Bay Street News

Kimco Realty® Announces Third Quarter 2024 Results

– Portfolio Occupancy Matches All-Time High –

– Board Increases Quarterly Cash Dividend on Common Shares by 4.2% –

– Raises 2024 Outlook –

JERICHO, N.Y., Oct. 31, 2024 (GLOBE NEWSWIRE) — Kimco Realty® (NYSE: KIM), a real estate investment trust (REIT) and leading owner and operator of high-quality, open-air, grocery-anchored shopping centers and mixed-use properties in the United States, today reported results for the third quarter ended September 30, 2024. For the three months ended September 30, 2024 and 2023, Kimco Realty’s net income available to the company’s common shareholders per diluted share was $0.19 and $0.18, respectively.

Third Quarter Highlights

“The ongoing positive supply and demand fundamentals in both the open-air sector and Kimco’s portfolio continue to be a cause for optimism and confidence,” stated Conor Flynn, CEO of Kimco. “Our high-quality, grocery-anchored properties continue to deliver outsized growth, record occupancy and advantageous pricing power. Moreover, our recent acquisition of the Waterford Lakes Town Center in Orlando positions us to be a net acquirer in 2024. With a favorable environment, best in class platform and a rock-solid balance sheet, we are again raising our financial outlook for the year.”

*Reconciliations of non-GAAP measures to the most directly comparable GAAP measure are provided in the tables accompanying this press release.

Financial Results

Net income available to the company’s common shareholders (“Net income”) for the third quarter of 2024 was $128.0 million, or $0.19 per diluted share, compared to $112.0 million, or $0.18 per diluted share, for the third quarter of 2023. This 5.6% increase per diluted share is primarily attributable to:

Other notable items impacting the year-over-year change include:

FFO was $287.4 million, or $0.43 per diluted share, for the third quarter of 2024, compared to $248.6 million, or $0.40 per diluted share, for the third quarter of 2023. The company excludes from FFO all realized or unrealized marketable securities/derivatives gains and losses, as well as gains and losses from the sales of properties, depreciation and amortization related to real estate, profit participations from other investments, and other items considered incidental to the company’s business.

Operating Results

Investment & Disposition Activities

Capital Market Activities

Dividend Declarations

2024 Full Year Outlook

The company has raised its 2024 outlook for Net income and FFO per diluted share as follows:

  Current Previous
Net income: $0.50 to $0.51 $0.44 to $0.46
FFO: $1.64 to $1.65 $1.60 to $1.62

The company has also updated the assumptions that support its full year outlook for Net income and FFO in the following table (Pro-rata share; dollars in millions):

2024 Guidance Assumptions YTD @ 09.30.24 Current Previous
Total acquisitions & structured investments combined:
  • Cap rate (blended)
$572** $565 to $625
  • 8.00% to 8.25%
$300 to $350
  • 7.0% to 8.0%
Dispositions:
  • Cap rate (blended)
$256 $250 to $300
  • 8.25% to 8.50%
$300 to $350
  • 8.25% to 8.50%
Same Property NOI growth (inclusive of RPT) 3.3% 3.25% + 2.75% to 3.25%
Credit loss as a % of total pro-rata rental revenues (0.73%) (0.75%) to (1.00%) (0.75%) to (1.00%)
RPT-related non-cash GAAP income (above & below market rents and straight-line rents) $4 $5 to $6 $4 to $5
RPT-related cost saving synergies included in G&A Only showing full year impact $35 to $36 $35 to $36
Lease termination income $3 $3 to $4 $2 to $4
Interest income – Other income (attributable to cash on balance sheet) $16 $20 to $22 $13 to $15
Capital expenditures (tenant improvements, landlord work and leasing commissions) $201 $225 to $275 $225 to $275

**Includes the purchase of Waterford Lakes Town Center which occurred on October 1, 2024.

Conference Call Information

About Kimco Realty®

Kimco Realty® (NYSE: KIM) is a real estate investment trust (REIT) and 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 strategically concentrated in the first-ring suburbs of the top major metropolitan markets, including high-barrier-to-entry coastal markets and rapidly expanding Sun Belt cities. Its tenant mix is focused on essential, necessity-based goods and services that drive multiple shopping trips per week. Publicly traded on the NYSE since 1991 and included in the S&P 500 Index, the company has specialized in shopping center ownership, management, acquisitions, and value-enhancing redevelopment activities for more than 60 years. With a proven commitment to corporate responsibility, Kimco Realty is a recognized industry leader in this area. As of September 30, 2024, the company owned interests in 567 U.S. shopping centers and mixed-use assets comprising 101 million square feet of gross leasable space.

The company announces material information to its investors using the company’s investor relations website (investors.kimcorealty.com), SEC filings, press releases, public conference calls, and webcasts. The company also uses social media to communicate with its investors and the public, and the information the company posts on social media may be deemed material information. Therefore, the company encourages investors, the media, and others interested in the company to review the information that it posts on the social media channels, including Facebook (www.facebook.com/kimcorealty), Twitter (www.twitter.com/kimcorealty) and LinkedIn (www.linkedin.com/company/kimco-realty-corporation). The list of social media channels that the company uses may be updated on its investor relations website from time to time.

Safe Harbor Statement

This communication contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with the safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe the Company’s future plans, strategies and expectations, are generally identifiable by use of the words “believe,” “expect,” “intend,” “commit,” “anticipate,” “estimate,” “project,” “will,” “target,” “plan,” “forecast” or similar expressions. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which, in some cases, are beyond the Company’s control and could materially affect actual results, performances or achievements. Factors which may cause actual results to differ materially from current expectations include, but are not limited to, (i) general adverse economic and local real estate conditions, (ii) the impact of competition, including the availability of acquisition or development opportunities and the costs associated with purchasing and maintaining assets; (iii) the inability of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or a general downturn in their business, (iv) the reduction in the Company’s income in the event of multiple lease terminations by tenants or a failure of multiple tenants to occupy their premises in a shopping center, (v) the potential impact of e-commerce and other changes in consumer buying practices, and changing trends in the retail industry and perceptions by retailers or shoppers, including safety and convenience, (vi) the availability of suitable acquisition, disposition, development and redevelopment opportunities, and the costs associated with purchasing and maintaining assets and risks related to acquisitions not performing in accordance with our expectations, (vii) the Company’s ability to raise capital by selling its assets, (viii) disruptions and increases in operating costs due to inflation and supply chain disruptions, (ix) risks associated with the development of mixed-use commercial properties, including risks associated with the development, and ownership of non-retail real estate, (x) changes in governmental laws and regulations, including, but not limited to, changes in data privacy, environmental (including climate change), safety and health laws, and management’s ability to estimate the impact of such changes, (xi) the Company’s failure to realize the expected benefits of the merger with RPT Realty (the “RPT Merger”), (xii) the risk of litigation, including shareholder litigation, in connection with the RPT Merger, including any resulting expense, (xiii) risks related to future opportunities and plans for the combined company, including the uncertainty of expected future financial performance and results of the combined company, (xiv) the possibility that, if the Company does not achieve the perceived benefits of the RPT Merger as rapidly or to the extent anticipated by financial analysts or investors, the market price of the Company’s common stock could decline, (xv) valuation and risks related to the Company’s joint venture and preferred equity investments and other investments, (xvi) collectability of mortgage and other financing receivables, (xvii) impairment charges, (xviii) criminal cybersecurity attacks, disruption, data loss or other security incidents and breaches, (xix) risks related to artificial intelligence, (xx) impact of natural disasters and weather and climate-related events, (xxi) pandemics or other health crises, (xxii) our ability to attract, retain and motivate key personnel, (xxiii) financing risks, such as the inability to obtain equity, debt or other sources of financing or refinancing on favorable terms to the Company, (xxiv) the level and volatility of interest rates and management’s ability to estimate the impact thereof, (xxv) changes in the dividend policy for the Company’s common and preferred stock and the Company’s ability to pay dividends at current levels, (xxvi) unanticipated changes in the Company’s intention or ability to prepay certain debt prior to maturity and/or hold certain securities until maturity, (xxvii) the Company’s ability to continue to maintain its status as a REIT for U.S. federal income tax purposes and potential risks and uncertainties in connection with its UPREIT structure, and (xxviii) other risks and uncertainties identified under Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023. Accordingly, there is no assurance that the Company’s expectations will be realized. The Company disclaims any intention or obligation to update the forward-looking statements, whether as a result of new information, future events or otherwise. You are advised to refer to any further disclosures the Company makes in other filings with the Securities and Exchange Commission (“SEC”).

CONTACT:
David F. Bujnicki
Senior Vice President, Investor Relations and Strategy
Kimco Realty Corporation
(833) 800-4343
dbujnicki@kimcorealty.com

 
Condensed Consolidated Balance Sheets
(in thousands, except share data)
(unaudited)
         
    September 30, 2024   December 31, 2023
Assets:      
  Real estate, net of accumulated depreciation and amortization      
  of $4,225,563 and $3,842,869, respectively $ 16,515,749     $ 15,094,925  
  Investments in and advances to real estate joint ventures   1,492,211       1,087,804  
  Other investments   106,513       144,089  
  Cash, cash equivalents and restricted cash   790,044       783,757  
  Marketable securities   2,355       330,057  
  Accounts and notes receivable, net   320,361       307,617  
  Operating lease right-of-use assets, net   130,914       128,258  
  Other assets   770,849       397,515  
Total assets $ 20,128,996     $ 18,274,022  
         
Liabilities:      
  Notes payable, net $ 7,966,940     $ 7,262,851  
  Mortgages payable, net   335,275       353,945  
  Accounts payable and accrued expenses   309,272       216,237  
  Dividends payable   6,722       5,308  
  Operating lease liabilities   121,417       109,985  
  Other liabilities   646,619       599,961  
Total liabilities   9,386,245       8,548,287  
Redeemable noncontrolling interests   73,688       72,277  
         
Stockholders’ Equity:      
  Preferred stock, $1.00 par value, authorized 7,054,000 shares;      
  Issued and outstanding (in series) 21,216 and 19,367 shares, respectively;      
  Aggregate liquidation preference $576,602 and $484,179, respectively   21       19  
  Common stock, $.01 par value, authorized 1,500,000,000 and 750,000,000 shares,      
  respectively; issued and outstanding 674,082,065 and 619,871,237 shares, respectively   6,741       6,199  
  Paid-in capital   10,917,003       9,638,494  
  Cumulative distributions in excess of net income   (387,067 )     (122,576 )
  Accumulated other comprehensive (loss)/income   (13,485 )     3,329  
Total stockholders’ equity   10,523,213       9,525,465  
  Noncontrolling interests   145,850       127,993  
Total equity   10,669,063       9,653,458  
Total liabilities and equity $ 20,128,996     $ 18,274,022  
         
 
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
               
  Three Months Ended September 30,   Nine Months Ended September 30,
    2024       2023       2024       2023  
Revenues              
Revenues from rental properties, net $ 502,875     $ 441,816     $ 1,498,001     $ 1,319,162  
Management and other fee income   4,757       4,249       13,616       12,635  
Total revenues   507,632       446,065       1,511,617       1,331,797  
Operating expenses              
Rent   (4,239 )     (3,939 )     (12,744 )     (12,097 )
Real estate taxes   (64,996 )     (57,875 )     (194,538 )     (173,002 )
Operating and maintenance   (88,744 )     (76,604 )     (262,267 )     (226,919 )
General and administrative   (33,850 )     (33,697 )     (103,238 )     (101,180 )
Impairment charges   (375 )     (2,237 )     (4,277 )     (14,043 )
Merger charges         (3,750 )     (25,246 )     (3,750 )
Depreciation and amortization   (144,688 )     (127,437 )     (447,555 )     (382,983 )
Total operating expenses   (336,892 )     (305,539 )     (1,049,865 )     (913,974 )
               
Gain on sale of properties   551             944       52,376  
Operating income   171,291       140,526       462,696       470,199  
               
Other income/(expense)              
Special dividend income                     194,116  
Other income, net   22,203       8,377       39,953       19,080  
Gain/(loss) on marketable securities, net   79       13,225       (27,613 )     17,642  
Interest expense   (76,216 )     (60,424 )     (224,122 )     (182,404 )
Income before income taxes, net, equity in income of joint ventures, net,              
and equity in income from other investments, net   117,357       101,704       250,914       518,633  
               
(Provision)/benefit for income taxes, net   (128 )     729       (72,355 )     (61,127 )
Equity in income of joint ventures, net   20,981       16,257       63,413       57,589  
Equity in income of other investments, net   216       2,100       9,468       8,741  
               
Net income   138,426       120,790       251,440       523,836  
Net income attributable to noncontrolling interests   (2,443 )     (2,551 )     (6,693 )     (9,208 )
Net income attributable to the company   135,983       118,239       244,747       514,628  
Preferred dividends, net   (7,961 )     (6,285 )     (23,864 )     (18,736 )
Net income available to the company’s common shareholders $ 128,022     $ 111,954     $ 220,883     $ 495,892  
               
Per common share:              
Net income available to the company’s common shareholders: (1)              
Basic $ 0.19     $ 0.18     $ 0.32     $ 0.80  
Diluted (2) $ 0.19     $ 0.18     $ 0.32     $ 0.80  
Weighted average shares:              
Basic   671,231       617,090       670,851       616,888  
Diluted   671,577       617,271       671,096       619,495  
               
(1) Adjusted for earnings attributable to participating securities of ($687) and ($641) for the three months ended September 30, 2024 and 2023, respectively. Adjusted for earnings attributable to participating securities of ($2,066) and ($2,460) for the nine months ended September 30, 2024 and 2023, respectively.
 
(2) Reflects the potential impact if certain units were converted to common stock at the beginning of the period. The impact of the conversion would have an antidilutive effect on net income and therefore have not been included. Adjusted for distributions on convertible units of $1,919 for the nine months ended September 30, 2023.
 
 
Reconciliation of Net Income Available to the Company’s Common Shareholders
to FFO Available to the Company’s Common Shareholders (1)
(in thousands, except per share data)
(unaudited)
                 
    Three Months Ended September 30,   Nine Months Ended September 30,
      2024       2023       2024       2023  
Net income available to the company’s common shareholders $ 128,022     $ 111,954     $ 220,883     $ 495,892  
  Gain on sale of properties   (551 )           (944 )     (52,376 )
  Gain on sale of joint venture properties   (7 )     (1,130 )     (1,501 )     (9,020 )
  Depreciation and amortization – real estate related   143,482       126,291       443,836       379,294  
  Depreciation and amortization – real estate joint ventures   21,218       16,244       64,161       48,390  
  Impairment charges (including real estate joint ventures)   375       2,237       8,778       14,040  
  Profit participation from other investments, net   377       479       (5,299 )     (2,282 )
  Special dividend income                     (194,116 )
  (Gain)/loss on marketable securities/derivative, net   (4,849 )     (6,225 )     25,922       (10,642 )
  Provision/(benefit) for income taxes, net (2)   59       (669 )     71,706       61,463  
  Noncontrolling interests (2)   (738 )     (575 )     (2,367 )     (68 )
FFO available to the company’s common shareholders (4) $ 287,388     $ 248,606     $ 825,175     $ 730,575  
                 
Weighted average shares outstanding for FFO calculations:              
  Basic   671,231       617,090       670,851       616,888  
  Units   3,293       2,562       3,245       2,555  
  Convertible preferred shares   4,265             4,265        
  Dilutive effect of equity awards   289       124       193       129  
  Diluted   679,078       619,776       678,554       619,572  
                 
  FFO per common share – basic $ 0.43     $ 0.40     $ 1.23     $ 1.18  
  FFO per common share – diluted (3) $ 0.43     $ 0.40     $ 1.23     $ 1.18  
                 
                 
(1) The company considers FFO to be an important supplemental measure of its operating performance and believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting results. Comparison of the company’s presentation of FFO to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in the application of the Nareit definition used by such REITs.
   
(2) Related to gains, impairments, depreciation on properties, gains/(losses) on sales of marketable securities and derivatives, where applicable.
   
(3) Reflects the potential impact of convertible preferred shares and certain units if converted to common stock at the beginning of the period. FFO available to the company’s common shareholders would be increased by $2,464 and $584 for the three months ended September 30, 2024 and 2023, respectively. FFO available to the company’s common shareholders would be increased by $7,370 and $1,752 for the nine months ended September 30, 2024 and 2023, respectively. The effect of other certain convertible securities would have an anti-dilutive effect upon the calculation of FFO available to the company’s common shareholders per share. Accordingly, the impact of such conversion has not been included in the determination of diluted FFO per share calculations.
   
(4) Includes merger-related charges of $25.2 million ($0.04 per share, on a diluted basis) for the nine months ended September 30, 2024. Includes merger-related charges of $3.8 million for both the three and nine months ended September 30, 2023. In addition, includes income related to the liquidation of the pension plan of $4.8 million, net and $5.0 million, net for the three and nine months ended September 30, 2023, respectively.
 
 
Reconciliation of Net Income Available to the Company’s Common Shareholders
to Same Property NOI (1)(2)
(in thousands)
(unaudited)
                 
    Three Months Ended September 30,   Nine Months Ended September 30,
      2024       2023       2024       2023  
Net income available to the company’s common shareholders $ 128,022     $ 111,954     $ 220,883     $ 495,892  
Adjustments:              
  Management and other fee income   (4,757 )     (4,249 )     (13,616 )     (12,635 )
  General and administrative   33,850       33,697       103,238       101,180  
  Impairment charges   375       2,237       4,277       14,043  
  Merger charges         3,750       25,246       3,750  
  Depreciation and amortization   144,688       127,437       447,555       382,983  
  Gain on sale of properties   (551 )           (944 )     (52,376 )
  Special dividend income                     (194,116 )
  Interest expense and other income, net   54,013       52,047       184,169       163,324  
  (Gain)/loss on marketable securities, net   (79 )     (13,225 )     27,613       (17,642 )
  Provision/(benefit) for income taxes, net   128       (729 )     72,355       61,127  
  Equity in income of other investments, net   (216 )     (2,100 )     (9,468 )     (8,741 )
  Net income attributable to noncontrolling interests   2,443       2,551       6,693       9,208  
  Preferred dividends, net   7,961       6,285       23,864       18,736  
  RPT same property NOI (3)         42,893       610       121,761  
  Non same property net operating income   (10,664 )     (14,368 )     (36,620 )     (43,209 )
  Non-operational expense from joint ventures, net   28,231       23,106       85,629       61,911  
Same Property NOI $ 383,444     $ 371,286     $ 1,141,484     $ 1,105,196  
                 
(1) The company considers Same Property NOI as an important operating performance measure because it is frequently used by securities analysts and investors to measure only the net operating income of properties that have been owned by the company for the entire current and prior year reporting periods. It excludes properties under redevelopment, development and pending stabilization; properties are deemed stabilized at the earlier of (i) reaching 90% leased or (ii) one year following a project’s inclusion in operating real estate. Same Property NOI assists in eliminating disparities in net income due to the development, acquisition or disposition of properties during the particular period presented, and thus provides a more consistent performance measure for the comparison of the company’s properties. The company’s method of calculating Same Property NOI may differ from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
                 
(2) Amounts represent Kimco Realty’s pro-rata share.
                 
(3) Amounts for the respective periods, represent the Same property NOI from RPT properties, not included in the Company’s Net income available to the Company’s common shareholders.
                 
 
Reconciliation of the Projected Range of Net Income Available to the Company’s Common Shareholders
to Funds From Operations Available to the Company’s Common Shareholders
(unaudited, all amounts shown are per diluted share)
         
    Projected Range
    Full Year 2024
    Low   High
Net income available to the company’s common shareholders $ 0.50     $ 0.51  
         
Gain on sale of properties         (0.01 )
         
Gain on sale of joint venture properties         (0.01 )
         
Depreciation & amortization – real estate related   0.87       0.88  
         
Depreciation & amortization – real estate joint ventures   0.12       0.13  
         
Impairment charges (including real estate joint ventures)   0.01       0.01  
         
Profit participation from other investments, net   (0.01 )     (0.01 )
         
Loss on marketable securities, net   0.04       0.04  
         
Provision for income taxes   0.11       0.11  
         
FFO available to the company’s common shareholders $ 1.64     $ 1.65  
         
Merger Cost Adjustment   0.04       0.04  
         
FFO Excluding Merger Costs $ 1.68     $ 1.69  
         
         
Projections involve numerous assumptions such as rental income (including assumptions on percentage rent), interest rates, tenant defaults, occupancy rates, selling prices of properties held for disposition, expenses (including salaries and employee costs), insurance costs and numerous other factors. Not all of these factors are determinable at this time and actual results may vary from the projected results, and may be above or below the range indicated. The above range represents management’s estimate of results based upon these assumptions as of the date of this press release.
 


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