-----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, Blk0d/owX/H4kQrPwKeFcLuxrC7U2lq1yvtluEeZppJO9M6554q4P62zhk/eH6xJ D3wV+2ixdsjt6wZjDY0t4Q== 0000889812-98-001345.txt : 19980525 0000889812-98-001345.hdr.sgml : 19980525 ACCESSION NUMBER: 0000889812-98-001345 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980123 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980522 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: KIMCO REALTY CORP CENTRAL INDEX KEY: 0000879101 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 132744380 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-10899 FILM NUMBER: 98630470 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 8-K 1 CURRENT REPORT 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 22, 1998 (January 23, 1998) Kimco Realty Corporation (Exact name of registrant as specified in its charter) Maryland 1-10899 13-2744380 - ----------------- ---------------------- ------------------- (State or other (Commission File Number) (IRS Employer jurisdiction of Identification No.) incorporation) 3333 New Hyde Park Road New Hyde Park, New York 11042/0-0020 - ------------------------------- ------------------ (Address of principal executive (zip code) offices) 516/869-9000 ----------------------------------- Registrant's telelphone, including area code Not Applicable - ------------------------------------------------------------------------------ (former name or former address, if changed since last report.) Page 1 of 18 KIMCO REALTY CORPORATION AND SUBSIDIARIES CURRENT REPORT ON FORM 8-K Item 5. Other Events Shopping Center Acquisitions - Certain subsidiaries of Kimco Realty Corporation (the "Company") acquired 15 neighborhood and community shopping center properties (the "Shopping Center Acquisitions") comprising approximately 1.7 million square feet of gross leasable area ("GLA") in 8 states. These shopping center properties, acquired in separate transactions for an aggregate purchase price of approximately $136.3 million, including the assumption of approximately $20.8 million of mortgage debt, include: o Village on the Park I and II, Aurora, Colorado o Phar-Mor Plaza, Englewood, Colorado o Heritage West Shopping Center, Lakewood, Colorado o Quincy Place Shopping Center, Aurora, Colorado o Spring Creek Shopping Center, Colorado Springs, Colorado o East Bank Shopping Center, Aurora, Colorado o West 38th Street Shopping Center, Denver, Colorado o The Shoppes at West Melbourne, West Melbourne, Florida o Marshalls Plaza, Cranston, Rhode Island o South Plains Plaza, Lubbock, Texas o Poca Fiesta Shopping Center, Mesa, Arizona o Wellington Park Shopping Center, Cary, North Carolina o Phar-Mor building, Greenville, South Carolina o Bayshore Gardens Shopping Center, Bradenton, Florida o Lafayette Marketplace, Lafayette, Indiana Although none of the above Shopping Center Acquisitions, individually represent a "significant acquisition" pursuant to the rules governing the reporting of transactions under this Current Report on Form 8-K, the Company considers these acquisitions in the aggregate to be material in relation to its overall financial position and results of operations. Consequently, this report has been filed for the purpose of providing certain historical financial information for certain acquired properties and pro forma financial information for the Shopping Center Acquisitions. More specific information with respect to each of these acquired properties is as follows: In January 1998, the Company acquired seven properties, in separate transactions, consisting of: (i) Village on the Park I and II, adjoining shopping centers located on South Parker Road in Aurora, Colorado, which are anchored by TJ Maxx and contain 2 approximately 146,000 square feet of GLA; (ii) Phar-Mor Plaza, located on West Gerard Avenue in Englewood, Colorado, which is anchored by Phar-Mor and contains approximately 80,000 square feet of GLA; (iii) Heritage West Shopping Center, located on West Jewel Avenue in Lakewood, Colorado, which is anchored by Safeway and contains approximately 83,000 square feet of GLA; (iv) Quincy Place Shopping Center, located on East Quincy Avenue in Aurora, Colorado, which is anchored by Blockbuster and contains approximately 44,000 square feet of GLA; (v) Spring Creek Shopping Center, located on Spring Circle Drive in Colorado Springs, Colorado, which is anchored by Cub Foods and contains approximately 108,000 square feet of GLA; (vi) East Bank Shopping Center, located on South Parker Road in Aurora, Colorado, which is anchored by Albertson's and Coomers and contains approximately 152,000 square feet of GLA; and (vii) West 38th Street Shopping Center, a single tenant property, located on West 38th Avenue in Denver, Colorado, occupied by Payless Drugs comprising approximately 18,000 square feet of GLA. These properties were acquired for an aggregate purchase price of approximately $43.9 million, including the assumption of approximately $1.4 million and $2.8 million of mortgage debt encumbering Phar-Mor Plaza and Quincy Place Shopping Center, respectively. In February 1998, the Company acquired The Shoppes at West Melbourne, located on West New Haven Avenue in West Melbourne, Florida, for a purchase price of approximately $11.0 million. The shopping center contains approximately 148,000 square feet of GLA and is anchored by Service Merchandise and Marshalls. In March 1998, the Company acquired three properties, in separate transactions, consisting of (i) Marshalls Plaza, (ii) South Plains Plaza and (iii) Poca Fiesta Shopping Center. Marshalls Plaza, located at the intersection of Oaklawn Avenue and Bald Hill Road in Cranston, Rhode Island, is anchored by Marshalls and Bob's Stores and contains approximately 118,000 square feet of GLA. South Plains Plaza, located on Slide Road in Lubbock, Texas, is anchored by PetsMart and Office Max and contains approximately 108,000 square feet of GLA. Poca Fiesta Shopping Center, located on Southern Avenue in Mesa, Arizona, is anchored by Ross Stores, and contains approximately 147,000 square feet of GLA. These properties were acquired for an aggregate purchase price of approximately $33.5 million, including the assumption of approximately $6.6 million and $10.0 million of mortgage debt encumbering South Plains Plaza and Poca Fiesta Shopping Center, respectively. In April 1998, the Company acquired Wellington Park Shopping Center and the Phar-Mor building, in separate transactions, for an aggregate purchase price of approximately $14.6 million. Wellington Park Shopping Center, located on Tryon Road in Cary, North Carolina, is anchored by Lowe's Grocery and contains approximately 103,000 square feet of GLA. The Phar-Mor building, located on Haywood Road in Greenville, South Carolina, is a 60,000 square foot building adjacent to a property previously acquired by the Company in December 1997 and is occupied by Phar-Mor. 3 In May 1998, the Company acquired two properties, Bayshore Gardens Shopping Center and Lafayette Marketplace, in separate transactions, for an aggregate purchase price of approximately $33.3 million, which included the issuance of partnership units valued at approximately $5.0 million in connection with the Bayshore Gardens acquisition. Bayshore Gardens Shopping Center, located on Flamingo Boulevard in Bradenton, Florida, is anchored by Publix and TJ Maxx, and contains approximately 163,000 square feet of GLA. The Lafayette Marketplace, located on State Road 38 East in Lafayette, Indiana, is anchored by Michael's and contains approximately 214,000 square feet of GLA. Management believes that the current annualized net cash flow generated by these recently acquired properties provides a weighted average annualized yield of approximately 9.8% on the Company's investment in such properties. Retail Properties Acquisition - As reported in the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1998, the Company, through an affiliated entity, acquired fee interests in three properties from a retailer in the Chicago, Illinois market comprising approximately 516,000 square feet of GLA 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. Financial statement information required under Item 7 of Form 8-K is not required in connection with the retail properties acquisition since these properties acquired were non-operating rental real estate assets owned by a retailer and not a business with financial statements and information of the type required by Item 7. 4 Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (a) (b) Financial Statements and Pro Forma Financial Information The financial statements and pro forma financial information filed herewith is as follows: Page Report of Independent Accountants..................................7 Combined Historical Summary of Revenue and Certain Operating Expenses of Certain Acquired Properties for the Year Ended December 31, 1997 (Audited) and the Three Months Ended March 31, 1998 (Unaudited)...................................8 Notes to Combined Historical Summary of Revenue and Certain Operating Expenses of Certain Acquired Properties..................9 Estimates of Net Income and Funds from Operations of Certain Acquired Properties...............................................10 Notes to Estimates of Net Income and Funds from Operations of Certain Acquired Properties.......................................11 Pro Forma Condensed Consolidated Balance Sheet as of March 31, 1998..............................................13 Pro Forma Condensed Consolidated Statements of Income for the Year Ended December 31, 1997 and the Three Months Ended March 31, 1998.............................14 Notes to Pro Forma Condensed Consolidated Financial Statements..............................................16 (c) Exhibits: * 23.1 Consent of Coopers & Lybrand L.L.P. ----------------- *Filed herewith. 5 KIMCO REALTY CORPORATION AND SUBSIDIARIES CERTAIN ACQUIRED PROPERTIES COMBINED HISTORICAL SUMMARY OF REVENUE AND CERTAIN OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1997 6 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholders of Kimco Realty Corporation: We have audited the accompanying Combined Historical Summary of Revenue and Certain Operating Expenses of Certain Acquired Properties, as defined in the accompanying Note 1, for the year ended December 31, 1997. This combined historical summary is the responsibility of the management of Kimco Realty Corporation. Our responsibility is to express an opinion on the combined historical summary based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined historical summary is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the combined historical summary. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the combined historical summary. We believe that our audit provides a reasonable basis for our opinion. The accompanying Combined Historical Summary of Revenue and Certain Operating Expenses of Certain Acquired Properties has been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in Note 2, and is not intended to be a complete presentation of the revenue and expenses of the Certain Acquired Properties. In our opinion, the combined historical summary referred to above presents fairly, in all material respects, the revenue and certain operating expenses of the Certain Acquired Properties described in Note 1 for the year ended December 31, 1997, in conformity with generally accepted accounting principles. COOPERS & LYBRAND L.L.P. New York, New York May 20, 1998 7 KIMCO REALTY CORPORATION AND SUBSIDIARIES CERTAIN ACQUIRED PROPERTIES COMBINED HISTORICAL SUMMARY OF REVENUE AND CERTAIN OPERATING EXPENSES
Year Ended Three Months Ended December 31, 1997 March 31, 1998 ------------------- ------------------ (Unaudited) Revenue: Base rentals $ 7,920,890 $ 2,032,285 Operating reimbursements and other income 2,191,061 613,760 ----------------- ---------------- 10,111,951 2,646,045 ----------------- ---------------- Certain operating expenses: Real estate taxes 1,435,817 288,374 Repairs and maintenance 1,009,477 300,623 Other operating expenses 413,700 96,773 ----------------- ---------------- 2,858,994 685,770 ----------------- ---------------- Excess of revenue over certain operating expenses $ 7,252,957 $ 1,960,275 ================= ================
The accompanying notes are an integral part of this combined financial statement. 8 KIMCO REALTY CORPORATION AND SUBSIDIARIES CERTAIN ACQUIRED PROPERTIES NOTES TO COMBINED HISTORICAL SUMMARY OF REVENUE AND CERTAIN OPERATING EXPENSES 1. Certain Acquired Properties The Combined Historical Summary of Revenue and Certain Operating Expenses for the year ended December 31, 1997 relates to the operations of the following certain acquired properties (the "Certain Acquired Properties"), while under ownership previous to Kimco Realty Corporation and Subsidiaries. Property Name Location - ------------- -------- Village on the Park I and II Aurora, Colorado Phar-Mor Plaza Englewood, Colorado Heritage West Shopping Center Lakewood, Colorado Quincy Place Shopping Center Aurora, Colorado Spring Creek Shopping Center Colorado Springs, Colorado East Bank Shopping Center Aurora, Colorado West 38th Street Shopping Center Denver, Colorado Marshalls Plaza Cranston, Rhode Island South Plains Plaza Lubbock, Texas Poca Fiesta Shopping Center Mesa, Arizona 2. Basis of Presentation The Combined Historical Summary has been prepared on the accrual method of accounting. Certain operating expenses include operating and maintenance costs, real estate taxes, and insurance expense relating to the operation of the Certain Acquired Properties. In accordance with the regulations of the Securities and Exchange Commission, mortgage interest, depreciation and general and administrative expenses have been excluded, as such costs are dependent upon a particular owner, purchase price or other financial agreements. 3. Revenue Recognition Minimum revenues from rental property are recognized on a straight-line basis over the terms of the related leases. The future minimum revenues from rental property under the terms of all noncancellable tenant leases are approximately as follows: 1998 $8,010,000 1999 $7,221,000 2000 $6,427,000 2001 $5,607,000 2002 $4,121,000 Thereafter $11,040,000 9 KIMCO REALTY CORPORATION AND SUBSIDIARIES ESTIMATES OF NET INCOME AND FUNDS FROM OPERATIONS OF CERTAIN ACQUIRED PROPERTIES (Unaudited) The following represents an estimate of the net income and funds from operations expected to be generated from the operation of the Certain Acquired Properties based upon the Combined Historical Summary of Revenue and Certain Operating Expenses of Certain Acquired Properties for the year ended December 31, 1997. These estimated results do not purport to represent results of operations for these properties in the future and were prepared on the basis described in the accompanying notes which should be read in conjunction herewith. Estimated Net Income Excess of revenue over certain operating expenses $ 7,252,957 Less: Estimated depreciation (Note 1) (1,586,828) =========== Estimated net income $ 5,666,129 =========== Estimated Funds from Operations Estimated net income $ 5,666,129 Add: Estimated depreciation (Note 1) 1,586,828 ----------- Estimated funds from operations $ 7,252,957 =========== 10 KIMCO REALTY COPRORATION AND SUBSIDIARIES NOTES TO ESTIMATES OF NET INCOME AND FUNDS FROM OPERATIONS OF CERTAIN ACQUIRED PROPERTIES 1. Basis of Presentation Depreciation has been estimated based upon an allocation of the purchase prices of the Certain Acquired Properties to land (20%) and building (80%) and assuming a 39 year useful life applied on a straight-line method. No income taxes have been provided because the Company is organized and operates in such a manner so as to qualify as a Real Estate Investment Trust ("REIT") under the provisions of the Internal Revenue Code (the "Code"). Accordingly, the Company generally will not pay Federal income taxes provided that distributions to its stockholders equal at least the amount of its REIT taxable income as defined under the Code. 2. Acquisition Considerations In assessing the properties acquired, the Company's management considered the existing tenancies, which are the primary revenue source, the occupancy rates, which averaged 97.3% on the dates of acquisition, the competitive nature of the markets and comparative rental rates. Furthermore, current and anticipated maintenance and repair costs, real estate taxes and capital improvement requirements were evaluated. Management is not aware of any material factors that would cause the reported financial information in the accompanying Combined Historical Summary of Revenue and Certain Operating Expenses and Estimates of Net Income and Funds from Operations of Certain Acquired Properties to be misleading. 11 KIMCO REALTY CORPORATION AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AND STATEMENTS OF INCOME The accompanying Pro Forma Condensed Consolidated Balance Sheet as of March 31, 1998 gives effect to (i) the purchase of four shopping center properties acquired by the Company during April and May 1998, (ii) the issuance of an aggregate 2,259,020 shares of the Company's common stock during April 1998, in four separate transactions, consisting of a primary public offering priced at $36.0625 per share and three private placements priced at $36.0625, $36.625 and $36.25 per share and (iii) the issuance of partnership units valued at approximately $5.0 million in connection with the Bayshore Gardens acquisition, as if these properties had been acquired and the common shares and partnership units were issued as of March 31, 1998. The accompanying Pro Forma Condensed Consolidated Statements of Income for the year ended December 31, 1997 and the three months ended March 31, 1998 assume the Shopping Center Acquisitions had occurred as of January 1, 1997. The pro forma information is based on the historical statements of the Company after giving effect to the acquisition of these properties. The Pro Forma Condensed Consolidated Balance Sheet and the Statements of Income have been prepared by the management of the Company. These pro forma statements may not be indicative of the results that would have actually occurred if the Shopping Center Acquisitions had been in effect on the date 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 Statements of Income should be read in conjunction with Kimco Realty Corporation's audited financial statements as of December 31, 1997 and for the year then ended (which are included in the Company's Annual Report on Form 10-K for the year ended December 31, 1997), and the unaudited condensed consolidated financial statements as of March 31, 1998 and for the three months then ended (which are included in the Company's Quarterly Report on Form 10-Q for the period ended March 31, 1998) and the accompanying notes thereto. 12 KIMCO REALTY CORPORATION AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET MARCH 31, 1998 --------------- (Unaudited)
PRO FORMA AS REPORTED ADJUSTMENTS PRO FORMA ----------------- ------------- ---------------- Assets: Real estate, net of accumulated depreciation $ 1,311,322,749 $ 47,985,000 $ 1,359,307,749 Investment in retail store leases 15,539,477 - 15,539,477 Cash and cash equivalents 34,377,395 34,551,891 68,929,286 Accounts and notes receivable 18,304,186 - 18,304,186 Other assets 91,573,797 - 91,573,797 --------------- ------------- --------------- $ 1,471,117,604 $ 82,536,891 $ 1,553,654,495 =============== ============= =============== Liabilities: Notes payable $ 510,250,000 $ - $ 510,250,000 Mortgages payable 141,192,853 - 141,192,853 Other liabilities, including minority interests in partnerships 74,341,707 4,973,196 79,314,903 --------------- ------------- ---------------- 725,784,560 4,973,196 730,757,756 --------------- ------------- ---------------- 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 42,678,460 shares, respectively 404,194 22,590 426,784 Paid-in capital 858,197,672 77,541,105 935,738,777 Cumulative distributions in excess of net income (114,168,822) - (114,168,822) --------------- ------------- --------------- 745,333,044 77,563,695 822,896,739 --------------- ------------- --------------- $ 1,471,117,604 $ 82,536,891 $ 1,553,654,495 =============== ============= ===============
The accompanying notes are an integral part of these pro forma condensed consolidated financial statements. 13 KIMCO REALTY CORPORATION AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1997 ------------------------------- (Unaudited)
Shopping Center As Reported Acquisitions Pro Forma --------------- ----------------- ---------------- Revenues from rental property $ 198,929,403 $ 17,191,682 $ 216,121,085 --------------- ----------------- ---------------- Rental property expenses: Rent 4,873,200 - 4,873,200 Real estate taxes 26,345,685 2,069,241 28,414,926 Interest 31,744,762 3,222,408 34,967,170 Operating and maintenance 22,194,628 2,163,488 24,358,116 Depreciation and amortization 30,052,714 2,796,779 32,849,493 --------------- ----------------- ---------------- 115,210,989 10,251,916 125,462,905 --------------- ----------------- ---------------- Income from rental property 83,718,414 6,939,766 90,658,180 Income from investment in retail store leases 3,571,946 - 3,571,946 --------------- ----------------- ---------------- 87,290,360 6,939,766 94,230,126 Management fee income 3,276,152 - 3,276,152 General and administrative expenses (11,651,341) - (11,651,341) Other income (expenses), net 6,677,279 (777,856) 5,899,423 --------------- ----------------- ---------------- Income before gain on sale of shopping center 85,592,450 6,161,910 91,754,360 Gain on sale of shopping center property 243,995 - 243,995 --------------- ----------------- ---------------- Net income $85,836,445 $6,161,910 $91,998,355 =============== ================= ================ Net income applicable to common shares $67,398,745 $6,161,910 $73,560,655 =============== ================= ================ Net income per common share Basic $1.80 $1.97 ===== ===== Diluted $1.78 $1.94 ===== =====
The accompanying notes are an integral part of these pro forma condensed consolidated financial statements. 14 KIMCO REALTY CORPORATION AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS ENDED March 31, 1998 ------------------------------------------ (Unaudited)
Shopping Center As Reported Acquisitions Pro Forma -------------- ---------------- ------------ Revenues from rental property $ 63,111,632 $ 3,186,827 $ 66,298,459 -------------- ---------------- ------------ Rental property expenses: Rent 2,752,135 - 2,752,135 Real estate taxes 8,876,999 265,551 9,142,550 Interest 11,039,207 367,816 11,407,023 Operating and maintenance 6,936,109 529,202 7,465,311 Depreciation and amortization 8,899,764 514,380 9,414,144 -------------- ---------------- ------------ 38,504,214 1,676,949 40,181,163 -------------- ---------------- ------------ Income from rental property 24,607,418 1,509,878 26,117,296 Income from investment in retail store leases 916,171 - 916,171 -------------- ---------------- ------------ 25,523,589 1,509,878 27,033,467 Management fee income 801,708 - 801,708 General and administrative expenses (3,180,653) - (3,180,653) Other income (expenses), net 1,437,863 (228,464) 1,209,399 -------------- ---------------- ------------ Income before gain on sale of shopping center 24,582,507 1,281,414 25,863,921 Gain on sale of shopping center property 901,249 - 901,249 -------------- ---------------- ------------ Net income $25,483,756 $1,281,414 $26,765,170 ============== ================ ============ Net income applicable to common shares $20,874,331 $1,281,414 $22,155,745 ============== ================ ============ Net income per common share Basic $0.52 $0.55 ===== ===== Diluted $0.51 $0.54 ===== =====
The accompanying notes are an integral part of these pro forma condensed consolidated financial statements. 15 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation The Pro Forma Condensed Consolidated Balance sheet as of March 31, 1998 gives effect to (i) the purchase of four shopping center properties acquired by the Company during April and May 1998, (ii) the issuance of an aggregate 2,259,020 shares of the Company's common stock during April 1998, in four separate transactions, consisting of a primary public offering priced at $36.0625 per share and three private placements priced at $36.0625, $36.625 and $36.25 per share and (iii) the issuance of partnership units valued at approximately $5.0 million in connection with the Bayshore Gardens acquisition, as if these properties had been acquired and the common shares and partnership units were issued as of March 31, 1998. As reported amounts have been adjusted based upon the historical results of the Shopping Center Acquisitions for the year ended December 31, 1997. These adjustments to the Pro Forma Condensed Consolidated Statements of Income have the effect of presenting the results for the year ended December 31, 1997 and the three months ended March 31, 1998 as if the Shopping Center Acquisitions had been completed as of January 1, 1997. 2. Pro Forma Adjustments The adjustment to interest expense relates to (i) the assumption of mortgage debt encumbering four of the properties acquired and additional borrowings related to the other Shopping Center Acquisitions. The adjustments to other income (expenses), net relate to (i) the elimination of interest earned on funds assumed to have been expended as of January 1, 1997 for the Shopping Center Acquisitions and (ii) the preferred return applicable to the partnership unitholders in connection with the Bayshore Gardens acquisition. The adjustment for depreciation was based upon an estimated useful life of 39 years using the straight-line method and purchase price allocations to land and building of 20% and 80%, respectively. 16 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 22, 1998 By: /s/ Michael V. Pappagallo --------------------------- Michael V. Pappagallo Chief Financial Officer 17 EX-23.1 2 CONSENT OF COOPERS & LYBRAND, L.L.P. CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the registration statement of Kimco Realty Corporation on Form S-3 (File No. 333-37285), of our report dated May 20, 1998 on our audit of the Combined Historical Summary of Revenue and Certain Operating Expenses of Certain Acquired Properties as of December 31, 1997, which report is included in this Current Report on Form 8-K. COOPERS & LYBRAND L.L.P. New York, New York May 22, 1998 18 -----END PRIVACY-ENHANCED MESSAGE-----