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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 13, 1999 (April 28, 1999)
Kimco Realty Corporation
(Exact name of registrant as specified in its charter)
Maryland 1-10899 13-2744380
- ------------------------------- ------------------------ -------------------
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
3333 New Hyde Park Road
New Hyde Park, New York 11042-0020
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(Address of principal (zip code)
executive offices)
516/869-9000
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Registrant's telelphone,
including area code
Not Applicable
- -------------------------------------------------------------------------------
(former name or former address, if changed since last report.)
Page 1 of 8
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KIMCO REALTY CORPORATION AND SUBSIDIARIES
CURRENT REPORT
ON
FORM 8-K
Item 2. Acquisition or Disposition of Assets
On April 28, 1999, Kimco Realty Corporation ("Kimco") entered into a
joint venture agreement with New York State Comptroller H. Carl McCall, as sole
trustee of the New York State Common Retirement Fund ("NYSCRF"), whereby NYSCRF
became a partner in Kimco Income Operating Partnership L.P. ("KIOP"), whose
general partner is Kimco Income REIT. KIOP will invest primarily in high quality
retail properties financed primarily through the use of individual non-recourse
mortgages. Under the agreement, Kimco contributed to KIOP, through individual
entities, 19 shopping center properties with an aggregate agreed equity value of
approximately $105 million. Additionally, Kimco has agreed to contribute an
additional $12 million to KIOP. NYSCRF has subscribed for up to $117 million of
equity in KIOP, of which approximately $70 million has been used to fund the
acquisition of four additional properties by KIOP, which were recently acquired
by Kimco. As a result of these transactions, Kimco holds a non-controlling
limited partnership interest in KIOP. For purposes of this Current Report on
Form 8-K, Kimco is deemed to have disposed of the 19 shopping center properties
and contributed such properties to KIOP and sold four properties to KIOP and,
accordingly, such entities will no longer be consolidated in the results of
operations of Kimco. Kimco will account for its investment in KIOP under the
equity method of accounting. In connection with these transactions, KIOP entered
into a master management agreement with Kimco, whereby, Kimco will perform
services for fee relating to the management, operation, supervision and
maintenance of the KIOP properties.
As a result of the assets contributed by Kimco and NYSCRF, KIOP owns, through
individual entities, 23 shopping center properties comprising approximately 4
million square feet of gross leasable area located in 13 states. The aggregate
equity value of the properties, net of non-recourse debt of approximately $253
million, is approximately $175 million. The properties are 98% leased and
include national anchor tenants such as Home Depot, Target and Kmart.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) (b) Financial Statements and Pro Forma Financial Information
The pro forma financial information filed herewith is as follows:
Page
----
Pro Forma Condensed Consolidated Balance
Sheet as of December 31, 1998................................4
Pro Forma Condensed Consolidated Statement of
Income for the Year Ended December 31, 1998..................5
Notes to Pro Forma Condensed Consolidated Financial Statements.....6
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KIMCO REALTY CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
The accompanying Pro Forma Condensed Consolidated Balance Sheet as of
December 31, 1998 gives effect to the contribution of 19 shopping center
properties by Kimco to KIOP and the sale of four shopping center
properties by Kimco to KIOP, as if the transactions had occurred as of
December 31, 1998 (the "KIOP Transactions").
The accompanying Pro Forma Condensed Consolidated Statement of Income
for the year ended December 31, 1998 reflects the historical results of
the Company adjusted to give effect to the contribution of 19 shopping
center properties by Kimco to KIOP and the sale of four shopping center
properties by Kimco to KIOP, as if the transactions had occurred as of
January 1, 1998.
The Pro Forma Condensed Consolidated Financial Statements have been prepared by
the management of the Company. These pro forma financial statements may not be
indicative of the results that would have actually occurred if the KIOP
Transactions had been in effect on the dates indicated. Also, they may not be
indicative of the results that may be achieved in the future. The Pro Forma
Condensed Consolidated Balance Sheet and Statement of Income should be read in
conjunction with Kimco's audited financial statements as of December 31, 1998
and 1997 and for each of the three years in the period ending December 31, 1998
(which are included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1998).
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KIMCO REALTY CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AT DECEMBER 31, 1998
(in thousands, except share information)
<TABLE>
<CAPTION>
Kimco Pro Forma Kimco
Historical Adjustments Pro Forma
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<S> <C> <C> <C>
ASSETS:
Real estate, net $ 2,767,952 $ (381,483) $ 2,386,469
Investment in retail store leases 15,172 -- 15,172
Investments and advances in real estate joint ventures 64,263 115,566 179,829
Cash and cash equivalents 43,920 21,274 65,194
Accounts and notes receivable 31,821 (2,541) 29,280
Other assets 128,050 (9,443) 118,607
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$ 3,051,178 $ (256,627) $ 2,794,551
=========================================
LIABILITIES & STOCKHOLDERS' EQUITY:
Notes payable $ 855,250 $ -- $ 855,250
Mortgages payable 434,311 (253,113) 181,198
Other liabilities 163,643 (3,514) 160,129
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1,453,204 (256,627) 1,196,577
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Minority interests in partnerships 12,955 -- 12,955
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Commitments and contingencies
Stockholders' equity
Preferred Stock, $1.00 par value, authorized 3,470,000 and 5,000,000
shares, respectively
Class A Preferred Stock, $1.00 par value, authorized 345,000 shares
Issued and outstanding 300,000 shares 300 -- 300
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 -- 200
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 -- 400
Aggregate liquidation preference $100,000,000
Class D Convertible Preferred Stock, $1.00 par value,
authorized 700,000 shares
Issued and outstanding 429,159 shares
Aggregate liquidation preference $107,289,750 429 -- 429
Common stock, $.01 par value, authorized 100,000,000 shares
Issued and outstanding 60,133,704 and 40,394,805
shares, respectively 601 -- 601
Paid-in capital 1,707,272 -- 1,707,272
Cumulative distributions in excess of net income (124,183) -- (124,183)
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1,585,019 -- 1,585,019
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$ 3,051,178 $ (256,627) $ 2,794,551
=========================================
</TABLE>
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KIMCO REALTY CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1998
(in thousands, except per share information)
<TABLE>
<CAPTION>
Kimco Pro Forma Kimco
Historical Adjustments Pro Forma
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<S> <C> <C> <C>
Revenues from rental property $ 338,798 $ (18,772) $ 320,026
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Rental property expenses:
Rent 12,568 (551) 12,017
Real estate taxes 45,473 (2,123) 43,350
Interest 64,912 (2,682) 62,230
Operating and maintenance 33,246 (1,308) 31,938
Depreciation and amortization 51,348 (3,927) 47,421
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207,547 (10,591) 196,956
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Income from rental property 131,251 (8,181) 123,070
Income from investment in retail store leases 3,703 -- 3,703
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134,954 (8,181) 126,773
Management fee income 3,646 1,200 4,846
General and administrative expenses (18,583) 300 (18,283)
Equity in income of real estate joint ventures, net 3,106 7,700 10,806
Minority interest in income of partnerships, net (1,275) -- (1,275)
Other income, net 4,417 (100) 4,317
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Income before gain on sale of shopping
center property and extraordinary items 126,265 919 127,184
Gain on sale of shopping center 901 -- 901
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Income before extraordinary items 127,166 919 128,085
Extraordinary items (4,900) -- (4,900)
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Net income $ 122,266 $ 919 $ 123,185
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Net income applicable to common shares $ 97,612 $ 919 $ 98,531
===================================
Per common share:
Income before extraordinary items
Basic $2.05 $2.07
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Diluted $2.02 $2.04
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Net income
Basic $1.95 $1.97
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Diluted $1.93 $1.95
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</TABLE>
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KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying Pro Forma Condensed Consolidated Balance Sheet as of December
31, 1998 gives effect to the contribution of 19 shopping center properties by
Kimco to KIOP and the sale of four shopping center properties by Kimco, to KIOP
as if the transactions had occurred, as of December 31, 1998 (the "KIOP
Transactions").
The accompanying Pro Forma Condensed Consolidated Statement of Income
for the year ended December 31, 1998 reflects the historical results of
the Company adjusted to give effect to the contribution of 19 shopping
center properties by Kimco to KIOP and the sale of four shopping center
properties by Kimco to KIOP as if the transactions had occurred as of
January 1, 1998.
The Pro Forma Condensed Consolidated Financial Statements have been prepared by
the management of the Company. These pro forma financial statements may not be
indicative of the results that would have actually occurred if the KIOP
Transactions had been in effect on the dates indicated. Also, they may not be
indicative of the results that may be achieved in the future.
2. Pro Forma Adjustments
(i) Balance Sheet:
A. The adjustments to real estate, net, accounts and notes receivable, other
assets, mortgages payable and other liabilities reflect as of December 31,
1998 the contribution of 19 shopping center properties by Kimco to KIOP and
the sale of two properties by Kimco to KIOP. (The remaining two properties
sold by Kimco to KIOP were not acquired by Kimco until 1999 and were,
therefore, not included in the Consolidated Balance Sheet of Kimco at
December 31, 1998. These two properties were sold to KIOP for amounts equal
to Kimco's acquisition cost and, accordingly, have no effect on the pro
forma adjustments.)
B. The adjustment to investments and advances in real estate joint ventures
reflects Kimco's initial contribution to KIOP of 19 shopping center
properties and advances related to the other assets and liabilities of such
properties.
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C. The adjustments to cash and cash equivalents reflects (i) the cash received
by Kimco from the sale of two properties to KIOP and (ii) the cash
contributed to KIOP in connection with the contribution of the 19 shopping
center properties.
(ii) Income Statement:
A. The adjustments to revenues from rental property and rental property
expenses, reflect the elimination of the operating results of the 19
shopping center properties contributed by Kimco to KIOP and the two
properties sold by Kimco to KIOP. (The remaining two properties sold by
Kimco to KIOP were not acquired by Kimco until 1999 and were, therefore,
not included in the Consolidated Income Statement of Kimco at December 31,
1998 and, accordingly, have no effect on the pro forma adjustments.) The
operating results eliminated from the Kimco historical amounts reflect the
operations for the period which Kimco owned the properties. Of the 21
properties contributed and sold by Kimco to KIOP, 16 properties were
acquired at various dates during 1998 and, accordingly, do not reflect a
full year of operating results.
B. The adjustment to management fee income reflects the fees payable to Kimco
by KIOP in connection with the management, operation, supervision and
maintenance of the properties owned by KIOP, as if Kimco began managing the
properties as of January 1, 1998.
C. The adjustment to equity in income of real estate joint ventures, net
reflects the equity in income from Kimco's investment in KIOP represented
by the results of operations of the 23 properties owned by KIOP for the
year ended December 31, 1998 as if KIOP had owned the properties as of
January 1, 1998. Mortgage financing was obtained on 19 of the properties
during November 1998. The results of operations of those properties reflect
mortgage interest as if the mortgage financing had been obtained as of
January 1, 1998.
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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 hereunto duly authorized.
Kimco Realty Corporation
------------------------
Registrant
Date: May 13, 1999
By: /s/ Michael V. Pappagallo
----------------------------
Michael V. Pappagallo
Chief Financial Officer
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