Kimco Realty® Announces Second Quarter 2022 Results

– Solid Operating Results Reaffirm Robust Demand for Quality Open-Air Retail Space –

– Company Updates 2022 Outlook –

– Board Raises Quarterly Common Dividend Third Consecutive Quarter; Up 29% Over Prior Year –

Kimco Realty® (NYSE: KIM), North America’s largest publicly traded owner and operator of open-air, grocery-anchored shopping centers, including mixed-use assets, today reported results for the second quarter ended June 30, 2022. For the three months ended June 30, 2022 and 2021, Kimco’s net (loss)/income available to the company’s common shareholders per diluted share was ($0.21) and $0.25, respectively.

Second Quarter Highlights:

• Produced Funds From Operations* (FFO) of $0.40 per diluted share, representing a 17.6% increase over the comparable period in 2021.
• Grew pro-rata portfolio occupancy 40 basis points sequentially to 95.1%, representing an increase of 120 basis points year-over-year.
• Increased pro-rata small shop occupancy 370 basis points over the second quarter of 2021, representing the largest year-over-year increase in over 10 years.
• Generated pro-rata leasing spreads of 16.6% for new leases on comparable spaces.
• Produced a 3.4% increase in Same-Property Net Operating Income* (NOI) over the same period a year ago.
• Subsequent to quarter end, published the company’s ninth annual Corporate Responsibility Report detailing performance in environmental, social, and governance (ESG) areas.

Kimco CEO Conor Flynn stated, “Our focus on leasing continues to validate the high quality of our portfolio, with over seven million square feet leased through the end of June. Our last-mile, open-air, grocery-anchored portfolio is facilitating higher retention, driving strong new tenant demand, and maintaining solid pricing power, even in the current inflationary environment, all of which should lead to greater free cashflow and visible earnings growth. With an emphasis on necessity-based goods and services, our portfolio is well-positioned in high-growth and affluent markets to serve the needs of consumers and retailers alike as we work to enhance shareholder value.”

Financial Results:

The company reported a net loss available to the company’s common shareholders of ($125.8) million, or ($0.21) per diluted share, for the second quarter of 2022. This compares to net income available to the company’s common shareholders of $110.3 million, or $0.25 per diluted share, for the second quarter of 2021. The year-over-year change is primarily attributable to a $285.8 million mark-to-market reduction on marketable securities mainly stemming from a change in the value of Albertsons Companies, Inc. (NYSE: ACI) common stock held by the company. Other items impacting the year-over-year change include an increase in consolidated revenues from rental properties of $137.5 million as well as higher depreciation and amortization expense of $52.0 million, both of which were due in part to the merger with Weingarten Realty Investors (Weingarten) in August of 2021.

*Reconciliations of net (loss)/income available to the company’s common shareholders to certain non-GAAP measures including FFO, Same-property NOI and Net Debt to EBITDA are provided in the tables accompanying this press release.

FFO was $246.4 million, or $0.40 per diluted share, for the second quarter 2022 compared to $148.8 million, or $0.34 per diluted share, for the second quarter 2021, which includes $3.2 million, or $0.01 per diluted share, of merger related costs.

Operating Results:

• Pro-rata portfolio occupancy ended the quarter at 95.1%, an increase of 40 basis points sequentially and 120 basis points year-over-year. The improvement in portfolio occupancy was driven by positive net absorption including the lowest level of vacates (by GLA) during a quarter in over 10 years.
• Pro-rata anchor occupancy ended the quarter at 97.6%, an increase of 30 basis points sequentially and 70 basis points year-over-year.
• Pro-rata small shop occupancy expanded 80 basis points sequentially and 370 basis points year-over-year to 89.2%.
• Signed 498 leases totaling 2.3 million square feet with blended pro-rata rental-rate spreads on comparable spaces increasing 7.1%, and with rental rates for new leases up 16.6% and renewals and options growing 5.6%.
• Reported a 290-basis-point spread between leased (reported) occupancy versus economic occupancy at the end of the second quarter, representing $44 million of future rent.
• Produced 3.4% growth in Same-Property Net Operating Income (NOI) over the same period a year ago, driven by a 4.7% increase in minimum rent.

Transaction Activities:

• Sold four shopping centers and four land parcels totaling 1.1 million square feet for $221.6 million. The company’s pro-rata share of the sales price was $100.3 million.
• Acquired three previously unowned parcels that are part of the company’s existing grocery-anchored centers for a gross purchase price of $6.3 million. Kimco’s share of the purchase price was $5.6 million. In addition, the company acquired an additional 3.58% ownership interest in the Kimco Income REIT (KIR) joint venture from existing partners for $55.1 million. Kimco’s interest in KIR is now 52.1%.
• Provided a total of $50.1 million in mezzanine financing on three different shopping centers with Kimco gaining either a right of first offer or right of first refusal in the event of a future sale of these assets.
• Subsequent to quarter end, acquired two grocery-anchored centers located in Philadelphia, Pennsylvania and Massapequa, New York totaling 329,000 square feet for $89.0 million in aggregate. In addition, the company acquired the fee interest at Pike Center in Rockville, MD for a purchase price of $21.2 million.

Capital Market Activities:

• Generated net proceeds of $11.3 million through the issuance of approximately 450,000 shares of common stock through the company’s “At the Market” (ATM) program at a weighted average price of $25.30 per share during the second quarter.
• Ended the quarter with a Net Debt to EBITDA* level of 6.4x on a look-through basis, which includes outstanding preferred stock and the company’s pro-rata share of joint venture debt, equaling the lowest reported leverage level since the company began reporting this metric.
• Ended the second quarter with approximately $2.3 billion of immediate liquidity, including full availability under the company’s $2.0 billion unsecured revolving credit facility, and $297 million of cash and cash equivalents on the balance sheet. In addition, Kimco maintains ACI common stock valued at over $1.0 billion, subject to certain lock-up provisions until September 10, 2022.

Dividend Declarations:

• Kimco’s board of directors declared a cash dividend of $0.22 per common share, representing a 10% increase from the prior quarterly dividend and 29.4% over the corresponding period of the prior year. The quarterly cash dividend on common shares, which is based on projected REIT taxable income, is payable on September 23, 2022 to shareholders of record on September 9, 2022.
• The board of directors also declared quarterly dividends with respect to each of the company’s Class L and Class M series of cumulative redeemable preferred shares. These dividends on the preferred shares will be paid on October 17, 2022 to shareholders of record on October 3, 2022.

2022 Full Year Outlook:

Based on these results and the outlook for the remainder of 2022, the company has revised its full-year guidance ranges as follows:

*The tables accompanying this press release provide a reconciliation for this forward-looking non-GAAP measure.

Conference Call Information

When: 8:30 AM ET, July 28, 2022

Live Webcast: 2Q22 Kimco Realty Earnings Conference Call or on Kimco Realty’s website investors.kimcorealty.com (replay available through October 27, 2022)

Dial #: 1-877-407-0784 (International: 1-201-689-8560)

About Kimco Realty®

Kimco Realty® (NYSE:KIM) is a real estate investment trust (REIT) headquartered in Jericho, N.Y. that is North America’s largest publicly traded owner and operator of open-air, grocery-anchored shopping centers, including mixed-use assets. The company’s portfolio is primarily concentrated in the first-ring suburbs of the top major metropolitan markets, including those in high-barrier-to-entry coastal markets and rapidly expanding Sun Belt cities, with a tenant mix focused on essential, necessity-based goods and services that drive multiple shopping trips per week. Kimco Realty is also committed to leadership in environmental, social and governance (ESG) issues and is a recognized industry leader in these areas. 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. As of June 30, 2022, the company owned interests in 533 U.S. shopping centers and mixed-use assets comprising 92 million square feet of gross leasable space. For further information, please visit www.kimcorealty.com.

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), YouTube (www.youtube.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, and Section 21E of the Securities Exchange Act of 1934, as amended. 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,” “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 inability of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or a general downturn in their business, (iii) 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, (iv) the availability of suitable acquisition, disposition, development and redevelopment opportunities, and risks related to acquisitions not performing in accordance with our expectations, (v) the Company’s ability to raise capital by selling its assets, (vi) increases in operating costs due to inflation and supply chain issues, (vii) 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 following the merger between Kimco and Weingarten Realty Investors (the “Merger”), (viii) the possibility that, if the Company does not achieve the perceived benefits of the Merger as rapidly or to the extent anticipated by financial analysts or investors, the market price of the Company’s common stock could decline, (ix) 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, (x) valuation and risks related to the Company’s joint venture and preferred equity investments, (xi) valuation of marketable securities and other investments, including the shares of Albertsons Companies, Inc. common stock held by the Company, (xii) impairment charges, (xiii) pandemics or other health crises, such as coronavirus disease 2019 (“COVID-19”), (xiv) financing risks, such as the inability to obtain equity, debt or other sources of financing or refinancing on favorable terms to the Company, (xv) the level and volatility of interest rates and management’s ability to estimate the impact thereof, (xvi) changes in the dividend policy for the Company’s common and preferred stock and the Company’s ability to pay dividends at current levels, (xvii) unanticipated changes in the Company’s intention or ability to prepay certain debt prior to maturity and/or hold certain securities until maturity, and (xviii) the other risks and uncertainties identified under Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year-ended December 31, 2021. 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 the Company’s Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that the Company files with the Securities and Exchange Commission (“SEC”).

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