On January 2, 2024, the Company completed the Merger with RPT, under which RPT merged with and into the Company, with the Company continuing as the surviving public company. The RPT Merger had 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 GLA. In addition, as a result of the RPT Merger, the Company obtained RPT’s 6% stake in a 49-property net lease joint venture.

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 number of RPT shares/units outstanding converted to shares of the Company’s shares/units as of January 2, 2024 were determined as follows (amounts presented in thousands, except per share data):


	As of January 2, 2024
	Common Shares (1)		OP Units		Cumulative Convertible Perpetual Preferred Shares
RPT shares/units outstanding		87,675		1,576		1,849
Exchange ratio		0.6049		0.6049		1.0000
Kimco shares/units issued		53,034		953		1,849

Value of Kimco stock per share/unit	$	22.0005	$	22.0005	$	57.13
Equity consideration given from Kimco shares/units issued	$	1,166,775	$	20,975	$	105,607

(1)

The Company paid cash in lieu of issuing fractional Kimco common shares, which is included in “Cash Consideration” caption in the table below.

The following table presents the total value of consideration paid by Kimco at the close of the RPT Merger (in thousands):


	Calculated Value of RPT Consideration		Cash Consideration*		Total Value of Consideration
As of January 2, 2024	$	1,293,357	$	149,103	$	1,442,460

* Amount includes $130.0 million to pay off the outstanding balance on RPT’s credit facility at closing, additional consideration of approximately $19.1 million relating to transaction costs incurred by RPT and $0.1 million of cash paid in lieu of issuing fractional Kimco common shares.

In accordance with ASC 805-10, Business Combinations, the Company accounted for the RPT Merger as a business combination using the acquisition method of accounting. Based on the total value of the consideration, the total fair value of the assets acquired and liabilities assumed in the RPT Merger was $1.4 billion.

The fair values of the real estate assets acquired were determined using either (i) the direct capitalization method, (ii) the discount cash flow method or (iii) executed purchase and sales agreements. The sales comparison approach was used in estimating the fair value of the land acquired. The Company determined that these valuation methodologies are classified within Level 3 of the fair value hierarchy. The significant assumptions used in these methodologies include stabilized net operating income, income growth rates, market lease rates, discount rates, terminal capitalization rates, planned capital expenditures, and estimates of future cash flows at the respective properties.

Under the direct capitalization method, the Company derived a normalized net operating income and applied an appropriate terminal capitalization rate for each property. The estimates of normalized net operating income are based on a number of factors, including historical operating results, market lease rates, known and anticipated trends, and market and economic conditions. Terminal capitalization rates utilized to derive these fair values ranged from 5.50% to 7.50%.

The discounted cash flow analyses were based on estimated future cash flows that employ discount rates, terminal capitalization rates and planned capital expenditures. These estimates approximate the inputs the Company believes would be utilized by market participants in assessing fair value. The estimates of future cash flows are based on a number of factors, including historical operating results, market lease rates, income growth rates, known and anticipated trends, and market and economic conditions. Terminal capitalization rates and discount rates utilized to estimate fair values ranged from 5.50% to 7.50% and 6.00% to 8.25%, respectively.

The Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets or liabilities based on their respective fair values. The fair value of any tangible real estate assets acquired is determined by valuing the building as if

it were vacant, and the fair value is then allocated to buildings and improvements. In allocating the purchase price to identified intangible assets and liabilities of acquired properties, the value of above-market and below-market leases is estimated based on the difference between the contractual amounts, including fixed rate below-market lease renewal options, and management’s estimate of the market lease rates and other lease provisions discounted over a period equal to the estimated remaining term of the lease using an appropriate discount rate. In determining the value of in-place leases, management considers current market conditions, market lease rates, costs to execute new or similar leases and carrying costs during the expected lease-up period from vacant to existing occupancy. The Company determined that these valuation methodologies are classified within Level 2 and Level 3 of the fair value hierarchy.

The following table summarizes the purchase price allocation based on the Company's initial valuation and subsequent adjustments, including estimates and assumptions of the acquisition date fair value of the tangible and intangible assets acquired and liabilities assumed (in thousands):


	Purchase Price Allocation
Land	$	312,343
Building and improvements		1,343,156
In-place leases		220,231
Above-market leases		12,861
Real estate assets		1,888,591
Investments in and advances to real estate joint ventures		433,345
Investments in and advances to other investments		12,672
Operating lease right-of-use assets, net		6,128
Accounts receivable and other assets		57,529
Total assets acquired		2,398,265

Notes payable		(821,500	)
Accounts payable and other liabilities		(53,213	)
Operating lease liabilities		(13,506	)
Below-market leases		(67,586	)
Total liabilities assumed		(955,805	)

Total purchase price	$	1,442,460

The following table details the weighted average useful lives, in years, of the purchase price allocated to real estate and related intangible assets and liabilities acquired arising from the RPT Merger:


	Weighted Average Useful Life (in Years)
Land	n/a
Buildings		50.0
Building improvements		45.0
Tenant improvements		3.9
In-place leases		3.1
Above-market leases		3.7
Below-market leases		22.1
Operating right-of-use assets		81.3

Since the date of the Merger through December 31, 2024, the revenue and net income from RPT included in the Company’s Consolidated Statements of Income are $178.6 million and $13.4 million (excluding $25.2 million of Merger charges), respectively.

The pro forma financial information set forth below is based upon the Company’s historical Consolidated Statements of Income for the years ended December 31, 2024 and 2023, 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.


	Year Ended December 31,
	2024		2023
Revenues from rental properties, net	$	2,019.1	$	1,945.7
Net income (1)	$	444.7	$	654.1
Net income available to the Company’s common shareholders (1)	$	401.0	$	606.9

(1)

The pro forma net income for the year ended December 31, 2024 was adjusted to exclude $25.2 million of Merger charges, while the pro forma net income for the year ended December 31, 2023 was adjusted to include $25.2 million of Merger charges incurred.