Exhibit 99.3
KIMCO REALTY CORPORATION AND SUBSIDIARIES
PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1997
-------------------------------
(Unaudited)
The following unaudited Pro Forma Combined Condensed Consolidated Balance Sheet
gives effect to the proposed Merger as if the Merger had occurred on September
30, 1997, under the purchase method of accounting in accordance with Accounting
Standards Board Opinion No. 16. In addition, the Kimco Pro Forma Balance Sheet
column at September 30, 1997 assumes the completion, as of September 30, 1997,of
the acquisition of eight shopping center properties (See Note 1 to the unaudited
Pro Forma Combined Condensed Consolidated Balance Sheet).
The unaudited Pro Forma Combined Condensed Consolidated Balance Sheet is
presented for comparative purposes only and is not necessarily indicative of
what the actual combined financial position of Kimco and Price REIT would have
been at September 30, 1997, nor does it purport to represent the future combined
financial position of Kimco and Price REIT. This information should be read in
conjunction with the audited consolidated financial statements and other
financial information contained in Kimco's Annual Report on Form 10-K and Price
REIT's Annual Report on Form 10-K for the year ended December 31, 1996,
respectively, including the notes thereto, and the unaudited condensed
consolidated financial statements contained in Kimco's Quarterly Report on Form
10-Q and Price REIT's Quarterly Report on Form 10-Q for the period ended
September 30, 1997, including the notes thereto, and in each case incorporated
by reference herein.
KIMCO REALTY CORPORATION AND SUBSIDIARIES
PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1997
------------
(Unaudited)
(000's)
Kimco Price Reit Pro Forma Pro Forma
Pro Forma Historical Adjustments Results
----------- ----------- ----------- -----------
Assets:
Real estate, net of accumulated depreciation $ 1,184,936 $ 534,467 $ 215,019 $ 1,934,422
Investment in retail store leases 16,409 -- -- 16,409
Cash and cash equivalents 55,042 15,097 (6,000) 64,139
Other assets 92,118 42,793 -- 134,911
----------- ----------- ----------- -----------
$ 1,348,505 $ 592,357 $ 209,019 $ 2,149,881
=========== =========== =========== ===========
Liabilities:
Notes payable $ 410,250 $ 223,038 $ -- $ 633,288
Mortgages payable 122,121 26,301 -- 148,422
Other liabilities, including minority interests
in partnerships 72,451 14,967 2,179 89,597
----------- ----------- ----------- -----------
604,822 264,306 2,179 871,307
----------- ----------- ----------- -----------
Stockholders' Equity:
Preferred stock 900 -- 476 1,376
Common stock 404 117 2 523
Paid-in capital 857,569 354,624 179,672 1,391,865
Cumulative distributions in excess of net income (115,190) (26,690) 26,690 (115,190)
----------- ----------- ----------- -----------
743,683 328,051 206,840 1,278,574
----------- ----------- ----------- -----------
$ 1,348,505 $ 592,357 $ 209,019 $ 2,149,881
=========== =========== =========== ===========
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA COMBINED CONDENSED CONSOLIDATED
BALANCE SHEET
---------------------
1. Basis of Presentation
- ------------------------
The Kimco Pro Forma Balance Sheet at September 30, 1997 represents the
historical condensed consolidated balance sheet adjusted to give effect
to the purchase of eight shopping center properties acquired by the
Company in October, November and December 1997 as if these properties
had been acquired at September 30, 1997. Information related to these
properties is included in the Kimco Current Report on Form 8-K dated
January 15, 1997.
2. Reclassification
- -------------------
Certain amounts reflected in the historical financial statements of
both companies have been reclassified to conform to the Pro Forma
Combined Condensed Consolidated Balance Sheet presentation.
3. Pro Forma Adjustments
- ------------------------
(i) Real estate net of accumulated depreciation -
The adjustment to Real estate, net of accumulated depreciation reflects
the increase in book value of Price REIT's real estate assets based
upon the Kimco purchase price (assuming Kimco common stock is valued at
$35 per share) and an exchange ratio of one share of Price REIT
common stock for one share of Kimco common stock and 0.4 depositary
shares, each depositary share (the "Kimco Class D Depositary Shares")
representing 1/10 of a share of a new issue of Kimco 7.5% Class D
Cumulative Convertible Preferred Stock, par value $1.00 per share,
liquidation preference $250.00 per share (the "Kimco Class D Preferred
Stock") as follows:
(000's)
-------
Issuance of 11,886,444 shares of Kimco common stock
(assumed value of $35 per share)
based on an exchange ratio of one for one $416,026
and
Issuance of 475,458 shares of Kimco Class D
Preferred Stock (represented by 4,754,580 Kimco Class D
Depositary Shares) based on an exchange ratio of 0.04
shares of Kimco Class D Preferred Stock (represented
by .4 Kimco Class D Depositary Shares) for one share
of Price REIT common stock in exchange for 11,886,444
shares of Price REIT common stock 118,865
Assumption of Price REIT liabilities 2,179
Merger costs 6,000 see (ii)
---------
Purchase price 543,070
Less: Historical book basis of Price REIT's
net assets acquired (328,051)
---------
Real estate, net of accumulated depreciation
Pro Forma adjustment $215,019
========
(ii) Cash and cash equivalents -
The adjustment to cash and cash equivalents reflects the estimated fees and
other expenses relating to the Merger, including, but not limited to, investment
banking fees, legal and accounting fees, printing, filing and other related
costs.
(iii) Stockholders' equity -
The adjustments to stockholders' equity reflect the issuance of 11,886,444
shares of Kimco common stock, par value $.01 per share, and 475,458 shares of
Kimco Class D Preferred Stock, (represented by 4,754,580 Kimco Class D
Depositary Shares) based on the exchange ratio of one share of Price REIT
common stock for one share of Kimco common stock and 0.04 shares of Kimco Class
D Preferred Stock (represented by 0.4 Kimco Class D Depositary Shares) as
follows:
Cumulative
Distributions
Common Preferred Paid-in in Excess of
Stock Stock Capital Net Income
(000's) (000's) (000's) (000's)
--------- --------- --------- -------------
Issuance of Kimco common stock $ 119 $ -- $ 415,907 $ --
Issuance of Kimco Class D Preferred Stock
-- 476 118,389 --
Price REIT's historical Stockholders'
equity (117) -- (354,624) (26,690)
--------- --------- --------- -------------
Stockholders' equity
Pro Forma adjustments $ 2 $ 476 $ 179,672 $ 26,690
========= ========= ========= =============
KIMCO REALTY CORPORATION AND SUBSIDIARIES
PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1996 AND THE NINE MONTHS ENDED
SEPTEMBER 30, 1997
-----------------------------
(Unaudited)
The following unaudited Pro Forma Combined Condensed Consolidated Statements of
Income for the year ended December 31, 1996 and the nine months ended September
30, 1997 give effect to the proposed Merger as if the Merger had occurred as of
January 1, 1996 under the purchase method of accounting in accordance with
Accounting Standards Board Opinion No. 16. In addition, the Kimco Pro Forma
Statements of Income columns for the year ended December 31, 1996 and the nine
months ended September 30, 1997 assumes the completion, as of January 1, 1996,
of the acquisition of 14 shopping center properties as previously reported in
the Current Report on Form 8-K dated January 15, 1997, incorporated by reference
herein. The Price REIT Pro Forma Statements of Income columns for the year ended
December 31, 1996 and the nine months ended September 30, 1997 assumes the
completion, as of January 1, 1996 of the acquisition of 12 shopping center
properties as previously reported in the Current Report on Form 8-K/A dated
November 13, 1997, incorporated by reference herein. (See Note 1 to the
unaudited Pro Forma Combined Condensed Consolidated Statements of Income).
The unaudited Pro Forma Combined Condensed Consolidated Statements of Income are
presented for comparative purposes only and are not necessarily indicative of
what the actual combined operating results of Kimco and Price REIT would have
been for the year ended December 31, 1996 and the nine months ended September
30, 1997, nor does it purport to represent the future combined operating results
of Kimco and Price REIT. This information should be read in conjunction with the
audited consolidated financial statements and other financial information
contained in Kimco's Annual Report on Form 10-K and Price REIT's Annual Report
on Form 10-K for the year ended December 31, 1996, respectively, including the
notes thereto, and the unaudited condensed consolidated finanical statements
contained in Kimco's Quarterly Report of Form 10-Q and Price REIT's Quarterly
Report on Form 10-Q for the period ended September 30, 1997, respectively,
including the notes thereto, and in each case incorporated by reference herein.
KIMCO REALTY CORPORATION AND SUBSIDIARIES
PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1996
---------------
(Unaudited)
(000's except per share data)
Price Reit
1997 Property
Acquisition Merger Combined
Kimco Price Reit Pro Forma Price Reit Pro Forma Pro Forma
Pro Forma Historical Adjustments Pro Forma Adjustments Results
----------- ----------- ----------- ----------- ----------- -----------
Revenues from rental property $ 187,804 $ 51,292 $ 24,364 $ 75,656 $ -- $ 263,460
----------- ----------- ----------- ----------- ----------- -----------
Rental property expenses-
Rent 1,455 -- -- -- -- 1,455
Real estate taxes and operating and maintenance 46,625 9,909 5,439 15,348 -- 61,973
Interest 31,282 12,071 8,868 20,939 -- 52,221
Depreciation and amortization 29,985 11,876 5,536 17,412 (1,769) 45,628
----------- ----------- ----------- ----------- ----------- -----------
109,347 33,856 19,843 53,699 (1,769) 161,277
----------- ----------- ----------- ----------- ----------- -----------
Income from rental property 78,457 17,436 4,521 21,957 1,769 102,183
Income from investment in retail store leases 3,632 3,632
----------- ----------- ----------- ----------- ----------- -----------
82,089 17,436 4,521 21,957 1,769 105,815
Management fee income 3,448 1,085 -- 1,085 -- 4,533
General and administrative expenses (10,334) (3,550) -- (3,550) 1,200 (12,684)
Other income (expenses), net 3,584 1,948 -- 1,948 -- 5,532
----------- ----------- ----------- ----------- ----------- -----------
Income before gain on sale of shopping center 78,787 16,919 4,521 21,440 2,969 103,196
Gain on sale of shopping center property 802 -- -- -- -- 802
----------- ----------- ----------- ----------- ----------- -----------
Net income $ 79,589 $ 16,919 $ 4,521 $ 21,440 $ 2,969 $ 103,998
=========== =========== =========== =========== =========== ===========
Net income applicable to common shares $ 63,453 $ 16,919 $ 4,521 $ 21,440 ($ 5,946) $ 78,947
=========== =========== =========== =========== =========== ===========
Net income per common share $1.77 $1.98 $2.50 $1.65
===== ===== ===== =====
Historical weighted average number of shares outstanding 35,906 8,560 8,560
====== ===== =====
Pro forma weighted number of shares outstanding 47,792
======
KIMCO REALTY CORPORATION AND SUBSIDIARIES
PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
---------------------
(Unaudited)
(000's, except per share data)
Price Reit
1997 Property
Acquisition Merger Combined
Kimco Price Reit Pro Forma Price Reit Pro Forma Pro Forma
Pro Forma Historical Adjustments Pro Forma Adjustments Results
----------- ----------- ----------- ----------- ----------- -----------
Revenues from rental property $ 153,701 $ 48,450 $ 13,302 $ 61,752 $ -- $ 215,453
----------- ----------- ----------- ----------- ----------- -----------
Rental property expenses-
Rent 2,527 -- -- -- -- 2,527
Real estate taxes and operating and maintenance 37,418 9,247 2,656 11,903 -- 49,321
Interest 24,439 10,667 6,990 17,657 -- 42,096
Depreciation and amortization 23,522 11,201 2,992 14,193 (2,328) 35,387
----------- ----------- ----------- ----------- ----------- -----------
87,906 31,115 12,638 43,753 (2,328) 129,331
----------- ----------- ----------- ----------- ----------- -----------
Income from rental property 65,795 17,335 664 17,999 2,328 86,122
Income from investment in retail store leases 2,705 -- -- -- -- 2,705
----------- ----------- ----------- ----------- ----------- -----------
68,500 17,335 664 17,999 2,328 88,827
Management fee income 2,755 226 -- 226 -- 2,981
General and administrative expenses (8,526) (2,815) -- (2,815) 900 (10,441)
Other income (expenses), net 3,750 2,366 -- 2,366 -- 6,116
----------- ----------- ----------- ----------- ----------- -----------
Income before gain on sale of shopping center 66,479 17,112 664 17,776 3,228 87,483
Gain on sale of shopping center property 244 2,787 -- 2,787 -- 3,031
----------- ----------- ----------- ----------- ----------- -----------
Net income $ 66,723 $ 19,899 $ 664 $ 20,563 $ 3,228 $ 90,514
=========== =========== =========== =========== =========== ===========
Net income applicable to common shares $ 52,896 $ 19,899 $ 664 $ 20,563 $ (3,458) $ 70,001
=========== =========== =========== =========== =========== ===========
Net income per common share $1.45 $1.85 $1.91 $1.45
===== ===== ===== =====
Historical weighted average number of shares
outstanding 36,375 10,742 10,742
====== ====== ======
Pro forma weighted number of shares outstanding 48,261
======
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA COMBINED CONDENSED STATEMENTS
OF INCOME
-------------------
1. Basis of Presentation
- ------------------------
The Kimco Pro Forma Statements of Income for the year ended December
31, 1996 and the nine months ended September 30, 1997 reflect the
historical results of Kimco adjusted to give effect, as of January 1,
1996 to the purchase of 14 shopping center properties acquired by the
Company throughout 1997 as previously reported in the Current Report on
Form 8-K dated January 15, 1997 and incorporated by reference herein.
The Price REIT Pro Forma Statements of Income for the year ended
December 31, 1996 and the nine months ended September 30, 1997 reflect
the historical results of Price REIT adjusted to give effect, as of
January 1, 1996 to the purchase of 12 shopping center properties
acquired by Price REIT throughout 1997 as previously reported in the
Current Report on Form 8-K/A dated November 13, 1997, and incorporated
by reference herein.
2. Reclassification
- -------------------
Certain amounts reflected in the historical financial statements of
both companies have been reclassified to conform to the presentation of
the unaudited Pro Forma Combined Condensed Statements of Income.
3. Pro Forma Adjustments
- ------------------------
Depreciation and amortization -
The adjustment to depreciation and amortization results from the net
increase in real estate owned as a result of recording Price REIT's
real estate assets at fair value versus historical cost. Depreciation
is computed on the straight-line method based upon an estimated useful
life of 39 years and an allocation of the stepped-up basis to land and
building of 20% and 80%, respectively.
Calculation of depreciation of real estate owned for the year ended December 31,
1996 and the nine months ended September 30, 1997 is as follows:
Year Ended Nine Months Ended
December 31, 1996 September 30, 1997
(000's) (000's)
----------------- ------------------
Depreciation expense based upon an estimated
useful life of 39 years $15,374 $11,530
Less: Pro Forma Price REIT depreciation of
real estate owned based upon an estimated useful life of (17,143) (13,858)
15 to 25 years
----------------- ------------------
Depreciation and amortization
Pro Forma adjustment ($1,769) ($2,328)
================= ==================
General and administrative -
The adjustment to general and administrative expenses reflects the net
estimated reduction of those costs which are anticipated to be eliminated or
reduced as a result of the Merger, as follows:
Year Ended December 31, Nine Months Ended
1996 September 30, 1997
(000's) (000's)
------------------------ ------------------
Net reduction in salary and benefit costs $550 $413
Net reduction in duplication of public company expenses 500 375
Net reduction in directors and officers insurance and
directors fees 150 112
------------------------ ------------------
General and administrative
Pro Forma adjustment $1,200 $900
======================== ==================
Weighted average number of common shares outstanding -
The pro forma weighted average number of common shares outstanding for
the year ended December 31, 1996 and the nine months ended September 30, 1997
are computed as follows:
Year Ended December 31, Nine Months Ended
1996 September 30, 1997
(000's) (000's)
------------------------ ------------------
Kimco's historical weighted average
number of shares outstanding 35,906 36,375
Issuance of Kimco common stock
at an exchange ratio of one for one for all Price
REIT common stock outstanding in connection
with the Merger 11,693 11,693
Add: Conversion of Price REIT stock options
to Kimco common stock in connection with the
Merger 193 193
------------------------ ------------------
Pro Forma weighted average number of Kimco
common shares outstanding 47,792 48,261
======================== ==================