-----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, BTNXBtTnVnXjAjMnBI555ywlKpMZwYhwuVIFzN48qvOexJXDZtSKakgIjxNSZVAY yL/lJzWpcHAGr1iO/sfLPQ== 0001125282-03-002483.txt : 20030327 0001125282-03-002483.hdr.sgml : 20030327 20030327160013 ACCESSION NUMBER: 0001125282-03-002483 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030327 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: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10899 FILM NUMBER: 03621046 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 10-K 1 b323865_10k.txt ANNUAL REPORT Page 1 of 110 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES - ------ EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the fiscal year ended December 31, 2002 ----------------- OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES - ------ EXCHANGE ACT OF 1934 [NO FEE REQUIRED] 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 of incorporation) (I.R.S. Employer Identification No.) 3333 New Hyde Park Road, New Hyde Park, NY 11042-0020 - ------------------------------------------------------------------------------- (Address of principal executive offices) Zip Code Registrant's telephone number, including area code (516)869-9000 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on Title of each class which registered ------------------- ---------------- Common Stock, par value $.01 per share. New York Stock Exchange - --------------------------------------- ------------------------ Depositary Shares, each representing one- tenth of a share of 7-3/4% Class A Cumulative Redeemable Preferred Stock, par value $1.00 per share. New York Stock Exchange - -------------------------- ------------------------ Depositary Shares, each representing one- tenth of a share of 8-1/2% Class B Cumulative Redeemable Preferred Stock, par value $1.00 per share. New York Stock Exchange - -------------------------- ------------------------ Depositary Shares, each representing one- tenth of a share of 8-3/8% Class C Cumulative Redeemable Preferred Stock, par value $1.00 per share. New York Stock Exchange - -------------------------- ------------------------- Securities registered pursuant to Section 12(g) of the Act: None - ------------------------------------------------------------------------------- Indicate by check mark whether the Registrant (i) 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 (ii) has been subject to such filing requirements for the past 90 days. Yes X No ---- ---- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. X ---- Indicate by check mark whether the Registrant is an accelerated filer (as defined in rule 12b-2 of the Act.) Yes X No ---- ---- The aggregate market value of the voting stock held by non-affiliates of the Registrant was approximately $2.8 billion based upon the closing price on the New York Stock Exchange for such stock on January 31, 2003. (APPLICABLE ONLY TO CORPORATE REGISTRANTS) Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of the latest practicable date. 104,651,866 shares as of January 31, 2003. 1 DOCUMENTS INCORPORATED BY REFERENCE Part III incorporates certain information by reference to the Registrant's definitive proxy statement to be filed with respect to the Annual Meeting of Stockholders expected to be held on May 15, 2003. Index to Exhibits begins on page 48. 2 TABLE OF CONTENTS
Form 10-K Report Item No. Page - -------- ----------- PART I 1. Business ................................................................. 4 2. Properties ............................................................... 17 3. Legal Proceedings ........................................................ 19 4. Submission of Matters to a Vote of Security Holders ...................... 19 Executive Officers of the Registrant ..................................... 29 PART II 5. Market for the Registrant's Common Equity and Related Shareholder Matters .......................................... 31 6. Selected Financial Data .................................................. 32 7. Management's Discussion and Analysis of Financial Condition and Results of Operations .................................................... 34 7A. Quantitative and Qualitative Disclosures About Market Risk ............... 45 8. Financial Statements and Supplementary Data .............................. 45 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ..................................................... 45 PART III 10. Directors and Executive Officers of the Registrant ....................... 46 11. Executive Compensation ................................................... 46 12. Security Ownership of Certain Beneficial Owners and Management ........... 46 13. Certain Relationships and Related Transactions ........................... 46 14. Controls and Procedures .................................................. 46 PART IV 15. Exhibits, Financial Statements, Schedules and Reports on Form 8-K ........ 47
3 PART I FORWARD-LOOKING STATEMENTS This annual report on Form 10-K, together with other statements and information publicly disseminated by Kimco Realty Corporation (the "Company" or "Kimco") contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe the Company's future plans, strategies and expectations, are generally identifiable by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project" or similar expressions. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond the Company's control and which could materially affect actual results, performances or achievements. Factors which may cause actual results to differ materially from current expectations include, but are not limited to, (i) general economic and local real estate conditions, (ii) the inability of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or general downturn in their business, (iii) financing risks, such as the inability to obtain equity or debt financing on favorable terms, (iv) changes in governmental laws and regulations, (v) the level and volatility of interest rates (vi) the availability of suitable acquisition opportunities and (vii) increases in operating costs. Accordingly, there is no assurance that the Company's expectations will be realized. SHARE SPLIT As of December 21, 2001, the Company effected a three-for-two split (the "Stock Split") of the Company's common stock in the form of a stock dividend paid to stockholders of record on December 10, 2001. All common share and per common share data included in this annual report on Form 10-K and the accompanying Consolidated Financial Statements and Notes thereto have been adjusted to reflect this Stock Split. Item 1. Business General Kimco Realty Corporation, a Maryland corporation, is one of the nation's largest owners and operators of neighborhood and community shopping centers. The Company is a self-administered real estate investment trust ("REIT") and manages its properties through present management, which has owned and operated neighborhood and community shopping centers for over 35 years. The Company has not engaged, nor does it expect to retain, any REIT advisors in connection with the operation of its properties. As of February 7, 2003, the Company's portfolio was comprised of 607 property interests including 538 neighborhood and community shopping center properties, two regional malls, 41 retail store leases, 22 ground-up development projects and four parcels of undeveloped land totaling approximately 90 million square feet of leasable space located in 41 states, Canada and Mexico. The Company's ownership interests in real estate consist of its consolidated portfolio and in portfolios where the Company owns an economic interest, such as; Kimco Income REIT ("KIR"), the RioCan Venture ("RioCan Venture"), Kimco Retail Opportunity Portfolio ("KROP") and other properties or portfolios where the Company also retains management (See Recent Developments - Operating Real Estate Joint Venture Investments and Note 6 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K). The Company believes its portfolio of neighborhood and community shopping center properties is the largest (measured by gross leasable area ("GLA")) currently held by any publicly-traded REIT. The Company's executive offices are located at 3333 New Hyde Park Road, New Hyde Park, New York 11042-0020 and its telephone number is (516) 869-9000. Unless the context indicates otherwise, the term the "Company" as used herein is intended to include subsidiaries of the Company. Our Web site is located at http://www.Kimcorealty.com. On our Web site you can obtain, free of charge, a copy of our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act of 1934, as amended, as soon as reasonably practicable after we file such material electronically with, or furnish it to, the Securities and Exchange Commission (the "SEC"). 4 History The Company began operations through its predecessor, The Kimco Corporation, which was organized in 1966 upon the contribution of several shopping center properties owned by its principal stockholders. In 1973, these principals formed the Company as a Delaware corporation, and in 1985, the operations of The Kimco Corporation were merged into the Company. The Company completed its initial public stock offering (the "IPO") in November 1991, and commencing with its taxable year which began January 1, 1992, elected to qualify as a REIT in accordance with Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"). In 1994, the Company reorganized as a Maryland corporation. The Company's growth through its first 15 years resulted primarily from the ground-up development and construction of its shopping centers. By 1981, the Company had assembled a portfolio of 77 properties that provided an established source of income and positioned the Company for an expansion of its asset base. At that time, the Company revised its growth strategy to focus on the acquisition of existing shopping centers and creating value through the redevelopment and re-tenanting of those properties. As a result of this strategy, substantially all of the operating shopping centers added to the Company's portfolio since 1981 have been through the acquisition of existing shopping centers. During 1998, the Company, through a merger transaction, completed the acquisition of The Price REIT, Inc., a Maryland corporation, (the "Price REIT"). Prior to the merger, Price REIT was a self-administered and self-managed equity REIT that was primarily focused on the acquisition, development, management and redevelopment of large retail community shopping center properties concentrated in the western part of the United States. In connection with the merger, the Company acquired interests in 43 properties, located in 17 states. With the completion of the Price REIT merger, the Company expanded its presence in certain western states including California, Arizona and Washington. In addition, Price REIT had strong ground-up development capabilities. These development capabilities, coupled with the Company's own construction management expertise, provides the Company, on a selective basis, the ability to pursue ground-up development opportunities. Also, during 1998, the Company formed KIR, an entity in which the Company held a 99.99% limited partnership interest. KIR was established for the purpose of investing in high quality properties financed primarily with individual non-recourse mortgages. The Company believes that these properties are appropriate for financing with greater leverage than the Company traditionally uses. At the time of formation, the Company contributed 19 properties to KIR, each encumbered by an individual non-recourse mortgage. During 1999, KIR sold a significant interest in the partnership to institutional investors. As of December 31, 2002, the Company holds a 43.3% non-controlling limited partnership interest in KIR and accounts for its investment in KIR under the equity method of accounting (See Recent Developments - Operating Real Estate Joint Venture Investments and Note 6 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K). In connection with the Tax Relief Extension Act of 1999 (the "RMA") which became effective January 1, 2001, the Company is now permitted to participate in activities which it was precluded from previously in order to maintain its qualification as a REIT, so long as these activities are conducted in entities which elect to be treated as taxable subsidiaries under the Code, subject to certain limitations. As such, the Company, through its taxable REIT subsidiaries, is engaged in various retail real estate related opportunities, including (i) merchant building through its wholly owned taxable REIT subsidiary, Kimco Developers, Inc. ("KDI"), which is primarily engaged in the ground-up development of neighborhood and community shopping centers and subsequent sale thereof upon completion (see Recent Developments - Kimco Developers, Inc. ("KDI")), (ii) retail real estate advisory and disposition services which primarily focus on leasing and disposition strategies for real estate property interests of both healthy and distressed retailers and (iii) acting as an agent or principal in connection with tax deferred exchange transactions. The Company will consider other investments through taxable REIT subsidiaries should suitable opportunities arise. During October 2001, the Company continued its geographical expansion by forming the RioCan Venture with RioCan Real Estate Investment Trust ("RioCan", Canada's largest publicly traded REIT measured by GLA) in which the Company has a non-controlling 50% interest, to acquire retail properties and development projects in Canada. The Company has committed a total equity investment of up to $250.0 million Canadian dollars ("CAD") and accounts for this investment under the equity method of accounting (see Recent Developments - Operating Real Estate Joint Venture Investments and Note 6 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K). In addition, the Company continues to capitalize on its established expertise in retail real estate by establishing other ventures in which the Company owns a smaller equity interest and provides management, leasing and operational support for those properties, including KROP. 5 Investment and Operating Strategy The Company's investment objective has been to increase cash flow, current income and, consequently, the value of its existing portfolio of properties, and to seek continued growth through (i) the strategic re-tenanting, renovation and expansion of its existing centers and (ii) the selective acquisition of established income-producing real estate properties and properties requiring significant re-tenanting and redevelopment, primarily in neighborhood and community shopping centers in geographic regions in which the Company presently operates. The Company will consider investments in other real estate sectors and in geographic markets where it does not presently operate should suitable opportunities arise. The Company's neighborhood and community shopping center properties are designed to attract local area customers and typically are anchored by a discount department store, a supermarket or drugstore tenant offering day-to-day necessities rather than high-priced luxury items. The Company may either purchase or lease income-producing properties in the future, and may also participate with other entities in property ownership through partnerships, joint ventures or similar types of co-ownership. Equity investments may be subject to existing mortgage financing and/or other indebtedness. Financing or other indebtedness may be incurred simultaneously or subsequently in connection with such investments. Any such financing or indebtedness will have priority over the Company's equity interest in such property. The Company may make loans to joint ventures in which it may or may not participate in the future. In addition to property or equity ownership, the Company provides property management services for fees relating to the management, leasing, operation, supervision and maintenance of real estate properties. While the Company has historically held its properties for long-term investment, and accordingly has placed strong emphasis on its ongoing program of regular maintenance, periodic renovation and capital improvement, it is possible that properties in the portfolio may be sold, in whole or in part, as circumstances warrant, subject to REIT qualification rules. The Company seeks to reduce its operating and leasing risks through diversification achieved by the geographic distribution of its properties and a large tenant base. At December 31, 2002, the Company's single largest neighborhood and community shopping center, accounted for only 1.2% of the Company's annualized base rental revenues and only 0.8% of the Company's total shopping center GLA. At December 31, 2002, the Company's five largest tenants, include Kmart Corporation (see Recent Developments - Kmart Bankruptcy), The Home Depot, Kohl's, TJX Companies and Wal-Mart, which represent approximately 4.5%, 2.8%, 2.7%, 2.5% and 1.9%, respectively, of the Company's annualized base rental revenues, including the proportionate share of base rental revenues from properties in which the Company has less than a 100% economic interest. In connection with the RMA, which became effective January 1, 2001, the Company has expanded its investment and operating strategy to include new retail real estate related opportunities which the Company was precluded from previously in order to maintain its qualification as a REIT. As such, the Company, has established a merchant building business through its KDI subsidiary. KDI makes selective acquisitions of land parcels for the ground-up development of neighborhood and community shopping centers and subsequent sale thereof upon completion. Additionally, the Company has developed a retail property solutions business which specializes in real estate advisory and disposition services of real estate controlled by both healthy and distressed and/or bankrupt retailers. These services may include assistance with inventory and fixture liquidation in connection with going-out-of-business sales. The Company may participate with other entities in providing these advisory services through partnerships, joint ventures or other co-ownership arrangements. The Company, as a regular part of its investment strategy, will continue to actively seek investments for its taxable REIT subsidiaries. The Company emphasizes equity real estate investments including preferred equity investments, but may, at its discretion, invest in mortgages, other real estate interests and other investments. The mortgages in which the Company may invest may be either first mortgages, junior mortgages or other mortgage-related securities. The Company provides mortgage financing to retailers with significant real estate assets, in the form of lease-hold interests or fee owned properties, where the Company believes the underlying value of the real estate collateral is in excess of its loan balance. In addition, the Company will acquire debt instruments at a discount in the secondary market where the Company believes the real estate value of the enterprise is substantially greater than the current value. 6 The Company may legally invest in the securities of other issuers, for the purpose, among others, of exercising control over such entities, subject to the gross income and asset tests necessary for REIT qualification. The Company may, on a selective basis, acquire all or substantially all securities or assets of other REITs or similar entities where such investments would be consistent with the Company's investment policies. In any event, the Company does not intend that its investments in securities will require it to register as an "investment company" under the Investment Company Act of 1940. The Company has authority to offer shares of capital stock or other senior securities in exchange for property and to repurchase or otherwise reacquire its common stock or any other securities and may engage in such activities in the future. At all times, the Company intends to make investments in such a manner as to be consistent with the requirements of the Code, to qualify as a REIT unless, because of circumstances or changes in the Code (or in Treasury Regulations), the Board of Directors determines that it is no longer in the best interests of the Company to qualify as a REIT. The Company's policies with respect to the aforementioned activities may be reviewed and modified from time to time by the Company's Board of Directors without the vote of the Company's stockholders. Capital Strategy and Resources The Company intends to operate with and maintain a conservative capital structure with a level of debt to total market capitalization of approximately 50% or less. As of December 31, 2002, the Company's level of debt to total market capitalization was 31%. In addition, the Company intends to maintain strong debt service coverage and fixed charge coverage ratios as part of its commitment to maintaining its investment-grade debt ratings. Since the completion of the Company's IPO in 1991, the Company has utilized the public debt and equity markets as its principal source of capital for its expansion needs. Since the IPO, the Company has completed additional offerings of its public unsecured debt and equity, raising in the aggregate over $2.7 billion for the purposes of, among other things, repaying indebtedness, acquiring interests in neighborhood and community shopping centers, funding ground-up development projects, expanding and improving properties in the portfolio and other investments. The Company has a $250.0 million, unsecured revolving credit facility, which is scheduled to expire in August 2003. This credit facility has made available funds to both finance the purchase of properties and meet any short-term working capital requirements. As of December 31, 2002, there was $40.0 million outstanding under this unsecured revolving credit facility. The Company intends to renew this revolving credit facility prior to the maturity date. The Company also has a $200.0 million medium-term notes program (the "MTN 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, development and redevelopment costs, and (ii) managing the Company's debt maturities. As of December 31, 2002, $98.0 million was available for issuance under the MTN program. (See Note 10 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.) In addition to the public debt and equity markets as capital sources, the Company may, from time to time, obtain mortgage financing on selected properties. As of December 31, 2002, the Company had over 380 unencumbered property interests in its portfolio representing over 89% of the Company's net operating income. 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, unsecured debt financings and/or mortgage financings and other capital alternatives in a manner consistent with its intention to operate with a conservative debt capitalization policy. During May 2001, the Company filed a shelf registration on Form S-3 for up to $750.0 million of debt securities, preferred stock, depositary shares, common stock and common stock warrants. As of January 31, 2003, the Company had approximately $288.7 million available for issuance under this shelf registration statement. 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 the payment of dividends in accordance with REIT requirements in both the short-term and long-term. In addition, the Company anticipates that cash on hand, free cash flow generated by the operating business, availability under its revolving credit facility, issuance of equity and public debt, as well as other debt and equity alternatives, will provide the necessary capital required by the Company. Cash flow from operations was $278.9 million for the year ended December 31, 2002, as compared to $287.4 million for the year ended December 31, 2001. 7 Competition As one of the original participants in the growth of the shopping center industry and one of the nation's largest owners and operators of neighborhood and community shopping centers, the Company has established close relationships with a large number of major national and regional retailers and maintains a broad network of industry contacts. Management is associated with and/or actively participates in many shopping center and REIT industry organizations. Notwithstanding these relationships, there are numerous regional and local commercial developers, real estate companies, financial institutions and other investors who compete with the Company for the acquisition of properties and in seeking tenants who will lease space in the Company's properties. Inflation and Other Business Issues 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 predetermined thresholds ("Percentage Rents"), 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 upon renewal to market rates. Most of the Company's leases require the tenant to reimburse the Company for their 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 fluctuations in foreign currency exchange rates and will, from time to time, enter into interest rate protection agreements and foreign currency hedge agreements which mitigate, but do not eliminate, the effect of changes in interest rates on its floating-rate debt and changes in foreign currency exchange rates. Risk Factors Set forth below are the material risks associated with the purchase and ownership of the securities of the Company. As an owner of real estate, the Company is subject to certain business risks arising in connection with the underlying real estate, including, among other factors, (i)defaults of major tenants due to bankruptcy, insolvency and/or general downturn in their business which could reduce the Company's cash flow, (ii) major tenants not renewing their leases as they expire or renew at lower rental rates which could reduce the Company's cash flow, (iii) changes in retailing trends which could reduce the need for shopping centers, (iv) potential liability for future or unknown environmental issues, (v) changes in real estate and zoning laws and competition from other real estate owners which could make it difficult to lease or develop properties, and (vi) the inability to acquire capital, either in the form of debt or equity, on satisfactory terms to fund the Company's cash requirements. The success of the Company also depends upon trends in the economy, including, but not limited to, interest rates, income tax laws, governmental regulations and legislation and population trends. Additionally, the Company is subject to complex regulations related to its status as a REIT and would be adversely affected if it failed to maintain its qualification as a REIT. Operating Practices Nearly all operating functions, including leasing, legal, construction, data processing, maintenance, finance and accounting, are administered by the Company from its executive offices in New Hyde Park, New York. The Company believes it is critical to have a management presence in its principal areas of operation and accordingly, the Company maintains regional offices in Hartford, Connecticut; Margate, Orlando and Tampa, Florida; Albany, New York; Philadelphia, Pennsylvania; Dallas, Texas; Dayton and Cleveland, Ohio; Lisle and Chicago, Illinois; Charlotte and Cary, North Carolina; Phoenix, Arizona; Jonesboro, Georgia; Woodbridge, Virginia; Los Angeles, San Francisco and Sacramento, California and Baltimore, Maryland. A total of 324 persons are employed at the Company's executive and regional offices. The Company's regional offices are generally staffed by a manager and the support personnel necessary to both function as local representatives for leasing and promotional purposes and to complement the corporate office efforts to ensure that property inspection and maintenance objectives are achieved. The regional offices are important in reducing the time necessary to respond to the needs of the Company's tenants. Leasing and maintenance personnel from the corporate office also conduct regular inspections of each shopping center. The Company also employs a total of 51 persons at several of its larger properties in order to more effectively administer its maintenance and security responsibilities. Management Information Systems Virtually all operating activities are supported by a sophisticated computer software system designed to provide management with operating data necessary to make informed business decisions on a timely basis. These systems are continually expanded and enhanced by the Company and reflect a commitment to quality management and tenant relations. The Company has integrated an advanced mid-range computer with personal computer technology, creating a management information system that facilitates the development of property cash flow budgets, forecasts and related management information. 8 Qualification as a REIT The Company has elected, commencing with its taxable year which began January 1, 1992, to qualify as a REIT under the Code. If, as the Company believes, it is organized and operates in such a manner so as to qualify and remain qualified as a REIT under the Code, the Company generally will not be subject to federal income tax, provided that distributions to its stockholders equal at least the amount of its REIT taxable income as defined under the Code. In connection with the RMA, which became effective January 1, 2001, the Company is now permitted to participate in activities which the Company was precluded from previously in order to maintain its qualification as a REIT, so long as these activities are conducted in entities which elect to be treated as taxable subsidiaries under the Code, subject to certain limitations. The primary activities conducted by the Company in its taxable REIT subsidiaries during 2002 include, but are not limited to, (i) the ground-up development of shopping center properties and subsequent sale thereof upon completion (see Recent Developments - Kimco Developers, Inc. ("KDI")) and (ii) real estate advisory and disposition services provided in connection with asset designation rights and assistance with inventory and furniture liquidations in connection with going-out-of-business sales by certain bankrupt retailers. As such, the Company was subject to federal and state income taxes on the income from these activities. Recent Developments Kmart Bankruptcy - On January 22, 2002, Kmart Corporation ("Kmart") filed for protection under Chapter 11 of the U.S. Bankruptcy Code. As of the filing date, Kmart occupied 69 locations (excluding the KIR portfolio which included six Kmart locations), representing 12.6% of the Company's annualized base rental revenues and 13.3% of the Company's total shopping center GLA as of the filing date. During 2002, Kmart rejected its leases at 31 locations, representing approximately $30.8 million of annualized base rental revenues and approximately 3.2 million square feet of GLA. As of December 31, 2002, Kmart represented 4.5% of annualized base rents and 6.9% of leased GLA. During December 2002, the Company disposed of, in separate transactions, seven former Kmart sites, comprised of approximately 1.0 million square feet of GLA, for an aggregate sales price of approximately $40.8 million. The Company has currently leased or is under agreement to lease 11 of the rejected locations, has terminated four ground lease locations and has received offers to purchase three of these sites. The Company is reviewing the offers received and is actively marketing the remaining six locations to prospective tenants, however, no assurances can be provided that these locations will be leased in the near term or at comparable rents previously paid by Kmart. The Company had previously encumbered seven of these rejected locations with individual non-recourse mortgage loans totaling approximately $70.8 million. Annualized interest expense on these loans was approximately $5.6 million. During July 2002, the Company suspended debt service payments on these loans and was actively negotiating with the respective lenders. During December 2002, the Company reached agreement with certain lenders in connection with four of these locations. The Company paid approximately $24.2 million in full satisfaction of the loans encumbering these properties which aggregated $46.5 million. As a result of these transactions, the Company recognized a gain on early extinguishment of debt of approximately $22.3 million. Also, during December 2002, the Company re-tenanted one location and brought the mortgage loan encumbering this property current. Additionally, during February 2003, the Company reached agreement with the lender in connection with the two remaining encumbered locations. The Company paid approximately $8.3 million in full satisfaction of these loans which aggregated approximately $14.7 million. As a result of this transaction, the Company will recognize a gain on early extinguishment of debt of approximately $6.2 million during the first quarter of 2003. On January 14, 2003, Kmart announced it would be closing an additional 326 locations of which nine of these locations (excluding the KIR portfolio which includes three additional locations and Kimsouth (as defined below) which includes two additional locations) are leased from the Company. The annualized base rental revenues from these nine locations are approximately $4.3 million. The Company had previously encumbered one of these properties with an individual non-recourse mortgage loan. The annualized interest expense for the one encumbered property is approximately $0.8 million. As of the date of this filing of this annual report on Form 10-K, the Company has not been notified directly by Kmart as to the timing of these store closings or whether the leases will be assigned or rejected. Until such time as the leases are rejected in accordance with the bankruptcy proceedings, Kmart remains obligated for payments of rent and operating expenses at these locations and all other remaining locations. 9 Effective May 1, 2003, the Company has agreed to a five-year rent reduction at six Kmart locations, consisting of approximately 0.6 million square feet of GLA. The average rent was reduced from $8.01 per square foot to $5.57 per square foot, or approximately $1.5 million of annualized base rent. The Company generally will have the right to file claims in connection with rejected leases for lost rent equal to three years of rental obligations as well as other amounts related to obligations under the leases. Actual amounts to be received in satisfaction of these claims will be subject to Kmart's final plan of reorganization and the availability of funds to pay creditors such as the Company. Operating Properties - Acquisitions - During the year ended December 31, 2002, the Company acquired 13 wholly owned operating properties located in seven states and Mexico, comprising approximately 1.8 million square feet of GLA for an aggregate purchase price of approximately $258.7 million including the issuance of approximately 2.4 million downREIT units valued at $80.0 million in connection with the acquisition of one of the properties and the assumption of approximately $3.5 million in mortgage debt encumbering one of the properties. Details of these transactions are as follows: During April 2002, the Company acquired three operating properties located in Columbia, MD, comprising approximately 0.2 million square feet of GLA, for an aggregate purchase price of approximately $15.4 million. During May 2002, the Company acquired a property located in Springfield, MO for an aggregate purchase price of approximately $4.3 million including the assumption of approximately $3.5 million in mortgage debt. During July 2002, the Company acquired a property located in East Windsor, NJ comprising approximately 0.2 million square feet of GLA, for an aggregate purchase price of approximately $26.5 million. During November 2002, the Company sold this property for a purchase price, which approximated net book value. The Company retained a minor interest in the property, which allows for the participation of Net Cash Flows, as defined. Effective with the sale, the Company entered into a property management agreement with the purchaser to provide services relating to the management, leasing, operation, supervision and maintenance of the property. During October 2002, the Company acquired an interest in a shopping center property, comprising approximately 0.6 million square feet of GLA, located in Daly City, CA. The property was valued at a purchase price of approximately $80.0 million and was acquired by issuing approximately 2.4 million downREIT units which are convertible at a ratio of 1:1 into the Company's common stock (see Note 16 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K). During October 2002, the Company, in separate transactions, purchased two properties located in Monterrey, Mexico comprising approximately 0.3 million square feet of GLA for an aggregate purchase price of approximately $368.5 million pesos ("MXN")(USD $35.7 million). One of these sites consists of a portion under development of approximately 0.1 million square feet of GLA with total development costs budgeted at approximately MXN $29.3 million (USD $5.8 million). The scheduled completion of this project is during the fourth quarter of 2003. The Company has entered into several foreign currency hedge transactions to reduce its exposure to fluctuations in foreign currency exchange rates. During December 2002, the Company acquired four operating properties, in separate transactions, comprising approximately 0.6 million square feet of GLA located in three states for an aggregate purchase price of approximately $96.3 million. 10 Dispositions - During 2002, the Company, (i) disposed of, in separate transactions, 12 operating properties for an aggregate sales price of approximately $74.5 million, including the assignment/repayment of approximately $22.6 million of mortgage debt encumbering three of the properties and (ii) terminated five leasehold positions in locations where a tenant in bankruptcy had rejected its lease. These transactions resulted in net gains of approximately $12.8 million. Details of these transactions are as follows: During April 2002, the Company disposed of an operating property located in Massapequa, NY for a sales price of approximately $4.1 million, including the assignment of approximately $2.7 million of mortgage debt. Cash proceeds from this disposition were used to acquire an exchange shopping center property located in Springfield, MO during May 2002. During July 2002, the Company disposed of an operating property located in Columbus, OH for a sales price of approximately $1.4 million. During September 2002, the Company disposed of an operating property located in Corsicana, TX for a sales price of approximately $11.5 million including the assignment of approximately $8.4 million of mortgage debt. During October 2002, the Company, in separate transactions, disposed of two operating properties for an aggregate sales price of approximately $6.3 million. Cash proceeds from one of these dispositions was used to acquire an exchange shopping center property in December 2002. During November 2002, the Company disposed of an operating property located in Chicago, IL. Net proceeds from this sale of approximately $8.0 million were accepted by a lender in full satisfaction of an outstanding mortgage loan of approximately $11.5 million. The Company recognized a gain on early extinguishment of debt of approximately $3.2 million. During December 2002, the Company, in separate transactions, disposed of six operating properties for an aggregate sales price of approximately $39.7 million. Proceeds from two of these sales will be used to purchase exchange shopping center properties. Redevelopments - The Company has an ongoing program to reformat and re-tenant its properties to maintain or enhance its competitive position in the marketplace. During 2002, the Company substantially completed the redevelopment and re-tenanting of various operating properties. The Company expended approximately $44.4 million in connection with these major redevelopments and re-tenanting projects during 2002. The Company is currently involved in redeveloping several other shopping centers in the existing portfolio. The Company anticipates its capital commitment toward these and other redevelopment projects will be approximately $30.0 million to $50.0 million during 2003. Kimco Developers, Inc. ("KDI") - Effective January 1, 2001, the Company elected taxable REIT subsidiary status for its wholly-owned subsidiary, KDI. KDI is primarily engaged in the ground-up development of neighborhood and community shopping centers and the subsequent sale thereof upon completion. As of December 31, 2002, KDI had in progress 19 ground-up development projects located in eight states. These projects had substantial pre-leasing prior to the commencement of construction. During 2002, KDI expended approximately $148.6 million in connection with the purchase of land and construction costs related to these projects. These projects are currently proceeding on schedule and in line with the Company's budgeted costs. The Company anticipates its capital commitment toward these and other development projects will be approximately $160.0 million to $200.0 million during 2003. The proceeds from the sales of the completed ground-up development projects during 2003 and proceeds from construction loans are expected to be sufficient to fund these anticipated capital requirements. KDI Acquisitions - During the year ended December 31, 2002, KDI acquired five land parcels, in separate transactions, for the ground-up development of shopping centers and subsequent sales thereof upon completion for an aggregate purchase price of approximately $21.3 million, as follows: During January 2002, KDI acquired two land parcels, in separate transactions, for an aggregate purchase price of approximately $6.2 million. 11 During April 2002, KDI acquired a land parcel located in Beaumont, TX for an aggregate purchase price of approximately $2.2 million. During May 2002, KDI acquired a land parcel located in Panama City, FL for an aggregate purchase price of approximately $2.0 million. During December 2002, KDI acquired a land parcel located in Woodlands, TX for an aggregate purchase price of approximately $10.9 million. The estimated project costs for these newly acquired parcels is approximately $131.2 million with completion dates ranging from March 2003 to June 2005. During 2002, the Company obtained individual construction loans on eight ground-up development properties. Total loan commitments aggregate $119.8 million of which approximately $38.9 million has been funded as of December 31, 2002. These loans have maturities ranging from 18 to 36 months and bear interest at rates averaging 4.38% at December 31, 2002. KDI Dispositions - During the year ended December 31, 2002, KDI sold four of its recently completed projects and eight out-parcels for approximately $128.7 million, including the assignment of approximately $17.7 million in mortgage debt encumbering one of the properties. These sales resulted in pre-tax gains of approximately $15.9 million. Details are as follows: During January 2002, KDI disposed of, in separate transactions, Mallwoods Center, a completed ground-up development project located in Miamisburg, OH and an out-parcel located in Hillsborough, NJ for an aggregate sales price of approximately $12.6 million. During August 2002, KDI disposed of Wakefield Crossing, a completed ground-up development project located in Raleigh, NC, for a sales price of approximately $10.7 million. During September 2002, KDI disposed of Cedar Hill Crossing, a completed ground-up development project located in Cedar Hills, TX, for a sales price of approximately $23.7 million including the assignment of approximately $17.7 million of mortgage debt. Effective with the sale, the Company entered into a property management agreement with the purchaser of this property. In addition to a property management fee, the Company is entitled to certain fees which are based on Net Cash Flows and Capital Transactions, as defined. During December 2002, KDI disposed of an out-parcel located in Henderson, NV for approximately $1.3 million. The property was owned through a joint venture in which KDI has a 50% interest. During 2002, KDI disposed of two out-parcels, located in Chandler, AZ for an aggregate sales price of approximately $1.6 million. During 2002, KDI disposed of, in separate transactions, Phase I and four out-parcels of Forum at Olympia, a ground-up development project located in San Antonio, TX, for an aggregate sales price of approximately $78.8 million. Operating Real Estate Joint Venture Investments - Kimco Income REIT ("KIR") - During 1998, the Company formed KIR, an entity that was established for the purpose of investing in high quality real estate properties financed primarily with individual non-recourse mortgages. These properties include, but are not limited to, fully developed properties with strong, stable cash flows from credit-worthy retailers with long-term leases. The Company originally held a 99.99% limited partnership interest in KIR. Subsequent to KIR's formation, the Company sold a significant portion of its original interest to an institutional investor and admitted three other limited partners. As of December 31, 2002, KIR has received total capital commitments of $569.0 million, of which the Company subscribed for $247.0 million and the four limited partners subscribed for $322.0 million. The Company has a 43.3% non-controlling limited partnership interest in KIR and accounts for its investment under the equity method of accounting. During 2002, the limited partners in KIR contributed $55.0 million towards their respective capital commitments, including $23.8 million by the Company. As of December 31, 2002, KIR had unfunded capital commitments of $129.0 million, including $55.9 million from the Company. 12 During 2002, KIR purchased five shopping center properties, in separate transactions, aggregating approximately 1.8 million square feet of GLA for approximately $213.5 million, including the assumption of approximately $63.1 million of mortgage debt encumbering two of the properties. During July 2002, KIR disposed of a shopping center property in Aurora, IL for an aggregate sales price of approximately $2.4 million, which represented the approximate book value of the property. As of December 31, 2002, the KIR portfolio was comprised of 68 shopping center properties aggregating approximately 14.0 million square feet of GLA located in 21 states. During 2002, KIR obtained individual non-recourse, non-cross collateralized fixed-rate ten year mortgages aggregating approximately $170.3 million on seven of its previously unencumbered properties with rates ranging from 5.95% to 7.38% per annum. The net proceeds were used to finance the acquisition of various shopping center properties. KIR maintains a secured revolving credit facility with a syndicate of banks, which is scheduled to expire in November 2003. This facility is collateralized by the unfunded subscriptions of certain partners, including those of the Company. The facility has an aggregate availability of up to $100.0 million based upon the amount of unfunded subscription commitments of certain partners. During January 2003, the aggregate availability under the credit facility was reduced to $90.0 million. Under the terms of the facility, funds may be borrowed for general corporate purposes including the acquisition of institutional quality properties. Borrowings under the facility accrue interest at LIBOR plus 0.80%. As of December 31, 2002, there was $15.0 million outstanding under this facility. RioCan Investments - During October 2001, the Company formed the RioCan Venture in which the Company has a 50% non-controlling interest, to acquire retail properties and development projects in Canada. The acquisition and development projects are to be sourced and managed by RioCan and are subject to review and approval by a joint oversight committee consisting of RioCan management and the Company's management personnel. During 2002, the RioCan venture acquired 24 shopping center properties and four development properties, in separate transactions, comprising approximately 5.7 million square feet of GLA for an aggregate purchase price of approximately CAD $683.7 million (approximately USD $435.8 million) including the assumption of approximately CAD $321.5 million (approximately USD $203.1 million) in mortgage debt encumbering 13 of the properties. The Company has committed a total equity investment of up to CAD $250.0 million for the acquisition of retail properties and development projects. Capital contributions will only be required as suitable opportunities arise and are agreed to by the Company and RioCan. As of December 31, 2002, the RioCan Venture was comprised of 28 operating properties and four development properties, consisting of approximately 6.7 million square feet of GLA. Kimco / G.E. Joint Venture - During 2001, the Company formed a joint venture (the "Kimco Retail Opportunity Portfolio" or "KROP") with GE Capital Real Estate ("GECRE"), in which the Company has a 20% non-controlling interest and manages the portfolio. The purpose of this joint venture is to acquire established, high-growth potential retail properties in the United States. Total capital commitments to KROP from GECRE and the Company are for $200.0 million and $50.0 million, respectively, and such commitments are funded proportionately as suitable opportunities arise and are agreed to by GECRE and the Company. The Company accounts for its investment in KROP under the equity method of accounting. During 2002, GECRE and the Company contributed approximately $39.0 million and $9.8 million, respectively, towards their capital commitments. Additionally, GECRE and the Company provided short-term interim financing for all acquisitions made by KROP without a mortgage in place at the time of acquisition. All such financing bears interest at rates ranging from LIBOR plus 4.0% to 4.25% and have maturities of less than one year. As of December 31, 2002, KROP had outstanding short-term interim financing to GECRE and the Company totaling $17.3 million each. During 2002, KROP purchased 16 shopping centers aggregating 1.6 million square feet of GLA for approximately $177.8 million, including the assumption of approximately $29.5 million of mortgage debt encumbering three of the properties. During October 2002, KROP disposed of a shopping center in Columbia, MD for an aggregate sales price of approximately $2.9 million, which resulted in a gain of approximately $0.7 million. 13 During 2002, KROP obtained a cross-collateralized mortgage with a five-year term aggregating $73.0 million on eight properties with an interest rate of LIBOR plus 1.8%. Upon the sale of one of the collateralized properties during 2002, $1.9 million was repaid. In order to mitigate the risks of interest rate fluctuations associated with this variable rate obligation, KROP entered into an interest rate cap agreement for the notional value of this mortgage. Other Real Estate Joint Ventures - The Company and its subsidiaries have investments in and advances to various other real estate joint ventures. These joint ventures are engaged primarily in the operation of shopping centers which are either owned or held under long-term operating leases. During 2002, the Company acquired seven former Service Merchandise locations, in separate transactions, through a venture in which the Company has a 42.5% non-controlling interest. These properties were purchased for an aggregate purchase price of approximately $20.9 million. In November 2002, the joint venture obtained mortgages on two of these locations for approximately $7.0 million. The venture has signed leases for six of these locations and is actively negotiating with other retailers to lease the remaining location. During July 2002, the Company acquired a property located in Kalamazoo, MI, through a joint venture in which the Company has a 50% non-controlling interest. The property was purchased for an aggregate purchase price of approximately $6.0 million. During December 2002, the Company acquired an out-parcel of an existing property located in Tampa, FL, through a joint venture in which the Company has a 50% interest. The property was purchased for an aggregate purchase price of approximately $4.9 million. Other Real Estate Investments - Montgomery Ward Asset Designation Rights - During March 2001, the Company, through a taxable REIT subsidiary, formed a joint venture (the "Ward Venture") in which the Company has a 50% interest, for purposes of acquiring asset designation rights for substantially all of the real estate property interests of the bankrupt estate of Montgomery Ward LLC and its affiliates. These asset designation rights have provided the Ward Venture the ability to direct the ultimate disposition of the 315 fee and leasehold interests held by the bankrupt estate. The asset designation rights expired in August 2002 for the leasehold positions and are scheduled to expire in December 2004 for the fee owned locations. During the marketing period, the Ward Venture will be responsible for all carrying costs associated with the properties until the property is designated to a user. For the year ended December 31, 2002, the Ward Venture has completed transactions on 32 properties and the Company has recognized pre-tax profits of approximately $11.3 million. As of December 31, 2002, there were 12 properties which continue to be marketed. Leveraged Lease - During June 2002, the Company acquired a 90% equity participation interest in an existing leveraged lease of 30 properties. The properties are leased under a long-term bond-type net lease whose primary term expires in 2016, with the lessee having certain renewal option rights. The Company's cash equity investment was approximately $4.0 million. This equity investment is reported as a net investment in leveraged lease in accordance with the Financial Accounting Standards Board's ("FASB") issue of statement of Financial Accounting Standard ("SFAS") No. 13 (as amended). The net investment in leveraged lease reflects the original cash investment adjusted by remaining net rentals, estimated unguaranteed residual value, unearned and deferred income, and deferred taxes relating to the investment. During 2002, four of these properties were sold whereby the proceeds from the sales were used to reduce the mortgage debt by approximately $9.6 million. As of December 31, 2002, the remaining 26 properties were encumbered by third party non-recourse debt of approximately $86.0 million that is scheduled to fully amortize during the primary term of the lease from a portion of the periodic net rents receivable under the net lease. As an equity participant in the leveraged lease, the Company has no general obligation for principal or interest payments on the debt, which is collateralized by a first mortgage lien on the properties and a collateral assignment of the lease. Accordingly, this obligation has been offset against the related net rental receivable under the lease. 14 Kmart Venture - During July 2002, the Company, through a taxable REIT subsidiary, formed a venture (the "Kmart Venture") in which the Company has a 60% controlling participation for purposes of acquiring asset designation rights for 54 former Kmart locations. The total commitment to Kmart by the Kmart Venture, prior to the profit sharing arrangement commencing, is approximately $43.0 million. As of December 31, 2002, the Kmart Venture has completed transactions on 35 properties and has funded the total commitment of approximately $43.0 million to Kmart. Kimsouth - During November 2002, the Company, through its taxable REIT subsidiary, together with Prometheus Southeast Retail Trust, completed the merger and privatization of Konover Property Trust, which has been renamed Kimsouth Realty, Inc., ("Kimsouth"). The Company acquired 44.5% of the common stock of Kimsouth, which consisted primarily of 38 retail shopping center properties comprising approximately 17.4 million square feet of GLA. Total acquisition value was approximately $280.9 million including approximately $216.2 million in mortgage debt. The Company's investment strategy with respect to Kimsouth includes re-tenanting, repositioning and disposition of the properties. During December 2002, Kimsouth sold its joint venture interest in one property to its joint venture partner for net proceeds of approximately $4.6 million and disposed of a single property for net proceeds of approximately $2.9 million. Preferred Equity Capital - During 2002, the Company established a preferred equity program, which provides capital to developers and owners of shopping centers. During 2002, the Company provided, in separate transactions, an aggregate of approximately $25.6 million in investment capital to developers and owners of nine shopping centers. Mortgages and Other Financing Receivables - During August 2001, the Company, through a joint venture in which the Company had a 50% interest, provided $27.5 million of debtor-in-possession financing (the "Ames Loan") to Ames Department Stores, Inc. ("Ames"), a retailer in bankruptcy. This loan which was collateralized by all of Ames' real estate interests, bore interest at prime plus 6.0%, and was scheduled to mature in August 2003. During September 2002, the Ames Loan was restructured as a two-year $100 million secured revolving loan of which the Company has a 40.0% interest. This revolving loan is collateralized by all of Ames' real estate interests. The loan bears interest at 8.5% per annum and provides for contingent interest upon the successful disposition of the Ames properties. The outstanding balance on the revolving loan at December 31, 2002 was approximately $4.1 million. During March 2002, the Company provided a $15.0 million three-year loan to Gottchalks, Inc., at an interest rate of 12.0% per annum collateralized by three properties. The Company receives interest and principal payments on a monthly basis. As of December 31, 2002, the outstanding loan balance was approximately $14.3 million. During March 2002, the Company provided a $50.0 million ten-year loan to Shopko Stores, Inc., at an interest rate of 11.0% per annum collateralized by 15 properties. The Company receives principal and interest payments on a monthly basis. As of December 31, 2002, the outstanding loan balance was approximately $49.8 million. During May 2002, the Company provided a $15.0 million three-year loan to Frank's Nursery & Crafts, Inc. ("Frank's"), at an interest rate of 10.25% per annum collateralized by 40 real estate interests. Interest is payable quarterly in arrears. An additional $7.5 million revolving loan at an interest rate of 10.25% per annum was also established. As of December 31, 2002, there were no borrowings outstanding on the additional revolving loan. As an inducement to make these loans, Frank's issued the Company approximately 4.4 million warrants with an exercise price of $1.15 per share. Financing Transactions - Unsecured Debt - During July 2002, the Company issued an aggregate $102.0 million of unsecured debt under its medium-term notes ("MTN") program. These issuances consisted of (i) an $85.0 million floating-rate MTN which matures in August 2004 and bears interest at LIBOR plus 0.50% per annum and (ii) a $17.0 million fixed-rate MTN which matures in July 2012 and bears interest at 5.98% per annum. The proceeds from these MTN issuances were used toward the repayment of a $110.0 million floating-rate MTN which matured in August 2002. In addition, the Company entered into an interest rate swap agreement on the $85.0 million floating-rate MTN which effectively fixed the interest rate at 2.3725% per annum until November 2003. 15 During November 2002, the Company issued $35 million of 4.961% fixed-rate Senior Notes due 2007 (the "2007 Notes"). Interest on the 2007 Notes is payable semi-annually in arrears. Net proceeds from the issuance totaling approximately $34.9 million, after related transaction costs of approximately $0.1 million, were primarily used to repay outstanding borrowings on the Company's unsecured credit facilities. Additionally, during November 2002, the Company issued $200 million of 6.0% fixed-rate Senior Notes due 2012 (the "2012 Notes"). Interest on the 2012 Notes is payable semi-annually in arrears. The 2012 Notes were sold at 99.79% of par value. Net proceeds from the issuance totaling approximately $198.3 million, after related transaction costs of approximately $1.3 million, were primarily used to repay outstanding borrowings on the Company's unsecured credit facilities. Construction Loans - During 2002, the Company obtained construction financing on eight ground-up development projects for an aggregate loan amount of up to $119.8 million, of which approximately $38.9 million has been funded as of December 31, 2002. These loans have maturities ranging from 18 to 36 months and a weighted average interest rate of 4.38% at December 31, 2002. Early Extinguishment of Non-Recourse Mortgages - As part of the Company's strategy to reduce its exposure to Kmart Corporation, the Company had previously encumbered seven Kmart sites with individual non-recourse mortgages aggregating approximately $70.8 million. As a result of the Kmart bankruptcy filing in January 2002 and the subsequent rejection of leases including leases at these encumbered sites, the Company, during July 2002, had suspended debt service payments on these loans and began active negotiations with the respective lenders. During December 2002, the Company reached agreement with certain lenders in connection with four of these locations. The Company paid approximately $24.2 million in full satisfaction of these loans which aggregated $46.5 million. The Company recognized a gain on the early extinguishment of debt of approximately $22.3 million. Additionally, during December 2002, the Company re-tenanted one location and has brought the mortgage loan encumbering this property current. During February 2003, the Company reached agreement with the lender in connection with the two remaining encumbered locations. The Company paid approximately $8.3 million in full satisfaction of these loans which aggregated approximately $14.7 million. The Company will recognize a gain on early extinguishment of debt of approximately $6.2 million in the first quarter of 2003. Credit Facilities - The Company maintains a $250.0 million unsecured revolving credit facility (the "Credit Facility") with a group of banks. The Credit Facility is scheduled to mature in August 2003. The Company intends to renew this facility prior to maturity. Under the terms of the Credit Facility, funds may be borrowed for general corporate purposes, including (i) funding property acquisitions, (ii) funding development and redevelopment costs and (iii) funding any short-term working capital requirements. Interest on borrowings under the Credit Facility accrues at a spread (currently 0.65%) to LIBOR, which fluctuates in accordance with changes in the Company's senior debt ratings. The Company's senior debt ratings are currently A-/stable from Standard & Poors and Baa1/stable from Moody's Investor Services. As part of the Credit Facility, the Company has a competitive bid option where the Company may auction up to $100.0 million of its requested borrowings to the bank group. This competitive bid option provides the Company the opportunity to obtain pricing below the currently stated spread to LIBOR of 0.65%. As of December 31, 2002, there was $40.0 million outstanding under the Credit Facility. During July 2002, the Company further enhanced its liquidity position by establishing an additional $150.0 million unsecured revolving credit facility. During December 2002, the Company repaid the outstanding balance and terminated this facility. 16 Equity - During November 2001, the Company announced the redemption of all outstanding depositary shares of the Company's 7-1/2% Class D Cumulative Convertible Preferred Stock (the "Class D Preferred Stock") in exchange for shares of the Company's common stock. The Board of Directors set January 3, 2002 as the mandatory redemption date on which all outstanding depositary shares of Class D Preferred Stock were redeemed. Holders of the Class D Preferred Stock on the redemption date received 0.93168 shares of the Company's common stock, as adjusted for the Company's three-for-two common stock split, for each depositary share redeemed. During 2001, 3,258,642 depositary shares of the Class D Preferred Stock were voluntarily converted to common stock by the holders. On January 3, 2002, the remaining 923,900 depositary shares of the Class D Preferred Stock were redeemed for common stock by the Company and a final dividend payment of 43.4680 cents per Class D Depositary share was paid on January 15, 2002. During 2002, the Company issued approximately 0.4 million shares of common stock in connection with the exercise of common stock options by employees and through the Company's dividend reinvestment plan. During October 2002, the Company acquired an interest in a shopping center property located in Daly City, CA valued at $80.0 million through the issuance of approximately 2.4 million downREIT units (the "Units") which are convertible at a ratio of 1:1 into the Company's common stock. The downREIT unit holder has the right to convert the Units at anytime after one year. In addition, the Company has the right to mandatorily require a conversion after ten years. If at the time of conversion the common stock price for the 20 previous trading days is less than $33.57 per share the unit holder would be entitled to additional shares, however, the maximum number of additional shares is limited to 251,966 based upon a floor common stock price of $30.36. The Company has the option to settle the conversion in cash. Dividends on the Units are paid quarterly at the rate of the Company's common stock dividend multiplied by 1.1057. Hedging Activities - During 2002, the Company entered into two interest rate swap agreements on its (i) $100.0 million remarketed reset notes, which fixed the interest rate at 3.03% from November 17, 2002 through August 17, 2003, and (ii) $85.0 million floating-rate notes, which fixed the interest rate at 2.3725% from November 2, 2002 through November 2, 2003. Additionally, during 2002, the Company entered into various foreign currency forward contracts and a cross currency swap aggregating approximately CAD $210.7 million and MXN $383.7 million in connection with the Company's Canadian and Mexican real estate investments and investment in stock of RioCan. (See Note 15 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.) Exchange Listings The Company's common stock, Class A Depositary Shares, Class B Depositary Shares and Class C Depositary Shares are traded on the NYSE under the trading symbols "KIM", "KIMprA", "KIMprB", and "KIMprC", respectively. Trading of the Class D Depositary Shares ceased on January 3, 2002 in connection with the Company's mandatory redemption of such shares. Item 2. Properties Real Estate Portfolio As of January 1, 2003, the Company's real estate portfolio was comprised of interests in approximately 86.5 million square feet of GLA in 530 neighborhood and community shopping center properties, two regional malls, 41 retail store leases, four parcels of undeveloped land and 22 projects under development, located in 41 states, Canada and Mexico. The Company's portfolio includes a 43.3% interest in 68 shopping center properties comprising approximately 14.0 million square feet of GLA relating to KIR, a 50% interest in 28 shopping center properties comprising approximately 6.7 million square feet of GLA relating to the RioCan Venture and a 20% interest in 15 shopping center properties comprising approximately 1.5 million square feet of GLA relating to KROP. Neighborhood and community shopping centers comprise the primary focus of the Company's current portfolio, representing approximately 98% of the Company's total shopping center GLA. As of January 1, 2003, approximately 87.8% of the Company's neighborhood and community shopping center space (excluding the KIR and KROP portfolios) was leased, and the average annualized base rent per leased square foot of the neighborhood and community shopping center portfolio (excluding the KIR and KROP portfolios) was $8.31. As of January 1, 2003, the KIR and KROP portfolios were 97.7% and 97.4% leased, respectively, with an average annualized base rent per leased square foot of $11.64 and $12.78, respectively. 17 The Company's neighborhood and community shopping center properties, generally owned and operated through subsidiaries or joint ventures, had an average size of approximately 149,000 square feet as of January 1, 2003. The Company generally retains its shopping centers for long-term investment and consequently pursues a program of regular physical maintenance together with major renovations and refurbishing to preserve and increase the value of its properties. These projects usually include renovating existing facades, installing uniform signage, resurfacing parking lots and enhancing parking lot lighting. During 2002, the Company capitalized approximately $7.0 million in connection with these property improvements and expensed to operations approximately $15.4 million. The Company's neighborhood and community shopping centers are usually "anchored" by a national or regional discount department store, supermarket or drugstore. As one of the original participants in the growth of the shopping center industry and one of the nation's largest owners and operators of shopping centers, the Company has established close relationships with a large number of major national and regional retailers. Some of the major national and regional companies that are tenants in the Company's shopping center properties include Kmart Corporation, The Home Depot, Kohl's, TJX Companies, Wal-Mart, Best Buy, Toys R' Us, Royal Ahold, Office Max and Petsmart. A substantial portion of the Company's income consists of rent received under long-term leases. Most of the leases provide for the payment of fixed base rentals monthly in advance and for the payment by tenants of an allocable share of the real estate taxes, insurance, utilities and common area maintenance expenses incurred in operating the shopping centers. Although many of the leases require the Company to make roof and structural repairs as needed, a number of tenant leases place that responsibility on the tenant, and the Company's standard small store lease provides for roof repairs to be reimbursed by the tenant as part of common area maintenance. The Company's management places a strong emphasis on sound construction and safety at its properties. Approximately 1,879 of the Company's 6,375 leases also contain provisions requiring the payment of additional rent calculated as a percentage of tenants' gross sales above predetermined thresholds. Percentage Rents accounted for approximately 1% of the Company's revenues from rental property for the year ended December 31, 2002. Minimum base rental revenues and operating expense reimbursements accounted for approximately 99% of the Company's total revenues from rental property for the year ended December 31, 2002. The Company's management believes that the base rent per leased square foot for many of the Company's existing leases is generally lower than the prevailing market-rate base rents in the geographic regions where the Company operates, reflecting the potential for future growth. For the period January 1, 2002 to December 31, 2002, the Company increased the average base rent per leased square foot in its portfolio of neighborhood and community shopping centers (excluding the KIR and KROP portfolios) from $8.08 to $8.31, an increase of $0.23. This increase primarily consists of a $0.26 increase relating to acquisitions and dispositions and a $0.13 increase relating to new leases signed partially offset by a decrease of $0.16 relating primarily to the impact of the Kmart bankruptcy filing and subsequent lease rejections. The Company seeks to reduce its operating and leasing risks through geographic and tenant diversity. No single neighborhood and community shopping center accounted for more than 0.8% of the Company's total shopping center GLA or more than 1.2% of total annualized base rental revenues as of December 31, 2002. The Company's five largest tenants, include Kmart Corporation (see Recent Developments - Kmart Bankruptcy), The Home Depot, Kohl's, TJX Companies and Wal-Mart, which represent approximately 4.5%, 2.8%, 2.7%, 2.5% and 1.9%, respectively, of the Company's annualized base rental revenues, including the proportionate share of base rental revenues from properties in which the Company has less than a 100% economic interest. The Company maintains an active leasing and capital improvement program that, combined with the high quality of the locations, has made, in management's opinion, the Company's properties attractive to tenants. The Company's management believes its experience in the real estate industry and its relationships with numerous national and regional tenants gives it an advantage in an industry where ownership is fragmented among a large number of property owners. 18 Retail Store Leases In addition to neighborhood and community shopping centers, as of January 1, 2003, the Company had interests in retail store leases totaling approximately 3.8 million square feet of anchor stores in 41 neighborhood and community shopping centers located in 22 states. As of January 1, 2003, approximately 88.0% of the space in these anchor stores had been sublet to retailers that lease the stores under net lease agreements providing for average annualized base rental payments of $3.99 per square foot. The average annualized base rental payments under the Company's retail store leases to the land owners of such subleased stores is approximately $2.64 per square foot. The average remaining primary term of the retail store leases (and, similarly, the remaining primary terms of the sublease agreements with the tenants currently leasing such space) is approximately 5 years, excluding options to renew the leases for terms which generally range from 5 to 25 years. The Company's investment in retail store leases are included in the caption Other Real Estate Investments on the Company's Consolidated Balance Sheets. Ground-Leased Properties The Company has interests in 60 shopping center properties that are subject to long-term ground leases where a third party owns and has leased the underlying land to the Company (or an affiliated joint venture) to construct and/or operate a shopping center. The Company or the joint venture pays rent for the use of the land and generally is responsible for all costs and expenses associated with the building and improvements. At the end of these long-term leases, unless extended, the land together with all improvements revert to the land owner. Ground-Up Development Properties As of January 1, 2003, the Company, through its wholly-owned taxable REIT subsidiary, KDI, has currently in progress 19 ground-up development projects located in eight states which are held for sale upon completion. These projects had substantial pre-leasing prior to the commencement of construction. As of January 1, 2003, the average annual base rent per leased square foot for the KDI portfolio was $12.68 and the average annual base rent per leased square foot for new leases executed in 2002 was $13.76. Undeveloped Land The Company owns certain unimproved land tracts and parcels of land adjacent to certain of its existing shopping centers that are held for possible expansion. At times, should circumstances warrant, the Company may develop or dispose of these parcels. The table on pages 20 to 28 sets forth more specific information with respect to each of the Company's property interests. Item 3. 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 4. Submission of Matters to a Vote of Security Holders - ------------------------------------------------------------ None. 19
YEAR OWNERSHIP LAND LEASABLE PERCENT DEVELOPED INTEREST/ AREA AREA LEASED LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1) - --------------------------------------------------------------------------------------------------- ALABAMA FAIRFIELD 2000 FEE 8.7 86,566 100.0 HOOVER 2000 FEE 11.5 115,347 100.0 MOBILE (9) 2002 JOINT VENTURE 52.6 525,505 71.6 ARIZONA CHANDLER (4) 2002 JOINT VENTURE 8.4 71,000 96.0 FOUNTAIN HILLS (4) 2001 JOINT VENTURE 24.5 56,000 55.0 GILBERT (4) 2001 JOINT VENTURE 16.7 39,000 29.0 GLENDALE (7) 1998 FEE 40.5 333,388 100.0 GLENDALE 1998 JOINT VENTURE 48.2 111,825 97.0 MESA 1998 FEE 19.8 146,492 92.1 NORTH PHOENIX 1998 FEE 17.0 230,164 100.0 PEORIA (4) 2000 JOINT VENTURE 69.8 259,000 18.0 PHOENIX 1998 FEE 13.4 143,646 97.6 PHOENIX 1998 FEE 26.6 333,382 68.8 PHOENIX 1997 FEE 17.5 131,621 82.0 TEMPE 1998 JOINT VENTURE 21.1 236,015 48.2 TEMPE (5) 1998 JOINT VENTURE 20.0 - - CALIFORNIA ALHAMBRA 1998 FEE 18.4 200,634 77.3 ANAHEIM 1995 FEE 1.0 15,396 100.0 CARMICHAEL 1998 FEE 18.5 212,811 98.8 CHULA VISTA 1998 FEE 31.3 371,222 39.1 CORONA 1998 FEE 47.6 486,958 100.0 COVINA (7) 2000 GROUND LEASE (2024) 25.4 263,699 100.0 DALY CITY 2002 FEE 25.6 485,318 79.7 LA MIRADA 1998 FEE 31.2 288,471 84.4 MONTEBELLO (7) 2000 FEE 20.4 250,439 100.0 OXNARD (7) 1998 FEE 14.4 171,580 100.0 SAN DIEGO (7) 2000 FEE 11.2 117,410 100.0 SAN RAMON (7) 1999 FEE 5.3 42,066 100.0 SANTA ANA 1998 FEE 12.0 134,400 100.0 SANTEE 1998 FEE 10.4 103,903 96.0 SANTEE (4) 2002 JOINT VENTURE 44.0 272,000 - STOCKTON 1999 FEE 14.6 152,919 31.2 TEMECULA (7) 1999 FEE 40.0 341,612 89.6 TORRANCE (7) 2000 FEE 26.7 266,917 97.0 COLORADO AURORA 1998 FEE 13.8 145,754 99.4 AURORA 1998 FEE 9.9 44,174 95.1 AURORA 1998 FEE 13.9 152,981 98.6 COLORADO SPRINGS 1998 FEE 10.7 107,310 92.1 DENVER 1998 FEE 1.5 18,405 100.0 ENGLEWOOD 1998 FEE 6.5 80,330 100.0 FT. COLLINS 2000 FEE 11.8 117,862 89.8 LAKEWOOD 1998 FEE 7.6 82,581 93.5 CONNECTICUT BRANFORD (7) 2000 FEE 19.1 191,496 96.2 ENFIELD (7) 2000 FEE 16.2 162,459 98.8 FARMINGTON 1998 FEE 16.9 184,572 100.0 HAMDEN 1967 JOINT VENTURE 31.7 341,502 95.1 NORTH HAVEN 1998 FEE 31.7 331,919 100.0 WATERBURY 1993 FEE 13.1 137,943 100.0 DELAWARE ELSMERE 1979 GROUND LEASE (2076) 17.1 114,530 100.0 DOVER (5) 1999 JOINT VENTURE 89.0 - - FLORIDA ALTAMONTE SPRINGS 1998 JOINT VENTURE 19.4 271,095 66.9 ALTAMONTE SPRINGS 1995 FEE 5.6 94,193 100.0 BOCA RATON 1967 FEE 9.9 73,549 95.5 BOYNTON BEACH (7) 1999 FEE 18.0 197,362 99.0 BRADENTON 1968 JOINT VENTURE 6.2 30,938 96.8 BRADENTON 1998 FEE 19.6 162,997 90.4 BRANDON (7) 2001 FEE 29.7 143,785 100.0 CORAL SPRINGS 1994 FEE 5.9 55,597 100.0 CORAL SPRINGS 1997 FEE 9.8 86,342 98.7 EAST ORLANDO 1971 GROUND LEASE (2068) 11.6 131,981 82.5 FT. PIERCE 1970 JOINT VENTURE 14.8 210,460 99.0 HOLLYWOOD (9) 2002 JOINT VENTURE 13.5 135,056 95.3 HOLLYWOOD 2002 JOINT VENTURE 5.0 50,000 100.0 HOMESTEAD 1972 GROUND LEASE (2018) /JOINT VENTURE 21.0 208,794 99.5 JACKSONVILLE 1999 FEE 18.6 203,536 100.0 JACKSONVILLE (9) 1987 JOINT VENTURE 7.2 72,136 98.5 JACKSONVILLE 2002 JOINT VENTURE 5.1 51,000 100.0 JENSEN BEACH 1994 FEE 20.7 173,356 97.4 JENSEN BEACH (9) 2002 JOINT VENTURE 19.8 197,731 95.0 KEY LARGO (7) 2000 FEE 21.5 207,361 97.6 KISSIMMEE 1996 FEE 18.4 130,983 98.0 LAKELAND 2001 FEE 22.9 229,383 95.3 LARGO 1968 FEE 12.0 149,472 100.0 LARGO 1992 FEE 29.4 215,916 95.7 LARGO 1993 FEE 6.6 59,730 64.3 LAUDERDALE LAKES 1968 JOINT VENTURE 10.0 115,341 98.2 LAUDERHILL 1978 FEE 17.8 181,476 91.7 LEESBURG 1969 GROUND LEASE (2017) 1.3 13,468 88.9 MARGATE 1993 FEE 34.1 260,896 94.1 MELBOURNE 1968 GROUND LEASE (2071) 11.5 168,737 97.5 MAJOR LEASES ------------------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION - ---------------------------------------------------------------------------------------------- ALABAMA FAIRFIELD TELETECH CUSTOM 2009 2029 HOOVER WAL-MART 2025 2095 MOBILE (9) WAL-MART 2006 2036 ARIZONA CHANDLER (4) BASHAS 2022 2042 FOUNTAIN HILLS (4) WALGREENS 2078 GILBERT (4) PETER PIPER PIZZA 2013 2023 GLENDALE (7) COSTCO 2011 2046 GLENDALE SEARS 2006 2016 MESA ROSS STORES 2005 NORTH PHOENIX BURLINGTON COAT FACTORY 2013 2023 PEORIA (4) ROSS STORES 2013 2033 PHOENIX HOME DEPOT 2020 2050 PHOENIX COSTCO 2006 2041 PHOENIX SAFEWAY 2009 2039 TEMPE PETSMART 2011 2031 TEMPE (5) CALIFORNIA ALHAMBRA COSTCO 2027 2057 ANAHEIM CARMICHAEL HOME DEPOT 2008 2022 CHULA VISTA COSTCO 2006 2041 CORONA COSTCO 2007 2042 COVINA (7) HOME DEPOT 2004 2034 DALY CITY BURLINGTON COAT FACTORY 2012 2022 LA MIRADA TOYS "R" US 2012 2032 MONTEBELLO (7) SEARS 2012 2062 OXNARD (7) TARGET 2008 2013 SAN DIEGO (7) LUCKY STORES 2012 SAN RAMON (7) PETCO 2012 2012 SANTA ANA HOME DEPOT 2015 2035 SANTEE OFFICE DEPOT 2006 2021 SANTEE (4) STOCKTON OFFICE DEPOT 2005 2015 TEMECULA (7) FOOD 4 LESS 2010 2030 TORRANCE (7) LINENS N THINGS 2010 2020 COLORADO AURORA TJ MAXX 2007 2012 AURORA AURORA ALBERTSONS 2007 2043 COLORADO SPRINGS ALBERTSONS 2004 2034 DENVER SAV-A-LOT 2012 2027 ENGLEWOOD HOBBY LOBBY 2013 2023 FT. COLLINS KOHLS 2020 2070 LAKEWOOD SAFEWAY 2007 2032 CONNECTICUT BRANFORD (7) KOHLS 2007 2022 ENFIELD (7) KOHLS 2021 2041 FARMINGTON SPORTS AUTHORITY 2018 2063 HAMDEN WAL-MART 2019 2039 NORTH HAVEN HOME DEPOT 2009 2029 WATERBURY STOP & SHOP 2013 2043 DELAWARE ELSMERE VALUE CITY 2008 2038 DOVER (5) FLORIDA ALTAMONTE SPRINGS DSW SHOE WAREHOUSE 2012 2032 ALTAMONTE SPRINGS THOMASVILLE HOME 2011 2021 BOCA RATON WINN DIXIE 2008 2033 BOYNTON BEACH (7) ALBERTSONS 2015 2040 BRADENTON GRAND CHINA 2009 2014 BRADENTON PUBLIX 2012 2032 BRANDON (7) BED BATH & BEYOND 2005 2015 CORAL SPRINGS LINENS N THINGS 2012 2027 CORAL SPRINGS TJ MAXX 2007 2017 EAST ORLANDO SPORTS AUTHORITY 2010 2020 FT. PIERCE KMART 2006 2016 HOLLYWOOD (9) WINN-DIXIE 2011 2036 HOLLYWOOD TJ MAXX 2010 HOMESTEAD PUBLIX 2014 2034 JACKSONVILLE BURLINGTON COAT FACTORY 2008 2018 JACKSONVILLE (9) FOOD LION 2012 2042 JACKSONVILLE TJ MAXX 2010 JENSEN BEACH MARSHALLS 2005 2020 JENSEN BEACH (9) HOME DEPOT 2005 2030 KEY LARGO (7) KMART 2014 2064 KISSIMMEE KASH N KARRY 2006 2036 LAKELAND STEIN MART 2006 2026 LARGO WAL-MART 2007 2027 LARGO PUBLIX 2009 2029 LARGO LAUDERDALE LAKES SAVE- A- LOT 2007 2017 LAUDERHILL WORLD JEWELRY CENTER 2014 2024 LEESBURG MARGATE PUBLIX 2008 2028 MELBOURNE SUBMITTORDER CO 2010 2022 MAJOR LEASES ---------------------------------------------------------------------------------------------------- LEASE OPTION LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION TENANT NAME EXPIRATION EXPIRATION - ----------------------------------------------------------------------------------------------------------------------------------- ALABAMA FAIRFIELD HOOVER MOBILE (9) KROGER 2006 SAAD'S HEALTH CARE 2004 ARIZONA CHANDLER (4) FOUNTAIN HILLS (4) GILBERT (4) GLENDALE (7) LEVITZ 2012 2032 GLENDALE MICHAELS 2008 2018 FACTORY 2U STORES 2005 2015 MESA HARKINS THEATRE 2005 2025 OUR HOME 2005 2015 NORTH PHOENIX ULTIMATE ELECTRONICS 2015 2030 MICHAELS 2007 2022 PEORIA (4) MICHAELS 2012 2032 PHOENIX JOANN FABRICS 2010 2025 AUTO ZONE 2008 2013 PHOENIX RODEO 2005 PETSMART 2003 PHOENIX PIANO WAREHOUSE 2006 2011 TEMPE STAPLES 2005 2025 GUITAR CENTER 2007 2017 TEMPE (5) CALIFORNIA ALHAMBRA COSTCO 2027 2057 JOANN FABRICS 2004 2019 ANAHEIM CARMICHAEL SPORTS AUTHORITY 2009 2024 LONGS DRUG 2013 2033 CHULA VISTA CORONA HOME DEPOT 2010 2029 LEVITZ 2009 2029 COVINA (7) STAPLES 2006 2011 PETSMART 2008 2028 DALY CITY SAFEWAY 2004 2024 WALGREENS 2007 LA MIRADA LA FITNESS 2012 2022 US POST OFFICE 2010 2020 MONTEBELLO (7) AMC THEATRES 2012 2032 TOYS "R" US 2018 2043 OXNARD (7) FOOD 4 LESS 2008 24 HOUR FITNESS 2010 2030 SAN DIEGO (7) SPORTMART 2013 SAN RAMON (7) SANTA ANA SANTEE ROSS STORES 2004 2024 MICHAELS 2008 2018 SANTEE (4) STOCKTON COSTCO 2008 2033 TEMECULA (7) TJ MAXX 2006 2011 KMART 2017 2032 TORRANCE (7) MARSHALLS 2004 2019 HL TORRANCE 2011 2021 COLORADO AURORA AURORA AURORA COOMER CRAFTS 2006 CROWN LIQUORS 2005 2010 COLORADO SPRINGS EL PASO COUNTY 2005 DENVER ENGLEWOOD OLD COUNTRY BUFFET 2009 2019 FT. COLLINS LAKEWOOD CONNECTICUT BRANFORD (7) SUPER FOODMART 2016 2038 ENFIELD (7) WALDBAUMS 2014 2034 FARMINGTON LINENS N THINGS 2016 2036 BORDERS BOOKS 2018 2063 HAMDEN BON-TON 2012 BOB'S STORES 2016 2036 NORTH HAVEN BJ'S 2006 2041 XPECT DISCOUNT 2008 2013 WATERBURY RAYMOUR & FLANIGAN 2017 2037 DELAWARE ELSMERE DOVER (5) FLORIDA ALTAMONTE SPRINGS MICHAELS 2005 2015 CLASSIC LEATHER 2009 2014 ALTAMONTE SPRINGS PEARL ARTS N CRAFTS 2008 2018 ORIENTAL MARKET 2012 2022 BOCA RATON BOYNTON BEACH (7) BRADENTON BRADENTON TJ MAXX 2009 2019 JOANN FABRICS 2009 2024 BRANDON (7) ROSS DRESS FOR LESS 2005 2025 THOMASVILLE 2010 2020 CORAL SPRINGS CORAL SPRINGS RAG SHOP 2006 2026 BLOCKBUSTER 2006 2016 EAST ORLANDO OFFICE DEPOT 2005 2025 FT. PIERCE WINN DIXIE 2005 2027 HOLLYWOOD (9) DOLLAR MART PLUS 2, INC. 2007 2011 HOLLYWOOD MICHAELS 2010 HOMESTEAD MARSHALLS 2011 2026 OFFICEMAX 2013 2028 JACKSONVILLE OFFICEMAX 2012 2032 TJ MAXX 2007 2017 JACKSONVILLE (9) JACKSONVILLE MICHAELS 2012 JENSEN BEACH JENSEN BEACH (9) PETSMART 2009 2029 KEY LARGO (7) PUBLIX 2009 2029 KISSIMMEE OFFICEMAX 2012 2027 JOANN FABRICS 2006 2016 LAKELAND AMC THEATRES 2007 2017 ROSS STORES 2007 2012 LARGO BARGAIN BOOKS 2003 LARGO AMC THEATRES 2011 2036 OFFICE DEPOT 2004 2019 LARGO LAUDERDALE LAKES THINK THRIFT 2007 2017 LAUDERHILL BABIES R US 2004 2014 BOARDMANS 2005 2010 LEESBURG MARGATE OFFICE DEPOT 2005 2020 SAM ASH MUSIC 2006 2011 MELBOURNE JOANN FABRICS 2006 2016 WALGREENS 2045
20
YEAR OWNERSHIP LAND LEASABLE PERCENT DEVELOPED INTEREST/ AREA AREA LEASED LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1) - --------------------------------------------------------------------------------------------------- MELBOURNE 1994 FEE 13.8 131,851 74.8 MELBOURNE 1998 FEE 13.2 148,660 94.0 MELBOURNE (9) 1987 JOINT VENTURE 11.9 118,828 87.3 MIAMI 1968 FEE 8.2 104,968 100.0 MIAMI 1962 JOINT VENTURE 14.0 166,578 96.0 MIAMI 1986 FEE 7.8 83,380 100.0 MIAMI 1995 FEE 5.4 63,604 100.0 MIAMI 1985 FEE 15.9 108,795 100.0 MOUNT DORA 1997 FEE 12.4 118,150 100.0 OAKLAND PARK (9) 2002 JOINT VENTURE 13.2 132,226 89.3 OCALA 1997 FEE 27.2 254,459 91.4 ORLANDO (7) 2000 FEE 18.0 179,065 97.4 ORLANDO 1968 JOINT VENTURE 10.0 114,434 100.0 ORLANDO 1968 FEE 12.0 131,646 97.5 ORLANDO 1968 GROUND LEASE (2047) /JOINT VENTURE 7.8 110,788 100.0 ORLANDO 1994 FEE 28.0 236,486 97.4 ORLANDO 1996 FEE 11.7 127,806 100.0 PALATKA 1970 FEE 8.9 82,730 85.7 PANAMA CITY (4) 2002 JOINT VENTURE 8.0 52,000 74.1 PENSACOLA (9) 2002 JOINT VENTURE 18.2 181,910 82.5 PLANTATION 1974 JOINT VENTURE 4.6 60,414 100.0 POMPANO BEACH 1968 JOINT VENTURE 6.6 66,838 100.0 PORT RICHEY (7) 1998 FEE 14.3 103,294 93.3 RIVIERA BEACH 1968 JOINT VENTURE 5.1 46,390 78.7 SANFORD 1989 FEE 40.9 155,753 98.5 SARASOTA 1970 FEE 10.0 102,485 100.0 SARASOTA 1989 FEE 12.0 128,177 88.3 ST. PETERSBURG 1968 GROUND LEASE (2084) /JOINT VENTURE 9.0 118,979 89.9 TALLAHASSEE 1998 FEE 12.8 105,535 95.4 TALLAHASSEE (4) 2000 GROUND LEASE(2085) /JOINT VENTURE 34.0 211,000 - TAMPA (7) 2001 FEE 73.0 324,846 98.2 TAMPA 1997 FEE 16.3 127,837 100.0 TAMPA (4) 2001 JOINT VENTURE 30.9 79,000 - WEST PALM BEACH (9) 2002 JOINT VENTURE 12.0 119,570 81.2 WEST PALM BEACH 1995 FEE 7.9 80,845 95.4 WEST PALM BEACH 1967 JOINT VENTURE 7.6 77,286 98.8 WINTER HAVEN 1973 JOINT VENTURE 13.9 92,428 88.9 GEORGIA ATLANTA 1988 FEE 19.5 165,314 100.0 AUGUSTA 1995 FEE 11.3 119,930 70.8 AUGUSTA (7) 2001 FEE 24.0 533,039 99.3 GAINSVILLE 1993 JOINT VENTURE 12.6 142,468 100.0 MACON 1969 FEE 12.3 127,260 54.9 MARIETTA (9) 2002 JOINT VENTURE 15.2 151,820 93.1 SAVANNAH 1993 FEE 22.2 187,076 92.2 SAVANNAH 1995 GROUND LEASE (2045) 9.5 88,325 98.2 SNELLVILLE (7) 2001 FEE 35.6 311,164 100.0 SMYRNA (9) 2002 JOINT VENTURE 7.8 77,961 99.7 ILLINOIS ADDISON 1968 GROUND LEASE (2066) 8.0 93,289 22.0 ADDISON 1998 FEE 16.4 115,130 - ALTON 1986 FEE 21.2 159,824 82.1 ARLINGTON HEIGHTS 1998 FEE 7.0 80,040 - AURORA 1998 FEE 17.9 91,182 - BATAVIA (7) 2002 FEE 31.7 272,416 100.0 BELLEVILLE 1987 GROUND LEASE (2066) 20.3 81,490 100.0 BLOOMINGTON 1972 FEE 16.1 188,250 100.0 BRADLEY 1996 FEE 5.4 80,535 100.0 BRIDGEVIEW (6) 1998 FEE 6.8 88,069 - CALUMET CITY 1997 FEE 17.0 197,383 33.9 CARBONDALE 1997 GROUND LEASE (2052) 8.1 80,535 100.0 CHAMPAIGN 1999 FEE 9.0 102,615 100.0 CHAMPAIGN(7) 2001 FEE 9.3 111,720 100.0 CHICAGO 1997 FEE 13.4 109,441 100.0 CHICAGO 1997 GROUND LEASE (2040) 17.5 104,264 100.0 CHICAGO 1997 FEE 6.0 86,894 100.0 CHICAGO 1988 FEE 6.4 80,842 - COUNTRYSIDE 1997 GROUND LEASE (2053) 27.7 121,894 2.9 CRESTWOOD 1997 GROUND LEASE (2051) 36.8 79,903 100.0 CRYSTAL LAKE 1998 FEE 6.1 80,390 100.0 DOWNERS GROVE 1998 GROUND LEASE (2041) 7.2 192,639 100.0 DOWNERS GROVE 1999 FEE 24.8 144,670 100.0 DOWNERS GROVE 1997 FEE 12.0 141,906 100.0 ELGIN 1972 FEE 18.7 186,432 92.5 ELGIN 1998 FEE 9.0 100,342 - FAIRVIEW HEIGHTS 1986 GROUND LEASE (2050) 19.1 192,073 96.6 FOREST PARK 1997 GROUND LEASE (2021) 9.3 98,371 100.0 GENEVA 1996 FEE 8.2 104,688 100.0 MATTESON 1997 FEE 17.0 136,885 91.3 MT. PROSPECT 1997 FEE 16.8 192,789 84.0 MUNDELIEN 1991 FEE 7.6 85,018 100.0 NAPERVILLE 1997 FEE 9.0 101,827 100.0 NORRIDGE 1997 GROUND LEASE (2042) 11.7 116,914 100.0 OAKLAWN 1997 FEE 15.4 165,337 100.0 OAKBROOK TERRACE 1997 FEE 15.6 165,100 100.0 ORLAND PARK 1998 FEE 7.8 166,000 100.0 ORLAND PARK 1980 FEE 18.8 131,546 100.0 OTTAWA 1970 FEE 9.0 60,000 100.0 MAJOR LEASES ------------------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION - -------------------------------------------------------------------------------------------- MELBOURNE TEGGE FURNISHINGS 2005 2007 MELBOURNE KROGER 2004 2034 MELBOURNE (9) PUBLIX 2007 MIAMI KMART 2009 2029 MIAMI BABIES R US 2006 2021 MIAMI PUBLIX 2009 2029 MIAMI KIDS R US 2016 2021 MIAMI PUBLIX 2019 2039 MOUNT DORA KMART 2013 2063 OAKLAND PARK (9) WINN DIXIE 2012 2037 OCALA KMART 2006 2021 ORLANDO (7) KMART 2014 2064 ORLANDO BALLY TOTAL FITNESS 2008 2018 ORLANDO BED BATH & BEYOND 2007 2022 ORLANDO OFFICE FURNITURE 2008 ORLANDO OLD TIME POTTER 2010 2020 ORLANDO ROSS STORES 2008 2028 PALATKA SAV-A-LOT 2003 2013 PANAMA CITY (4) ROSS DRESS FOR LESS 2014 2034 PENSACOLA (9) WINN DIXIE 2012 2037 PLANTATION BREAD OF LIFE 2009 2019 POMPANO BEACH RAMP 48 2003 2009 PORT RICHEY (7) CIRCUIT CITY 2011 2031 RIVIERA BEACH GOODWILL INDUSTRIES 2005 2008 SANFORD ROSS STORES 2012 2032 SARASOTA TJ MAXX 2007 2017 SARASOTA KASH N KARRY 2020 2040 ST. PETERSBURG KASH N KARRY 2017 2037 TALLAHASSEE STEIN MART 2003 2008 TALLAHASSEE (4) BED BATH & BEYOND 2017 2032 TAMPA (7) BEST BUY 2016 2031 TAMPA STAPLES 2008 2018 TAMPA (4) WEST PALM BEACH (9) WINN DIXIE 2017 2042 WEST PALM BEACH BABIES R US 2006 2021 WEST PALM BEACH WINN DIXIE 2010 2030 WINTER HAVEN BIG LOTS 2005 2010 GEORGIA ATLANTA SCOTT ANTIQUES 2005 AUGUSTA TJ MAXX 2004 2014 AUGUSTA (7) SPORTS AUTHORITY 2012 2027 GAINSVILLE FARMERS FURNITURE 2008 2013 MACON FREDS STORES 2004 2014 MARIETTA (9) GREAT ATLANTIC & PACIFIC 2004 2024 SAVANNAH BED BATH & BEYOND 2013 2028 SAVANNAH MEDIA PLAY 2006 2021 SNELLVILLE (7) KOHLS 2022 2062 SMYRNA (9) INGLES GROCERY 2012 ILLINOIS ADDISON ADDISON ALTON VALUE CITY 2008 2023 ARLINGTON HEIGHTS AURORA BATAVIA (7) KOHLS 2019 2049 BELLEVILLE KMART 2024 2054 BLOOMINGTON SCHNUCK MARKETS 2004 2024 BRADLEY CARSON PIRIE SCOTT 2014 2034 BRIDGEVIEW (6) CALUMET CITY MARSHALLS 2008 CARBONDALE K'S MERCHANDISE 2012 2052 CHAMPAIGN K'S MERCHANDISE 2014 2034 CHAMPAIGN(7) BEST BUY 2016 2031 CHICAGO CHICAGO GOLDBLATT'S 2005 2025 CHICAGO CHICAGO COUNTRYSIDE CRESTWOOD KMART 2024 2051 CRYSTAL LAKE HOBBY LOBBY 2009 2019 DOWNERS GROVE RHODES FURNITURE 2008 2018 DOWNERS GROVE DOMINICK'S 2004 2019 DOWNERS GROVE TJ MAXX 2009 2024 ELGIN ELGIN MALL 2013 2023 ELGIN FAIRVIEW HEIGHTS OFFICEMAX 2015 2025 FOREST PARK KMART 2021 GENEVA GANDER MOUNTAIN CO. 2013 2028 MATTESON MARSHALLS 2005 2010 MT. PROSPECT HOBBY LOBBY 2016 2026 MUNDELIEN BURLINGTON COAT FACTORY 2018 2033 NAPERVILLE BURLINGTON COAT FACTORY 2018 2033 NORRIDGE KMART 2024 2042 OAKLAWN KMART 2024 2054 OAKBROOK TERRACE LINENS N THINGS 2017 2032 ORLAND PARK RHODES FURNITURE 2008 2018 ORLAND PARK VALUE CITY 2015 2030 OTTAWA VALUE CITY 2006 2011 MAJOR LEASES ---------------------------------------------------------------------------------------------------- LEASE OPTION LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION TENANT NAME EXPIRATION EXPIRATION - ---------------------------------------------------------------------------------------------------------------------------------- MELBOURNE GOODWILL INDUSTRIES 2004 2010 SAVE-A-LOT 2013 2023 MELBOURNE BED BATH & BEYOND 2013 2028 MELBOURNE (9) WALGREENS 2027 MIAMI FLEMING COMPANIES 2003 2008 WALGREENS 2009 MIAMI FIRESTONE 2003 2009 MIAMI WALGREENS 2018 MIAMI PARTY CITY 2007 2017 MIAMI WALGREENS 2058 MOUNT DORA OAKLAND PARK (9) U.S. POST OFFICE 2006 2006 OCALA SUPERX DRUGS 2006 2021 ORLANDO (7) PUBLIX 2012 2037 ORLANDO JOANN FABRICS 2006 2011 PARTY CITY 2005 2015 ORLANDO BOOKS-A-MILLION 2006 2016 OFFICEMAX 2008 2023 ORLANDO HOUSE OF HOPE 2003 ORLANDO SPORTS AUTHORITY 2011 2031 SAND LAKE 7 THEATRE 2007 2012 ORLANDO BIG LOTS 2004 2009 WORLD GYM 2010 2020 PALATKA BIG LOTS 2007 2017 PANAMA CITY (4) BED BATH & BEYOND 2013 2028 PENSACOLA (9) GULF POWER COMPANY 2005 BEALLS OUTLET 2006 2016 PLANTATION WHOLE FOODS 2009 2019 POMPANO BEACH PORT RICHEY (7) STAPLES 2006 2011 MICHAELS 2006 RIVIERA BEACH SANFORD OFFICE DEPOT 2009 2019 ECKERD 2005 2025 SARASOTA OFFICEMAX 2009 2024 FRANKS NURSERY 2012 2032 SARASOTA ANTHONY'S LADIES WEAR 2007 2017 PET SUPERMARKET 2008 2013 ST. PETERSBURG TJ MAXX 2007 2012 BARGAIN BOOKS 2003 TALLAHASSEE TALLAHASSEE (4) MARSHALLS 2011 2021 MICHAELS 2011 2031 TAMPA (7) JOANN FABRICS 2016 2031 BED BATH & BEYOND 2015 2030 TAMPA ROSS STORES 2007 2022 TAMPA (4) WEST PALM BEACH (9) WALGREENS 2018 2058 WEST PALM BEACH WEST PALM BEACH WINTER HAVEN GEORGIA ATLANTA AUGUSTA ROSS STORES 2013 2033 AUGUSTA (7) MANSOUR'S 2020 2040 BED BATH & BEYOND 2013 2028 GAINSVILLE BIG LOTS 2012 OFFICE DEPOT 2004 2020 MACON ODD LOTS 2003 MARIETTA (9) WORLD'S GYM 2004 SAVANNAH TJ MAXX 2005 2015 MARSHALLS 2007 2022 SAVANNAH STAPLES 2015 2030 SNELLVILLE (7) BELK'S 2015 2035 LINENS N THINGS 2015 2030 SMYRNA (9) ILLINOIS ADDISON ADDISON ALTON ARLINGTON HEIGHTS AURORA BATAVIA (7) HOBBY LOBBY 2009 2019 LINENS N THINGS 2014 2029 BELLEVILLE BLOOMINGTON TOYS "R" US 2015 2045 BARNES & NOBLE 2005 2015 BRADLEY BRIDGEVIEW (6) CALUMET CITY BEST BUY 2012 2032 CARBONDALE CHAMPAIGN CHAMPAIGN(7) DICK'S SPORTING GOODS 2016 2031 MICHAELS 2010 2025 CHICAGO CHICAGO JB GRUBART 2005 2013 FASHION ISLAND 2003 2013 CHICAGO CHICAGO COUNTRYSIDE CRESTWOOD CRYSTAL LAKE DINO REX II, LLC 2012 2022 DOWNERS GROVE HOME DEPOT 2022 2062 DOWNERS GROVE WALGREENS 2022 DOWNERS GROVE BEST BUY 2016 2031 BEST BUY 2012 2032 ELGIN ELGIN FARMERS PRODUCTS 2010 2030 ELGIN FAIRVIEW HEIGHTS WALGREENS 2010 2029 FOREST PARK GENEVA MATTESON SPORTSMART 2014 2029 LINEN N THINGS 2014 2029 MT. PROSPECT KOHLS 2024 2054 MUNDELIEN NAPERVILLE NORRIDGE OAKLAWN CHUCK E CHEESE 2007 OAKBROOK TERRACE ORLAND PARK ORLAND PARK OTTAWA
21
YEAR OWNERSHIP LAND LEASABLE PERCENT DEVELOPED INTEREST/ AREA AREA LEASED LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1) - -------------------------------------------------------------------------------------------------- PEORIA 1997 GROUND LEASE (2031) 20.5 156,067 100.0 ROCKFORD (6) 1998 GROUND LEASE (2030) 10.3 102,971 - SCHAUMBURG 1998 FEE 7.3 167,690 100.0 SKOKIE 1997 FEE 5.8 58,455 100.0 SPRINGFIELD 1986 GROUND LEASE (2028) 11.6 115,526 100.0 STREAMWOOD 1999 FEE 5.6 81,000 100.0 WAUKEGAN 1998 FEE 6.8 90,555 100.0 WOODRIDGE 1998 FEE 13.1 163,573 94.7 INDIANA EVANSVILLE 1986 FEE 14.2 193,472 85.3 EVANSVILLE 1986 FEE 11.5 149,182 26.3 FELBRAM 1970 FEE 4.1 27,400 100.0 GREENWOOD 1970 FEE 25.7 168,577 100.0 GRIFFITH 1997 GROUND LEASE (2054) 10.6 114,684 100.0 INDIANAPOLIS 1963 JOINT VENTURE 17.4 165,220 92.8 INDIANAPOLIS 1986 FEE 20.6 185,589 94.3 INDIANAPOLIS 1997 FEE 9.6 96,476 - LAFAYETTE 1971 FEE 12.4 90,500 100.0 LAFAYETTE 1997 FEE 24.3 183,440 47.2 LAFAYETTE 1998 FEE 43.2 214,876 95.7 MISHAWAKA 1998 FEE 7.5 82,100 100.0 SOUTH BEND 1999 FEE 1.8 81,668 100.0 IOWA CLIVE 1996 FEE 8.8 90,000 100.0 CLIVE (8) 2002 JOINT VENTURE 23.0 109,434 91.0 DES MOINES 1999 FEE 23.0 156,506 77.1 SE DES MOINES 1996 FEE 9.6 111,847 100.0 DUBUQUE 1997 GROUND LEASE (2019) 6.5 82,979 100.0 DAVENPORT 1997 GROUND LEASE (2028) 9.1 91,035 100.0 WATERLOO 1996 FEE 9.0 96,000 100.0 KANSAS OVERLAND PARK 1980 FEE 14.5 162,982 100.0 WICHITA (7) 1998 FEE 13.5 133,771 97.3 E. WICHITA (7) 1996 FEE 6.5 96,011 100.0 W. WICHITA (7) 1996 FEE 8.1 96,319 100.0 KENTUCKY BELLEVUE 1976 FEE 6.0 53,695 100.0 LEXINGTON 1993 FEE 35.8 258,713 100.0 HINKLEVILLE 1998 GROUND LEASE (2039) 2.0 85,229 100.0 LOUISIANA NEW ORLEANS 1983 JOINT VENTURE 7.0 190,000 100.0 BATON ROUGE 1997 FEE 18.6 350,006 89.0 HOUMA 1999 FEE 10.1 98,586 94.4 LAFAYETTE 1997 FEE 21.9 226,933 98.1 MAINE BANGOR 2001 FEE 8.6 86,422 100.0 MARYLAND COLUMBIA (8) 2002 JOINT VENTURE 7.6 73,299 100.0 COLUMBIA (8) 2002 JOINT VENTURE 5.9 58,902 100.0 COLUMBIA (8) 2002 JOINT VENTURE 15.5 86,456 100.0 COLUMBIA (8) 2002 JOINT VENTURE 16.3 100,505 100.0 COLUMBIA (8) 2002 JOINT VENTURE 12.2 86,032 95.6 COLUMBIA (8) 2002 JOINT VENTURE 12.3 108,567 98.9 COLUMBIA 2002 FEE 7.3 52,291 100.0 COLUMBIA 2002 FEE 2.5 23,835 94.1 COLUMBIA (8) 2002 JOINT VENTURE 7.0 88,452 99.0 COLUMBIA 2002 FEE 6.1 58,224 100.0 COLUMBIA (8) 2002 JOINT VENTURE 15.2 101,707 100.0 COLUMBIA 2002 JOINT VENTURE 5.0 50,000 100.0 GAITHERSBURG 1989 FEE 9.0 87,061 100.0 GLEN BURNIE 1997 GROUND LEASE (2034) 6.0 60,173 100.0 HAGERSTOWN 1973 FEE 10.5 117,718 91.3 LANDOVER 1993 FEE 23.3 232,903 100.0 LAUREL 1964 FEE 8.1 75,924 100.0 LAUREL 1972 FEE 10.0 81,550 100.0 WHITE MARSH 1998 FEE 25.3 209,831 100.0 MASSACHUSETTS FOXBOROUGH (7) 2000 FEE 11.9 118,844 98.3 GREAT BARRINGTON 1994 FEE 14.1 134,817 95.9 LEOMINSTER 1975 FEE 57.0 662,804 98.1 SHREWSBURY 1955 FEE 10.8 108,418 100.0 MICHIGAN CLARKSTON 1996 FEE 20.0 168,102 95.7 CLAWSON 1993 FEE 13.5 179,572 100.0 FARMINGTON 1993 FEE 2.8 97,038 94.6 FLINT 1989 FEE 46.6 248,347 84.7 KALAMAZOO 2002 JOINT VENTURE 37.0 369,607 63.8 LIVONIA 1968 FEE 4.5 44,185 90.9 MUSKEGON 1985 FEE 12.2 79,215 100.0 TAYLOR 1993 FEE 13.0 141,549 100.0 WALKER 1993 FEE 41.8 338,928 100.0 MINNESOTA MAPLE GROVE (7) 2001 FEE 63.0 466,401 100.0 MINNETONKA (7) 1998 FEE 12.1 120,220 99.0 MAPLEWOOD (8) 2002 JOINT VENTURE 8.2 96,376 95.9 MISSISSIPPI JACKSON 2002 JOINT VENTURE 5.0 50,000 100.0 MAJOR LEASES ------------------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION - ---------------------------------------------------------------------------------------------- PEORIA MARSHALLS 2009 2024 ROCKFORD (6) SCHAUMBURG RHODES FURNITURE 2008 2018 SKOKIE MARSHALLS 2010 2025 SPRINGFIELD STREAMWOOD VALUE CITY 2015 2030 WAUKEGAN MEGA MARTS 2009 2029 WOODRIDGE HOLLYWOOD STARDUST 2012 2022 INDIANA EVANSVILLE BURLINGTON COAT FACTORY 2007 2027 EVANSVILLE BUEHLER FOODS 2003 2013 FELBRAM SAVE- A- LOT 2006 2016 GREENWOOD BABY SUPERSTORE 2006 2021 GRIFFITH KMART 2024 2054 INDIANAPOLIS AJ WRIGHT 2012 2027 INDIANAPOLIS TARGET 2009 2029 INDIANAPOLIS LAFAYETTE MENARD 2006 LAFAYETTE PAYLESS SUPERMARKET 2004 2014 LAFAYETTE FAMOUS FOOTWEAR 2011 2026 MISHAWAKA K'S MERCHANDISE 2013 2023 SOUTH BEND MENARD 2010 2030 IOWA CLIVE KMART 2021 2051 CLIVE (8) BABIES R US 2015 2040 DES MOINES BEST BUY 2008 2023 SE DES MOINES HOME DEPOT 2020 2065 DUBUQUE SHOPKO 2018 2038 DAVENPORT KMART 2024 2028 WATERLOO KANSAS OVERLAND PARK HOME DEPOT 2005 2050 WICHITA (7) BEST BUY 2010 2025 E. WICHITA (7) DICK'S SPORTING GOODS 2018 2033 W. WICHITA (7) SHOPKO 2018 2038 KENTUCKY BELLEVUE KROGER 2005 2035 LEXINGTON BEST BUY 2009 2024 HINKLEVILLE K'S MERCHANDISE 2014 2039 LOUISIANA NEW ORLEANS DILLARDS 2011 2031 BATON ROUGE BURLINGTON COAT FACTORY 2004 2024 HOUMA OLD NAVY 2009 2014 LAFAYETTE STEIN MART 2005 2020 MAINE BANGOR BURLINGTON COAT FACTORY 2007 2032 MARYLAND COLUMBIA (8) OLD NAVY 2008 2013 COLUMBIA (8) PARTY PARTY PARTY 2007 2012 COLUMBIA (8) GIANT FOOD 2009 2019 COLUMBIA (8) GIANT FOOD 2012 2022 COLUMBIA (8) SAFEWAY 2006 COLUMBIA (8) SAFEWAY 2018 2043 COLUMBIA GIANT FOOD 2007 COLUMBIA COLUMBIA (8) SAFEWAY 2018 2048 COLUMBIA METRO FOOD MARKET 2018 2043 COLUMBIA (8) GIANT FOOD 2017 2027 COLUMBIA TJ MAXX 2011 GAITHERSBURG GREAT BEGINNING 2011 2021 GLEN BURNIE ROOMSTORE 2003 HAGERSTOWN TJ MAXX 2007 2017 LANDOVER RAYTHEON 2003 2015 LAUREL VILLAGE THRIFT 2004 2009 LAUREL TJ MAXX 2007 2017 WHITE MARSH COSTCO 2013 2048 MASSACHUSETTS FOXBOROUGH (7) STOP & SHOP 2012 2022 GREAT BARRINGTON KMART 2006 2016 LEOMINSTER SEARS 2013 2033 SHREWSBURY BOB'S STORES 2018 2033 MICHIGAN CLARKSTON FARMER JACKS 2015 2045 CLAWSON FARMER JACKS 2006 2016 FARMINGTON DAMMAN HARDWARE 2015 2030 FLINT KESSEL FOOD MARKETS 2014 2034 KALAMAZOO FRANK'S NURSERY 2007 2012 LIVONIA CENTURY 21 2005 2010 MUSKEGON PLUMB'S FOOD 2007 2022 TAYLOR KOHLS 2022 2042 WALKER RUBLOFF DEVELOPMENT 2016 2051 MINNESOTA MAPLE GROVE (7) BYLERLY'S 2020 2035 MINNETONKA (7) TOYS "R" US 2016 2031 MAPLEWOOD (8) BEST BUY 2014 2029 MISSISSIPPI JACKSON TJ MAXX 2014 ----------------------------------------------------------------------------------------------------- LEASE OPTION LEASE OPTION LOCATION N TENANT NAME EXPIRATION EXPIRATION TENANT NAME EXPIRATION EXPIRATION - -------------------------------------------------------------------------------------------------------------------------------- PEORIA ROCKFORD (6) SCHAUMBURG SKOKIE OLD NAVY 2010 2015 SPRINGFIELD STREAMWOOD WAUKEGAN WOODRIDGE KOHLS 2010 2030 INDIANA EVANSVILLE OFFICEMAX 2012 2027 MICHAELS 2004 2019 EVANSVILLE FELBRAM GREENWOOD TJ MAXX 2004 2010 TOYS "R" US 2011 2056 GRIFFITH INDIANAPOLIS KROGER 2026 2066 CVS 2021 2031 INDIANAPOLIS DOLLAR TREE 2004 2014 INDIANAPOLIS LAFAYETTE LAFAYETTE JOANN FABRICS 2010 2020 LAFAYETTE PETSMART 2012 2032 STAPLES 2011 2026 MISHAWAKA SOUTH BEND IOWA CLIVE CLIVE (8) JOANN FABRICS 2013 2023 DAVID'S BRIDAL 2011 2021 DES MOINES OFFICEMAX 2008 2018 JOANN FABRICS 2007 2017 SE DES MOINES DUBUQUE DAVENPORT WATERLOO KANSAS OVERLAND PARK WICHITA (7) TJ MAXX 2004 2019 MICHAELS 2005 2025 E. WICHITA (7) GORDMANS 2012 2032 W. WICHITA (7) KENTUCKY BELLEVUE LEXINGTON BED BATH & BEYOND 2013 2038 TOYS "R" US 2013 2038 HINKLEVILLE LOUISIANA NEW ORLEANS BATON ROUGE STEIN MART 2006 2016 THE RUG GALLERY 2004 2009 HOUMA OFFICEMAX 2013 2028 MICHAELS 2009 2019 LAFAYETTE LINENS N THINGS 2009 2024 TJ MAXX 2003 2018 MAINE BANGOR MARYLAND COLUMBIA (8) COLUMBIA (8) COLUMBIA (8) COLUMBIA (8) COLUMBIA (8) COLUMBIA (8) COLUMBIA COLUMBIA COLUMBIA (8) COLUMBIA COLUMBIA (8) COLUMBIA MICHAELS 2013 GAITHERSBURG FURNITURE 4 LESS 2005 2010 GLEN BURNIE HAGERSTOWN SUPERSHOE 2006 2016 ADVANCE AUTO 2006 2011 LANDOVER LAUREL DOLLAR TREE 2010 2015 OLD COUNTRY BUFFET 2009 2019 LAUREL WHITE MARSH SPORTS AUTHORITY 2011 2021 PETSMART 2010 2030 MASSACHUSETTS FOXBOROUGH (7) OCEAN STATE JOB 2007 2022 GREAT BARRINGTON PRICE CHOPPER 2016 2036 LEOMINSTER FILENE'S 2022 2052 JC PENNEY 2009 2034 SHREWSBURY BED BATH & BEYOND 2012 2032 STAPLES 2006 2021 MICHIGAN CLARKSTON FRANKS NURSERY 2011 2031 CVS 2005 2020 CLAWSON FRANKS NURSERY 2016 STAPLES 2011 2026 FARMINGTON FLINT RITE AID 2003 2011 RAINBOW SHOPS 2006 2016 KALAMAZOO MARSHALLS 2010 2020 OFFICE MAX 2014 2034 LIVONIA MUSKEGON JOANN FABRICS 2005 2012 TAYLOR BABIES R US 2017 2043 WALKER KOHLS 2017 2037 OFFICEMAX 2013 2033 MINNESOTA MAPLE GROVE (7) BEST BUY 2015 2030 JOANN FABRICS 2010 2030 MINNETONKA (7) GOLFSMITH 2008 2018 OFFICEMAX 2006 2011 MAPLEWOOD (8) FRANKS NURSERY 2011 2031 MISSISSIPPI JACKSON MICHAELS 2014
22
YEAR OWNERSHIP LAND LEASABLE PERCENT DEVELOPED INTEREST/ AREA AREA LEASED LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1) - --------------------------------------------------------------------------------------------------- MISSOURI BRIDGETON 1997 GROUND LEASE (2040) 27.3 101,592 100.0 CAPE GIRARDEAU 1997 GROUND LEASE (2060) 7.0 80,803 - CREVE COEUR 1998 FEE 12.2 113,781 81.6 ELLISVILLE 1970 FEE 18.4 118,080 100.0 HAZELWOOD (3) 1970 FEE 16.8 149,230 17.2 INDEPENDENCE 1985 FEE 21.0 184,870 100.0 JOPLIN 1998 FEE 12.6 155,416 100.0 JOPLIN (7) 1998 FEE 9.5 80,524 100.0 KANSAS CITY 1997 FEE 17.8 150,381 82.3 KIRKWOOD 1980 GROUND LEASE (2069) 19.8 204,864 100.0 LEMAY 1974 GROUND LEASE (2073) 3.1 73,281 100.0 MANCHESTER (7) 1998 FEE 9.6 89,305 100.0 SPRINGFIELD 1994 FEE 41.5 277,560 98.3 SPRINGFIELD 1986 GROUND LEASE (2087) 18.5 202,926 100.0 SPRINGFIELD (3) 2002 FEE 8.5 84,916 100.0 ST. CHARLES (5) 1998 FEE 36.9 8,000 100.0 ST. CHARLES 1999 GROUND LEASE (2039) 8.4 84,460 100.0 ST. LOUIS (3) 1972 FEE 13.1 130,096 75.0 ST. LOUIS 1986 FEE 17.5 176,333 89.6 ST. LOUIS 1997 GROUND LEASE (2025) 19.7 193,875 96.7 ST. LOUIS 1997 GROUND LEASE (2035) 37.7 174,967 83.0 ST. LOUIS 1997 GROUND LEASE (2040) 16.3 128,765 100.0 ST. PETERS 1997 FEE 14.8 176,719 23.0 NEVADA HENDERSON (4) 1999 JOINT VENTURE 32.1 215,000 33.6 LAS VEGAS (6) (9) 2002 JOINT VENTURE 23.4 234,459 87.9 LAS VEGAS (7) 2000 FEE 22.9 234,496 51.4 LAS VEGAS 2002 FEE 15.3 156,576 100.0 NEW HAMPSHIRE SALEM 1994 FEE 39.8 344,076 100.0 NEW JERSEY BRIDGEWATER (7) 2001 FEE 15.8 506,545 100.0 CHERRY HILL 1985 JOINT VENTURE 18.6 124,750 85.9 CHERRY HILL 1996 GROUND LEASE (2035) 15.2 129,809 95.5 CINNAMINSON 1996 FEE 13.7 121,852 100.0 DELRAN (7) 2000 FEE 16.1 161,128 94.8 EAST WINDSOR 2002 FEE 34.8 249,029 97.5 FRANKLIN 1998 FEE 14.9 138,364 88.3 HILLSBOROUGH(4) 2001 FEE 14.5 315,000 - HOLMDEL 2002 FEE 29.7 296,784 89.6 LINDEN 2002 1.3 13,340 100.0 NORTH BRUNSWICK 1994 FEE 38.1 409,879 100.0 PISCATAWAY 1998 FEE 9.6 97,348 95.3 PLAINFIELD (7) 1998 FEE 16.2 136,939 97.9 RIDGEWOOD 1994 FEE 2.7 24,280 100.0 WESTMONT 1994 FEE 17.4 192,380 100.0 NEW MEXICO ALBUQUERQUE 1998 FEE 4.7 37,735 87.5 ALBUQUERQUE 1998 FEE 26.0 183,912 93.3 ALBUQUERQUE 1974 FEE 4.8 59,722 92.1 NEW YORK BRIDGEHAMPTON 1973 FEE 30.2 287,587 99.5 BRONX 1990 JOINT VENTURE 20.8 208,149 95.2 BROOKLYN (7) 2000 FEE 8.1 80,708 100.0 BUFFALO, AMHERST 1988 JOINT VENTURE 7.5 101,066 100.0 BUFFALO 1988 JOINT VENTURE 9.2 141,077 89.6 BUFFALO 1988 JOINT VENTURE 12.0 153,125 20.1 CARLE PLACE 1993 FEE 8.3 131,452 98.4 CENTEREACH 1993 JOINT VENTURE 40.7 380,128 93.1 COMMACK 1998 GROUND LEASE(2085) /JOINT VENTURE 35.7 265,409 100.0 COPIAGUE (7) 1998 FEE 15.4 163,999 100.0 FREEPORT (7) 2000 FEE 9.6 173,031 100.0 GLEN COVE (7) 2000 FEE 2.7 49,346 100.0 HAMPTON BAYS 1989 FEE 8.2 70,990 100.0 HEMPSTEAD (7) 2000 FEE 1.4 13,905 100.0 HENRIETTA 1988 FEE 14.9 129,238 100.0 IRONDEQUOIT 1988 FEE 12.8 17,995 100.0 LATHAM (7) 1999 FEE 60.3 616,130 100.0 MANHASSET (3) 1999 FEE 9.6 273,943 63.1 MERRICK (7) 2000 FEE 10.8 107,871 100.0 MIDDLETOWN (7) 2000 FEE 10.1 80,000 100.0 MUNSEY PARK (7) 2000 FEE 6.0 72,748 100.0 NANUET 1984 FEE 6.0 70,632 95.8 PLAINVIEW 1969 GROUND LEASE (2070) 7.0 88,222 100.0 POUGHKEEPSIE 1972 FEE 20.0 167,668 96.5 WEST GATES 1993 FEE 18.6 185,153 36.0 STATEN ISLAND (7) 2000 FEE 14.4 177,118 96.4 STATEN ISLAND 1989 FEE 16.7 210,875 100.0 STATEN ISLAND 1997 GROUND LEASE (2072) 7.0 101,337 100.0 SYOSSET 1967 FEE 2.5 32,124 100.0 YONKERS (7) 2000 GROUND LEASE(2047) 6.3 56,361 97.2 YONKERS 1995 FEE 4.4 43,560 100.0 NORTH CAROLINA APEX (9) 2002 JOINT VENTURE 6.7 67,402 87.8 BRUNSWICK (9) (5) 2002 JOINT VENTURE 568.0 - - CARY (7) 2001 FEE 38.6 315,797 100.0 CARY 1996 FEE 8.6 86,015 100.0 CARY 1998 FEE 10.9 102,787 95.7 MAJOR LEASES -------------------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION - ----------------------------------------------------------------------------------------------- MISSOURI BRIDGETON KOHLS 2010 2020 CAPE GIRARDEAU CREVE COEUR KOHLS 2018 2038 ELLISVILLE SHOP N SAVE 2005 2015 HAZELWOOD (3) WALGREENS 2006 INDEPENDENCE KMART 2024 2054 JOPLIN GOODY'S FAMILY CLOTHING 2010 2015 JOPLIN (7) SHOPKO 2018 2038 KANSAS CITY HOME DEPOT 2005 2050 KIRKWOOD HEMISPHERES 2012 2022 LEMAY SHOP N SAVE 2003 2008 MANCHESTER (7) KOHLS 2018 2038 SPRINGFIELD BEST BUY 2011 2026 SPRINGFIELD OFFICE DEPOT 2005 2010 SPRINGFIELD (3) BED BATH & BEYOND 2013 2028 ST. CHARLES (5) ST. CHARLES KOHLS 2019 2039 ST. LOUIS (3) SHOP N SAVE 2017 2082 ST. LOUIS BURLINGTON COAT FACTORY 2004 2024 ST. LOUIS WEEKENDS ONLY 2004 2009 ST. LOUIS KMART 2024 2035 ST. LOUIS KMART 2024 2040 ST. PETERS OFFICE DEPOT 2004 2009 NEVADA HENDERSON (4) SEARS 2022 2062 LAS VEGAS (6) (9) FACTORY 2 U STORES 2004 2009 LAS VEGAS (7) ALBERTSONS 2009 2019 LAS VEGAS BEST BUY 2013 2028 NEW HAMPSHIRE SALEM KOHLS 2008 2013 NEW JERSEY BRIDGEWATER (7) BED BATH & BEYOND 2010 2030 CHERRY HILL SUPER G 2016 2036 CHERRY HILL KOHLS 2016 2036 CINNAMINSON ODD JOB 2009 2014 DELRAN (7) EICKHOFF SUPERMARKETS 2006 2016 EAST WINDSOR GENUARDI'S 2026 2056 FRANKLIN EDWARDS 2010 2020 HILLSBOROUGH(4) LOWES 2023 2063 HOLMDEL A&P 2013 2043 LINDEN STAUSS DISCOUNT AUTO 2023 2033 NORTH BRUNSWICK WAL-MART 2018 2058 PISCATAWAY SHOP RITE 2014 2024 PLAINFIELD (7) A&P 2018 2058 RIDGEWOOD FRESH FIELDS 2015 2030 WESTMONT SUPER FRESH 2017 2081 NEW MEXICO ALBUQUERQUE SEARS HARDWARE 2006 2021 ALBUQUERQUE MOVIES WEST 2011 2021 ALBUQUERQUE PAGE ONE 2003 2013 NEW YORK BRIDGEHAMPTON KMART 2019 2039 BRONX NATIONAL AMUSEMENTS 2011 2036 BROOKLYN (7) HOME DEPOT 2022 2052 BUFFALO, AMHERST TOPS SUPERMARKET 2013 2033 BUFFALO TOPS SUPERMARKET 2012 2037 BUFFALO ECKERD 2003 2018 CARLE PLACE HARROWS 2004 CENTEREACH WAL-MART 2015 2044 COMMACK KING KULLEN 2017 2047 COPIAGUE (7) HOME DEPOT 2011 2056 FREEPORT (7) STOP & SHOP 2025 GLEN COVE (7) STAPLES 2014 2029 HAMPTON BAYS MACY'S EAST, INC. 2005 2025 HEMPSTEAD (7) WALGREENS 2059 HENRIETTA JEFFERESON ROAD 2015 2025 IRONDEQUOIT STAPLES 2010 2027 LATHAM (7) SAMS CLUB 2013 2043 MANHASSET (3) FILENE'S 2006 2011 MERRICK (7) WALDBAUMS 2013 2041 MIDDLETOWN (7) BEST BUY 2016 2031 MUNSEY PARK (7) BED BATH & BEYOND 2007 2022 NANUET GMF ASSOCIATES 2012 2022 PLAINVIEW FAIRWAY STORES 2017 2037 POUGHKEEPSIE STOP & SHOP 2020 2049 WEST GATES TOPS SUPERMARKET 2004 2024 STATEN ISLAND (7) TJ MAXX 2005 2025 STATEN ISLAND KMART 2006 2011 STATEN ISLAND WALDBAUMS 2006 2031 SYOSSET NY SPORTS 2016 2021 YONKERS (7) STAPLES 2014 2029 YONKERS SHOPRITE 2008 2028 NORTH CAROLINA APEX (9) FOOD LION 2018 BRUNSWICK (9) (5) CARY (7) BJ'S 2020 2040 CARY BED BATH & BEYOND 2005 2014 CARY LOWES 2017 2037 MAJOR LEASES ----------------------------------------------------------------------------------------------------- LEASE OPTION LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION TENANT NAME EXPIRATION EXPIRATION - ---------------------------------------------------------------------------------------------------------------------------------- MISSOURI BRIDGETON CAPE GIRARDEAU CREVE COEUR ELLISVILLE HAZELWOOD (3) INDEPENDENCE TILE SHOP 2014 2024 JOPLIN HASTINGS BOOKS 2004 2014 OFFICEMAX 2010 2025 JOPLIN (7) KANSAS CITY KIRKWOOD HANCOCK FABRICS 2007 2017 LEMAY ST. LOUIS SALES 2006 2011 MANCHESTER (7) SPRINGFIELD JC PENNEY 2005 2015 TJ MAXX 2006 2021 SPRINGFIELD SPRINGFIELD (3) MARSHALLS 2012 2027 BORDERS BOOKS 2023 2038 ST. CHARLES (5) ST. CHARLES ST. LOUIS (3) ST. LOUIS ST.LOUIS CUSTOM HOT RODS 2012 OFFICE DEPOT 2005 2015 ST. LOUIS FRANKS NURSERY 2005 2015 ST. LOUIS ST. LOUIS ST. PETERS NEVADA HENDERSON (4) LEVITZ 2013 2023 INTERIOR SURRONDINGS 2008 2013 LAS VEGAS (6) (9) LAS VEGAS (7) LAS VEGAS BED BATH & BEYOND 2013 2028 MARSHALLS 2012 2027 NEW HAMPSHIRE SALEM SHAWS SUPERMARKET 2008 2038 BOB'S STORES 2011 2021 NEW JERSEY BRIDGEWATER (7) MARSHALLS 2009 2024 PETSMART 2014 2029 CHERRY HILL CHERRY HILL SEARS HARDWARE 2003 2013 CINNAMINSON ACME MARKETS 2047 DELRAN (7) EAST WINDSOR TJ MAXX 2011 2026 TARGET 2027 2067 FRANKLIN NY SPORTS CLUB 2006 2016 HILLSBOROUGH(4) KOHLS 2100 PATHMARK 2022 2052 HOLMDEL MARSHALLS 2004 2019 THE WIZ 2003 2018 LINDEN NORTH BRUNSWICK BURLINGTON COAT FACTORY 2008 2013 MARSHALLS 2012 2027 PISCATAWAY PLAINFIELD (7) SEARS HARDWARE 2008 2028 CVS 2018 2038 RIDGEWOOD WESTMONT A & J FURNITURE OUTLET 2008 JOANN FABRICS 2010 2020 NEW MEXICO ALBUQUERQUE ALBUQUERQUE ROSS STORES 2006 2021 VALLEY FURNITURE 2007 2017 ALBUQUERQUE WALGREENS 2027 NEW YORK BRIDGEHAMPTON KING KULLEN 2015 2035 TJ MAXX 2007 2017 BRONX WALDBAUMS 2011 2046 OFFICE OF HEARING 2007 BROOKLYN (7) WALGREENS 2030 BUFFALO, AMHERST BUFFALO FASHION BUG 2005 2024 BUFFALO BIG LOTS 2004 2014 CARLE PLACE STAPLES 2010 2025 DRESS BARN 2011 2021 CENTEREACH MODELL'S 2009 2019 PARTY CITY 2007 2012 COMMACK LINENS N THINGS 2018 2038 SPORTS AUTHORITY 2017 2037 COPIAGUE (7) JACK LALANNE 2008 2018 FREEPORT (7) TOYS "R" US 2020 2040 MARSHALLS 2006 2016 GLEN COVE (7) ANNIE SEZ 2011 2026 HAMPTON BAYS GENOVESE 2006 2016 HEMPSTEAD (7) HENRIETTA STAPLES 2010 2022 IRONDEQUOIT LATHAM (7) WAL-MART 2013 2043 HOME DEPOT 2031 2071 MANHASSET (3) MERRICK (7) ANNIE SEZ 2006 2021 PARTY CITY 2012 2022 MIDDLETOWN (7) LINENS N THINGS 2016 2031 MUNSEY PARK (7) FRESH FIELDS 2011 2021 NANUET PLAINVIEW POUGHKEEPSIE ODD LOTS 2007 2017 WEST GATES STATEN ISLAND (7) NATIONAL LIQUIDATORS 2010 2030 MICHAELS 2006 2031 STATEN ISLAND PATHMARK 2011 2021 STATEN ISLAND SYOSSET YONKERS (7) YONKERS NORTH CAROLINA APEX (9) BRUNSWICK (9) (5) CARY (7) KOHLS 2022 2101 PETSMART 2016 2036 CARY DICK'S SPORTING 2014 2029 CARY ECKERD 2007 2017
23
YEAR OWNERSHIP LAND LEASABLE PERCENT DEVELOPED INTEREST/ AREA AREA LEASED LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1) - --------------------------------------------------------------------------------------------------- CARY (9) 2002 JOINT VENTURE 18.1 181,380 77.9 CARY (9) 2002 JOINT VENTURE 14.0 139,794 93.0 CHARLOTTE 1968 FEE 13.5 110,300 95.2 CHARLOTTE 1993 FEE 14.0 139,269 99.4 CHARLOTTE 1986 GROUND LEASE(2048) 18.4 253,979 100.0 DURHAM 1996 FEE 13.2 116,186 89.2 DURHAM (9) 2002 JOINT VENTURE 13.2 131,825 98.9 DURHAM (4) 2002 JOINT VENTURE 21.3 76,000 - DURHAM (7) 2002 FEE 39.5 408,292 100.0 GASTONIA 1989 FEE 24.9 240,957 73.7 GREENSBORO 1999 FEE 8.2 100,794 100.0 GREENSBORO (7) 1998 FEE 4.4 41,387 100.0 GREENVILLE (9) 2002 JOINT VENTURE 12.5 125,094 84.8 LENOIR (9) 2002 JOINT VENTURE 14.4 144,239 100.0 RALEIGH 1993 FEE 35.9 374,395 72.7 RALEIGH (4) 2001 JOINT VENTURE 24.4 - - RALEIGH (4) 2001 JOINT VENTURE 8.0 - - RALEIGH 2001 FEE 26.0 83,965 98.3 RALEIGH (9) 2002 JOINT VENTURE 11.0 110,001 82.8 RALEIGH (9) 2002 JOINT VENTURE 5.3 52,575 100.0 RALEIGH (9) 2002 JOINT VENTURE 15.2 152,273 88.0 RALEIGH (9) 2002 JOINT VENTURE 12.6 125,937 78.6 RALEIGH 1984 FEE 10.3 101,965 98.4 ROANOKE RAPIDS (9) 2002 JOINT VENTURE 4.1 41,090 100.0 WILSON (9) 2002 JOINT VENTURE 16.7 167,207 93.5 WINSTON-SALEM 1969 FEE 13.2 137,868 99.7 OHIO AKRON 1975 FEE 6.9 76,438 100.0 AKRON 1988 FEE 24.5 138,363 100.0 AKRON 1988 FEE 12.6 149,054 - AKRON 1988 GROUND LEASE (2012) 22.9 231,754 55.4 BARBERTON 1972 FEE 10.0 118,826 73.9 BEAVERCREEK 1986 FEE 18.2 148,210 80.6 BROOKLYN 1988 FEE 14.4 133,563 22.8 BRUNSWICK 1975 FEE 20.0 171,223 94.9 CAMBRIDGE 1997 FEE 13.1 98,533 93.5 CANTON 1993 FEE 7.9 67,589 78.9 CANTON 1972 FEE 19.6 173,069 89.4 CANTON 1988 FEE 9.2 99,267 - CANTON 1988 GROUND LEASE (2007) 20.6 150,900 - CENTERVILLE 1988 FEE 15.2 120,814 76.2 CINCINNATI 1988 FEE 11.6 224,758 100.0 CINCINNATI 2000 FEE 8.8 88,317 100.0 CINCINNATI (7) 2000 FEE 36.7 378,901 100.0 CINCINNATI 1988 GROUND LEASE(2054) 8.8 121,242 100.0 CINCINNATI (3) 1988 FEE 29.2 321,537 77.0 CINCINNATI 1999 FEE 16.7 89,742 100.0 CLEVELAND 1975 GROUND LEASE (2035) 9.4 69,383 74.1 COLUMBUS 1988 FEE 12.4 191,089 100.0 COLUMBUS 1988 FEE 13.7 142,743 99.2 COLUMBUS 1988 FEE 17.9 129,008 100.0 COLUMBUS 1988 FEE 12.4 135,650 100.0 COLUMBUS 1988 FEE 12.5 99,262 100.0 COLUMBUS (4) 2001 FEE 20.6 - - COLUMBUS (7) 2002 FEE 36.5 234,702 100.0 COLUMBUS (7) 1998 FEE 12.1 113,183 100.0 DAYTON 1969 GROUND LEASE (2043) 22.8 163,131 81.6 DAYTON 1984 FEE 32.1 213,728 93.0 DAYTON 1988 FEE 16.9 141,616 100.0 MIAMISBURG 1999 FEE 0.6 12,600 100.0 DAYTON 1988 FEE 11.2 116,374 100.0 HUBER HEIGHTS (7) 1999 FEE 40.0 318,468 100.0 KENT 1988 GROUND LEASE(2013) 12.2 106,500 100.0 LIMA 1986 FEE 18.1 193,633 90.1 MENTOR 1987 FEE 20.6 103,910 58.4 MENTOR 1988 FEE 25.0 271,259 86.8 MIDDLEBURG HEIGHTS 1988 FEE 8.2 104,342 51.5 NORTH OLMSTEAD 1988 FEE 11.7 99,862 100.0 SHARONVILLE 1977 GROUND LEASE (2076) /JOINT VENTURE 15.0 130,715 100.0 SPRINGBORO PIKE 1985 FEE 13.0 126,422 78.9 SPRINGDALE (7) 2000 FEE 22.0 243,047 89.7 SPRINGFIELD 1988 FEE 14.3 131,628 100.0 UPPER ARLINGTON 1969 FEE 13.3 160,806 91.3 WESTERVILLE 1993 FEE 25.4 242,124 87.4 WICKLIFFE 1982 FEE 10.0 128,180 100.0 WILLOUGHBY HILLS 1988 FEE 14.1 156,219 33.9 OKLAHOMA OKLAHOMA CITY 1997 FEE 9.8 103,027 5.3 MIDWEST CITY 1998 FEE 9.7 99,433 - NORMAN (7) 2001 FEE 31.3 262,624 100.0 OKLAHOMA CITY 1998 FEE 19.8 232,635 77.3 SOUTH TULSA 1996 FEE 8.8 100,190 4.1 PENNSLYVANIA EXTON 1990 FEE 6.1 60,685 100.0 BLUE BELL 1996 FEE 17.7 120,211 77.7 CHIPPEWA 2000 FEE 22.4 215,206 100.0 DUQUESNE 1993 FEE 8.8 69,733 100.0 EAST NORRITON 1984 FEE 12.5 136,635 100.0 MAJOR LEASES ------------------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION - -------------------------------------------------------------------------------------------- CARY (9) WELLSPRING 2013 2028 CARY (9) CARMIKE CINEMAS 2017 2027 CHARLOTTE MEDIA PLAY 2005 2020 CHARLOTTE BI-LO 2009 2029 CHARLOTTE TOYS "R" US 2012 2042 DURHAM TJ MAXX 2009 2014 DURHAM (9) KROGER 2013 2043 DURHAM (4) KROGER 2023 2053 DURHAM (7) WAL-MART 2015 2035 GASTONIA HOBBY LOBBY 2013 2023 GREENSBORO BEN FRANKLIN 2010 2020 GREENSBORO (7) STAPLES 2011 2031 GREENVILLE (9) FOOD LION 2015 2035 LENOIR (9) BI-LO 2014 2044 RALEIGH BEST BUY 2005 2020 RALEIGH (4) RALEIGH (4) RALEIGH KROGER 2019 2059 RALEIGH (9) LOWES 2021 2052 RALEIGH (9) BOOKS-A-MILLION 2006 2016 RALEIGH (9) FOOD LION 2014 2034 RALEIGH (9) RALEIGH ATHLETIC CLUB 2006 2030 RALEIGH HARRIS TEETER 2014 2034 ROANOKE RAPIDS (9) FOOD LION 2017 2037 WILSON (9) WINN DIXIE 2018 WINSTON-SALEM HARRIS TEETER 2016 2041 OHIO AKRON GIANT EAGLE 2021 2041 AKRON GABRIEL BROTHER 2005 2025 AKRON AKRON FIFTH AVENUE FLEA MARKET 2005 BARBERTON GIANT EAGLE 2027 2049 BEAVERCREEK KROGER 2018 2048 BROOKLYN ALMOST FREE 2010 BRUNSWICK KMART 2005 2050 CAMBRIDGE TRACTOR SUPPLY CO. 2010 2020 CANTON CINEMARK 2003 CANTON BURLINGTON COAT FACTORY 2018 2043 CANTON CANTON CENTERVILLE BED BATH & BEYOND 2017 2032 CINCINNATI LOWES 2022 2052 CINCINNATI HOBBY LOBBY 2011 2021 CINCINNATI (7) WAL-MART 2010 2040 CINCINNATI BURLINGTON COAT FACTORY 2005 2025 CINCINNATI (3) HOBBY LOBBY 2012 2022 CINCINNATI BIGGS FOODS 2008 2028 CLEVELAND COLUMBUS KOHLS 2011 2031 COLUMBUS KOHLS 2011 2031 COLUMBUS KOHLS 2011 2031 COLUMBUS KOHLS 2011 2031 COLUMBUS SOUTHLAND EXPO 2006 COLUMBUS (4) COLUMBUS (7) LOWES 2016 2046 COLUMBUS (7) BORDERS BOOKS 2018 2038 DAYTON BEST BUY 2004 2024 DAYTON VICTORIA'S SECRET 2004 2019 DAYTON VALUE CITY 2010 2020 MIAMISBURG DAYTON VALUE CITY 2010 2015 HUBER HEIGHTS (7) ELDER BEERMAN 2014 2044 KENT TOPS SUPERMARKET 2026 2096 LIMA RAYS SUPERMARKET 2011 2026 MENTOR GABRIEL BROTHER 2013 2028 MENTOR GIANT EAGLE 2019 2029 MIDDLEBURG HEIGHTS GABRIEL BROTHER 2013 2028 NORTH OLMSTEAD TOPS SUPERMARKET 2026 2096 SHARONVILLE KROGER 2003 2028 SPRINGBORO PIKE RHODES FURNITURE 2013 2028 SPRINGDALE (7) WAL-MART 2015 2045 SPRINGFIELD HOBBY LOBBY 2010 2020 UPPER ARLINGTON TJ MAXX 2011 2021 WESTERVILLE KOHLS 2016 2036 WICKLIFFE GABRIEL BROTHER 2008 2023 WILLOUGHBY HILLS MARCS DRUGS 2012 2017 OKLAHOMA OKLAHOMA CITY MIDWEST CITY NORMAN (7) ROSS STORES 2007 2027 OKLAHOMA CITY HOME DEPOT 2014 2044 SOUTH TULSA PENNSLYVANIA EXTON ACME MARKETS 2015 2045 BLUE BELL KOHLS 2016 2036 CHIPPEWA KMART 2018 2068 DUQUESNE PAT CATANS CRAFTS 2005 EAST NORRITON SHOP RITE 2017 2037 MAJOR LEASES ------------------------------------------------------------------------------------------------------ LEASE OPTION LEASE OPTION LOCATION ON TENANT NAME EXPIRATION EXPIRATION TENANT NAME EXPIRATION EXPIRATION - ----------------------------------------------------------------------------------------------------------------------------------- CARY (9) GOLD'S GYM 2011 2025 CARY (9) FOOD LION 2019 CHARLOTTE TJ MAXX 2007 2017 CVS 2015 2035 CHARLOTTE PARTY CITY 2004 2014 CHARLOTTE K&G MEN'S COMPANY 2008 2018 OFFICEMAX 2009 2024 DURHAM JOANN FABRICS 2010 2020 DURHAM (9) SPA HEALTH CLUB 2009 DURHAM (4) DURHAM (7) BEST BUY 2011 2026 LINENS N THINGS 2011 2026 GASTONIA TOYS "R" US 2015 2045 ECKERD 2005 GREENSBORO USA BABY 2008 2013 GREENSBORO (7) DAVID'S BRIDAL 2006 2026 GREENVILLE (9) PITT COUNTY HOSPITAL 2010 2025 LENOIR (9) RALEIGH MARSHALLS 2004 2014 OFFICEMAX 2011 RALEIGH (4) RALEIGH (4) RALEIGH RALEIGH (9) RALEIGH (9) RALEIGH (9) BIG LOTS 2006 2016 KIMBRELL'S 2003 RALEIGH (9) RALEIGH ECKERD 2005 2015 ROANOKE RAPIDS (9) WILSON (9) WINSTON-SALEM DOLLAR TREE 2006 2016 SPORTSMAN'S SUPPLY OHIO AKRON AKRON PAT CATANS CRAFTS 2013 ESSENCE BEAUTY MART 2008 2014 AKRON AKRON BARBERTON BEAVERCREEK MOORE'S FITNESS 2007 2013 REVCO 2007 2027 BROOKLYN BRUNSWICK GIANT EAGLE 2006 2031 CAMBRIDGE KROGER 2004 2014 CANTON DOLLAR GENERAL 2003 2012 BACKYARD ADVENTURES 2003 CANTON TJ MAXX 2007 2017 PRICELESS KIDS 2007 2012 CANTON CANTON CENTERVILLE ODD JOB 2007 2017 MICHAEL'S DAY SPA 2016 2026 CINCINNATI CIRCUIT CITY 2008 2031 BIG LOTS 2004 2019 CINCINNATI GOLD'S GYM 2017 2027 CINCINNATI (7) THRIFTWAY 2006 2026 DICK'S SPORTING GOODS 2016 2031 CINCINNATI TOYS "R" US 2019 2044 CINCINNATI (3) TOYS "R" US 2016 2046 OFFICE DEPOT 2004 2024 CINCINNATI CLEVELAND COLUMBUS TOYS "R" US 2015 2040 KROGER 2031 2071 COLUMBUS STAPLES 2010 2020 COLUMBUS GRANT/RIVERSIDE HOSP 2011 COLUMBUS CIRCUIT CITY 2019 2039 COLUMBUS COLUMBUS (4) COLUMBUS (7) KROGER 2017 2037 COLUMBUS (7) FRANNY'S HALLMARK 2004 2014 DAYTON BIG LOTS 2008 2018 JOANN FABRICS 2007 2012 DAYTON JOANN FABRICS 2006 2016 DAYTON CIRCUIT CITY 2018 2038 DOLLAR GENERAL 2004 2007 MIAMISBURG DAYTON HUBER HEIGHTS (7) KOHLS 2015 2035 MARSHALLS 2009 2024 KENT LIMA BUCKEYE DISCOUNT 2004 2024 JOANN FABRICS 2006 2011 MENTOR MENTOR BURLINGTON COAT FACTORY 2014 JOANN FABRICS 2009 2019 MIDDLEBURG HEIGHTS NORTH OLMSTEAD SHARONVILLE SPRINGBORO PIKE OFFICEMAX 2007 SPRINGDALE (7) HH GREGG 2012 2017 OFFICEMAX 2009 2024 SPRINGFIELD UPPER ARLINGTON PEDDLERS VILLAGE 2008 CVS 2019 2039 WESTERVILLE OFFICEMAX 2007 2022 MARC'S 2013 2023 WICKLIFFE BIG LOTS 2005 2010 DOLLAR GENERAL 2004 WILLOUGHBY HILLS OKLAHOMA OKLAHOMA CITY MIDWEST CITY NORMAN (7) BARNES & NOBLE 2012 2027 OFFICEMAX 2011 2031 OKLAHOMA CITY BEST BUY 2008 2023 GUITAR CENTER 2010 2020 SOUTH TULSA PENNSLYVANIA EXTON BLUE BELL CHIPPEWA HOME DEPOT 2018 2068 DUQUESNE RED, WHITE & BLUE 2005 EAST NORRITON STAPLES 2008 2023 JOANN FABRICS 2007 2012
24
YEAR OWNERSHIP LAND LEASABLE PERCENT DEVELOPED INTEREST/ AREA AREA LEASED LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1) - --------------------------------------------------------------------------------------------------- EAST STROUDSBURG 1973 FEE 15.3 168,506 100.0 EAGLEVILLE 1973 FEE 15.2 165,385 100.0 EASTWICK 1997 FEE 3.4 36,511 92.6 EXTON 1996 FEE 9.8 85,184 100.0 FEASTERVILLE 1996 FEE 4.6 86,575 100.0 GETTYSBURG 1986 FEE 2.3 30,706 93.8 GREENSBERG 2002 JOINT VENTURE 5.0 50,000 100.0 HARRISBURG 1972 FEE 17.0 175,917 52.4 HARRISBURG 1972 FEE 11.7 154,896 42.2 HAMBURG 2001 FEE 1.5 15,400 100.0 HAVERTOWN 1996 FEE 9.0 80,938 100.0 LANDSDALE 1996 GROUND LEASE (2037) 1.4 84,470 100.0 MONTGOMERY (7) 2002 FEE 45.0 257,565 98.8 MIDDLETOWN 1973 FEE 21.9 140,481 61.9 MIDDLETOWN 1986 FEE 4.7 38,953 83.0 NEW KENSINGTON 1986 FEE 12.5 106,624 100.0 PENN HILLS 1986 GROUND LEASE (2026) 31.1 110,517 - PHILADELPHIA 1983 JOINT VENTURE 8.1 214,970 97.2 PHILADELPHIA 1995 JOINT VENTURE 22.6 277,533 98.7 PHILADELPHIA 1996 FEE 6.3 82,345 100.0 PHILADELPHIA 1996 GROUND LEASE (2035) 6.8 133,309 100.0 RICHBORO 1986 FEE 14.5 105,807 98.0 SCOTT TOWNSHIP 2000 GROUND LEASE (2052) 6.9 69,288 100.0 SPRINGFIELD 1983 FEE 19.7 218,907 96.9 TREXLERTOWN (6) 1998 GROUND LEASE (2048) /J0INT VENTURE 1.2 41,680 90.8 UPPER ALLEN 1986 FEE 6.0 59,470 89.5 UPPER DARBY 1996 JOINT VENTURE 16.3 48,936 99.0 WEST MIFFLIN 1974 FEE 21.9 193,878 51.1 WEST MIFFLIN 1986 GROUND LEASE (2032) 8.3 84,279 94.0 WHITEHALL 1996 GROUND LEASE (2081) 6.0 84,524 100.0 YORK 1986 FEE 8.0 61,979 81.8 YORK 1986 FEE 13.7 59,016 95.2 YORK 1986 FEE 3.3 35,500 86.6 RHODE ISLAND CRANSTON 1998 FEE 11.0 129,907 94.6 SOUTH CAROLINA AIKEN 1989 FEE 3.2 11,200 33.1 CHARLESTON 1978 FEE 17.6 169,813 89.4 CHARLESTON 1995 FEE 17.2 191,140 91.8 CONWAY (9) 2002 JOINT VENTURE 5.4 54,124 100.0 FLORENCE 1997 FEE 21.0 113,922 100.0 GREENVILLE 1997 FEE 20.4 148,532 90.6 MT PLEASANT (9) 2002 JOINT VENTURE 11.6 115,632 94.3 NORTH CHARLESTON 2000 FEE 27.3 267,102 98.0 ORANGEBURG (9) 2002 JOINT VENTURE 10.7 106,617 86.5 MYRTLE BEACH (9) 2002 JOINT VENTURE 6.0 59,762 97.3 WALTERBORO (9) 2002 JOINT VENTURE 4.8 47,640 100.0 TENNESSEE MEMPHIS 2000 FEE 8.8 87,962 100.0 CHATTANOOGA 1973 GROUND LEASE (2074) 7.6 44,288 80.3 CHATTANOOGA 2002 JOINT VENTURE 5.0 50,000 100.0 MADISON (7) 1999 FEE 21.1 189,299 97.4 MADISON 1978 GROUND LEASE (2039) 14.5 184,506 70.6 MEMPHIS (7) 2001 FEE 3.9 40,000 100.0 MEMPHIS 1991 FEE 14.7 167,243 100.0 NASHVILLE (7) 1999 FEE 9.3 99,909 97.0 NASHVILLE 1998 FEE 10.2 109,012 95.6 NASHVILLE 1986 FEE 16.9 172,135 99.1 TEXAS AMARILLO (7) 1997 FEE 9.3 342,859 99.6 ARLINGTON (8) 2002 JOINT VENTURE 6.3 75,247 87.1 ARLINGTON 1997 FEE 8.0 96,127 100.0 AUSTIN (7) 1998 FEE 18.2 191,760 100.0 AUSTIN 1998 FEE 15.4 157,852 98.7 BAYTOWN 1996 FEE 8.7 86,240 100.0 BEAUMONT (4) 2002 FEE 11.4 46,000 - BURLESON (4) 2000 FEE 54.6 282,000 - DALLAS (8) 2002 JOINT VENTURE 9.6 105,195 95.2 DALLAS 2002 JOINT VENTURE 5.0 50,000 - DALLAS (3) 1969 JOINT VENTURE 75.0 581,595 - DALLAS (7) 1998 FEE 6.8 83,867 100.0 DUNCANVILLE 1996 FEE 6.8 96,500 - EAST PLANO 1996 FEE 9.0 100,598 100.0 GARLAND (7) 1998 FEE 6.3 62,000 100.0 GARLAND 1996 FEE 2.9 41,364 100.0 GARLAND 1996 FEE 8.8 103,600 100.0 HOUSTON (8) 2002 FEE 8.7 95,032 98.6 HOUSTON (4) 2001 JOINT VENTURE 23.8 53,000 - HOUSTON 1998 FEE 40.0 434,997 92.9 HOUSTON 1997 FEE 8.0 113,831 95.0 HOUSTON 1999 FEE 5.6 84,188 100.0 LEWISVILLE 1998 FEE 11.2 74,837 94.0 LEWISVILLE 1998 FEE 7.6 124,089 77.9 LEWISVILLE 1998 FEE 9.4 93,668 70.1 LUBBOCK 1998 FEE 9.6 108,326 100.0 MESQUITE 1974 FEE 9.0 79,550 100.0 MESQUITE 1998 FEE 30.0 209,579 93.5 NORTH ARLINGTON 1996 FEE 8.0 97,000 100.0 MAJOR LEASES ------------------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION - -------------------------------------------------------------------------------------------- EAST STROUDSBURG KMART 2007 2022 EAGLEVILLE KMART 2004 2019 EASTWICK MERCY HOSPITAL 2012 2022 EXTON KOHLS 2016 2036 FEASTERVILLE VALUE CITY 2011 2026 GETTYSBURG GIANT FOOD 2005 2010 GREENSBERG TJ MAXX 2010 HARRISBURG MEDIA PLAY 2011 2026 HARRISBURG BIG LOTS 2015 2045 HAMBURG LEHIGH HIGH VALLEY HEALTH 2016 2026 HAVERTOWN KOHLS 2016 2036 LANDSDALE KOHLS 2012 MONTGOMERY (7) GIANT FOOD 2020 2050 MIDDLETOWN SHARP SHOPPER 2010 2015 MIDDLETOWN US POST OFFICE 2016 2026 NEW KENSINGTON GIANT EAGLE 2006 2026 PENN HILLS PHILADELPHIA JC PENNEY 2012 2037 PHILADELPHIA PETSMART 2006 2016 PHILADELPHIA KOHLS 2016 2036 PHILADELPHIA RICHBORO SUPER FRESH 2018 2058 SCOTT TOWNSHIP WAL-MART 2015 2052 SPRINGFIELD VALUE CITY 2013 2043 TREXLERTOWN (6) LEHIGH VALLEY HEALTH 2008 2023 UPPER ALLEN GIANT FOOD 2010 2030 UPPER DARBY MERCY HOSPITAL 2012 2022 WEST MIFFLIN GIANT EAGLE 2014 2039 WEST MIFFLIN WHITEHALL KOHLS 2016 2036 YORK SUPERPETZ PET 2004 2009 YORK GIANT FOOD 2006 2026 YORK GIANT FOOD 2007 2017 RHODE ISLAND CRANSTON BOB'S STORES 2008 2028 SOUTH CAROLINA AIKEN CHARLESTON STEIN MART 2006 2016 CHARLESTON TJ MAXX 2009 2014 CONWAY (9) FOOD LION 2017 FLORENCE HAMRICKS 2006 2011 GREENVILLE RHODES FURNITURE 2005 2020 MT PLEASANT (9) STAPLES 2012 NORTH CHARLESTON SPORTS AUTHORITY 2013 2033 ORANGEBURG (9) BI-LO 2011 2031 MYRTLE BEACH (9) FOOD LION 2014 2020 WALTERBORO (9) FOOD LION 2018 2038 TENNESSEE MEMPHIS OLD TIME POTTER 2010 2025 CHATTANOOGA ECHOLS FURNITURE 2003 CHATTANOOGA TJ MAXX 2010 MADISON (7) SPORTS AUTHORITY 2013 2028 MADISON OLD TIME POTTER 2003 2006 MEMPHIS (7) BED BATH & BEYOND 2012 2027 MEMPHIS TOYS "R" US 2017 2042 NASHVILLE (7) BEST BUY 2014 2029 NASHVILLE MARSHALLS 2007 NASHVILLE STEIN MART 2003 2013 TEXAS AMARILLO (7) HOME DEPOT 2019 2069 ARLINGTON (8) TJ MAXX 2005 2015 ARLINGTON HOBBY LOBBY 2008 2018 AUSTIN (7) CIRCUIT CITY 2017 2037 AUSTIN HEB GROCERY 2006 2026 BAYTOWN HOBBY LOBBY 2008 2018 BEAUMONT (4) BED BATH & BEYOND 2013 2033 BURLESON (4) KOHLS 2023 DALLAS (8) TOM THUMB 2017 2032 DALLAS DALLAS (3) DALLAS (7) ROSS STORES 2007 2017 DUNCANVILLE EAST PLANO HOME DEPOT EXPO 2024 2054 GARLAND (7) MJ DESIGNS 2012 2022 GARLAND KROGER 2005 2025 GARLAND HOUSTON (8) MARSHALLS 2008 2023 HOUSTON (4) ROSS STORES 2013 2033 HOUSTON OSHMAN SPORTING 2009 2024 HOUSTON HEB PANTRY STORE 2007 2027 HOUSTON OFFICE DEPOT 2007 2022 LEWISVILLE BALLY TOTAL FITNESS 2007 2022 LEWISVILLE BABIES R US 2009 2027 LEWISVILLE DSW SHOE WAREHOUSE 2008 2028 LUBBOCK PETSMART 2015 2040 MESQUITE KROGER 2012 2037 MESQUITE BEST BUY 2009 2024 NORTH ARLINGTON MAJOR LEASES ----------------------------------------------------------------------------------------------------- LEASE OPTION LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION TENANT NAME EXPIRATION EXPIRATION - ---------------------------------------------------------------------------------------------------------------------------------- EAST STROUDSBURG WEIS MARKETS 2005 2010 EAGLEVILLE SAFEWAY 2011 2025 EASTWICK EXTON FEASTERVILLE GETTYSBURG GREENSBERG MICHAELS 2010 HARRISBURG SUPERPETZ 2007 2022 HARRISBURG HAMBURG HAVERTOWN LANDSDALE MONTGOMERY (7) BED BATH & BEYOND 2016 2030 COMP USA 2014 2028 MIDDLETOWN ELECTRONICS INSTITUTE 2003 CVS 2008 MIDDLETOWN NEW KENSINGTON PENN HILLS PHILADELPHIA TOYS "R" US 2007 2052 PHILADELPHIA AMC THEATERS 2003 2023 PEP BOYS 2004 2014 PHILADELPHIA PHILADELPHIA RICHBORO SCOTT TOWNSHIP SPRINGFIELD STAPLES 2008 2023 JOANN FABRICS 2006 2016 TREXLERTOWN (6) UPPER ALLEN CVS 2008 UPPER DARBY ALLEGHENY CHILD CARE 2012 2022 WEST MIFFLIN WEST MIFFLIN WHITEHALL YORK ECKERD 2004 YORK CVS 2005 2020 YORK RHODE ISLAND CRANSTON MARSHALLS 2011 2021 SOUTH CAROLINA AIKEN CHARLESTON BY THE YARD 2006 2017 GCO CARPET 2012 CHARLESTON OFFICE DEPOT 2006 2016 MARSHALLS 2006 2011 CONWAY (9) FLORENCE STAPLES 2010 2035 ATHLETE'S FOOT 2007 2017 GREENVILLE BABIES R US 2007 2022 MT PLEASANT (9) NORTH CHARLESTON MARSHALLS 2003 2013 TJ MAXX 2003 2008 ORANGEBURG (9) MYRTLE BEACH (9) WALTERBORO (9) TENNESSEE MEMPHIS CHATTANOOGA CHATTANOOGA MICHAELS 2017 MADISON (7) BEST BUY 2014 2029 GOODY'S FAMILY CLOTHING 2010 2020 MADISON MEMPHIS (7) MEMPHIS OFFICEMAX 2008 2028 JUST FOR FEET 2015 2025 NASHVILLE (7) OFFICEMAX 2015 2035 NASHVILLE OFFICEMAX 2004 2019 OLD COUNTRY BUFFET 2006 2016 NASHVILLE ASHLEY FURNITURE 2012 2022 BED BATH & BEYOND 2013 2028 TEXAS AMARILLO (7) CIRCUIT CITY 2010 2035 PETSMART 2015 2035 ARLINGTON (8) ARLINGTON AUSTIN (7) BABIES R US 2012 2027 WORLD MARKET 2011 2026 AUSTIN DANCE SPACE 2006 2011 BAYTOWN ROSS STORES 2012 2032 BEAUMONT (4) BURLESON (4) ROSS STORES 2013 2033 LINENS N THINGS 2013 2028 DALLAS (8) DALLAS DALLAS (3) DALLAS (7) KMART 2009 2024 BIG LOTS 2012 2032 DUNCANVILLE EAST PLANO GARLAND (7) OFFICE DEPOT 2006 2021 GARLAND GARLAND HOUSTON (8) HOUSTON (4) HOUSTON HOBBY LOBBY 2012 2022 BED BATH & BEYOND 2009 2019 HOUSTON PALAIS ROYAL 2007 2022 HOUSTON METROPOLITAN FURNITURE 2013 2023 JUST FOR FEET 2013 2023 LEWISVILLE TALBOTS OUTLET 2007 2017 LEWISVILLE BED BATH & BEYOND 2018 2033 LEWISVILLE PETLAND 2009 2019 LUBBOCK OFFICEMAX 2009 2029 BARNES & NOBLE 2010 2025 MESQUITE MESQUITE ASHLEY FURNITURE 2007 2017 PETSMART 2007 2027 NORTH ARLINGTON
25
YEAR OWNERSHIP LAND LEASABLE PERCENT DEVELOPED INTEREST/ AREA AREA LEASED LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1) - --------------------------------------------------------------------------------------------------- NORTH RICHLAND HILLS 1997 FEE 9.2 - - PASADENA (7) 1999 FEE 15.1 169,203 100.0 PASADENA (7) 2001 FEE 24.6 241,172 93.7 RICHARDSON (7) 1998 FEE 11.7 115,579 100.0 SAN ANTONIO (4) 1999 FEE 6.1 69,000 - WEST OAKS - HOUSTON 1996 FEE 8.2 96,500 100.0 HOUSTON (7) 2002 FEE 54.0 585,901 96.9 WOODLANDS (4) 2002 JOINT VENTURE 34.5 104,000 - UTAH OGDEN 1967 FEE 11.4 121,449 85.2 VIRGINIA BROOKNEAL (9) 2002 JOINT VENTURE 2.8 28,161 88.8 BLACKSBURG (9) 2002 JOINT VENTURE 16.7 167,461 100.0 COLONIAL HEIGHTS 1996 FEE 6.1 60,909 100.0 DANVILLE (9) 2002 JOINT VENTURE 5.6 55,909 97.9 FAIRFAX (7) 1998 FEE 37.0 323,262 100.0 HARRISONBURG 1993 FEE 3.1 31,111 100.0 HARRISONBURG (9) 2002 JOINT VENTURE 14.0 139,956 52.2 KEYSVILLE (9) 2002 JOINT VENTURE 4.0 40,227 91.2 MANASSAS 1997 FEE 13.5 117,525 100.0 PETERSBURG (9) 2002 JOINT VENTURE 5.0 50,280 87.1 RICHMOND 1995 FEE 11.5 128,612 100.0 RICHMOND 2002 FEE 8.5 84,683 100.0 ROANOKE (9) 2002 JOINT VENTURE 30.2 301,561 66.9 WOODBRIDGE 1973 GROUND LEASE(2072) /JOINT VENTURE 19.6 189,563 94.6 WOODBRIDGE (7) 1998 FEE 54.0 495,347 97.2 WASHINGTON BELLINGHAM (7) 1998 FEE 20.0 188,885 97.9 FEDERAL WAY (7) 2000 FEE 17.0 200,209 97.6 MARYSVILLE (8) 2002 JOINT VENTURE 15.5 226,038 100.0 SPOKANE (8) 2002 JOINT VENTURE 13.0 129,785 97.2 WEST VIRGINIA CHARLES TOWN 1985 FEE 22.0 208,048 100.0 SOUTH CHARLESTON 1999 FEE 14.8 188,589 87.5 MARTINSBURG 1986 FEE 6.0 43,212 100.0 WISCONSIN RACINE 1988 FEE 14.2 157,150 92.6 CANADA ALBERTA SHOPPES @ SHAWNESSEY 2002 JOINT VENTURE 16.30 163,000 100.0 SHAWNESSY CENTRE 2002 JOINT VENTURE 30.64 306,368 100.0 BRENTWOOD 2002 JOINT VENTURE 31.49 314,862 98.2 SOUTH EDMONTON COMMON 2002 JOINT VENTURE 29.17 291,695 100.0 SOUTH EDMONTON PHASE II (4) 2002 JOINT VENTURE 1.30 - - GRANDE PRAIRIE III 2002 JOINT VENTURE 6.34 63,413 100.0 BRITISH COLUMBIA TILLICUM 2002 JOINT VENTURE 41.18 411,781 98.0 PRINCE GEORGE 2001 JOINT VENTURE 37.27 372,725 92.6 STRAWBERRY HILL 2002 JOINT VENTURE 33.03 330,317 99.2 MISSION 2001 JOINT VENTURE 25.65 256,547 96.3 ABBOTSFORD 2002 JOINT VENTURE 19.86 198,574 100.0 CLEARBROOK 2001 JOINT VENTURE 18.83 188,252 91.6 SURREY 2001 JOINT VENTURE 17.08 170,766 97.3 LANGLEY GATE 2002 JOINT VENTURE 15.18 151,802 97.0 ONTARIO SHOPPERS WORLD ALBION 2002 JOINT VENTURE 34.32 343,207 97.5 SHOPPERS WORLD DANFORTH 2002 JOINT VENTURE 32.38 323,769 99.2 THICKSON RIDGE 2002 JOINT VENTURE 32.25 322,464 100.0 LINCOLN FIELDS 2002 JOINT VENTURE 28.76 287,566 97.9 404 TOWN CENTRE 2002 JOINT VENTURE 24.94 249,426 100.0 BOULEVARD CENTRE I 2002 JOINT VENTURE 21.74 217,446 100.0 BOULEVARD CENTRE II 2002 JOINT VENTURE - - - KENDALWOOD 2002 JOINT VENTURE 15.44 154,445 99.3 SUDBURY 2002 JOINT VENTURE 15.22 152,175 100.0 LEASIDE 2002 JOINT VENTURE 13.30 133,035 100.0 WALKER PLACE 2002 JOINT VENTURE 6.99 69,857 97.3 BOULEVARD III (4) 2002 JOINT VENTURE 4.86 - - NEW MARKET (4) 2002 JOINT VENTURE 15.41 - - DUFFERIN (4) 2002 JOINT VENTURE 9.95 - - PRINCE EDWARD ISLAND CHARLOTTETOWN 2002 JOINT VENTURE 39.00 390,027 98.4 QUEBEC GREENFIELD PARK 2002 JOINT VENTURE 37.47 374,693 92.0 JACQUES CARTIER 2002 JOINT VENTURE 21.26 212,628 93.4 CHATEAUGUAY 2002 JOINT VENTURE 21.16 211,556 98.0 MEXICO SALTILLO PLAZA 2002 FEE 17.41 174,079 99.5 NUEVO LEON 2002 FEE 12.00 120,050 95.7 ----------------------- ----------------------- TOTAL 558 PROPERTY INTERESTS 9,590 82,671,015 ----------------------- ----------------------- MAJOR LEASES ------------------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION - --------------------------------------------------------------------------------------------- NORTH RICHLAND HILLS PASADENA (7) PETSMART 2015 2030 PASADENA (7) BEST BUY 2012 2027 RICHARDSON (7) OFFICEMAX 2011 2026 SAN ANTONIO (4) HOBBY LOBBY 2018 2033 WEST OAKS - HOUSTON HOUSTON (7) LOEWS THEATRES 2017 2047 WOODLANDS (4) UTAH OGDEN VIRGINIA BROOKNEAL (9) FOOD LION 2018 2038 BLACKSBURG (9) VIRGINIA TECH 2007 COLONIAL HEIGHTS BLOOM BROS 2008 DANVILLE (9) FOOD LION 2014 FAIRFAX (7) HOME DEPOT 2013 2033 HARRISONBURG STAPLES 2004 2014 HARRISONBURG (9) FARMER JACK 2007 2037 KEYSVILLE (9) FOOD LION 2018 2038 MANASSAS SUPER FRESH 2006 2026 PETERSBURG (9) FOOD LION 2011 2031 RICHMOND BURLINGTON COAT FACTORY 2006 2035 RICHMOND BLOOM BROTHERS FURNITURE 2013 2023 ROANOKE (9) HEIRONIMUS 2004 2008 WOODBRIDGE CAMPOS FURNITURE 2003 WOODBRIDGE (7) LOWES 2012 2032 WASHINGTON BELLINGHAM (7) BON HOME STORE 2012 2022 FEDERAL WAY (7) ASSOCIATED 2015 2045 MARYSVILLE (8) GOTTSCHALKS 2008 2018 SPOKANE (8) BED BATH & BEYOND 2011 2026 WEST VIRGINIA CHARLES TOWN WAL-MART 2017 2047 SOUTH CHARLESTON KROGER 2008 2038 MARTINSBURG GIANT FOOD 2010 2030 WISCONSIN RACINE PIGGLY WIGGLY 2003 2009 CANADA ALBERTA SHOPPES @ SHAWNESSEY ZELLERS 2011 2096 SHAWNESSY CENTRE FUTURE SHOP (BEST BUY) 2009 2024 BRENTWOOD CANADA SAFEWAY 2007 2037 SOUTH EDMONTON COMMON HOME OUTFITTERS 2016 2031 SOUTH EDMONTON PHASE II (4) GRANDE PRAIRIE III MICHAELS 2011 2031 BRITISH COLUMBIA TILLICUM ZELLERS 2013 2098 PRINCE GEORGE OVERWAITEE 2018 2028 STRAWBERRY HILL HOME DEPOT 2016 2016 MISSION OVERWAITEE 2018 2028 ABBOTSFORD ZELLERS 2017 2052 CLEARBROOK SAFEWAY 2007 2037 SURREY CANADA SAFEWAY 2011 2061 LANGLEY GATE SEARS 2008 2018 ONTARIO SHOPPERS WORLD ALBION CANADIAN TIRE 2014 2025 SHOPPERS WORLD DANFORTH ZELLERS 2009 2029 THICKSON RIDGE WINNERS (TJ MAXX) 2012 2022 LINCOLN FIELDS WAL MART 2005 2025 404 TOWN CENTRE ZELLERS 2009 BOULEVARD CENTRE I ZELLERS 2017 2046 BOULEVARD CENTRE II KENDALWOOD PRICE CHOPPER 2013 2038 SUDBURY FAMOUS PLAYERS 2019 2039 LEASIDE CANADIAN TIRE 2006 2036 WALKER PLACE COMMISSO'S 2012 2032 BOULEVARD III (4) NEW MARKET (4) DUFFERIN (4) PRINCE EDWARD ISLAND CHARLOTTETOWN ZELLERS 2019 QUEBEC GREENFIELD PARK WINNERS (TJ MAXX) 2005 2020 JACQUES CARTIER GUZZO CINEMA 2010 2040 CHATEAUGUAY SUPER C 2008 2028 MEXICO SALTILLO PLAZA HEB NUEVO LEON HEB MAJOR LEASES ----------------------------------------------------------------------------------------------------- LEASE OPTION LEASE OPTION LOCATION N TENANT NAME EXPIRATION EXPIRATION TENANT NAME EXPIRATION EXPIRATION - ----------------------------------------------------------------------------------------------------------------------------------- NORTH RICHLAND HILLS PASADENA (7) OFFICEMAX 2014 2029 MICHAELS 2009 2024 PASADENA (7) ROSS STORES 2012 2032 MARSHALLS 2012 2027 RICHARDSON (7) BALLY TOTAL FITNESS 2009 2019 NORTHERN STORES 2004 2014 SAN ANTONIO (4) WEST OAKS - HOUSTON HOUSTON (7) OSHMAN SPORTING 2017 2037 HOBBY LOBBY 2016 2026 WOODLANDS (4) UTAH OGDEN VIRGINIA BROOKNEAL (9) BLACKSBURG (9) VTWC INC. 2008 VOLUME TWO BOOKSTORE 2005 COLONIAL HEIGHTS BOOKS-A-MILLION 2008 2015 DANVILLE (9) CVS 2004 2019 FAIRFAX (7) COSTCO 2011 2046 SPORTS AUTHORITY 2003 2013 HARRISONBURG CIRCUIT CITY 2003 2013 HARRISONBURG (9) CVS 2007 2017 KEYSVILLE (9) MANASSAS JOANN FABRICS 2003 2013 PETERSBURG (9) RICHMOND RICHMOND ROANOKE (9) MICHAEL'S 2004 2019 OFFICE MAX 2007 2012 WOODBRIDGE TJ MAXX 2006 2021 WOODBRIDGE (7) SHOPPERS FOOD 2009 2044 BORDERS BOOKS 2019 2039 WASHINGTON BELLINGHAM (7) BED BATH & BEYOND 2012 2027 TJ MAXX 2007 2012 FEDERAL WAY (7) JOANN FABRICS 2010 2030 BARNES & NOBLE 2011 2026 MARYSVILLE (8) JC PENNEY 2011 2046 STAPLES 2014 2029 SPOKANE (8) ROSS STORE 2009 2019 RITE AID 2009 2039 WEST VIRGINIA CHARLES TOWN STAPLES 2008 2018 SOUTH CHARLESTON TJ MAXX 2006 2021 KRISPY KREME 2006 2026 MARTINSBURG CVS 2003 2008 WISCONSIN RACINE BIG LOTS 2005 2015 HOBO 2004 2014 CANADA ALBERTA SHOPPES @ SHAWNESSEY SHAWNESSY CENTRE LINEN N THINGS 2015 2025 BUSINESS DEPOT (STAPLES) 2011 2028 BRENTWOOD SEARS WHOLE HOME 2010 2020 LINEN N THINGS 2015 2030 SOUTH EDMONTON COMMON LONDON DRUGS 2020 2057 MICHAELS 2011 2026 SOUTH EDMONTON PHASE II (4) GRANDE PRAIRIE III WINNERS (TJ MAXX) 2011 2026 JYSK LINEN 2012 2022 BRITISH COLUMBIA TILLICUM SAFEWAY 2023 2053 WINNERS (TJ MAXX) 2008 2023 PRINCE GEORGE THE BAY 2013 2083 LONDON DRUGS 2017 2027 STRAWBERRY HILL CINEPLEX ODEON 2008 2018 WINNERS (TJ MAXX) 2009 2024 MISSION FAMOUS PLAYERS 2010 2030 LONDON DRUGS 2019 2046 ABBOTSFORD PETSMART 2013 2033 WINNERS (TJ MAXX) 2008 2023 CLEARBROOK STAPLES 2012 2022 LANDMARK CINEMAS 2011 2021 SURREY LONDON DRUGS 2011 2021 LANGLEY GATE PETSMART 2008 2038 WINNERS (TJ MAXX) 2007 2017 ONTARIO SHOPPERS WORLD ALBION FORTINO'S 2010 2030 SHOPPERS WORLD DANFORTH DOMINION 2018 2028 BUSINESS DEPOT (STAPLES) 2015 2030 THICKSON RIDGE FUTURE SHOP (BEST BUY) 2006 2016 PETSMART 2012 2032 LINCOLN FIELDS LOEB (GROUND) 2004 2019 CAA OTTAWA 2007 2015 404 TOWN CENTRE A & P 2007 2027 NATIONAL GYM CLOTHING 2009 2014 BOULEVARD CENTRE I WINNERS (TJ MAXX) 2008 2023 LOEB 2008 BOULEVARD CENTRE II KENDALWOOD VALUE VILLAGE 2008 2028 SHOPPERS DRUG MART 2011 2021 SUDBURY BUSINESS DEPOT (STAPLES) 2014 2029 CHAPTERS 2010 2030 LEASIDE FUTURE SHOP (BEST BUY) 2010 2025 PETSMART 2012 2037 WALKER PLACE BOULEVARD III (4) NEW MARKET (4) DUFFERIN (4) PRINCE EDWARD ISLAND CHARLOTTETOWN WINNERS (TJ MAXX) 2009 WEST ROYALTY FITNESS 2010 QUEBEC GREENFIELD PARK BUREAU EN GROS (STAPLES) 2007 2022 GUZZO CINEMA 2019 2039 JACQUES CARTIER VALUE VILLAGE 2008 2028 IGA 2007 CHATEAUGUAY HART 2005 2025 MEXICO SALTILLO PLAZA NUEVO LEON
26
YEAR OWNERSHIP LAND LEASABLE PERCENT DEVELOPED INTEREST/ AREA AREA LEASED LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1) - --------------------------------------------------------------------------------------------------- ACQUISITIONS SUBSEQUENT TO DECEMBER 31, 2002 THROUGH FEBRUARY 28, 2003 ARIZONA AVONDALE (4) 2003 JOINT VENTURE 8.3 - - NEW HAMSPHIRE NASHUA 2003 FEE 22.0 179,610 95.0 OHIO MONTROSE 2003 FEE 53.4 926,600 99.4 TEXAS HOUSTON 2003 FEE 17.1 183,024 90.4 AMARILLO (7) 2003 JOINT VENTURE 10.6 142,789 93.2 WASHINGTON TUKWILA (7) 2003 JOINT VENTURE 46.7 467,452 97.9 DISPOSITIONS SUBSEQUENT TO DECEMBER 31, 2002 THROUGH FEBRUARY 28, 2003 GEORGIA SMYRNA (6) (9) 2002 JOINT VENTURE 7.8 77,961 99.7 ILLINOIS BRIDGEVIEW (6) 1998 FEE 6.8 88,069 - ROCKFORD (6) 1998 GROUND LEASE (2030) 10.3 102,971 - NEVADA LAS VEGAS (6) (9) 2002 JOINT VENTURE 23.4 234,459 87.9 MAJOR LEASES ------------------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION - ---------------------------------------------------------------------------------------------- ACQUISITIONS SUBSEQUENT TO DECEMBER 31, 2002 THROUGH FEBRUARY 28, 2003 ARIZONA AVONDALE (4) NEW HAMSPHIRE NASHUA DSW SHOE WAREHOUSE 2011 OHIO MONTROSE HOME DEPOT 2013 TEXAS HOUSTON ROSS STORES 2013 2033 AMARILLO (7) ROSS STORES 2012 WASHINGTON TUKWILA (7) BEST BUY 2015 DISPOSITIONS SUBSEQUENT TO DECEMBER 31, 2002 THROUGH FEBRUARY 28, 2003 GEORGIA SMYRNA (6) (9) INGLES GROCERY 2012 ILLINOIS BRIDGEVIEW (6) ROCKFORD (6) NEVADA LAS VEGAS (6) (9) FACTORY 2 U STORES 2004 2009 MAJOR LEASES ------------------------------------------------------------------------------------------------- LEASE OPTION LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION TENANT NAME EXPIRATION EXPIRATION - --------------------------------------------------------------------------------------------------------------------------------- ACQUISITIONS SUBSEQUENT TO DECEMBER 31, 2002 THROUGH FEBRUARY 28, 2003 ARIZONA AVONDALE (4) NEW HAMSPHIRE NASHUA BED BATH & BEYOND 2007 MICHAEL'S 2007 OHIO MONTROSE TOYS R US 2012 CHILIS 2009 TEXAS HOUSTON OFFICE DEPOT 2012 2032 OLD NAVY 2007 2022 AMARILLO (7) BED BATH & BEYOND 2012 JOANN FABRICS 2012 WASHINGTON TUKWILA (7) BABIES R US 2014 MARSHALLS 2011 DISPOSITIONS SUBSEQUENT TO DECEMBER 31, 2002 THROUGH FEBRUARY 28, 2003 GEORGIA SMYRNA (6) (9) ILLINOIS BRIDGEVIEW (6) ROCKFORD (6) NEVADA LAS VEGAS (6) (9)
27
YEAR OWNERSHIP LAND LEASABLE PERCENT DEVELOPED INTEREST/ AREA AREA LEASED LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1) - --------------------------------------------------------------------------------------------------- PENNSLYVANIA TREXLERTOWN (6) 1998 GROUND LEASE (2048) /JOINT VENTURE 1.2 41,680 90.8 RETAIL STORE LEASES (10) 1995/1997 LEASEHOLD - 3,809,000 ----- ---------- GRAND TOTAL 600 PROPERTY INTERESTS 9,699 87,834,350 ----- ---------- ----- ---------- MAJOR LEASES ------------------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION - ---------------------------------------------------------------------------------------------- TREXLERTOWN (6) LEHIGH VALLEY HEALTH 2008 2023
(1) PERCENT LEASED INFORMATION AS OF DECEMBER 31, 2002 OR DATE OF ACQUISITION IF ACQUIRED SUBSEQUENT TO DECEMBER 31, 2002. (2) THE TERM "JOINT VENTURE" INDICATES THAT THE COMPANY OWNS THE PROPERTY IN CONJUNCTION WITH ONE OR MORE JOINT VENTURE PARTNERS. THE DATE INDICATED IS THE EXPIRATION DATE OF ANY GROUND LEASE AFTER GIVING AFFECT TO ALL RENEWAL PERIODS. (3) DENOTES REDEVELOPMENT PROJECT. (4) DENOTES GROUND-UP DEVELOPMENT PROJECT. THE SQUARE FOOTAGE SHOWN REPRESENTS THE COMPLETED LEASEABLE AREA. (5) DENOTES UNDEVELOPED LAND. (6) SOLD OR TERMINATED SUBSEQUENT TO DECEMBER 31, 2002. (7) DENOTES PROPERTY INTEREST IN KIMCO INCOME REIT ("KIR"). (8) DENOTES PROPERTY INTEREST IN KIMCO RETAIL OPPORTUNITY PORTFOLIO ("KROP"). (9) DENOTES PROPERTY INTEREST IN KIMSOUTH REALTY, INC. (10) THE COMPANY HOLDS INTERESTS IN VARIOUS RETAIL STORE LEASES RELATED TO THE ANCHOR STORE PREMISES IN NEIGHBORHOOD AND COMMUNITY SHOPPING CENTERS. 28 Executive Officers of the Registrant The following table sets forth information with respect to the executive officers of the Company as of January 31, 2003. Name Age Position Since ---- --- -------- ----- Milton Cooper 74 Chairman of the Board of 1991 Directors and Chief Executive Officer Michael J. Flynn 67 Vice Chairman of the 1996 Board of Directors and President and Chief 1997 Operating Officer David B. Henry 54 Vice Chairman of the 2001 Board of Directors and Chief Investment Officer Thomas A. Caputo 56 Executive Vice President 2000 Glenn G. Cohen 39 Vice President - 2000 Treasurer 1997 Raymond Edwards 40 Vice President - 2001 Retail Property Solutions Jerald Friedman 58 President, KDI and 2000 Executive Vice President 1998 Bruce M. Kauderer 56 Vice President - Legal 1995 General Counsel and 1997 Secretary Michael V. Pappagallo 44 Vice President - 1997 Chief Financial Officer David M. Samber 53 Chief Executive Officer - Kimco Select Investments 1997 and Vice President 2001 Michael J. Flynn has been President and Chief Operating Officer since January 2, 1997, Vice Chairman of the Board of Directors since January 2, 1996 and a Director of the Company since December 1, 1991. Mr. Flynn was Chairman of the Board and President of Slattery Associates, Inc. for more than five years prior to joining the Company. David B. Henry has been Chief Investment Officer since April 2001 and Vice Chairman of the Board of Directors since May 2001. Mr. Henry served as the Chief Investment Officer and Senior Vice President of General Electric's GE Capital Real Estate business and Chairman of GE Capital Investment Advisors for more than five years prior to joining the Company. Thomas A. Caputo has been Executive Vice President of the Company since December 2000. Mr. Caputo was a principal with H & R Retail from January 2000 to December 2000. Mr. Caputo was a principal with the RREEF Funds, a pension advisor, for more than five years prior to January 2000. Glenn G. Cohen has been a Vice President of the Company since May 2000 and Treasurer of the Company since June 1997. Mr. Cohen served as Director of Accounting and Taxation of the Company from June 1995 to June 1997. Prior to joining the Company in June 1995, Mr. Cohen served as Chief Operating Officer and Chief Financial Officer for U.S. Balloon Manufacturing Co., Inc. from August 1993 to June 1995. Raymond Edwards has been Vice President - Retail Property Solutions since July 2001. Prior to joining the Company in July 2001, Mr. Edwards was Senior Vice President, Managing Director of SBC Group from 1998 to July 2001. SBC Group is a privately held company that acquires and invests in assets of retail companies. Previously, Mr. Edwards worked for 13 years at Keen Realty Consultants Inc. handling the marketing and disposition of real estate for retail operators including Caldor, Bonwit Teller, Alexander's and others. 29 Jerald Friedman has been President of the Company's KDI subsidiary since April 2000 and Executive Vice President of the Company since June 1998. Mr. Friedman was Senior Executive Vice President and Chief Operating Officer of The Price REIT, Inc. from January 1997 to June 1998. From 1994 through 1996, Mr. Friedman was the Chairman and Chief Executive Officer of K & F Development Company, an affiliate of The Price REIT, Inc. Bruce M. Kauderer has been a Vice President of the Company since June 1995 and since December 15, 1997, General Counsel and Secretary of the Company. Mr. Kauderer was a founder of and partner with Kauderer & Pack P.C. from 1992 to June 1995. Michael V. Pappagallo has been a Vice President and Chief Financial Officer of the Company since May 27, 1997. Mr. Pappagallo was Chief Financial Officer of GE Capital's Commercial Real Estate Financial and Services business from September 1994 to May 1997 and held various other positions within GE Capital for more than five years prior to joining the Company. David M. Samber has been Chief Executive Officer of Kimco Select Investments since January 1997 and a Vice President of the Company since January 2001. Mr. Samber was President and Chief Operating Officer of the Company from November 1991 through 1996 and held various other positions in the Company for more than five years prior to 1991. The executive officers of the Company serve in their respective capacities for approximate one-year terms and are subject to re-election by the Board of Directors, generally at the time of the Annual Meeting of the Board of Directors following the Annual Meeting of Stockholders. 30 PART II Item 5. Market for the Registrant's Common Equity and Related Shareholder Matters Market Information The following table sets forth the common stock offerings completed by the Company during the three year period ended December 31, 2002. The Company's common stock was sold for cash at the following offering prices per share. Offering Date Offering Price ------------- --------------- August 2000 $28.33 November 2001 $32.85 December 2001 $33.57 The table below sets forth, for the quarterly periods indicated, the high and low sales prices per share reported on the NYSE Composite Tape for the Company's common stock. The Company's common stock is traded under the trading symbol "KIM". Stock Price ---------------- Period High Low ------ ---- ---- 2001: First Quarter $30.08 $27.17 Second Quarter $31.57 $27.33 Third Quarter $33.30 $29.50 Fourth Quarter $34.07 $31.33 2002: First Quarter $33.50 $29.00 Second Quarter $33.87 $31.00 Third Quarter $33.20 $25.96 Fourth Quarter $32.08 $27.77 Holders The number of holders of record of the Company's common stock, par value $0.01 per share, was 1,273 as of January 31, 2003. Dividends Since the IPO, the Company has paid regular quarterly dividends to its stockholders. Quarterly dividends at the rate of $0.48 per share were declared and paid on December 4, 2000 and January 16, 2001, March 15, 2001 and April 16, 2001, June 15, 2001 and July 16, 2001, and September 17, 2001 and October 15, 2001, respectively. On October 24, 2001, the Company declared its dividend payable during the first quarter of 2002 at an increased rate of $0.52 per share payable on January 15, 2002 to shareholders of record as of January 2, 2002. Quarterly dividends at the rate of $0.52 per share were declared and paid on March 15, 2002 and April 15, 2002, June 17, 2002 and July 15, 2002, September 16, 2002 and October 15, 2002, respectively. On October 28, 2002, the Company declared its dividend payable during the first quarter of 2003 at an increased rate of $0.54 per share payable on January 15, 2003 to shareholders of record as of January 2, 2003. This $0.54 per share dividend, if annualized, would equal $2.16 per share or an annual yield of approximately 6.9% based on the closing price of $31.40 of the Company's common stock on the NYSE as of January 31, 2003. The Company has determined that the $2.08 dividend per common share paid during 2002 represented 96% ordinary income and 4% capital gain to its stockholders and the $1.92 dividend per common share paid during 2001 represented 95% ordinary income and 5% return of capital to its stockholders. While the Company intends to continue paying regular quarterly dividends, future dividend declarations will be at the discretion of the Board of Directors and will depend on the actual cash flow of the Company, its financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Code and such other factors as the Board of Directors deems relevant. The actual cash flow available to pay dividends will be affected by a number of factors, including the revenues received from rental properties, the operating expenses of the Company, the interest expense on its borrowings, the ability of lessees to meet their obligations to the Company and any unanticipated capital expenditures. 31 In addition to its common stock offerings, the Company has capitalized the growth in its business through the issuance of unsecured fixed and floating-rate medium-term notes, underwritten bonds, mortgage debt, convertible preferred stock and perpetual preferred stock. Borrowings under the Company's revolving credit facilities have also been an interim source of funds to both finance the purchase of properties and meet any short-term working capital requirements. The various instruments governing the Company's issuance of its unsecured public debt, bank debt, mortgage debt and preferred stock impose certain restrictions on the Company with regard to dividends, voting, liquidation and other preferential rights available to the holders of such instruments. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Notes 10 and 16 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K. The Company does not believe that the preferential rights available to the holders of its Class A, Class B and Class C Preferred Stock, the financial covenants contained in its public bond Indenture, as amended, or its revolving credit agreements will have an adverse impact on the Company's ability to pay dividends in the normal course to its common stockholders or to distribute amounts necessary to maintain its qualification as a REIT. The Company maintains a dividend reinvestment and direct stock purchase plan (the "Plan") pursuant to which common and preferred stockholders and other interested investors may elect to automatically reinvest their dividends to purchase shares of the Company's common stock or, through optional cash payments, purchase shares of the Company's common stock. The Company may, from time to time, either (i) purchase shares of its common stock in the open market, or (ii) issue new shares of its common stock, for the purpose of fulfilling its obligations under the Plan. Item 6. Selected Financial Data The following table sets forth selected, historical consolidated financial data for the Company and should be read in conjunction with the Consolidated Financial Statements of the Company and Notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations included in this annual report on Form 10-K. The Company believes that the book value of its real estate assets, which reflects the historical costs of such real estate assets less accumulated depreciation, is not indicative of the current market value of its properties. Historical operating results are not necessarily indicative of future operating performance. 32
Year ended December 31,(3) ----------------------------------------------------------------------- 2002 2001 2000 1999 1998 ----------- ----------- ----------- ----------- ----------- (in thousands, except per share information) Operating Data: Revenues from rental property (1) $ 450,829 $ 450,408 $ 441,336 $ 417,999 $ 329,652 Interest expense $ 86,896 $ 88,592 $ 91,870 $ 83,553 $ 64,285 Depreciation and amortization $ 74,223 $ 71,717 $ 69,052 $ 65,316 $ 50,117 Gain on sale of development properties $ 15,879 $ 13,418 $ -- $ -- $ -- Gain on sale of operating properties $ -- $ 3,040 $ 3,962 $ 1,552 $ 901 Provision for income taxes $ 12,904 $ 19,376 $ -- $ -- $ -- Income from continuing operations $ 248,570 $ 226,241 $ 193,925 $ 168,616 $ 124,112 Income per common share, from continuing operations: Basic $ 2.20 $ 2.09 $ 1.81 $ 1.57 $ 1.32 Diluted $ 2.19 $ 2.05 $ 1.79 $ 1.55 $ 1.31 Weighted average number of shares of common stock: Basic 104,458 96,317 92,688 90,709 75,106 Diluted 105,969 101,163 93,653 91,466 75,961 Cash dividends declared per common share $ 2.10 $ 1.96 $ 1.81 $ 1.64 $ 1.37 December 31, ----------------------------------------------------------------------- 2002 2001 2000 1999 1998 ----------- ----------- ----------- ----------- ----------- Balance Sheet Data: Real estate, before accumulated depreciation $ 3,398,971 $ 3,201,364 $ 3,114,503 $ 2,951,050 $ 3,023,902 Total assets $ 3,756,878 $ 3,384,779 $ 3,171,348 $ 3,007,476 $ 3,051,178 Total debt $ 1,576,982 $ 1,328,079 $ 1,325,663 $ 1,249,571 $ 1,289,561 Total stockholders' equity $ 1,907,328 $ 1,890,084 $ 1,704,339 $ 1,605,435 $ 1,585,019 Other Data: Year ended December 31, (3) ----------------------------------------------------------------------- 2002 2001 2000 1999 1998 ----------- ----------- ----------- ----------- ----------- Funds from Operations (2): Net income $ 245,668 $ 236,538 $ 205,025 $ 176,778 $ 122,266 Depreciation and amortization 76,674 74,209 71,129 67,416 51,348 Depreciation and amortization - real estate joint ventures 17,779 12,718 8,277 5,239 788 (Gain) on disposition of operating properties (12,778) (3,040) (3,962) (1,552) (901) (Gain) / loss on early extinguishment of debt (22,255) -- -- -- 4,900 Adjustment of property carrying values 33,030 -- -- -- -- Preferred stock dividends (18,437) (24,553) (26,328) (26,478) (24,654) ----------- ----------- ----------- ----------- ----------- Funds from operations $ 319,681 $ 295,872 $ 254,141 $ 221,403 $ 153,747 =========== =========== =========== =========== =========== Cash flow provided by operations $ 278,931 $ 287,444 $ 250,546 $ 237,153 $ 158,706 Cash flow used for investing activities $ (396,655) $ (157,193) $ (191,626) $ (205,219) $ (630,229) Cash flow (used for) provided by financing activities $ 59,839 $ (55,501) $ (67,899) $ (47,778) $ 484,465
(1) Does not include (i) revenues from rental property relating to unconsolidated joint ventures, (ii) revenues relating to the investment in retail stores leases and (iii) revenues from properties included in discontinued operations. (2) Most industry analysts and equity REITs, including the Company, generally consider funds from operations ("FFO") to be an appropriate supplemental measure of the performance of an equity REIT. FFO is defined as net income applicable to common shares before depreciation and amortization, extraordinary items, gains or losses on sales of operating real estate, plus the pro-rata amount of depreciation and amortization of unconsolidated joint ventures determined on a consistent basis. Given the nature of the Company's business as a real estate owner and operator, the Company believes that FFO is helpful to investors as a measure of its operational performance because it excludes various items included in net income that do not relate to or are not indicative of our operating performance such as various non-recurring items, gains and losses on sales of real estate and real estate related depreciation and amortization, which can make periodic and peer analyses of operating performance more difficult to compare. FFO does not represent cash generated from operating activities in accordance with generally accepted accounting principles and therefore should not be considered an alternative for net income as a measure of liquidity. In addition, the comparability of the Company's FFO with the FFO reported by other REITs may be affected by the differences that exist regarding certain accounting policies relating to expenditures for repairs and other recurring items. (3) All years have been adjusted to reflect the impact of operating properties sold during 2002 and properties classified as held for sale as of December 31, 2002 which are reflected in discontinued operations in the Consolidated Statements of Income. 33 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in this annual report on Form 10-K. Historical results and percentage relationships set forth in the Consolidated Statements of Income contained in the Consolidated Financial Statements, including trends which might appear, should not be taken as indicative of future operations. Critical Accounting Policies The Consolidated Financial Statements of the Company include the accounts of the Company, its wholly-owned subsidiaries and all partnerships in which the Company has a controlling interest. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying Consolidated Financial Statements and related notes. In preparing these financial statements, management has made its best estimates and assumptions that affect the reported amounts of assets and liabilities. These estimates are based on, but not limited to, historical results, industry standards and current economic conditions, giving due consideration to materiality. The most significant assumptions and estimates relate to revenue recognition and the recoverability of trade accounts receivable, depreciable lives and valuation of real estate. Application of these assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates. Revenue Recognition and Accounts Receivable Base rental revenues from rental property are recognized on a straight-line basis over the terms of the related leases. Certain of these leases also provide for percentage rents based upon the level of sales achieved by the lessee. These percentage rents are recorded once the required sales level is achieved. In addition, leases typically provide for reimbursement to the Company of common area maintenance, real estate taxes and other operating expenses. Operating expense reimbursements are recognized as earned. Rental income may also include payments received in connection with lease termination agreements. The Company makes estimates of the uncollectability of its accounts receivable related to base rents, expense reimbursements and other revenues. The Company analyzes accounts receivable and historical bad debt levels, customer credit worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. In addition, tenants in bankruptcy are analyzed and estimates are made in connection with the expected recovery of pre-petition and post-petition claims. The Company's reported net income is directly affected by management's estimate of the collectability of accounts receivable. The Company believes that its revenue recognition policy is in compliance with generally accepted accounting principles and in accordance with the Securities and Exchange Commission's Staff Accounting Bulletin No. 101, Revenue Recognition. Real Estate Land, buildings and fixtures and leasehold improvements are recorded at cost, less accumulated depreciation and amortization. Expenditures for maintenance and repairs are charged to operations as incurred. Significant renovations and replacements, which improve and extend the life of the asset, are capitalized. Depreciation and amortization are provided on the straight-line method over the estimated useful lives of the assets, as follows: Buildings 15 to 39 years Fixtures and leasehold improvements Terms of leases or useful lives, whichever is shorter The Company is required to make subjective assessments as to the useful lives of its properties for purposes of determining the amount of depreciation to reflect on an annual basis with respect to those properties. These assessments have a direct impact on the Company's net income. Real estate under development on the Company's Consolidated Balance Sheets represent ground-up development projects which are held for sale upon completion. These assets are carried at cost and no depreciation is recorded. The cost of land and buildings under development include specifically identifiable costs. The capitalized costs include pre-construction costs essential to the development of the property, development costs, construction costs, interest costs, real estate taxes, salaries and related costs and other costs incurred during the period of development. The Company ceases cost capitalization when the property is held available for occupancy upon substantial completion of tenant improvements, but no later than one year from the completion of major construction activity. If in management's opinion, the estimated net sales price of these assets is less than the net carrying value, an adjustment to the carrying value would be recorded to reflect the estimated fair value of the property. A gain on the sale of these assets is generally recognized using the full accrual method in accordance with the provisions of Statement of Financial Accounting Standard No. 66, Accounting for Real Estate Sales. 34 Long Lived Assets On a periodic basis, management assesses whether there are any indicators that the value of the real estate properties may be impaired. A property value is considered impaired only if management's estimate of current and projected operating cash flows (undiscounted and without interest charges) of the property over its remaining useful life is less than the net carrying value of the property. Such cash flow projections consider factors such as expected future operating income, trend and prospects, as well as the effects of demand, competition and other factors. To the extent impairment has occurred, the carrying value of the property would be adjusted to an amount to reflect the estimated fair value of the property. When a real estate asset is identified by management as held for sale the Company ceases depreciation of the asset and estimates the sales price of such asset net of selling costs. If, in management's opinion, the net sales price of the asset is less than the net book value of such asset, an adjustment to the carrying value would be recorded to reflect the estimated fair value of the property. The Company is required to make subjective assessments as to whether there are impairments in the value of its real estate properties, investments in joint ventures and other investments. The Company's reported net income is directly affected by management's estimate of impairments and/or valuation allowances recognized. Results of Operations Comparison 2002 to 2001 Revenues from rental property increased $0.4 million or 0.1% to $450.8 million for the year ended December 31, 2002, as compared with $450.4 million for the year ended December 31, 2001. This net increase resulted primarily from the combined effect of (i) the acquisition of 13 operating properties during 2002, providing revenues of $5.1 million for the year ended December 31, 2002, (ii) the full year impact related to the three operating properties acquired in 2001 providing incremental revenues of $2.3 million, and (iii) the completion of certain development and redevelopment projects, tenant buyouts and new leasing within the portfolio providing incremental revenues of approximately $20.5 million as compared to the corresponding year ended December 31, 2001, offset by (iv) an overall decrease in shopping center portfolio occupancy to 87.8% at December 31, 2002 as compared to 90.4% at December 31, 2001 due primarily to the bankruptcy filing of Kmart Corporation ("Kmart") and Ames Department Stores, Inc. ("Ames") and subsequent rejection of leases resulting in a decrease of revenues of approximately $25.1 million as compared to the preceding year, and (v) sales of certain shopping center properties throughout 2001 and 2002, resulting in a decrease of revenues of approximately $2.4 million as compared to the preceding year. Rental property expenses, including depreciation and amortization, increased $11.0 million or 5.9% to $196.8 million for the year ended December 31, 2002 as compared to $185.8 million for the preceding year. The rental property expense component of real estate taxes increased approximately $7.3 million or 13.1% for the year ended December 31, 2002 as compared with the year ended December 31, 2001. This increase relates primarily to the payment of real estate taxes by the Company on certain Kmart anchored locations where Kmart previously paid the real estate taxes directly to the taxing authorities. The rental property expense component of operating and maintenance increased approximately $1.5 million or 3.2% for the year ended December 31, 2002 as compared with the year ended December 31, 2001. This increase is primarily due to property acquisitions during 2002 and 2001, renovations within the portfolio and higher professional fees relating to tenant bankruptcies. Equity in income of real estate joint ventures, net increased $15.4 million to $35.6 million for the year ended December 31, 2002, as compared to $20.2 million for the year ended December 31, 2001. This increase is primarily attributable to the equity in income from the Kimco Income REIT joint venture investment, the RioCan joint venture investment, and the KROP joint venture investment as described below. During 1998, the Company formed KIR, a limited partnership established to invest in high quality retail properties financed primarily through the use of individual non-recourse mortgages. The Company has a 43.3% non-controlling limited partnership interest in KIR, which the Company manages, and accounts for its investment in KIR under the equity method of accounting. Equity in income of KIR increased $3.1 million to $16.3 million for the year ended December 31, 2002, as compared to $13.2 million for the preceding year. This increase is primarily due to the Company's increased capital investment in KIR totaling $23.8 million during 2002 and $30.8 million during 2001. The additional capital investments received by KIR from the Company and its other institutional partners were used to purchase additional shopping center properties throughout calendar year 2002 and 2001. 35 During October 2001, the Company formed a joint venture (the "RioCan Venture") with RioCan Real Estate Investment Trust ("RioCan", Canada's largest publicly traded REIT measured by gross leasable area ("GLA")), in which the Company has a 50% non-controlling interest, to acquire retail properties and development projects in Canada. As of December 31, 2002, the RioCan Venture consisted of 28 shopping center properties and four development projects with approximately 6.7 million square feet of GLA. The Company's equity in income from the RioCan Venture increased approximately $8.7 million to $9.1 million for the year ended December 31, 2002, as compared to $0.4 million for the preceding year. During October 2001, the Company formed the Kimco Retail Opportunity Fund ("KROP"), a joint venture with GE Capital Real Estate ("GECRE") which the Company manages and has a 20% interest. The purpose of this venture is to acquire established, high-growth potential retail properties in the United States. As of December 31, 2002, KROP consisted of 15 shopping center properties with approximately 1.5 million square feet of GLA. During the year ended December 31, 2002, the Company's equity in income from KROP was approximately $0.9 million. Minority interests in income of partnerships, net increased $0.7 million to $2.4 million as compared to $1.7 million for the preceding year. This increase is primarily due to the acquisition of a shopping center property acquired through a newly formed partnership by issuing approximately 2.4 million downREIT units valued at $80 million. The downREIT units are convertible at a ratio of 1:1 into the Company's common stock and are entitled to a distribution equal to the dividend rate on the Company's common stock multiplied by 1.1057. Income from other real estate investments decreased $22.1 million to $16.0 million as compared to $38.1 million for the preceding year. This decrease is primarily due to the decrease in income from the Montgomery Ward asset designation rights transactions described below. During March 2001, the Company, through a taxable REIT subsidiary, formed a real estate joint venture (the "Ward Venture") in which the Company has a 50% interest, for purposes of acquiring asset designation rights for substantially all of the real estate property interests of the bankrupt estate of Montgomery Ward LLC and its affiliates. These asset designation rights have provided the Ward Venture the ability to direct the ultimate disposition of the 315 fee and leasehold interests held by the bankrupt estate, of which 303 transactions have been completed to date. During the year ended December 31, 2002 the Ward Venture completed transactions of 32 properties. The pre-tax profits from the Ward Venture decreased approximately $23.3 million to $11.3 million for the year ended December 31, 2002 as compared to $34.6 million for the preceding year. Mortgage financing income increased $17.1 million to $19.4 million for the year ended December 31, 2002 as compared to $2.3 million for the year ended December 31, 2001. This increase is primarily due to increased interest income earned related to certain real estate lending activities during the year ended December 31, 2002. Effective January 1, 2001, the Company has elected taxable REIT subsidiary status for its wholly-owned development subsidiary ("KDI"). KDI is primarily engaged in the ground-up development of neighborhood and community shopping centers and the subsequent sale thereof upon completion. During the year ended December 31, 2002, KDI sold four projects and eight out-parcels, in separate transactions, for approximately $128.7 million, including the assignment of approximately $17.7 million of mortgage debt encumbering one of the properties. These sales resulted in pre-tax gains of approximately $15.9 million. During the year ended December 31, 2001, KDI sold two of its recently completed projects and five out-parcels, in separate transactions, for approximately $61.3 million, which resulted in pre-tax profits of $13.4 million. Management and other fee income increased approximately $6.4 million to $14.2 million for the year ended December 31, 2002 as compared to $7.8 million for the year ended December 31, 2001. This increase is primarily due to (i) a $1.1 million increase in management fees from KIR resulting from the growth of the KIR portfolio, (ii) $2.3 million of management and acquisition fees relating to the KROP joint venture activities during the year ended December 31, 2002 and (iii) increased property management activity providing incremental fee income of approximately $3.0 million. 36 Other income/(loss), net increased approximately $4.7 million to $2.5 million for the year ended December 31, 2002 as compared to the preceding calendar year. This increase is primarily due to pre-tax profits earned from the Company's participation in ventures established to provide inventory liquidation services to regional retailers in bankruptcy. Interest expense decreased $1.7 million or 1.9% to $86.9 million for the year ended December 31, 2002, as compared with $88.6 million for the year ended December 31, 2001. This decrease is primarily due to reduced interest costs on the Company's floating-rate revolving credit facilities and remarketed reset notes which was partially offset by an increase in borrowings during the year ended December 31, 2002, as compared to the preceding year. General and administrative expenses increased approximately $3.2 million for the year ended December 31, 2002, as compared to the preceding calendar year. This increase is primarily due to higher costs related to the growth of the Company including (i) increased senior management and staff levels, (ii) increased system related costs and (iii) other personnel related costs. The Company had previously encumbered seven Kmart sites with individual non-recourse mortgages aggregating approximately $70.8 million as part of its strategy to reduce its exposure to Kmart Corporation. As a result of the Kmart bankruptcy filing in January of 2002 and the subsequent rejection of leases including leases at these encumbered sites, the Company, during July 2002, had suspended debt services payments on these loans and was actively negotiating with the respective lenders. During December 2002, the Company reached agreement with certain lenders in connection with four of these locations. The Company paid approximately $24.2 million in full satisfaction of these loans which aggregated approximately $46.5 million. The Company recognized a gain on early extinguishment of debt of approximately $22.3 million. During December 2002, the Company identified two operating properties, comprised of approximately 0.2 million square feet of GLA, as "Held for Sale" in accordance with FASB No. 144. The book value of these properties, aggregating approximately $28.4 million, net of accumulated depreciation of approximately $2.9 million, exceeded their estimated fair value. The Company's determination of the fair value of these properties, aggregating approximately $7.9 million, is based upon executed contracts of sale with third parties less estimated selling costs. As a result, the Company recorded an adjustment of property carrying values of $20.5 million. This adjustment is included, along with the related property operations for the current and comparative years, in the caption Income/(loss) from discontinued operations on the Company's Consolidated Statements of Income. As part of the Company's periodic assessment of its real estate properties with regard to both the extent to which such assets are consistent with the Company's long-term real estate investment objectives and the performance and prospects of each asset, the Company determined in the fourth quarter of 2002, that its investment in four operating properties, comprised of an aggregate 0.4 million square feet of GLA with an aggregate net book value of approximately $23.8 million, may not be fully recoverable. Based upon management's assessment of current market conditions and the lack of demand for the properties, the Company has reduced its potential holding period of these investments. As a result of the reduction in the anticipated holding period, together with a reassessment of the projected future operating income of the properties and the effects of current market conditions, the Company has determined that its investment in these assets was not fully recoverable and has recorded an adjustment of property carrying value aggregating approximately $12.5 million. During 2002, the Company, (i) disposed of, in separate transactions, 12 operating properties for an aggregate sales price of approximately $74.5 million, including the assignment/repayment of approximately $22.6 million of mortgage debt encumbering three of the properties and, (ii) terminated five leasehold positions in locations where a tenant in bankruptcy had rejected its lease. These dispositions resulted in net gains of approximately $12.8 million for the year ended December 31, 2002. In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets ("FASB No. 144"), the operations and net gain on disposition of these properties have been included in the caption Discontinued operations on the Company's Consolidated Statements of Income. During 2001, the Company, in separate transactions, disposed of three operating properties, including the sale of a property to KIR, and a portion of another operating property comprising in the aggregate approximately 0.6 million square feet of GLA. Cash proceeds from these dispositions aggregated approximately $46.7 million, which resulted in a net gain of approximately $3.0 million. Cash proceeds from the sale of the operating property in Elyria, OH totaling $5.8 million, together with an additional $7.1 million cash investment, were used to acquire an exchange shopping center property located in Lakeland, FL during August 2001. 37 Net income for the year ended December 31, 2002 was $245.7 million as compared to $236.5 million for the year ended December 31, 2001, representing an increase of $9.2 million. This increase reflects the combined effect of increased contributions from the investments in KIR, KROP, the RioCan Venture and other financing investments, reduced by lower income resulting from tenant bankruptcies and subsequent rejection of leases and a decrease in profits from the Ward Venture. Comparison 2001 to 2000 Revenues from rental property increased $9.1 million or 2.1% to $450.4 million for the year ended December 31, 2001, as compared with $441.3 million for the year ended December 31, 2000. This net increase resulted primarily from the combined effect of (i) the acquisition of three operating properties during 2001, providing revenues of $1.3 million for the year ended December 31, 2001, (ii) the full year impact related to the 12 operating properties acquired in 2000 providing incremental revenues of $3.5 million, and (iii) the completion of certain development and redevelopment projects and new leasing within the portfolio providing incremental revenues of approximately $11.9 million as compared to the corresponding year ended December 31, 2000, offset by (iv) the commencement of new redevelopment projects and tenant buyouts causing a temporary increase in vacancy, sales of certain shopping center properties throughout 2001 and 2000 and an overall decrease in shopping center portfolio occupancy to 90.1% at December 31, 2001 as compared to 92.9% at December 31, 2000 due primarily to bankruptcies of tenants and subsequent rejections of leases resulting in a decrease of revenues of approximately $7.6 million as compared to the preceding year. Rental property expenses, including depreciation and amortization, increased $9.2 million or 5.2% to $185.8 million for the year ended December 31, 2001 as compared to $176.6 million for the preceding year. The rental property expense components of real estate taxes and operating and maintenance increased approximately $1.8 million and $4.4 million, respectively, for the year ended December 31, 2001 as compared with the year ended December 31, 2000. Depreciation and amortization increased $2.7 million for the year ended December 31, 2001 as compared to the preceding year. These increases are primarily due to property acquisitions during 2001 and 2000, renovations within the existing portfolio, the completion of certain redevelopment and development projects, and increased snow removal costs during 2001. Equity in income of real estate joint ventures, net increased $5.6 million to $20.2 million for the year ended December 31, 2001 as compared to $14.6 million for the year ended December 31, 2000. This increase is primarily attributable to the KIR transaction described below. During 1998, the Company formed KIR, a limited partnership established to invest in high quality retail properties financed primarily through the use of individual non-recourse mortgages. At the time of the formation, the Company contributed 19 property interests to KIR. On April 28, 1999, KIR sold a significant interest in the partnership to institutional investors. As a result, the Company holds a non-controlling limited partnership interest in KIR and accounts for its investment in KIR under the equity method of accounting. Equity in income of KIR increased $3.7 million to $13.2 million for the year ended December 31, 2001, as compared to $9.5 million for the preceding year. This increase is primarily due to the Company's increased capital investment in KIR totaling $30.8 million during 2001 and $29.6 million during 2000. The additional capital investments received by KIR from the Company and its other institutional partners were used to purchase additional shopping center properties throughout calendar years 2001 and 2000. Income from other real estate investments, increased approximately $30.4 million to $38.1 million for the year ended December 31, 2001 as compared with $7.7 million for the year ended December 31, 2000. This increase is primarily due to the Montgomery Ward asset designation rights transaction described below. During March 2001, the Company, through a taxable REIT subsidiary, formed a real estate joint venture (the "Ward Venture") in which the Company has a 50% interest, for purposes of acquiring asset designation rights for substantially all of the real estate property interests of the bankrupt estate of Montgomery Ward LLC and its affiliates. These asset designation rights have provided the Ward Venture the ability to direct the ultimate disposition of the 315 fee and leasehold interests held by the bankrupt estate. The Ward Venture has completed transactions on 271 properties, and the Company has recognized pre-tax profits of approximately $34.6 million for the year ended December 31, 2001. 38 Mortgage financing income increased approximately $0.8 million to $2.3 million for the year ended December 31, 2001 as compared to $1.5 million for the year ended December 31, 2000. This increase is primarily due to increased interest income earned related to certain real estate lending activities during the year ended December 31, 2001. Effective January 1, 2001, the Company has elected taxable REIT subsidiary status for its wholly owned development subsidiary, KDI. KDI is primarily engaged in the ground-up development of neighborhood and community shopping centers and the subsequent sale thereof upon completion. During the year ended December 31, 2001, KDI sold two of its recently completed projects and five out-parcels, in separate transactions, for approximately $61.3 million, which resulted in pre-tax profits of $13.4 million. Interest, dividends and other investment income increased approximately $0.9 million to $17.3 million for the year ended December 31, 2001 as compared to $16.4 million for the year ended December 31, 2000. Interest, dividends and other investment income is primarily comprised of interest income, dividend income and realized gains related to the Company's investments and sales of certain marketable equity and debt securities. Interest expense decreased $3.3 million or 3.6% to $88.6 million for the year ended December 31, 2001, as compared with $91.9 million for the year ended December 31, 2000. This decrease is primarily due to reduced interest costs on the Company's floating-rate revolving credit facility and remarketed reset notes during the year ended December 31, 2001, as compared to the preceding year. General and administrative expenses increased approximately $3.2 million for the year ended December 31, 2001, as compared to the preceding calendar year. This increase is primarily due to higher costs related to the growth of the Company including (i) increased senior management and staff levels, (ii) increased system related costs and (iii) other personnel related costs. In addition, the Company issued a stock grant award to a newly appointed executive officer of the Company valued at approximately $1.1 million during 2001. During 2001, the Company, in separate transactions, disposed of three operating properties, including the sale of a property to KIR, and a portion of another operating property comprising in the aggregate approximately 0.6 million square feet of GLA. Cash proceeds from these dispositions aggregated approximately $46.7 million, which resulted in a net gain of approximately $3.0 million. Cash proceeds from the sale of the operating property in Elyria, OH totaling $5.8 million, together with an additional $7.1 million cash investment, was used to acquire an exchange shopping center property located in Lakeland, FL during August 2001. During 2000, the Company, in separate transactions, disposed of ten shopping center properties. Sale prices from two of these dispositions aggregated approximately $4.5 million, which approximated their aggregate net book value. Sale prices from eight of these dispositions aggregated approximately $29.7 million, which resulted in net gains of approximately $4.0 million. Net income for the year ended December 31, 2001 was $236.5 million as compared to $205.0 million for the year ended December 31, 2000, representing an increase of $31.5 million. This improved performance reflects the combined effect of internal growth and property acquisitions in the core portfolio, profits from KDI, income from the investment in KIR and profits from the Ward Venture investment, which strengthened profitability. Tenant Concentrations The Company seeks to reduce its operating and leasing risks through diversification achieved by the geographic distribution of its properties, avoiding dependence on any single property, and a large tenant base. At December 31, 2002, the Company's five largest tenants, were Kmart Corporation, The Home Depot, Kohl's, TJX Companies, and Wal-Mart, which represented approximately 4.5%, 2.8%, 2.7%, 2.5% and 1.9%, respectively, of the Company's annualized base rental revenues, including the proportionate share of base rental revenues from properties in which the Company has less than a 100% economic interest. On January 22, 2002, Kmart filed for protection under Chapter 11 of the U.S. Bankruptcy Code. As of the filing date, Kmart occupied 69 locations (excluding the KIR portfolio which includes six Kmart locations), representing 12.6% of the Company's annualized base rental revenues and 13.3% of the Company's total shopping center GLA. During 2002, Kmart rejected its leases at 31 locations, representing approximately $30.8 million of annualized base rental revenues and approximately 3.2 million square feet of GLA. As of December 31, 2002, Kmart represented 4.5% of annualized base rents and 6.9% of leased GLA. 39 During December 2002, the Company disposed of, in separate transactions, seven former Kmart sites, comprised of approximately 0.7 million square feet of GLA, for an aggregate sales price of approximately $40.8 million. The Company has currently leased or is under agreement to lease 11 of the rejected locations, has terminated four ground lease locations and has received offers to purchase three of these sites. The Company is reviewing the offers received and is actively marketing the remaining six locations to prospective tenants, however, no assurances can be provided that these locations will be leased in the near term or at comparable rents previously paid by Kmart. The Company previously encumbered seven of these rejected locations with individual non-recourse mortgage loans totaling approximately $70.8 million. Annualized interest expense on these loans was approximately $5.6 million. During July 2002, the Company suspended debt service payments on these loans and was actively negotiating with the respective lenders. During December 2002, the Company reached agreements with certain lenders in connection with four of these locations. The Company paid approximately $24.2 million in full satisfaction of these loans aggregating approximately $46.5 million and the Company recognized a gain on early extinguishment of debt of approximately $22.3 million. Also, during December 2002, the Company re-tenanted one of these sites and has brought the mortgage loan encumbering this property current. During February 2003, the Company reached agreement with the lender in connection with the remaining two encumbered sites. The Company paid approximately $8.3 million in full satisfaction of these loans which aggregated approximately $14.7 million and the Company will recognize a gain on early extinguishment of debt of approximately $6.2 million during the first quarter of 2003. On January 14, 2003, Kmart announced it would be closing an additional 326 locations of which nine of these locations (excluding the KIR portfolio which includes three additional locations and Kimsouth which includes two additional locations) are leased from the Company. The annualized base rental revenues from these nine locations are approximately $4.3 million. The Company had previously encumbered one of these properties with an individual non-recourse mortgage loan. The annualized interest expense for the one encumbered property is approximately $0.8 million. As of the date of this filing of this annual report on Form 10-K, the Company has not been notified directly by Kmart as to the timing of the store closings or whether the leases will be assigned or rejected. Until such time as the leases are rejected, in accordance with the bankruptcy proceedings, Kmart remains obligated for payments of rent and operating expenses at these locations and all other remaining locations. Effective May 1, 2003, the Company has agreed to a five-year rent reduction at six Kmart locations, representing approximately 0.6 million square feet of GLA. The average rent was reduced from $8.01 per square foot to $5.57 per square foot, or approximately $1.5 million of annualized base rent. The Company generally will have the right to file claims in connection with these rejected leases for lost rent equal to three years of rental obligations as well as other amounts related to obligations under the leases. Actual amounts to be received in satisfaction of these claims will be subject to Kmart's final plan of reorganization and the availability of funds to pay creditors such as the Company. Liquidity and Capital Resources It is management's intention that the Company continually have access to the capital resources necessary to expand and develop its business. As such, the Company intends to operate with and maintain a conservative capital structure with a level of debt to total market capitalization of 50% or less. As of December 31, 2002 the Company's level of debt to total market capitalization was 31%. In addition, the Company intends to maintain strong debt service coverage and fixed charge coverage ratios as part of its commitment to maintaining its investment-grade debt ratings. The Company may, from time to time, seek to obtain funds through additional equity offerings, unsecured debt financings and/or mortgage financings and other debt and equity alternatives in a manner consistent with its intention to operate with a conservative debt structure. Since the completion of the Company's IPO in 1991, the Company has utilized the public debt and equity markets as its principal source of capital for its expansion needs. Since the IPO, the Company has completed additional offerings of its public unsecured debt and equity, raising in the aggregate over $2.7 billion for the purposes of, among other things, repaying indebtedness, acquiring interests in neighborhood and community shopping centers, funding ground-up development projects, expanding and improving properties in the portfolio and other investments. 40 The Company has a $250.0 million, unsecured revolving credit facility, which is scheduled to expire in August 2003. This credit facility has made available funds to both finance the purchase of properties and meet any short-term working capital requirements. As of December 31, 2002 there was $40.0 million outstanding under this credit facility. The Company intends to renew this facility prior to the maturity date. During July 2002, the Company further enhanced its liquidity position by establishing an additional $150.0 million unsecured revolving credit facility. During December 2002, the Company paid down the outstanding balance and terminated this facility. The Company also has a $200.0 million MTN 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, development and redevelopment costs and (ii) managing the Company's debt maturities. (See Note 10 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.) As of December 31, 2002, the Company had $98.0 million available for issuance under the MTN program. In addition to the public equity and debt markets as capital sources, the Company may, from time to time, obtain mortgage financing on selected properties. As of December 31, 2002, the Company had over 380 unencumbered property interests in its portfolio. During May 2001, the Company filed a shelf registration statement on Form S-3 for up to $750.0 million of debt securities, preferred stock, depositary shares, common stock and common stock warrants. As of December 31, 2002, the Company had $288.7 million available for issuance under this shelf registration statement. 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 operating income 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 and other investments as suitable opportunities arise, and such other factors as the Board of Directors considers appropriate. Cash dividends paid increased to $235.6 million in 2002, compared to $209.8 million in 2001 and $189.9 million in 2000. The Company's dividend payout ratio, based on funds from operations on a per-basic common share basis, for 2002, 2001 and 2000 was approximately 68.0%, 62.5% and 64.6%, respectively. Although the Company receives substantially all of its rental payments on a monthly basis, it generally intends to continue paying dividends quarterly. Amounts accumulated in advance of each quarterly distribution will be invested by the Company in short-term money market or other suitable instruments. The Company anticipates its capital commitment toward redevelopment projects during 2003 will be approximately $30.0 million to $50.0 million. Additionally, the Company anticipates its capital commitment toward ground-up development during 2003 will be approximately $160.0 million to $200.0 million. The proceeds from the sales of development properties and proceeds from construction loans in 2003 should be sufficient to fund the ground-up development capital requirements. 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, borrowings 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 as reported in the Consolidated Statements of Cash Flows was $278.9 million for 2002, $287.4 million for 2001 and $250.5 million for 2000. 41 Contractual Obligations and Other Commitments The Company has debt obligations relating to its revolving credit facility, MTNs, senior notes, mortgages and construction loans with maturities ranging from one to 22 years. As of December 31, 2002, the Company's total debt had a weighted average term to maturity of approximately five years. In addition, the Company has non-cancelable operating leases pertaining to its shopping center portfolio. As of December 31, 2002, the Company has certain shopping center properties that are subject to long-term ground leases where a third party owns and has leased the underlying land to the Company to construct and/or operate a shopping center. In addition, the Company has non-cancelable operating leases pertaining to its retail store lease portfolio. The following table summarizes the Company's debt maturities and obligations under non-cancelable operating leases as of December 31, 2002 (in millions):
2003 2004 2005 2006 2007 Thereafter Total -------- -------- -------- -------- -------- -------- -------- Long-Term Debt $ 147.3 $ 223.9 $ 221.3 $ 118.8 $ 206.1 $ 659.6 $1,577.0 Operating Leases Ground Leases $ 10.9 $ 10.8 $ 10.1 $ 9.5 $ 9.0 $ 125.1 $ 175.4 Retail Store Leases $ 9.5 $ 8.5 $ 7.3 $ 5.8 $ 3.9 $ 4.2 $ 39.2
The Company has $100.0 million of unsecured senior notes and $7.3 million of construction loans maturing in 2003. In addition, the Company's unsecured revolving credit facility, which is scheduled to mature in August 2003, had $40.0 million outstanding as of December 2002. The Company anticipates satisfying these maturities with a combination of operating cash flows, its unsecured revolving credit facility and new debt financings. The Company intends to renew its unsecured revolving credit facility prior to the maturity date. The Company has issued letters of credit in connection with the collateralization of tax-exempt mortgage bonds, completion guarantees for certain construction projects, and guaranty of payment related to the Company's insurance program. These letters of credit aggregate approximately $14.9 million. Additionally, the RioCan Venture, an entity in which the Company holds a 50% non-controlling interest, has a CAD $5.0 million (approximately USD $3.2 million) letter of credit facility. This facility is jointly guaranteed by RioCan and the Company and has approximately CAD $1.0 million (approximately USD $0.6 million) outstanding as of December 31, 2002 relating to various development projects. During 2002, the Company obtained construction financing on eight ground-up development properties for an aggregate loan amount of up to $119.8 million. As of December 31, 2002, approximately $38.9 million was outstanding. Unconsolidated Real Estate Joint Ventures The Company has investments in a number of unconsolidated real estate joint ventures with varying structures. These investments include the Company's 43.3% non-controlling interest in KIR, the Company's 50% non-controlling interest in the RioCan Venture, the Company's 20% non-controlling interest in KROP, and varying interests in other real estate joint ventures. These joint ventures operate either shopping center properties or are established for development projects. Such arrangements are generally with third party institutional investors, local developers and individuals. The properties owned by the joint ventures are primarily financed with individual non-recourse mortgage loans. Non-recourse mortgage debt is generally defined as debt whereby the lenders' sole recourse with respect to borrower defaults is limited to the value of the property collateralized by the mortgage. The lender generally does not have recourse against any other assets owned by the borrower or any of the constituent members of the borrower, except for certain specified exceptions listed in the particular loan documents. The KIR joint venture was established for the purpose of investing in high quality real estate properties financed primarily with individual non-recourse mortgages. The Company believes that these properties are appropriate for financing with greater leverage than the Company traditionally uses. As of December 31, 2002, KIR had interests in 68 properties comprising 14.0 million square feet of GLA. As of December 31, 2002, KIR had obtained individual non-recourse mortgage loans on 67 of these properties aggregating approximately $1,103.7 million. These non-recourse mortgage loans have maturities ranging from one to 16 years and rates ranging from 5.95% to 8.52%. In addition, KIR maintains a secured revolving credit facility with a syndicate of banks, which is scheduled to expire in November 2003. This facility is collateralized by the unfunded subscriptions of certain partners, including those of the Company. The facility has an aggregate availability of up to $100.0 million based upon the amount of unfunded subscription commitments of certain partners. During January 2003, the aggregate availability under the credit facility was reduced to $90.0 million. Under the terms of the facility, funds may be borrowed for general corporate purposes including the acquisition of institutional quality properties. Borrowings under the facility accrue interest at Libor plus 0.80%. As of December 31, 2002, there was $15.0 million outstanding under this facility. As of December 31, 2002, the Company's pro-rata share of non-recourse mortgages and other debt obligations relating to the KIR joint venture was approximately $484.4 million. The Company also has unfunded capital commitments to KIR in the amount of approximately $55.9 million as of December 31, 2002. (See Note 6 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.) 42 The RioCan Venture was established with RioCan Real Estate Investment Trust to acquire properties and development projects in Canada. As of December 31, 2002, the RioCan Venture consisted of 28 shopping center properties and four development projects with approximately 6.7 million square feet of GLA. As of December 31, 2002, the RioCan Venture had obtained individual, non-recourse mortgage loans on 26 of these properties aggregating approximately CAD $519.1 million (USD $329.3 million). These non-recourse mortgage loans have maturities ranging from one to 12 years and rates ranging from 5.82% to 10.31%. As of December 31, 2002 the Company's pro-rata share of non-recourse mortgage loans relating to the RioCan Venture was approximately CAD $259.6 million (USD $164.6 million). (See Note 6 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.) The Kimco Retail Opportunity Fund ("KROP"), a joint venture with GE Capital Real Estate ("GECRE") was established to acquire high-growth potential retail properties in the United States. As of December 31, 2002, KROP consisted of 15 shopping center properties with approximately 1.5 million square feet of GLA. During 2002, KROP obtained a cross-collateralized mortgage with a 5-year term aggregating $73.0 million on eight properties with an interest rate of LIBOR plus 1.8%. During 2002, $1.9 million of this mortgage was repaid upon the sale of one of the collateralized properties. The interest on this mortgage is payable in monthly installments with principal due in full upon maturity. Additionally, KROP assumed mortgage debt of approximately $29.5 million in connection with the acquisition of three shopping centers, with fixed interest rates ranging from 7.38% to 8.64%. Such mortgage debt is collateralized by the individual shopping center property and is payable in monthly installments of principal and interest. At December 31, 2002 the weighted average interest rate for all mortgage debt outstanding was 4.65% per annum. As of December 31, 2002, the Company's pro-rata share of non-recourse mortgage loans relating to the KROP joint venture was approximately $20.0 million. Additionally, the Company along with its joint venture partner have provided interim financing ("Short-term Notes") for all acquisitions without a mortgage in place at the time of closing. As of December 31, 2002 KROP has outstanding Short-term Notes of $17.3 million due each the Company and GECRE. These short-term notes all have maturities of less than one year with rates ranging from Libor plus 4.0% to 4.25%. (See Note 6 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.) The Company has various other unconsolidated real estate joint ventures with ownership interests ranging from 4% to 50%. As of December 31, 2002, these unconsolidated joint ventures had individual non-recourse mortgage loans aggregating approximately $187.9 million. The Company's pro-rata share of these non-recourse mortgages was approximately $78.9 million. (See Note 6 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.) Other Real Estate Investments During November 2002, the Company, through its taxable REIT subsidiary, together with Prometheus Southeast Retail Trust, completed the merger and privatization of Konover Property Trust, which has been renamed Kimsouth Realty, Inc., ("Kimsouth"). The Company acquired 44.5% of the common stock of Kimsouth, which consisted primarily of 38 retail shopping center properties comprising approximately 17.4 million square feet of GLA. Total acquisition value was approximately $280.9 million including approximately $216.2 million in mortgage debt. On December 23, 2002, Kimsouth obtained a cross-collateralized three-year mortgage, aggregating $21.3 million at a variable rate of Libor plus 3.0% which replaced (i) a secured line of credit for $8.0 million and (ii) a construction loan for $17.6 million. All mortgages, which are collateralized by the individual shopping center properties, are due in monthly installments. The scheduled maturities of all mortgages payable as of December 31, 2002, are approximately as follows (in millions): 2003: $74.7; 2004: $2.9; 2005: $30.3; 2006: $3.2; 2007: $45.3 and thereafter, $28.6. At December 31, 2002, the weighted average interest rate for all mortgage debt outstanding was 7.47% per annum. During June 2002, the Company acquired a 90% equity participation interest in an existing leveraged lease of 30 properties. The properties are leased under a long-term bond-type net lease whose primary term expires in 2016, with the lessee having certain renewal option rights. The Company's cash equity investment was approximately $4.0 million. This equity investment is reported as a net investment in leveraged lease in accordance with SFAS No. 13 (as amended). The net investment in leveraged lease reflects the original cash investment adjusted by remaining net rentals, estimated unguaranteed residual value, unearned and deferred income, and deferred taxes relating to the investment. 43 As of December 31, 2002, four of these properties were sold whereby the proceeds from the sales were used to paydown the mortgage debt by approximately $9.6 million. As of December 31, 2002, the remaining 26 properties were encumbered by third-party non-recourse debt of approximately $86.0 million that is scheduled to fully amortize during the primary term of the lease from a portion of the periodic net rents receivable under the net lease. As an equity participant in the leveraged lease, the Company has no general obligation for principal or interest payments on the debt, which is collateralized by a first mortgage lien on the properties and collateral assignment of the lease. Accordingly, this debt has been offset against the related net rental receivable under the lease. 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 often include increases based upon changes 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 foreign currency exchange rates and will, from time to time, enter into interest rate protection agreements and/or foreign currency hedge agreements which mitigate, but do not eliminate, the effect of changes in interest rates on its floating-rate debt and fluctuations in foreign currency exchange rates. New Accounting Pronouncements In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets ("FASB No. 144"), which supercedes SFAS No. 121. FASB No. 144 requires that long-lived assets that are to be disposed of by sale be measured at the lower of book value or fair value less cost to sell. FASB No. 144 retains the requirements of SFAS No. 121 regarding impairment loss recognition and measurement. In addition, it requires that one accounting model be used for long-lived assets to be disposed of by sale and broadens the presentation of discontinued operations to include more disposal transactions. FASB No. 144 is effective for fiscal years beginning after December 15, 2001. Effective January 1, 2002, the Company adopted FASB No. 144. The impact of adoption of FASB No. 144 did not have a material adverse impact on the Company's financial position or results of operations. In April 2002, the FASB issued SFAS No. 145, Rescission of FASB No. 4, 44, and 64, Amendment of FASB No. 13 and Technical Corrections ("FASB No. 145"). This statement eliminates the requirement to report gains and losses from extinguishment of debt as extraordinary unless they meet the criteria of APB Opinion 30. Debt extinguishments that were classified as extraordinary in prior periods presented that do not meet the criteria of APB Opinion 30 shall be reclassified. FASB No. 145 is effective for fiscal years beginning after May 15, 2002. During 2002, the Company elected early adoption of the provisions of FASB No. 145. The impact of adopting this statement did not have a material adverse impact on the Company's financial position or results of operations. In July 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities ("FASB 146"). This statement addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force ("EITF") Issue No. 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring). For purpose of this statement, an exit or disposal activity is initiated when management, having the authority to approve the action, commits to an exit or disposal plan or otherwise disposes of a long-lived asset (disposal group) and, if the activity involves the termination of employees, the criteria for a plan of termination of this statement are met. The provisions of this statement shall be effective for exit or disposal activities initiated after December 31, 2002. The impact of the adoption of FASB No. 146 is not expected to have a material adverse impact on the Company's financial position or results of operations. In November 2002, FASB issued FASB Interpretation No. 45 ("FIN 45"), Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others (an interpretation of FASB Statements No. 5, 57 and 107 and rescission of FASB Interpretation No. 34). FIN 45 clarifies the requirements of FASB Statement No. 5, Accounting for Contingencies. It requires that upon issuance of a guarantee, the guarantor must recognize a liability for the fair value of the obligation it assumes under that guarantee regardless of whether or not the guarantor receives separate identifiable consideration (i.e., a premium). The Company has adopted the new disclosure requirements, which are effective beginning with 2002 calendar year-end financials. FIN 45's provisions for initial recognition and measurement are effective on a prospective basis to guarantees issued or modified after December 31, 2002. The adoption of FIN 45 is not expected to have a material adverse impact on the Company's financial position or results of operations. 44 In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure an amendment of FASB Statement No. 123 ("FASB No. 148"). This Statement amends FASB Statement No. 123, Accounting for Stock-Based Compensation, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this Statement amends the disclosure requirements of Statement 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The transition and annual disclosure provision of FASB No. 148 shall be applied for fiscal years ending after December 15, 2002. The new interim disclosure provisions are effective for the first interim period beginning after December 15, 2002. Effective January 1, 2003, the Company will adopt the prospective method provisions of FASB No. 148, which will apply the recognition provisions of FASB No. 123 to all employee awards granted, modified or settled after January 1, 2003. The adoption is not expected to have a material adverse impact on the Company's results of operations. In January 2003, the FASB issued Interpretation No. 46, Consolidation of Variable Interest Entities ("FIN 46"), the primary objective of which is to provide guidance on the identification of entities for which control is achieved through means other than voting rights ("variable interest entities" or "VIEs") and to determine when and which business enterprise should consolidate the VIE (the "primary beneficiary"). This new model applies when either (i) the equity investors (if any) do not have a controlling financial interest or (ii) the equity investment at risk is insufficient to finance that entity's activities without additional financial support. In addition, FIN 46 requires additional disclosures. The Company is assessing the impact of this interpretation on its accounting for its investments in unconsolidated joint ventures (see Note 6 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K). Item 7A. Quantitative and Qualitative Disclosures About Market Risk As of December 31, 2002, the Company had approximately $280.0 million of floating-rate debt outstanding including $40.0 million on its unsecured revolving credit facility. The interest rate risk on $185.0 million of such debt has been mitigated through the use of interest rate swap agreements (the "Swaps") with major financial institutions. The Company is exposed to credit risk in the event of non-performance by the counter-party to the Swaps. The Company believes it mitigates its credit risk by entering into these Swaps with major financial institutions. The Company believes the interest rate risk represented by the remaining $95.0 million of floating-rate debt is not material to the Company or its overall capitalization. As of December 31, 2002, the Company has Canadian investments totaling CAD $204.5 million (approximately USD $130.2 million) comprised of marketable securities and a real estate joint venture. In addition, the Company has Mexican real estate investments of MXN $383.7 million (approximately USD $35.7 million). The foreign currency exchange risk has been mitigated through the use of foreign currency forward contracts (the "Forward Contracts") and a cross currency swap (the "CC Swap") with major financial institutions. The Company is exposed to credit risk in the event of non-performance by the counter-party to the Forward Contracts and the CC Swap. The Company believes it mitigates its credit risk by entering into the Forward Contracts and the CC Swap with major financial institutions. The Company has not, and does not plan to, enter into any derivative financial instruments for trading or speculative purposes. As of December 31, 2002, the Company had no other material exposure to market risk. Item 8. Financial Statements and Supplementary Data The response to this Item 8 is included as a separate section of this annual report on Form 10-K. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. 45 PART III Item 10. Directors and Executive Officers of the Registrant Incorporated herein by reference to the Company's definitive proxy statement to be filed with respect to its Annual Meeting of Stockholders expected to be held on May 15, 2003. Information with respect to the Executive Officers of the Registrant follows Part I, Item 4 of this annual report on Form 10-K. Item 11. Executive Compensation Incorporated herein by reference to the Company's definitive proxy statement to be filed with respect to its Annual Meeting of Stockholders expected to be held on May 15, 2003. Item 12. Security Ownership of Certain Beneficial Owners and Management Incorporated herein by reference to the Company's definitive proxy statement to be filed with respect to its Annual Meeting of Stockholders expected to be held on May 15, 2003. Item 13. Certain Relationships and Related Transactions Incorporated herein by reference to the Company's definitive proxy statement to be filed with respect to its Annual Meeting of Stockholders expected to be held on May 15, 2003. Item 14. Controls and Procedures Within the 90 days prior to the date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that as of the date of that evaluation the Company's disclosure controls and procedures are effective in providing timely reporting of material information regarding required disclosure and ensure that such information is recorded, processed, summarized and reported within the required time periods and included in the Company's periodic filings with the SEC. There have been no significant changes in the Company's internal controls or in other factors that could significantly affect the Company's internal controls subsequent to the date the Company carried out this evaluation. 46 PART IV Item 15. Exhibits, Financial Statements, Schedules and Reports on Form 8-K ----------------------------------------------------------------- (a) 1. Financial Statements - Form 10-K The following consolidated financial Form 10-K information is included as a separate Report section of this annual report on Form 10-K. Page --------- Report of Independent Accountants 55 Consolidated Financial Statements Consolidated Balance Sheets as of December 31, 2002 and 2001 56 Consolidated Statements of Income for the years ended December 31, 2002, 2001 and 2000 57 Consolidated Statements of Comprehensive Income for the years ended December 31, 2002, 2001 and 2000 58 Consolidated Statements of Stockholders' Equity for the years ended December 31, 2002, 2001 and 2000 59 Consolidated Statements of Cash Flows for the years ended December 31, 2002, 2001 and 2000 60 Notes to Consolidated Financial Statements 61 2. Financial Statement Schedules - Schedule II - Valuation and Qualifying Accounts 87 Schedule III - Real Estate and Accumulated Depreciation 88 All other schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule. 3. Exhibits The exhibits listed on the accompanying Index to Exhibits are filed as part of this report. 48 (b) Reports on Form 8-K A current report on Form 8-K dated October 28, 2002 was filed under Items 5 and 7 relating to the announcement of the Company's second quarter 2002 operating results. A current report on Form 8-K dated November 12, 2002 was furnished under Item 9 relating to the certifications of the Company's Chief Executive Officer and Chief Financial Officer as required by 18 U.S.C. ss. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002. A current report on Form 8-K dated November 15, 2002 was filed under Item 7 to disclose the U.S. Placement Agency Agreement, dated November 15, 2002, by and among, Banc of America Securities LLC, J.P. Morgan Securities Inc., Fleet Securities, Inc., HSBC Securities (USA) Inc., Wachovia Securities, Inc. and the Company in connection with the Company's $35.0 million Senior Note offering during November 2002. A current report on Form 8-K dated November 21, 2002 was filed under Item 7 to disclose the Underwriting and Terms Agreements, dated November 18, 2002, by and among, Banc One Capital Markets, Inc., J.P. Morgan Securities Inc., Banc of America Securities LLC, and the Company in connection with the Company's $200.0 million Senior Note offering during November 2002. 47 INDEX TO EXHIBITS Form 10-K Exhibits Page - -------- ---------- 2.1 --Form of Plan of Reorganization of Kimco Realty Corporation [Incorporated by reference to Exhibit 2.1 to the Company's Registration Statement on Form S-11 No. 33-42588]. 3.1 --Articles of Amendment and Restatement of the Company, dated August 4, 1994 [Incorporated by reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K for the year ended December 31, 1994]. 3.2 --By-laws of the Company dated February 6, 2002, as amended. 3.3 --Articles Supplementary relating to the 8 1/2% Class B Cumulative Redeemable Preferred Stock, par value $1.00 per share, of the Company, dated July 25, 1995. [Incorporated by reference to Exhibit 3.3 to the Company's Annual Report on Form 10-K for the year ended December 31, 1995 (file #1-10899) (the "1995 Form 10-K")]. 3.4 --Articles Supplementary relating to the 8 3/8% Class C Cumulative Redeemable Preferred Stock, par value $1.00 per share, of the Company, dated April 9, 1996 [Incorporated by reference to Exhibit 3.4 to the Company's Annual Report on Form 10-K for the year ended December 31, 1996]. 3.5 --Articles Supplementary relating to the 7 1/2% Class D Cumulative Convertible Preferred Stock, par value $1.00 per share, of the Company, dated May 14, 1998 [Incorporated by reference to the Company's and The Price REIT, Inc.'s Joint Proxy/Prospectus on Form S-4 No. 333-52667]. 4.1 --Agreement of the Company pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K [Incorporated by reference to Exhibit 4.1 to Amendment No. 3 to the Company's Registration Statement on Form S-11 No. 33-42588]. 4.2 --Certificate of Designations [Incorporated by reference to Exhibit 4(d) to Amendment No. 1 to the Registration Statement on Form S-3 dated September 10, 1993 (the "Registration Statement", Commission File No. 33-67552)]. 4.3 --Indenture dated September 1, 1993 between Kimco Realty Corporation and Bank of New York (as successor to IBJ Schroder Bank and Trust Company) [Incorporated by reference to Exhibit 4(a) to the Registration Statement]. 4.4 --First Supplemental Indenture, dated as of August 4, 1994. [Incorporated by reference to Exhibit 4.6 to the 1995 Form 10-K.] 4.5 --Second Supplemental Indenture, dated as of April 7, 1995 [Incorporated by reference to Exhibit 4(a) to the Company's Current Report on Form 8-K dated April 7, 1995 (the "April 1995 8-K")]. 48 INDEX TO EXHIBITS (continued) Form 10-K Exhibits Page - -------- ---------- 4.6 -- Form of Medium-Term Note (Fixed Rate). 4.7 -- Form of Medium-Term Note (Floating Rate). 4.8 -- Form of Remarketed Reset Note [Incorporated by reference to Exhibit 4(j) to the Company's Current Report on Form 8-K dated March 26, 1999]. 10.1 -- Form of Acquisition Option Agreement between the Company and the subsidiary named therein [Incorporated by reference to Exhibit 10.1 to Amendment No. 3 to the Company's Registration Statement on Form S-11 No. 33-42588]. 10.2 -- Management Agreement between the Company and KC Holdings, Inc. [Incorporated by reference to Exhibit 10.2 to the Company's Registration Statement on Form S-11 No. 33-47915]. 10.3 -- Amended and Restated Stock Option Plan [Incorporated by reference to Exhibit 10.3 to the 1995 Form 10-K]. 10.4 -- Employment Agreement between Kimco Realty Corporation and Michael J. Flynn, dated November 1, 1998. 10.5 -- Restricted Equity Agreement, Non-Qualified and Incentive Stock Option Agreement, and Price Condition Non-Qualified and Incentive Stock Option Agreement between Kimco Realty Corporation and Michael J. Flynn, each dated November 1, 1995 [Incorporated by reference to Exhibit 10.5 to the 1995 Form 10-K]. 10.6 -- Employment Agreement between Kimco Realty Corporation and Michael V. Pappagallo, dated January 1, 2002. 10.7 -- Employment Agreement between Kimco Realty Corporation and Jerald Friedman, dated January 13, 1998 [Incorporated by Reference to Exhibit 10.10 to the Company's and the Price REIT, Inc.'s Joint Proxy Statement/Prospectus on Form S-4 No. 333-52667]. 10.8 -- First Amendment to Amended and Restated Executive Employment Agreement between Kimco Realty Corporation and Jerald Friedman, dated January 1, 2002. 10.9 -- Amended and Restated Stock Option Plan [Incorporated by reference to the Company's and The Price REIT, Inc.'s Joint Proxy/Prospectus on Form S-4 No. 333-52667]. 10.10 -- Employment Agreement between Kimco Realty Corporation and David B. Henry - the Company commenced a five-year employment agreement with Mr. Henry pursuant to which Mr. Henry will serve as Chief Investment Officer and has been nominated as Vice Chairman of the Board of Directors [Incorporated by reference to Exhibit 10.11 to the Company's Form 10-Q filed on May 10, 2001]. *10.11 -- Employment Agreement between Kimco Realty Corporation and Raymond Edwards - the Company commenced a five-year employment agreement with Mr. Edwards pursuant to which Mr. Edwards will serve as a Vice President of the Company. 95 49 INDEX TO EXHIBITS (continued) Form 10-K Page ---------- *12.1 -- Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends. 102 *12.2 -- Computation of Ratio of Funds from Operations to Combined Fixed Charges and Preferred Stock Dividends. 103 *21.1 -- Subsidiaries of the Company 104 *23.1 -- Consent of PricewaterhouseCoopers LLP 110 - --------------------------------------- * Filed herewith. 50 SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) 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 (Registrant) By: /s/ Milton Cooper --------------------------- Milton Cooper Chief Executive Officer Dated: March 26, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signature Title Date - --------- ----- ---- /s/ Martin S. Kimmel Chairman (Emeritus) of March 26, 2003 - --------------------------- the Board of Directors Martin S. Kimmel /s/ Milton Cooper - --------------------------- Chairman of the Board March 26, 2003 Milton Cooper of Directors and Chief Executive Officer /s/ Michael J. Flynn Vice Chairman of the March 26, 2003 - --------------------------- Board of Directors, Michael J. Flynn President and Chief Operating Officer /s/ David B. Henry Vice Chairman of the March 26, 2003 - --------------------------- Board of Directors and David B. Henry Chief Investment Officer /s/ Richard G. Dooley Director March 26, 2003 - --------------------------- Richard G. Dooley /s/ Joe Grills Director March 26, 2003 - --------------------------- Joe Grills /s/ Frank Lourenso Director March 26, 2003 - --------------------------- Frank Lourenso /s/ Michael V. Pappagallo - --------------------------- Vice President - March 26, 2003 Michael V. Pappagallo Chief Financial Officer /s/ Glenn G. Cohen - --------------------------- Vice President - March 26, 2003 Glenn G. Cohen Treasurer /s/ Paul Westbrook Director of Accounting March 26, 2003 - --------------------------- Paul Westbrook 51 Kimco Realty Corporation Certification I, Milton Cooper, Chief Executive Officer, certify that: 1. I have reviewed this annual report on Form 10-K of Kimco Realty Corporation; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: March 26, 2003 /s/ Milton Cooper Milton Cooper Chief Executive Officer 52 Kimco Realty Corporation Certification I, Michael V. Pappagallo, Chief Financial Officer, certify that: 1. I have reviewed this annual report on Form 10-K of Kimco Realty Corporation; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: March 26, 2003 /s/ Michael V. Pappagallo Michael V. Pappagallo Chief Financial Officer 53 ANNUAL REPORT ON FORM 10-K ITEM 8, ITEM 15 (a) (1) and (2) INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES ------- FORM 10-K Page No. ----------- KIMCO REALTY CORPORATION AND SUBSIDIARIES Report of Independent Accountants 55 Consolidated Financial Statements and Financial Statement Schedules: Consolidated Balance Sheets as of December 31, 2002 and 2001 56 Consolidated Statements of Income for the years ended December 31, 2002, 2001 and 2000 57 Consolidated Statements of Comprehensive Income for the years ended December 31, 2002, 2001 and 2000 58 Consolidated Statements of Stockholders' Equity for the years ended December 31, 2002, 2001 and 2000 59 Consolidated Statements of Cash Flows for the years ended December 31, 2002, 2001 and 2000 60 Notes to Consolidated Financial Statements 61 Financial Statement Schedules: II. Valuation and Qualifying Accounts 87 III. Real Estate and Accumulated Depreciation 88 54 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholders of Kimco Realty Corporation: In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Kimco Realty Corporation and Subsidiaries (collectively, the "Company") at December 31, 2002 and 2001, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedules listed in the accompanying index present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedules are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements and financial statement schedules based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. As discussed in Note 1 to the consolidated financial statements, effective January 1, 2002 the Company adopted the provisions of Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," which requires that the results of operations, including any gain or loss on sale, relating to real estate that has been disposed of or is classified as held for sale after initial adoption be reported in discontinued operations for all periods presented. /s/ PricewaterhouseCoopers LLP New York, New York March 18, 2003 55 KIMCO REALTY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share information)
December 31, December 31, 2002 2001 ----------- ----------- Assets: Real Estate Rental property Land $ 518,268 $ 540,927 Building and improvements 2,666,626 2,454,559 ----------- ----------- 3,184,894 2,995,486 Less, accumulated depreciation and amortization 516,558 452,878 ----------- ----------- 2,668,336 2,542,608 Real estate under development 212,765 204,530 Undeveloped land parcels 1,312 1,348 ----------- ----------- Real estate, net 2,882,413 2,748,486 Investment and advances in real estate joint ventures 412,672 272,920 Other real estate investments 99,542 7,613 Mortgages and other financing receivables 94,024 53,611 Cash and cash equivalents 35,962 93,847 Marketable securities 66,992 82,997 Accounts and notes receivable 55,012 48,074 Deferred charges and prepaid expenses 50,149 38,031 Other assets 60,112 39,200 ----------- ----------- $ 3,756,878 $ 3,384,779 =========== =========== Liabilities & Stockholders' Equity: Notes payable $ 1,302,250 $ 1,035,250 Mortgages payable 230,760 286,929 Construction loans payable 43,972 5,900 Accounts payable and accrued expenses 94,784 68,323 Dividends payable 59,646 57,345 Other liabilities 24,198 32,573 ----------- ----------- 1,755,610 1,486,320 ----------- ----------- Minority interests in partnerships 93,940 8,375 ----------- ----------- Commitments and contingencies 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 300 300 Aggregate liquidation preference $75,000 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 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 Class D Convertible Preferred Stock, $1.00 par value, authorized 700,000 shares Issued and outstanding 0 and 92,390 shares, respectively -- 92 Aggregate liquidation preference $0 and $23,098, respectively Common stock, $.01 par value, authorized 200,000,000 shares Issued and outstanding 104,601,828 and 103,352,570 shares, respectively 1,046 1,034 Paid-in capital 1,984,820 1,976,442 Cumulative distributions in excess of net income (85,367) (93,131) ----------- ----------- 1,901,399 1,885,337 Accumulated other comprehensive income 7,401 7,310 Notes receivable from officer stockholders (1,472) (2,563) ----------- ----------- 1,907,328 1,890,084 ----------- ----------- $ 3,756,878 $ 3,384,779 =========== ===========
The accompanying notes are an integral part of these consolidated financial statements. 56 KIMCO REALTY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data)
Year Ended December 31, ----------------------------------- 2002 2001 2000 --------- --------- --------- Real estate operations: Revenues from rental property $ 450,829 $ 450,408 $ 441,336 --------- --------- --------- Rental property expenses: Rent 12,392 12,649 12,205 Real estate taxes 62,991 55,717 53,931 Operating and maintenance 47,214 45,759 41,373 --------- --------- --------- 122,597 114,125 107,509 --------- --------- --------- 328,232 336,283 333,827 Equity in income of real estate joint ventures, net 35,569 20,217 14,570 Minority interests in income of partnerships, net (2,430) (1,682) (2,054) Income from other real estate investments 16,038 38,113 7,710 Mortgage financing income 19,424 2,318 1,557 Gain on sale of development properties 15,879 13,418 -- Management and other fee income 14,193 7,797 6,131 Depreciation and amortization (74,223) (71,717) (69,052) --------- --------- --------- Income from real estate operations 352,682 344,747 292,689 --------- --------- --------- Other investments: Interest, dividends and other investment income 18,557 17,286 16,432 Other income/(loss), net 2,532 (2,184) (1,803) --------- --------- --------- 21,089 15,102 14,629 --------- --------- --------- Interest expense (86,896) (88,592) (91,870) General and administrative expenses (31,904) (28,680) (25,485) Gain on early extinguishment of debt 19,033 -- -- Adjustment of property carrying values (12,530) -- -- Gain on disposition of operating properties, net -- 3,040 3,962 --------- --------- --------- Income from continuing operations before income taxes 261,474 245,617 193,925 Provision for income taxes (12,904) (19,376) -- --------- --------- --------- Income from continuing operations 248,570 226,241 193,925 --------- --------- --------- Discontinued operations: Income/(loss) from discontinued operating properties (including adjustment of property carrying values of ($20,500) in 2002 and gain on early extinguishment of debt of $3,222 in 2002) (15,680) 10,297 11,100 Gain on disposition of operating properties, net 12,778 -- -- --------- --------- --------- Income/(loss) from discontinued operations (2,902) 10,297 11,100 --------- --------- --------- Net income 245,668 236,538 205,025 Preferred stock dividends (18,437) (24,553) (26,328) --------- --------- --------- Net income available to common shareholders $227,231 $211,985 $178,697 ========= ========= ========= Per common share: Income from continuing operations - Basic $2.20 $2.09 $1.81 ========= ========= ========= - Diluted $2.19 $2.05 $1.79 ========= ========= ========= Net Income - Basic $2.18 $2.20 $1.93 ========= ========= ========= - Diluted $2.16 $2.16 $1.91 ========= ========= =========
The accompanying notes are an integral part of these consolidated financial statements. 57 KIMCO REALTY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands)
Year ended December 31, ----------------------------------- 2002 2001 2000 --------- --------- --------- Net income $ 245,668 $ 236,538 $ 205,025 --------- --------- --------- Other comprehensive income: Change in unrealized gain/(loss) on marketable securities (4,456) 8,784 -- Change in unrealized gain/(loss) on interest rate swaps 3,264 (3,884) -- Change in unrealized gain on warrants 1,524 2,410 -- Change in unrealized gain on foreign currency hedge agreements 195 -- -- Foreign currency translation adjustment (436) -- -- --------- --------- --------- Other comprehensive income 91 7,310 -- --------- --------- --------- Comprehensive income $ 245,759 $ 243,848 $ 205,025 ========= ========= =========
The accompanying notes are an integral part of these consolidated financial statements. 58 KIMCO REALTY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY For the Years Ended December 31, 2002, 2001 and 2000 (in thousands, except per share information)
Preferred Stock Common Stock ------------------------ ----------------------- Paid-in Issued Amount Issued Amount Capital ---------- ---------- ---------- ---------- ---------- Balance, December 31, 1999 1,329 $ 1,329 91,194 $ 913 $1,729,973 Net income Dividends ($1.81 per common share; $1.9375, $2.125, $2.0938, and $1.875 per Class A, Class B, Class C, and Class D Depositary Share, respectively) Issuance of common stock 3,234 31 86,718 Exercise of common stock options 289 3 4,933 Repurchase of Class D Preferred Stock (11) (11) (2,494) Collection of notes receivable ---------- ---------- ---------- ---------- ---------- Balance, December 31, 2000 1,318 1,318 94,717 947 1,819,130 Net income Dividends ($1.96 per common share; $1.9375, $2.125, $2.0938, and $1.8409 per Class A, Class B, Class C, and Class D Depositary Share, respectively) Issuance of common stock 3,906 40 122,103 Exercise of common stock options 1,694 17 34,919 Collection of notes receivable Conversion of Class D Preferred Stock to common stock (326) (326) 3,036 30 290 Accumulated other comprehensive income ---------- ---------- ---------- ---------- ---------- Balance, December 31, 2001 992 992 103,353 1,034 1,976,442 Net income Dividends ($2.10 per common share; $1.9375, $2.125, $2.0938, and $1.8409 per Class A, Class B, and Class C Depositary Share, respectively) Issuance of common stock 80 1 2,523 Exercise of common stock options 308 3 5,771 Collection of notes receivable Conversion of Class D Preferred Stock to common stock (92) (92) 861 8 84 Accumulated other comprehensive income ---------- ---------- ---------- ---------- ---------- Balance, December 31, 2002 900 $ 900 104,602 $ 1,046 $1,984,820 ========== ========== ========== ========== ========== Cumulative Accumulated Notes Distributions Other Receivable Total in Excess Comprehensive from Officer Stockholders' of Net Income Income Stockholders Equity ----------- ----------- ----------- ----------- Balance, December 31, 1999 $ (122,959) $ -- $ (3,821) $ 1,605,435 Net income 205,025 205,025 Dividends ($1.81 per common share; $1.9375, $2.125, $2.0938, and $1.875 per Class A, Class B, Class C, and Class D Depositary Share, respectively) (195,176) (195,176) Issuance of common stock 86,749 Exercise of common stock options (387) 4,549 Repurchase of Class D Preferred Stock (2,505) Collection of notes receivable 262 262 ----------- ----------- ----------- ----------- Balance, December 31, 2000 (113,110) -- (3,946) 1,704,339 Net income 236,538 236,538 Dividends ($1.96 per common share; $1.9375, $2.125, $2.0938, and $1.8409 per Class A, Class B, Class C, and Class D Depositary Share, respectively) (216,559) (216,559) Issuance of common stock 122,143 Exercise of common stock options (850) 34,086 Collection of notes receivable 2,233 2,233 Conversion of Class D Preferred Stock to common stock (6) Accumulated other comprehensive income 7,310 7,310 ----------- ----------- ----------- ----------- Balance, December 31, 2001 (93,131) 7,310 (2,563) 1,890,084 Net income 245,668 245,668 Dividends ($2.10 per common share; $1.9375, $2.125, $2.0938, and $1.8409 per Class A, Class B, and Class C Depositary Share, respectively) (237,904) (237,904) Issuance of common stock 2,524 Exercise of common stock options (555) 5,219 Collection of notes receivable 1,646 1,646 Conversion of Class D Preferred Stock to common stock -- Accumulated other comprehensive income 91 91 ----------- ----------- ----------- ----------- Balance, December 31, 2002 $ (85,367) $ 7,401 $ (1,472) $ 1,907,328 =========== =========== =========== ===========
The accompanying notes are an integral part of these consolidated financial statements. 59 KIMCO REALTY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
Year Ended December 31, ----------------------------------- 2002 2001 2000 --------- --------- --------- Cash flow from operating activities: Net income $245,668 $236,538 $205,025 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 76,674 74,209 71,129 Adjustment of property carrying values 33,031 -- -- Gain on sale of development properties (15,879) (13,418) -- Gain on sale of operating properties (12,778) (3,040) (3,962) Gain on early extinguishment of debt (22,255) -- -- Minority interests in income of partnerships, net 2,430 1,682 2,054 Equity in income of real estate joint ventures, net (35,569) (20,217) (14,570) Income from other real estate investments (13,222) (33,518) (2,298) Change in accounts and notes receivable (6,938) (1,956) (12,806) Change in accounts payable and accrued expenses 12,612 3,607 (1,176) Change in other operating assets and liabilities 15,157 43,557 7,150 --------- --------- --------- Net cash flow provided by operating activities 278,931 287,444 250,546 --------- --------- --------- Cash flow from investing activities: Acquisition of and improvements to operating real estate (240,528) (63,403) (158,515) Acquisition of and improvements to real estate under development (113,450) (107,364) -- Investment in marketable securities (39,183) (29,070) (45,616) Proceeds from sale of marketable securities 49,396 36,427 16,055 Redemption of minority interests in real estate partnerships -- (7,133) -- Investments in joint ventures (11,419) (1,382) -- Reimbursements of investments in joint ventures 12,800 -- -- Investments and advances to real estate joint ventures (161,649) (88,532) (30,066) Reimbursements of advances to real estate joint ventures 16,665 24,824 2,400 Other real estate investments (69,288) -- -- Reimbursements of advances to other real estate investments 1,179 -- -- Investments and advances to affiliated companies -- (100) (6,866) Investment in mortgage loans receivable (123,242) (36,099) -- Collection of mortgage loans receivable 89,053 5,952 2,967 Collection of note receivable 400 -- -- Investment in and advances received from designation rights 263 -- -- Proceeds from sale of operating properties 84,139 46,766 28,015 Proceeds from sale of development properties 108,209 61,921 -- --------- --------- --------- Net cash flow used for investing activities (396,655) (157,193) (191,626) --------- --------- --------- Cash flow from financing activities: Principal payments on debt, excluding normal amortization of rental property debt (30,689) (4,587) (17,024) Principal payments on construction loan financings (801) -- -- Principal payments on rental property debt (5,931) (5,126) (4,510) Repayment of medium-term note (110,000) -- (60,000) Proceeds from issuance of medium-term notes 102,000 -- 210,000 Repayment of senior notes -- -- (100,000) Proceeds from issuance of senior notes 235,000 -- -- Repayment of borrowings under senior term loan -- -- (52,000) Borrowings under revolving credit facilities 269,000 10,000 90,000 Repayment of borrowings under revolving credit facilities (229,000) (55,000) (45,000) Financing origination costs -- -- (2,863) Proceeds from mortgage financings 28,900 51,230 44,396 Proceeds from construction loan financings 38,873 -- -- Payment of unsecured obligation (11,300) -- (18,172) Dividends paid (235,602) (209,785) (189,896) Payment for repurchase of stock -- -- (2,505) Proceeds from issuance of stock 9,389 157,767 79,675 --------- --------- --------- Net cash flow provided by (used for) financing activities 59,839 (55,501) (67,899) --------- --------- --------- Change in cash and cash equivalents (57,885) 74,750 (8,979) Cash and cash equivalents, beginning of year 93,847 19,097 28,076 --------- --------- --------- Cash and cash equivalents, end of year $ 35,962 $ 93,847 $ 19,097 ========= ========= ========= Interest paid during the year $ 93,066 $ 89,016 $ 89,857 ========= ========= ========= Income taxes paid during the year $ 12,035 $ 24,888 $ -- ========= ========= ========= Supplemental schedule of noncash investing/financing activities: Acquisition of real estate interests by assumption of mortgage debt $ 3,477 $ 17,220 $ 30,986 ========= ========= ========= Acquisition of real estate interest by issuance of convertible downREIT units $ 80,000 $ -- $ -- ========= ========= ========= Acquisition of real estate through purchase of partnership interests $ 6,638 $ -- $ -- ========= ========= ========= Investment in real estate joint ventures by issuance of stock and contribution of property $ -- $ 3,420 $ -- ========= ========= ========= Disposition of real estate interests by assignment of mortgage debt $ 28,747 $ -- $ 9,124 ========= ========= ========= Proceeds held in escrow from sale of real estate interests $ 5,433 $ -- $ 2,700 ========= ========= ========= Notes received upon disposition of real estate interests $ -- $ 400 $ -- ========= ========= ========= Notes received upon exercise of stock options $ 555 $ 850 $ 387 ========= ========= ========= Declaration of dividends paid in succeeding period $ 59,646 $ 57,345 $ 50,570 ========= ========= =========
The accompanying notes are an integral part of these consolidated financial statements. 60 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies: Business Kimco Realty Corporation (the "Company" or "Kimco"), its subsidiaries, affiliates and related real estate joint ventures are engaged principally in the operation of neighborhood and community shopping centers which are anchored generally by discount department stores, supermarkets or drugstores. The Company also provides property management services for shopping centers owned by affiliated entities, various real estate joint ventures and unaffiliated third parties. Additionally, in connection with the Tax Relief Extension Act of 1999 (the "RMA"), which became effective January 1, 2001, the Company is now permitted to participate in activities which it was precluded from previously in order to maintain its qualification as a Real Estate Investment Trust ("REIT"), so long as these activities are conducted in entities which elect to be treated as taxable subsidiaries under the Code, subject to certain limitations. As such, the Company, through its taxable REIT subsidiaries, is engaged in various retail real estate related opportunities including (i) merchant building, through its Kimco Developers, Inc. ("KDI") subsidiary, which is primarily engaged in the ground-up development of neighborhood and community shopping centers and the subsequent sale thereof upon completion and (ii) retail real estate advisory and disposition services which primarily focuses on leasing and disposition strategies of retail real estate controlled by both healthy and distressed and/or bankrupt retailers. The Company seeks to reduce its operating and leasing risks through diversification achieved by the geographic distribution of its properties, avoiding dependence on any single property, and a large tenant base. At December 31, 2002, the Company's single largest neighborhood and community shopping center accounted for only 1.2% of the Company's annualized base rental revenues and only 0.8% of the Company's total shopping center gross leasable area ("GLA"). At December 31, 2002, the Company's five largest tenants include Kmart Corporation, The Home Depot, Kohl's, TJX Companies and Wal-Mart, which represented approximately 4.5%, 2.8%, 2.7%, 2.5% and 1.9%, respectively, of the Company's annualized base rental revenues, including the proportionate share of base rent of revenues from properties in which the Company has less than a 100% economic interest. The principal business of the Company and its consolidated subsidiaries is the ownership, development and operation of retail shopping centers. The Company does not distinguish or group its operations on a geographical basis for purposes of measuring performance. Accordingly, the Company believes it has a single reportable segment for disclosure purposes in accordance with accounting principles generally accepted in the United States. Principles of Consolidation and Estimates The accompanying Consolidated Financial Statements include the accounts of the Company, its subsidiaries, all of which are wholly-owned, and all partnerships in which the Company has a controlling interest. All significant intercompany balances and transactions have been eliminated in consolidation. Generally accepted accounting principles ("GAAP") require the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during a reporting period. The most significant assumptions and estimates relate to the valuation of real estate, depreciable lives, revenue recognition and the recoverability of trade accounts receivable. Application of these assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates. 61 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued Real Estate Real estate assets are stated at cost, less accumulated depreciation and amortization. If there is an event or a change in circumstances that indicates that the basis of a property may not be recoverable, then management will assess any impairment in value by making a comparison of (i) the current and projected operating cash flows (undiscounted and without interest charges) of the property over its remaining useful life and (ii) the net carrying amount of the property. If the current and projected operating cash flows (undiscounted and without interest charges) are less than the carrying value of the property, the carrying value would be adjusted to an amount to reflect the estimated fair value of the property. When a real estate asset is identified by management as held for sale, the Company ceases depreciation of the asset and estimates the sales price, net of selling costs. If, in management's opinion, the net sales price of the asset is less than the net book value of the asset, an adjustment to the carrying value would be recorded to reflect the estimated fair value of the property. Depreciation and amortization are provided on the straight-line method over the estimated useful lives of the assets, as follows: Buildings 15 to 39 years Fixtures and leasehold improvements Terms of leases or useful lives, whichever is shorter Expenditures for maintenance and repairs are charged to operations as incurred. Significant renovations are capitalized. Real Estate Under Development Real estate under development represents the ground-up development of neighborhood and community shopping centers which are held for sale upon completion. These properties are carried at cost and no depreciation is recorded on these assets. The cost of land and buildings under development include specifically identifiable costs. The capitalized costs include pre-construction costs essential to the development of the property, development costs, construction costs, interest costs, real estate taxes, salaries and related costs and other costs incurred during the period of development. The Company ceases cost capitalization when the property is held available for occupancy upon substantial completion of tenant improvements, but no later than one year from the completion of major construction activity. If in management's opinion, the net sales price of these assets is less than the net carrying value, the carrying value would be written down to an amount to reflect the estimated fair value of the property. Investments in Unconsolidated Joint Ventures The Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting as the Company exercises significant influence, but does not control these entities. These investments are recorded initially at cost and subsequently adjusted for equity in earnings and cash contributions and distributions. On a periodic basis, management assesses whether there are any indicators that the value of the Company's investments in unconsolidated joint ventures may be impaired. An investment's value is impaired only if management's estimate of the fair value of the investment is less than the carrying value of the investment. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the investment over the fair value of the investment. Marketable Securities The Company classifies its existing marketable equity securities as available-for-sale in accordance with the provisions of Statement of Financial Accounting Standard No. 115, Accounting for Certain Investments in Debt and Equity Securities. These securities are carried at fair market value, with unrealized gains and losses reported in stockholders' equity as a component of Other Comprehensive Income ("OCI"). Gains or losses on securities sold are based on the specific identification method. All debt securities are classified as held-to-maturity because the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at amortized cost, adjusted for amortization of premiums and accretion discounts to maturity. 62 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued Deferred Leasing and Financing Costs Costs incurred in obtaining tenant leases and long-term financing, included in deferred charges and prepaid expenses in the accompanying Consolidated Balance Sheets, are amortized over the terms of the related leases or debt agreements, as applicable. Revenue Recognition Base rental revenues from rental property are recognized on a straight-line basis over the terms of the related leases. Certain of these leases also provide for percentage rents based upon the level of sales achieved by the lessee. These percentage rents are recorded once the required sales level is achieved. In addition, leases typically provide for reimbursement to the Company of common area maintenance costs, real estate taxes and other operating expenses. Operating expense reimbursements are recognized as earned. Income Taxes The Company and its subsidiaries file a consolidated federal income tax return. The Company has made an election to qualify, and believes it is operating so as to qualify, as a REIT for federal income tax purposes. Accordingly, the Company generally will not be subject to federal income tax, provided that distributions to its stockholders equal at least the amount of its REIT taxable income as defined under Section 856 through 860 of the Internal Revenue Code, as amended (the "Code"). In connection with the RMA, which became effective January 1, 2001, the Company is now permitted to participate in certain activities which it was previously precluded from in order to maintain its qualification as a REIT, so long as these activities are conducted in entities which elect to be treated as taxable subsidiaries under the Code. As such, the Company is subject to federal and state income taxes on the income from these activities. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Foreign Currency Translation and Transactions Assets and liabilities of our foreign operations are translated using year-end exchange rates, and revenues and expenses are translated using exchange rates as determined throughout the year. Gains or losses resulting from translation are included in accumulated other comprehensive income, as a separate component of the Company's stockholders' equity. Gains or losses resulting from foreign currency transactions are translated to local currency at the rates of exchange prevailing at the dates of the transactions. The effect of the transaction's gain or loss is included in the caption Other income/(loss), net in the Consolidated Statements of Income. Derivative / Financial Instruments Effective January 1, 2001, the Company adopted Statement of Financial Accounting Standard No. 133, Accounting for Derivative Instruments and Hedging Activities ("FASB No. 133"), as amended. FASB No. 133 establishes accounting and reporting standards for derivative instruments. This accounting standard requires the Company to measure derivative instruments at fair value and to record them in the Consolidated Balance Sheet as an asset or liability, depending on the Company's rights or obligations under the applicable derivative contract. In addition, the fair value adjustments will be recorded in either stockholders' equity or earnings in the current period based on the designation of the derivative. The effective portions of changes in fair value of cash flow hedges are reported in OCI and are subsequently reclassified into earnings when the hedged item affects earnings. The changes in fair value of derivative instruments which are not designated as hedging instruments and the ineffective portions of hedges are recorded in earnings for the current period. 63 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued The Company utilizes derivative financial instruments to reduce exposure to fluctuations in interest rates, foreign currency exchange rates and market fluctuation on equity securities. The Company has established policies and procedures for risk assessment and the approval, reporting and monitoring of derivative financial instrument activities. The Company has not, and does not plan to enter into financial instruments for trading or speculative purposes. Additionally, the Company has a policy of only entering into derivative contracts with major financial institutions. The principal financial instruments used by the Company are interest rate swaps, foreign currency exchange forward contracts, cross currency swaps and warrant contracts. In accordance with the provisions of FASB No. 133, these derivative instruments were designated and qualified as either cash flow or fair value hedges (see Note 15). Earnings Per Share On October 24, 2001, the Company's Board of Directors declared a three-for-two split (the "Stock Split") of the Company's common stock which was effected in the form of a stock dividend paid on December 21, 2001 to stockholders of record on December 10, 2001. All share and per share data included in the accompanying Consolidated Financial Statements and Notes thereto have been adjusted to reflect this Stock Split. The following table sets forth the reconciliation of earnings and the weighted average number of shares used in the calculation of basic and diluted earnings per share (amounts presented in thousands, except per share data):
2002 2001 2000 --------- --------- --------- Computation of Basic Earnings Per Share: Income from continuing operations applicable to common shares $ 230,133 $ 201,688 $ 167,597 Income/(1oss) from discontinued operations (2,902) 10,297 11,100 --------- --------- --------- Net income applicable to common shares $ 227,231 $ 211,985 $ 178,697 ========= ========= ========= Weighted average common shares outstanding 104,458 96,317 92,688 ========= ========= ========= Basic Earnings Per Share: Income from continuing operations $ 2.20 $ 2.09 $ 1.81 Income/(loss) from discontinued operations (.02) 0.11 0.12 --------- --------- --------- Net income $ 2.18 $ 2.20 $ 1.93 ========= ========= ========= Computation of Diluted Earnings Per Share: Income from continuing operations applicable to common shares $ 230,133 $ 201,688 $ 167,597 Dividends on Class D Convertible Preferred Stock -- 6,115 (a) Dividends on convertible downREIT units 1,423 -- -- --------- --------- --------- Income from continuing operations for diluted earnings per share 231,556 207,803 167,597 Income/(loss) from discontinued operations (2,902) 10,297 11,100 --------- --------- --------- Net income for diluted earnings per share $ 228,654 $ 218,100 $ 178,697 ========= ========= ========= Weighted average common shares outstanding - Basic 104,458 96,317 92,688 Effect of dilutive securities: Stock options 999 1,139 965 Assumed conversion of Class D Preferred stock to common stock 4 3,707 (a) Assumed conversion of downREIT units 508 -- -- --------- --------- --------- Shares for diluted earnings per share 105,969 101,163 93,653 ========= ========= ========= Diluted Earnings Per Share: Income from continuing operations $ 2.19 $ 2.05 $ 1.79 Income/(loss) from discontinued operations (.03) 0.11 0.12 --------- --------- --------- Net income $ 2.16 $ 2.16 $ 1.91 ========= ========= =========
(a) In 2000, the effect of the assumed conversion of the Class D Preferred Stock had an anti-dilutive effect upon the calculation of net income per common share. Accordingly, the impact of such conversion has not been included in the determination of diluted earnings per common share. 64 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued The Company applies the intrinsic value-based method of accounting prescribed by Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations including FASB Interpretation No. 44, Accounting for Certain Transactions involving Stock Compensation (an interpretation of APB Opinion No. 25), issued in March 2000, to account for stock-based employee compensation plans. Under this method, compensation cost is recognized for awards of shares of common stock or stock options to directors, officers and employees of the Company and consolidated subsidiaries only if the quoted market price of the stock at the grant date (or other measurement date, if later) is greater than the amount the grantee must pay to acquire the stock. The following table illustrates the effect on net income and earnings per share if the fair value based method had been applied to all outstanding stock awards in each period:
Year Ended December 31, --------------------------------------- 2002 2001 2000 --------------------------------------- Net income, as reported $ 245,668 $ 236,538 $ 205,025 Deduct: Total stock based employee compensation expense determined under fair value based method for all awards (3,153) (2,702) (2,190) --------- --------- --------- Pro Forma Net Income - Basic $ 242,515 $ 233,836 $ 202,835 ========= ========= ========= Earnings Per Share Basic - as reported $ 2.18 $ 2.20 $ 1.93 ========= ========= ========= Basic - pro forma $ 2.15 $ 2.17 $ 1.90 ========= ========= ========= Net income for diluted earnings per share $ 228,654 $ 218,100 $ 178,697 Deduct: Total stock based employee compensation expense determined under fair value based method for all awards (3,153) (2,702) (2,190) --------- --------- --------- Pro Forma Net Income - Diluted $ 225,501 $ 215,398 $ 176,507 ========= ========= ========= Earnings Per Share Diluted - as reported $ 2.16 $ 2.16 $ 1.91 ========= ========= ========= Diluted - pro forma $ 2.13 $ 2.13 $ 1.88 ========= ========= =========
65 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued New Accounting Pronouncements In August 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets ("FASB No. 144"), which supercedes SFAS No. 121. FASB No. 144 requires that long-lived assets that are to be disposed of by sale be measured at the lower of book value or fair value less cost to sell. FASB No. 144 retains the requirements of SFAS No. 121 regarding impairment loss recognition and measurement. In addition, it requires that one accounting model be used for long-lived assets to be disposed of by sale and broadens the presentation of discontinued operations to include more disposal transactions. Effective January 1, 2002, the Company adopted FASB No. 144. The adoption of FASB No. 144 did not have a material adverse impact on the Company's financial position or results of operations (see Note 5). In April 2002, the FASB issued SFAS No. 145, Rescission of FASB No. 4, 44 and 64, Amendment of FASB No. 13 and Technical Corrections ("FASB No. 145"). This statement eliminates the requirement to report gains and losses from extinguishment of debt as extraordinary unless they meet the criteria of APB Opinion 30. Debt extinguishments that were classified as extraordinary in prior periods presented that do not meet the criteria of APB Opinion 30 shall be reclassified. FASB No. 145 is effective for fiscal years beginning after May 15, 2002. During 2002, the Company elected early adoption of the provisions of FASB No. 145. The impact of adopting this statement did not have a material adverse impact on the Company's financial position or results of operations. In July 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities ("FASB 146"). This statement addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force ("EITF") Issue No. 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring). For purpose of this statement, an exit or disposal activity is initiated when management, having the authority to approve the action, commits to an exit or disposal plan or otherwise disposes of a long-lived asset (disposal group) and, if the activity involves the termination of employees, the criteria for a plan of termination of this statement are met. The provisions of this statement shall be effective for exit or disposal activities initiated after December 31, 2002. The impact of the adoption of FASB No. 146 is not expected to have a material adverse impact on the Company's financial position or results of operations. In November 2002, the FASB issued FASB Interpretation No. 45 ("FIN 45"), Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others (an interpretation of FASB Statements No. 5, 57 and 107 and rescission of FASB Interpretation No. 34). FIN 45 clarifies the requirements of FASB Statement No. 5, Accounting for Contingencies. It requires that upon issuance of a guarantee, the guarantor must recognize a liability for the fair value of the obligation it assumes under the guarantee regardless of whether or not the guarantor receives separate identifiable consideration (i.e., a premium). The Company has adopted the new disclosure requirements, which are effective beginning with 2002 calendar year-end financials. FIN 45's provision for initial recognition and measurement are effective on a prospective basis to guarantees issued or modified after December 31, 2002. The adoption of FIN 45 is not expected to have a material adverse impact on the Company's financial position or results of operations. In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure an amendment of FASB Statement No. 123 ("FASB No. 148"). This statement amends FASB Statement No. 123, Accounting for Stock-Based Compensation, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this statement amends the disclosure requirements of FASB Statement No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The transition and annual disclosure provisions of FASB No. 148 shall be applied for fiscal years ending after December 15, 2002. The new interim disclosure provisions are effective for the first interim period beginning after December 15, 2002. Effective January 1, 2003, the Company will adopt the prospective method provisions of FASB No. 148, which will apply the recognition provisions of FASB No. 123 to all employee awards granted, modified or settled after January 1, 2003. The adoption is not expected to have a material adverse impact on the Company's financial position or results of operations. 66 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued In January 2003, the FASB issued Interpretation No. 46, Consolidation of Variable Interest Entities ("FIN 46"), the primary objective of which is to provide guidance on the identification of entities for which control is achieved through means other than voting rights ("variable interest entities" or "VIEs") and to determine when and which business enterprise should consolidate the VIE (the "primary beneficiary"). This new model applies when either (i) the equity investors (if any) do not have a controlling financial interest or (ii) the equity investment at risk is insufficient to finance that entity's activities without additional financial support. In addition, FIN 46 requires additional disclosures. The Company is assessing the impact of this interpretation on its accounting for its investments in unconsolidated joint ventures. The Company's exposure to losses associated with these unconsolidated joint ventures is limited to its carrying value in these investments (see Note 6). Reclassifications Certain reclassifications of prior years' amounts have been made to conform with the current year presentation. 2. Property Acquisitions, Developments and Other Investments: Operating Properties - During the years 2002, 2001 and 2000 the Company acquired wholly owned real estate interests, in separate transactions, at aggregate costs of approximately $258.7 million, $21.1 million and $62.5 million, respectively. Ground-Up Development Properties - Effective January 1, 2001, the Company elected taxable REIT subsidiary status for its wholly owned development subsidiary, Kimco Developers, Inc. ("KDI"). KDI is primarily engaged in the ground-up development of neighborhood and community shopping centers and the subsequent sale thereof upon completion. During the years 2002, 2001 and 2000 certain subsidiaries and affiliates of the Company expended approximately $148.6 million, $119.4 million and $74.0 million, respectively, in connection with the purchase of land and construction costs related to its ground-up development projects. Other Investments - During October 2002, the Company purchased from various joint venture partners, the remaining interest in a property located in Harrisburg, PA for an aggregate purchase price of $0.5 million. This property is now 100% owned by the Company. During June 2001, the Company purchased from an unaffiliated partner the remaining 20% interest in a property located in Skokie, IL for an aggregate purchase price of approximately $0.8 million. The property is now 100% owned by the Company. Additionally, during June 2001, the Company purchased from an unaffiliated partner the remaining 10% interest in a property located in Smithtown, NY for an aggregate purchase price of approximately $2.5 million. The property is now 100% owned by the Company. During December 2001, the Company purchased the remaining 10% interest in Kimco Select Investments, a New York general partnership for an aggregate price of approximately $1.7 million. Kimco Select Investments was formed in 1997 to provide the Company, through its 90% ownership interest, the opportunity to make investments outside of its core neighborhood and community shopping center business. These property acquisitions and other investments have been funded principally through the application of proceeds from the Company's public unsecured debt issuances, equity offerings and proceeds from mortgage financings (see Notes 10, 11 and 16). 67 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued 3. Dispositions of Real Estate: During 2002, the Company, (i) disposed of, in separate transactions, 12 operating properties for an aggregate sales price of approximately $74.5 million, including the assignment/repayment of approximately $22.6 million of mortgage debt encumbering three of the properties and (ii) terminated five leasehold positions in locations where a tenant in bankruptcy had rejected its lease. These transactions resulted in net gains of approximately $12.8 million (see Note 5). During 2002, KDI sold four of its recently completed projects and eight out-parcels for approximately $128.7 million including the assignment of approximately $17.7 million in mortgage debt encumbering one of the properties. The sales resulted in pre-tax gains of approximately $15.9 million. During 2001, the Company, in separate transactions, disposed of three operating properties (including the sale of a property to KIR) and a portion of another operating property, comprising approximately 0.6 million square feet of GLA. Cash proceeds from these dispositions aggregated approximately $46.7 million which resulted in a net gain of approximately $3.0 million. Cash proceeds from the disposition of the operating property in Elyria, OH, totaling $5.8 million, together with an additional $7.1 million cash investment, was used to acquire an exchange shopping center property located in Lakeland, FL during August 2001. During 2001, KDI sold two of its recently completed projects and five out-parcels for approximately $61.3 million, which resulted in pre-tax profits of $13.4 million. 4. Adjustment of Property Carrying Values: As part of the Company's periodic assessment of its real estate properties with regard to both the extent to which such assets are consistent with the Company's long-term real estate investment objectives and the performance and prospects of each asset, the Company determined in the fourth quarter of 2002, that its investment in four operating properties comprised of an aggregate 0.4 million square feet of GLA with an aggregate net book value of approximately $23.8 million, may not be fully recoverable. Based upon management's assessment of current market conditions and lack of demand for the properties, the Company has reduced its anticipated holding period of these investments. As a result of the reduction in the anticipated holding period, together with a reassessment of the potential future operating income of the properties and the effects of current market conditions, the Company determined that its investment in these assets was not fully recoverable and has recorded an adjustment of property carrying values aggregating approximately $12.5 million. 5. Discontinued Operations and Assets Held for Sale: In August 2001, the FASB issued Statement of Financial Accounting Standard No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets ("FASB 144"). FASB 144 established criteria beyond that previously specified in Statement of Financial Accounting Standard No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of ("FASB 121"), to determine when a long-lived asset is classified as held for sale, and it provides a single accounting model for the disposal of long-lived assets. FASB 144 was effective beginning January 1, 2002. In accordance with FASB 144, the Company now reports as discontinued operations assets held for sale (as defined by FASB 144) and assets sold in the current period. All results of these discontinued operations, are included in a separate component of income on the Consolidated Statements of Income under Discontinued operations. This change has resulted in certain reclassifications of 2001 and 2000 financial statement amounts. 68 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued The components of Income/(loss) from operations related to discontinued operations for each of the three years in the period ended December 31, 2002 are shown below. These include the results of operations through the date of each respective sale for properties sold during 2002 and a full year of operations for those assets classified as held for sale as of December 31, 2002, (dollars in thousands):
2002 2001 2000 -------- -------- -------- Discontinued Operations: Revenues from rental property $ 9,275 $ 18,208 $ 18,070 Rental property expenses (4,455) (4,280) (4,456) -------- -------- -------- Income from property operations 4,820 13,928 13,614 Depreciation and amortization (2,451) (2,492) (2,078) Interest expense (787) (840) (230) Gain on early extinguishment of debt 3,222 -- -- Adjustment of property carrying values (20,500) -- -- Other 16 (299) (206) -------- -------- -------- Income/(loss) from discontinued operating properties (15,680) 10,297 11,100 Gain on disposition of operating properties, net 12,778 -- -- -------- -------- -------- Income/(loss) from discontinued operations $ (2,902) $ 10,297 $ 11,100 ======== ======== ========
During November 2002, the Company disposed of an operating property located in Chicago, IL. Net proceeds from this sale of approximately $8.0 million were accepted by a lender in full satisfaction of an outstanding mortgage loan of approximately $11.5 million. The Company recognized a gain on early extinguishment of debt of approximately $3.2 million. During December 2002, the Company identified two operating properties, comprised of approximately 0.2 million square feet of GLA, as "Held for Sale" in accordance with FASB No. 144. The book value of these properties, aggregating approximately $28.4 million, net of accumulated depreciation of approximately $2.9 million, exceeded their estimated fair value. The Company's determination of the fair value of these properties, aggregating approximately $7.9 million, is based upon executed contracts of sale with third parties less estimated selling costs. As a result, the Company recorded an adjustment of property carrying values of $20.5 million. This adjustment is included, along with the related property operations for the current and comparative years, in the caption Income/(loss) from discontinued operations on the Company's Consolidated Statements of Income. 6. Investment and Advances in Real Estate Joint Ventures: Kimco Income REIT ("KIR") - During 1998, the company formed KIR, an entity that was established for the purpose of investing in high quality real estate properties financed primarily with individual non-recourse mortgages. These properties include, but are not limited to, fully developed properties with strong, stable cash flows from credit-worthy retailers with long-term leases. The Company originally held a 99.99% limited partnership interest in KIR. Subsequent to KIR's formation, the Company sold a significant portion of its original interest to an institutional investor and admitted three other limited partners. As of December 31, 2002, KIR has received total capital commitments of $569.0 million, of which the Company subscribed for $247.0 million and the four limited partners subscribed for $322.0 million. The Company has a 43.3% non-controlling limited partnership interest in KIR and accounts for its investment under the equity method of accounting. During 2002, the limited partners in KIR contributed $55.0 million towards their respective capital commitments, including $23.8 million by the Company. As of December 31, 2002, KIR had unfunded capital commitments of $129.0 million, including $55.9 million from the Company. 69 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued The Company's equity in income from KIR for the years ended December 31, 2002, 2001 and 2000 was approximately $16.3 million, $13.2 million and $9.5 million, respectively. In addition, KIR entered into a master management agreement with the Company, whereby, the Company will perform services for fees related to management, leasing, operations, supervision and maintenance of the joint venture properties. For the years ended December 31, 2002, 2001 and 2000, the Company (i) earned management fees of approximately $4.4 million, $3.3 million and $2.0 million, respectively, (ii) received reimbursement of administrative fees of approximately $1.0 million, $1.4 million and $1.4 million, respectively, and (iii) earned leasing commissions of approximately $0.8 million, $0.3 million and $0.1 million, respectively. During 2002, KIR purchased five shopping center properties, in separate transactions, aggregating approximately 1.8 million square feet of GLA for approximately $213.5 million, including the assumption of approximately $63.1 million of mortgage debt encumbering two of the properties. During July 2002, KIR disposed of a shopping center property in Aurora, IL for an aggregate sales price of approximately $2.4 million, which represented the approximate book value of the property. As of December 31, 2002, the KIR portfolio was comprised of 68 shopping center properties aggregating approximately 14.0 million square feet of GLA located in 21 states. During 2002, KIR obtained individual non-recourse, non-cross collateralized fixed-rate ten year mortgages aggregating approximately $170.3 million on seven of its previously unencumbered properties with rates ranging from 5.95% to 7.38% per annum. The net proceeds were used to finance the acquisition of various shopping center properties. During the year ended December 31, 2001, KIR purchased 12 shopping center properties (including one property from the Company for $37.0 million), in separate transactions, aggregating 2.9 million square feet of GLA for approximately $349.0 million, including the assumption of approximately $40.2 million of mortgage debt. During December 2001, KIR disposed of a shopping center property in Lake Mary, FL for an aggregate sales price of approximately $2.4 million. This disposition resulted in a gain of approximately $0.5 million. Proceeds from this sale were used to acquire an exchange shopping center property. During 2001, KIR obtained individual non-recourse, non-cross collateralized fixed-rate mortgages aggregating approximately $280.0 million on 14 of its previously unencumbered properties with terms ranging from 7 to 10 years and rates ranging from 6.76% to 7.69% per annum. The net proceeds were used to finance the acquisition of various shopping center properties. KIR maintains a secured revolving credit facility with a syndicate of banks, which is scheduled to expire in November 2003. This facility is collateralized by the unfunded subscriptions of certain partners, including those of the Company. The facility has an aggregate availability of up to $100.0 million based upon the amount of unfunded subscription commitments of certain partners. During January 2003, the aggregate availability under the credit facility was reduced to $90.0 million. Under the terms of the facility, funds may be borrowed for general corporate purposes, including the acquisition of institutional quality properties. Borrowings under the facility accrue interest at LIBOR plus 0.80%. As of December 31, 2002, there was $15.0 million outstanding under this facility. RioCan Investments - During October 2001, the Company formed a joint venture (the "RioCan Venture") with RioCan Real Estate Investment Trust ("RioCan") in which the Company has a 50% non-controlling interest, to acquire retail properties and development projects in Canada. The acquisition and development projects are to be sourced and managed by RioCan and are subject to review and approval by a joint oversight committee consisting of RioCan management and the Company's management personnel. The Company has committed a total equity investment of up to CAD $250.0 million Canadian dollars ("CAD") for the acquisition of retail properties and development projects. Capital contributions will only be required as suitable opportunities arise and are agreed to by the Company and RioCan. During 2002, the RioCan Venture acquired 24 shopping center properties and four development properties, in separate transactions, comprising approximately 5.7 million square feet of GLA for an aggregate purchase price of approximately CAD $683.7 million (approximately USD $435.8 million) including the assumption of approximately CAD $321.5 million (approximately USD $203.1 million) in mortgage debt encumbering 13 of the properties. 70 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued During October 2001, the RioCan Venture acquired a portfolio of four shopping center properties located in British Columbia for an aggregate purchase price of approximately CAD $170.0 million (approximately USD $107.8 million) including the assumption of approximately CAD $108.5 million (approximately USD $68.8 million) in mortgage debt. As of December 31, 2002, the RioCan Venture was comprised of 28 operating properties and four development properties consisting of approximately 6.7 million square feet of GLA. Kimco / G.E. Joint Venture - During 2001, the Company formed a joint venture (the "Kimco Retail Opportunity Portfolio" or "KROP") with GE Capital Real Estate ("GECRE"), in which the Company has a 20% non-controlling interest and manages the portfolio. The purpose of this joint venture is to acquire established high growth potential retail properties in the United States. Total capital commitments to KROP from GECRE and the Company are for $200.0 million and $50.0 million, respectively, and such commitments are funded proportionately as suitable opportunities arise and are agreed to by GECRE and the Company. During 2002, GECRE and the Company contributed approximately $39.0 million and $9.8 million, respectively, towards their capital commitments. Additionally, GECRE and the Company provided short-term interim financing for all acquisitions made by KROP without a mortgage in place at the time of acquisition. All such financing bears interest at rates ranging from Libor plus 4.0% to 4.25% and have maturities of less than one year. As of December 31, 2002, outstanding balances relating to short-term interim financing is $17.3 million each for GECRE and the Company. During 2002, KROP purchased 16 shopping centers aggregating 1.6 million square feet of GLA for approximately $177.8 million, including the assumption of approximately $29.5 million of mortgage debt encumbering three of the properties. During October 2002, KROP disposed of a shopping center in Columbia, MD for an aggregate sales price of approximately $2.9 million, which resulted in a gain of approximately $0.7 million. During 2002, KROP obtained a cross-collateralized mortgage with a five-year term aggregating $73.0 million on eight properties with an interest rate of Libor plus 1.8%. Upon the sale of one of the collateralized properties, $1.9 million was repaid during 2002. In order to mitigate the risks of interest rate fluctuations associated with this variable rate obligation, KROP entered into an interest rate cap agreement for the notional value of this mortgage. Other Real Estate Joint Ventures - The Company and its subsidiaries have investments in and advances to various other real estate joint ventures. These joint ventures are engaged primarily in the operation of shopping centers which are either owned or held under long-term operating leases. During 2002, the Company acquired seven former Service Merchandise locations, in separate transactions, through a venture in which the Company has a 42.5% non-controlling interest. These properties were purchased for an aggregate purchase price of approximately $20.9 million. In November 2002, the joint venture obtained mortgages on two of these locations for approximately $7.0 million. The venture has signed leases for six of these locations and is actively negotiating with other retailers to lease the remaining location. During July 2002, the Company acquired a property located in Kalamazoo, MI, through a joint venture in which the Company has a 50% non-controlling interest. The property was purchased for an aggregate purchase price of approximately $6.0 million. 71 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued During December 2002, the Company acquired an out-parcel of an existing property located in Tampa, Fl, through a joint venture in which the Company has a 50% non-controlling interest. The property was purchased for an aggregate purchase price of approximately $4.9 million. Additionally, during 2002, the Company, in separate transactions, disposed of two operating properties through a joint venture in which the Company has a 50% non-controlling interest. The properties were located in Tempe, AZ and Glendale, AZ and sold for approximately $19.2 million and $1.7 million, respectively. During March 2001, the Company exercised its option to acquire a 50% non-controlling interest in a joint venture from KC Holdings, Inc. ("KC Holdings"), an entity formed in connection with the Company's initial public stock offering in November 1991. This joint venture consists of three shopping center properties located in Buffalo, NY, comprising approximately 0.4 million square feet of GLA. The joint venture was acquired for an aggregate option price of approximately $3.5 million, paid approximately $2.7 million in cash and $0.8 million in shares of the Company's common stock (29,638 shares valued at $27.67 per share). The members of the Company's Board of Directors who are not also shareholders of KC Holdings, unanimously approved the Company's purchase of this joint venture investment. Summarized financial information for the recurring operations of these real estate joint ventures, is as follows (in millions): December 31, ------------------------- 2002 2001 -------- -------- Assets: Real estate, net $2,511.8 $1,676.4 Other assets 132.5 94.1 -------- -------- $2,644.3 $1,770.5 ======== ======== Liabilities and Partners' Capital: Notes Payable $ 49.6 $ 15.0 Mortgages payable 1,720.6 1,189.5 Other liabilities 116.6 72.6 Minority Interest 10.8 14.8 Partners' capital 746.7 478.6 -------- -------- $2,644.3 $1,770.5 ======== ========
Year Ended December 31, ----------------------------------------- 2002 2001 2000 ------- ------- ------- Revenues from rental property $ 314.8 $ 209.4 $ 135.0 ------- ------- ------- Operating expenses (78.2) (52.9) (32.8) Interest (108.0) (74.5) (44.8) Depreciation and amortization (41.6) (31.0) (19.8) Other, net (4.5) (3.0) (1.6) ------- ------- ------- (232.3) (161.4) (99.0) ------- ------- ------- Net income $ 82.5 $ 48.0 $ 36.0 ======= ======= =======
Other liabilities in the accompanying Consolidated Balance Sheets include accounts with certain real estate joint ventures totaling approximately $5.3 million and $8.7 million at December 31, 2002 and 2001, respectively. The Company and its subsidiaries have varying equity interests in these real estate joint ventures, which may differ from their proportionate share of net income or loss recognized in accordance with generally accepted accounting principles. 72 7. Other Real Estate Investments: Ward Venture - During March 2001, through a taxable REIT subsidiary, the Company formed a real estate joint venture, (the "Ward Venture") in which the Company has a 50% interest, for purposes of acquiring asset designation rights for substantially all of the real estate property interests of the bankrupt estate of Montgomery Ward LLC and its affiliates. These asset designation rights have provided the Ward Venture the ability to direct the ultimate disposition of the 315 fee and leasehold interests held by the bankrupt estate. The asset designation rights expired in August 2002 for the leasehold positions and expire in December 2004 for the fee owned locations. During the marketing period, the Ward Venture will be responsible for all carrying costs associated with the properties until the property is designated to a user. As of December 31, 2002, there were 12 properties which continue to be marketed. During 2002, the Ward Venture completed transactions on 32 properties, and the Company recognized pre-tax profits of approximately $11.3 million. During 2001, the Ward Venture completed transactions on 271 properties, and the Company recognized pre-tax profits from the Ward Venture of approximately $34.6 million. Leveraged Lease - During June 2002, the Company acquired a 90% equity participation interest in an existing leveraged lease of 30 properties. The properties are leased under a long-term bond-type net lease whose primary term expires in 2016, with the lessee having certain renewal option rights. The Company's cash equity investment was approximately $4.0 million. This equity investment is reported as a net investment in leveraged lease in accordance with FASB No. 13 (as amended). During 2002, four of these properties were sold whereby the proceeds from the sales were used to paydown the mortgage debt by approximately $9.6 million. As of December 31, 2002, the remaining 26 properties were encumbered by third-party non-recourse debt of approximately $86.0 million that is scheduled to fully amortize during the primary term of the lease from a portion of the periodic net rents receivable under the net lease. As an equity participant in the leveraged lease, the Company has no general obligation for principal or interest payments on the debt, which is collateralized by a first mortgage lien on the properties and collateral assignment of the lease. Accordingly, this obligation has been offset against the related net rental receivable under the lease. The net investment in leveraged lease reflects the original cash investment adjusted by remaining net rentals of approximately $94.8 million, estimated unguaranteed residual value of approximately $65.2 million, non-recourse mortgage debt of approximately ($86.0) million and unearned and deferred income of approximately ($70.0) million. Kmart Venture - During July 2002, the Company formed the Kmart Venture in which the Company has a 60% controlling participation for purposes of acquiring asset designation rights for 54 former Kmart locations. The total commitment to Kmart by the Kmart Venture, prior to the profit sharing arrangement commencing, is approximately $43.0 million. As of December 31, 2002, the Kmart Venture has completed transactions on 35 properties and has funded the total commitment of approximately $43.0 million to Kmart. Kimsouth - During November 2002, the Company, through its taxable REIT subsidiary, together with Prometheus Southeast Retail Trust, completed the merger and privatization of Konover Property Trust, which has been renamed Kimsouth Realty, Inc., ("Kimsouth"). The Company acquired 44.5% of the common stock of Kimsouth, which consisted primarily of 38 retail shopping center properties comprising approximately 17.4 million square feet of GLA. Total acquisition value was approximately $280.9 million including approximately $216.2 million in mortgage debt. The Company's investment strategy with respect to Kimsouth includes re-tenanting, repositioning and disposition of the properties. During December 2002, Kimsouth sold its joint venture interest in one property to its joint venture partner for net proceeds of approximately $4.6 million and disposed of a single property for net proceeds of approximately $2.9 million. 73 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued Selected financial information for Kimsouth as of December 31, 2002, is as follows: real estate, net of accumulated depreciation, $282.3 million; other assets $38.3 million; mortgages payable $185.0 million; other liabilities $3.6 million. Preferred Equity Capital - During 2002, the Company established a preferred equity program, which provides capital to developers and owners of shopping centers. During 2002, the Company provided, in separate transactions, an aggregate of approximately $25.6 million in investment capital to developers and owners of nine shopping centers. Investment in Retail Store Leases - The Company has interests in various retail store leases relating to the anchor store premises in neighborhood and community shopping centers. These premises have been sublet to retailers who lease the stores pursuant to net lease agreements. Income from the investment in these retail store leases during the years ended December 31, 2002, 2001 and 2000 was approximately $0.8 million, $3.2 million and $4.0 million, respectively. These amounts represent sublease revenues during the years ended December 31, 2002, 2001 and 2000 of approximately $13.9 million, $16.8 million and $19.0 million, respectively, less related expenses of $11.7 million, $12.2 million and $13.6 million, respectively, and an amount, which in management's estimate, reasonably provides for the recovery of the investment over a period representing the expected remaining term of the retail store leases. The Company's future minimum revenues under the terms of all noncancellable tenant subleases and future minimum obligations through the remaining terms of its retail store leases, assuming no new or renegotiated leases are executed for such premises, for future years are as follows (in millions): 2003, $12.2 and $9.5; 2004, $10.7 and $8.5; 2005, $8.8 and $7.3; 2006, $7.8 and $5.8; 2007, $5.2 and $3.9 and thereafter, $6.5 and $4.2, respectively. 8. Mortgages and Other Financing Receivables: During August 2001, the Company, through a joint venture in which the Company had a 50% interest, provided $27.5 million of debtor-in-possession financing (the "Ames Loan") to Ames Department Stores, Inc. ("Ames"), a retailer in bankruptcy. This loan bore interest at prime plus 6.0%, was collateralized by all real estate owned by Ames and was scheduled to mature in August 2003. During September 2002, the Ames Loan, was restructured as a two-year $100.0 million secured revolving loan of which the Company has a 40% interest. This revolving loan is collateralized by all of Ames' real estate interests. The loan bears interest at 8.5% per annum and provides for contingent interest upon the successful disposition of the Ames properties. The outstanding balance on the revolving loan at December 31, 2002 was approximately $4.1 million. During March 2002, the Company provided a $15.0 million three-year loan to Gottchalks, Inc., at an interest rate of 12.0% per annum collateralized by three properties. The Company receives principal and interest payment on a monthly basis. As of December 31, 2002, the outstanding loan balance was approximately $14.3 million. During March 2002, the Company provided a $50.0 million ten-year loan to Shopko Stores Inc., at an interest rate of 11.0% per annum collateralized by 15 properties. The Company receives principal and interest payments on a monthly basis. As of December 31, 2002, the outstanding loan balance was approximately $49.8 million. During May 2002, the Company provided a $15.0 million three-year loan to Frank's Nursery & Crafts, Inc. ("Frank's"), at an interest rate of 10.25% per annum collateralized by 40 real estate interests. Interest is payable quarterly in arrears. An additional $7.5 million revolving loan at an interest rate of 10.25% per annum was also established. As of December 31, 2002 there were no borrowings outstanding on the additional revolving loan. As an inducement to make these loans, Frank's issued the Company approximately 4.4 million warrants with an exercise price of $1.15 per share. 74 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued 9. Cash and Cash Equivalents: Cash and cash equivalents (demand deposits in banks, commercial paper and certificates of deposit with original maturities of three months or less) includes tenants' security deposits, escrowed funds and other restricted deposits approximating $0.1 million at December 31, 2002 and 2001. Cash and cash equivalent balances may, at a limited number of banks and financial institutions, exceed insurable amounts. The Company believes it mitigates its risks by investing in or through major financial institutions. Recoverability of investments is dependent upon the performance of the issuers. 10. Notes Payable: The Company has implemented a medium-term notes ("MTN") 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, development and redevelopment costs, and (ii) managing the Company's debt maturities. As of December 31, 2002, a total principal amount of $507.25 million, in senior fixed-rate MTNs had been issued under the MTN program primarily for the acquisition of neighborhood and community shopping centers, the expansion and improvement of properties in the Company's portfolio and the repayment of certain debt of the Company. These fixed-rate notes had maturities ranging from five to twelve years at the time of issuance and bear interest at rates ranging from 5.98% to 7.91%. Interest on these fixed-rate senior unsecured notes is payable semi-annually in arrears. During July 2002, the Company issued an aggregate $102.0 million of unsecured debt under its MTN program. These issuances consisted of (i) an $85.0 million floating-rate MTN which matures in August 2004 and bears interest at Libor plus 0.50% per annum and (ii) a $17.0 million fixed-rate MTN which matures in July 2012 and bears interest at 5.98% per annum. The proceeds from these MTN issuances were used toward the repayment of a $110.0 million floating-rate MTN which matured in August 2002. In addition, the Company entered into an interest rate swap agreement on the $85.0 million floating-rate MTN which effectively fixed the interest rate at 2.3725% per annum until November 2003. During November 2002, the Company issued $35.0 million of 4.961% fixed-rate Senior Notes due 2007 (the "2007 Notes"). Interest on the 2007 Notes is payable semi-annually in arrears. Net proceeds from the issuance totaling approximately $34.9 million, after related transaction costs of approximately $0.1 million, were primarily used to repay outstanding borrowings on the Company's unsecured credit facilities. Also, during November 2002, the Company issued $200.0 million of 6% fixed-rate Senior Notes due 2012 (the "2012 Notes"). Interest on the 2012 Notes is payable semi-annually in arrears. The Notes were sold at 99.79% of par value. Net proceeds from the issuance totaling approximately $198.3 million, after related transaction costs of approximately $1.3 million, were primarily used to repay outstanding borrowings on the Company's unsecured credit facilities. As of December 31, 2002, the Company has a total principal amount of $570.0 million, in fixed-rate unsecured senior notes. These fixed-rate notes have maturities ranging from 2003 through 2009 and bear interest at rates ranging from 4.96% to 7.50%. Interest on these fixed-rate senior unsecured notes is payable semi-annually in arrears. 75 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued As of December 31, 2002, the Company had outstanding $100.0 million of remarketed reset notes, which mature in August 2008. The interest rate spread applicable to each period is determined pursuant to a remarketing agreement between the Company and a financial institution. The current interest rate is LIBOR plus 1.25% per annum, and interest is payable quarterly in arrears. During November 2002, the Company entered into an interest rate swap agreement which effectively fixed the interest rate at 3.03% per annum through August 2003. In accordance with the terms of the Indenture, as amended, pursuant to which the Company's senior, unsecured notes have been issued, the Company is (a) subject to maintaining certain maximum leverage ratios on both unsecured senior corporate and secured debt, minimum debt service coverage ratios and minimum equity levels, and (b) restricted from paying dividends in amounts that exceed by more than $26.0 million the funds from operations, as defined, generated through the end of the calendar quarter most recently completed prior to the declaration of such dividend; however, this dividend limitation does not apply to any distributions necessary to maintain the Company's qualification as a REIT providing the Company is in compliance with its total leverage limitations. During August 2000, the Company established a $250.0 million, unsecured revolving credit facility (the "Credit Facility") with a group of banks which is scheduled to expire in August 2003. The Company intends to renew the Credit Facility prior to the maturity date. This Credit Facility has made available funds for general corporate purposes, including the funding of property acquisitions, development and redevelopment costs. Interest on borrowings accrues at a spread (currently 0.65%) to LIBOR or money-market rates, as applicable, which fluctuates in accordance with changes in the Company's senior debt ratings. The Company's senior debt ratings are currently A-/stable from Standard & Poors and Baa1/stable from Moody's Investor Services. As part of this Credit Facility, the Company has a competitive bid option where the Company may auction up to $100.0 million of its requested borrowings to the bank group. This competitive bid option provides the Company the opportunity to obtain pricing below the currently stated spread to LIBOR of 0.65%. A facility fee of 0.15% per annum is payable quarterly in arrears. Pursuant to the terms of the agreement, the Company, among other things, is (a) subject to maintaining certain maximum leverage ratios on both unsecured senior corporate and secured debt, a minimum debt service coverage ratio and minimum unencumbered asset and equity levels, and (b) restricted from paying dividends in amounts that exceed 90% of funds from operations, as defined. As of December 31, 2002, there was $40.0 million outstanding under this Credit Facility. During July 2002, the Company further enhanced its liquidity position by establishing an additional $150.0 million unsecured revolving credit facility. During December 2002, the Company paid down the outstanding balance and terminated this facility. The scheduled maturities of all unsecured senior notes payable as of December 31, 2002 are approximately as follows (in millions): 2003, $140.0; 2004, $185.0; 2005, $200.25; 2006, $85.0; 2007, $195.0 and thereafter, $497.0. 11. Mortgages Payable: As part of the Company's strategy to reduce its exposure to Kmart Corporation, the Company had previously encumbered seven Kmart sites with individual non-recourse mortgages aggregating approximately $70.8 million. As a result of the Kmart bankruptcy filing in January 2002 and the subsequent rejection of leases including these encumbered sites, the Company, during July 2002, had suspended debt service payments on these loans and began active negotiations with the respective lenders. During December 2002, the Company reached agreement with certain lenders in connection with four of these locations. The Company paid approximately $24.2 million in full satisfaction of the loans encumbering these properties which aggregated $46.5 million and the Company recognized a gain on early extinguishment of debt of approximately $22.3 million (see Note 5). During December 2002, the Company re-tenanted one location and has brought the mortgage loan encumbering this property current. During February 2003, the Company reached agreement with the lender in connection with the two remaining encumbered locations. The Company paid approximately $8.3 million in full satisfaction of these loans which aggregated approximately $14.7 million and will recognize a gain on early extinguishment of debt of approximately $6.2 million during the first quarter of 2003. During 2001, the Company obtained four individual non-recourse fixed-rate mortgage loans providing aggregate proceeds to the Company of approximately $51.2 million. These ten-year loans mature in 2011 and have effective interest rates ranging from 7.31% to 7.64% per annum. 76 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued Mortgages payable, collateralized by certain shopping center properties and related tenants' leases, are generally due in monthly installments of principal and/or interest which mature at various dates through 2023. Interest rates range from approximately 6.50% to 9.50% (weighted average interest rate of 7.82% as of December 31, 2002). The scheduled maturities of all mortgages payable as of December 31, 2002, are approximately as follows (in millions):2003, $0.0; 2004, $8.8; 2005, $14.6; 2006, $33.8; 2007, $11.1 and thereafter, $162.5. Two of the Company's properties are encumbered by approximately $11.1 million in floating-rate, tax-exempt mortgage bond financing. The rates on the bonds are reset annually, at which time bondholders have the right to require the Company to repurchase the bonds. The Company has engaged a remarketing agent for the purpose of offering for resale those bonds that are tendered to the Company. All bonds tendered for redemption in the past have been remarketed and the Company has arrangements, including letters of credit, with banks to both collateralize the principal amount and accrued interest on such bonds and to fund any repurchase obligations. 12. Construction Loans Payable: During 2002, the Company obtained construction financing on eight ground-up development projects for an aggregate loan amount of up to $119.8 million, of which approximately $38.9 million has been funded as of December 31, 2002. These loans have maturities ranging from 18 to 36 months and a weighted average interest rate of 4.38% at December 31, 2002. The scheduled maturities of all construction loans payable as of December 31, 2002, are approximately as follows (in millions): 2003, $7.3; 2004, $30.2; and 2005, $6.5. 13. KC Holdings: To facilitate the Company's November 1991 initial public stock offering (the "IPO"), 46 shopping center properties and certain other assets, together with indebtedness related thereto, were transferred to subsidiaries of KC Holdings, a newly-formed corporation that is owned by the stockholders of the Company prior to the IPO. The Company was granted ten-year, fixed-price acquisition options (the "Acquisition Options") to reacquire the real estate assets owned by KC Holdings' subsidiaries, subject to any liabilities outstanding with respect to such assets at the time of an option exercise. During the Acquisition Options period, which expired in November 2001, KC Holdings' subsidiaries had conveyed 29 shopping centers and a 50% interest in a joint venture consisting of three properties back to the Company. Additionally, KC Holdings' subsidiaries disposed of ten additional centers in transactions with third parties. The members of the Company's Board of Directors who are not also shareholders of KC Holdings unanimously approved the purchase of each of these properties that have been reacquired by the Company from KC Holdings. The Company manages three of KC Holdings' four remaining shopping center properties pursuant to a management agreement (See Note 17). 14. Fair Value Disclosure of Financial Instruments: All financial instruments of the Company are reflected in the accompanying Consolidated Balance Sheets at amounts which, in management's estimation based upon an interpretation of available market information and valuation methodologies (including discounted cash flow analyses with regard to fixed-rate debt) considered appropriate, reasonably approximate their fair values except those listed below for which fair values are reflected. Such fair value estimates are not necessarily indicative of the amounts that would be realized upon disposition of the Company's financial instruments. The following are financial instruments for which the Company's estimate of fair value differs from the carrying amounts (in thousands): December 31, 2002 Carrying Amounts Fair Value --------------- --------- Notes payable $1,302,250 $1,353,884 Mortgages payable $ 230,760 $ 282,361 77 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued 15. Financial Instruments - Derivatives and Hedging: The Company is exposed to the effect of changes in interest rates, foreign currency exchange rate fluctuations and market value fluctuations of equity securities. The Company limits these risks by following established risk management policies and procedures including the use of derivatives. The principal financial instruments currently used by the Company are interest rate swaps, foreign currency exchange forward contracts, cross currency swaps and warrant contracts. The Company, from time to time, hedges the future cash flows of its floating-rate debt instruments to reduce exposure to interest rate risk principally through interest rate swaps with major financial institutions. The Company has interest-rate swap agreements on its $85.0 million floating-rate MTN and on its $100.0 million floating-rate remarketed reset notes, which have been designated and qualified as cash flow hedges. The Company has determined that these swap agreements are highly effective in offsetting future variable interest cash flows related to the Company's debt portfolio. For the year ended December 31, 2002, the change in the fair value of the interest rate swaps was $3.3 million which was recorded in Other Comprehensive Income ("OCI") a component of stockholders' equity, with a corresponding liability reduction for the same amount. During 2002, the Company entered into foreign currency forward contracts on its Canadian investment in marketable securities in the amount of approximately CAD $31.2 million (approximately USD $19.9 million). The Company has designated these foreign currency forward contracts as fair value hedges. The Company expects these forward contracts to be highly effective in limiting its exposure to the variability in the fair value of its Canadian investments as it relates to changes in the exchange rate. The gain or loss on the forward contracts will be recognized currently in earnings and the gain or loss on the Canadian investments attributable to changes in the exchange rate will be recognized currently in earnings and shall adjust the carrying amount of the hedged investments. As of December 31, 2002, the Company had foreign currency forward contracts on its Canadian investments in real estate aggregating approximately CAD $173.3 million (approximately USD $110.3 million). In addition, the Company had foreign currency forward contracts and a cross currency swap aggregating $383.7 million pesos ("MXN")(approximately USD $35.7 million) on its Mexican real estate investments. The Company has designated these foreign currency agreements as hedges of the foreign currency exposure of its net investment in Canadian and Mexican real estate operations. The Company believes that these agreements are highly effective in reducing the exposure to fluctuations in the exchange rate. The gains and losses on these net investment hedges are recorded in OCI with a corresponding asset or liability for the same amount. Similarly, the foreign currency translation gains and losses on the Canadian and Mexican investments attributable to changes in the exchange rate will also be recorded in OCI. During 2001, the Company acquired warrants to purchase the common stock of a Canadian REIT. The Company has designated the warrants as a cash flow hedge of the variability in expected future cash outflows upon purchasing the common stock. The Company has determined the hedged cash outflow is probable and expected to occur prior to the expiration date of the warrants. The Company has determined that the warrants are fully effective. For the year ended December 31, 2002, the change in fair value of the warrants was a loss of approximately $0.1 million which was recorded in OCI with a corresponding asset for the same amount. The following table summarized the notional values and fair values of the Company's derivative financial instruments as of December 31, 2002:
Fair Value Hedge Type Notional Value Rate Maturity (in millions) ---------- -------------- ---- -------- ------------- Interest rate swap - cash flow $185.0 million 1.78% - 8/03 - ($0.6) 1.8725% 11/03 Foreign currency forwards - fair value CAD $31.2 million 1.5882 - 9/03 - 4/05 $0.1 1.5918 Warrants - cash flow 2,500,000 shares of CAD 9/06 $2.3 common stock $11.02 Foreign currency forwards - net CAD $173.3 million 1.5527 - 1/05 - 8/05 $1.3 investment 1.6194 Foreign currency forwards - net MXN $243.8 million 10.57 - 9/06 ($0.5) investment 12.14 MXN cross currency swap MXN $139.9 million 7.227 10/07 ($0.4)
78 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued As of December 31, 2002, these derivative instruments were reported at their fair value as other liabilities of $1.5 million and other assets of $3.7 million. During the next 12 months, the Company expects to reclassify to earnings as expense approximately $0.6 million of the current balance in accumulated OCI primarily related to the fair value of the interest rate swaps. 16. Preferred Stock, Common Stock and DownREIT Unit Transactions: During October 2002, the Company acquired an interest in a shopping center property located in Daly City, CA valued at $80.0 million through the issuance of approximately 2.4 million downREIT units (the "Units") which are convertible at a ratio of 1:1 into the Company's common stock. The downREIT unit holder has the right to convert the Units anytime after one year. In addition, the Company has the right to mandatorily require a conversion after ten years. If at the time of conversion the common stock price for the 20 previous trading days is less than $33.57 per share the unit holder would be entitled to additional shares, however, the maximum number of additional shares is limited to 251,966 based upon a floor common stock price of $30.36. The Company has the option to settle the conversion in cash. Dividends on the Units are paid quarterly at the rate of the Company's common stock dividend multiplied by 1.1057. The value of the units is included in Minority interest in partnerships on the accompanying Consolidated Balance Sheets. During March 2001, the Company issued 29,638 shares of common stock at $27.67 per share in connection with the exercise of its option to acquire a 50% interest in a joint venture consisting of three shopping center properties from KC Holdings. During November 2001, the Company completed a primary public stock offering of 2,250,000 shares of common stock priced at $32.85 per share. The net proceeds from this sale of common stock, totaling approximately $70.1 million (after related transaction costs of $3.8 million) was used primarily to invest equity capital in a new joint venture formed with G.E. Capital Real Estate and for additional equity capital in KIR (see Note 6). During December 2001, the Company completed a primary public stock offering of 1,500,000 shares of common stock priced at $33.57 per share. The net proceeds from this sale of common stock, totaling approximately $47.6 million (after related transaction costs of $2.7 million) was used for general corporate purposes, including (i) the investment of additional equity capital in KIR (see Note 6) and (ii) the development, redevelopment and expansion of properties in the Company's portfolio. Additionally, during November 2001, the Company announced the redemption of all outstanding depositary shares of the Company's 7-1/2% Class D Cumulative Convertible Preferred Stock (the "Class D Preferred Stock") in exchange for shares of the Company's common stock. The Board of Directors set January 3, 2002 as the mandatory redemption date on which all outstanding depositary shares of Class D Preferred Stock would be redeemed. Holders of the Class D Preferred Stock on the redemption date received 0.93168 shares of the Company's common stock, as adjusted for the Company's three-for-two common stock split, for each depositary share redeemed. During 2001, 3,258,642 depositary shares of the Class D Preferred Stock were voluntarily converted to common stock by the holders. On January 3, 2002, the remaining 923,900 depositary shares of the Class D Preferred Stock were redeemed for common stock by the Company and a final dividend payment of 43.4680 cents per class D Depositary share was paid on January 15, 2002. At December 31, 2002, the Company had outstanding 3,000,000 Depositary Shares (the "Class A Depositary Shares"), each such Class A Depositary Share representing a one-tenth fractional interest of a share of the Company's 7-3/4% Class A Cumulative Redeemable Preferred Stock, par value $1.00 per share (the "Class A Preferred Stock"), 2,000,000 Depositary Shares (the "Class B Depositary Shares"), each such Class B Depositary Share representing a one-tenth fractional interest of a share of the Company's 8-1/2% Class B Cumulative Redeemable Preferred Stock, par value $1.00 per share (the "Class B Preferred Stock") and 4,000,000 Depositary Shares (the "Class C Depositary Shares"), each such Class C Depositary Share representing a one-tenth fractional interest of a share of the Company's 8-3/8% Class C Cumulative Redeemable Preferred Stock, par value $1.00 per share (the "Class C Preferred Stock"). 79 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued Dividends on the Class A Depositary Shares are cumulative and payable quarterly in arrears at the rate of 7-3/4% per annum based on the $25.00 per share initial offering price, or $1.9375 per depositary share. The Class A Depositary Shares are redeemable, in whole or in part, for cash on or after September 23, 1998 at the option of the Company, at a redemption price of $25 per depositary share, plus any accrued and unpaid dividends thereon. The Class A Depositary Shares are not convertible or exchangeable for any other property or securities of the Company. The Class A Preferred Stock (represented by the Class A Depositary Shares outstanding) ranks pari passu with the Company's Class B Preferred Stock, and Class C Preferred Stock as to voting rights, priority for receiving dividends and liquidation preferences as set forth below. Dividends on the Class B Depositary Shares are cumulative and payable quarterly in arrears at the rate of 8-1/2% per annum based on the $25.00 per share initial offering price, or $2.125 per depositary share. The Class B Depositary Shares are redeemable, in whole or in part, for cash on or after July 15, 2000 at the option of the Company at a redemption price of $25.00 per depositary share, plus any accrued and unpaid dividends thereon. The redemption price of the Class B 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 B Depositary Shares are not convertible or exchangeable for any other property or securities of the Company. The Class B Preferred Stock (represented by the Class B Depositary Shares outstanding) ranks pari passu with the Company's Class A Preferred Stock, and Class C Preferred Stock as to voting rights, priority for receiving dividends and liquidation preferences as set forth below. 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 $25.00 per share initial offering price, or $2.0938 per depositary share. The Class C Depositary Shares are redeemable, in whole or in part, for cash on or after April 15, 2001 at the option of the Company at a redemption price of $25.00 per depositary 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 Class A Preferred Stock and Class B Preferred Stock as to voting rights, priority for receiving dividends and liquidation preferences as set forth below. Voting Rights - As to any matter on which the Class A Preferred Stock, Class B Preferred Stock, and Class C Preferred Stock (collectively, the "Preferred Stock") may vote, including any action by written consent, each share of Preferred Stock shall be entitled to 10 votes, each of which 10 votes may be directed separately by the holder thereof. With respect to each share of Preferred Stock, the holder thereof may designate up to 10 proxies, with each such proxy having the right to vote a whole number of votes (totaling 10 votes per share of Preferred Stock). As a result, each Class A, each Class B, and each Class C Depositary Share is entitled to one vote. Liquidation Rights - In the event of any liquidation, dissolution or winding up of the affairs of the Company, the Preferred Stock holders are entitled to be paid, out of the assets of the Company legally available for distribution to its stockholders, a liquidation preference of $250.00 per share ($25.00 per Class A, Class B, and Class C Depositary Share, respectively), plus an amount equal to any accrued and unpaid dividends to the date of payment, before any distribution of assets is made to holders of the Company's common stock or any other capital stock that ranks junior to the Preferred Stock as to liquidation rights. 80 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued 17. Transactions with Related Parties: During 2002, the Company, along with its joint venture partner provided KROP short-term interim financing for all acquisitions by KROP for which a mortgage was not in place at the time of closing. All such financing bears interest at rates ranging from Libor plus 4.0% and 4.25% and have maturities of less than one year. As of December 31, 2002, KROP had outstanding short-term interim financing to GECRE and the Company totaling $17.3 million each. The Company earned $0.8 million during 2002 related to such interim financing. The Company provides management services for shopping centers owned principally by affiliated entities and various real estate joint ventures in which certain stockholders of the Company have economic interests. Such services are performed pursuant to management agreements which provide for fees based upon a percentage of gross revenues from the properties and other direct costs incurred in connection with management of the centers. The Consolidated Statements of Income include management fee income from KC Holdings of less than $0.4 million for each of the years ended December 31, 2002, 2001 and 2000, respectively. In November 1991 the Company was granted Acquisition Options to reacquire the real estate assets owned by KC Holdings' subsidiaries. The remaining Acquisition Options expired in November 2001 with regard to the real estate assets which the Company had not reacquired. In March 2001, the Company exercised its option to acquire a 50% interest in a joint venture from KC Holdings. The joint venture consists of three shopping center properties located in Buffalo, NY. This joint venture interest was acquired for an aggregate option price of approximately $3.5 million, paid approximately $2.7 million in cash and $0.8 million in shares of the Company's common stock (29,638 shares valued at $27.67 per share). Reference is made to Notes 6, 13, and 16 for additional information regarding transactions with related parties. 18. Commitments and Contingencies: The Company and its subsidiaries are primarily engaged in the operation of shopping centers which are either owned or held under long-term leases which expire at various dates through 2087. The Company and its subsidiaries, in turn, lease premises in these centers to tenants pursuant to lease agreements which provide for terms ranging generally from 5 to 25 years and for annual minimum rentals plus incremental rents based on operating expense levels and tenants' sales volumes. Annual minimum rentals plus incremental rents based on operating expense levels comprised approximately 99% of total revenues from rental property for each of the three years ended December 31, 2002, 2001 and 2000, respectively. The future minimum revenues from rental property under the terms of all noncancellable tenant leases, assuming no new or renegotiated leases are executed for such premises, for future years are approximately as follows (in millions): 2003, $335.3; 2004, $309.7; 2005, $282.2; 2006, $250.8; 2007, $222.0 and thereafter, $1,333.3. Minimum rental payments under the terms of all noncancellable operating leases pertaining to its shopping center portfolio for future years are approximately as follows (in millions): 2003, $10.9; 2004, $10.8; 2005, $10.1; 2006, $9.5; 2007, $9.0 and thereafter, $125.1. The Company has issued letters of credit in connection with the collateralization of tax-exempt mortgage bonds, completion guarantees for certain construction projects, and guaranty of payment related to the Company's insurance program. These letters of credit aggregate approximately $14.9 million. Additionally, the RioCan Venture, an entity in which the Company holds a 50% non-controlling interest, has a CAD $5.0 million (approximately USD $3.2 million) letter of credit facility. This facility is jointly guaranteed by RioCan and the Company and has approximately CAD $1.0 million (approximately USD $0.6 million) outstanding as of December 31, 2002 relating to various development projects. 81 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued During 2002, the limited partners in KIR, an entity in which the Company holds a 43.3% non-controlling interest, contributed $55.0 million towards their respective capital commitments, including $23.8 million by the Company. As of December 31, 2002, KIR had unfunded capital commitments of $129.0 million, including $55.9 million from the Company. KIR maintains a secured revolving credit facility with a syndicate of banks, which is scheduled to expire in November 2003. This facility is collateralized by the unfunded subscriptions of certain partners, including those of the Company. The facility has an aggregate availability of up to $100.0 million based upon the amount of unfunded subscription commitments of certain partners. During January 2003, the aggregate availability under the credit facility was reduced to $90.0 million. As of December 31, 2002, there was $15.0 million outstanding under this facility. 19. Incentive Plans: The Company maintains a stock option plan (the "Plan") pursuant to which a maximum 13,500,000 shares of the Company's common stock may be issued for qualified and non-qualified options. Options granted under the Plan generally vest ratably over a three-year term, expire ten years from the date of grant and are exercisable at the market price on the date of grant, unless otherwise determined by the Board in its sole discretion. In addition, the Plan provides for the granting of certain options to each of the Company's non-employee directors (the "Independent Directors") and permits such Independent Directors to elect to receive deferred stock awards in lieu of directors' fees. Information with respect to stock options under the Plan for the years ended December 31, 2002, 2001 and 2000 is as follows: Weighted Average Exercise Price Shares Per Share --------- --------------- Options outstanding, December 31, 1999 4,869,138 $20.56 Exercised (290,106) $17.03 Granted 1,347,637 $27.09 Forfeited (387,874) $19.07 ---------- Options outstanding, December 31, 2000 5,538,795 $22.44 Exercised (1,694,227) $20.62 Granted 2,119,175 $30.71 Forfeited (54,390) $25.76 ---------- Options outstanding, December 31, 2001 5,909,353 $25.90 Exercised (307,831) $18.76 Granted 1,562,525 $31.27 Forfeited (61,974) $27.99 ---------- Options outstanding, December 31, 2002 7,102,073 $27.37 ========= Options exercisable - December 31, 2000 2,921,737 $20.13 ========= ====== December 31, 2001 2,369,288 $21.98 ========= ====== December 31, 2002 3,298,417 $24.06 ========= ====== The exercise prices for options outstanding as of December 31, 2002 range from $14.17 to $33.67 per share. The weighted average remaining contractual life for options outstanding as of December 31, 2002 was approximately 7.8 years. Options to purchase 1,731,321, 3,293,846 and 913,042 shares of the Company's common stock were available for issuance under the Plan at December 31, 2002, 2001 and 2000, respectively. The Company has elected to adopt the disclosure-only provisions of Statement of Financial Accounting Standards No. 123 "Accounting for Stock-Based Compensation". Accordingly, no compensation cost has been recognized with regard to options granted under the Plan in the accompanying Consolidated Statements of Income. If stock-based compensation costs had been recognized based on the estimated fair values at the dates of grant for options awarded, net income and net income per diluted common share for the years ended December 31, 2002, 2001 and 2000 would have been reduced by approximately $3.2 million or $0.03 per diluted share, $2.7 million or $0.03 per diluted share and $2.2 million or $0.03 per diluted share, respectively. Effective January 1, 2003, the Company will adopt the prospective method provisions of FASB No. 148, which will apply the recognition provisions of FASB No. 123 to all employee awards granted, modified or settled after January 1, 2003. 82 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued These pro forma adjustments to net income and net income per diluted common share assume fair values of each option grant estimated using the Black-Scholes option pricing formula. The more significant assumptions underlying the determination of such fair values for options granted during 2002, 2001 and 2000 include: (i) weighted average risk-free interest rates of 3.06%, 4.85% and 5.69%, respectively; (ii) weighted average expected option lives of 4.1 years, 5.5 years, and 4.4 years, respectively; (iii) an expected volatility of 16.12%, 15.76% and 15.82%, respectively, and (iv) an expected dividend yield of 6.87%, 6.74% and 6.95%, respectively. The per share weighted average fair value at the dates of grant for options awarded during 2002, 2001 and 2000 was $1.50, $1.98 and $2.05, respectively. The Company maintains a 401(k) retirement plan covering substantially all officers and employees which permits participants to defer up to a maximum 10% of their eligible compensation. This deferred compensation, together with Company matching contributions which generally equal employee deferrals up to a maximum of 5% of their eligible compensation, is fully vested and funded as of December 31, 2002. Company contributions to the plan were approximately $0.7 million, $0.7 million and $0.6 million for the years ended December 31, 2002, 2001 and 2000, respectively. 20. Income Taxes: The Company elected to qualify as a REIT in accordance with the Code commencing with its taxable year which began January 1, 1992. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that it currently distribute at least 90% of its adjusted REIT taxable income to its stockholders. It is management's intention to adhere to these requirements and maintain the Company's REIT status. As a REIT, the Company generally will not be subject to corporate federal income tax, provided that distributions to its stockholders equal at least the amount of its REIT taxable income as defined under the Code. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years. Even if the Company qualifies for taxation as a REIT, the Company is subject to certain state and local taxes on its income and property and federal income and excise taxes on its undistributed taxable income. In addition, taxable income from non-REIT activities managed through taxable REIT subsidiaries is subject to federal, state and local income taxes. Reconciliation between GAAP Net Income and Federal Taxable Income: The following table reconciles GAAP net income to taxable income for the years ended December 31, 2002, 2001 and 2000 (in thousands):
2002 2001 2000 (Estimated) (Actual) (Actual) --------- --------- -------- GAAP net income $245,668 $236,538 $205,025 Less: GAAP net income of taxable REIT subsidiaries (23,573) (29,063) - --------- --------- -------- GAAP net income from REIT operations (Note 1) 222,095 207,475 205,025 Net book depreciation in excess of tax depreciation 4,043 3,612 2,889 Deferred and prepaid rents (5,800) (6,647) (7,117) Exercise of non-qualified stock options (3,000) (15,354) (2,534) Book/tax depreciation differences from investments in real estate joint ventures (1,929) (3,206) (2,253) Other book/tax differences, net 18,365 12,863 (14,240) -------- -------- --------- Adjusted taxable income subject to 90% dividend requirements $233,774 $198,743 $181,770 ======== ======== ========
Note 1 - All adjustments to "GAAP net income from REIT operations" are net of amounts attributable to minority interest and taxable REIT subsidiaries. 83 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued Reconciliation between Cash Dividends Paid and Dividends Paid Deductions: Cash dividends paid were equal to the dividends paid deduction for the years ended December 31, 2002, 2001 and 2000, and amounted to (in thousands) $235,602, $209,785 and $189,896, respectively. Characterization of Distributions: The following characterizes distributions paid for the years ended December 31, 2002, 2001 and 2000 (in thousands):
2002 2001 2000 ---- ---- ---- Preferred Dividends Ordinary income $17,935 96% $26,253 100% $26,376 100% Capital gain 764 4% - - - - -------- ---- -------- ---- -------- ---- $18,699 100% $26,253 100% $26,376 100% Common Dividends Ordinary income $208,040 96% $174,380 95% $163,520 100% Capital gain 8,863 4% - - - - Return of capital - - 9,152 5% - - -------- ---- -------- ---- -------- ---- $216,903 100% $183,532 100% $163,520 100% Total dividends distributed $235,602 $209,785 $189,896 ======== ======== ========
Taxable REIT Subsidiaries ("TRS"): Commencing January 1, 2001, the Company is subject to federal, state and local income taxes on the income from it TRS activities. Income taxes have been provided for on the asset and liability method as required by Statement of Financial Accounting Standard No. 109, Accounting for Income Taxes. Under the asset and liability method, deferred income taxes are recognized for the temporary differences between the financial reporting basis and the tax basis of the TRS assets and liabilities. The Company's TRS income and provision for income taxes for the years ended December 31, 2002 and 2001, are summarized as follows (in thousands): 2002 2001 ---- ---- Taxable income before income taxes $36,477 $48,439 ------- ------- Less provision for income taxes: Federal 10,538 15,682 State and local 2,366 3,694 Total tax provision 12,904 19,376 ------- ------- TRS net income $23,573 $29,063 ======= ======= There was no provision for income taxes for the year ended December 31, 2000. Deferred tax assets of approximately $4.4 million as of December 31, 2002 and 2001 and deferred tax liabilities of approximately $1.7 million as of December 31, 2002, are included in the caption Other assets and Other liabilities on the accompanying Consolidated Balance Sheets at December 31, 2002 and 2001, respectively. These deferred tax assets and liabilities relate primarily to differences in the timing of the recognition of income/(loss) between GAAP and tax basis of accounting of (i) real estate joint ventures, (ii) other real estate investments and (iii) other deductible temporary differences. 84 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued The income tax provision differs from the amount computed by applying the statutory federal income tax rate to taxable income before income taxes as follows (in thousands): 2002 2001 ---- ---- Federal provision at statutory tax rate (35%) $12,767 $16,954 State and local taxes, net of federal benefit 2,010 2,422 Other (1,873) - -------- ------ $12,904 $19,376 ======= ======= 21. Supplemental Financial Information: The following represents the results of operations, expressed in thousands except per share amounts, for each quarter during years 2002 and 2001:
2002 (Unaudited) ----------------------------------------------------------------- Mar. 31 June 30 Sept. 30 Dec. 31 ------- ------- -------- ------- Revenues from rental property(1) $ 112,255 $ 112,494 $ 110,191 $ 115,891 Net income $ 60,894 $ 61,055 $ 60,756 $ 62,963 Net income per common share: Basic $ .54 $ .54 $ .54 $ .56 Diluted $ .53 $ .54 $ .53 $ .56
2001 (Unaudited) -------------------------------------------------------------- Mar. 31 June 30 Sept. 30 Dec. 31 ------- ------- -------- ------- Revenues from rental property(1) $ 116,469 $ 113,695 $ 109,974 $110,270 Net income $ 56,053 $ 59,352 $ 59,250 $ 61,883 Net income per common share: Basic $ .52 $ .55 $ .55 $ .58 Diluted $ .51 $ .55 $ .54 $ .56
(1) All periods have been adjusted to reflect the impact of operating properties sold during 2002 and properties classified as held for sale as of December 31, 2002 which are reflected in Discounted operations in the Consolidated Statements of Income. Accounts and notes receivable in the accompanying Consolidated Balance Sheets are net of estimated unrecoverable amounts of approximately $5.8 million and $4.3 million at December 31, 2002 and 2001, respectively. 22. Pro Forma Financial Information (Unaudited): As discussed in Notes 2 and 3, the Company and certain of its subsidiaries acquired and disposed of interests in certain operating properties during 2002. The pro forma financial information set forth below is based upon the Company's historical Consolidated Statements of Income for the years ended December 31, 2002 and 2001, adjusted to give effect to these transactions as of January 1, 2001. 85 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued 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 on January 1, 2001, nor does it purport to represent the results of operations for future periods. (Amounts presented in millions, except per share figures.) Years ended December 31, 2002 2001 ---- ---- Revenues from rental property $473.8 $478.1 Net income $235.6 $237.7 Net income per common share: Basic $2.08 $2.21 ===== ===== Diluted $2.06 $2.17 ===== ===== 86 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued KIMCO REALTY CORPORATION AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS For Years Ended December 31, 2002, 2001 and 2000 (in thousands)
Adjustments to Balance at valuation Balance at end Beginning of Charged to accounts of period Period expenses Deductions ----------------- --------------- ------------------ ------------------ ---------------- Year Ended December 31, 2002 Allowance for uncollectable accounts $4,300 $2,750 $ - ($1,300) $5,750 ----------------- --------------- ------------------ ------------------ ---------------- Year Ended December 31, 2001 Allowance for uncollectable accounts $4,000 $3,400 $ - ($3,100) $4,300 ----------------- --------------- ------------------ ------------------ ---------------- Year Ended December 31, 2000 Allowance for uncollectable accounts $3,750 $2,650 $ - ($2,400) $4,000 ----------------- --------------- ------------------ ------------------ ----------------
87 SCHEDULE III KIMCO REALTY CORPORATION AND SUBSIDARIES REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2002
INITIAL COST BUILDING AND SUBSEQUENT BUILDINGS AND PROPERTIES LAND IMPROVEMENT TO ACQUISITION LAND IMPROVEMENTS TOTAL - ---------- ---- ----------- -------------- ---- ------------ ----- FAIRFIELD SHOPPING CENTER $ 529,247 $ 2,137,493 $ 180,479 $ 529,247 $ 2,317,972 $ 2,847,219 HOOVER 279,106 7,735,873 -- 279,106 7,735,873 8,014,979 HAMSTRA SQUARE 1,648,206 -- 6,140,247 1,648,206 6,140,247 7,788,452 FOUR PEAKS PLAZA 3,150,780 -- 11,136,798 3,150,780 11,136,798 14,287,578 GILBERT FIESTA DEVELOPMENT 1,683,843 -- 2,699,962 1,683,843 2,699,962 4,383,805 KIMCO MESA 679, INC. AZ 2,915,000 11,686,291 758,781 2,915,000 12,445,072 15,360,072 METRO SQUARE 4,101,017 16,410,632 462,640 4,101,017 16,873,272 20,974,289 PEORIA CROSSING 7,212,588 -- 17,295,451 7,235,425 17,272,615 24,508,040 HAYDEN PLAZA NORTH 2,015,726 4,126,509 4,983,587 2,015,726 9,110,096 11,125,822 PHOENIX, COSTCO 5,324,501 21,269,943 213,315 5,324,501 21,483,258 26,807,759 PHOENIX 2,450,341 9,802,046 151,421 2,450,341 9,953,467 12,403,808 ALHAMBRA, COSTCO 4,995,639 19,982,557 -- 4,995,639 19,982,557 24,978,196 MADISON PLAZA 5,874,396 23,476,190 44,831 5,874,396 23,521,021 29,395,417 CHULA VISTA, COSTCO 6,460,743 25,863,153 1,566,737 6,460,743 27,429,890 33,890,633 CORONA HILLS, COSTCO 13,360,965 53,373,453 610,097 13,360,965 53,983,550 67,344,515 LA MIRADA THEATRE CENTER 8,816,741 35,259,965 5,800 8,816,741 35,265,765 44,082,506 THE CENTRE 3,403,724 13,625,899 18,680 3,403,724 13,644,579 17,048,303 SANTA ANA, HOME DEPOT 4,592,364 18,345,257 -- 4,592,364 18,345,257 22,937,621 SANTEE TOWN CENTER 2,252,812 9,012,256 778,545 2,252,812 9,790,801 12,043,613 WESTLAKE SHOPPING CENTER 16,174,307 64,818,562 -- 16,174,307 64,818,562 80,992,869 VILLAGE ON THE PARK 2,194,463 8,885,987 118,886 2,194,463 9,004,873 11,199,336 AURORA QUINCY 1,148,317 4,608,249 176,871 1,148,317 4,785,120 5,933,437 AURORA EAST BANK 1,500,568 6,180,103 139,219 1,500,568 6,319,322 7,819,890 SPRING CREEK COLORADO 1,423,260 5,718,813 26,244 1,423,260 5,745,057 7,168,317 DENVER WEST 38TH STREET 161,167 646,983 -- 161,167 646,983 808,150 ENGLEWOOD PHAR MOR 805,837 3,232,650 18,800 805,837 3,251,450 4,057,287 FORT COLLINS 1,253,497 7,625,278 -- 1,253,497 7,625,278 8,878,775 HERITAGE WEST 1,526,576 6,124,074 79,252 1,526,576 6,203,326 7,729,902 WEST FARM SHOPPING CENTER 5,805,969 23,348,024 129,893 5,805,969 23,477,917 29,283,886 N.HAVEN, HOME DEPOT 7,704,968 30,797,640 191,857 7,704,968 30,989,497 38,694,465 WATERBURY 2,253,078 9,017,012 248,806 2,253,078 9,265,818 11,518,896 ELSMERE -- 3,185,642 -- -- 3,185,642 3,185,642 ALTAMONTE SPRINGS 770,893 3,083,574 165,495 770,893 3,249,069 4,019,962 BOCA RATON 573,875 2,295,501 1,048,565 573,875 3,344,066 3,917,941 BRADENTON 125,000 299,253 333,571 125,000 632,824 757,824 BAYSHORE GARDENS, BRADENTON FL 2,901,000 11,738,955 336,222 2,901,000 12,075,177 14,976,177 CORAL SPRINGS 710,000 2,842,907 3,204,985 710,000 6,047,892 6,757,892 CORAL SPRINGS 1,649,000 6,626,301 134,306 1,649,000 6,760,607 8,409,607 EAST ORLANDO 491,676 1,440,000 2,809,868 1,007,882 3,733,662 4,741,544 FERN PARK 225,000 902,000 2,693,939 225,000 3,595,939 3,820,939 REGENCY PLAZA 2,410,000 9,671,160 169,799 2,410,000 9,840,959 12,250,959 KISSIMMEE 1,328,536 5,296,652 1,706,687 1,328,536 7,003,339 8,331,875 LAUDERDALE LAKES 342,420 2,416,645 2,651,211 342,420 5,067,856 5,410,276 MERCHANTS WALK 2,580,816 10,366,090 31,778 2,580,816 10,397,868 12,978,684 LARGO 293,686 792,119 1,140,646 293,686 1,932,765 2,226,451 LEESBURG -- 171,636 173,537 -- 345,173 345,173 LARGO EAST BAY 2,832,296 11,329,185 971,043 2,832,296 12,300,228 15,132,524 LAUDERHILL 1,002,733 2,602,415 10,014,388 1,774,443 11,845,093 13,619,536 MELBOURNE -- 1,754,000 2,812,962 -- 4,566,962 4,566,962 GROVE GATE 365,893 1,049,172 1,139,954 365,893 2,189,126 2,555,019 NORTH MIAMI 732,914 4,080,460 10,541,973 732,914 14,622,433 15,355,347 MILLER ROAD 1,138,082 4,552,327 1,501,207 1,138,082 6,053,534 7,191,616 MARGATE 2,948,530 11,754,120 2,378,665 2,948,530 14,132,785 17,081,315 MELBOURNE 715,844 2,878,374 604,459 715,844 3,482,833 4,198,677 MT. DORA 1,011,000 4,062,890 97,491 1,011,000 4,160,381 5,171,381 ORLANDO 923,956 3,646,904 1,815,647 1,172,119 5,214,388 6,386,507 RENAISSANCE CENTER 9,104,379 36,540,873 2,651,778 9,104,379 39,192,651 48,297,030 SAND LAKE 3,092,706 12,370,824 1,146,644 3,092,706 13,517,468 16,610,174 ORLANDO 560,800 2,268,112 2,074,004 580,030 4,322,886 4,902,916 OCALA 1,980,000 7,927,484 713,063 1,980,000 8,640,547 10,620,547 POMPANO BEACH 97,169 874,442 1,234,339 97,169 2,108,781 2,205,950 PALATKA 130,844 556,658 1,002,280 130,844 1,558,938 1,689,782 PANAMA CITY 1,962,500 -- 4,159,999 1,962,500 4,159,999 6,122,499 ST. PETERSBURG -- 917,360 765,297 -- 1,682,657 1,682,657 TUTTLE BEE SARASOTA 254,961 828,465 1,709,550 254,961 2,538,015 2,792,976 SOUTH EAST SARASOTA 1,283,400 5,133,544 3,327,957 1,440,264 8,304,637 9,744,901 SANFORD 1,832,732 9,523,261 5,164,810 1,832,732 14,688,071 16,520,803 TOTAL COST, NET OF DATE OF ACCUMULATED ACCUMULATED CONSTRUCTION(C) DEPRECIATION DEPRECIATION ENCUMBRANCES ACQUISITION(A) ------------ ------------ ------------ -------------- FAIRFIELD SHOPPING CENTER $ 137,540 $ 2,709,679 $ -- 2000(A) HOOVER 595,240 7,419,738 -- 1999(A) HAMSTRA SQUARE -- 7,788,452 3,619,064 2002(C) FOUR PEAKS PLAZA -- 14,287,578 5,400,560 2001(C) GILBERT FIESTA DEVELOPMENT -- 4,383,805 1,402,976 2001(C) KIMCO MESA 679, INC. AZ 1,452,752 13,907,320 -- 1998(A) METRO SQUARE 1,916,879 19,057,410 -- 1998(A) PEORIA CROSSING -- 24,508,040 8,437,275 2000(C) HAYDEN PLAZA NORTH 658,503 10,467,319 -- 1998(A) PHOENIX, COSTCO 2,470,598 24,337,161 -- 1998(A) PHOENIX 1,311,927 11,091,881 7,618,446 1997(A) ALHAMBRA, COSTCO 2,319,383 22,658,813 -- 1998(A) MADISON PLAZA 2,713,440 26,681,977 -- 1998(A) CHULA VISTA, COSTCO 3,071,816 30,818,818 -- 1998(A) CORONA HILLS, COSTCO 6,169,808 61,174,707 -- 1998(A) LA MIRADA THEATRE CENTER 4,072,393 40,010,113 -- 1998(A) THE CENTRE 1,091,506 15,956,797 7,899,089 1999(A) SANTA ANA, HOME DEPOT 2,109,921 20,827,700 -- 1998(A) SANTEE TOWN CENTER 958,045 11,085,568 -- 1998(A) WESTLAKE SHOPPING CENTER 276,555 80,716,314 -- 2002(A) VILLAGE ON THE PARK 1,126,665 10,072,671 -- 1998(A) AURORA QUINCY 589,410 5,344,027 2,507,950 1998(A) AURORA EAST BANK 783,216 7,036,675 -- 1998(A) SPRING CREEK COLORADO 721,545 6,446,772 -- 1998(A) DENVER WEST 38TH STREET 81,542 726,608 -- 1998(A) ENGLEWOOD PHAR MOR 407,756 3,649,531 1,196,795 1998(A) FORT COLLINS 553,973 8,324,801 2,988,284 2000(A) HERITAGE WEST 778,092 6,951,810 -- 1998(A) WEST FARM SHOPPING CENTER 2,651,656 26,632,230 13,366,149 1998(A) N.HAVEN, HOME DEPOT 3,540,807 35,153,658 -- 1998(A) WATERBURY 2,134,860 9,384,036 -- 1993(A) ELSMERE 2,676,286 509,356 -- 1979(C) ALTAMONTE SPRINGS 553,644 3,466,319 -- 1995(A) BOCA RATON 925,258 2,992,684 -- 1992(A) BRADENTON 369,628 388,196 -- 1968(C) BAYSHORE GARDENS, BRADENTON FL 1,399,051 13,577,126 -- 1998(A) CORAL SPRINGS 1,000,598 5,757,294 -- 1994(A) CORAL SPRINGS 868,359 7,541,248 -- 1997(A) EAST ORLANDO 1,831,218 2,910,326 -- 1971(C) FERN PARK 1,654,579 2,166,360 -- 1968(C) REGENCY PLAZA 759,594 11,491,366 8,777,574 1999(A) KISSIMMEE 1,138,831 7,193,044 -- 1996(A) LAUDERDALE LAKES 3,424,959 1,985,317 -- 1968(C) MERCHANTS WALK 354,657 12,624,027 -- 2001(A) LARGO 1,553,211 673,239 -- 1968(C) LEESBURG 213,597 131,576 -- 1969(C) LARGO EAST BAY 3,705,992 11,426,532 -- 1992(A) LAUDERHILL 5,238,982 8,380,554 -- 1974(C) MELBOURNE 1,703,437 2,863,525 -- 1968(C) GROVE GATE 1,486,605 1,068,414 -- 1968(C) NORTH MIAMI 4,787,356 10,567,990 -- 1985(A) MILLER ROAD 4,136,847 3,054,768 -- 1986(A) MARGATE 3,029,406 14,051,909 -- 1993(A) MELBOURNE 692,408 3,506,270 -- 1994(A) MT. DORA 533,086 4,638,295 -- 1997(A) ORLANDO 1,109,966 5,276,541 -- 1995(A) RENAISSANCE CENTER 4,952,672 43,344,359 -- 1998(A) SAND LAKE 2,887,246 13,722,928 -- 1994(A) ORLANDO 590,055 4,312,861 -- 1996(A) OCALA 1,198,869 9,421,677 -- 1997(A) POMPANO BEACH 1,116,534 1,089,416 -- 1968(C) PALATKA 657,523 1,032,259 -- 1970(C) PANAMA CITY -- 6,122,499 117,147 2002(C) ST. PETERSBURG 662,207 1,020,450 -- 1968(C) TUTTLE BEE SARASOTA 1,536,392 1,256,584 -- 1970(C) SOUTH EAST SARASOTA 2,337,884 7,407,017 -- 1989(A) SANFORD 4,495,911 12,024,892 -- 1989(A)
88
INITIAL COST BUILDING AND SUBSEQUENT BUILDINGS AND PROPERTIES LAND IMPROVEMENT TO ACQUISITION LAND IMPROVEMENTS TOTAL - ---------- ---- ----------- -------------- ---- ------------ ----- STUART 2,109,677 8,415,323 418,577 2,109,677 8,833,900 10,943,577 SOUTH MIAMI 1,280,440 5,133,825 2,502,710 1,280,440 7,636,535 8,916,975 TALLAHASSEE -- 2,431,659 17,991,873 -- 20,423,532 20,423,532 TAMPA, FLORIDA 3,054,280 -- 5,594,009 3,054,280 5,594,009 8,648,289 TAMPA 2,820,000 11,283,189 1,311,993 2,820,000 12,595,182 15,415,182 VILLAGE COMMONS S.C 2,192,331 8,774,158 384,702 2,192,331 9,158,860 11,351,191 WEST PALM BEACH 550,896 2,298,964 488,847 550,896 2,787,811 3,338,707 THE SHOPS AT WEST MELBOURNE 2,200,000 8,829,541 1,829,222 2,200,000 10,658,763 12,858,763 JONESBORO RD. &I-285 468,118 1,872,473 53,114 468,118 1,925,587 2,393,705 AUGUSTA 1,482,564 5,928,122 1,219,534 1,482,564 7,147,656 8,630,220 MACON 262,700 1,487,860 1,562,098 349,326 2,963,332 3,312,658 SAVANNAH 2,052,270 8,232,978 584,844 2,052,270 8,817,822 10,870,092 SAVANNAH 652,255 2,616,522 273,677 652,255 2,890,199 3,542,454 CLIVE 500,525 2,002,101 -- 500,525 2,002,101 2,502,626 SOUTHDALE SHOPPING CENTER 1,720,330 6,916,294 793,477 1,720,330 7,709,770 9,430,100 DES MOINES 500,525 2,559,019 37,079 500,525 2,596,098 3,096,623 DUBUQUE -- 2,152,476 -- -- 2,152,476 2,152,476 WATERLOO 500,525 2,002,101 -- 500,525 2,002,101 2,502,626 ADDISON -- 753,343 1,164,548 -- 1,917,891 1,917,891 ALTON, BELTLINE HWY 329,532 1,987,981 59,934 329,532 2,047,915 2,377,447 AURORA, N. LAKE 2,059,908 9,531,721 -- 2,059,908 9,531,721 11,591,629 KRC ARLINGTON HEIGHT 1,983,517 9,178,272 (5,250,000) 1,983,517 3,928,272 5,911,789 BLOOMINGTON 805,521 2,222,353 5,039,413 805,521 7,261,766 8,067,287 BELLEVILLE, WESTFIELD PLAZA -- 5,372,253 -- -- 5,372,253 5,372,253 BRADLEY 500,422 2,001,687 -- 500,422 2,001,687 2,502,109 KRC BRIDGEVIEW -- -- 491,565 -- 491,565 491,565 CALUMET CITY 1,479,217 8,815,760 21,730 1,479,217 8,837,490 10,316,707 COUNTRYSIDE -- 4,770,671 35,625 -- 4,806,296 4,806,296 CARBONDALE -- 500,000 -- -- 500,000 500,000 CHICAGO 2,577,473 3,716,745 79,335 2,577,473 3,796,080 6,373,553 CHICAGO -- 2,687,046 48,916 -- 2,735,962 2,735,962 CHAMPAIGN, NEIL ST 230,519 1,285,460 49,327 230,519 1,334,787 1,565,306 ELSTON 1,010,375 5,692,211 -- 1,010,375 5,692,211 6,702,586 S. CICERO -- 1,541,560 149,203 -- 1,690,763 1,690,763 CRYSTAL LAKE, NW HWY 179,964 1,025,811 233,766 180,269 1,259,272 1,439,541 KRC PETERSON AVE 2,215,960 10,253,981 -- 2,215,960 10,253,981 12,469,941 BUTTERFIELD SQUARE 1,601,960 6,637,926 291,220 1,601,960 6,929,146 8,531,106 DOWNERS PARK PLAZA 2,510,455 10,164,494 227,550 2,510,455 10,392,044 12,902,499 DOWNER GROVE 811,778 4,322,956 1,664,058 811,778 5,987,014 6,798,792 ELGIN 842,555 2,108,674 1,657,257 842,555 3,765,931 4,608,486 FOREST PARK -- 2,335,884 -- -- 2,335,884 2,335,884 FAIRVIEW HTS, BELLVILLE RD -- 11,866,880 694,881 -- 12,561,761 12,561,761 GENEVA 500,422 12,917,712 14,927 500,422 12,932,639 13,433,061 MATTERSON 950,515 6,292,319 161,795 950,515 6,454,114 7,404,629 MT. PROSPECT 1,017,345 6,572,176 1,217,808 1,017,345 7,789,984 8,807,329 MUNDELIEN, S. LAKE 1,127,720 5,826,129 1,914 1,129,634 5,826,129 6,955,763 NORRIDGE -- 2,918,315 -- -- 2,918,315 2,918,315 NAPERVILLE 669,483 4,464,998 -- 669,483 4,464,998 5,134,481 OTTAWA 137,775 784,269 361,788 137,775 1,146,057 1,283,832 ORLAND SQUARE 1,601,960 6,425,253 -- 1,601,960 6,425,253 8,027,213 ORLAND PARK, S. HARLEM 476,972 2,764,775 907,541 476,972 3,672,316 4,149,288 OAK LAWN 1,530,111 8,776,631 100,280 1,530,111 8,876,911 10,407,022 OAKBROOK TERRACE 1,527,188 8,679,108 105,074 1,527,188 8,784,182 10,311,370 PEORIA -- 5,081,290 1,315,822 -- 6,397,112 6,397,112 PLAZA AT ROCKFORD, IL -- 83,158 -- -- 83,158 83,158 EAST WOODFIELD SQUARE 1,601,960 6,466,646 -- 1,601,960 6,466,646 8,068,606 SPRINGFIELD, MACARTHUR -- 131,091 -- -- 131,091 131,091 SKOKIE -- 2,276,360 9,488,383 2,628,440 9,136,303 11,764,743 KRC STREAMWOOD 181,962 1,057,740 181,885 181,962 1,239,625 1,421,587 WOODGROVE FESTIVAL 5,049,149 20,822,993 1,396,500 5,049,149 22,219,493 27,268,642 WAUKEGAN, BELVEDERE 203,427 1,161,847 37,012 203,772 1,198,514 1,402,286 PLAZA EAST 1,236,149 4,944,597 2,804,497 1,140,849 7,844,394 8,985,243 PLAZA WEST 808,435 3,210,187 624,109 808,435 3,834,296 4,642,731 FELBRAM 72,971 302,579 399,948 72,971 702,527 775,498 GREENWOOD 423,371 1,883,421 1,436,442 423,371 3,319,863 3,743,234 GRIFFITH -- 2,495,820 (19,188) -- 2,476,632 2,476,632 INDIANAPOLIS 447,600 3,607,193 2,380,643 447,600 5,987,836 6,435,436 LAFAYETTE 230,402 1,305,943 158,525 230,402 1,464,468 1,694,870 LAFAYETTE 812,810 3,252,269 982,359 812,810 4,234,628 5,047,438 KIMCO LAFAYETTE MARKET PLACE 4,184,000 16,752,165 135,374 4,184,000 16,887,538 21,071,538 KRC MISHAWAKA 895 378,088 1,999,079 642 378,730 1,999,079 2,377,809 SOUTH BEND, S. HIGH ST 183,463 1,070,401 196,858 183,463 1,267,259 1,450,722 OVERLAND PARK, 1,183,911 6,335,308 132,624 1,185,906 6,465,937 7,651,843 TOTAL COST, NET OF DATE OF ACCUMULATED ACCUMULATED CONSTRUCTION(C) DEPRECIATION DEPRECIATION ENCUMBRANCES ACQUISITION(A) ------------ ------------ ------------ -------------- STUART 1,880,582 9,062,995 -- 1994(A) SOUTH MIAMI 1,283,328 7,633,647 -- 1995(A) TALLAHASSEE -- 20,423,532 -- 2000(C) TAMPA, FLORIDA -- 8,648,289 -- 2001(C) TAMPA 1,764,737 13,650,445 -- 1997(A) VILLAGE COMMONS S.C 915,443 10,435,748 -- 1998(A) WEST PALM BEACH 451,554 2,887,153 -- 1995(A) THE SHOPS AT WEST MELBOURNE 1,106,298 11,752,466 -- 1998(A) JONESBORO RD. &I-285 793,424 1,600,281 -- 1988(A) AUGUSTA 1,082,513 7,547,707 -- 1995(A) MACON 1,415,848 1,896,810 -- 1969(C) SAVANNAH 2,033,799 8,836,293 -- 1993(A) SAVANNAH 507,218 3,035,236 -- 1995(A) CLIVE 355,074 2,147,552 -- 1996(A) SOUTHDALE SHOPPING CENTER 709,425 8,720,675 4,929,194 1999(A) DES MOINES 441,906 2,654,717 -- 1996(A) DUBUQUE 285,174 1,867,302 -- 1997(A) WATERLOO 355,074 2,147,552 -- 1996(A) ADDISON 1,248,303 669,588 -- 1968(C) ALTON, BELTLINE HWY 599,952 1,777,495 -- 1998(A) AURORA, N. LAKE 1,078,211 10,513,418 6,866,542 1998(A) KRC ARLINGTON HEIGHT 1,038,225 4,873,564 -- 1998(A) BLOOMINGTON 3,334,632 4,732,655 -- 1972(C) BELLEVILLE, WESTFIELD PLAZA 608,263 4,763,990 -- 1998(A) BRADLEY 402,591 2,099,518 -- 1996(A) KRC BRIDGEVIEW 33,251 458,314 -- 1998(A) CALUMET CITY 1,101,764 9,214,943 -- 1997(A) COUNTRYSIDE 601,479 4,204,817 -- 1997(A) CARBONDALE 51,282 448,718 -- 1997(A) CHICAGO 482,690 5,890,862 9,372,549 1997(A) CHICAGO 355,961 2,380,001 -- 1997(A) CHAMPAIGN, NEIL ST 129,411 1,435,895 -- 1998(A) ELSTON 644,307 6,058,279 -- 1997(A) S. CICERO 226,115 1,464,648 -- 1997(A) CRYSTAL LAKE, NW HWY 121,100 1,318,440 -- 1998(A) KRC PETERSON AVE 1,159,922 11,310,019 7,781,750 1998(A) BUTTERFIELD SQUARE 839,937 7,691,169 -- 1998(A) DOWNERS PARK PLAZA 1,033,616 11,868,884 -- 1999(A) DOWNER GROVE 654,025 6,144,767 -- 1997(A) ELGIN 1,956,193 2,652,293 -- 1972(C) FOREST PARK 314,228 2,021,656 -- 1997(A) FAIRVIEW HTS, BELLVILLE RD 1,352,593 11,209,168 -- 1998(A) GENEVA 1,590,160 11,842,901 9,626,143 1996(A) MATTERSON 768,093 6,636,537 -- 1997(A) MT. PROSPECT 880,389 7,926,941 -- 1997(A) MUNDELIEN, S. LAKE 658,576 6,297,187 -- 1998(A) NORRIDGE 386,852 2,531,463 -- 1997(A) NAPERVILLE 541,605 4,592,876 -- 1997(A) OTTAWA 941,763 342,069 -- 1970(C) ORLAND SQUARE 818,661 7,208,552 -- 1998(A) ORLAND PARK, S. HARLEM 324,185 3,825,103 -- 1998(A) OAK LAWN 1,117,879 9,289,143 14,774,523 1997(A) OAKBROOK TERRACE 1,108,791 9,202,579 -- 1997(A) PEORIA 743,440 5,653,672 -- 1997(A) PLAZA AT ROCKFORD, IL 83,158 (0) -- 1998(A) EAST WOODFIELD SQUARE 821,314 7,247,291 -- 1998(A) SPRINGFIELD, MACARTHUR 14,514 116,577 -- 1998(A) SKOKIE 407,894 11,356,849 8,684,524 1997(A) KRC STREAMWOOD 118,258 1,303,329 -- 1998(A) WOODGROVE FESTIVAL 2,448,977 24,819,665 -- 1998(A) WAUKEGAN, BELVEDERE 116,006 1,286,280 -- 1998(A) PLAZA EAST 1,126,931 7,858,312 -- 1995(A) PLAZA WEST 577,228 4,065,502 -- 1995(A) FELBRAM 480,508 294,990 -- 1970(C) GREENWOOD 1,762,369 1,980,865 -- 1970(C) GRIFFITH 318,009 2,158,623 -- 1997(A) INDIANAPOLIS 3,531,004 2,904,431 -- 1986(A) LAFAYETTE 1,120,915 573,955 -- 1971(C) LAFAYETTE 589,439 4,457,999 -- 1997(A) KIMCO LAFAYETTE MARKET PLACE 1,934,378 19,137,161 -- 1998(A) KRC MISHAWAKA 895 225,494 2,152,315 -- 1998(A) SOUTH BEND, S. HIGH ST 117,585 1,333,136 -- 1998(A) OVERLAND PARK, 679,962 6,971,881 -- 1998(A)
89
INITIAL COST BUILDING AND SUBSEQUENT BUILDINGS AND PROPERTIES LAND IMPROVEMENT TO ACQUISITION LAND IMPROVEMENTS TOTAL - ---------- ---- ----------- -------------- ---- ------------ ----- BELLEVUE 405,217 1,743,573 101,153 405,217 1,844,726 2,249,943 LEXINGTON 1,675,031 6,848,209 5,092,491 1,675,031 11,940,700 13,615,731 PADUCAH MALL, KY -- 1,047,281 (123,196) -- 924,085 924,085 BATON ROUGE 3,813,873 15,260,609 1,056,714 3,813,873 16,317,323 20,131,196 KIMCO HOUMA 274, LLC 1,980,000 7,945,784 98,866 1,980,000 8,044,650 10,024,650 LAFAYETTE 2,115,000 8,508,218 8,730,136 3,678,274 15,675,080 19,353,354 GREAT BARRINGTON 642,170 2,547,830 6,932,531 751,124 9,371,407 10,122,531 LEOMINSTER 3,732,508 6,754,092 38,296,034 4,933,640 43,848,994 48,782,634 SHREWSBURY SHOPPING CENTER 1,284,168 5,284,853 4,484,231 1,284,168 9,769,083 11,053,251 WILDE LAKE 1,468,038 5,869,862 -- 1,468,038 5,869,862 7,337,899 LYNX LANE 1,019,035 4,091,894 -- 1,019,035 4,091,894 5,110,929 OAKLAND MILLS 667,165 2,663,081 -- 667,165 2,663,081 3,330,246 GAITHERSBURG 244,890 6,787,534 121,951 244,890 6,909,485 7,154,375 GLEN BURNIE -- 1,000,000 -- -- 1,000,000 1,000,000 HAGERSTOWN 541,389 2,165,555 993,343 541,389 3,158,898 3,700,287 LAUREL 349,562 1,398,250 849,625 349,562 2,247,875 2,597,437 LAUREL 274,580 1,100,968 (3,820) 274,580 1,097,148 1,371,728 LARGO/LANDOVER 982,266 27,223,105 -- 982,266 27,223,105 28,205,372 WHITE MARSH, COSTCO 3,517,018 14,049,542 23,351 3,517,018 14,072,893 17,589,911 BANGOR, ME 403,833 1,622,331 93,752 403,833 1,716,083 2,119,916 CLAWSON 1,624,771 6,578,142 2,559,533 1,624,771 9,137,675 10,762,446 WHITE LAKE 2,300,050 9,249,607 1,354,424 2,300,050 10,604,031 12,904,081 FARMINGTON 1,098,426 4,525,723 1,972,156 1,098,426 6,497,879 7,596,305 FLINT 984,338 8,053,218 469,723 984,338 8,534,856 9,519,194 LIVONIA 178,785 925,818 576,365 178,785 1,502,183 1,680,968 MUSKEGON 391,500 958,500 788,805 391,500 1,747,305 2,138,805 TAYLOR 1,451,397 5,806,263 224,879 1,451,397 6,031,142 7,482,539 WALKER 3,682,478 14,730,060 1,809,480 3,682,478 16,539,540 20,222,018 BRIDGETON -- 2,196,834 -- -- 2,196,834 2,196,834 CREVE COEUR, WOODCREST/OLIVE 1,044,598 5,475,623 502,705 960,813 6,062,112 7,022,926 CRYSTAL CITY, MI -- 234,378 -- -- 234,378 234,378 CAPE GIRARDEAU -- 2,242,469 -- -- 2,242,469 2,242,469 HAZELWOOD, MO -- -- 324,258 -- 324,258 324,258 INDEPENDENCE, NOLAND DR 1,728,367 8,951,101 47,757 1,731,300 8,995,925 10,727,225 NORTH POINT SHOPPING CENTER 1,935,380 7,800,746 167,922 1,935,380 7,968,668 9,904,048 KIRKWOOD -- 9,704,005 1,045,668 -- 10,749,673 10,749,673 KANSAS CITY 574,777 2,971,191 246,276 574,777 3,217,467 3,792,244 LEMAY 125,879 503,510 187,384 125,879 690,894 816,773 GRAVOIS 1,032,416 4,455,514 10,149,529 1,032,416 14,605,043 15,637,459 SPRINGFIELD 2,745,595 10,985,778 4,102,038 2,904,022 14,929,389 17,833,411 KMART PARCEL 905,674 3,666,386 4,533,377 905,674 8,199,763 9,105,437 KRC ST. CHARLES -- 550,204 -- -- 550,204 550,204 ST. LOUIS, CHRISTY BLVD 809,087 4,430,514 892,293 809,087 5,322,807 6,131,894 OVERLAND -- 4,928,677 161,877 -- 5,090,554 5,090,554 ST. LOUIS -- 5,756,736 216,173 -- 5,972,909 5,972,909 ST. LOUIS -- 2,766,644 43,298 -- 2,809,942 2,809,942 ST. PETERS 1,182,194 7,423,459 148,752 1,182,194 7,572,211 8,754,405 SPRINGFIELD, GLENSTONE AVE -- 608,793 1,589,269 -- 2,198,062 2,198,062 ST. CHARLES-UNDERDEVELOPED LAND, MO 431,960 -- 758,855 431,960 758,855 1,190,815 CHARLOTTE 919,251 3,570,981 1,036,008 919,251 4,606,989 5,526,240 CHARLOTTE 1,783,400 7,139,131 181,568 1,783,400 7,320,699 9,104,099 TYVOLA RD -- 4,736,345 1,853,235 -- 6,589,580 6,589,580 CROSSROADS PLAZA 767,864 3,098,881 -- 767,864 3,098,881 3,866,744 KIMCO CARY 696, INC 2,180,000 8,756,865 383,993 2,256,799 9,064,059 11,320,858 HOPE VALLEY FARMS 3,977,412 -- 8,170,330 3,977,412 8,170,330 12,147,742 DURHAM 1,882,800 7,551,576 1,130,056 1,882,800 8,681,632 10,564,432 LANDMARK STATION S.C 1,200,000 4,808,785 53,016 1,200,000 4,861,801 6,061,801 GASTONIA 2,467,696 9,870,785 864,334 2,467,696 10,735,119 13,202,815 RALEIGH 5,208,885 20,885,792 1,943,495 5,208,885 22,829,287 28,038,172 WAKEFIELD COMMONS II 6,506,450 -- 935,446 6,506,450 935,446 7,441,896 WAKEFIELD CROSSINGS 3,413,932 -- (1,784,670) 1,480,406 148,856 1,629,262 WAKEFIELD COMMONS 1,240,000 5,015,595 -- 1,240,000 5,015,595 6,255,595 SUTTON SQUARE 3,310,690 -- -- 3,310,690 13,245,510 16,556,200 WINSTON-SALEM 540,667 719,655 4,960,983 540,667 5,680,638 6,221,305 ROCKINGHAM 2,660,915 10,643,660 10,040,180 2,660,915 20,683,840 23,344,755 BRIDGEWATER NJ 3,511,411 227,498 8,867,382 3,511,411 9,094,880 12,606,291 CHERRY HILL 2,417,583 6,364,094 1,036,868 2,417,583 7,400,962 9,818,545 MARLTON PIKE -- 4,318,534 -- -- 4,318,534 4,318,534 CINNAMINSON 652,123 2,608,491 1,381,927 652,123 3,990,418 4,642,541 FRANKLIN TOWNE CENTER 4,903,113 19,608,193 41,428 4,903,113 19,649,621 24,552,734 HILLSBOROUGH 11,886,809 -- 20,143,094 11,886,809 20,143,094 32,029,903 HOLMDEL TOWNE CENTER 10,824,624 43,301,494 -- 10,824,624 43,301,494 54,126,118 STRAUSS DISCOUNT AUTO 1,225,294 91,203 -- 1,225,294 91,203 1,316,497 TOTAL COST, NET OF DATE OF ACCUMULATED ACCUMULATED CONSTRUCTION(C) DEPRECIATION DEPRECIATION ENCUMBRANCES ACQUISITION(A) ------------ ------------ ------------ -------------- BELLEVUE 1,624,578 625,365 -- 1976(A) LEXINGTON 2,621,845 10,993,886 -- 1993(A) PADUCAH MALL, KY 143,407 780,679 -- 1998(A) BATON ROUGE 2,059,602 18,071,593 -- 1997(A) KIMCO HOUMA 274, LLC 646,938 9,377,712 -- 1999(A) LAFAYETTE 1,757,926 17,595,428 -- 1997(A) GREAT BARRINGTON 1,297,727 8,824,804 -- 1994(A) LEOMINSTER 14,314,205 34,468,430 -- 1975(A) SHREWSBURY SHOPPING CENTER 417,401 10,635,850 -- 2000(A) WILDE LAKE 112,468 7,225,431 -- 2002(A) LYNX LANE 78,111 5,032,819 -- 2002(A) OAKLAND MILLS 51,013 3,279,233 -- 2002(A) GAITHERSBURG 530,889 6,623,486 -- 1999(A) GLEN BURNIE 51,282 948,718 -- 2000(A) HAGERSTOWN 1,852,610 1,847,677 -- 1973(C) LAUREL 542,485 2,054,952 -- 1995(A) LAUREL 866,170 505,558 -- 1972(C) LARGO/LANDOVER 2,094,085 26,111,286 -- 1999(A) WHITE MARSH, COSTCO 1,617,114 15,972,797 -- 1998(A) BANGOR, ME 42,732 2,077,184 -- 2001(A) CLAWSON 1,839,391 8,923,055 -- 1993(A) WHITE LAKE 1,652,576 11,251,506 -- 1996(A) FARMINGTON 1,300,099 6,296,206 -- 1993(A) FLINT 3,209,314 6,309,881 -- 2000(A) LIVONIA 532,352 1,148,616 -- 1968(C) MUSKEGON 1,269,073 869,732 -- 1985(A) TAYLOR 1,376,586 6,105,953 -- 1993(A) WALKER 3,567,549 16,654,469 -- 1993(A) BRIDGETON 295,759 1,901,075 -- 1997(A) CREVE COEUR, WOODCREST/OLIVE 663,243 6,359,682 -- 1998(A) CRYSTAL CITY, MI 25,102 209,276 -- 1997(A) CAPE GIRARDEAU 290,033 1,952,436 -- 1997(A) HAZELWOOD, MO 23,083 301,175 -- 1971(C) INDEPENDENCE, NOLAND DR 1,015,099 9,712,126 -- 1998(A) NORTH POINT SHOPPING CENTER 820,556 9,083,491 7,195,441 1998(A) KIRKWOOD 1,117,378 9,632,294 -- 1998(A) KANSAS CITY 407,006 3,385,239 -- 1997(A) LEMAY 506,025 310,748 -- 1974(C) GRAVOIS 4,116,682 11,520,777 -- 1972(C) SPRINGFIELD 2,665,285 15,168,126 -- 1994(A) KMART PARCEL 52,168 9,053,269 3,250,798 2002(A) KRC ST. CHARLES 56,431 493,772 -- 1998(A) ST. LOUIS, CHRISTY BLVD 447,413 5,684,481 -- 1998(A) OVERLAND 689,361 4,401,193 -- 1997(A) ST. LOUIS 808,533 5,164,376 -- 1997(A) ST. LOUIS 367,715 2,442,227 -- 1997(A) ST. PETERS 953,299 7,801,106 -- 1997(A) SPRINGFIELD, GLENSTONE AVE 126,190 2,071,872 -- 1998(A) ST. CHARLES-UNDERDEVELOPED LAND, MO 34,978 1,155,837 -- 1998(A) CHARLOTTE 837,413 4,688,826 -- 1995(A) CHARLOTTE 1,721,481 7,382,618 -- 1993(A) TYVOLA RD 4,112,677 2,476,903 -- 1986(A) CROSSROADS PLAZA 198,379 3,668,365 -- 2000(A) KIMCO CARY 696, INC 1,063,115 10,257,743 -- 1998(A) HOPE VALLEY FARMS -- 12,147,742 6,503,650 2002(C) DURHAM 1,390,597 9,173,835 -- 1996(A) LANDMARK STATION S.C 400,451 5,661,350 -- 1999(A) GASTONIA 3,561,217 9,641,598 -- 1989(A) RALEIGH 4,643,050 23,395,122 -- 1993(A) WAKEFIELD COMMONS II -- 7,441,896 5,900,000 2001(C) WAKEFIELD CROSSINGS -- 1,629,262 -- 2001(C) WAKEFIELD COMMONS 214,316 6,041,279 -- 2001(C) SUTTON SQUARE 11,164 16,545,036 -- WINSTON-SALEM 1,715,502 4,505,803 -- 1969(C) ROCKINGHAM 3,438,784 19,905,971 -- 1994(A) BRIDGEWATER NJ 1,491,363 11,114,928 -- 1998(C) CHERRY HILL 3,687,947 6,130,598 4,025,000 1985(C) MARLTON PIKE 701,301 3,617,233 -- 1996(A) CINNAMINSON 345,931 4,296,609 -- 1996(A) FRANKLIN TOWNE CENTER 2,267,162 22,285,572 12,217,480 1998(A) HILLSBOROUGH -- 32,029,903 12,467,710 2001(C) HOLMDEL TOWNE CENTER -- 54,126,118 -- 2002(A) STRAUSS DISCOUNT AUTO -- 1,316,497 -- 2002(A)
90
INITIAL COST BUILDING AND SUBSEQUENT BUILDINGS AND PROPERTIES LAND IMPROVEMENT TO ACQUISITION LAND IMPROVEMENTS TOTAL - ---------- ---- ----------- -------------- ---- ------------ ----- NORTH BRUNSWICK 3,204,978 12,819,912 12,746,958 3,204,978 25,566,870 28,771,848 PISCATAWAY TOWN CENTER 3,851,839 15,410,851 73,029 3,851,839 15,483,880 19,335,719 RIDGEWOOD 450,000 2,106,566 982,954 450,000 3,089,520 3,539,520 WESTMONT 601,655 2,404,604 9,579,543 601,655 11,984,147 12,585,802 SYCAMORE PLAZA 1,404,443 5,613,270 56,400 1,404,443 5,669,670 7,074,113 PLAZA PASEO DEL-NORTE 4,653,197 18,633,584 288,617 4,653,197 18,922,201 23,575,398 JUAN TABO, ALBUQUERQUE 1,141,200 4,566,817 157,004 1,141,200 4,723,821 5,865,021 CANYON POINT 5,091,333 20,367,462 -- 5,091,333 20,367,462 25,458,795 BRIDGEHAMPTON 1,811,752 3,107,232 22,204,337 1,811,752 25,311,569 27,123,321 CARLE PLACE 1,183,290 4,903,642 11,185,850 1,314,540 15,958,242 17,272,782 KING KULLEN PLAZA 5,968,082 23,243,404 680,571 5,968,082 23,923,975 29,892,057 HAMPTON BAYS 1,495,105 5,979,320 113,495 1,495,105 6,092,815 7,587,920 HENRIETTA 1,075,358 6,635,486 683,250 1,075,358 7,318,736 8,394,094 IRONDEQUOIT 213,617 546,101 1,004,064 213,617 1,550,165 1,763,782 MANHASSET VENTURE LLC 4,567,003 19,165,808 2,689,567 4,567,003 21,855,375 26,422,378 NANUET 798,932 2,361,900 2,461,459 798,932 4,823,359 5,622,291 PLAINVIEW 263,693 584,031 9,620,395 263,693 10,204,426 10,468,119 POUGHKEEPSIE 876,548 4,695,659 12,524,453 876,548 17,220,112 18,096,660 SYOSSET, NY 106,655 76,197 656,299 -- 732,496 732,496 STATEN ISLAND 2,280,000 9,027,951 4,344,575 2,280,000 13,372,526 15,652,526 STATEN ISLAND 2,940,000 11,811,964 355,715 2,940,000 12,167,679 15,107,679 WEST GATES 1,784,718 9,721,970 (2,063,261) 1,784,718 7,658,709 9,443,427 YONKERS 871,977 3,487,909 -- 871,977 3,487,909 4,359,886 AKRON WATERLOO 437,277 1,912,222 4,113,885 437,277 6,026,107 6,463,384 WEST MARKET ST 560,255 3,909,430 193,675 560,255 4,103,105 4,663,360 ROMIG ROAD 855,713 5,472,635 -- 855,713 5,472,635 6,328,348 AKRON, OH -- 2,491,079 64,934 -- 2,556,013 2,556,013 BARBERTON 505,590 1,948,135 1,501,992 505,590 3,450,127 3,955,717 BRUNSWICK 771,765 6,058,560 606,553 771,765 6,665,113 7,436,878 BEAVERCREEK 635,228 3,024,722 2,772,189 635,228 5,796,911 6,432,139 MEMPHIS AVE 696,495 4,048,722 -- 696,495 4,048,722 4,745,218 CANTON HILLS 500,980 2,020,274 1,185,309 500,980 3,205,583 3,706,563 CANTON 792,985 1,459,031 4,390,486 792,985 5,849,517 6,642,502 CAMBRIDGE -- 1,848,195 885,408 473,060 2,260,543 2,733,603 MORSE RD 835,386 2,097,600 2,693,575 835,386 4,791,175 5,626,561 HAMILTON RD 856,178 2,195,520 3,747,927 856,178 5,943,447 6,799,625 OLENTANGY RIVER RD 764,517 1,833,600 2,243,843 764,517 4,077,443 4,841,960 W. BROAD ST 982,464 3,929,856 3,117,677 969,804 7,060,193 8,029,997 RIDGE ROAD 1,285,213 4,712,358 10,021,969 1,285,213 14,734,327 16,019,540 GLENWAY AVE 530,243 3,788,189 527,010 530,243 4,315,198 4,845,441 SPRINGDALE 3,205,653 14,619,732 5,358,223 3,205,653 19,977,955 23,183,608 EVERHARD RD 633,046 3,729,612 -- 633,046 3,729,612 4,362,658 SOUTH HIGH ST 602,421 2,737,004 22,343 602,421 2,759,347 3,361,768 CANTON, OH -- 2,708,276 (1,530,767) -- 1,177,613 1,177,613 GLENWAY CROSSING 699,359 3,112,047 86,996 699,359 3,199,043 3,898,402 HIGHLAND RIDGE PLAZA 1,540,000 6,178,398 141,991 1,540,000 6,320,389 7,860,389 SHILOH SPRING RD -- 1,735,836 1,927,464 -- 3,663,300 3,663,300 OAKCREEK 1,245,870 4,339,637 4,047,657 1,245,870 8,387,294 9,633,164 SALEM AVE 665,314 347,818 5,400,137 665,314 5,747,955 6,413,269 KETTERING 1,190,496 4,761,984 671,539 1,190,496 5,433,523 6,624,019 KENT, OH 6,254 3,028,914 -- 6,254 3,028,914 3,035,168 KENT 2,261,530 -- -- 2,261,530 -- 2,261,530 LIMA 695,121 3,080,479 726,190 695,121 3,806,669 4,501,790 MENTOR 503,981 2,455,926 665,167 503,981 3,121,093 3,625,074 MIDDLEBURG HEIGHTS 639,542 3,783,096 33,151 639,542 3,816,246 4,455,788 MENTOR ERIE COMMONS 2,234,474 9,648,000 4,510,609 2,234,474 14,158,609 16,393,083 MALLWOODS CENTER 294,232 -- (496,786) 294,232 1,184,543 1,478,775 NORTH OLMSTED 626,818 3,712,045 35,000 626,818 3,747,045 4,373,862 ORANGE OHIO 4,800,143 -- 2,741,456 4,800,144 2,741,456 7,541,600 SPRINGBORO PIKE 1,854,527 2,572,518 2,568,712 1,854,527 5,141,230 6,995,757 SPRINGFIELD 842,976 3,371,904 1,489,623 842,976 4,861,527 5,704,503 UPPER ARLINGTON 504,256 2,198,476 8,243,706 1,255,544 9,690,894 10,946,438 WICKLIFFE 610,991 2,471,965 1,332,751 610,991 3,804,716 4,415,707 CHARDON ROAD 481,167 5,947,751 45,596 481,167 5,993,347 6,474,514 WESTERVILLE 1,050,431 4,201,616 7,630,230 1,050,431 11,831,846 12,882,277 EDMOND 477,036 3,591,493 -- 477,036 3,591,493 4,068,529 MIDWEST CITY 1,435,506 7,370,459 (3,397,576) 1,437,930 3,970,459 5,408,389 CENTENNIAL PLAZA 4,650,634 18,604,307 146,732 4,650,634 18,751,039 23,401,673 TULSA 500,950 2,002,508 11,500 500,950 2,014,008 2,514,958 TULSA -- -- 131,399 -- 131,399 131,399 CHIPPEWA 2,881,525 11,526,101 75,561 2,881,525 11,601,662 14,483,187 CARNEGIE -- 3,298,908 17,747 -- 3,316,655 3,316,655 CENTER SQUARE 731,888 2,927,551 -- 731,888 2,927,551 3,659,439 TOTAL COST, NET OF DATE OF ACCUMULATED ACCUMULATED CONSTRUCTION(C) DEPRECIATION DEPRECIATION ENCUMBRANCES ACQUISITION(A) ------------ ------------ ------------ -------------- NORTH BRUNSWICK 4,370,294 24,401,553 -- 1994(A) PISCATAWAY TOWN CENTER 1,783,545 17,552,174 -- 1998(A) RIDGEWOOD 501,342 3,038,178 -- 1993(A) WESTMONT 1,574,439 11,011,363 -- 1994(A) SYCAMORE PLAZA 650,722 6,423,391 1,716,148 1998(A) PLAZA PASEO DEL-NORTE 2,156,599 21,418,799 -- 1998(A) JUAN TABO, ALBUQUERQUE 526,130 5,338,891 -- 1998(A) CANYON POINT 10,144 25,448,651 -- 2002(A) BRIDGEHAMPTON 7,928,857 19,194,464 -- 1972(C) CARLE PLACE 2,141,159 15,131,624 -- 1993(A) KING KULLEN PLAZA 3,284,043 26,608,014 -- 1998(A) HAMPTON BAYS 2,515,387 5,072,533 -- 1989(A) HENRIETTA 1,929,224 6,464,870 -- 1993(A) IRONDEQUOIT 455,720 1,308,062 -- 1993(A) MANHASSET VENTURE LLC 1,515,987 24,906,391 -- 1999(A) NANUET 1,908,503 3,713,788 -- 1984(A) PLAINVIEW 2,754,089 7,714,029 -- 1969(C) POUGHKEEPSIE 4,528,546 13,568,114 -- 1972(C) SYOSSET, NY 85,086 647,410 -- 1990(C) STATEN ISLAND 4,757,144 10,895,382 -- 1989(A) STATEN ISLAND 1,543,307 13,564,372 3,649,681 1997(A) WEST GATES 2,359,231 7,084,196 -- 1993(A) YONKERS 661,432 3,698,454 -- 1998(A) AKRON WATERLOO 1,801,807 4,661,577 -- 1975(C) WEST MARKET ST 1,766,098 2,897,262 -- 1999(A) ROMIG ROAD 2,244,357 4,083,991 -- 1999(A) AKRON, OH 837,214 1,718,799 -- 1999(A) BARBERTON 1,761,982 2,193,735 -- 1972(C) BRUNSWICK 5,363,585 2,073,294 -- 1975(C) BEAVERCREEK 3,370,599 3,061,540 -- 1986(A) MEMPHIS AVE 1,734,198 3,011,020 -- 1999(A) CANTON HILLS 570,723 3,135,840 -- 1993(A) CANTON 2,818,725 3,823,778 -- 1972(C) CAMBRIDGE 1,589,555 1,144,048 -- 1973(C) MORSE RD 1,907,190 3,719,371 -- 1988(A) HAMILTON RD 2,204,184 4,595,442 -- 1988(A) OLENTANGY RIVER RD 2,001,367 2,840,593 -- 1988(A) W. BROAD ST 2,559,821 5,470,176 -- 1988(A) RIDGE ROAD 1,752,931 14,266,609 -- 1992(A) GLENWAY AVE 1,747,321 3,098,120 -- 1999(A) SPRINGDALE 6,035,321 17,148,287 -- 1992(A) EVERHARD RD 1,480,066 2,882,592 -- 1999(A) SOUTH HIGH ST 1,402,759 1,959,009 -- 1999(A) CANTON, OH 1,177,613 -- -- 1999(A) GLENWAY CROSSING 194,849 3,703,553 -- 2000(A) HIGHLAND RIDGE PLAZA 494,929 7,365,460 -- 1999(A) SHILOH SPRING RD 2,330,706 1,332,594 -- 1969(C) OAKCREEK 3,798,561 5,834,602 4,225,000 1984(A) SALEM AVE 1,904,869 4,508,400 -- 1988(A) KETTERING 2,270,534 4,353,485 -- 1988(A) KENT, OH 990,640 2,044,528 -- 1999(A) KENT -- 2,261,530 -- 1995(A) LIMA 708,773 3,793,016 -- 1995(A) MENTOR 1,458,286 2,166,788 -- 1987(A) MIDDLEBURG HEIGHTS 1,538,989 2,916,799 -- 1999(A) MENTOR ERIE COMMONS 4,460,283 11,932,800 -- 1988(A) MALLWOODS CENTER 5,062 1,473,712 -- 1999(C) NORTH OLMSTED 1,478,752 2,895,110 -- 1999(A) ORANGE OHIO -- 7,541,600 -- 2001(C) SPRINGBORO PIKE 2,895,278 4,100,479 -- 1985(C) SPRINGFIELD 1,626,009 4,078,494 -- 1988(A) UPPER ARLINGTON 4,724,515 6,221,923 -- 1969(C) WICKLIFFE 654,167 3,761,539 -- 1995(A) CHARDON ROAD 1,923,098 4,551,416 -- 1999(A) WESTERVILLE 3,153,154 9,729,123 -- 1988(A) EDMOND 450,056 3,618,473 -- 1997(A) MIDWEST CITY 848,707 4,559,682 -- 1998(A) CENTENNIAL PLAZA 2,164,970 21,236,703 9,554,818 1998(A) TULSA 355,331 2,159,627 -- 1996(A) TULSA 14,692 116,707 -- 1997(A) CHIPPEWA 865,656 13,617,531 12,146,296 2000(A) CARNEGIE 255,128 3,061,528 -- 1999(A) CENTER SQUARE 475,415 3,184,024 -- 1996(A)
91
INITIAL COST BUILDING AND SUBSEQUENT BUILDINGS AND PROPERTIES LAND IMPROVEMENT TO ACQUISITION LAND IMPROVEMENTS TOTAL - ---------- ---- ----------- -------------- ---- ------------ ----- WEST MIFFLIN 475,815 1,903,231 724,416 475,815 2,627,647 3,103,462 EAST STROUDSBURG 1,050,000 2,372,628 1,057,589 1,050,000 3,430,217 4,480,217 EXTON 176,666 4,895,360 -- 176,666 4,895,360 5,072,026 EXTON 731,888 2,927,551 -- 731,888 2,927,551 3,659,439 EASTWICK 889,001 2,762,888 2,386,166 889,001 5,539,713 6,428,714 FEASTERVILLE 520,521 2,082,083 38,692 520,521 2,120,775 2,641,296 GETTYSBURG 74,626 671,630 101,519 74,626 773,149 847,775 HARRISBURG, PA 452,888 6,665,238 -- 452,888 6,665,238 7,118,126 SIMPSON FERRY 658,346 6,908,711 308,060 658,346 7,216,771 7,875,116 HAMBURG 439,232 -- 2,023,428 494,982 1,967,677 2,462,660 HAVERTOWN 731,888 2,927,551 -- 731,888 2,927,551 3,659,439 OLMSTED 167,337 2,815,856 444,283 167,337 3,260,139 3,427,476 MIDDLETOWN 207,283 1,174,603 447,331 207,283 1,621,934 1,829,217 NORRISTOWN 686,134 2,664,535 3,374,215 774,084 5,950,800 6,724,884 NEW KENSINGTON 521,945 2,548,322 676,040 521,945 3,224,362 3,746,307 PENN HILLS -- 1,737,289 -- -- 1,737,289 1,737,289 PHILADELPHIA 731,888 2,927,551 -- 731,888 2,927,551 3,659,439 GALLERY, PHILADELPHIA PA -- -- 258,931 -- 258,931 258,931 RICHBORO 788,761 3,155,044 11,321,312 976,439 14,288,678 15,265,117 SPRINGFIELD 919,998 4,981,589 1,517,181 919,998 6,498,770 7,418,768 TREXLERTOWN WELLNESS -- 2,880,597 10,213 -- 2,600,047 2,600,047 UPPER ALLEN 445,743 1,782,972 173,253 445,743 1,956,225 2,401,968 UPPER DARBY 231,821 927,286 3,304,456 285,828 4,106,486 4,392,314 WEST MIFFLIN HILLS 636,366 3,199,729 7,028,351 636,366 10,228,080 10,864,446 WEST MIFFLIN 1,468,341 -- -- 1,468,341 -- 1,468,341 WHITEHALL -- 5,195,577 9,231 -- 5,204,808 5,204,808 EASTERN BLVD 412,016 1,876,962 602,164 412,016 2,479,126 2,891,142 E. PROSPECT ST 604,826 2,755,314 309,126 604,826 3,064,440 3,669,266 W. MARKET ST 188,562 1,158,307 -- 188,562 1,158,307 1,346,869 MARSHALL PLAZA, CRANSTON RI 1,886,600 7,575,302 368,647 1,886,600 7,943,949 9,830,549 AIKEN 183,901 1,087,979 69,601 183,901 1,157,580 1,341,481 CHARLESTON 730,164 3,132,092 4,569,389 730,164 7,701,481 8,431,645 CHARLESTON 1,744,430 6,986,094 3,515,642 1,744,430 10,501,736 12,246,166 FLORENCE 1,465,661 6,011,013 85,458 1,465,661 6,096,471 7,562,132 GREENVILLE 2,209,812 8,850,864 120,303 2,209,812 8,971,167 11,180,979 NORTH CHARLESTON 744,093 2,974,990 18,815 744,093 2,993,805 3,737,898 N. CHARLESTON 2,965,748 11,895,294 400,974 2,965,748 12,296,268 15,262,016 MADISON -- 4,133,904 2,007,570 -- 6,141,474 6,141,474 HICKORY RIDGE COMMONS 596,347 2,545,033 7,624 596,347 2,552,656 3,149,004 TROLLEY STATION 3,303,682 13,218,740 55,985 3,303,682 13,274,725 16,578,407 MARKET PLACE AT RIVERGATE 2,574,635 10,339,449 491,717 2,574,635 10,831,166 13,405,801 RIVERGATE, TN 3,038,561 12,157,408 2,422,836 3,038,561 14,580,244 17,618,805 CENTER OF THE HILLS, TX 2,923,585 11,706,145 272,976 2,923,585 11,979,121 14,902,706 ARLINGTON 500,414 2,001,656 -- 500,414 2,001,656 2,502,070 ARLINGTON 3,160,203 2,285,377 -- 3,160,203 2,285,377 5,445,580 DOWLEN CENTER 2,244,581 -- 5,366,156 2,244,581 5,366,156 7,610,737 BURLESON 8,600,698 -- 17,970,997 8,600,698 17,970,997 26,571,695 BAYTOWN 500,422 2,431,651 208,430 500,422 2,640,081 3,140,503 CORPUS CHRISTI, TX -- 944,562 3,180,673 -- 4,125,235 4,125,235 DALLAS 1,299,632 5,168,727 4,652,572 1,299,632 9,821,299 11,120,931 DUNCANVILLE 500,414 2,001,656 -- 500,414 2,001,656 2,502,070 GARLAND 210,286 845,845 -- 210,286 845,845 1,056,131 GARLAND 500,414 2,001,656 -- 500,414 2,001,656 2,502,070 SPRING CYPRESS, TX 2,261,557 -- 5,725,496 2,261,557 5,725,496 7,987,053 CENTER AT BAYBROOK 6,941,017 27,727,491 30,255 6,941,017 27,757,746 34,698,763 HARRIS COUNTY 1,843,000 7,372,420 885,401 2,003,260 8,097,561 10,100,821 SHARPSTOWN COURT 1,560,010 6,245,807 25,917 1,560,010 6,271,724 7,831,734 SHOPS AT VISTA RIDGE 3,257,199 13,029,416 82,992 3,257,199 13,112,408 16,369,607 VISTA RIDGE PLAZA 2,926,495 11,716,483 1,433,373 2,926,495 13,149,856 16,076,351 VISTA RIDGE PHASE II 2,276,575 9,106,300 -- 2,276,575 9,106,300 11,382,875 SOUTH PLAINES PLAZA, TX 1,890,000 7,577,145 83,854 1,890,000 7,661,000 9,551,000 MESQUITE 520,340 2,081,356 711,892 520,340 2,793,248 3,313,588 MESQUITE TOWN CENTER 3,757,324 15,061,644 796,177 3,757,324 15,857,821 19,615,145 N. RICHLAND HILLS 1,000,000 -- 80,837 1,065,837 15,000 1,080,837 FORUM AT OLYMPIA PARKWAY 1,829,102 -- 1,239,162 1,662,390 8,230,145 9,892,535 PLANO 500,414 2,830,835 -- 500,414 2,830,835 3,331,249 WEST OAKS 500,422 2,001,687 -- 500,422 2,001,687 2,502,109 MARKET STREET AT WOODLANDS 10,920,168 -- 2,587,444 10,920,168 2,587,444 13,507,612 OGDEN 213,818 855,275 543,594 213,818 1,398,869 1,612,687 COLONIAL HEIGHTS 125,376 3,476,073 10,220 125,376 3,486,293 3,611,669 HARRISONBURG 69,885 1,938,239 -- 69,885 1,938,239 2,008,123 MANASSAS 1,788,750 7,162,661 171,273 1,788,750 7,333,934 9,122,684 RICHMOND 82,544 2,289,288 292,171 82,544 2,581,460 2,664,003 TOTAL COST, NET OF DATE OF ACCUMULATED ACCUMULATED CONSTRUCTION(C) DEPRECIATION DEPRECIATION ENCUMBRANCES ACQUISITION(A) ------------ ------------ ------------ -------------- WEST MIFFLIN 541,895 2,561,567 -- 1993(A) EAST STROUDSBURG 2,146,602 2,333,616 -- 1973(C) EXTON 376,566 4,695,460 -- 1999(A) EXTON 475,415 3,184,024 -- 1996(A) EASTWICK 817,619 5,611,095 4,778,036 1997(A) FEASTERVILLE 324,635 2,316,661 -- 1996(A) GETTYSBURG 663,155 184,620 -- 1986(A) HARRISBURG, PA 3,795,301 3,322,824 -- 2002(A) SIMPSON FERRY 2,544,620 5,330,497 -- 2000(A) HAMBURG 37,840 2,424,820 2,662,352 2000(C) HAVERTOWN 475,415 3,184,024 -- 1996(A) OLMSTED 2,416,814 1,010,662 -- 1973(C) MIDDLETOWN 1,078,870 750,347 -- 1986(A) NORRISTOWN 3,240,026 3,484,858 -- 1984(A) NEW KENSINGTON 2,578,146 1,168,161 -- 1986(A) PENN HILLS 1,457,762 279,527 -- 1986(A) PHILADELPHIA 475,415 3,184,024 -- 1996(A) GALLERY, PHILADELPHIA PA 4,846 254,085 -- 1996(A) RICHBORO 4,549,046 10,716,070 -- 1986(A) SPRINGFIELD 3,738,733 3,680,035 2,825,000 1983(A) TREXLERTOWN WELLNESS 1,142,196 1,457,852 1,780,841 1997(A) UPPER ALLEN 1,604,241 797,727 -- 1986(A) UPPER DARBY 755,624 3,636,689 3,754,170 1996(A) WEST MIFFLIN HILLS 4,809,697 6,054,749 -- 1973(C) WEST MIFFLIN -- 1,468,341 -- 1986(A) WHITEHALL 843,727 4,361,081 -- 1996(A) EASTERN BLVD 1,671,890 1,219,252 -- 1987(A) E. PROSPECT ST 2,496,897 1,172,369 -- 1986(A) W. MARKET ST 1,010,953 335,916 -- 1986(A) MARSHALL PLAZA, CRANSTON RI 949,778 8,880,771 -- 1998(A) AIKEN 478,773 862,708 -- 1989(A) CHARLESTON 2,228,080 6,203,565 -- 1978(C) CHARLESTON 1,596,822 10,649,344 -- 1995(A) FLORENCE 815,592 6,746,540 -- 1997(A) GREENVILLE 1,126,229 10,054,749 -- 1997(A) NORTH CHARLESTON 185,773 3,552,125 2,118,704 2000(A) N. CHARLESTON 1,384,786 13,877,229 -- 1997(A) MADISON 3,683,675 2,457,799 -- 1978(C) HICKORY RIDGE COMMONS 161,353 2,987,650 -- 2000(A) TROLLEY STATION 1,441,943 15,136,464 11,005,390 1998(A) MARKET PLACE AT RIVERGATE 1,188,400 12,217,400 -- 1998(A) RIVERGATE, TN 1,389,340 16,229,464 -- 1998(A) CENTER OF THE HILLS, TX 1,338,848 13,563,858 -- 1998(A) ARLINGTON 354,992 2,147,078 -- 1996(A) ARLINGTON 301,476 5,144,105 -- 1997(A) DOWLEN CENTER -- 7,610,737 123,971 2002(C) BURLESON -- 26,571,695 -- 2000(C) BAYTOWN 410,137 2,730,366 -- 1996(A) CORPUS CHRISTI, TX 152,849 3,972,386 -- 1997(A) DALLAS 8,388,021 2,732,910 -- 1969(C) DUNCANVILLE 354,992 2,147,078 -- 1996(A) GARLAND 144,310 911,821 -- 1996(A) GARLAND 354,992 2,147,078 -- 1996(A) SPRING CYPRESS, TX -- 7,987,053 -- 2001(C) CENTER AT BAYBROOK 3,182,731 31,516,032 -- 1998(A) HARRIS COUNTY 1,073,331 9,027,490 -- 1997(A) SHARPSTOWN COURT 630,135 7,201,599 5,822,851 1999(A) SHOPS AT VISTA RIDGE 1,511,969 14,857,638 18,154,041 1998(A) VISTA RIDGE PLAZA 1,377,543 14,698,807 -- 1998(A) VISTA RIDGE PHASE II 972,474 10,410,401 -- 1998(A) SOUTH PLAINES PLAZA, TX 928,978 8,622,021 5,531,532 1998(A) MESQUITE 478,666 2,834,922 -- 1995(A) MESQUITE TOWN CENTER 1,743,476 17,871,669 -- 1998(A) N. RICHLAND HILLS -- 1,080,837 -- 1997(A) FORUM AT OLYMPIA PARKWAY -- 9,892,535 -- 1999(C) PLANO 448,016 2,883,233 -- 1996(A) WEST OAKS 354,994 2,147,115 -- 1996(A) MARKET STREET AT WOODLANDS -- 13,507,612 -- 2002(C) OGDEN 987,849 624,838 -- 1967(C) COLONIAL HEIGHTS 268,469 3,343,200 -- 1999(A) HARRISONBURG 149,095 1,859,028 -- 1999(A) MANASSAS 964,479 8,158,205 -- 1997(A) RICHMOND 21,965 2,642,038 -- 1999(A)
92
INITIAL COST BUILDING AND SUBSEQUENT BUILDINGS AND PROPERTIES LAND IMPROVEMENT TO ACQUISITION LAND IMPROVEMENTS TOTAL - ---------- ---- ----------- -------------- ---- ------------ ----- RICHMOND 670,500 2,751,375 -- 670,500 2,751,375 3,421,875 RACINE 1,403,082 5,612,330 1,517,130 1,403,082 7,129,460 8,532,542 CHARLES TOWN 602,000 3,725,871 10,429,460 602,000 14,155,331 14,757,331 MARTINSBURG 242,634 1,273,828 628,937 242,634 1,902,765 2,145,399 RIVERWALK PLAZA 2,708,290 10,841,674 69,794 2,708,290 10,911,468 13,619,758 PLAZA REAL SALTILLO 11,219,522 10,247,831 -- 11,219,522 10,247,831 21,467,353 PLAZA REAL SENDERO NORTE 8,812,971 4,217,562 -- 8,812,971 4,217,562 13,030,533 BALANCE OF PORTFOLIO 205,631 4,492,127 25,474,116 3,746,182 31,386,020 35,132,201 ------------ -------------- -------------- $592,655,320 $2,806,315,647 $3,398,970,967 ============ ============== ============== TOTAL COST, NET OF DATE OF ACCUMULATED ACCUMULATED CONSTRUCTION(C) DEPRECIATION DEPRECIATION ENCUMBRANCES ACQUISITION(A) ------------ ------------ ------------ -------------- RICHMOND 351,939 3,069,936 -- 1995(A) RACINE 2,721,128 5,811,414 -- 1988(A) CHARLES TOWN 5,330,508 9,426,823 -- 1985(A) MARTINSBURG 1,456,156 689,243 -- 1986(A) RIVERWALK PLAZA 1,076,116 12,543,641 7,956,529 1999(A) PLAZA REAL SALTILLO 124,616 21,342,737 -- 2002(A) PLAZA REAL SENDERO NORTE 49,965 12,980,568 -- 2002(A) BALANCE OF PORTFOLIO 11,603,487 23,528,715 -- VARIOUS -------------- -------------- ------------- $ 516,558,124 $2,882,412,843 $ 274,731,971 ============== ============== =============
Depreciation and amortization of the Company's investment in buildings and improvements reflected in the statements of income is calculated over the estimated useful lives of the assets as follows: Buildings.................... 15 to 39 years Improvements................. Terms of leases or useful lives, whichever is shorter
The aggregate cost for Federal income tax purposes was approximately $3.3 billion at December 31, 2002. The changes in total real estate assets for the years ended December 31, 2002, 2001 and 2000 are as follows:
2002 2001 2000 --------------- --------------- --------------- Balance, beginning of period .................................. $ 3,201,363,929 $ 3,111,707,470 $ 2,951,050,304 Acquisitions ................................................ 287,379,293 61,622,301 93,347,127 Improvements ................................................ 154,638,211 134,094,630 101,030,279 Transfers from (to) unconsolidated joint ventures .......... 415,492 (38,139,367) 5,567,007 Sales ....................................................... (200,957,621) (60,388,331) (39,287,247) Assets held for sale ........................................ (10,837,674) -- -- Adjustment of property carrying values ...................... (33,030,663) -- -- Adjustment for fully depreciated assets ..................... -- (7,532,774) -- --------------- --------------- --------------- Balance, end of period ........................................ $ 3,398,970,967 $ 3,201,363,929 $ 3,111,707,470 =============== =============== ===============
The changes in accumulated depreciation for the years ended December 31, 2002, 2001, and 2000 are as follows:
2002 2001 2000 --------------- --------------- --------------- Balance, beginning of period .................................. $ 452,877,433 $ 391,945,913 $ 323,737,853 Charged to accumulated depreciation ........................... -- 3,445,686 4,474,484 Depreciation for year ....................................... 72,791,420 69,901,342 68,590,773 Transfers from (to) unconsolidated joint ventures ........... 3,575,220 (1,810,541) 42,580 Sales ....................................................... (9,771,567) (3,072,193) (4,899,777) Assets held for sale ........................................ (2,914,382) -- -- Adjustment for fully depreciated assets ..................... -- (7,532,774) -- --------------- --------------- --------------- Balance, end of period ........................................ $ 516,558,124 $ 452,877,433 $ 391,945,913 =============== =============== ===============
93 EX-10.11 3 b323865ex_10-11.txt EMPLOYMENT AGREEMENT Exhibit 10.11 EMPLOYMENT AGREEMENT THIS AGREEMENT, dated June 29th, 2001 is made by and between Kimco Realty Corporation (the "Company"), a Maryland corporation, and Raymond Edwards (the "Executive"). RECITALS: A. It is the desire of the Company to assure itself of the management services of the Executive by engaging the Executive as a Vice President of the Company. B. The Executive desires to commit himself to serve the Company on the terms herein provided. NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements set forth below the parties hereto agree as follows: 1 Certain Definitions. (a) "Base Salary" is defined in Section 5(a). (b) "Benefits" is defined in Section 5(e). (c) "Bonus" is defined in Section 5(b). (d) "Calendar Quarter" shall mean each of the three-month periods ending March 31, June 30, September 30 and December 31 of each year. (e) "Cause" For purposes of this Agreement, the Company shall have "Cause" to terminate the Executive's employment hereunder upon (i) a reasonable finding by the Board that he has materially harmed the Company through a material act of dishonesty in the performance of his duties hereunder, (ii) his conviction of a felony, or (iii) his failure to perform his material duties under this Agreement (other than a failure due to disability) after written notice from the Board of Directors of the Company specifying the failure and a reasonable opportunity (of at least 30 days duration) to cure (it being understood that if his failure to perform is not of a type requiring a single action to cure fully, that he may commence the cure within 30 days after such written notice and thereafter diligently prosecute such cure to completion). (f) "Disability" shall mean the absence of the Executive from the Executive's duties to the Company on a full-time basis for a total of 16 weeks during any 12 month period as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Company and acceptable to the Executive or the Executive's legal representative. (g) "Effective Date" shall mean July 31, 2001. (h) "Good Reason" shall mean the Company's breach of any material term of this Agreement including the second sentence of Section 10. (i) "Stock Options" is defined in Section 5(c). (j) "Term of Employment" is defined in Section 2. 2 Employment. The Company shall employ the Executive, and the Executive shall enter the employ of the Company, in the position set forth in Section 3 and upon the other terms and conditions herein provided. Unless sooner terminated as provided herein, this Agreement and the term of employment hereunder (the "Term of Employment") shall commence on the Effective Date and expire on the fifth anniversary of such date, provided that the Term of Employment shall automatically be extended in successive one year terms unless either party hereto gives written notice of non-extension to the other (pursuant to Section 13) no later than six months prior to the end of the otherwise applicable term. (a) The Executive is entitled to fulfill all prior obligations with his previous employer, Schottenstein Bernstein Capital Group. Once these obligations are completed, Executive will accept no further assignments and devote full-time to Kimco Realty Corporation. Receipt of any money from SBCG on account of such prior obligations is permissible. 3 Position. During the Term of Employment, the Executive shall serve as a Vice President of the Company. 4 Place of Performance. In connection with his employment during the Term of Employment, the Executive shall be based at the Company's principal executive offices in New Hyde Park, NY, or such other location as shall be agreed between the Executive and the Company. During the term of employment, the main office of The Company shall be in Nassau County, New York. 5 Compensation and Related Matters. (a) Base Salary. During the Term of Employment the Executive shall receive a base salary ("Base Salary") at a rate of $350,000 per annum (or such greater amount as shall be determined by the Company's Chief Executive Officer in conjunction with the Board of Directors), payable monthly or more frequently in accordance with the Company's practice as applied to other senior executives. Such base salary shall be reviewed at least annually. (b) Bonus. Provided that Executive remains employed hereunder on such dates, on each annual anniversary of the Effective Date, Executive shall become entitled to receive a cash bonus (the "Guaranteed Bonus") at the minimum amount of $50,000 (or such greater amount as shall be determined by the Company's Chief Executive Officer in conjunction with the Board of Directors). The total "Guaranteed Bonus" during the Term of Agreement (and the Executive remains employed hereunder) shall be not less than $350,000. 2 (c) Equity Compensation. Executive shall be eligible to be granted options with respect to the Company's common stock ("Stock Options") pursuant to an agreement under the Stock Option Plan for Key Employees and Outside Directors of Kimco Realty Corporation (the "Option Plan"). The amount, terms and conditions of any such grant shall be determined in the sole discretion of the Company's Board of Directors or committee thereof. Executive shall initially be granted 2,500 shares of the Company's common stock. Additionally, the Executive shall receive 75,000 Stock Options of the Company's common stock. The Stock Options with respect to a maximum of 25,000 of these shares shall be granted with intent that they qualify as "incentive stock options" as defined in Section 422 (b) of the Internal Revenue Code of 1986 as amended. (d) Automobile Allowance. Executive shall be entitled to an automobile allowance, in accordance with the Company's regular policies in connection therewith, in the amount of $700 per month. (e) Benefits. During the Term of Employment, the Executive shall be entitled to participate in or receive benefits under the employee benefit plans (including health, welfare and insurance plans) and other arrangements made available by the Company to its senior employees generally (collectively "Benefits"), subject to and on a basis consistent with the terms, conditions and overall administration of such plans or arrangements. (f) Business Expenses. The Company shall promptly reimburse the Executive for all reasonable travel and other business expenses incurred by the Executive in the performance of his duties to the Company hereunder. (g) No Waiver. The Executive shall also be entitled to such other benefits or terms of employment as are provided by law. 6 Termination. The Executive's employment hereunder may be terminated by the Company or the Executive, as applicable, without any breach of this Agreement only under the following circumstances: (a) Death. The Executive's employment hereunder shall terminate upon his death. (b) Disability. If the Company determines in good faith that the Disability of the Executive has occurred during the Term of Employment, the Company may give the Executive written notice of its intention to terminate the Executive's employment. In such event, the Executive's employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive, provided that within the 30 days after such receipt, the Executive shall not have returned to full-time performance of his duties. The Executive shall continue to receive his Base Salary and Benefits until the date of termination. 3 This subsection 6(b) shall not limit the entitlement of the Executive, his estate or beneficiaries to any disability or other benefits then available to the Executive under any disability insurance or other benefit plan or policy which is maintained by the Company for the Executive's benefit. (c) Cause. The Company may terminate the Executive's employment hereunder for Cause. (d) Without Cause. The Company may terminate the Executive's employment hereunder without Cause upon thirty days notice. The giving of a notice of non-extension as described in Section 2 shall not be deemed to constitute a termination without Cause. (e) For Good Reason. The Executive may resign his employment upon thirty days notice for Good Reason as defined in Section 1(h). (f) Notice of Termination. Any termination of the Executive's employment hereunder (other than by reason of the Executive's death) shall be communicated by a notice of termination to the other parties hereto. For purposes of this Agreement, a "notice of termination" shall mean a written notice which (i) indicates the specific termination provision in the Agreement relied upon, (ii) sets forth in reasonable detail any facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision indicated and (iii) specifies the effective date of the termination. 7 Benefits upon Termination of Employment. (a) Termination upon Death or Disability: If the Executive's employment shall terminate by reason of his death (pursuant to Section 6(a)) or by reason of his Disability (pursuant to Section 6(b)), the Company shall continue to pay to, or on behalf of, the Executive his Base Salary at the time of his Death or Disability and Guaranteed Bonus and to make all necessary payments for and provide all Benefits to the Executive under this Agreement pursuant to Section 5(e) until the effective date of his termination and any Stock Options of Executive shall become fully vested as of such effective date of termination. (b) Termination without Cause: If the Executive's employment shall terminate without Cause (pursuant to Section 6(d)) or for Good Reason (pursuant to Section 6(e)), (i) the Company shall continue, on its regular payroll dates, to pay the Executive his Base Salary at the time of his termination without cause and Guaranteed Bonus and to make all necessary payments for and provide all Benefits to the Executive under this Agreement for a period from the effective date of his termination of employment equal to the greater of 4 (A) the duration of the remaining Term of Employment (without extension) and (B) one year; and (ii) any Stock Options of Executive which have not become vested and have not otherwise expired as of such date of termination, shall thereupon become vested and exercisable. (c) Other Terminations of Employment: Should the Executive's employment hereunder terminate by reason of expiration of the Term of Employment or for any other reason not set forth in subsections (a) - (b) above, then any Stock Options not then vested shall be forfeited and the Company shall have no other obligation of any kind hereunder to the Executive, except to the extent that any obligation to the Executive hereunder remains unpaid. 8 Survival. The expiration or termination of the Term of Employment shall not impair the rights or obligations of any party hereto which shall have accrued hereunder prior to such expiration. 9 Disputes. Any dispute or controversy arising under, out of, in connection with or in relation to this Agreement shall, at the election and upon written demand of any party to this Agreement, be finally determined and settled by arbitration in Garden City, New York in accordance with the rules and procedures of the American Arbitration Association, and judgment upon the award may be entered in any court having jurisdiction thereof. The prevailing party in any such proceeding shall be entitled to collect from the other party, all legal fees and expenses reasonably incurred in connection therewith. 10 Binding on Successors. This Agreement shall be binding upon and inure to the benefit of the Company, the Executive and their respective successors, assigns, personnel and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable. The Company shall cause any successor to all or substantially all of its assets or business to assume this Agreement. 11 Governing Law. This Agreement is being made and executed in and is intended to be performed in the State of New York, and shall be governed, construed, interpreted and enforced in accordance with the substantive laws of the State of New York without regard to its choice of law rules. 12 Validity. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 5 13 Notices. Any notice, request, claim, demand, document and other communication hereunder to any party shall be effective upon receipt (or refusal of receipt) and shall be in writing and delivered personally or sent, by telex, telecopy, facsimile transmission, or certified or registered mail, postage prepaid, as follows: If to the Company, addressed to: 3333 New Hyde Park Rd. New Hyde Park, NY 11042 Att: Vice President of Human Resources If to the Executive, to him at the address set forth below under his signature; or at any other address as any party shall have specified by notice in writing to the other parties in accordance herewith. 14 Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement. 15 Entire Agreement. The terms of this Agreement are intended by the parties to be the final expression of their agreement with respect to the employment of the Executive by the Company and may not be contradicted by evidence of any prior or contemporaneous agreement. The parties further intend that this Agreement shall constitute the complete and exclusive statement of its terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement. 16 Amendments; Waivers. This Agreement may not be modified, amended, or terminated except by an instrument in writing, signed by the Executive and a disinterested director of the Company. By an instrument in writing similarly executed, the Executive or the Company may waive compliance by the other party with any provision of this Agreement that such other party was or is obligated to comply with or perform, provided, however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure. No failure to exercise and no delay in exercising any right, remedy, or power hereunder shall preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity. 17 No Effect on Other Contractual Rights. Notwithstanding Section 6, the provisions of this Agreement, and any other payment provided for hereunder, shall not reduce any amounts otherwise payable to the Executive under any other agreement between the Executive and the Company, or in any way diminish the Executive's rights under any employee benefit plan, program or arrangement of the Company to which he may be entitled as an employee of the Company. Upon the execution hereof the Original Agreement shall be of no further force or effect. 6 18 No Inconsistent Actions; Cooperation. (a) The parties hereto shall not voluntarily undertake or fail to undertake any action or course of action inconsistent with the provisions or essential intent of this Agreement. Furthermore, it is the intent of the parties hereto to act in a fair and reasonable manner with respect to the interpretation and application of the provisions of this Agreement. (b) Each of the parties hereto shall cooperate and take such actions, and execute such other documents as may be reasonably requested by the other in order to carry out the provisions and purposes of this Agreement. 19 No Alienation of Benefits. To the extent permitted by law the benefits provided by this Agreement shall not be subject to garnishment, attachment or any other legal process by the creditors of the Executive, his beneficiary or his estate. 20 Indemnification. The Company shall provide indemnification to the Executive to the maximum extent permitted by the Company's corporate bylaws and under New York law. Additionally, the Executive will be covered under the Company's Director's and Officer's liability insurance. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written. KIMCO REALTY CORPORATION, a Maryland corporation By: /s/ Milton Cooper -------------------- Milton Cooper Chairman and CEO EXECUTIVE /s/ Raymond Edwards Raymond Edwards Executive's payee pursuant to Section 7(a): Name Lauren P. Edwards Address 37 Morewood Oaks Port Washington, NY 11050 EX-12.1 4 b323865ex_12-1.txt COMPUTATION OF RATIO OF FUNDS Exhibit 12.1 Kimco Realty Corporation and Subsidiaries Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends For the Year Ended December 31, 2002 Pretax earnings from continuing operations $ 261,473,589 Add: Interest on indebtedness 85,771,695 Amortization of debt related expenses 3,060,946 Portion of rents representative of the interest factor 5,910,534 ------------- 356,216,764 Adjustment for equity share in partnerships (34,113,135) ------------- Pretax earnings from continuing operations, as adjusted $ 322,103,629 ============= Combined fixed charges and preferred stock dividends - Interest on indebtedness $ 94,860,415 Preferred stock dividends 18,437,700 Amortization of debt related expenses 2,504,105 Portion of rents representative of the interest factor 5,910,534 ------------- Combined fixed charges and preferred stock dividends $ 121,712,754 ============= Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends 2.6 ============= EX-12.2 5 b323865ex_12-2.txt COMPUTATION OF RATIO OF FUNDS Exhibit 12.2 Kimco Realty Corporation and Subsidiaries Computation of Ratio of Funds from Operations to Combined Fixed Charges and Preferred Stock Dividends For the Year Ended December 31, 2002 Funds from operations, available to common stockholders $ 319,680,669 Add: Interest on indebtedness 85,771,695 Preferred stock dividends 18,437,700 Portion of rents representative of the interest factor 5,910,534 ------------- 429,800,598 Adjustment for equity share in partnerships (51,891,970) ------------- Funds from operations, as adjusted $ 377,908,628 ============= Combined fixed charges and preferred stock dividends - Interest on indebtedness $ 94,860,415 Preferred stock dividends 18,437,700 Portion of rents representative of the interest factor 5,910,534 ------------- Combined fixed charges and preferred stock dividends $ 119,208,649 ============= Ratio of Funds from Operations to Combined Fixed Charges and Preferred Stock Dividends 3.2 ============= EX-21.1 6 b323865ex_21-1.txt SUBSIDIARIES OF THE COMPANY Exhibit 21.1 SUBSIDIARIES OF THE COMPANY 44 PLAZA, INC. AUK REALTY CORPORATION BRENDA PROPERTIES CARROLWOOD COMMONS OUTPARCEL CORP. EAST END OPERATING CORP. EASTON 257, INC. FOX HILL POUGHKEEPSIE, INC. GC ACQUISITION CORP. HAMBURG WELLNESS PARTNERS HARVEST OF NASHVILLE, INC. HARVEST PROPERTIES, INC. KCH ACQUISITION, INC. KCHGC, INC. KIMSQUARE GLEN BURNIE 474, INC. KIMSQUARE HOMEWOOD 461, INC. KIMCOAST OF WARREN, INC. KIMCADE, INC. KIMCAL CORPORATION KIMCO BBB 878A, INC. KIMCO 118 O/P, INC. KIMCO 120 O/P, INC. KIMCO 413B, INC. KIMCO 420, INC. KIMCO 632, INC. KIMCO ACADIANA 670, INC. KIMCO ALTAMONTE SPRINGS 636, INC. KIMCO ANAHEIM, INC. KIMCO AUGUSTA 635, INC. KIMCO AUSTIN 589, INC. KIMCO AUTOVENTURE, INC. KIMCO BANGOR 2000, INC. KIMCO BATON ROUGE 666, INC. KIMCO BBB 878A, INC. KIMCO BLACKWOOD 644, INC. KIMCO BT CORP. KIMCO BUCKS 651, INC. KIMCO BRADENTON 698, INC. KIMCO BUCKS 651, INC. KIMCO BURLESON 496, INC. KIMCO CARY 696, INC. KIMCO CAMBRIDGE 242, INC. KIMCO CANTON 182, INC. KIMCO CANYON POINTE INC. KIMCO CAPITAL CORP. KIMCO CARROLLWOOD 664, INC. KIMCO CEDAR HILL CROSSING 712, INC. KIMCO CHARLESTON 631, INC. KIMCO CHARLOTTE 192, INC. KIMCO CINNAMINSON 645, INC. KIMCO CLAWSON 143, INC. KIMCO COLUMBUS, INC. KIMCO CONCOURSE, INC. KIMCO CORAL SPRINGS 623, INC. KIMCO CRANSTON 691, INC. KIMCO CROSS CREEK 607, INC. KIMCO DECATUR 797, INC. KIMCO DENVER 680, INC. KIMCO DEV. OF MCINTOSH SARASOTA KIMCO DEV. OF MENTOR, INC. KIMCO DEV. OF MUSKEGON, INC. KIMCO DEV. OF NEW KENSINGTON, INC. KIMCO DEV. OF SEMINOLE SANFORD, INC. KIMCO DEV. OF TROY, INC. KIMCO DEV. OF TYVOLA, INC. KIMCO DEV. OF WATERLOO AKRON, INC. KIMCO DOVER 501, INC. KIMCO DOWNERS PARK 764, INC. KIMCO DURHAM 639, INC. KIMCO EAST BANK 689, INC. KIMCO FARMINGTON 146, INC. KIMCO FLORENCE 646, INC. KIMCO FORUM 717, INC. KIMCO GALLERY 660, INC. KIMCO GATES 149, INC. KIMCO GOVERNORS MARKETPLACE 317, INC. KIMCO GOVERNORS MARKETPLACE II 318, INC. KIMCO GREAT BARRINGTON 609, INC. KIMCO GREEN ORCHARD 606, INC. KIMCO GREENVILLE 676, INC. KIMCO HAYDEN PLAZA 604, INC. KIMCO HAZELWOOD, INC. KIMCO HOMDEL TOWNE CENTER 1007, INC. KIMCO HOMDEL COMMONS 1008, INC. KIMCO HOUMA 274, LLC KIMCO JUAN TABO PLAZA 591, INC. KIMCO KENT 637, INC. KIMCO KISSIMMEE 613, INC. KIMCO KML, INC. KIMCO LAFAYETTE 671, INC. KIMCO LAFAYETTE MARKET PLACE 697, INC. KIMCO LAKELAND 123, INC. KIMCO LAKEWOOD 684, INC. KIMCO LANDMARK STATION 275, INC. KIMCO LARGO 136, INC. KIMCO LARGO 139, INC. KIMCO LAUREL, INC. KIMCO LAUREL 173, INC. KIMCO LEXINGTON 140, INC. KIMCO LIVONIA, INC. KIMCO MANASSAS 672, INC. KIMCO MELBOURNE 616, INC. KIMCO MANAGEMENT OF NEW JERSEY KIMCO MANAGEMENT OF MARYLAND, INC. KIMCO MAPLE HILL 138, INC. KIMCO MAPLEWOOD 673, INC. KIMCO MESA 679, INC. KIMCO MIAMISBURG 714, INC. KIMCO MORRISVILLE 648, INC. KIMCO MT. DORA 677, INC. KIMCO NJ, INC. KIMCO NORTH BRUNSWICK 617, INC. KIMCO NORTHWEST SQUARE 597, INC. KIMCO OCALA 665, INC. KIMCO OPPORTUNITY, INC. KIMCO ORLANDO 638, INC. KIMCO PALMER PARK 654, INC. KIMCO PEPPERTREE 604, INC. KIMCO PEPPERTREE, INC. KIMCO PHILMED, INC. KIMCO PLANO 768, INC. KIMCO PORT WASHINGTON 675, INC. KIMCO PREFERRED INVESTOR I, INC. KIMCO PREFERRED INVESTOR II, INC. KIMCO PREFERRED INVESTOR III, INC. KIMCO PREFERRED INVESTOR IV, TRUST KIMCO PREFERRED INVESTOR V, INC. KIMCO PREFERRED INVESTOR VI, INC. KIMCO PREFERRED INVESTOR VII, INC. KIMCO PREFERRED INVESTOR VIII, INC. KIMCO PREFERRED INVESTOR IX, INC. KIMCO PROPERTIES, INC. KIMCO PROPS. NASHVILLE, INC. KIMCO PURCHASING AGENCY CORPORATION KIMCO RALEIGH 177, INC. KIMCO RALPH'S CORNER 659, INC. KIMCO RICHMOND 800, INC. KIMCO RIDGEWOOD 615, INC. KIMCO RIVERS AVE. 622, INC. KIMCO RIVERGATE 588, INC. KIMCO ROCKINGHAM 620, INC. KIMCO SACRAMENTO 788, INC. KIMCO SAND LAKE 618, INC. KIMCO SANTEE 705, INC. KIMCO SARASOTA 378, INC. KIMCO SAVANNAH 185, INC. KIMCO SCOTTSDALE MALL 183, INC. KIMCO SELECT TREXLER 663, INC. KIMCO SHARONVILLE 276, INC. KIMCO SOUTH MIAMI 634, INC. KIMCO SOUTH PARKER 682, INC. KIMCO SPRING CREEK 686, INC. KIMCO ST. CHARLES, INC. KIMCO TALLAHASSEE 715, INC. KIMCO TAMPA 470, INC. KIMCO TEXAS, INC. KIMCO TITLE CORPORATION KIMCO WARRINGTON 652, INC. KIMCO WEST MELBOURNE 668, INC. KIMCO WEST PALM BEACH 633, INC. KIMCO WESTERVILLE 178, INC. KIMCO WESTMONT 614, INC. KIMCO WHITE LAKE 667, INC. KIMCO WM148, INC. KIMCO WOODFOREST 655, INC. KIMCO YONKERS 801, INC. KIMCO DEV. OF WOOSTER, INC. KIMCO DEV. OF 31 SOUTH, INC. KIMCO DEV. OF AIKEN, INC. KIMCO DEV. OF GASTONIA, INC. KIMCO DEV. OF GIANTS, INC. KIMCO DEV. OF GREENWOOD OP. INC. KIMCO DEV. OF HAMPTON BAYS, INC. KIMCO DEV. OF KETTERING, INC. KIMCO OF CHERRY HILL, INC. KIMCO OF GEORGIA, INC. KIMCO OF HERMITAGE, INC. KIMCO OF HICKORY HOLLOW, INC. KIMCO OF HUNTINGTON, INC. KIMCO OF ILLINOIS, INC. KIMCO OF MILLERODE, INC. KIMCO OF NANUET, INC. KIMCO OF NEW ENGLAND, INC. KIMCO OF NEW YORK, INC. KIMCO OF NORTH CAROLINA, INC. KIMCO OF NORTH MIAMI, INC. KIMCO OF OAKVIEW, INC. KIMCO OF OHIO, INC. KIMCO OF PENNSYLVANIA, INC. KIMCO OF RACINE, INC. KIMCO OF SPRINGBORO PIKE, INC. KIMCO OF SPRINGFIELD, INC. KIMCO OF SPRINGFIELD 625, INC. KIMCO OF STUART 619, INC. KIMCO OF SYOSSET, INC. KIMCO OF TAMPA, INC. KIMCO OF TENNESEE, INC. KIMCO OF UTAH, INC. KRC ACQUISITION CORP. KRC ALTON 802, INC. KRC ARLINGTON 866, INC. KRC ARLINGTON HEIGHTS 896, INC. KRC BELLEVILLE 808, INC. KRC BRIDGEVIEW 894, INC. KRC BRIDGETON 875, INC. KRC CARBONDALE 848, INC. KRC CHAMPAIGN 870, INC. KRC CHRISTY 804, INC. KRC CRESTHILL 868, INC. KRC CRYSTAL CITY 850, INC. KRC CRYSTAL LAKE 891, INC. KRC CORPUS CHRISTI 878, INC. KRC CREVE COEUR 830, INC. KRC CRESTWOOD 887, INC. KRC DECATUR 797, INC. KRC DUBUQUE 847, INC. KRC ELGIN 860, INC. KRC FAIRVIEW HEIGHTS 881, INC. KRC FOREST PARK 862, INC. KRC HARRISBURG 193, INC. KRC INDEPENDENCE 806, INC. KRC KIRKWOOD 803, INC. KRC LEMAY 834, INC. KRC MACARTHUR BLVD. 799, INC. KRC MERRILLVILLE 849, INC. KRC MIDWEST CITY 857, INC. KRC MISHAWAKA 895, INC. KRC MUNDELIEN 874, INC. KRC NILES 865, INC. KRC NORTH ROCKWELL 882, INC. KRC NORRIDGE 845, INC. KRC O'FALLON DC 861, INC. KRC ORLAND PARK 809, INC. KRC OVERLAND PARK 805, INC. KRC PADUCAH 795, INC. KRC PROPERTY MANAGEMENT I, INC. KRC ROCKFORD 796, INC. KRC ST. CHARLES 798, INC. KRC ST. JOSEPH 880, INC. KRC STATE AVENUE 807, INC. KRC SCHAUMBERG 855, INC. KRC SOUTHBEND 883, INC. KRC SOUTH SHIELDS 871, INC. KRC SPRINGFIELD 869, INC. KRC STREAMWOOD 897, INC. KRC THEATRE PORTFOLIO, INC. KRC TULSA 859, INC. KRC WAKEGAN 886, INC. KRCV CORP. KSI CONVENIENCE, LLC KSI MORTGAGE INVESTMENT, LLC KSI TRUST KIMEX SALTILLO HOLDING, INC. KIMEX SALTILLO HOLDING 1, INC. KIMEX SENDERO NORTE HOLDING I, INC. KIMEX SENDERO NORTE HIOLDING II, INC. KIMGS, INC. KIMSCHOTT, INC. KIMSTRAUSS 184, INC. KIMSWORTH INC. KIMSWORTH OF ALABAMA, INC. KIMSWORTH OF ARIZONA, INC. KIMSWORTH OF ARKANSAS, INC. KIMSWORTH OF COLORADO, INC. KIMSWORTH OF FLORIDA, INC. KIMSWORTH OF GEORGIA, INC. KIMSWORTH OF ILLINOIS, INC. KIMSWORTH OF INDIANA, INC. KIMSWORTH OF IOWA, INC. KIMSWORTH OF KANSAS, INC. KIMSWORTH OF LOUISIANA, INC. KIMSWORTH OF MARYLAND, INC. KIMSWORTH OF MICHIGAN, INC. KIMSWORTH OF MINNESOTA, INC. KIMSWORTH OF MISSISSIPPI, INC. KIMSWORTH OF MISSOURI, INC. KIMSWORTH OF MONTANA, INC. KIMSWORTH OF NEBRASKA, INC. KIMSWORTH OF NEW JERSEY, INC. KIMSWORTH OF NEW MEXICO, INC. KIMSWORTH OF OHIO, INC. KIMSWORTH OF PENNSYLVANIA, INC. KIMSWORTH OF SOUTH CAROLINA, INC. KIMSWORTH OF TEXAS, INC. KIMSWORTH OF VIRGINIA, INC. KIMWEST 186, INC. KIMVEN CORPORATION KIMZADD, INC. KIMZAY BENTON HARBOR, INC. KIMZAY BLOOMINGTON, INC. KIMZAY CORPORATION KIMZAY GEORGIA, INC. KIMZAY GREENWOOD, INC. KIMZAY OF CHARLOTTE, INC. KIMZAY OF FLORIDA, INC. KIMZAY OF ILLINOIS, INC. KIMZAY WINSTON-SALEM, INC. KIMZFERN, INC. KIMZGATE, INC. KIMZLAR, IINC. KIMZWOOD, INC. MANHASSET VENTURE, LLC MANMORT, INC. MANETTO HILLS ASSOCIATES, INC. MASSAPEQUA KSI VENTURE, LLC MC KIM CORP. MC MORT CORP. MILMAR REALTY CORPORATION NW MP 1006, INC. NORBER CORP. OWL HOLDINGS, INC. PASSIVE INVESTORS, INC. PERMELYNN CORPORATION PERMELYNN OF BRIDGEHAMPTON, INC. PERMELYNN OF GEORGIA, INC. PERMELYNN OF WESTCHESTER, INC. RCS HOLDING CORP. REDEL CONSTRUCTION CORP. RICH HILL, INC. SS 1005, INC. SANNDREL INC. SANNDREL OF HARRISBURGH, INC. SANNDREL OF PENNSYLVANIA, INC. SANNDREL OF VIRGINIA, INC. SP 255, INC. SS 1005, INC. ST. ANDREWS SHOPPING CENTER CORP. OF CHARLESTON SUTTON SQ. CORP. THE KIMCO CORPORATION WOODSO CORP. EX-23.1 7 b323865ex_23-1.txt CONSENT OF INDEPENDENT ACCOUNTANTS Exhibit 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (Nos. 333-61303 and 333-59970) and Form S-8 (Nos. 333-61323, 33-60050, 033-80729, 033-77670, 033-51864 and 333-62626) of Kimco Realty Corporation and Subsidiaries of our report dated March 18, 2003, relating to the consolidated financial statements and financial statement schedules, which appear in this Form 10-K. New York, New York March 26, 2003 -----END PRIVACY-ENHANCED MESSAGE-----