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Cover and table of contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

or

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-10899 (Kimco Realty Corporation)

Commission File Number: 333-269102-01 (Kimco Realty OP, LLC)

KIMCO REALTY CORPORATION

KIMCO REALTY OP, LLC

(Exact name of registrant as specified in its charter)

Maryland (Kimco Realty Corporation) Delaware (Kimco Realty OP, LLC)13-2744380 92-1489725
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)

500 North Broadway, Suite 201**,** Jericho**,** NY 11753

(Address of principal executive offices) (Zip Code)

(516) 869-9000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year,

if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Kimco Realty Corporation

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $.01 per share.KIMNew York Stock Exchange
Depositary Shares, each representing one one-thousandth of a share of 5.125% Class L Cumulative Redeemable, Preferred Stock, $1.00 par value per share.KIMprLNew York Stock Exchange
Depositary Shares, each representing one one-thousandth of a share of 5.250% Class M Cumulative Redeemable, Preferred Stock, $1.00 par value per share.KIMprMNew York Stock Exchange
Depositary Shares, each representing one one-thousandth of a share of 7.250% Class N Cumulative Convertible Preferred Stock, $1.00 par value per share.KIMprNNew York Stock Exchange

Kimco Realty OP, LLC

Title of each classTrading Symbol(s)Name of each exchange on which registered
NoneN/AN/A

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.

Kimco Realty Corporation Yes  No ☐Kimco Realty OP, LLC Yes  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Kimco Realty Corporation Yes  No ☐Kimco Realty OP, LLC Yes  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Kimco Realty Corporation:

Large accelerated filer☒Accelerated filer☐Non-accelerated filer☐
Smaller reporting company☐Emerging growth company☐

Kimco Realty OP, LLC:

Large accelerated filer☐Accelerated filer☐Non-accelerated filer☒
Smaller reporting company☐Emerging growth company☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Kimco Realty Corporation ☐Kimco Realty OP, LLC ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Kimco Realty Corporation Yes ☐ No Kimco Realty OP, LLC Yes ☐ No 

(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.

As of October 22, 2024, Kimco Realty Corporation had 674,081,407 shares of common stock outstanding.

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the quarterly period ended September 30, 2024, of Kimco Realty Corporation (the “Company”) and Kimco Realty OP, LLC (“Kimco OP”). Prior to January 1, 2023, the Company’s business was conducted through a predecessor entity also known as Kimco Realty Corporation (the “Predecessor”). On December 14, 2022, the Predecessor’s Board of Directors approved the entry into an Agreement and Plan of Merger (the “UPREIT Merger”) with the company formerly known as New KRC Corp., which was a Maryland corporation and wholly owned subsidiary of the Predecessor (the “Parent Company”), and KRC Merger Sub Corp., which was a Maryland corporation and wholly owned subsidiary of the Parent Company (“Merger Sub”), to effect the reorganization (the “Reorganization”) of the Predecessor’s business into an umbrella partnership real estate investment trust, or “UPREIT”.

On January 1, 2023, pursuant to the UPREIT Merger, Merger Sub merged with and into the Predecessor, with the Predecessor continuing as the surviving entity and a wholly owned subsidiary of the Parent Company, and each outstanding share of capital stock of the Predecessor was converted into one equivalent share of capital stock of the Parent Company (each share of which has continued to trade under their respective existing ticker symbol with the same rights, powers and limitations that existed immediately prior to the Reorganization).

In connection with the Reorganization, the Parent Company changed its name to Kimco Realty Corporation, and replaced the Predecessor as the New York Stock Exchange-listed public company. Effective as of January 3, 2023, the Predecessor converted into a limited liability company, organized in the State of Delaware, known as Kimco Realty OP, LLC, the entity we refer to herein as “Kimco OP”.

Following the Reorganization, substantially all of the Company’s assets are held by, and substantially all of the Company’s operations are conducted through, Kimco OP (either directly or through its subsidiaries), as the Company’s operating company, and the Company is the managing member of Kimco OP. The officers and directors of the Company are the same as the officers and directors of the Predecessor immediately prior to the Reorganization.

The Parent Company is a real estate investment trust ("REIT") and is the managing member of Kimco OP. As of September 30, 2024, the Parent Company owned 99.84% of the outstanding limited liability company interests (the "OP Units") in Kimco OP.

Stockholders' equity and members’ capital are the primary areas of difference between the unaudited Condensed Consolidated Financial Statements of the Parent Company and those of Kimco OP. Kimco OP’s capital currently includes OP Units owned by the Parent and non-controlling OP Units owned by third parties. OP Units owned by third parties are accounted for within capital on Kimco OP’s financial statements and in non-controlling interests in the Parent Company’s financial statements.

The Parent Company consolidates Kimco OP for financial reporting purposes, and the Parent Company does not have significant assets other than its investment in Kimco OP. Therefore, while stockholders’ equity, members’ capital and noncontrolling interests differ as discussed above, the assets and liabilities of the Parent Company and Kimco OP are the same on their respective financial statements.

The Company believes combining the quarterly reports on Form 10-Q of the Parent Company and Kimco OP into this single report provides the following benefits:

Enhances investors' understanding of the Parent Company and Kimco OP by enabling investors to view the businesses as a whole in the same manner as management views and operates the business;

Eliminates duplicative disclosure and provides a more concise and readable presentation, because a substantial portion of the disclosure applies to both the Parent Company and Kimco OP; and

Creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

In order to highlight the differences between the Parent Company and Kimco OP, there are sections in this Quarterly Report that separately discuss the Parent Company and Kimco OP, including separate financial statements (but combined footnotes), separate controls and procedures sections, and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure for the Parent Company and Kimco OP, unless context otherwise requires, this Quarterly Report refers to actions or holdings of the Parent Company and/or Kimco OP as being the actions or holdings of the Company (either directly or through its subsidiaries, including Kimco OP).

Throughout this Quarterly Report, unless the context requires otherwise:

The “Company,” “we,” “our” or “us” refer to:

o

the Parent Company and its business and operations conducted through its directly or indirectly owned subsidiaries, including Kimco OP; and

o

in statements regarding qualification as a REIT, such terms refer solely to the Predecessor or Parent Company, as applicable.

“Kimco OP” refers to Kimco Realty OP, LLC, our operating company following the UPREIT Merger.

References to “shares” and “shareholders” refer to the shares and shareholders of the Parent Company and not the limited liability company interests of Kimco OP.

PART I - FINANCIAL INFORMATION
Item 1.Financial Statements4
Condensed Consolidated Financial Statements of Kimco Realty Corporation and Subsidiaries (unaudited)
Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 20234
Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2024 and 20235
Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2024 and 20236
Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2024 and 20237
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 20239
Condensed Consolidated Financial Statements of Kimco Realty OP, LLC and Subsidiaries (unaudited)
Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 202310
Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2024 and 202311
Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2024 and 202312
Condensed Consolidated Statements of Changes in Capital for the Three and Nine Months Ended September 30, 2024 and 202313
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 202315
Kimco Realty Corporation and Subsidiaries and Kimco Realty OP, LLC and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)16
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations.43
Item 3.Quantitative and Qualitative Disclosures About Market Risk.57
Item 4.Controls and Procedures.57
PART II - OTHER INFORMATION
Item 1.Legal Proceedings.59
Item 1A.Risk Factors.59
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.59
Item 3.Defaults Upon Senior Securities.59
Item 4.Mine Safety Disclosures.60
Item 5.Other Information.60
Item 6.Exhibits.60
Signatures61

KIMCO REALTY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands, except share information)

September 30, 2024December 31, 2023
Assets:
Real estate, net of accumulated depreciation and amortization of $4,225,563 and $3,842,869, respectively$16,515,749$15,094,925
Investments in and advances to real estate joint ventures1,492,2111,087,804
Other investments106,513144,089
Cash, cash equivalents and restricted cash790,044783,757
Marketable securities2,355330,057
Accounts and notes receivable, net320,361307,617
Operating lease right-of-use assets, net130,914128,258
Other assets770,849397,515
Total assets (1)$20,128,996$18,274,022
Liabilities:
Notes payable, net$7,966,940$7,262,851
Mortgages payable, net335,275353,945
Accounts payable and accrued expenses309,272216,237
Dividends payable6,7225,308
Operating lease liabilities121,417109,985
Other liabilities646,619599,961
Total liabilities (1)9,386,2458,548,287
Redeemable noncontrolling interests73,68872,277
Commitments and Contingencies (Footnote 19)
Stockholders' equity:
Preferred stock, $1.00 par value, authorized 7,054,000 shares; Issued and outstanding (in series) 21,216 and 19,367 shares, respectively; Aggregate liquidation preference $576,602 and $484,179, respectively2119
Common stock, $.01 par value, authorized 1,500,000,000 and 750,000,000 shares, respectively; Issued and outstanding 674,082,065 and 619,871,237 shares, respectively6,7416,199
Paid-in capital10,917,0039,638,494
Cumulative distributions in excess of net income(387,067)(122,576)
Accumulated other comprehensive (loss)/income(13,485)3,329
Total stockholders' equity10,523,2139,525,465
Noncontrolling interests145,850127,993
Total equity10,669,0639,653,458
Total liabilities and equity$20,128,996$18,274,022

(1)

Total assets include restricted assets of consolidated variable interest entities (“VIEs”) at September 30, 2024 and December 31, 2023 of $333,749 and $388,626, respectively. Total liabilities include non-recourse liabilities of consolidated VIEs at September 30, 2024 and December 31, 2023 of $169,855 and $180,855, respectively. See Footnote 14 of the Notes to Condensed Consolidated Financial Statements.

The accompanying notes are an integral part of these condensed consolidated financial statements.

KIMCO REALTY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

(in thousands, except per share data)

Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Revenues
Revenues from rental properties, net$502,875$441,816$1,498,001$1,319,162
Management and other fee income4,7574,24913,61612,635
Total revenues507,632446,0651,511,6171,331,797
Operating expenses
Rent(4,239)(3,939)(12,744)(12,097)
Real estate taxes(64,996)(57,875)(194,538)(173,002)
Operating and maintenance(88,744)(76,604)(262,267)(226,919)
General and administrative(33,850)(33,697)(103,238)(101,180)
Impairment charges(375)(2,237)(4,277)(14,043)
Merger charges-(3,750)(25,246)(3,750)
Depreciation and amortization(144,688)(127,437)(447,555)(382,983)
Total operating expenses(336,892)(305,539)(1,049,865)(913,974)
Gain on sale of properties551-94452,376
Operating income171,291140,526462,696470,199
Other income/(expense)
Special dividend income---194,116
Other income, net22,2038,37739,95319,080
Gain/(loss) on marketable securities, net7913,225(27,613)17,642
Interest expense(76,216)(60,424)(224,122)(182,404)
Income before income taxes, net, equity in income of joint ventures, net, and equity in income from other investments, net117,357101,704250,914518,633
(Provision)/benefit for income taxes, net(128)729(72,355)(61,127)
Equity in income of joint ventures, net20,98116,25763,41357,589
Equity in income of other investments, net2162,1009,4688,741
Net income138,426120,790251,440523,836
Net income attributable to noncontrolling interests(2,443)(2,551)(6,693)(9,208)
Net income attributable to the Company135,983118,239244,747514,628
Preferred dividends, net(7,961)(6,285)(23,864)(18,736)
Net income available to the Company's common shareholders$128,022$111,954$220,883$495,892
Per common share:
Net income available to the Company's common shareholders:
-Basic$0.19$0.18$0.32$0.80
-Diluted$0.19$0.18$0.32$0.80
Weighted average shares:
-Basic671,231617,090670,851616,888
-Diluted671,577617,271671,096619,495

The accompanying notes are an integral part of these condensed consolidated financial statements.

KIMCO REALTY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

(in thousands)

Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Net income$138,426$120,790$251,440$523,836
Other comprehensive (loss)/income:
Unrealized gains related to defined benefit plan-(10,581)-(10,581)
Unrealized losses on cash flow hedges for interest payments, net(22,050)-(14,230)-
Equity in unrealized (losses)/gains on cash flow hedges for interest payments of unconsolidated investee, net(2,671)1,255(2,584)6,616
Other comprehensive loss(24,721)(9,326)(16,814)(3,965)
Comprehensive income113,705111,464234,626519,871
Comprehensive income attributable to noncontrolling interests(2,443)(2,551)(6,693)(9,208)
Comprehensive income attributable to the Company$111,262$108,913$227,933$510,663

The accompanying notes are an integral part of these condensed consolidated financial statements.

KIMCO REALTY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the Three Months Ended September 30, 2024 and 2023

(unaudited)

(in thousands)

Retained
Earnings/
(Cumulative
DistributionsAccumulated
in ExcessOtherTotal
Preferred StockCommon StockPaid-inof NetComprehensiveStockholders'NoncontrollingTotal
IssuedAmountIssuedAmountCapitalIncome)(Loss)/IncomeEquityInterestsEquity
Balance at July 1, 202319$19619,889$6,199$9,621,686$(20,748)$15,942$9,623,098$132,310$9,755,408
Contributions from noncontrolling interests--------1010
Net income-----118,239-118,2392,551120,790
Other comprehensive income:
Unrealized gains related to defined benefit plan------(10,581)(10,581)-(10,581)
Equity in unrealized gains on cash flow hedges for interest payments of unconsolidated investee, net------1,2551,255-1,255
Redeemable noncontrolling interests income--------(1,525)(1,525)
Dividends declared to preferred shares-----(6,285)-(6,285)-(6,285)
Dividends declared to common shares-----(142,583)-(142,583)-(142,583)
Distributions to noncontrolling interests--------(1,108)(1,108)
Surrender of restricted common stock--(14)-(134)--(134)-(134)
Amortization of equity awards----7,896--7,896-7,896
Redemption/conversion of noncontrolling interests----(788)--(788)(7)(795)
Balance at September 30, 202319$19619,875$6,199$9,628,660$(51,377)$6,616$9,590,117$132,231$9,722,348
Balance at July 1, 202421$21674,112$6,741$10,914,084$(353,310)$11,236$10,578,772$147,835$10,726,607
Contributions from noncontrolling interests--------274274
Net income-----135,983-135,9832,443138,426
Other comprehensive income:
Unrealized losses on cash flow hedges for interest payments, net------(22,050)(22,050)-(22,050)
Equity in unrealized losses on cash flow hedges for interest payments of unconsolidated investee, net------(2,671)(2,671)-(2,671)
Redeemable noncontrolling interests income--------(1,110)(1,110)
Dividends declared to preferred shares-----(7,961)-(7,961)-(7,961)
Dividends declared to common shares-----(161,779)-(161,779)-(161,779)
Repurchase of preferred stock----(5)--(5)-(5)
Distributions to noncontrolling interests--------(1,178)(1,178)
Surrender of restricted common stock--(30)-(599)--(599)-(599)
Amortization of equity awards----7,662--7,6624338,095
Redemption/conversion of noncontrolling interests----(461)--(461)(2,847)(3,308)
Adjustment of redeemable noncontrolling interests to estimated fair value----(3,678)--(3,678)-(3,678)
Balance at September 30, 202421$21674,082$6,741$10,917,003$(387,067)$(13,485)$10,523,213$145,850$10,669,063

The accompanying notes are an integral part of these condensed consolidated financial statements.

KIMCO REALTY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the Nine Months Ended September 30, 2024 and 2023

(unaudited)

(in thousands)

Retained
Earnings/
(Cumulative
DistributionsAccumulated
in ExcessOtherTotal
Preferred StockCommon StockPaid-inof NetComprehensiveStockholders'NoncontrollingTotal
IssuedAmountIssuedAmountCapitalIncome)(Loss)/IncomeEquityInterestsEquity
Balance at January 1, 202319$19618,484$6,185$9,618,271$(119,548)$10,581$9,515,508$131,401$9,646,909
Contributions from noncontrolling interests--------1313
Net income-----514,628-514,6289,208523,836
Other comprehensive income:
Unrealized gains related to defined benefit plan------(10,581)(10,581)-(10,581)
Equity in unrealized gains on cash flow hedges for interest payments of unconsolidated investee, net------6,6166,616-6,616
Redeemable noncontrolling interests income--------(4,629)(4,629)
Dividends declared to preferred shares-----(18,735)-(18,735)-(18,735)
Dividends declared to common shares-----(427,722)-(427,722)-(427,722)
Repurchase of preferred stock----(1,631)--(1,631)-(1,631)
Distributions to noncontrolling interests--------(3,755)(3,755)
Issuance of common stock--1,98820(20)-----
Surrender of restricted common stock--(770)(8)(16,263)--(16,271)-(16,271)
Exercise of common stock options--17323,725--3,727-3,727
Amortization of equity awards----25,366--25,366-25,366
Redemption/conversion of noncontrolling interests----(788)--(788)(7)(795)
Balance at September 30, 202319$19619,875$6,199$9,628,660$(51,377)$6,616$9,590,117$132,231$9,722,348
Balance at January 1, 202419$19619,871$6,199$9,638,494$(122,576)$3,329$9,525,465$127,993$9,653,458
Contributions from noncontrolling interests--------274274
Net income-----244,747-244,7476,693251,440
Other comprehensive income:
Unrealized losses on cash flow hedges for interest payments, net------(14,230)(14,230)-(14,230)
Equity in unrealized losses on cash flow hedges for interest payments of unconsolidated investee, net------(2,584)(2,584)-(2,584)
Redeemable noncontrolling interests income--------(3,392)(3,392)
Dividends declared to preferred shares-----(23,882)-(23,882)-(23,882)
Dividends declared to common shares-----(485,356)-(485,356)-(485,356)
Repurchase of preferred stock----(5)--(5)-(5)
Distributions to noncontrolling interests--------(4,519)(4,519)
Issuance of preferred stock for merger (1)22--105,605--105,607-105,607
Issuance of common stock for merger (1)--53,0345301,166,234--1,166,764-1,166,764
Issuance of common stock--1,96720(20)-----
Noncontrolling interests assumed from the merger (1)--------20,97520,975
Surrender of restricted common stock--(790)(8)(15,285)--(15,293)-(15,293)
Amortization of equity awards----25,160--25,1601,25726,417
Redemption/conversion of noncontrolling interests----(479)--(479)(3,431)(3,910)
Adjustment of redeemable noncontrolling interests to estimated fair value----(2,701)--(2,701)-(2,701)
Balance at September 30, 202421$21674,082$6,741$10,917,003$(387,067)$(13,485)$10,523,213$145,850$10,669,063

(1)

See Footnotes 1 and 3 of the Notes to Condensed Consolidated Financial Statements for further details.

The accompanying notes are an integral part of these condensed consolidated financial statements.

KIMCO REALTY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

Nine Months Ended September 30,
20242023
Cash flow from operating activities:
Net income$251,440$523,836
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation and amortization447,555382,983
Impairment charges4,27714,043
Straight-line rental income adjustments, net(17,228)(17,458)
Amortization of above-market and below-market leases, net(17,567)(13,969)
Amortization of deferred financing costs and fair value debt adjustments, net(955)(6,999)
Equity award expense26,38425,334
Gain on sale of properties(944)(52,376)
Loss/(gain) on marketable securities, net27,613(17,642)
Change in fair value of embedded derivative liability(1,691)7,000
Equity in income of joint ventures, net(63,413)(57,589)
Equity in income of other investments, net(9,468)(8,741)
Distributions from joint ventures and other investments74,87754,875
Change in accounts and notes receivable, net20,18332,584
Change in accounts payable and accrued expenses58,27048,712
Change in other operating assets and liabilities, net(33,253)(33,184)
Net cash flow provided by operating activities766,080881,409
Cash flow from investing activities:
Acquisition of operating real estate and other related net assets(10,000)(269,499)
Improvements to operating real estate(213,441)(179,145)
Acquisition of RPT Realty(149,103)-
Investment in marketable securities(1,375)(3,102)
Proceeds from sale of marketable securities301,463291,341
Investment in cost method investment(40)(1,532)
Investments in and advances to real estate joint ventures(3,558)(21,408)
Reimbursements of investments in and advances to real estate joint ventures22,1409,024
Investments in and advances to other investments(6,246)(13,594)
Reimbursements of investments in and advances to other investments2,911236
Investment in mortgage and other financing receivables(190,183)(11,211)
Collection of mortgage and other financing receivables85,148108
Proceeds from sale of properties70,429122,821
Net cash flow used for investing activities(91,855)(75,961)
Cash flow from financing activities:
Principal payments on debt, excluding normal amortization of rental property debt(11,774)(49,187)
Principal payments on rental property debt(7,200)(8,481)
Proceeds from issuance of unsecured term loans860,000-
Proceeds from issuance of unsecured notes500,000-
Repayments of unsecured term loans(310,000)-
Repayments of unsecured notes(1,157,700)-
Financing origination costs(7,046)(6,041)
Contributions from noncontrolling interests27413
Redemption/distribution of noncontrolling interests(13,913)(8,870)
Dividends paid(507,826)(446,617)
Proceeds from issuance of stock-3,727
Repurchase of preferred stock(5)(1,491)
Shares repurchased for employee tax withholding on equity awards(15,260)(16,239)
Change in tenants' security deposits2,5122,171
Net cash flow used for financing activities(667,938)(531,015)
Net change in cash, cash equivalents and restricted cash6,287274,433
Cash, cash equivalents and restricted cash, beginning of the period783,757149,829
Cash, cash equivalents and restricted cash, end of the period$790,044$424,262
Interest paid (net of capitalized interest of $1,682 and $1,705, respectively)$220,719$180,664
Income taxes paid, net of refunds$61,073$60,235

The accompanying notes are an integral part of these condensed consolidated financial statements.

KIMCO REALTY OP, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands, except unit information)

September 30, 2024December 31, 2023
Assets:
Real estate, net of accumulated depreciation and amortization of $4,225,563 and $3,842,869, respectively$16,515,749$15,094,925
Investments in and advances to real estate joint ventures1,492,2111,087,804
Other investments106,513144,089
Cash, cash equivalents and restricted cash790,044783,757
Marketable securities2,355330,057
Accounts and notes receivable, net320,361307,617
Operating lease right-of-use assets, net130,914128,258
Other assets770,849397,515
Total assets (1)$20,128,996$18,274,022
Liabilities:
Notes payable, net$7,966,940$7,262,851
Mortgages payable, net335,275353,945
Accounts payable and accrued expenses309,272216,237
Dividends payable6,7225,308
Operating lease liabilities121,417109,985
Other liabilities646,619599,961
Total liabilities (1)9,386,2458,548,287
Redeemable noncontrolling interests73,68872,277
Commitments and Contingencies (Footnote 19)
Members' capital:
Preferred units; 21,216 and 19,367 units outstanding, respectively572,998467,396
General member; 674,082,065 and 619,871,237 common units outstanding, respectively9,963,7009,054,740
Limited members; 1,073,942 common units outstanding at September 30, 202421,848-
Accumulated other comprehensive (loss)/income(13,485)3,329
Total members' capital10,545,0619,525,465
Noncontrolling interests124,002127,993
Total capital10,669,0639,653,458
Total liabilities and capital$20,128,996$18,274,022

(1)

Total assets include restricted assets of consolidated variable interest entities (“VIEs”) at September 30, 2024 and December 31, 2023 of $333,749 and $388,626, respectively. Total liabilities include non-recourse liabilities of consolidated VIEs at September 30, 2024 and December 31, 2023 of $169,855 and $180,855, respectively. See Footnote 14 of the Notes to Condensed Consolidated Financial Statements.

The accompanying notes are an integral part of these condensed consolidated financial statements.

KIMCO REALTY OP, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

(in thousands, except per unit data)

Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Revenues
Revenues from rental properties, net$502,875$441,816$1,498,001$1,319,162
Management and other fee income4,7574,24913,61612,635
Total revenues507,632446,0651,511,6171,331,797
Operating expenses
Rent(4,239)(3,939)(12,744)(12,097)
Real estate taxes(64,996)(57,875)(194,538)(173,002)
Operating and maintenance(88,744)(76,604)(262,267)(226,919)
General and administrative(33,850)(33,697)(103,238)(101,180)
Impairment charges(375)(2,237)(4,277)(14,043)
Merger charges-(3,750)(25,246)(3,750)
Depreciation and amortization(144,688)(127,437)(447,555)(382,983)
Total operating expenses(336,892)(305,539)(1,049,865)(913,974)
Gain on sale of properties551-94452,376
Operating income171,291140,526462,696470,199
Other income/(expense)
Special dividend income---194,116
Other income, net22,2038,37739,95319,080
Gain/(loss) on marketable securities, net7913,225(27,613)17,642
Interest expense(76,216)(60,424)(224,122)(182,404)
Income before income taxes, net, equity in income of joint ventures, net, and equity in income from other investments, net117,357101,704250,914518,633
(Provision)/benefit for income taxes, net(128)729(72,355)(61,127)
Equity in income of joint ventures, net20,98116,25763,41357,589
Equity in income of other investments, net2162,1009,4688,741
Net income138,426120,790251,440523,836
Net income attributable to noncontrolling interests(2,227)(2,551)(6,301)(9,208)
Net income attributable to Kimco OP136,199118,239245,139514,628
Preferred distributions, net(7,961)(6,285)(23,864)(18,736)
Net income available to Kimco OP's common unitholders$128,238$111,954$221,275$495,892
Per common unit:
Net income available to Kimco OP's common unitholders:
-Basic$0.19$0.18$0.32$0.80
-Diluted$0.19$0.18$0.32$0.80
Weighted average units:
-Basic672,185617,090671,801616,888
-Diluted672,531617,271672,045619,495

The accompanying notes are an integral part of these condensed consolidated financial statements.

KIMCO REALTY OP, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

(in thousands)

Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Net income$138,426$120,790$251,440$523,836
Other comprehensive (loss)/income:
Unrealized gains related to defined benefit plan-(10,581)-(10,581)
Unrealized losses on cash flow hedges for interest payments, net(22,050)-(14,230)-
Equity in unrealized (losses)/gains on cash flow hedges for interest payments of unconsolidated investee, net(2,671)1,255(2,584)6,616
Other comprehensive loss(24,721)(9,326)(16,814)(3,965)
Comprehensive income113,705111,464234,626519,871
Comprehensive income attributable to noncontrolling interests(2,227)(2,551)(6,301)(9,208)
Comprehensive income attributable to Kimco OP$111,478$108,913$228,325$510,663

The accompanying notes are an integral part of these condensed consolidated financial statements.

KIMCO REALTY OP, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL

For the Three Months Ended September 30, 2024 and 2023

(unaudited)

(in thousands)

Accumulated
General MemberLimited MembersOtherTotal
Preferred UnitsCommon UnitsCommon UnitsComprehensiveMembers'NoncontrollingTotal
IssuedAmountIssuedAmountIssuedAmount(Loss)/IncomeCapitalInterestsCapital
Balance at July 1, 202319$467,396619,889$9,139,760-$-$15,942$9,623,098$132,310$9,755,408
Contributions from noncontrolling interests--------1010
Net income-6,285-111,954---118,2392,551120,790
Other comprehensive income:
Unrealized gains related to defined benefit plan------(10,581)(10,581)-(10,581)
Equity in unrealized gains on cash flow hedges for interest payments of unconsolidated investee, net------1,2551,255-1,255
Redeemable noncontrolling interests income--------(1,525)(1,525)
Distributions declared to preferred unitholders-(6,285)-----(6,285)-(6,285)
Distributions declared to common unitholders---(142,583)---(142,583)-(142,583)
Distributions to noncontrolling interests--------(1,108)(1,108)
Surrender of restricted common units--(14)(134)---(134)-(134)
Amortization of equity awards---7,896---7,896-7,896
Redemption/conversion of noncontrolling interests---(788)---(788)(7)(795)
Balance at September 30, 202319$467,396619,875$9,116,105-$-$6,616$9,590,117$132,231$9,722,348
Balance at July 1, 202421$573,003674,112$9,994,5331,074$21,458$11,236$10,600,230$126,377$10,726,607
Contributions from noncontrolling interests--------274274
Net income-7,961-128,022-216-136,1992,227138,426
Other comprehensive income:
Unrealized losses on cash flow hedges for interest payments, net------(22,050)(22,050)-(22,050)
Equity in unrealized losses on cash flow hedges for interest payments of unconsolidated investee, net------(2,671)(2,671)-(2,671)
Redeemable noncontrolling interests income--------(1,109)(1,109)
Distributions declared to preferred unitholders-(7,961)-----(7,961)-(7,961)
Distributions declared to common unitholders---(161,779)-(259)-(162,038)-(162,038)
Repurchase of preferred units-(5)-----(5)-(5)
Distributions to noncontrolling interests--------(920)(920)
Surrender of restricted common units--(30)(599)---(599)-(599)
Amortization of equity awards---7,662-433-8,095-8,095
Redemption/conversion of noncontrolling interests---(461)---(461)(2,847)(3,308)
Adjustment of redeemable noncontrolling interests to estimated fair value---(3,678)---(3,678)-(3,678)
Balance at September 30, 202421$572,998674,082$9,963,7001,074$21,848$(13,485)$10,545,061$124,002$10,669,063

The accompanying notes are an integral part of these condensed consolidated financial statements.

KIMCO REALTY OP, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL

For the Nine Months Ended September 30, 2024 and 2023

(unaudited)

(in thousands)

Accumulated
General MemberLimited MembersOtherTotal
Preferred UnitsCommon UnitsCommon UnitsComprehensiveMembers'NoncontrollingTotal
IssuedAmountIssuedAmountIssuedAmount(Loss)/IncomeCapitalInterestsCapital
Balance at January 1, 202319$469,027618,484$9,035,900-$-$10,581$9,515,508$131,401$9,646,909
Contributions from noncontrolling interests--------1313
Net income-18,736-495,892---514,6289,208523,836
Other comprehensive income:
Unrealized gains related to defined benefit plan------(10,581)(10,581)-(10,581)
Equity in unrealized gains on cash flow hedges for interest payments of unconsolidated investee, net------6,6166,616-6,616
Redeemable noncontrolling interests income--------(4,629)(4,629)
Distributions declared to preferred unitholders-(18,736)-----(18,736)-(18,736)
Distributions declared to common unitholders---(427,721)---(427,721)-(427,721)
Repurchase of preferred units-(1,631)-----(1,631)-(1,631)
Distributions to noncontrolling interests--------(3,755)(3,755)
Issuance of common units--1,988-------
Surrender of restricted common units--(770)(16,271)---(16,271)-(16,271)
Exercise of common stock options--1733,727---3,727-3,727
Amortization of equity awards---25,366---25,366-25,366
Redemption/conversion of noncontrolling interests---(788)---(788)(7)(795)
Balance at September 30, 202319$467,396619,875$9,116,105-$-$6,616$9,590,117$132,231$9,722,348
Balance at January 1, 202419$467,396619,871$9,054,740-$-$3,329$9,525,465$127,993$9,653,458
Contributions from noncontrolling interests--------274274
Net income-23,864-220,883-392-245,1396,301251,440
Other comprehensive income:
Unrealized losses on cash flow hedges for interest payments, net------(14,230)(14,230)-(14,230)
Equity in unrealized losses on cash flow hedges for interest payments of unconsolidated investee, net------(2,584)(2,584)-(2,584)
Redeemable noncontrolling interests income--------(3,392)(3,392)
Distributions declared to preferred unitholders-(23,864)-----(23,864)-(23,864)
Distributions declared to common unitholders---(485,374)-(773)-(486,147)-(486,147)
Repurchase of preferred units-(5)-----(5)-(5)
Distributions to noncontrolling interests--------(3,746)(3,746)
Issuance of preferred units for merger (1)2105,607-----105,607-105,607
Issuance of common units for merger (1)--53,0341,166,76495320,975-1,187,739-1,187,739
Issuance of common units--1,967-121-----
Redemption of common units-----(3)-(3)-(3)
Surrender of restricted common units--(790)(15,293)---(15,293)-(15,293)
Amortization of equity awards---25,160-1,257-26,417-26,417
Redemption/conversion of noncontrolling interests---(479)---(479)(3,428)(3,907)
Adjustment of redeemable noncontrolling interests to estimated fair value---(2,701)---(2,701)-(2,701)
Balance at September 30, 202421$572,998674,082$9,963,7001,074$21,848$(13,485)$10,545,061$124,002$10,669,063

(1)

See Footnotes 1 and 3 of the Notes to Condensed Consolidated Financial Statements for further details.

The accompanying notes are an integral part of these condensed consolidated financial statements.

KIMCO REALTY OP, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

Nine Months Ended September 30,
20242023
Cash flow from operating activities:
Net income$251,440$523,836
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation and amortization447,555382,983
Impairment charges4,27714,043
Straight-line rental income adjustments, net(17,228)(17,458)
Amortization of above-market and below-market leases, net(17,567)(13,969)
Amortization of deferred financing costs and fair value debt adjustments, net(955)(6,999)
Equity award expense26,38425,334
Gain on sale of properties(944)(52,376)
Loss/(gain) on marketable securities, net27,613(17,642)
Change in fair value of embedded derivative liability(1,691)7,000
Equity in income of joint ventures, net(63,413)(57,589)
Equity in income of other investments, net(9,468)(8,741)
Distributions from joint ventures and other investments74,87754,875
Change in accounts and notes receivable, net20,18332,584
Change in accounts payable and accrued expenses58,27048,712
Change in other operating assets and liabilities, net(33,253)(33,184)
Net cash flow provided by operating activities766,080881,409
Cash flow from investing activities:
Acquisition of operating real estate and other related net assets(10,000)(269,499)
Improvements to operating real estate(213,441)(179,145)
Acquisition of RPT Realty(149,103)-
Investment in marketable securities(1,375)(3,102)
Proceeds from sale of marketable securities301,463291,341
Investment in cost method investments(40)(1,532)
Investments in and advances to real estate joint ventures(3,558)(21,408)
Reimbursements of investments in and advances to real estate joint ventures22,1409,024
Investments in and advances to other investments(6,246)(13,594)
Reimbursements of investments in and advances to other investments2,911236
Investment in mortgage and other financing receivables(190,183)(11,211)
Collection of mortgage and other financing receivables85,148108
Proceeds from sale of properties70,429122,821
Net cash flow used for investing activities(91,855)(75,961)
Cash flow from financing activities:
Principal payments on debt, excluding normal amortization of rental property debt(11,774)(49,187)
Principal payments on rental property debt(7,200)(8,481)
Proceeds from issuance of unsecured term loans860,000-
Proceeds from issuance of unsecured notes500,000
Repayments of unsecured term loans(310,000)-
Repayments of unsecured notes(1,157,700)-
Financing origination costs(7,046)(6,041)
Contributions from noncontrolling interests27413
Redemption/distribution of noncontrolling interests(13,913)(8,870)
Distributions paid to common and preferred unitholders(507,826)(446,617)
Proceeds from issuance of units-3,727
Repurchase of preferred units(5)(1,491)
Units repurchased for employee tax withholding on equity awards(15,260)(16,239)
Change in tenants' security deposits2,5122,171
Net cash flow used for financing activities(667,938)(531,015)
Net change in cash, cash equivalents and restricted cash6,287274,433
Cash, cash equivalents and restricted cash, beginning of the period783,757149,829
Cash, cash equivalents and restricted cash, end of the period$790,044$424,262
Interest paid (net of capitalized interest of $1,682 and $1,705, respectively)$220,719$180,664
Income taxes paid, net of refunds$61,073$60,235

The accompanying notes are an integral part of these condensed consolidated financial statements.

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

  1. Business and Organization

Kimco Realty Corporation and its subsidiaries (the “Parent Company”) operates as a Real Estate Investment Trust ("REIT"), of which substantially all of the Parent Company’s assets are held by, and substantially all of the Parent Company’s operations are conducted through, Kimco Realty OP, LLC (“Kimco OP”), either directly or through its subsidiaries, as the Parent Company’s operating company. The Parent Company is the managing member and exercises exclusive control over Kimco OP. As of September 30, 2024, the Parent Company owned 99.84% of the outstanding limited liability company interests (the "OP Units") in Kimco OP. The terms “Kimco”, “the Company” and “our” each refer to the Parent Company and Kimco OP, collectively, unless the context indicates otherwise. In statements regarding qualification as a REIT, such terms refer solely to Kimco Realty Corporation.

The Company is North America’s largest publicly traded owner and operator of open-air, grocery-anchored shopping centers and a growing portfolio of mixed-use assets. The Company’s portfolio is primarily concentrated in the first-ring suburbs of the top major metropolitan markets, including those in high-barrier-to-entry coastal markets and rapidly expanding Sun Belt cities, with a tenant mix focused on essential, necessity-based goods and services that drive multiple shopping trips per week. The Company, its affiliates and related real estate joint ventures are engaged principally in the ownership, management, development and operation of open-air shopping centers, including mixed-use assets, which are anchored primarily by grocery stores, off-price retailers, discounters or service-oriented tenants. Additionally, the Company provides complementary services that capitalize on the Company’s established retail real estate expertise. The Company’s mission is to create destinations for everyday living that inspire a sense of community and deliver value to our many stakeholders. The Company evaluates performance on a property specific or transactional basis and does not distinguish its principal business 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 of America (“GAAP”).

The Company elected status as a REIT for federal income tax purposes commencing with its taxable year which began January 1, 1992 and operates in a manner that enables the Company to maintain its status as a REIT. To qualify as a REIT, the Company must meet several organizational and operational requirements, and is required to annually distribute at least 90% of its net taxable income, determined without regard to the dividends paid deduction and excluding any net capital gain. In addition, the Company will be subject to federal income tax at regular corporate rates to the extent that it distributes less than 100% of its net taxable income, including any net capital gains. In January 2023, the Company consummated the Reorganization into an UPREIT structure as described in the Explanatory Note at the beginning of this Quarterly Report on Form 10-Q. 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 U.S. federal income tax, provided that distributions to its stockholders equal at least the amount of its REIT taxable income, as defined in the Code. The Company maintains certain subsidiaries that have made joint elections with the Company to be treated as taxable REIT subsidiaries (“TRSs”), that permit the Company to engage through such TRSs in certain business activities that the REIT may not conduct directly. A TRS is subject to federal and state income taxes on its income, and the Company includes, when applicable, a provision for taxes in its condensed consolidated financial statements.

RPT Merger

On August 28, 2023, the Company and RPT Realty (“RPT”) announced that they had entered into a definitive merger agreement (the “Merger Agreement”) pursuant to which the Company would acquire RPT through a series of mergers (collectively, the “RPT Merger”). On January 2, 2024, RPT merged with and into the Company, with the Company continuing as the surviving public company. The RPT Merger added 56 open-air shopping centers, 43 of which were wholly owned and 13 of which are owned through a joint venture, comprising 13.3 million square feet of gross leasable area (“GLA”). In addition, as a result of the RPT Merger, the Company obtained RPT’s 6% stake in a 49-property net lease joint venture.

Under the terms of the Merger Agreement, each RPT common share was converted into 0.6049 of a newly issued share of the Company’s common stock, together with cash in lieu of fractional shares, and each 7.25% Series D Cumulative Convertible Perpetual Preferred Share of RPT was converted into the right to receive one depositary share representing one one-thousandth of a share of the Company’s newly issued 7.25% Class N Cumulative Convertible Perpetual Preferred Stock, par value $1.00 per share (“Class N Preferred Stock”).

During the nine months ended September 30, 2024, the Company incurred expenses of $25.2 million associated with the RPT Merger, primarily comprised of severance, legal and professional fees. See Footnote 3 of the Notes to Condensed Consolidated Financial Statements for further details.

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

  1. Summary of Significant Accounting Policies

Basis of Presentation

This report combines the quarterly reports on Form 10-Q for the quarterly period ended September 30, 2024, of the Parent Company and Kimco OP into this single report. The accompanying Condensed Consolidated Financial Statements include the accounts of the Parent Company and Kimco OP and their consolidated subsidiaries. The Reorganization resulted in a merger of entities under common control in accordance with GAAP. The Company’s subsidiaries include subsidiaries which are wholly owned or which the Company has a controlling interest, including where the Company has been determined to be a primary beneficiary of a variable interest entity (“VIE”) in accordance with the consolidation guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). The Parent Company serves as the general member of Kimco OP. The limited members of Kimco OP have limited rights over Kimco OP and do not have the power to direct the activities that most significantly impact Kimco OP’s economic performance. As such, Kimco OP is considered a VIE, and the Parent Company, which consolidates it, is the primary beneficiary. All inter-company balances and transactions have been eliminated in consolidation. The information presented in the accompanying Condensed Consolidated Financial Statements 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. Amounts as of December 31, 2023 included in the Condensed Consolidated Financial Statements have been derived from the audited Consolidated Financial Statements as of that date, but does not include all annual disclosures required by GAAP. These Condensed Consolidated Financial Statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as certain disclosures in this Quarterly Report that would duplicate those included in such Annual Report on Form 10-K are not included in these Condensed Consolidated Financial Statements.

On January 2, 2024, the Parent Company, as managing member of Kimco OP, entered into an amended and restated limited liability company agreement of Kimco OP (the “Amended and Restated Limited Liability Company Agreement”), providing for, among other things, the creation of Class N Preferred Units of Kimco OP, having the preferences, rights and limitations set forth therein, and certain modifications to the provisions regarding LTIP Units (as defined in the Amended and Restated Limited Liability Company Agreement), including provisions governing distribution and tax allocation requirements and the procedures for converting LTIP Units.

Subsequent Events

The Company has evaluated subsequent events and transactions for potential recognition or disclosure in its Condensed Consolidated Financial Statements (See Footnote 4 of the Notes to Condensed Consolidated Financial Statements).

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

New Accounting Pronouncements

The following table represents Accounting Standards Updates (“ASUs”) to the FASB’s ASC that, as of September 30, 2024, are not yet effective for the Company and for which the Company has not elected early adoption, where permitted:

ASUDescriptionEffective DateEffect on the financial statements or other significant matters
ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment DisclosuresThe amendments in this ASU improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements.Annual fiscal years beginning January 1, 2024, and interim periods for fiscal years beginning January 1, 2025; Early adoption permittedThere are aspects of this ASU that apply to entities with one reportable segment. The Company will review the extent of new disclosures necessary prior to implementation. Other than additional disclosure, the adoption of this ASU is not expected to have a material impact on the Company’s financial position and/or results of operations.
ASU 2023-05, Business Combinations – Joint Venture Formations (Subtopic 805-60): Recognition and Initial MeasurementThe amendments in this ASU address the accounting for contributions made to a joint venture, upon formation, in a joint venture’s separate financial statements. To reduce diversity in practice and provide decision-useful information to a joint venture’s investors, these amendments require that a joint venture apply a new basis of accounting upon formation. By applying a new basis of accounting, a joint venture, upon formation, will recognize and initially measure its assets and liabilities at fair value (with exceptions to fair value measurement that are consistent with the business combinations guidance). Additionally, existing joint ventures have the option to apply the guidance retrospectively.January 1, 2025; Early adoption permittedThis ASU does not impact accounting for joint ventures by the venturers. As such, the Company does not expect the adoption of this ASU will have a material impact on the Company’s financial position and/or results of operations.
ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax DisclosuresThis ASU requires entities to provide additional information in the rate reconciliation and additional disclosures about income taxes paid. The guidance requires public business entities to disclose in their rate reconciliation table additional categories of information about federal, state and foreign income taxes and to provide more details about the reconciling items in some categories if the items meet a quantitative threshold. The guidance requires all entities annually to disclose income taxes paid (net of refunds received) disaggregated by federal (national), state and foreign taxes and to disaggregate the information by jurisdiction based on a quantitative threshold.Annual fiscal years beginning January 1, 2025, and interim periods for fiscal years beginning January 1, 2026; Early adoption permittedThe Company will review the extent of new disclosures necessary prior to implementation. Other than additional disclosure, the adoption of this ASU is not expected to have a material impact on the Company’s financial position and/or results of operations.

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

ASU 2024-01, Compensation - Stock Compensation (Topic 718)The amendments in this ASU clarify how to determine whether profits interest and similar awards should be accounted for as a share-based payment arrangement (ASC 718) or as a cash bonus or profit-sharing arrangement (ASC 710, Compensation - General, or other guidance) and applies to all reporting entities that account for profits interest awards as compensation to employees or non-employees. In addition to the illustrative guidance, this ASU modifies the language in paragraph 718-10-15-3 to improve its clarity and operability without changing the guidance. The amendments should be applied either retrospectively to all prior periods presented in the financial statements, or prospectively to profits interests and similar awards granted or modified on or after the adoption date.January 1, 2025; Early adoption permittedThe Company does not expect the adoption of this ASU to have a material impact on the Company’s financial position and/or results of operations.

The following ASU to the FASB’s ASC has been adopted by the Company as of the date listed:

ASUDescriptionAdoption DateEffect on the financial statements or other significant matters
ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale RestrictionsThis ASU clarifies the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and provides new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820.January 1, 2024The adoption of this ASU did not have a material impact on the Company’s financial position and/or results of operations.

Regulatory Update

On March 6, 2024, the Securities and Exchange Commission (“SEC”) adopted final rules that will require registrants to disclose climate-related information in registration statements and annual reports, including material climate-related risks and impacts, descriptions of board oversight and risk management activities, and any material climate-related targets or goals. The landmark rules also will require accelerated and large accelerated filers to disclose material Scope 1 and Scope 2 greenhouse gas emissions. These disclosures will be subject to independent third-party assurance. Registrants will also have to disclose, among other things, certain effects of severe weather events and other natural conditions and amounts related to carbon offsets and renewable energy credits or certificates in their audited financial statements. On March 15, 2024, a federal appellate court imposed a temporary stay pending judicial review of these new rules. The SEC voluntarily stayed its recently adopted climate disclosure rules pending the completion of judicial review. The Company plans to comply with the disclosure requirements of the final rules when they become effective, and are currently evaluating the impact these final rules will have on the Company’s SEC filings and related disclosures.

  1. RPT Merger

Overview

On January 2, 2024, the Company completed the Merger with RPT, under which RPT merged with and into the Company, with the Company continuing as the surviving public company. The RPT Merger added 56 open-air shopping centers, 43 of which were wholly owned and 13 of which are owned through a joint venture, comprising 13.3 million square feet of GLA. In addition, pursuant to the RPT Merger, the Company obtained RPT’s 6% stake in a 49-property net lease joint venture.

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Under the terms of the Merger Agreement, each RPT common share was converted into 0.6049 of a newly issued share of the Company’s common stock, together with cash in lieu of fractional shares and each 7.25% Series D Cumulative Convertible Perpetual Preferred Share of RPT was converted into the right to receive one depositary share representing one one-thousandth of a share of Class N Preferred Stock of the Company having the rights, preferences and privileges substantially as set forth in the Merger Agreement, in each case, without interest, and subject to any withholding required under applicable law, upon the terms and subject to the conditions set forth in the Merger Agreement.

The number of RPT shares/units outstanding as of January 2, 2024, converted to shares of the Company’s shares/units were determined as follows (amounts presented in thousands, except per share data):

Common Shares (1)OP UnitsCumulative Convertible Perpetual Preferred Shares
RPT shares/units outstanding as of January 2, 202487,6751,5761,849
Exchange ratio0.60490.60491.0000
Kimco shares/units issued53,0349531,849
Value of Kimco stock per share/unit$22.0005$22.0005$57.13
Equity consideration given from Kimco shares/units issued$1,166,775$20,975$105,607

(1)

The Company paid cash in lieu of issuing fractional Kimco common shares, which is included in “Cash Consideration” caption in the table below.

The following table presents the total value of consideration paid by Kimco at the close of the RPT Merger (in thousands):

Calculated Value of RPT ConsiderationCash Consideration*Total Value of Consideration
As of January 2, 2024$1,293,357$149,103$1,442,460
  • Amount includes $130.0 million to pay off the outstanding balance on RPT’s credit facility at closing, additional consideration of approximately $19.1 million relating to transaction costs incurred by RPT and $0.1 million of cash paid in lieu of issuing fractional Kimco common shares.

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Provisional Purchase Price Allocation

In accordance with ASC 805-10, Business Combinations, the Company accounted for the RPT Merger as a business combination using the acquisition method of accounting. Based on the total value of the consideration, the total fair value of the assets acquired and liabilities assumed in the RPT Merger was $1.4 billion. The following table summarizes the provisional purchase price allocation based on the Company’s initial valuation and subsequent adjustments, including estimates and assumptions of the acquisition date fair value of the tangible and intangible assets acquired and liabilities assumed (in thousands):

Provisional Allocation as of January 2, 2024AdjustmentsProvisional Allocation as of September 30, 2024
Land$312,663$(320)$312,343
Building and improvements1,340,1642,9921,343,156
In-place leases220,607(376)220,231
Above-market leases12,872(11)12,861
Real estate assets1,886,3062,2851,888,591
Investments in and advances to real estate joint ventures433,345-433,345
Investments in and advances to other investments12,672-12,672
Operating lease right-of-use assets, net6,128-6,128
Accounts receivable and other assets57,529-57,529
Total assets acquired2,395,9802,2852,398,265
Notes payable(821,500)-(821,500)
Accounts payable and other liabilities(50,713)(2,500)(53,213)
Operating lease liabilities(13,506)-(13,506)
Below-market leases(67,801)215(67,586)
Total liabilities assumed(953,520)(2,285)(955,805)
Total purchase price$1,442,460$-$1,442,460

The provisional fair market value of the acquired properties is based upon a valuation prepared by the Company with assistance of a third-party valuation specialist. The Company is in the process of reviewing the assumptions and inputs used by the third-party valuation specialist to ensure reasonableness and that the procedures are performed in accordance with management’s policy. Therefore, the final acquisition accounting adjustments, including the purchase price and its allocation, are not yet complete as of this filing. Once the purchase price and allocation are complete, an adjustment to the provisional purchase price or allocation may occur. Additionally, any excess purchase price, which could differ materially, may result in the recognition of goodwill, the amount of which may be significant.

The following table details the provisional weighted average useful lives, in years, of the purchase price provisionally allocated to real estate and related intangible assets and liabilities acquired arising from the RPT Merger:

Weighted Average Useful Life (in Years)
Landn/a
Building50.0
Building improvements45.0
Tenant improvements3.9
In-place leases3.1
Above-market leases3.7
Below-market leases22.1
Operating right-of-use assets81.3

Since the date of the Merger through September 30, 2024, the revenue and earnings from RPT included in the Company’s Condensed Consolidated Statements of Income are $133.3 million and $12.8 million (excluding $25.2 million of merger-related charges), respectively.

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Pro forma Information

The pro forma financial information set forth below is based upon the Company’s historical Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2024 and 2023, adjusted to give effect to these properties acquired as of January 1, 2023. The pro forma financial information is presented for informational purposes only and may not be indicative of what actual results of income would have been, nor does it purport to represent the results of income for future periods. Amounts are presented in millions, except per share figures.

Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Revenues from rental properties, net$502.9$485.8$1,498.0$1,452.5
Net income (1)$138.4$131.7$276.7$511.4
Net income available to the Company’s common shareholders (1)$128.0$120.9$246.1$478.0

(1)

The pro forma earnings for the three months ended September 30, 2023 and nine months ended September 30, 2024 were adjusted to exclude merger-related charges of $3.8 million and $25.2 million, respectively, while the pro forma earnings for the nine months ended September 30, 2023 was adjusted to include merger-related charges of $25.2 million.

  1. Real Estate

Acquisitions

During the nine months ended September 30, 2024, there were no operating property acquisitions other than those acquired in connection with the RPT Merger. During the nine months ended September 30, 2023, the Company acquired the following operating properties, through direct asset purchases or consolidation due to change in control resulting from the purchase of additional interests in certain operating properties held in an unconsolidated joint venture (in thousands):

Purchase Price
Property NameLocationMonth AcquiredCashDebtOtherTotalGLA
Portfolio (2 properties) (1)VariousJan-23$69,130$19,637$13,019$101,786342
Crossroads Plaza ParcelCary, NCJan-232,173--2,1735
Northridge Shopping Center ParcelArvada, COJan-23728--72857
Stafford Marketplace Parcel (2)Stafford, VAFeb-23--12,52712,52787
Tustin Heights (1)Tustin, CAMar-2326,50117,5504,91048,961137
Marlton Plaza ParcelCherry Hill, NJJul-23529--529-
Stonebridge at Potomac Town CenterWoodbridge, VAAug-23169,840-1,667171,507504
$268,901$37,187$32,123$338,2111,132

(1)

Other includes the Company’s previously held equity investments in the Prudential Investment Program and net gains on change in control. The Company evaluated these transactions pursuant to the FASB’s Consolidation guidance and as a result, recognized gains on change in control of interest of $7.7 million, in aggregate, resulting from the fair value adjustments associated with the Company’s previously held equity interests, which are included in Equity in income of joint ventures, net on the Company’s Condensed Consolidated Statements of Income. The Company previously held an ownership interest of 15.0% in these property interests. See Footnote 5 of the Notes to Condensed Consolidated Financial Statements.

(2)

During March 2023, the Company received a land parcel as consideration resulting from the exercise of a termination option of an operating lease.

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The purchase price for these acquisitions was allocated to real estate and related intangible assets and liabilities acquired, as applicable, in accordance with our accounting policies for asset acquisitions. The purchase price allocation for properties acquired/consolidated during the nine months ended September 30, 2023, were as follows (in thousands):

Allocation as of September 30, 2023Weighted Average Useful Life (in Years)
Land$103,836n/a
Building161,66750.0
Building improvements22,28245.0
Tenant improvements22,4756.4
In-place leases47,2905.3
Above-market leases4,9816.7
Below-market leases(25,129)21.6
Other assets1,777n/a
Other liabilities(968)n/a
Net assets acquired$338,211

In October 2024, the Company acquired Waterford Lakes Town Center, which was comprised of 701,941 square feet of GLA, located in Orlando, Florida, for a purchase price of $322.0 million, including the assumption of a $164.6 million mortgage loan.

Dispositions

The table below summarizes the Company’s disposition activity relating to consolidated operating properties and parcels for the nine months ended September 30, 2024 and 2023 (dollars in millions):

Nine Months Ended September 30,
20242023
Aggregate sales price/gross fair value (1) (2) (3)$254.1$175.0
Gain on sale of properties (4)$0.9$52.4
Number of properties sold114
Number of parcels sold/deconsolidated (2)711

(1)

During 2024, the Company provided, as a lender, seller financing totaling $175.4 million related to the sale of nine operating properties. See Footnote 10 of the Notes to Condensed Consolidated Financial Statements for mortgage receivable loan disclosure.

(2)

During 2023, the Company contributed a land parcel and related entitlements, located in Ardmore, PA, into a preferred equity investment with a gross value of $19.6 million. As a result, the Company no longer consolidates this land parcel and has a non-controlling interest in this investment. See Footnote 6 of the Notes to Condensed Consolidated Financial Statements for preferred equity investment disclosure.

(3)

During 2023, the Company provided, as a lender, seller financing of $25.0 million related to the sale of an operating property located in Gresham, OR.

(4)

Before noncontrolling interests of $1.6 million and taxes of $1.5 million for the nine months ended September 30, 2023.

Impairments

During the nine months ended September 30, 2024, the Company recognized aggregate impairment charges related to adjustments to property carrying values of $4.3 million, for which the Company’s estimated fair values were primarily based upon signed contracts or letters of intent from third party offers. These adjustments to property carrying values were recognized in connection with the Company’s efforts to market certain properties and management’s assessment as to the likelihood and timing of such potential transactions. See Footnote 15 of the Notes to Condensed Consolidated Financial Statements for fair value disclosure.

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

  1. Investments in and Advances to Real Estate Joint Ventures

The Company has investments in and advances to various 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. The Company and the joint venture partners have joint approval rights for major decisions, including those regarding property operations. As such, the Company holds noncontrolling interests in these joint ventures and accounts for them under the equity method of accounting. The Company manages certain of these joint venture investments and, where applicable, earns acquisition fees, leasing commissions, property management fees, asset management fees and construction management fees. The table below presents unconsolidated joint venture investments for which the Company held an ownership interest at September 30, 2024 and December 31, 2023 (dollars in millions):

Noncontrolling Ownership InterestThe Company’s Investment
Joint VentureAs of September 30, 2024September 30, 2024December 31, 2023
Prudential Investment Program15.0%$133.6$138.7
Kimco Income Opportunity Portfolio (“KIR”)52.1%286.2286.3
R2G Venture LLC (“R2G”) (1)51.5%414.4-
Canada Pension Plan Investment Board (“CPP”)55.0%203.6204.6
Other Institutional Joint VenturesVarious240.4247.5
Other Joint Venture Programs (2)Various214.0210.7
Total*$1,492.2$1,087.8
  • Represents 116 property interests, 48 other property interests and 25.1 million square feet of GLA, as of September 30, 2024, and 104 property interests and 21.1 million square feet of GLA, as of December 31, 2023.

(1)

In connection with the RPT Merger, the Company acquired ownership in an unconsolidated joint venture with an affiliate of GIC Private Limited, which had a provisional fair market value of $425.9 million at the time of Merger, representing 13 property interests.

(2)

In connection with the RPT Merger, the Company acquired ownership in an unconsolidated joint venture, which had a provisional fair market value of $7.4 million at the time of Merger, representing 49 other property interests.

The table below presents the Company’s share of net income for the above investments, which is included in Equity in income of joint ventures, net on the Company’s Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2024 and 2023 (in millions):

Three Months Ended September 30,Nine Months Ended September 30,
Joint Venture2024202320242023
Prudential Investment Program$3.1$3.4$9.5$15.4
KIR8.88.227.326.0
R2G2.6-6.8-
CPP2.51.57.16.9
Other Institutional Joint Ventures1.00.73.32.2
Other Joint Venture Programs3.02.59.47.1
Total$21.0$16.3$63.4$57.6

During the nine months ended September 30, 2024, certain of the Company’s real estate joint ventures disposed of an operating property and other property interest, in separate transactions, for an aggregate sales price of $19.2 million. These transactions resulted in an aggregate net gain to the Company of $1.4 million for the nine months ended September 30, 2024.

During the nine months ended September 30, 2023, the Company acquired the remaining 85% interest in three operating properties from Prudential Investment Program, in separate transactions, with an aggregate gross fair value of $150.7 million. The Company evaluated these transactions pursuant to the FASB’s Consolidation guidance and, as a result, recognized net gains on change in control of interests of $7.7 million, in aggregate, resulting from the fair value adjustments associated with the Company’s previously held equity interests. See Footnote 4 of the Notes to Condensed Consolidated Financial Statements for the operating properties acquired by the Company.

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The table below presents debt balances within the Company’s unconsolidated joint venture investments for which the Company held noncontrolling ownership interests at September 30, 2024 and December 31, 2023 (dollars in millions):

As of September 30, 2024As of December 31, 2023
Joint VentureMortgages and Notes Payable, NetWeighted Average Interest RateWeighted Average Remaining Term (months)*Mortgages and Notes Payable, NetWeighted Average Interest RateWeighted Average Remaining Term (months)*
Prudential Investment Program$269.25.90%22.7$291.66.00%24.6
KIR273.75.82%30.2273.45.82%39.2
R2G (1)68.22.90%77.7---
CPP81.04.88%22.081.95.12%31.0
Other Institutional Joint Ventures234.65.76%26.7234.15.76%35.7
Other Joint Venture Programs (2)548.65.05%43.8367.94.44%59.6
Total$1,475.3$1,248.9
  • Includes extension options

(1)

In connection with the RPT Merger, the Company acquired an ownership interest in this joint venture, which had aggregate secured debt of $66.7 million (including a fair market value adjustment of $14.4 million).

(2)

In connection with the RPT Merger, the Company acquired an ownership interest in a joint venture, which had aggregate secured debt of $187.1 million (including a fair market value adjustment of $3.2 million).

  1. Other Investments

The Company has provided capital to owners and developers of real estate properties through its Preferred Equity program, which is included in Other investments on the Company’s Condensed Consolidated Balance Sheets. In connection with the RPT Merger, the Company acquired a preferred equity investment of $12.7 million. In addition, the Company has invested capital in structured investments, which are primarily accounted for on the equity method of accounting. As of September 30, 2024, the Company’s Other investments were $106.5 million, of which the Company’s net investment under the Preferred Equity program was $69.2 million.

During the nine months ended September 30, 2024, the Company converted its $50.2 million preferred equity investment into mezzanine loan financing for a property in San Antonio, TX. In addition, the Company acquired the outstanding senior mortgage loan of $146.2 million encumbering the property. See Footnote 10 of the Notes to the Condensed Consolidated Financial Statements for mortgage and other financing receivable disclosure.

During the nine months ended September 30, 2023, the Company contributed a land parcel and related entitlements, located in Ardmore, PA, into a preferred equity investment with a gross value of $19.6 million. As a result, the Company no longer consolidates this land parcel and has a non-controlling interest in this investment.

  1. Marketable Securities

The amortized cost and unrealized gains, net of marketable securities as of September 30, 2024 and December 31, 2023, were as follows (in thousands):

As of September 30, 2024As of December 31, 2023
Marketable securities:
Amortized cost$2,301$40,110
Unrealized gain54289,947
Total fair value$2,355$330,057

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Company’s net gains/(losses) on marketable securities and dividend income for the three and nine months ended September 30, 2024 and 2023, were as follows (in thousands):

Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Gain/(loss) on marketable securities, net$79$13,225$(27,613)$17,642
Dividend income (included in Other income, net and Special dividend income)$-$1,705$1,705$201,044

The portion of unrealized gains/(losses) on marketable securities for the period that relates to marketable securities still held at the reporting date (in thousands):

Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Gain/(loss) on marketable securities, net$79$13,225$(27,613)$17,642
Less: Net (gain)/loss recognized related to marketable securities sold(19)(21)27,65210,630
Unrealized gain related to marketable securities still held$60$13,204$39$28,272

During the nine months ended September 30, 2024, the Company sold its remaining 14.2 million shares of common stock of Albertsons Companies Inc. (“ACI”) held by the Company, generating net proceeds of $299.1 million. For tax purposes, the Company recognized a long-term capital gain of $288.7 million during the nine months ended September 30, 2024. The Company anticipates retaining the proceeds from this stock sale for general corporate purposes and, as a result, recorded estimated federal and state taxes of $72.9 million on the taxable gain.

During the nine months ended September 30, 2023, the Company received a $194.1 million special dividend payment on its shares of ACI common stock and recognized this as Special dividend income on the Company’s Condensed Consolidated Statements of Income. As a result, the Company’s Board of Directors declared a $0.09 per common share special cash dividend to maintain distribution requirements as a REIT. This special dividend was paid on December 21, 2023, to shareholders of record on December 7, 2023.

Also, during the nine months ended September 30, 2023, the Company sold 14.1 million shares of ACI common stock held by the Company, generating net proceeds of $282.3 million. For tax purposes, the Company recognized a long-term capital gain of $241.2 million. The Company elected to retain the proceeds from this stock sale for general corporate purposes and paid federal and state taxes of $61.0 million on the taxable gain.

  1. Accounts and Notes Receivable

The components of accounts and notes receivable, net of potentially uncollectible amounts as of September 30, 2024 and December 31, 2023, were as follows (in thousands):

As of September 30, 2024As of December 31, 2023
Billed tenant receivables$9,196$30,444
Unbilled common area maintenance, insurance and tax reimbursements66,54355,499
Other receivables15,98110,086
Straight-line rent receivables228,641211,588
Total accounts and notes receivable, net$320,361$307,617
  1. Leases

Lessor Leases

The Company’s primary source of revenues is derived from lease agreements, which includes rental income and expense reimbursement. The Company’s lease income is comprised of minimum base rent, expense reimbursements, percentage rent, lease termination fee income, ancillary income, amortization of above-market and below-market rent adjustments and straight-line rent adjustments.

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The disaggregation of the Company’s lease income, which is included in Revenues from rental properties, net on the Company’s Condensed Consolidated Statements of Income, as either fixed or variable lease income based on the criteria specified in ASC 842, for the three and nine months ended September 30, 2024 and 2023, was as follows (in thousands):

Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Lease income:
Fixed lease income (1)$405,468$354,465$1,199,803$1,052,126
Variable lease income (2)96,73285,452295,019261,781
Above-market and below-market leases amortization, net7,2223,96717,56713,969
Adjustments for potentially uncollectible lease income or disputed amounts(6,547)(2,068)(14,388)(8,714)
Total lease income$502,875$441,816$1,498,001$1,319,162

(1)

Includes minimum base rents, expense reimbursements, ancillary income and straight-line rent adjustments.

(2)

Includes minimum base rents, expense reimbursements, percentage rent, lease termination fee income and ancillary income.

Lessee Leases

The Company currently leases real estate space under non-cancelable operating lease agreements for ground leases and administrative office leases. The Company’s operating leases have remaining lease terms ranging from less than one year to 81 years, some of which include options to extend the terms for up to an additional 75 years.

In connection with the RPT Merger, the Company obtained a $13.5 million operating right-of-use asset (excluding an intangible right-of-use asset of $7.4 million) in exchange for a new operating lease liability related to a property under an operating ground lease agreement. In addition, the Company obtained a finance intangible right-of-use asset of $6.8 million (which is included in Other assets on the Company’s Condensed Consolidated Balance Sheets).

The Company has three properties under finance leasing arrangements that consist of variable lease payments with a bargain purchase option. As of September 30, 2024, the finance right-of-use assets of $33.0 million are included in Other assets on the Company’s Condensed Consolidated Balance Sheets and finance lease liabilities of $24.2 million are included in Other liabilities on the Company’s Condensed Consolidated Balance Sheets.

The weighted-average remaining non-cancelable lease term and weighted-average discount rates for the Company’s operating and finance leases as of September 30, 2024 were as follows:

Operating LeasesFinance Leases
Weighted-average remaining lease term (in years)29.880.25
Weighted-average discount rate6.78%6.00%

The components of the Company’s lease expense, which are included in interest expense, rent expense and general and administrative expense on the Company’s Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2024 and 2023, were as follows (in thousands):

Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Lease cost:
Finance lease cost$365$314$1,096$949
Operating lease cost3,7973,68611,51111,064
Variable lease cost5294861,6901,773
Total lease cost$4,691$4,486$14,297$13,786

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

  1. Other Assets

Mortgages and Other Financing Receivables

During the nine months ended September 30, 2024, the Company provided, as a lender, the following mortgage and other financing receivables (dollars in millions):

Date IssuedFace AmountInterest RateMaturity Date
Feb-24 (1)$9.310.00%Feb-29
Mar-24$9.012.00%Mar-29
Mar-24 (1)$166.16.35%-10.00%Mar-29-Mar-34
Apr-24$8.010.00%Oct-34
Apr-24$2.012.00%Apr-27
Jun-24$10.012.00%Jul-29
Jun-24 (2)$146.29.00%Jun-25
Jun-24 (2)$50.212.00%Jun-34
Aug-24$8.611.00%Aug-28
Apr-24-Sept-24$3.510.50%Nov-26

(1)

Issued as lender seller financing related to the sale of nine operating properties which were acquired in conjunction with the RPT Merger.

(2)

Relates to the Company’s previously held preferred equity investment. See Footnote 6 of the Notes to Condensed Consolidated Financial Statements for further details.

During the nine months ended September 30, 2024, the Company incurred charges of $4.5 million in allowance for credit loss relating to its mortgage and other financing receivables.

During the nine months ended September 30, 2024, the Company collected the following mortgage and other financing receivables (dollars in millions):

Date CollectedFace AmountInterest RateMaturity Date
Mar-24$38.26.35%-10.00%Mar-29-Mar-34
Jun-24$21.96.35%Dec-24
Sept-24$24.012.00%Oct-24
  1. Notes and Mortgages Payable

Notes Payable

On September 9, 2024, Fitch Ratings assigned the Company a rating of A- for its senior unsecured debt, assigned a BBB credit rating for its preferred stock, and assigned its ‘Stable’ rating outlook. As a result, the Company achieved certain interest rate reductions and facility fee reductions for its Credit Facility and unsecured term loans.

The Company has a $2.0 billion Credit Facility with a group of banks. The Credit Facility is scheduled to expire in March 2027 with two additional six-month options to extend the maturity date, at the Company’s discretion, to March 2028. The Credit Facility is guaranteed by the Parent Company. The Credit Facility can be increased to $2.75 billion through an accordion feature. The Credit Facility is a green credit facility tied to sustainability metric targets, as described in the agreement. The Credit Facility accrues interest at a rate of Adjusted Term Secured Overnight Financing Rate (“SOFR”), as defined in the terms of the Credit Facility, plus 77.5 basis points and fluctuates in accordance with the Company’s credit ratings. The interest rate can be further adjusted upward or downward based on the sustainability metric targets and the Company’s credit rating outlook, as defined in the agreement. As of September 30, 2024, the interest rate on the Credit Facility is Adjusted Term SOFR plus 68.5 basis points (5.53% as of September 30, 2024) after reductions for sustainability metrics achieved and an upgraded credit rating profile. Pursuant to the terms of the Credit Facility, the Company is subject to certain covenants. As of September 30, 2024, the Credit Facility had no outstanding balance, no appropriations for letters of credit, and the Company was in compliance with its covenants.

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

In connection with the RPT Merger, the Company assumed the following notes payable (dollars in millions):

TypeAmount AssumedInterest RateMaturity Date
Unsecured notes (1)$511.53.64%-4.74%Jun-25-Nov-31
Unsecured term loan (2)$50.04.15%Nov-26
Unsecured term loan (2)$100.04.11%Feb-27
Unsecured term loan (2)$50.03.43%Aug-27
Unsecured term loan (2)$110.03.71%Feb-28

(1)

The Company fully repaid these unsecured notes in January 2024 and incurred a make-whole charge of $0.3 million resulting from this early repayment of these notes, which are included in Merger charges on the Company’s Condensed Consolidated Statements of Income.

(2)

The Company entered into a Seventh Amended and Restated Credit Agreement, through which the assumed term loans were terminated (fully repaid) and new term loans were issued to replace the assumed loans. The new term loans retained the amounts and maturities of the assumed term loans, however the rates (Adjusted Term SOFR plus 0.905% and fluctuate based on credit rating profile and achieving sustainability metric targets, as described in the agreement) and covenants were revised to match those within the Company’s Credit Facility. As of September 30, 2024, the interest rate on these term loans is Adjusted Term SOFR plus 81.0 basis points after reductions for sustainability metrics achieved and an upgraded credit rating profile. The Company entered into 20 swap rate agreements with various lenders swapping the interest rates to all-in fixed rates (ranging from 4.5793% to 4.7801% as of September 30, 2024). See Footnote 12 of the Notes to Condensed Consolidated Financial Statements for interest rate swap disclosure.

During September 2024, the Company issued $500.0 million in senior unsecured notes, which are scheduled to mature in March 2035 and accrue interest at a rate of 4.85% per annum. These senior unsecured notes are guaranteed by the Parent Company.

On January 2, 2024, the Company entered into a new $200.0 million unsecured term loan credit facility (the “Term Loan Credit Facility”) pursuant to a credit agreement, which matures in January 2026, with three one-year extension options. The Term Loan Credit Facility accrues interest at a spread (currently 0.800% after reductions for sustainability metrics achieved and an upgraded credit rating profile) to the Adjusted Term SOFR Rate (as defined in the credit agreement), that fluctuates in accordance with changes in the Company’s senior debt ratings. In addition, during the three months ended September 30 2024, the Company amended the Term Loan Credit Facility, in separate transactions, to increase the aggregate principal amount from $200.0 million to $550.0 million. The additional $350.0 million is subject to the same terms as the existing Term Loan Credit Facility. As of September 30, 2024, the Company had six swap rate agreements with various lenders swapping the overall interest rate on the $550.0 million Term Loan Credit Facility to an all-in fixed rate of 4.6122%. See Footnote 12 of the Notes to Condensed Consolidated Financial Statements for interest rate swap disclosure.

During the nine months ended September 30, 2024, the Company fully repaid the following notes payables (dollars in millions):

TypeDate PaidAmount RepaidInterest RateMaturity Date
Unsecured noteJan-24$246.24.45%Jan-24
Unsecured noteMar-24$400.02.70%Mar-24

Mortgages Payable

During the nine months ended September 30, 2024, the Company repaid $11.8 million of mortgage debt that encumbered three operating properties.

  1. Derivatives

Derivative Instruments & Hedging Activities

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company manages economic risks, including interest rate, liquidity, and credit risks primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company may use derivatives to manage exposures that arise

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

from changes in interest rates and limits the risk by following established risk management policies and procedures, including the use of derivatives.

During the nine months ended September 30, 2024, the Company entered into 26 interest rate swap agreements with notional amounts aggregating to $860.0 million. The Company did not enter into any interest rate swap agreements during 2023. The interest rate swap agreements are designated as cash flow hedges and are held by the Company to reduce the impact of changes in interest rates on variable rate debt. The differential between fixed and variable rates to be paid or received is accrued, as interest rates change, and recognized as Interest expense in the Company’s Condensed Consolidated Statements of Income. If the hedges are deemed to be effective, the fair value is included within the Accumulated other comprehensive (loss)/income (“AOCI”) on the Company’s Condensed Consolidated Balance Sheets, and subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. As of September 30, 2024, all interest rate swaps were deemed effective and are therefore included within AOCI. As of September 30, 2024, the Company expects approximately $0.4 million of accumulated comprehensive income on derivative instruments to be reclassified into earnings as a reduction to interest expense during the next 12 months.

The interest rate swaps are measured at fair value using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The Company classifies the interest rate swaps as Level 2 and are measured on a recurring basis.

The following table summarizes the terms and fair value of the Company’s derivative financial instruments as of September 30, 2024 (amounts in thousands):

InstrumentNumber of Swap AgreementsAssociated Debt InstrumentEffective DateMaturity DateNotional Amount (1)Fair Value (2)
Interest rate swap1$200.0 Million Term LoanJan-24Jan-29$(200,000)$(3,137)
Interest rate swaps3$50.0 Million Term LoanJan-24Nov-26(50,000)(496)
Interest rate swaps3$100.0 Million Term LoanJan-24Feb-27(100,000)(1,089)
Interest rate swaps7$50.0 Million Term LoanJan-24Aug-27(50,000)(598)
Interest rate swaps7$110.0 Million Term LoanJan-24Feb-28(110,000)(1,460)
Interest rate swaps4$300.0 Million Term LoanJul-24Jan-29(300,000)(7,162)
Interest rate swap1$50.0 Million Term LoanSept-24Jan-29(50,000)(288)
$**(**860,000)$**(**14,230)

(1)

These interest rate swap agreements utilize a 1-month SOFR CME index.

(2)

Included within Other liabilities on the Company’s Condensed Consolidated Balance Sheets.

The table below details the location in the financial statements of the gain/(loss) recognized on interest rate swaps designated as cash flow hedges for the three and nine months ended September 30, 2024 (amounts in thousands):

Three Months Ended September 30, 2024Nine Months Ended September 30, 2024
Amount of loss recognized in AOCI on interest rate swaps, net$(18,978)$(6,996)
Amount reclassified from AOCI into income as Interest expense$3,072$7,234
Total amount of Interest expense presented in the Condensed Consolidated Statements of Income in which the effects of cash flow hedges are being recorded$(76,216)$(224,122)

The Company has interests in certain unconsolidated joint ventures, which have interest rate swaps. As of September 30, 2024 and December 31, 2023, the Company’s share of the change in fair value of the cash flow hedges for interest payments was $0.7 million and $3.3 million, respectively, which is included within Accumulated other comprehensive (loss)/income on the Company’s Condensed Consolidated Balance Sheets.

  1. Noncontrolling Interests

Noncontrolling interests represent the portion of equity that the Company does not own in those entities it consolidates as a result of having a controlling interest or having determined that the Company was the primary beneficiary of a VIE in accordance with the provisions of the FASB’s Consolidation guidance. The Company accounts and reports for noncontrolling interests in accordance with

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

the Consolidation guidance and the Distinguishing Liabilities from Equity guidance issued by the FASB. The Company identifies its noncontrolling interests separately within the equity section on the Company’s Condensed Consolidated Balance Sheets. The amounts of consolidated net income attributable to the Company and to the noncontrolling interests are presented separately on the Company’s Condensed Consolidated Statements of Income.

In connection with the RPT Merger, the Parent Company issued 953,400 OP units in Kimco OP, which had a fair market value of $21.0 million. Upon consummation of the RPT Merger, the Parent Company owned 99.86% of the outstanding OP Units in Kimco OP, which is no longer a disregarded entity for federal income tax purposes. In addition, during the nine months ended September 30, 2024, the Parent Company issued 326,140 long-term incentive plan units (“LTIP Units”) OP Units. See Footnote 16 of the Notes to Condensed Consolidated Financial Statements for further disclosure. As of September 30, 2024, the Parent Company owned 99.84% of the outstanding OP units in Kimco OP.

During the nine months ended September 30, 2024, the Company acquired the remaining outside partners’ interests in a consolidated property for a purchase price of $3.3 million. This transaction resulted in a decrease in Noncontrolling interests of $3.8 million and a corresponding decrease in Paid-in capital of $0.5 million on the Company’s Condensed Consolidated Balance Sheets.

The Company owns eight shopping center properties located in Long Island, NY, which were acquired during 2022, partially through the issuance of $122.1 million of Preferred Outside Partner Units and $13.6 million of Common Outside Partner Units. The noncontrolling interest is classified as mezzanine equity and included in Redeemable noncontrolling interests on the Company’s Condensed Consolidated Balance Sheets as a result of the put right available to the unit holders, an event that is not solely in the Company’s control. During 2024, 101,369 Preferred Outside Partner Units and 3,441 Common Outside Partner Units were redeemed for cash of $2.1 million, in separate transactions. These transactions resulted in a net decrease in Redeemable noncontrolling interests of $1.3 million and a decrease in the embedded derivative liability in Other liabilities of $0.8 million on the Company’s Condensed Consolidated Balance Sheets. As of September 30, 2024, the Outside Partner Units related to these acquisitions total $91.9 million, including noncontrolling interests of $63.5 million and an embedded derivative liability associated with put and call options of these unitholders of $28.4 million. The Outside Partner Units related annual cash distribution rates and related conversion features consisted of the following as of September 30, 2024:

TypePar Value Per UnitNumber of Units RemainingReturn Per Annum
Preferred Outside Partner Units$20.003,876,9353.75%
Common Outside Partner Units$20.00618,317Equal to the Company’s common stock dividend

Included within noncontrolling interests are units that were determined to be contingently redeemable that are classified as Redeemable noncontrolling interests and presented in the mezzanine section between Total liabilities and Stockholders’ equity on the Company’s Condensed Consolidated Balance Sheets.

The following table presents the change in the redemption value of the Redeemable noncontrolling interests for the nine months ended September 30, 2024 and 2023 (in thousands):

Nine Months Ended September 30,
20242023
Balance at January 1,$72,277$92,933
Net income3,3924,629
Distributions(3,392)(4,629)
Redemption/conversion of noncontrolling interests(1,290)-
Adjustment to estimated redemption value2,701-
Balance at September 30,$73,688$92,933

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

  1. Variable Interest Entities

Consolidated Operating Properties

Included within the Company’s operating properties at September 30, 2024 and December 31, 2023, are 29 and 30 consolidated entities, respectively, that are VIEs for which the Company is the primary beneficiary. These entities have been established to own and operate real estate property. The Company’s involvement with these entities is through its majority ownership and management of the properties. The entities were deemed VIEs primarily because the unrelated investors do not have substantive kick-out rights to remove the general or managing partner by a vote of a simple majority or less, and they do not have substantive participating rights. The Company determined that it was the primary beneficiary of these VIEs as a result of its controlling financial interest. At September 30, 2024, total assets of these VIEs were $1.7 billion, and total liabilities were $169.9 million. At December 31, 2023, total assets of these VIEs were $1.8 billion, and total liabilities were $180.9 million.

The majority of the operations of these VIEs are funded with cash flows generated from the properties. The Company has not provided financial support to any of these VIEs that it was not previously contractually required to provide, which consists primarily of funding any capital expenditures, including tenant improvements, which are deemed necessary to continue to operate the entity and any operating cash shortfalls that the entity may experience.

All liabilities of these consolidated VIEs are non-recourse to the Company (“VIE Liabilities”). The assets of the unencumbered VIEs are not restricted for use to settle only the obligations of these VIEs. The remaining VIE assets are encumbered by third-party non-recourse mortgage debt. The assets associated with these encumbered VIEs (“Restricted Assets”) are collateral under the respective mortgages and are therefore restricted and can only be used to settle the corresponding liabilities of the VIE. The table below summarizes the consolidated VIEs and the classification of the Restricted Assets and VIE Liabilities on the Company’s Condensed Consolidated Balance Sheets, exclusive of Kimco OP, as follows (dollars in millions):

As of September 30, 2024As of December 31, 2023
Number of unencumbered VIEs2728
Number of encumbered VIEs22
Total number of consolidated VIEs2930
Restricted Assets:
Real estate, net$326.0$379.8
Cash, cash equivalents and restricted cash3.43.9
Accounts and notes receivable, net2.53.6
Other assets1.81.3
Total Restricted Assets$333.7$388.6
VIE Liabilities:
Mortgages payable, net$85.3$97.3
Accounts payable and accrued expenses16.911.4
Operating lease liabilities4.95.0
Other liabilities62.867.2
Total VIE Liabilities$169.9$180.9

Unconsolidated Redevelopment Investment

Included in the Company’s preferred equity investments at September 30, 2024, is an unconsolidated development project which is a VIE for which the Company is not the primary beneficiary. This preferred equity investment was primarily established to develop real estate property for long-term investment and was deemed a VIE primarily based on the fact that the equity investment at risk was not sufficient to permit the entity to finance its activities without additional financial support. The initial equity contributed to this entity was not sufficient to fully finance the real estate construction as development costs are funded by the partners over the construction period. The Company determined that it was not the primary beneficiary of this VIE based on the fact that the Company has shared control of this entity along with the entity’s partners and therefore does not have a controlling financial interest.

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of September 30, 2024, the Company’s investment in this VIE was $37.3 million, which is included in Other investments on the Company’s Condensed Consolidated Balance Sheets. The Company’s maximum exposure to loss as a result of its involvement with this VIE is the Company’s carrying value in this investment. The Company has not provided financial support to this VIE that it was not previously contractually required to provide. All future costs of development will be funded with construction loan financing or capital contributions from the Company and the outside partner in accordance with their respective ownership percentages if necessary.

  1. Fair Value Measurements

All financial instruments of the Company are reflected in the accompanying Condensed Consolidated Balance Sheets at amounts which, in management’s estimation, based upon an interpretation of available market information and valuation methodologies, reasonably approximate their fair values, except those listed below, for which fair values are disclosed. The valuation method used to estimate fair value for fixed-rate and variable-rate debt, and mortgage and other finance receivables, is based on discounted cash flow analyses, with assumptions that include credit spreads, market yield curves, trading activity, loan amounts and debt maturities. The fair values for marketable securities are based on published values, securities dealers’ estimated market values or comparable market sales. The fair value for embedded derivative liability is based on using the “with-and-without” method. Such fair value estimates are not necessarily indicative of the amounts that would be realized upon disposition. Interest rate swaps are measured at fair value using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.

As a basis for considering market participant assumptions in fair value measurements, the FASB’s Fair Value Measurements and Disclosures guidance establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

The following are financial instruments for which the Company’s estimated fair value differs from the carrying amount (in thousands):

September 30, 2024December 31, 2023
Fair Value HierarchyCarrying AmountsEstimated Fair ValueCarrying AmountsEstimated Fair Value
Assets:
Mortgage and other financing receivables (1)Level 3$456,917$459,049$130,745$122,323
Liabilities:
Notes payable, net (2)
Senior unsecured notesLevel 2$7,109,218$6,728,623$7,262,851$6,671,450
Term loansLevel 3$857,722$861,493$-$-
Mortgages payable, net (3)Level 3$335,275$321,280$353,945$329,955

(1)

The carrying value includes allowance for credit losses of $5.8 million and $1.3 million as of September 30, 2024 and December 31, 2023, respectively.

(2)

The carrying value includes deferred financing costs of $65.6 million and $65.0 million as of September 30, 2024 and December 31, 2023, respectively.

(3)

The carrying value includes deferred financing costs of $0.9 million and $1.2 million as of September 30, 2024 and December 31, 2023, respectively.

The Company has certain financial instruments that must be measured under the FASB’s Fair Value Measurements and Disclosures guidance, including available for sale securities, interest rate swaps and embedded derivative liabilities. The Company currently does not have non-financial assets and non-financial liabilities that are required to be measured at fair value on a recurring basis.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level of the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The tables below present the Company’s financial assets and liabilities measured at fair value on a recurring basis at September 30, 2024 and December 31, 2023, aggregated by the level of the fair value hierarchy within which those measurements fall (in thousands):

Balance at September 30, 2024Level 1Level 2Level 3
Assets:
Marketable equity securities$2,355$2,355$-$-
Liabilities:
Interest rate swaps derivative liabilities$14,230$-$14,230$-
Embedded derivative liability$28,421$-$-$28,421
Balance at December 31, 2023Level 1Level 2Level 3
Assets:
Marketable equity securities$330,057$330,057$-$-
Liabilities:
Embedded derivative liability$30,914$-$-$30,914

The significant unobservable input (Level 3 inputs) used in measuring the Company’s embedded derivative liability, which is categorized with Level 3 of the fair value hierarchy, is the discount rate of 5.70% and 6.40% as of September 30, 2024 and December 31, 2023, respectively.

The table below presents the change in fair value of the embedded derivative liability measured using Level 3 inputs for the nine months ended September 30, 2024 and 2023 (in thousands):

Nine Months Ended September 30,
20242023
Balance as of January 1,$30,914$56,000
Settlements(802)-
Change in fair value (included in Other income, net)(1,691)7,000
Balance as of September 30,$28,421$63,000

Assets measured at fair value on a non-recurring basis at December 31, 2023 were as follows (in thousands):

Balance at December 31, 2023Level 1Level 2Level 3
Real estate$11,724$-$-$11,724

During the nine months ended September 30, 2024 and 2023, the Company recognized impairment charges related to adjustments to property carrying values of $4.3 million and $14.0 million, respectively. The Company’s estimated fair values of these assets were primarily based upon estimated sales prices from signed contracts or letters of intent from third-party offers, which were less than the carrying value of the assets. The Company does not have access to the unobservable inputs used to determine the estimated fair values of third-party offers. Based on these inputs, the Company determined that its valuation of these investments was classified within Level 3 of the fair value hierarchy.

  1. Incentive Plans

The Company has an Equity Participation Plan (as amended and/or restated, the “Equity Plan”), which provides for a maximum of 10,000,000 shares of the Company’s common stock to be reserved for the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalents, LTIP Units, stock payments and deferred stock awards. At September 30, 2024, the Company had 3.0 million shares of common stock available for issuance under the Equity Plan.

The Company accounts for equity awards in accordance with FASB’s compensation – Stock Compensation guidance, which requires that all share-based payments to employees, including grants of employee stock options, restricted stock, performance shares and LTIP Units, be recognized in the Condensed Consolidated Statements of Income over the service period based on their fair values. Fair value of performance awards is determined using the Monte Carlo method, which is intended to estimate the fair value of the awards at the grant date. Fair value of restricted shares is calculated based on the price on the date of grant.

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Company recognized expenses associated with its equity awards of $26.4 million and $25.3 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, the Company had $54.5 million of total unrecognized compensation cost related to unvested stock compensation granted under the Plans. That cost is expected to be recognized over a weighted-average period of approximately 2.8 years.

Restricted Stock

Information with respect to restricted stock under the Plan for the nine months ended September 30, 2024 and 2023 is as follows:

Nine Months Ended September 30,
20242023
Restricted stock outstanding as of January 1,2,746,1162,632,340
Granted (1)872,150893,880
Vested(762,784)(761,154)
Forfeited(23,464)(11,978)
Restricted stock outstanding as of September 30,2,832,0182,753,088

(1)

The weighted-average grant date fair value for restricted stock issued during the nine months ended September 30, 2024 and 2023 was $19.47 and $21.30, respectively.

Performance Shares

Information with respect to performance share awards under the Plan for the nine months ended September 30, 2024 and 2023 is as follows:

Nine Months Ended September 30,
20242023
Performance share awards outstanding as of January 1,989,8601,004,040
Granted (1)377,690531,200
Vested (2)(458,660)(545,380)
Performance share awards outstanding as of September 30,908,890989,860

(1)

The weighted-average grant date fair value for performance shares issued during the nine months ended September 30, 2024 and 2023 was $18.14 and $42.61, respectively.

(2)

For the nine months ended September 30, 2024 and 2023, the corresponding common stock equivalent of these vested awards was 970,232 and 998,238 shares, respectively.

The significant assumptions underlying the determination of fair values using Monte Carlo simulations for these performance awards granted during 2024 and 2023 were as follows:

20242023
Stock price19.5321.30
Dividend yield (1)--
Risk-free interest rate4.39%4.38%
Volatility (2)28.85%44.89%
Term of the award (years)2.872.87

(1)

Total Shareholder Returns, as used in the performance share awards computation, are measured based on cumulative dividend stock prices, as such a zero percent dividend yield is utilized.

(2)

Volatility is based on the annualized standard deviation of the daily logarithmic returns on dividend-adjusted closing prices over the look-back period based on the term of the award.

Time-Based LTIP Units

During the nine months ended September 30, 2024, the Company granted to certain employees and directors 120,700 LTIP Units with time-based vesting requirements (“Time-Based LTIP Units”) and a weighted average grant-date fair value of $19.47 per unit that vest

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

ratably over five years subject to continued employment. Compensation expense for these units is being recognized over a five-year period.

The aggregate grant-date fair value of the Time-Based LTIP Units for the nine months ended September 30, 2024 was $2.4 million. Granted Time-Based LTIP Units do not have redemption rights, but any OP Units into which units are converted are entitled to redemption rights. The Time-Based LTIPs were valued based on the Company’s closing common share price on the date of grant.

Performance-Based LTIP Units

During the nine months ended September 30, 2024, the Company granted to certain employees 205,440 LTIP Units with performance-based vesting requirements (“Performance-Based LTIP Units”) and a weighted average grant-date fair value of $18.14 per unit.

Performance-Based LTIP Units are performance-based equity compensation pursuant to which participants have the opportunity to earn LTIP Units based on the total shareholder return of the Company’s common shares relative to its peers, as defined, or based on other performance criteria as determined by the Board of Directors, over the defined performance period. Any Performance-Based LTIP Units that are earned vest at the end of the three-year performance period. Compensation expense for these units is recognized over the performance period.

The aggregate grant-date fair value of the Performance-Based LTIP Units for the nine months ended September 30, 2024 was $3.7 million, valued using Monte Carlo simulations based on the following significant assumptions:

2024
Stock price19.53
Dividend yield (1)-
Risk-free interest rate4.39%
Volatility (2)28.85%
Term of the award (years)2.87

(1)

Total Shareholder Returns, as used in the performance share awards computation, are measured based on cumulative dividend stock prices, as such a zero percent dividend yield is utilized.

(2)

Volatility is based on the annualized standard deviation of the daily logarithmic returns on dividend-adjusted closing prices over the look-back period based on the term of the award.

  1. Stockholders’ Equity

Preferred Stock

The Company’s outstanding Preferred Stock is detailed below (in thousands, except share data and par values):

As of September 30, 2024
Class of Preferred StockShares AuthorizedShares Issued and OutstandingLiquidation PreferenceDividend RateAnnual Dividend per Depositary SharePar ValueOptional Redemption Date
Class L10,3508,902$222,5435.125%$1.28125$1.008/16/2022
Class M10,58010,465261,6365.250%$1.31250$1.0012/20/2022
Class N (1)1,8491,84992,4237.250%$3.62500$1.00N/A
21,216$576,602

(1)

In connection with the RPT Merger, the Company issued 1,849 shares of Class N Preferred Stock with a par value of $1.00 per share, represented by 1,848,539 depositary shares, which had a fair market value of $105.6 million. The Class N Preferred Stock depositary shares are convertible by the holders at an exchange ratio of 2.3071 into the Company’s common shares or under certain circumstances by the Company’s election. As of September 30, 2024, the Class N Preferred Stock was potentially convertible into 4.3 million shares of common stock.

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of December 31, 2023
Class of Preferred StockShares AuthorizedShares Issued and OutstandingLiquidation PreferenceDividend RateAnnual Dividend per Depositary SharePar ValueOptional Redemption Date
Class L10,3508,902$222,5435.125%$1.28125$1.008/16/2022
Class M10,58010,465261,6365.250%$1.31250$1.0012/20/2022
19,367$484,179

During January 2024, the Company’s Board of Directors authorized the repurchase of up to 891,000 depositary shares of Class L Preferred Stock, 1,047,000 depositary shares of Class M Preferred Stock, and 185,000 depositary shares of Class N Preferred Stock through February 28, 2026. During the nine months ended September 30, 2024, the Company repurchased the following preferred stock:

Class of Preferred StockDepositary Shares RepurchasedPurchase Price (in thousands)
Class N80$5

The Class L, M and N Preferred Stock rank pari passu as to voting rights, priority for receiving dividends and liquidation preference as set forth below.

As to any matter on which the Class L, M or N Preferred Stock may vote, including any actions by written consent, each share of the Class L, M or N Preferred Stock shall be entitled to 1,000 votes, each of which 1,000 votes may be directed separately by the holder thereof. With respect to each share of Class L, M or N Preferred Stock, the holder thereof may designate up to 1,000 proxies, with each such proxy having the right to vote a whole number of votes (totaling 1,000 votes per share of Class L, M or N Preferred Stock). As a result, each Class L, M or N Depositary Share is entitled to one vote.

Common Stock

The Company has a common share repurchase program, which is scheduled to expire February 28, 2026. Under this program, the Company may repurchase shares of its common stock, par value $0.01 per share, with an aggregate gross purchase price of up to $300.0 million. The Company did not repurchase any shares of common stock under the share repurchase program during the nine months ended September 30, 2024. As of September 30, 2024, the Company had $224.9 million available under this common share repurchase program.

During September 2023, the Company established an at-the-market continuous offering program (the “ATM Program”) pursuant to which the Company may offer and sell from time-to-time shares of its common stock, par value $0.01 per share, with an aggregate gross sales price of up to $500.0 million through a consortium of banks acting as sales agents. Sales of the shares of common stock may be made, as needed, from time to time in “at the market” offerings as defined in Rule 415 of the Securities Act of 1933, as amended, including by means of ordinary brokers’ transactions on the New York Stock Exchange or otherwise (i) at market prices prevailing at the time of sale, (ii) at prices related to prevailing market prices or (iii) as otherwise agreed to with the applicable sales agent. In addition, the Company may, from time to time, enter into separate forward sale agreements with one or more banks. The Company did not issue any shares under the ATM Program during the nine months ended September 30, 2024. As of September 30, 2024, the Company had $500.0 million available under this ATM Program.

In connection with the RPT Merger, each RPT common share was converted into 0.6049 shares of newly issued Kimco common stock, resulting in approximately 53.0 million common shares being issued in connection with the RPT Merger.

Dividends Declared

The following table provides a summary of the dividends declared per share:

Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Common Shares$0.24000$0.23000$0.72000$0.69000
Class L Depositary Shares$0.32031$0.32031$0.96093$0.96093
Class M Depositary Shares$0.32813$0.32813$0.98439$0.98439
Class N Depositary Shares$0.90625$-$2.71875$-

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

  1. Supplemental Schedule of Non-Cash Investing / Financing Activities

The following schedule summarizes the non-cash investing and financing activities of the Company for the nine months ended September 30, 2024 and 2023 (in thousands):

Nine Months Ended September 30,
20242023
Proceeds held in escrow through the sale of real estate interests$-$3,462
Acquisition of real estate interests from a lease modification$-$12,527
Disposition of real estate interests through the issuance of mortgage and other financing receivables$175,420$25,000
Decrease in other investments through the issuance of mortgage and other financing receivables$50,219$-
Deconsolidation of real estate interests through contribution to other investments$-$19,618
Surrender of common stock/units$15,293$16,271
Declaration of dividends paid in succeeding period$6,722$5,308
Capital expenditures accrual$52,754$36,225
Lease liabilities arising from obtaining operating right-of-use assets$1,448$-
Decrease in redeemable noncontrolling interests’ carrying amount, net$3,180$-
RPT Merger:
Real estate assets, net$1,821,052$-
Investment in real estate joint ventures$433,345$-
Investment in other investments$12,672$-
Other assets and liabilities, net$(3,109)$-
Notes payable$(821,500)$-
Lease liabilities arising from obtaining operating right-of-use assets$(13,506)$-
Non-controlling interest$(20,975)$-
Preferred stock issued in exchange for RPT preferred shares$(105,607)$-
Common stock issued in exchange for RPT common shares$(1,166,775)$-
Consolidation of Joint Ventures:
Increase in real estate and other assets, net$-$54,345
Increase in mortgage payables$-$37,187

The following table provides a reconciliation of cash, cash equivalents and restricted cash recorded on the Company’s Condensed Consolidated Balance Sheets to the Company’s Condensed Consolidated Statements of Cash Flows (in thousands):

As of September 30, 2024As of December 31, 2023
Cash and cash equivalents$788,951$780,518
Restricted cash1,0933,239
Total cash, cash equivalents and restricted cash$790,044$783,757
  1. Commitments and Contingencies

Letters of Credit

The Company has issued letters of credit in connection with the completion and repayment guarantees, primarily on certain of the Company’s redevelopment projects and guaranty of payment related to the Company’s insurance program. At September 30, 2024, these letters of credit aggregated $39.8 million.

Funding Commitments

The Company has investments with funding commitments of $27.5 million, of which $19.3 million has been funded as of September 30, 2024.

Other

The Parent Company guarantees the unsecured debt instruments of Kimco OP. These guarantees by the Parent Company are full, irrevocable, unconditional and absolute joint and several guarantees to the holders of each series of such unsecured debt instruments.

In connection with the construction of its development and redevelopment projects and related infrastructure, certain public agencies require posting of performance and surety bonds to guarantee that the Company’s obligations are satisfied. These bonds expire upon the

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

completion of the improvements and infrastructure. As of September 30, 2024, there were $16.2 million in performance and surety bonds outstanding.

The Company provides a guaranty for the payment of any debt service shortfalls on the Sheridan Redevelopment Agency issued Series A bonds, which are tax increment revenue bonds issued in connection with a development project in Sheridan, Colorado. These tax increment revenue bonds have a balance of $41.0 million outstanding at September 30, 2024. The bonds are to be repaid with incremental sales and property taxes and a public improvement fee (“PIF”) to be assessed on current and future retail sales and, to the extent necessary, any amounts the Company may have to provide under a guaranty. The revenue generated from incremental sales, property taxes and PIF have satisfied the debt service requirements to date. The incremental taxes and PIF are to remain intact until the earlier of the payment of the bond liability in full or 2040.

In connection with the RPT Merger, the Company provides a guaranty for the payment of any debt service shortfalls on the City of Jacksonville Series 2005A bonds, which are tax increment revenue bonds issued in connection with a redevelopment project in Jacksonville, FL. Repayment of the bonds is to be made in accordance with a level-payment amortization schedule over 20 years, and repayments are made out of tax revenues generated by the redevelopment. The remaining debt service payments due over the life of the bonds, including principal and interest, are $4.5 million as of September 30, 2024. There have been no payments made by the Company under this guaranty agreement to date and the Company does not expect to make any payments over the life of the agreement.

The Company is subject to various other legal proceedings and claims that arise in the ordinary course of business. Management believes that the final outcome of such matters will not have a material adverse effect on the financial position, results of operations or liquidity of the Company taken as a whole as of September 30, 2024.

  1. Accumulated Other Comprehensive (Loss)/Income (“AOCI”)

The following tables present the change in the components of AOCI for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30, 2024Nine Months Ended September 30, 2024
Cash Flow Hedges for Interest PaymentsCash Flow Hedges for Interest Payments of Unconsolidated InvesteeTotalCash Flow Hedges for Interest PaymentsCash Flow Hedges for Interest Payments of Unconsolidated InvesteeTotal
Balance at beginning of period$7,820$3,416$11,236$-$3,329$3,329
Other comprehensive (loss)/income before reclassifications(18,978)(1,687)(20,665)(6,996)383(6,613)
Amounts reclassed from AOCI(3,072)(984)(4,056)(7,234)(2,967)(10,201)
Net current-period other comprehensive loss(22,050)(2,671)(24,721)(14,230)(2,584)(16,814)
Balance at end of period$(14,230)$745$(13,485)$(14,230)$745$(13,485)
Three Months Ended September 30, 2023Nine Months Ended September 30, 2023
Defined Benefit PlanCash Flow Hedges for Interest Payments of Unconsolidated InvesteeTotalDefined Benefit PlanCash Flow Hedges for Interest Payments of Unconsolidated InvesteeTotal
Balance at beginning of period$10,581$5,360$15,941$10,581$-$10,581
Other comprehensive income before reclassifications267-2672676,6166,883
Amounts reclassified from AOCI(10,848)1,256(9,592)(10,848)-(10,848)
Net current-period other comprehensive (loss)/income(10,581)1,256(9,325)(10,581)6,616(3,965)
Balance at end of period$-$6,616$6,616$-$6,616$6,616

On the Company’s Condensed Consolidated Statements of Income, unrealized gains and losses reclassified from AOCI related to (i) cash flow hedges for interest payments, which are included in Interest expense, (ii) cash flow hedges for interest payments of

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

unconsolidated investee, which are included in Equity in income of joint ventures, net, and (iii) settlement of defined benefit plan which is included in Other income, net.

During the three months ended September 30, 2023, the Weingarten Realty Investors’ noncontributory qualified cash balance retirement plan (the “Benefit Plan”) obligations of $25.5 million were settled through third-party annuity contracts, lump sum distributions and IRA Rollovers. In addition, during the three months ended September 30, 2023, the Benefit Plan transferred excess assets with a value of $3.9 million to the qualified replacement plan managed by the Company and reverted excess assets with a value of $10.6 million to the Company. Upon the liquidation of the Benefit Plan, the Company realized $10.8 million of settlement gains during the three months ended September 30, 2023, which are included in Other income, net on the Company’s Condensed Consolidated Statements of Income and were previously included in Accumulated other comprehensive (loss)/income on the Company’s Condensed Consolidated Balance Sheets. In addition, the Company incurred excise taxes of $2.2 million, resulting from the reversion of excess pension plan assets during the three months ended September 30, 2023, which are included in Other income, net on the Company’s Condensed Consolidated Statements of Income.

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

  1. Earnings Per Share/Units

The following table sets forth the reconciliation of the Company’s 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):

Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Computation of Basic and Diluted Earnings Per Share:
Net income available to the Company's common shareholders$128,022$111,954$220,883$495,892
Change in redeemable noncontrolling interests' carrying amount(1,691)-(1,691)-
Earnings attributable to participating securities(687)(641)(2,066)(2,460)
Net income available to the Company’s common shareholders for basic earnings per share125,644111,313217,126493,432
Distributions on convertible units---1,919
Net income available to the Company’s common shareholders for diluted earnings per share$125,644$111,313$217,126$495,351
Weighted average common shares outstanding – basic671,231617,090670,851616,888
Effect of dilutive securities (1):
Equity awards289124193129
Assumed conversion of convertible units5757522,478
Weighted average common shares outstanding – diluted671,577617,271671,096619,495
Net income available to the Company's common shareholders:
Basic earnings per share$0.19$0.18$0.32$0.80
Diluted earnings per share$0.19$0.18$0.32$0.80

(1)

The effect of the assumed conversion of certain convertible units and convertible preferred stock had an anti-dilutive effect upon the calculation of Net income available to the Company’s common shareholders per share. Accordingly, the impact of such conversions has not been included in the determination of diluted earnings per share calculations.

The following table sets forth the reconciliation of Kimco OP’s earnings and the weighted-average number of units used in the calculation of basic and diluted earnings per unit (amounts presented in thousands except per unit data):

Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Computation of Basic and Diluted Earnings Per Unit:
Net income available to Kimco OP’s common unitholders$128,238$111,954$221,275$495,892
Change in redeemable noncontrolling interests' carrying amount(1,691)-(1,691)
Earnings attributable to participating securities(716)(641)(2,139)(2,460)
Net income available to Kimco OP’s common unitholders for basic earnings per unit125,831111,313217,445493,432
Distributions on convertible units---1,919
Net income available to Kimco OP’s common unitholders for diluted earnings per unit$125,831$111,313$217,445$495,351
Weighted average common units outstanding – basic672,185617,090671,801616,888
Effect of dilutive securities (1):
Unit awards289124193129
Assumed conversion of convertible units5757512,478
Weighted average common units outstanding – diluted672,531617,271672,045619,495
Net income available to Kimco OP’s common unitholders:
Basic earnings per unit$0.19$0.18$0.32$0.80
Diluted earnings per unit$0.19$0.18$0.32$0.80

KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(1)

The effect of the assumed conversion of certain convertible units and convertible preferred units had an anti-dilutive effect upon the calculation of Net income available to Kimco OP’s common unitholders per unit. Accordingly, the impact of such conversions has not been included in the determination of diluted earnings per unit calculations.

Unvested restricted share awards contain non-forfeitable rights to distributions or distribution equivalents. The impact of the unvested restricted share awards on earnings per share has been calculated using the two-class method whereby earnings are allocated to the unvested restricted share awards based on dividends declared and the unvested restricted shares’ participation rights in undistributed earnings.

Next: Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations