KITE REALTY GROUP TRUST

Previous wording

As of March 31, 2024, we owned interests in 180 operating retail properties totaling approximately 28.1 million square feet and one office property with 0.3 million square feet. Of the 180 operating retail properties, 10 contain an office component. We also owned two development projects under construction as of this date and an additional two properties with future redevelopment opportunities.

Current wording

As of June 30, 2024, we owned interests in 178 operating retail properties totaling approximately 27.6 million square feet, excluding one operating retail property classified as held for sale as of June 30, 2024, and one office property with 0.3 million square feet. Of the 178 operating retail properties, 10 contain an office component. We also owned two development projects under construction as of this date and an additional two properties with future redevelopment opportunities.

Previous wording

We believe inflationary concerns could negatively impact consumer confidence and spending and our tenants’ sales and overall health. This could, in turn, continue to put downward pricing pressure on rents that we are able to charge to new or renewing tenants, such that future rent spreads and, in some cases, our percentage rents, could be adversely impacted. Many of our leases contain provisions designed to mitigate the adverse impact of inflation, including annual rent increases and requirements for tenants to pay a share of operating expenses, including common area maintenance, real estate taxes, insurance or other operating expenses related to the maintenance of our properties, with escalation clauses in most leases. Over the last year, we have made significant improvements converting leases to include higher fixed-rent bumps while also including CPI-based, anti-gouging protection for tenants. However, the stated rent increases or limits on such tenant’s obligation to pay its share of operating expenses could be lower than the increase in inflation at any given time. Inflation may also increase labor or other general and administrative expenses that cannot be easily reduced.

Current wording

We believe inflationary concerns could negatively impact consumer confidence and spending and our tenants’ sales and overall health. This could, in turn, continue to put downward pricing pressure on rents that we are able to charge to new or renewing tenants, such that future rent spreads and, in some cases, our percentage rents, could be adversely impacted. Many of our leases contain provisions designed to mitigate the adverse impact of inflation, including annual rent increases and requirements for tenants to pay a share of operating expenses, including common area maintenance, real estate taxes, insurance or other operating expenses related to the maintenance of our properties, with escalation clauses in most leases. Over the last year, we have made significant progress in converting leases to include higher fixed-rent bumps while also including CPI-based, anti-gouging protection for tenants. However, the stated rent increases or limits on such tenant’s obligation to pay its share of operating expenses could be lower than the increase in inflation at any given time. Inflation may also increase labor or other general and administrative expenses that cannot be easily reduced.

Previous wording

During the first quarter of 2024, we executed new and renewal leases on 185 individual spaces totaling 968,681 square feet (12.8% cash leasing spread on 130 comparable leases). New leases were signed on 38 individual spaces for 175,087 square feet of gross leasable area (“GLA”) (48.1% cash leasing spread on 19 comparable leases), while non-option renewal leases were signed on 93 individual spaces for 330,966 square feet of GLA (12.2% cash leasing spread on 57 comparable leases) and option renewals were signed on 54 individual spaces for 462,628 square feet of GLA (5.3% cash leasing spread). The blended cash spreads for comparable new and non-option renewal leases were 23.3%. Comparable new and renewal leases are defined as those for which the space was occupied by a tenant within the last 12 months.

Current wording

During the second quarter of 2024, we executed new and renewal leases on 160 individual spaces totaling 1,153,766 square feet (15.6% cash leasing spread on 136 comparable leases). New leases were signed on 55 individual spaces for 372,155 square feet of gross leasable area (“GLA”) (34.8% cash leasing spread on 40 comparable leases), while non-option renewal leases were signed on 69 individual spaces for 314,899 square feet of GLA (14.3% cash leasing spread on 60 comparable leases) and option renewals were signed on 36 individual spaces for 466,712 square feet of GLA (6.0% cash leasing spread). The blended cash spreads for comparable new and non-option renewal leases were 23.7%. Comparable new and renewal leases are defined as those for which the space was occupied by a tenant within the last 12 months.

Previous wording

The comparability of results of operations for the three months ended March 31, 2024 and 2023 is affected by our development, redevelopment, and operating property acquisition and disposition activities during these periods. Therefore, we believe it is most useful to review the comparisons of our results of operations for these periods in conjunction with the discussion of our activities during those periods, which is set forth below.

Current wording

The comparability of results of operations for the three and six months ended June 30, 2024 and 2023 is affected by our development, redevelopment, and operating property acquisition and disposition activities during these periods. Therefore, we believe it is most useful to review the comparisons of our results of operations for these periods in conjunction with the discussion of our activities during those periods, which is set forth below.

Previous wording

In addition, during the three months ended March 31, 2024, the joint venture that owned Glendale Center Apartments, of which we have an 11.5% ownership interest, sold the 267-unit property to a third party. Glendale Center Apartments is adjacent to our Glendale Town Center operating retail property in the Indianapolis MSA.

Current wording

In addition, during the six months ended June 30, 2024, the joint venture that owned Glendale Center Apartments, of which we have an 11.5% ownership interest, sold the 267-unit property to a third party. Glendale Center Apartments is adjacent to our Glendale Town Center operating retail property in the Indianapolis MSA.

Previous wording

(iv) an increase in ancillary income of $0.4 million. The occupancy of the fully operational properties decreased from 92.6% for the three months ended March 31, 2023 to 90.9% for the three months ended March 31, 2024.

Current wording

The net increase of $2.2 million in rental income for properties that were fully operational during 2023 and 2024 is primarily due to increases in the following: (i) tenant reimbursements of $3.5 million due to higher recoverable common area maintenance expenses, (ii) base minimum rent of $2.0 million due to contractual rent changes, (iii) ancillary income of $0.5 million, and (iv) overage rent of $0.3 million due to improved tenant performance. These variances were partially offset by a decrease in lease termination income of $2.8 million and an increase in bad debt expense of $1.3 million. The occupancy of the fully operational properties decreased from 92.5% for the three months ended June 30, 2023 to 91.3% for the three months ended June 30, 2024.

Previous wording

We recorded fee income of $0.3 million and $1.8 million during the three months ended March 31, 2024 and 2023, respectively, from property management and development services provided to third parties and unconsolidated joint ventures. The decrease in fee income is primarily related to a decrease in development fees earned related to the development of a corporate campus for Republic Airways at Hamilton Crossing Centre.

Current wording

We recorded fee income of $3.5 million and $1.0 million during the three months ended June 30, 2024 and 2023, respectively, from property management and development services provided to third parties and unconsolidated joint ventures. The increase in fee income is primarily related to development fees earned related to the development of a hotel on the Pan Am Plaza site during the three months ended June 30, 2024.

Previous wording

The net decrease of $0.4 million in real estate taxes for properties that were fully operational during 2023 and 2024 is primarily due to higher capitalized real estate tax expenses related to signed anchor leases at certain properties in the portfolio in 2024. The majority of real estate tax expense is recoverable from tenants and such recovery is reflected within “Rental income” in the accompanying consolidated statements of operations and comprehensive income.

Current wording

The net increase of $0.3 million in real estate taxes for properties that were fully operational during 2023 and 2024 is primarily due to lower real estate tax refunds received in 2024, partially offset by higher capitalized real estate tax expenses related to signed anchor leases at certain properties in the portfolio in 2024. The majority of real estate tax expense is recoverable from tenants and such recovery is reflected within “Rental income” in the accompanying consolidated statements of operations and comprehensive income.

Previous wording

Depreciation and amortization expense decreased $7.7 million, or 7.1%, due to the following(in thousands):

Current wording

Depreciation and amortization expense decreased $10.2 million, or 9.3%, due to the following(in thousands):

Previous wording

The net decrease of $6.9 million in depreciation and amortization at properties that were fully operational during 2023 and 2024 is primarily due to the timing of placing assets in service and writing-off tenant-related assets as a result of tenant move-outs along with certain assets with shorter useful lives acquired in the October 2021 merger with RPAI that became fully depreciated during the prior year.

Current wording

The net decrease of $8.6 million in depreciation and amortization at properties that were fully operational during 2023 and 2024 is primarily due to the timing of placing assets in service and writing-off tenant-related assets as a result of tenant move-outs along with certain assets acquired in the October 2021 merger with RPAI that became fully depreciated during the three months ended June 30, 2024.

Previous wording

Interest expense increased $4.9 million, or 19.4%, primarily due to interest on the January 2024 public offering of $350.0 million in aggregate principal amount of 5.50% senior unsecured notes due 2034 (“Notes Due 2034”), partially offset by favorable interest rate swaps.

Current wording

Interest expense increased $3.8 million, or 13.9%, primarily due to interest on the January 2024 public offering of $350.0 million in aggregate principal amount of 5.50% senior unsecured notes due 2034 (the “Notes Due 2034”), partially offset by favorable interest rate swaps.

Previous wording

Other income, net increased $3.2 million primarily due to interest income earned on the proceeds from the Notes Due 2034.

Current wording

Other income, net increased $4.0 million primarily due to interest income earned on the proceeds from the Notes Due 2034, which were invested in short-term deposits during the three months ended June 30, 2024.

Previous wording

Rental income (including tenant reimbursements) increased $2.8 million, or 1.4%, due to the following(in thousands):

Current wording

Rental income (including tenant reimbursements) increased $2.8 million, or 0.7%, due to the following(in thousands):

Previous wording

The net increase of $3.7 million in rental income for properties that were fully operational during 2023 and 2024 is primarily due to (i) an increase in lease termination income of $1.5 million, (ii) a decrease in bad debt expense of $1.1 million, (iii) an increase in tenant reimbursements of $0.7 million due to higher recoverable common area maintenance expenses, and

Current wording

The net increase of $6.7 million in rental income for properties that were fully operational during 2023 and 2024 is primarily due to increases in the following: (i) tenant reimbursements of $4.3 million due to higher recoverable common area maintenance expenses, (ii) base minimum rent of $2.6 million due to contractual rent changes, (iii) ancillary income of $0.9 million, and (iv) overage rent of $0.2 million due to improved tenant performance. These variances were partially offset by a decrease in lease termination income of $1.3 million.

Previous wording

Other property-related revenue primarily consists of parking revenues, gains on the sale of land and other miscellaneous activity. This revenue decreased by $0.6 million primarily as a result of a decrease in parking revenue of $0.4 million due to the sale of Pam Am Plaza Garage in June 2023 along with a decrease in miscellaneous income of $0.2 million.

Current wording

Other property-related revenue primarily consists of parking revenues, gains on the sale of land and other miscellaneous activity. This revenue increased by $0.7 million primarily as a result of higher gains on sales of undepreciated assets recognized during the six months ended June 30, 2024, partially offset by decreases in miscellaneous income of $0.7 million and parking revenue of $0.5 million.

Previous wording

The net increase of $1.8 million in property operating expenses for properties that were fully operational during 2023 and 2024 is primarily due to increases in the following: (i) $0.7 million in landscaping and repairs and maintenance expenses, (ii) $0.6 million in insurance, (iii) $0.3 million in non-recoverable operating expenses, and (iv) $0.2 million in security expenses. As a percentage of revenue, property operating expenses increased from 13.2% to 13.5% due to an increase in expenses in 2024.

Current wording

The net increase of $3.8 million in property operating expenses for properties that were fully operational during 2023 and 2024 is primarily due to increases in the following: (i) $1.4 million in landscaping and repairs and maintenance expenses, (ii) $1.2 million in non-recoverable operating expenses, (iii) $1.0 million in insurance, and (iv) $0.3 million in security expenses. As a percentage of revenue, property operating expenses increased from 13.1% to 13.5% due to an increase in expenses in 2024.

Previous wording

The $2.3 million gain on sale of unconsolidated property represents our share of the gain on the sale of Glendale Center Apartments during the three months ended March 31, 2024. No such gain was recorded during the three months ended March 31, 2023.

Current wording

The $2.3 million gain on sale of unconsolidated property represents our share of the gain on the sale of Glendale Center Apartments recognized during the six months ended June 30, 2024. No such gain was recorded during the six months ended June 30, 2023.

Previous wording

For the three months ended March 31, 2024, the same property pool excludes the following:

Current wording

For the three and six months ended June 30, 2024, the same property pool excludes the following:

Previous wording

The following table presents Same Property NOI and a reconciliation to net income attributable to common shareholders for the three months ended March 31, 2024 and 2023(dollars in thousands):

Current wording

The following table presents Same Property NOI and a reconciliation to net income attributable to common shareholders for the three and six months ended June 30, 2024 and 2023(dollars in thousands):

Previous wording

(2)Decrease in leased and economic occupancy percentages is primarily attributable to the Bed Bath & Beyond Inc. bankruptcy.

Current wording

(2)Decrease in the economic occupancy percentage is primarily attributable to the Bed Bath & Beyond Inc. bankruptcy.

Previous wording

Our Same Property NOI increased 1.8% for the three months ended March 31, 2024 compared to the same period of the prior year primarily due to contractual rent growth and lower bad debt expense.

Current wording

Our Same Property NOI increased 1.8% for the three months ended June 30, 2024 compared to the same period of the prior year primarily due to contractual rent growth, partially offset by higher bad debt expense.

Previous wording

Our calculations of FFO and reconciliation to net income for the three months ended March 31, 2024 and 2023 (unaudited) are as follows(dollars in thousands):

Current wording

Our calculations of FFO and reconciliation to net income for the three and six months ended June 30, 2024 and 2023 (unaudited) are as follows(dollars in thousands):

Previous wording

As of March 31, 2024, we had approximately $83.6 million in cash and cash equivalents on hand, $5.4 million in restricted cash and escrow deposits, $265.0 million of short-term deposits, and $1.1 billion of remaining availability under the Revolving Facility compared to $269.6 million of debt maturing in the second through fourth quarters of 2024. During the three months ended March 31, 2024, we completed a public offering of the Notes Due 2034, the proceeds of which are currently invested in short-term deposits that will be used to satisfy all 2024 debt maturities. We believe we will have adequate liquidity over the next 12 months and beyond to operate our business and meet our cash requirements.

Current wording

As of June 30, 2024, we had approximately $153.8 million in cash and cash equivalents on hand, $4.9 million in restricted cash and escrow deposits, $120.0 million of short-term deposits that were used to repay the $120.0 million unsecured term loan due July 2024 (the “$120M Term Loan”), and $1.1 billion of remaining availability under the Revolving Facility. During the six months ended June 30, 2024, we completed a public offering of the Notes Due 2034, the proceeds of which were used to satisfy all 2024 debt maturities and for general corporate purposes. We believe we will have adequate liquidity over the next 12 months and beyond to operate our business and meet our cash requirements.

Previous wording

As of March 31, 2024, we had approximately $1.1 billion available under the Revolving Facility for future borrowings. We also had $348.6 million in cash, cash equivalents and short-term deposits as of March 31, 2024.

Current wording

As of June 30, 2024, we had approximately $1.1 billion available under the Revolving Facility for future borrowings. We also had $273.8 million in cash, cash equivalents and short-term deposits as of June 30, 2024.

Previous wording

In November 2021, the Company filed with the SEC a shelf registration statement on Form S-3, which is effective for a term of three years, relating to the offer and sale, from time to time, of an indeterminate amount of equity and debt securities. Equity securities may be offered and sold by the Parent Company, and the net proceeds of any such offerings would be contributed to the Operating Partnership in exchange for additional General Partner Units. Debt securities may be offered and sold by the Operating Partnership with the Operating Partnership receiving the proceeds. From time to time, we may issue securities under this shelf registration statement for general corporate purposes, which may include acquisitions of additional properties, repayment of outstanding indebtedness, capital expenditures, the expansion, redevelopment, and/or improvement of properties in our portfolio, working capital and other general purposes.

Current wording

On June 7, 2024, the Company filed with the SEC a new shelf registration statement on Form S-3, which is effective for a term of three years, relating to the offer and sale, from time to time, of an indeterminate amount of equity and debt securities. Equity securities may be offered and sold by the Parent Company, and the net proceeds of any such offerings would be contributed to the Operating Partnership in exchange for additional General Partner Units. Debt securities may be offered and sold by the Operating Partnership with the Operating Partnership receiving the proceeds. From time to time, we may issue securities under this shelf registration statement for general corporate purposes, which may include acquisitions of additional properties, repayment of outstanding indebtedness, capital expenditures, the expansion, redevelopment, and/or improvement of properties in our portfolio, working capital and other general purposes.

Previous wording

Near-Term Debt Maturities. As of March 31, 2024, we had no secured debt, excluding scheduled monthly principal payments, and $619.6 million of unsecured debt scheduled to mature prior to March 31, 2025. We believe we have sufficient liquidity to repay these obligations with proceeds from the Notes Due 2034, additional available cash on hand, and borrowings on the Revolving Facility.

Current wording

Near-Term Debt Maturities. As of June 30, 2024, over the next 12 months we have no secured debt, excluding scheduled monthly principal payments, and $470.0 million of unsecured debt scheduled to mature. Subsequent to June 30, 2024, we repaid the $120M Term Loan with a portion of the proceeds from the Notes Due 2034, leaving $350.0 million of unsecured debt scheduled to mature prior to June 30, 2025. We believe we have sufficient liquidity to repay this obligation through a combination of cash flows generated from operations, capital markets transactions, and borrowings on the Revolving Facility.

Previous wording

Other Short-Term Liquidity Needs. The requirements for qualifying as a REIT and for a tax deduction for some or all of the dividends paid to shareholders necessitate that we distribute at least 90% of our taxable income on an annual basis. Such requirements cause us to have substantial liquidity needs over both the short and long term. Our short-term liquidity needs consist primarily of funds necessary to pay operating expenses associated with our operating properties, scheduled interest and principal payments on our debt of approximately $90.0 million and $3.9 million, respectively, for the remainder of 2024, expected dividend payments to our common shareholders and common unitholders, and recurring capital expenditures.

Current wording

Other Short-Term Liquidity Needs. The requirements for qualifying as a REIT and for a tax deduction for some or all of the dividends paid to shareholders necessitate that we distribute at least 90% of our taxable income on an annual basis. Such requirements cause us to have substantial liquidity needs over both the short and long term. Our short-term liquidity needs consist primarily of funds necessary to pay operating expenses associated with our operating properties, scheduled interest and principal payments on our debt of approximately $60.0 million and $2.6 million, respectively, for the remainder of 2024, expected dividend payments to our common shareholders and common unitholders, and recurring capital expenditures.

Previous wording

In February 2024, our Board of Trustees declared a cash distribution of $0.25 per common share and Common Unit for the first quarter of 2024. This distribution was paid on April 12, 2024 to common shareholders and common unitholders of record as of April 5, 2024. Future distributions, if any, are at the discretion of the Board of Trustees, who will continue to evaluate our sources and uses of capital, liquidity position, operating fundamentals, maintenance of our REIT qualification and other factors they may deem relevant. We believe we have sufficient liquidity to pay any dividend from available cash on hand and borrowings on the Revolving Facility.

Current wording

In April 2024, our Board of Trustees declared a cash distribution of $0.25 per common share and Common Unit for the second quarter of 2024. This distribution was paid on July 16, 2024 to common shareholders and common unitholders of record as of July 9, 2024. Future distributions, if any, are at the discretion of the Board of Trustees, who will continue to evaluate our sources and uses of capital, liquidity position, operating fundamentals, maintenance of our REIT qualification and other factors they may deem relevant. We believe we have sufficient liquidity to pay any dividend from available cash on hand and borrowings on the Revolving Facility.

Previous wording

Other short-term liquidity needs include expenditures for tenant improvements, external leasing commissions and recurring capital expenditures. During the three months ended March 31, 2024, we incurred $5.7 million for recurring capital expenditures on operating properties and $18.4 million for tenant improvements and external leasing commissions, which includes costs to re-lease anchor space at our operating properties related to tenants open and operating as of March 31, 2024 (excluding development and redevelopment properties). We currently anticipate incurring approximately $100 million of additional major tenant improvement costs related to leasing activity for space that is currently vacant at a number of our operating properties over the next 12 to 24 months. We believe we have the ability to fund these costs through cash flows from operations or borrowings on the Revolving Facility.

Current wording

Other short-term liquidity needs include expenditures for tenant improvements, external leasing commissions and recurring capital expenditures. During the six months ended June 30, 2024, we incurred $12.7 million for recurring capital expenditures on operating properties and $43.6 million for tenant improvements and external leasing commissions, which includes costs to re-lease anchor space at our operating properties related to tenants open and operating as of June 30, 2024 (excluding development and redevelopment properties). We currently anticipate incurring approximately $100 million of additional major tenant improvement costs related to executed leases for tenants not yet open at a number of our operating properties over the next 12 to 24 months. We believe we have the ability to fund these costs through cash flows from operations or borrowings on the Revolving Facility.

Previous wording

As of March 31, 2024, we had development projects under construction at Carillon medical office building and The Corner – IN. Our share of total estimated costs for these two projects is $91.6 million, of which our share of the expected funding requirement is estimated to be $59.7 million. As of March 31, 2024, we have incurred $31.9 million of these costs. We anticipate incurring the majority of the remaining costs for these projects over the next 12 months and believe we have the ability to fund these projects through cash flows from operations or borrowings on the Revolving Facility.

Current wording

As of June 30, 2024, we had development projects under construction at Carillon medical office building and The Corner – IN. Our share of total estimated costs for these two projects is $91.6 million, of which our share of the expected funding requirement is estimated to be $59.7 million. As of June 30, 2024, we have incurred $33.1 million of these costs. We anticipate incurring the majority of the remaining costs for these projects over the next 12 months and believe we have the ability to fund these projects through cash flows from operations or borrowings on the Revolving Facility.

Previous wording

The following table summarizes cash capital expenditures for our development and redevelopment projects and other capital expenditures for the three months ended March 31, 2024(in thousands):

Current wording

The following table summarizes cash capital expenditures for our development and redevelopment projects and other capital expenditures for the six months ended June 30, 2024(in thousands):

Previous wording

We capitalize certain indirect costs such as interest, payroll, and other general and administrative costs related to these development activities. If we had experienced a 10% reduction in development and redevelopment activities without a corresponding decrease in indirect project costs, we would have recorded additional expense of $0.1 million for the three months ended March 31, 2024.

Current wording

We capitalize certain indirect costs such as interest, payroll, and other general and administrative costs related to these development activities. If we had experienced a 10% reduction in development and redevelopment activities without a corresponding decrease in indirect project costs, we would have recorded additional expense of $0.2 million for the six months ended June 30, 2024.

Previous wording

Failure to comply with the obligations under our debt agreements, including payment obligations, could cause an event of default under such debt, which, among other things, could result in the loss of title to the assets securing the debt, acceleration of the payment of all principal and interest and/or termination of the agreements, or exposure to the risk of foreclosure. In addition, certain of our variable rate loans contain cross-default provisions whereby a violation by the Company of any financial covenant set forth in the Revolving Facility will constitute an “Event of Default” under the loans, which could allow the lenders to accelerate the amounts due under our debt agreements if we fail to satisfy these financial covenants. See Item 1A. “Risk Factors – Risks Related to Our Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023 for more information related to the risks associated with our indebtedness.

Current wording

Failure to comply with the obligations under our debt agreements, including payment obligations, could cause an event of default under such debt, which, among other things, could result in the loss of title to the assets securing the debt, acceleration of the payment of all principal and interest and/or termination of the agreements, or exposure to the risk of foreclosure. In addition, certain of our variable rate loans contain cross-default provisions whereby a violation by the Company of any financial covenant set forth in the Revolving Facility will constitute an “Event of Default” under the loans, which could allow the lenders to accelerate the amounts due under our debt agreements if we fail to satisfy these financial covenants. See Item 1A.

Previous wording

We have received investment grade corporate credit ratings from three nationally recognized credit rating agencies. During the three months ended March 31, 2024, we received a credit rating upgrade with a stable outlook from one of the rating agencies and a positive credit rating outlook from another rating agency.

Current wording

We have received investment grade corporate credit ratings from three nationally recognized credit rating agencies. During the six months ended June 30, 2024, we received a credit rating upgrade with a stable outlook from two of the rating agencies and a positive credit rating outlook from the third rating agency.

Previous wording

As of March 31, 2024, we had cash, cash equivalents and restricted cash of $89.0 million. We may be subject to concentrations of credit risk with regard to our cash and cash equivalents. We place our cash and short-term investments with highly rated financial institutions. While we attempt to limit our exposure at any point in time, occasionally such cash and investments may temporarily exceed the Federal Deposit Insurance Corporation (“FDIC”) and the Securities Investor Protection Corporation (“SIPC”) insurance limits. We also maintain certain compensating balances in several financial institutions in support of borrowings from those institutions. Such compensating balances were not material to the accompanying consolidated balance sheets.

Current wording

As of June 30, 2024, we had cash, cash equivalents and restricted cash of $158.8 million. We may be subject to concentrations of credit risk with regard to our cash and cash equivalents. We place our cash and short-term investments with highly rated financial institutions. While we attempt to limit our exposure at any point in time, occasionally such cash and investments may temporarily exceed the Federal Deposit Insurance Corporation (“FDIC”) and the Securities Investor Protection Corporation (“SIPC”) insurance limits. We also maintain certain compensating balances in several financial institutions in support of borrowings from those institutions. Such compensating balances were not material to the accompanying consolidated balance sheets.

Previous wording

Cash provided by operating activities was $53.6 million for the three months ended March 31, 2024 and $63.6 million for the same period of 2023. The cash flows were negatively impacted due to the timing of annual insurance premium payments, partially offset by an increase in net operating income.

Current wording

Cash provided by operating activities was $195.7 million for the six months ended June 30, 2024 and $180.4 million for the same period of 2023. The cash flows were positively impacted by an increase in net operating income and interest income received from the short-term certificates of deposit.

Previous wording

Cash used in investing activities was $289.3 million for the three months ended March 31, 2024 and $41.5 million for the same period of 2023. Highlights of significant cash sources and uses in investing activities are as follows:

Current wording

Cash used in investing activities was $154.6 million for the six months ended June 30, 2024 compared to cash provided by investing activities of $8.0 million for the same period of 2023. Highlights of significant cash sources and uses in investing activities are as follows:

Previous wording

•We invested $265.0 million of proceeds from the Notes Due 2034 in short-term certificates of deposit during the three months ended March 31, 2024;

Current wording

•We invested $265.0 million of proceeds from the Notes Due 2034 in short-term certificates of deposit and received $145.0 million upon maturity of the certificate of deposit that matured in June 2024;

Previous wording

•Capital expenditures decreased by $10.9 million primarily related to the timing of capital projects along with a change in construction payables of $0.5 million for the three months ended March 31, 2024;

Current wording

•Capital expenditures decreased by $0.6 million primarily related to the timing of capital projects along with a change in construction payables of $2.8 million for the six months ended June 30, 2024; and

Previous wording

•We received a $1.6 million distribution upon the joint venture’s disposition of Glendale Center Apartments, of which we own an 11.5% interest, to a third party during the three months ended March 31, 2024.

Current wording

•We received a $1.6 million distribution upon the joint venture’s disposition of Glendale Center Apartments, of which we own an 11.5% interest, to a third party during the six months ended June 30, 2024.