<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1998
OR
/ / 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 13-2744380
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
3333 New Hyde Park Road, New Hyde Park, NY 11042
(Address of principal executive offices - Zip Code)
(516) 869-9000
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report)
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 /X/ No / /
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date.
42,710,526 shares outstanding as of April 30, 1998.
1 of 13
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Financial Statements -
Condensed Consolidated Balance Sheets as of
March 31, 1998 and December 31, 1997.
Condensed Consolidated Statements of Income for the Three
Months Ended March 31, 1998 and 1997.
Condensed Consolidated Statements of Cash Flows for the
Three Months Ended March 31, 1998 and 1997.
Notes to Condensed Consolidated Financial Statements.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion should be read in conjunction with the accompanying
Condensed Consolidated Financial Statements and Notes thereto. These unaudited
financial statements include all adjustments which are, in the opinion of
management, necessary to reflect a fair statement of the results for the interim
periods presented, and all such adjustments are of a normal recurring nature.
Results of Operations
Revenues from rental property increased $17.9 million or 39.6% to $63.1 million
for the three months ended March 31, 1998, as compared with $45.2 million for
the corresponding quarter ended March 31, 1997. This increase resulted primarily
from the combined effect of (i) property acquisitions during the three-month
period ended March 31, 1998 (11 shopping center properties and 3 retail
properties) providing revenues of $2.1 million (ii) acquisitions throughout
calendar year 1997 (14 shopping center properties and 49 retail properties)
providing incremental revenues of $13.8 million as compared to the corresponding
quarter and (iii) new leasing, property redevelopments and re-tenanting within
the portfolio at improved rental rates.
Rental property expenses, including depreciation and amortization, increased
$13.6 million or 54.6% to $38.5 million for the three months ended March 31,
1998, as compared with $24.9 million for the corresponding quarter ended March
31, 1997. Rent, real estate taxes and depreciation and amortization charges
contributed significantly to this net increase in rental property expenses
(increasing $2.3 million, $3.5 million, and $2.0 million, respectively, for the
three months ended March 31, 1998, as compared to the corresponding quarter in
the preceding year) primarily due to the 1998 property acquisitions and the
property acquisitions throughout 1997. Interest expense increased $4.7 million
between the respective periods reflecting higher average outstanding borrowings
during the three months ended March 31, 1998 (resulting from the issuance of an
aggregate $100 million unsecured medium-term notes during May and July 1997, the
assumption of approximately $94.1 million of mortgage debt during 1997 and the
quarter ended March 31, 1998, and increased borrowings under the Company's
unsecured revolving credit facilities during the quarter ended March 31, 1998)
as compared to the corresponding period in 1997.
During January 1998, the Company disposed of a property in Pinellas Park, FL.
Cash proceeds from the disposition totaling $2.3 million, together with an
additional $7.1 million cash investment, were used to acquire an exchange
shopping center property located in Cranston, RI during March 1998.
Net income for the three months ended March 31, 1998 and 1997 was $25.5 million
and $20.6 million, respectively. After adjusting for the gain on the sale of a
shopping center property during the quarter ended March 31, 1998, net income
increased by $4.0 million, or $.06 per share, as compared to the quarter ended
March 31, 1997. This substantially improved performance was primarily
attributable to property acquisitions, property redevelopments and increased
leasing activity which strengthened operating profitability.
2
<PAGE>
Liquidity and Capital Resources
Since the Company's initial public stock offering in November 1991, the Company
has completed additional offerings of its public unsecured debt and equity
raising in the aggregate over $1.2 billion for the purposes of acquiring
interests in neighborhood and community shopping center properties, repaying
indebtedness and for expanding and improving properties in the portfolio.
Management believes the public debt and equity markets will continue to be the
Company's principal source of capital for the future. A $100 million, unsecured
revolving credit facility established in June 1994, which is scheduled to expire
in June 2000, and an additional $150 million interim unsecured revolving credit
facility established in March 1998, scheduled to expire in June 1998, have made
available funds to both finance property acquisitions and meet any short-term
working capital requirements. It is the Company's intention to extend the term
of the $150 million interim revolving credit facility and establish it as a
continuing part of the Company's total unsecured revolving credit availability.
As of March 31, 1998, the Company had approximately $143 million available under
the revolving credit facilities. The Company has also implemented a $150 million
medium-term notes program pursuant to which it 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 and redevelopment costs and (ii) better managing the Company's debt
maturities.
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 which
are expected to increase due to property acquisitions and growth in rental
revenues in the existing portfolio and from other sources. 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, repayment of debt, the acquisition of
interests in new properties as suitable opportunities arise and such other
factors as the Board of Directors considers appropriate.
It is management's intention that the Company continually have access to the
capital resources necessary to expand and develop its business. Accordingly, the
Company may seek to obtain funds through additional equity offerings or debt
financings in a manner consistent with its intention to operate with a
conservative debt capitalization policy.
The Company anticipates that cash flows from operations will continue to provide
adequate capital to fund its operating and administrative expenses, regular debt
service obligations and all dividend payments in accordance with REIT
requirements in both the short-term and long-term. In addition, the Company
anticipates that cash on hand, availability under its revolving credit
facilities, issuance of equity and public debt, as well as other debt and equity
alternatives, will provide the necessary capital required by the Company. Cash
flows from operations increased to $35.0 million for the quarter ended March 31,
1998 as compared to $29.9 million for the corresponding quarter ended March 31,
1997.
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 include increases 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 will, from time to time, enter into interest rate protection
agreements which mitigate, but do not eliminate, the effect of changes in
interest rates on its floating-rate loans.
3
<PAGE>
Forward-looking Statements
This quarterly report on Form 10-Q includes certain forward-looking statements
reflecting the Company's and management's intentions and expectations, however,
many factors which may affect the actual results are difficult to predict.
Factors that may cause actual results to differ materially from current
expectations include general economic conditions, local real estate conditions,
increases in interest rates and increases in operating costs. Accordingly, there
is no assurance that the Company's expectations will be realized.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not applicable.
4
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
------------------ -----------------
<S> <C> <C>
Assets:
Real estate, net of accumulated depreciation
of $215,612,563 and $207,408,091, respectively $ 1,311,322,749 $ 1,196,788,068
Investment in retail store leases 15,539,477 15,938,041
Cash and cash equivalents 34,377,395 30,978,178
Accounts and notes receivable 18,304,186 16,203,454
Other assets 91,573,797 83,982,383
------------------ -----------------
$ 1,471,117,604 $ 1,343,890,124
================== =================
Liabilities:
Notes payable $510,250,000 $410,250,000
Mortgages payable 141,192,853 121,363,908
Other liabilities, including minority interests
in partnerships 74,341,707 68,957,005
------------------ -----------------
725,784,560 600,570,913
------------------ -----------------
Stockholders' Equity:
Preferred stock, $1.00 par value, authorized 5,000,000
shares
Class A Preferred Stock, $1.00 par value, authorized
345,000 shares
Issued and outstanding 300,000 shares 300,000 300,000
Aggregate liquidation preference $75,000,000
Class B Preferred Stock, $1.00 par value, authorized
230,000 shares
Issued and outstanding 200,000 shares 200,000 200,000
Aggregate liquidation preference $50,000,000
Class C Preferred Stock, $1.00 par value, authorized
460,000 shares
Issued and outstanding 400,000 shares 400,000 400,000
Aggregate liquidation preference $100,000,000
Common stock, $.01 par value, authorized 100,000,000
shares
Issued and outstanding 40,419,440 and 40,394,805 404,194 403,948
shares, respectively
Paid-in capital 858,197,672 857,658,054
Cumulative distributions in excess of net income (114,168,822) (115,642,791)
------------------ -----------------
745,333,044 743,319,211
------------------ -----------------
$1,471,117,604 $1,343,890,124
================== =================
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
5
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Three Months ended March 31, 1998 and 1997
---------------------------------
<TABLE>
<CAPTION>
1998 1997
----------------- -----------------
<S> <C> <C>
Revenues from rental property $ 63,111,632 $ 45,195,317
----------------- -----------------
Rental property expenses:
Rent 2,752,135 427,948
Real estate taxes 8,876,999 5,394,520
Interest 11,039,207 6,295,604
Operating and maintenance 6,936,109 5,886,499
Depreciation and amortization 8,899,764 6,899,248
----------------- -----------------
38,504,214 24,903,819
----------------- -----------------
Income from rental property 24,607,418 20,291,498
Income from investment in retail store leases 916,171 915,939
----------------- -----------------
25,523,589 21,207,437
Management fee income 801,708 788,351
General and administrative expenses (3,180,653) (2,754,691)
Other income, net 1,437,863 1,363,176
----------------- -----------------
Income before gain on sale of shopping center property 24,582,507 20,604,273
Gain on sale of shopping center property 901,249 -
----------------- -----------------
Net Income $ 25,483,756 $ 20,604,273
================= =================
Net income applicable to common shares $ 20,874,331 $ 15,994,848
================= =================
Net income per common share
Basic $0.52 $0.44
===== =====
Diluted $0.51 $0.44
===== =====
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
6
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months ended March 31, 1998 and 1997
-----------------------------------
<TABLE>
<CAPTION>
1998 1997
---------------- ---------------
<S> <C> <C>
Cash flow provided by operations $ 35,036,248 $ 29,939,986
---------------- ---------------
Cash flow from investing activities:
Acquisition of and improvements to real estate (103,530,002) (15,217,792)
Investment in marketable securities (4,183,159) (976,197)
Investment in mortgage loans receivable (1,980,760) -
Repayment of mortgage loans receivable 1,456,200 -
Construction advance to real estate joint ventures (1,268,901) -
Proceeds from disposition of shopping center property 2,300,000 -
---------------- ---------------
Net cash flow used for investing activities (107,206,622) (16,193,989)
---------------- ---------------
Cash flow from financing activities:
Principal payments on debt, excluding
normal amortization of rental
property debt - (4,650,000)
Principal payments on rental property
debt (971,342) (311,097)
Increase in notes payable 100,000,000 -
Dividends paid (23,998,931) (20,173,944)
Proceeds from issuance of stock 539,864 450,400
---------------- ---------------
Net cash flow provided (used for) by financing activities 75,569,591 (24,684,641)
---------------- ---------------
Change in cash and cash equivalents 3,399,217 (10,938,644)
Cash and cash equivalents, beginning of period 30,978,178 37,425,206
---------------- ---------------
Cash and cash equivalents, end of period $ 34,377,395 $ 26,486,562
================ ===============
Interest paid during the period $ 6,390,697 $ 3,641,774
================ ===============
Supplemental schedule of noncash investing/financing activity:
Acquisition of real estate interests by assumption of mortgage debt $ 20,800,287 $ -
================ ===============
Declaration of dividends paid in succeeding period $ 22,556,662 $ 18,736,226
================ ===============
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
7
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
----------------
1. Interim Financial Statements
The accompanying Condensed Consolidated Financial Statements include
the accounts of Kimco Realty Corporation (the "Company"), its subsidiaries, all
of which are wholly-owned, and all majority-owned partnerships. The information
furnished is unaudited and reflects all adjustments which are, in the opinion of
management, necessary to reflect a fair statement of the results for the interim
periods presented, and all such adjustments are of a normal recurring nature.
These Condensed Consolidated Financial Statements should be read in conjunction
with the financial statements included in the Company's Annual Report on Form
10-K.
2. Property Acquisitions
During the three months ended March 31, 1998, the Company acquired
interests in 11 shopping center properties comprising approximately 1.2 million
square feet of leasable area located in Colorado, Florida, Rhode Island, Texas
and Arizona through separate transactions for an aggregate purchase price of
approximately $88.4 million, including the assumption of $20.8 million of
mortgage debt.
3. Retail Properties Acquisition
During January 1998, the Company, through an affiliated entity,
acquired interests in three retail properties in the Chicago, IL market
comprising approximately 516,000 square feet of leasable area for an aggregate
purchase price of approximately $23.7 million. These properties include
approximately 70,000 square feet of showroom space and adjoining warehouses of
approximately 100,000 square feet at each location. Simultaneous with this
transaction, the Company leased, to a national furniture retailer, the showroom
portion of each property under individual long-term leases. The Company is
currently planning the redevelopment of the warehouse portion of each property.
4. Investment in Retail Store Leases
Income from the investment in retail store leases for the three months
ended March 31, 1998 and 1997 represents sublease revenues of approximately $5.0
million and $5.4 million, respectively, less related expenses of $3.7 million
and $4.0 million, respectively, and amounts, which in management's estimation,
reasonably provide for the recovery of the investment over a period representing
the expected remaining term of the retail store leases.
5. Property Disposition
During January 1998, the Company disposed of a shopping center property
in Pinellas Park, FL. Cash proceeds from the disposition totaling $2.3 million,
together with an additional $7.1 million cash investment, were used to acquire
an exchange shopping center property located in Cranston, RI during March 1998.
8
<PAGE>
6. Price REIT Merger
On January 13, 1998, the Company, REIT Sub, Inc., a Maryland
corporation and a wholly owned subsidiary of the Company ("Merger Sub"), and The
Price REIT, Inc., a Maryland corporation ("Price REIT"), signed a definitive
Agreement and Plan of Merger dated January 13, 1998, as amended March 5, 1998
(the "Merger Agreement"). Pursuant to the terms of the Merger Agreement, Price
REIT will be merged into Merger Sub. The merger is intended, for financial
accounting purposes, to be accounted for using the purchase method of
accounting.
Price REIT is a self-administered and self-managed equity REIT that is
primarily focused on the acquisition, development, management and redevelopment
of destination retail shopping center properties known as "power centers." As of
March 31, 1998, Price REIT owned or had interests in 40 properties, consisting
of 36 power and community centers, one stand-alone retail warehouse, one project
under development and two undeveloped land parcels, located in 16 states
containing approximately 7.6 million square feet of leasable area with
approximately 582 tenants. The overall occupancy rate of the power and community
centers was approximately 98.2% with an average base rent per leased square foot
of $10.19 at March 31, 1998.
Upon completion of the transaction contemplated by the Merger Agreement
(the "Merger"), each share of Price REIT Common Stock (as defined in the Merger
Agreement) issued and outstanding immediately prior to the Effective Time (as
defined in the Merger Agreement) will be converted into the right to receive:
(A) in the event that the sum of (i) the Kimco Average Price (as
defined below) and (ii) $10.00 (the sum being referred to herein
as the "Notional Value") is less than or equal to $45.00: one
share of Kimco Common Stock, plus a number of Kimco Class D
Depositary Shares (the "Class D Depositary Shares", each
depositary share representing a 1/10 of a share interest in a new
issue of Kimco 7.5% Class D Cumulative Preferred Stock) equal to a
fraction, the numerator of which is $45.00 less the Kimco Average
Price and the denominator of which is $25.00; provided, however,
that if the Kimco Average Price is less than $33.75, each share of
Price REIT Common Stock will be converted into the right to
receive 0.45 Class D Depositary Shares plus a number of shares of
Kimco Common Stock equal to a fraction, the numerator of which is
$33.75 and the denominator of which is the Kimco Average Price;
and
(B) if the Notional Value is greater than $45.00: one share of Kimco
Common Stock plus a number of Class D Depositary Shares equal to
0.40 minus a fraction, the numerator of which is the Notional
Value less $45.00 and the denominator of which is $50.00;
provided, however, that in no event shall the aggregate fractional
number of Class D Depositary Shares issued in respect of one share
of Price REIT Common Stock be less than 0.36. However, Price REIT
stockholders will never receive less than $9.00 in liquidation
preference of Class D Depositary Shares. Thus, as a result of the
Merger, Price REIT stockholders will obtain the benefit of 50% of
the increase in value of Kimco Common Stock as reflected in the
Kimco Average Price between $35.00 and $37.00 and 100% of any
increase above $37.00. The "Kimco Average Price" (as defined in
the Merger Agreement, is the average of the daily high and low
sales prices of Kimco Common Stock on the NYSE as reported in The
Wall Street Journal, or, if not reported thereby, by another
authoritative source, during the fifteen (15) randomly selected
trading days within the thirty (30) consecutive trading days
ending on and including the seventh trading day immediately
preceding the date of the annual meeting of the Kimco stockholders
(the "Kimco Annual Meeting"). The random selection of trading days
will be made under the joint supervision of the financial advisors
retained by the Company and Price REIT in connection with the
transactions contemplated by the Merger Agreement.
9
<PAGE>
The dividend rate on the Class D Depositary Shares will be 7.5% per
annum, or, if greater, the dividend on the shares of Kimco Common Stock into
which a Class D Depositary Share is convertible plus $0.0275 quarterly. The
Class D Depositary Shares will be convertible into Kimco Common Stock at a
conversion price of $40.25 per share at any time by the holder and may be
redeemed by the Company at the conversion price in shares of Kimco Common Stock
at any time after the third anniversary of the Merger if for any 20 trading days
during a rolling 30 day consecutive trading-day period the Kimco Common Stock
closing price exceeds $48.30, subject to certain adjustments. The Class D
Depositary Shares are expected to be listed on the NYSE.
The Merger is subject to a number of conditions, including, among
others (i) obtaining approval of the holders of a majority of the outstanding
shares of Price REIT's Common Stock and the holders of a majority of Kimco
Common Stock votes cast at the Kimco Annual Meeting, so long as the total votes
cast at the Kimco Annual Meeting represents over 50% in interest of all Kimco
Common Stock entitled to vote, (ii) the absence of any material adverse change
in the financial condition, business or operations of the other party (other
than any such change that affects both parties in a substantially similar
manner), (iii) the absence of any injunction prohibiting consummation of the
Merger, (iv) the receipt of certain legal opinions with respect to the tax
consequences of the Merger, (v) the receipt of certain legal opinions with
respect to the organization and operation in conformity with the requirements
for qualification of the Company and Price REIT as a REIT under the Code, (vi)
obtaining all material consents, authorizations, orders and approvals of
governmental agencies and third parties, and (vii) the Registration Statement
registering the offering of the Merger Consideration (as defined in the Merger
Agreement) having become effective.
The Merger Agreement may be terminated and the Merger may be abandoned
at any time prior to the Effective Time, before or after the approval of the
Kimco Share Proposal (as defined in the Merger Agreement) and the Merger by the
stockholders of the Company and Price REIT, respectively, under the following
circumstances, among others, (a) by the mutual consent of the Company and Price
REIT; (b) by action of either the Board of Directors of the Company or Price
REIT if (i) the Merger shall not have been consummated by June 30, 1998
(provided that the terminating party shall not have breached in any material
respect its obligations under the Merger Agreement in any manner that shall have
proximately contributed to the occurrence of such failure to consummate the
Merger) or (ii) a meeting of the Company's or Price REIT's stockholders shall
have been duly convened and held and the approval by such stockholders of the
Kimco Share Proposal (as defined in the Merger Agreement) or the Merger and the
transactions contemplated thereby, respectively, shall not have been obtained at
such meeting or any adjournment thereof; (c) by action of the Board of Directors
of Price REIT, if (i) a majority of the Board of Directors of Price REIT
determines in good faith that such termination is required because a pending
Acquisition Proposal (as defined in the Merger Agreement) has been made for
Price REIT, (ii) the Company or any of its directors or officers participate in
negotiations regarding an Acquisition Proposal for the Company in breach of the
terms of the Merger Agreement, (iii) there has been a breach by the Company or
Merger Sub of any representation or warranty contained in the Merger Agreement
that would have or would be reasonably likely to have a material adverse effect
on the business, assets, results of operations or condition (financial or
otherwise) of the Company and its subsidiaries taken as a whole, which is not
curable by June 29, 1998, or (iv) there has been a material breach by the
Company of any covenant or agreement set forth in the Merger Agreement that is
not curable or, if curable, is not cured within 30 days after written notice of
such breach; or (d) by action of the Board of Directors of the Company if (i) a
majority of the Board of Directors of the Company determines in good faith that
such termination is required because a pending Acquisition Proposal (as defined
in the Merger Agreement) has been made for the Company, (ii) Price REIT or any
of its directors or officers participate in negotiations regarding an
Acquisition Proposal (as defined in the Merger Agreement) for Price REIT in
breach of the terms of the Merger Agreement, (iii) there has been a breach by
Price REIT of any representation or warranty contained in the Merger Agreement
that would have or would be reasonably likely to have a material adverse effect
on the business, assets, results of operations or condition (financial or
otherwise) of Price REIT and its subsidiaries taken as a whole, that is not
curable by June 29, 1998, (iv) there has been a material breach by Price REIT of
any convenant or agreement set forth in the Merger Agreement that is not curable
or, if curable, is not cured within 30 days after written notice of such breach,
or (v) the Kimco Average Price or the closing price of Kimco Common Stock on the
Closing Date or on either of the two immediately preceding business days is less
than $32.00.
10
<PAGE>
If the Merger does not occur, under certain circumstances, the Company
will be entitled to receive a fee of up to $12.5 million, plus, in certain
instances, expenses, from Price REIT and under other circumstances Price REIT
will be entitled to receive a fee of either $6.25 million or $12.5 million from
the Company, plus, in certain instances, expenses. In no event, however, shall
the fee received by the Company result in the Company losing its favorable tax
status as a REIT.
7. Net Income Per Common Share
The following table sets forth the basic and diluted weighted
average numbers of common shares outstanding for each period used in the
calculation of basic and diluted net income per common share:
March 31, 1998 March 31, 1997
-------------- --------------
Basic EPS - weighted average number of
common shares outstanding 40,408,841 36,229,366
Effect of dilutive securities - Stock
options 508,848 486,349
-------------- -------------
Diluted EPS - weighted average number of
common shares 40,917,689 36,715,715
-------------- -------------
8. Pro Forma Financial Information
As discussed in Notes 2 and 5, the Company and certain of its
subsidiaries acquired and disposed of interests in certain shopping center
properties during the three months ended March 31, 1998. The pro forma financial
information set forth below is based upon the Company's historical Condensed
Consolidated Statement of Income for the three months ended March 31, 1998 and
1997, adjusted to give effect to these transactions as of January 1,
1997.
The pro forma financial information is presented for
informational purposes only and may not be indicative of what actual results of
operations would have been had the transactions occurred as of January 1, 1997,
nor does it purport to represent the results of future operations. (Amounts
presented in millions, except per share figures.)
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
March 31, 1998 March 31, 1997
------------------ ------------------
<S> <C> <C>
Revenues from rental property $ 64.9 $ 48.2
Net income $ 25.4 $ 22.4
Net income per common share:
Basic $ .51 $ .49
Diluted $ .51 $ .48
</TABLE>
9. Subsequent Events
During April 1998, the Company completed the sale of an aggregate
2,259,020 shares of common stock in four separate transactions consisting of a
primary public stock offering of 460,000 shares of common stock priced at
$36.0625 per share and three private placements of 415,945 shares, 546,075
shares and 837,000 shares of common stock priced at $36.0625, $36.625 and $36.25
per share, respectively. The common stock sold in these private placements will
be deposited in separate unit investment trusts. The net cash proceeds from
these offerings totaling approximately $77.6 million (after related transaction
costs of approximately $4.4 million) will be used for general corporate
purposes, including the acquisition of interests in neighborhood and community
shopping centers as suitable opportunities arise and the expansion and
improvement of properties in the Company's portfolio. Pending such use, the
Company may (i) temporarily repay borrowings under the Company's revolving
credit facilities or (ii) invest in short-term income producing investments such
as investments in commercial paper, government securities or money market funds
that invest in government securities.
11
<PAGE>
PART II
OTHER INFORMATION
Item 1. 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, or
which is not covered by the Company's liability insurance.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
Not Applicable.
Item 6. Exhibits and Reports on Form 8-K
Exhibits -
None.
Form 8-K -
A current report on Form 8-K was filed on January 21, 1998 to
disclose the signing of a definitive agreement to merge The Price REIT, Inc.
("Price REIT") into a wholly-owned subsidiary of the Company ("Merger-Sub") and
to disclose the Agreement and Plan of Merger, dated January 13, 1998 (the
"Original Agreement") among the Company, Merger Sub and Price REIT. A current
report on Form 8-K was filed on January 30, 1998 to disclose certain historical
and pro forma financial information relating to the Company and Price REIT as if
the Merger had occurred as of January 1, 1996 and September 30, 1997. A current
report on Form 8-K was filed on March 12, 1998 to disclose that the Company,
Merger-Sub and Price REIT entered into a first Amendment, dated March 5, 1998,
to the Original Agreement.
A current report on Form 8-K was filed on January 22, 1998 and
amended on Form 8-K/A filed on April 21, 1998, to disclose certain historical
financial information for certain properties acquired during 1997 and pro forma
financial information for all shopping center acquisitions during 1997.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
KIMCO REALTY CORPORATION
May 15, 1998 /s/ Milton Cooper
- ------------ ------------------------
(Date) Milton Cooper
Chairman of the Board
May 15, 1998 /s/ Michael V. Pappagallo
- ------------ ------------------------
(Date) Michael V. Pappagallo
Chief Financial Officer
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 34,377,395
<SECURITIES> 23,099,716
<RECEIVABLES> 20,004,186
<ALLOWANCES> 1,700,000
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,526,935,312
<DEPRECIATION> 215,612,563
<TOTAL-ASSETS> 1,471,117,604
<CURRENT-LIABILITIES> 0
<BONDS> 651,442,853
0
900,000
<COMMON> 404,194
<OTHER-SE> 744,028,850
<TOTAL-LIABILITY-AND-EQUITY> 1,471,117,604
<SALES> 63,111,632
<TOTAL-REVENUES> 63,111,632
<CGS> 18,565,243
<TOTAL-COSTS> 18,565,243
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,039,207
<INCOME-PRETAX> 25,483,756
<INCOME-TAX> 0
<INCOME-CONTINUING> 25,483,756
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25,483,756
<EPS-PRIMARY> 0.52
<EPS-DILUTED> 0.51
<FN>
Financial Data Schedule information has been extracted from the Registrant's
Condensed Consolidted Balance Sheet (non-classified) as of March 31, 1998 and
the Condensed Consolidated Statement of Income for the three months then
ended.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 54,498,438
<SECURITIES> 13,401,157
<RECEIVABLES> 17,794,160
<ALLOWANCES> 1,350,000
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,057,560,887
<DEPRECIATION> 173,591,070
<TOTAL-ASSETS> 1,035,286,677
<CURRENT-LIABILITIES> 0
<BONDS> 372,517,640
0
900,000
<COMMON> 361,680
<OTHER-SE> 602,967,500
<TOTAL-LIABILITY-AND-EQUITY> 1,035,286,677
<SALES> 124,943,673
<TOTAL-REVENUES> 124,943,673
<CGS> 32,516,169
<TOTAL-COSTS> 32,516,169
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,320,905
<INCOME-PRETAX> 54,199,610
<INCOME-TAX> 0
<INCOME-CONTINUING> 54,199,610
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 54,199,610
<EPS-PRIMARY> 1.19
<EPS-DILUTED> 1.18
<FN>
This Restated Financial Data Schedule is being filed to reflect the
impact on EPS in accordance with Financial Accounting Standards No. 128
-"Earnings Per Share"
Financial Data Schedule information has been extracted from the
Registrant's Condensed Consolidated Balance Sheet (non-classified) as of
September 30, 1996 and the Condensed Consolidated Statement of Income for
the nine months then ended.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 37,425,206
<SECURITIES> 7,778,310
<RECEIVABLES> 14,870,048
<ALLOWANCES> 1,350,000
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,072,055,986
<DEPRECIATION> 180,552,647
<TOTAL-ASSETS> 1,022,566,471
<CURRENT-LIABILITIES> 0
<BONDS> 364,654,939
0
900,000
<COMMON> 362,151
<OTHER-SE> 604,042,728
<TOTAL-LIABILITY-AND-EQUITY> 1,022,566,471
<SALES> 168,144,419
<TOTAL-REVENUES> 168,144,419
<CGS> 42,892,691
<TOTAL-COSTS> 42,892,691
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 27,019,283
<INCOME-PRETAX> 73,826,893
<INCOME-TAX> 0
<INCOME-CONTINUING> 73,826,893
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 73,826,893
<EPS-PRIMARY> 1.61
<EPS-DILUTED> 1.59
<FN>
This Restated Financial Data Schedule is being filed to reflect the
impact on EPS in accordance with Financial Accounting Standards No.
128 - "Earnings Per Share".
Financial Data Schedule information has been extracted from the
Registrant's Consolidated Balance Sheet (non-classified) as of
December31, 1996 and the Condensed Consolidated Statement of Income
for the year then ended.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 122,645,949
<SECURITIES> 9,747,199
<RECEIVABLES> 17,440,574
<ALLOWANCES> 1,350,000
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,302,496,935
<DEPRECIATION> 199,156,875
<TOTAL-ASSETS> 1,334,513,042
<CURRENT-LIABILITIES> 0
<BONDS> 518,379,377
0
900,000
<COMMON> 403,909
<OTHER-SE> 742,378,913
<TOTAL-LIABILITY-AND-EQUITY> 1,334,513,042
<SALES> 141,294,177
<TOTAL-REVENUES> 141,294,177
<CGS> 36,665,881
<TOTAL-COSTS> 36,665,881
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 22,252,562
<INCOME-PRETAX> 62,290,240
<INCOME-TAX> 0
<INCOME-CONTINUING> 62,290,240
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 62,290,240
<EPS-PRIMARY> 1.33
<EPS-DILUTED> 1.32
<FN>
This Restated Financial Data Schedule is being filed to reflect the
impact on EPS in accordance with Financial Accounting Standards No. 128 -
"Earnings Per Share".
Financial Data Schedule information has been extracted from the
Registrant's Condensed Consolidated Balance Sheet (non-classified) as of
September 30, 1997 and the Condensed Consolidated Statement of Income for
the nine months then ended.
</TABLE>
