-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QYagjbPulmPxMCMWtfzuloLaSbZyNs48mDcudx0Fg5mMMptBsY82ixlWQtvcUJ5u XyJpvNb5bSrSd+jmiggM+Q== 0000889812-96-000425.txt : 19960620 0000889812-96-000425.hdr.sgml : 19960620 ACCESSION NUMBER: 0000889812-96-000425 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960506 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: KIMCO REALTY CORP CENTRAL INDEX KEY: 0000879101 STANDARD INDUSTRIAL CLASSIFICATION: 6512 IRS NUMBER: 132744380 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10899 FILM NUMBER: 96556645 BUSINESS ADDRESS: STREET 1: 3333 NEW HYDE PARK RD STREET 2: PO BOX 5020 CITY: NEW HYDE PARK STATE: NY ZIP: 11042 BUSINESS PHONE: 5168699000 10-Q 1 QUARTERLY REPORT 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, 1996 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 of incorporation or organization) Identification No) 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. 36,060,594 shares outstanding as of April 30, 1996. PART I FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets as of March 31, 1996 and December 31, 1995. Condensed Consolidated Statements of Income for the Three Months Ended March 31, 1996 and 1995. Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1996 and 1995. 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 $7.2 million or 20.9% to $41.7 million for the three months ended March 31, 1996, as compared with $34.5 million for the corresponding quarter ended March 31, 1995. This net increase is primarily attributable to (i) property acquisitions during the first quarter of 1996 (19 properties) and throughout calendar year 1995 (18 properties), and (ii) new leasing and re-tenanting within the portfolio at improved rental rates. Rental property expenses, including depreciation and amortization, increased $3.8 million or 17.4% to $25.4 million for the three months ended March 31, 1996, as compared with $21.6 million for the corresponding quarter ended March 31, 1995. Real estate taxes, operating and maintenance and depreciation and amortization charges contributed significantly to this net increase in rental property expenses (increasing $3.1 million, or 20.6%, for the three months ended March 31, 1996, as compared with the corresponding period in the preceding year), primarily due to property acquisitions, renovations within the existing portfolio and increased snow removal costs. Interest expense increased $.7 million or 10.6% for the quarter ended March 31, 1996, as compared to the corresponding period in the previous year, reflecting higher outstanding borrowings during 1996 as compared with 1995. During July 1995, certain subsidiaries of the Company obtained interests in 60 retail store leases relating to the anchor store premises in neighborhood and community shopping centers. These premises have been substantially sublet to retailers which lease the stores pursuant to net lease agreements. Income from the investment in retail store leases for the quarter ended March 31, 1996 was $.9 million. Net income for the three months ended March 31, 1996 and 1995, was $15.9 million and $12.0 million, respectively. This represents an increase of $.06 per share. This improvement is primarily attributable to both property acquisitions and increased leasing activity which strengthened operating profitability. 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 in excess of $850 million for the purposes of repaying secured indebtedness, acquiring neighborhood and community shopping centers and for expanding and improving properties in the portfolio. Management believes the public debt and equity markets will 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 1998, replaced the Company's $50 million secured acquisition line and has made available funds to both finance the purchase of properties and meet any short-term working capital requirements. 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, including its mortgage maturities beginning in 1996. 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, debt reduction, 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 financing in a manner consistent with its intention to operate with a conservative debt capitalization policy. The Company anticipates that adequate cash will be available from operations to fund its operating and administrative expenses, regular debt service obligations and the payment of dividends in accordance with REIT requirements in both the short-term and long-term. Effects of Inflation Substantially all of the Company's leases contain provisions designed to mitigate the adverse impact of inflation. Such provisions include clauses enabling the Company to receive percentage rents based on tenants' gross sales, which generally increase as prices rise, and/or escalation clauses, which generally increase rental rates during the terms of the leases. Such escalation clauses are often related to 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, 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. KIMCO REALTY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31, 1996 1995 ------------- ------------- Assets: Real estate, net of accumulated depreciation of $162,105,746 and $156,131,718(Notes 3 and 4) $ 838,535,015 $ 776,258,543 Investment in retail store leases (Note 5) 21,570,102 22,127,786 Cash and cash equivalents 15,859,090 16,164,666 Accounts and notes receivable 15,152,115 16,146,808 Other assets 53,869,074 53,544,331 ------------- ------------- $ 944,985,396 $ 884,242,134 ============= ============= Liabilities: Notes payable $ 325,250,000 $ 325,250,000 Mortgages payable 63,545,833 63,972,735 Other liabilities, including minority interests in partnerships 52,709,226 47,868,939 ------------- ------------- 441,505,059 437,091,674 ------------- ------------- Stockholders' Equity (Notes 2 and 7): Preferred stock, $1.00 par value, authorized 1,850,000 shares Class A Preferred Stock, authorized 345,000 shares Issued and outstanding 300,000 shares 300,000 300,000 Aggregate liquidation preference $75,000,000 Class B Preferred Stock, authorized 230,000 shares Issued and outstanding 200,000 shares 200,000 200,000 Aggregate liquidation preference $50,000,000 Common stock, $.01 par value, authorized 50,000,000 shares Issued and outstanding 36,018,219 and 33,731,348 360,182 337,313 shares, respectively Paid-in capital 619,209,491 562,311,822 Cumulative distributions in excess of net income (115,300,178) (114,665,183) Notes receivable from officer stockholders (1,289,158) (1,333,492) ------------- ------------- 503,480,337 447,150,460 ------------- ------------- $ 944,985,396 $ 884,242,134 ============= =============
The accompanying notes are an integral part of these condensed consolidated financial statements. KIMCO REALTY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME For the Three Months ended March 31, 1996 and 1995
1996 1995 ------------ ------------ Revenues from rental property $ 41,662,070 $ 34,447,776 ------------ ------------ Rental property expenses: Rent 342,349 331,558 Real estate taxes 4,677,563 4,372,108 Interest 6,864,598 6,208,520 Operating and maintenance 7,022,213 4,540,511 Depreciation and amortization 6,449,400 6,139,243 ------------ ------------ 25,356,123 21,591,940 ------------ ------------ Income from rental property 16,305,947 12,855,836 Income from investment in retail store leases (Note 5) 918,913 -- ------------ ------------ 17,224,860 12,855,836 Management fee income 759,450 982,993 General and administrative expenses (2,420,546) (2,112,061) Other income (expenses), net 363,971 278,816 ------------ ------------ Net income $ 15,927,735 $ 12,005,584 ============ ============ Net income applicable to common shares $ 13,412,110 $ 10,552,459 ============ ============ Net income per common share (Note 6) $0.38 $0.32 ===== =====
The accompanying notes are an integral part of these condensed consolidated financial statements. KIMCO REALTY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the Three Months ended March 31, 1996 and 1995
1996 1995 ------------ ------------ Cash flow provided by operations $ 27,122,138 $ 15,339,400 ------------ ------------ Cash flow from investing activities: Acquisition of and improvements to real estate (68,250,500) (13,836,544) Investment in marketable securities -- (903,156) Proceeds from disposition of real estate -- 4,975,582 Construction advance to real estate joint venture -- (1,723,505) ------------ ------------ Net cash flow used for investing activities (68,250,500) (11,487,623) ------------ ------------ Cash flow from financing activities: Principal payments on debt, excluding normal amortization of rental property debt -- (20,812,150) Principal payments on rental property debt, net (426,902) (386,817) Change in notes payable -- (34,200,000) Dividends paid (15,670,850) (12,303,125) Proceeds from issuance of stock 56,920,538 69,768,842 ------------ ------------ Net cash flow provided by financing activities 40,822,786 2,066,750 ------------ ------------ Change in cash and cash equivalents (305,576) 5,918,527 Cash and cash equivalents, beginning of period 16,164,666 10,944,226 ------------ ------------ Cash and cash equivalents, end of period $ 15,859,090 $ 16,862,753 ============ ============ Interest paid during the period $ 4,512,109 $ 4,819,231 ============ ============ Supplemental schedule of noncash investing/ financing activity: Acquisition of real estate interests by issuance of common stock and assumption of debt -- $ 38,714,717 ============ ============ Declaration of dividends paid in succeeding period $ 15,109,605 $ 12,078,600 ============ ============
The accompanying notes are an integral part of these condensed consolidated financial statements. 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. Public Stock Offering On February 2, 1996, the Company completed a primary public stock offering of 2,200,000 shares of Common Stock at $26.50 per share. The proceeds from this sale of Common Stock, net of related transaction costs of approximately $3.4 million, totaling approximately $55.0 million, have been used primarily for the acquisition of neighborhood and community shopping centers. 3. Sale-Leaseback Transactions During January 1996, the Company entered into two sale-leaseback transactions pursuant to which it acquired fee title to 16 retail properties located in Texas, Iowa, Oklahoma, Illinois and Kansas for a purchase price of $40 million. Simultaneously, the Company executed two long-term net leases covering the 16 locations pursuant to which the seller/tenant may remain in occupancy and continue to conduct business in these premises. 4. Property Acquisitions During the three months ended March 31, 1996, the Company acquired 3 shopping center properties in Kissimmee and Orlando, FL and Durham, NC through separate transactions for an aggregate purchase price of approximately $18.8 million. 5. Investment in Retail Store Leases During July 1995, certain subsidiaries of the Company obtained interests in 60 retail store leases relating to approximately 5.4 million square feet of anchor store premises in neighborhood and community shopping centers for an aggregate price of approximately $23 million. These premises have been substantially sublet to retailers which lease the stores pursuant to net lease agreements. Income from the investment in these retail store leases for the quarter ended March 31, 1996 was approximately $.9 million. This amount represents sublease revenues of approximately $5.1 million less related expenses of $3.6 million and an amount which, in management's estimation, reasonably provides for the recovery of the $23 million investment over a ten-year period. 6. Net Income Per Common Share Net income per common share is based upon weighted average numbers of common shares outstanding of 35,224,170 and 32,607,072 for the three months ended March 31, 1996 and 1995, respectively. 7. Subsequent Event: On April 10, 1996, the Company completed a public offering of 4,000,000 Depositary Shares (the "Class C Depositary Shares") at $25.00 per share, each such Class C Depositary Share representing 1/10 of a share of the Company's 8-3/8% Class C Cumulative Redeemable Preferred Stock (the "Class C Preferred Stock"), par value $1.00 per share. The cash proceeds to the Company, net of related transaction costs of approximately $3.4 million, totaling approximately $96.6 million, will be used for general corporate purposes, including the acquisition of interests in neighborhood and community shopping centers, and the redevelopment, expansion and improvement of properties in the Company's portfolio. Dividends on the Class C Depositary Shares are cumulative and payable quarterly in arrears at the rate of 8-3/8% per annum based on the $25 per share initial offering price, or $2.0938 per share. The Class C Depositary Shares are redeemable for cash, in whole or in part, on or after April 15, 2001 at the option of the Company at a redemption price of $25 per share, plus any accrued and unpaid dividends thereon. The redemption price of the Class C Preferred Stock may be paid solely from the sale proceeds of other capital stock of the Company, which may include other classes or series of preferred stock. The Class C Depositary Shares are not convertible or exchangeable for any other property or securities of the Company. The Class C Preferred Stock (represented by the Class C Depositary Shares outstanding) ranks pari passu with the Company's 7-3/4% Class A Cumulative Redeemable Preferred Stock and 8-1/2% Class B Cumulative Redeemable Preferred Stock as to voting rights, priority for receiving dividends and liquidation preferences. 8. Pro Forma Financial Information As discussed in Note 4, the Company and certain of its subsidiaries acquired interests in shopping center properties during the three months ended March 31, 1996. The pro forma financial information set forth below is based upon the Company's historical, Consolidated Statement of Income for the year ended December 31, 1995, and the Condensed Consolidated Statement of Income for the three months ended March 31, 1996, adjusted to give effect to these transactions as of January 1, 1995. 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, 1995, nor does it purport to represent the results of future operations. (Amounts presented in millions, except per share figures.) 1996 1995 ----- ------ Revenues from rental property $42.2 $146.0 Net income $16.2 $53.6 Net income per common share $.39 $1.38 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 by the Company on January 25, 1996, to disclose that certain subsidiaries of the Company were acquiring fee title to 16 retail properties comprising 1.6 million square feet of gross leasable area located in 5 states from a family value department store operator for a purchase price of $40 million. Simultaneously, the Company's subsidiaries were to execute two long-term net leases covering all 16 properties pursuant to which this seller/tenant may remain in occupancy and continue to conduct business in these premises. This transaction was completed in January 1996. 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 05/6/96 s/s Milton Cooper (Date) Milton Cooper Chairman of the Board 05/6/96 s/s Louis J. Petra (Date) Louis J. Petra Chief Financial Officer EX-27 2 ARTICLE 5 FDS FOR 1ST QUARTER 10-Q
5 1 3-MOS DEC-31-1996 MAR-31-1996 15,859,090 8,505,225 16,502,115 1,350,000 0 0 1,000,640,761 162,105,746 944,985,396 0 388,795,833 0 500,000 360,182 502,620,155 944,985,396 41,662,070 41,662,070 12,042,125 12,042,125 0 0 6,864,598 15,927,735 0 15,927,735 0 0 0 15,927,735 .38 .38 Financial Data Schedule information has been extracted from the Registrant's Condensed Consolidated Balance Sheet (non-classified) as of March 31, 1996, and the Condensed Consolidated Statement of Income for the three months then ended.
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