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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FLORIDA (REGENCY CENTERS CORPORATION)
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59-3191743
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DELAWARE (REGENCY CENTERS, L.P)
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59-3429602
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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One Independent Drive, Suite 114
Jacksonville, Florida 32202
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(904) 598-7000
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(Address of principal executive offices) (zip code)
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(Registrant's telephone number, including area code)
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Large accelerated filer
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x
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Accelerated filer
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o
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Emerging growth company
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o
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Non-accelerated filer
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o
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Smaller reporting company
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o
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Large accelerated filer
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o
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Accelerated filer
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x
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Emerging growth company
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o
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Non-accelerated filer
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o
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Smaller reporting company
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o
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•
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Enhances investors' understanding of the Parent Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;
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•
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Eliminates duplicative disclosure and provides a more streamlined and readable presentation; and
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•
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Creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.
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Form 10-Q
Report Page
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PART I - FINANCIAL INFORMATION
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Item 1.
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Financial Statements
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Regency Centers Corporation:
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Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016
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Consolidated Statements of Operations for the periods ended June 30, 2017 and 2016
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Consolidated Statements of Comprehensive Income for the periods ended June 30, 2017 and 2016
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Consolidated Statements of Equity for the periods ended June 30, 2017 and 2016
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Consolidated Statements of Cash Flows for the periods ended June 30, 2017 and 2016
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Regency Centers, L.P.:
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Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016
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Consolidated Statements of Operations for the periods ended June 30, 2017 and 2016
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Consolidated Statements of Comprehensive Income for the periods ended June 30, 2017 and 2016
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Consolidated Statements of Capital for the periods ended June 30, 2017 and 2016
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Consolidated Statements of Cash Flows for the periods ended June 30, 2017 and 2016
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Notes to Consolidated Financial Statements
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Item 2.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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Item 3.
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Quantitative and Qualitative Disclosures about Market Risk
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Item 4.
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Controls and Procedures
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PART II - OTHER INFORMATION
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Item 1.
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Legal Proceedings
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Item 1A.
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Risk Factors
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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Item 3.
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Defaults Upon Senior Securities
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Item 4.
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Mine Safety Disclosures
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Item 5.
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Other Information
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Item 6.
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Exhibits
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SIGNATURES
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2017
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2016
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Assets
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(unaudited)
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Real estate investments at cost:
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Land
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$
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4,690,171
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1,660,424
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Buildings and improvements
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5,779,172
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3,092,197
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Properties in development
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373,962
|
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180,878
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10,843,305
|
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4,933,499
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Less: accumulated depreciation
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1,225,474
|
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1,124,391
|
|
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9,617,831
|
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3,809,108
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Properties held for sale
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19,600
|
|
|
—
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Investments in real estate partnerships
|
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376,800
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296,699
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Net real estate investments
|
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10,014,231
|
|
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4,105,807
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Cash and cash equivalents
|
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97,266
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13,256
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Restricted cash
|
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7,435
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|
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4,623
|
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Tenant and other receivables, net of allowance for doubtful accounts and straight-line rent reserves of $10,898 and $9,021 at June 30, 2017 and December 31, 2016, respectively
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125,372
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111,722
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Deferred leasing costs, less accumulated amortization of $88,612 and $83,529 at June 30, 2017 and December 31, 2016, respectively
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70,653
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69,000
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Acquired lease intangible assets, less accumulated amortization of $98,447 and $56,695 at June 30, 2017 and December 31, 2016, respectively
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540,119
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118,831
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Trading securities held in trust
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29,839
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28,588
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Other assets
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307,429
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|
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37,079
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Total assets
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$
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11,192,344
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4,488,906
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Liabilities and Equity
|
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Liabilities:
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Notes payable
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$
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2,944,995
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|
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1,363,925
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Unsecured credit facilities
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563,031
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278,495
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Accounts payable and other liabilities
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246,462
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138,936
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Acquired lease intangible liabilities, less accumulated amortization of $39,696 and $23,538 at June 30, 2017 and December 31, 2016, respectively
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653,695
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54,180
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Tenants’ security, escrow deposits and prepaid rent
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50,126
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28,868
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Total liabilities
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4,458,309
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1,864,404
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Commitments and contingencies
|
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—
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—
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Equity:
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|
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Stockholders’ equity:
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Preferred stock, $0.01 par value per share, 30,000,000 shares authorized; 3,000,000 Series 7 shares issued and outstanding at June 30, 2017, and 13,000,000 Series 6 and 7 shares issued and outstanding at December 31, 2016, with liquidation preferences of $25 per share
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75,000
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325,000
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Common stock, $0.01 par value per share, 220,000,000 and 150,000,000 shares authorized; 170,102,787 and 104,497,286 shares issued at June 30, 2017 and December 31, 2016, respectively
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1,701
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1,045
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Treasury stock at cost, 359,784 and 347,903 shares held at June 30, 2017 and December 31, 2016, respectively
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(18,105
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)
|
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(17,062
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)
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Additional paid in capital
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7,772,791
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3,294,923
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Accumulated other comprehensive loss
|
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(16,435
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)
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(18,346
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)
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Distributions in excess of net income
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(1,122,666
|
)
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(994,259
|
)
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Total stockholders’ equity
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6,692,286
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2,591,301
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Noncontrolling interests:
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|
|
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Exchangeable operating partnership units, aggregate redemption value of $21,918 and $10,630 at June 30, 2017 and December 31, 2016, respectively
|
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10,955
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(1,967
|
)
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Limited partners’ interests in consolidated partnerships
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30,794
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|
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35,168
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Total noncontrolling interests
|
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41,749
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|
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33,201
|
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Total equity
|
|
6,734,035
|
|
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2,624,502
|
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Total liabilities and equity
|
$
|
11,192,344
|
|
|
4,488,906
|
|
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|
Three months ended June 30,
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Six months ended June 30,
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||||||||
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2017
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2016
|
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2017
|
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2016
|
||||
Revenues:
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|
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|
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|
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|
||||
Minimum rent
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$
|
195,992
|
|
|
109,945
|
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$
|
337,232
|
|
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217,619
|
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Percentage rent
|
|
1,456
|
|
|
453
|
|
|
4,362
|
|
|
2,156
|
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Recoveries from tenants and other income
|
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57,256
|
|
|
35,874
|
|
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102,535
|
|
|
69,362
|
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Management, transaction, and other fees
|
|
6,601
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|
|
6,140
|
|
|
13,307
|
|
|
12,904
|
|
Total revenues
|
|
261,305
|
|
|
152,412
|
|
|
457,436
|
|
|
302,041
|
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Operating expenses:
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
|
92,230
|
|
|
40,299
|
|
|
152,284
|
|
|
79,015
|
|
Operating and maintenance
|
|
36,105
|
|
|
23,709
|
|
|
65,868
|
|
|
46,394
|
|
General and administrative
|
|
16,746
|
|
|
16,350
|
|
|
34,419
|
|
|
32,649
|
|
Real estate taxes
|
|
28,871
|
|
|
16,769
|
|
|
50,321
|
|
|
32,639
|
|
Other operating expenses (note 2)
|
|
6,616
|
|
|
2,440
|
|
|
78,129
|
|
|
4,747
|
|
Total operating expenses
|
|
180,568
|
|
|
99,567
|
|
|
381,021
|
|
|
195,444
|
|
Other expense (income):
|
|
|
|
|
|
|
|
|
||||
Interest expense, net
|
|
35,407
|
|
|
24,401
|
|
|
62,606
|
|
|
48,544
|
|
Provision for impairment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,666
|
|
Early extinguishment of debt
|
|
12,404
|
|
|
—
|
|
|
12,404
|
|
|
—
|
|
Net investment (income) loss, including unrealized (gains) losses of ($11) and ($863), and ($275) and $892 for the three and six months ended June 30, 2017 and 2016, respectively
|
|
(887
|
)
|
|
(602
|
)
|
|
(1,984
|
)
|
|
(446
|
)
|
Total other expense (income)
|
|
46,924
|
|
|
23,799
|
|
|
73,026
|
|
|
49,764
|
|
Income from operations before equity in income of investments in real estate partnerships
|
|
33,813
|
|
|
29,046
|
|
|
3,389
|
|
|
56,833
|
|
Equity in income of investments in real estate partnerships
|
|
12,240
|
|
|
11,050
|
|
|
21,583
|
|
|
23,971
|
|
Income tax expense of taxable REIT subsidiary
|
|
246
|
|
|
—
|
|
|
296
|
|
|
—
|
|
Income from operations
|
|
45,807
|
|
|
40,096
|
|
|
24,676
|
|
|
80,804
|
|
Gain on sale of real estate, net of tax
|
|
4,366
|
|
|
548
|
|
|
4,781
|
|
|
13,417
|
|
Net income
|
|
50,173
|
|
|
40,644
|
|
|
29,457
|
|
|
94,221
|
|
Noncontrolling interests:
|
|
|
|
|
|
|
|
|
||||
Exchangeable operating partnership units
|
|
(104
|
)
|
|
(64
|
)
|
|
(85
|
)
|
|
(150
|
)
|
Limited partners’ interests in consolidated partnerships
|
|
(576
|
)
|
|
(504
|
)
|
|
(1,247
|
)
|
|
(853
|
)
|
Income attributable to noncontrolling interests
|
|
(680
|
)
|
|
(568
|
)
|
|
(1,332
|
)
|
|
(1,003
|
)
|
Net income attributable to the Company
|
|
49,493
|
|
|
40,076
|
|
|
28,125
|
|
|
93,218
|
|
Preferred stock dividends and issuance costs
|
|
(1,125
|
)
|
|
(5,266
|
)
|
|
(12,981
|
)
|
|
(10,531
|
)
|
Net income attributable to common stockholders
|
$
|
48,368
|
|
|
34,810
|
|
$
|
15,144
|
|
|
82,687
|
|
|
|
|
|
|
|
|
|
|
||||
Income per common share - basic
|
$
|
0.28
|
|
|
0.36
|
|
$
|
0.10
|
|
|
0.85
|
|
Income per common share - diluted
|
$
|
0.28
|
|
|
0.35
|
|
$
|
0.10
|
|
|
0.84
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Net income
|
$
|
50,173
|
|
|
40,644
|
|
$
|
29,457
|
|
|
94,221
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
||||
Effective portion of change in fair value of derivative instruments:
|
|
|
|
|
|
|
|
|
||||
Effective portion of change in fair value of derivative instruments
|
|
(3,805
|
)
|
|
(9,846
|
)
|
|
(3,873
|
)
|
|
(26,631
|
)
|
Reclassification adjustment of derivative instruments included in net income
|
|
3,071
|
|
|
2,500
|
|
|
5,726
|
|
|
4,952
|
|
Unrealized gain on available-for-sale securities
|
|
11
|
|
|
73
|
|
|
43
|
|
|
37
|
|
Other comprehensive (loss) income
|
|
(723
|
)
|
|
(7,273
|
)
|
|
1,896
|
|
|
(21,642
|
)
|
Comprehensive income
|
|
49,450
|
|
|
33,371
|
|
|
31,353
|
|
|
72,579
|
|
Less: comprehensive income (loss) attributable to noncontrolling interests:
|
|
|
|
|
|
|
|
|
||||
Net income attributable to noncontrolling interests
|
|
680
|
|
|
568
|
|
|
1,332
|
|
|
1,003
|
|
Other comprehensive (loss) income attributable to noncontrolling interests
|
|
(80
|
)
|
|
(128
|
)
|
|
(15
|
)
|
|
(297
|
)
|
Comprehensive income attributable to noncontrolling interests
|
|
600
|
|
|
440
|
|
|
1,317
|
|
|
706
|
|
Comprehensive income attributable to the Company
|
$
|
48,850
|
|
|
32,931
|
|
$
|
30,036
|
|
|
71,873
|
|
REGENCY CENTERS CORPORATION
Consolidated Statements of Equity
For the six months ended June 30, 2017 and 2016
(in thousands, except per share data)
(unaudited)
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling Interests
|
|
|
||||||||||||||||
|
|
Preferred
Stock
|
|
Common
Stock
|
|
Treasury
Stock
|
|
Additional
Paid In
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Distributions
in Excess of
Net Income
|
|
Total
Stockholders’
Equity
|
|
Exchangeable
Operating
Partnership
Units
|
|
Limited
Partners’
Interest in
Consolidated
Partnerships
|
|
Total
Noncontrolling
Interests
|
|
Total
Equity
|
||||||||||||
Balance at December 31, 2015
|
|
$
|
325,000
|
|
|
972
|
|
|
(19,658
|
)
|
|
2,742,508
|
|
|
(58,693
|
)
|
|
(936,020
|
)
|
|
2,054,109
|
|
|
(1,975
|
)
|
|
30,486
|
|
|
28,511
|
|
|
2,082,620
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
93,218
|
|
|
93,218
|
|
|
150
|
|
|
853
|
|
|
1,003
|
|
|
94,221
|
|
|
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,345
|
)
|
|
—
|
|
|
(21,345
|
)
|
|
(34
|
)
|
|
(263
|
)
|
|
(297
|
)
|
|
(21,642
|
)
|
|
Deferred compensation plan, net
|
|
—
|
|
|
—
|
|
|
2,815
|
|
|
(2,815
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Restricted stock issued, net of amortization
|
|
—
|
|
|
2
|
|
|
—
|
|
|
6,802
|
|
|
—
|
|
|
—
|
|
|
6,804
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,804
|
|
|
Common stock redeemed for taxes withheld for stock based compensation, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,876
|
)
|
|
—
|
|
|
—
|
|
|
(7,876
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,876
|
)
|
|
Common stock issued under dividend reinvestment plan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
547
|
|
|
—
|
|
|
—
|
|
|
547
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
547
|
|
|
Common stock issued, net of issuance costs
|
|
—
|
|
|
21
|
|
|
—
|
|
|
149,767
|
|
|
—
|
|
|
—
|
|
|
149,788
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
149,788
|
|
|
Contributions from partners
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,600
|
|
|
8,600
|
|
|
8,600
|
|
|
Distributions to partners
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(350
|
)
|
|
—
|
|
|
—
|
|
|
(350
|
)
|
|
—
|
|
|
(2,394
|
)
|
|
(2,394
|
)
|
|
(2,744
|
)
|
|
Cash dividends declared:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Preferred stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,531
|
)
|
|
(10,531
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,531
|
)
|
|
Common stock/unit ($1.00 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(97,608
|
)
|
|
(97,608
|
)
|
|
(154
|
)
|
|
—
|
|
|
(154
|
)
|
|
(97,762
|
)
|
|
Balance at June 30, 2016
|
|
$
|
325,000
|
|
|
995
|
|
|
(16,843
|
)
|
|
2,888,583
|
|
|
(80,038
|
)
|
|
(950,941
|
)
|
|
2,166,756
|
|
|
(2,013
|
)
|
|
37,282
|
|
|
35,269
|
|
|
2,202,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2016
|
|
$
|
325,000
|
|
|
1,045
|
|
|
(17,062
|
)
|
|
3,294,923
|
|
|
(18,346
|
)
|
|
(994,259
|
)
|
|
2,591,301
|
|
|
(1,967
|
)
|
|
35,168
|
|
|
33,201
|
|
|
2,624,502
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,125
|
|
|
28,125
|
|
|
85
|
|
|
1,247
|
|
|
1,332
|
|
|
29,457
|
|
|
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,911
|
|
|
—
|
|
|
1,911
|
|
|
1
|
|
|
(16
|
)
|
|
(15
|
)
|
|
1,896
|
|
|
Deferred compensation plan, net
|
|
—
|
|
|
—
|
|
|
(1,043
|
)
|
|
1,044
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
Restricted stock issued, net of amortization
|
|
—
|
|
|
2
|
|
|
—
|
|
|
7,169
|
|
|
—
|
|
|
—
|
|
|
7,171
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,171
|
|
|
Common stock redeemed for taxes withheld for stock based compensation, net
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(18,332
|
)
|
|
—
|
|
|
—
|
|
|
(18,333
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,333
|
)
|
|
Common stock issued under dividend reinvestment plan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
607
|
|
|
—
|
|
|
—
|
|
|
607
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
607
|
|
|
Common stock issued, net of issuance costs
|
|
—
|
|
|
654
|
|
|
—
|
|
|
4,470,816
|
|
|
—
|
|
|
—
|
|
|
4,471,470
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,471,470
|
|
|
Restricted stock issued upon Equity One merger
|
|
—
|
|
|
1
|
|
|
—
|
|
|
7,950
|
|
|
—
|
|
|
—
|
|
|
7,951
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,951
|
|
|
Redemption of preferred stock
|
|
(250,000
|
)
|
|
—
|
|
|
—
|
|
|
8,614
|
|
|
—
|
|
|
(8,614
|
)
|
|
(250,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(250,000
|
)
|
|
Contributions from partners
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,100
|
|
|
341
|
|
|
13,441
|
|
|
13,441
|
|
|
Distributions to partners
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,946
|
)
|
|
(5,946
|
)
|
|
(5,946
|
)
|
|
Cash dividends declared:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Preferred stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,367
|
)
|
|
(4,367
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,367
|
)
|
|
Common stock/unit (
$1.04
per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(143,551
|
)
|
|
(143,551
|
)
|
|
(264
|
)
|
|
—
|
|
|
(264
|
)
|
|
(143,815
|
)
|
|
Balance at June 30, 2017
|
|
$
|
75,000
|
|
|
1,701
|
|
|
(18,105
|
)
|
|
7,772,791
|
|
|
(16,435
|
)
|
|
(1,122,666
|
)
|
|
6,692,286
|
|
|
10,955
|
|
|
30,794
|
|
|
41,749
|
|
|
6,734,035
|
|
|
|
2017
|
|
2016
|
||
Cash flows from operating activities:
|
|
|
|
|
||
Net income
|
$
|
29,457
|
|
|
94,221
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||
Depreciation and amortization
|
|
152,284
|
|
|
79,015
|
|
Amortization of deferred loan cost and debt premium
|
|
4,769
|
|
|
4,831
|
|
(Accretion) and amortization of above and below market lease intangibles, net
|
|
(11,683
|
)
|
|
(1,176
|
)
|
Stock-based compensation, net of capitalization
|
|
13,826
|
|
|
5,189
|
|
Equity in income of investments in real estate partnerships
|
|
(21,583
|
)
|
|
(23,971
|
)
|
Gain on sale of real estate, net of tax
|
|
(4,781
|
)
|
|
(13,417
|
)
|
Provision for impairment
|
|
—
|
|
|
1,666
|
|
Early extinguishment of debt
|
|
12,404
|
|
|
—
|
|
Distribution of earnings from operations of investments in real estate partnerships
|
|
26,271
|
|
|
26,159
|
|
Deferred compensation expense
|
|
1,948
|
|
|
429
|
|
Realized and unrealized (gain) loss on investments
|
|
(1,951
|
)
|
|
(446
|
)
|
Changes in assets and liabilities:
|
|
|
|
|
||
Restricted cash
|
|
(1,228
|
)
|
|
(31
|
)
|
Accounts receivable, net
|
|
10,639
|
|
|
1,143
|
|
Straight-line rent receivables, net
|
|
(8,887
|
)
|
|
(3,071
|
)
|
Deferred leasing costs
|
|
(6,701
|
)
|
|
(5,386
|
)
|
Other assets
|
|
3,617
|
|
|
(1,718
|
)
|
Accounts payable and other liabilities
|
|
(23,850
|
)
|
|
(9,447
|
)
|
Tenants’ security, escrow deposits and prepaid rent
|
|
1,291
|
|
|
(2,693
|
)
|
Net cash provided by operating activities
|
|
175,842
|
|
|
151,297
|
|
Cash flows from investing activities:
|
|
|
|
|
||
Acquisition of operating real estate
|
|
(345
|
)
|
|
(297,448
|
)
|
Advance deposits paid on acquisition of operating real estate
|
|
(100
|
)
|
|
(1,500
|
)
|
Acquisition of Equity One, net of cash acquired of $72,534
|
|
(648,957
|
)
|
|
—
|
|
Real estate development and capital improvements
|
|
(161,574
|
)
|
|
(75,320
|
)
|
Proceeds from sale of real estate investments
|
|
15,344
|
|
|
36,751
|
|
Issuance of notes receivable
|
|
(2,837
|
)
|
|
—
|
|
Investments in real estate partnerships
|
|
(3,064
|
)
|
|
(3,823
|
)
|
Distributions received from investments in real estate partnerships
|
|
30,612
|
|
|
25,746
|
|
Dividends on investment securities
|
|
128
|
|
|
137
|
|
Acquisition of securities
|
|
(9,853
|
)
|
|
(46,306
|
)
|
Proceeds from sale of securities
|
|
10,877
|
|
|
45,739
|
|
Net cash used in investing activities
|
|
(769,769
|
)
|
|
(316,024
|
)
|
Cash flows from financing activities:
|
|
|
|
|
||
Net proceeds from common stock issuance
|
|
—
|
|
|
149,788
|
|
Repurchase of common shares in conjunction with equity award plans
|
|
(18,998
|
)
|
|
(7,984
|
)
|
Proceeds from sale of treasury stock
|
|
76
|
|
|
904
|
|
Redemption of preferred stock and partnership units
|
|
(250,000
|
)
|
|
—
|
|
Distributions to limited partners in consolidated partnerships, net
|
|
(5,891
|
)
|
|
(2,214
|
)
|
Distributions to exchangeable operating partnership unit holders
|
|
(264
|
)
|
|
(154
|
)
|
Dividends paid to common stockholders
|
|
(142,944
|
)
|
|
(97,061
|
)
|
Dividends paid to preferred stockholders
|
|
(4,366
|
)
|
|
(10,531
|
)
|
Proceeds from issuance of fixed rate unsecured notes, net
|
|
953,115
|
|
|
—
|
|
Proceeds from unsecured credit facilities
|
|
905,000
|
|
|
295,000
|
|
Repayment of unsecured credit facilities
|
|
(620,000
|
)
|
|
(150,000
|
)
|
Proceeds from notes payable
|
|
124,088
|
|
|
20,000
|
|
Repayment of notes payable
|
|
(232,839
|
)
|
|
(41,584
|
)
|
Scheduled principal payments
|
|
(4,789
|
)
|
|
(3,062
|
)
|
Payment of loan costs
|
|
(11,832
|
)
|
|
(292
|
)
|
Early redemption costs
|
|
(12,419
|
)
|
|
—
|
|
Net cash provided by financing activities
|
|
677,937
|
|
|
152,810
|
|
Net increase (decrease) in cash and cash equivalents
|
|
84,010
|
|
|
(11,917
|
)
|
Cash and cash equivalents at beginning of the period
|
|
13,256
|
|
|
36,856
|
|
Cash and cash equivalents at end of the period
|
$
|
97,266
|
|
|
24,939
|
|
|
|
2017
|
|
2016
|
||
Supplemental disclosure of cash flow information:
|
|
|
|
|
||
Cash paid for interest (net of capitalized interest of $3,290 and $1,766 in 2017 and 2016, respectively)
|
$
|
43,643
|
|
|
44,153
|
|
Cash received for income tax refunds, net of payments
|
$
|
899
|
|
|
—
|
|
Supplemental disclosure of non-cash transactions:
|
|
|
|
|
||
Exchangeable operating partnership units issued for acquisition of real estate
|
$
|
13,100
|
|
|
—
|
|
Real estate under capital lease obligation
|
$
|
6,000
|
|
|
—
|
|
Common stock issued under dividend reinvestment plan
|
$
|
607
|
|
|
547
|
|
Stock-based compensation capitalized
|
$
|
1,624
|
|
|
1,723
|
|
Contributions from limited partners in consolidated partnerships, net
|
$
|
286
|
|
|
8,420
|
|
Common stock issued for dividend reinvestment in trust
|
$
|
366
|
|
|
384
|
|
Contribution of stock awards into trust
|
$
|
1,372
|
|
|
1,488
|
|
Distribution of stock held in trust
|
$
|
640
|
|
|
4,060
|
|
Change in fair value of securities available-for-sale
|
$
|
43
|
|
|
37
|
|
Equity One Merger:
|
|
|
|
|
||
Notes payable assumed in Equity One merger, at fair value
|
$
|
757,399
|
|
|
—
|
|
Common stock exchanged for Equity One shares
|
$
|
(4,471,808
|
)
|
|
—
|
|
|
|
2017
|
|
2016
|
||
Assets
|
|
(unaudited)
|
|
|
||
Real estate investments at cost:
|
|
|
|
|
||
Land
|
$
|
4,690,171
|
|
|
1,660,424
|
|
Buildings and improvements
|
|
5,779,172
|
|
|
3,092,197
|
|
Properties in development
|
|
373,962
|
|
|
180,878
|
|
|
|
10,843,305
|
|
|
4,933,499
|
|
Less: accumulated depreciation
|
|
1,225,474
|
|
|
1,124,391
|
|
|
|
9,617,831
|
|
|
3,809,108
|
|
Properties held for sale
|
|
19,600
|
|
|
—
|
|
Investments in real estate partnerships
|
|
376,800
|
|
|
296,699
|
|
Net real estate investments
|
|
10,014,231
|
|
|
4,105,807
|
|
Cash and cash equivalents
|
|
97,266
|
|
|
13,256
|
|
Restricted cash
|
|
7,435
|
|
|
4,623
|
|
Tenant and other receivables, net of allowance for doubtful accounts and straight-line rent reserves of $10,898 and $9,021 at June 30, 2017 and December 31, 2016, respectively
|
|
125,372
|
|
|
111,722
|
|
Deferred leasing costs, less accumulated amortization of $88,612 and $83,529 at June 30, 2017 and December 31, 2016, respectively
|
|
70,653
|
|
|
69,000
|
|
Acquired lease intangible assets, less accumulated amortization of $98,447 and $56,695 at June 30, 2017 and December 31, 2016, respectively
|
|
540,119
|
|
|
118,831
|
|
Trading securities held in trust
|
|
29,839
|
|
|
28,588
|
|
Other assets
|
|
307,429
|
|
|
37,079
|
|
Total assets
|
$
|
11,192,344
|
|
|
4,488,906
|
|
Liabilities and Capital
|
|
|
|
|
||
Liabilities:
|
|
|
|
|
||
Notes payable
|
$
|
2,944,995
|
|
|
1,363,925
|
|
Unsecured credit facilities
|
|
563,031
|
|
|
278,495
|
|
Accounts payable and other liabilities
|
|
246,462
|
|
|
138,936
|
|
Acquired lease intangible liabilities, less accumulated amortization of $39,696 and $23,538 at June 30, 2017 and December 31, 2016, respectively
|
|
653,695
|
|
|
54,180
|
|
Tenants’ security, escrow deposits and prepaid rent
|
|
50,126
|
|
|
28,868
|
|
Total liabilities
|
|
4,458,309
|
|
|
1,864,404
|
|
Commitments and contingencies
|
|
—
|
|
|
—
|
|
Capital:
|
|
|
|
|
||
Partners’ capital:
|
|
|
|
|
||
Preferred units of general partner, $0.01 par value per unit, 3,000,000 and 13,000,000 units issued and outstanding at June 30, 2017 and December 31, 2016, respectively, liquidation preference of $25 per unit
|
|
75,000
|
|
|
325,000
|
|
General partner; 170,102,787 and 104,497,286 units outstanding at June 30, 2017 and December 31, 2016, respectively
|
|
6,633,721
|
|
|
2,284,647
|
|
Limited partners; 349,902 and 154,170 units outstanding at June 30, 2017 and December 31, 2016, respectively
|
|
10,955
|
|
|
(1,967
|
)
|
Accumulated other comprehensive loss
|
|
(16,435
|
)
|
|
(18,346
|
)
|
Total partners’ capital
|
|
6,703,241
|
|
|
2,589,334
|
|
Noncontrolling interests:
|
|
|
|
|
||
Limited partners’ interests in consolidated partnerships
|
|
30,794
|
|
|
35,168
|
|
Total noncontrolling interests
|
|
30,794
|
|
|
35,168
|
|
Total capital
|
|
6,734,035
|
|
|
2,624,502
|
|
Total liabilities and capital
|
$
|
11,192,344
|
|
|
4,488,906
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Revenues:
|
|
|
|
|
|
|
|
|
||||
Minimum rent
|
$
|
195,992
|
|
|
109,945
|
|
$
|
337,232
|
|
|
217,619
|
|
Percentage rent
|
|
1,456
|
|
|
453
|
|
|
4,362
|
|
|
2,156
|
|
Recoveries from tenants and other income
|
|
57,256
|
|
|
35,874
|
|
|
102,535
|
|
|
69,362
|
|
Management, transaction, and other fees
|
|
6,601
|
|
|
6,140
|
|
|
13,307
|
|
|
12,904
|
|
Total revenues
|
|
261,305
|
|
|
152,412
|
|
|
457,436
|
|
|
302,041
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
|
92,230
|
|
|
40,299
|
|
|
152,284
|
|
|
79,015
|
|
Operating and maintenance
|
|
36,105
|
|
|
23,709
|
|
|
65,868
|
|
|
46,394
|
|
General and administrative
|
|
16,746
|
|
|
16,350
|
|
|
34,419
|
|
|
32,649
|
|
Real estate taxes
|
|
28,871
|
|
|
16,769
|
|
|
50,321
|
|
|
32,639
|
|
Other operating expenses (note 2)
|
|
6,616
|
|
|
2,440
|
|
|
78,129
|
|
|
4,747
|
|
Total operating expenses
|
|
180,568
|
|
|
99,567
|
|
|
381,021
|
|
|
195,444
|
|
Other expense (income):
|
|
|
|
|
|
|
|
|
||||
Interest expense, net
|
|
35,407
|
|
|
24,401
|
|
|
62,606
|
|
|
48,544
|
|
Provision for impairment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,666
|
|
Early extinguishment of debt
|
|
12,404
|
|
|
—
|
|
|
12,404
|
|
|
—
|
|
Net investment (income) loss, including unrealized (gains) losses of ($11) and ($863), and ($275) and $892 for the three and six months ended June 30, 2017 and 2016, respectively
|
|
(887
|
)
|
|
(602
|
)
|
|
(1,984
|
)
|
|
(446
|
)
|
Total other expense (income)
|
|
46,924
|
|
|
23,799
|
|
|
73,026
|
|
|
49,764
|
|
Income from operations before equity in income of investments in real estate partnerships
|
|
33,813
|
|
|
29,046
|
|
|
3,389
|
|
|
56,833
|
|
Equity in income of investments in real estate partnerships
|
|
12,240
|
|
|
11,050
|
|
|
21,583
|
|
|
23,971
|
|
Income tax expense of taxable REIT subsidiary
|
|
246
|
|
|
—
|
|
|
296
|
|
|
—
|
|
Income from operations
|
|
45,807
|
|
|
40,096
|
|
|
24,676
|
|
|
80,804
|
|
Gain on sale of real estate, net of tax
|
|
4,366
|
|
|
548
|
|
|
4,781
|
|
|
13,417
|
|
Net income
|
|
50,173
|
|
|
40,644
|
|
|
29,457
|
|
|
94,221
|
|
Limited partners’ interests in consolidated partnerships
|
|
(576
|
)
|
|
(504
|
)
|
|
(1,247
|
)
|
|
(853
|
)
|
Net income attributable to the Partnership
|
|
49,597
|
|
|
40,140
|
|
|
28,210
|
|
|
93,368
|
|
Preferred unit distributions and issuance costs
|
|
(1,125
|
)
|
|
(5,266
|
)
|
|
(12,981
|
)
|
|
(10,531
|
)
|
Net income attributable to common unit holders
|
$
|
48,472
|
|
|
34,874
|
|
$
|
15,229
|
|
|
82,837
|
|
|
|
|
|
|
|
|
|
|
||||
Income per common unit - basic
|
$
|
0.28
|
|
|
0.36
|
|
$
|
0.10
|
|
|
0.85
|
|
Income per common unit - diluted
|
$
|
0.28
|
|
|
0.35
|
|
$
|
0.10
|
|
|
0.84
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Net income
|
$
|
50,173
|
|
|
40,644
|
|
$
|
29,457
|
|
|
94,221
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
||||
Effective portion of change in fair value of derivative instruments:
|
|
|
|
|
|
|
|
|
||||
Effective portion of change in fair value of derivative instruments
|
|
(3,805
|
)
|
|
(9,846
|
)
|
|
(3,873
|
)
|
|
(26,631
|
)
|
Reclassification adjustment of derivative instruments included in net income
|
|
3,071
|
|
|
2,500
|
|
|
5,726
|
|
|
4,952
|
|
Unrealized gain on available-for-sale securities
|
|
11
|
|
|
73
|
|
|
43
|
|
|
37
|
|
Other comprehensive (loss) income
|
|
(723
|
)
|
|
(7,273
|
)
|
|
1,896
|
|
|
(21,642
|
)
|
Comprehensive income
|
|
49,450
|
|
|
33,371
|
|
|
31,353
|
|
|
72,579
|
|
Less: comprehensive income (loss) attributable to noncontrolling interests:
|
|
|
|
|
|
|
|
|
||||
Net income attributable to noncontrolling interests
|
|
576
|
|
|
504
|
|
|
1,247
|
|
|
853
|
|
Other comprehensive income (loss) attributable to noncontrolling interests
|
|
79
|
|
|
(117
|
)
|
|
(16
|
)
|
|
(263
|
)
|
Comprehensive income attributable to noncontrolling interests
|
|
655
|
|
|
387
|
|
|
1,231
|
|
|
590
|
|
Comprehensive income attributable to the Partnership
|
$
|
48,795
|
|
|
32,984
|
|
$
|
30,122
|
|
|
71,989
|
|
REGENCY CENTERS, L.P.
Consolidated Statements of Capital
For the six months ended June 30, 2017 and 2016
(in thousands)
(unaudited)
|
||||||||||||||||||
|
|
General Partner
Preferred and
Common Units
|
|
Limited
Partners
|
|
Accumulated
Other
Comprehensive Loss
|
|
Total
Partners’
Capital
|
|
Noncontrolling
Interests in
Limited Partners’
Interest in
Consolidated
Partnerships
|
|
Total
Capital
|
||||||
Balance at December 31, 2015
|
$
|
2,112,802
|
|
|
(1,975
|
)
|
|
(58,693
|
)
|
|
2,052,134
|
|
|
30,486
|
|
|
2,082,620
|
|
Net income
|
|
93,218
|
|
|
150
|
|
|
—
|
|
|
93,368
|
|
|
853
|
|
|
94,221
|
|
Other comprehensive loss
|
|
—
|
|
|
(34
|
)
|
|
(21,345
|
)
|
|
(21,379
|
)
|
|
(263
|
)
|
|
(21,642
|
)
|
Contributions from partners
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,600
|
|
|
8,600
|
|
Distributions to partners
|
|
(97,958
|
)
|
|
(154
|
)
|
|
—
|
|
|
(98,112
|
)
|
|
(2,394
|
)
|
|
(100,506
|
)
|
Preferred unit distributions
|
|
(10,531
|
)
|
|
—
|
|
|
—
|
|
|
(10,531
|
)
|
|
—
|
|
|
(10,531
|
)
|
Restricted units issued as a result of amortization of restricted stock issued by Parent Company
|
|
6,804
|
|
|
—
|
|
|
—
|
|
|
6,804
|
|
|
—
|
|
|
6,804
|
|
Common units redeemed as a result of common stock redeemed by Parent Company, net of issuances
|
|
142,459
|
|
|
—
|
|
|
—
|
|
|
142,459
|
|
|
—
|
|
|
142,459
|
|
Balance at June 30, 2016
|
|
2,246,794
|
|
|
(2,013
|
)
|
|
(80,038
|
)
|
|
2,164,743
|
|
|
37,282
|
|
|
2,202,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance at December 31, 2016
|
|
2,609,647
|
|
|
(1,967
|
)
|
|
(18,346
|
)
|
|
2,589,334
|
|
|
35,168
|
|
|
2,624,502
|
|
Net income
|
|
28,125
|
|
|
85
|
|
|
—
|
|
|
28,210
|
|
|
1,247
|
|
|
29,457
|
|
Other comprehensive income
|
|
—
|
|
|
1
|
|
|
1,911
|
|
|
1,912
|
|
|
(16
|
)
|
|
1,896
|
|
Deferred compensation plan, net
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Contributions from partners
|
|
—
|
|
|
13,100
|
|
|
—
|
|
|
13,100
|
|
|
341
|
|
|
13,441
|
|
Distributions to partners
|
|
(143,551
|
)
|
|
(264
|
)
|
|
—
|
|
|
(143,815
|
)
|
|
(5,946
|
)
|
|
(149,761
|
)
|
Preferred unit distributions
|
|
(4,367
|
)
|
|
—
|
|
|
—
|
|
|
(4,367
|
)
|
|
—
|
|
|
(4,367
|
)
|
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization
|
|
7,171
|
|
|
—
|
|
|
—
|
|
|
7,171
|
|
|
—
|
|
|
7,171
|
|
Preferred stock redemptions
|
|
(250,000
|
)
|
|
—
|
|
|
—
|
|
|
(250,000
|
)
|
|
—
|
|
|
(250,000
|
)
|
Common units issued as a result of common stock issued by Parent Company, net of repurchases
|
|
4,453,744
|
|
|
—
|
|
|
—
|
|
|
4,453,744
|
|
|
—
|
|
|
4,453,744
|
|
Restricted units issued as a result of restricted stock issued by Parent Company upon Equity One merger
|
|
7,951
|
|
|
—
|
|
|
—
|
|
|
7,951
|
|
|
—
|
|
|
7,951
|
|
Balance at June 30, 2017
|
$
|
6,708,721
|
|
|
10,955
|
|
|
(16,435
|
)
|
|
6,703,241
|
|
|
30,794
|
|
|
6,734,035
|
|
|
|
2017
|
|
2016
|
||
Cash flows from operating activities:
|
|
|
|
|
||
Net income
|
$
|
29,457
|
|
|
94,221
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||
Depreciation and amortization
|
|
152,284
|
|
|
79,015
|
|
Amortization of deferred loan cost and debt premium
|
|
4,769
|
|
|
4,831
|
|
(Accretion) and amortization of above and below market lease intangibles, net
|
|
(11,683
|
)
|
|
(1,176
|
)
|
Stock-based compensation, net of capitalization
|
|
13,826
|
|
|
5,189
|
|
Equity in income of investments in real estate partnerships
|
|
(21,583
|
)
|
|
(23,971
|
)
|
Gain on sale of real estate, net of tax
|
|
(4,781
|
)
|
|
(13,417
|
)
|
Provision for impairment
|
|
—
|
|
|
1,666
|
|
Early extinguishment of debt
|
|
12,404
|
|
|
—
|
|
Distribution of earnings from operations of investments in real estate partnerships
|
|
26,271
|
|
|
26,159
|
|
Deferred compensation expense
|
|
1,948
|
|
|
429
|
|
Realized and unrealized (gain) loss on investments
|
|
(1,951
|
)
|
|
(446
|
)
|
Changes in assets and liabilities:
|
|
|
|
|
||
Restricted cash
|
|
(1,228
|
)
|
|
(31
|
)
|
Accounts receivable, net
|
|
10,639
|
|
|
1,143
|
|
Straight-line rent receivables, net
|
|
(8,887
|
)
|
|
(3,071
|
)
|
Deferred leasing costs
|
|
(6,701
|
)
|
|
(5,386
|
)
|
Other assets
|
|
3,617
|
|
|
(1,718
|
)
|
Accounts payable and other liabilities
|
|
(23,850
|
)
|
|
(9,447
|
)
|
Tenants’ security, escrow deposits and prepaid rent
|
|
1,291
|
|
|
(2,693
|
)
|
Net cash provided by operating activities
|
|
175,842
|
|
|
151,297
|
|
Cash flows from investing activities:
|
|
|
|
|
||
Acquisition of operating real estate
|
|
(345
|
)
|
|
(297,448
|
)
|
Advance deposits paid on acquisition of operating real estate
|
|
(100
|
)
|
|
(1,500
|
)
|
Acquisition of Equity One, net of cash acquired of $72,534
|
|
(648,957
|
)
|
|
—
|
|
Real estate development and capital improvements
|
|
(161,574
|
)
|
|
(75,320
|
)
|
Proceeds from sale of real estate investments
|
|
15,344
|
|
|
36,751
|
|
Issuance of notes receivable
|
|
(2,837
|
)
|
|
—
|
|
Investments in real estate partnerships
|
|
(3,064
|
)
|
|
(3,823
|
)
|
Distributions received from investments in real estate partnerships
|
|
30,612
|
|
|
25,746
|
|
Dividends on investment securities
|
|
128
|
|
|
137
|
|
Acquisition of securities
|
|
(9,853
|
)
|
|
(46,306
|
)
|
Proceeds from sale of securities
|
|
10,877
|
|
|
45,739
|
|
Net cash used in investing activities
|
|
(769,769
|
)
|
|
(316,024
|
)
|
Cash flows from financing activities:
|
|
|
|
|
||
Net proceeds from common units issued as a result of common stock issued by Parent Company
|
|
—
|
|
|
149,788
|
|
Repurchase of common shares in conjunction with equity award plans
|
|
(18,998
|
)
|
|
(7,984
|
)
|
Proceeds from sale of treasury stock
|
|
76
|
|
|
904
|
|
Redemption of preferred partnership units
|
|
(250,000
|
)
|
|
—
|
|
Distributions (to) from limited partners in consolidated partnerships, net
|
|
(5,891
|
)
|
|
(2,214
|
)
|
Distributions to partners
|
|
(143,208
|
)
|
|
(97,215
|
)
|
Distributions to preferred unit holders
|
|
(4,366
|
)
|
|
(10,531
|
)
|
Proceeds from issuance of fixed rate unsecured notes, net
|
|
953,115
|
|
|
—
|
|
Proceeds from unsecured credit facilities
|
|
905,000
|
|
|
295,000
|
|
Repayment of unsecured credit facilities
|
|
(620,000
|
)
|
|
(150,000
|
)
|
Proceeds from notes payable
|
|
124,088
|
|
|
20,000
|
|
Repayment of notes payable
|
|
(232,839
|
)
|
|
(41,584
|
)
|
Scheduled principal payments
|
|
(4,789
|
)
|
|
(3,062
|
)
|
Payment of loan costs
|
|
(11,832
|
)
|
|
(292
|
)
|
Early redemption costs
|
|
(12,419
|
)
|
|
—
|
|
Net cash provided by financing activities
|
|
677,937
|
|
|
152,810
|
|
Net increase (decrease) in cash and cash equivalents
|
|
84,010
|
|
|
(11,917
|
)
|
Cash and cash equivalents at beginning of the period
|
|
13,256
|
|
|
36,856
|
|
Cash and cash equivalents at end of the period
|
$
|
97,266
|
|
|
24,939
|
|
|
|
2017
|
|
2016
|
||
Supplemental disclosure of cash flow information:
|
|
|
|
|
||
Cash paid for interest (net of capitalized interest of $3,290 and $1,766 in 2017 and 2016, respectively)
|
$
|
43,643
|
|
|
44,153
|
|
Cash received for income tax refunds, net of payments
|
$
|
899
|
|
|
—
|
|
Supplemental disclosure of non-cash transactions:
|
|
|
|
|
||
Limited partner units issued in exchange for acquisition of real estate
|
$
|
13,100
|
|
|
—
|
|
Real estate under capital lease obligation
|
$
|
6,000
|
|
|
—
|
|
Common stock issued by Parent Company for dividend reinvestment plan
|
$
|
607
|
|
|
547
|
|
Stock-based compensation capitalized
|
$
|
1,624
|
|
|
1,723
|
|
Contributions from limited partners in consolidated partnerships, net
|
$
|
286
|
|
|
8,420
|
|
Common stock issued for dividend reinvestment in trust
|
$
|
366
|
|
|
384
|
|
Contribution of stock awards into trust
|
$
|
1,372
|
|
|
1,488
|
|
Distribution of stock held in trust
|
$
|
640
|
|
|
4,060
|
|
Change in fair value of securities available-for-sale
|
$
|
43
|
|
|
37
|
|
|
|
|
|
|
||
Equity One Merger:
|
|
|
|
|
|
|
Notes payable assumed in Equity One merger, at fair value
|
$
|
757,399
|
|
|
—
|
|
General partner units issued to Parent Company for common stock exchanged for Equity One shares
|
$
|
(4,471,808
|
)
|
|
—
|
|
1.
|
Organization and Significant Accounting Policies
|
•
|
Those partnerships for which the partners only have protective rights are considered VIEs under ASC 810, Consolidation. Regency is the primary beneficiary of these VIEs as Regency has power over these partnerships and they operate primarily for the benefit of Regency. As such, Regency consolidates these entities and reports the limited partners’ interest as noncontrolling interests.
|
•
|
Those partnerships for which the partners are involved in the day to day decisions and do not have any other aspects that would cause them to be considered VIEs, are evaluated for consolidation using the voting interest model.
|
◦
|
Those partnerships in which Regency has a controlling financial interest are consolidated and the limited partners’ ownership interest and share of net income is recorded as noncontrolling interest.
|
◦
|
Those partnerships in which Regency does not have a controlling financial interest are accounted for using the equity method, and its ownership interest is recognized through single-line presentation as Investments in real estate partnerships in the Consolidated Balance Sheet, and Equity in income of investments in real estate partnerships in the Consolidated Statements of Operations. Cash distributions of earnings from operations of investments in real estate partnerships are presented in cash flows provided by operating activities in the accompanying Consolidated Statements of Cash Flows. Cash distributions from the sale of a property or loan proceeds received from the placement of debt on a property included in investments in real estate partnerships are presented in cash flows provided by investing activities in the accompanying Consolidated Statements of Cash Flows. The net difference in the carrying amount of investments in real estate partnerships and the underlying equity in net assets is either (1) accreted to income and recorded in Equity in income of investments in real estate partnerships in the accompanying Consolidated Statements of Operations over the expected useful lives of the properties and other intangible assets, which range in lives from
10
to
40
years, or (2) recognized upon sale of the underlying asset(s) or settlement of underlying liabilities, or (3) recognized at liquidation if the joint venture agreement includes a unilateral right to elect to dissolve the real estate partnership and, upon such an election, receive a distribution in-kind.
|
(in thousands)
|
June 30, 2017
|
December 31, 2016
|
|||
Assets
|
|
|
|||
Real estate assets, net
|
$
|
92,341
|
|
86,440
|
|
Cash and cash equivalents
|
2,957
|
|
3,444
|
|
|
Liabilities
|
|
|
|||
Notes payable
|
9,774
|
|
8,175
|
|
|
Equity
|
|
|
|||
Limited partners’ interests in consolidated partnerships
|
17,691
|
|
17,565
|
|
Standard
|
|
Description
|
|
Date of adoption
|
|
Effect on the financial statements or other significant matters
|
Recently adopted:
|
|
|
|
|
|
|
ASU 2016-09, March 2016,
Compensation-Stock Compensation (Topic 718):
Improvements to Employee Share-Based Payment Accounting
|
|
This ASU affects entities that issue share-based payment awards to their employees. The ASU is designed to simplify several aspects of accounting for share-based payment award transactions including income tax consequences, classification of awards as either equity or liabilities, an option to recognize stock compensation forfeitures as they occur, and changes to classification on the statement of cash flows.
|
|
January 2017
|
|
The adoption of this standard resulted in the reclassification of income taxes withheld on share-based awards out of operating activities into financing activities on the Statement of Cash Flows. As retrospective application was required for this component of the ASU, $8.0 million was reclassified on the Statements of Cash Flows for the six months ended June 30, 2016.
|
Not yet adopted:
|
|
|
|
|
|
|
ASU 2017-01
January 2017, Business Combinations (Topic 805): Clarifying the Definition of a Business |
|
The amendments in this update provide a screen to determine when an integrated set of assets and activities, collectively referred to as a "set", is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business.
If the screen is not met, the amendments in this update (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. The amendments provide a framework to assist entities in evaluating whether both an input and a substantive process are present. Early adoption is permitted. |
|
July 2017
|
|
The Company expects this standard to change the treatment of individual operating properties from being considered a business to being considered an asset.
This change will result in acquisition costs being capitalized as part of the asset acquisition, whereas current treatment has them recognized in earnings in the period incurred. The Company will adopt this standard effective July 1, 2017. |
|
|
|
|
|
|
|
ASU 2016-01, January 2016,
Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities
|
|
The standard amends the guidance to classify equity securities with readily-determinable fair values into different categories and requires equity securities to be measured at fair value with changes in the fair value recognized through net income. Equity investments accounted for under the equity method are not included in the scope of this amendment. Early adoption of this amendment is not permitted.
|
|
January 2018
|
|
The Company does not expect the adoption and implementation of this standard to have a material impact on its results of operations, financial
condition or cash flows.
|
|
|
|
|
|
|
|
ASU 2016-15, August 2016,
Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments
|
|
The standard will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. Early adoption is permitted on a retrospective basis.
|
|
January 2018
|
|
The ASU is consistent with the Company's current treatment and the Company does not expect the adoption and implementation of this standard to have an impact on its cash flow statement.
|
|
|
|
|
|
|
|
ASU 2016-18, November 2016,
Statement of Cash Flows (Topic 230): Restricted Cash
|
|
This ASU requires entities to show the changes in the total of cash, cash equivalents, restricted cash, and restricted cash equivalents in the statement of cash flows. Early adoption is permitted on a retrospective basis.
|
|
January 2018
|
|
The Company is evaluating the alternative methods of adoption and does not expect the adoption to have a material impact on its Statements of Cash Flows.
|
|
|
|
|
|
|
|
Standard
|
|
Description
|
|
Date of adoption
|
|
Effect on the financial statements or other significant matters
|
Revenue from Contracts with Customers (Topic 606):
ASU 2014-09, May 2014,
Revenue from Contracts with Customers (Topic 606)
ASU 2016-08, March 2016,
Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations
ASU 2016-10, April 2016,
Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing
ASU 2016-12, May 2016,
Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients
ASU 2016-19, December 2016,
Technical Corrections and Improvements
ASU 2016-20, December 2016,
Technical Corrections and Improvements to Topic 606 Revenue from Contracts With Customers
ASU 2017-05, February 2017,
Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets
|
|
The standard will replace existing revenue recognition standards and significantly expand the disclosure requirements for revenue arrangements. It may be adopted either retrospectively or on a modified retrospective basis to new contracts and existing contracts with remaining performance obligations as of the effective date.
|
|
January 2018
|
|
The Company is completing its evaluation of the new ASU's as applied to its revenue streams and contracts within the scope of Topic 606. The Company currently does not expect the adoption of these new ASU's to result in a material change to its revenue recognition policies or practices, including timing or presentation.
The Company is evaluating the adoption method to apply.
|
|
|
|
|
|
|
|
Standard
|
|
Description
|
|
Date of adoption
|
|
Effect on the financial statements or other significant matters
|
ASU 2016-02, February 2016,
Leases (Topic 842)
|
|
The standard amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets. It also makes targeted changes to lessor accounting, including a change to the treatment of initial direct leasing costs, which no longer considers fixed internal leasing salaries as capitalizable costs.
Early adoption of this standard is permitted to coincide with adoption of ASU 2014-09. The standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief.
|
|
January 2019
|
|
The Company is evaluating the impact this standard will have on its financial statements and related disclosures.
Upon adoption, the Company will recognize right of use assets and corresponding lease obligations for its office and ground leases.
Capitalization of internal leasing salaries and legal costs will no longer be permitted upon the adoption of this standard, which will result in an increase in Total operating expenses in the Consolidated Statements of Operations in the period of adoption and prospectively.
Historic capitalization of internal leasing salaries was $5.0 million and $10.5 million during the six months ended June 30, 2017 and the year ended December 31, 2016, respectively.
Historic capitalization of legal costs was $0.5 million and $0.7 million during the six months ended June 30, 2017 and the year ended December 31, 2016, respectively, including our pro rata share recognized through Equity in income of investments in real estate partnerships.
|
|
|
|
|
|
|
|
ASU 2016-13, June 2016
, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
|
|
The amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.
This ASU applies to how the Company determines its allowance for doubtful accounts on tenant receivables.
|
|
January 2020
|
|
The Company is evaluating the alternative methods of adoption and the impact it will have on its financial statements and related disclosures.
|
|
|
|
|
|
|
|
ASU 2017-04, January 2017,
Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment
|
|
This amendment in this update simplifies how an entity tests goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit's goodwill with the carrying amount of that goodwill. Instead, under this update, the Company will perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The Company would then recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to that reporting unit.
|
|
January 2020
|
|
The Company is evaluating the impact of early adoption and the effect this ASU will have on its financial statements and related disclosures.
|
|
|
|
|
|
|
|
2.
|
Real Estate Investments
|
(in thousands, except stock price)
|
Purchase Price
|
||
Shares of common stock issued for merger
|
65,379
|
|
|
Closing stock price on March 1, 2017
|
$
|
68.40
|
|
Value of common stock issued for merger
|
$
|
4,471,808
|
|
Debt repaid
|
716,278
|
|
|
Other cash payments
|
5,019
|
|
|
Total purchase price
|
$
|
5,193,105
|
|
|
|
|
|
June 30, 2017
|
|||
(in thousands)
|
|
Three months ended
|
Six months ended
|
||
Increase in total revenues
|
$
|
100,864
|
|
135,813
|
|
Increase in net income attributable to common stockholders
|
|
23,695
|
|
29,464
|
|
(in thousands)
|
|
Preliminary Purchase Price Allocation
|
||
Land
|
|
$
|
3,019,448
|
|
Building and improvements
|
|
2,651,506
|
|
|
Properties in development
|
|
70,179
|
|
|
Properties held for sale
|
|
19,600
|
|
|
Investments in unconsolidated real estate partnerships
|
|
103,566
|
|
|
Real estate assets
|
|
5,864,299
|
|
|
Cash, accounts receivable and other assets
|
|
112,271
|
|
|
Intangible assets
|
|
463,882
|
|
|
Goodwill
|
|
246,619
|
|
|
Total assets acquired
|
|
6,687,071
|
|
|
|
|
|
||
Notes payable
|
|
757,399
|
|
|
Accounts payable, accrued expenses, and other liabilities
|
|
120,616
|
|
|
Lease intangible liabilities
|
|
615,951
|
|
|
Total liabilities assumed
|
|
1,493,966
|
|
|
|
|
|
||
Total purchase price
|
|
$
|
5,193,105
|
|
(in years)
|
|
Weighted Average Amortization Period
|
Assets:
|
|
|
In-place leases
|
|
10.0
|
Above-market leases
|
|
8.9
|
Below-market ground leases
|
|
52.3
|
Liabilities:
|
|
|
Acquired lease intangible liabilities
|
|
22.6
|
(in thousands)
|
Weighted Average Contractual Rate
|
Weighted Average Effective Rate
|
June 30, 2017
|
|
December 31, 2016
|
|||
Notes payable:
|
|
|
|
|
|
|||
Fixed rate mortgage loans
|
4.9%
|
4.2%
|
$
|
500,447
|
|
|
384,786
|
|
Variable rate mortgage loans
|
2.4%
|
2.6%
|
119,085
|
|
(1)
|
86,969
|
|
|
Fixed rate unsecured public and private debt
|
4.2%
|
4.7%
|
2,325,463
|
|
|
892,170
|
|
|
Total notes payable
|
|
|
2,944,995
|
|
|
1,363,925
|
|
|
Unsecured credit facilities:
|
|
|
|
|
|
|||
Line of Credit (the "Line")
(2)
|
1.9%
|
2.0%
|
—
|
|
|
15,000
|
|
|
Term loans
|
2.4%
|
2.5%
|
563,031
|
|
|
263,495
|
|
|
Total unsecured credit facilities
|
|
563,031
|
|
|
278,495
|
|
||
Total debt outstanding
|
|
|
$
|
3,508,026
|
|
|
1,642,420
|
|
|
|
|
|
|
|
|||
(1)
Includes five mortgages, whose interest rates vary on LIBOR based formulas. Three of these variable rate loans have interest rate swaps in place to fix the interest rates at a range of 2.8% to 4.07%
|
||||||||
(2)
Weighted average effective and contractual rate for the Line is calculated based on a fully drawn Line balance.
|
•
|
$300.0 million
of
4.4%
senior unsecured public notes due in 2047, which priced at
99.110%
. The Company used the net proceeds to redeem all of the outstanding shares of its
$250 million
6.625%
Series 6 preferred stock on February 16, 2017 and to pay down the balance of the Line.
|
•
|
$350.0 million
of
3.6%
senior unsecured public notes due in 2027, which priced at
99.741%
. The Company used the net proceeds to repay a
$250.0 million
Equity One term loan upon the effective date of the merger and to pay merger related transaction costs.
|
•
|
$125.0 million
of
4.4%
senior unsecured public notes due in 2047, which priced at
100.784%
, whose proceeds will be used to redeem all of the outstanding shares of its
$75.0 million
6.000%
Series 7 preferred stock on August 23, 2017, with the balance used to pay down the Line.
|
•
|
$175.0 million
of
3.6%
senior unsecured public notes due in 2027, which priced at
100.379%
, with proceeds used to retire
$112.0 million
of mortgage loans with interest rates ranging from
7.0%
to
7.8%
on various properties, with the balance used to pay down the Line.
|
•
|
Increased the size of its Line commitment to
$1.0 billion
with an accordion feature permitting the Company to request an increase in the facility of up to an additional
$500 million
.
|
•
|
Completed a
$300 million
unsecured term loan that matures on December 2, 2020 with the option to prepay at par anytime prior to maturity without penalty. The interest rate on the term loan is equal to LIBOR plus a ratings based margin; however, the Company entered into interest rate swaps to fix the interest rate on the the entire
$300 million
with a weighted average interest rate of
1.824%
(see note 5). The proceeds of the term loan were used to repay a
$300 million
Equity One term loan that came due as a result of the merger.
|
•
|
Assumed
$300 million
of senior unsecured public notes with an interest rate of
3.75%
maturing in 2022.
|
•
|
Assumed
$200 million
of the senior unsecured private placement notes issued in
two
$100 million
tranches with interest rates of
3.81%
and
3.91%
, respectively, maturing in 2026.
|
•
|
Assumed
$226.3 million
of fixed rate mortgage loans with interest rates ranging from
3.76%
to
7.94%
, and assumed a
$27.8 million
variable rate mortgage loan whose interest rate varies with LIBOR.
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value
|
|||||||
|
(in thousands)
|
|
|
|
|
|
|
|
Assets (Liabilities)
(1)
|
|||||||||
|
Effective Date
|
|
Maturity Date
|
|
Notional Amount
|
|
Bank Pays Variable Rate of
|
|
Regency Pays Fixed Rate of
|
|
June 30, 2017
|
|
December 31, 2016
|
|||||
|
6/2/17
|
|
6/2/27
|
|
$
|
37,500
|
|
|
1 Month LIBOR with Floor
|
|
2.366%
|
|
$
|
(497
|
)
|
|
(580
|
)
|
|
4/3/17
|
|
12/2/20
|
|
300,000
|
|
|
1 Month LIBOR with Floor
|
|
1.824%
|
|
(1,167
|
)
|
|
—
|
|
||
|
8/1/16
|
|
1/5/22
|
|
265,000
|
|
|
1 Month LIBOR with Floor
|
|
1.053%
|
|
8,979
|
|
|
9,889
|
|
||
|
4/7/16
|
|
4/1/23
|
|
20,000
|
|
|
1 Month LIBOR
|
|
1.303%
|
|
641
|
|
|
720
|
|
||
|
12/1/16
|
|
11/1/23
|
|
33,000
|
|
|
1 Month LIBOR
|
|
1.490%
|
|
879
|
|
|
1,013
|
|
||
Total derivative financial instruments
|
|
$
|
8,835
|
|
|
11,042
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(1) Derivative in an asset position are included within Other assets in the accompanying Consolidated Balance Sheets, while those in a liability position are included within Accounts payable and other liabilities.
|
|
June 30, 2017
|
|
December 31, 2016
|
|||||||||||
(in thousands)
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
|||||||
Financial assets:
|
|
|
|
|
|
|
|
|||||||
Notes receivable
|
$
|
13,332
|
|
|
13,223
|
|
|
$
|
10,481
|
|
|
10,380
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|||||||
Notes payable
|
$
|
2,944,995
|
|
|
$
|
2,988,426
|
|
|
$
|
1,363,925
|
|
|
1,435,000
|
|
Unsecured credit facilities
|
$
|
563,031
|
|
|
$
|
565,000
|
|
|
$
|
278,495
|
|
|
279,700
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
|
|
Low
|
|
High
|
|
Low
|
|
High
|
Notes receivable
|
|
7.3%
|
|
7.3%
|
|
7.2%
|
|
7.2%
|
Notes payable
|
|
3.1%
|
|
4.1%
|
|
2.9%
|
|
3.9%
|
Unsecured credit facilities
|
|
2.0%
|
|
2.0%
|
|
1.5%
|
|
1.6%
|
|
Fair Value Measurements as of June 30, 2017
|
|||||||||||
(in thousands)
|
|
|
Quoted Prices in Active Markets for Identical Assets
|
|
Significant Other Observable Inputs
|
|
Significant Unobservable Inputs
|
|||||
Assets:
|
Balance
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|||||
Trading securities held in trust
|
$
|
29,839
|
|
|
29,839
|
|
|
—
|
|
|
—
|
|
Available-for-sale securities
|
7,009
|
|
|
—
|
|
|
7,009
|
|
|
—
|
|
|
Interest rate derivatives
|
10,499
|
|
|
—
|
|
|
10,499
|
|
|
—
|
|
|
Total
|
$
|
47,347
|
|
|
29,839
|
|
|
17,508
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|||||
Liabilities:
|
|
|
|
|
|
|
|
|||||
Interest rate derivatives
|
$
|
(1,664
|
)
|
|
—
|
|
|
(1,664
|
)
|
|
—
|
|
|
Fair Value Measurements as of December 31, 2016
|
|||||||||||
(in thousands)
|
|
|
Quoted Prices in Active Markets for Identical Assets
|
|
Significant Other Observable Inputs
|
|
Significant Unobservable Inputs
|
|||||
Assets:
|
Balance
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|||||
Trading securities held in trust
|
$
|
28,588
|
|
|
28,588
|
|
|
—
|
|
|
—
|
|
Available-for-sale securities
|
7,420
|
|
|
—
|
|
|
7,420
|
|
|
—
|
|
|
Interest rate derivatives
|
11,622
|
|
|
—
|
|
|
11,622
|
|
|
—
|
|
|
Total
|
$
|
47,630
|
|
|
28,588
|
|
|
19,042
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|||||
Liabilities:
|
|
|
|
|
|
|
|
|||||
Interest rate derivatives
|
$
|
(580
|
)
|
|
—
|
|
|
(580
|
)
|
|
—
|
|
|
Six months ended June 30,
|
||
(dollar amounts are in thousands, except price per share data)
|
2016
|
||
Shares issued
(1)
|
182,787
|
|
|
Weighted average price per share
|
$
|
68.85
|
|
Gross proceeds
|
$
|
12,584
|
|
Commissions
|
$
|
157
|
|
(1)
Reflects shares traded in December and settled in January.
|
|
Controlling Interest
|
|
Noncontrolling Interest
|
|
Total
|
||||||||||||||||
(in thousands)
|
Cash Flow Hedges
|
|
Unrealized gain (loss) on Available-For-Sale Securities
|
|
AOCI
|
|
Cash Flow Hedges
|
|
Unrealized gain (loss) on Available-For-Sale Securities
|
|
AOCI
|
|
AOCI
|
||||||||
Balance as of December 31, 2015
|
$
|
(58,650
|
)
|
|
(43
|
)
|
|
(58,693
|
)
|
|
(785
|
)
|
|
—
|
|
|
(785
|
)
|
|
(59,478
|
)
|
Other comprehensive income before reclassifications
|
(26,256
|
)
|
|
37
|
|
|
(26,219
|
)
|
|
(375
|
)
|
|
—
|
|
|
(375
|
)
|
|
(26,594
|
)
|
|
Amounts reclassified from accumulated other comprehensive income
|
4,874
|
|
|
—
|
|
|
4,874
|
|
|
78
|
|
|
—
|
|
|
78
|
|
|
4,952
|
|
|
Current period other comprehensive income, net
|
(21,382
|
)
|
|
37
|
|
|
(21,345
|
)
|
|
(297
|
)
|
|
—
|
|
|
(297
|
)
|
|
(21,642
|
)
|
|
Balance as of June 30, 2016
|
$
|
(80,032
|
)
|
|
(6
|
)
|
|
(80,038
|
)
|
|
(1,082
|
)
|
|
—
|
|
|
(1,082
|
)
|
|
(81,120
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Controlling Interest
|
|
Noncontrolling Interest
|
|
Total
|
||||||||||||||||
(in thousands)
|
Cash Flow Hedges
|
|
Unrealized gain (loss) on Available-For-Sale Securities
|
|
AOCI
|
|
Cash Flow Hedges
|
|
Unrealized gain (loss) on Available-For-Sale Securities
|
|
AOCI
|
|
AOCI
|
||||||||
Balance as of December 31, 2016
|
$
|
(18,327
|
)
|
|
(19
|
)
|
|
(18,346
|
)
|
|
(301
|
)
|
|
—
|
|
|
(301
|
)
|
|
(18,647
|
)
|
Other comprehensive income before reclassifications
|
(3,770
|
)
|
|
43
|
|
|
(3,727
|
)
|
|
(103
|
)
|
|
—
|
|
|
(103
|
)
|
|
(3,830
|
)
|
|
Amounts reclassified from accumulated other comprehensive income
|
5,638
|
|
|
—
|
|
|
5,638
|
|
|
88
|
|
|
—
|
|
|
88
|
|
|
5,726
|
|
|
Current period other comprehensive income, net
|
1,868
|
|
|
43
|
|
|
1,911
|
|
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|
1,896
|
|
|
Balance as of June 30, 2017
|
$
|
(16,459
|
)
|
|
24
|
|
|
(16,435
|
)
|
|
(316
|
)
|
|
—
|
|
|
(316
|
)
|
|
(16,751
|
)
|
AOCI Component
|
Amount Reclassified from AOCI into income
|
|
Affected Line Item(s) Where Net Income is Presented
|
||||||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
||||||
Interest rate swaps
|
$
|
3,071
|
|
|
2,500
|
|
|
$
|
5,726
|
|
|
4,952
|
|
|
Interest expense and Loss on derivative instruments
|
(in thousands)
|
June 30, 2017
|
|
December 31, 2016
|
|||
Assets:
|
|
|
|
|||
Trading securities held in trust
|
$
|
29,839
|
|
|
28,588
|
|
Liabilities:
|
|
|
|
|||
Accounts payable and other liabilities
|
$
|
29,511
|
|
|
28,214
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||
(in thousands, except per share data)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||
Numerator:
|
|
|
|
|
|
|
|
|
||||||
Income from operations attributable to common unit holders - basic
|
|
$
|
48,472
|
|
|
34,874
|
|
|
$
|
15,229
|
|
|
82,837
|
|
Income from operations attributable to common unit holders - diluted
|
|
$
|
48,472
|
|
|
34,874
|
|
|
$
|
15,229
|
|
|
82,837
|
|
Denominator:
|
|
|
|
|
|
|
|
|
||||||
Weighted average common units outstanding for basic EPU
|
|
170,410
|
|
|
97,811
|
|
|
148,849
|
|
|
97,742
|
|
||
Weighted average common units outstanding for diluted EPU
(1)
|
|
170,742
|
|
|
98,372
|
|
|
149,169
|
|
|
98,229
|
|
||
|
|
|
|
|
|
|
|
|
||||||
Income per common unit – basic
|
|
$
|
0.28
|
|
|
0.36
|
|
|
$
|
0.10
|
|
|
0.85
|
|
Income per common unit – diluted
|
|
$
|
0.28
|
|
|
0.35
|
|
|
$
|
0.10
|
|
|
0.84
|
|
(1)
Includes the dilutive impact of unvested restricted stock and the forward equity offering using the treasury stock method.
|
•
|
Same Property
information is provided for retail operating properties that were owned and operated for the entirety of both calendar year periods being compared and excludes Non-Same Properties and Properties in Development.
|
•
|
A Non-Same Property
is a property acquired, sold, or a development completion during either calendar year period being compared. Non-retail properties and corporate activities, including activities of our captive insurance company, are part of Non-Same Property.
|
•
|
Property In Development
includes land or properties in various stages of development and redevelopment including active pre-development activities.
|
•
|
Development Completion
is a project in development that is deemed complete upon the earliest of: (i) 90% of total estimated net development costs have been incurred and percent leased equals or exceeds 95%, or (ii) the project
|
•
|
Pro-Rata
information includes 100% of our consolidated properties plus our economic share (based on our ownership interest) in our unconsolidated real estate investment partnerships.
|
•
|
The amounts shown on the individual line items were derived by applying our overall economic ownership interest percentage determined when applying the equity method of accounting or allocating noncontrolling interests, and do not necessarily represent our legal claim to the assets and liabilities, or the revenues and expenses; and
|
•
|
Other companies in our industry may calculate their pro-rata interest differently, limiting the usefulness as a comparative measure.
|
•
|
Adjusted EBITDA
is defined as earnings before interest, taxes, depreciation and amortization, real estate gains and losses, development and acquisition pursuit costs, straight line rental income, and above and below market rent amortization.
|
•
|
Fixed Charge Coverage Ratio
is defined as Adjusted EBITDA divided by the sum of the gross interest and scheduled mortgage principal paid to our lenders plus dividends paid to our preferred stockholders.
|
•
|
Net Operating Income ("NOI")
is the sum of minimum rent, percentage rent and recoveries from tenants and other income, less operating and maintenance, real estate taxes, and provision for doubtful accounts. NOI excludes straight-line rental income and expense, above and below market rent amortization and other fees. The Company also provides disclosure of NOI excluding termination fees, which excludes both termination fee income and expenses.
|
•
|
NAREIT Funds from Operations ("NAREIT FFO")
is a commonly used measure of REIT performance, which the National Association of Real Estate Investment Trusts ("NAREIT") defines as net income, computed in accordance with GAAP, excluding gains and losses from sales of depreciable property, net of tax, excluding operating real estate impairments, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. We compute NAREIT FFO for all periods presented in accordance with NAREIT's definition. Many companies use different depreciable lives and methods, and real estate values historically fluctuate with market conditions. Since NAREIT FFO excludes depreciation and amortization and gains and losses from depreciable property dispositions, and impairments, it provides a performance measure that, when compared year over year, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, acquisition and development activities, and financing costs. This provides a perspective of our financial performance not immediately apparent from net income determined in accordance with GAAP. Thus, NAREIT FFO is a supplemental non-GAAP financial measure of our operating performance, which does not represent cash generated from operating activities in accordance with GAAP; and, therefore, should not be considered a substitute measure of cash flows from operations. The Company provides a reconciliation of Net Income (Loss) Attributable to Common Stockholders to NAREIT FFO.
|
•
|
Core FFO
is an additional performance measure used by Regency as the computation of NAREIT FFO includes certain non-cash and non-comparable items that affect the Company's period-over-period performance. Core FFO excludes from NAREIT FFO, but is not limited to: (a) transaction related gains, income or expense; (b) impairments on land; (c) gains or losses from the early extinguishment of debt; and (d) other non-core amounts as they occur. The Company provides a reconciliation of NAREIT FFO to Core FFO.
|
•
|
Own and manage an unequaled portfolio of high-quality neighborhood and community shopping centers anchored by market leading grocers and located in affluent suburban and near urban trade areas in the country’s most desirable metro areas. This combination produces highly desirable and attractive centers with best-in-class retailers. These centers command higher rental and occupancy rates resulting in excellent prospects to grow net operating income (NOI);
|
•
|
Maintain an industry leading and disciplined development platform to deliver exceptional retail centers at higher margins as compared to acquisitions;
|
•
|
Support our business activities with a strong balance sheet; and
|
•
|
Engage a talented, dedicated team of employees, who are guided by Regency’s special culture and aligned with shareholder interests.
|
•
|
Sustain superior same property NOI growth compared to our shopping center peers;
|
•
|
Develop and redevelop high quality shopping centers at attractive returns on investment;
|
•
|
Maintain a conservative balance sheet providing financial flexibility to cost effectively fund investment opportunities and debt maturities on a favorable basis, and to weather economic downturns;
|
•
|
Attract and motivate an exceptional team of employees who operate efficiently and are recognized as industry leaders;
|
•
|
Generate reliable growth in earnings per share, funds from operations per share, and most importantly total shareholder returns that consistently rank among the leading shopping center REITS.
|
•
|
We achieved pro-rata same property NOI growth, excluding termination fees, of 3.5% as compared to the same period in the prior year on the newly combined portfolio.
|
•
|
We executed
843
leasing transactions in our shopping centers representing
2.9 million
pro-rata SF of new and renewal leasing, with trailing twelve month rent spreads of 9.1% on comparable retail operating property spaces.
|
•
|
At June 30, 2017, our total property portfolio was 95.0% leased, while our same property portfolio was 95.9% leased.
|
•
|
We started three new developments representing a total investment of $158.5 million upon completion, with projected weighted average returns on investment of 7.1%.
|
•
|
Including these new projects, a total of 29 properties were in the process of development or redevelopment, representing a combined investment upon completion of $624 million.
|
•
|
In January 2017, we issued $300.0 million of 4.4% senior unsecured notes due February 1, 2047, the proceeds of which were used to redeem all of the $250.0 million 6.625% Series 6 preferred stock and reduce the balance of the Line.
|
•
|
On March 1, 2017 in conjunction with the merger with Equity One, we increased the commitment amount of our line of credit (the "Line") to $1.0 billion.
|
•
|
In June 2017, we issued an additional $125.0 million of 4.4% senior unsecured notes due February 1, 2047, the proceeds of which will be used to redeem the $75.0 million of 6.0% Series 7 preferred stock on August 23, 2017, and to repay the Line balance.
|
•
|
Also in June 2017, the Company issued an additional $175.0 million of 3.6% senior unsecured public notes due in 2027, with proceeds used to retire $112.0 million of mortgage loans with interest rates ranging from 7.0% to 7.8% on various properties, with the balance used to pay down our Line.
|
•
|
At June 30, 2017, our annualized net debt-to-adjusted EBITDA ratio on a pro-rata basis was 5.1x versus 4.5x at December 31, 2016.
|
(in thousands, except stock price)
|
Purchase Price
|
||
Shares of common stock issued for merger
|
65,379
|
|
|
Closing stock price on March 1, 2017
|
$
|
68.40
|
|
Value of common stock issued for merger
|
$
|
4,471,808
|
|
Debt repaid
|
716,278
|
|
|
Other cash payments
|
5,019
|
|
|
Total purchase price
|
$
|
5,193,105
|
|
|
|
(GLA in thousands)
|
|
June 30, 2017
|
|
December 31, 2016
|
Number of Properties
|
|
313
|
|
198
|
Properties in Development
|
|
8
|
|
6
|
GLA
|
|
39,075
|
|
23,931
|
% Leased – Operating and Development
|
|
94.8%
|
|
94.8%
|
% Leased – Operating
|
|
95.5%
|
|
96.0%
|
Weighted average annual effective rent per square foot ("PSF"), net of tenant concessions.
|
|
$20.61
|
|
$19.70
|
(GLA in thousands)
|
|
June 30, 2017
|
|
December 31, 2016
|
Number of Properties
|
|
115
|
|
109
|
GLA
|
|
15,087
|
|
13,899
|
% Leased –Operating
|
|
96.2%
|
|
96.3%
|
Weighted average annual effective rent PSF, net of tenant concessions
|
|
$20.20
|
|
$19.25
|
|
|
Six months ended June 30, 2017
|
||||||||||||||
|
|
Leasing Transactions
(1,3)
|
|
SF (in thousands)
|
|
Base Rent PSF
(2)
|
|
Tenant Improvements PSF
(2)
|
|
Leasing Commissions PSF
(2)
|
||||||
Anchor Leases
|
|
|
|
|
|
|
|
|
|
|
||||||
New
|
|
18
|
|
488
|
|
$
|
18.85
|
|
|
$
|
5.47
|
|
|
$
|
3.11
|
|
Renewal
|
|
36
|
|
1007
|
|
$
|
16.28
|
|
|
$
|
—
|
|
|
$
|
0.68
|
|
Total Anchor Leases
(1)
|
|
54
|
|
1,495
|
|
$
|
17.12
|
|
|
$
|
1.79
|
|
|
$
|
1.47
|
|
Shop Space
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
New
|
|
245
|
|
416
|
|
$
|
31.17
|
|
|
$
|
12.59
|
|
|
$
|
12.01
|
|
Renewal
|
|
544
|
|
942
|
|
$
|
31.31
|
|
|
$
|
1.00
|
|
|
$
|
2.85
|
|
Total Shop Space Leases
(1)
|
|
789
|
|
1,358
|
|
$
|
31.27
|
|
|
$
|
4.55
|
|
|
$
|
5.65
|
|
Total Leases
|
|
843
|
|
2,853
|
|
$
|
23.85
|
|
|
$
|
3.10
|
|
|
$
|
3.46
|
|
|
|
Six months ended June 30, 2016
|
||||||||||||||
|
|
Leasing Transactions
(1)
|
|
SF (in thousands)
|
|
Base Rent PSF
(2)
|
|
Tenant Improvements PSF
(2)
|
|
Leasing Commissions PSF
(2)
|
||||||
Anchor Leases
|
|
|
|
|
|
|
|
|
|
|
||||||
New
|
|
8
|
|
235
|
|
$
|
12.76
|
|
|
$
|
5.64
|
|
|
$
|
3.07
|
|
Renewal
|
|
36
|
|
885
|
|
$
|
12.12
|
|
|
$
|
0.51
|
|
|
$
|
1.43
|
|
Total Anchor Leases
(1)
|
|
44
|
|
1,120
|
|
$
|
12.25
|
|
|
$
|
1.59
|
|
|
$
|
1.77
|
|
Shop Space
|
|
|
|
|
|
|
|
|
|
|
||||||
New
|
|
209
|
|
376
|
|
$
|
28.85
|
|
|
$
|
13.00
|
|
|
$
|
13.16
|
|
Renewal
|
|
455
|
|
704
|
|
$
|
30.57
|
|
|
$
|
1.78
|
|
|
$
|
3.88
|
|
Total Shop Space Leases
(1)
|
|
664
|
|
1,080
|
|
$
|
29.97
|
|
|
$
|
5.68
|
|
|
$
|
7.11
|
|
Total Leases
|
|
708
|
|
2,200
|
|
$
|
20.95
|
|
|
$
|
3.60
|
|
|
$
|
4.39
|
|
|
|
Three months ended June 30,
|
|
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
|
Change
|
||||
Minimum rent
|
|
$
|
195,992
|
|
|
109,945
|
|
|
86,047
|
|
Percentage rent
|
|
1,456
|
|
|
453
|
|
|
1,003
|
|
|
Recoveries from tenants
|
|
53,504
|
|
|
32,414
|
|
|
21,090
|
|
|
Other income
|
|
3,752
|
|
|
3,460
|
|
|
292
|
|
|
Management, transaction, and other fees
|
|
6,601
|
|
|
6,140
|
|
|
461
|
|
|
Total revenues
|
|
$
|
261,305
|
|
|
152,412
|
|
|
108,893
|
|
•
|
$1.6 million increase from rent commencing at development properties;
|
•
|
$1.8 million increase from new acquisitions of operating properties;
|
•
|
$4.8 million increase in minimum rent from same properties reflecting a $3.5 million increase from rental rate growth on new and renewal leases, and a $1.3 million increase from straight line rent related to a 2016 charge for expected early terminations; and
|
•
|
$79.3 million increase from properties acquired through the Equity One merger;
|
•
|
reduced by $1.5 million from the sale of operating properties.
|
•
|
$373,000 increase from rent commencing at development properties;
|
•
|
$615,000 increase from new acquisitions of operating properties;
|
•
|
$833,000 increase from same properties associated with higher recoverable costs and improvements in recovery rates; and
|
•
|
$19.7 million increase from properties acquired through the Equity One merger;
|
•
|
reduced by $457,000 from the sale of operating properties.
|
|
|
Three months ended June 30,
|
|
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
|
Change
|
||||
Depreciation and amortization
|
|
$
|
92,230
|
|
|
40,299
|
|
|
51,931
|
|
Operating and maintenance
|
|
36,105
|
|
|
23,709
|
|
|
12,396
|
|
|
General and administrative
|
|
16,746
|
|
|
16,350
|
|
|
396
|
|
|
Real estate taxes
|
|
28,871
|
|
|
16,769
|
|
|
12,102
|
|
|
Other operating expenses
|
|
6,616
|
|
|
2,440
|
|
|
4,176
|
|
|
Total operating expenses
|
|
$
|
180,568
|
|
|
99,567
|
|
|
81,001
|
|
•
|
$736,000 increase as we began depreciating costs at development properties where tenant spaces were completed and became available for occupancy;
|
•
|
$823,000 increase from new acquisitions of operating properties and corporate assets;
|
•
|
$1.0 million increase from same properties attributable to recent capital improvements and redevelopments; and
|
•
|
$49.8 million increase from properties acquired through the Equity One merger;
|
•
|
reduced by $388,000 from the sale of operating properties.
|
•
|
$420,000 increase from operations commencing at development properties;
|
•
|
$444,000 increase from same properties primarily attributable to recoverable costs; and
|
•
|
$11.9 million increase from properties acquired through the Equity One merger and other new acquisitions of operating properties;
|
•
|
reduced by $321,000 from the sale of operating properties.
|
•
|
$530,000 increase from new acquisitions of operating properties and development properties where capitalization ceased as tenant spaces became available for occupancy;
|
•
|
$265,000 increase from same properties from increased tax assessments; and
|
•
|
$11.5 million increase from properties acquired through the Equity One merger;
|
•
|
reduced by $201,000 from sold properties.
|
•
|
$5.3 million increase from properties acquired through the Equity One merger, primarily the $4.7 million of merger costs;
|
•
|
reduced by $1.1 million primarily due to acquisition costs incurred in the second quarter of 2016 for the acquisition of Market Common Clarendon.
|
|
|
Three months ended June 30,
|
|
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
|
Change
|
||||
Interest expense, net
|
|
|
|
|
|
|
||||
Interest on notes payable
|
|
$
|
31,302
|
|
|
21,819
|
|
|
9,483
|
|
Interest on unsecured credit facilities
|
|
4,313
|
|
|
1,357
|
|
|
2,956
|
|
|
Capitalized interest
|
|
(2,033
|
)
|
|
(793
|
)
|
|
(1,240
|
)
|
|
Hedge expense
|
|
2,102
|
|
|
2,269
|
|
|
(167
|
)
|
|
Interest income
|
|
(277
|
)
|
|
(251
|
)
|
|
(26
|
)
|
|
Interest expense, net
|
|
35,407
|
|
|
24,401
|
|
|
11,006
|
|
|
Early extinguishment of debt
|
|
12,404
|
|
|
—
|
|
|
12,404
|
|
|
Net investment (income) loss
|
|
(887
|
)
|
|
(602
|
)
|
|
(285
|
)
|
|
(Income) loss on derivative instruments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total other expense (income)
|
|
$
|
46,924
|
|
|
23,799
|
|
|
23,125
|
|
•
|
$9.5 million
increase in interest on notes payable due to:
|
◦
|
$7.4 million of additional interest on notes payable assumed with the Equity One merger; and
|
◦
|
$6.5 million increase from issuances of $650 million of new unsecured debt;
|
◦
|
offset by $4.4 million decrease due to the early redemption of our $300 million notes in the third quarter of 2016;
|
•
|
$3.0 million
increase in interest on unsecured credit facilities related to higher average balances including a new $300 million term loan which closed on March 1, 2017;
|
•
|
offset by
$1.2 million
decrease from higher capitalization of interest based on the size and progress of development and redevelopment projects in process.
|
•
|
GRIR had a reduction in depreciation expense related to fully depreciated assets;
|
•
|
Columbia I and Other investments in real estate partnerships had an increase in
2017
gains on sale of real estate;
|
•
|
Columbia II had a decrease in the gains on sale of real estate as compared to 2016 sales.
|
|
|
Three months ended June 30,
|
|
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
|
Change
|
||||
Income from operations
|
|
$
|
45,807
|
|
|
40,096
|
|
|
5,711
|
|
Gain on sale of real estate, net of tax
|
|
4,366
|
|
|
548
|
|
|
3,818
|
|
|
Income attributable to noncontrolling interests
|
|
(680
|
)
|
|
(568
|
)
|
|
(112
|
)
|
|
Preferred stock dividends and issuance costs
|
|
(1,125
|
)
|
|
(5,266
|
)
|
|
4,141
|
|
|
Net income attributable to common stockholders
|
|
$
|
48,368
|
|
|
34,810
|
|
|
13,558
|
|
Net income attributable to exchangeable operating partnership units
|
|
104
|
|
|
64
|
|
|
40
|
|
|
Net income attributable to common unit holders
|
|
$
|
48,472
|
|
|
34,874
|
|
|
13,598
|
|
|
|
Six months ended June 30,
|
|
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
|
Change
|
||||
Minimum rent
|
|
$
|
337,232
|
|
|
217,619
|
|
|
119,613
|
|
Percentage rent
|
|
4,362
|
|
|
2,156
|
|
|
2,206
|
|
|
Recoveries from tenants
|
|
95,328
|
|
|
63,240
|
|
|
32,088
|
|
|
Other income
|
|
7,207
|
|
|
6,122
|
|
|
1,085
|
|
|
Management, transaction, and other fees
|
|
13,307
|
|
|
12,904
|
|
|
403
|
|
|
Total revenues
|
|
$
|
457,436
|
|
|
302,041
|
|
|
155,395
|
|
•
|
$3.5 million increase from rent commencing at development properties;
|
•
|
$5.6 million increase from new acquisitions of operating properties;
|
•
|
$8.0 million increase in minimum rent from same properties reflecting a $5.9 million increase from rental rate growth on new and renewal leases, and a $1.8 million increase from straight line rent related to a 2016 charge for expected early terminations; and
|
•
|
$105.7 million increase from properties acquired through the Equity One merger;
|
•
|
reduced by $3.1 million from the sale of operating properties.
|
•
|
$829,000 increase from rent commencing at development properties;
|
•
|
$1.8 million increase from new acquisitions of operating properties;
|
•
|
$3.7 million increase from same properties associated with higher recoverable costs; and
|
•
|
$26.9 million increase from properties acquired through the Equity One merger;
|
•
|
reduced by $1.1 million from the sale of operating properties.
|
|
|
Six months ended June 30,
|
|
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
|
Change
|
||||
Depreciation and amortization
|
|
$
|
152,284
|
|
|
79,015
|
|
|
73,269
|
|
Operating and maintenance
|
|
65,868
|
|
|
46,394
|
|
|
19,474
|
|
|
General and administrative
|
|
34,419
|
|
|
32,649
|
|
|
1,770
|
|
|
Real estate taxes
|
|
50,321
|
|
|
32,639
|
|
|
17,682
|
|
|
Other operating expenses
|
|
78,129
|
|
|
4,747
|
|
|
73,382
|
|
|
Total operating expenses
|
|
$
|
381,021
|
|
|
195,444
|
|
|
185,577
|
|
•
|
$1.5 million increase as we began depreciating costs at development properties where tenant spaces were completed and became available for occupancy;
|
•
|
$2.9 million increase from new acquisitions of operating properties and corporate assets;
|
•
|
$2.4 million increase from same properties primarily attributable redevelopments; and
|
•
|
$67.6 million increase from properties acquired through the Equity One merger;
|
•
|
reduced by $1.1 million from the sale of operating properties.
|
•
|
$744,000 increase from operations commencing at development properties;
|
•
|
$933,000 increase from acquisitions of operating properties;
|
•
|
$1.4 million increase primarily from recoverable costs at same properties; and
|
•
|
$17.1 million increase from properties acquired through the Equity One merger;
|
•
|
reduced by $714,000 from the sale of operating properties.
|
•
|
$1.5 million change in the value of participant obligations within the deferred compensation plan, and a
|
•
|
$3.3 million increase in general and administrative costs primarily due to the merger, including staffing and occupancy costs; offset by a
|
•
|
$3.0 million increase in development overhead capitalization based on the status and size of current development projects.
|
•
|
$280,000 increase from development properties where capitalization ceased as tenant spaces became available for occupancy;
|
•
|
$1.1 million increase from acquisitions of operating properties;
|
•
|
$1.3 million increase at same properties from increased tax assessments; and
|
•
|
$15.4 million increase from properties acquired through the Equity One merger;
|
•
|
reduced by $411,000 from sold properties.
|
•
|
$422,000 increase in corporate expenses for licenses and franchise taxes; and
|
•
|
$75.3 million increase from properties acquired through the Equity One merger and merger costs;
|
•
|
reduced by $1.8 million primarily due to acquisition costs incurred in the second quarter of 2016 for the acquisition of Market Common Clarendon; and
|
•
|
reduced by $515,000 at same properties primarily from a environmental expenses incurred in the second quarter of 2016.
|
|
|
Six months ended June 30,
|
|
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
|
Change
|
||||
Interest expense, net
|
|
|
|
|
|
|
||||
Interest on notes payable
|
|
$
|
55,915
|
|
|
44,072
|
|
|
11,843
|
|
Interest on unsecured credit facilities
|
|
6,744
|
|
|
2,273
|
|
|
4,471
|
|
|
Capitalized interest
|
|
(3,290
|
)
|
|
(1,766
|
)
|
|
(1,524
|
)
|
|
Hedge expense
|
|
4,204
|
|
|
4,499
|
|
|
(295
|
)
|
|
Interest income
|
|
(967
|
)
|
|
(534
|
)
|
|
(433
|
)
|
|
Interest expense, net
|
|
62,606
|
|
|
48,544
|
|
|
14,062
|
|
|
Provision for impairment
|
|
—
|
|
|
1,666
|
|
|
(1,666
|
)
|
|
Early extinguishment of debt
|
|
12,404
|
|
|
—
|
|
|
12,404
|
|
|
Net investment (income) loss
|
|
(1,984
|
)
|
|
(446
|
)
|
|
(1,538
|
)
|
|
Total other expense (income)
|
|
$
|
73,026
|
|
|
49,764
|
|
|
23,262
|
|
•
|
$11.8 million
increase in interest on notes payable due to:
|
◦
|
$9.2 million of additional interest on notes payable assumed with the Equity One merger; and
|
◦
|
$11.2 million increase from issuances of $650 million of new unsecured debt;
|
◦
|
offset by $8.8 million decrease due to the early redemption of our $300 million notes in the third quarter of 2016;
|
•
|
$4.5 million
increase in interest on unsecured credit facilities related to higher average balances including a new $300 million term loan which closed on March 1, 2017;
|
•
|
offset by $1.5 million decrease from higher capitalization of interest based on the size and progress of development and redevelopment projects in process.
|
•
|
GRIR had a decrease in the gain on sale of real estate as compared to 2016 sales offset by a reduction in depreciation expense from fully depreciated assets;
|
•
|
Columbia I and Other investments in real estate partnerships had an increase in gain on sale of real estate; and
|
•
|
Columbia II had a decrease in gains on sale of real estate as compared to 2016 sales of real estate.
|
|
|
Six months ended June 30,
|
|
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
|
Change
|
||||
Income from operations
|
|
$
|
24,676
|
|
|
80,804
|
|
|
(56,128
|
)
|
Gain on sale of real estate, net of tax
|
|
4,781
|
|
|
13,417
|
|
|
(8,636
|
)
|
|
Income attributable to noncontrolling interests
|
|
(1,332
|
)
|
|
(1,003
|
)
|
|
(329
|
)
|
|
Preferred stock dividends and issuance costs
|
|
(12,981
|
)
|
|
(10,531
|
)
|
|
(2,450
|
)
|
|
Net income attributable to common stockholders
|
|
$
|
15,144
|
|
|
82,687
|
|
|
(67,543
|
)
|
Net income attributable to exchangeable operating partnership units
|
|
85
|
|
|
150
|
|
|
(65
|
)
|
|
Net income attributable to common unit holders
|
|
$
|
15,229
|
|
|
82,837
|
|
|
(67,608
|
)
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
||||||||
Base rent
(1)
|
|
$
|
196,532
|
|
|
190,286
|
|
|
6,246
|
|
|
$
|
391,113
|
|
|
378,531
|
|
|
12,582
|
|
Percentage rent
(1)
|
|
1,395
|
|
|
1,527
|
|
|
(132
|
)
|
|
6,024
|
|
|
6,329
|
|
|
(305
|
)
|
||
Recovery revenue
(1)
|
|
58,894
|
|
|
58,015
|
|
|
879
|
|
|
119,997
|
|
|
115,435
|
|
|
4,562
|
|
||
Other income
(1)
|
|
2,752
|
|
|
3,962
|
|
|
(1,210
|
)
|
|
6,094
|
|
|
7,633
|
|
|
(1,539
|
)
|
||
Operating expenses
(1)
|
|
70,736
|
|
|
70,801
|
|
|
(65
|
)
|
|
145,041
|
|
|
141,716
|
|
|
3,325
|
|
||
Pro-rata same property NOI, as adjusted
|
|
$
|
188,837
|
|
|
182,989
|
|
|
5,848
|
|
|
$
|
378,187
|
|
|
366,212
|
|
|
11,975
|
|
Less: Termination fees
(1)
|
|
24
|
|
|
103
|
|
|
(79
|
)
|
|
259
|
|
|
901
|
|
|
(642
|
)
|
||
Pro-rata same property NOI, as adjusted, excluding termination fees
|
|
$
|
188,813
|
|
|
182,886
|
|
|
5,927
|
|
|
$
|
377,928
|
|
|
365,311
|
|
|
12,617
|
|
Pro-rata same property NOI growth, as adjusted
|
|
|
|
|
|
3.2
|
%
|
|
|
|
|
|
3.5
|
%
|
|
Three months ended June 30,
|
||||||||
|
2017
|
|
2016
|
||||||
(GLA in thousands)
|
Property Count
|
GLA
|
|
Property Count
|
GLA
|
||||
Beginning same property count
|
402
|
|
41,120
|
|
|
302
|
|
27,057
|
|
Disposed properties
|
(2
|
)
|
(57
|
)
|
|
(4
|
)
|
(105
|
)
|
SF adjustments
(1)
|
—
|
|
13
|
|
|
—
|
|
12
|
|
Ending same property count
|
400
|
|
41,076
|
|
|
298
|
|
26,964
|
|
|
|
|
|
|
|
||||
|
Six months ended June 30,
|
||||||||
|
2017
|
|
2016
|
||||||
(GLA in thousands)
|
Property Count
|
GLA
|
|
Property Count
|
GLA
|
||||
Beginning same property count
|
289
|
|
26,392
|
|
|
300
|
|
26,508
|
|
Acquired properties owned for entirety of comparable periods
|
1
|
|
180
|
|
|
6
|
|
443
|
|
Developments that reached completion by beginning of earliest comparable period presented
|
2
|
|
330
|
|
|
2
|
|
342
|
|
Disposed properties
|
(2
|
)
|
(57
|
)
|
|
(10
|
)
|
(365
|
)
|
SF adjustments
(1)
|
—
|
|
50
|
|
|
—
|
|
36
|
|
Properties acquired through Equity One merger
|
110
|
|
14,181
|
|
|
—
|
|
—
|
|
Ending same property count
|
400
|
|
41,076
|
|
|
298
|
|
26,964
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||
(in thousands, except share information)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||
Reconciliation of Net income to NAREIT FFO
|
|
|
|
|
|
|
|
|
||||||
Net income attributable to common stockholders
|
|
$
|
48,368
|
|
|
34,810
|
|
|
$
|
15,144
|
|
|
82,687
|
|
Adjustments to reconcile to NAREIT FFO:
(1)
|
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization (excluding FF&E)
|
|
100,144
|
|
|
48,130
|
|
|
167,589
|
|
|
95,545
|
|
||
Provision for impairment to operating properties
|
|
—
|
|
|
—
|
|
|
—
|
|
|
659
|
|
||
Gain on sale of operating properties, net of tax
|
|
(5,054
|
)
|
|
(3,308
|
)
|
|
(5,065
|
)
|
|
(14,948
|
)
|
||
Exchangeable operating partnership units
|
|
104
|
|
|
64
|
|
|
85
|
|
|
150
|
|
||
NAREIT FFO attributable to common stock and unit holders
|
|
$
|
143,562
|
|
|
79,696
|
|
|
$
|
177,753
|
|
|
164,093
|
|
Reconciliation of NAREIT FFO to Core FFO
|
|
|
|
|
|
|
|
|
||||||
NAREIT FFO attributable to common stock and unit holders
|
|
$
|
143,562
|
|
|
79,696
|
|
|
$
|
177,753
|
|
|
164,093
|
|
Adjustments to reconcile to Core FFO:
(1)
|
|
|
|
|
|
|
|
|
||||||
Development pursuit costs
|
|
(74
|
)
|
|
395
|
|
|
318
|
|
|
620
|
|
||
Acquisition pursuit and closing costs
|
|
110
|
|
|
1,056
|
|
|
137
|
|
|
1,813
|
|
||
Merger related costs
|
|
4,676
|
|
|
—
|
|
|
74,408
|
|
|
—
|
|
||
Gain on sale of land
|
|
(2,446
|
)
|
|
(148
|
)
|
|
(2,850
|
)
|
|
(7,258
|
)
|
||
Provision for impairment to land
|
|
—
|
|
|
—
|
|
|
—
|
|
|
512
|
|
||
Loss on derivative instruments and hedge ineffectiveness
|
|
(6
|
)
|
|
1
|
|
|
(14
|
)
|
|
3
|
|
||
Early extinguishment of debt
|
|
12,404
|
|
|
14
|
|
|
12,404
|
|
|
14
|
|
||
Preferred redemption charge
|
|
—
|
|
|
—
|
|
|
9,369
|
|
|
—
|
|
||
Debt offering interest for merger
|
|
—
|
|
|
|
|
975
|
|
|
—
|
|
|||
Core FFO attributable to common stock and unit holders
|
|
$
|
158,226
|
|
|
81,014
|
|
|
$
|
272,500
|
|
|
159,797
|
|
|
|
Three months ended June 30,
|
||||||||||||||||||
|
|
2017
|
|
2016
|
||||||||||||||||
(in thousands)
|
|
Same Property
|
|
Other
(1)
|
|
Total
|
|
Same Property
|
|
Other
(1)
|
|
Total
|
||||||||
Net income attributable to common stockholders
|
|
$
|
121,612
|
|
|
(73,244
|
)
|
|
48,368
|
|
|
$
|
65,759
|
|
|
(30,949
|
)
|
|
34,810
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Management, transaction, and other fees
|
|
—
|
|
|
6,601
|
|
|
6,601
|
|
|
—
|
|
|
6,140
|
|
|
6,140
|
|
||
Gain on sale of real estate, net of tax
|
|
—
|
|
|
4,366
|
|
|
4,366
|
|
|
—
|
|
|
548
|
|
|
548
|
|
||
Other
(2)
|
|
4,461
|
|
|
10,603
|
|
|
15,064
|
|
|
644
|
|
|
2,940
|
|
|
3,584
|
|
||
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
|
37,796
|
|
|
54,434
|
|
|
92,230
|
|
|
37,275
|
|
|
3,024
|
|
|
40,299
|
|
||
General and administrative
|
|
—
|
|
|
16,746
|
|
|
16,746
|
|
|
—
|
|
|
16,350
|
|
|
16,350
|
|
||
Other operating expense, excluding provision for doubtful accounts
|
|
84
|
|
|
5,613
|
|
|
5,697
|
|
|
300
|
|
|
1,645
|
|
|
1,945
|
|
||
Other expense (income)
|
|
21,986
|
|
|
24,938
|
|
|
46,924
|
|
|
6,777
|
|
|
17,022
|
|
|
23,799
|
|
||
Equity in income (loss) of investments in real estate excluded from NOI
(3)
|
|
11,820
|
|
|
557
|
|
|
12,377
|
|
|
11,192
|
|
|
816
|
|
|
12,008
|
|
||
Net income attributable to noncontrolling interests
|
|
—
|
|
|
680
|
|
|
680
|
|
|
—
|
|
|
568
|
|
|
568
|
|
||
Preferred stock dividends and issuance costs
|
|
—
|
|
|
1,125
|
|
|
1,125
|
|
|
—
|
|
|
5,266
|
|
|
5,266
|
|
||
NOI from Equity One prior to merger
(4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62,330
|
|
|
—
|
|
|
62,330
|
|
||
Pro-rata NOI, as adjusted
|
|
$
|
188,837
|
|
|
9,279
|
|
|
198,116
|
|
|
$
|
182,989
|
|
|
4,114
|
|
|
187,103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Six months ended June 30,
|
||||||||||||||||||
|
|
2017
|
|
2016
|
||||||||||||||||
(in thousands)
|
|
Same Property
|
|
Other
(1)
|
|
Total
|
|
Same Property
|
|
Other
(1)
|
|
Total
|
||||||||
Net income attributable to common stockholders
|
|
$
|
211,295
|
|
|
(196,151
|
)
|
|
15,144
|
|
|
$
|
134,846
|
|
|
(52,159
|
)
|
|
82,687
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Management, transaction, and other fees
|
|
—
|
|
|
13,307
|
|
|
13,307
|
|
|
—
|
|
|
12,904
|
|
|
12,904
|
|
||
Gain on sale of real estate, net of tax
|
|
—
|
|
|
4,781
|
|
|
4,781
|
|
|
—
|
|
|
13,417
|
|
|
13,417
|
|
||
Other
(2)
|
|
7,630
|
|
|
15,632
|
|
|
23,262
|
|
|
2,841
|
|
|
4,651
|
|
|
7,492
|
|
||
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
|
75,444
|
|
|
76,840
|
|
|
152,284
|
|
|
73,519
|
|
|
5,496
|
|
|
79,015
|
|
||
General and administrative
|
|
—
|
|
|
34,419
|
|
|
34,419
|
|
|
—
|
|
|
32,649
|
|
|
32,649
|
|
||
Other operating expense, excluding provision for doubtful accounts
|
|
365
|
|
|
76,278
|
|
|
76,643
|
|
|
896
|
|
|
2,950
|
|
|
3,846
|
|
||
Other expense (income)
|
|
30,062
|
|
|
42,964
|
|
|
73,026
|
|
|
14,322
|
|
|
35,442
|
|
|
49,764
|
|
||
Equity in income (loss) of investments in real estate excluded from NOI
(3)
|
|
25,646
|
|
|
1,064
|
|
|
26,710
|
|
|
19,962
|
|
|
1,835
|
|
|
21,797
|
|
||
Net income attributable to noncontrolling interests
|
|
—
|
|
|
1,332
|
|
|
1,332
|
|
|
—
|
|
|
1,003
|
|
|
1,003
|
|
||
Preferred stock dividends and issuance costs
|
|
—
|
|
|
12,981
|
|
|
12,981
|
|
|
|
|
10,531
|
|
|
10,531
|
|
|||
NOI from Equity One prior to merger
(4)
|
|
43,005
|
|
|
—
|
|
|
43,005
|
|
|
125,508
|
|
|
—
|
|
|
125,508
|
|
||
Pro-rata NOI, as adjusted
|
|
$
|
378,187
|
|
|
16,007
|
|
|
394,194
|
|
|
$
|
366,212
|
|
|
6,775
|
|
|
372,987
|
|
(in thousands)
|
|
Two Months Ended
February 2017 |
|
Three Months Ended
June 2016 |
|
Six Months Ended
June 2016
|
|||||
Base rent
|
|
$
|
44,593
|
|
|
$
|
65,481
|
|
|
129,647
|
|
Percentage rent
|
|
1,151
|
|
|
643
|
|
|
3,203
|
|
||
Recovery revenue
|
|
14,175
|
|
|
20,226
|
|
|
40,980
|
|
||
Other income
|
|
615
|
|
|
847
|
|
|
1,819
|
|
||
Operating expenses
|
|
17,529
|
|
|
24,867
|
|
|
50,141
|
|
||
Pro-rata same property NOI, as adjusted
(1)
|
|
$
|
43,005
|
|
|
$
|
62,330
|
|
|
125,508
|
|
Less: Termination fees
|
|
30
|
|
|
18
|
|
|
72
|
|
||
Pro-rata same property NOI, as adjusted, excluding termination fees
|
|
$
|
42,975
|
|
|
$
|
62,312
|
|
|
125,436
|
|
|
|
Six months ended June 30,
|
|
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
|
Change
|
||||
Net cash provided by operating activities
|
|
$
|
175,842
|
|
|
151,297
|
|
|
24,545
|
|
Net cash used in investing activities
|
|
(769,769
|
)
|
|
(316,024
|
)
|
|
(453,745
|
)
|
|
Net cash provided by financing activities
|
|
677,937
|
|
|
152,810
|
|
|
525,127
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
$
|
84,010
|
|
|
(11,917
|
)
|
|
95,927
|
|
Total cash and cash equivalents
|
|
$
|
97,266
|
|
|
24,939
|
|
|
72,327
|
|
•
|
$28.3 million
increase in cash from operating income; offset by
|
•
|
$3.9 million
net decrease in cash due to timing of cash receipts and payments related to operating activities.
|
|
|
Six months ended June 30,
|
|
|
|||||||
(in thousands)
|
|
2017
|
|
2016
|
|
Change
|
|||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|||||
Acquisition of operating real estate
|
|
$
|
(345
|
)
|
|
(297,448
|
)
|
|
297,103
|
|
|
Advance deposits paid on acquisition of operating real estate
|
|
(100
|
)
|
|
(1,500
|
)
|
|
1,400
|
|
||
Acquisition of Equity One, net of cash acquired of $72,534
|
|
(648,957
|
)
|
—
|
|
—
|
|
|
(648,957
|
)
|
|
Real estate development and capital improvements
|
|
(161,574
|
)
|
|
(75,320
|
)
|
|
(86,254
|
)
|
||
Proceeds from sale of real estate investments
|
|
15,344
|
|
|
36,751
|
|
|
(21,407
|
)
|
||
Issuance of notes receivable
|
|
(2,837
|
)
|
|
—
|
|
|
(2,837
|
)
|
||
Investments in real estate partnerships
|
|
(3,064
|
)
|
|
(3,823
|
)
|
|
759
|
|
||
Distributions received from investments in real estate partnerships
|
|
30,612
|
|
|
25,746
|
|
|
4,866
|
|
||
Dividends on investment securities
|
|
128
|
|
|
137
|
|
|
(9
|
)
|
||
Acquisition of securities
|
|
(9,853
|
)
|
|
(46,306
|
)
|
|
36,453
|
|
||
Proceeds from sale of securities
|
|
10,877
|
|
|
45,739
|
|
|
(34,862
|
)
|
||
Net cash used in investing activities
|
|
$
|
(769,769
|
)
|
|
(316,024
|
)
|
|
(453,745
|
)
|
•
|
We did not acquire any operating properties, other than those included in the merger, during
2017
compared to
$297.4 million
for two operating property in the same period in 2016.
|
•
|
We issued 65.5 million common shares to the shareholders of Equity One valued at $4.5 billion in a stock for stock exchange and merged Equity One into the Company on March 1, 2017. As part of the merger, we paid
$649.0 million
, net of cash acquired, to repay Equity One credit facilities not assumed with the merger.
|
•
|
We invested
$86.3 million
more in
2017
than the same period in
2016
on real estate development and capital improvements, as further detailed in a table below.
|
•
|
We received proceeds of
$15.3 million
from the sale of
seven
land parcels and
one
operating property in
2017
, compared to
$36.8 million
for
four
shopping centers and
ten
land parcels in the same period in
2016
.
|
•
|
We invested
$3.1 million
in our real estate partnerships during
2017
to fund our share of redevelopment activity, compared to
$3.8 million
for our share of maturing mortgage debt and redevelopment activity during the same period in 2016.
|
•
|
Distributions from our unconsolidated real estate partnerships include return of capital from sales or financing proceeds. The
$30.6 million
received in
2017
is driven by the sale of two operating properties and one land parcel plus our share of financing proceeds from encumbering certain operating properties within one partnership. During the same period in
2016
, we received
$25.7 million
from the sale of six shopping centers within the partnerships.
|
•
|
Acquisition of securities and proceeds from sale of securities pertain to equity and debt securities held by our captive insurance company and our deferred compensation plan.
|
|
|
Six months ended June 30,
|
|
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
|
Change
|
||||
Capital expenditures:
|
|
|
|
|
|
|
||||
Land acquisitions for development / redevelopment
|
|
$
|
22,748
|
|
|
—
|
|
|
22,748
|
|
Building and tenant improvements
|
|
19,458
|
|
|
13,068
|
|
|
6,390
|
|
|
Redevelopment costs
|
|
65,463
|
|
|
20,529
|
|
|
44,934
|
|
|
Development costs
|
|
41,611
|
|
|
32,883
|
|
|
8,728
|
|
|
Capitalized interest
|
|
3,290
|
|
|
1,766
|
|
|
1,524
|
|
|
Capitalized direct compensation
|
|
9,004
|
|
|
7,074
|
|
|
1,930
|
|
|
Real estate development and capital improvements
|
|
$
|
161,574
|
|
|
75,320
|
|
|
86,254
|
|
•
|
During
2017
we acquired
two
land parcels for new development projects.
|
•
|
Redevelopment expenditures are higher in 2017 due to the timing, magnitude, and number of projects currently in process at existing centers and in process projects acquired from Equity One. We intend to continuously improve our portfolio of shopping centers through redevelopment which can include adjacent land acquisition, existing building expansion, new out-parcel building construction, and tenant improvement costs. The size and magnitude of each redevelopment project varies with each redevelopment plan.
|
•
|
Development expenditures are higher in
2017
due to the progress towards completion of our development projects currently in process. At
June 30, 2017
and
December 31, 2016
, we had
eight
and
six
development projects, respectively, that were either under construction or in lease up. See the tables below for more details about our development projects.
|
•
|
Interest is capitalized on our development and redevelopment projects and is based on cumulative actual development costs expended. We cease interest capitalization when the property is no longer being developed or is available for occupancy upon substantial completion of tenant improvements, but in no event would we capitalize interest on the project beyond 12 months after the anchor opens for business.
|
•
|
We have a staff of employees who directly support our development and redevelopment programs. Internal compensation costs directly attributable to these activities are capitalized as part of each project. Changes in the level of future development and redevelopment activity could adversely impact results of operations by reducing the amount of internal costs for development and redevelopment projects that may be capitalized. A 10% reduction in development and redevelopment activity without a corresponding reduction in development related compensation costs could result in an additional charge to net income of $1.6 million per year.
|
|
|
Six months ended June 30, 2017
|
||||||||||||
Property Name
|
|
Location
|
|
Completion Date
|
|
Net Development
Costs
(1)
|
|
GLA
|
|
Cost PSF
of GLA
(1)
|
||||
Willow Oaks Crossing
|
|
Charlotte, NC
|
|
Q1-17
|
|
$
|
13,991
|
|
|
69
|
|
$
|
203
|
|
|
|
Six months ended June 30,
|
|
|
||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
Change
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Equity issuances
|
|
$
|
—
|
|
|
149,788
|
|
|
(149,788
|
)
|
||
Repurchase of common shares in conjunction with equity award plans
|
|
(18,998
|
)
|
|
(7,984
|
)
|
|
(11,014
|
)
|
|||
Preferred stock redemption
|
|
(250,000
|
)
|
|
—
|
|
|
(250,000
|
)
|
|||
Distributions to limited partners in consolidated partnerships, net
|
|
(5,891
|
)
|
|
(2,214
|
)
|
|
(3,677
|
)
|
|||
Dividend payments
|
|
(147,574
|
)
|
|
(107,746
|
)
|
|
(39,828
|
)
|
|||
Unsecured credit facilities
|
|
285,000
|
|
|
145,000
|
|
|
140,000
|
|
|||
Proceeds from debt issuance
|
|
1,077,203
|
|
|
20,000
|
|
|
1,057,203
|
|
|||
Debt repayment
|
|
(250,047
|
)
|
|
(44,646
|
)
|
|
(205,401
|
)
|
|||
Payment of loan costs
|
|
(11,832
|
)
|
|
(292
|
)
|
|
(11,540
|
)
|
|||
Proceeds from sale of treasury stock, net
|
|
76
|
|
|
904
|
|
|
(828
|
)
|
|||
Net cash provided by financing activities
|
|
$
|
677,937
|
|
|
$
|
152,810
|
|
|
$
|
525,127
|
|
•
|
We raised
$149.8 million
during 2016 by issuing
182,787
shares of common stock through our ATM program at an average price of
$68.85
per share resulting in net proceeds of $12.3 million, and by settling 1,850,000 shares under our forward equity offering at an average price of $74.32 per share resulting in proceeds of $137.5 million.
|
•
|
We repurchased for cash a portion of the common stock related to stock based compensation to satisfy employee federal and state tax withholding requirements. The repurchases increased
$11.0 million
in 2017 due to the vesting of Equity One's stock based compensation program as a result of the merger.
|
•
|
We redeemed all of the issued and outstanding shares of $250.0 million 6.625% Series 6 cumulative redeemable preferred stock on February 16, 2017.
|
•
|
Distributions to limited partners in consolidated partnerships, net increased
$3.7 million
from a distribution of financing proceeds to a partner during May 2017.
|
•
|
As a result of the common shares issued during 2016 and common shares issued as merger consideration during 2017, combined with an increase in our quarterly dividend rate over the comparable periods, our dividend payments increased
$39.8 million
.
|
•
|
We received $300.0 million in proceeds upon closing a new term loan and used the funds to repay a $300.0 million Equity One term loan that became due upon merger. We also repaid the outstanding $15.0 million balance on our Line with proceeds from the June senior unsecured notes discussed below.
|
•
|
The $1.1 billion of proceeds in 2017 related to the following activity:
|
•
|
We received proceeds of $122.5 million from mortgage loans and $1.6 million from development construction draws, all within consolidated real estate partnerships.
|
•
|
We paid
$250.0 million
to repay or refinance mortgage loans and pay scheduled principal payments as compared to
$44.6 million
in 2016.
|
•
|
In connection with the new debt issued above, including expanding our Line commitment, we incurred
$11.8 million
of loan costs.
|
|
|
Combined
|
|
Regency's Share
(1)
|
||||||||||
(dollars in thousands)
|
|
June 30, 2017
|
|
December 31, 2016
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||
Number of Co-investment Partnerships
|
|
12
|
|
|
11
|
|
|
|
|
|
||||
Regency’s Ownership
|
|
20%-50%
|
|
|
20%-50%
|
|
|
|
|
|
||||
Number of Properties
|
|
115
|
|
|
109
|
|
|
|
|
|
||||
Assets
|
|
$
|
2,905,230
|
|
|
2,608,742
|
|
|
$
|
1,003,851
|
|
|
878,977
|
|
Liabilities
|
|
1,668,624
|
|
|
1,404,588
|
|
|
569,165
|
|
|
473,255
|
|
||
Equity
|
|
1,236,606
|
|
|
1,204,154
|
|
|
434,686
|
|
|
405,722
|
|
||
less: Negative investment in US Regency Retail I, LLC
(2)
|
|
|
|
$
|
8,376
|
|
|
—
|
|
|||||
add: Basis difference
|
|
|
|
|
|
44,143
|
|
|
1,382
|
|
||||
add: Restricted Gain Method deferral
|
|
|
|
(30,902
|
)
|
|
(30,902
|
)
|
||||||
less: Impairment of investment in real estate partnerships
|
|
|
|
(1,300
|
)
|
|
(1,300
|
)
|
||||||
less: Net book equity in excess of purchase price
|
|
|
|
(78,203
|
)
|
|
(78,203
|
)
|
||||||
Investments in real estate partnerships
|
|
|
|
$
|
376,800
|
|
|
296,699
|
|
(in thousands)
|
Regency's Ownership
|
|
June 30, 2017
|
|
December 31, 2016
|
|||
GRI - Regency, LLC (GRIR)
|
40.00%
|
|
$
|
198,995
|
|
|
201,240
|
|
New York Common Retirement Fund (NYC)
(1)
|
30.00%
|
|
57,726
|
|
|
—
|
|
|
Columbia Regency Retail Partners, LLC (Columbia I)
|
20.00%
|
|
7,488
|
|
|
9,687
|
|
|
Columbia Regency Partners II, LLC (Columbia II)
|
20.00%
|
|
13,960
|
|
|
14,750
|
|
|
Cameron Village, LLC (Cameron)
|
30.00%
|
|
12,129
|
|
|
11,877
|
|
|
RegCal, LLC (RegCal)
|
25.00%
|
|
21,022
|
|
|
21,516
|
|
|
US Regency Retail I, LLC (USAA)
(2)
|
20.01%
|
|
—
|
|
|
13,176
|
|
|
Other investments in real estate partnerships
(1)
|
20.00% - 50.00%
|
|
65,480
|
|
|
24,453
|
|
|
Total investment in real estate partnerships
|
|
|
$
|
376,800
|
|
|
296,699
|
|
(in thousands)
|
|
June 30, 2017
|
||||||||||||||
Scheduled Principal Payments and Maturities by Year:
|
|
Scheduled
Principal
Payments
|
|
Mortgage Loan
Maturities
|
|
Unsecured
Maturities
|
|
Total
|
|
Regency’s
Pro-Rata
Share
|
||||||
2017
|
|
$
|
10,016
|
|
|
—
|
|
|
19,635
|
|
|
29,651
|
|
|
7,559
|
|
2018
|
|
21,059
|
|
|
67,022
|
|
|
—
|
|
|
88,081
|
|
|
28,422
|
|
|
2019
|
|
19,852
|
|
|
73,259
|
|
|
—
|
|
|
93,111
|
|
|
24,448
|
|
|
2020
|
|
16,823
|
|
|
222,199
|
|
|
—
|
|
|
239,022
|
|
|
86,167
|
|
|
2021
|
|
10,818
|
|
|
269,942
|
|
|
—
|
|
|
280,760
|
|
|
100,402
|
|
|
Beyond 5 Years
|
|
10,580
|
|
|
819,000
|
|
|
—
|
|
|
829,580
|
|
|
286,440
|
|
|
Net unamortized loan costs, debt premium / (discount)
|
|
—
|
|
|
(10,898
|
)
|
|
—
|
|
|
(10,898
|
)
|
|
(3,512
|
)
|
|
Total
|
|
$
|
89,148
|
|
|
1,440,524
|
|
|
19,635
|
|
|
1,549,307
|
|
|
529,926
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||
Asset management, property management, leasing, and investment and financing services
|
|
$
|
6,318
|
|
|
5,981
|
|
|
12,851
|
|
|
12,594
|
|
Period
|
Total number of shares purchased
(1)
|
Average price paid per share
|
Total number of shares purchased as part of publicly announced plans or programs
|
Maximum number or approximate dollar value of shares that may yet be purchased under the plans or programs
|
|||||
April 1 through April 30, 2017
|
380
|
|
$
|
65.47
|
|
—
|
|
—
|
|
May 1 through May 31, 2017
|
756
|
|
$
|
60.86
|
|
—
|
|
—
|
|
June 1 through June 30, 2017
|
35
|
|
$
|
62.37
|
|
—
|
|
—
|
|
•
|
should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
|
•
|
have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;
|
•
|
may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
|
•
|
were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.
|
1.
|
Form of Equity Distribution Agreement dated May 17, 2017 among Regency Centers Corporation, Regency Centers, L.P. and the parties listed below (incorporated by reference to Exhibit 1.1 to the Company’s Form 8-K filed on May 17, 2017). The Equity Distribution Agreements listed below are substantially identical in all material respects to the Form of Equity Distribution Agreement, except for the identities of the parties, and have not been filed as exhibits to the Company’s 1934 Act reports pursuant to Instruction 2 to item 601 of Regulation S-K:
|
a.
|
Equity Distribution Agreement dated May 17, 2017 among Regency Centers Corporation, Regency Centers, L.P. and Wells Fargo Securities, LLC;
|
b.
|
Equity Distribution Agreement dated May 17, 2017 among Regency Centers Corporation, Regency Centers, L.P. and J.P. Morgan Securities LLC;
|
c.
|
Equity Distribution Agreement dated May 17, 2017 among Regency Centers Corporation, Regency Centers, L.P. and Merrill Lynch, Pierce, Fenner & Smith Incorporated;
|
d.
|
Equity Distribution Agreement dated May 17, 2017 among Regency Centers Corporation, Regency Centers, L.P. and BB&T Capital Markets, a division of BB&T Securities, LLC;
|
e.
|
Equity Distribution Agreement dated May 17, 2017 among Regency Centers Corporation, Regency Centers, L.P. and BTIG, LLC;
|
f.
|
Equity Distribution Agreement dated May 17, 2017 among Regency Centers Corporation, Regency Centers, L.P. and RBC Capital Markets, LLC;
|
g.
|
Equity Distribution Agreement dated May 17, 2017 among Regency Centers Corporation, Regency Centers, L.P. and SunTrust Robinson Humphrey, Inc.; and
|
h.
|
Equity Distribution Agreement dated May 17, 2017 among Regency Centers Corporation, Regency Centers, L.P. and Mizuho Securities USA LLC.
|
3.
|
a. Restated Articles of Incorporation of Regency Centers Corporation (amendment is incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed on March 1, 2017).
|
3.
|
b. Amended and Restated Bylaws of Regency Centers Corporation (amendment is incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K filed on March 1, 2017).
|
4.
|
a. Supplemental Indenture No. 14, dated as of March 1, 2017, among Equity One, Inc., Regency Centers Corporation, Regency Centers, L.P., and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K filed on March 1, 2017).
|
4.
|
b. Supplemental Indenture No. 15, dated as of July 26, 2017, among Regency Centers Corporation, Regency Centers, L.P., and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K filed on July 27, 2017).
|
4.
|
c. Assumption Agreement, dated as of March 1, 2017, by Regency Centers Corporation (incorporated by reference to Exhibit 4.2 to the Company’s Form 8-K filed on March 1, 2017)
|
10.
|
a. Term Loan Agreement, dated as of March 2, 2017, by and among Regency Centers, L.P., as borrower, Regency Centers Corporation, as guarantor, Wells Fargo Bank, National Association, as administrative agent, and certain lenders party thereto (incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K filed on March 2, 2017).
|
*
|
Furnished, not filed.
|
August 8, 2017
|
REGENCY CENTERS CORPORATION
|
|
|
By:
|
/s/ Lisa Palmer
Lisa Palmer, President and Chief Financial Officer (Principal Financial Officer)
|
|
|
|
|
By:
|
/s/ J. Christian Leavitt
J. Christian Leavitt, Senior Vice President and Treasurer (Principal Accounting Officer)
|
August 8, 2017
|
REGENCY CENTERS, L.P.
|
|
|
By:
|
Regency Centers Corporation, General Partner
|
|
By:
|
/s/ Lisa Palmer
Lisa Palmer, President and Chief Financial Officer (Principal Financial Officer)
|
|
|
|
|
By:
|
/s/ J. Christian Leavitt
J. Christian Leavitt, Senior Vice President and Treasurer (Principal Accounting Officer)
|
|
|
/s/ J. Christian Leavitt
|
|
|
J. Christian Leavitt, Senior Vice President
|
|
|
F & L CORP., Registered Agent
|
|
|
|
|
|
/s/ Charles V. Hedrick
|
|
|
Charles V. Hedrick, Authorized Signatory
|
|
|
|
|
|
Date: May 31, 2013
|
|
By:
|
/s/ Barbara C. Johnston
|
|
|
Name: Barbara C. Johnston
|
|
|
Title: Senior Vice President, Secretary and General Counsel
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of
Regency Centers Corporation
(“registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Martin E. Stein, Jr.
|
Martin E. Stein, Jr.
|
Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of
Regency Centers Corporation
(“registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Lisa Palmer
|
Lisa Palmer
|
President and Chief Financial Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of
Regency Centers, L.P.
(“registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Martin E. Stein, Jr.
|
Martin E. Stein, Jr.
|
Chief Executive Officer of Regency Centers Corporation, general partner of registrant
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of
Regency Centers, L.P.
(“registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Lisa Palmer
|
Lisa Palmer
|
President and Chief Financial Officer of Regency Centers Corporation, general partner of registrant
|
/s/ Martin E. Stein, Jr.
|
Martin E. Stein, Jr.
|
Chief Executive Officer
|
/s/ Lisa Palmer
|
Lisa Palmer
|
President and Chief Financial Officer
|
/s/ Martin E. Stein, Jr.
|
Martin E. Stein, Jr.
|
Chief Executive Officer of Regency Centers Corporation, general partner of registrant
|
/s/ Lisa Palmer
|
Lisa Palmer
|
President and Chief Financial Officer of Regency Centers Corporation, general partner of registrant
|