[Earnings Press Release](index=3&type=section&id=Earnings%20Press%20Release) [First Quarter 2024 Operating Results](index=3&type=section&id=First%20Quarter%202024%20Operating%20Results) Kite Realty Group Trust reported strong Q1 2024 results, with net income increasing to $14.2 million and FFO at $0.50 per diluted share, raising full-year guidance Q1 2024 Key Financial Metrics | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Income Attributable to Common Shareholders | $14.2 million | $5.4 million | | Net Income per Diluted Share | $0.06 | $0.02 | | NAREIT FFO of the Operating Partnership | $112.8 million | - | | NAREIT FFO per Diluted Share | $0.50 | - | | Same Property NOI Increase | 1.8% | - | - Executed **185** new and renewal leases totaling approximately **1.0 million square feet**[8](index=8&type=chunk) - Achieved blended cash leasing spreads of **12.8%** on comparable leases, with new leases at **48.1%**[8](index=8&type=chunk) - The retail portfolio's leased percentage increased by **10 basis points** sequentially to **94.0%**[8](index=8&type=chunk) - Received a corporate credit rating upgrade to **Baa2** from Baa3 by Moody's Investors Service and a 'Positive' outlook revision from Fitch Ratings[8](index=8&type=chunk)[9](index=9&type=chunk) - Net debt to Adjusted EBITDA stood at **5.1x** as of March 31, 2024[8](index=8&type=chunk) [Dividend](index=4&type=section&id=Dividend) The Board of Trustees declared a Q2 2024 dividend of $0.25 per common share, a 4.2% increase year-over-year, payable July 16, 2024 - Declared a Q2 2024 dividend of **$0.25 per common share**, a **4.2%** year-over-year increase[10](index=10&type=chunk) [2024 Earnings Guidance](index=4&type=section&id=2024%20Earnings%20Guidance) The company raised its 2024 NAREIT FFO guidance to $2.02-$2.08 per diluted share, based on improved Same Property NOI growth and lower bad debt assumption Updated 2024 NAREIT FFO Guidance (per diluted share) | Guidance | Low | High | | :--- | :--- | :--- | | Net income | $0.30 | $0.36 | | Depreciation and amortization | $1.73 | $1.73 | | Realized gains/losses on sales, net | ($0.01) | ($0.01) | | **NAREIT FFO** | **$2.02** | **$2.08** | - Raised 2024 Same Property NOI growth guidance to a range of **1.5% to 2.5%**, a **50-basis point** increase at the midpoint[14](index=14&type=chunk) - Decreased full-year bad debt assumption to **0.55% to 1.05%** of total revenues, a **20-basis point** decrease at the midpoint[14](index=14&type=chunk) [Results Overview](index=7&type=section&id=Results%20Overview) This section provides a comprehensive snapshot of KRG's financial and operational performance for Q1 2024, highlighting key metrics and updated guidance [Summary Financial Results and Ratios](index=7&type=section&id=Summary%20Financial%20Results%20and%20Ratios) In Q1 2024, KRG generated $207.4 million in revenue and $14.2 million net income, with NAREIT FFO at $0.50 per diluted share and Same Property NOI growth of 1.8% Q1 2024 Financial Highlights | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total Revenue | $207,439 thousand | $206,750 thousand | | Net Income Attributable to Common Shareholders | $14,156 thousand | $5,391 thousand | | NAREIT FFO per Diluted Share | $0.50 | $0.51 | | Same Property NOI Performance | 1.8% | 6.5% | - Net debt to Adjusted EBITDA was **5.1x**, consistent with the previous two quarters but down from **5.3x** in Q1 2023[21](index=21&type=chunk) [Summary Portfolio Statistics](index=7&type=section&id=Summary%20Portfolio%20Statistics) As of Q1 2024, KRG's portfolio comprised 180 retail properties, 94.0% leased, with ABR per square foot at $20.84 and a 12.8% blended cash rent spread Q1 2024 Portfolio and Leasing Metrics | Metric | Q1 2024 | | :--- | :--- | | Operating Retail Properties | 180 | | Owned Retail Operating GLA | 28.1 M sq. ft. | | Percent Leased – Retail | 94.0% | | ABR per Square Foot | $20.84 | | Total New and Renewal Lease Cash Rent Spread | 12.8% | - On January 31, 2024, a joint venture sold the **267-unit Glendale Center Apartments** property[22](index=22&type=chunk) [Consolidated Financial Statements](index=8&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2024, KRG's total assets increased to $7.2 billion, primarily due to higher indebtedness, while total equity slightly decreased to $3.53 billion Balance Sheet Summary (in thousands) | Account | March 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Net Investment Properties | $6,305,657 | $6,358,291 | | Cash and Cash Equivalents | $83,579 | $36,413 | | Total Assets | $7,204,494 | $6,944,078 | | Mortgage and Other Indebtedness, net | $3,167,513 | $2,829,202 | | Total Liabilities | $3,598,072 | $3,300,223 | | Total Equity | $3,532,709 | $3,570,568 | [Consolidated Statements of Operations](index=9&type=section&id=Consolidated%20Statements%20of%20Operations) For Q1 2024, KRG reported total revenues of $207.4 million, with net income attributable to common shareholders significantly rising to $14.2 million ($0.06 per share) Statement of Operations Summary (in thousands) | Account | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total Revenue | $207,439 | $206,750 | | Operating Income | $39,425 | $30,798 | | Interest Expense | ($30,364) | ($25,425) | | Gain on sale of unconsolidated property, net | $2,325 | $— | | Net Income Attributable to Common Shareholders | $14,156 | $5,391 | | Net Income per Diluted Share | $0.06 | $0.02 | [NOI and EBITDA Analysis](index=10&type=section&id=NOI%20and%20EBITDA%20Analysis) [Same Property Net Operating Income (NOI)](index=10&type=section&id=Same%20Property%20Net%20Operating%20Income) For Q1 2024, Same Property NOI increased by 1.8% to $143.8 million, driven by higher minimum rent, tenant recoveries, and reduced bad debt reserve Same Property NOI Growth (in thousands) | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $196,372 | $192,018 | - | | Total Expenses | ($52,576) | ($50,816) | - | | **Same Property NOI** | **$143,796** | **$141,202** | **1.8%** | - The same property pool for the period consisted of **179 properties**[28](index=28&type=chunk) [Net Operating Income and Adjusted EBITDA by Quarter](index=11&type=section&id=Net%20Operating%20Income%20and%20Adjusted%20EBITDA%20by%20Quarter) In Q1 2024, KRG's total property NOI was $152.5 million and Adjusted EBITDA was $140.0 million, both showing stability with a 73.8% NOI margin Quarterly NOI and Adjusted EBITDA (in thousands) | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | NOI | $152,509 | $151,917 | $150,482 | | Adjusted EBITDA | $140,040 | $138,073 | $138,869 | | NOI Margin - Retail | 74.4% | 76.5% | 74.4% | | Recovery Ratio - Retail | 91.6% | 92.2% | 87.2% | - Minimum rent in Q1 2024 included **$2.0 million** of lease termination income[31](index=31&type=chunk) [Funds From Operations (FFO)](index=12&type=section&id=Funds%20From%20Operations) For Q1 2024, KRG reported FFO of $112.8 million ($0.50 per diluted share), slightly down from Q1 2023, with Total Recurring Adjusted FFO at $83.2 million [Joint Venture Summary](index=13&type=section&id=Joint%20Venture%20Summary) As of March 31, 2024, KRG holds interests in consolidated and unconsolidated joint ventures, with a $2.3 million gain from a recent property sale [Debt Profile and Liquidity](index=14&type=section&id=Debt%20Profile%20and%20Liquidity) [Key Debt Metrics](index=14&type=section&id=Key%20Debt%20Metrics) As of Q1 2024, KRG maintained a strong balance sheet with a Net Debt to Adjusted EBITDA ratio of 5.1x and total liquidity of approximately $1.45 billion - The ratio of Company share of Net Debt to Annualized Adjusted EBITDA was **5.1x**[46](index=46&type=chunk) - Total liquidity was **$1.45 billion**, including **$1.1 billion** available under the unsecured credit facility[45](index=45&type=chunk) - The company is in compliance with all major debt covenants, such as total debt to undepreciated assets at **36%** (vs. <60% limit)[44](index=44&type=chunk) - **95%** of the company's Total NOI is unencumbered[45](index=45&type=chunk) [Summary of Outstanding Debt](index=15&type=section&id=Summary%20of%20Outstanding%20Debt) KRG's total outstanding debt was $3.22 billion with a 4.37% weighted average interest rate and 4.3 years to maturity, with 93% fixed-rate debt Total Outstanding Debt Overview | Debt Type | Amount Outstanding (in thousands) | Ratio | Weighted Avg. Interest Rate | Weighted Avg. Years to Maturity | | :--- | :--- | :--- | :--- | :--- | | Fixed Rate Debt | $2,980,273 | 93% | 4.05% | 4.4 | | Variable Rate Debt | $171,400 | 5% | 9.09% | 2.5 | | **Total** | **$3,222,086** | **100%** | **4.37%** | **4.3** | - Proceeds from the January 2024 issuance of **$350.0 million** in senior unsecured notes are expected to satisfy all 2024 debt maturities[51](index=51&type=chunk) [Maturity Schedule of Outstanding Debt](index=16&type=section&id=Maturity%20Schedule%20of%20Outstanding%20Debt) The company has a well-staggered debt maturity profile, with $269.6 million maturing in 2024 and larger maturities in 2025 and 2026 Upcoming Debt Maturities (Unsecured) | Year | Amount Maturing (in thousands) | | :--- | :--- | | 2024 | $269,635 | | 2025 | $430,000 | | 2026 | $550,000 | | 2027 | $250,000 | - The company utilizes interest rate swaps to manage interest rate risk, with **$820.0 million** of variable rate debt hedged to fixed rates and **$155.0 million** of fixed rate debt hedged to floating rates[49](index=49&type=chunk)[50](index=50&type=chunk) [Development and Redevelopment Projects](index=17&type=section&id=Development%20and%20Redevelopment%20Projects) KRG has two active development projects, Carillon and The Corner, expected to complete in Q4 2024 and add $5.2-$5.9 million in stabilized NOI [Portfolio Diversification](index=18&type=section&id=Portfolio%20Diversification) [Geographic Diversification](index=18&type=section&id=Geographic%20Diversification) KRG's retail portfolio is heavily concentrated in the Southern U.S., accounting for 62.8% of ABR, with Texas as the largest single state at 26.3% Retail ABR by Region | Region | % of Weighted Retail ABR | | :--- | :--- | | South | 62.8% | | West | 16.5% | | Midwest | 11.8% | | Northeast | 8.9% | - Texas is the most significant state, representing **26.3%** of total retail ABR from **44 properties**[68](index=68&type=chunk) [Top 25 Tenants by ABR](index=19&type=section&id=Top%2025%20Tenants%20by%20ABR) KRG's tenant base is diversified, with the top 25 tenants representing 28.7% of total ABR, and The TJX Companies as the top tenant at 2.7% - The top 25 tenants represent **28.7%** of the total weighted ABR[71](index=71&type=chunk) Top 5 Tenants by ABR | Rank | Tenant | % of Weighted ABR | S&P Rating | | :--- | :--- | :--- | :--- | | 1 | The TJX Companies, Inc. | 2.7% | A | | 2 | Best Buy Co., Inc. | 2.0% | BBB+ | | 3 | Ross Stores, Inc. | 1.9% | BBB+ | | 4 | PetSmart, Inc. | 1.8% | B+ | | 5 | Michaels Stores, Inc. | 1.4% | N/A | [Leasing Activity](index=20&type=section&id=Leasing%20Activity) [Retail Leasing Spreads](index=20&type=section&id=Retail%20Leasing%20Spreads) In Q1 2024, KRG executed 185 leases for 968,681 square feet, achieving a 12.8% blended cash rent spread, with new leases at 48.1% Q1 2024 Comparable Cash Rent Spreads | Category | Leases | Sq. Ft. | Cash Rent Spread | | :--- | :--- | :--- | :--- | | New Leases | 19 | 115,295 | 48.1% | | Non-Option Renewals | 57 | 174,284 | 12.2% | | Option Renewals | 54 | 462,628 | 5.3% | | **Total** | **130** | **752,207** | **12.8%** | [Lease Expirations](index=21&type=section&id=Lease%20Expirations) KRG has a manageable lease expiration schedule, with 5.5% of ABR expiring in 2024 and larger maturities in 2025 and 2028 Lease Expiration Schedule by ABR | Year | % of Total ABR Expiring | | :--- | :--- | | 2024 | 5.5% | | 2025 | 12.3% | | 2026 | 11.9% | | 2027 | 13.2% | | 2028 | 15.6% | - The expiring ABR per square foot for leases maturing in 2024 is **$23.98**, which is above the portfolio average of **$20.84**, suggesting potential for positive re-leasing spreads[79](index=79&type=chunk) [Components of Net Asset Value](index=22&type=section&id=Components%20of%20Net%20Asset%20Value) This section details the calculation of Annualized Normalized Portfolio Cash NOI, a key input for NAV, reaching $603.6 million including ground leases [Non-GAAP Financial Measures](index=23&type=section&id=Non-GAAP%20Financial%20Measures) This section defines non-GAAP financial measures like FFO, AFFO, NOI, Same Property NOI, and EBITDA, provided to help investors assess operating performance

Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a m ...

Vertigo3d Income investing can be a lot like building real estate. Similar to how a building is put together brick by brick (or steel frame by frame), a sizable income stream can be accumulated over time so long as one is willing to be patient and make opportunistic purchases when the chips are down. Such may be the case with Kite Realty Group Trust (NYSE:KRG), which, as shown below, now sits near lows last reached in October of last year. At the current price of $20, and the dividend yield is now back to 5 ...

Portfolio and Properties - As of December 31, 2023, Kite Realty Group Trust owned interests in 180 operating retail properties totaling approximately 28.1 million square feet and one office property with 0.3 million square feet [186]. - Kite Realty's portfolio includes a refined mix of prominent grocers and expanding retailers, enhancing tenant demand [190]. - Kite Realty's development and redevelopment projects include properties like Hamilton Crossing Centre and Edwards Multiplex, with ongoing transitions to mixed-use developments [198]. - The company is obligated under 12 ground leases for approximately 98 acres of land, with expiration dates ranging from 2025 to 2092 [247]. Financial Performance - Total revenue for the year ended December 31, 2023, was $823.0 million, an increase of $21.0 million or 2.6% compared to $802.0 million in 2022 [201]. - Net income attributable to common shareholders for 2023 was $47.5 million, a substantial increase of $60.1 million compared to a net loss of $12.6 million in 2022 [201]. - FFO attributable to common shareholders rose to $446,890 in 2023, up from $425,845 in 2022, with FFO per share increasing to $2.03 from $1.94 [224]. - Same Property NOI increased by 4.8% in 2023 to $555,396 compared to $530,021 in 2022, driven by contractual rent growth and lower bad debt expense [219]. - Total property NOI for 2023 was $608,254, reflecting a 4.6% increase from $581,651 in 2022 [218]. Leasing and Occupancy - In Q4 2023, Kite Realty experienced its highest quarterly new leasing activity in the company's history with over 380,000 square feet of new leasing volume [188]. - The average base rent for new comparable leases signed in 2023 was $27.53 per square foot, compared to $19.48 per square foot for expiring leases, indicating a significant increase in leasing rates [202]. - The occupancy rate of fully operational properties increased from 91.8% in 2022 to 92.0% in 2023, reflecting improved property performance [201]. - The leased percentage at period end decreased to 94.0% from 95.4% in 2022, attributed to tenant bankruptcies [218][223]. - Economic occupancy percentage at period end was 91.2%, down from 92.5% in 2022 [218]. Expenses and Costs - Property operating expenses decreased as a percentage of total revenue from 13.4% in 2022 to 13.1% in 2023, despite a nominal increase in expenses [205]. - Depreciation and amortization expenses decreased by $43.4 million, or 9.2%, primarily due to certain assets becoming fully depreciated [209]. - General, administrative, and other expenses increased by $1.3 million, or 2.3%, mainly due to higher transportation expenses and consulting fees [207]. - Capital expenditures decreased by $16.0 million in 2023, primarily due to timing of capital projects [257]. Debt and Liquidity - Kite Realty ended 2023 with approximately $1.1 billion of combined cash and borrowing capacity on the Revolving Facility [191]. - The company had $269.6 million of debt principal scheduled to mature through December 31, 2024, expected to be satisfied with proceeds from the Notes Due 2034 issued in January 2024 [191]. - The company had $269.6 million of unsecured debt scheduled to mature in 2024, with sufficient liquidity to repay these obligations [238]. - Net Debt to Adjusted EBITDA ratio stood at 5.1x as of December 31, 2023 [227]. - The company expects adequate liquidity over the next 12 months to meet its cash requirements [230]. Investments and Distributions - The company incurred $142.6 million in total capital expenditures for the year ended December 31, 2023, including $28.1 million for active development and redevelopment projects and $114.5 million for recurring operating capital expenditures [248]. - Cash used in investing activities was $81.7 million for the year ended December 31, 2023, compared to $45.1 million in 2022, reflecting increased investment activity [253]. - The company made distributions to common shareholders totaling $213.5 million in 2023, compared to $182.2 million in 2022 [257]. - The company declared a cash distribution of $0.25 per common share for the first quarter of 2024, expected to be paid on April 12, 2024 [240]. Interest Rates and Debt Structure - Fixed rate debt constituted 94% of total consolidated indebtedness, with a weighted average interest rate of 4.30% [259][276]. - A 100-basis point change in interest rates on fixed rate debt scheduled to mature in 2024 would change annual cash flow by $2.7 million [277]. - As of December 31, 2023, the one-month Bloomberg Short Term Bank Yield Index (BSBY) interest rate was 5.44% [261].

Q4 2023 INVESTOR UPDATE Balance Sheet Snapshot NYSE Well-Staggered Maturity Ladder ■ Unsecured Debt ■Line of Credit Top 15 Population Growth States1 22% Strategic Gateway Markets (DC, Seattle and NYC) | --- | --- | |----------------------------|-------| | TOP 5 STATES (ABR) \nTexas | 26% | | Florida | 11% | | Maryland | 6% | | North Carolina | 6% | | | | KRG LISTED Debt Maturity Profile as of December 31, 2023 ($ in M) We intend to use proceeds from our January 2024 $350.0 million senior unsecured notes iss ...

Kite Realty Group Trust (NYSE:KRG) Q4 2023 Earnings Conference Call February 14, 2024 1:00 PM ET Company Participants Bryan McCarthy – Senior Vice President-Corporate Marketing and Communications John Kite – Chairman and Chief Executive Officer Heath Fear – Executive Vice President and Chief Financial Officer Tom McGowan – President and Chief Operating Officer Conference Call Participants Todd Thomas – KeyBanc Capital Markets Floris van Dijkum – Compass Point Craig Mailman – Citi Alex Goldfarb – Piper Sandl ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 (Exact name of registrant as specified in its charter) Delaware Kite Realty Group, L.P. 20-1453863 (State or other jurisdiction of incorporation or organization) 30 S. Meridian Street, Suite 1100, Indianapolis, Indiana 46204 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SEC ...

Financial Data and Key Metrics Changes - The company generated FFO per share of $0.51 for Q3, with same-property NOI growing by 4.7% year-over-year, driven by minimum rent growth, lower bad debt, and overage rent [39][68] - Year-to-date, the company has earned $1.54 of NAREIT FFO per share and increased same-property NOI by 5.5% year-over-year [47][68] - The company raised its NAREIT FFO guidance to a range of $1.99 to $2.03 per share, reflecting a $0.03 increase at the midpoint [47][62] Business Line Data and Key Metrics Changes - The company signed 214 leases in Q3, representing approximately 1.4 million square feet, with blended cash spreads of 14.2% on comparable new and renewal leases [40] - Non-option renewal spreads for the quarter were 17.8%, indicating strong performance in lease renewals [40] - Average annual fixed rent increases for new and non-option renewals year-to-date was 2.5%, which is 100 basis points higher than the portfolio average [41] Market Data and Key Metrics Changes - The company reported a predictable step backward in lease rates due to the Bed Bath & Beyond situation, but has seen a flurry of activity on empty boxes, signing five box deals at 53% comparable cash spreads [42] - The company is negotiating leases with 16 boxes, including eight related to Bed Bath & Beyond, indicating strong leasing activity [22] Company Strategy and Development Direction - The company aims to drive value by leasing space and commencing rent, with a focus on organic growth opportunities in open-air retail environments [43] - The company is committed to maintaining a strong balance sheet while being opportunistic in the unsecured bond market [48] - The company is focused on enhancing its merchandising mix and operational efficiencies to further drive demand for its properties [44] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the retail environment, noting that retailers recognize the benefits of opening stores quickly [17][18] - The company believes that supply and demand dynamics are favorable, with limited high-quality space available [31][32] - Management anticipates that the current favorable conditions will continue in the medium term [33] Other Important Information - The company reported a bad debt reserve assumption of 45 basis points for the full year, which is below the typical run rate of 75 to 100 basis points [13][14] - The company has a limited active development pipeline but is working on several projects, including Hamilton Crossing and Carillon [70][92] Q&A Session Summary Question: How did the rents stack up versus original pro forma on backfilling boxes? - Management indicated that they are focused on the right tenant mix and are pleased with the current leasing activity [8] Question: Can you provide more color around the dispositions that closed during the quarter? - Management noted that the pricing for disposed assets was attractive, with a cap rate in the high five range [9][10] Question: What is the bad debt reserve assumption for the full year? - The bad debt reserve was reaffirmed at 45 basis points, which is lower than the typical run rate [13][14] Question: Are there any markets that are slower in the approval process? - Management acknowledged that the approval process has been slow but emphasized their success in pushing for timely approvals [17][54] Question: What is the outlook for fee income trends over the next few quarters? - Management indicated that fee income from the Hamilton Crossing project will wind down, but there are potential new projects that could generate fee income [106]

PART I — FINANCIAL INFORMATION Presents unaudited consolidated financial statements for Kite Realty Group Trust and its Operating Partnership, including notes [Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited consolidated financial statements for Kite Realty Group Trust and its Operating Partnership, including notes [Kite Realty Group Trust Financial Statements](index=5&type=section&id=Kite%20Realty%20Group%20Trust%20Financial%20Statements) Kite Realty Group Trust reports increased net income for Q2 and H1 2023, with slight asset and liability decreases Kite Realty Group Trust - Key Financial Highlights (in thousands) | Metric | June 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Balance Sheet** | | | | Total Assets | $7,165,099 | $7,341,982 | | Total Liabilities | $3,405,861 | $3,516,130 | | Total Shareholders' Equity | $3,692,807 | $3,766,515 | | Metric | Q2 2023 | Q2 2022 | | :--- | :--- | :--- | | **Income Statement (3 Months)** | | | | Total Revenue | $208,759 | $202,605 | | Net Income Attributable to Common Shareholders | $32,058 | $13,131 | | EPS (basic and diluted) | $0.15 | $0.06 | | Metric | H1 2023 | H1 2022 | | :--- | :--- | :--- | | **Income Statement (6 Months)** | | | | Total Revenue | $415,509 | $396,996 | | Net Income (Loss) Attributable to Common Shareholders | $37,449 | $(3,673) | | EPS (basic and diluted) | $0.17 | $(0.02) | - Net cash provided by operating activities for the six months ended June 30, 2023, was **$180.4 million**, an increase from **$154.3 million** in the prior-year period[24](index=24&type=chunk) - Net cash used in financing activities decreased to **$175.5 million** from **$224.2 million** year-over-year[24](index=24&type=chunk) [Kite Realty Group, L.P. and subsidiaries Financial Statements](index=9&type=section&id=Kite%20Realty%20Group%2C%20L.P.%20and%20subsidiaries%20Financial%20Statements) Operating Partnership financials mirror the Parent Company, differing primarily in the equity section Kite Realty Group, L.P. - Key Financial Highlights (in thousands) | Metric | June 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Balance Sheet** | | | | Total Assets | $7,165,099 | $7,341,982 | | Total Liabilities | $3,405,861 | $3,516,130 | | Total Partners' Equity | $3,692,807 | $3,766,515 | | Metric | Q2 2023 | Q2 2022 | | :--- | :--- | :--- | | **Income Statement (3 Months)** | | | | Total Revenue | $208,759 | $202,605 | | Net Income Attributable to Common Unitholders | $32,451 | $13,263 | | Net Income per Common Unit | $0.15 | $0.06 | [Notes to Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Detailed notes explain accounting policies, property portfolio, debt, and equity programs, with 181 retail properties Property Portfolio as of June 30, 2023 | Property Type | Properties | Square Footage | | :--- | :--- | :--- | | Operating retail properties | 181 | 28,590,350 | | Office properties | 1 | 287,291 | | Development/redevelopment projects | 2 | 150,000 | - During the first six months of 2023, the company sold two properties for a total of **$79.4 million**, recognizing a gain of **$28.4 million**[68](index=68&type=chunk) - No properties were acquired during this period[68](index=68&type=chunk) Consolidated Indebtedness as of June 30, 2023 (in thousands) | Debt Type | Amount Outstanding | Weighted Avg. Interest Rate | Weighted Avg. Years to Maturity | | :--- | :--- | :--- | :--- | | Fixed rate debt | $2,727,256 | 4.02% | 4.3 | | Variable rate debt | $182,933 | 8.87% | 2.7 | | **Total** | **$2,910,189** | **4.32%** | **4.2** | - The company has a **$300 million** Share Repurchase Program, extended through February 28, 2024[107](index=107&type=chunk) - No shares have been repurchased under this program as of June 30, 2023[107](index=107&type=chunk) - The company also has a **$150 million** At-The-Market (ATM) offering program, under which no shares have been sold[108](index=108&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2023 operations, financial results, non-GAAP measures, liquidity, and critical accounting estimates [Overview and Operating Activity](index=29&type=section&id=Overview%20and%20Operating%20Activity) Overview of REIT operations, portfolio of 181 retail properties, and Q2 2023 leasing activity - In Q2 2023, the company signed **190 leases** for **1,331,056 sq. ft.** with a blended cash leasing spread of **24.0%** for comparable new and non-option renewal leases[127](index=127&type=chunk) - Management notes that while most leases have provisions to mitigate inflation, the high inflation environment and rising interest rates have increased borrowing costs[125](index=125&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Detailed comparison of Q2 and H1 2023 operating results, including non-GAAP measures like Same Property NOI and FFO Comparison of Operating Results (Three Months Ended June 30, in thousands) | Line Item | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Rental income | $205,836 | $196,205 | $9,631 | | Total revenue | $208,759 | $202,605 | $6,154 | | Total expenses | $177,890 | $187,549 | $(9,659) | | Operating income | $59,309 | $39,014 | $20,295 | | Net income attributable to common shareholders | $32,058 | $13,131 | $18,927 | Same Property NOI Growth (in thousands) | Period | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $140,434 | $132,852 | 5.7% | | Six Months Ended June 30 | $279,442 | $263,328 | 6.1% | FFO, as adjusted, per Share (Diluted) | Period | 2023 | 2022 | | :--- | :--- | :--- | | Three Months Ended June 30 | $0.51 | $0.49 | | Six Months Ended June 30 | $1.02 | $0.94 | - The company's Net Debt to Annualized Adjusted EBITDA ratio was **5.0x** as of June 30, 2023[168](index=168&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) Strong liquidity with $129.3 million cash and $1.1 billion available on credit facility as of June 30, 2023 - As of June 30, 2023, liquidity consisted of **$129.3 million** in cash and **$1.1 billion** of availability under the unsecured revolving credit facility[171](index=171&type=chunk) - The company anticipates incurring approximately **$100 million** in major tenant improvement costs over the next 12-18 months, largely related to re-leasing vacant space, including former Bed Bath & Beyond locations[182](index=182&type=chunk) Debt Maturities as of June 30, 2023 (in thousands) | Year | Total Debt Maturing | | :--- | :--- | | 2023 (remainder) | $124,246 | | 2024 | $272,356 | | 2025 | $682,848 | | 2026 | $552,981 | | 2027 | $253,120 | | Thereafter | $1,024,638 | Cash Flow Summary (Six Months Ended June 30, in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $180,425 | $154,322 | | Net cash provided by investing activities | $8,013 | $68,646 | | Net cash used in financing activities | $(175,454) | $(224,179) | [Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20about%20Market%20Risk) Discusses market risk, primarily interest rate risk, with 94% of debt fixed-rate as of June 30, 2023 - As of June 30, 2023, after considering interest rate hedges, **94%** (**$2.7 billion**) of the company's debt was fixed-rate and **6%** (**$182.9 million**) was variable-rate[197](index=197&type=chunk) - A **100-basis point** change in interest rates on unhedged variable-rate debt would change annual cash flow by **$1.8 million**[198](index=198&type=chunk) [Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirms effective disclosure controls and procedures with no material changes in internal controls - The CEO and CFO of both the Parent Company and the Operating Partnership concluded that disclosure controls and procedures were effective as of June 30, 2023[199](index=199&type=chunk)[201](index=201&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[200](index=200&type=chunk)[202](index=202&type=chunk) PART II — OTHER INFORMATION Covers legal proceedings, risk factors, equity sales, related-party transactions, and exhibits [Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company is not subject to any material litigation or threatened legal proceedings - The company is not subject to any material litigation, nor is any material litigation currently threatened against it[205](index=205&type=chunk) [Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the 2022 Annual Report on Form 10-K - There have been no material changes from the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2022[206](index=206&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No share repurchases in Q2 2023; $300 million remains available under repurchase program - No shares of common stock were repurchased during the three months ended June 30, 2023[207](index=207&type=chunk) - As of June 30, 2023, **$300.0 million** remained available under the Share Repurchase Program, which now terminates on February 28, 2024[208](index=208&type=chunk) [Other Information](index=48&type=section&id=Item%205.%20Other%20Information) Discloses a related-party transaction involving assignment of development rights for Pan Am Plaza site - On August 7, 2023, a company subsidiary assigned development rights for the Pan Am Plaza site to Pan Am Development Partners, LLC, an entity affiliated with Chairman Emeritus Alvin E. Kite, CEO John A. Kite, and COO Thomas K. McGowan[117](index=117&type=chunk)[211](index=211&type=chunk) - In exchange for the rights, the assignee will pay an assignment fee of up to **$3.5 million**, payable upon completion of certain development activities expected in 2024[117](index=117&type=chunk)[212](index=212&type=chunk) - The transaction was approved by a special committee of independent trustees[117](index=117&type=chunk)[212](index=212&type=chunk) [Exhibits](index=49&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the Form 10-Q, including certifications and XBRL financial data - Exhibits filed include certifications from the CEO and CFO (Exhibits 31.1-31.4, 32.1-32.2) and Inline XBRL documents (Exhibits 101, 104)[213](index=213&type=chunk)

Financial Data and Key Metrics Changes - The company generated NAREIT FFO per share of $0.51 during Q2 2023, exceeding consensus estimates by $0.03 per share [58] - Same-property NOI growth for the quarter was 5.7%, compared to the same period in 2022 [58] - The company raised its NAREIT FFO per share guidance range to $1.96 to $2, reflecting a $0.03 increase at the midpoint [48] Business Line Data and Key Metrics Changes - The average annual fixed rent increases for new and non-option renewals in the first half of 2023 was 2.4%, which is 90 basis points higher than the portfolio average [42] - The company signed 190 leases, representing over 1.3 million square feet, producing a sector-leading 14.8% blended cash spread on comparable new and renewal leases [59] - The company experienced a 32% return on capital for new leases [59] Market Data and Key Metrics Changes - The company is seeing strong demand for open-air retail, with a focus on enhancing the merchandising mix [63] - The company has opened two grocery stores in its portfolio year-to-date and has four more in the pipeline [44] - The company is negotiating with 15 different brands across various retail sectors, indicating a broad interest in its properties [43] Company Strategy and Development Direction - The company is focused on enhancing its merchandising mix and driving pricing power to improve its long-term growth profile [41] - The company is not actively seeking new land acquisitions but is concentrating on densifying and redeveloping existing projects [10] - The company aims to capitalize on the demand for open-air retail and the resiliency of its cash flows [63] Management's Comments on Operating Environment and Future Outlook - Management noted that the current economic environment is uncertain, leading to a conservative approach to bad debt assumptions [1][2] - The company anticipates a continued low supply environment for new retail construction, making existing centers more attractive [9] - Management expressed confidence in the ability to backfill spaces vacated by Bed Bath & Beyond with better tenants at higher rents [60] Other Important Information - The company has an enviable balance sheet with a net debt-to-EBITDA ratio of 5 times and over $1.2 billion in liquidity [50] - The company is not modeling any additional rent from Bed Bath & Beyond for the second half of 2023, expecting a decrease in gross rent from those locations [49] Q&A Session Summary Question: What is the impact of initiatives on the long-term growth of the portfolio? - Management indicated that the embedded rent growth achieved in 2023 is significantly above historical averages, with a focus on annual bumps and CPI adjustments [71][72] Question: Are there successes in driving annual escalators with anchor tenants? - Management confirmed that they are having success in discussions with tenants, although it is more challenging with anchor tenants due to less turnover [74][75] Question: What is the expected trajectory for occupancy rates moving into the second half of the year? - Management expects occupancy rates to decline initially due to the impact of Bed Bath & Beyond but anticipates recovery as new leases are signed [92][93] Question: What is the company's approach to acquisitions in the current market? - Management stated that while the acquisition environment is tepid, they are actively reviewing opportunities and remain selective [144][146]