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
April 30, 2018
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=12217952&doc=6
 
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))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company  o 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   o
 






Item 2.02    Disclosure of Results of Operations and Financial Condition
On April 30, 2018, Regency issued an earnings release for the three months ended March 31, 2018, which is attached as Exhibit 99.1.
On April 30, 2018, Regency posted on its website, at www.regencycenters.com, the supplemental information for the three months ended March 31, 2018, which is attached as Exhibit 99.2.

Item 9.01    Financial Statements and Exhibits
(d) Exhibits
Exhibit 99.1Earnings release issued by Regency on April 30, 2018, for the three months ended March 31, 2018.
Exhibit 99.2Supplemental information posted on its website on April 30, 2018, for the three months ended March 31, 2018.





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
April 30, 2018
By:

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



Exhibit
EXHIBIT 99.1


http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12217952&doc=4
Regency Centers Reports First Quarter 2018 Results

JACKSONVILLE, FL. (April 30, 2018) - Regency Centers Corporation (“Regency” or the “Company”) today reported financial and operating results for the period ended March 31, 2018.


First Quarter 2018 Highlights

First quarter Net Income Attributable to Common Stockholders (“Net Income”) of $0.31 per diluted share.
First quarter NAREIT Funds From Operations (“NAREIT FFO”) of $0.96 per diluted share.
Same property Net Operating Income (“NOI”) as adjusted, excluding termination fees, increased 4.0% as compared to the same period in the prior year, which reflects adjustments for the Equity One merger.
As of March 31, 2018, the same property portfolio was 95.7% leased.
As of March 31, 2018, a total of 19 properties were in development or redevelopment representing a total investment of approximately $454 million.
Acquired three shopping centers during the quarter and one subsequent to quarter end for approximately $134 million.
Repurchased 2.145 million shares of common stock at an average price of $58.24 per share for $125 million as part of the Company’s previously announced stock repurchase program.
Completed a public offering of $300 million 4.125% notes due 2028 (the “Notes”) and increased the size of its unsecured revolving credit facility (the “Facility”) to $1.25 billion while extending the maturity date of the Facility to 2023.
On April 26, 2018, Lisa Palmer and Deirdre J. Evens were elected to Regency’s Board of Directors (the “Board”) along with nine returning directors.

“Well conceived and well merchandised shopping centers, located in affluent and dense infill communities and neighborhoods, remain a critical component to a retailers success, as demonstrated by another quarter of solid results from Regency’s preeminent portfolio” stated Martin E. “Hap” Stein, Jr., Chairman and Chief Executive Officer. “Regency’s unequaled combination of strategic advantages will continue to enable us to meet the challenges of the ever-changing retail environment and further position us to attract winning retailers and grow shareholder value.”


Financial Results

Regency reported Net Income for the first quarter of $52.7 million, or $0.31 per diluted share compared to the Net Loss Attributable to Common Stockholders (“Net Loss”) of $33.2 million, or $0.26 per diluted share, for the same period in 2017. Net Income for the first quarter included impairments in the amount of $16.1 million, or $0.09 per diluted share, primarily from an asset currently under contract for sale. The Net Loss in the first quarter of 2017 includes one-time merger related costs of $69.7 million, or $0.55 per share.



1

EXHIBIT 99.1

The Company reported NAREIT FFO for the first quarter of $164.9 million, or $0.96 per diluted share, compared to $34.2 million, or $0.27 per diluted share, for the same period in 2017. NAREIT FFO in the first quarter of 2017 includes one-time merger related costs of $69.7 million, or $0.55 per share.

The Company reported Operating FFO for the first quarter of $152.2 million, or $0.89 per diluted share, compared to $106.2 million, or $0.84 per diluted share, for the same period in 2017.


Operating Results

First quarter same property NOI as adjusted, excluding termination fees, increased 4.0% compared to the same period in 2017 driven primarily by base rent growth. 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, 2017. Please refer to the Company’s supplemental package for additional details.

As of March 31, 2018, Regency’s wholly-owned portfolio plus its pro-rata share of co-investment partnerships was 95.1% leased. The same property portfolio was 95.7% leased, which is a decrease of 40 basis points sequentially and flat from the same period in 2017.

For the three months ended March 31, 2018, Regency executed approximately 1.0 million square feet of comparable new and renewal leases at blended rent spreads of 8.4%. Rent spreads on new and renewal leases were 15.5% and 6.8%, respectively.


Investments

Property Transactions

During the quarter the Company closed on $64.9 million of acquisitions, as previously disclosed, and $3.5 million of dispositions.

Ballard Blocks I (Seattle, WA) - The Company acquired a 49.9% equity interest in Ballard Blocks I, an operating 132,000 square foot shopping center, anchored by Trader Joe’s, for $27.2 million. Regency also acquired a 49.9% interest in adjacent land, and concurrently announced the development start of Ballard Blocks II (description below).

District at Metuchen (Metuchen, NJ) - Regency and a co-investment partner acquired District at Metuchen, a 67,000 square foot Whole Foods Market anchored shopping center located in the New York metro area for a gross purchase price of $33.8 million. The Company’s share of the purchase price was $6.8 million.

Hewlett Crossing I & II (Hewlett, NY) - The Company acquired Hewlett Crossing I, a 32,000 square foot retail center anchored by Petco, for a gross purchase price of $19.5 million. A secured mortgage of $9.7 million was assumed at closing. Regency also acquired the adjacent Hewlett Crossing II, a 20,000 square foot neighborhood retail center anchored by Duane Reade, for a gross purchase price of $11.4 million. Regency will operate the two centers as a single center known as Hewlett Crossing.

Regency sold one Winn-Dixie anchored operating property for a gross purchase price of $3.5 million located in Jacksonville, FL.

Subsequent to quarter end, Regency closed on a $68.9 million acquisition and one disposition for $10.6 million.


2

EXHIBIT 99.1

Rivertowns Square (Dobbs Ferry, NY) - Regency acquired Rivertowns Square, a 116,000 square foot retail shopping center, anchored by Brooklyn Harvest Market, a specialty grocer with seven existing locations in the New York metro area, for a gross purchase price of $68.9 million.

Regency sold one operating property for a gross purchase price of $10.6 million located in Palm Coast, FL.


Developments and Redevelopments

As previously disclosed, during the quarter the Company started one ground up development project.

Ballard Blocks II (Seattle, WA) - Ballard Blocks II is an 114,000 square foot joint venture development anchored by PCC Community Markets. Regency’s pro-rata share of estimated development cost is $31.1 million with a projected 6.3% stabilized yield.

At quarter end, the Company had 19 properties in development or redevelopment with combined, estimated net development costs of approximately $454 million. In-process development projects were a combined 61% funded and 80% leased, and are expected to yield an average return of 7.2%.

During the quarter, Regency completed five redevelopment projects with combined costs of approximately $126.7 million, which includes the redevelopment at Serramonte Shopping Center. The redevelopment at Serramonte Shopping Center was completed with costs of $116.2 and includes 250,000 square feet of new retail including the addition of Nordstrom Rack, Ross, TJ Maxx and Dave & Busters.


Capital Markets

Stock Repurchase Program

During the quarter, Regency purchased 2.145 million shares of common stock at an average price of $58.24 per share for $125 million under its stock repurchase program, which authorizes share repurchases up to $250 million. This program is scheduled to expire on February 6, 2020. The timing of share repurchases under this program depends upon marketplace conditions and other factors, and the program remains subject to the discretion of the Board.

Debt Offering

As previously disclosed on February 28, 2018, the Company’s operating partnership, Regency Centers, L.P., priced a public offering of $300 million 4.125% notes due 2028. The Notes are due March 15, 2028 and were priced at 99.837%. Interest on the Notes is payable semiannually on March 15th and September 15th of each year, with the first payment on September 15, 2018. Net proceeds of the offering have been used to repay in full $150 million 6.0% notes originally due June 15, 2020, including a make-whole premium of approximately $10.5 million, which was redeemed on April 2, 2018, and to reduce the outstanding balance on the line of credit. The balance of the net proceeds of the offering are intended to be used to repay approximately $115 million in 2018 mortgage maturities with an average interest rate of 6.3% and for general corporate purposes.


Unsecured Revolving Credit Facility

As previously disclosed on March 26, 2018, the Company closed on its amended and restated unsecured revolving credit facility. The amendment and restatement increased the size of the Facility to $1.25 billion from $1.0 billion and extended the maturity date to March 23, 2022, with options to extend maturity for two additional six-month periods. Borrowings now bear interest at an annual rate of LIBOR plus 87.5 basis

3

EXHIBIT 99.1

points, subject to the Company’s credit ratings, compared to a rate of 92.5 basis points under its previous Facility. An annual facility fee of 15 basis points, subject to the Company’s credit ratings, applies to the entire $1.25 billion Facility.


Dividend

On April 25, 2018, Regency’s Board declared a quarterly cash dividend on the Company’s common stock of $0.555 per share. The dividend is payable on May 30, 2018, to shareholders of record as of May 16, 2018.


Board Changes

At the Annual Shareholders meeting on April 26, 2018, Lisa Palmer and Deirdre J. Evens were elected to Regency’s Board of Directors along with nine returning directors. Ms. Palmer, Regency’s President and Chief Financial Officer, has been with the Company for over 20 years and has extensive experience in finance and capital markets, operations, public board strategy and governance. Ms. Evens, Chief of Operations of Iron Mountain Incorporated (NYSE: IRM), brings a strong background in corporate strategy, addressing technological change, marketing, and human resources. Regency believes that the quality, dedication, and chemistry of Regency’s Board are characteristics vital to the Company’s success and are further enhanced through these additions.



2018 Guidance

The Company has updated certain components of its 2018 earnings guidance. Please refer to the Company’s first quarter 2018 supplemental information package for a complete list of updates. Updated guidance for NAREIT FFO includes a one-time charge of $10.5 million, or $0.06 per diluted share, for the early the redemption of the Company’s $150 million 6.0% Senior Unsecured Notes originally due June 15, 2020, that occurred subsequent to the quarter. Updated guidance for NAREIT FFO also includes a non-cash income benefit of $6.0 million, or $0.04 per diluted share, for the required recognition of the unamortized below market rent intangible for a Toys R Us lease that was purchased at auction.

2018 Guidance
 
Previous Guidance
Updated Guidance
Net Income Attributable to Common Stockholders (“Net Income”)
$1.47 - $1.56
$1.33 - $1.38
NAREIT Funds From Operations (“NAREIT FFO”) per diluted share
$3.73 - $3.82
$3.74 - $3.79
Operating Funds From Operations ("Operating FFO") per diluted share
$3.48 - $3.54
$3.49 - $3.54
Same Property Net Operating Income (“SPNOI”) Growth excluding termination fees (pro-rata)
2.25% - 3.25%
2.40% - 3.25%


Conference Call Information

To discuss Regency’s first quarter results, the Company will host a conference call on Tuesday, May 1, 2018, at 11:00 a.m. EDT. Dial-in and webcast information is listed below.


4

EXHIBIT 99.1

First Quarter Earnings Conference Call
Date:
Tuesday, May 1, 2018
Time:
11:00 a.m. EDT
Dial#:
877-407-0789 or 201-689-8562
Webcast:
investors.regencycenters.com


Replay

Webcast Archive: Investor Relations page under Events & Webcasts


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. Operating FFO is an additional performance measure that excludes from NAREIT FFO: (a) certain non-cash components of earnings derived from above and below market rent amortization, straight-line rents, and amortization of mark-to-market of debt adjustments. The Company provides a reconciliation of Net Income to NAREIT FFO and Operating FFO for actual results.


5

EXHIBIT 99.1

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

For the Periods Ended March 31, 2018 and 2017
 
Three Months Ended
 
Year to Date
Reconciliation of Net Income (Loss) to NAREIT FFO:
 
2018
2017
 
2018
2017
Net Income (Loss) Attributable to Common Stockholders
 
$
52,660

(33,223
)
 
$
52,660

(33,223
)
Adjustments to reconcile to NAREIT Funds From Operations(1):
 
 
 
 
 
 
Depreciation and amortization (excluding FF&E)
 
96,197

67,444

 
96,197

67,444

Provision for impairment to operating properties
 
16,054


 
16,054


Gain on sale of operating properties
 
(102
)
(12
)
 
(102
)
(12
)
Exchangeable operating partnership units
 
111

(19
)
 
111

(19
)
NAREIT Funds From Operations
 
$
164,920

34,190

 
$
164,920

34,190

Reconciliation of NAREIT FFO to Operating FFO:
 
 
 
 
 
 
NAREIT Funds From Operations
 
$
164,920

34,190

 
164,920

34,190

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

27

 

27

Gain on sale of land
 
(107
)
(404
)
 
(107
)
(404
)
Loss on derivative instruments and hedge ineffectiveness
 

(8
)
 

(8
)
Early extinguishment of debt
 
162


 
162


Interest on bonds for period from notice to redemption
 
600


 
600


Merger related costs
 

69,732

 

69,732

Merger related debt offering interest
 

975

 

975

Preferred redemption costs
 

9,368

 

9,368

Straight line rent, net
 
(4,081
)
(3,365
)
 
(4,081
)
(3,365
)
Above/below market rent amortization, net
 
(8,422
)
(3,719
)
 
(8,422
)
(3,719
)
Debt premium/discount amortization
 
(899
)
(641
)
 
(899
)
(641
)
Operating Funds From Operations
 
$
152,173

106,155

 
$
152,173

106,155

 
 
 
 
 
 
 
 
 
Weighted Average Shares For Diluted Earnings per Share
 
170,959

126,649

 
170,959

126,649

Weighted Average Shares For Diluted FFO and Operating FFO per Share
 
171,309

127,051

 
171,309

127,051

 
 
 
 
 
 
 
 
 
(1)  Includes pro-rata share of unconsolidated co-investment partnerships, net of pro-rata share attributable to noncontrolling interests.



6

EXHIBIT 99.1

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 net income to pro-rata same property NOI.

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

For the Periods Ended March 31, 2018 and 2017
 
Three Months Ended
 
Year to Date
 
 
 
 
2018
2017
 
2018
2017
Net Income (Loss) Attributable to Common Stockholders
 
$
52,660

(33,223
)
 
$
52,660

(33,223
)
Less:
 
 
 
 
 
 
Management, transaction, and other fees
 
(7,158
)
(6,706
)
 
(7,158
)
(6,706
)
Gain on sale of real estate
 
(96
)
(415
)
 
(96
)
(415
)
Other(1)
 
(14,173
)
(8,196
)
 
(14,173
)
(8,196
)
Plus:
 
 
 
 
 
 
Depreciation and amortization
 
88,525

60,053

 
88,525

60,053

General and administrative
 
17,606

17,673

 
17,606

17,673

Other operating expense, excluding provision for doubtful accounts
 
437

70,945

 
437

70,945

Other expense (income)
 
52,969

26,102

 
52,969

26,102

Equity in income of investments in real estate excluded from NOI (2)
 
15,093

14,334

 
15,093

14,334

Net income attributable to noncontrolling interests
 
805

652

 
805

652

Preferred stock dividends and issuance costs
 

11,856

 

11,856

NOI
 
206,668

153,075

 
206,668

153,075

 
 
 
 
 
 
 
Less non-same property NOI (3)
 
(2,496
)
(1,051
)
 
(2,496
)
(1,051
)
Plus same property NOI for non-ownership periods of Equity One(4)
 

43,757

 

43,757

 
 
 
 
 
 
 
Same Property NOI
 
$
204,172

195,781

 
$
204,172

195,781

 
 
 
 
 
 
 
Same Property NOI without termination fees
 
$
203,110

195,301

 
$
203,110

195,301

 
 
 
 
 
 
 
Same Property NOI without termination fees or redevelopments
 
$
180,401

175,831

 
$
180,401

175,831

 
(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 market rent amortization, depreciation and amortization, and interest expense.
(3) Includes revenues and expenses attributable to Non-Same Property, Projects in Development, corporate activities, and noncontrolling interests.
(4) Refer to page ii of the Company's first quarter 2018 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.








7

EXHIBIT 99.1


Reconciliation of Net Income Attributable to Common Stockholders to NAREIT FFO and Operating FFO - Guidance (per diluted share)

 
 
 
Full Year
NAREIT FFO and Operating FFO Guidance:
 
 
2018
 
 
 
 
 
Net income attributable to common stockholders
 
 
$
1.33

1.38

 
 
 
 
 
Adjustments to reconcile net income to NAREIT FFO:
 
 
 
 
Depreciation and amortization
 
 
2.32

2.32

Provision for impairment
 
 
0.09

0.09

 
 
 
 
 
 
 
 
 
 
NAREIT Funds From Operations
 
 
$
3.74

3.79

 
 
 
 
 
 
 
 
 
 
Adjustments to reconcile NAREIT FFO to Operating FFO:
 
 
 
Early extinguishment of debt
 
 
0.06

0.06

Other non-comparable costs
 
 
0.01

0.01

Straight line rent, net
 
 
(0.1
)
(0.1
)
Market rent amortization, net
 
 
(0.2
)
(0.2
)
Debt mark-to-market
 
 
(0.02
)
(0.02
)
 
 
 
 
 
 
 
 
 
 
Operating Funds From Operations
 
 
$
3.49

$
3.54




The Company has published forward-looking statements and additional financial information in its first quarter 2018 supplemental information package that may help investors estimate earnings for 2018. A copy of the Company’s first quarter 2018 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 March 31, 2018. 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

8

EXHIBIT 99.1

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


9
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
March 31, 2018

 
 
 
Non-GAAP Disclosures..............................................................................................................................................
i
 
 
 
Earnings Press Release................................................................................................................................................
iii
 
 
 
Summary Information:
 
 
 
 
Summary Financial Information..................................................................................................................................
1
 
 
 
Summary Real Estate Information..............................................................................................................................
2
 
 
 
Financial Information:
 
 
 
 
Consolidated Balance Sheets.......................................................................................................................................
3
 
 
 
Consolidated Statements of Operations.......................................................................................................................
4
 
 
 
Supplemental Details of Operations (Consolidated Only)..........................................................................................
5
 
 
 
Supplemental Details of Assets and Liabilities (Real Estate Partnerships Only)........................................................
6
 
 
 
Supplemental Details of Operations (Real Estate Partnerships Only)........................................................................
7
 
 
 
Supplemental Details of Same Property NOI as adjusted (Pro-Rata).........................................................................
8
 
 
Reconciliations of Non-GAAP Financial Measures and Additional Disclosures.......................................................
9
 
 
 
Summary of Consolidated Debt .................................................................................................................................
11
 
 
Summary of Consolidated Debt Detail ......................................................................................................................
12
 
 
Summary of Unsecured Debt Covenants and Leverage Ratios...................................................................................
13
 
 
 
Summary of Unconsolidated Debt..............................................................................................................................
14
 
 
 
Investment Activity:
 
 
 
 
Property Transactions..................................................................................................................................................
15
 
 
 
Summary of Development...........................................................................................................................................
16
 
 
 
Summary of Redevelopment.......................................................................................................................................
17
 
 
 
Co-investment Partnerships:
 
 
 
 
Unconsolidated Investments........................................................................................................................................
18
 
 
 
Real Estate Information:
 
 
 
 
Leasing Statistics.........................................................................................................................................................
19
 
 
 
Average Base Rent by CBSA......................................................................................................................................
20
 
 
 
Significant Tenant Rents..............................................................................................................................................
21
 
 
 
Tenant Lease Expirations.............................................................................................................................................
22
 
 
Portfolio Summary Report by State............................................................................................................................
23
 
 
 
Components of NAV and Forward-Looking Information:
 
 
 
 
Components of NAV....................................................................................................................................................
30
 
 
 
Earnings Guidance.......................................................................................................................................................
31
 
 
 
Reconciliation of Net Income to Earnings Guidance................................................................
32
 
 
 
Glossary of Terms........................................................................................................................................................
33







Non-GAAP Disclosures
March 31, 2018

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.
Operating Funds From Operations (Operating FFO): The Company believes Operating 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 Operating FFO.
Net Operating Income (NOI): The Company believes NOI provides useful information to investors to measure the operating performance of its portfolio of 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, 2017. 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 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 non-ownership periods of Equity One included in Same Property NOI as adjusted:

 
Two months ended February 2017
 
Same Property NOI detail for non-ownership periods of Equity One:
 
 
 
 
Real Estate Revenues:
 
 
Base Rent
45,401

 
Recoveries from Tenants
14,206

 
Percentage Rent
1,267

 
Termination Fees
30

 
Other Income
586

 
Total Real Estate Revenues
61,490

 
 
 
 
Real Estate Operating Expenses:
 
 
Operating and Maintenance
9,573

 
Real Estate Taxes
7,815

 
Ground Rent
78

 
Provision for Doubtful Accounts
267

 
Total Real Estate Operating Expenses
17,733

 
 
 
 
Same Property NOI
$
43,757

 
 
 
 
Same Property NOI without Termination Fees
$
43,727

 
 
 
 
Same Property NOI without Termination Fees or Redevelopments
$
38,495

 


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Regency Centers Reports First Quarter 2018 Results

JACKSONVILLE, FL. (April 30, 2018) - Regency Centers Corporation (“Regency” or the “Company”) today reported financial and operating results for the period ended March 31, 2018.


First Quarter 2018 Highlights

First quarter Net Income Attributable to Common Stockholders (“Net Income”) of $0.31 per diluted share.
First quarter NAREIT Funds From Operations (“NAREIT FFO”) of $0.96 per diluted share.
Same property Net Operating Income (“NOI”) as adjusted, excluding termination fees, increased 4.0% as compared to the same period in the prior year, which reflects adjustments for the Equity One merger.
As of March 31, 2018, the same property portfolio was 95.7% leased.
As of March 31, 2018, a total of 19 properties were in development or redevelopment representing a total investment of approximately $454 million.
Acquired three shopping centers during the quarter and one subsequent to quarter end for approximately $134 million.
Repurchased 2.145 million shares of common stock at an average price of $58.24 per share for $125 million as part of the Company’s previously announced stock repurchase program.
Completed a public offering of $300 million 4.125% notes due 2028 (the “Notes”) and increased the size of its unsecured revolving credit facility (the “Facility”) to $1.25 billion while extending the maturity date of the Facility to 2023.
On April 26, 2018, Lisa Palmer and Deirdre J. Evens were elected to Regency’s Board of Directors (the “Board”) along with nine returning directors.

“Well conceived and well merchandised shopping centers, located in affluent and dense infill communities and neighborhoods, remain a critical component to a retailers success, as demonstrated by another quarter of solid results from Regency’s preeminent portfolio” stated Martin E. “Hap” Stein, Jr., Chairman and Chief Executive Officer. “Regency’s unequaled combination of strategic advantages will continue to enable us to meet the challenges of the ever-changing retail environment and further position us to attract winning retailers and grow shareholder value.”


Financial Results

Regency reported Net Income for the first quarter of $52.7 million, or $0.31 per diluted share compared to the Net Loss Attributable to Common Stockholders (“Net Loss”) of $33.2 million, or $0.26 per diluted share, for the same period in 2017. Net Income for the first quarter included impairments in the amount of $16.1 million, or $0.09 per diluted share, primarily from an asset currently under contract for sale. The Net Loss in the first quarter of 2017 includes one-time merger related costs of $69.7 million, or $0.55 per share.

The Company reported NAREIT FFO for the first quarter of $164.9 million, or $0.96 per diluted share, compared to $34.2 million, or $0.27 per diluted share, for the same period in 2017. NAREIT FFO in the first quarter of 2017 includes one-time merger related costs of $69.7 million, or $0.55 per share.

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The Company reported Operating FFO for the first quarter of $152.2 million, or $0.89 per diluted share, compared to $106.2 million, or $0.84 per diluted share, for the same period in 2017.


Operating Results

First quarter same property NOI as adjusted, excluding termination fees, increased 4.0% compared to the same period in 2017 driven primarily by base rent growth. 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, 2017. Please refer to the Company’s supplemental package for additional details.

As of March 31, 2018, Regency’s wholly-owned portfolio plus its pro-rata share of co-investment partnerships was 95.1% leased. The same property portfolio was 95.7% leased, which is a decrease of 40 basis points sequentially and flat from the same period in 2017.

For the three months ended March 31, 2018, Regency executed approximately 1.0 million square feet of comparable new and renewal leases at blended rent spreads of 8.4%. Rent spreads on new and renewal leases were 15.5% and 6.8%, respectively.


Investments

Property Transactions

During the quarter the Company closed on $64.9 million of acquisitions, as previously disclosed, and $3.5 million of dispositions.

Ballard Blocks I (Seattle, WA) - The Company acquired a 49.9% equity interest in Ballard Blocks I, an operating 132,000 square foot shopping center, anchored by Trader Joe’s, for $27.2 million. Regency also acquired a 49.9% interest in adjacent land, and concurrently announced the development start of Ballard Blocks II (description below).

District at Metuchen (Metuchen, NJ) - Regency and a co-investment partner acquired District at Metuchen, a 67,000 square foot Whole Foods Market anchored shopping center located in the New York metro area for a gross purchase price of $33.8 million. The Company’s share of the purchase price was $6.8 million.

Hewlett Crossing I & II (Hewlett, NY) - The Company acquired Hewlett Crossing I, a 32,000 square foot retail center anchored by Petco, for a gross purchase price of $19.5 million. A secured mortgage of $9.7 million was assumed at closing. Regency also acquired the adjacent Hewlett Crossing II, a 20,000 square foot neighborhood retail center anchored by Duane Reade, for a gross purchase price of $11.4 million. Regency will operate the two centers as a single center known as Hewlett Crossing.

Regency sold one Winn-Dixie anchored operating property for a gross purchase price of $3.5 million located in Jacksonville, FL.

Subsequent to quarter end, Regency closed on a $68.9 million acquisition and one disposition for $10.6 million.

Rivertowns Square (Dobbs Ferry, NY) - Regency acquired Rivertowns Square, a 116,000 square foot retail shopping center, anchored by Brooklyn Harvest Market, a specialty grocer with seven existing locations in the New York metro area, for a gross purchase price of $68.9 million.


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Regency sold one operating property for a gross purchase price of $10.6 million located in Palm Coast, FL.


Developments and Redevelopments

As previously disclosed, during the quarter the Company started one ground up development project.

Ballard Blocks II (Seattle, WA) - Ballard Blocks II is an 114,000 square foot joint venture development anchored by PCC Community Markets. Regency’s pro-rata share of estimated development cost is $31.1 million with a projected 6.3% stabilized yield.

At quarter end, the Company had 19 properties in development or redevelopment with combined, estimated net development costs of approximately $454 million. In-process development projects were a combined 61% funded and 80% leased, and are expected to yield an average return of 7.2%.

During the quarter, Regency completed five redevelopment projects with combined costs of approximately $126.7 million, which includes the redevelopment at Serramonte Shopping Center. The redevelopment at Serramonte Shopping Center was completed with costs of $116.2 and includes 250,000 square feet of new retail including the addition of Nordstrom Rack, Ross, TJ Maxx and Dave & Busters.


Capital Markets

Stock Repurchase Program

During the quarter, Regency purchased 2.145 million shares of common stock at an average price of $58.24 per share for $125 million under its stock repurchase program, which authorizes share repurchases up to $250 million. This program is scheduled to expire on February 6, 2020. The timing of share repurchases under this program depends upon marketplace conditions and other factors, and the program remains subject to the discretion of the Board.

Debt Offering

As previously disclosed on February 28, 2018, the Company’s operating partnership, Regency Centers, L.P., priced a public offering of $300 million 4.125% notes due 2028. The Notes are due March 15, 2028 and were priced at 99.837%. Interest on the Notes is payable semiannually on March 15th and September 15th of each year, with the first payment on September 15, 2018. Net proceeds of the offering have been used to repay in full $150 million 6.0% notes originally due June 15, 2020, including a make-whole premium of approximately $10.5 million, which was redeemed on April 2, 2018, and to reduce the outstanding balance on the line of credit. The balance of the net proceeds of the offering are intended to be used to repay approximately $115 million in 2018 mortgage maturities with an average interest rate of 6.3% and for general corporate purposes.


Unsecured Revolving Credit Facility

As previously disclosed on March 26, 2018, the Company closed on its amended and restated unsecured revolving credit facility. The amendment and restatement increased the size of the Facility to $1.25 billion from $1.0 billion and extended the maturity date to March 23, 2022, with options to extend maturity for two additional six-month periods. Borrowings now bear interest at an annual rate of LIBOR plus 87.5 basis points, subject to the Company’s credit ratings, compared to a rate of 92.5 basis points under its previous Facility. An annual facility fee of 15 basis points, subject to the Company’s credit ratings, applies to the entire $1.25 billion Facility.


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Dividend

On April 25, 2018, Regency’s Board declared a quarterly cash dividend on the Company’s common stock of $0.555 per share. The dividend is payable on May 30, 2018, to shareholders of record as of May 16, 2018.


Board Changes

At the Annual Shareholders meeting on April 26, 2018, Lisa Palmer and Deirdre J. Evens were elected to Regency’s Board of Directors along with nine returning directors. Ms. Palmer, Regency’s President and Chief Financial Officer, has been with the Company for over 20 years and has extensive experience in finance and capital markets, operations, public board strategy and governance. Ms. Evens, Chief of Operations of Iron Mountain Incorporated (NYSE: IRM), brings a strong background in corporate strategy, addressing technological change, marketing, and human resources. Regency believes that the quality, dedication, and chemistry of Regency’s Board are characteristics vital to the Company’s success and are further enhanced through these additions.


2018 Guidance

The Company has updated certain components of its 2018 earnings guidance. Please refer to the Company’s first quarter 2018 supplemental information package for a complete list of updates. Updated guidance for NAREIT FFO includes a one-time charge of $10.5 million, or $0.06 per diluted share, for the early the redemption of the Company’s $150 million 6.0% Senior Unsecured Notes originally due June 15, 2020, that occurred subsequent to the quarter. Updated guidance for NAREIT FFO also includes a non-cash income benefit of $6.0 million, or $0.04 per diluted share, for the required recognition of the unamortized below market rent intangible for a Toys R Us lease that was purchased at auction.


2018 Guidance
 
Previous Guidance
Updated Guidance
Net Income Attributable to Common Stockholders (“Net Income”)
$1.47 - $1.56
$1.33 - $1.38
NAREIT Funds From Operations (“NAREIT FFO”) per diluted share
$3.73 - $3.82
$3.74 - $3.79
Operating Funds From Operations ("Operating FFO") per diluted share
$3.48 - $3.54
$3.49 - $3.54
Same Property Net Operating Income (“SPNOI”) Growth excluding termination fees (pro-rata)
2.25% - 3.25%
2.40% - 3.25%


Conference Call Information

To discuss Regency’s first quarter results, the Company will host a conference call on Tuesday, May 1, 2018, at 11:00 a.m. EDT. Dial-in and webcast information is listed below.

First Quarter Earnings Conference Call
Date:
Tuesday, May 1, 2018
Time:
11:00 a.m. EDT
Dial#:
877-407-0789 or 201-689-8562
Webcast:
investors.regencycenters.com

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Replay

Webcast Archive: Investor Relations page under Events & Webcasts


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. Operating FFO is an additional performance measure that excludes from NAREIT FFO: (a) certain non-cash components of earnings derived from above and below market rent amortization, straight-line rents, and amortization of mark-to-market of debt adjustments. The Company provides a reconciliation of Net Income to NAREIT FFO and Operating FFO for actual results.



















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


For the Periods Ended March 31, 2018 and 2017
 
Three Months Ended
 
Year to Date
 
 
 
 
2018
2017
 
2018
2017
 
 
 
 
 
 
 
 
 
Reconciliation of Net Income (Loss) to NAREIT FFO:
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income (Loss) Attributable to Common Stockholders
 
$
52,660

(33,223
)
 
$
52,660

(33,223
)
Adjustments to reconcile to NAREIT Funds From Operations(1):
 
 
 
 
 
 
Depreciation and amortization (excluding FF&E)
 
96,197

67,444

 
96,197

67,444

Provision for impairment to operating properties
 
16,054


 
16,054


Gain on sale of operating properties
 
(102
)
(12
)
 
(102
)
(12
)
Exchangeable operating partnership units
 
111

(19
)
 
111

(19
)
NAREIT Funds From Operations
 
$
164,920

34,190

 
$
164,920

34,190

 
 
 
 
 
 
 
Reconciliation of NAREIT FFO to Operating FFO:
 
 
 
 
 
 
 
 
 
 
 
 
 
NAREIT Funds From Operations
 
$
164,920

34,190

 
164,920

34,190

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

27

 

27

Gain on sale of land
 
(107
)
(404
)
 
(107
)
(404
)
Loss on derivative instruments and hedge ineffectiveness
 

(8
)
 

(8
)
Early extinguishment of debt
 
162


 
162


Interest on bonds for period from notice to redemption
 
600


 
600


Merger related costs
 

69,732

 

69,732

Merger related debt offering interest
 

975

 

975

Preferred redemption costs
 

9,368

 

9,368

Straight line rent, net
 
(4,081
)
(3,365
)
 
(4,081
)
(3,365
)
Above/below market rent amortization, net
 
(8,422
)
(3,719
)
 
(8,422
)
(3,719
)
Debt premium/discount amortization
 
(899
)
(641
)
 
(899
)
(641
)
Operating Funds From Operations
 
$
152,173

106,155

 
$
152,173

106,155

 
 
 
 
 
 
 
 
 
Weighted Average Shares For Diluted Earnings per Share
 
170,959

126,649

 
170,959

126,649

Weighted Average Shares For Diluted FFO and Operating FFO per Share
 
171,309

127,051

 
171,309

127,051

 
 
 
 
 
 
 
 
 
(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 net income 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 March 31, 2018 and 2017
 
Three Months Ended
 
Year to Date
 
 
 
 
2018
2017
 
2018
2017
 
 
 
 
 
 
 
 
 
Net Income (Loss) Attributable to Common Stockholders
 
$
52,660

(33,223
)
 
$
52,660

(33,223
)
Less:
 
 
 
 
 
 
Management, transaction, and other fees
 
(7,158
)
(6,706
)
 
(7,158
)
(6,706
)
Gain on sale of real estate
 
(96
)
(415
)
 
(96
)
(415
)
Other(1)
 
(14,173
)
(8,196
)
 
(14,173
)
(8,196
)
Plus:
 
 
 
 
 
 
Depreciation and amortization
 
88,525

60,053

 
88,525

60,053

General and administrative
 
17,606

17,673

 
17,606

17,673

Other operating expense, excluding provision for doubtful accounts
 
437

70,945

 
437

70,945

Other expense (income)
 
52,969

26,102

 
52,969

26,102

Equity in income of investments in real estate excluded from NOI (2)
 
15,093

14,334

 
15,093

14,334

Net income attributable to noncontrolling interests
 
805

652

 
805

652

Preferred stock dividends and issuance costs
 

11,856

 

11,856

NOI
 
206,668

153,075

 
206,668

153,075

 
 
 
 
 
 
 
Less non-same property NOI (3)
 
(2,496
)
(1,051
)
 
(2,496
)
(1,051
)
Plus same property NOI for non-ownership periods of Equity One(4)
 

43,757

 

43,757

 
 
 
 
 
 
 
Same Property NOI
 
$
204,172

195,781

 
$
204,172

195,781

 
 
 
 
 
 
 
Same Property NOI without termination fees
 
$
203,110

195,301

 
$
203,110

195,301

 
 
 
 
 
 
 
Same Property NOI without termination fees or redevelopments
 
$
180,401

175,831

 
$
180,401

175,831

 
(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
    market rent amortization, depreciation and amortization, and interest expense.
(3) Includes revenues and expenses attributable to Non-Same Property, Projects in Development, corporate activities, and noncontrolling interests.
(4) Refer to page ii of the Company's first quarter 2018 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.


Reconciliation of Net Income Attributable to Common Stockholders to NAREIT FFO and Operating FFO - Guidance (per diluted share)



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Full Year
 
 
NAREIT FFO and Operating FFO Guidance:
2018
 
 
 
 
 
 
 
 
 
 
Net income attributable to common stockholders
$
1.33

$
1.38

 
 
 
 
 
 
 
 
 
 
 
Adjustments to reconcile net income to NAREIT FFO:
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
$
2.32

$
2.32

 
 
 
Provision for impairment
$
0.09

$
0.09

 
 
 
NAREIT Funds From Operations
$
3.74

$
3.79

 
 
 
 
 
 
 
 
 
 
 
Adjustments to reconcile NAREIT FFO to Operating FFO:
 
 
 
 
 
Early extinguishment of debt
$
0.06

$
0.06

 
 
 
Other non-comparable costs
$
0.01

$
0.01

 
 
 
Straight line rent, net
$
(0.1
)
$
(0.1
)
 
 
 
Market rent amortization, net
$
(0.2
)
$
(0.2
)
 
 
 
Debt mark-to-market
 
 
$
(0.02
)
$
(0.02
)
 
 
 
Operating Funds From Operations
$
3.49

$
3.54

 
 
 
 
 
 
 
 
 
 
 



The Company has published forward-looking statements and additional financial information in its first quarter 2018 supplemental information package that may help investors estimate earnings for 2018. A copy of the Company’s first quarter 2018 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 March 31, 2018. 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 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
March 31, 2018
(in thousands, except per share data)
 
 
Three Months Ended
 
Year to Date
 
 
2018
 
2017
 
2018
 
2017
Financial Results
 
 
 
 
 
 
 
 
Net income (loss) attributable to common stockholders (page 4)
 
$
52,660

 
$
(33,223
)
 
$
52,660

 
$
(33,223
)
Net income (loss) per diluted share
 
$
0.31

 
$
(0.26
)
 
$
0.31

 
$
(0.26
)
 
 
 
 
 
 
 
 
 
NAREIT Funds From Operations (NAREIT FFO) (page 9)
 
$
164,920

 
$
34,190

 
$
164,920

 
$
34,190

NAREIT FFO per diluted share
 
$
0.96

 
$
0.27

 
$
0.96

 
$
0.27

 
 
 
 
 
 
 
 
 
Operating Funds From Operations (Operating FFO) (page 9)
 
$
152,173

 
$
106,155

 
$
152,173

 
$
106,155

Operating FFO per diluted share
 
$
0.89

 
$
0.84

 
$
0.89

 
$
0.84

 
 
 
 
 
 
 
 
 
Same Property NOI as adjusted without termination fees (page 8)
 
$
203,110

 
$
195,301

 
$
203,110

 
$
195,301

% growth
 
4.0
%
 
 
 
4.0
%
 
 
 
 
 
 
 
 
 
 
 
Operating EBITDAre (page 10)
 
$
197,660

 
$
143,782

143,782,000.00

$
197,659

197,659,000.00

$
143,782

 
 
 
 
 
 
 
 
 
Dividends paid per share and unit
 
$
0.555

 
$
0.51

 
$
0.555

 
$
0.51

Payout ratio of Operating FFO per share (diluted)
 
62.4
%
 
60.7
%
 
62.4
%
 
60.7
%
 
 
 
 
 
 
 
 
 
Diluted share and unit count
 
 
 
 
 
 
 
 
Weighted average shares (diluted) - Net income (loss)
 
170,959

 
126,649

 
170,959

 
126,649

Weighted average shares (diluted) - NAREIT FFO and Operating FFO
 
171,309

 
127,051

 
171,309

 
127,051

 
 
 
 
 
 
 
 
 
 
 
As of
 
As of
 
As of
 
As of
 
 
3/31/2018
 
12/31/17
 
12/31/2016
 
12/31/2015
Capital Information
 
 
 
 
 
 
 
 
Market price per common share
 
$
58.98

 
$
69.18

 
$
68.95

 
$
68.12

 
 
 
 
 
 
 
 
 
Common shares outstanding
 
169,409

 
171,365

 
104,497

 
97,213

Exchangeable units held by noncontrolling interests
 
350

 
350

 
154

 
154

Common shares and equivalents issued and outstanding
 
169,759

 
171,715

 
104,651

 
97,367

Market equity value of common and convertible shares
 
$
10,012,367

 
$
11,879,231

 
$
7,215,718

 
$
6,632,627

 
 
 
 
 
 
 
 
 
Non-convertible preferred stock
 
$

 
$

 
$
325,000

 
$
325,000

 
 
 
 
 
 
 
 
 
Outstanding debt
 
$
4,359,787

 
$
4,115,588

 
$
2,111,450

 
$
2,363,238

Less: cash
 
(93,636
)
 
(49,381
)
 
(17,879
)
 
(40,623
)
Net debt
 
$
4,266,151

 
$
4,066,207

 
$
2,093,571

 
$
2,322,615

 
 
 
 
 
 
 
 
 
Total market capitalization
 
$
14,278,518

 
$
15,945,438

 
$
9,634,289

 
$
9,280,242

 
 
 
 
 
 
 
 
 
Debt metrics (pro-rata; trailing 12 months "TTM") (1)
 
 
 
 
 
 
 
 
Net Debt-to-Operating EBITDAre
 
5.6x

 
5.4x

 
4.4x

 
5.2x

Fixed charge coverage
 
4.1x

 
4.1x

 
3.3x

 
2.8x

 
 
 
 
 
 
 
 
 
(1) In light of the merger with Equity One on March 1, 2017, debt metric calculations for 2017 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
March 31, 2018
(GLA in thousands)
Wholly Owned and 100% of Co-investment Partnerships
 
3/31/2018
 
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
Number of properties
 
429
 
426
 
427
 
428
 
429
Number of retail operating properties
 
414
 
412
 
413
 
414
 
416
Number of same properties
 
409
 
395
 
399
 
400
 
402
Number of properties in redevelopment
 
9
 
14
 
22
 
21
 
23
Number of properties in development
 
10
 
9
 
8
 
8
 
7
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross Leasable Area (GLA) - All properties
 
54,174
 
53,881
 
54,067
 
54,162
 
54,038
GLA including retailer-owned stores - All properties
 
59,137
 
58,845
 
59,031
 
59,125
 
59,002
GLA - Retail operating properties
 
52,378
 
52,161
 
52,250
 
52,344
 
52,473
GLA - Same properties
 
51,667
 
50,144
 
50,624
 
50,719
 
50,848
GLA - Properties in redevelopment(1)
1,934
 
3,607
 
4,907
 
4,591
 
4,691
GLA - Properties in development
 
1,575
 
1,461
 
1,348
 
1,348
 
1,096
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wholly Owned and Pro-Rata Share of Co-investment Partnerships
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GLA - All properties
 
44,131
 
44,015
 
44,281
 
44,284
 
44,075
GLA including retailer-owned stores - All properties
 
48,982
 
48,979
 
49,244
 
49,248
 
49,039
GLA - Retail operating properties
 
42,553
 
42,456
 
42,536
 
42,540
 
42,583
GLA - Same properties
 
41,961
 
40,601
 
41,073
 
41,076
 
41,120
Spaces ≥ 10,000 sf
 
26,482
 
25,239
 
25,914
 
25,930
 
25,912
Spaces < 10,000 sf
 
15,479
 
13,874
 
15,159
 
15,146
 
15,208
GLA - Properties in redevelopment(1)
 
1,235
 
2,817
 
4,138
 
3,865
 
4,211
GLA - Properties in development
 
1,431
 
1,374
 
1,348
 
1,348
 
1,096
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% leased - All properties
 
95.1%
 
95.5%
 
95.3%
 
95.0%
 
95.3%
% leased - Retail operating properties
 
95.7%
 
96.2%
 
95.9%
 
95.7%
 
95.8%
% leased - Same properties
 
95.7%
 
96.1%
 
95.8%
 
95.6%
 
95.7%
Spaces ≥ 10,000 sf
 
97.7%
 
98.2%
 
97.8%
 
97.6%
 
98.1%
Spaces < 10,000 sf
 
92.2%
 
92.5%
 
92.4%
 
92.3%
 
91.8%
Average % leased - Same properties
 
95.7%
 
96.1%
 
95.8%
 
95.6%
 
95.7%
% commenced - Same properties(2)
 
94.1%
 
94.2%
 
93.4%
 
93.4%
 
93.5%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Same property NOI as adjusted growth - YTD (see page 8)
 
4.3%
 
3.5%
 
3.9%
 
3.3%
 
3.3%
Same property NOI as adjusted growth without termination fees - YTD
 
4.0%
 
3.6%
 
4.0%
 
3.5%
 
3.7%
Same property NOI as adjusted growth without termination fees or redevelopments - YTD
 
2.6%
 
2.7%
 
3.3%
 
2.9%
 
3.1%
Rent spreads - Trailing 12 months(3) (see page 19)
 
7.9%
 
7.8%
 
9.4%
 
9.1%
 
9.8%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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(1) Represents entire center GLA rather than redevelopment portion only. Included in Same Property pool unless noted otherwise.
(2) Excludes leases that are signed but have not yet commenced.
(3) 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
March 31, 2018 and December 31, 2017
(in thousands)
 
2018
 
2017
 
(unaudited)
 

Assets
 
 
 
Real estate investments at cost:
 
 
 
Land, building and improvements
$
10,768,379

 
$
10,578,430

Properties in development
179,123

 
314,391

 
10,947,502

 
10,892,821

Less: accumulated depreciation
1,394,276

 
1,339,771

 
9,553,226

 
9,553,050

Properties held for sale
8,742

 

Investments in real estate partnerships
448,257

 
386,304

Net real estate investments
10,010,225

 
9,939,354

 
 
 
 
Cash and cash equivalents
93,636

 
49,381

Accounts receivable, net
50,025

 
66,586

Straight line rent receivables, net
93,246

 
88,596

Notes receivable
16,316

 
15,803

Deferred leasing costs, net
83,638

 
80,044

Acquired lease intangible assets, net
455,589

 
478,826

Goodwill
330,716

 
331,884

Other assets
100,465

 
95,243

Total assets
$
11,233,856

 
$
11,145,717

 
 
 
 
Liabilities and Equity
 
 
 
Liabilities:
 
 
 
Notes payable
$
3,276,888

 
$
2,971,715

Unsecured credit facilities
563,380

 
623,262

Total notes payable
3,840,268

 
3,594,977

 
 
 
 
Accounts payable and other liabilities
212,515

 
234,272

Acquired lease intangible liabilities, net
527,264

 
537,401

Tenants' security and escrow deposits
48,428

 
46,013

Total liabilities
4,628,475

 
4,412,663

 
 
 
 
Equity:


 

Stockholders' Equity:
 
 
 
Common stock, $.01 par
1,694

 
1,714

Additional paid in capital
7,727,671

 
7,854,797

Accumulated other comprehensive income (loss)
4,764

 
(6,289
)
Distributions in excess of net income
(1,169,828
)
 
(1,158,170
)
Total stockholders' equity
6,564,301

 
6,692,052

Noncontrolling Interests:
 
 
 
Exchangeable operating partnership units
10,847

 
10,907

Limited partners' interest
30,233

 
30,095

Total noncontrolling interests
41,080

 
41,002

Total equity
6,605,381

 
6,733,054

Total liabilities and equity
$
11,233,856

 
$
11,145,717

 
 
 
 
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 March 31, 2018 and 2017
(in thousands)
unaudited
 
Three Months Ended
 
Year to Date
 
2018
 
2017
 
2018
 
2017
Revenues:
 
 
 
 
 
 
 
  Minimum rent
$
201,392

 
141,240

 
$
201,392

 
141,240

  Percentage rent
3,873

 
2,906

 
3,873

 
2,906

  Recoveries from tenants and other income
64,270

 
45,279

 
64,270

 
45,279

  Management, transaction, and other fees
7,158

 
6,706

 
7,158

 
6,706

        Total revenues
276,693

 
196,131

 
276,693

 
196,131

Operating Expenses:
 
 
 
 
 
 
 
  Depreciation and amortization
88,525

 
60,053

 
88,525

 
60,053

  Operating and maintenance
42,516

 
29,763

 
42,516

 
29,763

  General and administrative
17,606

 
17,673

 
17,606

 
17,673

  Real estate taxes
30,425

 
21,450

 
30,425

 
21,450

  Other operating expense
1,632

 
71,562

 
1,632

 
71,562

        Total operating expenses
180,704

 
200,501

 
180,704

 
200,501

Other Expense (Income):
 
 
 
 
 
 
 
  Interest expense, net of interest income
36,785

 
27,199

 
36,785

 
27,199

  Provision for impairment
16,054

 

 
16,054

 

  Early extinguishment of debt
162

 

 
162

 

  Net investment (income) loss
(32
)
 
(1,097
)
 
(32
)
 
(1,097
)
       Total other expense
52,969

 
26,102

 
52,969

 
26,102

        Income (loss) from operations before equity in income of
        investments in real estate partnerships
43,020

 
(30,472
)
 
43,020

 
(30,472
)
  Equity in income of investments in real estate partnerships
10,349

 
9,342

 
10,349

 
9,342

        Income (loss) from operations
53,369

 
(21,130
)
 
53,369

 
(21,130
)
  Gain on sale of real estate, net of tax
96

 
415

 
96

 
415

        Net income (loss)
53,465

 
(20,715
)
 
53,465

 
(20,715
)
Noncontrolling Interests:
 
 
 
 
 
 
 
  Exchangeable operating partnership units
(111
)
 
19

 
(111
)
 
19

  Limited partners' interests in consolidated partnerships
(694
)
 
(671
)
 
(694
)
 
(671
)
        Net income (loss) attributable to noncontrolling interests
(805
)
 
(652
)
 
(805
)
 
(652
)
        Net income (loss) attributable to controlling interests
52,660

 
(21,367
)
 
52,660

 
(21,367
)
  Preferred stock dividends and issuance costs

 
(11,856
)
 

 
(11,856
)
        Net income (loss) attributable to common stockholders
$
52,660

 
(33,223
)
 
$
52,660

 
(33,223
)
 
 
 
 
 
 
 
 
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 March 31, 2018 and 2017
(in thousands)
 
Three Months Ended
 
Year to Date
 
2018
2017
 
2018
2017
Real Estate Revenues:
 
 
 
 
 
Base rent
$
188,332

133,976

 
$
188,332

133,976

Recoveries from tenants
58,881

41,699

 
58,881

41,699

Percentage rent
3,873

2,906

 
3,873

2,906

Termination fees
958

408

 
958

408

Other income
4,431

3,172

 
4,431

3,172

Total real estate revenues
256,475

182,161

 
256,475

182,161

 
 
 
 
 
 
Real Estate Operating Expenses:
 
 
 
 
 
Operating and maintenance
39,503

27,122

 
39,503

27,122

Real estate taxes
30,426

21,450

 
30,426

21,450

Ground rent
2,426

2,053

 
2,426

2,053

Provision for doubtful accounts
1,195

617

 
1,195

617

Total real estate operating expenses
73,550

51,242

 
73,550

51,242

 
 
 
 
 
 
Other Rent Amounts:
 
 
 
 
 
Straight line rent, net
4,292

3,177

 
4,292

3,177

Above/below market rent amortization, net
8,181

3,498

 
8,181

3,498

Total other rent amounts
12,473

6,675

 
12,473

6,675

 
 
 
 
 
 
Fee Income: