Kite Realty Group Trust Reports Fourth Quarter and Full Year 2008 Results

Business Wire, Feb 18, 2009

- Declared First Quarter Distribution of $0.1525 Per Common Share -

INDIANAPOLIS -- Kite Realty Group Trust (NYSE: KRG):

Highlights

* Funds From Operations (FFO) was $0.24 per diluted share for the fourth quarter of 2008 and $1.17 per diluted share for the full year

* Excluding the effects of assets written off in connection with the announced liquidation of Circuit City, diluted FFO per share would have been $0.27 for the fourth quarter and $1.20 for the full year

* Cash on hand and availability under current borrowing facilities totaled approximately $90 million at December 31, 2008

* Extended or refinanced approximately $131 million of 2008 and 2009 maturities in the fourth quarter

* Completed a common equity offering, using net proceeds of approximately $48 million to pay down the Company's revolving line of credit

* Disposed of Silver Glen Crossing and Spring Mill Medical properties and used the majority of the Company's share of the $23.6 million net proceeds to pay down the revolving line of credit

* In December 2008, executed a 22,400 square foot lease with Sprouts Farmers Market at Plaza at Cedar Hill in Dallas, Texas

Kite Realty Group Trust (NYSE: KRG) (the "Company") today announced results for its fourth quarter and year ended December 31, 2008. Financial statements and exhibits attached to this release include results for the three and twelve months ended December 31, 2008 and December 31, 2007.

Financial and Operating Results

For the three months ended December 31, 2008, funds from operations (FFO), a widely accepted supplemental measure of REIT performance established by the National Association of Real Estate Investment Trusts, was $10.0 million, or $0.24 per diluted share, which reflects the increased common shares issued in the October equity offering, for the Kite Portfolio compared to $12.7 million, or $0.34 per diluted share, for the Kite Portfolio for the same period in the prior year. The fourth quarter of 2008 reflects the one-time write-off of assets associated with three locations occupied by Circuit City which announced in January 2009 that it is liquidating its operations. Excluding this write off, FFO for the Kite Portfolio was $11.2 million or $0.27 per diluted share. The Company's allocable share of FFO was $8.1 million for the three months ended December 31, 2008 compared with the Company's allocable share of $9.9 million for the same period in 2007.

For the twelve months ended December 31, 2008, FFO for the Kite Portfolio was $45.1 million or $1.17 per diluted share, which reflects the increased common shares issued in the October equity offering, compared to $47.2 million, or $1.26 per diluted share for the prior year. Excluding the Circuit City write off, FFO for the Kite Portfolio for the full year of 2008 was $46.3 million or $1.20 per diluted share. The Company's allocable share of FFO was $35.4 million for the year ended December 31, 2008 compared to $36.7 million for 2007.

Given the nature of the Company's business as a real estate owner and operator, the Company believes that FFO is helpful to investors when measuring operating performance because it excludes various items included in net income that do not relate to or are not indicative of operating performance, such as gains or losses from sales of operating properties and depreciation and amortization, which can make periodic and peer analyses of operating performance more difficult. A reconciliation of net income to FFO is included in the attached table.

The Company's total revenue for the fourth quarter of 2008 increased 5.7% to $41.8 million from $39.6 million for the same period in 2007. The Company's net loss was $2.0 million for the fourth quarter of 2008 and includes a net loss from the sale of operating properties and the write off of assets in connection with the Circuit City liquidation totaling approximately $4.4 million. The reported net loss of $2.0 million compares to net income of $5.2 million in the fourth quarter of 2007, which included a $1.6 million gain on the sale of a retail operating property.

The Company's total revenue for the twelve months ended December 31, 2008 increased 2.8% to $142.7 million from $138.8 million during 2007. The Company's net income was $6.1 million for the twelve months ended December 31, 2008 and includes the net loss from the sale of operating properties and the write off of assets in connection with the Circuit City liquidation totaling approximately $4.4 million. The reported net income of $6.1 million compares to net income of $13.5 million for the twelve months ended December 31, 2007 which included the $1.6 million gain on the sale of the retail operating property.

John A. Kite, Kite Realty Group's Chairman and Chief Executive Officer said, "Given the tremendous dislocation in the credit and capital markets, our primary objective has been the strengthening of our balance sheet, managing our debt maturities and conserving cash. We closed 2008 by executing on our plan to strengthen our capital structure, ending the year with approximately $90 million of cash and borrowing capacity. We will remain focused on 2009 and 2010 refinancings and will continue to aggressively manage our operating portfolio."