Kimco Realty Corporation — FY 2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. This is an annual report, not a standalone fourth-quarter filing. It reports the predecessor’s 2022 business; the company reorganized as an UPREIT in January 2023, with substantially all operations subsequently conducted through Kimco Realty OP, LLC.
Business context and portfolio
Kimco owns and operates open-air, primarily grocery-anchored shopping centers and mixed-use properties. At year-end, it had interests in 532 shopping center properties totaling 90.8 million square feet across 28 states, plus 23 other property interests. The combined shopping center portfolio was 95.7% leased; the consolidated operating portfolio was 95.5% leased, up from 94.2% at year-end 2021. The company generated 85% of annualized base rent from its 19 targeted major metropolitan markets.
Financial and operating performance
| Metric | FY 2022 | FY 2021 |
|---|---|---|
| Total revenue | $1.728 billion | $1.365 billion |
| Net income available to common shareholders | $100.8 million; $0.16 diluted share | $818.6 million; $1.60 diluted share |
| FFO available to common shareholders (non-GAAP) | $976.4 million; $1.58 diluted share | $706.8 million; $1.38 diluted share |
| Same-property NOI (non-GAAP) | $1.264 billion; up 4.4% | $1.211 billion |
| Cash from operating activities | $861.1 million | $618.9 million |
| Cash and cash equivalents at year-end | $149.8 million | $334.7 million |
| Common dividend per share | $0.84 | $0.68 |
FY 2021 includes only five months of Weingarten’s operations following the August 2021 merger, so year-over-year revenue and cash-flow comparisons reflect portfolio growth and a longer period of acquired operations. The sharp decline in GAAP earnings principally reflects the reversal from a $505.2 million gain to a $315.5 million loss on marketable securities, mainly ACI shares, along with higher taxes and impairments. FFO and same-property NOI improved. The filing does not provide a directly comparable conventional operating margin measure.
Debt, liquidity and capital allocation
- Consolidated debt was approximately $7.16 billion at year-end, comprising $6.78 billion of notes payable and $376.9 million of mortgages payable. Weighted-average debt interest rate was 3.49%; weighted-average maturity was 9.5 years.
- Immediate liquidity was $2.1 billion, including $149.8 million of cash. The $2.0 billion revolving credit facility had no outstanding balance at December 31, 2022. A replacement $2.0 billion facility closed in February 2023, extending scheduled maturity to March 2027, with extension options through March 2028.
- Operating cash flow rose to $861.1 million. Investing activities used $63.2 million and financing activities used $982.7 million; year-end cash declined by $184.8 million.
- Issued $1.25 billion of senior notes at 3.20% and 4.60%, and repaid $1.4 billion of notes. Debt covenants were met. Unconsolidated joint venture debt of $1.38 billion is separate from consolidated debt.
- Paid $544.7 million of dividends in 2022. The board declared a quarterly common dividend of $0.23 per share in February 2023. Future dividends remain subject to board discretion and operating and capital requirements.
Changes, outlook and notable items
- Same-property NOI increased 4.4% for the year, which management attributed mainly to leasing activity and lower rent abatements and vacancies as COVID-19 effects diminished; higher tenant credit losses partly offset growth. Average base rent per leased square foot in the consolidated portfolio increased from $19.05 to $19.60.
- 2022 activity included $524.9 million of acquisitions, $191.1 million of property and parcel dispositions, and $193.7 million of operating real estate improvements. Management anticipated 2023 acquisitions of $125–$250 million and redevelopment and re-tenanting commitments of $175–$225 million.
- Kimco sold 11.5 million ACI shares for net proceeds of $301.1 million and retained the proceeds for general corporate purposes, paying $57.2 million in corporate and state taxes on the taxable gain. It held 28.3 million ACI shares valued at $587.7 million at year-end, subject to lock-up provisions expiring in May 2023.
- ACI’s $6.85-per-share special dividend was not recognized in 2022 because of litigation. After the restraint was lifted, Kimco received $194.1 million in January 2023 and expected to recognize the income in first-quarter 2023.
- Management identified inflation, rising interest rates, supply-chain and labor constraints, slower growth or recession, e-commerce, tenant credit and leasing risk, and potential property impairments as factors that could pressure costs, rents, occupancy, asset values and financing.
- In February 2023, Kimco reported a ransomware attack involving archival data on legacy Weingarten servers separate from Kimco’s network. The company said the incident was not expected to materially affect operations or financial results; it initiated containment, investigation and recovery measures.
- There is no formal earnings or FFO guidance in the provided filing text. The quantified 2023 acquisition and redevelopment plans are spending expectations, not earnings guidance.
Investor verification priorities
- Reconcile the GAAP earnings decline with ACI mark-to-market losses, taxes, and nonrecurring items; assess FFO and same-property NOI as supplemental, non-GAAP measures.
- Review ACI share value, remaining lock-up, merger/regulatory developments, and the timing and accounting for the $194.1 million special dividend.
- Check leasing trends, occupancy, rent spreads, tenant credit losses and upcoming lease expirations against the company’s stated growth assumptions.
- Evaluate debt maturities, refinancing costs, joint venture and preferred-equity exposures, covenant headroom, and the adequacy of liquidity for planned acquisitions and redevelopment.
- Monitor delivery, cost and leasing risks in redevelopment and mixed-use projects, alongside the status of the 2023 capital plans.
- Follow updates on the UPREIT structure and the February 2023 cybersecurity incident; the filing reports no material impact expected from the incident.