-----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, IIdB4rtH5RCR6l+d8U751KeidVNkVoly9IW/pDLi7vPrOqQQmBuX9IqC100l1l8i WDJTjdhfgXKmwCGGIHh6pQ== 0000889812-98-002039.txt : 19980820 0000889812-98-002039.hdr.sgml : 19980820 ACCESSION NUMBER: 0000889812-98-002039 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980818 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980819 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: 98694684 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 MAIL ADDRESS: STREET 1: 3333 NEW HYDE PARK ROAD STREET 2: PO BOX 5020 CITY: NEW HYDE PARKQ STATE: NY ZIP: 11042 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): August 18, 1998 Kimco Realty Corporation (Exact name of registrant as specified in its charter) Maryland 1-10899 13-2744380 - ------------------------------- ---------------- -------------------- (State or other jurisdiction of (Commission File (IRS Employer incorporation) Number) Identification No.) 3333 New Hyde Park Road New Hyde Park, New York 11042-0020 - ------------------------------- -------------------- (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 10 KIMCO REALTY CORPORATION AND SUBSIDIARIES CURRENT REPORT ON FORM 8-K Item 2. Acquisition or Disposition of Assets As previously reported on Current Report on Form 8-K dated June 24, 1998 and on Current Report on Form 8-K dated August 5, 1998, on June 19, 1998, Kimco Realty Corporation (the "Company") and The Price REIT, Inc. ("Price REIT") consummated a merger (the "Merger") whereby the Company acquired control of Price REIT pursuant to an Agreement and Plan of Merger, dated as of January 13, 1998, as amended as of March 5, 1998 and May 14, 1998 (the "Merger Agreement"), among the Company, REIT Sub, Inc., a wholly owned subsidiary of the Company ("Merger Sub"), and Price REIT. Pursuant to the Merger, Price REIT was merged with and into Merger Sub, whereupon the separate existence of Price REIT ceased. Item 5. Other Events Shopping Center Acquisitions - As previously reported on Current Report on Form 8-K dated May 22, 1998, certain subsidiaries of the Company acquired, in separate transactions, 15 shopping center properties comprising approximately 1.7 million square feet of gross leasable area ("GLA") in eight states for an aggregate purchase price of approximately $136.3 million, including the assumption of approximately $20.8 million in mortgage debt (the "15 Shopping Center Acquisitions"). Additionally, as previously reported on Current Report on Form 8-K dated July 8, 1998, on July 1, 1998 the Company acquired from Metropolitan Life Insurance Company 30 fee and leasehold positions consisting of 29 neighborhood and community shopping center properties and 1 office/distribution facility comprising approximately 3.8 million square feet of GLA in five states for an aggregate purchase price of $167.5 million (the "Met Life Acquisition"). Also, as previously reported on Current Report on Form 8-K dated August 5, 1998, during July 1998 the Company acquired 3 neighborhood and community shopping center properties comprising approximately 384,000 square feet of GLA in three states for an aggregate purchase price of approximately $35.3 million (the "July 1998 Acquisitions" and collectively, with the 15 Shopping Center Acquisitions and the Met Life Acquisition, the "1998 Previously Reported Acquisitions") This report has been filed for the purpose of providing updated pro forma financial information for (i) the 1998 Previously Reported Acquisitions and (ii) the effects of the Merger. 2 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 June 30, 1998....5 Pro Forma Condensed Consolidated Statement of Income for the Six Months Ended June 30, 1998............................................6 Notes to Pro Forma Condensed Consolidated Financial Statements........7 3 KIMCO REALTY CORPORATION AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The accompanying Pro Forma Condensed Consolidated Balance Sheet as of June 30, 1998 gives effect to (i) the Met Life Acquisition on July 1, 1998 and (ii) the purchase of three shopping centers acquired by the Company in July 1998 (the "July 1998 Acquisitions"), as if these acquisitions had occurred as of June 30, 1998. The accompanying Pro Forma Condensed Consolidated Statement of Income for the six months ended June 30, 1998 reflects the historical results of the Company adjusted to give effect to (i) the 1998 Previously Reported Acquisitions, which include the 15 Shopping Center Acquisitions, the Met Life Acquisition and the July 1998 Acquisitions, and (ii) the Merger, which was accounted for under the purchase method of accounting in accordance with Accounting Principles Board Opinion No. 16, as if these 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 1998 Previously Reported Acquisitions and the Merger 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 financial statements should be read in conjunction with the Company's unaudited condensed consolidated financial statements as of June 30, 1998 and for the six months then ended (which are included in the Company's Quarterly Report on Form 10-Q for the period ended June 30, 1998) and the accompanying notes thereto. 4 KIMCO REALTY CORPORATION AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET JUNE 30, 1998 ----------------- (Unaudited)
Pro Forma Adjustments --------------------- Met Life and Kimco July 1998 Historical Acquisitions Pro Forma --------------- ---------------- --------------- Assets: Real estate, net of accumulated depreciation $ 2,311,122,932 $ 202,825,000 $ 2,513,947,932 Investment in retail store leases 15,220,823 - 15,220,823 Cash and cash equivalents 33,921,947 (5,325,000) 28,596,947 Accounts and notes receivable 24,806,498 - 24,806,498 Other assets 143,714,737 - 143,714,737 --------------- --------------- --------------- $ 2,528,786,937 $ 197,500,000 $ 2,726,286,937 =============== =============== =============== Liabilities: Notes payable $ 715,250,000 $ 197,500,000 $ 912,750,000 Mortgages payable 215,236,686 - 215,236,686 Other liabilities, including minority interests in partnerships 112,506,756 - 112,506,756 --------------- --------------- --------------- 1,042,993,442 197,500,000 1,240,493,442 --------------- --------------- --------------- 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 Class D Convertible Preferred Stock, $1.00 par value, authorized 700,000 shares Issued and outstanding 429,159 shares 429,159 - 429,159 Aggregate liquidation preference $107,289,750 Class E Preferred Stock, $1.00 par value, Authorized, issued and outstanding 65,000 shares 65,000 - 65,000 Aggregate liquidation preference $65,000,000 Common stock, $.01 par value, authorized 100,000,000 shares Issued and outstanding 55,446,111 shares 554,461 - 554,461 Paid-in capital 1,597,131,335 - 1,597,131,335 Cumulative distributions in excess of net income (113,286,460) - (113,286,460) --------------- --------------- --------------- 1,485,793,495 - 1,485,793,495 --------------- --------------- --------------- $ 2,528,786,937 $ 197,500,000 $ 2,726,286,937 =============== =============== ===============
The accompanying notes are an integral part of these pro forma condensed consolidated financial statements. 5 KIMCO REALTY CORPORATION AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1998 ------------------------------- (Unaudited)
Pro Forma Adjustments ----------------------------- 1998 Previously Kimco Reported Price REIT Historical Acquisitions Acquisition Pro Forma ------------- ---------------- ----------- ------------ Revenues from rental property $ 132,452,630 $ 15,722,647 $ 45,526,846 $ 193,702,123 ------------- ------------- ------------- ------------- Rental property expenses: Rent 5,558,711 - 820,546 6,379,257 Real estate taxes 18,309,425 545,052 4,906,401 23,760,878 Interest 23,411,176 7,000,982 10,863,396 41,275,554 Operating and maintenance 13,920,139 800,805 3,512,059 18,233,003 Depreciation and amortization 18,890,684 2,819,346 9,492,014 31,202,044 ------------- ------------- ------------- ------------- 80,090,135 11,166,185 29,594,416 120,850,736 ------------- ------------- ------------- ------------- Income from rental property 52,362,495 4,556,462 15,932,430 72,851,387 Income from investment in retail store leases 1,828,248 - - 1,828,248 ------------- ------------- ------------- ------------- 54,190,743 4,556,462 15,932,430 74,679,635 Management fee income 1,531,293 - 338,085 1,869,378 General and administrative expenses (7,004,659) - (1,743,065) (8,747,724) Other income (expenses), net 3,395,054 (460,428) 871,211 3,805,837 ------------- ------------- ------------- ------------- Income before gain on sale of shopping center 52,112,431 4,096,034 15,398,661 71,607,126 Gain on sale of shopping center property 901,249 - - 901,249 ------------- ------------- ------------- ------------- Net income $ 53,013,680 $ 4,096,034 $ 15,398,661 $ 72,508,375 ============= ============= ============= ============= Net income applicable to common shares $ 43,360,206 $ 4,096,034 $ 9,313,919 $ 56,770,159 ============= ============= ============= ============= Net income per common share Basic $1.03 $1.06 ====== ===== Diluted $1.01 $1.05 ====== =====
The accompanying notes are an integral part of these pro forma condensed consolidated financial statements. 6 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 June 30, 1998 gives effect to (i) the Met Life Acquisition on July 1, 1998 and (ii) the purchase of three shopping centers acquired by the Company in July 1998 (the "July 1998 Acquisitions"), as if these acquisitions had occurred as of June 30, 1998. The accompanying Pro Forma Condensed Consolidated Statement of Income for the six months ended June 30, 1998 reflects the historical results of the Company adjusted to give effect to (i) the 1998 Previously Reported Acquisitions, which include the 15 Shopping Center Acquisitions, the Met Life Acquisition and the July 1998 Acquisitions, and (ii) the Merger, which was accounted for under the purchase method of accounting in accordance with Accounting Principles Board Opinion No. 16, as if these transactions had occurred as of January 1, 1998. 2. Pro Forma Adjustments (i) With respect to the 1998 Previously Reported Acquisitions: A. The adjustment to interest expense relates to the issuance of the $130.0 million medium-term notes and the additional borrowings of $67.5 million under the Company's unsecured revolving credit facility. B. The adjustments to other income (expenses), net relates to (i) the elimination of interest earned on funds assumed to have been expended as of January 1, 1998 and (ii) the preferred return applicable to the partnership unitholders in connection with one of the 1998 Previously Reported Acquisitions. C. 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 for the fee simple properties and to building (100%) for the properties subject to ground leases. 7 (ii) With respect to the Price REIT Merger: The Price REIT Acquisition column in the accompanying Pro Forma Condensed Consolidated Statement of Income includes the results of Price REIT for the period from January 1, 1998 to June 19, 1998 adjusted for the results of Price REIT's 1998 pre-merger acquisitions as if those acquisitions had occurred at January 1, 1998. Additionally, the Price REIT Acquisitions column has been adjusted for the following: A. The adjustment to depreciation and amortization results from the net increase in real estate owned as a result of recording the acquired Price REIT real estate assets at fair value versus historical cost. Depreciation is computed on the straight-line method based upon an estimated useful life of 39 years and an allocation of the stepped-up basis to land and building of 20% and 80%, respectively. Pro forma adjustments to depreciation of real estate for the six months ended June 30, 1998 are as follows:
Six Months Ended June 30, 1998 (000's) ---------------- Depreciation expense based upon an estimated useful life of 39 years $9,286 Less: Price REIT depreciation of real estate owned based upon an estimated useful life of 15 to 25 years (9,722) ------ Depreciation and amortization Pro Forma adjustment ($436) ------
B. The adjustment to general and administrative expenses reflects the net estimated reduction of those costs which are anticipated to be eliminated or reduced as a result of the Merger, as follows:
Six Months Ended June 30, 1998 (000's) ---------------- Net reduction in salary and benefit costs $ 350 Net reduction in duplication of public company expenses 300 Net reduction in directors and officers' insurance and directors fees 100 ----- General and administrative Pro Forma adjustment $ 750 -----
8 C. During April 1996, the Company and Price REIT formed a partnership to purchase a property in Phoenix, AZ. The Company had consolidated this partnership for financial reporting purposes and Price REIT had recorded their interest using the equity method. The adjustments of $35,858 to Equity in income of real estate joint ventures, net and Minority interest in partnerships both included in Other income (expenses), net reflect the elimination of the partnership accounting for this partnership as a result of the Merger, for the six months ended June 30, 1998. D. Weighted average number of shares outstanding- The pro forma weighted average number of common shares outstanding for the six months ended June 30, 1998 are computed as follows:
Six Months Ended June 30, 1998 (000's) ---------------- Kimco's historical weighted average number of shares outstanding 42,279 Add: Incremental weighted average number of shares assumed to be issued and outstanding in connection with the Merger as if the Merger had occurred January 1, 1998 11,132 ------ Pro Forma weighted average number of Kimco common shares outstanding (Basic) 53,411 Effect of Dilutive Securities- Stock options 561 ------ Pro Forma weighted average number of Kimco common shares outstanding (Diluted) 53,972 ------
The effect of the conversion of the Company's Class D Convertible Preferred Stock would have an anti-dilutive effect upon net income per common share. Accordingly, the impact of such conversion has not been included in the determination of diluted earnings per common share. 9 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: August 15, 1998 By: /s/ Michael V. Pappagallo ------------------------- Michael V. Pappagallo Chief Financial Officer 10 -----END PRIVACY-ENHANCED MESSAGE-----