UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-10899
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Kimco Realty Corporation
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(Exact name of registrant as specified in its charter)
Maryland 13-2744380
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3333 New Hyde Park Road, New Hyde Park, NY 11042
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(Address of principal executive offices - Zip Code)
(516) 869-9000
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
-------------------------------------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date.
61,233,703 shares outstanding as of July 31, 2000
1 of 16
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Financial Statements -
Condensed Consolidated Balance Sheets as of June 30, 2000 and December 31,
1999.
Condensed Consolidated Statements of Income for the Three and Six Months
Ended June 30, 2000 and 1999.
Condensed Consolidated Statements of Cash Flows for the Six Months Ended
June 30, 2000 and 1999.
Notes to Condensed Consolidated Financial Statements.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The following discussion should be read in conjunction with the
accompanying Condensed Consolidated Financial Statements and Notes thereto.
These unaudited financial statements include all adjustments which are, in the
opinion of management, necessary to reflect a fair statement of the results for
the interim periods presented, and all such adjustments are of a normal
recurring nature.
Results of Operations
- ---------------------
Revenues from rental property increased $8.8 million or 8.3% to $114.9
million for the three months ended June 30, 2000, as compared with $106.1
million for the corresponding quarter ended June 30, 1999. Similarly, revenues
from rental property increased $8.3 million or 3.8% to $227.2 million for the
six months ended June 30, 2000, as compared with $218.9 million for the
corresponding six month period ended June 30, 1999. These increases resulted
primarily from the combined effect of (i) the acquisition of 10 shopping center
properties providing revenues of $1.2 million and $1.6 million for the three and
six month periods ended June 30, 2000, respectively, (ii) acquisitions
throughout calendar year 1999 (35 shopping center properties) providing
incremental revenues of $4.1 million and $9.7 million as compared to the
corresponding three and six month periods in 1999, respectively, and (iii) the
completion of certain development and redevelopment projects, new leasing and
re-tenanting within the portfolio at improved rental rates providing incremental
revenues of approximately $7.4 million and $13.3 million as compared to the
corresponding three and six month periods in 1999, respectively. These increases
were offset as a result of the deconsolidation of 23 shopping center properties,
as of April 28, 1999, in connection with the sale of a controlling interest in
Kimco Income REIT ("KIR"). Revenues from these 23 properties totaled
approximately $3.9 million and $16.3 million for the three and six month periods
ended June 30, 1999.
2
Rental property expenses, including depreciation and amortization,
increased approximately $5.0 million or 7.9% to $69.0 million for the three
months ended June 30, 2000, as compared with $64.0 million for the corresponding
quarter ended June 30, 1999. Similarly, rental property expenses, including
depreciation and amortization, increased $1.4 million or 1.1% to $136.6 million
for the six months ended June 30, 2000, as compared with $135.2 million for the
corresponding period in the preceding year. These rental property expense
increases are the result of the combined effect of (i) increased expenses
relating to new property acquisitions made throughout calendar year 1999 and
during the six months ended June 30, 2000, offset by (ii) the reduction of
rental property expenses relating to the deconsolidation of 23 shopping center
properties as of April 28, 1999, in connection with the sale of a controlling
interest in KIR. Interest expense increased $2.8 million and $1.9 million for
the three and six month periods ended June 30, 2000, respectively, reflecting
higher average outstanding borrowings as compared to the corresponding periods
in 1999 resulting from (i) the issuance of an additional $152.0 million of
unsecured debt and the assumption of mortgage debt during 1999 and 2000 in
connection with certain property acquisitions, offset by (ii) the
deconsolidation of $252.4 million of mortgage debt on 19 properties as of April
28, 1999, in connection with the sale of a controlling interest in KIR.
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 formation, the Company
contributed 19 property interests to KIR. On April 28, 1999, KIR sold a
significant interest in the partnership to an institutional investor. 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.
The Company's equity in income of KIR for the three and six month periods ended
June 30, 2000 was approximately $2.3 million and $4.6 million, respectively.
Net income for the three and six months ended June 30, 2000 was $50.9
million and $99.7 million, respectively. Net income for the three and six months
ended June 30, 1999 was $42.4 million and $81.9 million, respectively. On a per-
diluted share basis, net income improved $0.11 and $0.25 for the three and six
month periods ended June 30, 2000, respectively, after adjusting for the gains
on sales of certain shopping center properties in the respective periods in
2000. This improved performance reflects the effect of property acquisitions,
internal growth from strong leasing activity and the completion of certain
development and redevelopment projects which strengthened operating
profitability.
Liquidity and Capital Resources
- -------------------------------
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.
Since the IPO, the Company has completed additional offerings of its public
unsecured debt and equity, raising in the aggregate over $2.1 billion for the
purposes of repaying
3
indebtedness, acquiring interests in neighborhood and community shopping centers
and for expanding and improving properties in the portfolio.
During August 1998, the Company established a $215 million, unsecured
revolving credit facility (the "Credit Facility"), which is scheduled to expire
in August 2001. This Credit Facility has made available funds to both finance
the purchase of properties and meet any short-term working capital requirements.
As of June 30, 2000 there was $35.0 million outstanding under the Credit
Facility.
The Company has also implemented a $200 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.
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 June 30, 2000, the Company had over 350 unencumbered property
interests in its portfolio.
During 1998, the Company filed a shelf registration statement on Form
S-3 for up to $750 million of debt securities, preferred stock, depositary
shares, common stock and common stock warrants. As of June 30, 2000, the Company
had approximately $393.2 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
rental revenues in the existing portfolio and from other sources. Since cash
used to pay dividends reduces amounts available for capital investment, the
Company generally intends to maintain a conservative dividend payout ratio,
reserving such amounts as it considers necessary for the expansion and
renovation of shopping centers in its portfolio, repayment of debt, the
acquisition of interests in new properties as suitable opportunities arise, and
such other factors as the Board of Directors considers appropriate.
It is management's intention that the Company continually have access
to the capital resources necessary to expand and develop its business.
Accordingly, the Company may seek to obtain funds through additional equity
offerings, unsecured debt financings and/or mortgage financings in a manner
consistent with its intention to operate with a conservative debt capitalization
policy.
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, availability under its revolving credit facility,
issuance
4
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 increased to $128.7 million for the six months ended June 30, 2000 as
compared to $114.8 million for the corresponding period ended June 30, 1999.
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 will, from
time to time, enter into interest rate protection agreements which mitigate, but
do not eliminate, the effect of changes in interest rates on its floating-rate
loans.
New Accounting Pronouncements
- -----------------------------
During December 1999, the Securities and Exchange Commission issued
Staff Accounting Bulletin No. 101 "Revenue Recognition in Financial Statements"
("SAB 101") which, among other things, provides further guidance as to the
recognition of contingent rents (i.e. additional rents based on tenants' sales
volumes). The Company has elected early adoption of SAB 101 effective January 1,
2000. The management of the Company believes the implementation of SAB 101 will
not have a material impact on the Company's financial position or result of
operations.
Forward-looking Statements
- --------------------------
This quarterly report on Form 10-Q, together with other statements and
information publicly disseminated by the Company 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
5
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) financing risks, such as the inability to
obtain equity or debt financing on favorable terms, (iii) changes in
governmental laws and regulations, (iv) the level and volatility of interest
rates (v) the availability of suitable acquisition opportunities and (vi)
increases in operating costs. Accordingly, there is no assurance that the
Company's expectations will be realized.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
As of June 30, 2000, the Company had approximately $265.8 million of
floating-rate debt outstanding, including $35.0 million on its unsecured line of
credit. The interest rate risk on $60.0 million of such debt has been mitigated
through the use of an interest rate swap agreement (the "Swap") with a major
financial institution. The Company is exposed to credit risk in the event of
non-performance by the counter-party to the Swap. The Company believes it
mitigates its credit risk by entering into this Swap with a major financial
institution.
The Company believes the interest rate risk represented by the
remaining $205.8 million of floating-rate debt is not material to the Company or
its overall capitalization.
The Company has not, and does not plan to, enter into any derivative
financial instruments for trading or speculative purposes. As of June 30, 2000,
the Company had no other material exposure to market risk.
6
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share information)
June 30, December 31,
2000 1999
----------- -----------
Assets:
Real estate, net of accumulated depreciation
of $360,341 and $323,738 respectively $ 2,712,682 $ 2,627,312
Investment and advances in KIR 114,268 114,217
Investments and advances in other real estate joint ventures 64,318 68,553
Investments in retail store leases 12,054 12,709
Cash and cash equivalents 18,742 28,076
Accounts and notes receivable 37,099 31,689
Other assets 134,722 124,920
----------- -----------
$ 3,093,885 $ 3,007,476
=========== ===========
Liabilities:
Notes payable $ 1,072,250 $ 1,037,250
Mortgages payable 245,139 212,321
Other liabilities, including minority interests in partnerships 152,442 152,470
----------- -----------
1,469,831 1,402,041
----------- -----------
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 418,278 and 428,514 shares, respectively 418 429
Aggregate liquidation preference $104,569 and $107,129, respectively
Common stock, $.01 par value, authorized 200,000,000 shares
Issued and outstanding 61,206,632 and 60,795,593 shares, respectively 612 608
Paid-in capital 1,742,786 1,730,278
Cumulative distributions in excess of net income (117,018) (122,959)
----------- -----------
1,627,698 1,609,256
Notes receivable from officer stockholders (3,644) (3,821)
----------- -----------
1,624,054 1,605,435
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$ 3,093,885 $ 3,007,476
=========== ===========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
7
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Three and Six Months ended June 30, 2000 and 1999
(in thousands, except per share data)
Three Months Ended June 30, Six Months Ended June 30,
2000 1999 2000 1999
--------- --------- --------- ---------
Revenues from rental property $ 114,867 $ 106,072 $ 227,224 $ 218,948
--------- --------- --------- ---------
Rental property expenses:
Rent 3,368 3,497 6,782 6,995
Real estate taxes 14,651 13,255 27,678 27,568
Interest 22,940 20,128 45,223 43,366
Operating and maintenance 10,404 10,290 22,208 22,574
Depreciation and amortization 17,679 16,794 34,753 34,665
--------- --------- --------- ---------
69,042 63,964 136,644 135,168
--------- --------- --------- ---------
Income from rental property 45,825 42,108 90,580 83,780
Income from investment in retail store leases 1,024 997 2,037 1,980
--------- --------- --------- ---------
46,849 43,105 92,617 85,760
Management fee income 1,388 1,307 2,909 2,143
General and administrative expenses (6,440) (5,882) (12,661) (11,851)
Equity in income of KIR 2,285 1,147 4,633 1,147
Other income, net 5,490 2,764 10,480 4,730
--------- --------- --------- ---------
Income before gain on sale of shopping center
properties 49,572 42,441 97,978 81,929
Gain on sale of shopping center properties 1,374 - 1,677 -
--------- --------- --------- ---------
Net Income $ 50,946 $ 42,441 $ 99,655 $ 81,929
========= ========= ========= =========
Net income applicable to common shares $ 44,376 $ 35,820 $ 86,467 $ 68,687
========= ========= ========= =========
Net income per common share
Basic $ 0.73 $ 0.59 $ 1.42 $ 1.14
========= ========= ========= =========
Diluted $ 0.72 $ 0.59 $ 1.41 $ 1.13
========= ========= ========= =========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
8
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months ended June 30, 2000 and 1999
(in thousands)
2000 1999
--------- ---------
Cash flow provided by operations $ 128,701 $ 114,846
--------- ---------
Cash flow from investing activities:
Acquisition of and improvements to real estate (92,704) (139,728)
Investment in marketable securities (14,366) (11,833)
Proceeds from sale of marketable securities 6,958 10,416
Investments and advances to affiliated companies (2,766) (950)
Investments and advances to joint ventures - (17,276)
Repayment of mortgage loans receivable - 4,545
Collection of mortgage loans receivable 2,517 -
Investment in real estate joint ventures (500) -
Reimbursement of advances to real estate joint ventures - 7,500
Net proceeds from sale of interest in KIR - 68,179
Proceeds from sale of real estate properties 7,964 5,890
--------- ---------
Net cash flow used for investing activities (92,897) (73,257)
--------- ---------
Cash flow from financing activities:
Principal payments on debt, excluding
normal amortization of rental property debt (16,420) (18,464)
Principal payments on rental property debt (2,261) (2,655)
Proceeds from mortgage financing 34,396 23,306
Payment of unsecured obligation (3,250) (20,984)
Proceeds from issuance of senior notes - 130,000
Repayment of senior notes - (100,000)
Borrowings under revolving credit facility 45,000 50,000
Repayment of borrowings under revolving credit facility (10,000) (35,000)
Dividends paid (93,491) (83,627)
Repurchase and retirement of preferred stock (2,505) -
Proceeds from issuance of stock 3,393 4,236
--------- ---------
Net cash flow used for financing activities (45,138) (53,188)
--------- ---------
Change in cash and cash equivalents (9,334) (11,599)
Cash and cash equivalents, beginning of year 28,076 43,920
--------- ---------
Cash and cash equivalents, end of year $ 18,742 $ 32,321
========= =========
Interest paid during the period $ 43,699 $ 41,937
========= =========
Supplemental schedule of noncash investing/financing activity:
Acquisition of real estate interests by issuance of stock
and/or assumption of mortgage debt $ 28,727 $ 41,607
========= =========
Declaration of dividends paid in succeeding period $ 45,513 $ 41,576
========= =========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
9
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
1. Interim Financial Statements
The accompanying Condensed Consolidated Financial Statements include
the accounts of Kimco Realty Corporation (the "Company"), its subsidiaries, all
of which are wholly-owned, and all partnerships in which the Company has a
controlling interest. The information furnished is unaudited and reflects all
adjustments which are, in the opinion of management, necessary to reflect a fair
statement of the results for the interim periods presented, and all such
adjustments are of a normal recurring nature. These Condensed Consolidated
Financial Statements should be read in conjunction with the financial statements
included in the Company's Annual Report on Form 10-K.
During December 1999, the Securities and Exchange Commission issued
Staff Accounting Bulletin No. 101 "Revenue Recognition in Financial Statements"
("SAB 101") which, among other things, provides further guidance as to the
recognition of contingent rents (i.e. additional rents based on tenants' sales
volumes). The Company has elected early adoption of SAB 101 effective January 1,
2000. The management of the Company believes the implementation of SAB 101 will
not have a material impact on the Company's financial position or results of
operations.
2. Property Acquisitions
During the three months ended March 31, 2000, the Company acquired
interests in three neighborhood and community shopping center properties, in
separate transactions, comprising approximately 0.4 million square feet of gross
leasable area ("GLA") in three states for an aggregate purchase price of
approximately $26.7 million, including the assumption of approximately $16.5
million in mortgage debt encumbering two of the properties. In addition, the
Company acquired fee title to a shopping center property in which the Company
held a leasehold interest for an aggregate purchase price of approximately $2.5
million.
During 1998, in connection with the Company's merger with The Price
REIT, Inc., the Company acquired a 50% interest in a joint venture in Houston,
TX. During March 2000, the Company acquired the remaining 50% interest in such
partnership for $5.0 million and now accounts for its investment under the
consolidation method of accounting.
10
During May 2000, the Company, through an affiliated entity, acquired
five neighborhood and community shopping centers comprising approximately 0.5
million square feet of GLA located in five states for approximately $18.9
million. These properties were formerly anchored by a retailer which filed for
protection under Chapter 11 of the Bankruptcy Code in June 1999 and rejected
these leases in January 2000. The Company acquired these properties with an
occupancy level of approximately 43% and is actively negotiating with other
retailers to lease the vacant space.
On June 1, 2000, the Company exercised its option to acquire two
shopping center properties comprising 0.4 million square feet of GLA from KC
Holdings, Inc. ("KC Holdings"), an entity formed in connection with the
Company's initial public stock offering in November 1991. The properties were
acquired for an aggregate option price of approximately $12.2 million, paid
approximately $11.6 million in shares of the Company's common stock (285,148
shares valued at $40.7625 per share at June 1, 2000) and $0.6 million through
the assumption of mortgage debt encumbering one of the properties. The members
of the Company's Board of Directors who are not also shareholders of KC
Holdings, unanimously approved the Company's purchase of these two shopping
center properties.
3. Property Dispositions
During the six months ended June 30, 2000, the Company disposed of four
shopping center properties, in separate transactions, comprising approximately
0.2 million square feet of GLA, for aggregate proceeds of approximately $5.1
million. Gains on sales of these properties was approximately $1.7 million. In
addition, the Company disposed of two land parcels, in separate transactions,
for aggregate proceeds of approximately $2.9 million.
4. Debt Financings
During the six months ended June 30, 2000, the Company obtained
individual non-recourse mortgage debt on four Kmart anchored locations,
providing aggregate proceeds to the Company of approximately $34.2 million.
These ten-year loans mature in 2010 and have effective interest rates ranging
from 7.91% to 8.15% per annum.
5. Investment and advances in KIR
During 1998, the Company formed Kimco Income REIT ("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
formation, the Company contributed 19 property interests to KIR. On April 28,
1999, KIR sold a significant interest in the partnership to an institutional
investor. 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. The Company's equity in income of KIR for the six months ended
11
June 30, 2000 and for the period April 28, 1999 to June 30, 1999, were
approximately $4.6 million and $1.1 million, respectively.
In addition, KIR entered into a master management agreement with the
Company, whereby, the Company will perform services for fee relating to the
management, operation, supervision and maintenance of the joint venture
properties. For the six months ended June 30, 2000, and for the period April 28,
1999 to June 30, 1999, the Company earned management fees of approximately $0.9
million and $0.2 million, respectively.
6. Investment in Retail Store Leases
Income from the investment in retail store leases for the six months
ended June 30, 2000 and 1999 represents sublease revenues of approximately $9.5
million and $10.2 million, respectively, less related expenses of $6.8 million
and $7.4 million, respectively, and amounts, which in management's estimation,
reasonably provide for the recovery of the investment over a period representing
the expected remaining term of the retail store leases.
7. Net Income Per Common Share
The following table sets forth the basic and diluted weighted average
numbers of common shares outstanding for each period used in the calculation of
basic and diluted net income per common share:
Three Months Ended Six Months Ended
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
------------- ------------- ------------- -------------
Basic EPS - weighted
average number of common
shares outstanding 60,972,107 60,258,048 60,883,950 60,212,320
Effect of dilutive securities -
stock options 727,163 588,405 554,260 595,084
-------------- -------------- -------------- ---------------
Diluted EPS - weighted
average number of
Common shares 61,699,270 60,846,453 61,438,210 60,807,404
============== ============== ============== ===============
The effect of the conversion of the Class D Preferred Stock would have
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 net income per common share.
12
8. Pro Forma Financial Information
As discussed in Notes 2 and 3, the Company and certain of its
affiliates acquired and disposed of interests in certain shopping center
properties during the six months ended June 30, 2000. The pro forma financial
information set forth below is based upon the Company's historical Condensed
Consolidated Statement of Income for the six months ended June 30, 2000 and
1999, adjusted to give effect to these transactions as of January 1, 1999.
The pro forma financial information is presented for informational
purposes only and may not be indicative of what actual results of operations
would have been had the transactions occurred as of January 1, 1999, nor does it
purport to represent the results of future operations. (Amounts presented in
millions, except per share figures).
Six Months Ended June 30,
2000 1999
------- -------
Revenues from rental property $ 228.8 $ 223.6
Net Income $ 98.6 $ 85.2
Net Income per common share:
Basic $ 1.40 $ 1.19
======= =======
Diluted $ 1.39 $ 1.18
======= =======
9. Subsequent Events
During August 2000, the Company issued $110.0 million of floating rate
medium-term notes ("MTNs") under its MTN Program. The floating rate MTNs were
priced at 99.7661% of par, mature in August 2002, and bear interest at LIBOR
plus .25%. The proceeds from this MTN issuance were used to repay a $60 million
MTN that matured in August 2000 and to prepay a $52.0 million term loan due in
November 2000.
Also in August 2000, the Company completed a primary public stock
offering of 1,800,000 shares of common stock at $42.50 per share. The net
proceeds from this sale of common stock, totaling approximately $72.4 million
(after related transaction costs of $4.1 million) will be used for general
corporate purposes, including (i) the investment of additional equity capital in
KIR, (ii) the acquisition of neighborhood and community shopping centers as
suitable opportunities arise, and (iii) the development, redevelopment and
expansion of properties in the Company's portfolio.
13
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not presently involved in any litigation, nor to its
knowledge is any litigation threatened against the Company or its subsidiaries,
that in management's opinion, would result in any material adverse effect on the
Company's ownership, management or operation of its properties, or which is not
covered by the Company's liability insurance.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders.
In connection with the Annual Meeting of Stockholders held on May 18,
2000 (the "Meeting"), stockholders were asked to vote with respect to (I) the
election of Directors to serve for the ensuing year.
A total of 49,794,368 votes were cast regarding Proposal I as follows:
Proposal I -
- ----------
(Election of Directors) Votes For Withheld
----- --- --------
Nominees:
---------
Martin S. Kimmel 49,794,368 47,934,724 1,859,644
Milton Cooper 49,794,368 44,935,104 4,859,264
Joseph Kornwasser 49,794,368 48,378,490 1,415,878
Richard G. Dooley 49,794,368 48,466,370 1,327,998
Joe Grills 49,794,368 48,473,142 1,321,226
Michael J. Flynn 49,794,368 48,399,255 1,395,113
Frank Lourenso 49,794,368 48,454,881 1,339,487
Item 5. Other Information
Not Applicable
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Item 6. Exhibits and Reports on Form 8-K
Exhibits -
4.1 Agreement to File Instruments
Kimco Realty Corporation (the "Registrant") hereby agrees to file with
the Securities and Exchange Commission, upon request of the Commission, all
instruments defining the rights of holders of long-term debt of the Registrant
and its consolidated subsidiaries, and for any of its unconsolidated
subsidiaries for which financial statements are required to be filed, and for
which the total amount of securities authorized thereunder does not exceed 10
percent of the total assets of the Registrant and its subsidiaries on a
consolidated basis.
Form 8-K -
None.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KIMCO REALTY CORPORATION
August 10, 2000 /s/ Milton Cooper
- -------------------- --------------------------------------
(Date) Milton Cooper
Chairman of the Board
August 10, 2000 /s/ Michael V. Pappagallo
- -------------------- --------------------------------------
(Date) Michael V. Pappagallo
Chief Financial Officer
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