11-K: Annual report of employee stock purchase, savings and similar plans
Published on October 28, 2002
As filed with the Securities and Exchange Commission on October 28, 2002
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE,
SAVINGS AND SIMILAR PLANS PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended April 30, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number: I-10899
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
KIMCO REALTY CORP. 401(k) PLAN
B. Name of issuer of the securities held pursuant to the plan and
the address of it principal executive office:
KIMCO REALTY CORPORATION
3333 NEW HYDE PARK RD, SUITE 100
NEW HYDE PARK, NY 11042
KIMCO REALTY CORP. 401(k) PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator of
Kimco Realty Corp. 401(k) Plan:
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of Kimco Realty Corp. 401(k) Plan (the "Plan") at April 30, 2002 and 2001, and
the changes in net assets available for benefits for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America. These financial statements are the responsibility of the Plan's
management; our responsibility is to express an opinion on these financial
statements 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.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
(held at end of year) and reportable transactions included on pages 8 and 9 are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements, and in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ PRICEWATERHOUSECOOPERS LLP
New York, New York
October 24, 2002
1
Kimco Realty Corp. 401(k) Plan
Statements of Net Assets Available for Benefits
April 30, 2002 and 2001
2002 2001
---------- ----------
Assets
Investments at fair value:
Cash $7,852,257 $ 13,251
Income receivable 5,101 -
Collective trust - 1,562,487
Mutual funds - 6,404,006
Common stock 1,621,528 1,166,301
---------- ----------
9,478,886 9,146,045
Loans to participants 162,389 182,776
Contributions receivable:
Participants 96,340 84,108
Employer 61,160 54,874
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS
$9,798,775 $9,467,803
========== ==========
The accompanying notes are an integral part of these financial statements.
2
Kimco Realty Corp. 401(k) Plan
Statements of Changes in Net Assets Available for Benefits
Years ended April 30, 2002 and 2001
2002 2001
------------ ------------
Additions to net assets:
Contributions:
Participants' salary deferral $ 1,091,193 $ 899,570
Employer matching of salary deferral 712,660 648,206
Participants' rollover 96,096
207
----------- -----------
1,899,949 1,547,983
----------- -----------
Investment income:
Net (depreciation) appreciation
in fair value of investments
(919,242) (1,493,955)
Interest and dividends 297,761 600,560
----------- -----------
(621,481) (893,395)
----------- -----------
Other receipts and credits 10,041 2,525
----------- -----------
Total additions 1,288,509 657,113
----------- -----------
Deductions from net assets:
Benefits paid to participants (940,462) (934,522)
Other disbursements (17,075) (2,825)
----------- -----------
Total deductions (957,537) (937,347)
----------- -----------
Net increase (decrease) 330,972 (280,234)
Net assets available for benefits:
Beginning of year 9,467,803 9,748,037
----------- -----------
End of year $ 9,798,775 $ 9,467,803
=========== ===========
The accompanying notes are an integral part of these financial statements.
3
KIMCO REALTY CORP. 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF PLAN:
The following description of the Kimco Realty Corp. 401(k) Plan (the
"Plan") provides only general information. Participants should refer to the
Plan agreement for a more comprehensive description of the Plan's
provisions.
General - The Plan was established on March 1, 1984 as a defined
contribution plan covering all eligible employees of Kimco Realty
Corporation (the "Company") who have completed one year of service and are
age eighteen or older. The Plan was last amended on July 1, 1994 to comply
with the Tax Reform Act of 1986 and subsequent legislation. Eligible
employees may elect to participate in the Plan on the first day of the
month, after their first year of service. The Plan is subject to the
applicable provisions of the Employee Retirement Income Security Act of
1974 ("ERISA").
Contributions - Each year, participants may contribute up to 10 percent of
pre-tax annual compensation, as defined in the Plan. A participant's total
contributions may not exceed an amount determined by the Internal Revenue
Service each calendar year ($11,000 in 2002 and $10,500 in 2001). The
participants may change their percentage contribution election monthly. The
Company matches participants' contributions annually up to 5% of base
compensation subject to IRS limitations. In addition to the matching
contribution, the Company may make a discretionary contribution which is
determined and approved by the Company's board of directors annually. No
discretionary contribution payments were made for the fiscal years ended
April 30, 2002 and 2001. All Company contributions are invested based upon
participant account elections.
Participant accounts - Each participant's account is credited with the
participant's contribution and allocations of the Company's contribution
and Plan earnings.
Vesting - Participants are immediately vested in their voluntary and
Company matching contributions plus actual earnings thereon.
Investment options - Upon enrollment in the Plan, participants may direct
their contributions into any one of the following 26 investment options for
the fiscal years ended April 30, 2002 and 2001. (See Note 8)
1) Merrill Lynch Corporate Bond Fund, Inc.
2) Merrill Lynch S&P 500 Index Fund
3) Merrill Lynch Basic Value Fund, Inc.
4) Merrill Lynch Capital Fund, Inc.
5) Merrill Lynch Fundamental Growth Fund
6) Merrill Lynch Global Allocation Fund, Inc.
7) Merrill Lynch Retirement Preservation Trust
8) Merrill Lynch Growth Fund
9) Alliance Premiere Growth Fund
10) AIM Blue Chip Fund
11) AIM International Equity Fund
12) Massachusetts Investors Trust
13) MFS Emerging Growth Fund
14) Kimco Realty Corporation - Common Stock
15) Dreyfus Premier Balance Fund
16) Dreyfus Worldwide Growth Fund
17) Merrill Lynch Corporate Bond Fund - Intermediate Term Portfolio
18) Merrill Lynch Corporate Bond Fund - Investment Grade Portfolio
19) Merrill Lynch Global Value Fund
20) Merrill Lynch International Equity Fund
4
KIMCO REALTY CORP. 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
(Continued)
21) Merrill Lynch Small Cap Index
22) Merrill Lynch Global Growth Fund
23) Oppenheimer Global Growth and Income Fund
24) Phoenix-Engemann Small/Middle Growth
25) PIMCO Total Return Fund
26) Van Kampen American Value Fund
Participants may change their investment options daily.
Loans to Participants - Participants may borrow from their fund accounts,
an amount aggregating the lesser of 50% of their total account balance or
$50,000. Participants may have only one loan outstanding at a time. Loan
terms range from one to five years or a reasonable period of time greater
than 5 years for the purchase of a principal residence. The loans are
collateralized by the balance in the participant's account and bear
interest at the prime rate plus 0.5%. The interest rate must be one that a
bank or other professional lender would charge for making a loan in similar
circumstance. The interest rate for loans outstanding at April 30, 2002 and
2001 ranged from 5.25% to 10.5%.
Payment of benefits - Upon termination of service due to death, total and
permanent disability, or retirement, a participant may elect to either
receive a lump-sum amount equal to the value of the participant's vested
interest in his or her account or select the installment plan, provided the
participant's account balance exceeds $5,000. For termination of service
due to other reasons, a participant may receive the value of his or her
account as a lump-sum distribution.
2. SUMMARY OF ACCOUNTING POLICIES:
Basis of Accounting
The financial statements of the Plan are prepared under the accrual method
of accounting in conformity with accounting principles generally accepted
in the United States of America ("GAAP"). Certain 2001 amounts have been
reclassified to conform to the 2002 financial statement presentation.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported
amounts of net assets available for benefits and disclosure of commitments
at the date of the financial statements and the changes in net assets
available for benefits during the reporting period. The most significant
estimates relate to the valuation of investments. Actual results could
differ from those estimates. Moreover, it is reasonably possible that the
value of these investments will change in the ensuing year.
Investment Valuation and Income Recognition
Mutual funds, common stock investments and collective trusts are stated at
fair market value as determined by quoted market prices. Participant loans
are valued at cost, which, in the opinion of management, approximates fair
value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded on
the record date.
Risks and Uncertainties
The Plan provides for various investment options which may invest in any
combination of stock and bonds, fixed income securities, mutual funds and
other investment securities. Investment securities are exposed to various
risks, such as interest rate, market and credit. Due to the level of risk
associated with certain investment securities and the level of uncertainty
related to changes in the value of investment securities, it is at least
reasonably possible that changes in risks in the near term would materially
affect the amounts reported in the statement of net assets available for
benefits and the statement of changes in net assets available for benefits.
5
KIMCO REALTY CORP. 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
(Continued)
3. ASSETS HELD FOR INVESTMENT PURPOSES:
For the years ended April 30, 2002 and 2001, Merrill Lynch Trust Company
("Merrill Lynch") served as trustee of the plan (See Note 8). The fair
market value of the following investments represent 5% or more of the
Plan's net assets available for benefits at April 30, 2002 and 2001:
2002 2001
---- ----
Merrill Lynch S&P 500 Index Fund $ - $ 988,832
Merrill Lynch Capital Fund, Inc. $ - $ 490,194
Merrill Lynch Fundamental Growth Fund $ - $1,326,241
Merrill Lynch Retirement Preservation Trust $ - $1,562,487
Kimco Realty Corporation Common Stock $ 1,621,528 $1,166,301
Aim Blue Chip Fund $ - $ 573,938
In 2002 and 2001, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) (depreciated)
appreciated in value as follows:
2002 2001
---- ----
Mutual Funds $(1,059,169) $ (1,605,019)
Common Stock 139,927 111,064
----------- ------------
$( 919,242) $ (1,493,955)
=========== ============
4. PLAN TERMINATION:
Although it has not expressed any intent to do so, the Company has the
right under the plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, account balances will be distributed in accordance with Plan
provisions.
5. TAX STATUS:
The Plan has received a favorable determination letter, dated June 24,
1998, from the Internal Revenue Service that the Plan qualifies under
Section 401 (a) of the Internal Revenue Code ("IRC") and, therefore, has
made no provision for federal income taxes under the provisions of Section
501 (a). The Company believes that the Plan is designed and is currently
being operated in compliance with the applicable provisions of the IRC.
6. PARTY-IN-INTEREST TRANSACTIONS:
All administrative expenses and accounting fees of the Plan are paid by the
Company. Certain Plan investments are shares of mutual funds managed by
Merrill Lynch. Merrill Lynch is the trustee as defined by the Plan and
therefore, these transactions qualify as party-in-interest. The following
investment funds are sponsored by the Trustee:
Merrill Lynch Corporate Bond Fund, Inc.
Merrill Lynch S&P Index Fund
Merrill Lynch Basic Value Fund, Inc.
Merrill Lynch Capital Fund, Inc.
Merrill Lynch Fundamental Growth Fund
Merrill Lynch Global Allocation Fund, Inc.
Merrill Lynch Retirement Preservation Trust
Merrill Lynch Growth Fund
Merrill Lynch Corp Bond Fund - Intermediate Term Portfolio
Merrill Lynch Corp Bond Fund - Investment Grade Portfolio
Merrill Lynch Global Value Fund
Merrill Lynch Small Cap Index
Merrill Lynch Global Growth Fund
6
KIMCO REALTY CORP. 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
(Continued)
Merrill Lynch International Equity Fund
In addition, investments are made in Kimco Realty Corporation common stock.
7. RECONCILIATION BETWEEN FINANCIAL STATEMENTS AND FORM 5500:
At April 30, 2002 and 2001, net assets available for benefits as reported
in the Form 5500 were less than net assets reported in the financial
statements because the financial statements included an asset for
contributions receivable in the amount $157,500 and $138,982, respectively,
which were not included in Form 5500.
8. SUBSEQUENT EVENT
Effective May 1, 2002, the Company entered into agreements with UBS/Paine
Webber ("UBS") as the trustee and custodian, and MFS Investment Management
("MFS") as record-keeper for the Plan. In connection with the custodian
agreement, except for Kimco Realty Corporation common stock, the Plan
liquidated all investments held by the previous custodian, Merrill Lynch,
based on each investment fund's market value as of April 30, 2002 with the
aggregate amount held in a cash account. Such amounts were reinvested into
investment funds offered by MFS, on behalf of the Plan, based on each
investment fund's market value as of May 1, 2002.
The following illustrates the amounts invested and the number of shares
owned in each of the investment funds offered by MFS as of May 1, 2002:
Shares Market Value
Investment Fund Purchased/Owned As of May 1, 2002
MFS Bond Fund 51,178 $ 627,441
MFS Mid-Cap Growth Fund 4 $ 33
MFS New Discovery Fund 1,328 $ 20,649
American Europacific Growth Fund 36,928 $1,010,347
Washington Mutual Investors Fund 8,343 $ 238,359
Davis New York Venture Fund 6,822 $ 169,924
The Growth Fund of America 104,642 $2,331,418
UBS Tactical Allocation Fund 40,237 $ 990,240
Franklin Mutual Qualified Fund 13,333 $ 228,925
Alliance Balanced Shares Fund 33,352 $ 493,267
MFS Fixed Fund 1,736,338 $1,736,338
Kimco Realty Corporation - Common Stock 50,725 $1,648,563
7
Kimco Realty Corp. 401(k) Plan
Schedule H, line 4i - Schedule of Assets (Held at End of Year)
as of April 30, 2002
* Denotes a party-in-interest.
8
Kimco Realty Corp. 401(k) Plan
Schedule H, line 4j - Schedule of Reportable Transactions for the
year ended April 30, 2002
The following represents the liquidation of the Fund's assets on April 30, 2002:
* Denotes a party-in-interest.
9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plans) have duly
caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized, on the 28th day of October.
Kimco Realty Corp. 401(k) Plan, as administrator
By: /s/ Michael V. Pappagallo
-----------------------------
Michael V. Pappagallo
Its: Chief Financial Officer
10
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-60050) of Kimco Realty Corporation and
Subsidiaries of our report dated October 24, 2002 relating to the financial
statements of Kimco Realty Corp. 401(k) Plan, which appears in this Form 11-K.
/s/ PricewaterhouseCoopers LLP
New York, NY
October 24, 2002