed Rate . . . . . . . . . . . . . . . . . . . $
Average Interest Rate . . . . . . . . .
CLP Denominated
Secured Debt
Variable Rate. . . . . . . . . . . . . . . . . $
Average Interest Rate . . . . . . . . .
$
$
-
-
-
-
$
$
$
-
-
-
-
-
-
$
100.0
$
1.09%
$
129.1
$
5.99%
$
$
-
-
-
-
-
-
-
-
39
-
-
-
-
-
-
$
-
-
$
500.0
$
491.7
1.19%
$
172.2
$
301.3
$
325.4
3.86%
4.77%
$
$
36.7
5.68%
$
36.7
5.68%
41.5
Based on the Company’s variable-rate debt balances, interest expense would have increased by $5.8 million in
2014 if short-term interest rates were 1.0% higher.
The following table presents the Company’s foreign investments and respective cumulative translation adjustment
(“CTA”) as of December 31, 2014. Investment amounts are shown in their respective local currencies and the U.S. dollar
equivalents and CTA balances are shown in US dollars:
Foreign Investment (in millions)
Country
Mexican real estate investments (MXN) . . . . . . . . . . . . . . . .
Canadian real estate investments (CAD). . . . . . . . . . . . . . . .
Chilean real estate investments (CLP) . . . . . . . . . . . . . . . . . .
Local Currency
708.2
442.3
32,408
$
$
$
US Dollars
48.0
380.7
53.4
CTA Gain/(Loss)
$
-
15.2
$
(14.9)
$
The foreign currency exchange risk has been partially mitigated, but not eliminated, through the use of local
currency denominated debt. The Company has not, and does not plan to, enter into any derivative financial instruments
for trading or speculative purposes.
Currency fluctuations between local currency and the U.S. dollar during the period in which the Company held
its investment result in a CTA, which is recorded as a component of Accumulated other comprehensive income
(“AOCI”) on the Company’s Consolidated Balance Sheets. The CTA amounts are subject to future changes resulting
from ongoing fluctuations in the respective foreign currency exchange rates. Changes in exchange rates are impacted
by many factors that cannot be forecasted with reliable accuracy. Any change could have a favorable or unfavorable
impact on the Company’s CTA balance. The Company’s aggregate CTA net gain balance at December 31, 2014,
is $0.3 million.
Under U.S. GAAP, the Company is required to release CTA balances into earnings when the Company has
substantially liquidated its investment in a foreign entity. During 2013, the Company began selling properties within
its Latin American portfolio. During the year ended December 31, 2014, the Company continued selling properties
in its Latin American portfolio and as a result substantially liquidated its investments in Mexico and Peru. Due to the
substantial liquidation of its investments in Mexico and Peru, the Company recognized a loss from foreign currency
translation in the aggregate amount of $134.4 million, after noncontrolling interest of $5.8 million.
Item 8. Financial Statements and Supplementary Data
The response to this Item 8 is included in our audited Notes to Consolidated Financial Statements, which are
contained in Part IV Item 15 of this Form 10-K.
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial
Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined
in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the
end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief
Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures
are effective.
Changes in Internal Control Over Financial Reporting
There have not been any changes in the Company’s internal control over financial reporting (as such term is
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth fiscal quarter ended December 31,
2014, to which this report relates, that have materially affected, or are reasonably likely to materially affect, the Company’s
internal control over financial reporting.
40
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting,
as such term is defined in Exchange Act Rule 13a-15(f) and 15d-15(f). Under the supervision and with the participation
of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation
of the effectiveness of our internal control over financial reporting based on the framework in the Internal Control -
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Based on our evaluation under the framework in Internal Control - Integrated Framework (2013), our management
concluded that our internal control over financial reporting was effective as of December 31, 2014.
The effectiveness of our internal control over financial reporting as of December 31, 2014, has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is
included herein.
Item 9B. Other Information
None.
41
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this item is incorporated by reference to “Proposal 1—Election of Directors,”
“Corporate Governance,” “Committees of the Board of Directors” and “Other Matters—Section 16(a) Beneficial
Ownership Reporting Compliance” in our Proxy Statement.
We have adopted a Code of Business Conduct and Ethics that applies to all employees (the “Code of Ethics”).
The Code of Ethics is available at the Investors/Governance/Governance Documents section of our website at
www.kimcorealty.com. A copy of the Code of Ethics is available in print, free of charge, to stockholders upon request to
us at the address set forth in Item 1 of this Annual Report on Form 10-K under the section “Business - Background.” We
intend to satisfy the disclosure requirements under the Securities and Exchange Act of 1934, as amended, regarding
an amendment to or waiver from a provision of our Code of Ethics by posting such information on our web site.
Item 11. Executive Compensation
The information required by this item is incorporated by reference to “Compensation Discussion and Analysis,”
“Executive Compensation Committee Report,” “Compensation Tables” and “Compensation of Directors” in our
Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item is incorporated by reference to “Security Ownership of Certain Beneficial
Owners and Management” and “Compensation Tables” in our Proxy Statement.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item is incorporated by reference to “Certain Relationships and Related
Transactions” and “Corporate Governance” in our Proxy Statement.
Item 14. Principal Accounting Fees and Services
The information required by this item is incorporated by reference to “Independent Registered Public
Accountants” in our Proxy Statement.
42
Item 15. Exhibits, Financial Statement Schedules
PART IV
Form 10-K
Report
Page
(a)
1. Financial Statements –
The following consolidated financial information is included as a separate section of this
annual report on Form 10-K.
Report of Independent Registered Public Accounting Firm. . . . . . . . . . . . . . . . . . . . . . . . . . . .
50
Consolidated Financial Statements
Consolidated Balance Sheets as of December 31, 2014 and 2013 . . . . . . . . . . . . . . . . . . . . . . .
51
Consolidated Statements of Income for the years ended December 31, 2014, 2013
and 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
52
Consolidated Statements of Comprehensive Income for the years ended December 31,
2014, 2013 and 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
53
Consolidated Statements of Changes in Equity for the years ended December 31, 2014,
2013 and 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
54
Consolidated Statements of Cash Flows for the years ended December 31, 2014,
2013 and 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Financial Statement Schedules -
Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule II -
Schedule III - Real Estate and Accumulated Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule IV - Mortgage Loans on Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other schedules are omitted since the required information is not present or is not
present in amounts sufficient to require submission of the schedule.
57
58
112
113
128
3. Exhibits -
The exhibits listed on the accompanying Index to Exhibits are filed as part of this report. . . .
44
43
INDEX TO EXHIBITS
Exhibit
Number
3.1(a)
3.1(b)
3.1(c)
3.1(d)
3.1(e)
3.1(f)
3.2
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
Exhibit Description
Articles of Restatement of Kimco Realty
Corporation, dated January 14, 2011
Amendment to Articles of Restatement of
Kimco Realty Corporation dated May 8, 2014
Articles Supplementary of Kimco Realty
Corporation dated November 8, 2010
Articles Supplementary of Kimco Realty
Corporation, dated March 12, 2012
Articles Supplementary of Kimco Realty
Corporation, dated July 17, 2012
Articles Supplementary of Kimco Realty
Corporation, dated November 30, 2012
Amended and Restated By-laws of Kimco
Realty Corporation, dated February 25, 2009
Agreement of Kimco Realty Corporation
pursuant to Item 601(b)(4)(iii)(A) of
Regulation S-K
Form of Certificate of Designations for the
Preferred Stock
Indenture dated September 1, 1993,
between Kimco Realty Corporation and
Bank of New York (as successor to IBJ
Schroder Bank and Trust Company)
First Supplemental Indenture, dated
August 4, 1994, between Kimco Realty
Corporation and Bank of New York (as
successor to IBJ Schroder Bank and
Trust Company)
Second Supplemental Indenture, dated
April 7, 1995, between Kimco Realty
Corporation and Bank of New York (as
successor to IBJ Schroder Bank and
Trust Company)
Indenture dated April 21, 2005, between
Kimco North Trust III, Kimco Realty
Corporation, as guarantor and BNY Trust
Company of Canada, as trustee
Third Supplemental Indenture, dated
June 2, 2006, between Kimco Realty
Corporation, and The Bank of New York,
as trustee
First Supplemental Indenture, dated
October 31, 2006, among Kimco Realty
Corporation, Pan Pacific Retail Properties,
Inc. and Bank of New York Trust Company,
N.A., as trustee
Fifth Supplemental Indenture, dated
October 31, 2006, among Kimco Realty
Corporation, Pan Pacific Retail Properties,
Inc. and Bank of New York Trust Company,
N.A., as trustee
Incorporated by Reference
Form File No.
1-10899
10-K
Date of
Filing
02/28/11
Exhibit
Number
3.1(a)
Filed
Herewith
Page
Number
10-K
1-10899
02/27/15
3.1(b)
10-K
1-10899
02/28/11
3.1(b)
8-A12B
1-10899
03/13/12
3.2
8-A12B
1-10899
07/18/12
3.2
8-A12B
1-10899
12/03/12
3.2
10-K
1-10899
02/27/09
3.2
S-11
333-42588 09/11/91
4.1
S-3
333-67552 09/10/93
4(d)
S-3
333-67552 09/10/93
4(a)
10-K
1-10899
03/28/96
4.6
8-K
1-10899
04/07/95
4(a)
8-K
1-10899
04/25/05
4.1
8-K
1-10899
06/05/06
4.1
8-K
1-10899
11/03/06
4.2
8-K
1-10899
11/03/06
4.1
44
Exhibit
Number
4.10
4.11
4.12
4.13
4.14
4.15
4.16
4.17
10.1
10.2
10.3
10.4
10.5
10.6
10.7
Exhibit Description
First Supplemental Indenture, dated
June 2, 2006, among Kimco North Trust III,
Kimco Realty Corporation, as guarantor and
BNY Trust Company of Canada, as trustee
Second Supplemental Indenture, dated
August 16, 2006, among Kimco North Trust
III, Kimco Realty Corporation, as guarantor
and BNY Trust Company of Canada,
as trustee
Fourth Supplemental Indenture, dated
April 26, 2007, between Kimco Realty
Corporation and The Bank of New York,
as trustee
Fifth Supplemental Indenture, dated
September 24, 2009, between Kimco Realty
Corporation and The Bank of New York
Mellon, as trustee
Third Supplemental Indenture, dated
April 13, 2010, among Kimco North Trust III,
Kimco Realty Corporation, as guarantor and
BNY Trust Company of Canada, as trustee
Sixth Supplemental Indenture, dated
May 23, 2013, between Kimco Realty
Corporation and The Bank of New York
Mellon, as trustee
Fourth Supplemental Indenture, dated
July 22, 2013, among Kimco North Trust III,
Kimco Realty Corporation, as guarantor and
BNY Trust Company of Canada, as trustee
Seventh Supplemental Indenture, dated
April 24, 2014, between Kimco Realty
Corporation and The Bank of New York
Mellon, as trustee
Amended and Restated Stock Option Plan
Second Amended and Restated 1998
Equity Participation Plan of Kimco Realty
Corporation (restated February 25, 2009)
Form of Indemnification Agreement
Agency Agreement, dated July 17, 2013, by
and among Kimco North Trust III, Kimco
Realty Corporation and Scotia Capital Inc.,
RBC Dominion Securities Inc., CIBC World
Markets Inc. and National Bank Financial Inc.
1 billion MXN Credit Agreement, dated
March 3, 2008, among KRC Mexico
Acquisition, LLC, as borrower, Kimco Realty
Corporation, as guarantor and each of the
parties named therein
Kimco Realty Corporation Executive
Severance Plan, dated March 15, 2010
Kimco Realty Corporation 2010 Equity
Participation Plan
Incorporated by Reference
Form File No.
1-10899
10-K
Date of
Filing
02/28/07
Exhibit
Number
4.12
Filed
Herewith
Page
Number
10-K
1-10899
02/28/07
4.13
8-K
1-10899
04/26/07
1.3
8-K
1-10899
09/24/09
4.1
10-Q
1-10899
05/07/10
99.2
8-K
1-10899
05/23/13
4.1
10-Q
1-10899
08/02/13
99.2
8-K
1-10899
04/24/14
4.1
10-K
10-K
1-10899
1-10899
03/28/95
02/27/09
10.3
10.9
10-K
10-Q
1-10899
1-10899
02/27/09
08/02/13
99.1
99.1
10-K/A
1-10899
08/17/10
10.18
8-K
1-10899
03/19/10
10.5
8-K
1-10899
03/19/10
10.7
45
Exhibit
Number
10.8
10.9
10.10
10.11
10.12
10.13
10.14
10.15
10.16
10.17
10.18
10.19
Exhibit Description
Form of Performance Share Award
Grant Notice and Performance Share
Award Agreement
Credit Agreement, dated April 17, 2009,
among Kimco Realty Corporation and each
of the parties named therein
$1.75 Billion Credit Agreement, dated
October 27, 2011, among Kimco Realty
Corporation and each of the parties
named therein
Agreement and General Release between
Kimco Realty Corporation and Barbara
Pooley, dated January 18, 2012
$400 Million Credit Agreement, dated
April 17, 2012, among Kimco Realty
Corporation as borrower and each of the
parties named therein
First Amendment to the Kimco Realty
Corporation Executive Severance Plan,
dated March 20, 2012
$147.5 Million Credit Agreement, dated
June 28, 2012, by and among InTown
Hospitality Corp. as borrower, Kimco Realty
Corporation as guarantor, and each of the
parties named therein
First Amendment to the Kimco Realty
Corporation 2010 Equity Participation Plan
First Amendment to Credit Agreement,
dated June 3, 2013, among Kimco Realty
Corporation, a Maryland corporation, the
subsidiaries of Kimco party thereto, the
lenders party thereto, and JPMorgan Chase
Bank, N.A., as administrative agent
$1.75 Billion Amended and Restated Credit
Agreement, dated March 17, 2014, among
Kimco Realty Corporation, the subsidiaries
of Kimco party thereto, the lenders party
thereto, and JPMorgan Chase Bank, N.A.,
as administrative agent
First Amendment, dated March 17,
2014, to the Credit Agreement, dated
April 17, 2012, among Kimco Realty
Corporation, the subsidiaries of
Kimco party thereto, the lenders party
thereto, and PNC Bank, National
Association, as administrative agent
Underwriting Agreement, dated April 14,
2014, by and among Kimco Realty
Corporation and Citigroup Global Markets
Inc., UBS Securities LLC and Wells Fargo
Securities, LLC
Incorporated by Reference
Form File No.
1-10899
8-K
Date of
Filing
03/19/10
Exhibit
Number
10.8
Filed
Herewith
Page
Number
10-K/A
1-10899
08/17/10
10.19
8-K
1-10899
11/02/11
10.1
8-K
1-10899
01/19/12
10.1
8-K
1-10899
04/20/12
10.1
10-Q
1-10899
05/10/12
10.3
8-K
1-10899
07/03/12
10.1
S-8
333-184776 11/06/12
99.1
8-K
1-10899
06/07/13
10.1
8-K
1-10899
03/20/14
10.1
8-K
1-10899
03/20/14
10.2
8-K
1-10899
04/15/14
1.1
46
Exhibit Description
Form File No.
Incorporated by Reference
Date of
Filing
—
Exhibit
Number
—
Filed
Herewith
X
Page
Number
129
Exhibit
Number
12.1
31.2
12.2
21.1
23.1
31.1
Computation of Ratio of Earnings to
Fixed Charges
Computation of Ratio of Earnings to
Combined Fixed Charges and Preferred
Stock Dividends
Significant Subsidiaries of the Company
Consent of PricewaterhouseCoopers LLP
Certification of the Company’s Chief
Executive Officer, David B. Henry, pursuant
to Section 302 of the Sarbanes-Oxley
Act of 2002
Certification of the Company’s Chief
Financial Officer, Glenn G. Cohen, pursuant
to Section 302 of the Sarbanes-Oxley
Act of 2002
Certification of the Company’s Chief
Executive Officer, David B. Henry, and the
Company’s Chief Financial Officer, Glenn
G. Cohen, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
Property Chart
99.1
101.INS
XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema
101.CAL XBRL Taxonomy Extension
32.1
Calculation Linkbase
101.DEF XBRL Taxonomy Extension
Definition Linkbase
101.LAB XBRL Taxonomy Extension Label Linkbase
101.PRE XBRL Taxonomy Extension
Presentation Linkbase
—
—
—
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—
—
—
—
—
—
—
—
—
—
—
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—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
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—
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—
—
—
—
—
—
—
—
—
—
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—
—
—
—
—
—
—
130
131
132
133
134
X
*
*
X
X
X
X
*
*
*
*
*
*
* Incorporated by reference to the corresponding Exhibit to the Company’s Annual Report on Form 10-K filed on
February 27, 2015
47
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
KIMCO REALTY CORPORATION
By: /s/ David B. Henry
David B. Henry
Chief Executive Officer
Dated: February 27, 2015
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Milton Cooper
Milton Cooper
/s/ David B. Henry
David B. Henry
/s/ Richard G. Dooley
Richard G. Dooley
/s/ Joe Grills
Joe Grills
/s/ Frank Lourenso
Frank Lourenso
/s/ Richard Saltzman
Richard Saltzman
/s/ Philip Coviello
Philip Coviello
/s/ Colombe Nicholas
Colombe Nicholas
/s/ Conor Flynn
Conor Flynn
/s/ Glenn G. Cohen
Glenn G. Cohen
/s/ Paul Westbrook
Paul Westbrook
Executive Chairman of the Board of Directors
February 27, 2015
Chief Executive Officer and Vice Chairman of
the Board of Directors
February 27, 2015
Director
Director
Director
Director
Director
Director
February 27, 2015
February 27, 2015
February 27, 2015
February 27, 2015
February 27, 2015
February 27, 2015
President - Chief Operating Officer
February 27, 2015
Executive Vice President - Chief Financial
Officer and Treasurer
February 27, 2015
Vice President - Chief Accounting Officer
February 27, 2015
48
ANNUAL REPORT ON FORM 10-K
ITEM 8, ITEM 15 (a) (1) and (2)
INDEX TO FINANCIAL STATEMENTS
AND
FINANCIAL STATEMENT SCHEDULES
Form 10-K
Page
KIMCO REALTY CORPORATION AND SUBSIDIARIES
Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50
Consolidated Financial Statements and Financial Statement Schedules:
Consolidated Balance Sheets as of December 31, 2014 and 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Income for the years ended December 31, 2014, 2013 and 2012 . . . . . . .
51
52
Consolidated Statements of Comprehensive Income for the years ended December 31, 2014,
2013 and 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
53
Consolidated Statements of Changes in Equity for the years ended December 31, 2014,
2013 and 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows for the years ended December 31, 2014, 2013 and 2012 . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
54
57
58
Financial Statement Schedules:
II. Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
III. Real Estate and Accumulated Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IV. Mortgage Loans on Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
112
113
128
49
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders
of Kimco Realty Corporation:
In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) present fairly,
in all material respects, the financial position of Kimco Realty Corporation and its subsidiaries (the “Company”) at
December 31, 2014 and 2013, and the results of their operations and their cash flows for each of the three years in the period
ended December 31, 2014 in conformity with accounting principles generally accepted in the United States of America.
In addition, in our opinion, the financial statement schedules listed in the index appearing under Item 15(a)(2) present
fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated
financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s
management is responsible for these financial statements and financial statement schedules, for maintaining effective
internal control over financial reporting and for its assessment of the effectiveness of internal control over financial
reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A.
Our responsibility is to express opinions on these financial statements, on the financial statement schedules, and on
the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in
accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements
are free of material misstatement and whether effective internal control over financial reporting was maintained in all
material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation. Our audit of internal control over
financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control
based on the assessed risk. Our audits also included performing such other procedures as we considered necessary
in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorizations
of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on
the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.
/s/ PricewaterhouseCoopers LLP
New York, New York
February 27, 2015
50
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share information)
December 31,
2014
December 31,
2013
Assets:
Real Estate
Rental property
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Building and improvements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Less: accumulated depreciation and amortization . . . . . . . . . . . . . . . . . . .
Real estate under development. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments and advances in real estate joint ventures . . . . . . . . . . . . . . . . . . .
Other real estate investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgages and other financing receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts and notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred charges and prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities:
Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgages payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable and accrued expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Redeemable noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments and Contingencies
Stockholders’ equity:
Preferred stock, $1.00 par value, authorized 5,959,100 shares
102,000 shares issued and outstanding (in series), Aggregate
liquidation preference $975,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock, $.01 par value, authorized 750,000,000 shares issued
and outstanding 411,819,818 and 409,731,058 shares, respectively . . . . . . . .
Paid-in capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cumulative distributions in excess of net income . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
2,365,800
7,520,095
9,885,895
(1,955,406)
7,930,489
132,331
8,062,820
1,037,218
266,157
74,013
187,322
90,235
172,386
182,630
212,947
10,285,728
3,192,167
1,428,131
129,509
111,143
431,533
5,292,483
91,480
$
$
$
2,072,099
6,953,427
9,025,526
(1,878,681)
7,146,845
97,818
7,244,663
1,257,010
274,641
30,243
148,768
62,766
164,326
175,698
305,515
9,663,630
3,186,047
1,035,354
124,290
104,496
357,764
4,807,951
86,153
102
102
4,118
5,732,021
(1,006,578)
45,122
4,774,785
126,980
4,901,765
10,285,728
$
4,097
5,689,258
(996,058)
(64,982)
4,632,417
137,109
4,769,526
9,663,630
The accompanying notes are an integral part of these consolidated financial statements
51
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share information)
Revenues
Revenues from rental properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management and other fee income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Operating expenses
Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating and maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income/(expense)
Mortgage financing income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest, dividends and other investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (expense)/income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from continuing operations before income taxes, equity in income of joint
ventures, gain on change in control of interests and equity in income from other
real estate investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in income of joint ventures, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on change in control of interests, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in income of other real estate investments, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from continuing operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations
Income from discontinued operating properties, net of tax . . . . . . . . . . . . . . . . . . . . . . . .
Impairment/loss on operating properties, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on disposition of operating properties, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income/(loss) from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on sale of operating properties, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to noncontrolling interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preferred stock redemption costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preferred dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income available to the Company’s common shareholders . . . . . . . . . . . . . . . . . .
Per common share:
Income from continuing operations:
-Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to the Company:
-Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average shares:
-Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amounts attributable to the Company’s common shareholders:
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income/(loss) from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
$
$
$
$
Year Ended December 31,
2013
2014
2012
958,888
35,009
993,897
14,250
124,670
119,697
122,201
4,882
39,808
258,074
683,582
310,315
3,129
966
(8,544)
(203,759)
102,107
(22,438)
159,560
107,235
38,042
384,506
36,780
(176,315)
190,520
50,985
389
435,880
(11,879)
424,001
-
(58,294)
365,707
0.77
0.77
0.89
0.89
409,088
411,038
316,839
48,868
365,707
$
$
$
$
$
$
$
$
825,210
36,317
861,527
13,347
108,746
99,405
127,470
6,133
32,247
224,713
612,061
249,466
4,304
16,847
1,195
(212,240)
59,572
(32,654)
208,689
21,711
31,136
288,454
50,610
(143,057)
43,914
(48,533)
1,432
241,353
(5,072)
236,281
-
(58,294)
177,987
0.53
0.53
0.43
0.43
407,631
408,614
218,590
(40,603)
177,987
$
$
$
$
$
$
$
$
755,851
37,522
793,373
12,745
101,820
92,409
123,524
4,843
10,289
214,827
560,457
232,916
7,504
2,022
(6,949)
(223,736)
11,757
(15,603)
112,896
15,555
53,397
178,002
53,153
(38,432)
83,253
97,974
4,299
280,275
(14,202)
266,073
(21,703)
(71,697)
172,673
0.19
0.19
0.42
0.42
405,997
406,689
79,360
93,313
172,673
The accompanying notes are an integral part of these consolidated financial statements
52
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income:
Change in unrealized gain on marketable securities . . . . . . . . . . . . .
Change in unrealized (loss)/gain on interest rate swaps . . . . . . . . . .
Change in foreign currency translation adjustment, net . . . . . . . . . .
Other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year Ended December 31,
2013
2014
2012
$
435,880
$
241,353
$
280,275
20,202
(1,404)
96,895
115,693
6,773
-
(4,208)
2,565
3,013
450
43,515
46,978
Comprehensive income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
551,573
243,918
327,253
Comprehensive income attributable to noncontrolling interests. . . . .
(17,468)
(6,436)
(19,702)
Comprehensive income attributable to the Company . . . . . . . . . . . . .
$
534,105
$
237,482
$
307,551
The accompanying notes are an integral part of these consolidated financial statements.
53
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Years Ended December 31, 2014, 2013 and 2012
(in thousands)
Cumulative
Distributions
in Excess of
Net Income
Accumulated
Other
Comprehensive
Income
Preferred Stock
Issued Amount
Common Stock
Issued
Amount
Paid-in
Capital
Total
Stockholders’
Equity
Noncontrolling
Interests
Total
Equity
Balance,
January 1, 2012 . . . . . . . $
(702,999) $
(107,660)
954 $
954
406,938 $ 4,069 $5,492,022 $
4,686,386 $
193,757 $ 4,880,143
Contributions from
noncontrolling
interests . . . . . . . . . . . .
Comprehensive income:
Net income attributable
to the Company . . . . . .
Other comprehensive
income, net of tax:
Change in unrealized
gain on marketable
securities . . . . . . . . . . .
Change in unrealized
gain on interest
rate swaps. . . . . . . . . . .
Change in foreign
currency translation
adjustment . . . . . . . . . .
Redeemable
noncontrolling
interests . . . . . . . . . . . .
Dividends ($0.78 per
common share; $1.0344
per Class F Depositary
Share, $1.5016
per Class G Depositary
Share, $1.725 per
Class H Depositary
Share, $1.1708 per
Class I Depositary
Share, $0.5958 per
Class J Depositary
Share, and $0.0938
per Class K Depositary
Share, respectively) . . . .
Distributions to
noncontrolling
interests . . . . . . . . . . . .
Issuance of
common stock . . . . . . .
Issuance of
preferred stock . . . . . .
Surrender of
common stock . . . . . . .
Repurchase of
common stock . . . . . . .
Exercise of common
stock options . . . . . . . .
Acquisition of
noncontrolling
interests . . . . . . . . . . . .
Amortization of
equity awards . . . . . . . .
Redemption of
preferred stock . . . . . .
Balance,
-
266,073
-
-
-
-
(387,082)
-
-
-
-
-
-
-
-
-
-
-
3,013
450
38,015
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(884)
(884)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,384
1,384
266,073
14,202
280,275
3,013
450
-
-
3,013
450
38,015
5,500
43,515
-
(6,337)
(6,337)
(387,082)
-
(387,082)
-
(15,328)
(15,328)
1,096
11
18,104
18,115
32
32
-
-
774,125
774,157
(111)
(1)
(2,072)
(2,073)
(1,636)
(16)
(30,931)
(30,947)
1,495
15
22,576
22,591
-
-
-
-
-
18,115
774,157
(2,073)
(30,947)
22,591
-
-
-
-
-
-
(95)
(95)
(25,858)
(25,953)
11,557
11,557
(634,116)
(635,000)
-
-
11,557
(635,000)
December 31, 2012 . . .
(824,008)
(66,182)
102
102
407,782
4,078
5,651,170
4,765,160
167,320
4,932,480
The accompanying notes are an integral part of these consolidated financial statements.
54
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Years Ended December 31, 2014, 2013 and 2012
(in thousands) (continued)
Cumulative
Distributions
in Excess of
Net Income
Accumulated
Other
Comprehensive
Income
Preferred Stock
Issued Amount
Common Stock
Issued
Amount
Paid-in
Capital
Total
Stockholders’
Equity
Noncontrolling
Interests
Total
Equity
Contributions from
noncontrolling
interests . . . . . . . . . . . .
Comprehensive income:
Net income attributable
to the Company . . . . . .
Other comprehensive
income, net of tax:
Change in unrealized
gain on marketable
securities . . . . . . . . . . .
Change in foreign
currency translation
adjustment . . . . . . . . . .
Redeemable
noncontrolling
interests . . . . . . . . . . . .
Dividends ($0.855 per
common share;
$1.725 per Class H
Depositary Share,
$1.5000 per Class I
Depositary Share,
$1.3750 per Class J
Depositary Share,
and $1.40625 per
Class K Depositary
Share, respectively) . . .
Distributions to
noncontrolling
interests . . . . . . . . . . . .
Issuance of
common stock . . . . . . .
Surrender of
restricted stock . . . . . .
Exercise of common
stock options . . . . . . . .
Acquisition of
noncontrolling
interests . . . . . . . . . . . .
Amortization of
equity awards . . . . . . . .
Balance,
-
236,281
-
-
-
(408,331)
-
-
-
-
-
-
-
-
6,773
(5,573)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
560
(247)
1,636
-
-
-
-
-
-
-
-
-
5
(2)
16
-
-
-
-
-
-
-
-
-
-
1,026
1,026
236,281
5,072
241,353
6,773
-
6,773
(5,573)
1,365
(4,208)
-
(6,892)
(6,892)
(408,331)
-
(408,331)
-
(10,686)
(10,686)
9,208
9,213
(3,889)
(3,891)
30,193
30,209
-
-
-
9,213
(3,891)
30,209
(8,894)
(8,894)
(20,096)
(28,990)
11,470
11,470
-
11,470
December 31, 2013 . . .
(996,058)
(64,982)
102
102
409,731
4,097
5,689,258
4,632,417
137,109
4,769,526
The accompanying notes are an integral part of these consolidated financial statements.
55
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Years Ended December 31, 2014, 2013 and 2012
(in thousands) (continued)
Cumulative
Distributions
in Excess of
Net Income
Accumulated
Other
Comprehensive
Income
Preferred Stock
Issued Amount
Common Stock
Issued
Amount
Paid-in
Capital
Total
Stockholders’
Equity
Noncontrolling
Interests
Total
Equity
Contributions from
noncontrolling
interests . . . . . . . . . . . .
Comprehensive income:
Net income attributable
to the Company . . . . . .
Other comprehensive
income, net of tax:
Change in unrealized
gain on marketable
securities . . . . . . . . . . .
Change in unrealized
loss on interest
rate swaps. . . . . . . . . . .
Change in foreign
currency translation
adjustment . . . . . . . . . .
Redeemable
noncontrolling
interests . . . . . . . . . . . .
Dividends ($0.915 per
common share;
$1.725 per Class H
Depositary Share,
$1.5000 per Class I
Depositary Share,
$1.3750 per Class J
Depositary Share,
and $1.40625 per
Class K Depositary
Share, respectively) . . .
Distributions to
noncontrolling
interests . . . . . . . . . . . .
Issuance of
common stock . . . . . . .
Surrender of
restricted stock . . . . . .
Exercise of common
stock options . . . . . . . .
Acquisition of
noncontrolling
interests . . . . . . . . . . . .
Amortization of
equity awards . . . . . . . .
Balance,
-
424,001
-
-
-
-
(434,521)
-
-
-
-
-
-
-
-
20,202
(1,404)
91,306
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
805
(190)
1,474
-
-
-
-
-
-
-
-
-
-
8
(2)
15
-
-
-
-
-
-
-
-
-
-
-
6,259
6,259
424,001
11,879
435,880
20,202
(1,404)
-
-
20,202
(1,404)
91,306
5,589
96,895
-
(6,335)
(6,335)
(434,521)
-
(434,521)
-
(26,755)
(26,755)
14,039
14,047
(4,049)
(4,051)
23,859
23,874
-
-
-
14,047
(4,051)
23,874
(294)
9,208
(294)
9,208
(766)
(1,060)
-
9,208
December 31, 2014 . . . $ (1,006,578) $
45,122
102 $
102
411,820 $ 4,118 $5,732,021 $
4,774,785 $
126,980 $ 4,901,765
The accompanying notes are an integral part of these consolidated financial statements.
56
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Cash flow from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity award expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on sale of operating properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in income of joint ventures, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on change in control of interests, net . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in income from other real estate investments, net . . . . . . . . . . . . .
Distributions from joint ventures and other real estate investments . . . .
Change in accounts and notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in accounts payable and accrued expenses . . . . . . . . . . . . . . . . .
Change in other operating assets and liabilities . . . . . . . . . . . . . . . . . . . .
Net cash flow provided by operating activities . . . . . . . . . . . . . . . . . . .
Cash flow from investing activities:
Acquisition of operating real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Improvements to operating real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition of real estate under development . . . . . . . . . . . . . . . . . . . . . .
Improvements to real estate under development . . . . . . . . . . . . . . . . . . .
Investment in marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sale/repayments of marketable securities . . . . . . . . . . . .
Investments and advances to real estate joint ventures . . . . . . . . . . . . . .
Reimbursements of investments and advances to real estate
joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment in other real estate investments . . . . . . . . . . . . . . . . . . . . . . . .
Reimbursements of investments and advances to other real
estate investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment in mortgage loans receivable . . . . . . . . . . . . . . . . . . . . . . . . . .
Collection of mortgage loans receivable . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment in other investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reimbursements of other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sale of operating properties . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sale of development properties . . . . . . . . . . . . . . . . . . . . .
Net cash flow provided by/(used for) investing activities . . . . . . . . . . .
Cash flow from financing activities:
Principal payments on debt, excluding normal amortization of
rental property debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Principal payments on rental property debt . . . . . . . . . . . . . . . . . . . . . . . .
Principal payments on construction loan financings . . . . . . . . . . . . . . . . .
Proceeds from mortgage/construction loan financings . . . . . . . . . . . . . .
(Repayments)/Proceeds under unsecured revolving credit facility, net . . .
Proceeds from issuance of unsecured term loan/notes. . . . . . . . . . . . . . .
Repayments under unsecured term loan/notes . . . . . . . . . . . . . . . . . . . . .
Financing origination costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Redemption of noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Redemption of preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchase of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash flow used for financing activities . . . . . . . . . . . . . . . . . . . . . . .
Change in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Interest paid during the year (net of capitalized interest of
2014
Year Ended December 31,
2013
2012
435,880
$
241,353
$
280,275
273,093
217,858
17,879
(203,889)
(159,560)
(107,235)
(38,042)
255,532
(8,060)
(1,095)
(53,018)
629,343
(384,828)
(131,795)
(65,724)
(418)
(11,445)
3,780
(93,845)
222,590
(4,338)
16,312
(50,000)
8,302
-
-
612,748
5,366
126,705
(327,963)
(22,841)
-
15,700
(94,354)
500,000
(370,842)
(11,911)
(1,284)
(427,873)
23,874
-
-
(717,494)
38,554
148,768
187,322
257,855
190,218
18,897
(51,529)
(208,689)
(21,711)
(31,136)
258,050
7,213
10,166
(100,652)
570,035
(354,287)
(107,277)
-
(591)
(33,588)
26,406
(296,550)
440,161
(23,566)
30,151
(11,469)
29,192
(21,366)
9,175
385,844
-
72,235
(256,346)
(23,804)
-
35,974
(57,775)
621,562
(546,717)
(8,041)
(30,086)
(400,354)
30,210
-
-
(635,377)
6,893
141,875
148,768
216,258
33,838
$
$
$
262,742
59,569
17,907
(94,369)
(112,896)
(15,555)
(53,397)
194,110
2,940
(11,281)
(50,991)
479,054
(442,541)
(109,928)
-
(2,487)
-
156
(219,885)
187,856
(5,638)
33,720
(16,021)
63,600
(924)
11,553
449,539
-
(51,000)
(284,815)
(23,130)
(2,177)
14,776
8,559
400,000
(215,900)
(2,138)
(42,315)
(382,722)
796,748
(635,000)
(30,947)
(399,061)
28,993
112,882
141,875
226,775
2,122
$
$
$
$2,383, $1,263, $1,538, respectively) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
207,632
Income taxes paid during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
23,292
The accompanying notes are an integral part of these consolidated financial statements
57
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Amounts relating to the number of buildings, square footage, tenant and occupancy data, joint venture debt average
interest rates and terms and estimated project costs are unaudited.
1.
Summary of Significant Accounting Policies:
Business
Kimco Realty Corporation and subsidiaries (the “Company” or “Kimco”), affiliates and related real estate joint
ventures are engaged principally in the operation of neighborhood and community shopping centers which are
anchored generally by discount department stores, supermarkets or drugstores. The Company also provides
property management services for shopping centers owned by affiliated entities, various real estate joint ventures
and unaffiliated third parties.
Additionally, in connection with the Tax Relief Extension Act of 1999 (the “RMA”), which became effective
January 1, 2001, the Company is permitted to participate in activities which it was precluded from previously
in order to maintain its qualification as a Real Estate Investment Trust (“REIT”), so long as these activities are
conducted in entities which elect to be treated as taxable subsidiaries under the Internal Revenue Code, as
amended (the “Code”), subject to certain limitations. As such, the Company, through its wholly-owned taxable
REIT subsidiaries (“TRS”), has been engaged in various retail real estate related opportunities including retail
real estate management and disposition services which primarily focuses on leasing and disposition strategies of
retail real estate controlled by both healthy and distressed and/or bankrupt retailers. The Company may consider
other investments through its TRS should suitable opportunities arise.
The Company seeks to reduce its operating and leasing risks through diversification achieved by the geographic
distribution of its properties, avoiding dependence on any single property and a large tenant base. At December 31,
2014, the Company’s single largest neighborhood and community shopping center accounted for only 1.8% of
the Company’s annualized base rental revenues and only 1.4% of the Company’s total shopping center gross
leasable area (“GLA”), including the proportionate share of base rental revenues from properties in which the
Company has less than a 100% economic interest. At December 31, 2014, the Company’s five largest tenants were
TJX Companies, The Home Depot, Wal-Mart, Kohl’s and Bed Bath & Beyond which represented 3.3%, 2.4%, 1.8%,
1.8% and 1.8%, respectively, of the Company’s annualized base rental revenues, including the proportionate share
of base rental revenues from properties in which the Company has less than a 100% economic interest.
The principal business of the Company and its consolidated subsidiaries is the ownership, management,
development and operation of retail shopping centers, including complementary services that capitalize on the
Company’s established retail real estate expertise. The Company evaluates performance on a property specific
or transactional basis and does not distinguish its principal business or group its operations on a geographical
basis for purposes of measuring performance. Accordingly, the Company believes it has a single reportable
segment for disclosure purposes in accordance with accounting principles generally accepted in the United
States of America (“GAAP”).
Principles of Consolidation and Estimates
The accompanying Consolidated Financial Statements include the accounts of Kimco Realty Corporation and
subsidiaries (the “Company”). The Company’s subsidiaries includes subsidiaries which are wholly-owned and all
entities in which the Company has a controlling interest, including where the Company has been determined to
be a primary beneficiary of a variable interest entity (“VIE”) or meets certain criteria of a sole general partner or
managing member in accordance with the Consolidation guidance of the Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification (“ASC”). All inter-company balances and transactions have been
eliminated in consolidation.
GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues
and expenses during a reporting period. The most significant assumptions and estimates relate to the valuation
of real estate and related intangible assets and liabilities, equity method investments, marketable securities and
other investments, including the assessment of impairments, as well as, depreciable lives, revenue recognition,
58
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
the collectability of trade accounts receivable, realizability of deferred tax assets and the assessment of uncertain
tax positions. Application of these assumptions requires the exercise of judgment as to future uncertainties, and,
as a result, actual results could differ from these estimates.
Subsequent Events
The Company has evaluated subsequent events and transactions for potential recognition or disclosure
in its consolidated financial statements (see Footnote 7, 8, 12, 19 and 26 of the Notes to Consolidated
Financial Statements).
Real Estate
Real estate assets are stated at cost, less accumulated depreciation and amortization. Upon acquisition of real
estate operating properties, the Company estimates the fair value of acquired tangible assets (consisting of
land, building, building improvements and tenant improvements) and identified intangible assets and liabilities
(consisting of above and below-market leases, in-place leases and tenant relationships, where applicable),
assumed debt and redeemable units issued at the date of acquisition, based on evaluation of information and
estimates available at that date. Fair value is determined based on an exit price approach, which contemplates the
price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. If, up to one year from the acquisition date, information regarding fair value
of the assets acquired and liabilities assumed is received and estimates are refined, appropriate adjustments, if
material, are made to the purchase price allocation on a retrospective basis. The Company expenses transaction
costs associated with business combinations in the period incurred.
In allocating the purchase price to identified intangible assets and liabilities of an acquired property, the value of
above-market and below-market leases is estimated based on the present value of the difference between the
contractual amounts, including fixed rate below-market lease renewal options, to be paid pursuant to the leases
and management’s estimate of the market lease rates and other lease provisions (i.e., expense recapture, base
rental changes, etc.) measured over a period equal to the estimated remaining term of the lease. The capitalized
above-market or below-market intangible is amortized to rental income over the estimated remaining term of the
respective leases, which includes the expected renewal option period. Mortgage debt discounts or premiums
are amortized into interest expense over the remaining term of the related debt instrument. Unit discounts and
premiums are amortized into noncontrolling interest in income, net over the period from the date of issuance to
the earliest redemption date of the units.
In determining the value of in-place leases, management considers current market conditions and costs to execute
similar leases in arriving at an estimate of the carrying costs during the expected lease-up period from vacant
to existing occupancy. In estimating carrying costs, management includes real estate taxes, insurance, other
operating expenses, estimates of lost rental revenue during the expected lease-up periods and costs to execute
similar leases including leasing commissions, legal and other related costs based on current market demand. The
value assigned to in-place leases and tenant relationships is amortized over the estimated remaining term of the
leases. If a lease were to be terminated prior to its scheduled expiration, all unamortized costs relating to that
lease would be written off.
Depreciation and amortization are provided on the straight-line method over the estimated useful lives of the
assets, as follows:
Buildings and building improvements
Fixtures, leasehold and tenant improvements
(including certain identified intangible assets)
15 to 50 years
Terms of leases or useful
lives, whichever is shorter
Expenditures for maintenance and repairs are charged to operations as incurred. Significant renovations and
replacements, which improve or extend the life of the asset, are capitalized. The useful lives of amortizable
intangible assets are evaluated each reporting period with any changes in estimated useful lives being accounted
for over the revised remaining useful life.
59
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
When a real estate asset is identified by management as held-for-sale, the Company ceases depreciation of the
asset and estimates the sales price, net of selling costs. If the net sales price of the asset is less than the net book
value of the asset, an adjustment to the carrying value would be recorded to reflect the estimated fair value of
the property.
On a continuous basis, management assesses whether there are any indicators, including property operating
performance, changes in anticipated holding period and general market conditions, that the value of the real
estate properties (including any related amortizable intangible assets or liabilities) may be impaired. A property
value is considered impaired only if management’s estimate of current and projected operating cash flows
(undiscounted and unleveraged) of the property over its remaining hold period is less than the net carrying value
of the property. Such cash flow projections consider factors such as expected future operating income, trends
and prospects, as well as the effects of demand, competition and other factors. To the extent impairment has
occurred, the carrying value of the property would be adjusted to an amount to reflect the estimated fair value
of the property.
Real Estate Under Development
Real estate under development represents the ground-up development of neighborhood and community
shopping center projects which the Company plans to hold as long-term investments. These properties are
carried at cost. The cost of land and buildings under development includes specifically identifiable costs. The
capitalized costs include pre-construction costs essential to the development of the property, development
costs, construction costs, interest costs, real estate taxes, salaries and related costs of personnel directly involved
and other costs incurred during the period of development. The Company ceases cost capitalization when the
property is held available for occupancy upon substantial completion of tenant improvements, but no later than
one year from the completion of major construction activity. If, in management’s opinion, the net sales price of
assets held for resale or the current and projected undiscounted cash flows of these assets to be held as long-
term investments is less than the net carrying value, the carrying value would be adjusted to an amount that
reflects the estimated fair value of the property.
Investments in Unconsolidated Joint Ventures
The Company accounts for its investments in unconsolidated joint ventures under the equity method of
accounting as the Company exercises significant influence, but does not control these entities. These investments
are recorded initially at cost and subsequently adjusted for cash contributions, distributions and our share of
earnings and losses. Earnings for each investment are recognized in accordance with each respective investment
agreement and where applicable, based upon an allocation of the investment’s net assets at book value as if the
investment was hypothetically liquidated at the end of each reporting period.
The Company’s joint ventures and other real estate investments primarily consist of co-investments with
institutional and other joint venture partners in neighborhood and community shopping center properties,
consistent with its core business. These joint ventures typically obtain non-recourse third-party financing on their
property investments, thus contractually limiting the Company’s exposure to losses primarily to the amount of its
equity investment; and due to the lender’s exposure to losses, a lender typically will require a minimum level of
equity in order to mitigate its risk. The Company, on a limited selective basis, has obtained unsecured financing
for certain joint ventures. These unsecured financings are guaranteed by the Company with guarantees from
the joint venture partners for their proportionate amounts of any guaranty payment the Company is obligated
to make.
To recognize the character of distributions from equity investees the Company reviews the nature of the cash
distribution to determine the proper character of cash flow distributions as either returns on investment, which
would be included in operating activities or returns of investment, which would be included in investing activities.
60
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
On a continuous basis, management assesses whether there are any indicators, including the underlying investment
property operating performance and general market conditions, that the value of the Company’s investments in
unconsolidated joint ventures may be impaired. An investment’s value is impaired only if management’s estimate
of the fair value of the investment is less than the carrying value of the investment and such difference is deemed
to be other-than-temporary. To the extent impairment has occurred, the loss shall be measured as the excess of
the carrying amount of the investment over the estimated fair value of the investment.
The Company’s estimated fair values are based upon a discounted cash flow model for each joint venture that
includes all estimated cash inflows and outflows over a specified holding period and, where applicable, any
estimated debt premiums. Capitalization rates, discount rates and credit spreads utilized in these models are
based upon rates that the Company believes to be within a reasonable range of current market rates.
Other Real Estate Investments
Other real estate investments primarily consist of preferred equity investments for which the Company provides
capital to owners and developers of real estate. The Company typically accounts for its preferred equity investments
on the equity method of accounting, whereby earnings for each investment are recognized in accordance with
each respective investment agreement and based upon an allocation of the investment’s net assets at book value
as if the investment was hypothetically liquidated at the end of each reporting period.
On a continuous basis, management assesses whether there are any indicators, including the underlying
investment property operating performance and general market conditions, that the value of the Company’s
Other real estate investments may be impaired. An investment’s value is impaired only if management’s estimate
of the fair value of the investment is less than the carrying value of the investment and such difference is deemed
to be other-than-temporary. To the extent impairment has occurred, the loss shall be measured as the excess of
the carrying amount of the investment over the estimated fair value of the investment.
The Company’s estimated fair values are based upon a discounted cash flow model for each investment that
includes all estimated cash inflows and outflows over a specified holding period and, where applicable, any
estimated debt premiums. Capitalization rates, discount rates and credit spreads utilized in these models are
based upon rates that the Company believes to be within a reasonable range of current market rates.
Mortgages and Other Financing Receivables
Mortgages and other financing receivables consist of loans acquired and loans originated by the Company.
Borrowers of these loans are primarily experienced owners, operators or developers of commercial real estate.
The Company’s loans are primarily mortgage loans that are collateralized by real estate. Loan receivables are
recorded at stated principal amounts, net of any discount or premium or deferred loan origination costs or
fees. The related discounts or premiums on mortgages and other loans purchased are amortized or accreted
over the life of the related loan receivable. The Company defers certain loan origination and commitment fees,
net of certain origination costs and amortizes them as an adjustment of the loan’s yield over the term of the
related loan. The Company reviews on a quarterly basis credit quality indicators such as (i) payment status to
identify performing versus non-performing loans, (ii) changes affecting the underlying real estate collateral and
(iii) national and regional economic factors.
Interest income on performing loans is accrued as earned. A non-performing loan is placed on non-accrual status
when it is probable that the borrower may be unable to meet interest payments as they become due. Generally,
loans 90 days or more past due are placed on non-accrual status unless there is sufficient collateral to assure
collectability of principal and interest. Upon the designation of non-accrual status, all unpaid accrued interest is
reserved and charged against current income. Interest income on non-performing loans is generally recognized
on a cash basis. Recognition of interest income on non-performing loans on an accrual basis is resumed when it
is probable that the Company will be able to collect amounts due according to the contractual terms.
The Company has determined that it has one portfolio segment, primarily represented by loans collateralized by
real estate, whereby it determines, as needed, reserves for loan losses on an asset-specific basis. The reserve for
loan losses reflects management’s estimate of loan losses as of the balance sheet date. The reserve is increased
61
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
through loan loss expense and is decreased by charge-offs when losses are confirmed through the receipt of
assets such as cash or via ownership control of the underlying collateral in full satisfaction of the loan upon
foreclosure or when significant collection efforts have ceased.
The Company considers a loan to be impaired when, based upon current information and events, it is probable that
the Company will be unable to collect all amounts due under the existing contractual terms. A reserve allowance
is established for an impaired loan when the estimated fair value of the underlying collateral (for collateralized
loans) or the present value of expected future cash flows is lower than the carrying value of the loan. An internal
valuation is performed generally using the income approach to estimate the fair value of the collateral at the time
a loan is determined to be impaired. The model is updated if circumstances indicate a significant change in value
has occurred. The Company does not provide for an additional allowance for loan losses based on the grouping
of loans as the Company believes the characteristics of the loans are not sufficiently similar to allow an evaluation
of these loans as a group for a possible loan loss allowance. As such, all of the Company’s loans are evaluated
individually for impairment purposes.
Cash and Cash Equivalents
Cash and cash equivalents (demand deposits in banks, commercial paper and certificates of deposit with original
maturities of three months or less). Cash and cash equivalent balances may, at a limited number of banks and
financial institutions, exceed insurable amounts. The Company believes it mitigates risk by investing in or through
major financial institutions and primarily in funds that are currently U.S. federal government insured. Recoverability
of investments is dependent upon the performance of the issuers.
Marketable Securities
The Company classifies its marketable equity securities as available-for-sale in accordance with the FASB’s
Investments-Debt and Equity Securities guidance. These securities are carried at fair market value with unrealized
gains and losses reported in stockholders’ equity as a component of Accumulated other comprehensive income
(“AOCI”). Gains or losses on securities sold are based on the specific identification method.
All debt securities are generally classified as held-to-maturity because the Company has the positive intent and
ability to hold the securities to maturity. It is more likely than not that the Company will not be required to sell the
debt security before its anticipated recovery and the Company expects to recover the security’s entire amortized
cost basis even if the entity does not intend to sell. Held-to-maturity securities are stated at amortized cost,
adjusted for amortization of premiums and accretion of discounts to maturity. Debt securities which contain
conversion features generally are classified as available-for-sale.
On a continuous basis, management assesses whether there are any indicators that the value of the Company’s
marketable securities may be impaired, which includes reviewing the underlying cause of any decline in value and
the estimated recovery period, as well as the severity and duration of the decline. In the Company’s evaluation,
the Company considers its ability and intent to hold these investments for a reasonable period of time sufficient
for the Company to recover its cost basis. A marketable security is impaired if the fair value of the security is less
than the carrying value of the security and such difference is deemed to be other-than-temporary. To the extent
impairment has occurred, the loss shall be measured as the excess of the carrying amount of the security over the
estimated fair value in the security.
Deferred Leasing and Financing Costs
Costs incurred in obtaining tenant leases and long-term financing, included in deferred charges and prepaid
expenses in the accompanying Consolidated Balance Sheets, are amortized on a straight-line basis, which
approximates the effective interest method, over the terms of the related leases or debt agreements, as
applicable. Such capitalized costs include salaries, lease incentives and related costs of personnel directly
involved in successful leasing efforts.
62
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Software Development Costs
Expenditures for major software purchases and software developed for internal use are capitalized and amortized
on a straight-line basis generally over a 3 to 5 year period. The Company’s policy provides for the capitalization
of external direct costs of materials and services associated with developing or obtaining internal use computer
software. In addition, the Company also capitalizes certain payroll and payroll-related costs for employees who
are directly associated with internal use computer software projects. The amount of capitalizable payroll costs
with respect to these employees is limited to the time directly spent on such projects. Costs associated with
preliminary project stage activities, training, maintenance and all other post-implementation stage activities are
expensed as incurred. As of December 31, 2014 and 2013, the Company had unamortized software development
costs of $24.0 million and $28.2 million, respectively, which is included in Other assets on the Company’s
Consolidated Balance Sheets. The Company expensed $9.2 million, $7.6 million and $5.5 million in amortization
of software development costs during the years ended December 31, 2014, 2013 and 2012, respectively.
Revenue Recognition and Accounts Receivable
Base rental revenues from rental property are recognized on a straight-line basis over the terms of the related
leases. Certain of these leases also provide for percentage rents based upon the level of sales achieved by the
lessee. These percentage rents are recognized once the required sales level is achieved. Rental income may also
include payments received in connection with lease termination agreements. In addition, leases typically provide
for reimbursement to the Company of common area maintenance costs, real estate taxes and other operating
expenses. Operating expense reimbursements are recognized as earned.
Management and other fee income consists of property management fees, leasing fees, property acquisition and
disposition fees, development fees and asset management fees. These fees arise from contractual agreements
with third parties or with entities in which the Company has a noncontrolling interest. Management and other fee
income, including acquisition and disposition fees, are recognized as earned under the respective agreements.
Management and other fee income related to partially owned entities are recognized to the extent attributable
to the unaffiliated interest.
Gains and losses from the sale of depreciated operating property and ground-up development projects are
generally recognized using the full accrual method in accordance with the FASB’s real estate sales guidance,
provided that various criteria relating to the terms of sale and subsequent involvement by the Company with the
properties are met.
Gains and losses on transfers of operating properties result from the sale of a partial interest in properties to
unconsolidated joint ventures and are recognized using the partial sale provisions of the FASB’s real estate
sales guidance.
The Company makes estimates of the uncollectability of its accounts receivable related to base rents, straight-
line rent, expense reimbursements and other revenues. The Company analyzes accounts receivable and historical
bad debt levels, customer credit worthiness and current economic trends when evaluating the adequacy of the
allowance for doubtful accounts. In addition, tenants in bankruptcy are analyzed and estimates are made in
connection with the expected recovery of pre-petition and post-petition claims. The Company’s reported net
earnings are directly affected by management’s estimate of the collectability of accounts receivable.
Accounts and notes receivable in the accompanying Consolidated Balance Sheets are net of estimated
unrecoverable amounts of $10.4 million and $10.8 million of billed accounts receivable at December 31, 2014
and 2013, respectively. Additionally, Accounts and notes receivable in the accompanying Consolidated Balance
Sheets are net of estimated unrecoverable amounts of $22.9 million and $23.4 million of straight-line rent receivable
at December 31, 2014 and 2013, respectively.
63
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Income Taxes
The Company has made an election to qualify, and believes it is operating so as to qualify, as a REIT for federal
income tax purposes. Accordingly, the Company generally will not be subject to federal income tax, provided
that distributions to its stockholders equal at least the amount of its REIT taxable income as defined under
Section 856 through 860 of the Code.
In connection with the RMA, which became effective January 1, 2001, the Company is permitted to participate in
certain activities which it was previously precluded from in order to maintain its qualification as a REIT, so long as
these activities are conducted by entities which elect to be treated as taxable REIT subsidiaries under the Code.
As such, the Company is subject to federal and state income taxes on the income from these activities. The
Company is also subject to local taxes on certain non-U.S. investments.
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are
recognized for the estimated future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax
credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the
year in which those temporary differences are expected to be recovered or settled. The Company provides a
valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more
likely than not.
The Company reviews the need to establish a valuation allowance against deferred tax assets on a quarterly
basis. The review includes an analysis of various factors, such as future reversals of existing taxable temporary
differences, the capacity for the carryback or carryforward of any losses, the expected occurrence of future
income or loss and available tax planning strategies.
The Company applies the FASB’s guidance relating to uncertainty in income taxes recognized in a Company’s
financial statements. Under this guidance the Company may recognize the tax benefit from an uncertain tax
position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities,
based on the technical merits of the position. The tax benefits recognized in the financial statements from such a
position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized
upon ultimate settlement. The guidance on accounting for uncertainty in income taxes also provides guidance on
de-recognition, classification, interest and penalties on income taxes, and accounting in interim periods.
Foreign Currency Translation and Transactions
Assets and liabilities of the Company’s foreign operations are translated using year-end exchange rates, and
revenues and expenses are translated using exchange rates as determined throughout the year. Gains or losses
resulting from translation are included in AOCI, as a separate component of the Company’s stockholders’
equity. Gains or losses resulting from foreign currency transactions are translated to local currency at the rates
of exchange prevailing at the dates of the transactions. The effect of the transactions gain or loss is included in
the caption Other expense, net in the Consolidated Statements of Income. The Company is required to release
cumulative translation adjustment (“CTA”) balances into earnings when the Company has substantially liquidated
its investment in a foreign entity.
Derivative/Financial Instruments
The Company is exposed to certain risks arising from both its business operations and economic conditions.
The Company principally manages its exposures to a wide variety of business and operational risk through
management of its core business activities. The Company manages economic risks, including interest rate,
liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and the use
of derivative financial instruments. Specifically, the Company may use derivatives to manage exposures that arise
from changes in interest rates, foreign currency exchange rate fluctuations and market value fluctuations of equity
securities. The Company limits these risks by following established risk management policies and procedures
including the use of derivatives.
64
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
The Company measures its derivative instruments at fair value and records them in the Consolidated Balance
Sheet as an asset or liability, depending on the Company’s rights or obligations under the applicable derivative
contract. The accounting for changes in the fair value of the derivatives depends on the intended use of the
derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge
accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting.
Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability,
or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges.
Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or
other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as
hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally
provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition
of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair
value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company
may enter into derivative contracts that are intended to economically hedge certain of its risk, even though
hedge accounting does not apply or the Company elects not to apply hedge accounting under the Derivatives
and Hedging guidance issued by the FASB.
The effective portion of the changes in fair value of derivatives designated and that qualify as cash flow hedges
is recorded in AOCI and is subsequently reclassified into earnings in the period that the hedged forecasted
transaction affects earnings. Any ineffective portion of the change in fair value of the derivatives is recognized
directly in earnings. During 2014, 2013 and 2012, the Company had no hedge ineffectiveness.
Noncontrolling Interests
The Company accounts for noncontrolling interests in accordance with the Consolidation guidance and the
Distinguishing Liabilities from Equity guidance issued by the FASB. Noncontrolling interests represent the
portion of equity that the Company does not own in those entities it consolidates. The Company identifies its
noncontrolling interests separately within the equity section on the Company’s Consolidated Balance Sheets.
The amounts of consolidated net earnings attributable to the Company and to the noncontrolling interests are
presented separately on the Company’s Consolidated Statements of Income.
Noncontrolling interests also includes amounts related to partnership units issued by consolidated subsidiaries
of the Company in connection with certain property acquisitions. These units have a stated redemption value or
a defined redemption amount based upon the trading price of the Company’s common stock and provides the
unit holders various rates of return during the holding period. The unit holders generally have the right to redeem
their units for cash at any time after one year from issuance. For convertible units, the Company typically has the
option to settle redemption amounts in cash or common stock.
The Company evaluates the terms of the partnership units issued in accordance with the FASB’s Distinguishing
Liabilities from Equity guidance. Units which embody an unconditional obligation requiring the Company to
redeem the units for cash after a specified or determinable date (or dates) or upon an event that is certain
to occur are determined to be mandatorily redeemable under this guidance and are included as Redeemable
noncontrolling interest and classified within the mezzanine section between Total liabilities and Stockholders’
equity on the Company’s Consolidated Balance Sheets. Convertible units for which the Company has the option
to settle redemption amounts in cash or Common Stock are included in the caption Noncontrolling interest
within the equity section on the Company’s Consolidated Balance Sheets.
65
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Earnings Per Share
The following table sets forth the reconciliation of earnings and the weighted-average number of shares used in
the calculation of basic and diluted earnings per share (amounts presented in thousands, except per share data):
Computation of Basic Earnings Per Share:
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Gain on sale of operating properties, net of tax . . . . . . . . . . . . . . . . . .
Net income attributable to noncontrolling interests . . . . . . . . . . . . . .
Discontinued operations attributable to noncontrolling interests . . .
Preferred stock redemption costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from continuing operations available to the
common shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earnings attributable to unvested restricted shares . . . . . . . . . . . . . . .
Income from continuing operations attributable to
For the year ended December 31,
2012
2013
2014
384,506 $
389
(11,879)
2,117
-
(58,294)
288,454 $
1,432
(5,072)
(7,930)
-
(58,294)
316,839
(1,749)
218,590
(1,360)
178,002
4,299
(14,202)
4,661
(21,703)
(71,697)
79,360
(1,221)
common shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
315,090
217,230
78,139
Income/(loss) from discontinued operations attributable to the
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48,868
(40,603)
93,313
Net income attributable to the Company’s common shareholders
for basic earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Weighted average common shares outstanding . . . . . . . . . . . . . . . . . .
363,958
409,088
$
176,627
407,631
$
171,452
405,997
Basic Earnings Per Share Attributable to the Company’s
Common Shareholders:
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Income(loss) from discontinued operations . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
0.77 $
0.12
0.89 $
0.53 $
(0.10)
0.43 $
0.19
0.23
0.42
Computation of Diluted Earnings Per Share:
Income from continuing operations attributable to
common Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
315,090
$
217,230
$
78,139
Income/(loss) from discontinued operations attributable
to the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48,868
(40,603)
93,313
Net income attributable to the Company’s common shareholders
for diluted earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Weighted average common shares outstanding – basic . . . . . . . . . . .
Effect of dilutive securities(a):
Equity awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares for diluted earnings per common share . . . . . . . . . . . . . . . . . . .
Diluted Earnings Per Share Attributable to the Company’s
Common Shareholders:
363,958
409,088
$
176,627
407,631
$
171,452
405,997
1,950
411,038
983
408,614
692
406,689
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Income/(loss) from discontinued operations . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
0.77 $
0.12
0.89 $
0.53 $
(0.10)
0.43 $
0.19
0.23
0.42
(a) The effect of the assumed conversion of certain convertible units had an anti-dilutive effect upon the
calculation of Income from continuing operations per share. Accordingly, the impact of such conversions
has not been included in the determination of diluted earnings per share calculations. Additionally, there
were 7,137,120, 10,950,388 and 11,159,160, stock options that were not dilutive as of December 31, 2014, 2013
and 2012, respectively.
66
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
The Company’s unvested restricted share awards contain non-forfeitable rights to distributions or distribution
equivalents. The impact of the unvested restricted share awards on earnings per share has been calculated
using the two-class method whereby earnings are allocated to the unvested restricted share awards based on
dividends declared and the unvested restricted shares’ participation rights in undistributed earnings.
Stock Compensation
The Company maintains two equity participation plans, the Second Amended and Restated 1998 Equity
Participation Plan (the “Prior Plan”) and the 2010 Equity Participation Plan (the “2010 Plan”) (collectively, the
“Plans”). The Prior Plan provides for a maximum of 47,000,000 shares of the Company’s common stock to be
issued for qualified and non-qualified options and restricted stock grants. The 2010 Plan provides for a maximum
of 10,000,000 shares of the Company’s common stock to be issued for qualified and non-qualified options,
restricted stock, performance awards and other awards, plus the number of shares of common stock which
are or become available for issuance under the Prior Plan and which are not thereafter issued under the Prior
Plan, subject to certain conditions. Unless otherwise determined by the Board of Directors at its sole discretion,
options granted under the Plans generally vest ratably over a range of three to five years, expire ten years from
the date of grant and are exercisable at the market price on the date of grant. Restricted stock grants generally
vest (i) 100% on the fourth or fifth anniversary of the grant, (ii) ratably over three or four years, (iii) over three years
at 50% after two years and 50% after the third year or (iv) over ten years at 20% per year commencing after the fifth
year. Performance share awards provide a potential to receive shares of restricted stock based on the Company’s
performance relative to its peers, as defined, or based on other performance criteria as determined by the Board
of Directors. In addition, the Plans provide for the granting of certain options and restricted stock to each of the
Company’s non-employee directors (the “Independent Directors”) and permits such Independent Directors to
elect to receive deferred stock awards in lieu of directors’ fees.
The Company accounts for equity awards in accordance with the FASB’s Stock Compensation guidance which
requires that all share based payments to employees, be recognized in the Statement of Income over the service
period based on their fair values. Fair value is determined, depending on the type of award, using either the Black-
Scholes option pricing formula or the Monte Carlo method, both of which are intended to estimate the fair value
of the awards at the grant date (see Footnote 20 for additional disclosure on the assumptions and methodology).
New Accounting Pronouncements
In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern (Subtopic
205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”),
which requires management to evaluate, at each annual and interim reporting period, whether there are conditions
or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year
after the date the financial statements are issued and provide related disclosures. ASU 2014-15 is effective for
annual periods ending after December 15, 2016 and interim periods thereafter, early adoption is permitted. The
Company does not expect the adoption of ASU 2014-15 will have a material effect on the Company’s consolidated
financial statements.
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”).
ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue
to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects
to receive in exchange for those goods or services. In adopting ASU 2014-09, companies may use either a full
retrospective or a modified retrospective approach. ASU 2014-09 is effective for the first interim period within
annual reporting periods beginning after December 15, 2016, and early adoption is not permitted. The Company
is currently in the process of evaluating the impact the adoption of ASU 2014-09 will have on the Company’s
financial position or results of operations.
In April 2014, the FASB issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant,
and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of
an Entity (“ASU 2014-08”). The amendments in ASU 2014-08 change the criteria for determining which disposals
can be presented as discontinued operations and modifies related disclosure requirements. The amendments
in ASU 2014-08 are effective for fiscal years beginning after December 15, 2014. Early adoption is permitted.
67
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
The Company will adopt ASU 2014-08 beginning in its fiscal year 2015 and appropriately apply the guidance
to prospective disposals of its shopping center properties. The Company believes that a significant portion
of its shopping center disposals in the ordinary course of business will not qualify for discontinued operations
presentation under this new standard.
In February 2013, the FASB issued new guidance regarding liabilities, ASU 2013-04, Liabilities (Topic 405):
Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the
Obligation Is Fixed at the Reporting Date (“ASU 2013-04”), effective retrospectively for fiscal years beginning
after December 15, 2013 and interim periods within those years. The amendments require an entity to measure
obligations resulting from joint and several liability arrangements for which the total amount of the obligation
within the scope of the guidance is fixed at the reporting date, as the sum of the amount the reporting entity
agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting
entity expects to pay on behalf of its co-obligors. In addition, the amendments require an entity to disclose
the nature and amount of the obligation, as well as other information about the obligations. The adoption of
ASU 2013-04 did not have a material impact on the Company’s financial position or results of operations.
2.
Real Estate:
The Company’s components of Rental property consist of the following (in thousands):
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Undeveloped land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings and improvements:
$
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Building improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tenant improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixtures and leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . .
Other rental property (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated depreciation and amortization . . . . . . . . . . . . . . . . . . . . .
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
December 31,
2014
2,291,338
74,462
$
2013
1,989,830
82,269
4,909,152
1,349,028
658,868
61,122
541,925
9,885,895
(1,955,406)
7,930,489
$
4,572,740
1,168,959
725,570
61,015
425,143
9,025,526
(1,878,681)
7,146,845
(1) At December 31, 2014 and 2013, Other rental property (net of accumulated amortization of $290,748 and
$252,810, respectively), consisted of intangible assets including (i) $399,293 and $290,838, respectively, of
in-place leases, (ii) $20,858 and $21,326, respectively, of tenant relationships, and (iii) $121,774 and $112,979,
respectively, of above-market leases.
In addition, at December 31, 2014 and 2013, the Company had intangible liabilities relating to below-market leases
from property acquisitions of $255.4 million and $181.5 million, respectively, net of accumulated amortization of
$169.8 million and $155.7 million, respectively. These amounts are included in the caption Other liabilities on the
Company’s Consolidated Balance Sheets.
The Company’s amortization associated with above and below market leases for the years ended December 31,
2014, 2013, and 2012, resulted in net increases to revenue of $13.5 million, $11.5 million and $14.4 million, respectively.
The estimated net amortization associated with the Company’s above and below market leases for the next
five years are as follows (in millions): 2015, $13.7; 2016, $14.2; 2017, $13.0; 2018, $9.8 and 2019, $9.9.
The Company’s amortization expense associated with leases in place and tenant relationships for the years ended
December 31, 2014, 2013 and 2012 was $41.2 million, $31.1 million and $28.1 million, respectively. The estimated
net amortization associated with leases in place and tenant relationships over the next five years is as follows (in
millions): 2015, $33.9; 2016, $26.7; 2017, $20.6; 2018, $15.7 and 2019, $12.2.
68
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
3.
Property Acquisitions, Developments and Other Investments:
Operating property acquisitions, ground-up development costs and other investments have been funded
principally through the application of proceeds from the Company’s public equity and unsecured debt issuances,
proceeds from mortgage financings, proceeds from the disposition of properties and availability under the
Company’s revolving line of credit.
Acquisition of Operating Properties –
During the year ended December 31, 2014, the Company acquired the following properties, in separate
transactions (in thousands):
Property Name
Location
North Valley Leasehold . . . . . . Peoria, AZ
LaSalle Properties
(3 properties) . . . . . . . . . . . . Various (1)
Harrisburg Land Parcel . . . . . . . Harrisburg, PA
Crossroads Plaza . . . . . . . . . . . . Cary, NC
Quail Corners . . . . . . . . . . . . . . Charlotte, NC (2)
KIF 1 Portfolio (12 properties) . . . Various (3)
Fountain at Arbor Lakes
Purchase Price
Month
Acquired
Cash*
Debt
Assumed
Other
Total
Jan-14 $
3,000 $
- $
- $
3,000
GLA**
-
Jan-14
Jan-14
Feb-14
Mar-14
Apr-14
62,239
2,550
18,691
9,398
128,699
23,269
-
72,309
17,409
157,010
7,642
-
-
4,943
122,291
93,150
2,550
91,000
31,750
408,000
316
-
489
110
1,589
900
-
270,000
2,550
1,426
6
-
-
-
(2 Parcels). . . . . . . . . . . . . . . . Maple Grove, MN
Apr-14
900
-
Boston Portfolio
(24 properties). . . . . . . . . . . . Various
Vinnin Square . . . . . . . . . . . . . . . Swampscott, MA
SEB Portfolio
(10 properties) . . . . . . . . . . . . Various (4)
Highlands Ranch Parcel . . . . . . Highlands Ranch, CO
BIG Portfolios
Apr-14
May-14
Jul-14
Sep-14
(7 properties) . . . . . . . . . . . . Various (5)
Oct-14
Nov-14
Springfield S.C. . . . . . . . . . . . . . Springfield, MO
North Quincy Plaza . . . . . . . . . . Quincy, MA (6)
Dec-14
Belmart Plaza . . . . . . . . . . . . . . . West Palm Beach, FL (7) Dec-14
Dec-14
Braelinn Village . . . . . . . . . . . . . Peachtree City, GA
149,486
2,550
120,514
-
69,261
3,800
193,600
-
12,911
-
275,772
3,800
1,415
10
-
8,800
20,470
3,208
27,000
194,950
8,800
23,000
6,015
27,000
$ 510,052 $ 702,550 $ 229,635 $ 1,442,237
118,439
-
-
-
-
76,511
-
2,530
2,807
-
1,148
210
81
77
227
7,104
*
**
(1)
(2)
(3)
(4)
Includes 1031 sales proceeds of $126.8 million
Gross leasable area (“GLA”)
The Company acquired three properties from a joint venture in which the Company had an 11% noncontrolling interest. The Company
evaluated this transaction pursuant to the FASB’s Consolidation guidance and as such recognized a gain of $3.7 million from the fair
value adjustment associated with the Company’s original ownership due to a change in control, which is reflected in the purchase
price above in Other.
The Company acquired a 65.4% controlling ownership interest in this property and the seller retained a 34.6% noncontrolling interest
in the property. The partner has the ability to put its partnership interest to the Company. As such, the Company has recorded the
partners’ share of the property’s fair value of $4.9 million as Redeemable noncontrolling interests on the Company’s Consolidated
Balance Sheets.
The Company acquired from its partners the remaining ownership interest in a joint venture which holds 12 encumbered properties for
which the Company had a 39.1% noncontrolling interest. The Company evaluated this transaction pursuant to the FASB’s Consolidation
guidance and as a result, recognized a gain of $65.6 million from the fair value adjustment associated with the Company’s original
ownership due to a change in control, which is reflected in the purchase price above in Other. Subsequently, the Company repaid
$128.4 million in debt encumbering ten of the properties. Additionally, during June 2014, the Company sold one of the properties to
a third party, which approximated its carrying value.
The Company acquired from its partner the remaining ownership interest in 10 properties that were held in a joint venture in which the
Company has a 15% noncontrolling interest. The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance
and as a result, recognized a gain of $14.4 million from the fair value adjustment associated with the Company’s original ownership
due to a change in control, which is reflected in the purchase price above in Other.
69
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
(5)
(6)
(7)
The Company and their joint venture partner BIG divided 15 of the 21 properties in the BIG Shopping Centers venture with the
Company receiving a 99% ownership interest in seven operating properties and BIG receiving a 99% ownership interest in eight
operating properties. The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance and as a result,
recognized a gain of $19.5 million from the fair value adjustment associated with the Company’s original ownership due to a change
in control, which is reflected in the purchase price above in Other. Additionally, during December 2014, the Company sold one of the
properties to a third party, which approximated its carrying value.
The Company acquired from its partners the remaining ownership interest in this property that was held in a joint venture in which
the Company had an 11% noncontrolling interest. The Company evaluated this transaction pursuant to the FASB’s Consolidation
guidance and as a result, recognized a gain of $2.2 million from the fair value adjustment associated with the Company’s original
ownership due to a change in control, which is reflected in the purchase price above in Other.
The Company increased its ownership interest to 74.8% in this property that was held in a joint venture in which the Company had
a 21.5% noncontrolling interest. The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance and as a
result, recognized a gain of $1.7 million from the fair value adjustment associated with the Company’s original ownership due to a
change in control, which is reflected in the purchase price above in Other.
During the year ended December 31, 2013, the Company acquired the following properties, in separate
transactions (in thousands):
Property Name
Location
Acquired Cash
Assumed Other
Total
GLA
Month
Debt
Purchase Price
Santee Trolley Square . . . . . . . . Santee, CA(1)
Shops at Kildeer . . . . . . . . . . . . Kildeer, IL(2)
Village Commons S.C. . . . . . . . Tallahassee, FL
Putty Hill Plaza . . . . . . . . . . . . . . Baltimore, MD(3)
Columbia Crossing II S.C. . . . . . Columbia, MD
Roseville Plaza Outparcel . . . . . Roseville, MN
Wilton River Park . . . . . . . . . . . . Wilton, CT(4)
Canyon Square . . . . . . . . . . . . . Santa Clarita, CA(5)
JTS Portfolio (7 properties) . . . Baton Rouge, LA(6)
Factoria Mall . . . . . . . . . . . . . . . Bellevue, WA(7)
6 Outparcels . . . . . . . . . . . . . . . Various
Highlands Ranch II . . . . . . . . . . Highlands Ranch, CO
Elmsford . . . . . . . . . . . . . . . . . . . Elmsford, NY
Northridge . . . . . . . . . . . . . . . . . Arvada, CO
Five Forks Crossing . . . . . . . . . . Liburn, GA
Greenwood S.C. Outparcel . . . Greenwood, IN
Clark Portfolio (4 properties) . . . Clark, NJ
Winn Dixie Portfolio
(6 properties). . . . . . . . . . . . . Louisiana & Florida
Tomball S.C. . . . . . . . . . . . . . . . . Houston, TX
Atascocita S.C.. . . . . . . . . . . . . . Humble, TX
Lawrenceville . . . . . . . . . . . . . . . Lawrenceville, GA
Jan-13 $
Jan-13
Jan-13
Jan-13
Jan-13
Jan-13
Mar-13
Apr-13
Apr-13
May-13
Jun-13
July-13
Aug-13
Oct-13
Oct-13
Oct-13
Nov-13
26,863 $
-
7,100
4,592
21,800
5,143
777
1,950
-
37,283
13,053
14,600
23,000
8,239
9,825
4,067
35,553
48,456 $
32,724
-
9,115
-
-
36,000
13,800
43,267
56,000
-
-
-
11,511
-
-
-
Dec-13
Dec-13
Dec-13
Dec-13
43,506
35,327
38,250
36,824
-
-
28,250
-
$ 367,752 $ 279,123 $
22,681 $
-
-
489
-
-
5,223
-
11,733
37,467
-
-
-
-
-
-
-
-
-
-
-
77,593 $
98,000
32,724
7,100
14,196
21,800
5,143
42,000
15,750
55,000
130,750
13,053
14,600
23,000
19,750
9,825
4,067
35,553
311
168
125
91
101
80
187
97
520
510
97
44
143
146
74
30
189
43,506
35,327
66,500
36,824
392
149
317
286
724,468 4,057
(1)
(2)
(3)
This property was acquired from a joint venture in which the Company had a 45% noncontrolling interest. The Company evaluated
this transaction pursuant to the FASB’s Consolidation guidance and as such recognized a gain of $22.7 million, before income tax,
from the fair value adjustment associated with the Company’s original ownership due to a change in control, which is reflected in the
purchase price above in Other.
This property was acquired from a joint venture in which the Company had a 19% noncontrolling interest. The Company evaluated
this transaction pursuant to the FASB’s Consolidation guidance. This transaction resulted in a change in control with no gain or
loss recognized.
The Company acquired the remaining 80% interest in an operating property from an unconsolidated joint venture in which the
Company had a 20% noncontrolling interest. The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance
and as such recognized a gain of $0.5 million from the fair value adjustment associated with the Company’s original ownership due to
a change in control, which is reflected in the purchase price above in Other.
70
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
(4)
(5)
(6)
(7)
The acquisition of this property included the issuance of $5.2 million of redeemable units, which are redeemable at the option of the
holder after one year and earn a yield of 6% per annum, which is included in the purchase price above in Other. In connection with
this transaction, the Company provided the sellers a $5.2 million loan at a rate of 6.5%, which is secured by the redeemable units.
This property was acquired from a joint venture in which the Company has a 15% noncontrolling interest. The Company evaluated
this transaction pursuant to the FASB’s Consolidation guidance. This transaction resulted in a change in control with no gain or
loss recognized.
The Company acquired the remaining interest in a portfolio of office properties from a preferred equity investment in which the
Company held a noncontrolling interest. The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance
and as such recognized a change in control loss of $9.6 million from the fair value adjustment associated with the Company’s
original ownership, which is reflected in the purchase price above in Other. The debt assumed in connection with this transaction of
$43.3 million was repaid in April 2013 and the properties within the portfolio were later sold during October and November 2013.
The Company acquired an additional 49% interest in this operating property from an unconsolidated joint venture in which the
Company had a 50% noncontrolling interest. As such the Company now consolidates this investment. The Company evaluated this
transaction pursuant to the FASB’s Consolidation guidance and as a result, recognized a gain of $8.2 million from the fair value
adjustment associated with the Company’s original ownership due to a change in control, which is reflected in the purchase price
above in Other.
The aggregate purchase price of the above 2014 and 2013 property acquisitions have been allocated as follows
(in thousands):
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Below Market Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Above Market Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
In-Place Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Building Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tenant Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgage Fair Value Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014
414,879
679,753
(81,362)
30,307
113,513
290,882
26,536
(39,368)
7,097
-
1,442,237
2013
198,263
368,478
(25,298)
15,758
35,262
115,110
22,196
(5,794)
894
(401)
724,468
$
$
$
$
Additionally, during the years ended December 31, 2014 and 2013, the Company acquired the remaining
interest in three and four previously consolidated joint ventures for $1.1 million and $9.4 million, respectively. The
Company continues to consolidate these entities as there was no change in control from these transactions. The
purchase of the remaining interests resulted in an aggregate decrease in noncontrolling interest of $0.8 million
and $0.4 million for the years ended December 31, 2014 and 2013, respectively and an aggregate decrease of
$0.3 million and $8.2 million to the Company’s Paid-in capital, during 2014 and 2013, respectively.
Ground-Up Development -
The Company is engaged in ground-up development projects, which will be held as long-term investments by
the Company. As of December 31, 2014, the Company had in progress a total of four ground-up development
projects located in the U.S.
During 2014, the Company acquired, in separate transactions, three land parcels located in various cities
throughout the U.S., for an aggregate purchase price of $53.5 million. These land parcels will be developed
into retail centers aggregating 0.9 million square feet of GLA with a total estimated aggregate project cost of
$192.8 million.
Additionally, during the fourth quarter 2014, the Company purchased land parcels in Dania, Florida for an
aggregate purchase price of $62.8 million. The Company then contributed the land to an unconsolidated joint
venture to be used for a ground-up development project.
71
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
FNC Realty Corporation –
During 2013, the Company acquired the remaining 17.3% ownership interest in FNC Realty Corporation (“FNC”)
for $20.4 million. As a result of this transaction the Company now owns 100% of FNC. The Company had previously
and continues to consolidate FNC. No change in control resulted from this transaction, as such, the purchase of
the additional interest resulted in a decrease in noncontrolling interest of $19.7 million and a decrease of $0.7
million to the Company’s Paid-in capital during 2013.
4. Dispositions of Real Estate:
Operating Real Estate –
During 2014, the Company disposed of 90 operating properties, in separate transactions, for an aggregate sales
price of $833.5 million, including 27 operating properties in Latin America. These transactions, which are included
in Discontinued operations on the Company’s Consolidated Statements of Income, resulted in an aggregate
gain of $203.3 million, before income taxes and noncontrolling interests and aggregate impairment charges of
$178.0 million, before income taxes and noncontrolling interests, including $92.9 million related to the release of
a cumulative foreign currency translation loss due to the Company’s substantial liquidation of its investment in
Mexico. The Company provided financing aggregating $52.7 million on three of these transactions which bear
interest at rates ranging from LIBOR plus 250 basis points to 7% per annum and are scheduled to mature in June
and August 2015. The Company evaluated these transactions pursuant to the FASB’s real estate guidance to
determine sale and gain recognition.
During 2013, the Company disposed of 36 operating properties and three out-parcels in separate transactions, for
an aggregate sales price of $279.5 million. These transactions, which are included in Discontinued operations in
the Company’s Consolidated Statements of Income, resulted in an aggregate gain of $25.4 million and impairment
charges of $61.9 million, before income taxes.
Additionally, during 2013, the Company sold eight properties in its Latin American portfolio for an aggregate
sales price of $115.4 million. These transactions, which are included in Discontinued operations in the Company’s
Consolidated Statements of Income, resulted in an aggregate gain of $23.3 million, before income taxes,
and aggregate impairment charges of $26.9 million (including the release of the cumulative foreign currency
translation loss of $7.8 million associated with the sale of the Company’s interest in two properties within
Brazil, which represented a full liquidation of the Company’s investment in Brazil), before income taxes and
noncontrolling interests.
During 2012, the Company disposed of 62 operating properties and two outparcels, in separate transactions, for
an aggregate sales price of $418.9 million. These transactions, which are included in Discontinued operations in
the Company’s Consolidated Statements of Income, resulted in an aggregate pre-tax gain of $85.9 million and
aggregate impairment charges of $22.5 million, before income taxes. The Company provided seller financing in
connection with the sale of one of the operating properties for $4.2 million, which bore interest at a rate of 6.0%
and matured in November 2013. The Company evaluated this transaction pursuant to the FASB’s real estate sales
guidance and concluded that the criteria for sale recognition were met.
During 2012, the Company sold a previously consolidated operating property to a newly formed unconsolidated
joint venture in which the Company has a 20% noncontrolling interest for a sales price of $55.5 million. This
transaction resulted in a pre-tax gain of $10.0 million, of which the Company deferred $2.0 million due to its
continued involvement. This gain has been recorded as Gain on sale of operating properties, net of tax in the
Company’s Consolidated Statements of Income. The Company evaluated this transaction pursuant to the FASB’s
real estate sales guidance and concluded that the criteria for sale recognition were met.
Land Sales –
During 2013, the Company sold nine land parcels for an aggregate sales price of $18.2 million in separate
transactions. These transactions resulted in an aggregate gain of $11.5 million, before income taxes expense and
noncontrolling interest. The gains from these transactions are recorded as other income, which is included in
Other income/(expense), net, in the Company’s Consolidated Statements of Income.
72
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
During 2012, the Company disposed of two land parcels and two outparcels for an aggregate sales price of
$4.1 million and recognized an aggregate gain of $2.0 million related to these transactions. These gains are
recorded as other income, which is included in Other income/(expense), net, in the Company’s Consolidated
Statements of Income. The Company provided seller financing in connection with the sale of one of the land
parcels for $1.8 million, which bore interest at a rate of 6.5% for the first six months and 7.5% for the remaining
term and matured in March 2013. The Company evaluated this transaction pursuant to the FASB’s real estate sales
guidance and concluded that the criteria for sale recognition were met.
Also during 2012, the Company sold a land parcel in San Juan del Rio, Mexico for a sales price of 24.3 million
Mexican Pesos (“MXN”) (USD $1.9 million). The Company recognized a gain of MXN 5.7 million (USD $0.4 million)
on this transaction. The gain from this transaction is recorded as other income, which is included in Other income/
(expense), net, in the Company’s Consolidated Statements of Income.
5. Discontinued Operations and Assets Held-for-Sale:
The Company reports as discontinued operations assets held-for-sale as of the end of the current period and
assets sold during the period. All results of these discontinued operations are included in a separate component
of income on the Consolidated Statements of Income under the caption Discontinued operations. This has
resulted in certain reclassifications of 2014, 2013 and 2012 financial statement amounts.
The components of Income from discontinued operations for each of the three years in the period ended
December 31, 2014, are shown below. These include the results of income through the date of each respective
sale for properties sold during 2014, 2013 and 2012, and the operations for the applicable periods for those assets
classified as held-for-sale as of December 31, 2014 (in thousands):
Discontinued operations:
Revenues from rental property . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rental property expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from other real estate investments . . . . . . . . . . . . . . . . .
Other expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from discontinued operating properties,
2014
2013
2012
$
$
71,906
(16,657)
(15,019)
(719)
(1,823)
680
(756)
129,315
(39,425)
(33,142)
(2,971)
(1,371)
720
(880)
$
157,472
(49,925)
(47,916)
(3,423)
(4,855)
676
(254)
before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
37,612
52,246
51,775
Impairment of property carrying value,
before income taxes (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(178,048)
(157,972)
(49,280)
Gain on disposition of operating properties,
before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Provision)/benefit for income taxes . . . . . . . . . . . . . . . . . . . . . . .
Income/(loss) from discontinued operating properties . . . . . . .
Net (income)/loss attributable to noncontrolling interests . . . .
Income/(loss) from discontinued operations attributable
203,271
(11,850)
50,985
(2,117)
48,731
8,462
(48,533)
7,930
85,894
9,585
97,974
(4,661)
to the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
48,868
$
(40,603)
$
93,313
(1)
The year ended December 31, 2014, includes $92.9 million related to the release of a cumulative foreign currency
translation loss due to the Company’s substantial liquidation of its investment in Mexico. During 2013, the Company
began selling properties within its Latin American portfolio. During the year ended December 31, 2014, the Company
continued selling properties in its Latin American portfolio and as a result substantially liquidated its investment
in Mexico.
73
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
During 2014, the Company classified as held-for-sale 35 operating properties. The aggregate book value of
these properties was $239.9 million, net of accumulated depreciation of $76.5 million. The Company recognized
impairment charges on 11 of these properties aggregating $56.2 million, which were sold during 2014. The book
value of the remaining other 24 properties did not exceed their estimated fair value, less costs to sell, and as
such no impairment charges were recognized. The Company’s determination of the fair value for each property,
aggregating $316.5 million, was based upon executed contracts of sale with third parties (see Footnote 15). The
Company completed the sale of the 35 held-for-sale operating properties during 2014 (these dispositions are
included in Footnote 4 above). At December 31, 2014, the Company had no operating properties classified as
held-for-sale.
During 2013, the Company classified as held-for-sale 19 operating properties, comprising 1.9 million square feet
of GLA. The aggregate book value of these properties was $178.4 million, net of accumulated depreciation of
$19.2 million. The Company recognized impairment charges of $25.2 million, after income taxes, on eight of these
properties. The book value of the other properties did not exceed their estimated fair value, less costs to sell,
and as such no impairment charges were recognized. The Company’s determination of the fair value for each
property, aggregating $158.6 million, was based upon executed contracts of sale with third parties (see Footnote
15). In addition, the Company completed the sale of 15 held-for-sale operating properties during the year ended
December 31, 2013, one of which was classified as held-for-sale during 2012 (these dispositions are included in
Footnote 4 above). At December 31, 2013, the Company had five remaining operating properties classified as
held-for-sale at a carrying amount of $70.3 million, net of accumulated depreciation of $8.1 million, which are
included in Other assets on the Company’s Consolidated Balance Sheets.
During 2012, the Company classified as held-for-sale 18 operating properties, comprising 2.1 million square feet
of GLA. The book value of these properties was $73.2 million, net of accumulated depreciation of $57.2 million.
The Company recognized impairment charges of $4.2 million on three of these properties. The book value of the
other properties did not exceed their estimated fair value, less costs to sell, and as such no impairment charges
were recognized. The Company’s determination of the fair value for each property, aggregating $102.0 million,
was based upon executed contracts of sale with third parties. In addition, the Company completed the sale of
19 operating properties during the year ended December 31, 2012, of which two were classified as held-for-sale
during 2011 (these dispositions are included in Footnote 4 above).
6.
Impairments:
Management assesses on a continuous basis whether there are any indicators, including property operating
performance, changes in anticipated holding period and general market conditions, that the value of the
Company’s assets (including any related amortizable intangible assets or liabilities) may be impaired. To the
extent impairment has occurred, the carrying value of the asset would be adjusted to an amount to reflect the
estimated fair value of the asset.
During 2014, the Company implemented a plan to accelerate the disposition of certain U.S. properties. This plan
effectively shortened the Company’s anticipated hold period for these properties and as a result the Company
recognized impairment charges on various consolidated operating properties. In addition, during 2013, the
Company began selling properties within its Latin American portfolio as part of its overall strategy to exit these
markets and as a result the Company recognized impairment charges on various Latin American operating
properties. During the year ended December 31, 2014, the Company continued selling properties in its Latin
American portfolio and as a result substantially liquidated its investment in Mexico which resulted in the release
of a cumulative foreign currency translation loss. (See Footnote 15 for fair value disclosure).
74
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
The Company’s efforts to market certain assets and management’s assessment as to the likelihood and timing
of such potential transactions and/or the property hold period caused the Company to recognize impairment
charges for the years ended December 31, 2014, 2013 and 2012 as follows (in millions):
Impairment of property carrying values * (1)(2)(3). . . . . . . . . . . . . . .
Investments in other real estate investments* (4) . . . . . . . . . . . . . . .
Marketable securities and other investments* (5) . . . . . . . . . . . . . .
Total Impairment charges included in operating expenses . . . .
Cumulative foreign currency translation loss included in
discontinued operations (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of property carrying values included in
discontinued operations **. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total gross impairment charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax benefit included in discontinued operations . . . . . .
Income tax benefit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total net impairment charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
2014
2013
2012
33.3
1.7
4.8
39.8
92.9
85.1
217.8
(0.4)
(1.7)
(6.1)
209.6
$
$
18.6
2.9
10.7
32.2
5.1
152.9
190.2
(10.6)
(14.8)
(7.6)
157.2
$
$
7.6
2.7
-
10.3
-
49.3
59.6
(0.4)
(10.6)
-
48.6
*
**
See Footnote 15 for additional disclosure on fair value
See Footnotes 4 & 5 above for additional disclosure
(1) During 2014, the Company recognized aggregate impairment charges of $33.3 million, before an income tax benefit of
$6.1 million and noncontrolling interests of $0.3 million, primarily related to adjustments to property carrying values in
connection with the Company’s efforts to market certain properties and management’s assessment as to the likelihood
and timing of such potential transactions and the anticipated hold period for such properties.
(2) During 2013, the Company recorded $18.6 million, before an income tax benefit of $7.6 million and noncontrolling
interests of $1.0 million, in impairment charges primarily related to two land parcels and four operating properties
based upon purchase prices or purchase price offers.
(3) During 2012, the Company recognized an aggregate impairment charge of $7.6 million, before income tax benefit of
$0.3 million, relating to its investment in four land parcels. The estimated aggregate fair value of these properties was
based upon purchase price offers.
Impairment charges primarily based upon review of debt maturity status and the likelihood of foreclosure of certain
underlying properties within the Company’s preferred equity investments, during 2014, 2013 and 2012. The Company
believes it will not recover its investment in certain preferred equity investments and as such recorded full impairments
on these investments.
(4)
(5) During 2014 and 2013, the Company reviewed the underlying cause of the decline in value of certain cost method
investments, as well as the severity and the duration of the decline and determined that the decline was other-than-
temporary. Impairment charges were recognized based upon the calculation of the investments’ estimated fair value.
(6) Due to the substantial liquidation of its investment in Mexico, the Company recognized a loss from foreign currency
translation related to consolidated properties in the amount of $92.9 million, before noncontrolling interest of
$5.8 million. (See footnote 22 for additional disclosure).
In addition to the impairment charges above, the Company recognized pretax impairment charges during 2014,
2013 and 2012 of $54.5 million (including $47.3 million in cumulative foreign currency translation loss relating to the
Company’s substantial liquidation of its investment in Mexico), $29.5 million, and $11.1 million, respectively, relating
to certain properties held by various unconsolidated joint ventures in which the Company holds noncontrolling
interests. These impairment charges are included in Equity in income of joint ventures, net in the Company’s
Consolidated Statements of Income (see Footnote 7).
The Company will continue to assess the value of its assets on an on-going basis. Based on these assessments,
the Company may determine that one or more of its assets may be impaired and would therefore write-down its
carrying basis accordingly.
75
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
7.
Investment and Advances in Real Estate Joint Ventures:
The Company and its subsidiaries have investments and advances in various real estate joint ventures. These
joint ventures are engaged primarily in the operation of shopping centers which are either owned or held under
long-term operating leases. The Company and the joint venture partners have joint approval rights for major
decisions, including those regarding property operations. As such, the Company holds noncontrolling interests
in these joint ventures and accounts for them under the equity method of accounting. The table below presents
joint venture investments for which the Company held an ownership interest at December 31, 2014 and 2013 (in
millions, except number of properties):
Average
Ownership
Interest
As of December 31, 2014
Gross
Number
Real
of
Estate
Properties GLA
The
Company’s
Investment
Average
Ownership
Interest
As of December 31, 2013
Gross
Real
Estate
Number
of
Properties GLA
The
Company’s
Investment
15.0%
60 10.6 $
2,728.9 $
178.6
15.0%
60 10.6 $
2,724.0 $
179.7
Venture
Prudential Investment
Program (“KimPru”
and “KimPru II”) (1) (2) . . .
Kimco Income
Opportunity Portfolio
(“KIR”) (2) (3) . . . . . . . . . .
Kimstone (2) (5) . . . . . . . . . .
BIG Shopping
Centers (2) (6) * . . . . . . . .
The Canada Pension Plan
Investment Board
(“CPP”) (2) (7) . . . . . . . . .
Kimco Income Fund
(“KIF”) (2) (8) . . . . . . . . . .
SEB Immobilien (2) (9) . . . . .
Other Institutional
Programs (2) (10) (11) . . . .
RioCan . . . . . . . . . . . . . . . . .
Latin America (15) . . . . . . . .
Other Joint Venture
Programs (20) (23) . . . . .
Total . . . . . . . . . . . . . . . . . . .
48.6%
33.3%
50.1%
55.0%
-
15.0%
Various
50.0%
Various
Various
54 11.5
5.6
39
1,488.2
1,098.7
152.1
98.1
48.6%
33.3%
57 12.0
5.6
39
1,496.0
1,095.3
163.6
100.3
1.0
151.6
-
37.9%
21
3.4
520.1
29.5
6
7
-
3
50
45
13
2.4
-
0.4
1.4
9.3
0.1
504.0
188.9
55.0%
6
2.4
437.4
144.8
-
86.0
327.8
1,205.8
91.2
-
2.5
8.5
159.8
24.4
39.5%
15.0%
Various
50.0%
Various
Various
12
13
56
45
28
1.5
1.8
2.1
9.3
3.7
288.7
361.9
385.3
1,314.3
313.2
50.6
0.9
16.8
156.3
156.7
75 11.5
412 63.9 $
1,548.9
10,485.1 $
257.8
1,257.0
60
9.5
337 51.8 $
1,401.2
9,083.4 $
224.3
1,037.2
*
Ownership % is a blended rate
The table below presents the Company’s share of net income/(loss) for these investments which is included in the
Company’s Consolidated Statements of Income under Equity in income of joint ventures, net for the years ended
December 31, 2014, 2013 and 2012 (in millions):
Year ended December 31,
2013
2012
2014
KimPru and KimPru II (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
KIR (3)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kimstone (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BIG Shopping Centers (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CPP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
KIF (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SEB Immobilien (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Institutional Programs (10-13) . . . . . . . . . . . . . . . . . . . . . . . . .
RioCan (14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Latin America (15-19) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Joint Venture Programs (20-28) . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
8.1
26.5
2.0
22.5
7.1
0.9
0.8
2.6
30.6
(3.8)
62.3
159.6
$
$
9.1
25.3
3.6
3.0
5.8
3.3
1.1
3.2
27.6
103.1
23.6
208.7
$
$
7.4
23.4
-
(3.7)
5.3
1.7
0.7
5.5
30.4
15.8
26.4
112.9
76
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
(1)
(2)
This venture represents four separate joint ventures, with four separate accounts managed by Prudential Real Estate
Investors (“PREI”), three of these ventures are collectively referred to as KimPru and the remaining venture is referred
to as KimPru II. During the year ended December 31, 2014, KimPru recognized impairment charges of $21.4 million
related to the decline in value of two operating properties. The Company had previously taken other-than-temporary
impairment charges on its investment in KimPru and had allocated these impairment charges to the underlying assets
of the KimPru joint ventures including a portion to these operating properties. As such, the Company’s share of these
impairment charges was $2.4 million.
The Company manages these joint venture investments and, where applicable, earns acquisition fees, leasing
commissions, property management fees, asset management fees and construction management fees.
(3) During the year ended December 31, 2014 KIR, (i) sold two operating properties for a sales price of $17.7 million, for
which the Company recognized its share of an aggregate net gain of $1.1 million, (ii) recognized aggregate impairment
charges of $5.0 million, of which the Company’s share was $2.8 million, related to two properties which KIR anticipates
selling within the next year and therefore effectively shortened its anticipated hold period for these assets which
resulted in the expected future cash flows being less than the carrying value and (iii) sold one of the impaired properties
for a sales price of $2.0 million.
(4) During the year ended December 31, 2013, KIR sold an operating property in Cincinnati, OH for a sales price of
$30.0 million and recognized a gain of $6.1 million. The Company’s share of this gain was $3.0 million.
(5) During June 2013, the Company increased its ownership interest in the UBS Programs to 33.3% and simultaneously UBS
transferred its remaining 66.7% ownership interest in the UBS Programs to affiliates of Blackstone Real Estate Partners
VII (“Blackstone”). Both of these transactions were based on a gross purchase price of $1.1 billion. Upon completion of
these transactions, Blackstone and the Company entered into a new joint venture (Kimstone) in which the Company
owns a 33.3% noncontrolling interest. On February 2, 2015, the Company purchased the remaining 66.7% interest in the
39-property Kimstone portfolio from Blackstone for a gross purchase price of $1.4 billion, including the assumption of
$638.0 million in mortgage debt (see Footnote 26 of the Notes to Consolidated Financial Statements).
(6) During the year ended December 31, 2014, the Company and their joint venture partner BIG divided 15 of the
21 properties in the BIG Shopping Centers venture with the Company receiving a 99% ownership interest in seven
operating properties and BIG receiving a 99% ownership interest in eight operating properties. The Company
recognized a gain of $19.7 million on the properties where BIG obtained a 99% interest (see Footnote 3 of the Notes
to Consolidated Financial Statements). Subsequent to this transaction the BIG Shopping Centers venture continues to
hold six operating properties. During the year ended December 31, 2013, BIG recognized a gain on early extinguishment
of debt of $13.7 million related to a property that was foreclosed on by a third party lender. The Company’s share of this
gain was $2.4 million.
(7) During the year ended December 31, 2014, CPP acquired land parcels in Dania, FL, for $62.8 million. These land parcels
will be developed into a retail center.
(8) During the year ended December 31, 2014, the Company purchased the remaining interest in KIF based on a gross
purchase price of $408.0 million (see Footnote 3 of the Notes to Consolidated Financial Statements).
(9) During the year ended December 31, 2014, the Company purchased the remaining 85% interest in 10 SEB properties
based on a gross purchase price of $275.8 million (see Footnote 3 of the Notes to Consolidated Financial Statements).
(10) During the year ended December 31, 2014, the Company acquired four properties from a joint venture in which
the Company has a noncontrolling interest for a total sales price of $116.2 million (see Footnote 3 of the Notes to
Consolidated Financial Statements).
(11) During the year ended December 31, 2014, two joint ventures in which the Company holds a noncontrolling interest sold
two operating properties for an aggregate sales price of $46.6 million and recognized an aggregate gain of $11.1 million.
The Company’s share of this gain was $2.2 million.
(12) During the year ended December 31, 2012, a joint venture in which the Company holds a noncontrolling interest sold
two encumbered operating properties to the Company for an aggregate sales price of $75.5 million. As a result of this
transaction, the Company recognized promote income of $2.6 million. Additionally, another joint venture in which the
Company holds a noncontrolling interest sold an operating property to the Company for a sales price of $127.0 million.
As a result of this transaction, the Company recognized promote income of $1.1 million.
(13) During the year ended December 31, 2012, the UBS Program recognized impairment charges of $13.0 million related to
the sale of two properties. The Company’s share of these impairment charges was $2.2 million.
(14) During the year ended December 31, 2012, the Company recognized income of $7.5 million, before taxes of $1.5 million,
from the sale of certain air rights at one of the properties in the RioCan portfolio.
(15) During the year ended December 31, 2014, the Company sold its noncontrolling interest in 14 operating properties
located throughout Mexico based on a gross aggregate sales price of $324.5 million. The Company recognized a net
gain of $39.1 million, before income taxes of $9.0 million.
(16) During the fourth quarter 2014, the Company substantially liquidated its investment in Mexico, which resulted in the
release of a cumulative foreign currency translation loss of $47.3 million.
77
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
(17) During the year ended December 31, 2013, joint ventures in which the Company held noncontrolling interests sold
20 operating properties located throughout Mexico and Chile for $341.9 million. These transactions resulted in an
aggregate net gain to the Company of $22.9 million, after tax.
(18) During the year ended December 31, 2013, the Company and its joint venture partner sold their noncontrolling
ownership interest in a joint venture which held interests in 84 operating properties located throughout Mexico for
$603.5 million (including debt of $301.2 million). The Company’s share of the net gain was $78.2 million, before income
taxes of $25.1 million.
(19) During the year ended December 31, 2013, the Company was in advanced negotiations to sell 10 operating properties
located throughout Mexico, which were held in unconsolidated joint ventures in which the Company held noncontrolling
interests. Based upon the allocation of the selling price, the Company recorded its share of impairment charges of
$9.4 million on six of these properties.
(20) During the year ended December 31, 2014, a joint venture in which the Company holds a noncontrolling interest sold
16 operating properties for an aggregate sales price of $199.5 million and recognized an aggregate gain of $62.9 million.
The Company’s share of this gain was $31.7 million.
(21) During the year ended December 31, 2014, the Company received a distribution of $15.4 million from a joint venture that
was in excess of its carrying value and as such, the Company recognized this amount as equity in income.
(22) During the year ended December 31, 2014, two joint ventures in which the Company holds a noncontrolling interest sold
two operating properties for an aggregate sales price of $46.5 million and recognized an aggregate gain of $11.1 million.
The Company’s share of this gain was $2.2 million.
(23) During the year ended December 31, 2014, the Company acquired a partners’ interest in a joint venture in which the
Company had a noncontrolling interest for a total price of $3.0 million (see Footnote 3 of the Notes to Consolidated
Financial Statements).
(24) During June 2013, the Intown portfolio was sold for a sales price of $735.0 million which included the assignment of
$609.2 million in debt. This transaction resulted in a deferred gain to the Company of $21.7 million. The Company
maintains its guarantee on a portion of the debt ($139.7 million as of December 31, 2014 and 2013) assumed by the buyer.
Due to this continued involvement, the Company deferred its gain until such time that the guarantee and commitment
expire. On February 24, 2015, the outstanding debt balance of $139.7 million was fully repaid and as such, the Company
was relieved of its related commitments and guarantee. As a result, the Company will recognize the deferred gain of
$21.7 million during the first quarter of 2015 (see Footnote 19 of the Notes to Consolidated Financial Statements).
(25) During the year ended December 31, 2013, two joint ventures in which the Company held noncontrolling interests
sold two operating properties to the Company, in separate transactions, for an aggregate price of $228.8 million (see
Footnote 3 of the Notes to Consolidated Financial Statements).
(26) During the year ended December 31, 2013, joint ventures in which the Company has noncontrolling interests sold
six operating properties, in separate transactions, for an aggregate sales price of $132.1 million. In connection with
these transactions, the Company recognized its share of the aggregate gains of $6.1 million and aggregate impairment
charges of $1.5 million.
(27) During the year ended December 31, 2012, two joint ventures in which the Company holds noncontrolling interests
sold two properties, in separate transactions, for an aggregate sales price of $118.0 million. The Company’s share of the
aggregate gain related to these transactions was $8.3 million.
(28) During the year ended December 31, 2012, three joint ventures in which the Company has noncontrolling interests
recognized aggregate impairment charges of $12.8 million related to the sale of one operating property, the pending
sale of one property and the potential foreclosure of another property. The Company’s share of these impairment
charges was $6.4 million.
78
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
The table below presents debt balances within the Company’s joint venture investments for which the Company
held noncontrolling ownership interests at December 31, 2014 and 2013 (dollars in millions):
As of December 31, 2014
As of December 31, 2013
Mortgages
and
Notes
Payable
Average
Interest
Rate
Venture
KimPru and KimPru II . . . . $
KIR . . . . . . . . . . . . . . . . . . . .
Kimstone . . . . . . . . . . . . . .
BIG Shopping Centers . . .
CPP . . . . . . . . . . . . . . . . . . .
Kimco Income Fund . . . . .
SEB Immobilien . . . . . . . . .
RioCan . . . . . . . . . . . . . . . .
Other Institutional
920.4
866.4
704.4
144.6
112.1
-
50.2
642.6
5.53%
5.04%
4.45%
5.52%
5.05%
-
4.06%
4.29%
Average
Remaining
Term
(months)**
23.0
61.9
28.7
22.0
10.1
-
35.7
39.9
Mortgages
and
Notes
Payable
Average
Interest
Rate
$
923.4
889.1
749.9
406.5
138.6
158.0
243.8
743.7
5.53%
5.05%
4.62%
5.39%
5.23%
5.45%
5.11%
4.59%
Average
Remaining
Term
(months)**
35.0
75.1
39.3
40.1
19.0
8.7
43.3
48.0
Programs . . . . . . . . . . . .
223.1
5.47%
20.8
272.9
5.32%
31.0
Other Joint Venture
Programs . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . $
927.5
4,591.3
** Average remaining term includes extensions
KIR -
5.31%
58.6
1,063.1
5,589.0
$
5.53%
60.6
The Company holds a 48.6% noncontrolling limited partnership interest in KIR and has a master management
agreement whereby the Company performs services for fees relating to the management, operation, supervision
and maintenance of the joint venture properties.
The Company’s equity in income from KIR for the years ended December 31, 2012, exceeded 10% of the Company’s
income from continuing operations before income taxes; as such the Company is providing summarized financial
information for KIR as follows (in millions):
Assets:
Real estate, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Liabilities and Members’ Capital:
Mortgages payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Members’ capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
December 31,
2014
2013
1,024.3
80.5
1,104.8
866.4
19.8
218.6
1,104.8
$
$
$
$
1,064.2
81.9
1,146.1
889.1
21.8
235.2
1,146.1
79
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Year Ended December 31,
2013
2012
2014
Revenues from rental property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from continuing operations. . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued Operations:
$
201.6
(57.7)
(46.1)
(39.2)
(3.1)
(1.5)
(147.6)
54.0
$
197.0
(53.7)
(47.8)
(38.8)
-
(0.6)
(140.9)
56.1
Income from discontinued operations . . . . . . . . . . . . . . . . . . . . . .
Impairment on dispositions of properties. . . . . . . . . . . . . . . . . . . .
Gain on dispositions of properties . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
0.2
(4.3)
4.5
54.4
$
1.9
(9.8)
6.1
54.3
$
190.6
(50.8)
(54.0)
(38.8)
-
(1.3)
(144.9)
45.7
2.6
(0.1)
-
48.2
RioCan Investments -
The Company has three joint ventures (collectively, the “RioCan Ventures”) with RioCan Real Estate Investment
Trust (“RioCan”), in which the Company has 50% noncontrolling interests, to acquire retail properties and
development projects in Canada. The acquisition and development projects are to be sourced and managed by
RioCan and are subject to review and approval by a joint oversight committee consisting of RioCan management
and the Company’s management personnel. Capital contributions will only be required as suitable opportunities
arise and are agreed to by the Company and RioCan.
The Company’s equity in income from the RioCan Ventures for the year ended December 31, 2012, exceeded 10%
of the Company’s income from continuing operations, as such the Company is providing summarized financial
information for the RioCan Ventures as follows (in millions):
Assets:
Real estate, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Liabilities and Members’ Capital:
Mortgages payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Members’ capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
December 31,
2014
2013
987.4
40.7
1,028.1
642.6
13.1
372.4
1,028.1
$
$
$
$
1,106.2
43.8
1,150.0
743.7
13.0
393.3
1,150.0
Year ended December 31,
2013
2012
2014
Revenues from rental properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
202.5
$
209.9
$
213.3
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (expense)/income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(74.6)
(31.9)
(33.5)
(1.3)
(141.3)
61.2
$
(76.9)
(40.1)
(36.0)
(1.8)
(154.8)
55.1
$
(78.1)
(51.9)
(37.3)
14.7
(152.6)
60.7
80
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Summarized financial information for the Company’s investment and advances in real estate joint ventures
(excluding KIR and the RioCan Ventures, which are presented above) is as follows (in millions):
Assets:
Real estate, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Liabilities and Partners’/Members’ Capital:
Mortgages payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Construction loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Partners’/Members’ capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
December 31,
2014
2013
5,410.3
208.6
5,618.9
3,061.3
21.0
87.6
21.4
2,427.6
5,618.9
$
$
$
$
6,601.8
390.1
6,991.9
3,956.2
-
102.0
19.2
2,914.5
6,991.9
Year Ended December 31,
2013
2014
Revenues from rental property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from continuing operations. . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued Operations:
Income/(loss) from discontinued operations . . . . . . . . . . . . . . . . .
Impairment on dispositions of properties. . . . . . . . . . . . . . . . . . . .
Gain on dispositions of properties . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
655.8
(201.2)
(169.3)
(187.3)
(20.0)
(11.6)
(589.4)
66.4
2.6
0.5
466.6
536.1
$
$
873.3
(279.7)
(228.5)
(224.0)
(32.3)
(13.8)
(778.3)
95.0
12.2
(5.0)
223.4
325.6
$
$
2012
1,009.2
(330.6)
(281.3)
(258.4)
(17.0)
(19.8)
(907.1)
102.1
(9.1)
(21.1)
94.5
166.4
Other liabilities included in the Company’s accompanying Consolidated Balance Sheets include accounts
with certain real estate joint ventures totaling $40.3 million and $41.5 million at December 31, 2014 and 2013,
respectively. The Company and its subsidiaries have varying equity interests in these real estate joint ventures,
which may differ from their proportionate share of net income or loss recognized in accordance with GAAP.
The Company’s maximum exposure to losses associated with its unconsolidated joint ventures is primarily limited
to its carrying value in these investments. Generally, such investments contain operating properties and the
Company has determined these entities do not contain the characteristics of a VIE. As of December 31, 2014 and
2013, the Company’s carrying value in these investments is $1.0 billion and $1.3 billion, respectively.
81
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
8. Other Real Estate Investments:
Preferred Equity Capital –
The Company previously provided capital to owners and developers of real estate properties through its Preferred
Equity program. As of December 31, 2014, the Company’s net investment under the Preferred Equity program was
$229.1 million relating to 443 properties, including 385 net leased properties. For the year ended December 31,
2014, the Company earned $37.2 million from its preferred equity investments, including $18.6 million in profit
participation earned from six capital transactions. For the year ended December 31, 2013, the Company’s net
investment under the Preferred Equity program was $236.9 million relating to 483 properties, including 392 net
leased properties. For the year ended December 31, 2013, the Company earned $43.0 million from its preferred
equity investments, including $20.8 million in profit participation earned from 16 capital transactions.
During 2013, the Company amended one of its Canadian preferred equity agreements to restructure its investment
into a pari passu joint venture investment in which the Company holds a noncontrolling interest. As a result of
the amendment, the Company continues to account for this investment under the equity method of accounting
and from the date of the amendment will include this investment in Investments and advances to real estate joint
ventures within the Company’s Consolidated Balance Sheets.
During 2013, a preferred equity investment in a portfolio of properties was acquired by the Company. As a result
of this transaction, the Company now consolidates this investment. The Company evaluated this transaction
pursuant to the FASB’s Consolidation guidance and as such recognized a change in control loss of $9.6 million,
from the fair value adjustment associated with the Company’s original ownership. The Company’s estimated
fair value relating to the change in control loss was based upon a discounted cash flow model that included all
estimated cash inflows and outflows over a specified holding period. The capitalization rate, and discount rate
utilized in this model were based upon rates that the Company believes to be within a reasonable range of current
market rates.
During 2012, the Company amended one of its preferred equity agreements to restructure its investment into
a pari passu joint venture investment in which the Company holds a noncontrolling interest. The Company
will continue to account for this investment under the equity method of accounting and from the date of the
amendment will include this investment in Investments and advances in real estate joint ventures within the
Company’s Consolidated Balance Sheets.
Included in the capital transactions described above for the year ended December 31, 2012, is the sale of three
preferred equity investments in which the Company had no investment and recognized promote income of
$10.0 million. In connection with this transaction, the Company provided seller financing for $7.5 million, which
bore interest at a rate of 7.0% and was paid off in October 2013. The Company evaluated this transaction pursuant
to the FASB’s real estate sales guidance and concluded that the criteria for sale recognition was met.
During 2007, the Company invested $81.7 million of preferred equity capital in an entity which was comprised
of 403 net leased properties (“Net Leased Portfolio”) which consisted of 30 master leased pools with each pool
leased to individual corporate operators. Each master leased pool is accounted for as a direct financing lease.
These properties consist of a diverse array of free-standing restaurants, fast food restaurants, convenience and
auto parts stores. As of December 31, 2014, the remaining 385 properties were encumbered by third party loans
aggregating $317.8 million with interest rates ranging from 5.08% to 10.47% with a weighted-average interest
rate of 9.2% and maturities ranging from one to nine years. The Company recognized $14.5 million, $13.2 million
and $14.0 million in equity in income from this investment during the years ended December 31, 2014, 2013 and
2012, respectively.
82
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
The Company’s maximum exposure to losses associated with its preferred equity investments is primarily limited
to its invested capital. As of December 31, 2014 and 2013, the Company’s invested capital in its preferred equity
investments approximated $229.1 million and $236.9 million, respectively.
Summarized financial information relating to the Company’s preferred equity investments is as follows (in millions):
Assets:
Real estate, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities and Partners’/Members’ Capital:
Notes and mortgages payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Partners’/Members’ capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
2014
2013
$
$
$
$
456.9
666.6
1,123.5
767.6
21.6
334.3
1,123.5
$
$
$
$
571.7
676.1
1,247.8
878.1
26.1
343.6
1,247.8
Year Ended December 31,
2013
2012
2014
Revenues from rental property. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment charges (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from continuing operations. . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued Operations:
Gain on disposition of properties. . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
146.0
(47.0)
(47.1)
(19.2)
-
(7.2)
25.5
159.5
(34.8)
(55.2)
(24.0)
-
(7.1)
38.4
195.0
(44.7)
(72.0)
(33.7)
(2.7)
(8.3)
33.6
31.5
57.0
$
20.8
59.2
$
17.5
51.1
$
(a)
Represents an impairment charge against one master leased pool due to decline in fair market value.
Kimsouth -
Kimsouth Realty Inc. (“Kimsouth”) is a wholly-owned subsidiary of the Company that holds a 13.6% noncontrolling
interest in a joint venture which owns a portion of Albertson’s Inc. During the year ended December 31, 2013,
the Company funded an aggregate $70.8 million as its participation in a transaction with Supervalu, Inc. (“SVU”)
through a consortium led by Cerberus Capital Management, L.P. (“Cerberus”). This investment included a
contribution of $22.3 million to acquire 414 Albertsons locations from SVU through the Company’s existing joint
venture in Albertsons. The Company recorded this additional investment in Other real estate investments on
the Company’s Consolidated Balance Sheets and will continue to account for its investment in this joint venture
under the equity method of accounting. During the years ended December 31, 2014 and 2013, the Company
recorded equity losses from operations in this joint venture of $5.8 million and $16.5 million, respectively,
which is included in Equity in income from other real estate investments, net on the Company’s Consolidated
Statements of Income. As such, the Company’s investment in its Albertsons joint venture as of December 31, 2014
and 2013, was $0.0 million and $5.8 million, respectively. Also included in this $70.8 million aggregate funding is
the Company’s contribution of $14.9 million to fund its 15% noncontrolling investment in NAI Group Holdings
Inc., a C-corporation, to acquire four grocery banners (Shaw’s, Jewel-Osco, Acme and Star Market) totaling
456 locations from SVU. The Company recorded this investment in Other assets on the Company’s Consolidated
Balance Sheets and accounts for this investment under the cost method of accounting. Additionally, as part of
this overall funding, the Company acquired 8.2 million shares of SVU common stock for $33.6 million, which is
recorded in Marketable securities on the Company’s Consolidated Balance Sheets.
83
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
During 2012, the Albertsons joint venture distributed $50.3 million of which the Company received $6.9 million,
which was recognized as income from cash received in excess of the Company’s investment, before income
tax, and is included in Equity in income from other real estate investments, net on the Company’s Consolidated
Statements of Income.
In January 2015, the Company invested an additional $85.3 million of new equity in the Company’s Albertsons
joint venture to facilitate the acquisition of Safeway Inc. by the Cerberus lead consortium. As a result, Kimco now
holds a 9.8% ownership interest in the combined company which operates 2,230 stores across 34 states.
Leveraged Lease -
During June 2002, the Company acquired a 90% equity participation interest in an existing leveraged lease of
30 properties. The properties are leased under a long-term bond-type net lease whose primary term expires in
2016, with the lessee having certain renewal option rights. The Company’s cash equity investment was $4.0 million.
This equity investment is reported as a net investment in leveraged lease in accordance with the FASB’s lease
guidance.
As of December 31, 2014, 19 of these properties were sold, whereby the proceeds from the sales were used to
pay down $32.3 million in mortgage debt and the remaining 11 properties remain encumbered by third-party
non-recourse debt of $11.2 million that is scheduled to fully amortize during the primary term of the lease from a
portion of the periodic net rents receivable under the net lease.
As an equity participant in the leveraged lease, the Company has no recourse obligation for principal or interest
payments on the debt, which is collateralized by a first mortgage lien on the properties and collateral assignment
of the lease. Accordingly, this obligation has been offset against the related net rental receivable under the lease.
At December 31, 2014 and 2013, the Company’s net investment in the leveraged lease consisted of the following
(in millions):
Remaining net rentals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Estimated unguaranteed residual value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-recourse mortgage debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unearned and deferred income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment in leveraged lease. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014
2013
$
$
8.3
30.3
(10.1)
(12.9)
15.6
$
$
15.9
30.3
(16.1)
(19.9)
10.2
9.
Variable Interest Entities:
Consolidated Ground-Up Development Projects
Included within the Company’s ground-up development projects at December 31, 2014, is an entity that is a VIE,
for which the Company is the primary beneficiary. This entity was established to develop real estate property to
hold as a long-term investment. The Company’s involvement with this entity is through its majority ownership and
management of the property. This entity was deemed a VIE primarily based on the fact that the equity investment
at risk is not sufficient to permit the entity to finance its activities without additional financial support. The initial
equity contributed to this entity was not sufficient to fully finance the real estate construction as development
costs are funded by the partners throughout the construction period. The Company determined that it was the
primary beneficiary of this VIE as a result of its controlling financial interest.
At December 31, 2014, total assets of this ground-up development VIE were $77.7 million and total liabilities
were $0.1 million. The classification of these assets is primarily within Real estate under development in the
Company’s Consolidated Balance Sheets and the classifications of liabilities are primarily within Accounts payable
and accrued expenses on the Company’s Consolidated Balance Sheets.
Substantially all of the projected development costs to be funded for this ground-up development VIE, aggregating
$32.8 million, will be funded with capital contributions from the Company and by the outside partners, when
contractually obligated. The Company has not provided financial support to this VIE that it was not previously
contractually required to provide.
84
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Unconsolidated Ground-Up Development
Also included within the Company’s ground-up development projects at December 31, 2014, is an unconsolidated
joint venture, which holds a VIE for which the Company is not the primary beneficiary. This entity was primarily
established to develop real estate property for long-term investment and was deemed a VIE primarily based on
the fact that the equity investment at risk was not sufficient to permit the entity to finance its activities without
additional financial support. The initial equity contributed to this entity was not sufficient to fully finance the real
estate construction as development costs are funded by the partners throughout the construction period. The
Company determined that it was not the primary beneficiary of this VIE based on the fact that the Company has
shared control of this entity along with the entity’s partner and therefore does not have a controlling financial
interest.
The Company’s investment in this VIE was $35.1 million as of December 31, 2014, which is included in Investments
and advances in real estate joint ventures in the Company’s Consolidated Balance Sheets. The Company’s
maximum exposure to loss as a result of its involvement with this VIE is estimated to be $35.1 million, which
primarily represents the Company’s current investment. The Company has not provided financial support to this
VIE that it was not previously contractually required to provide. All future costs of development will be funded with
capital contributions from the Company and the outside partner in accordance with their respective ownership
percentages.
Unconsolidated Redevelopment Investment
Included in the Company’s joint venture investments at December 31, 2014, is one unconsolidated joint venture,
which is a VIE for which the Company is not the primary beneficiary. This joint venture was primarily established
to redevelop real estate property for long-term investment and was deemed a VIE primarily based on the fact
that the equity investment at risk was not sufficient to permit the entity to finance its activities without additional
financial support. The initial equity contributed to this entity was not sufficient to fully finance the real estate
construction as redevelopment costs are funded by the partners throughout the construction period. The
Company determined that it was not the primary beneficiary of this VIE based on the fact that the Company
has shared control of this entity along with the entity’s partners and therefore does not have a controlling
financial interest.
As of December 31, 2014, the Company’s investment in this VIE was a negative $9.9 million, due to the fact that the
Company had a remaining capital commitment obligation, which is included in Other liabilities in the Company’s
Consolidated Balance Sheets. The Company’s maximum exposure to loss as a result of its involvement with this
VIE is estimated to be $9.9 million, which is the remaining capital commitment obligation. The Company has
not provided financial support to this VIE that it was not previously contractually required to provide. All future
costs of redevelopment will be funded with capital contributions from the Company and the outside partner in
accordance with their respective ownership percentages.
10. Mortgages and Other Financing Receivables:
The Company has various mortgages and other financing receivables which consist of loans acquired and loans
originated by the Company. For a complete listing of the Company’s mortgages and other financing receivables
at December 31, 2014, see Financial Statement Schedule IV included in this annual report on Form 10-K.
85
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
The following table reconciles mortgage loans and other financing receivables from January 1, 2012 to
December 31, 2014 (in thousands):
Balance at January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions:
New mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions under existing mortgage loans . . . . . . . . . . . . .
Write-off of loan discounts . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation. . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of loan discounts . . . . . . . . . . . . . . . . . . . . . .
Deductions:
Loan repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loan foreclosures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge off/foreign currency translation . . . . . . . . . . . . . . .
Collections of principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of loan costs . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
2014
2013
$
30,243
$
70,704
$
2012
102,972
52,728
-
286
-
126
(7,330)
-
(1,066)
(972)
(2)
74,013
$
8,527
7,810
-
-
653
(28,068)
(25,572)
(1,260)
(2,529)
(22)
30,243
$
29,496
895
-
1,181
247
(60,740)
-
(430)
(2,861)
(56)
70,704
The Company reviews payment status to identify performing versus non-performing loans. As of December 31,
2014, the Company had a total of 16 loans aggregating $74.0 million all of which were identified as performing
loans.
During 2013, the Company foreclosed on two non-performing loans, in separate transactions, for an aggregate
$25.6 million. As such, the Company acquired 59.24 acres of undeveloped land located in Westbrook, Maine
(which was sold in 2014 at price which approximated its carrying value) and 427 acres of undeveloped land located
in Brantford, Ontario, which was the collateral under each of the respective loans. The carrying values of the
mortgage receivables did not exceed the fair values of the underlying collateral upon foreclosure.
11. Marketable Securities:
The amortized cost and estimated fair values of securities available-for-sale and held-to-maturity at December 31,
2014 and 2013, are as follows (in thousands):
December 31, 2014
Gross
Unrealized
Gains/Losses
Amortized
Cost
Estimated
Fair Value
Available-for-sale:
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
41,462
$
46,197
$
87,659
Held-to-maturity:
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,576
44,038
$
$
(200)
45,997
2,376
90,035
$
December 31, 2013
Gross
Unrealized
Gains
Amortized
Cost
Estimated
Fair Value
Available-for-sale:
Equity securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
33,728
$
25,995
$
59,723
Held-to-maturity:
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,043
36,771
$
$
59
26,054
3,102
62,825
$
86
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
During 2014, 2013 and 2012, the Company received $3.8 million, $26.4 million and $0.2 million in proceeds
from the sale/redemption of certain marketable securities, respectively. In connection with these transactions,
during 2014, 2013 and 2012 the Company recognized (i) gross realizable gains of $0.0 million, $12.1 million and
$0.0 million, respectively, and (ii) gross realizable losses of $0.1 million, $0.0 million and $0.0 million, respectively.
As of December 31, 2014, the contractual maturities of debt securities classified as held-to-maturity are as follows:
after one year through five years, $1.8 million; and after five years through 10 years, $0.8 million. Actual maturities
may differ from contractual maturities as issuers may have the right to prepay debt obligations with or without
prepayment penalties.
12. Notes Payable:
As of December 31, 2014 and 2013 the Company’s Notes Payable consisted of the following (dollars in millions):
Senior Unsecured Notes . . . .
Medium Term Notes . . . . . . .
U.S. Term Loan (e) . . . . . . . . .
Canadian Notes Payable . . .
Credit Facility . . . . . . . . . . . . .
Senior Unsecured Notes . . . .
Medium Term Notes . . . . . . .
U.S. Term Loan (d) . . . . . . . . .
Canadian Notes Payable . . .
Credit Facility . . . . . . . . . . . . .
Mexican Term Loan . . . . . . . .
Balance at
12/31/14
1,540.9
$
850.0
400.0
301.3
100.0
3,192.2
$
Balance at
12/31/13
1,140.9
$
1,044.6
400.0
329.5
194.5
76.5
3,186.0
$
Interest Rate
Range (Low)
3.13%
4.30%
(a)
3.86%
(b)
Interest Rate
Range (High)
6.88%
5.78%
(a)
5.99%
(b)
Maturity Date
Range (Low)
Sep-2015
Feb-2015
Apr-2015
Apr-2018
Apr-2018
Maturity Date
Range (High)
Jun-2023
Feb-2018
Apr-2015
Aug-2020
Apr-2018
Interest Rate
Range (Low)
3.13%
4.30%
(a)
3.86%
(a)
(c)
Interest Rate
Range (High)
6.88%
5.78%
(a)
5.99%
(a)
(c)
Maturity Date
Range (Low)
Jun-2014
Jun-2014
Apr-2014
Apr-2018
Oct-2015
Mar-2018
Maturity Date
Range (High)
Jun-2023
Feb-2018
Apr-2014
Aug-2020
Oct-2015
Mar-2018
Interest rate is equal to LIBOR + 1.05% (1.21% and 1.22% at December 31, 2014 and 2013, respectively).
Interest rate is equal to LIBOR + .925% (1.09% at December 31, 2014).
Interest rate is equal to TIIE (Equilibrium Interbank Interest Rate) plus 1.35% (5.15% at December 31, 2013).
(a)
(b)
(c)
(d) During January 2014, the Company exercised its one-year extension option to extend the maturity date to April 2015.
(e) During January 2015, the Company repaid its $400.0 million term loan which was scheduled to mature in 2015 with a
new $650.0 million unsecured term loan that bears interest at a rate equal to LIBOR + .95% and is scheduled to mature
in 2017, with three one-year extensions at the Company’s discretion.
The weighted-average interest rate for all unsecured notes payable is 4.17% as of December 31, 2014. The
scheduled maturities of all unsecured notes payable as of December 31, 2014, were as follows (in millions): 2015,
$750.0; 2016, $300.0; 2017, $290.9; 2018, $529.1; 2019, $300.0 and thereafter, $1,022.2.
87
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Senior Unsecured Notes / Medium Term Notes –
During September 2009, the Company entered into a fifth supplemental indenture, under the indenture governing
its Medium Term Notes (“MTN”) and Senior Notes, which included the financial covenants for future offerings
under the indenture that were removed by the fourth supplemental indenture.
In accordance with the terms of the Indenture, as amended, pursuant to which the Company’s Senior Unsecured
Notes, except for $300.0 million issued during April 2007 under the fourth supplemental indenture, have been
issued, the Company is subject to maintaining (a) certain maximum leverage ratios on both unsecured senior
corporate and secured debt, minimum debt service coverage ratios and minimum equity levels, (b) certain debt
service ratios, (c) certain asset to debt ratios and (d) restricted from paying dividends in amounts that exceed by
more than $26.0 million the funds from operations, as defined, generated through the end of the calendar quarter
most recently completed prior to the declaration of such dividend; however, this dividend limitation does not
apply to any distributions necessary to maintain the Company’s qualification as a REIT providing the Company is
in compliance with its total leverage limitations.
The Company had a MTN program pursuant to which it offered for sale its senior unsecured debt for any general
corporate purposes, including (i) funding specific liquidity requirements in its business, including property
acquisitions, development and redevelopment costs and (ii) managing the Company’s debt maturities.
Interest on the Company’s fixed-rate senior unsecured notes and medium term notes is payable semi-annually in
arrears. Proceeds from these issuances were primarily used for the acquisition of neighborhood and community
shopping centers, the expansion and improvement of properties in the Company’s portfolio and the repayment
of certain debt obligations of the Company.
During April 2014, the Company issued $500.0 million of 7-year Senior Unsecured Notes at an interest rate of
3.20% payable semi-annually in arrears which are scheduled to mature in May 2021. The Company used the net
proceeds from this issuance of $495.4 million, after deducting the underwriting discount and offering expenses,
for general corporate purposes including reducing borrowings under the Company’s revolving credit facility and
repayment of maturing debt. In connection with this issuance, the Company entered into a seventh supplemental
indenture which, among other things, revised, for all securities created on or after the date of the seventh
supplemental indenture, the definition of Unencumbered Total Asset Value, used to determine compliance with
certain covenants within the indenture.
During May 2013, the Company issued $350.0 million of 10-year Senior Unsecured Notes at an interest rate of
3.125% payable semi-annually in arrears which are scheduled to mature in June 2023. Net proceeds from the
issuance were $344.7 million, after related transaction costs of $0.5 million. The proceeds from this issuance
were used for general corporate purposes including the partial reduction of borrowings under the Company’s
revolving credit facility and the repayment of $75.0 million senior unsecured notes which matured in June 2013.
During July 2013, a wholly-owned subsidiary of the Company issued $200.0 million Canadian denominated
(“CAD”) Series 4 unsecured notes on a private placement basis in Canada. The notes bear interest at 3.855% and
are scheduled to mature on August 4, 2020. Proceeds from the notes were used to repay the Company’s CAD
$200.0 million 5.180% unsecured notes, which matured on August 16, 2013.
During the years ended December 31, 2014 and 2013, the Company repaid the following notes (dollars in millions):
Type
MTN
Senior Note
MTN
Senior Note
Senior Note
Date Issued
Jun-05
Oct-06
Oct-03
Oct-06
Oct-06
Amount
Repaid
194.6
$
100.0
$
100.0
$
75.0
$
100.0
$
Interest Rate
4.82%
5.95%
5.19%
4.70%
6.125%
Maturity
Date
Jun-14
Jun-14
Oct-13
Jun-13
Jan-13
Date Paid
Jun-14
Jun-14
Oct-13
Jun-13
Jan-13
88
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Credit Facility -
During March 2014, the Company established a new $1.75 billion unsecured revolving credit facility (the “Credit
Facility”) with a group of banks, which is scheduled to expire in March 2018 with two additional six-month options to
extend the maturity date, at the Company’s discretion, to March 2019. This Credit Facility replaced the Company’s
then existing $1.75 billion unsecured revolving credit facility which was scheduled to mature in October 2015. The
Credit Facility, which can be increased to $2.25 billion through an accordion feature, accrues interest at a rate of
LIBOR plus 92.5 basis points on drawn funds. In addition, the Credit Facility includes a $500 million sub-limit which
provides the Company the opportunity to borrow in alternative currencies including Canadian dollars, British
Pounds Sterling, Japanese Yen or Euros. Pursuant to the terms of the Credit Facility, the Company, among other
things, is subject to covenants requiring the maintenance of (i) maximum leverage ratios on both unsecured and
secured debt and (ii) minimum interest and fixed coverage ratios. As of December 31, 2014, the Credit Facility had
a balance of $100.0 million outstanding and $1.0 million appropriated for letters of credit.
U.S. Term Loan -
As of December 31, 2014, the Company had a $400.0 million unsecured term loan with a consortium of banks, which
accrued interest at LIBOR plus 105 basis points. This term loan was scheduled to mature in April 2014, with three
additional one-year options to extend the maturity date, at the Company’s discretion, to April 17, 2017. During
January 2014, the Company exercised the first of its one-year extension options to extend the maturity date to
April 17, 2015. During January 2015, the Company entered into a new $650.0 million unsecured term loan credit
facility which is scheduled to mature in January 2017, with three one-year extension options at the Company’s
discretion, and accrues interest at a spread (currently 0.95%) to LIBOR or at the Company’s option at a base rate
as defined per the agreement. The proceeds from the new term loan were used to repay the $400.0 million term
loan and general corporate purposes. Pursuant to the terms of both the new term loan credit agreement and
the prior term loan credit agreement, the Company, among other things, is subject to covenants requiring the
maintenance of (i) maximum indebtedness ratios and (ii) minimum interest and fixed charge coverage ratios.
Mexican Term Loan -
During March 2013, the Company entered into a five year 1.0 billion Mexican peso term loan which was scheduled
to mature in March 2018. This term loan bore interest at a rate equal to TIIE (Equilibrium Interbank Interest Rate)
plus 1.35%. The Company had the option to swap this rate to a fixed rate at any time during the term of the loan.
The Company used these proceeds to repay its 1.0 billion MXN term loan, which matured in March 2013 and
bore interest at a fixed rate of 8.58%. This 1.0 billion MXN term loan (USD $76.3 million) was fully repaid during
September 2014.
13. Mortgages Payable:
During 2014, the Company (i) assumed $742.0 million of individual non-recourse mortgage debt relating
to the acquisition of 53 operating properties, including an increase of $39.4 million associated with fair value
debt adjustments (ii) paid off $328.0 million of mortgage debt that encumbered 21 operating properties and
(iii) obtained $15.7 million of individual non-recourse debt relating to one operating property.
During 2013, the Company (i) assumed $284.9 million of individual non-recourse mortgage debt relating to the
acquisition of nine operating properties, including an increase of $5.8 million associated with fair value debt
adjustments, (ii) paid off $256.3 million of mortgage debt that encumbered 14 properties and (iii) obtained
$36.0 million of individual non-recourse debt relating to three operating properties.
Mortgages payable, collateralized by certain shopping center properties and related tenants’ leases, are
generally due in monthly installments of principal and/or interest, which mature at various dates through 2035.
Interest rates range from LIBOR (0.08% as of December 31, 2014) to 9.75% (weighted-average interest rate of
5.58% as of December 31, 2014). The scheduled principal payments (excluding any extension options available to
the Company) of all mortgages payable, excluding unamortized fair value debt adjustments of $40.1 million, as
of December 31, 2014, were as follows (in millions): 2015, $157.2; 2016, $363.4; 2017, $457.6; 2018, $73.1; 2019, $10.0
and thereafter, $326.7.
89
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
14. Noncontrolling Interests:
Noncontrolling interests represent the portion of equity that the Company does not own in those entities
it consolidates as a result of having a controlling interest or determined that the Company was the primary
beneficiary of a VIE in accordance with the provisions of the FASB’s Consolidation guidance.
The Company accounts and reports for noncontrolling interests in accordance with the Consolidation guidance
and the Distinguishing Liabilities from Equity guidance issued by the FASB. The Company identifies its
noncontrolling interests separately within the equity section on the Company’s Consolidated Balance Sheets.
Units that are determined to be mandatorily redeemable are classified as Redeemable noncontrolling interests
and presented in the mezzanine section between Total liabilities and Stockholder’s equity on the Company’s
Consolidated Balance Sheets. The amounts of consolidated net income attributable to the Company and to the
noncontrolling interests are presented separately on the Company’s Consolidated Statements of Income.
The Company owns seven shopping center properties located throughout Puerto Rico. These properties were
acquired partially through the issuance of $158.6 million of non-convertible units and $45.8 million of convertible
units. Noncontrolling interests related to these acquisitions totaled $233.0 million of units, including premiums
of $13.5 million and a fair market value adjustment of $15.1 million (collectively, the “Units”). The Company is
restricted from disposing of these assets, other than through a tax free transaction until November 2015. The
Units and related annual cash distribution rates consisted of the following:
Type
Preferred A Units (1) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class A Preferred Units (1) . . . . . . . . . . . . . . . . . . . . . .
Class B-1 Preferred Units (2) . . . . . . . . . . . . . . . . . . . . .
Class B-2 Preferred Units (1) . . . . . . . . . . . . . . . . . . . . .
Class C DownReit Units (2) . . . . . . . . . . . . . . . . . . . . . .
Number of
Units Issued
81,800,000
2,000
2,627
5,673
640,001
Par Value Per
Unit
$
$
$
$
$
1.00
10,000
10,000
10,000
30.52
Return Per
Annum
7.0%
LIBOR plus 2.0%
7.0%
7.0%
Equal to the Company’s
common stock dividend
(1)
(2)
These units are redeemable for cash by the holder or callable by the Company and are included in Redeemable
noncontrolling interests on the Company’s Consolidated Balance Sheets.
These units are redeemable for cash by the holder or at the Company’s option, shares of the Company’s common
stock, based upon the conversion calculation as defined in the agreement. These units are included in Noncontrolling
interests on the Company’s Consolidated Balance Sheets.
The following Units have been redeemed for cash as of December 31, 2014:
Type
Preferred A Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class A Preferred Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class B-1 Preferred Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class B-2 Preferred Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class C DownReit Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Units
Redeemed
2,200,000
2,000
2,438
5,576
61,804
Par Value
Redeemed
(in millions)
2.2
$
20.0
$
24.4
$
55.8
$
1.9
$
Noncontrolling interest relating to the remaining units was $111.6 million and $111.4 million as of December 31,
2014 and 2013, respectively.
90
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
The Company owns two shopping center properties located in Bay Shore, NY and Centereach, NY. Included in
Noncontrolling interests was $41.6 million, including a discount of $0.3 million and a fair market value adjustment
of $3.8 million, in redeemable units, issued by the Company in connection with the acquisition of these properties.
These units and related annual cash distribution rates consist of the following:
Type
Class A Units (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class B Units (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Number of
Units Issued
13,963
647,758
Par Value
Per Unit
1,000
$
37.24
$
Return Per Annum
5.0%
Equal to the Company’s
common stock dividend
(1)
(2)
These units are redeemable for cash by the holder or callable by the Company any time after April 3, 2016 and are
included in Redeemable noncontrolling interests on the Company’s Consolidated Balance Sheets.
These units are redeemable for cash by the holder or at the Company’s option, shares of the Company’s common stock
at a ratio of 1:1 and are callable by the Company any time after April 3, 2026. These units are included in Noncontrolling
interests on the Company’s Consolidated Balance Sheets.
During 2012, all 13,963 Class A Units were redeemed by the holder in cash. Additionally, during 2007, 30,000 units,
or $1.1 million par value, of the Class B Units were redeemed and at the Company’s option settled in cash. As of
December 31, 2014 and 2013, noncontrolling interest relating to the remaining Class B Units was $26.4 million.
Noncontrolling interests also includes 138,015 convertible units issued during 2006 by the Company, which were
valued at $5.3 million, including a fair market value adjustment of $0.3 million, related to an interest acquired in
an office building located in Albany, NY. These units are currently redeemable at the option of the holder for
cash or at the option of the Company for the Company’s common stock at a ratio of 1:1. The holder is entitled
to a distribution equal to the dividend rate of the Company’s common stock. The Company is restricted from
disposing of these assets, other than through a tax free transaction, until January 2017.
The following table presents the change in the redemption value of the Redeemable noncontrolling interests for
the years ended December 31, 2014 and 2013 (in thousands):
Balance at January 1, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of redeemable partnership interests (1) (2) . . . . . . . . . . . . . . . . . . .
Unit redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair market value adjustment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at December 31,. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014
2013
86,153
4,943
-
225
159
91,480
$
$
81,076
5,223
-
(225)
79
86,153
$
$
(1) During the year ended December 31, 2014, the Company acquired a 65.4% controlling ownership interest in an operating
property and the seller retained a 34.6% noncontrolling interest in the property. The partner has the ability to put its
partnership interest to the Company at any time after March 2015. As such, the Company has recorded the partners’
share of the property’s fair value of $4.9 million as Redeemable noncontrolling interests.
(2) During the year ended December 31, 2013, the Company issued 5,223 redeemable units valued at $5.2 million relating
to the acquisition of an operating property. These units are redeemable at the option of the holder after one year from
issuance and earn a yield of 6% per annum.
91
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
15. Fair Value Disclosure of Financial Instruments:
All financial instruments of the Company are reflected in the accompanying Condensed Consolidated Balance
Sheets at amounts which, in management’s estimation based upon an interpretation of available market
information and valuation methodologies, reasonably approximate their fair values except those listed below, for
which fair values are disclosed. The valuation method used to estimate fair value for fixed-rate and variable-rate
debt is based on discounted cash flow analyses, with assumptions that include credit spreads, market yield
curves, trading activity, loan amounts and debt maturities. The fair values for marketable securities are based
on published values, securities dealers’ estimated market values or comparable market sales. Such fair value
estimates are not necessarily indicative of the amounts that would be realized upon disposition.
As a basis for considering market participant assumptions in fair value measurements, the FASB’s Fair Value
Measurements and Disclosures guidance establishes a fair value hierarchy that distinguishes between market
participant assumptions based on market data obtained from sources independent of the reporting entity
(observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own
assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).
The following are financial instruments for which the Company’s estimate of fair value differs from the carrying
amounts (in thousands):
December 31,
2014
2013
Marketable Securities (1) . . . . . . . . . . . . . . . .
Notes Payable (2) . . . . . . . . . . . . . . . . . . . . . . .
Mortgages Payable (3) . . . . . . . . . . . . . . . . . .
$
$
$
90,235
3,192,167
1,428,131
Carrying
Amounts
Estimated
Fair Value
$
$
$
90,035
3,334,361
1,485,041
Carrying
Amounts
$
$
$
62,766
3,186,047
1,035,354
Estimated
Fair Value
$
$
$
62,824
3,333,614
1,083,801
(2)
(1) As of December 31, 2014 and 2013, the Company determined that $87.7 million and $59.7 million respectively, of the
Marketable securities estimated fair value were classified within Level 1 of the fair value hierarchy and the remaining
$2.3 million and $3.1 million, respectively, were classified within Level 3 of the fair value hierarchy.
The Company determined that its valuation of these Notes Payable was classified within Level 2 of the fair
value hierarchy.
The Company determined that its valuation of these Mortgages Payable was classified within Level 3 of the fair
value hierarchy.
(3)
The Company has available for sale securities that must be measured under the FASB’s Fair Value Measurements
and Disclosures guidance. The Company currently does not have non-financial assets and non-financial liabilities
that are required to be measured at fair value on a recurring basis.
In instances where the determination of the fair value measurement is based on inputs from different levels of
the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is
based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s
assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment,
and considers factors specific to the asset or liability.
The Company from time to time has used interest rate swaps to manage its interest rate risk. The fair values of
interest rate swaps are determined using the market standard methodology of netting the discounted future
fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable
cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from
observable market interest rate curves. Based on these inputs, the Company has determined that interest rate
swap valuations are classified within Level 2 of the fair value hierarchy.
92
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
The table below presents the Company’s assets and liabilities measured at fair value on a recurring basis
as of December 31, 2014 and 2013, aggregated by the level in the fair value hierarchy within which those
measurements fall.
Assets measured at fair value on a recurring basis at December 31, 2014 and 2013 (in thousands):
Balance at
December 31,
2014
Level 1
Level 2
Level 3
Assets:
Marketable equity securities . . . . . . . . . . . . . . .
Liabilities:
Interest rate swaps. . . . . . . . . . . . . . . . . . . . . . . .
$
$
87,659
1,404
$
$
87,659
-
$
$
-
1,404
$
$
-
-
Marketable equity securities . . . . . . . . . . . . . . .
$
59,723
$
59,723
Balance at
December 31,
2013
Level 1
Level 2
$
-
Level 3
$
-
Assets measured at fair value on a non-recurring basis at December 31, 2014 and 2013 are as follows (in thousands):
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
80,270
Balance at
December 31,
2014
Balance at
December 31,
2013
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint venture investments . . . . . . . . . . . . . . . . . . . .
Other real estate investments . . . . . . . . . . . . . . . . .
Cost method investment . . . . . . . . . . . . . . . . . . . . .
$
$
$
$
217,529
59,693
2,050
4,670
Level 1
$
-
Level 2
$
-
Level 3
$
80,270
Level 1
$
$
$
$
-
-
-
-
Level 2
$
$
$
$
-
-
-
-
Level 3
$ 217,529
59,693
$
2,050
$
4,670
$
During the year ended December 31, 2014, the Company recognized impairment charges of $217.8 million, of
which $178.0 million, before income tax benefits of $1.7 million, is included in discontinued operations. These
impairment charges consist of (i) $118.4 million related to adjustments to property carrying values, (ii) the
release of cumulative foreign currency translation loss of $92.9 million relating to the substantial liquidation of
the Company’s investment in Mexico, (iii) $4.8 million related to a cost method investment and (iv) $1.6 million
related to a preferred equity investment. During the year ended December 31, 2013, the Company recognized
impairment charges of $190.2 million, of which $158.0 million, before income taxes, is included in discontinued
operations. These impairment charges consist of (i) $175.6 million related to adjustments to property carrying
values, (ii) $10.4 million related to a cost method investment, (iii) $1.0 million related to certain joint venture
investments and (iv) $3.2 million related to a preferred equity investment.
The adjustments to property carrying values were recognized in connection with the Company’s efforts to market
certain properties and management’s assessment as to the likelihood and timing of such potential transactions
and the anticipated hold period for such properties. During the second quarter ended June 30, 2014, the Company
implemented a plan to accelerate its disposition of certain U.S. non-strategic properties. This plan effectively
shortened the Company’s anticipated hold period for these properties and as a result the Company recognized
impairment charges on certain operating properties.
93
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
The Company’s estimated fair values for the year ended December 31, 2014, as it relates to property carrying
values were primarily based upon (i) estimated sales prices from third party offers based on signed contracts or
letters of intent (this method was used to determine $88.2 million of the $118.4 million in impairments recognized
during the year ended December 31, 2014), for which the Company does not have access to the unobservable
inputs used to determine these estimated fair values, and (ii) discounted cash flow models (this method was used
to determine $30.2 million of the $118.4 million in impairments recognized during the year ended December 31,
2014). The discounted cash flow models include all estimated cash inflows and outflows over a specified holding
period. These cash flows were comprised of unobservable inputs which include forecasted revenues and expenses
based upon market conditions and expectations for growth. The capitalization rates primarily ranging from 7.0%
to 12.5% and discount rates primarily ranging from 7.5% to 13.5% which were utilized in the models were based
upon observable rates that the Company believes to be within a reasonable range of current market rates for
each respective investments.
The Company’s estimated fair value as it relates to the cost method investment, was based upon a discounted
cash flow model. The discounted cash flow model includes all estimated cash inflows and outflows over a specified
holding period. These cash flows were comprised of unobservable inputs which include forecasted revenues
and expenses based upon market conditions and expectations for growth. The capitalization rate of 6.0% and
discount rate of 9.1% which were utilized in this model were based upon observable rates that the Company
believes to be within a reasonable range of current market rates for the respective investment.
The Company’s estimated fair values for the year ended December 31, 2013, were primarily based upon (i) estimated
sales prices from third party offers based on signed contracts relating to property carrying values and joint
venture investments and (ii) a discounted cash flow model relating to the Company’s cost method investment.
The Company does not have access to the unobservable inputs used by the third parties to determine these
estimated fair values. The discounted cash flows model includes all estimated cash inflows and outflows over
a specified holding period. These cash flows were comprised of unobservable inputs which include forecasted
revenues and expenses based upon market conditions and expectations for growth. The capitalization rate of
6.0% and discount rate of 9.5% which were utilized in this model were based upon observable rates that the
Company believes to be within a reasonable range of current market rates for the respective investments.
Based on these inputs the Company determined that its valuation of these investments was classified within
Level 3 of the fair value hierarchy. The property carrying value impairment charges resulted from the Company’s
efforts to market certain assets and management’s assessment as to the likelihood and timing of such
potential transactions.
16. Preferred Stock, Common Stock and Convertible Unit Transactions –
Preferred Stock –
The Company’s outstanding Preferred Stock is detailed below (in thousands, except share information and
par values):
As of December 31, 2014 and 2013
Series of
Preferred Stock
Series H . . . . . . . . . . . . . . . . . .
Series I . . . . . . . . . . . . . . . . . . .
Series J . . . . . . . . . . . . . . . . . . .
Series K . . . . . . . . . . . . . . . . . . .
Shares
Authorized
70,000
18,400
9,000
8,050
105,450
Shares
Issued and
Outstanding
Liquidation
Preference
175,000
400,000
225,000
175,000
975,000
70,000 $
16,000
9,000
7,000
102,000 $
94
Annual
Dividend
per
Depositary
Share
Dividend
Rate
$
6.90%
$
6.00%
5.50%
$
5.625% $
1.72500 $
1.50000 $
1.37500 $
1.40625 $
Par Value
1.00
1.00
1.00
1.00
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Series of
Preferred Stock
Series H (1) . . . . . . . . . .
Series I (2) . . . . . . . . . . .
Series J (3) . . . . . . . . . .
Series K (4) . . . . . . . . . .
Date Issued
8/30/2010
3/20/2012
7/25/2012
12/7/2012
Depositary
Shares
Issued
7,000,000
16,000,000
9,000,000
7,000,000
Fractional
Interest per
Share
1/100
1/1000
1/1000
1/1000
Net
Proceeds,
After
Expenses
(in millions)
169.2
$
387.2
$
217.8
$
169.1
$
Offering/
Redemption
Price
$
$
$
$
25.00
25.00
25.00
25.00
Optional
Redemption
Date
8/30/2015
3/20/2017
7/25/2017
12/7/2017
(1)
(2)
(3)
(4)
The net proceeds received from this offering were used to repay $150.0 million in mortgages payable and for general
corporate purposes.
The net proceeds received from this offering were used for general corporate purposes, including the reduction of
borrowings outstanding under the Company’s revolving credit facility and the redemption of shares of the Company’s
preferred stock.
The net proceeds received from this offering were used for the redemption of all the outstanding depositary shares
representing the Company’s Class F preferred stock, which redemption occurred on August 15, 2012, as discussed
below, with the remaining proceeds used towards the redemption of outstanding depositary shares representing the
Company’s Class G preferred stock, which redemption occurred on October 10, 2012, as discussed below, and general
corporate purposes.
The net proceeds received from this offering were used for general corporate purposes, including funding towards the
repayment of maturing Senior Unsecured Notes.
The following Preferred Stock series were redeemed during the year ended December 31, 2012:
Series of
Preferred Stock
Series F (1) . . . . . . . . . .
Series G (2) . . . . . . . . . .
Date
Issued
6/5/2003
10/10/2007
Depositary
Shares
Issued
7,000,000 $
18,400,000 $
Redemption
Amount
(in millions)
Offering/
Redemption
Price
175.0 $
460.0 $
25.00
25.00
Optional
Redemption
Date
6/5/2008
10/10/2012
Actual
Redemption
Date
8/15/2012
10/10/2012
(1)
(2)
In connection with this redemption the Company recorded a non-cash charge of $6.2 million resulting from the
difference between the redemption amount and the carrying amount of the Class F Preferred Stock on the Company’s
Consolidated Balance Sheets in accordance with the FASB’s guidance on Distinguishing Liabilities from Equity. The
$6.2 million was subtracted from net income to arrive at net income available to common shareholders and is used in
the calculation of earnings per share for the year ended December 31, 2012.
In connection with this redemption the Company recorded a non-cash charge of $15.5 million resulting from the
difference between the redemption amount and the carrying amount of the Class G Preferred Stock on the Company’s
Consolidated Balance Sheets in accordance with the FASB’s guidance on Distinguishing Liabilities from Equity. The
$15.5 million was subtracted from net income to arrive at net income available to common shareholders and is used in
the calculation of earnings per share for the year ended December 31, 2012.
The Company’s Preferred Stock Depositary Shares for all series are not convertible or exchangeable for any other
property or securities of the Company.
95
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Voting Rights - The Class H Preferred Stock, Class I Preferred Stock, Class J Preferred Stock and Class K Preferred
Stock rank pari passu as to voting rights, priority for receiving dividends and liquidation preference as set
forth below.
As to any matter on which the Class H Preferred Stock may vote, including any actions by written consent, each
share of the Class H Preferred Stock shall be entitled to 100 votes, each of which 100 votes may be directed
separately by the holder thereof. With respect to each share of Class H Preferred Stock, the holder thereof may
designate up to 100 proxies, with each such proxy having the right to vote a whole number of votes (totaling 100
votes per share of Class H Preferred Stock). As a result, each Class H Depositary Share is entitled to one vote.
As to any matter on which the Class I, J, or K Preferred Stock may vote, including any actions by written consent,
each share of the Class I, J or K Preferred Stock shall be entitled to 1,000 votes, each of which 1,000 votes may be
directed separately by the holder thereof. With respect to each share of Class I, J or K Preferred Stock, the holder
thereof may designate up to 1,000 proxies, with each such proxy having the right to vote a whole number of votes
(totaling 1,000 votes per share of Class I, J or K Preferred Stock). As a result, each Class I, J or K Depositary Share
is entitled to one vote.
Liquidation Rights –
In the event of any liquidation, dissolution or winding up of the affairs of the Company, preferred stock holders
are entitled to be paid, out of the assets of the Company legally available for distribution to its stockholders,
a liquidation preference of $2,500.00 Class H Preferred Stock per share, $25,000.00 Class I Preferred Stock per
share, $25,000.00 Class J Preferred Stock per share and $25,000.00 Class K Preferred Stock per share ($25.00 per
each Class H, Class I, Class J and Class K Depositary Share), plus an amount equal to any accrued and unpaid
dividends to the date of payment, before any distribution of assets is made to holders of the Company’s common
stock or any other capital stock that ranks junior to the preferred stock as to liquidation rights.
Common Stock –
The Company, from time to time, repurchases shares of its common stock in amounts that offset new issuances
of common shares in connection with the exercise of stock options or the issuance of restricted stock awards.
These share repurchases may occur in open market purchases, privately negotiated transactions or otherwise
subject to prevailing market conditions, the Company’s liquidity requirements, contractual restrictions and other
factors. During 2014, 2013 and 2012, the Company repurchased 128,147 shares, 144,727 shares and 106,010 shares
respectively, in connection with common shares surrendered to the Company to satisfy statutory minimum tax
withholding obligations in connection with the vesting of restricted stock awards under the Company’s equity-
based compensation plans. In addition, during the year ended December 31, 2012, the Company repurchased
1,635,823 shares of the Company’s common stock for $30.9 million, of which $22.6 million was provided to the
Company from stock options exercised.
Convertible Units –
The Company has various types of convertible units that were issued in connection with the purchase of operating
properties (see footnote 14). The amount of consideration that would be paid to unaffiliated holders of units
issued from the Company’s consolidated subsidiaries which are not mandatorily redeemable, as if the termination
of these consolidated subsidiaries occurred on December 31, 2014, is $41.0 million. The Company has the option
to settle such redemption in cash or shares of the Company’s common stock. If the Company exercised its right
to settle in Common Stock, the unit holders would receive 1.6 million shares of Common Stock.
96
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
17. Supplemental Schedule of Non-Cash Investing/Financing Activities:
The following schedule summarizes the non-cash investing and financing activities of the Company for the years
ended December 31, 2014, 2013 and 2012 (in thousands):
Acquisition of real estate interests by assumption of
mortgage debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition of real estate interests through foreclosure . . . . . . . . . . . .
Acquisition of real estate interests by issuance of redeemable
units/partnership interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition of real estate interests through proceeds
held in escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds held in escrow through sale of real estate interests . . . . . . .
Disposition of real estate interest by assignment of
mortgage debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Disposition of real estate through the issuance of
mortgage receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment in real estate joint venture through contribution
of real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease of noncontrolling interests through sale of real estate . . . .
Issuance of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Surrender of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Declaration of dividends paid in succeeding period . . . . . . . . . . . . . .
Consolidation of Joint Ventures:
Increase in real estate and other assets . . . . . . . . . . . . . . . . . . . . . .
Increase in mortgage payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
$
$
$
$
$
$
$
$
$
$
$
2014
2013
2012
210,232 $
- $
76,477 $
24,322 $
179,198
-
8,219 $
3,985 $
179,387 $
197,270 $
42,892 $
- $
-
-
-
- $
- $
17,083
2,728 $
3,513 $
13,475
35,080 $
17,650 $
14,047 $
(4,051) $
111,143 $
- $
- $
9,213 $
(3,891) $
104,496 $
-
-
18,115
(2,073)
96,518
687,538 $
492,318 $
228,200 $
206,489 $
-
-
18. Transactions with Related Parties:
The Company provides management services for shopping centers owned principally by affiliated entities and
various real estate joint ventures in which certain stockholders of the Company have economic interests. Such
services are performed pursuant to management agreements which provide for fees based upon a percentage of
gross revenues from the properties and other direct costs incurred in connection with management of the centers.
Reference is made to Footnotes 3, 4, 7 and 19 for additional information regarding transactions with related parties.
Ripco Real Estate Corp. (“Ripco”) business activities include serving as a leasing agent and representative for
national and regional retailers including Target, Best Buy, Kohls and many others, providing real estate brokerage
services and principal real estate investing. Mr. Todd Cooper, an officer and 50% shareholder of Ripco, is a son of
Mr. Milton Cooper, Executive Chairman of the Board of Directors of the Company. During 2014, 2013 and 2012,
the Company paid brokerage commissions of $0.3 million, $0.6 million and $0.8 million, respectively, to Ripco for
services rendered primarily as leasing agent for various national tenants in shopping center properties owned by
the Company. The Company believes that the brokerage commissions paid were at or below the customary rates
for such leasing services.
Additionally, the Company held joint venture investments with Ripco in which the Company and Ripco each held
50% noncontrolling interests. The Company accounted for its investment in these joint ventures under the equity
method of accounting. During 2013, the one remaining joint venture investment with Ripco sold its only operating
property for a sales price of $3.5 million, which was encumbered by a $2.8 million loan, which was guaranteed
by the Company. As a result of this transaction the loan was fully repaid and the Company was relieved of the
corresponding debt guarantee on the loan. As such, as of December 31, 2013 the Company no longer held any
joint venture investments with Ripco.
ProHEALTH is a multi-specialty physician group practice offering one-stop health care. ProHEALTH’s CEO, Dr. David
Cooper, M.D. is a son of Milton Cooper, Executive Chairman of the Company. ProHEALTH and or its affiliates
(“ProHEALTH”) have leasing arrangements with the Company whereby four property locations are currently under
97
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
lease. Total annual base rent for properties leased to ProHEALTH for the years ended December 31, 2014, 2013 and
2012 aggregated $0.7 million, $0.1 and $0.1 million, respectively. The Company determined that the leasing terms
for these leases are consistent with fair market rental values and that the transactions, taken as a whole, are no less
favorable to the Company than terms available to an unaffiliated third party under similar circumstances.
19. Commitments and Contingencies:
Operations -
The Company and its subsidiaries are primarily engaged in the operation of shopping centers that are either
owned or held under long-term leases that expire at various dates through 2095. The Company and its subsidiaries,
in turn, lease premises in these centers to tenants pursuant to lease agreements which provide for terms ranging
generally from 5 to 25 years and for annual minimum rentals plus incremental rents based on operating expense
levels and tenants’ sales volumes. Annual minimum rentals plus incremental rents based on operating expense
levels and percentage rents comprised 99% of total revenues from rental property for each of the three years
ended December 31, 2014, 2013 and 2012.
The future minimum revenues from rental property under the terms of all non-cancelable tenant leases, assuming
no new or renegotiated leases are executed for such premises, for future years are as follows (in millions): 2015,
$749.5; 2016, $683.6; 2017, $589.6; 2018, $490.1; 2019, $402.1 and thereafter; $1,849.2.
Base rental revenues from rental property are recognized on a straight-line basis over the terms of the related
leases. The difference between the amount of rental income contracted through leases and rental income
recognized on a straight-line basis before allowances for the years ended December 31, 2014, 2013 and 2012 was
$8.4 million, $4.8 million and $6.2 million, respectively.
Minimum rental payments under the terms of all non-cancelable operating leases pertaining to the Company’s
shopping center portfolio for future years are as follows (in millions): 2015, $13.2; 2016, $12.5; 2017, $11.6; 2018,
$10.3; 2019, $10.4 and thereafter, $164.8.
Guarantees –
On a select basis, the Company had provided guarantees on interest bearing debt held within real estate joint
ventures. The Company is often provided with a back-stop guarantee from its partners. The Company had the
following outstanding guarantees as of December 31, 2014 (amounts in millions):
Name of Joint
Venture
InTown Suites Management, Inc. . . .
Amount of
Guarantee
139.7
$
Victoriaville. . . . . . . . . . . . . . . . . . . . .
Anthem K -12, LP. . . . . . . . . . . . . . . . .
$
$
Interest rate
LIBOR plus
1.15%
3.92%
Maturity, with
extensions
2015
2020
2.1
42.2
Various (2)
Various (2)
Terms
(1)
Jointly and severally
with partner
Jointly and severally
with partner
Type of debt
Unsecured
credit facility
Promissory note
Promissory
notes
(1) During June 2013, the Company sold its unconsolidated investment in the InTown portfolio for a sales price of
$735.0 million which included the assignment of $609.2 million in debt. This transaction resulted in a deferred gain
to the Company of $21.7 million. The Company continues to maintain its guarantee of a portion of the debt assumed
by the buyer ($139.7 million as of December 31, 2014). The guarantee is collateralized by the buyer’s ownership interest
in the portfolio. Additionally, the Company has entered into a commitment to provide financing up to the outstanding
amount of the guaranteed portion of the loan for five years past the date of maturity. This commitment can be in the
form of extensions with the current lender or a new lender or financing directly from the Company to the buyer. On
February 24, 2015, the outstanding debt balance of $139.7 million was fully repaid and as such, the Company was relieved
of its related commitments and guarantee. As a result, the Company will recognize the deferred gain of $21.7 million
during the first quarter of 2015.
(2) As of December 31, 2014, the interest rates range from 3.62% to 4.97% and maturity dates with extensions range from
2015 to 2022.
98
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
The Company evaluated these guarantees in connection with the provisions of the FASB’s Guarantees guidance
and determined that the impact did not have a material effect on the Company’s financial position or results of
operations.
Letters of Credit -
The Company has issued letters of credit in connection with the completion and repayment guarantees for
loans encumbering certain of the Company’s redevelopment projects and guaranty of payment related to the
Company’s insurance program. At December 31, 2014, these letters of credit aggregated $24.9 million.
Other -
In connection with the construction of its development and redevelopment projects and related infrastructure,
certain public agencies require posting of performance and surety bonds to guarantee that the Company’s
obligations are satisfied. These bonds expire upon the completion of the improvements and infrastructure. As of
December 31, 2014, there were $22.0 million in performance and surety bonds outstanding.
On January 28, 2013, the Company received a subpoena from the Enforcement Division of the SEC in connection
with an investigation, In the Matter of Wal-Mart Stores, Inc. (FW-3678), that the SEC Staff is currently conducting
with respect to possible violations of the Foreign Corrupt Practices Act. The Company is responding to the
subpoena and intends to cooperate fully with the SEC in this matter. The U.S. Department of Justice (“DOJ”) is
conducting a parallel investigation, and the Company is cooperating with the DOJ investigation. At this point, we
are unable to predict the duration, scope or result of the SEC or DOJ investigation.
The Company is subject to various other legal proceedings and claims that arise in the ordinary course of
business. Management believes that the final outcome of such matters will not have a material adverse effect on
the financial position, results of operations or liquidity of the Company as of December 31, 2014.
20.
Incentive Plans:
The Company accounts for equity awards in accordance with FASB’s Compensation – Stock Compensation
guidance which requires that all share based payments to employees, including grants of employee stock options,
restricted stock and performance shares, be recognized in the Statement of Income over the service period
based on their fair values. Fair value is determined, depending on the type of award, using either the Black-
Scholes option pricing formula or the Monte Carlo method for performance shares, both of which are intended
to estimate the fair value of the awards at the grant date. Fair value of restricted shares is calculated based on the
price on the date of grant.
The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing
formula. The assumption for expected volatility has a significant effect on the grant date fair value. Volatility is
determined based on the historical equity of common stock for the most recent historical period equal to the
expected term of the options plus an implied volatility measure. The expected term is determined using the
simplified method due to the lack of exercise and cancelation history for the current vesting terms. During 2014,
the Company did not grant any stock options. The more significant assumptions underlying the determination of
fair values for options granted during 2013 and 2012 were as follows:
Weighted average fair value of options granted . . . . . . . . . . . . . . . . . . . . . . .
Weighted average risk-free interest rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average expected option lives (in years) . . . . . . . . . . . . . . . . . . . .
Weighted average expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average expected dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
5.04
1.46%
6.25
35.95%
3.85%
4.52
1.04%
6.25
37.53%
3.94%
Year Ended December 31,
2013
2012
99
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Information with respect to stock options under the Plan for the years ended December 31, 2014, 2013, and 2012
are as follows:
Options outstanding, January 1, 2012 . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options outstanding, December 31, 2012 . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options outstanding, December 31, 2013 . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options outstanding, December 31, 2014 . . . . . . . . . . . . . . .
Options exercisable (fully vested)-
Shares
17,110,592
(1,495,432)
1,522,450
(579,613)
16,557,997
(1,636,300)
1,354,250
(901,802)
15,374,145
(1,474,432)
(2,005,952)
11,893,761
December 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12,830,255
12,039,439
10,159,570
Weighted-
Average
Exercise Price
Per Share
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
28.14
19.84
18.78
28.73
28.42
23.15
21.55
31.38
28.79
16.19
28.68
30.23
31.57
31.24
31.96
Aggregate
Intrinsic
Value
(in millions)
8.0
$
$
$
$
$
$
$
14.9
13.1
29.8
7.7
8.2
19.9
The exercise prices for options outstanding as of December 31, 2014, range from $11.54 to $53.14 per share. The
Company estimates forfeitures based on historical data. The weighted-average remaining contractual life for
options outstanding as of December 31, 2014, was 3.9 years. The weighted-average remaining contractual term
of options currently exercisable as of December 31, 2014, was 3.4 years. Options to purchase 9,251,021, 8,049,534
and 8,871,495, shares of the Company’s common stock were available for issuance under the Plan at December 31,
2014, 2013 and 2012, respectively. As of December 31, 2014, the Company had 1,734,191 options expected to vest,
with a weighted-average exercise price per share of $20.11 and an aggregate intrinsic value of $9.9 million.
Cash received from options exercised under the Plan was $23.9 million, $30.2 million and $22.6 million for the
years ended December 31, 2014, 2013 and 2012, respectively. The total intrinsic value of options exercised during
2014, 2013 and 2012, was $9.4 million, $7.6 million, and $7.0 million, respectively.
As of December 31, 2014, 2013 and 2012, the Company had restricted shares outstanding of 1,911,145, 1,591,082
and 1,562,912, respectively. Information with respect to restricted stock under the Plan for the years ended
December 31, 2014, 2013, and 2012 are as follows:
Restricted stock outstanding as of January 1, . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted stock outstanding as of December 31, . . . . . .
2014
$ 1,591,082
804,465
(418,309)
(66,093)
$ 1,911,145
2013
$ 1,562,912
549,263
(430,378)
(90,715)
$ 1,591,082
2012
$
832,726
1,093,423
(357,987)
(5,250)
$ 1,562,912
100
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
As of December 31, 2014, 2013 and 2012, the Company had performance share awards outstanding of 171,400,
185,200 and 197,700, respectively. The more significant assumptions underlying the determination of fair values
for these awards granted during 2014, 2013 and 2012 were as follows:
Stock price . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividend yield . . . . . . . . . . . . . . . . . . . . . . . . .
Risk-free rate . . . . . . . . . . . . . . . . . . . . . . . . . .
Volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Term of the award (years) . . . . . . . . . . . . . . . .
2014
$
$
21.49
0%
0.65%
25.93%
0.88, 1.88, 2.88
$
21.54
0%
0.14%
16.90%
0.88
18.78
0%
0.16%
38.31%
0.87
Year Ended December 31,
2013
2012
The Company recognized expense associated with its equity awards of $17.9 million, $18.9 million and $17.9 million,
for the years ended December 31, 2014, 2013 and 2012, respectively. As of December 31, 2014, the Company had
$25.7 million of total unrecognized compensation cost related to unvested stock compensation granted under
the Plans. That cost is expected to be recognized over a weighted average period of 3.0 years.
The Company maintains a 401(k) retirement plan covering substantially all officers and employees, which permits
participants to defer up to the maximum allowable amount determined by the Internal Revenue Service of their
eligible compensation. This deferred compensation, together with Company matching contributions, which
generally equal employee deferrals up to a maximum of 5% of their eligible compensation (capped at $170,000
per the plan), is fully vested and funded as of December 31, 2014. The Company’s contributions to the plan were
$2.2 million, $2.1 million, and $2.1 million for the years ended December 31, 2014, 2013 and 2012, respectively.
The Company recognized severance costs associated with employee terminations during the years ended
December 31, 2014, 2013 and 2012 of $6.3 million, $4.3 million and $5.8 million, respectively.
21.
Income Taxes:
The Company elected to qualify as a REIT in accordance with the Code commencing with its taxable year which
began January 1, 1992. To qualify as a REIT, the Company must meet several organizational and operational
requirements, including a requirement that it currently distribute at least 90% of its adjusted REIT taxable income
to its stockholders. Management intends to adhere to these requirements and maintain the Company’s REIT status.
As a REIT, the Company generally will not be subject to corporate federal income tax, provided that distributions
to its stockholders equal at least the amount of its REIT taxable income. If the Company failed to qualify as a
REIT in any taxable year, it would be subject to federal income taxes at regular corporate rates (including any
applicable alternative minimum tax) and may not be permitted to elect REIT status for four subsequent taxable
years. Even if the Company qualifies for taxation as a REIT, the Company is subject to certain state and local taxes
on its income and property, and federal income and excise taxes on its undistributed taxable income. In addition,
taxable income from non-REIT activities managed through taxable REIT subsidiaries is subject to federal, state
and local income taxes. The Company is also subject to local taxes on certain Non-U.S. investments.
101
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Reconciliation between GAAP Net Income and Federal Taxable Income:
The following table reconciles GAAP net income to taxable income for the years ended December 31, 2014, 2013
and 2012 (in thousands):
GAAP net income attributable to the Company . . . . . . . . . . . . . . . .
Less: GAAP net income of taxable REIT subsidiaries . . . . . . . . . .
GAAP net income from REIT operations (a) . . . . . . . . . . . . . . . . . . . .
Net book depreciation in excess of tax depreciation . . . . . . . . . . . .
Capitalized leasing/legal commissions . . . . . . . . . . . . . . . . . . . . . . . .
Deferred/prepaid/above and below market rents, net . . . . . . . . . . .
Fair market value debt amortization . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Book/tax differences from non-qualified stock options . . . . . . . . . .
Book/tax differences from investments in real
estate joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Book/tax difference on sale of property . . . . . . . . . . . . . . . . . . . . . .
Foreign income tax from Mexico capital gains . . . . . . . . . . . . . . . . .
Cumulative foreign currency translation adjustment & deferred
2014
(Estimated)
424,001
$
(13,110)
410,891
39,620
(13,576)
(20,487)
(7,419)
(681)
(1,078)
(5,144)
33,268
(152,613)
(17,387)
$
2013
(Actual)
2012
(Actual)
$
236,281
(5,950)
230,331
32,906
-
(11,985)
(3,510)
(3,047)
(2,247)
(255)
(11,928)
36,896
(31,130)
266,073
(5,249)
260,824
37,492
(12,986)
(16,050)
(2,977)
(741)
(200)
1,774
60,441
(77,853)
-
tax adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
145,608
5,095
-
Book adjustment to property carrying values and marketable
equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxable currency exchange (loss)/gain, net . . . . . . . . . . . . . . . . . . . .
Book/tax differences on capitalized costs . . . . . . . . . . . . . . . . . . . . .
Repair regulation deduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends from taxable REIT subsidiaries . . . . . . . . . . . . . . . . . . . . .
GAAP change in control gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other book/tax differences, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted REIT taxable income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
93,956
(73,138)
5,498
(95,033)
66,745
(107,235)
(1,052)
300,743
$
22,811
(25,958)
4,607
-
2,980
9,147
(4,822)
249,891
$
2,656
(2,620)
5,781
-
2,304
(15,555)
502
242,792
$
Certain amounts in the prior periods have been reclassified to conform to the current year presentation, in the
table above.
(a) All adjustments to “GAAP net income from REIT operations” are net of amounts attributable to noncontrolling interest
and taxable REIT subsidiaries.
Cash Dividends Paid and Dividends Paid Deductions (in thousands):
For the years ended December 31, 2014, 2013 and 2012 cash dividends paid exceeded the dividends paid
deduction and amounted to $427,873, $400,354, and $382,722, respectively.
102
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Characterization of Distributions:
The following characterizes distributions paid for the years ended December 31, 2014, 2013 and 2012,
(in thousands):
Preferred F Dividends
Ordinary income . . . . . . . . . . . . . . . . . . .
Capital gain . . . . . . . . . . . . . . . . . . . . . . .
Preferred G Dividends
Ordinary income . . . . . . . . . . . . . . . . . . .
Capital gain . . . . . . . . . . . . . . . . . . . . . . .
Preferred H Dividends
Ordinary income . . . . . . . . . . . . . . . . . . .
Capital gain . . . . . . . . . . . . . . . . . . . . . . .
Preferred I Dividends
Ordinary income . . . . . . . . . . . . . . . . . . .
Capital gain . . . . . . . . . . . . . . . . . . . . . . .
Preferred J Dividends
Ordinary income . . . . . . . . . . . . . . . . . . .
Capital gain . . . . . . . . . . . . . . . . . . . . . . .
Preferred K Dividends
Ordinary income . . . . . . . . . . . . . . . . . . .
Capital gain . . . . . . . . . . . . . . . . . . . . . . .
Common Dividends
Ordinary income . . . . . . . . . . . . . . . . . . .
Capital Gain . . . . . . . . . . . . . . . . . . . . . . .
Return of capital . . . . . . . . . . . . . . . . . . .
Total dividends distributed . . . . . . . . . .
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
2014
2013
2012
-
-
-
-
-
-
6,762
5,313
12,075
13,440
10,560
24,000
6,930
5,445
12,375
-% $
-%
-% $
-% $
-%
-% $
56% $
44%
100% $
56% $
44%
100% $
56% $
44%
100% $
-
-
-
-
-
-
8,694
3,381
12,075
17,280
6,720
24,000
8,910
3,465
12,375
-% $
-%
-% $
-% $
-%
-% $
72% $
28%
100% $
72% $
28%
100% $
72% $
28%
100% $
5,513
4,331
9,844
56% $
44%
100% $
6,064
2,358
8,422
72% $
28%
100% $
9,116
582
9,698
33,046
2,109
35,155
11,351
725
12,076
12,847
820
13,667
2,585
165
2,750
-
-
-
133,048
103,483
133,048
369,579
427,873
36% $
28%
36%
100% $
$
158,001
61,827
123,654
343,482
400,354
46% $
18%
36%
100% $
$
222,751
15,469
71,156
309,376
382,722
94%
6%
100%
94%
6%
100%
94%
6%
100%
94%
6%
100%
94%
6%
100%
-%
-%
-%
72%
5%
23%
100%
Taxable REIT Subsidiaries (“TRS”) and Taxable Entities:
The Company is subject to federal, state and local income taxes on income reported through its TRS activities,
which include wholly owned subsidiaries of the Company. The Company’s TRS consists of Kimco Realty Services
(“KRS”), which due to a merger on April 1, 2013 includes FNC Realty Corporation (“FNC”), and the consolidated
entity, Blue Ridge Real Estate Company/Big Boulder Corporation. On April 2, 2013, the Company contributed
its interest in FNC to KRS and KRS acquired all of the outstanding stock of FNC in a reverse cash merger. The
Company is also subject to local non-U.S. taxes on certain investments located outside the U.S.
103
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
The Company is subject to taxes on its activities in Canada, Mexico, and Chile. In general, under local country
law applicable to the structures the Company has in place and applicable treaties, the repatriation of cash to the
Company from its subsidiaries and joint ventures in Canada and Mexico generally are not subject to withholding
tax. The Company does not anticipate the need to repatriate foreign funds from Chile to provide for its cash flow
needs in the U.S. and, as such, no significant withholding or transaction taxes are expected in the foreseeable
future. The Company will be subject to withholding taxes in Chile on the distribution of any proceeds from sale
transactions. The Company is subject to and also includes in its tax provision non-U.S. income taxes on certain
investments located in jurisdictions outside the U.S. These investments are held by the Company at the REIT level
and not in the Company’s U.S. taxable REIT subsidiaries. Accordingly, the Company does not expect a U.S. income
tax impact associated with the repatriation of undistributed earnings from the Company’s foreign subsidiaries.
Income taxes have been provided for on the asset and liability method as required by the FASB’s Income
Tax guidance. Under the asset and liability method, deferred income taxes are recognized for the temporary
differences between the financial reporting basis and the tax basis of taxable assets and liabilities.
The Company’s pre-tax book income/(loss) and (provision)/benefit for income taxes relating to the Company’s
TRS and taxable entities which have been consolidated for accounting reporting purposes, for the years ended
December 31, 2014, 2013, and 2012, are summarized as follows (in thousands):
Income/(loss) before income taxes – U.S. . . . . . . . . . . . . . . .
(Provision)/benefit for income taxes, net:
Federal :
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal tax (provision)/benefit . . . . . . . . . . . . . . . . . . . . . .
State and local:
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State tax (provision)/benefit . . . . . . . . . . . . . . . . . . . . . . . .
Total tax (provision)/benefit – U.S. . . . . . . . . . . . . . . . . . . . . .
Net income from U.S. taxable REIT subsidiaries. . . . . . . . . .
Income before taxes – Non-U.S.. . . . . . . . . . . . . . . . . . . . . . .
(Provision)/benefit for Non-U.S. income taxes:
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-U.S. tax (provision)/benefit . . . . . . . . . . . . . . . . . . . . . . .
2014
2013
2012
$
22,176
$
(4,849)
$
8,390
(522)
(7,156)
(7,678)
(165)
(1,223)
(1,388)
(9,066)
13,110
116,184
(18,131)
(6,749)
(24,880)
$
$
$
$
(1,647)
9,725
8,078
1,159
1,562
2,721
10,799
5,950
188,215
(30,102)
2,045
(28,057)
$
$
$
$
$
$
$
$
(503)
(535)
(1,038)
(1,543)
(560)
(2,103)
(3,141)
5,249
33,842
5,790
1,239
7,029
104
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
The Company’s deferred tax assets and liabilities at December 31, 2014 and 2013, were as follows (in thousands):
2014
2013
Deferred tax assets:
Tax/GAAP basis differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net operating losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Related party deferred losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charitable contribution carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-U.S. tax/GAAP basis differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance – U.S.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance – Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities – U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities – Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
68,702
51,142
3,843
3,899
3,995
11
10,566
(25,045)
(9,257)
107,856
(25,503)
(6,812)
75,541
$
$
50,133
72,716
6,214
3,773
3,867
-
50,920
(25,045)
(38,667)
123,911
(21,302)
(11,367)
91,242
As of December 31, 2014, the Company had net deferred tax assets of $75.5 million comprised of (i) $43.2 million
relating to the difference between the basis of accounting for federal and state income tax reporting and GAAP
reporting for real estate assets, joint ventures, and other investments, net of $25.5 million of deferred tax liabilities,
(ii) $19.8 million and $6.3 million for the tax effect of net operating loss carryovers within KRS and FNC, respectively,
net of a valuation allowance within FNC of $25.0 million, (iii) $3.8 million for losses deferred for federal and state
income tax purposes for transactions with related parties, (iv) $3.9 million for tax credit carryovers, (v) $4.0 million
for capital loss carryovers, and (vi) $1.3 million of deferred tax assets related to its investments in Canada and
Latin America, net of a valuation allowance of $9.3 million and deferred tax liabilities of $6.8 million. General
business tax credit carryovers of $1.5 million within KRS expire during taxable years from 2027 through 2033, and
alternative minimum tax credit carryovers of $2.4 million do not expire.
The major differences between GAAP basis of accounting and the basis of accounting used for federal and state
income tax reporting consist of impairment charges recorded for GAAP, but not recognized for tax purposes,
depreciation and amortization, rental revenue recognized on the straight line method for GAAP, reserves for
doubtful accounts, and the period in which certain gains were recognized for tax purposes, but not yet recognized
under GAAP. The Company had foreign net deferred tax liabilities of $5.5 million, related to its operations in
Canada and Latin America, which consists primarily of differences between the GAAP book basis and the basis
of accounting applicable to the jurisdictions in which the Company is subject to tax.
Deferred tax assets and deferred tax liabilities are included in the caption Other assets and Other liabilities on the
accompanying Consolidated Balance Sheets at December 31, 2014 and 2013. Operating losses and the valuation
allowance are related primarily to the Company’s consolidation of its taxable REIT subsidiaries for accounting
and reporting purposes. For the year ended December 31, 2014, KRS produced $27.4 million of taxable income
and utilized $27.4 million of its $72.8 million net operating loss carryovers. For the year ended December 31, 2013,
KRS produced $64.3 million of net operating loss carryovers which expire in 2033 and $10.0 million of capital
loss carryforwards that expire in 2018. At December 31, 2014 and 2013, FNC had $94.4 million and $108.4 million,
respectively, of net operating loss carryovers which expire from 2021 through 2024.
During 2013, the Company determined that a reduction of $8.7 million of the valuation allowance against
FNC’s deferred tax assets was deemed appropriate based on expected future taxable income. The Company
maintained a valuation allowance of $25.0 million within FNC to reduce the deferred tax asset of $42.5 million
related to net operating loss carryovers to the amount the Company determined is more likely than not realizable.
The Company analyzed projected taxable income and the expected utilization of FNC’s remaining net operating
loss carryovers and determined a partial valuation allowance was appropriate.
105
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
The Company’s investments in Latin America are made through individual entities which are subject to local
taxes. The Company assesses each entity to determine if deferred tax assets are more likely than not realizable.
This assessment primarily includes an analysis of cumulative earnings and the determination of future earnings
to the extent necessary to fully realize the individual deferred tax asset. Based on this analysis the Company has
determined that a full valuation allowance is required for entities which have a three-year cumulative book loss
and for which future earnings are not readily determinable. In addition, the Company has determined that no
valuation allowance is needed for entities that have three-years of cumulative book income and future earnings
are anticipated to be sufficient to more likely than not realize their deferred tax assets. At December 31, 2014,
the Company had total deferred tax assets of $9.5 million relating to its Latin American investments with an
aggregate valuation allowance of $9.3 million.
The Company’s deferred tax assets in Canada result principally from depreciation deducted under GAAP
that exceed capital cost allowances claimed under Canadian tax rules. The deferred tax asset will naturally
reverse upon disposition as tax basis will be greater than the basis of the assets under generally accepted
accounting principles.
As of December 31, 2014, the Company determined that no valuation allowance was needed against a $65.5 million
net deferred tax asset within KRS. The Company based its determination on an analysis of both positive evidence
and negative evidence using its judgment as to the relative weight of each. The Company believes, when
evaluating KRS’s deferred tax assets, special consideration should be given to the unique relationship between
the Company as a REIT and KRS as a taxable REIT subsidiary. This relationship exists primarily to protect the REIT’s
qualification under the Code by permitting, within certain limits, the REIT to engage in certain business activities
in which the REIT cannot directly participate. As such, the REIT controls which and when investments are held
in, or distributed or sold from, KRS. This relationship distinguishes a REIT and taxable REIT subsidiary from an
enterprise that operates as a single, consolidated corporate taxpayer. The Company will continue through this
structure to operate certain business activities in KRS.
The Company’s analysis of KRS’s ability to utilize its deferred tax assets includes an estimate of future projected
income. To determine future projected income, the Company scheduled KRS’s pre-tax book income and taxable
income over a twenty year period taking into account its continuing operations (“Core Earnings”). Core Earnings
consist of estimated net operating income for properties currently in service and generating rental income. Major
lease turnover is not expected in these properties as these properties were generally constructed and leased
within the past seven years. The Company can employ strategies to realize KRS’s deferred tax assets including
transferring its property management business or selling certain built-in gain assets.
The Company’s projection of KRS’s future taxable income over twenty years, utilizing the assumptions above with
respect to Core Earnings, net of related expenses, generates sufficient taxable income to absorb a reversal of
the Company’s deductible temporary differences, including net operating loss carryovers. Based on this analysis,
the Company concluded it is more likely than not that KRS’s net deferred tax asset of $65.5 million (excluding net
deferred tax assets of FNC discussed above) will be realized and therefore, no valuation allowance is needed at
December 31, 2014. If future income projections do not occur as forecasted or the Company incurs additional
impairment losses in excess of the amount Core Earnings can absorb, the Company will reconsider the need for
a valuation allowance.
Provision/(benefit) differ from the amounts computed by applying the statutory federal income tax rate to taxable
income before income taxes as follows (in thousands):
Federal provision/(benefit) at statutory tax rate (35%) . . . . . . . . .
State and local provision/(benefit), net of federal benefit . . . . . .
Acquisition of FNC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total tax provision/(benefit) – U.S. . . . . . . . . . . . . . . . . . . . . . . .
$
$
7,762
1,304
-
-
9,066
$
$
(1,697)
(205)
(9,126)
229
(10,799)
$
$
2,936
230
-
(25)
3,141
2014
2013
2012
106
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Uncertain Tax Positions:
The Company is subject to income tax in certain jurisdictions outside the U.S., principally Canada and Mexico.
The statute of limitations on assessment of tax varies from three to seven years depending on the jurisdiction and
tax issue. Tax returns filed in each jurisdiction are subject to examination by local tax authorities. The Company
is currently under audit by the Canadian Revenue Agency, Mexican Tax Authority and the U.S. Internal Revenue
Service (“IRS”). In October 2011, the IRS issued a notice of proposed adjustment, which proposes pursuant to
Section 482 of the Code, to disallow a capital loss claimed by KRS on the disposition of common shares of Valad
Property Ltd., an Australian publicly listed company. Because the adjustment is being made pursuant to Section
482 of the Code, the IRS believes it can assert a 100 percent “penalty” tax pursuant to Section 857(b)(7) of the
Code and disallow the capital loss deduction. The notice of proposed adjustment indicates the IRS’ intention to
impose the 100 percent “penalty” tax on the Company in the amount of $40.9 million and disallowing the capital
loss claimed by KRS. The Company and its outside counsel have considered the IRS’ assessment and believe that
there is sufficient documentation establishing a valid business purpose for the transfer, including recent case
history showing support for similar positions. Accordingly, the Company strongly disagrees with the IRS’ position
on the application of Section 482 of the Code to the disposition of the shares, the imposition of the 100 percent
penalty tax and the simultaneous assertion of the penalty tax and disallowance of the capital loss deduction. The
Company received a Notice of Proposed Assessment and filed a written protest and requested an IRS Appeals
Office conference. An appeals hearing was attended by Management and its attorneys, the IRS Compliance
Group and an IRS Appeals Officer in November, 2014, at which time IRS Compliance presented arguments
in support of their position, as noted herein. Management and its attorneys presented rebuttal arguments in
support of its position. The matter is currently under consideration by the Appeals Officer. The Company intends
to vigorously defend its position in this matter and believes it will prevail.
Resolutions of these audits are not expected to have a material effect on the Company’s financial statements.
During 2013, the Company early adopted ASU 2013-11 prospectively and reclassified a portion of its reserve
for uncertain tax positions. The reserve for uncertain tax positions included amounts related to the Company’s
Canadian operations. The Company has unrecognized tax benefits reported as deferred tax assets and are
available to settle adjustments made with respect to the Company’s uncertain tax positions in Canada. The
Company reduced its reserve for uncertain tax positions by $12.3 million associated with its Canadian operations
and reduced its deferred tax assets in accordance with ASU 2013-11. The Company does not believe that the
total amount of unrecognized tax benefits as of December 31, 2014, will significantly increase or decrease within
the next 12 months. As of December 31, 2014, the Company’s Canadian uncertain tax positions, which reduce its
deferred tax assets, aggregated $10.4 million.
The liability for uncertain tax benefits principally consists of estimated foreign, federal and state income tax
liabilities in years for which the statute of limitations is open. Open years range from 2008 through 2014 and vary
by jurisdiction and issue. The aggregate changes in the balance of unrecognized tax benefits for the years ended
December 31, 2014 and 2013 were as follows (in thousands):
Balance, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increases for tax positions related to current year . . . . . . . . . . . . . . . . . . . . . . . . .
Reduction due to adoption of ASU 2013-11(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
4,590
59
-
4,649
$
$
16,890
15
(12,315)
4,590
2014
2013
(a)
This amount was reclassified against the related deferred tax asset relating to the Company’s early adoption of
ASU 2013-11 as discussed above.
107
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
22. Accumulated Other Comprehensive Income
The following table displays the change in the components of AOCI for the year ended December 31, 2014
and 2013:
Balance as of January 1, 2013 . . . . . . . . . . . . . . . . . . . .
Other comprehensive income before
reclassifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amounts reclassified from AOCI . . . . . . . . . . . . . . . . .
Net current-period other comprehensive income . . .
Balance as of December 31, 2013 . . . . . . . . . . . . . . . .
Foreign
Currency
Translation
Adjustments
(85,404)
$
Unrealized
Gains on
Available-for-
Sale
Investments
$
19,222
(10,668)
5,095 (a)
(5,573)
(90,977)
$
$
16,205
(9,432)(b)
6,773
25,995
Total
(66,182)
5,537
(4,337)
1,200
(64,982)
$
$
(a) Amounts were reclassified to Impairment/loss on operating properties sold, net of tax, within Discontinued operations
on the Company’s Consolidated Statements of Income, as a result of the full liquidation of the Company’s investment
in Brazil.
(b) Amounts were reclassified to Interest, dividends and other investment income on the Company’s Consolidated
Statements of Income.
Balance as of January 1, 2014 . . . . . . . . . . . . . $
Other comprehensive income
Foreign
Currency
Translation
Adjustments
(90,977)
Unrealized
Gains on
Available-for-
Sale
Investments
$
25,995 $
Unrealized
Gain/(Loss)
on Interest
Rate Swaps
-
Total
$
(64,982)
before reclassifications . . . . . . . . . . . . . . . .
Amounts reclassified from AOCI . . . . . . . . . .
Net current-period other
(43,045)
134,351 (c)
20,202
-
(1,404)
-
(24,247)
134,351
comprehensive income . . . . . . . . . . . . . . .
Balance as of December 31, 2014 . . . . . . . . . $
91,306
329
$
20,202
46,197 $
(1,404)
(1,404) $
110,104
45,122
(c) During 2014, the Company recognized a cumulative foreign currency translation loss as a result of the substantial
liquidation of the Company’s investment in Mexico and Peru. Amounts were reclassified on the Company’s Consolidated
Statements of Income as follows (i) $92.9 million of loss was reclassified to Impairment/loss on operating properties
sold, net of tax, within Discontinued operations (ii) $47.3 million of loss was reclassified to Equity in income of joint
ventures, net and (iii) $5.8 million of a loss was reclassified to Net income attributable to noncontrolling interest.
At December 31, 2014, the Company had a net $0.3 million, of unrealized cumulative foreign currency translation
adjustment (“CTA”) gains relating to its foreign entity investments in Canada and Chile. The CTA is comprised of
$15.2 million of unrealized gains relating to its Canadian investments and $14.9 million of unrealized losses relating
to its Chilean investment. CTA results from currency fluctuations between local currency and the U.S. dollar
during the period in which the Company held its investment. CTA amounts are subject to future changes resulting
from ongoing fluctuations in the respective foreign currency exchange rates. Under U.S. GAAP, the Company is
required to release CTA balances into earnings when the Company has substantially liquidated its investment in a
foreign entity. During 2013, the Company began selling properties within its Latin American portfolio and as such,
the Company may, in the near term, substantially liquidate its remaining investment in Chile, which will require the
then unrealized loss on foreign currency translation to be recognized as a charge against earnings.
108
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
23. Supplemental Financial Information:
The following represents the results of income, expressed in thousands except per share amounts, for each
quarter during the years 2014 and 2013:
Revenues from rental properties (1) . . . . . . . . .
Net income attributable to the Company . . . .
Net income per common share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revenues from rental properties (1) . . . . . . . . .
Net income attributable to the Company . . . .
Net income per common share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mar. 31
June 30
Sept. 30
Dec. 31
2014 (Unaudited)
$
$
$
$
$
$
$
$
219,152
87,000
0.18
0.18
Mar. 31
199,467
67,770
0.13
0.13
$
$
$
$
$
$
$
$
237,432
89,512
0.18
0.18
$
$
$
$
246,555
194,708
0.44
0.44
2013 (Unaudited)
June 30
Sept. 30
203,080
51,139
0.09
0.09
$
$
$
$
205,300
55,763
0.10
0.10
$
$
$
$
$
$
$
$
255,749
52,781
0.09
0.09
Dec. 31
217,363
61,609
0.11
0.11
(1) All periods have been adjusted to reflect the impact of operating properties sold during 2014 and 2013, which are
reflected in the caption Discontinued operations on the accompanying Consolidated Statements of Income.
24. Captive Insurance Company:
In October 2007, the Company formed a wholly-owned captive insurance company, Kimco Insurance Company,
Inc., (“KIC”), which provides general liability insurance coverage for all losses below the deductible under our
third-party policy. The Company entered into the Insurance Captive as part of its overall risk management
program and to stabilize its insurance costs, manage exposure and recoup expenses through the functions of
the captive program. The Company capitalized KIC in accordance with the applicable regulatory requirements.
KIC established annual premiums based on projections derived from the past loss experience of the Company’s
properties. KIC has engaged an independent third party to perform an actuarial estimate of future projected
claims, related deductibles and projected expenses necessary to fund associated risk management programs.
Premiums paid to KIC may be adjusted based on this estimate, like premiums paid to third-party insurance
companies, premiums paid to KIC may be reimbursed by tenants pursuant to specific lease terms. The Company
assumes occurrence basis general liability coverage for the Company and its affiliates under the terms of the
reinsurance agreement entered into by the Company and the reinsurance provider.
From October 1, 2007 through October 1, 2015, KIC assumes 100% of the first $250,000 per occurrence risk layer.
This coverage is subject to annual aggregates ranging between $7.8 million and $11.0 million per policy year. The
annual aggregate is adjustable based on the amount of audited square footage of the insureds’ locations and can
be adjusted for subsequent program years. Defense costs erode the stated policy limits. KIC is required to pay
the reinsurance provider for unallocated loss adjustment expenses an amount ranging between 9.5% and 12.2%
of incurred losses for the policy periods ending October 1, 2008 through October 1, 2015. These amounts do not
erode the Company’s per occurrence or aggregate limits.
As of December 31, 2014 and 2013, the Company maintained an uncollateralized letter of credit in the amount of
$22.0 million issued in favor of the reinsurance provider to provide security for the Company’s obligations under
its agreement with the reinsurance provider. The letter of credit maintained as of December 31, 2014, has an
expiration date of February 15, 2015, with automatic renewals for one year.
109
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Activity in the liability for unpaid losses and loss adjustment expenses for the years ended December 31, 2014
and 2013, is summarized as follows (in thousands):
Balance at the beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Incurred related to:
Current year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Paid related to:
Current year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at the end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
2014
2013
$
17,602
$
19,884
7,281
(1,671)
5,610
(1,497)
(3,637)
(5,134)
18,078
$
6,679
(3,574)
3,105
(475)
(4,912)
(5,387)
17,602
As a result in changes in estimates in insured events in the prior years, incurred losses and loss adjustment expenses
decreased for the years ended December 31, 2014 and 2013 by $1.7 million and $3.6 million, respectively, which
was primarily due to continued regular favorable loss development on the general liability coverage assumed.
25. Pro Forma Financial Information (Unaudited):
As discussed in Notes 3, 4 and 5, the Company and certain of its subsidiaries acquired and disposed of interests
in certain operating properties during 2014. The pro forma financial information set forth below is based upon
the Company’s historical Consolidated Statements of Income for the years ended December 31, 2014 and 2013,
adjusted to give effect to these transactions at the beginning of 2013 and 2012, respectively.
The pro forma financial information is presented for informational purposes only and may not be indicative of
what actual results of income would have been had the transactions occurred at the beginning of 2013, nor
does it purport to represent the results of income for future periods. (Amounts presented in millions, except
per share figures.)
Revenues from rental properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income available to the Company’s common shareholders . . . . . . . . . . . .
Net income attributable to the Company’s common shareholders
per common share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year ended December 31,
2014
2013
$
$
$
$
$
1,012.5
431.5
363.4
0.89
0.88
$
$
$
$
$
954.6
394.7
323.4
0.79
0.79
26. Subsequent Events:
On February 2, 2015, the Company, through its wholly-owned subsidiary, KUBS Income Fund I L.P., purchased the
remaining 66.7% interest in the 39-property Kimstone portfolio for a gross purchase price of $1.4 billion, including
the assumption of $638.0 million in mortgage debt. The Company is evaluating this transaction pursuant to the
FASB’s Consolidation guidance and as such anticipates recognizing a gain, due to a change in control, from
the fair value adjustment associated with the Company’s original ownership, ranging from $130.0 million to
$140.0 million.
The Company’s estimate of its purchase price allocation to the assets acquired and liabilities assumed is based
upon their preliminary fair values at February 2, 2015. The fair values of the lease intangibles acquired were
measured in a manner consistent with our purchase price allocation policy described in Footnote 1. The following
110
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed in the
acquisition based upon the Company’s current best estimate. The Company is in the process of finalizing its
assessment of the fair value of the assets acquired and liabilities assumed (in thousands).
Preliminary Purchase Price Allocation (Unaudited)
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Below Market Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Above Market Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
In-Place Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Building Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tenant Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgage Fair Value Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
377,319
796,269
(62,109)
30,588
142,598
106,271
20,785
(24,221)
1,387,500
The pro forma financial information set forth below is based upon the Company’s historical Consolidated
Statements of Income for the year ended December 31, 2014, adjusted to give effect to (i) acquisitions and
dispositions of interests in certain operating properties during 2014 and (ii) the Kimstone transaction described
above, as if these transactions occurred January 1, 2014.
Pro Forma Financial Information, amounts presented in millions, except per share figures (Unaudited):
Revenues from rental properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income available to the Company’s common shareholders . . . . . . . . . . . . . . . . . . . . .
Net income attributable to the Company’s common shareholders
per common share:
Year ended
December 2014
1,123.8
$
425.6
$
357.6
$
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
0.87
0.87
111
KIMCO REALTY CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
For Years Ended December 31, 2014, 2013 and 2012
(in thousands)
Balance at
beginning of
period
Charged to
expenses
Adjustments
to valuation
accounts
Deductions
Balance at
end of
period
Year Ended December 31, 2014
Allowance for uncollectable accounts . . . . . $
Allowance for deferred tax asset . . . . . . . . . . $
Year Ended December 31, 2013
Allowance for uncollectable accounts . . . . . $
Allowance for deferred tax asset . . . . . . . . . . $
Year Ended December 31, 2012
Allowance for uncollectable accounts . . . . . $
Allowance for deferred tax asset . . . . . . . . . . $
10,771 $
63,712 $
3,886 $
- $
-
$
(29,410) $
(4,289) $
$
-
10,368
34,302
16,402 $
71,912 $
3,521 $
- $
-
$
(8,200) $
(9,152) $
$
-
10,771
63,712
18,059 $
66,520 $
6,309 $
- $
-
5,392
$
$
(7,966) $
$
-
16,402
71,912
112
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KIMCO REALTY CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2014
Depreciation and amortization are provided on the straight-line method over the estimated useful lives of the assets
as follows:
Buildings
Fixtures, building and leasehold improvements
(including certain identified intangible assets)
15 to 50 years
Terms of leases or useful lives,
whichever is shorter
The aggregate cost for Federal income tax purposes was approximately $8.6 billion at December 31, 2014.
The changes in total real estate assets for the years ended December 31, 2014, 2013 and 2012, are as follows:
Balance, beginning of period . . . . . . . . . . . . . . . . . . . .
Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfers from (to) unconsolidated
joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustment of fully depreciated asset. . . . . . . . . . .
Adjustment of property carrying values . . . . . . . . .
Change in exchange rate . . . . . . . . . . . . . . . . . . . . .
Balance, end of period. . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
2014
2013
2012
9,123,343,869 $
548,553,619
134,921,993
8,947,286,646 $
475,108,219
107,411,806
8,771,256,852
411,166,315
85,801,777
1,065,330,540
(781,200,981)
-
(8,628,954)
(32,935,408)
(31,158,903)
10,018,225,775 $
317,995,154
(559,328,593)
(77,664,078)
(4,780,841)
(69,463,649)
(13,220,795)
9,123,343,869 $
212,231,319
(503,767,086)
(9,845,065)
(21,711,782)
(34,121,504)
36,275,820
8,947,286,646
The changes in accumulated depreciation for the years ended December 31, 2014, 2013 and 2012 are as follows:
Balance, beginning of period . . . . . . . . . . . . . . . . . . . .
Depreciation for year. . . . . . . . . . . . . . . . . . . . . . . . .
Transfers (to) unconsolidated joint ventures . . . . . .
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustment of fully depreciated asset. . . . . . . . . . .
Assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in exchange rate . . . . . . . . . . . . . . . . . . . . .
Balance, end of period. . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
Reclassifications:
2014
2013
1,878,680,836 $
256,088,382
-
(167,458,882)
(8,628,954)
-
(3,275,662)
1,955,405,720 $
1,745,461,577 $
243,011,431
-
(96,915,316)
(4,780,841)
(7,351,096)
(744,919)
1,878,680,836 $
2012
1,693,089,989
248,426,786
(8,390,550)
(161,515,292)
(21,711,782)
(6,582,611)
2,145,037
1,745,461,577
Certain Amounts in the Prior Period Have Been Reclassified in Order to Conform with the Current Period’s Presentation.
127
KIMCO REALTY CORPORATION AND SUBSIDIARIES
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
AS OF DECEMBER 31, 2014
(in thousands)
Type of Loan/Borrower Description
Location (c)
Interest
Accrual
Rates
Interest
Payment
Rates
Final
Maturity
Date
Periodic
Payment
Terms (a)
Prior
Liens
Face
Amount of
Mortgages
or
Maximum
Available
Credit (b)
Carrying
Amount of
Mortgages
(b) (c)
Mortgage Loans:
Borrower A
Retail
Various, Mexico
Borrower B
Borrower C
Borrower D
Borrower E
Borrower F
Borrower G
Borrower H
Retail
Retail
Retail
NonRetail
Retail
Retail
Retail
Various, Mexico
Westport, CT
Las Vegas, NV
Toronto, ON
Mexicali, Mexico
Miami, FL
Miami, FL
TIIE rate
+ 3.25%
Libor
+ 2.5%
6.50%
12.00%
7.00%
7.00%
7.57%
7.57%
TIIE rate
+ 3.25% 8/16/2015
Libor
+ 2.5% 8/16/2015
6.50%
3/4/2033
12.00% 5/14/2033
7.00% 3/28/2018
7.00% 6/16/2015
6/1/2019
7.57%
6/1/2019
7.57%
P& I
P& I
I
I
P& I
I
P& I
P& I
Individually < 3%
(d)
(e)
(e)
(f)
Other:
Individually < 3%
Capitalized loan costs
Total
(g)
(g)
(h)
-
-
-
-
-
-
-
-
-
$ 34,268
$ 34,268
15,000
5,014
3,075
3,513
2,718
4,201
3,966
15,000
5,014
3,075
2,972
2,718
2,363
2,355
8,550
80,305
5,754
73,519
600
-
483
11
$ 80,905
$ 74,013
I = Interest only; P&I = Principal & Interest
(a)
(b) The instruments actual cash flows are denominated in U.S. dollars, Canadian Dollars and Mexican pesos as indicated by the
geographic location above
The aggregate cost for Federal income tax purposes is $74.0 million
Interest rates range from 6.00% to 9.0%
(c)
(d) Comprised of six separate loans with original loan amounts ranging between $0.3 million and $2.2 million
(e)
(f) Maturity dates range from 4.5 years to 11.75 years
(g)
Interest rate 2.28%
(h) Maturity date 4/1/2027
For a reconciliation of mortgage and other financing receivables from January 1, 2012 to December 31, 2014 see
Note 10 of the Notes to Consolidated Financial Statements included in this annual report of Form 10K.
The Company feels it is not practicable to estimate the fair value of each receivable as quoted market prices are not
available.
The cost of obtaining an independent valuation on these assets is deemed excessive considering the materiality of
the total receivables.
128
Exhibit 12.1
Kimco Realty Corporation and Subsidiaries
Computation of Ratio of Earnings to Fixed Charges
For the year ended December 31, 2014
Pretax earnings from continuing operations before adjustment for noncontrolling
interests or income loss from equity investees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
102,726,009
Add:
Interest on indebtedness (excluding capitalized interest). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of debt related expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portion of rents representative of the interest factor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
212,081,486
2,025,069
8,435,339
325,267,903
Distributed income from equity investees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
255,531,665
Pretax earnings from continuing operations, as adjusted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
580,799,568
Fixed charges -
Interest on indebtedness (including capitalized interest) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of debt related expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portion of rents representative of the interest factor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
213,369,556
(2,631,332)
8,435,339
Fixed charges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
219,173,563
Ratio of earnings to fixed charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.6
129
Exhibit 12.2
Kimco Realty Corporation and Subsidiaries
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
For the year ended December 31, 2014
Pretax earnings from continuing operations before adjustment for noncontrolling
interests or income loss from equity investees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
102,726,009
Add:
Interest on indebtedness (excluding capitalized interest). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of debt related expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portion of rents representative of the interest factor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
212,081,486
2,025,069
8,435,339
325,267,903
Distributed income from equity investees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
255,531,665
Pretax earnings from continuing operations, as adjusted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
580,799,568
Combined fixed charges and preferred stock dividends -
Interest on indebtedness (including capitalized interest) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preferred dividend factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of debt related expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portion of rents representative of the interest factor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
213,369,556
61,726,839
(2,631,332)
8,435,339
Combined fixed charges and preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
280,900,402
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends . . . . . . . . . . . . . . . . .
2.1
130
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 31.1
I, David B. Henry, certify that:
1. I have reviewed this Annual Report on Form 10-K of Kimco Realty Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting
to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over
financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
Date: February 27, 2015
/s/ David B. Henry
David B. Henry
Chief Executive Officer
131
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 31.2
I, Glenn G. Cohen, certify that:
1. I have reviewed this Annual Report on Form 10-K of Kimco Realty Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting
to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over
financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
Date: February 27, 2015
/s/ Glenn G. Cohen
Glenn G. Cohen
Chief Financial Officer
132
Section 1350 Certification
Exhibit 32.1
Pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the
undersigned officers of Kimco Realty Corporation (the “Company”) hereby certifies, to such officer’s knowledge, that:
(i) the accompanying Annual Report on Form 10-K of the Company for the year ended December 31, 2014 (the
“Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.
Date: February 27, 2015
Date: February 27, 2015
/s/ David B. Henry
David B. Henry
Chief Executive Officer
/s/ Glenn G. Cohen
Glenn G. Cohen
Chief Financial Officer
133
LOCATION
PORTFOLIO
YEAR
DEVELOPED
OR
ACQUIRED
LEASABLE
AREA
(SQ.FT.)
PERCENT
LEASED
(1)
TENANT NAME
GLA
TENANT NAME
GLA
TENANT NAME
GLA
MAJOR LEASES
Exhibit 99.1
ALABAMA
HOOVER
ARIZONA
GLENDALE
GLENDALE
MESA
MESA
MESA
PEORIA
PHOENIX
PHOENIX
PHOENIX
PHOENIX
PHOENIX
PHOENIX
PHOENIX
SUN CITY
TEMPE
CALIFORNIA
ALHAMBRA
ANAHEIM
ANAHEIM
ANAHEIM
ANAHEIM
BELLFLOWER
CARLSBAD
CARMICHAEL
CHICO
CHICO
CHINO
CHINO
CHINO HILLS
CHULA VISTA
COLMA
CORONA
CORONA
COVINA
CUPERTINO (5)
DALY CITY
DUBLIN
EL CAJON
ELK GROVE
ENCINITAS
ESCONDIDO
FAIR OAKS
FREMONT
FREMONT
FRESNO
GARDENA
GRANITE BAY
GRASS VALLEY
HACIENDA HEIGHTS
HAYWARD
HUNTINGTON BEACH
JACKSON
LA MIRADA
LA VERNE
LAGUNA HILLS
LINCOLN
LIVERMORE
LOS ANGELES
LOS ANGELES
MODESTO
MONTEBELLO
MORAGA
NAPA
NORTHRIDGE
KIR
PRU
PRU
PRU
PRU
BLS
PRU
PRU
BLS
KIR
PRU
CPP
PRU
PRU
PRU
PRU
PRU
PRU
PRU
PRU
PRU
OJV
PRU
PRU
OJV
BLS
PRU
PRU
PRU
KIR
BIG
2007
1998
2008
2009
2005
2011
2011
1998
1998
1998
1997
2009
2006
2011
2012
2011
1998
1995
2006
2006
2006
2014
2014
1998
2008
2013
2006
2006
2008
1998
2013
1998
2007
2000
2006
2002
2006
2010
2006
2006
2006
2006
2007
2006
2009
2006
2006
2006
2011
2006
2006
2008
1998
2014
2007
2013
2006
2010
2006
2006
2000
2010
2006
2005
140,358
76.6 MARSHALLS
25,000 PETCO
15,000 DOLLAR TREE
221,388
93.6 FLOOR & DECOR
75,000 LINA HOME FURNISHINGS
45,000 EJ’S AUCTION &
CONSIGNMENT
169,257
227,627
1,082,180
98.1 WALMART
100.0 SPORTS AUTHORITY
93.5 WALMART
81,535 MOR FURNITURE FOR LESS
51,154 MEGA FURNITURE
208,000 BASS PRO SHOPS
40,000 MICHAELS
41,750 PETSMART
170,000 HOME DEPOT
10,000
28,909
17,500
25,339
102,589
79,790
167,862
228,071
153,180
229,707
131,621
70,428
94,379
184,292
68,209
62,285
100.0 MOR FURNITURE
FOR LESS
OUTDOOR WORLD
33,234 MICHAELS
25,520
99.3 NORTH VALLEY LH
96.0 BURLINGTON COAT
53,984 JO-ANN FABRICS
98,054 MICHAELS
40,734 ROSS DRESS FOR LESS
23,190 GUITAR CENTER
23,984
20,293
FACTORY
78.8 HOME DEPOT
95.4 COSTCO
95.7 SAFEWAY
97.8 SAFEWAY *
79.3 ROSS DRESS FOR
LESS
100.0 WALMART
91.9 CVS
100.0 WHOLE FOODS
MARKET
107,724
141,659 FALLAS PAREDES
62,573 TRADER JOE’S
42,504
29,765 DOLLAR TREE
110,627 MICHAELS
24,519
32,306
24,390 DD’S DISCOUNTS
11,145
21,406
11,450
25,666
195,455
15,396
100.0 COSTCO
100.0 NORTHGATE
116,560 COSTCO
15,396
40,459 JO-ANN FABRICS
13,454
348,285
154,043
105,338
113,233
160,928
214,197
264,335
69,812
339,001
168,264
73,352
356,335
228,465
491,898
148,805
278,562
107,969
614,026
155,070
98,396
137,035
118,804
231,157
96,625
504,666
131,239
121,107
65,987
140,240
216,683
135,012
GONZALEZ
MARKETS
100.0 FOREVER 21
96.1 RALPH’S
94.8 STATER BROTHERS
98.3 STATER BROTHERS
92.8 MARSHALLS
96.8 HOME DEPOT
98.6 EVANS FURNITURE
GALLERIES
92.9 RALEY’S
86.5 LA CURACAO
100.0 DOLLAR TREE
90.0 STATER BROTHERS
100.0 COSTCO
94.7 MARSHALLS
95.5 COSTCO
97.0 VONS
96.9 LOWE’S HOME
CENTER
80,000 EL SUPER
45,000 RITE AID
37,440 HARBOR FREIGHT TOOLS
64,039 PLANET FITNESS
27,000 DOLLAR TREE
110,861 WALMART
57,635 FOOD MAXX
62,098
104,465 ROSS DRESS FOR LESS
25,060 PETSMART
43,235
154,569 WALMART
54,087 SMART & FINAL
18,235 99 CENT DISCOUNT
17,459 DOLLAR TREE
29,025
16,610 KIDS R US
44,257 FALLAS PAREDES
54,239 BED BATH & BEYOND
30,730 DD’S DISCOUNTS
24,225 RITE AID
153,578 NAVCARE
32,000 NORDSTROM RACK
30,809 BED BATH & BEYOND
114,112 HOME DEPOT
55,650 PETSMART
111,348 SKYZONE
100,000 UFC GYMS
24,515 ANNA’S LINENS
25,608 PLANET FITNESS
30,000
12,200
10,797
15,062
21,890
25,002
25,000
21,440
14,580
30,644
45,000
15,120
22,878
90.2 99 RANCH MARKET
98.8 HOME DEPOT
29,657
109,000 SAFEWAY
57,817 BURLINGTON COAT
55,000
FACTORY
100.0 ORCHARD SUPPLY
HARDWARE
95.2 RITE AID
95.5 BEL AIR MARKET
100.0 KOHL’S
77.1 LA FITNESS
96.1 RALEY’S
89.6 SAFEWAY
96.2 SAVE MART
100.0 BED BATH &
BEYOND
100.0 99 RANCH MARKET
92.8 RALEY’S
90.8 RALEY’S
96.9 168 MARKET
35,829 MARSHALLS
32,000 ROSS DRESS FOR LESS
31,060
27,642 ROSS DRESS FOR LESS
56,435 24 HOUR FITNESS
58,004 TOTAL WOMAN GYM AND
ATMOSPHERE
40,000 VONS
59,231
54,741 BED BATH & BEYOND
48,000 CVS
36,725 SPROUTS FARMERS
MARKET
22,000 RITE AID
60,114
60,114 JCPENNEY
44,128 VIVO DANCESPORT
CENTER
24,000 PETCO
22,000
13,000
40,000 CVS
39,830 MARSHALLS
24,437 24 HOUR FITNESS
35,747 ROSS DRESS FOR LESS
19,300
10,000
22,880
30,028
24,145
30,187
37,259 SOUTH YUBA CLUB
12,000 DAISO JAPAN
12,567
10,000
80,311
88.4 99 CENTS ONLY
29,300 BIG LOTS
23,334
148,805
67,665
264,513
226,872
160,000
119,559
104,165
STORE
92.0 VONS
100.0 RALEY’S
95.4 U.S. POSTAL
SERVICE
91.7 TARGET
100.0 MACY’S
40,800 CVS
62,625
26,577 MOVIES 7 DOLLAR
THEATRE
114,732 MARSHALLS
160,000
20,120 CRUNCH FITNESS
24,900 CVS
27,764 STAPLES
97.4 SAFEWAY
84.2 ROSS DRESS FOR
55,342 CVS
24,000 BIG 5 SPORTING GOODS
23,077
10,000
LESS
165,195
94.9 RALPHS/FOOD 4
38,950 FACTORY 2-U
22,224 RITE AID
169,653
214,389
251,489
164,000
349,530
158,645
LESS
100.0 KMART
57.7 RALEY’S
97.9 SEARS
93.8 TJ MAXX
100.0 TARGET
75.4 DSW SHOE
WAREHOUSE
134
82,504 SUPERIOR MARKETS
49,800 PLANET FITNESS
105,000 TOYS R US/BABIES R US
31,133 CVS
116,000 HOME DEPOT
34,420 CVS
23,240
46,270 AMC THEATERS
25,844 U.S. POSTAL SERVICE
100,238 RALEY’S
43,000 SUPER KING MARKET
39,348
16,609
22,268
15,661
18,160
25,487
39,263
14,380
60,890
LOCATION
PORTFOLIO
NOVATO
OCEANSIDE
OCEANSIDE
OCEANSIDE
ORANGEVALE
PACIFICA
PACIFICA
PLEASANTON
POWAY
RANCHO CUCAMONGA
REDWOOD CITY
RIVERSIDE
ROSEVILLE
ROSEVILLE
SACRAMENTO (5)
SAN DIEGO
SAN DIEGO
SAN DIEGO
SAN DIEGO
SAN DIEGO
SAN DIEGO
SAN DIEGO
SAN DIEGO
SAN DIEGO
SAN DIMAS
SAN JOSE
SAN LEANDRO
SAN LUIS OBISPO
SAN RAMON
SANTA ANA
SANTA CLARITA
SANTA ROSA
SANTEE
TEMECULA
TEMECULA
TORRANCE
TRUCKEE
TRUCKEE
TURLOCK
TUSTIN
TUSTIN
TUSTIN
UPLAND
VALENCIA
VISTA
WALNUT CREEK
WESTMINSTER
WINDSOR
WINDSOR
YORBA LINDA
COLORADO
ARVADA
AURORA (5)
AURORA
AURORA
COLORADO SPRINGS
DENVER
ENGLEWOOD
FORT COLLINS
GREELEY
HIGHLANDS RANCH
HIGHLANDS RANCH
HIGHLANDS RANCH
LAKEWOOD
LITTLETON
CONNECTICUT
BRANFORD
DANBURY
ENFIELD
FARMINGTON
HAMDEN
NORTH HAVEN (5)
WILTON
WILTON
PRU
PRU
PRU
BIG
PRU
OJV
PRU
BLS
PRU
OJV
KIR
CPP
PRU
BLS
BLS
PRU
PRU
PRU
KIR
KIR
CPP
KIR
BLS
PRU
OJV
PRU
PRU
PRU
PRU
PRU
PRU
PRU
BIG
KIR
KIR
OJV
2008
2014
2013
2006
2007
2000
2010
2009
2006
2007
2013
2013
2012
2006
2006
2006
2005
1999
1998
2013
2005
2002
1999
2010
2000
2006
2013
2006
2013
2006
2006
2006
2006
2006
2006
2006
2010
2014
2012
2013
1998
1998
1998
1998
1998
1998
2000
2012
2011
2011
2013
1998
2011
2000
2014
2000
1998
1973
1998
2012
2013
YEAR
DEVELOPED
OR
ACQUIRED
2009
2006
2006
2006
2010
2014
2006
2007
2005
2006
2009
LEASABLE
AREA
(SQ.FT.)
133,485
351,690
92,378
87,740
161,339
168,871
104,281
175,000
121,594
56,019
49,429
PERCENT
LEASED
(1)
100.0 SAFEWAY
TENANT NAME
95.1 SEARS OUTLET
100.0 TRADER JOE’S
88.3 SMART & FINAL
96.5 SAVE MART
93.5 SAFEWAY
87.1 SAVE MART
100.0 MACY’S
79.9 STEIN MART
87.1 CVS
100.0 ORCHARD SUPPLY
HARDWARE
MAJOR LEASES
TENANT NAME
GLA
51,199 RITE AID
38,902 ROSS DRESS FOR LESS
12,881 LAMPS PLUS
25,000 USA LIVING
62,000 CVS
45,892 ROSS DRESS FOR LESS
29,200 RITE AID
175,000
40,000 HOME GOODS
21,415
49,429
GLA
TENANT NAME
GLA
24,769 DOLLAR TREE
30,000 BARNES & NOBLE
11,000
23,800
31,180 U.S. POSTAL SERVICE
24,246 RITE AID
23,064
26,210
15,708
25,000
15,771
19,085
86,108
98.7 BURLINGTON COAT
67,104
FACTORY
188,493
90.0 SPORTS AUTHORITY
43,373 SPROUTS FARMERS
36,041 ROSS DRESS FOR LESS
27,471
81,171
147,679
225,919
117,410
412,674
35,000
205,853
48,169
57,411
59,414
108,741
154,000
183,180
95,255
174,428
41,913
134,400
96,627
39,645
311,498
342,127
417,252
268,465
25,673
41,149
111,558
687,590
193,415
137,963
273,149
143,070
122,563
114,627
209,749
107,769
130,631
160,773
144,315
128,654
44,097
149,975
107,310
18,405
80,330
115,862
138,818
133,382
30,397
44,412
82,581
190,104
190,738
136,209
148,517
184,959
345,023
290,451
90,860
44,575
100.0 SAFEWAY
91.3 SEAFOOD CITY
100.0 NORDSTROM
100.0 24 HOUR FITNESS
100.0 COSTCO
100.0 CLAIM JUMPER
100.0 TJ MAXX
100.0 NAMASTE PLAZA
SUPERMARKET
94.4
100.0
MARKET
55,146
53,842 PLANET FITNESS
225,919
19,840 BIG 5 SPORTING
GOODS
66,851 SPORTS AUTHORITY
153,095 PRICE SELF STORAGE
38,359
120,962 COSTCO
10,600
31,152 HOME GOODS
10,439
30,619 CVS
98.6 ALBERTSONS
100.0 STEIN MART
92.7 WALMART
96.7 ROSS DRESS FOR
66,284
30,000 ROSS DRESS FOR LESS
101,500 WALGREENS
26,706 MICHAELS
LESS
93.3 VONS
81.0 PETCO
100.0 HOME DEPOT
96.5 VALLARTA
SUPERMARKETS
97.0 ACE HARDWARE
99.6 24 HOUR FITNESS
97.4 KMART
100.0 WALMART
100.0 SEARS OUTLET
90.1
89.5
100.0 RALEY’S
97.9 TARGET
97.4 VONS
100.0 RALPH’S
97.8 HOME DEPOT
92.5 RALPH’S
92.7 ALBERTSONS
92.7 CENTURY THEATRES
100.0 PAVILIONS
84.8 RALEY’S
95.3 SAFEWAY
100.0 DICK’S SPORTING
GOODS
52,071 MICHAELS
10,000
134,400
40,751
12,100
36,000 BED BATH & BEYOND
86,479 FOOD 4 LESS
221,639 KOHL’S
43,595 UFC GYMS
60,114 DECHINA 1 BUFFET
134,639 AMC THEATERS
41,430 RITE AID
36,400 CVS *
98,064 HOBBY LOBBY
45,579 CVS
46,819 CVS
57,017 COST PLUS
69,445 HOWARD’S APPLIANCES &
FLAT SCR
56,477
52,610 CVS
50,000 BED BATH & BEYOND
80.7 RITE AID
84.2 ROSS DRESS FOR
56,674
30,187 TJ MAXX
27,200 PETCO
14,000
19,020
21,006 CVS
30,000 TJ MAXX
52,640 TRISTONE THEATRES
88,728 ROSS DRESS FOR LESS
40,635 MARSHALLS
10,625
68,159 WHOLE FOODS
MARKET
19,072 CRUNCH
23,250 MICHAELS
63,748 STAPLES
25,500
22,154
19,044
17,962
10,000
50,000
30,000
15,000
16,854
28,000
29,650
30,138
27,000
60,550
16,520
22,364
24,133
19,950
43,000 MICHAELS
23,923
28,140 SPACE AGE FEDERAL
11,047
CU
41,896 DOLLAR TREE
65,280 DOLLAR TREE
14,301 KEY BANK *
12,000
18,405
50,690 OLD COUNTRY BUFFET
105,862 GUITAR CENTER
27,974 MICHAELS
33,450 TJ MAXX
10,000
10,000
21,323 SPROUTS FARMERS
MARKET
30,000 OFFICEMAX
11,250
21,236
23,500
49,788
64,532 OFFICE DEPOT
86,830 BIG Y
105,255 MARSHALLS
88,000 BEST BUY
50,000 NORDSTROM RACK
89,750 BON-TON
111,500 COSTCO
46,764
14,248
25,267 KWAL PAINT
15,000
46,669
30,954
30,048
35,834 LA FITNESS
58,604 BOB’S STORES
109,920 TJ MAXX
33,320
49,133
25,050
LESS
83.9
77.2 ALBERTSONS
82.3 CAMERONS
PRODUCTS
100.0 SAVE-A-LOT
100.0 HOBBY LOBBY
100.0 KOHL’S
100.0 BED BATH &
BEYOND
100.0 ACE HARDWARE
78.3
96.2
93.4 SAFEWAY
80.4 KING SOOPERS
100.0 KOHL’S
100.0 WALMART
95.1 KOHL’S
99.3 SPORTS AUTHORITY
100.0 WALMART
99.1 HOME DEPOT
86.3 STOP & SHOP
92.2 BOW TIE CINEMAS
135
LOCATION
PORTFOLIO
YEAR
DEVELOPED
OR
ACQUIRED
LEASABLE
AREA
(SQ.FT.)
PERCENT
LEASED
(1)
TENANT NAME
GLA
TENANT NAME
GLA
TENANT NAME
GLA
MAJOR LEASES
DELAWARE
DOVER
ELSMERE
NEWARK (2)
WILMINGTON
FLORIDA
ALTAMONTE
SPRINGS (5)
BOCA RATON (5)
BONITA SPRINGS
BOYNTON BEACH
BRADENTON
BRANDON
CAPE CORAL
CAPE CORAL
CLEARWATER
CORAL SPRINGS
CORAL SPRINGS
CORAL WAY
DANIA BEACH (2)
DELRAY BEACH
FORT LAUDERDALE
HOLLYWOOD
HOMESTEAD
HOMESTEAD
JACKSONVILLE (2)
JACKSONVILLE
JACKSONVILLE
KEY LARGO
LAKELAND
LARGO
LARGO (5)
LAUDERHILL
LEESBURG
MARATHON
MELBOURNE
MERRITT ISLAND
MIAMI
MIAMI (5)
MIAMI
MIAMI
MIAMI
MIAMI
MIAMI
MIAMI
MIAMI
MIAMI
MIDDLEBURG
MIRAMAR (3)
MOUNT DORA (5)
NORTH LAUDERDALE
NORTH MIAMI BEACH
ORANGE PARK
ORLANDO
ORLANDO (5)
ORLANDO
ORLANDO
ORLANDO
OVIEDO
PENSACOLA
PLANTATION
POMPANO BEACH
SAINT PETERSBURG
SARASOTA
SARASOTA
ST. AUGUSTINE
TALLAHASSEE (5)
TALLAHASSEE
TAMPA
TAMPA
TAMPA
BLS
KIR
KIR
BLS
BLS
OJV
CPP
BLS
CPP
OJV
BLS
KIR
BLS
OJV
BLS
BLS
OTH
PRU
OJV
KIR
BLS
OJV
KIR
2003
1979
2014
2014
1998
1967
2013
1999
1998
2001
2013
2013
2005
1994
1997
2003
2014
2013
2009
2010
1972
1972
2005
2013
2010
2000
2001
1968
1992
1978
2008
2013
1968
2013
1968
1965
1986
2009
2013
2013
2007
2011
2013
1995
2005
2005
1997
2007
1985
2003
1971
2000
2008
2009
2011
2013
2011
1974
2012
1968
2008
1989
2013
1998
2013
2001
1997
2004
4,835
105,446
100.0
100.0 BJ’S WHOLESALE
CLUB
85,188 WALGREENS
13,650
165,805
100.0 SHOPRITE
58,236 SPORTS AUTHORITY
42,456 RAYMOUR &
36,000
FLANIGAN
FURNITURE
161,961
100.0 DSW SHOE
23,990 PETCO
15,250 PIER 1 IMPORTS
10,458
54,376
103,479 ALBERTSONS
42,112 TJ MAXX
51,195
25,019 STACEY’S
HOMESTYLE BUFFET
40,000 ROSS DRESS FOR LESS
25,106 YOUFIT HEALTH
44,684 ROSS DRESS FOR LESS
99.0 HOME DEPOT
100,200 JO-ANN FABRICS
100.0 BIG LOTS
100.0 TJ MAXX
33,517
29,500 DISCOVERY CLOTHING
CO.
88,205
100.0 WINN-DIXIE
55,944 STAPLES
24,202
CLUBS
32,265 STAPLES
49,865 STAPLES
15,000 PARTY CITY
94.1 PUBLIX
93.4 REGAL CINEMAS
44,840
52,936 LA FITNESS
48,479 OFFICE DEPOT
142,280 BJ’S WHOLESALE CLUB
120,251 KMART
56,077 MARSHALLS
29,575 OFFICEMAX
44,916 HHGREGG
44,840
36,000 SEARS OUTLET
108,842 PUBLIX
53,271 STEIN MART
101,900 ALDI
42,112 DOLLAR TREE
44,450 STAPLES
92.1 KMART
71.4 GSI COMMERCE
52,571 WINN-DIXIE
69,900 WALGREENS
30,209
28,020 TJ MAXX
48,555
39,500 ROSS DRESS FOR LESS
20,800
12,000
23,500 PRESIDENTE
SUPERMARKET
38,400
15,525 MAKOTO SEAFOOD
AND STEAKHOUSE
10,666
15,000
20,347
17,055
12,000
24,887
114,764
23,500
25,200
30,846
22,772
11,616
34,935
79,676
196,776
162,996
143,785
42,030
125,108
212,388
55,089
86,342
50,906
229,034
898,913
205,614
3,600
116,000
72,840
256,980
207,365
241,256
149,472
79,711
181,576
13,468
106,491
168,737
60,103
107,000
67,210
40,288
293,001
63,563
60,280
349,826
112,423
61,837
63,604
59,252
73,000
78,452
250,209
108,795
50,299
WAREHOUSE
76.0
93.9 PUBLIX
95.1 BEALLS
74.7 PUBLIX
96.1 BED BATH &
BEYOND
80.9
100.0 PUBLIX
100.0 HOME DEPOT
100.0 PUBLIX
100.0
76.0 HAVERTY’S
88.5 PUBLIX
100.0 STEIN MART
93.9 KMART
96.1 HOBBY LOBBY
91.2 WALMART *
100.0 PUBLIX
91.5 TOYS R US/BABIES
R US
100.0
CALL CENTER
100.0 PUBLIX
100.0 HOME DEPOT
96.8 BABIES R US
96.5 WALGREENS
98.6 KMART
100.0 PUBLIX
95.4 PUBLIX
99.2 PUBLIX
94.2 WINN-DIXIE
100.0 WINN-DIXIE
91.8 PETCO
80.8 DOLLAR TREE
87.8 24 HOUR FITNESS
96.2 TJ MAXX
91.2 HOME DEPOT
95.9 PUBLIX
100.0 BED BATH &
BEYOND
44,840
105,154
40,214
14,468
114,000 HOBBY LOBBY
40,000 MARSHALLS
27,808
44,271
45,600
56,000 BUY BUY BABY
34,890 LITTLE VILLAGE LEARNING
CENTER
61,837
22,418 PARTY CITY
10,000
36,025
23,000
29,953 OFFICE DEPOT *
10,000
24,840
10,000
110,410 CHANCELLOR ACADEMY
51,420 WALGREENS
25,978 MICHAELS
46,531 PUBLIX
15,930
24,321
39,795
131,981
63.8 FLORIDA CAREER
44,000 C-TOWN
23,145
127,639
180,156
154,356
86,321
78,093
101,377
60,414
80,917
COLLEGE
98.7 PUBLIX
83.4 24 HOUR FITNESS
98.1 MARSHALLS
100.0 THE FRESH MARKET
94.9 PUBLIX
100.0 PUBLIX
90.1 WHOLE FOODS
MARKET
100.0 WHOLE FOODS
MARKET
55,000 PGA TOUR SUPERSTORE
49,875 TJ MAXX
30,027 GOLFSMITH GOLF CENTER
18,400
44,270
61,389
28,320 WHOLE FOODS MARKET -
BAKE HOUSE
40,100 SPORTS AUTHORITY
118,574
93.3 KASH N’ KARRY *
45,871 YOU FIT HEALTH CLUB
100,237
129,700
51,048
185,998
51,515
340,541
206,564
197,181
90.0 TJ MAXX
80.4 WINN-DIXIE
100.0 WINN-DIXIE
87.6 STEIN MART
100.0 WINN-DIXIE
96.8 BEST BUY
84.7 AMERICAN
SIGNATURE
99.3 LOWE’S HOME
CENTER
29,825 OFFICEMAX
46,295 AARON’S
51,048
31,920 HOME GOODS
51,515
46,121 JO-ANN FABRICS
49,106 ROSS DRESS FOR LESS
167,000
50,239
26,843 ORLANDO HEALTH
20,179 PETCO
24,787
14,100
13,120
35,069
22,000 YOUFIT HEALTH
CLUBS
23,800 DOLLAR TREE
10,000 PET SUPERMARKET
15,595
19,700
10,000
24,471 THE FRESH MARKET
22,300
45,965 BED BATH & BEYOND
26,250 DSW SHOE
40,852
26,191
WAREHOUSE
136
LOCATION
WEST PALM BEACH (5)
PORTFOLIO
YEAR
DEVELOPED
OR
ACQUIRED
2009
LEASABLE
AREA
(SQ.FT.)
23,350
PERCENT
LEASED
TENANT NAME
(1)
100.0 FLORIDA SCHOOL
FOR DANCE EDUCA
GLA
23,350
MAJOR LEASES
TENANT NAME
GLA
TENANT NAME
GLA
OJV
OIP
KIR
BLS
KIR
KIR
KIR
WEST PALM BEACH (5)
WEST PALM BEACH
WINTER HAVEN
YULEE
GEORGIA
ALPHARETTA
ATLANTA
ATLANTA
AUGUSTA
AUGUSTA
DULUTH
FLOWERY BRANCH
LAWRENCEVILLE
LILBURN
PEACHTREE CITY
SAVANNAH
SAVANNAH (5)
SNELLVILLE
IDAHO
NAMPA
ILLINOIS
BATAVIA
BLOOMINGTON
BRADLEY
CALUMET CITY
CHAMPAIGN
CHICAGO
CHICAGO
CRYSTAL LAKE
DOWNERS GROVE
DOWNERS GROVE
ELGIN
FAIRVIEW HEIGHTS
FOREST PARK
GENEVA
KILDEER
MOUNT PROSPECT
MUNDELEIN
NAPERVILLE
NORRIDGE
OAK LAWN
OAKBROOK TERRACE
ORLAND PARK
PEORIA
ROCKFORD
ROLLING MEADOWS (5)
SKOKIE
STREAMWOOD
VERNON HILLS
WOODRIDGE
INDIANA
GREENWOOD (5)
INDIANAPOLIS
SOUTH BEND
OJV
OJV
IOWA
CLIVE
COUNCIL BLUFFS
DUBUQUE
KANSAS
OVERLAND PARK
WICHITA
WICHITA
KENTUCKY
BELLEVUE
LEXINGTON
KIR
KIR
2014
1997
1973
2003
2008
2008
2007
2001
1995
2013
2011
2013
2013
2014
1993
2008
2001
2005
2002
1972
1996
1997
2001
1997
1997
1998
1999
1997
1972
1998
1997
1996
2013
1997
1998
1997
1997
1997
2001
1997
1997
2008
2003
1997
1998
2012
1998
1970
1964
2003
1996
2006
1997
2006
1998
1996
1976
1993
37,640
3,787
95,660
78.5
100.0
100.0 BIG LOTS
41,200 JO-ANN FABRICS
12,375 BUDDY’S HOME
10,225
FURNISHINGS
59,426
80.0 PETCO
15,335 DOLLAR TREE
10,220
130,407
259,495
175,835
532,945
112,537
78,025
92,985
285,656
73,910
227,389
186,526
195,377
311,093
95.1 KROGER
83.8 KROGER
59.0 MARSHALLS
91.7 HOBBY LOBBY
100.0 TJ MAXX
100.0 WHOLE FOODS
MARKET
95.2 PUBLIX
98.7 HOBBY LOBBY
100.0 KROGER
94.4 KMART
100.0 BED BATH &
BEYOND
96.6 HHGREGG
91.7 KOHL’S
62,000
56,647 DAYS INN
36,598 NORDSTROM RACK
65,864 HHGREGG
35,200 ROSS DRESS FOR LESS
70,125
54,340
67,400 AMC-COLONIAL 18
62,000
86,479 KROGER
35,005 TJ MAXX
39,392 PLANET FITNESS
36,000 OLD NAVY
44,000 ASHLEY FURNITURE
HOMESTORE
30,187 ANNA’S LINENS
19,838
13,939
40,000
11,920
65,442 ROSS DRESS FOR LESS
36,995
69,295
33,067 MARSHALLS
31,000
21,000
34,000
32,026 ROSS DRESS FOR LESS
86,584 BELK
30,187 COST PLUS
58,416 HHGREGG
133,259
100.0 HOBBY LOBBY
55,000 DICK’S SPORTING GOODS
45,000 STEVENS-HENAGER
15,000
274,282
188,250
80,535
3,029
111,720
102,011
86,894
80,624
141,578
141,702
178,920
95.5 KOHL’S
94.6 SCHNUCK MARKETS
100.0 CARSON PIRIE
SCOTT
100.0
100.0 BEST BUY
100.0 BURLINGTON COAT
FACTORY
100.0 KMART
81.2 HOBBY LOBBY
92.2 SHOP & SAVE
MARKET
100.0 TJ MAXX
97.8 ELGIN MALL
86,584 HOBBY LOBBY
68,800 TOYS R US/BABIES R US
80,535
COLLEGE
51,214 BUY BUY BABY
46,070 BARNES & NOBLE
45,350 DICK’S SPORTING GOODS
75,623 RAINBOW SHOPS
30,247 MICHAELS
13,770 BEAUTY ONE
86,894
65,502
42,610 DOLLAR TREE
54,850 BEST BUY
81,550 ELGIN FARMERS
PRODUCTS
15,808 WALGREENS
54,400 OLD NAVY
31,358 AARON SALES &
LEASE OWNERSHIP
193,023
100.0 SPORTS AUTHORITY
45,085 FRESH THYME FARMERS
28,000 HOME GOODS
98,371
104,688
165,822
192,547
89,692
100.0 KMART
100.0 GANDER
MOUNTAIN
100.0 BED BATH &
BEYOND
100.0 KOHL’S
100.0 BURLINGTON COAT
FACTORY
MARKET
96,871
104,688
35,000 MICHAELS
31,578 OLD NAVY
101,097 HOBBY LOBBY
56,596 TRUE VALUE
87,547
34,624
22,192
24,123
12,618
12,000
15,726
10,000
24,000
17,375
27,619
102,327
97.9 BURLINGTON COAT
100,200
116,914
183,893
176,263
15,535
162,442
89,047
58,455
81,000
192,624
FACTORY
100.0 KMART
100.0 KMART
92.6 HOME DEPOT
100.0
100.0 KMART
98.0 BEST BUY
116,914
140,580 CHUCK E CHEESE
121,903 BIG LOTS
122,605
45,760 ROSS DRESS FOR LESS
100.0 MARSHALLS
100.0 VALUE CITY
97.4 DICK’S SPORTING
GOODS
30,406 OLD NAVY
81,000
54,997 PETSMART
15,934
30,000 TWIN PEAKS
11,360
34,000
28,049
27,518 CHUCK E CHEESE
14,040
144,867
95.8 HOLLYWOOD BLVD
48,118 SHOE CARNIVAL
15,000
CINEMA
184,206
100.0 BABIES R US
49,426 TOYS R US
165,255
271,307
90,000
294,324
82,979
120,164
133,771
82.2 KROGER
91.8 BED BATH &
BEYOND
63,468 CVS
28,000 TJ MAXX
100.0 KMART
100.0 HOBBY LOBBY
100.0 SHOPKO
90,000
55,000 TJ MAXX
82,979
97.7 HOME DEPOT
100.0 BEST BUY
113,969
45,300 TJ MAXX
47,000 FRESH THYME
FARMERS MARKET
12,800 DOLLAR GENERAL
28,000 DSW SHOE
WAREHOUSE
29,979
10,686
26,069
25,160 BED BATH & BEYOND
20,400
30,000 NORTHERN TOOL &
EQUIPMENT
18,040
96,011
100.0 DICK’S SPORTING
48,933 GORDMANS
47,078
GOODS
53,695
216,235
100.0 KROGER
98.5 BEST BUY
53,695
45,750 BED BATH & BEYOND
43,072 TOYS R US/BABIES
41,900
R US
137
LOCATION
PORTFOLIO
YEAR
DEVELOPED
OR
ACQUIRED
LEASABLE
AREA
(SQ.FT.)
PERCENT
LEASED
(1)
TENANT NAME
GLA
TENANT NAME
GLA
TENANT NAME
GLA
MAJOR LEASES
LOUISIANA
BATON ROUGE
HARVEY
LAFAYETTE
LAFAYETTE
LAKE CHARLES
SHREVEPORT
SHREVEPORT
MAINE
SOUTH PORTLAND
MARYLAND
BALTIMORE
BALTIMORE
BALTIMORE
BALTIMORE
BALTIMORE
BALTIMORE
BALTIMORE
BEL AIR
CLARKSVILLE
CLINTON
CLINTON
COLUMBIA
COLUMBIA
COLUMBIA
COLUMBIA
COLUMBIA
COLUMBIA (5)
COLUMBIA
COLUMBIA
COLUMBIA
DISTRICT HEIGHTS
EASTON
ELLICOTT CITY
ELLICOTT CITY
ELLICOTT CITY
FREDERICK
GAITHERSBURG
HUNT VALLEY
LAUREL
LAUREL
NORTH EAST
PASADENA
PERRY HALL
PERRY HALL
PIKESVILLE
TIMONIUM
TIMONIUM
TOWSON
TOWSON
MASSACHUSETTS
ABINGTON
BRIGHTON
CAMBRIDGE
CHATHAM
DORCHESTER
BLS
BLS
BLS
BLS
OIP
SEB
BLS
PRU
OJV
EVERETT
FALL RIVER
FALMOUTH
FRAMINGHAM
GREAT BARRINGTON
HYANNIS
MARLBOROUGH
MEDFORD
OJV
PITTSFIELD
QUINCY
QUINCY
REVERE
SALEM
SHREWSBURY
SPRINGFIELD
1997
2008
1997
2010
2010
2010
2010
2008
2014
2014
2013
2014
2014
2014
2013
2014
2014
2003
2003
2012
2013
2013
2014
2013
2002
2005
2011
2013
2010
2014
2013
2014
2007
2003
1999
2008
1964
1972
2014
2003
2003
2014
2011
2014
2003
2014
2012
2014
2014
2014
2014
2014
2014
2014
2014
2014
1994
2014
2004
2014
2014
2014
2014
2014
2014
2000
2014
349,857
94.7 BURLINGTON COAT
80,450 STEIN MART
174,445
244,768
29,405
134,844
69,088
78,761
FACTORY
100.0 BEST BUY
99.4 STEIN MART
84.4
96.4 MARSHALLS
100.0 OFFICEMAX
95.0 MICHAELS
45,733 MICHAELS
37,736 HOME FURNITURE
COMPANY
40,000 K&G MEN’S
COMPANY
24,626 BARNES & NOBLE
36,000 TJ MAXX
30,000 ROSS DRESS FOR LESS
23,500 BARNES & NOBLE
23,875 DOLLAR TREE
29,975 BED BATH & BEYOND
23,100 OLD NAVY
12,000
32,723
23,000
32,556
20,000
15,000
98,948
100.0 DSW SHOE
25,000 DOLLAR TREE
15,450 GUITAR CENTER
12,236
WAREHOUSE
152,834
114,045
58,879
77,287
78,477
90,903
90,830
130,176
105,907
2,615
26,412
50,000
73,230
100,803
98,399
91,165
66,166
6,780
99,350
100,841
90,929
113,330
86,456
139,898
433,467
86,968
88,277
94,653
75,924
81,550
87,006
38,766
94.8 KMART
97.7 SAFEWAY
95.9 CORT FURNITURE
95,932 SALVO AUTO PARTS
54,200 RITE AID
14,856
12,000
11,868 DOLLAR TREE
10,000
RENTAL
100.0 WEIS MARKETS
97.3 GIANT FOOD
100.0 GIANT FOOD
100.0 GIANT FOOD
95.2 SAFEWAY
100.0 GIANT FOOD
100.0
100.0 MICHAELS
100.0 OLD NAVY
97.6 GIANT FOOD
99.4 HARRIS TEETER
100.0 SAFEWAY
92.3 DAVID’S NATURAL
MARKET
100.0
100.0 NORDSTROM RACK
100.0 TOYS R US/BABIES
R US
100.0 GIANT FOOD
97.9 GIANT FOOD
100.0 GIANT FOOD
97.9 SAFEWAY
100.0 TARGET
100.0 GIANT FOOD
93.2 GREAT BEGINNINGS
58,187
55,108
56,892
43,136
55,032 CVS
62,943
26,706 HOME GOODS
16,000
57,994
56,905
55,164
15,079 CVS
40,750 TJ MAXX
63,062 REI
64,333
64,885 DOLLAR TREE
55,000
50,093 PETCO
146,773 KOHL’S
10,125 DOLLAR TREE
10,000
23,294
13,225 DAVID’S NATURAL
11,627
MARKET
30,600 BOOKS-A-MILLION
24,075 COLUMBIA
EXPONENTS
28,000
10,004
10,000
12,400
106,889 SAFEWAY
55,164
56,166
60,102 MATTRESS & FURNITURE
10,026
MART
91.5 GIANT FOOD
100.0 PLANET FITNESS
55,330
21,000 DOLLAR TREE
100.0 VILLAGE THRIFT
90.3 FOOD LION
92.6 DAVITA
HEALTHCARE OF
MD
81,550
38,372
10,496
13,253 SEAFOOD PALACE
12,709
BUFFET
173,475
88.4 BRUNSWICK
40,544 RITE AID
21,250 ACE HARDWARE
18,704
65,059
105,530
59,799
187,561
88,405
679,843
102,000
27,550
62,555
24,432
84,470
41,278
30,897
78,642
26,482
131,102
231,546
104,125
56,215
72,014
80,510
24,805
15,272
48,425
109,100
19,287
BOWLING
100.0 GIANT FOOD
94.9 GIANT FOOD
80.0 AMERICAN
RADIOLOGY
92.5 GIANT FOOD
100.0 SAFEWAY
100.0 WALMART
56,848
63,529
13,573
61,941 STAPLES
59,180 AAA MID-ATLANTIC
154,828 TARGET
15,000
11,500 CVS
132,608 WEIS MARKETS
10,125
55,452
100.0 LOWE’S HOME
CENTER
100.0 BGH II, LP
100.0 MICRO CENTER
100.0 OCEAN STATE JOB
LOT
100.0 NATIONAL
102,000
20,350
41,724 TRADER JOE’S
24,432
84,470
11,065
WHOLESALE
LIQUIDATORS
100.0 WALGREENS
100.0 STAPLES
100.0 STAPLES
100.0
100.0 KMART
98.8 SHAW’S
SUPERMARKET
100.0 BEST BUY
100.0 OFF BROADWAY
SHOE
92.3 STOP & SHOP
100.0 HANNAFORD
100.0 WALGREENS
100.0 WALGREENS
100.0 STAPLES
93.7 BOB’S STORES
100.0 CVS
138
14,707
24,000
24,652 PIER 1 IMPORTS
11,695 DOLLAR TREE
11,200
52,486 PRICE CHOPPER
54,712 TOYS R US/BABIES R US
44,667
46,932 HOME GOODS
45,000 DSW SHOE WAREHOUSE
22,478 ALDI
22,362 PURE HOCKEY
21,952
24,904
21,063
61,935
55,087 RITE AID
12,607
15,272
20,388
40,982 BED BATH & BEYOND
19,287
14,247
32,767 STAPLES
18,689
LOCATION
STURBRIDGE
PORTFOLIO
BLS
YEAR
DEVELOPED
OR
ACQUIRED
2013
LEASABLE
AREA
(SQ.FT.)
230,590
PERCENT
LEASED
(1)
100.0 STOP & SHOP
TENANT NAME
MAJOR LEASES
GLA
57,769 MARSHALLS
TENANT NAME
GLA
TENANT NAME
30,000 CINEMAGIC
THEATERS
GLA
29,000
SWAMPSCOTT
WAKEFIELD
WALTHAM
WOBURN
WORCESTER
MICHIGAN
CLARKSTON
CLAWSON (5)
FARMINGTON
LIVONIA
MUSKEGON
TAYLOR
WALKER
MINNESOTA
MAPLE GROVE
MAPLE GROVE
MINNETONKA
ROSEVILLE
MISSISSIPPI
HATTIESBURG
MISSOURI
CRYSTAL CITY
ELLISVILLE
FLORISSANT
JOPLIN
JOPLIN
KIRKWOOD
LEMAY
MANCHESTER
SAINT CHARLES
SAINT CHARLES
SAINT LOUIS
SAINT LOUIS
SAINT LOUIS (5)
SAINT LOUIS
SAINT LOUIS
SAINT PETERS
SPRINGFIELD
SPRINGFIELD
SPRINGFIELD
NEBRASKA
OMAHA
NEVADA
HENDERSON
HENDERSON
LAS VEGAS
LAS VEGAS
RENO
RENO
RENO
RENO
RENO
SPARKS
SPARKS
NEW HAMPSHIRE
MILFORD
NASHUA
SALEM
NEW JERSEY
KIR
KIR
KIR
KIR
PRU
PRU
BIG
PRU
BLS
BLS
BLS
BLS
BRIDGEWATER
KIR
CHERRY HILL
CHERRY HILL
CHERRY HILL
CHERRY HILL
CINNAMINSON
CLARK
CLARK
CLARK
2014
2014
2014
2014
2014
1996
1993
1993
1968
1985
1993
1993
2001
2006
1998
2005
2004
1997
1970
1997
1998
1998
1990
1974
1998
1998
1998
1998
1972
1998
1997
1997
1997
1994
2002
1998
2005
1999
2006
2006
2010
2006
2006
2013
2013
2013
2007
2013
2008
2014
1994
2001
1985
1996
2014
2011
1996
2013
2013
2013
10,541
10,624
14,564
63,975
15,984
24,284
119,378
66,281
100.0 CVS
100.0 MG FITNESS
100.0 PETCO
100.0 KOHL’S
100.0 PEP BOYS
11,060
15,984
13,650
104,385 DOLLAR TREE
21,521 HARBOR FREIGHT TOOLS
10,470
18,859 DOLLAR TREE
151,358
72.8 NEIMAN’S FAMILY
45,092 OFFICE DEPOT
19,605 CVS
116,635
96,915
33,121
79,215
141,549
387,210
466,825
488,157
MARKET
78.1 STAPLES
63.2 TUESDAY MORNING
94.0 CVS
65.2 PLUMB’S FOOD
100.0 KOHL’S
100.0 RUBY-15-WALKER,
LLC
93.6 BYERLY’S
98.4 LOWE’S HOME
CENTER
24,000 ALDI
19,610 FITNESS 19
13,810
34,332
93,310 BABIES R US
156,366 KOHL’S
16,498 RITE AID
10,250
37,459
104,508 STAR THEATRE
74,211
55,043 BEST BUY
137,933 DICK’S SPORTING GOODS
45,953 JO-ANN FABRICS
51,182 MARSHALLS
45,940
33,335
120,231
97.5 TOYS R US/BABIES
61,369 GOLFSMITH GOLF &
108,213
100.0 SPORTS AUTHORITY
80,065 GOLFSMITH
R US
TENNIS
25,775
18,480
295,848
100,724
118,080
172,165
155,416
80,524
251,775
79,747
89,305
8,000
84,460
113,781
129,093
168,460
169,982
128,765
178,364
282,792
84,916
92.7 ASHLEY FURNITURE
HOMESTORE
100.0 KMART
89.0 SHOP N SAVE
100.0 KMART *
100.0 ASHLEY FURNITURE
HOMESTORE
100.0 JOPLIN SCHOOLS
100.0 HOBBY LOBBY
100.0 SHOP N SAVE
100.0 KOHL’S
100.0
100.0 KOHL’S
100.0 KOHL’S
94.5 SHOP N SAVE
100.0 BURLINGTON COAT
FACTORY
100.0 HOME DEPOT
100.0 KMART
100.0 HOBBY LOBBY
99.3 BEST BUY
100.0 BED BATH &
BEYOND
45,000 ROSS DRESS FOR LESS
30,187 BED BATH & BEYOND
23,065
100,724
80,000
135,504 K&G MEN’S COMPANY
36,412 ROSS DRESS FOR LESS
27,000
29,108 OFFICEMAX
23,500
80,524
64,876 BURLINGTON COAT
FACTORY
56,198 DOLLAR GENERAL
89,305
-
84,460
92,870 CLUB FITNESS
68,307
80,000 BIG LOTS
122,540 PLANET FITNESS
128,765
57,028 SPORTS AUTHORITY
48,150 JCPENNEY
30,050 MARSHALLS
58,400 SPORTS AUTHORITY
35,764
10,500
20,911
35,040 SOCIETY OF ST.
VINCENT DE PAUL
27,000 NAPA AUTO PARTS
40,418 OFFICE DEPOT
46,144 TJ MAXX
29,400 ROSS DRESS FOR LESS
27,000
18,442
24,500
31,275
25,466
209,650
100.0 KMART
122,306 OFFICE DEPOT
28,000 PACE-BATTLEFIELD,
26,000
LLC
178,686
78.6 MARSHALLS
33,000 BIG LOTS
28,760 OFFICEMAX
20,022
176,081
130,773
77,650
361,486
36,619
113,376
152,601
104,319
119,871
119,601
113,743
55.6 BIG LOTS
34.4
90.5 ALBERTSONS
86.9 WALMART
100.0 PIER 1 IMPORTS
74.1 SCOLARI’S
WAREHOUSE
MARKET
97.4 BED BATH &
BEYOND
95.0 RALEY’S
95.0 RALEY’S
89.4 SAFEWAY
96.7 RALEY’S
30,000 SAVERS
25,000
58,050
114,513 COLLEEN’S CLASSICS
40,728 MARSHALLS
30,000
CONSIGNMENT
10,542
50,451
35,185 NORDSTROM RACK
31,000 WILD OATS MARKETS
28,788
65,519
61,570 SHELL OIL
56,061 CVS
63,476
*
10,000
18,990
17,050
148,002
92.5 SHAW’S
71,000 RITE AID
SUPERMARKET
176,437
344,976
98.8 TJ MAXX
100.0 KOHL’S
25,219 MICHAELS
91,282 SHAW’S SUPERMARKET
24,300 MODELL’S
51,507 BOB’S STORES
241,997
100.0 BED BATH &
40,415 MARSHALLS
39,562 BABIES R US
124,750
129,809
209,185
256,099
BEYOND
72.4 STOP & SHOP *
100.0 KOHL’S
97.6 KOHL’S
93.9 SHOPRITE
62,532 RETRO FITNESS
96,629 PLANET FITNESS
86,770 SPORTS AUTHORITY
71,676 BOB’S DISCOUNT
FURNITURE
10,366
22,320
40,000 BABIES R US
30,711 ROSS DRESS FOR LESS
123,388
100.0 SPEED RACEWAY
85,440 HIBACHI GRILL & SUPREME
19,412 ACME MARKETS *
85,000
52,812
41,537
100.0 SHOPRITE
100.0 A&P
100.0 BALLY TOTAL
FITNESS
BUFFET
85,000
52,812
28,000 RITE AID
13,537
21,319
43,905
37,355
37,491
30,076
17,000
139
LOCATION
DELRAN
EAST WINDSOR
EDGEWATER
HILLSDALE
HOLMDEL
HOLMDEL
MILLBURN
MOORESTOWN
NORTH BRUNSWICK
PISCATAWAY
RIDGEWOOD
UNION
WAYNE (5)
WESTMONT
NEW MEXICO
ALBUQUERQUE
NEW YORK
AMHERST
BAYSHORE
BELLMORE
BRIDGEHAMPTON
BRONX (5)
BROOKLYN
BROOKLYN
BROOKLYN
BROOKLYN
BROOKLYN HEIGHTS
BUFFALO
CENTEREACH
CENTEREACH
COMMACK
COMMACK
COPIAGUE (5)
ELMONT
ELMONT
ELMSFORD
FARMINGDALE
FLUSHING
FRANKLIN SQUARE
FREEPORT
FREEPORT
GLEN COVE
HAMPTON BAYS
HARRIMAN
HICKSVILLE
HUNTINGTON STATION
JERICHO
JERICHO
JERICHO
JERICHO
KEW GARDENS HILLS
LATHAM
LEVITTOWN
LITTLE NECK
LONG ISLAND CITY
MANHASSET
MASPETH
MERRICK
MIDDLETOWN
MINEOLA
MUNSEY PARK
NESCONSET
NORTH MASSAPEQUA
PLAINVIEW
SELDEN
STATEN ISLAND
STATEN ISLAND
STATEN ISLAND
STATEN ISLAND
STATEN ISLAND (5)
PORTFOLIO
KIR
PRU
YEAR
DEVELOPED
OR
ACQUIRED
2000
2008
2007
2014
2007
2007
2014
2009
1994
1998
1994
2007
2009
1994
1998
2009
2006
2004
2009
2013
2000
2003
2004
2004
2012
2009
1993
2006
1998
2007
1998
2004
2005
2013
2013
2007
2004
2000
2000
2000
1989
2013
2004
2011
2007
2007
2007
2007
2012
1999
2006
2003
2012
1999
2004
2000
2000
2007
2000
2009
2004
1969
2014
2000
1989
1997
2005
2006
OJV
OJV
KIR
OJV
OJV
KIR
OJV
BLS
KIR
KIR
KIR
BLS
KIR
OJV
KIR
KIR
KIR
KIR
10,126
30,000
35,000
37,344
25,482
10,185
19,380
52,440
11,186
20,315
42,970
34,821
27,540
19,450
LEASABLE
AREA
(SQ.FT.)
77,583
249,029
423,316
60,432
299,723
234,557
89,348
201,351
PERCENT
LEASED
(1)
100.0 PETSMART
100.0 TARGET
99.1 TARGET
TENANT NAME
100.0 KING’S SUPER
MARKET
97.6 A&P
100.0 BEST MARKET
100.0 KINGS
SUPERMARKET
100.0 LOWE’S HOME
CENTER
442,554
100.0 WALMART
97,348
24,280
98,193
311,115
173,259
100.0 SHOPRITE
100.0 WHOLE FOODS
MARKET
100.0 WHOLE FOODS
MARKET
100.0 COSTCO
85.0 THRIFTWAY
SUPERMARKET
GLA
TENANT NAME
GLA
MAJOR LEASES
GLA
20,443 OFFICE DEPOT *
TENANT NAME
126,200 GENUARDI’S *
113,156 PATHMARK
30,811 WALGREENS
56,021 MARSHALLS
37,500 BEST BUY
40,024 WALGREENS
20,006 PARTY CITY
52,869 TJ MAXX
63,966 TJ MAXX
16,332
48,833 LA FITNESS
30,109 MICHAELS
17,139 PET SUPPLIES PLUS
135,198 SKYZONE MOORESTOWN
42,173
INTERNATIONAL
FOOD AND VEGETAB
134,202 BURLINGTON COAT
FACTORY
80,542 MARSHALLS
54,100
24,280
60,000 BEST BUY
30,225
147,350 SOVRAN ACQUISITION LP
48,142 SUPER FITNESS
85,598 SPORTS AUTHORITY
15,000 TUESDAY MORNING
49,132
13,271
183,718
95.0 MOVIES WEST
27,883 ROSS DRESS FOR LESS
26,250 SEARS OUTLET
25,000
101,066
100.0 TOPS
101,066
SUPERMARKET
176,831
96.3 BEST BUY
45,499 TOYS R US/BABIES R US
43,123 HARBOR FREIGHT
20,965
12,052
89,935 KING KULLEN
58,860 FOOD BAZAAR-161
58,200 WALGREENS
10,000
10,300
15,638 PC RICHARD & SON
TOOLS
61,892 TJ MAXX
51,680 BLINK FITNESS
33,800
18,845
11,050
11,311
22,416
100.0 FRUIT VALLEY
15,200
15,445
287,507
175,356
80,708
10,000
29,671
40,373
7,200
141,466
379,745
105,851
261,664
24,617
135,436
27,078
12,900
143,288
437,105
100.0 PETSMART
100.0 KMART
99.3 NATIONAL
AMUSEMENTS
100.0 HOME DEPOT
100.0 RITE AID
100.0 DUANE READE
100.0 DUANE READE
100.0
100.0 TOPS
SUPERMARKET
99.0 WALMART
95.1 PATHMARK
100.0 TOYS R US/BABIES
R US
100.0 DEAL$
100.0 HOME DEPOT
100.0 DUANE READE
100.0 CVS
100.0 ELMSFORD 119
96.6 HOME DEPOT
17,789
13,905
172,631
49,090
70,990
227,939
35,736
52,950
63,998
57,013
2,085
105,851
10,790
617,810
47,199
48,275
6,065
155,321
22,500
108,296
80,000
26,747
72,748
PRODUCE
100.0 PETCO
100.0 WALGREENS
97.8 STOP & SHOP
100.0 STAPLES
100.0 MACY’S
83.4 KOHL’S
97.3 DOLLAR TREE
97.1 BEST MARKET
100.0 WHOLE FOODS
MARKET
100.0 MARSHALLS
100.0
100.0 MILLERIDGE INN
100.0
96.8 SAM’S CLUB
100.0 SPORTS AUTHORITY
100.0
100.0
100.0 MARSHALLS
100.0 DUANE READE
100.0 WALDBAUMS
100.0 BEST BUY
100.0 NORTH SHORE
FARMS
100.0 BED BATH &
BEYOND
55,968
100.0 PETSMART
84,000 PETSMART
20,165 CITI TRENDS
151,067 BIG LOTS
63,459 ACE HARDWARE
63,296 KING KULLEN
14,137
112,000
11,878
12,900
84,450 SPORTS AUTHORITY
116,790 DAVE & BUSTER’S
33,600 MODELL’S
25,000
60,216 SPORTS AUTHORITY
58,838
60,000 SUNRISE CREDIT
SERVICES
11,857
13,905
46,753 VORNADO REALTY TRUST
24,880 ANNIE SEZ
50,000 PETCO
86,584 MICHAELS
10,481
30,700 RITE AID
38,304
37,328 MARSHALLS
13,360
11,890
24,008 MODELL’S
11,010
33,600
105,851
134,900 WALMART
116,097 HOME DEPOT
115,436
30,164 DSW SHOE WAREHOUSE
17,035
40,114 KING KULLEN
22,500
44,478 HOME GOODS
45,000 CHRISTMAS TREE SHOPS
10,000
41,393 WHOLE FOODS MARKET
28,916 BOB’S DISCOUNT
FURNITURE
37,570 NORDSTROM RACK
24,836 ANNIE SEZ
35,000
34,257
15,038
20,000
27,052
29,599
88,222
236,130
190,779
260,510
100,977
100,641
348,548
52.8
100.0 FAIRWAY STORES
55,162
93.1 HOME DEPOT
92.1 TJ MAXX
99.2 TARGET
98.3 LA FITNESS
100.0 KOHL’S *
98.2 KMART
102,220 KING KULLEN
34,798 LA FITNESS
139,839 PATHMARK
33,180
100,641
103,823 PATHMARK
140
52,250
34,000 MICHAELS
48,377 OLD NAVY
17,573
15,000
59,809 TOYS R US/BABIES
42,025
R US
LOCATION
STATEN ISLAND
SYOSSET
VALLEY STREAM
WHITE PLAINS
WOODSIDE
YONKERS
YONKERS
NORTH CAROLINA
ASHEVILLE
CARY
CARY
CHARLOTTE
CHARLOTTE
CHARLOTTE
CHARLOTTE
CHARLOTTE
CORNELIUS
DAVIDSON
DURHAM
DURHAM
GREENSBORO
KNIGHTDALE
KNIGHTDALE
MOORESVILLE
MORRISVILLE
RALEIGH
RALEIGH
RALEIGH
RALEIGH
WINSTON-SALEM
OHIO
BEAVERCREEK
COLUMBUS
COLUMBUS
COLUMBUS
HUBER HEIGHTS
KENT
NORTH OLMSTED
SHARONVILLE
OREGON
CLACKAMAS
GRESHAM
GRESHAM
GRESHAM
HILLSBORO
MILWAUKIE
PORTLAND (5)
PENNSYLVANIA
ARDMORE
BEAVER FALLS
BLUE BELL
CARLISLE
CHAMBERSBURG
CHAMBERSBURG
DEVON
EAGLEVILLE
EAST NORRITON
EAST STROUDSBURG
EXTON
EXTON
GREENSBURG
HAMBURG
HARRISBURG
HAVERTOWN
HORSHAM
MONROEVILLE
MONTGOMERY
PORTFOLIO
YEAR
DEVELOPED
OR
ACQUIRED
2005
1967
2012
2004
2012
1995
2005
2012
2001
2000
1968
1986
2012
2012
2014
2011
2012
2002
1996
2011
2011
2011
2007
2008
1993
2006
2003
2011
1969
1986
2002
1988
1998
1999
1995
1988
1977
2007
2006
2009
2009
2008
2007
2006
2007
2000
1996
2013
2008
2006
2012
2008
1984
1973
1999
1996
2002
2000
1972
1996
2013
2013
2002
KIR
KIR
SEB
SEB
KIR
KIR
KIR
OJV
PRU
PRU
PRU
PRU
PRU
BLS
OJV
BLS
BLS
KIR
LEASABLE
AREA
(SQ.FT.)
47,270
32,124
27,924
22,220
7,500
43,560
10,329
153,820
315,797
MAJOR LEASES
TENANT NAME
GLA
TENANT NAME
GLA
PERCENT
LEASED
(1)
100.0 STAPLES
TENANT NAME
95.0 NEW YORK SPORTS
CLUB
100.0 KEY FOOD
35.0
100.0
100.0 SHOPRITE
100.0 ADVANCE AUTO
PARTS
GLA
47,270
16,664
27,924
43,560
10,329
100.0 TJ MAXX
45,189 ROSS DRESS FOR LESS
98.4 BJ’S WHOLESALE
108,532 KOHL’S
28,223 HHGREGG
86,584 PETSMART
26,488
26,040
CLUB
586,667
95.8 DICK’S SPORTING
55,000 BEST BUY
51,259 BED BATH & BEYOND
43,015
110,300
100.0 BURLINGTON COAT
48,000 TJ MAXX
31,954 CVS
GOODS
233,939
97.9 ROSS DRESS FOR
32,003 K&G MEN’S COMPANY
FACTORY
75,134
136,685
110,005
77,600
79,084
408,065
116,186
215,193
184,244
LESS
100.0 HARRIS TEETER
86.2 HOME DEPOT
97.5 HARRIS TEETER
100.0 HARRIS TEETER
100.0 HARRIS TEETER
100.0 WALMART
85.8 TJ MAXX
50,627
85,600 CORT FURNITURE RENTAL
51,486
57,260
48,000
149,929 BEST BUY
31,303 JO-ANN FABRICS
100.0 KOHL’S
98.3 ROSS DRESS FOR
87,110 HARRIS TEETER
30,144 BED BATH & BEYOND
LESS
31,577 ASHLEY FURNITURE
HOMESTORE
27,700
45,000 BUY BUY BABY
16,051 HIBACHI GRILL &
SUPREME BUFFET
47,452 RITE AID
22,941 MICHAELS
136,955
98.9 DICK’S SPORTING
45,000 BEST BUY
30,000 TJ MAXX
165,798
169,901
362,078
9,800
97,103
136,203
GOODS
97.8 BEST BUY
98.1 CARMIKE CINEMAS
93.8 GOLFSMITH
53.3
80.8 FOOD LION
99.3 OFFICE DEPOT
30,000 BED BATH & BEYOND
60,124 FOOD LION
59,719 BED BATH & BEYOND
28,000 STAPLES
36,427 STEIN MART
35,335 ROSS DRESS FOR LESS
38,273 ACE HARDWARE
22,391 02 FITNESS
16,593
20,006 TOWN AND COUNTRY
HARDWARE
10,722
26,200
31,772
11,200
11,606
21,545
26,297
20,388
36,000
30,187
12,000
132,190
98.5 HARRIS TEETER
60,279 DOLLAR TREE
142,547
269,201
129,008
100.0 KROGER
96.7 LOWE’S HOME
CENTER
100.0 KOHL’S
112,862
97.7 FRESH THYME
122,697
131,644 KROGER
99,408 GRANT/RIVERSIDE
METHODIST HOSP
27,500 PIER 1 IMPORTS
101,840 KOHL’S
99,862
14,849
78,314
24,400
12,015 PATEL BROTHERS
INDIAN GROCERS
80,731 MARSHALLS
11,060
29,500
315,914
3,000
99,862
121,105
236,672
264,765
208,276
107,583
210,941
185,760
109,498
321,309
215,206
120,211
90,289
131,623
273,104
68,935
62,636
131,794
169,381
60,685
85,184
50,000
15,400
FARMERS MARKET
100.0 ELDER BEERMAN
100.0
100.0 TOPS
SUPERMARKET
100.0 GABRIEL BROTHERS
97.5 SPORTS AUTHORITY
77.9 MADRONA
WATUMULL
87.5 MARSHALLS
96.0 WALMART
100.0 SAFEWAY
92.0 MACY’S
100.0 KMART
100.0 KOHL’S
100.0 GIANT FOOD
90.6 GIANT FOOD
100.0 KOHL’S
100.0 WHOLE FOODS
MARKET
35.4 DOLLAR TREE
97.0 SHOPRITE
80.3 KMART
100.0 ACME MARKETS *
100.0 KOHL’S
100.0 TJ MAXX
100.0 LEHIGH VALLEY
HEALTH
94.1 ALBERTSONS
92.5 SAFEWAY
42,630 RITE AID
48,000 DOLLAR TREE
55,103 KROGER
30,975 UNITED ART AND
19,467
EDUCATION
45,121 NORDSTROM RACK
55,120 ROSS DRESS FOR LESS
27,766 OLD NAVY
26,832 PETSMART
27,500 OFFICE DEPOT
60,000 CASCADE ATHLETIC CLUB
53,000 RITE AID
26,706 BIG LOTS
21,633
27,465 DSW SHOE
WAREHOUSE
31,472 JO-ANN FABRICS
11,660
99,725 BANANA REPUBLIC
107,806 HOME DEPOT
93,444 HOME GOODS
71,441
67,521 WINE & SPIRITS SHOPPE
88,782 GIANT FOOD
33,504 WINE & SPIRITS SHOPPE
10,180
107,400
26,767
11,309
68,000 MICHAELS
10,394
20,400
21,600
25,000
19,949
13,775
21,479
10,263
66,506 RETRO FITNESS
102,763
60,685
85,184
26,775 MICHAELS
15,400
177,917
82.0 GANDER
83,777 AMERICAN SIGNATURE
80,938
71,737
143,200
257,565
MOUNTAIN
100.0 KOHL’S
97.8 GIANT FOOD
95.5 PETSMART
98.8 GIANT FOOD
80,938
48,820
29,650 BED BATH & BEYOND
67,179 BED BATH & BEYOND
141
18,025 JO-ANN FABRICS
12,250
23,225
48,884 OLD COUNTRY
BUFFET
25,312 MICHAELS
32,037 HHGREGG
11,200
23,629
28,892
LOCATION
NEW KENSINGTON
PHILADELPHIA
PHILADELPHIA (5)
PHILADELPHIA
PHILADELPHIA
PHILADELPHIA
PITTSBURGH
PITTSBURGH
QUAKERTOWN
RICHBORO
SCOTT TOWNSHIP
SHREWSBURY
SPRINGFIELD
WEST MIFFLIN
WHITEHALL
WHITEHALL
WYNNEWOOD (2)
YORK
PUERTO RICO
BAYAMON
CAGUAS
CAROLINA
MANATI
MAYAGUEZ
PONCE
TRUJILLO ALTO
RHODE ISLAND
CRANSTON
SOUTH CAROLINA
CHARLESTON
CHARLESTON (5)
GREENVILLE
GREENVILLE
GREENVILLE
GREENVILLE
TENNESSEE
MADISON
MEMPHIS
TEXAS
AMARILLO
AMARILLO
ARLINGTON
AUSTIN
AUSTIN
AUSTIN
AUSTIN
AUSTIN
AUSTIN
AUSTIN
AUSTIN
BAYTOWN
BEAUMONT
BROWNSVILLE
BURLESON
CONROE
CORPUS CHRISTI
CORPUS CHRISTI
DALLAS
DALLAS
FORT WORTH
FRISCO
GEORGETOWN
GRAND PRAIRIE
HOUSTON
HOUSTON
HOUSTON
HOUSTON
PORTFOLIO
OJV
OJV
OJV
OIP
CPP
OJV
KIR
KIR
KIR
OJV
OJV
OJV
OJV
OJV
KIR
PRU
OIP
KIR
PRU
OJV
OJV
OIP
BLS
BLS
1995
1996
2006
2010
2007
2011
1986
1999
2014
1983
1986
2005
1996
2014
1986
2006
2006
2006
2006
2006
2006
2006
1998
1978
1995
1997
2009
2010
2012
1978
2001
1997
2003
1997
2011
2011
2011
2011
2011
1998
1998
2007
1996
2005
2005
2011
2006
1997
2011
1998
2007
2012
2006
2011
2006
2005
2006
2013
2013
335,036
82,345
292,878
148,932
166,495
266,565
107,432
69,288
94,706
171,277
84,279
151,418
84,524
35,500
189,554
122,058
148,532
294,336
118,736
51,672
175,593
40,000
343,875
142,647
96,127
54,651
88,829
40,000
131,039
207,614
191,760
157,852
213,768
105,133
9,600
225,959
280,430
289,322
99,154
60,175
83,867
171,143
291,121
230,197
115,416
239,588
41,576
237,634
144,055
350,836
YEAR
DEVELOPED
OR
ACQUIRED
1986
1997
1983
LEASABLE
AREA
(SQ.FT.)
PERCENT
LEASED
(1)
TENANT NAME
108,950
36,511
175,456
96.7 GIANT EAGLE
100.0 MERCY HOSPITAL
100.0 BURLINGTON COAT
FACTORY
94.7 TARGET
100.0 KOHL’S
97.2 SEARS
90.4 WHOLE FOODS
MARKET
MAJOR LEASES
TENANT NAME
GLA
101,750
33,000
70,723 TOYS R US
137,000 PATHMARK
82,345
237,151
GLA
TENANT NAME
GLA
33,000 BOB’S DISCOUNT
FURNITURE
66,703 PEP BOYS
33,233 THE TILE SHOP
16,059 RITE AID
98.6 HHGREGG
96.2 BJ’S WHOLESALE
31,296 TJ MAXX
85,188 BEST BUY
30,000 STAPLES
30,720 PETSMART
CLUB
97.7 SUPER FRESH
100.0 WALMART
100.0 GIANT FOOD
98.7 GIANT FOOD
100.0 BIG LOTS
100.0 VALUE CITY
FURNITURE
100.0 KOHL’S
100.0
100.0 GIANT FOOD
55,537
69,288
54,785
66,825 STAPLES
84,279
48,800 JO-ANN FABRICS
84,524
30,500
26,535 EMPIRE BEAUTY
SCHOOL
31,000 BOOKS-A-MILLION
19,937
186,421
97.3 AMIGO
35,588 OFFICEMAX
18,100 CHUCK E CHEESE
599,681
570,621
69,640
354,830
191,680
SUPERMARKET
99.5 SAM’S CLUB
96.4 KMART
69.1 PLANET FITNESS
98.4 HOME DEPOT
97.2 2000 CINEMA CORP.
138,622 COSTCO
118,242 HOME DEPOT
20,350
109,800 SAM’S CLUB
60,000 SUPERMERCADOS
MAXIMO
134,881 JCPENNEY
109,800 ECONO RIAL
100,408 CARIBBEAN CINEMA
35,651 PETSMART
199,513
99.1 KMART
80,100 PUEBLO SUPERMARKET
26,869 ANNA’S LINENS
129,941
98.4 BOB’S STORES
41,114 MARSHALLS
28,000 TONI & GUY
100.0 HARRIS TEETER
90.2 TJ MAXX
94.2 GABRIEL BROTHERS
96.4 INGLES MARKETS
100.0 ACADEMY SPORTS
& OUTDOORS
83.8 THE FRESH MARKET
52,334 STEIN MART
31,220 BARNES & NOBLE
51,268 CONN’S HOMEPLUS
65,000 GOLD’S GYM
89,510 TRADER JOE’S
20,550
HAIRDRESSING ACAD
37,000 PETCO
25,389 OFFICE DEPOT
35,621
35,000 TJ MAXX
12,836
29,723
20,800
15,000
23,884
20,245
11,472
13,600
98,348
56,372
45,126
13,279
11,895
12,020
15,314
16,490
30,300
98.8 OLD TIME POTTERY
100.0 BED BATH &
99,400 WALMART
40,000
BEYOND
39,687
100.0 HOME DEPOT
109,800 KOHL’S
98.1 ROSS DRESS FOR
30,187 BED BATH & BEYOND
94,680 CONN’S HOMEPLUS
30,000 JO-ANN FABRICS
33,008
30,000
LESS
100.0 HOBBY LOBBY
100.0 CONN’S
95.8 BARNES & NOBLE
100.0 DAVE & BUSTER’S
95.0 GATTI LAND EATER-
TAINMENT
98.5 ACADEMY SPORTS
& OUTDOORS
92.4 TOYS R US/BABIES
R US
73.8 HEB GROCERY
99.3 BED BATH &
BEYOND
100.0 HOBBY LOBBY
96,127
26,650
24,685 PETCO
40,000
31,094 24 HOUR FITNESS
61,452 PACIFIC RESOURCES
ASSOCIATES
55,000 BED BATH & BEYOND
64,310
42,098 BUY BUY BABY
12,350
29,678 DOLLAR TREE
46,690 GOLD’S GYM
44,846 WORLD MARKET
14,326
30,000
19,089
28,730 ROSS DRESS FOR LESS
26,250
63,328 ROSS DRESS FOR LESS
30,108
100.0 BURLINGTON COAT
80,274 TJ MAXX
28,460 MICHAELS
FACTORY
99.6 KOHL’S
99.4 ASHLEY FURNITURE
HOMESTORE
100.0 BEST BUY
95.7 BED BATH &
BEYOND
100.0 ROSS DRESS FOR
LESS
92.2 CVS
97.4 MARSHALLS
92.0 HOBBY LOBBY /
MARDELS
68.9 DOLLAR TREE
88.6 24 HOUR FITNESS
100.0 MICHAELS
100.0 TJ MAXX
100.0 BEST BUY
89.4 MARSHALLS
142
86,584 ROSS DRESS FOR LESS
48,000 TJ MAXX
30,187 TJ MAXX
32,000 ROSS DRESS FOR LESS
47,616 ROSS DRESS FOR LESS
26,300 MICHAELS
34,000 SHOE CARNIVAL
24,800
28,160 OFFICEMAX
23,500 BIG LOTS
16,799 VITAMIN COTTAGE
NATURAL FOOD
38,032 ROSS DRESS FOR LESS
81,392 HEMISPHERES
13,250 CVS
30,000 ROSS DRESS FOR LESS
21,531
32,000 ROSS DRESS FOR LESS
35,317 HOME GOODS
30,382 BED BATH & BEYOND
11,110 ULTA 3
30,079 OFFICE DEPOT
50,000 SPROUTS FARMERS
MARKET
10,080
29,931 MARSHALLS
30,187 BED BATH & BEYOND
31,620 BARNES & NOBLE
26,535 PALAIS ROYAL
21,447
28,000
30,183
17,538
-
18,007
10,800
20,000
26,043
28,000
30,049
25,001
21,500
LOCATION
PORTFOLIO
HOUSTON
HOUSTON
HUMBLE
LAKE JACKSON
LEWISVILLE
LEWISVILLE
LEWISVILLE
LUBBOCK
MESQUITE
PASADENA
PASADENA
PLANO
PLANO
SOUTHLAKE
SPRING (2)
SUGAR LAND
TEMPLE
WEBSTER
VIRGINIA
BURKE
COLONIAL HEIGHTS
DUMFRIES
FAIRFAX
FAIRFAX
FAIRFAX
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
FREDERICKSBURG
HARRISONBURG
LEESBURG
MANASSAS
PENTAGON CITY (5)
RICHMOND
RICHMOND
RICHMOND
ROANOKE
ROANOKE
STAFFORD
STAFFORD
STAFFORD
STAFFORD
STAFFORD
STERLING
STERLING
WOODBRIDGE
WOODBRIDGE
YEAR
DEVELOPED
OR
ACQUIRED
2013
LEASABLE
AREA
(SQ.FT.)
149,065
PERCENT
LEASED
(1)
TENANT NAME
96.9 ROSS DRESS FOR
LESS
MAJOR LEASES
GLA
30,176 OLD NAVY
TENANT NAME
GLA
TENANT NAME
19,222 PETCO
GLA
13,500
1996
2013
2012
1998
1998
1998
1998
1974
1999
2001
2011
1996
2008
2014
2012
2013
2006
2014
1999
2005
1998
2007
2007
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2014
2007
2013
2010
1999
1995
2005
2014
2004
2005
2005
2005
2005
2013
2008
2013
1973
1998
KIR
KIR
BLS
OIP
KIR
PRU
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
OIP
PRU
BLS
CPP
OIP
OIP
OIP
OIP
OIP
BLS
BLS
OJV
KIR
96,500
100.0 BURLINGTON COAT
96,500
316,624
34,969
74,837
123,560
93,668
108,326
79,550
169,190
240,881
149,343
100,598
FACTORY
99.6 KOHL’S
70.0
88.2 YOUFIT HEALTH
CLUBS
97.6 BABIES R US
94.2 BURKE’S OUTLET
94.1 PETSMART
100.0 KROGER
100.0 PETSMART
99.2 BEST BUY
100.0 HOME DEPOT
100.0 HOME DEPOT
EXPO *
37,447
84.4
88,827 TJ MAXX
50,035 ROSS DRESS FOR LESS
30,237
20,105 PIER 1 IMPORTS
12,000
42,420 BED BATH & BEYOND
24,974 DSW SHOE WAREHOUSE
25,448 OFFICEMAX
51,000
26,027 OFFICEMAX
36,896 ROSS DRESS FOR LESS
34,030 HOME ZONE
20,000 CHARMING CHARLIE
23,500 MATTRESS FIRM
23,500 MICHAELS
30,187 MARSHALLS
19,865
12,600
18,000
22,491
30,000
149,343
97,798
-
96,623
262,799
365,623
124,148
71,509
1,702
341,727
101,332
52,946
4,842
32,000
2,454
3,650
4,261
3,000
10,578
10,002
8,000
5,126
6,818
4,800
2,909
6,000
11,097
7,200
8,027
6,100
5,540
7,241
3,076
5,892
5,020
7,256
4,828
3,000
33,179
3,822
3,028
4,352
7,000
10,125
10,125
2,170
7,200
1,762
7,993
10,125
190,484
318,794
107,233
331,229
84,683
128,612
3,060
299,134
81,789
4,211
4,400
7,310
101,042
331,280
361,050
799,442
186,079
495,038
91.2 KROGER
94.1 HOBBY LOBBY
97.6 HOBBY LOBBY
64,842
56,125 ROSS DRESS FOR LESS
100,086 BEL FURNITURE
30,187 MARSHALLS
58,842 BED BATH & BEYOND
28,000
53,829
100.0 SAFEWAY
100.0 ASHLEY FURNITURE
100.0
98.5 COSTCO
100.0 WALGREENS
88.2
100.0
100.0 BASSETT
FURNITURE
100.0
100.0
100.0
100.0
100.0 CHUCK E CHEESE
100.0 CRACKER BARREL
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0 SHONEY’S
96.6 KOHL’S
99.7 SHOPPERS FOOD
95.3 BURLINGTON COAT
FACTORY
100.0 COSTCO
100.0 ROOMS TO GO
100.0 BURLINGTON COAT
FACTORY
100.0
53,495 CVS
39,903 BOOKS-A-MILLION
12,380
21,006
139,658 HOME DEPOT
40,000 TJ MAXX
126,290 24 HOUR FITNESS
42,837
27,888
32,000
10,578
10,002
NTB TIRES
11,097
HHGREGG
CVS
CVS
10,125
88,248 MARTIN’S
63,168 BIG LOTS
69,960 AUTOZONE
73,396
36,958 STEIN MART
10,852
169,452 MARSHALLS
42,142 BEST BUY
84,683
121,550
33,179
10,125
10,125
36,900
36,532
96.1 MICHAELS
100.0 DICK’S SPORTING
40,002 MARSHALLS
47,700 HHGREGG
35,134 ROSS DRESS FOR LESS
34,089
29,826
GOODS
100.0
100.0
100.0
100.0 GIANT FOOD
100.0 SHOPPERS FOOD
98.1 TOYS R US
99.8 WALMART
78.9 REGENCY
FURNITURE
95.4 SHOPPERS FOOD
143
61,500 STAPLES
67,995 TJ MAXX
45,210 MICHAELS
209,613 LOWE’S HOME CENTER
73,882 THE SALVATION ARMY
23,942 PETCO
30,545 ROSS DRESS FOR LESS
35,333 HHGREGG
135,197 SAM’S CLUB
17,070 WEDGEWOOD
ANTIQUES & AUCTION
63,971 DICK’S SPORTING GOODS
57,437 LA FITNESS
12,000
30,179
33,000
135,193
16,700
47,328
LOCATION
PORTFOLIO
YEAR
DEVELOPED
OR
ACQUIRED
LEASABLE
AREA
(SQ.FT.)
PERCENT
LEASED
(1)
TENANT NAME
GLA
TENANT NAME
GLA
TENANT NAME
GLA
MAJOR LEASES
WASHINGTON
AUBURN
BELLEVUE
BELLINGHAM
BELLINGHAM
FEDERAL WAY
KENT
KENT
LAKE STEVENS
MILL CREEK
OLYMPIA
OLYMPIA
OLYMPIA
SEATTLE
SILVERDALE
SILVERDALE
SPOKANE
TACOMA
TUKWILA
WEST VIRGINIA
CHARLES TOWN
CANADA ALBERTA
BRENTWOOD
CALGARY
CALGARY
CALGARY
CALGARY
EDMONTON
EDMONTON
EDMONTON
GRANDE PRAIRIE
HINTON
BRITISH COLUMBIA
100 MILE HOUSE
ABBOTSFORD
ABBOTSFORD
CHILLIWACK
GIBSONS
KAMLOOPS
LANGLEY
LANGLEY
LANGLEY
MISSION
NORTH VANCOUVER
PORT ALBERNI
PRINCE GEORGE
PRINCE GEORGE
PRINCE GEORGE
SURREY
SURREY
SURREY
VICTORIA
TRAIL
WESTBANK
NOVA SCOTIA
DARTMOUTH
HALIFAX
NEWFOUNDLAND &
LABRADOR
ST. JOHN’S
ONTARIO
BELLEVILLE
BROCKVILLE
BURLINGTON
CHATHAM
FERGUS
HAWKESBURY
HAWKESBURY
LONDON
MISSISSAUGA
MISSISSAUGA
NEWMARKET
NEWMARKET
KIR
PRU
KIR
PRU
BIG
OIP
BIG
PRU
PRU
PRU
BLS
PRU
KIR
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
2007
2013
1998
2007
2000
2006
2010
2012
2010
2010
2006
2012
2006
2012
2006
2013
2006
2003
1985
2002
2002
2002
2005
2005
2002
2007
2012
2002
2005
2005
2002
2001
2011
2005
2005
2003
2002
2005
2001
2005
2005
2001
2005
2008
2002
2001
2005
2002
2005
2005
2008
2008
2006
2008
2010
2002
2008
2008
2008
2008
2008
2004
2003
2002
2003
174,470
510,533
188,885
378,621
200,126
86,909
67,468
193,749
96,671
167,117
69,212
6,243
86,060
170,406
67,287
129,785
134,839
467,690
164,682
119,670
127,779
430,414
235,565
143,252
63,413
138,998
69,047
219,892
188,962
87,730
117,102
128,478
228,293
151,736
34,832
271,522
36,218
34,518
372,724
81,692
69,820
326,669
170,698
113,668
472,027
172,593
111,763
178,305
137,818
71,985
276,574
69,857
71,423
105,965
55,434
17,032
87,279
213,069
93.2 ALBERTSONS *
95.5 TARGET
92.5 MACY’S
92.0 KMART
51,696 OFFICE DEPOT
101,495 WALMART
40,000 BEST BUY
103,950 SAFEWAY
96.0 H MART
81.5 ROSS DRESS FOR
55,069 JO-ANN FABRICS
27,200
LESS
88.5 RITE AID
97.8 SAFEWAY
86.5 SAFEWAY
68.2 ALBERTSONS
100.0 BARNES & NOBLE
100.0
93.9 SAFEWAY
100.0 SAFEWAY
83.8 ROSS DRESS FOR
LESS
84.4 BED BATH &
BEYOND
98.9 TJ MAXX
89.7 MACY’S
23,380
61,000 SPORTS AUTHORITY
55,275
54,736 ROSS DRESS FOR LESS
20,779 PETCO
39,556 BARTELL DRUGS
55,003 JO-ANN FABRICS
29,020
23,070 RITE AID
76,207 NORDSTROM RACK
30,000 BED BATH & BEYOND
67,070 GOODWILL
INDUSTRIES
43,506 BARNES & NOBLE
21,875
41,258
28,000
35,735
24,987
45,364 BARTELL DRUGS
17,622
21,287
16,459 TRADER JOE’S
13,327
29,903 RITE AID
36,692 ROSS DRESS FOR LESS
25,000 RITE AID
25,160 DESTINY CITY CHURCH
48,670 BEST BUY
23,228 OFFICE DEPOT
45,884 SPORTS AUTHORITY
208,888
100.0 WALMART
144,298 STAPLES
15,642
290,808
100.0 SEARS WHOLE
HOME
46,043 BED BATH & BEYOND
37,809 LONDON DRUGS
305,865
99.6 WINNERS
34,740 SPORT CHEK
100.0 TARGET (ZELLERS)
100.0 WINNERS
98.6 BEST BUY
100.0 THE BRICK
100.0 T&T SUPERMARKET
(LOBLAWS)
91.8 SOBEYS *
100.0 MICHAELS
98.3 WALMART
124,216
34,227 HOMESENSE
36,726 HOMESENSE
45,803 HOME OUTFITTERS
47,496 LONDON DRUGS
34,606
24,180 WINNERS
60,346 SAFEWAY
89.5 SAVE-ON-FOODS
31,420 DOLLAR TREE
100.0 TARGET
115,407 WINNERS HOMESENSE
55,724 GOODLIFE FITNESS
59,648
26,422 SUPER VALU
45,500 JYSK
33,265 BUSINESS DEPOT
(STAPLES)
28,600 DOLLAR TREE
26,792 PETSMART
40,539 LONDON DRUGS
36,115 BED, BATH & BEYOND
23,505 JYSK LINEN
29,586
13,164
51,982 PETSMART
26,034 STAPLES
23,420 CHEVRON
18,500
96.2 SAFEWAY
97.5 SAVE-ON-FOODS
94.2 LONDON DRUGS
100.0 WINNERS
HOMESENSE
97.2 WINNERS
100.0 SEARS
90.5
93.1 SAVE ON FOODS
100.0
100.0 BUY-LOW FOODS
90.0 THE BAY
100.0 SAVE ON FOODS
96.5 BRICK WAREHOUSE
99.6 HOME DEPOT
92.6 SAFEWAY
97.7 SAFEWAY
97.3 TARGET
48.8 NO FRILLS
96.9 SAVE-ON-FOODS
95.3 SOBEYS
100.0 WALMART
34,175 MICHAELS
34,983 HOMESENSE
23,754 FUTURE SHOP
24,986 CHAPTERS
60,679 FAMOUS PLAYERS
57,802 LONDON DRUGS
22,834
111,500 SAVE ON FOODS
39,068 SHOPPERS DRUG MART
29,808
103,879 CINEPLEX ODEON
52,174 LONDON DRUGS
55,169 NEW HOLLYWOOD
THEATRE
120,684 SAFEWAY
41,409
38,874 SHOPPERS DRUG MART
44,602 LONDON DRUGS
15,898
52,000 WINNERS
27,894
11,806
55,720 FAMOUS PLAYERS
16,679 HOME HARDWARE
75,694 SHOPPERS DRUG MART
16,334 DOLLARAMA
132,192
12,593
23,470
23,293
22,880
40,000
25,250
25,914
10,913
16,602
32,787
24,989
15,728
22,583
24,688
16,964
23,559
23,782
31,743
32,428
30,927
55,568
10,035
12,818
366,171
96.0 SPORT CHEK
40,152 BED BATH & BEYOND
30,605 LABELS
29,913
96.9 METRO
79.3 SEARS
45,485
88,898 GALAXY
20,000 SHOPPERS DRUG
18,040
97.6 FRESH CO.
100.0 FOOD BASICS
99.0 TARGET
100.0 PRICE CHOPPER *
100.0 PHARMAPRIX *
100.0 TALIZE
98.5 CANADIAN TIRE
28,848
36,484 DOLLAR TREE
95,978
29,950 HAWKESBURY HOSPITAL
OFFICES
17,032
31,388 SHOPPERS DRUG MART
60,872 METRO
118,637
100.0 WINNERS
27,308 STAPLES
267,865
100.0 WALMART
67,604 METRO
160,225
100.0 BED BATH &
28,015 MICHAELS
BEYOND
144
MART
10,500
13,000 BINGO HALL
18,163 FIT FOR LESS
53,768 SHOPPERS DRUG
MART
20,038 SHOPPERS DRUG
MART
49,112 SHOPPERS DRUG
MART
21,563 PETSMART
12,000
12,443
13,989
16,339
23,514
15,293
YEAR
DEVELOPED
OR
ACQUIRED
2002
LEASABLE
AREA
(SQ.FT.)
PERCENT
LEASED
(1)
TENANT NAME
281,057
88.6 WALMART
PORTFOLIO
UJV
MAJOR LEASES
GLA
116,649 METRO
TENANT NAME
LOCATION
OTTAWA
OTTAWA
OTTAWA
OTTAWA
OTTAWA
OTTAWA
SUDBURY
SUDBURY
TORONTO
TORONTO
TORONTO
TORONTO
WHITBY
WHITBY
PRINCE EDWARD ISLAND
CHARLOTTETOWN
QUEBEC
BOISBRIAND
CHATEAUGUAY
GATINEAU
GREENFIELD PARK
LAVAL
LONGUEUIL
CHILE
VINA DEL MAR
MEXICO TAMAULIPAS
MATAMOROS
MATAMOROS
REYNOSA
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
UJV
2008
2002
2002
2004
2012
2002
2004
2002
2002
2002
2002
2002
2002
2002
2006
2002
2008
2002
2008
2002
2008
2007
2007
2007
127,270
135,242
88,767
82,872
100.0 METRO
100.0 TARGET
100.0 WINNERS
100.0 FOOD BASICS
109,459
95.5 YOUR
40,265 BEST BUY
105,078 METRO
29,609 STAPLES
35,134 MARK’S WORK
WEARHOUSE
49,018 PHARMA PLUS
INDEPENDENT
GROCER
99.0 SEARS
100.0 FAMOUS PLAYERS
96.0 CANADIAN TIRE
100.0 TARGET
95.8 WINNERS
100.0 CANADIAN TIRE
98.9 SEARS WHOLE
HOME
99.0 FRESH CO.
250,208
152,175
363,841
326,519
171,162
133,035
391,292
158,688
43,000 WINNERS
58,099 STAPLES
114,577 NO FRILLS
134,845 METRO
31,896 DOT FURNITURE
94,607 PETSMART
60,444 HOME OUTFITTERS
GLA
TENANT NAME
42,108 CANADIAN NTL
INSTITUTE OF HEALTH
37,076 HOMESENSE
24,670
14,633 DOLLARAMA
11,439
10,648
32,447 HOMESENSE
27,391 CHAPTERS
51,965 I.C.U. THEATERS
53,008 LA FITNESS
13,984 SEARS APPLIANCE &
MATTRESS *
23,767
42,632 WINNERS
GLA
14,824
28,604
10,558
23,665
24,532
16,774
27,240
11,589
35,094
33,441 VALUE VILLAGE
26,685 SHOPPERS DRUG MART
23,780
388,587
99.4 TARGET
107,806 WEST ROYALTY FITNESS
60,157 LOBLAWS
736,321
209,793
286,507
364,467
116,147
220,692
97.0 TARGET
85.9 SUPER C
100.0 WALMART
100.0 CINEMA GUZZO
100.0 TARGET
92.1 CINEMA GUZZO
114,753 THE BRICK
48,198 LES AILES DE LA MODE
125,719 CANADIAN TIRE
91,000 LE GRANDE MARCHE
116,147
47,732 IGA
45,860 TOYS R US
20,378 DOLLARAMA
88,640 SUPER C
64,670 MAXI
31,848 VALUE VILLAGE
35,513
41,352
10,679
52,300
44,732
23,747
264,846
95.2 SODIMAC
132,656 LIDER
81,688
153,774
10,835
9,684
99.1 CINEPOLIS
69.5
100.0
40,296 SORIANA
39,554 OFFICE DEPOT
18,141
TOTAL 754 SHOPPING CENTER PROPERTY
INTERESTS (4)
109,500,122
Tenants are Dark & Paying
*
(1) Percent leased information as of December 31, 2014.
(2) Denotes ground-up development project. This includes properties that are currently under construction and completed projects awaiting stabilization. The square footage shown represents the
completed leasable area and future development.
(3) Denotes operating property not yet in occupancy.
(4) Does not include 533 properties, primarily through the Company’s preferred equity investments, other real estate investments and non-retail properties, totaling approximately 11.7 million square feet
of GLA.
(5) Denotes projects which exclude GLA of units being held for redevelopment
BIG-Denotes property interest in BIG Shopping Centers.
BLS-Denotes property interest in Blackstone Portfolio.
CPP-Denotes property interest in Canada Pension Plan.
KIR-Denotes property interest in Kimco Income REIT.
OIP-Denotes property interest in Other Institutional Programs.
OJV-Denotes property interest in Other US Joint Ventures.
PRU-Denotes property interest in Prudential Investment Program.
SEB-Denotes property interest in SEB Immobilien.
UJV-Denotes property interest in Unconsolidated Joint Venture.
145
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Kimco Realty Corporation and Subsidiaries
Shareholder Information
Counsel
Latham & Watkins LLP
New York, NY
Auditors
PricewaterhouseCoopers LLP
New York, NY
Registrar and Transfer Agent
Wells Fargo Bank, N.A.
Shareowner Services
P.O. Box 64874
St. Paul, MN 55164-0854
1-866-557-8695
Website: www.shareowneronline.com
Stock Listings
NYSE—Symbols
KIM, KIMprH, KIMprI
KIMprJ, KIMprK
On May 9, 2014, the Company’s Chief
(cid:39)(cid:90)(cid:71)(cid:69)(cid:87)(cid:86)(cid:75)(cid:88)(cid:71)(cid:2)(cid:49)(cid:72)(cid:386)(cid:69)(cid:71)(cid:84)(cid:2)(cid:85)(cid:87)(cid:68)(cid:79)(cid:75)(cid:86)(cid:86)(cid:71)(cid:70)(cid:2)(cid:86)(cid:81)(cid:2)(cid:86)(cid:74)(cid:71)(cid:2)(cid:48)(cid:71)(cid:89)(cid:2)
(cid:59)(cid:81)(cid:84)(cid:77)(cid:2)(cid:53)(cid:86)(cid:81)(cid:69)(cid:77)(cid:2)(cid:39)(cid:90)(cid:69)(cid:74)(cid:67)(cid:80)(cid:73)(cid:71)(cid:2)(cid:86)(cid:74)(cid:71)(cid:2)(cid:67)(cid:80)(cid:80)(cid:87)(cid:67)(cid:78)(cid:2)(cid:69)(cid:71)(cid:84)(cid:86)(cid:75)(cid:386)(cid:69)(cid:67)-
tion required by Section 303A.12(a) of the
NYSE Company Manual. In addition, the
(cid:37)(cid:81)(cid:79)(cid:82)(cid:67)(cid:80)(cid:91)(cid:2)(cid:74)(cid:67)(cid:85)(cid:2)(cid:386)(cid:78)(cid:71)(cid:70)(cid:2)(cid:89)(cid:75)(cid:86)(cid:74)(cid:2)(cid:86)(cid:74)(cid:71)(cid:2)(cid:53)(cid:71)(cid:69)(cid:87)(cid:84)(cid:75)(cid:86)(cid:75)(cid:71)(cid:85)(cid:2)
and Exchange Commission as exhibits
(cid:86)(cid:81)(cid:2)(cid:75)(cid:86)(cid:85)(cid:2)(cid:40)(cid:81)(cid:84)(cid:79)(cid:2)(cid:19)(cid:18)(cid:15)(cid:45)(cid:2)(cid:72)(cid:81)(cid:84)(cid:2)(cid:86)(cid:74)(cid:71)(cid:2)(cid:386)(cid:85)(cid:69)(cid:67)(cid:78)(cid:2)(cid:91)(cid:71)(cid:67)(cid:84)(cid:2)(cid:71)(cid:80)(cid:70)(cid:71)(cid:70)(cid:2)
(cid:38)(cid:71)(cid:69)(cid:71)(cid:79)(cid:68)(cid:71)(cid:84)(cid:2)(cid:21)(cid:19)(cid:14)(cid:2)(cid:20)(cid:18)(cid:19)(cid:22)(cid:14)(cid:2)(cid:86)(cid:74)(cid:71)(cid:2)(cid:69)(cid:71)(cid:84)(cid:86)(cid:75)(cid:386)(cid:69)(cid:67)(cid:86)(cid:75)(cid:81)(cid:80)(cid:85)(cid:14)(cid:2)
required pursuant to Section 302 of the
Sarbanes-Oxley Act, of its Chief Executive
(cid:49)(cid:72)(cid:386)(cid:69)(cid:71)(cid:84)(cid:2)(cid:67)(cid:80)(cid:70)(cid:2)(cid:37)(cid:74)(cid:75)(cid:71)(cid:72)(cid:2)(cid:40)(cid:75)(cid:80)(cid:67)(cid:80)(cid:69)(cid:75)(cid:67)(cid:78)(cid:2)(cid:49)(cid:72)(cid:386)(cid:69)(cid:71)(cid:84)(cid:2)(cid:84)(cid:71)(cid:78)(cid:67)(cid:86)(cid:75)(cid:80)(cid:73)(cid:2)
to the quality of its public disclosure.
Investor Relations
A copy of the Company’s Annual Report
to the U.S. Securities and Exchange
Commission on Form 10-K may be
obtained at no cost to stockholders by
writing to:
David F. Bujnicki
Vice President, Investor Relations &
Corporate Communications
Kimco Realty Corporation
3333 New Hyde Park Road
New Hyde Park, NY 11042
1-866-831-4297
E-mail: ir@kimcorealty.com
Annual Report to Stockholders
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with the Securities and Exchange
Commission (SEC) is included in our mail-
ing to stockholders and together with
this 2014 Annual Report forms our annual
report to stockholders within the meaning
of SEC rules.
Dividend Reinvestment and
Common Stock Purchase Plan
The Company’s Dividend Reinvestment
and Common Stock Purchase Plan pro-
vides common and preferred stockhold-
ers with an opportunity to conveniently
and economically acquire Kimco common
stock. Stockholders may have their divi-
dends automatically directed to our trans-
fer agent to purchase common shares
without paying any brokerage commis-
sions. Requests for booklets describing
the Plan, enrollment forms and any cor-
respondence or questions regarding the
Plan should be directed to:
Wells Fargo Bank, N.A.
Shareowner Services
P.O. Box 64874
St. Paul, MN 55164-0854
1-866-557-8695
Holders of Record
Holders of record of the Company’s
common stock, par value $.01 per share,
totaled 2,50 as of March 16, 2015.
3
Annual Meeting of Stockholders
Stockholders of Kimco Realty Corporation
are cordially invited to attend the Annual
Meeting of Stockholders scheduled to be
held at 10:00
Grand Hyatt New York
109 E 42nd Street
New York, NY 10017.
on May 5, 2015, at
AM
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3333 New Hyde Park Road
New Hyde Park, NY 11042
516-869-9000
www.kimcorealty.com
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Mesa, AZ
480-461-0050
Daly City, CA
650-301-3000
Carmichael, CA
916-791-0600
Irvine, CA
949-252-3880
Los Angeles, CA
310-284-6000
Vista, CA
760-727-1002
Aurora, CO
720-870-1210
Wilton, CT
203-761-8951
Hollywood, FL
954-923-8444
Orlando, FL
407-302-4400
Tampa, FL
727-536-3287
Rosemont, IL
847-299-1160
Newton, MA
617-933-2820
Timonium, MD
410-684-2000
Charlotte, NC
704-367-0131
Raleigh, NC
919-791-3650
Las Vegas, NV
702-258-4330
New York, NY
212-972-7456
Portland, OR
503-574-3329
Ardmore, PA
610-896-7560
Dallas, TX
214-720-0559
Houston, TX
832-242-6913
San Antonio, TX
210-566-7610
Arlington, VA
703-415-7612
Woodbridge, VA
703-583-0071
Bellevue, WA
425-373-3500
Canada
Toronto, Ontario
416-593-6358
Corporate Directory
Board of Directors
Milton Cooper
Executive Chairman
Kimco Realty Corporation
Philip E. Coviello (1(cid:89))(2)(3)
Partner *
Latham & Watkins LLP
Richard G. Dooley (1)(2)(3(cid:89))
Lead Independent Director
Executive Vice President
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Massachusetts Mutual Life
Insurance Company
Joe Grills (1)(2(cid:89))(3)
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IBM Retirement Fund
David B. Henry
Vice Chairman & Chief
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Kimco Realty Corporation
Frank Lourenso (1)(2)(3)
Executive Vice President *
JPMorgan Chase & Co.
Colombe M. Nicholas (2)(3)
Consultant
Financo Global Consulting
Richard Saltzman (2)(3)
President
Colony Capital LLC
* Retired
(1) Audit Committee
(2) Executive Compensation
Committee
(3) Nominating and Corporate
Governance Committee
(cid:89) Chairman
Executive Management
Corporate Management
Milton Cooper
Executive Chairman
David B. Henry
Vice Chairman &
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Conor C. Flynn
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Glenn G. Cohen
Executive Vice President,
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U.S. Regional Management
Robert Nadler
President,
Central Region
Paul D. Puma
President,
Southeast Region
Wilbur “Tom” Simmons III
President,
Mid-Atlantic Region
Armand Vasquez
President,
Western Region
Josh Weinkranz
President,
Northeast Region
International Management
Kelly Smith
Managing Director,
Canada
James J. Bruin
Vice President,
Portfolio Management
David F. Bujnicki
Vice President,
Investor Relations &
Corporate Communications
Ross Cooper
Senior Vice President,
Investments
Raymond Edwards
Vice President,
Retail Services
David Jamieson
Senior Vice President,
Asset Management
Leah Landro
Vice President,
Human Resources
Scott G. Onufrey
Senior Vice President,
Investment Management
Bruce Rubenstein
Senior Vice President,
General Counsel &
Secretary
Thomas Taddeo
Vice President,
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Paul Westbrook
Vice President,
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3333 New Hyde Park Road
New Hyde Park, NY 11042
Tel: 516-869-9000
kimcorealty.com / blog.kimcorealty.com