filings.toolsCover and table of contents
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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 March 31, 2025
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 class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock, par value $.01 per share. | KIM | New 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. | KIMprL | New 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. | KIMprM | New 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. | KIMprN | New York Stock Exchange |
Kimco Realty OP, LLC
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| None | N/A | N/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 April 22, 2025, Kimco Realty Corporation had 676,496,300 shares of common stock outstanding.
KIMCO REALTY CORPORATION
KIMCO REALTY OP, LLC
QUARTERLY REPORT ON FORM 10-Q
QUARTERLY PERIOD ENDED MARCH 31, 2025
EXPLANATORY NOTE
This report combines the quarterly reports on Form 10-Q for the quarterly period ended March 31, 2025, of Kimco Realty Corporation (the “Parent Company”) and Kimco Realty OP, LLC (“Kimco OP”). Unless stated otherwise or the context requires, references to “Kimco Realty Corporation” or the “Parent Company” mean Kimco Realty Corporation and its subsidiaries, and references to “Kimco Realty OP, LLC” or “Kimco OP” mean Kimco Realty OP, LLC and its subsidiaries. The terms the “Company,” “we,” “our” or “us” refer to the Parent Company and its business and operations conducted through its directly or indirectly owned subsidiaries, including Kimco OP; and in statements regarding qualification as a Real Estate Investment Trust ("REIT"), such terms refer solely to the Parent Company. 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.
The Parent Company is a REIT and is the managing member of Kimco OP. As of March 31, 2025, the Parent Company owned 99.84% of the outstanding limited liability company interests (the "OP Units") in Kimco OP. Noncontrolling OP Unit interests are owned by third parties and certain officers and directors of the Company.
Substantially all of the Parent Company’s assets are held by, and substantially all of the Parent Company’s operations are conducted through, Kimco OP (either directly or through its subsidiaries), as the Parent Company’s operating company, and the Parent Company is the managing member of Kimco OP. In addition, the officers and directors of the Parent Company are the same as the officers and directors of Kimco OP. Management operates the Parent Company and Kimco OP as one business. The management of the Parent Company consists of the same individuals as the management of Kimco OP. These individuals are officers of the Parent Company and employees of 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 Company and noncontrolling OP Units owned by third parties and certain officers and directors of the Company. OP Units owned by outside members are accounted for within capital on Kimco OP’s financial statements and in noncontrolling 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).
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except share information)
| March 31, 2025 | December 31, 2024 | |||||||
| Assets: | ||||||||
| Real estate, net of accumulated depreciation and amortization of $4,474,547 and $4,360,239, respectively | $ | 16,837,121 | $ | 16,810,333 | ||||
| Investments in and advances to real estate joint ventures | 1,476,841 | 1,487,675 | ||||||
| Other investments | 107,300 | 107,347 | ||||||
| Cash, cash equivalents and restricted cash | 132,503 | 689,731 | ||||||
| Mortgage and other financing receivables, net | 421,849 | 444,966 | ||||||
| Accounts and notes receivable, net | 339,311 | 340,469 | ||||||
| Operating lease right-of-use assets, net | 124,925 | 126,441 | ||||||
| Other assets | 291,402 | 302,934 | ||||||
| Total assets (1) | $ | 19,731,252 | $ | 20,309,896 | ||||
| Liabilities: | ||||||||
| Notes payable, net | $ | 7,579,983 | $ | 7,964,738 | ||||
| Mortgages payable, net | 444,148 | 496,438 | ||||||
| Accounts payable and accrued expenses | 257,542 | 281,867 | ||||||
| Dividends payable | 6,373 | 6,409 | ||||||
| Operating lease liabilities | 116,113 | 117,199 | ||||||
| Other liabilities | 546,492 | 597,456 | ||||||
| Total liabilities (1) | 8,950,651 | 9,464,107 | ||||||
| Redeemable noncontrolling interests | 46,624 | 47,877 | ||||||
| Commitments and Contingencies (Footnote 19) | ||||||||
| Stockholders' equity: | ||||||||
| Preferred stock, $1.00 par value, authorized 7,054,000 shares; Issued and outstanding (in series) 20,759 and 20,806 shares, respectively; Aggregate liquidation preference $553,762 and $556,113, respectively | 21 | 21 | ||||||
| Common stock, $.01 par value, authorized 1,500,000,000 shares; Issued and outstanding 679,497,438 and 679,493,522 shares, respectively | 6,795 | 6,795 | ||||||
| Paid-in capital | 11,025,904 | 11,033,485 | ||||||
| Cumulative distributions in excess of net income | (443,533 | ) | (398,792 | ) | ||||
| Accumulated other comprehensive (loss)/income | (911 | ) | 11,038 | |||||
| Total stockholders' equity | 10,588,276 | 10,652,547 | ||||||
| Noncontrolling interests | 145,701 | 145,365 | ||||||
| Total equity | 10,733,977 | 10,797,912 | ||||||
| Total liabilities and equity | $ | 19,731,252 | $ | 20,309,896 |
(1)
Total assets include restricted assets of consolidated variable interest entities (“VIEs”) at March 31, 2025 and December 31, 2024 of $333,111 and $334,859, respectively. Total liabilities include non-recourse liabilities of consolidated VIEs at March 31, 2025 and December 31, 2024 of $159,454 and $161,577, 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 OPERATIONS
(unaudited)
(in thousands, except per share data)
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues | ||||||||
| Revenues from rental properties, net | $ | 531,286 | $ | 498,905 | ||||
| Management and other fee income | 5,338 | 4,849 | ||||||
| Total revenues | 536,624 | 503,754 | ||||||
| Operating expenses | ||||||||
| Rent | (4,184 | ) | (4,279 | ) | ||||
| Real estate taxes | (69,911 | ) | (63,360 | ) | ||||
| Operating and maintenance | (89,553 | ) | (85,774 | ) | ||||
| General and administrative | (34,392 | ) | (36,298 | ) | ||||
| Impairment charges | (534 | ) | (3,701 | ) | ||||
| Merger charges | - | (25,246 | ) | |||||
| Depreciation and amortization | (158,453 | ) | (154,719 | ) | ||||
| Total operating expenses | (357,027 | ) | (373,377 | ) | ||||
| Gain on sale of properties | 887 | 318 | ||||||
| Operating income | 180,484 | 130,695 | ||||||
| Other income/(expense) | ||||||||
| Other income, net | 216 | 9,570 | ||||||
| Mortgage and other financing income, net | 11,269 | 2,519 | ||||||
| Loss on marketable securities, net | (9 | ) | (27,686 | ) | ||||
| Interest expense | (80,377 | ) | (74,565 | ) | ||||
| Income before income taxes, net, equity in income of joint ventures, net, and equity in income from other investments, net | 111,583 | 40,533 | ||||||
| Provision for income taxes, net | (464 | ) | (72,010 | ) | ||||
| Equity in income of joint ventures, net | 22,683 | 20,905 | ||||||
| Equity in income of other investments, net | 701 | 1,534 | ||||||
| Net income/(loss) | 134,503 | (9,038 | ) | |||||
| Net income attributable to noncontrolling interests | (1,686 | ) | (1,936 | ) | ||||
| Net income/(loss) attributable to the Company | 132,817 | (10,974 | ) | |||||
| Preferred dividends, net | (7,683 | ) | (7,942 | ) | ||||
| Net income/(loss) available to the Company's common shareholders | $ | 125,134 | $ | (18,916 | ) | |||
| Per common share: | ||||||||
| Net income/(loss) available to the Company's common shareholders: | ||||||||
| -Basic | $ | 0.18 | $ | (0.03 | ) | |||
| -Diluted | $ | 0.18 | $ | (0.03 | ) | |||
| Weighted average shares: | ||||||||
| -Basic | 677,074 | 670,118 | ||||||
| -Diluted | 677,299 | 670,118 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
(unaudited)
(in thousands)
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net income/(loss) | $ | 134,503 | $ | (9,038 | ) | |||
| Other comprehensive (loss)/income: | ||||||||
| Change in fair value of cash flow hedges for interest payments | (10,269 | ) | 6,459 | |||||
| Equity in change in fair value of cash flow hedges for interest payments of unconsolidated investees | (1,680 | ) | 491 | |||||
| Other comprehensive (loss)/income | (11,949 | ) | 6,950 | |||||
| Comprehensive income/(loss) | 122,554 | (2,088 | ) | |||||
| Comprehensive income attributable to noncontrolling interests | (1,686 | ) | (1,936 | ) | ||||
| Comprehensive income/(loss) attributable to the Company | $ | 120,868 | $ | (4,024 | ) |
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 March 31, 2025 and 2024
(unaudited)
(in thousands)
| Cumulative | Accumulated | |||||||||||||||||||||||||||||||||||||||
| Distributions | Other | Total | ||||||||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-in | in Excess of | Comprehensive | Stockholders' | Noncontrolling | Total | |||||||||||||||||||||||||||||||||
| Issued | Amount | Issued | Amount | Capital | Net Income | Income/(Loss) | Equity | Interests | Equity | |||||||||||||||||||||||||||||||
| Balance at January 1, 2024 | 19 | $ | 19 | 619,871 | $ | 6,199 | $ | 9,638,494 | $ | (122,576 | ) | $ | 3,329 | $ | 9,525,465 | $ | 127,993 | $ | 9,653,458 | |||||||||||||||||||||
| Net (loss)/income | - | - | - | - | - | (10,974 | ) | - | (10,974 | ) | 1,936 | (9,038 | ) | |||||||||||||||||||||||||||
| Other comprehensive income: | ||||||||||||||||||||||||||||||||||||||||
| Change in fair value of cash flow hedges for interest payments | - | - | - | - | - | - | 6,459 | 6,459 | - | 6,459 | ||||||||||||||||||||||||||||||
| Equity in change in fair value of cash flow hedges for interest payments of unconsolidated investees | - | - | - | - | - | - | 491 | 491 | - | 491 | ||||||||||||||||||||||||||||||
| Redeemable noncontrolling interests income | - | - | - | - | - | - | - | - | (1,137 | ) | (1,137 | ) | ||||||||||||||||||||||||||||
| Dividends declared to preferred shares | - | - | - | - | - | (7,960 | ) | - | (7,960 | ) | - | (7,960 | ) | |||||||||||||||||||||||||||
| Dividends declared to common shares | - | - | - | - | - | (161,792 | ) | - | (161,792 | ) | - | (161,792 | ) | |||||||||||||||||||||||||||
| Distributions to noncontrolling interests | - | - | - | - | - | - | - | - | (1,760 | ) | (1,760 | ) | ||||||||||||||||||||||||||||
| Issuance of preferred stock for merger (1) | 2 | 2 | - | - | 105,605 | - | - | 105,607 | - | 105,607 | ||||||||||||||||||||||||||||||
| Issuance of common stock for merger (1) | - | - | 53,034 | 530 | 1,166,234 | - | - | 1,166,764 | - | 1,166,764 | ||||||||||||||||||||||||||||||
| Issuance of common stock | - | - | 1,967 | 20 | (20 | ) | - | - | - | - | - | |||||||||||||||||||||||||||||
| Noncontrolling interests assumed from the merger (1) | - | - | - | - | - | - | - | - | 20,975 | 20,975 | ||||||||||||||||||||||||||||||
| Surrender of restricted common stock | - | - | (754 | ) | (8 | ) | (14,651 | ) | - | - | (14,659 | ) | - | (14,659 | ) | |||||||||||||||||||||||||
| Amortization of equity awards | - | - | - | - | 9,679 | - | - | 9,679 | 391 | 10,070 | ||||||||||||||||||||||||||||||
| Redemption/conversion of noncontrolling interests | - | - | - | - | (18 | ) | - | - | (18 | ) | (581 | ) | (599 | ) | ||||||||||||||||||||||||||
| Adjustment of redeemable noncontrolling interests to estimated fair value | - | - | - | - | 977 | - | - | 977 | - | 977 | ||||||||||||||||||||||||||||||
| Balance at March 31, 2024 | 21 | $ | 21 | 674,118 | $ | 6,741 | $ | 10,906,300 | $ | (303,302 | ) | $ | 10,279 | $ | 10,620,039 | $ | 147,817 | $ | 10,767,856 | |||||||||||||||||||||
| Balance at January 1, 2025 | 21 | $ | 21 | 679,494 | $ | 6,795 | $ | 11,033,485 | $ | (398,792 | ) | $ | 11,038 | $ | 10,652,547 | $ | 145,365 | $ | 10,797,912 | |||||||||||||||||||||
| Net income | - | - | - | - | - | 132,817 | - | 132,817 | 1,686 | 134,503 | ||||||||||||||||||||||||||||||
| Other comprehensive loss: | ||||||||||||||||||||||||||||||||||||||||
| Change in fair value of cash flow hedges for interest payments | - | - | - | - | - | - | (10,269 | ) | (10,269 | ) | - | (10,269 | ) | |||||||||||||||||||||||||||
| Equity in change in fair value of cash flow hedges for interest payments of unconsolidated investees | - | - | - | - | - | - | (1,680 | ) | (1,680 | ) | - | (1,680 | ) | |||||||||||||||||||||||||||
| Redeemable noncontrolling interests income | - | - | - | - | - | - | - | - | (813 | ) | (813 | ) | ||||||||||||||||||||||||||||
| Dividends declared to preferred shares | - | - | - | - | - | (7,553 | ) | - | (7,553 | ) | - | (7,553 | ) | |||||||||||||||||||||||||||
| Dividends declared to common shares | - | - | - | - | - | (169,875 | ) | - | (169,875 | ) | - | (169,875 | ) | |||||||||||||||||||||||||||
| Repurchase of preferred stock | - | - | - | - | (2,687 | ) | (130 | ) | - | (2,817 | ) | - | (2,817 | ) | ||||||||||||||||||||||||||
| Distributions to noncontrolling interests | - | - | - | - | - | - | - | - | (1,196 | ) | (1,196 | ) | ||||||||||||||||||||||||||||
| Issuance of common stock | - | - | 525 | 5 | (5 | ) | - | - | - | - | - | |||||||||||||||||||||||||||||
| Surrender of restricted common stock | - | - | (522 | ) | (5 | ) | (11,531 | ) | - | - | (11,536 | ) | - | (11,536 | ) | |||||||||||||||||||||||||
| Amortization of equity awards | - | - | - | - | 6,065 | - | - | 6,065 | 659 | 6,724 | ||||||||||||||||||||||||||||||
| Adjustment of redeemable noncontrolling interests to estimated fair value | - | - | - | - | 577 | - | - | 577 | - | 577 | ||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | 21 | $ | 21 | 679,497 | $ | 6,795 | $ | 11,025,904 | $ | (443,533 | ) | $ | (911 | ) | $ | 10,588,276 | $ | 145,701 | $ | 10,733,977 |
(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)
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flow from operating activities: | ||||||||
| Net income/(loss) | $ | 134,503 | $ | (9,038 | ) | |||
| Adjustments to reconcile net income/(loss) to net cash flow provided by operating activities: | ||||||||
| Depreciation and amortization | 158,453 | 154,719 | ||||||
| Impairment charges | 534 | 3,701 | ||||||
| Straight-line rental income adjustments, net | (6,299 | ) | (7,405 | ) | ||||
| Amortization of above-market and below-market leases, net | (5,314 | ) | (5,901 | ) | ||||
| Amortization of deferred financing costs and fair value debt adjustments, net | 100 | (710 | ) | |||||
| Equity award expense | 6,725 | 10,044 | ||||||
| Gain on sale of properties | (887 | ) | (318 | ) | ||||
| Loss on marketable securities, net | 9 | 27,686 | ||||||
| Change in fair value of embedded derivative liability | 316 | 1,842 | ||||||
| Equity in income of joint ventures, net | (22,683 | ) | (20,905 | ) | ||||
| Equity in income of other investments, net | (701 | ) | (1,534 | ) | ||||
| Distributions from joint ventures and other investments | 22,130 | 23,508 | ||||||
| Change in accounts and notes receivable, net | 7,385 | 22,446 | ||||||
| Change in accounts payable and accrued expenses | (33,996 | ) | 4,533 | |||||
| Change in other operating assets and liabilities, net | (36,462 | ) | (26,577 | ) | ||||
| Net cash flow provided by operating activities | 223,813 | 176,091 | ||||||
| Cash flow from investing activities: | ||||||||
| Acquisition of operating real estate and other related net assets | (106,244 | ) | - | |||||
| Improvements to operating real estate | (52,117 | ) | (44,083 | ) | ||||
| Acquisition of RPT Realty | - | (149,103 | ) | |||||
| Investment in marketable securities | (1 | ) | (1 | ) | ||||
| Proceeds from sale of marketable securities | 500 | 299,634 | ||||||
| Investments in preferred stock and cost method investments | (5,000 | ) | - | |||||
| Investments in and advances to real estate joint ventures | (1,778 | ) | (3,182 | ) | ||||
| Reimbursements of investments in and advances to real estate joint ventures | 9,282 | 5,920 | ||||||
| Investments in and advances to other investments | (1,210 | ) | (2,894 | ) | ||||
| Reimbursements of investments in and advances to other investments | 1,127 | 931 | ||||||
| Investment in mortgage and other financing receivables | - | (9,000 | ) | |||||
| Collection of mortgage and other financing receivables | 23,117 | 38,189 | ||||||
| Proceeds from sale of properties | 1,324 | 65,019 | ||||||
| Proceeds from insurance casualty claims | 446 | - | ||||||
| Net cash flow (used for)/provided by investing activities | (130,554 | ) | 201,430 | |||||
| Cash flow from financing activities: | ||||||||
| Principal payments on debt, excluding normal amortization of rental property debt | (48,844 | ) | - | |||||
| Principal payments on rental property debt | (3,485 | ) | (2,724 | ) | ||||
| Proceeds from issuance of unsecured term loans | - | 510,000 | ||||||
| Proceeds from unsecured revolving credit facility, net | 120,000 | 125,000 | ||||||
| Repayments of unsecured term loans | - | (310,000 | ) | |||||
| Repayments of unsecured notes | (500,000 | ) | (1,157,700 | ) | ||||
| Financing origination costs | (22 | ) | (1,538 | ) | ||||
| Redemption/distribution of noncontrolling interests | (3,054 | ) | (4,904 | ) | ||||
| Dividends paid | (177,464 | ) | (168,338 | ) | ||||
| Repurchase of preferred stock | (2,817 | ) | - | |||||
| Shares repurchased for employee tax withholding on equity awards | (11,536 | ) | (14,631 | ) | ||||
| Principal payments under finance lease obligations | (24,362 | ) | - | |||||
| Change in tenants' security deposits | 1,097 | 324 | ||||||
| Net cash flow used for financing activities | (650,487 | ) | (1,024,511 | ) | ||||
| Net change in cash, cash equivalents and restricted cash | (557,228 | ) | (646,990 | ) | ||||
| Cash, cash equivalents and restricted cash, beginning of the period | 689,731 | 783,757 | ||||||
| Cash, cash equivalents and restricted cash, end of the period | $ | 132,503 | $ | 136,767 | ||||
| Interest paid (net of capitalized interest of $531 and $666, respectively) | $ | 84,019 | $ | 73,556 | ||||
| Income taxes paid, net of refunds | $ | 23,370 | $ | 51,157 |
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)
| March 31, 2025 | December 31, 2024 | |||||||
| Assets: | ||||||||
| Real estate, net of accumulated depreciation and amortization of $4,474,547 and $4,360,239, respectively | $ | 16,837,121 | $ | 16,810,333 | ||||
| Investments in and advances to real estate joint ventures | 1,476,841 | 1,487,675 | ||||||
| Other investments | 107,300 | 107,347 | ||||||
| Cash, cash equivalents and restricted cash | 132,503 | 689,731 | ||||||
| Mortgage and other financing receivables, net | 421,849 | 444,966 | ||||||
| Accounts and notes receivable, net | 339,311 | 340,469 | ||||||
| Operating lease right-of-use assets, net | 124,925 | 126,441 | ||||||
| Other assets | 291,402 | 302,934 | ||||||
| Total assets (1) | $ | 19,731,252 | $ | 20,309,896 | ||||
| Liabilities: | ||||||||
| Notes payable, net | $ | 7,579,983 | $ | 7,964,738 | ||||
| Mortgages payable, net | 444,148 | 496,438 | ||||||
| Accounts payable and accrued expenses | 257,542 | 281,867 | ||||||
| Dividends payable | 6,373 | 6,409 | ||||||
| Operating lease liabilities | 116,113 | 117,199 | ||||||
| Other liabilities | 546,492 | 597,456 | ||||||
| Total liabilities (1) | 8,950,651 | 9,464,107 | ||||||
| Redeemable noncontrolling interests | 46,624 | 47,877 | ||||||
| Commitments and Contingencies (Footnote 19) | ||||||||
| Members' capital: | ||||||||
| Preferred units; 20,759 and 20,806 units outstanding, respectively | 546,901 | 549,588 | ||||||
| General member; 679,497,438 and 679,493,522 common units outstanding, respectively | 10,042,286 | 10,091,921 | ||||||
| Limited members; 1,073,942 common units outstanding | 22,877 | 22,276 | ||||||
| Accumulated other comprehensive (loss)/income | (911 | ) | 11,038 | |||||
| Total members' capital | 10,611,153 | 10,674,823 | ||||||
| Noncontrolling interests | 122,824 | 123,089 | ||||||
| Total capital | 10,733,977 | 10,797,912 | ||||||
| Total liabilities and capital | $ | 19,731,252 | $ | 20,309,896 |
(1)
Total assets include restricted assets of consolidated VIEs at March 31, 2025 and December 31, 2024 of $333,111 and $334,859, respectively. Total liabilities include non-recourse liabilities of consolidated VIEs at March 31, 2025 and December 31, 2024 of $159,454 and $161,577, 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 OPERATIONS
(unaudited)
(in thousands, except per unit data)
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues | ||||||||
| Revenues from rental properties, net | $ | 531,286 | $ | 498,905 | ||||
| Management and other fee income | 5,338 | 4,849 | ||||||
| Total revenues | 536,624 | 503,754 | ||||||
| Operating expenses | ||||||||
| Rent | (4,184 | ) | (4,279 | ) | ||||
| Real estate taxes | (69,911 | ) | (63,360 | ) | ||||
| Operating and maintenance | (89,553 | ) | (85,774 | ) | ||||
| General and administrative | (34,392 | ) | (36,298 | ) | ||||
| Impairment charges | (534 | ) | (3,701 | ) | ||||
| Merger charges | - | (25,246 | ) | |||||
| Depreciation and amortization | (158,453 | ) | (154,719 | ) | ||||
| Total operating expenses | (357,027 | ) | (373,377 | ) | ||||
| Gain on sale of properties | 887 | 318 | ||||||
| Operating income | 180,484 | 130,695 | ||||||
| Other income/(expense) | ||||||||
| Other income, net | 216 | 9,570 | ||||||
| Mortgage and other financing income, net | 11,269 | 2,519 | ||||||
| Loss on marketable securities, net | (9 | ) | (27,686 | ) | ||||
| Interest expense | (80,377 | ) | (74,565 | ) | ||||
| Income before income taxes, net, equity in income of joint ventures, net, and equity in income from other investments, net | 111,583 | 40,533 | ||||||
| Provision for income taxes, net | (464 | ) | (72,010 | ) | ||||
| Equity in income of joint ventures, net | 22,683 | 20,905 | ||||||
| Equity in income of other investments, net | 701 | 1,534 | ||||||
| Net income/(loss) | 134,503 | (9,038 | ) | |||||
| Net income attributable to noncontrolling interests | (1,475 | ) | (1,951 | ) | ||||
| Net income/(loss) attributable to Kimco OP | 133,028 | (10,989 | ) | |||||
| Preferred distributions, net | (7,683 | ) | (7,942 | ) | ||||
| Net income/(loss) available to Kimco OP's common unitholders | $ | 125,345 | $ | (18,931 | ) | |||
| Per common unit: | ||||||||
| Net income/(loss) available to Kimco OP's common unitholders: | ||||||||
| -Basic | $ | 0.18 | $ | (0.03 | ) | |||
| -Diluted | $ | 0.18 | $ | (0.03 | ) | |||
| Weighted average units: | ||||||||
| -Basic | 678,040 | 673,954 | ||||||
| -Diluted | 678,265 | 673,954 |
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/(LOSS)
(unaudited)
(in thousands)
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net income/(loss) | $ | 134,503 | $ | (9,038 | ) | |||
| Other comprehensive (loss)/income: | ||||||||
| Change in fair value of cash flow hedges for interest payments | (10,269 | ) | 6,459 | |||||
| Equity in change in fair value of cash flow hedges for interest payments of unconsolidated investees | (1,680 | ) | 491 | |||||
| Other comprehensive (loss)/income | (11,949 | ) | 6,950 | |||||
| Comprehensive income/(loss) | 122,554 | (2,088 | ) | |||||
| Comprehensive income attributable to noncontrolling interests | (1,475 | ) | (1,951 | ) | ||||
| Comprehensive income/(loss) attributable to Kimco OP | $ | 121,079 | $ | (4,039 | ) |
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 March 31, 2025 and 2024
(unaudited)
(in thousands)
| Accumulated | ||||||||||||||||||||||||||||||||||||||||
| General Member | Limited Members | Other | Total | |||||||||||||||||||||||||||||||||||||
| Preferred Units | Common Units | Common Units | Comprehensive | Members' | Noncontrolling | Total | ||||||||||||||||||||||||||||||||||
| Issued | Amount | Issued | Amount | Issued | Amount | Income/(Loss) | Capital | Interests | Capital | |||||||||||||||||||||||||||||||
| Balance at January 1, 2024 | 19 | $ | 467,396 | 619,871 | $ | 9,054,740 | - | $ | - | $ | 3,329 | $ | 9,525,465 | $ | 127,993 | $ | 9,653,458 | |||||||||||||||||||||||
| Net income/(loss) | - | 7,942 | - | (18,916 | ) | - | (15 | ) | - | (10,989 | ) | 1,951 | (9,038 | ) | ||||||||||||||||||||||||||
| Other comprehensive income: | ||||||||||||||||||||||||||||||||||||||||
| Change in fair value of cash flow hedges for interest payments | - | - | - | - | - | - | 6,459 | 6,459 | - | 6,459 | ||||||||||||||||||||||||||||||
| Equity in change in fair value of cash flow hedges for interest payments of unconsolidated investees | - | - | - | - | - | - | 491 | 491 | - | 491 | ||||||||||||||||||||||||||||||
| Redeemable noncontrolling interests income | - | - | - | - | - | - | - | - | (1,137 | ) | (1,137 | ) | ||||||||||||||||||||||||||||
| Distributions declared to preferred unitholders | - | (7,942 | ) | - | - | - | - | - | (7,942 | ) | - | (7,942 | ) | |||||||||||||||||||||||||||
| Distributions declared to common unitholders | - | - | - | (161,810 | ) | - | (258 | ) | - | (162,068 | ) | - | (162,068 | ) | ||||||||||||||||||||||||||
| Distributions to noncontrolling interests | - | - | - | - | - | - | - | - | (1,502 | ) | (1,502 | ) | ||||||||||||||||||||||||||||
| Issuance of preferred units for merger (1) | 2 | 105,607 | - | - | - | - | - | 105,607 | - | 105,607 | ||||||||||||||||||||||||||||||
| Issuance of common units for merger (1) | - | - | 53,034 | 1,166,764 | 953 | 20,975 | - | 1,187,739 | - | 1,187,739 | ||||||||||||||||||||||||||||||
| Issuance of common units | - | - | 1,967 | - | 121 | - | - | - | - | - | ||||||||||||||||||||||||||||||
| Surrender of restricted common units | - | - | (754 | ) | (14,659 | ) | - | - | - | (14,659 | ) | - | (14,659 | ) | ||||||||||||||||||||||||||
| Amortization of equity awards | - | - | - | 9,679 | - | 391 | - | 10,070 | - | 10,070 | ||||||||||||||||||||||||||||||
| Redemption/conversion of noncontrolling interests | - | - | - | (18 | ) | - | - | - | (18 | ) | (581 | ) | (599 | ) | ||||||||||||||||||||||||||
| Adjustment of redeemable noncontrolling interests to estimated fair value | - | - | - | 977 | - | - | - | 977 | - | 977 | ||||||||||||||||||||||||||||||
| Balance at March 31, 2024 | 21 | $ | 573,003 | 674,118 | $ | 10,036,757 | 1,074 | $ | 21,093 | $ | 10,279 | $ | 10,641,132 | $ | 126,724 | $ | 10,767,856 | |||||||||||||||||||||||
| Balance at January 1, 2025 | 21 | $ | 549,588 | 679,494 | $ | 10,091,921 | 1,074 | $ | 22,276 | $ | 11,038 | $ | 10,674,823 | $ | 123,089 | $ | 10,797,912 | |||||||||||||||||||||||
| Net income | - | 7,683 | - | 125,134 | - | 211 | - | 133,028 | 1,475 | 134,503 | ||||||||||||||||||||||||||||||
| Other comprehensive loss: | ||||||||||||||||||||||||||||||||||||||||
| Change in fair value of cash flow hedges for interest payments | - | - | - | - | - | - | (10,269 | ) | (10,269 | ) | - | (10,269 | ) | |||||||||||||||||||||||||||
| Equity in change in fair value of cash flow hedges for interest payments of unconsolidated investees | - | - | - | - | - | - | (1,680 | ) | (1,680 | ) | - | (1,680 | ) | |||||||||||||||||||||||||||
| Redeemable noncontrolling interests income | - | - | - | - | - | - | - | - | (813 | ) | (813 | ) | ||||||||||||||||||||||||||||
| Distributions declared to preferred unitholders | - | (7,553 | ) | - | - | - | - | - | (7,553 | ) | - | (7,553 | ) | |||||||||||||||||||||||||||
| Distributions declared to common unitholders | - | - | - | (169,875 | ) | - | (269 | ) | - | (170,144 | ) | - | (170,144 | ) | ||||||||||||||||||||||||||
| Repurchase of preferred units | - | (2,817 | ) | - | - | - | - | - | (2,817 | ) | - | (2,817 | ) | |||||||||||||||||||||||||||
| Distributions to noncontrolling interests | - | - | - | - | - | - | - | (927 | ) | (927 | ) | |||||||||||||||||||||||||||||
| Issuance of common units | - | - | 525 | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
| Surrender of restricted common units | - | - | (522 | ) | (11,536 | ) | - | - | - | (11,536 | ) | - | (11,536 | ) | ||||||||||||||||||||||||||
| Amortization of equity awards | - | - | - | 6,065 | - | 659 | - | 6,724 | - | 6,724 | ||||||||||||||||||||||||||||||
| Adjustment of redeemable noncontrolling interests to estimated fair value | - | - | - | 577 | - | - | - | 577 | - | 577 | ||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | 21 | $ | 546,901 | 679,497 | $ | 10,042,286 | 1,074 | $ | 22,877 | $ | (911 | ) | $ | 10,611,153 | $ | 122,824 | $ | 10,733,977 |
(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)
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flow from operating activities: | ||||||||
| Net income/(loss) | $ | 134,503 | $ | (9,038 | ) | |||
| Adjustments to reconcile net income/(loss) to net cash flow provided by operating activities: | ||||||||
| Depreciation and amortization | 158,453 | 154,719 | ||||||
| Impairment charges | 534 | 3,701 | ||||||
| Straight-line rental income adjustments, net | (6,299 | ) | (7,405 | ) | ||||
| Amortization of above-market and below-market leases, net | (5,314 | ) | (5,901 | ) | ||||
| Amortization of deferred financing costs and fair value debt adjustments, net | 100 | (710 | ) | |||||
| Equity award expense | 6,725 | 10,044 | ||||||
| Gain on sale of properties | (887 | ) | (318 | ) | ||||
| Loss on marketable securities, net | 9 | 27,686 | ||||||
| Change in fair value of embedded derivative liability | 316 | 1,842 | ||||||
| Equity in income of joint ventures, net | (22,683 | ) | (20,905 | ) | ||||
| Equity in income of other investments, net | (701 | ) | (1,534 | ) | ||||
| Distributions from joint ventures and other investments | 22,130 | 23,508 | ||||||
| Change in accounts and notes receivable, net | 7,385 | 22,446 | ||||||
| Change in accounts payable and accrued expenses | (33,996 | ) | 4,533 | |||||
| Change in other operating assets and liabilities, net | (36,462 | ) | (26,577 | ) | ||||
| Net cash flow provided by operating activities | 223,813 | 176,091 | ||||||
| Cash flow from investing activities: | ||||||||
| Acquisition of operating real estate and other related net assets | (106,244 | ) | - | |||||
| Improvements to operating real estate | (52,117 | ) | (44,083 | ) | ||||
| Acquisition of RPT Realty | - | (149,103 | ) | |||||
| Investment in marketable securities | (1 | ) | (1 | ) | ||||
| Proceeds from sale of marketable securities | 500 | 299,634 | ||||||
| Investments in preferred stock and cost method investments | (5,000 | ) | - | |||||
| Investments in and advances to real estate joint ventures | (1,778 | ) | (3,182 | ) | ||||
| Reimbursements of investments in and advances to real estate joint ventures | 9,282 | 5,920 | ||||||
| Investments in and advances to other investments | (1,210 | ) | (2,894 | ) | ||||
| Reimbursements of investments in and advances to other investments | 1,127 | 931 | ||||||
| Investment in mortgage and other financing receivables | - | (9,000 | ) | |||||
| Collection of mortgage and other financing receivables | 23,117 | 38,189 | ||||||
| Proceeds from sale of properties | 1,324 | 65,019 | ||||||
| Proceeds from insurance casualty claims | 446 | - | ||||||
| Net cash flow (used for)/provided by investing activities | (130,554 | ) | 201,430 | |||||
| Cash flow from financing activities: | ||||||||
| Principal payments on debt, excluding normal amortization of rental property debt | (48,844 | ) | - | |||||
| Principal payments on rental property debt | (3,485 | ) | (2,724 | ) | ||||
| Proceeds from issuance of unsecured term loans | - | 510,000 | ||||||
| Proceeds from unsecured revolving credit facility, net | 120,000 | 125,000 | ||||||
| Repayments of unsecured term loans | - | (310,000 | ) | |||||
| Repayments of unsecured notes | (500,000 | ) | (1,157,700 | ) | ||||
| Financing origination costs | (22 | ) | (1,538 | ) | ||||
| Redemption/distribution of noncontrolling interests | (3,054 | ) | (4,904 | ) | ||||
| Distributions paid to common and preferred unitholders | (177,464 | ) | (168,338 | ) | ||||
| Repurchase of preferred units | (2,817 | ) | - | |||||
| Units repurchased for employee tax withholding on equity awards | (11,536 | ) | (14,631 | ) | ||||
| Principal payments under finance lease obligations | (24,362 | ) | - | |||||
| Change in tenants' security deposits | 1,097 | 324 | ||||||
| Net cash flow used for financing activities | (650,487 | ) | (1,024,511 | ) | ||||
| Net change in cash, cash equivalents and restricted cash | (557,228 | ) | (646,990 | ) | ||||
| Cash, cash equivalents and restricted cash, beginning of the period | 689,731 | 783,757 | ||||||
| Cash, cash equivalents and restricted cash, end of the period | $ | 132,503 | $ | 136,767 | ||||
| Interest paid (net of capitalized interest of $531 and $666, respectively) | $ | 84,019 | $ | 73,556 | ||||
| Income taxes paid, net of refunds | $ | 23,370 | $ | 51,157 |
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
- 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 March 31, 2025, 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 the leading owner and operator of high-quality, open-air, grocery-anchored shopping centers and mixed-use properties in the United States. 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 a reorganization into an umbrella partnership real estate investment trust structure (“UPREIT”). The Company believes it is organized and operates in such a manner to qualify and remain qualified as a REIT, in accordance with Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (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 January 2, 2024, RPT Realty (“RPT”) merged with and into the Company, with the Company continuing as the surviving public company (the “RPT Merger”), pursuant to the definitive merger agreement (the “Merger Agreement”) between the Company and RPT, entered into on August 28, 2023. 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 7.25% Class N Cumulative Convertible Perpetual Preferred Stock, par value $1.00 per share (“Class N Preferred Stock”). During the three months ended March 31, 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)
- Summary of Significant Accounting Policies
Basis of Presentation
This report combines the quarterly reports on Form 10-Q for the quarterly period ended March 31, 2025, 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 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, 2024 included in the Condensed Consolidated Financial Statements have been derived from the audited Consolidated Financial Statements as of that date, but do 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, 2024, 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 long-term incentive plan units (“LTIP Units”), 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 17 of the Notes to Condensed Consolidated Financial Statements).
Reclassifications
Certain amounts in the prior period have been reclassified in order to conform to the current period’s presentation. For comparative purposes, as of December 31, 2024, the Company reclassified Mortgage and other financing receivables, net from Other assets to a separate line item and reclassified Marketable securities to Other assets on the Company’s Condensed Consolidated Balance Sheet as follows (in thousands):
| As of December 31, 2024 | ||||
| Mortgage and other financing receivables, net | $ | 444,966 | ||
| Marketable securities | $ | (2,290 | ) | |
| Other assets | $ | (442,676 | ) |
For comparative purposes, for the three months ended March 31, 2024, the Company reclassified Mortgage and other financing income, net from Other income, net to a separate line item on the Company’s Condensed Consolidated Statements of Operations as follows (in thousands):
| Three Months Ended March 31, 2024 | ||||
| Mortgage and other financing income, net | $ | 2,519 | ||
| Other income, net | $ | (2,519 | ) |
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 March 31, 2025, are not yet effective for the Company and for which the Company has not elected early adoption, where permitted:
| ASU | Description | Effective Date | Effect on the financial statements or other significant matters |
| ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures | This 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. | Fiscal years beginning January 1, 2025, and interim periods for fiscal years beginning January 1, 2026; Early adoption permitted | The Company will review the extent of new disclosures necessary prior to implementation. Other than additional disclosure, the adoption of this ASU will not have a material impact on the Company’s financial position and/or results of operations. |
| ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ASU 2025-01, Income Statement - Reporting Comprehensive, Income -Expense Disaggregation Disclosures (Subtopic 220-40), Clarifying the Effective Date | This ASU requires additional disclosure about a public business entity’s expenses and more detailed information about the types of expenses in commonly presented expense captions. Such information should allow investors to better understand an entity's performance, assess future cash flows, and compare performance over time and with other entities. The amendments will require public business entities to disclose in the notes to the financial statements, at each interim and annual reporting period, specific information about certain costs and expenses, employee compensation, depreciation, and intangible asset amortization included in each expense caption presented on the face of the income statement, and the total amount of an entity's operating expenses. | Fiscal years beginning January 1, 2027, and interim periods for fiscal years beginning January 1, 2028; Early adoption permitted | The 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 ASUs to the FASB’s ASCs have been adopted by the Company as of the date listed:
| ASU | Description | Adoption Date | Effect on the financial statements or other significant matters |
| ASU 2023-05, Business Combinations – Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement | The 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 | January 1, 2025 | This ASU does not impact accounting for joint ventures by the venturers. As such, the adoption of this ASU did not have an 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)
| 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. | |||
| 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 apply 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 | The adoption of this ASU did not have a material impact on the Company’s financial position and/or results of operations. |
- RPT Merger
Overview
On January 2, 2024, the Company completed the RPT Merger, under which RPT merged with and into the Company, with the Company continuing as the surviving public company. 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.
The following highlights the Company’s significant activity upon completion of the $1.4 billion RPT Merger on January 2, 2024:
Added 56 open-air shopping centers, 43 of which were wholly owned and 13 of which were owned through a joint venture, comprising 13.3 million square feet of gross leasable area (“GLA”);
Obtained RPT’s 6% stake in a 49-property net lease joint venture;
Assumed $821.5 million of unsecured notes and term loans, of which the Company repaid $511.5 million of unsecured notes in January 2024;
Issued 53.0 million shares of common stock and 1.8 million depositary shares of Class N Preferred Stock to effect the RPT Merger;
Issued 953,400 OP Units in Kimco OP, which were fully vested upon issuance and had a fair market value of $21.0 million;
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; and
Obtained a finance right-of-use asset of $6.8 million (which is included in Other assets on the Company’s Condensed Consolidated Balance Sheets).
Revenues from rental properties, net and Net income/(loss) available to the Company’s common shareholders in the Company’s Condensed Consolidated Statements of Operations includes revenues of $44.7 million and net income of $1.4 million (excluding $25.2 million of merger-related charges), respectively, resulting from the RPT Merger during the three months ended March 31, 2024.
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 Statement of Operations for the three months ended March 31, 2024, 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.
| Three Months Ended March 31, | ||||
| 2024 | ||||
| Revenues from rental properties, net | $ | 498.9 | ||
| Net income (1) | $ | 16.2 | ||
| Net income available to the Company’s common shareholders (1) | $ | 6.3 |
(1)
The pro forma earnings for the three months ended March 31, 2024 were adjusted to exclude merger-related charges of $25.2 million.
- Real Estate
Acquisitions
During the three months ended March 31, 2025, the Company acquired the following operating properties, through direct asset acquisitions (in thousands):
| Purchase Price | ||||||||||||||||||||||||
| Property Name | Location | Month Acquired | Cash | Debt | Other | Total | GLA | |||||||||||||||||
| Markets at Town Center (1) | Jacksonville, FL | Jan-25 | $ | 108,238 | $ | - | $ | - | $ | 108,238 | 254 | |||||||||||||
| College Park Land (2) | Las Vegas, NV | Jan-25 | 12,746 | - | 1,428 | 14,174 | - | |||||||||||||||||
| Francisco Center Land (2) | Las Vegas, NV | Jan-25 | 11,588 | - | 593 | 12,181 | - | |||||||||||||||||
| $ | 132,572 | $ | - | $ | 2,021 | $ | 134,593 | 254 |
(1)
The Company had a mortgage receivable of $15.0 million related to this property, which was repaid by the seller at closing.
(2)
The Company acquired the fee interest in two properties under finance ground lease agreements through the exercise of a call option for an aggregate purchase price of $24.2 million. In addition, the Company had a mortgage receivable of $3.4 million, which was repaid by the seller at closing. This transaction also resulted in a decrease in Other assets of $26.2 million and a decrease in Other liabilities of $24.2 million on the Company’s Condensed Consolidated Balance Sheets related to the finance right-of-use assets and lease liabilities (included in Other). See Footnote 9 of the Notes to Condensed Consolidated Financial Statements for further details.
Included in the Company’s Consolidated Statements of Operations is $2.7 million in total revenues from the date of acquisition through March 31, 2025 for the operating properties acquired during the period.
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 three months ended March 31, 2025 were as follows (in thousands):
| Allocation as of March 31, 2025 | Weighted Average Useful Life (in Years) | ||||||
| Land | $ | 48,844 | n/a | ||||
| Buildings | 68,659 | 50.0 | |||||
| Building improvements | 4,700 | 45.0 | |||||
| Tenant improvements | 5,390 | 6.2 | |||||
| In-place leases | 12,859 | 4.9 | |||||
| Above-market leases | 457 | 5.4 | |||||
| Below-market leases | (6,316 | ) | 15.8 | ||||
| Net assets acquired | $ | 134,593 |
During the three months ended March 31, 2024, there were no operating property acquisitions other than those acquired in connection with the RPT Merger (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)
Dispositions
The table below summarizes the Company’s disposition activity relating to consolidated operating properties and parcels for the three months ended March 31, 2025 and 2024 (dollars in millions):
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Aggregate sales price/gross fair value (1) | $ | 1.5 | $ | 248.4 | ||||
| Gain on sale of properties (2) | $ | 0.9 | $ | 0.3 | ||||
| Number of operating properties sold | - | 10 | ||||||
| Number of parcels sold | 1 | 5 |
(1)
During the three months ended March 31, 2024, the Company provided, as a lender, seller financing totaling $175.4 million related to the sale of nine operating properties.
(2)
Before taxes of $0.2 million for the three months ended March 31, 2025.
- 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 March 31, 2025 and December 31, 2024 (in millions, except number of properties and GLA):
| Noncontrolling Ownership Interest | The Company’s Investment | |||||||||
| Joint Venture | As of March 31, 2025 | March 31, 2025 | December 31, 2024 | |||||||
| Prudential Investment Program | 15.0% | $ | 127.7 | $ | 133.3 | |||||
| Kimco Income Opportunity Portfolio (“KIR”) | 52.1% | 288.6 | 289.1 | |||||||
| R2G Venture LLC (“R2G”) | 51.5% | 409.9 | 411.8 | |||||||
| Canada Pension Plan Investment Board (“CPP”) | 55.0% | 204.3 | 202.8 | |||||||
| Other Institutional Joint Ventures | Various | 234.8 | 237.7 | |||||||
| Other Joint Venture Programs | Various | 211.5 | 213.0 | |||||||
| Total* | $ | 1,476.8 | $ | 1,487.7 |
- Represents 115 property interests, 48 other property interests and 25.0 million square feet of GLA, as of March 31, 2025, and 116 property interests, 48 other property interests and 25.1 million square feet of GLA, as of December 31, 2024.
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 Operations for the three months ended March 31, 2025 and 2024 (in millions):
| Three Months Ended March 31, | ||||||||
| Joint Venture | 2025 | 2024 | ||||||
| Prudential Investment Program | $ | 3.1 | $ | 2.3 | ||||
| KIR | 10.1 | 9.7 | ||||||
| R2G | 2.3 | 1.7 | ||||||
| CPP | 3.2 | 2.1 | ||||||
| Other Institutional Joint Ventures | 1.1 | 1.4 | ||||||
| Other Joint Venture Programs | 2.9 | 3.7 | ||||||
| Total | $ | 22.7 | $ | 20.9 |
During the three months ended March 31, 2025, certain of the Company’s real estate joint ventures disposed of an operating property and a land parcel, in separate transactions, for an aggregate sales price of $39.8 million. These transactions resulted in an aggregate net gain to the Company of $0.8 million for the three months ended March 31, 2025, which is included in Equity in income of joint ventures, net on the Company’s Condensed Consolidated Statements of Operations.
KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
During the three months ended March 31, 2024, a real estate joint venture disposed of an other property interest for a sales price of $1.8 million. This transaction resulted in no gain or loss to the Company during the three months ended March 31, 2024, which is included in Equity in income of joint ventures, net on the Company’s Condensed Consolidated Statements of Operations.
The table below presents debt balances within the Company’s unconsolidated joint venture investments for which the Company held noncontrolling ownership interests at March 31, 2025 and December 31, 2024 (dollars in millions):
| As of March 31, 2025 | As of December 31, 2024 | |||||||||||||||||||||||
| Joint Venture | Mortgages and Notes Payable, Net | Weighted Average Interest Rate | Weighted Average Remaining Term (months)* | Mortgages and Notes Payable, Net | Weighted Average Interest Rate | Weighted Average Remaining Term (months)* | ||||||||||||||||||
| Prudential Investment Program | $ | 267.8 | 5.38 | % | 29.2 | $ | 268.5 | 5.47 | % | 19.6 | ||||||||||||||
| KIR | 274.0 | 4.70 | % | 24.2 | 273.9 | 5.82 | % | 27.2 | ||||||||||||||||
| R2G | 69.2 | 2.90 | % | 71.7 | 68.7 | 2.90 | % | 74.6 | ||||||||||||||||
| CPP | 80.3 | 4.88 | % | 16.0 | 80.6 | 4.88 | % | 19.0 | ||||||||||||||||
| Other Institutional Joint Ventures | 234.9 | 5.99 | % | 20.7 | 234.7 | 5.76 | % | 23.7 | ||||||||||||||||
| Other Joint Venture Programs | 544.9 | 4.96 | % | 37.8 | 547.3 | 4.98 | % | 40.8 | ||||||||||||||||
| Total | $ | 1,471.1 | $ | 1,473.7 |
- Includes extension options
- 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 addition, the Company has invested capital in structured investments, which are primarily accounted for on the equity method of accounting. As of March 31, 2025 and December 31, 2024, the Company’s Other investments were both $107.3 million, of which the Company’s net investment under the Preferred Equity program was $69.5 million and $70.1 million as of March 31, 2025 and December 31, 2024, respectively.
- Mortgage and Other Financing Receivables
The Company has various mortgage and other financing receivables, which consist of loans acquired and loans originated by the Company. As of March 31, 2025 and December 31, 2024, the Company had mortgage and other financing receivables, net of allowance for credit losses, of $421.8 million and $445.0 million, respectively. During the three months ended March 31, 2025 and 2024, the Company recognized mortgage and other financing income, net of $11.3 million and $2.5 million, respectively, on the Company’s Condensed Consolidated Statements of Operations.
During the three months ended March 31, 2025, the Company collected $23.1 million of mortgage and other financing receivables, of which $18.4 million was repaid at closing upon the Company’s acquisition of the corresponding properties.
During the three months ended March 31, 2024, the Company (i) issued $175.4 million of seller financing related to the sale of nine operating properties, which were acquired in conjunction with the RPT Merger, (ii) provided $9.0 million of mortgage and other financing loans, and (iii) collected $38.2 million of mortgage and other financing receivables.
The following table presents the change in the allowance for credit losses for the three months ended March 31, 2025 and 2024, respectively (in thousands):
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Balance at January 1, | $ | 6,800 | $ | 1,300 | ||||
| Provision for credit losses | - | 2,000 | ||||||
| Balance at March 31, | $ | 6,800 | $ | 3,300 |
KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
- Accounts and Notes Receivable
The components of Accounts and notes receivable, net of potentially uncollectible amounts as of March 31, 2025 and December 31, 2024, were as follows (in thousands):
| As of March 31, 2025 | As of December 31, 2024 | |||||||
| Billed tenant receivables | $ | 16,350 | $ | 23,011 | ||||
| Unbilled common area maintenance, insurance and tax reimbursements | 65,761 | 67,010 | ||||||
| Other receivables | 16,394 | 15,865 | ||||||
| Straight-line rent receivables | 240,806 | 234,583 | ||||||
| Total accounts and notes receivable, net | $ | 339,311 | $ | 340,469 |
- 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.
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 Operations, as either fixed or variable lease income based on the criteria specified in ASC 842, for the three months ended March 31, 2025 and 2024, was as follows (in thousands):
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Lease income: | ||||||||
| Fixed lease income (1) | $ | 416,171 | $ | 397,695 | ||||
| Variable lease income (2) | 112,987 | 98,281 | ||||||
| Above-market and below-market leases amortization, net | 5,314 | 5,901 | ||||||
| Adjustments for potentially uncollectible lease income or disputed amounts | (3,186 | ) | (2,972 | ) | ||||
| Total lease income | $ | 531,286 | $ | 498,905 |
(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 80.1 years, some of which include options to extend the terms for up to an additional 60 years.
The Company had three properties under finance ground lease agreements that consisted of variable lease payments with a bargain purchase option. During 2025, the Company acquired the fee interest in two properties under finance ground lease agreements through the exercise of its call option for an aggregate purchase price of $24.2 million. This transaction resulted in a decrease in Other assets of $26.2 million and a decrease in Other liabilities of $24.2 million on the Company’s Condensed Consolidated Balance Sheets related to the finance right-of-use assets and lease liabilities. As of March 31, 2025, the Company has a property under a finance ground lease agreement with a right-of-use asset of $6.8 million, which is included in Other assets 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 leases as of March 31, 2025 were as follows:
| Operating Leases | ||||
| Weighted-average remaining lease term (in years) | 30.41 | |||
| Weighted-average discount rate | 6.79 | % |
KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
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 Operations for the three months ended March 31, 2025 and 2024, were as follows (in thousands):
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Lease cost: | ||||||||
| Finance lease cost | $ | 43 | $ | 366 | ||||
| Operating lease cost | 3,441 | 3,871 | ||||||
| Variable lease cost | 841 | 659 | ||||||
| Total lease cost | $ | 4,325 | $ | 4,896 |
- Other Assets
Marketable Securities
During the three months ended March 31, 2024, the Company sold its remaining 14.2 million shares of common stock of Albertsons Companies Inc. (“ACI”), generating net proceeds of $299.1 million. For tax purposes, the Company recognized a long-term capital gain of $288.7 million and elected to retain the proceeds from the sale of ACI common stock, resulting in estimated federal and state income tax expense of $72.9 million during the three months ended March 31, 2024.
The portion of unrealized (losses)/gains on marketable securities for the three months ended March 31, 2025 and 2024 that related to marketable securities still held at the reporting date (in thousands):
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Loss on marketable securities, net | $ | (9 | ) | $ | (27,686 | ) | ||
| Less: Net (gain)/loss recognized related to marketable securities sold | (2 | ) | 27,695 | |||||
| Unrealized (loss)/gain related to marketable securities still held | $ | (11 | ) | $ | 9 |
- Notes and Mortgages Payable
Notes Payable
The Company has a $2.0 billion unsecured revolving credit facility (the “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 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 an applicable spread determined by the Company’s credit ratings. The interest rate can be further adjusted upward or downward based on the sustainability metric targets, as defined in the agreement. As of March 31, 2025, the interest rate on the Credit Facility is Adjusted Term SOFR plus 68.5 basis points (5.12% as of March 31, 2025) 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 March 31, 2025, the Credit Facility had an outstanding balance of $120.0 million and no appropriations for letters of credit, and the Company was in compliance with its covenants.
The Company has $310.0 million of unsecured term loans (the “Term Loans”) with a group of banks, which are scheduled to expire between November 2026 to February 2028. The Term Loans accrue interest at the rate of Adjusted Term SOFR plus an applicable spread determined by the Company’s credit rating outlook and sustainability metric targets, as described in the agreement. As of March 31, 2025, the interest rates on the Term Loans is Adjusted Term SOFR plus 81.0 basis points after reductions for an upgraded credit rating profile and sustainability metrics achieved. As of March 31, 2025, the Company had 20 swap rate agreements with various lenders swapping the interest rates on the Term Loans to all-in fixed rates ranging from 4.5793% to 4.7801%. See Footnote 12 of the Notes to Condensed Consolidated Financial Statements for interest rate swap disclosure.
KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
The Company has a $550.0 million unsecured term loan credit facility (the “Term Loan Credit Facility”) with a group of banks, which is scheduled to mature in January 2026 with three one-year options to extend the maturity date, at the Company’s discretion, to January 2029. The Term Loan Credit Facility accrues interest at a spread (currently 80.0 basis points after reductions for 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. As of March 31, 2025, 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 three months ended March 31, 2025 and 2024, the Company fully repaid the following notes payable (dollars in millions):
| Type | Date Paid | Amount Repaid | Interest Rate | Maturity Date | ||||||
| Unsecured note | Feb-25 | $ | 500.0 | 3.30% | Feb-25 | |||||
| Unsecured notes (1) | Jan-24 | $ | 511.5 | 3.64%-4.74% | Jun-25-Nov-31 | |||||
| Unsecured term loan | Jan-24 | $ | 50.0 | 4.15% | Nov-26 | |||||
| Unsecured term loan | Jan-24 | $ | 100.0 | 4.11% | Feb-27 | |||||
| Unsecured term loan | Jan-24 | $ | 50.0 | 3.43% | Aug-27 | |||||
| Unsecured term loan | Jan-24 | $ | 110.0 | 3.71% | Feb-28 |
(1)
The Company 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 Operations.
The Parent Company guarantees the unsecured debt instruments of Kimco OP, including the Credit Facility. 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.
Mortgages Payable
During the three months ended March 31, 2025, the Company repaid $48.9 million of mortgage debt (including fair market value adjustment of $0.1 million) that encumbered three operating properties.
- 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 from changes in interest rates and limits the risk by following established risk management policies and procedures, including the use of derivative financial instruments.
The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate these risks, the Company only enters into derivative financial instruments with counterparties with major financial institutions. The Company does not anticipate that any of the counterparties will fail to meet their obligations. The Company's objectives in using interest rate derivatives are to attempt to stabilize interest expense where possible and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
During 2024, the Company entered into 26 interest rate swap agreements with notional amounts aggregating to $860.0 million. 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. As of March 31, 2025, all interest rate swaps were deemed effective and are therefore included within Accumulated other comprehensive (loss)/income (“AOCI”) on the Company’s Condensed Consolidated Balance Sheets. As of March 31, 2025, the Company expects approximately $1.5 million of accumulated comprehensive income on derivative instruments to be reclassified into earnings as a reduction to interest expense during the next 12 months.
KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
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 the fair value of the interest rate swaps are measured on a recurring basis.
The following table summarizes the terms and fair value of the Company’s derivative financial instruments as of March 31, 2025 (dollars in thousands):
| Instrument | Number of Swap Agreements | Associated Debt Instrument | Effective Date | Maturity Date | Notional Amount (1) | Derivative Assets (2) | Derivative Liabilities (2) | |||||||||||||
| Interest rate swap | 1 | $200.0 Million Term Loan | Jan-24 | Jan-29 | $ | 200,000 | $ | - | $ | (230 | ) | |||||||||
| Interest rate swaps | 3 | $50.0 Million Term Loan | Jan-24 | Nov-26 | 50,000 | - | (108 | ) | ||||||||||||
| Interest rate swaps | 3 | $100.0 Million Term Loan | Jan-24 | Feb-27 | 100,000 | - | (244 | ) | ||||||||||||
| Interest rate swaps | 7 | $50.0 Million Term Loan | Jan-24 | Aug-27 | 50,000 | - | (104 | ) | ||||||||||||
| Interest rate swaps | 7 | $110.0 Million Term Loan | Jan-24 | Feb-28 | 110,000 | - | (199 | ) | ||||||||||||
| Interest rate swaps | 4 | $300.0 Million Term Loan | Jul-24 | Jan-29 | 300,000 | - | (2,529 | ) | ||||||||||||
| Interest rate swap | 1 | $50.0 Million Term Loan | Sept-24 | Jan-29 | 50,000 | 384 | - | |||||||||||||
| $ | 860,000 | $ | 384 | $ | **(**3,414 | ) |
(1)
These interest rate swap agreements utilize a one-month SOFR CME index.
(2)
Derivative assets and derivative liabilities are included within Other assets and Other liabilities, respectively, on the Company’s Condensed Consolidated Balance Sheets. The Company classifies the interest rate swaps as Level 2, and the fair value of the interest rate swaps are measured on a recurring basis, see Footnote 15 of the Notes to Condensed Consolidated Financial Statements.
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 months ended March 31, 2025 (in thousands):
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Amount of (loss)/gain recognized in AOCI on interest rate swaps, net | $ | (8,987 | ) | $ | 8,536 | |||
| Amount reclassified from AOCI into income as Interest expense | $ | 1,282 | $ | 2,077 | ||||
| Total amount of Interest expense presented in the Condensed Consolidated Statements of Operations in which the effects of cash flow hedges are being recorded | $ | (80,377 | ) | $ | (74,565 | ) |
The Company has interests in certain unconsolidated joint ventures, which have cash flow hedges for interest payments. As of March 31, 2025 and December 31, 2024, the Company’s share of the fair value of cash flow hedges for interest payments of unconsolidated investees was $2.1 million and $3.8 million, respectively, which is included within AOCI on the Company’s Condensed Consolidated Balance Sheets.
- 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 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 Operations.
The Parent Company issued 953,400 OP Units in Kimco OP during 2024, which were fully vested upon issuance and had a fair market value of $21.0 million. In addition, the Parent Company has granted to certain employees and directors LTIP Units with time-based vesting requirements (“Time-Based LTIP Units”) and LTIP Units with performance-based vesting requirements (“Performance-Based LTIP Units”), assuming the maximum target performance. See Footnote 16 of the Notes to Condensed Consolidated Financial Statements for further disclosure. As of March 31, 2025, the Parent Company owned 99.84% of the outstanding OP Units in Kimco OP. The OP Units are currently redeemable at the option of the holder (subject to restrictions agreed upon at the time of issuance of LTIP Units to certain holders that may restrict such redemption right for a period of time) for the Parent Company’s common stock at a ratio
KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
of 1:1 or cash at the option of the Parent Company. As of March 31, 2025, noncontrolling interests relating to the Noncontrolling OP units were $22.9 million and consisted of the following:
| Type | Units Outstanding | Return Per Annum | ||||
| Vested OP Units | 977,382 | Equal to the Company’s common stock dividend | ||||
| Unvested Time-Based OP Units | 96,560 | Equal to the Company’s common stock dividend | ||||
| Unvested Performance-Based OP Units | 474,611 | Dividend equivalent OP Units upon vesting |
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 the three months ended March 31, 2025, 46,461 Preferred Outside Partner Units and 5,162 Common Outside Partner Units were redeemed for cash of $1.0 million, in separate transactions. These transactions resulted in a net decrease in Redeemable noncontrolling interests of $0.7 million and a decrease in the embedded derivative liability in Other liabilities of $0.4 million on the Company’s Condensed Consolidated Balance Sheets. During the three months ended March 31, 2024, 70,395 Preferred Outside Partner Units were redeemed for cash of $1.4 million. This transaction resulted in a net decrease in Redeemable noncontrolling interests of $0.9 million and a decrease in the embedded derivative liability in Other liabilities of $0.5 million on the Company’s Consolidated Balance Sheets. As of March 31, 2025, the Outside Partner Units related to these acquisitions total $56.4 million, including noncontrolling interests of $36.6 million and an embedded derivative liability associated with put and call options of these unitholders of $19.8 million. The Outside Partner Units related annual cash distribution rates and related conversion features consisted of the following as of March 31, 2025:
| Type | Par Value Per Unit | Units Outstanding | Return Per Annum | |||||||
| Preferred Outside Partner Units | $ | 20.00 | 2,450,246 | 3.75% | ||||||
| Common Outside Partner Units | $ | 20.00 | 261,369 | Equal 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/Members’ capital 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 three months ended March 31, 2025 and 2024 (in thousands):
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Balance at January 1, | $ | 47,877 | $ | 72,277 | ||||
| Net income | 813 | 1,137 | ||||||
| Distributions | (813 | ) | (1,137 | ) | ||||
| Redemption/conversion of noncontrolling interests (1) | (676 | ) | (861 | ) | ||||
| Adjustment to estimated redemption value | (577 | ) | (977 | ) | ||||
| Balance at March 31, | $ | 46,624 | $ | 70,439 |
(1)
Includes Preferred and Common Outside Partner Units, which were partially redeemed during the three months ended March 31, 2025 and 2024.
- Variable Interest Entities
Consolidated Operating Properties
Kimco OP is considered a VIE, and the Parent Company, which consolidates it, is the primary beneficiary. Substantially all of the Parent Company's assets and liabilities are the assets and liabilities of Kimco OP. In addition, included within the Company’s operating properties at March 31, 2025 and December 31, 2024, are 28 and 29 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
KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
beneficiary of these VIEs as a result of its controlling financial interest. At March 31, 2025, total assets of these VIEs were $1.7 billion and total liabilities were $159.5 million. At December 31, 2024, total assets of these VIEs were $1.7 billion and total liabilities were $161.6 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 are as follows (dollars in millions):
| As of March 31, 2025 | As of December 31, 2024 | |||||||
| Number of unencumbered VIEs | 26 | 27 | ||||||
| Number of encumbered VIEs | 2 | 2 | ||||||
| Total number of consolidated VIEs | 28 | 29 | ||||||
| Restricted Assets: | ||||||||
| Real estate, net | $ | 323.9 | $ | 326.1 | ||||
| Cash, cash equivalents and restricted cash | 4.0 | 4.1 | ||||||
| Accounts and notes receivable, net | 3.6 | 3.4 | ||||||
| Other assets | 1.6 | 1.3 | ||||||
| Total Restricted Assets | $ | 333.1 | $ | 334.9 | ||||
| VIE Liabilities: | ||||||||
| Mortgages payable, net | $ | 84.5 | $ | 85.1 | ||||
| Accounts payable and accrued expenses | 11.9 | 11.6 | ||||||
| Operating lease liabilities | 1.8 | 1.8 | ||||||
| Other liabilities | 61.3 | 63.1 | ||||||
| Total VIE Liabilities | $ | 159.5 | $ | 161.6 |
Unconsolidated Redevelopment Investment
Included in the Company’s preferred equity investments at March 31, 2025, 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 construction loan financing and 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.
As of March 31, 2025 and December 31, 2024, the Company’s investment in this VIE was $38.1 million and $37.6 million, respectively, 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 and its remaining capital commitment obligation. 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.
KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
- 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. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty's nonperformance risk in the fair value measurements for interest rate swaps.
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 table presents the carrying amount and estimated fair value of Company's financial instruments not measured at fair value as of March 31, 2025 and December 31, 2024 (in thousands):
| March 31, 2025 | December 31, 2024 | |||||||||||||||||
| Fair Value Hierarchy | Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||||
| Assets: | ||||||||||||||||||
| Mortgage and other financing receivables (1) | Level 3 | $ | 421,849 | $ | 424,573 | $ | 444,966 | $ | 443,234 | |||||||||
| Liabilities: | ||||||||||||||||||
| Notes payable, net (2) | ||||||||||||||||||
| Senior unsecured notes | Level 2 | $ | 6,605,944 | $ | 6,092,201 | $ | 7,106,835 | $ | 6,538,784 | |||||||||
| Unsecured term loans | Level 3 | $ | 858,355 | $ | 861,073 | $ | 857,903 | $ | 861,296 | |||||||||
| Credit facility | Level 3 | $ | 115,684 | $ | 120,474 | $ | - | $ | - | |||||||||
| Mortgages payable, net (3) | Level 3 | $ | 444,148 | $ | 425,129 | $ | 496,438 | $ | 469,734 |
(1)
The carrying value includes and the fair value excludes allowance for credit losses of $6.8 million as of both March 31, 2025 and December 31, 2024.
(2)
The carrying value includes and the fair value excludes deferred financing costs of $66.9 million and $65.0 million as of March 31, 2025 and December 31, 2024, respectively.
(3)
The carrying value includes and the fair value excludes deferred financing costs of $1.1 million as of both March 31, 2025 and December 31, 2024.
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 swap derivative assets/liabilities 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 as of March 31, 2025 and December 31, 2024, aggregated by the level of the fair value hierarchy within which those measurements fall (in thousands):
| Balance at March 31, 2025 | Level 1 | Level 2 | Level 3 | |||||||||||||
| Assets: | ||||||||||||||||
| Interest rate swaps derivative assets | $ | 384 | $ | - | $ | 384 | $ | - | ||||||||
| Liabilities: | ||||||||||||||||
| Interest rate swaps derivative liabilities | $ | 3,414 | $ | - | $ | 3,414 | $ | - | ||||||||
| Embedded derivative liability | $ | 19,810 | $ | - | $ | - | $ | 19,810 |
| Balance at December 31, 2024 | Level 1 | Level 2 | Level 3 | |||||||||||||
| Assets: | ||||||||||||||||
| Marketable equity securities | $ | 2,290 | $ | 2,290 | $ | - | $ | - | ||||||||
| Interest rate swaps derivative assets | $ | 7,239 | $ | - | $ | 7,239 | $ | - | ||||||||
| Liabilities: | ||||||||||||||||
| Embedded derivative liability | $ | 19,864 | $ | - | $ | - | $ | 19,864 |
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 6.30% and 6.40% as of March 31, 2025 and December 31, 2024, respectively.
The table below summarizes the change in the fair value of the embedded derivative liability measured using Level 3 inputs for the three months ended March 31, 2025 and 2024 (in thousands):
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Balance as of January 1, | $ | 19,864 | $ | 30,914 | ||||
| Settlements | (370 | ) | (547 | ) | ||||
| Change in fair value (included in Other income, net) | 316 | 1,842 | ||||||
| Balance as of March 31, | $ | 19,810 | $ | 32,209 |
- 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 March 31, 2025, the Company had 2.9 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 Operations over the service period based on their fair values. Fair value of restricted shares and Time-Based LTIP Units are calculated based on the on the Company’s common stock closing share price on the date of grant. Fair value of performance awards and Performance-Based LTIP Units are determined using the Monte Carlo method, which is intended to estimate the fair value of the awards at the grant date. Granted Time-Based LTIP Units and Performance-Based LTIP Units do not have redemption rights into shares of Company common stock, but any OP Units into which LTIP Units may be converted are entitled to redemption rights.
The Company recognized expenses associated with its equity awards of $6.7 million and $10.0 million for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, the Company had $39.8 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 2.5 years.
KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Restricted Stock
Information with respect to restricted stock under the Plan for the three months ended March 31, 2025 and 2024 is as follows:
| 2025 | 2024 | |||||||
| Restricted stock outstanding as of January 1, | 2,745,884 | 2,746,116 | ||||||
| Granted (1) | - | 872,150 | ||||||
| Vested | (654,548 | ) | (679,546 | ) | ||||
| Forfeited | (3,306 | ) | (15,562 | ) | ||||
| Restricted stock outstanding as of March 31, | 2,088,030 | 2,923,158 |
(1)
The weighted-average grant date fair value for restricted stock issued during the three months ended March 31, 2024 was $19.47.
Performance Shares
Information with respect to performance share awards under the Plan for the three months ended March 31, 2025 and 2024 is as follows:
| 2025 | 2024 | |||||||
| Performance share awards outstanding as of January 1, | 908,890 | 989,860 | ||||||
| Granted (1) | - | 377,690 | ||||||
| Vested | - | (458,660 | ) | |||||
| Performance share awards outstanding as of March 31, | 908,890 | 908,890 |
(1)
The weighted-average grant date fair value for performance shares issued during the three months ended March 31, 2024 was $18.14.
For the three months ended March 31, 2025 and 2024, the Company issued 524,636 and 1,094,621 common shares, respectively, in connection with vested performance share awards, including performance dividend equivalent shares.
The significant assumptions underlying the determination of fair values using Monte Carlo simulations for the performance share awards granted during 2024 were as follows:
| 2024 | ||||
| Stock price | $ | 19.53 | ||
| Dividend yield (1) | - | |||
| Risk-free interest rate | 4.39 | % | ||
| 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.
Time-Based LTIP Units
Information with respect to Time-Based LTIP Units awards with time-based vesting requirements under the Plan for the three months ended March 31, 2025 and 2024 is as follows:
| 2025 | 2024 | |||||||
| Time-Based LTIP unit awards outstanding as of January 1, | 120,700 | - | ||||||
| Granted (1) | - | 120,700 | ||||||
| Vested | (24,140 | ) | - | |||||
| Time-Based LTIP unit awards outstanding as of March 31, | 96,560 | 120,700 |
(1)
The weighted-average grant date fair value for Time-Based LTIP Units issued during the three months ended March 31, 2024 was $19.47.
KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Performance-Based LTIP Units
Information with respect to Performance-Based LTIP Units under the Plan for the three months ended March 31, 2025 and 2024 is as follows:
| 2025 | 2024 | |||||||
| Performance-Based LTIP unit awards outstanding as of January 1, | 474,611 | - | ||||||
| Granted (1) | - | 474,611 | ||||||
| Performance-Based LTIP unit awards outstanding as of March 31, | 474,611 | 474,611 |
(1)
The weighted-average grant date fair value for Performance-Based LTIP Units issued during the three months ended March 31, 2024 was $9.07.
The significant assumptions underlying the determination of fair values using Monte Carlo simulations for the Performance-Based LTIP Units granted during 2024 were as follows:
| 2024 | |||
| Stock price | $ | 19.53 | |
| Dividend yield (1) | - | ||
| Risk-free interest rate | 4.39 | % | |
| Volatility (2) | 28.85 | % | |
| Term of the award (years) | 2.87 |
(1)
Total Shareholder Returns, as used in the Performance-Based LTIP Unit 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.
- Stockholders’ Equity
Preferred Stock
The Company’s outstanding Preferred Stock is detailed below:
| As of March 31, 2025 | ||||||||||||||||||||||||||
| Class of Preferred Stock | Shares Authorized | Shares Issued and Outstanding | Liquidation Preference (in thousands) | Dividend Rate | Annual Dividend per Depositary Share | Par Value | Optional Redemption Date | |||||||||||||||||||
| Class L | 10,350 | 8,902 | $ | 222,543 | 5.125 | % | $ | 1.28125 | $ | 1.00 | 8/16/2022 | |||||||||||||||
| Class M | 10,580 | 10,465 | 261,636 | 5.250 | % | $ | 1.31250 | $ | 1.00 | 12/20/2022 | ||||||||||||||||
| Class N | 1,849 | 1,392 | 69,583 | 7.250 | % | $ | 3.62500 | $ | 1.00 | N/A | ||||||||||||||||
| 20,759 | $ | 553,762 |
| As of December 31, 2024 | ||||||||||||||||||||||||||
| Class of Preferred Stock | Shares Authorized | Shares Issued and Outstanding | Liquidation Preference (in thousands) | Dividend Rate | Annual Dividend per Depositary Share | Par Value | Optional Redemption Date | |||||||||||||||||||
| Class L | 10,350 | 8,902 | $ | 222,543 | 5.125 | % | $ | 1.28125 | $ | 1.00 | 8/16/2022 | |||||||||||||||
| Class M | 10,580 | 10,465 | 261,636 | 5.250 | % | $ | 1.31250 | $ | 1.00 | 12/20/2022 | ||||||||||||||||
| Class N | 1,849 | 1,439 | 71,934 | 7.250 | % | $ | 3.62500 | $ | 1.00 | N/A | ||||||||||||||||
| 20,806 | $ | 556,113 |
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 March 31, 2025, the Class N Preferred Stock was potentially convertible into 3.2 million shares of common stock.
KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
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 three months ended March 31, 2025, the Company repurchased the following preferred stock:
| Class of Preferred Stock | Depositary Shares Repurchased | Purchase Price (in thousands) | ||||||
| Class N | 47,035 | $ | 2,817 |
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
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 three months ended March 31, 2025. As of March 31, 2025, the Company had $362.5 million available under this ATM Program.
During February 2018, the Company established 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 three months ended March 31, 2025. As of March 31, 2025, the Company had $224.9 million available under this common share repurchase program. Subsequent to the three months ended March 31, 2025, during April 2025, the Company repurchased 3.0 million shares of common stock for an aggregate purchase price of $58.8 million (weighted average price of $19.61 per share).
Dividends Declared
The following table provides a summary of the dividends declared per share:
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Common Shares | $ | 0.25000 | $ | 0.24000 | ||||
| Class L Depositary Shares | $ | 0.32031 | $ | 0.32031 | ||||
| Class M Depositary Shares | $ | 0.32813 | $ | 0.32813 | ||||
| Class N Depositary Shares | $ | 0.90625 | $ | 0.90625 |
KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
- Supplemental Schedule of Non-Cash Investing / Financing Activities
The following schedule summarizes the non-cash investing and financing activities of the Company for the three months ended March 31, 2025 and 2024 (in thousands):
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Disposition of real estate interests through the issuance of mortgage and other financing receivables | $ | - | $ | 175,420 | ||||
| Surrender of common stock/units | $ | 11,536 | $ | 14,659 | ||||
| Declaration of dividends/distributions paid in succeeding period | $ | 6,373 | $ | 6,722 | ||||
| Capital expenditures accrual | $ | 48,419 | $ | 44,726 | ||||
| Decrease in redeemable noncontrolling interests’ carrying amount, net | $ | (577 | ) | $ | (959 | ) | ||
| RPT Merger: | ||||||||
| Real estate assets, net | $ | - | $ | 1,818,552 | ||||
| Investment in real estate joint ventures | $ | - | $ | 433,345 | ||||
| Investment in other investments | $ | - | $ | 12,672 | ||||
| Other assets and liabilities, net | $ | - | $ | (609 | ) | |||
| Notes payable | $ | - | $ | (821,500 | ) | |||
| Lease liabilities arising from obtaining operating right-of-use assets | $ | - | $ | (13,506 | ) | |||
| Noncontrolling interest/Limited members' capital | $ | - | $ | (20,975 | ) | |||
| Preferred stock/units issued in exchange for RPT preferred shares | $ | - | $ | (105,607 | ) | |||
| Common stock/units issued in exchange for RPT common shares | $ | - | $ | (1,166,775 | ) |
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 March 31, 2025 | As of December 31, 2024 | |||||||
| Cash and cash equivalents | $ | 131,271 | $ | 688,622 | ||||
| Restricted cash | 1,232 | 1,109 | ||||||
| Total cash, cash equivalents and restricted cash | $ | 132,503 | $ | 689,731 |
- 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 March 31, 2025, these letters of credit aggregated $43.6 million.
Funding Commitments
The Company has investments with funding commitments of $30.9 million, of which $22.2 million has been funded as of March 31, 2025. In addition, the Company has mortgage and other financing receivables with undrawn loan advances of $9.7 million as of March 31, 2025.
Other
The Parent Company guarantees the unsecured debt instruments of Kimco OP, including the Credit Facility. 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 completion of the improvements and infrastructure. As of March 31, 2025, there were $15.7 million in performance and surety bonds outstanding.
KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
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 $36.2 million outstanding at March 31, 2025. 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.
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 March 31, 2025.
- Accumulated Other Comprehensive (Loss)/Income (“AOCI”)
The following tables present the change in the components of AOCI for the three months ended March 31, 2025 and 2024 (in thousands):
| Three Months Ended March 31, 2025 | ||||||||||||
| Cash Flow Hedges for Interest Payments | Cash Flow Hedges for Interest Payments of Unconsolidated Investees | Total | ||||||||||
| Balance at beginning of period | $ | 7,239 | $ | 3,799 | $ | 11,038 | ||||||
| Other comprehensive loss before reclassifications | (8,987 | ) | (1,314 | ) | (10,301 | ) | ||||||
| Amounts reclassed from AOCI | (1,282 | ) | (366 | ) | (1,648 | ) | ||||||
| Net current-period other comprehensive loss | (10,269 | ) | (1,680 | ) | (11,949 | ) | ||||||
| Balance at end of period | $ | (3,030 | ) | $ | 2,119 | $ | (911 | ) |
| Three Months Ended March 31, 2024 | ||||||||||||
| Cash Flow Hedges for Interest Payments | Cash Flow Hedges for Interest Payments of Unconsolidated Investees | Total | ||||||||||
| Balance at beginning of period | $ | - | $ | 3,329 | $ | 3,329 | ||||||
| Other comprehensive income before reclassifications | 8,536 | 491 | 9,027 | |||||||||
| Amounts reclassified from AOCI | (2,077 | ) | - | (2,077 | ) | |||||||
| Net current-period other comprehensive income | 6,459 | 491 | 6,950 | |||||||||
| Balance at end of period | $ | 6,459 | $ | 3,820 | $ | 10,279 |
On the Company’s Condensed Consolidated Statements of Operations, unrealized gains and losses reclassified from AOCI related to (i) cash flow hedges for interest payments are included in Interest expense and (ii) cash flow hedges for interest payments of unconsolidated investees are included in Equity in income of joint ventures, net.
- Segment Reporting:
The Company is an owner and operator of open-air, grocery-anchored shopping centers and mixed-used assets of which all the Company's properties are located within the U.S., inclusive of Puerto Rico. Management does not distinguish or group its operations on a geographical basis for purposes of allocating resources or capital. The Company reviews and evaluates operating and financial data for each property on an individual basis. As a result, each of the Company's individual properties is a separate operating segment. The Company defines its reportable segments to be in accordance with the method of internal reporting and the manner in which the Company's chief operating decision maker ("CODM"), makes key operating decisions, evaluates financial results, allocates resources and manages the Company's business. Accordingly, the Company aggregates its operating segments into a single reportable segment due to the similarities with regard to the nature and economics of its properties, tenants and operations, which are operated using consistent business strategies.
In accordance with ASC Topic 280 Segment Reporting, the Company’s CODM has been identified as the Chief Executive Officer. The CODM evaluates the Company’s portfolio and assesses the ongoing operations and performance of its consolidated properties and the Company's share of unconsolidated joint venture operations. The accounting policies of the reportable segments are the same as the
KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Company’s accounting policies. Net Operating Income ("NOI") is the primary performance measure reviewed by the Company’s CODM to assess operating performance and consists only of revenues and expenses directly related to real estate rental operations. NOI is calculated by deducting property operating expenses from lease revenues and other property related income. NOI reflects property acquisitions and dispositions, occupancy levels, rental rate increases or decreases, and the recoverability of operating expenses. The Company’s calculation of NOI may not be directly comparable to similarly titled measures calculated by other REITs. The CODM does not review asset information as a measure to assess performance.
The following table presents accrual-based lease revenue and other property related income and operating expenses included in the Company's share of NOI for its consolidated and unconsolidated properties ("NOI at share") the periods presented (in thousands):
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues | $ | 531,286 | $ | 498,905 | ||||
| Operating expenses | ||||||||
| Rent | (4,184 | ) | (4,279 | ) | ||||
| Real estate taxes | (69,911 | ) | (63,360 | ) | ||||
| Operating and maintenance | (89,553 | ) | (85,774 | ) | ||||
| Total operating expenses | (163,648 | ) | (153,413 | ) | ||||
| NOI from unconsolidated real estate joint ventures | 50,997 | 50,027 | ||||||
| NOI at share | $ | 418,635 | $ | 395,519 |
The following table presents the reconciliation of NOI at share to Net income/(loss) (in thousands):
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| NOI at share | $ | 418,635 | $ | 395,519 | ||||
| Adjustments: | ||||||||
| Management and other fee income | 5,338 | 4,849 | ||||||
| General and administrative | (34,392 | ) | (36,298 | ) | ||||
| Impairment charges | (534 | ) | (3,701 | ) | ||||
| Merger charges | - | (25,246 | ) | |||||
| Depreciation and amortization | (158,453 | ) | (154,719 | ) | ||||
| Gain on sale of properties | 887 | 318 | ||||||
| Other income, net | 216 | 9,570 | ||||||
| Mortgage and other financing income, net | 11,269 | 2,519 | ||||||
| Loss on marketable securities, net | (9 | ) | (27,686 | ) | ||||
| Interest expense | (80,377 | ) | (74,565 | ) | ||||
| Provision for income taxes, net | (464 | ) | (72,010 | ) | ||||
| Equity in income of joint ventures, net | 22,683 | 20,905 | ||||||
| Equity in income of other investments, net | 701 | 1,534 | ||||||
| NOI from unconsolidated real estate joint ventures | (50,997 | ) | (50,027 | ) | ||||
| Net income/(loss) | $ | 134,503 | $ | (9,038 | ) |
KIMCO REALTY CORPORATION AND SUBSIDIARIES AND KIMCO REALTY OP, LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
- Earnings Per Share/Unit
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 March 31, | ||||||||
| 2025 | 2024 | |||||||
| Computation of Basic and Diluted Earnings Per Share: | ||||||||
| Net income/(loss) available to the Company's common shareholders | $ | 125,134 | $ | (18,916 | ) | |||
| Earnings attributable to participating securities | (604 | ) | (680 | ) | ||||
| Net income/(loss) available to the Company’s common shareholders for basic and diluted earnings per share | $ | 124,530 | $ | (19,596 | ) | |||
| Weighted average common shares outstanding – basic | 677,074 | 670,118 | ||||||
| Effect of dilutive securities (1): | ||||||||
| Equity awards | 178 | - | ||||||
| Assumed conversion of convertible units | 47 | - | ||||||
| Weighted average common shares outstanding – diluted | 677,299 | 670,118 | ||||||
| Net income/(loss) available to the Company's common shareholders: | ||||||||
| Basic earnings per share | $ | 0.18 | $ | (0.03 | ) | |||
| Diluted earnings per share | $ | 0.18 | $ | (0.03 | ) |
(1)
The effect of the assumed conversion of certain convertible units/preferred shares had an anti-dilutive effect upon the calculation of Net income/(loss) 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 March 31, | ||||||||
| 2025 | 2024 | |||||||
| Computation of Basic and Diluted Earnings Per Unit: | ||||||||
| Net income/(loss) available to Kimco OP’s common unitholders | $ | 125,345 | $ | (18,931 | ) | |||
| Earnings attributable to participating securities | (631 | ) | (680 | ) | ||||
| Net income/(loss) available to Kimco OP’s common unitholders for basic and diluted earnings per unit | $ | 124,714 | $ | (19,611 | ) | |||
| Weighted average common units outstanding – basic | 678,040 | 673,954 | ||||||
| Effect of dilutive securities (1): | ||||||||
| Unit awards | 178 | - | ||||||
| Assumed conversion of convertible units | 47 | - | ||||||
| Weighted average common units outstanding – diluted | 678,265 | 673,954 | ||||||
| Net income/(loss) available to Kimco OP’s common unitholders: | ||||||||
| Basic earnings per unit | $ | 0.18 | $ | (0.03 | ) | |||
| Diluted earnings per unit | $ | 0.18 | $ | (0.03 | ) |
(1)
The effect of the assumed conversion of certain convertible units/preferred units had an anti-dilutive effect upon the calculation of Net income/(loss) 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.
The Company’s unvested restricted share/unit awards contain non-forfeitable rights to distributions or distribution equivalents. The impact of the unvested restricted share/unit awards on earnings per share/unit has been calculated using the two-class method whereby earnings are allocated to the unvested restricted share/unit awards based on dividends declared and the unvested restricted shares/units’ participation rights in undistributed earnings.
Next: Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations