Document
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM 8-K
 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

November 1, 2017
Date of Report (Date of earliest event reported)
 
 
 
REGENCY CENTERS CORPORATION
(Exact name of registrant as specified in its charter)
 
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=11866812&doc=7
 
Florida
59-3191743
(State or other jurisdiction
of incorporation)
001-12298
(IRS Employer
Identification No.)
 
(Commission
File Number)
 
 
 
 
One Independent Drive, Suite 114
Jacksonville, Florida 32202
(Address of principal executive offices) (Zip Code)
 
 
 
 (904) 598-7000
(Registrant's telephone number, including area code)
 
Not Applicable
(Former name or former address, if changed since last report)
 
 
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230 .425)
 o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 






Item 2.02    Disclosure of Results of Operations and Financial Condition

On November 1, 2017, Regency issued an earnings release for the three and nine months ended September 30, 2017, which is attached as Exhibit 99.1.

On November 1, 2017, Regency posted on its website, at www.regencycenters.com, the supplemental information for the three and nine months ended September 30, 2017, which is attached as Exhibit 99.2.


Item 9.01    Financial Statements and Exhibits

(d) Exhibits

Exhibit 99.1 Earnings release issued by Regency on November 1, 2017, for the three and nine months ended
September 30, 2017.

Exhibit 99.2Supplemental information posted on its website on November 1, 2017, for the three and nine months ended September 30, 2017.
    





SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
REGENCY CENTERS CORPORATION
November 1, 2017
By:

/s/ J. Christian Leavitt
J. Christian Leavitt, Senior Vice President and Treasurer
(Principal Accounting Officer)



Exhibit
EXHIBIT 99.1


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Regency Centers Reports Third Quarter 2017 Results

JACKSONVILLE, FL. (November 1, 2017) - Regency Centers Corporation (“Regency” or the “Company”) today reported financial and operating results for the period ended September 30, 2017.

Third Quarter 2017 Highlights

Net Income Attributable to Common Stockholders (“Net Income”) of $0.35 per diluted share.
NAREIT Funds From Operations (“NAREIT FFO”) of $0.91 per diluted share and Core Funds From Operations (“Core FFO”) of $0.95 per diluted share.
Same property Net Operating Income (“NOI”) as adjusted, which reflects adjustments for the Equity One merger, excluding termination fees, increased 5.0% as compared to the same period in the prior year.
As of September 30, 2017, the same property portfolio was 96.1% leased, a 20 basis point increase sequentially.
Spaces less than 10,000 square feet (“Small Shops”) were 92.5% leased, a 40 basis point increase sequentially.
Executed 1.8 million square feet of new and renewal leases on a comparable basis, resulting in 17.4% blended rent spreads.
As of September 30, 2017, a total of 30 properties were in development or redevelopment representing a combined investment of approximately $600 million.

“Our experienced and deep team, unequaled high quality portfolio, value add asset management and development capabilities and opportunities, and strong balance sheet continue to drive solid performance even in today’s challenging environment,” stated Martin E. “Hap” Stein, Jr., Chairman and Chief Executive Officer. “Regency is well positioned to grow NOI, NAV, earnings and shareholder value at levels that are at or near the top of our shopping center peers.”

Financial Results

Regency reported Net Income for the third quarter of $59.7 million, or $0.35 per diluted share compared to Net Income of $5.3 million, or $0.05 per diluted share, for the same period in 2016. For the nine months ended September 30, 2017 Net Income was $74.8 million, or $0.48 per diluted share, compared to $88.0 million, or $0.88 per diluted share, for the same period in 2016.

The Company reported NAREIT FFO for the third quarter of $155.7 million, or $0.91 per diluted share, compared to $30.1 million, or $0.29 per diluted share, for the same period in 2016. For the nine months ended September 30, 2017 NAREIT FFO was $333.5 million, or $2.13 per diluted share, compared to $194.2 million, or $1.94 per diluted share, for the same period in 2016. NAREIT FFO for the third quarter included a non-recurring charge of $1.9 million, or $0.01 per diluted share, related to repair and clean-up caused by Hurricanes Harvey and Irma.



1

EXHIBIT 99.1

Core FFO for the third quarter was $161.7 million, or $0.95 per diluted share, compared to $84.3 million, or $0.81 per diluted share, for the same period in 2016. For the nine months ended September 30, 2017 Core FFO was $434.2 million, or $2.78 per diluted share, compared to $244.1 million, or $2.43 per diluted share for the same period in 2016. Given the non-comparable nature of the $1.9 million expense incurred in the third quarter related to the hurricanes, these charges have been added back to Core FFO.

Operating Results

Third quarter same property NOI as adjusted, excluding termination fees, increased 5.0% compared to the same period in 2016. This growth included an 80 basis point positive impact from redevelopments. The $1.9 million hurricane related expenses charged to our captive insurance program were excluded from same property NOI. Consistent with previous practice, gains and losses in our captive insurance program are excluded from same property NOI. Please note that for purposes of evaluating same property NOI on a comparative basis, and in light of the merger with Equity One on March 1, 2017, same property NOI as adjusted is presented on a pro forma basis as if the merger had occurred January 1, 2016. Please refer to the Company’s supplemental package for additional details.

As of September 30, 2017, Regency’s wholly owned portfolio plus its pro-rata share of co-investment partnerships was 95.3% leased. The same property portfolio was 96.1% leased, which is an increase of 20 basis points sequentially and an increase of 40 basis points from the same period in 2016 when adjusted for the current same property pool. Within the same property portfolio, Small Shops were 92.5% leased, an increase of 40 basis points sequentially and an increase of 70 basis points from the same period in 2016 when adjusted for the current same property pool.

Regency executed 1.8 million square feet of comparable new and renewal leases during the quarter at blended rent spreads of 7.8%. Rent spreads on new and renewal leases were 17.4% and 5.7%, respectively.

Investments

Property Transactions

During the quarter, the Company sold one co-investment property for a gross sales price of $29.9 million. Regency’s share of the gross sales price was $6.0 million. Subsequent to the third quarter, the Company sold one wholly-owned property for a gross sales price of $29.0 million, bringing gross sales proceeds for the year to $46.3 million on a pro rata basis.

Developments and Redevelopments

At quarter end, the Company had 30 properties in development or redevelopment with combined, estimated net development costs of approximately $600 million. In-process development projects were a combined 54% funded and 80% leased, and expected to yield an average return of 7.3%.

Subsequent to the third quarter the Company started a ground up development project in the Midtown neighborhood of Raleigh, NC. The project, named “Midtown East”, will feature a 120,000 square foot Wegmans, which is expected to open July of 2019, and 54,000 square feet of additional retail. Midtown East is a 50/50 joint venture between Regency Centers and ITB Holdings, LLC representing a total investment of approximately $44 million at a projected 7.9% stabilized yield.

Balance Sheet

Preferred Redemption

As previously announced, Regency redeemed all of its issued and outstanding 6.0% Series 7 cumulative redeemable preferred shares (the “Preferred Stock”). The 3,000,000 shares of Preferred Stock were

2

EXHIBIT 99.1

redeemed on August 23, 2017 (the “Redemption Date”) with proceeds from the Company’s June 30,2017, senior unsecured debt offering of $175 million 3.6% notes due 2027 and $125 million 4.4% notes due 2047. The redemption price for the Preferred Stock was $25.22083 per share, equal to $25.00 plus accrued and unpaid dividends to, but excluding, the Redemption Date. The aggregate amount paid to redeem the Preferred Stock was $75.7 million.

2017 Guidance

The Company has updated certain components of its 2017 earnings guidance. These changes are summarized below. Please refer to the Company’s third quarter 2017 supplemental information package for a complete list of updates.

 
Full Year 2017 Guidance
 
Previous Guidance
Updated Guidance
Net Income per diluted share
$0.68 - $0.74
$0.76 - $0.81
NAREIT FFO per diluted share
$2.97 - $3.03
$3.00- $3.05
Core FFO per diluted share
$3.62 - $3.68
$3.66- $3.70
Acquisitions ($ thousands)
Cap Rate (weighted average)
$0 - $80,000
+/- 5.0%
+/- $225,000
+/- 5.0%
Dispositions ($ thousands)
Cap Rate (weighted average)
$100,000 - $200,000
6.25% - 7.25%
+/- $225,000
+/- 7.0%


Dividend

On October 31, 2017, Regency’s Board of Directors declared a quarterly cash dividend on the Company’s common stock of $0.53 per share. The dividend is payable on November 29, 2017 to shareholders of record as of November 15, 2017.

Conference Call Information

To discuss Regency’s third quarter results, the Company will host a conference call on Thursday, November 2, 2017 at 9:00 a.m. ET. Dial-in and webcast information is listed below.


Third Quarter Conference Call
Date:
 
Thursday, November 2, 2017
Time:
 
9:00 a.m. ET
Dial#:
 
877-407-0789 or 201-689-8562
Webcast:
 
www.regencycenters.com under Investors



Replay

Webcast Archive: Investor Relations page under Events & Webcasts



3

EXHIBIT 99.1



Non-GAAP Disclosure

The Company uses certain non-GAAP performance measures, in addition to the required GAAP presentations, as it believes these measures improve the understanding of the Company's operational results. Regency manages its entire real estate portfolio without regard to ownership structure, although certain decisions impacting properties owned through partnerships require partner approval. Therefore, the Company believes presenting its pro-rata share of operating results regardless of ownership structure, along with other non-GAAP measures, makes comparisons of other REITs' operating results to the Company's more meaningful. Management continually evaluates the usefulness, relevance, limitations, and calculation of the Company’s reported non-GAAP performance measures to determine how best to provide relevant information to the public, and thus such reported measures could change.

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 dispositions of depreciable property, net of tax, excluding operating real estate impairments, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Regency computes 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 can provide 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 the Company’s financial performance not immediately apparent from net income determined in accordance with GAAP. Thus, NAREIT FFO is a supplemental non-GAAP financial measure of the Company's 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. 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: (a) transaction related income or expenses; (b) impairments on land; (c) gains or losses from the early extinguishment of debt; and (d) other non-comparable amounts as they occur. The Company provides a reconciliation of NAREIT FFO to Core FFO.




















4

EXHIBIT 99.1




Reconciliation of Net Income Attributable to Common Stockholders to NAREIT FFO and Core FFO - Actual (in thousands)


For the Periods Ended June 30, 2017 and 2016
 
Three Months Ended
 
Year to Date
 
 
 
 
2017
2016
 
2017
2016
Net Income Attributable to Common Stockholders
 
$
59,666

5,305

 
$
74,810

87,992

Adjustments to reconcile to NAREIT Funds From Operations(1):
 
 
 
 
 
 
Depreciation and amortization (excluding FF&E)
 
99,284

47,826

 
266,873

143,373

Provision for impairment to operating properties
 


 

659

Gain on sale of operating properties
 
(3,349
)
(23,067
)
 
(8,415
)
(38,016
)
Exchangeable operating partnership units
 
132

16

 
217

165

NAREIT Funds From Operations
 
$
155,733

30,080

 
$
333,485

194,173

 
 
 
 
 
 
 
NAREIT Funds From Operations
 
$
155,733

30,080

 
333,485

194,173

Adjustments to reconcile to Core Funds From Operations(1):
 
 
 
 
 
 
Acquisition pursuit and closing costs
 

(47
)
 
138

1,766

Development pursuit costs
 
202

287

 
521

907

Gain on sale of land
 
(119
)
(628
)
 
(2,969
)
(7,886
)
Provision for impairment to land
 

35

 

547

Loss on derivative instruments and hedge ineffectiveness
 
2

40,586

 
(12
)
40,589

Early extinguishment of debt
 

13,943

 
12,404

13,957

Merger related costs
 
1,175


 
75,584


Merger related debt offering interest
 


 
975


Preferred redemption costs
 
2,859


 
12,226


Hurricane losses
 
1,852


 
1,852


Core Funds From Operations
 
$
161,704

84,256

 
$
434,204

244,053

 
 
 
 
 
 
 
 
 
Weighted Average Shares For Diluted Earnings per Share
 
170,466

104,255

 
156,190

100,128

Weighted Average Shares For Diluted FFO and Core FFO per Share
 
170,816

104,409

 
156,467

100,282

 
 
 
 
 
 
 
 
 
(1)  Includes pro-rata share of unconsolidated co-investment partnerships, net of pro-rata share attributable to noncontrolling interests.
Same property NOI is a key non-GAAP measure used by management in evaluating the operating performance of Regency’s properties. The Company provides a reconciliation of income from operations to pro-rata same property NOI.















5

EXHIBIT 99.1

Reconciliation of Net Income Attributable to Common Stockholders to Pro-Rata Same Property NOI as adjusted - Actual (in thousands)


For the Periods Ended September 30, 2017 and 2016
 
Three Months Ended
 
Year to Date
 
 
 
 
2017
2016
 
2017
2016
Net Income Attributable to Common Stockholders
 
$
59,666

5,305

 
$
74,810

87,992

Less:
 
 
 
 
 
 
Management, transaction, and other fees
 
(6,047
)
(5,855
)
 
(19,353
)
(18,759
)
Gain on sale of real estate
 
(131
)
(9,580
)
 
(4,913
)
(22,997
)
Other(1)
 
(13,273
)
(3,680
)
 
(36,534
)
(11,170
)
Plus:
 
 
 
 
 
 
Depreciation and amortization
 
91,474

40,705

 
243,757

119,721

General and administrative
 
15,199

16,046

 
49,618

48,695

Other operating expense, excluding provision for doubtful accounts
 
2,130

498

 
78,774

4,346

Other expense (income)
 
33,708

75,653

 
106,734

125,416

Equity in income of investments in real estate excluded from NOI (2)
 
11,809

(116
)
 
38,519

21,681

Net income attributable to noncontrolling interests
 
769

543

 
2,101

1,545

Preferred stock dividends and issuance costs
 
3,147

5,266

 
16,128

15,797

NOI
 
198,451

124,785

 
549,641

372,267

 
 
 
 
 
 
 
Less non-same property NOI (4)
 
(7,626
)
(5,669
)
 
(23,824
)
(12,618
)
Plus same property NOI for non-ownership periods of Equity One(1)
 

62,555

 
43,005

188,063

 
 
 
 
 
 
 
Same Property NOI
 
$
190,825

181,671

 
$
568,822

547,712

 
 




 




Same Property NOI without termination fees
 
$
190,611

181,534

 
$
568,350

546,674

 
 
 
 
 
 
 
Same Property NOI without termination fees or redevelopments
 
$
166,742

159,950

 
$
498,755

482,686

 
(1) Includes straight-line rental income and expense, net of reserves, above and below market rent amortization, other fees, and noncontrolling interests.
(2) Includes non-NOI expenses incurred at our unconsolidated real estate partnerships, such as, but not limited to, straight-line rental income, above and below
(3) Includes revenues and expenses attributable to Non-Same Property, Projects in Development, corporate activities, and noncontrolling interests.
(4) Refer to page 2 of the Company's third quarter 2017 supplemental package for Same Property NOI detail for the non-ownership periods of Equity One.

Reported results are preliminary and not final until the filing of the Company’s Form 10-Q with the SEC and, therefore, remain subject to adjustment.













6

EXHIBIT 99.1

Reconciliation of Net Income Attributable to Common Stockholders to NAREIT FFO and Core FFO - Guidance
 
 
 
Full Year
NAREIT FFO and Core FFO Guidance:
 
2017
Net income attributable to common stockholders
 
$
0.76

0.81

Adjustments to reconcile net income to NAREIT FFO:
 
 
 
Depreciation and amortization
 
2.29

2.29

Gain on sale of operating properties
 
(0.05
)
(0.05
)
NAREIT Funds From Operations
 
$
3.00

3.05

 
 
 
 
Adjustments to reconcile NAREIT FFO to Core FFO:
 
 
 
Acquisition pursuit and closing costs
 


Development pursuit costs
 
0.01

0.01

Gain on sale of land
 
(0.02
)
(0.02
)
Early extinguishment of debt
 
0.08

0.08

Merger related costs
 
0.50

0.49

Preferred redemption costs
 
0.08

0.08

Hurricane losses
 
0.01

0.01

Core Funds From Operations
 
$
3.66

3.70




The Company has published forward-looking statements and additional financial information in its third quarter 2017 supplemental information package that may help investors estimate earnings for 2017. A copy of the Company’s third quarter 2017 supplemental information will be available on the Company's website at www.RegencyCenters.com or by written request to: Investor Relations, Regency Centers Corporation, One Independent Drive, Suite 114, Jacksonville, Florida, 32202. The supplemental information package contains more detailed financial and property results including financial statements, an outstanding debt summary, acquisition and development activity, investments in partnerships, information pertaining to securities issued other than common stock, property details, a significant tenant rent report and a lease expiration table in addition to earnings and valuation guidance assumptions. The information provided in the supplemental package is unaudited and there can be no assurance that the information will not vary from the final information in the Company’s Form 10-Q for the quarter ended September 30, 2017. Regency may, but assumes no obligation to, update information in the supplemental package from time to time.

About Regency Centers Corporation (NYSE: REG)

Regency Centers is the preeminent national owner, operator, and developer of shopping centers located in affluent and densely populated trade areas. Our portfolio includes thriving properties merchandised with highly productive grocers, restaurants, service providers, and best-in-class retailers that connect to their neighborhoods, communities, and customers. Operating as a fully integrated real estate company, Regency Centers is a qualified real estate investment trust (REIT) that is self-administered, self-managed, and an S&P 500 Index member. For more information, please visit regencycenters.com.
###

Forward-looking statements involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements. Please refer to the documents filed by Regency Centers Corporation with the SEC, specifically the most recent reports on Forms 10-K and

7

EXHIBIT 99.1

10-Q, which identify important risk factors which could cause actual results to differ from those contained in the forward-looking statements.

8
Exhibit
EXHIBIT 99.2

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At Regency Centers, we have lived our values
for 50 years by executing and successfully
meeting our commitments to our people, our
customers, and our communities. We hold
ourselves to that high standard every day.
Our exceptional culture will set us apart
for the next 50 years through our unending
dedication to these beliefs:

We are our people.
We believe our people are our most
fundamental asset - the best professionals
in the business who bring our culture to life.
We are the company you want to work for and
the people you want to do business with.

We work together to sustain
superior results.
We believe that, by partnering with each other
and with our customers, our talented team
will sustain superior results over the long
term. We believe that when you are passionate
about what you are doing and who you are
working with in a results-oriented, family
atmosphere, you do it better.

We provide exceptional service
to our customers.
We believe in putting our customers first.
This starts by owning, operating, and
developing dominant shopping centers
that are exceptionally merchandised and
maintained and most preferred by the
neighborhoods and communities where our
best-in-class retailers will thrive.



 
We add value.
We believe in creating value from every
transaction. We realize the critical importance
of executing, performing and delivering on our
commitments.

We perform for our investors.
We believe that the capital that our investors
have entrusted to us is precious. We are
open and transparent. We are committed
to enhancing the investments of our
shareholders, bond and mortgage holders,
lenders, and co-investment partners.

We connect to our communities.
We believe in contributing to the betterment
of our communities. We strive to develop
and operate thriving shopping centers that
are connected to our neighborhoods. We are
continuously reducing our environmental
impact through our greengenuity® program.

We do what is right.
We believe in unwavering standards of
honesty and integrity. Since 1963, our
Company has built its reputation by
maintaining the highest ethical principles.
You will find differentiation in our character –
we do what is right and you can take us at
our word.

We are the industry leader.
We believe that through dedication to
excellence, innovation, and ongoing process
improvements, and by remaining focused on
our core values, we will continue to be the
industry leader in a highly competitive and
ever-changing market.

Our Mission is to enhance our standing as the preeminent national shopping center company through the first-rate performance of our exceptionally merchandised portfolio of dominant grocery-anchored shopping centers, the value-added service from the best team of professionals in the business to our top-performing retailers, and profitable growth and development.



Table of Contents
September 30, 2017

 
 
 
Non-GAAP Disclosures..............................................................................................................................................
 
 
 
Earnings Press Release................................................................................................................................................
 
 
 
Summary Information:
 
 
 
 
Summary Financial Information..................................................................................................................................
 
 
 
Summary Real Estate Information..............................................................................................................................
 
 
 
Financial Information:
 
 
 
 
Consolidated Balance Sheets.......................................................................................................................................
 
 
 
Consolidated Statements of Operations.......................................................................................................................
 
 
 
Supplemental Details of Operations............................................................................................................................
 
 
 
Supplemental Details of Assets and Liabilities (Real Estate Partnerships Only)........................................................
 
 
 
Supplemental Details of Operations (Real Estate Partnerships Only)........................................................................
 
 
 
Supplemental Details of Same Property NOI as adjusted (Pro-Rata).........................................................................
 
 
Reconciliations of Non-GAAP Financial Measures and Additional Disclosures.......................................................
 
 
 
Summary of Consolidated Debt .................................................................................................................................
 
 
Summary of Unsecured Debt Covenants and Leverage Ratios...................................................................................
 
 
 
Summary of Unconsolidated Debt..............................................................................................................................
 
 
 
Investment Activity:
 
 
 
 
Property Transactions..................................................................................................................................................
 
 
 
Summary of Development...........................................................................................................................................
 
 
 
Summary of Redevelopment.......................................................................................................................................
 
 
 
Co-investment Partnerships:
 
 
 
 
Unconsolidated Investments........................................................................................................................................
 
 
 
Real Estate Information:
 
 
 
 
Leasing Statistics.........................................................................................................................................................
 
 
 
Average Base Rent by CBSA......................................................................................................................................
 
 
 
Significant Tenant Rents..............................................................................................................................................
 
 
 
Tenant Lease Expirations.............................................................................................................................................
 
 
Portfolio Summary Report by State............................................................................................................................
 
 
 
Forward-Looking Information:
 
 
 
 
Earnings and Valuation Guidance................................................................................................................................
 
 
 
Reconciliation of Net Income to NAREIT FFO and Core FFO Guidance................................................................
 
 
 
Glossary of Terms........................................................................................................................................................




Non-GAAP Disclosures
September 30, 2017

We use certain non-GAAP performance measures, in addition to the required GAAP presentations, as we believe these measures improve the understanding of the Company's operational results. We manage our entire real estate portfolio without regard to ownership structure, although certain decisions impacting properties owned through partnerships require partner approval. Therefore, we believe presenting our pro-rata share of operating results regardless of ownership structure, along with other non-GAAP measures, makes comparisons of other REITs' operating results to the Company's more meaningful. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP performance measures to determine how best to provide relevant information to the public, and thus such reported measures could change.

The pro-rata information provided is not, and is not intended to be, presented in accordance with GAAP. The pro- rata supplemental details of assets and liabilities and supplemental details of operations reflect our proportionate economic ownership of the assets, liabilities and operating results of the properties in our portfolio, regardless of ownership structure.

The items labeled as "Consolidated" are prepared on a basis consistent with the Company's consolidated financial statements as filed with the SEC on the most recent Form 10-Q or 10-K, as applicable.

The columns labeled "Share of JVs" represent our ownership interest in our unconsolidated (equity method) investments in real estate partnerships, and was derived on a partnership by partnership basis by applying to each financial statement line item our ownership percentage interest used to arrive at our share of investments in real estate partnerships and equity in income or loss of investments in real estate partnerships during the period when applying the equity method of accounting to each of our unconsolidated co-investment partnerships.

A similar calculation was performed for the amounts in columns labeled ''Noncontrolling Interests”, which represent the limited partners’ interests in consolidated partnerships attributable to each financial statement line item.

We do not control the unconsolidated investment partnerships, and the presentations of the assets and liabilities and revenues and expenses do not necessarily represent our legal claim to such items. The partners are entitled to profit or loss allocations and distributions of cash flows according to the operating agreements, which provide for such allocations according to their invested capital. Our share of invested capital establishes the ownership interest we
use to prepare our pro-rata share.

The presentation of pro-rata financial information has limitations as an analytical tool. Some of these limitations include, but are not limited to the following:

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 interests differently, limiting the comparability of pro-rata information.

Because of these limitations, the supplemental details of assets and liabilities and supplemental details of operations should not be considered independently or as a substitute for our financial statements as reported under GAAP. We compensate for these limitations by relying primarily on our GAAP results and using the pro-rata details as a supplement.


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The following non-GAAP measures, as defined in the Glossary of Terms, are commonly used by management and the investing public to understand and evaluate our operating results and performance:

NAREIT Funds From Operations (NAREIT FFO): The Company believes NAREIT FFO 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. The Company provides a reconciliation of Net Income (Loss) Attributable to Common Stockholders to NAREIT FFO.

Core Funds From Operations (Core FFO): The Company believes Core FFO, which excludes certain non-cash and non-comparable items from the computation of NAREIT FFO that affect the Company's period-over-period performance, is useful to investors because it is more reflective of the core operating performance of its portfolio of properties. The Company provides a reconciliation of NAREIT FFO to Core FFO.

Net Operating Income (NOI): The Company believes NOI provides useful information to investors to measure the operating performance of its portfolio properties. The Company provides a reconciliation of Net Income (Loss) Attributable to Common Stockholders to pro-rata NOI.

Same Property NOI: The Company provides disclosure of NOI on a same property basis because it believes the measure provides investors with additional information regarding the operating performances of comparable assets. Same Property NOI excludes all development, non-same property and corporate level revenue and expenses. The Company also provides disclosure of NOI excluding termination fees, which excludes bother termination fee income and expenses.

Same Property NOI as adjusted: For purposes of evaluating Same Property NOI on a comparative basis, and in light of the merger with Equity One on March 1, 2017, we are presenting our Same Property NOI as adjusted, which is on a pro forma basis as if the merger had occurred January 1, 2016. This perspective allows us to evaluate Same Property NOI growth over a comparable period. Same Property NOI as adjusted is not necessarily indicative of what the actual Same Property NOI and growth would have been if the merger had occurred as of the earliest period presented, nor does it purport to represent the Same Property NOI and growth for future periods. We derived this information from the accounting records of Equity One and did not adjust such information. Equity One’s financial information for the two month period ended February 28, 2017 and nine month period ended September 30, 2016 was subject to a limited internal review by Regency. The Company provides a reconciliation of Net Income (Loss) Attributable to Common Stockholders to Same Property NOI as adjusted.
Following is the detail for the current non-ownership periods of Equity One included in Same Property NOI as adjusted:
 
Two months ended February 2017
 
Three Months Ended September 2016
Nine months Ended September 2016
Same Property NOI detail for non-ownership periods of Equity One:
 
 
 
 
 
 
 
Real Estate Revenues:
 
 
 
 
Base Rent
$
44,593

 
$
65,305

194,952

Recoveries from Tenants
14,175

 
20,647

61,627

Percentage Rent
1,151

 
1,128

4,331

Termination Fees
30

 
191

263

Other Income
585

 
727

2,473

Total Real Estate Revenues
60,534

 
87,998

263,646

 
 
 
 
 
Real Estate Operating Expenses:
 
 
 
 
Operating and Maintenance
9,456

 
13,709

40,788

Termination Expense

 
170

170

Real Estate Taxes
7,808

 
11,264

32,959

Ground Rent
35

 
79

236

Provision for Doubtful Accounts
230

 
221

1,430

Total Real Estate Operating Expenses
17,529

 
25,443

75,583

 
 
 
 
 
Same Property NOI
$
43,005

 
$
62,555

188,063

 
 
 
 
 
Same Property NOI without Termination Fees
$
42,975

 
$
62,534

187,970

 
 
 
 
 
Same Property NOI without Termination Fees or Redevelopments
$
37,666

 
$
55,147

166,339



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Regency Centers Reports Third Quarter 2017 Results

JACKSONVILLE, FL. (November 1, 2017) - Regency Centers Corporation (“Regency” or the “Company”) today reported financial and operating results for the period ended September 30, 2017.

Third Quarter 2017 Highlights

Net Income Attributable to Common Stockholders (“Net Income”) of $0.35 per diluted share.
NAREIT Funds From Operations (“NAREIT FFO”) of $0.91 per diluted share and Core Funds From Operations (“Core FFO”) of $0.95 per diluted share.
Same property Net Operating Income (“NOI”) as adjusted, which reflects adjustments for the Equity One merger, excluding termination fees, increased 5.0% as compared to the same period in the prior year.
As of September 30, 2017, the same property portfolio was 96.1% leased, a 20 basis point increase sequentially.
Spaces less than 10,000 square feet (“Small Shops”) were 92.5% leased, a 40 basis point increase sequentially.
Executed 1.8 million square feet of new and renewal leases on a comparable basis, resulting in 17.4% blended rent spreads.
As of September 30, 2017, a total of 30 properties were in development or redevelopment representing a combined investment of approximately $600 million.

“Our experienced and deep team, unequaled high quality portfolio, value add asset management and development capabilities and opportunities, and strong balance sheet continue to drive solid performance even in today’s challenging environment,” stated Martin E. “Hap” Stein, Jr., Chairman and Chief Executive Officer. “Regency is well positioned to grow NOI, NAV, earnings and shareholder value at levels that are at or near the top of our shopping center peers.”

Financial Results

Regency reported Net Income for the third quarter of $59.7 million, or $0.35 per diluted share compared to Net Income of $5.3 million, or $0.05 per diluted share, for the same period in 2016. For the nine months ended September 30, 2017 Net Income was $74.8 million, or $0.48 per diluted share, compared to $88.0 million, or $0.88 per diluted share, for the same period in 2016.

The Company reported NAREIT FFO for the third quarter of $155.7 million, or $0.91 per diluted share, compared to $30.1 million, or $0.29 per diluted share, for the same period in 2016. For the nine months ended September 30, 2017 NAREIT FFO was $333.5 million, or $2.13 per diluted share, compared to $194.2 million, or $1.94 per diluted share, for the same period in 2016. NAREIT FFO for the third quarter included a non-recurring charge of $1.9 million, or $0.01 per diluted share, related to repair and clean-up caused by Hurricanes Harvey and Irma.



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Core FFO for the third quarter was $161.7 million, or $0.95 per diluted share, compared to $84.3 million, or $0.81 per diluted share, for the same period in 2016. For the nine months ended September 30, 2017 Core FFO was $434.2 million, or $2.78 per diluted share, compared to $244.1 million, or $2.43 per diluted share for the same period in 2016. Given the non-comparable nature of the $1.9 million expense incurred in the third quarter related to the hurricanes, these charges have been added back to Core FFO.

Operating Results

Third quarter same property NOI as adjusted, excluding termination fees, increased 5.0% compared to the same period in 2016. This growth included an 80 basis point positive impact from redevelopments. The $1.9 million hurricane related expenses charged to our captive insurance program were excluded from same property NOI. Consistent with previous practice, gains and losses in our captive insurance program are excluded from same property NOI. Please note that for purposes of evaluating same property NOI on a comparative basis, and in light of the merger with Equity One on March 1, 2017, same property NOI as adjusted is presented on a pro forma basis as if the merger had occurred January 1, 2016. Please refer to the Company’s supplemental package for additional details.

As of September 30, 2017, Regency’s wholly owned portfolio plus its pro-rata share of co-investment partnerships was 95.3% leased. The same property portfolio was 96.1% leased, which is an increase of 20 basis points sequentially and an increase of 40 basis points from the same period in 2016 when adjusted for the current same property pool. Within the same property portfolio, Small Shops were 92.5% leased, an increase of 40 basis points sequentially and an increase of 70 basis points from the same period in 2016 when adjusted for the current same property pool.

Regency executed 1.8 million square feet of comparable new and renewal leases during the quarter at blended rent spreads of 7.8%. Rent spreads on new and renewal leases were 17.4% and 5.7%, respectively.

Investments

Property Transactions

During the quarter, the Company sold one co-investment property for a gross sales price of $29.9 million. Regency’s share of the gross sales price was $6.0 million. Subsequent to the third quarter, the Company sold one wholly-owned property for a gross sales price of $29.0 million, bringing gross sales proceeds for the year to $46.3 million on a pro rata basis.

Developments and Redevelopments

At quarter end, the Company had 30 properties in development or redevelopment with combined, estimated net development costs of approximately $600 million. In-process development projects were a combined 54% funded and 80% leased, and expected to yield an average return of 7.3%.

Subsequent to the third quarter the Company started a ground up development project in the Midtown neighborhood of Raleigh, NC. The project, named “Midtown East”, will feature a 120,000 square foot Wegmans, which is expected to open July of 2019, and 54,000 square feet of additional retail. Midtown East is a 50/50 joint venture between Regency Centers and ITB Holdings, LLC representing a total investment of approximately $44 million at a projected 7.9% stabilized yield.

Balance Sheet

Preferred Redemption

As previously announced, Regency redeemed all of its issued and outstanding 6.0% Series 7 cumulative redeemable preferred shares (the “Preferred Stock”). The 3,000,000 shares of Preferred Stock were

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redeemed on August 23, 2017 (the “Redemption Date”) with proceeds from the Company’s June 30,2017, senior unsecured debt offering of $175 million 3.6% notes due 2027 and $125 million 4.4% notes due 2047. The redemption price for the Preferred Stock was $25.22083 per share, equal to $25.00 plus accrued and unpaid dividends to, but excluding, the Redemption Date. The aggregate amount paid to redeem the Preferred Stock was $75.7 million.

2017 Guidance

The Company has updated certain components of its 2017 earnings guidance. These changes are summarized below. Please refer to the Company’s third quarter 2017 supplemental information package for a complete list of updates.

 
Full Year 2017 Guidance
 
Previous Guidance
Updated Guidance
Net Income per diluted share
$0.68 - $0.74
$0.76 - $0.81
NAREIT FFO per diluted share
$2.97 - $3.03
$3.00- $3.05
Core FFO per diluted share
$3.62 - $3.68
$3.66- $3.70
Acquisitions ($ thousands)
Cap Rate (weighted average)
$0 - $80,000
+/- 5.0%
+/- $225,000
+/- 5.0%
Dispositions ($ thousands)
Cap Rate (weighted average)
$100,000 - $200,000
6.25% - 7.25%
+/- $225,000
+/- 7.0%


Dividend

On October 31, 2017, Regency’s Board of Directors declared a quarterly cash dividend on the Company’s common stock of $0.53 per share. The dividend is payable on November 29, 2017 to shareholders of record as of November 15, 2017.

Conference Call Information

To discuss Regency’s third quarter results, the Company will host a conference call on Thursday, November 2, 2017 at 9:00 a.m. ET. Dial-in and webcast information is listed below.


Third Quarter Conference Call
Date:
 
Thursday, November 2, 2017
Time:
 
9:00 a.m. ET
Dial#:
 
877-407-0789 or 201-689-8562
Webcast:
 
www.regencycenters.com under Investors



Replay

Webcast Archive: Investor Relations page under Events & Webcasts



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Non-GAAP Disclosure

The Company uses certain non-GAAP performance measures, in addition to the required GAAP presentations, as it believes these measures improve the understanding of the Company's operational results. Regency manages its entire real estate portfolio without regard to ownership structure, although certain decisions impacting properties owned through partnerships require partner approval. Therefore, the Company believes presenting its pro-rata share of operating results regardless of ownership structure, along with other non-GAAP measures, makes comparisons of other REITs' operating results to the Company's more meaningful. Management continually evaluates the usefulness, relevance, limitations, and calculation of the Company’s reported non-GAAP performance measures to determine how best to provide relevant information to the public, and thus such reported measures could change.

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 dispositions of depreciable property, net of tax, excluding operating real estate impairments, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Regency computes 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 can provide 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 the Company’s financial performance not immediately apparent from net income determined in accordance with GAAP. Thus, NAREIT FFO is a supplemental non-GAAP financial measure of the Company's 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. 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 income or expenses; (b) impairments on land; (c) gains or losses from the early extinguishment of debt; and (d) other non-comparable amounts as they occur. The Company provides a reconciliation of NAREIT FFO to Core FFO.





















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Reconciliation of Net Income Attributable to Common Stockholders to NAREIT FFO and Core FFO - Actual (in thousands)


For the Periods Ended September 30, 2017 and 2016
 
Three Months Ended
 
Year to Date
 
 
 
 
2017
2016
 
2017
2016
Net Income Attributable to Common Stockholders
 
$
59,666

5,305

 
$
74,810

87,992

Adjustments to reconcile to NAREIT Funds From Operations(1):
 
 
 
 
 
 
Depreciation and amortization (excluding FF&E)
 
99,284

47,826

 
266,873

143,373

Provision for impairment to operating properties
 


 

659

Gain on sale of operating properties
 
(3,349
)
(23,067
)
 
(8,415
)
(38,016
)
Exchangeable operating partnership units
 
132

16

 
217

165

NAREIT Funds From Operations
 
$
155,733

30,080

 
$
333,485

194,173

 
 
 
 
 
 
 
NAREIT Funds From Operations
 
$
155,733

30,080

 
333,485

194,173

Adjustments to reconcile to Core Funds From Operations(1):
 
 
 
 
 
 
Acquisition pursuit and closing costs
 

(47
)
 
138

1,766

Development pursuit costs
 
202

287

 
521

907

Gain on sale of land
 
(119
)
(628
)
 
(2,969
)
(7,886
)
Provision for impairment to land
 

35

 

547

Loss on derivative instruments and hedge ineffectiveness
 
2

40,586

 
(12
)
40,589

Early extinguishment of debt
 

13,943

 
12,404

13,957

Merger related costs
 
1,175


 
75,584


Merger related debt offering interest
 


 
975


Preferred redemption costs
 
2,859


 
12,226


Hurricane losses
 
1,852


 
1,852


Core Funds From Operations
 
$
161,704

84,256

 
$
434,204

244,053

 
 
 
 
 
 
 
 
 
Weighted Average Shares For Diluted Earnings per Share
 
170,466

104,255

 
156,190

100,128

Weighted Average Shares For Diluted FFO and Core FFO per Share
 
170,816

104,409

 
156,467

100,282

 
 
 
 
 
 
 
 
 
(1)  Includes pro-rata share of unconsolidated co-investment partnerships, net of pro-rata share attributable to noncontrolling interests.
Same property NOI is a key non-GAAP measure used by management in evaluating the operating performance of Regency’s properties. The Company provides a reconciliation of income from operations to pro-rata same property NOI.










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Reconciliation of Net Income Attributable to Common Stockholders to Pro-Rata Same Property NOI as adjusted - Actual (in thousands)


For the Periods Ended September 30, 2017 and 2016
 
Three Months Ended
 
Year to Date
 
 
 
 
2017
2016
 
2017
2016
Net Income Attributable to Common Stockholders
 
$
59,666

5,305

 
$
74,810

87,992

Less:
 
 
 
 
 
 
Management, transaction, and other fees
 
(6,047
)
(5,855
)
 
(19,353
)
(18,759
)
Gain on sale of real estate
 
(131
)
(9,580
)
 
(4,913
)
(22,997
)
Other(1)
 
(13,273
)
(3,680
)
 
(36,534
)
(11,170
)
Plus:
 
 
 
 
 
 
Depreciation and amortization
 
91,474

40,705

 
243,757

119,721

General and administrative
 
15,199

16,046

 
49,618

48,695

Other operating expense, excluding provision for doubtful accounts
 
2,130

498

 
78,774

4,346

Other expense (income)
 
33,708

75,653

 
106,734

125,416

Equity in income of investments in real estate excluded from NOI (2)
 
11,809

(116
)
 
38,519

21,681

Net income attributable to noncontrolling interests
 
769

543

 
2,101

1,545

Preferred stock dividends and issuance costs
 
3,147

5,266

 
16,128

15,797

NOI
 
198,451

124,785

 
549,641

372,267

 
 
 
 
 
 
 
Less non-same property NOI (4)
 
(7,626
)
(5,669
)
 
(23,824
)
(12,618
)
Plus same property NOI for non-ownership periods of Equity One(1)
 

62,555

 
43,005

188,063

 
 
 
 
 
 
 
Same Property NOI
 
$
190,825

181,671

 
$
568,822

547,712

 
 




 




Same Property NOI without termination fees
 
$
190,611

181,534

 
$
568,350

546,674

 
 
 
 
 
 
 
Same Property NOI without termination fees or redevelopments
 
$
166,742

159,950

 
$
498,755

482,686

 
(1) Includes straight-line rental income and expense, net of reserves, above and below market rent amortization, other fees, and noncontrolling interests.
(2) Includes non-NOI expenses incurred at our unconsolidated real estate partnerships, such as, but not limited to, straight-line rental income, above and below
(3) Includes revenues and expenses attributable to Non-Same Property, Projects in Development, corporate activities, and noncontrolling interests.
(4) Refer to page 2 of the Company's third quarter 2017 supplemental package for Same Property NOI detail for the non-ownership periods of Equity One.

Reported results are preliminary and not final until the filing of the Company’s Form 10-Q with the SEC and, therefore, remain subject to adjustment.













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Reconciliation of Net Income Attributable to Common Stockholders to NAREIT FFO and Core FFO - Guidance
 
 
 
Full Year
NAREIT FFO and Core FFO Guidance:
 
2017
Net income attributable to common stockholders
 
$
0.76

0.81

Adjustments to reconcile net income to NAREIT FFO:
 
 
 
Depreciation and amortization
 
2.29

2.29

Gain on sale of operating properties
 
(0.05
)
(0.05
)
NAREIT Funds From Operations
 
$
3.00

3.05

 
 
 
 
Adjustments to reconcile NAREIT FFO to Core FFO:
 
 
 
Acquisition pursuit and closing costs
 


Development pursuit costs
 
0.01

0.01

Gain on sale of land
 
(0.02
)
(0.02
)
Early extinguishment of debt
 
0.08

0.08

Merger related costs
 
0.50

0.49

Preferred redemption costs
 
0.08

0.08

Hurricane losses
 
0.01

0.01

Core Funds From Operations
 
$
3.66

3.70




The Company has published forward-looking statements and additional financial information in its third quarter 2017 supplemental information package that may help investors estimate earnings for 2017. A copy of the Company’s third quarter 2017 supplemental information will be available on the Company's website at www.RegencyCenters.com or by written request to: Investor Relations, Regency Centers Corporation, One Independent Drive, Suite 114, Jacksonville, Florida, 32202. The supplemental information package contains more detailed financial and property results including financial statements, an outstanding debt summary, acquisition and development activity, investments in partnerships, information pertaining to securities issued other than common stock, property details, a significant tenant rent report and a lease expiration table in addition to earnings and valuation guidance assumptions. The information provided in the supplemental package is unaudited and there can be no assurance that the information will not vary from the final information in the Company’s Form 10-Q for the quarter ended September 30, 2017. Regency may, but assumes no obligation to, update information in the supplemental package from time to time.

About Regency Centers Corporation (NYSE: REG)

Regency Centers is the preeminent national owner, operator, and developer of shopping centers located in affluent and densely populated trade areas. Our portfolio includes thriving properties merchandised with highly productive grocers, restaurants, service providers, and best-in-class retailers that connect to their neighborhoods, communities, and customers. Operating as a fully integrated real estate company, Regency Centers is a qualified real estate investment trust (REIT) that is self-administered, self-managed, and an S&P 500 Index member. For more information, please visit regencycenters.com.
###

Forward-looking statements involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements. Please refer to the documents filed by Regency Centers Corporation with the SEC, specifically the most recent reports on Forms 10-K and

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10-Q, which identify important risk factors which could cause actual results to differ from those contained in the forward-looking statements.



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Summary Financial Information
September 30, 2017
(in thousands, except per share data)
 
 
Three Months Ended
 
Year to Date
 
 
2017
 
2016
 
2017
 
2016
Financial Results
 
 
 
 
 
 
 
 
Net income attributable to common stockholders (page 13)
 
$
59,666

 
$
5,305

 
$
74,810

 
$
87,992

Net income per diluted share
 
$
0.35

 
$
0.05

 
$
0.48

 
$
0.88

 
 
 
 
 
 
 
 
 
NAREIT Funds From Operations (NAREIT FFO) (page 18)
 
$
155,733

 
$
30,080

 
$
333,485

 
$
194,173

NAREIT FFO per diluted share
 
$
0.91

 
$
0.29

 
$
2.13

 
$
1.94

 
 
 
 
 
 
 
 
 
Core Funds From Operations (Core FFO) (page 18)
 
$
161,704

 
$
84,256

 
$
434,204

 
$
244,053

Core FFO per diluted share
 
$
0.95

 
$
0.81

 
$
2.78

 
$
2.43

 
 
 
 
 
 
 
 
 
Same Property NOI as adjusted without termination fees (page 17)
 
$
190,611

 
$
181,534

 
$
568,350

 
$
546,674

% growth
 
5.0
%
 
 
 
4.0
%
 
 
 
 
 
 
 
 
 
 
 
Dividends paid per share and unit
 
$
0.53

 
$
0.50

 
$
1.57

 
$
1.50

Payout ratio of Core FFO per share (diluted)
 
55.8
%
 
61.7
%
 
56.5
%
 
61.7
%
 
 
 
 
 
 
 
 
 
Diluted share and unit count
 
 
 
 
 
 
 
 
Weighted average shares (diluted) - Net income
 
170,466

 
104,255

 
156,190

 
100,128

Weighted average shares (diluted) - NAREIT FFO and Core FFO
 
170,816

 
104,409

 
156,467

 
100,282

 
 
 
 
 
 
 
 
 
 
 
As of
 
As of
 
As of
 
As of
 
 
9/30/2017
 
12/31/2016
 
12/31/2015
 
12/31/2014
Capital Information
 
 
 
 
 
 
 
 
Market price per common share
 
$
62.04

 
$
68.95

 
$
68.12

 
$
63.78

 
 
 
 
 
 
 
 
 
Common shares outstanding
 
170,109

 
104,497

 
97,213

 
94,108

Exchangeable units held by noncontrolling interests
 
350

 
154

 
154

 
154

Common shares and equivalents issued and outstanding
 
170,459

 
104,651

 
97,367

 
94,262

Market equity value of common and convertible shares
 
$
10,575,273

 
$
7,215,718

 
$
6,632,627

 
$
6,012,045

 
 
 
 
 
 
 
 
 
Non-convertible preferred stock
 
$

 
$
325,000

 
$
325,000

 
$
325,000

 
 
 
 
 
 
 
 
 
Outstanding debt
 
$
4,043,634

 
$
2,111,450

 
$
2,363,238

 
$
2,528,137

Less: cash
 
(30,641
)
 
(17,879
)
 
(40,623
)
 
(121,789
)
Net debt
 
$
4,012,993

 
$
2,093,571

 
$
2,322,615

 
$
2,406,348

 
 
 
 
 
 
 
 
 
Total market capitalization
 
$
14,588,266

 
$
9,634,289

 
$
9,280,242

 
$
8,743,393

 
 
 
 
 
 
 
 
 
Debt metrics (pro-rata; trailing 12 months "TTM") (1)
 
 
 
 
 
 
 
 
Net Debt-to-Adjusted EBITDA
 
5.4x

 
4.4x

 
5.2x

 
5.7x

Fixed charge coverage
 
4.1x

 
3.3x

 
2.8x

 
2.5x

 
 
 
 
 
 
 
 
 
(1) In light of the merger with Equity One on March 1, 2017, debt metric calculations include legacy Regency results for the trailing 12 months and the annualized impact of year to date results for the Equity One contribution post merger.


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Summary Real Estate Information
September 30, 2017
(GLA in thousands)
Wholly Owned and 100% of Co-investment Partnerships
 
9/30/2017
 
6/30/2017
 
3/31/2017*
 
12/31/2016
 
9/30/2016
Number of properties
 
427
 
428
 
429
 
307
 
307
Number of retail operating properties
 
413
 
414
 
416
 
301
 
302
Number of same properties
 
399
 
400
 
402
 
289
 
292
Number of properties in redevelopment
 
22
 
21
 
23
 
15
 
16
Number of properties in development
 
8
 
8
 
7
 
6
 
5
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross Leasable Area (GLA) - All properties
 
54,067
 
54,162
 
54,038
 
37,831
 
37,635
GLA including retailer-owned stores - All properties
 
59,031
 
59,125
 
59,002
 
42,246
 
42,050
GLA - Retail operating properties
 
52,250
 
52,344
 
52,473
 
36,923
 
37,090
GLA - Same properties
 
50,624
 
50,719
 
50,848
 
35,316
 
35,707
GLA - Properties in redevelopment(1)
 
4,907
 
4,591
 
4,691
 
2,692
 
2,926
GLA - Properties in development
 
1,348
 
1,348
 
1,096
 
908
 
545
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wholly Owned and Pro-Rata Share of Co-investment Partnerships
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GLA - All properties
 
44,281
 
44,284
 
44,075
 
28,745
 
28,565
GLA including retailer-owned stores - All properties
 
49,244
 
49,248
 
49,039
 
33,160
 
32,979
GLA - Retail operating properties
 
42,536
 
42,540
 
42,583
 
27,837
 
28,020
GLA - Same properties
 
41,073
 
41,076
 
41,120
 
26,392
 
26,636
Spaces ≥ 10,000 sf
 
25,914
 
25,930
 
25,912
 
16,113
 
16,298
Spaces < 10,000 sf
 
15,159
 
15,146
 
15,208
 
10,279
 
10,338
GLA - Properties in redevelopment(1)
 
4,138
 
3,865
 
4,211
 
2,277
 
2,535
GLA - Properties in development
 
1,348
 
1,348
 
1,096
 
908
 
545
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% leased - All properties
 
95.3%
 
95.0%
 
95.3%
 
95.4%
 
95.6%
% leased - Retail operating properties
 
95.9%
 
95.7%
 
95.8%
 
96.0%
 
95.8%
% leased - Same properties (2)
 
96.1%
 
95.9%
 
96.0%
 
96.2%
 
96.0%
Spaces ≥ 10,000 sf (2)
 
98.2%
 
98.1%
 
98.4%
 
98.3%
 
98.1%
Spaces < 10,000 sf (2)
 
92.5%
 
92.1%
 
91.8%
 
93.0%
 
92.7%
Average % leased - Same properties (2)
 
96.0%
 
96.1%
 
96.1%
 
96.1%
 
96.2%
% commenced - Same properties(2)(3)
 
93.7%
 
93.7%
 
93.7%
 
94.3%
 
94.5%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Same property NOI as adjusted growth - YTD (see page 17) (2) (4)
 
3.9%
 
3.3%
 
3.3%
 
3.9%
 
3.6%
Same property NOI as adjusted growth without termination fees - YTD(2) (4)
 
4.0%
 
3.5%
 
3.7%
 
3.5%
 
3.4%
Same property NOI as adjusted growth without termination fees or redevelopments - YTD (2) (4)
 
3.3%
 
2.9%
 
3.1%
 
3.1%
 
3.0%
Rent spreads - Trailing 12 months (5) (see page 27)
 
9.4%
 
9.1%
 
9.8%
 
11.3%
 
11.0%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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*Note: Beginning with the quarter ended 3/31/17, information includes the impact of the Equity One merger closed March 1, 2017. The information presented for periods prior to 3/31/17 has not been restated and is therefore not comparable.
(1) Represents entire center GLA rather than redevelopment portion only. Included in Same Property pool unless noted otherwise.
 
 
 
 
 
 
 
(2) Periods prior to 3/31/17 are not adjusted for current same property pool.
(3) Excludes leases that are signed but have not yet commenced.
 
 
 
 
 
 
 
 
 
 
(4) From 3/31/17 forward, Same Property NOI growth is presented as adjusted, as if the merger had occurred on 1/1/16. Please see page 17 for more detail.
(5) Retail operating properties only. Rent spreads are calculated on a comparable-space, cash basis for new and renewal leases executed.

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Consolidated Balance Sheets
September 30, 2017 and December 31, 2016
(in thousands)
 
2017
 
2016
 
(unaudited)
 

Assets
 
 
 
Real estate investments at cost:
 
 
 
Land, building and improvements
$
10,412,550

 
$
4,752,621

Properties in development
433,707

 
180,878

 
10,846,257

 
4,933,499

Less: accumulated depreciation
1,281,510

 
1,124,391

 
9,564,747

 
3,809,108

Properties held for sale
27,802

 

Investments in real estate partnerships
380,930

 
296,699

Net real estate investments
9,973,479

 
4,105,807

 
 
 
 
Cash and cash equivalents
30,641

 
17,879

Accounts receivable, net
45,491

 
31,418

Straight line rent receivables, net
83,678

 
69,823

Notes receivable
13,984

 
10,481

Deferred leasing costs, net
71,826

 
69,000

Acquired lease intangible assets, net
508,868

 
118,831

Trading securities held in trust, at fair value
30,720

 
28,588

Goodwill
302,303

 

Other assets
57,755

 
37,079

Total assets
$
11,118,745

 
$
4,488,906

 
 
 
 
Liabilities and Equity
 
 
 
Liabilities:
 
 
 
Notes payable
$
2,943,986

 
$
1,363,925

Unsecured credit facilities
578,144

 
278,495

Total notes payable
3,522,130

 
1,642,420

 
 
 
 
Accounts payable and other liabilities
276,363

 
138,936

Acquired lease intangible liabilities, net
637,217

 
54,180

Tenants' security and escrow deposits
46,351

 
28,868

Total liabilities
4,482,061

 
1,864,404

 
 
 
 
Equity:


 

Stockholders' Equity:
 
 
 
Preferred stock

 
325,000

Common stock, $.01 par
1,701

 
1,045

Additional paid in capital
7,761,055

 
3,277,861

Accumulated other comprehensive loss
(14,141
)
 
(18,346
)
Distributions in excess of net income
(1,153,153
)
 
(994,259
)
Total stockholders' equity
6,595,462

 
2,591,301

Noncontrolling Interests:
 
 
 
Exchangeable operating partnership units
10,906

 
(1,967
)
Limited partners' interest
30,316

 
35,168

Total noncontrolling interests
41,222

 
33,201

Total equity
6,636,684

 
2,624,502

Total liabilities and equity
$
11,118,745

 
$
4,488,906

 
 
 
 
These consolidated balance sheets should be read in conjunction with the Company's most recent Form 10-Q and Form 10-K filed with the Securities and Exchange Commission.

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Consolidated Statements of Operations
For the Periods Ended September 30, 2017 and 2016
(in thousands)
unaudited
 
Three Months Ended
 
Year to Date
 
2017
 
2016
 
2017
 
2016
Revenues:
 
 
 
 
 
 
 
  Minimum rent
$
195,393

 
111,886

 
$
532,625

 
329,506

  Percentage rent
1,147

 
495

 
5,509

 
2,651

  Recoveries from tenants and other income
59,554

 
34,532

 
162,089

 
103,894

  Management, transaction, and other fees
6,047

 
5,855

 
19,353

 
18,759

        Total revenues
262,141

 
152,768

 
719,576

 
454,810

Operating Expenses:
 
 
 
 
 
 
 
  Depreciation and amortization
91,474

 
40,705

 
243,757

 
119,721

  Operating and maintenance
38,020

 
23,373

 
103,888

 
69,767

  General and administrative
15,199

 
16,046

 
49,618

 
48,695

  Real estate taxes
29,315

 
17,058

 
79,636

 
49,697

  Other operating expense
3,195

 
1,046

 
81,621

 
5,795

        Total operating expenses
177,203

 
98,228

 
558,520

 
293,675

Other Expense (Income):
 
 
 
 
 
 
 
  Interest expense, net of interest income
34,679

 
21,945

 
97,285

 
70,489

  Provision for impairment

 

 

 
1,666

  Early extinguishment of debt

 
13,943

 
12,404

 
13,943

  Net investment (income) loss
(971
)
 
(821
)
 
(2,955
)
 
(1,268
)
  Loss on derivative instruments

 
40,586

 

 
40,586

       Total other expense
33,708

 
75,653

 
106,734

 
125,416

        Income (loss) from operations before equity in income of
        investments in real estate partnerships
51,230

 
(21,113
)
 
54,332

 
35,719

  Equity in income of investments in real estate partnerships
12,221

 
22,647

 
33,804

 
46,618

        Income from operations
63,451

 
1,534

 
88,126

 
82,337

  Gain on sale of real estate, net of tax
131

 
9,580

 
4,913

 
22,997

        Net income
63,582

 
11,114

 
93,039

 
105,334

Noncontrolling Interests:
 
 
 
 
 
 
 
  Exchangeable operating partnership units
(132
)
 
(16
)
 
(217
)
 
(165
)
  Limited partners' interests in consolidated partnerships
(637
)
 
(527
)
 
(1,884
)
 
(1,380
)
        Net income attributable to noncontrolling interests
(769
)
 
(543
)
 
(2,101
)
 
(1,545
)
        Net income attributable to controlling interests
62,813

 
10,571

 
90,938

 
103,789

  Preferred stock dividends and issuance costs
(3,147
)
 
(5,266
)
 
(16,128
)
 
(15,797
)
        Net income attributable to common stockholders
$
59,666

 
5,305

 
$
74,810

 
87,992

 
 
 
 
 
 
 
 
These consolidated statements of operations should be read in conjunction with the Company's most recent Form 10-Q and Form 10-K filed with the Securities and Exchange Commission.

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Supplemental Details of Operations (Consolidated Only)
For the Periods Ended September 30, 2017 and 2016
(in thousands)
<
 
Three Months Ended
 
Year to Date
 
2017
2016
 
2017
2016
Real Estate Revenues:
 
 
 
 
 
Base rent
$
182,921

108,702

 
$
498,603

321,647

Recoveries from tenants
54,483

31,444

 
149,811

94,684

Percentage rent
1,147

495

 
5,509

2,651

Termination fees
191

93

 
623

611

Other income
4,921

2,995

 
11,696

8,599

Total real estate revenues
243,663

143,729

 
666,242

428,192

 
 
 
 
 
 
Real Estate Operating Expenses:
 
 
 
 
 
Operating and maintenance
35,046

20,589

 
95,346

63,128

Real estate taxes
29,315

17,058

 
79,636

49,697

Ground rent
2,218

1,857

 
6,433

5,251

Provision for doubtful accounts
1,065

548

 
2,847

1,449

Total real estate operating expenses
67,644

40,052

 
184,262

119,525

 
 
 
 
 
 
Other Rent Amounts:
 
 
 
 
 
Straight line rent, net
4,719

1,137

 
13,048

4,150

Above/below market rent amortization, net
6,956

1,120

 
18,824

2,321

Total other rent amounts
11,675

2,257

 
31,872

6,471

 
 
 
 
 
 
Fee Income:
 
 
 
 
 
Property management fees
3,446

3,197

 
10,452

9,819

Asset management fees
1,761

1,611

 
5,313

4,935

Leasing commissions and other fees
840

1,047

 
3,588

4,005

Total fee income
6,047

5,855

 
19,353

18,759

 
 
 
 
 
 
Interest Expense, net:
 
 
 
 
 
Gross interest expense
35,286

21,075

 
97,387

66,792

Derivative amortization
2,102

1,807

 
6,306

6,306

Debt cost and premium/discount amortization
263

309

 
827

936

Capitalized interest
(2,488
)
(857
)
 
(5,778
)
(2,622
)
Interest income
(486
)
(389
)
 
(1,452
)
(923
)
Total interest expense, net
34,677

21,945

 
97,290

70,489

 
 
 
 
 
 
General & Administrative, net:
 
 
 
 
 
Gross general & administrative
17,629

17,557

 
55,511

52,796

Stock-based compensation
3,749

3,163

 
11,150

9,967

Capitalized direct leasing compensation costs
(2,507
)
(2,763
)
 
(7,483
)
(8,049
)
Capitalized direct development compensation costs
(4,632
)
(2,766
)
 
(12,517
)
(7,343