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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K/A

 

CURRENT REPORT

 

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

 

Date of Report (Date of earliest event reported) June 1, 2005

 

REGENCY CENTERS CORPORATION

(Exact name of registrant as specified in its charter)

 

Florida		001-12298		59-3191743
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

121 West Forsyth Street, Suite 200 Jacksonville, Florida		32202
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number including area code: (904)-598-7000

 

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:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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ONLY THOSE ITEMS AMENDED ARE REPORTED HEREIN.

 

The registrant hereby amends its Current Report on Form 8-K dated June 1, 2005 as follows:

 

Item 9.01

Financial Statements and Exhibits

 

(a)

Financial Statements of Business Acquired.

 

1.

Audited Combined Historical Summary of Revenue and Certain Expenses for the Year Ended December 31, 2004 and the unaudited Historical Summaries of Combined Revenue and Certain Expenses for the Three Months Ended March 31, 2005 and 2004 as attached as Exhibit 99.2 to this report.

 

(b)

Pro Forma Financial Information.

 

The pro forma financial information of the Company as attached as Exhibit 99.1

 

(c)

Exhibits.

 

See the Exhibit Index attached hereto and incorporated herein by reference

 

Exhibit		Description
10.1*		275,000,000 Credit Agreement dated as of June 1, 2005 by and among Regency Centers, L.P. as Borrower, Regency Centers Corporation as Guarantor, each of the Lenders signatory thereto, and Wells Fargo Bank, National Association, as Agent.
10.2*		Amended and Restated Limited Liability Company Agreement dated as of June 1, 2005 by and among Regency Centers, L.P., Macquarie CountryWide (US) No. 2 LLC, Macquarie-Regency Management, LLC, Macquarie CountryWide (US) No. 2 Corporation and Marquarie CountryWide Management Limited.
23.1		Consent of PricewaterhouseCoopers, LLP
99.1		Unaudited Pro Forma Consolidated Financial Statements
99.2		Audited Combined Historical Summary of Revenue and Certain Expenses for the Year Ended December 31, 2004 and the unaudited Historical Summaries of Combined Revenue and Certain Expenses for the Three Months Ended March 31, 2005 and 2004 as attached to this report.

 

*	To be filed as an exhibit to the applicable periodic report or registration statement pursuant to Regulation S-K 601.

 

2

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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
						(registrant)
Date: July 19, 2005						By:		/s/ J. Christian Leavitt
								J. Christian Leavitt, Senior Vice President, Finance and Principal Accounting Officer

 

Exhibit 23.1

 

CONSENT OF INDEPENDENT ACCOUNTANTS

 

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-930, 333-52089, 333-44724, 333-114567, 333-37911, 333-118910, 333-58966, 333-125858, 333-125913, 333-125886 and 333-125886-1) and Form S-8 (No. 333-24971, 333-55062, 333-125857) of Regency Centers Corporation of our report dated July 6, 2005 relating to the Combined Historical Summary of Revenue and certain Expenses of Macquarie Countrywide-Regency II, LLC Acquisition Properties, which appears in the Current Report on Form 8-K of Regency Centers Corporation dated June 1, 2005.

 

/s/ PricewaterhouseCoopers LLP

McLean, Virginia

July 19, 2005

 

Exhibit 99.1

 

INDEX

 

REGENCY CENTERS CORPORATION:
Unaudited Pro Forma Consolidated Balance Sheet as of March 31, 2005		F-2
Unaudited Pro Forma Consolidated Statement of Operations for the Three Months Ended March 31, 2005		F-3
Unaudited Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 2004		F-4
Notes to Unaudited Pro Forma Consolidated Financial Statements		F-5

 

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REGENCY CENTERS CORPORATION

Pro Forma Consolidated Balance Sheet

March 31, 2005

(Unaudited)

(in thousands, except share data)

 

		Historical Regency Centers Corporation (a)				Pro Forma Adjustments (b)			Total Pro Forma Consolidated
Assets
Real estate investments at cost:
Land		$	826,266			—			826,266
Buildings and improvements			1,944,493			—			1,944,493
			2,770,759			—			2,770,759
Less: accumulated depreciation			352,818			—			352,818
			2,417,941			—			2,417,941
Properties in development			379,313			—			379,313
Operating properties held for sale			15,910			—			15,910
Investments in real estate partnerships			180,478			396,515	(2)		576,993
Net real estate investments			2,993,642			396,515			3,390,157
Cash and cash equivalents			53,591			—			53,591
Notes receivable			23,252			—			23,252
Tenant receivables, net of allowance for uncollectible accounts			50,051			—			50,051
Deferred costs, less accumulated amortization			40,502			—			40,502
Acquired lease intangible assets, net			13,280			—			13,280
Other assets			21,248			—			21,248
		$	3,195,566			396,515			3,592,081
Liabilities and Stockholders’ Equity
Liabilities:
Notes payable		$	1,291,039			—			1,291,039
Unsecured line of credit and Bridge Loan			175,000			195,552	(2)		370,552
Accounts payable and other liabilities			79,919			—			79,919
Acquired lease intangible liabilities, net			4,923			—			4,923
Tenants’ security and escrow deposits			9,959			—			9,959
Total liabilities			1,560,840			195,552			1,756,392
Preferred units			101,762			—			101,762
Exchangeable operating partnership units			29,324			—			29,324
Limited partners’ interest in consolidated partnerships			1,932			—			1,932
Total minority interest			133,018			—			133,018
Stockholders’ equity:
Preferred stock, $.01 par value per share			200,000			—			200,000
Common stock, $.01 par value per share			684			43	(2)		727
Treasury stock, at cost			(111,414	)		—			(111,414	)
Additional paid in capital			1,497,124			200,920	(2)		1,698,044
Accumulated other comprehensive (loss) income			(5,148	)		—			(5,148	)
Distributions in excess of net income			(79,538	)		—			(79,538	)
Total stockholders’ equity			1,501,708			200,963			1,702,671
Commitments and contingencies
		$	3,195,566			396,515			3,592,081

 

(a)	Amounts are derived from the Consolidated Balance Sheet included in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005.

 

(b)	See the accompanying notes for references to Pro Forma Adjustments

 

The accompanying notes are an integral part of these statements.

 

F-2

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REGENCY CENTERS CORPORATION

Pro Forma Consolidated Statement of Operations

For the Three Months ended March 31, 2005

(Unaudited)

(in thousands, except per share data)

 

		Historical Regency Centers Corporation (a)				Pro Forma Adjustments (b)			Total Pro Forma Consolidated
Revenues:
Minimum rent		$	73,682			—			73,682
Percentage rent			551			—			551
Recoveries from tenants			21,746			—			21,746
Management fees and commissions			3,318			868	(6)		4,186
Equity in income of investments in real estate partnerships			2,391			(4,371	)(4)		(1,980	)
Total revenues			101,688			(3,503	)		98,185
Operating expenses:
Depreciation and amortization			21,004			—			21,004
Operating and maintenance			13,592			—			13,592
General and administrative			8,652			1,000	(5)		9,652
Real estate taxes			10,488			—			10,488
Other expenses			1,428			—			1,428
Total operating expenses			55,164			1,000			56,164
Other expense (income)
Interest expense, net of interest income			21,076			1,871	(7)		22,947
Gain on sale of operating properties and properties in development			(6,542	)		—			(6,542	)
Total other expense (income)			14,534			1,871			16,405
Income before minority interests			31,990			(6,374	)		25,616
Minority interest of preferred units			(2,112	)		—			(2,112	)
Minority interest of exchangeable operating partnership units			(656	)		—			(656	)
Minority interest of limited partners			(76	)		—			(76	)
Income from continuing operations		$	29,146			(6,374	)		22,772
Income from continuing operations per share:
Basic		$	0.40						0.28
Diluted		$	0.40						0.28

 

(a)	Amounts are derived from the Consolidated Statement of Operations included in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005.

 

(b)	See the accompanying notes for references to Pro Forma Adjustments

 

The accompanying notes are an integral part of these statements.

 

F-3

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REGENCY CENTERS CORPORATION

Pro Forma Consolidated Statement of Operations

For the year ended December 31, 2004

(Unaudited)

(in thousands, except per share data)

 

		Historical Regency Centers Corporation (a)				Pro Forma Adjustments (b)			Total Pro Forma Consolidated
Revenues:
Minimum rent		$	286,081			—			286,081
Percentage rent			4,083			—			4,083
Recoveries from tenants			80,927			—			80,927
Management fees and commissions			10,663			3,250	(6)		13,913
Equity in income of investments in real estate partnerships			10,194			(17,821	)(4)		(7,627	)
Total revenues			391,948			(14,571	)		377,377
Operating expenses:
Depreciation and amortization			81,125			—			81,125
Operating and maintenance			53,863			—			53,863
General and administrative			30,282			4,000	(5)		34,282
Real estate taxes			40,403			—			40,403
Other expenses			8,043			—			8,043
Total operating expenses			213,716			4,000			217,716
Other expense (income)
Interest expense, net of interest income			81,196			7,482	(7)		88,678
Gain on sale of operating properties and properties in development			(39,387	)		—			(39,387	)
Provision for loss on operating properties			810			—			810
Other income			—			—			—
Total other expense (income)			42,619			7,482			50,101
Income before minority interests			135,613			(26,053	)		109,560
Minority interest of preferred units			(19,829	)		—			(19,829	)
Minority interest of exchangeable operating partnership units			(2,156	)		—			(2,156	)
Minority interest of limited partners			(319	)		—			(319	)
Income from continuing operations		$	113,309			(26,053	)		87,256
Income from continuing operations per share:
Basic		$	1.71						1.20
Diluted		$	1.71						1.20

 

(a)	Amounts are derived from the Consolidated Statement of Operations included in the Company’s Quarterly Report on Form 10-K for the year ended December 31, 2004 and updated on Form 8-K dated June 13, 2005.

 

(b)	See the accompanying notes for references to Pro Forma Adjustments

 

The accompanying notes are an integral part of these statements.

 

F-4

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REGENCY CENTERS CORPORATION

Notes to Pro Forma Consolidated Financial Statements

March 31, 2005 and December 31, 2004

(Unaudited)

(in thousands, except per share data)

 

1.	Summary of Condensed Accounting Policies

 

(a)	Pro Forma Basis of Presentation

 

The pro forma consolidated financial statements are based upon the historical financial information of Regency Centers Corporation (“Regency” or the “Company”) and the historical financial information of the Macquarie-CountryWide-Regency II, LLC Acquisition Properties (the “First Washington Portfolio”) described below in note 2, as if Regency’s investment in the joint venture which acquired the First Washington Portfolio had occurred on the first day of the earliest period presented for the unaudited pro forma consolidated statements of operations and as of the date of the unaudited pro forma consolidated balance sheet. In management’s opinion, all adjustments necessary to reflect these transactions have been included.

 

The unaudited pro forma consolidated financial statements should be read in conjunction with the Historical Summaries of Revenues and Certain Operating Expenses included elsewhere herein and the Company’s Current Reports on Form 8-K filed on June 13, 2005, June 1, 2005, March 30, 2005, March 28, 2005, February 14, 2005, February 3, 2005 and February 2, 2005, its Annual Report on Form 10-K for the year ended December 31, 2004 and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2005.

 

The First Washington Portfolio acquisition will be accounted for as a purchase business combination by Macquarie CountryWide-Regency II, LLC (“MCWR II”). MCWR II is owned 64.95% by an affiliate of Macquarie Countrywide Trust (“MCW”), 34.95% by Regency and 0.1% by Macquarie-Regency Management, LLC (“US Manager”). US Manager is owned 50% by Regency and 50% by an affiliate of Macquarie Bank Limited. Including its share of US Manager, Regency’s effective ownership is 35% and is reflected as such in the accompanying pro forma consolidated financial statements. The fair value of the consideration paid by MCW and Regency will be used as the valuation basis for the First Washington Portfolio. The costs of the assets acquired and liabilities assumed in conjunction with the First Washington Portfolio will be revalued based on their respective fair values as of the effective date of the acquisition. The unaudited pro forma adjustments, including the preliminary purchase accounting adjustments, are based on currently available information and upon preliminary assumptions and estimates that the Company believes are reasonable. The preliminary purchase accounting allocations are subject to reallocation as additional information, including third-party market valuations, become available and when the final purchase accounting is completed. The Company will account for its investment in MCWR II as an unconsolidated investment in real estate partnerships. The Company has determined that MCWR II is not a variable interest entity, and therefore subject to the voting interest model in determining its basis of accounting. Major decisions, including property acquisitions and dispositions, financings, annual budgets and dissolution of the Venture, are subject to the approval of all partners of both the Venture and US Manager.

 

The pro forma financial information contained in these pro forma consolidated financial statements may not necessarily be indicative of what actual results of the Company would have been if such transactions had been completed as of the dates indicated nor does it purport to represent the results of operations for future periods.

 

The Company has elected to be treated as a Real Estate Investment Trust (“REIT”) pursuant to the Internal Revenue Code of 1986, as amended. As a REIT, the majority of the Company’s operations will generally not be subject to Federal income tax on taxable income distributed currently to its stockholders. However, an affiliate of the Company, Regency Realty Group, Inc., is a taxable REIT subsidiary (“TRS”). A TRS is permitted to engage in non-qualifying REIT activities and the taxable income of a TRS is subject to Federal, state, and local income taxes. Deferred income taxes relate primarily to the TRS and are accounted for using the asset and liability method.

 

F-5

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REGENCY CENTERS CORPORATION

Notes to Pro Forma Consolidated Financial Statements

March 31, 2005 and December 31, 2004

(Unaudited)

(in thousands, except per share data)

 

1.	Summary of Condensed Accounting Policies

 

(b)	Real Estate Investments

 

The Company allocates the purchase price of assets acquired (net tangible and identifiable intangible assets) and liabilities assumed based on their relative fair values at the date of acquisition pursuant to the provisions of SFAS No. 141, “Business Combinations” (“Statement 141”). Statement 141 provides guidance on allocating a portion of the purchase price of a property to intangible assets. The Company’s methodology for this allocation includes estimating an “as-if vacant” fair value of the physical property, which is allocated to land, building and improvements. The difference between the purchase price and the “as-if vacant” fair value is allocated to intangible assets. There are three categories of intangible assets to be considered: (i) value of in-place leases, (ii) above and below-market value of in-place leases and (iii) customer relationship value.

 

The value of in-place leases is estimated based on the value associated with the costs avoided in originating leases comparable to the acquired in-place leases as well as the value associated with lost rental and recovery revenue during the assumed lease-up period. The value of in-place leases is amortized to expense over the estimated weighted-average remaining lease lives.

 

Above-market and below-market in-place lease values for acquired properties are recorded based on the present value of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimates of fair market lease rates for the comparable in-place leases, measured over a period equal to the remaining non-cancelable term of the lease. The value of above-market leases is amortized as a reduction of base rental revenue over the remaining terms of the respective leases. The value of below-market leases is accreted as an increase to base rental revenue over the remaining terms of the respective leases, including renewal options.

 

The Company allocates no value to customer relationship intangibles if it has pre-existing business relationships with the major retailers in the acquired property because the customer relationships associated with the acquired property provide no incremental value over the Company’s existing relationships.

 

F-6

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REGENCY CENTERS CORPORATION

Notes to Pro Forma Consolidated Financial Statements

March 31, 2005 and December 31, 2004

(Unaudited)

(in thousands, except per share data)

 

2.	Investment in Real Estate Partnerships

 

On June 1, 2005, MCWR II closed on the acquisition of 100 retail shopping centers totaling approximately 12.8 million square feet located throughout 17 states and the District of Columbia from a joint venture between CalPERS and an affiliate of First Washington Realty, Inc. (the “Sellers”) pursuant to a Purchase and Sale Agreement dated February 14, 2005. The purchase price was approximately $2.68 billion, including the assumption of approximately $68.6 million of mortgage debt and the issuance of approximately $1.6 billion of new mortgage loans on the properties acquired.

 

On June 1, 2005, Regency entered into a credit agreement that provided for a $275 million unsecured term loan maturing on March 1, 2006 (the “Bridge Loan”). The facility was fully drawn on the closing date. Interest accrues at a floating rate of LIBOR plus 65 basis points, which is subject to adjustment based on the credit ratings assigned by Regency’s rating agencies. Interest only is payable monthly, and principal is due at maturity, except that the loan is subject to mandatory prepayment from the net cash proceeds of any equity issuances. The purpose of the Bridge Loan was to finance Regency’s 35% equity investment in MCWR II, the joint venture that acquired the First Washington Portfolio. Regency’s required equity investment not drawn from the Bridge Loan was drawn from its line of credit (the “Existing Line of Credit”).

 

On March 30, 2005, Regency entered into a forward stock purchase contract with Citibank pursuant to which Regency has agreed to issue 4.3 million of its common shares and Citibank has agreed to purchase the shares at $46.60 per share. The net proceeds of approximately $200 million are required to be used to reduce the balance of the Bridge Loan described above. The forward stock purchase contract will settle no later than August 1, 2005. Regency will not receive any proceeds from the sale of common stock prior to the settlement date. The summary of Regency’s equity contribution reflects the forward stock purchase agreement as if it had settled on the first day of the earliest period presented for the unaudited consolidated statements of operations and as of the date of the unaudited consolidated balance sheet, with the proceeds reducing the balance of the Bridge Loan.

 

Acquisition of the First Washington Portfolio by MCWR II (in thousands):

 

Purchase price including closing costs		$	2,791,504
Other assets and liabilities acquired, net			16,227
Total Cost of Acquistion			2,807,731
Less: Debt issued and mortgages assumed by MCWR II			1,674,831
Partner Equity Requirement		$	1,132,900
Equity Contribution by MCWR II Partners:
MCW Equity Contribution (65% Ownership)			736,385
Regency Equity Contribution (35% Ownership)			396,515
Total Equity Contributed by all partners		$	1,132,900
Regency Equity Contribution provided from:
Issuance of common stock			200,963
Bridge Loan			74,037
Existing Line of Credit			121,515
Pro Forma Investment in Real Estate Partnerships		$	396,515

 

F-7

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REGENCY CENTERS CORPORATION

Notes to Pro Forma Consolidated Financial Statements

March 31, 2005 and December 31, 2004

(Unaudited)

(in thousands, except per share data)

 

3.	Statement of Operations and Pro Forma MCWR II Joint Venture

 

The following summarizes the historical operations of the First Washington Portfolio and the pro forma adjustments of MCWR II. The Pro Forma MCWR II results are used for purposes of determining Regency’s equity in net income (loss) as determined in note 4 below because the Company will account for its 35% investment in MCWR II on the equity method.

 

		Three Months Ended, March 31, 2005
		First Washington Portfolio Historical (a)			Pro Forma Adjustments			Pro Forma MCWR II
Minimum rents, and recoveries of operating expenses, real estate taxes and insurance		$	57,858		1,181	(b)		61,687
					2,648	(d)
Total Revenues			57,858		3,829			61,687
Operating expenses, real estate taxes and insurance			16,211		—			16,211
Property management fees			1,710		26	(c)		1,736
Depreciation and amortization			—		36,485	(d)		36,485
Interest expense			—		19,745	(e)		19,745
Total Operating Expenses			17,921		56,256			74,177
Net income (loss)		$	39,937		(52,427	)		(12,490	)

 

		For the Year Ended, December 31, 2004
		First Washington Portfolio Historical (a)			Pro Forma Adjustments			Pro Forma MCWR II
Minimum rents, and recoveries of operating expenses, real estate taxes and insurance		$	216,651		8,155	(b)		235,399
					10,593	(d)
Total Revenues			216,651		18,748			235,399
Operating expenses, real estate taxes and insurance			54,898		—			54,898
Property management fees			6,421		79	(c)		6,500
Depreciation and amortization			—		145,938	(d)		145,938
Interest expense			—		78,979	(e)		78,979
Total Operating Expenses			61,319		224,996			286,315
Net income (loss)		$	155,332		(206,248	)		(50,916	)

 

(a)

Amounts are derived from the audited Combined Historical Summary of Revenue and Certain Expenses for the year ended December 31, 2004 and the unaudited Combined Historical Summary of Revenue and Certain Expenses for the three months ended March 31, 2005, prepared in accordance with Rule 3-14 of the Securities Exchange Act attached to these Pro Forma financial statements.

 

F-8

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REGENCY CENTERS CORPORATION

Notes to Pro Forma Consolidated Financial Statements

March 31, 2005 and December 31, 2004

(Unaudited)

(in thousands, except per share data)

 

		Three Months Ended March 31, 2005				Year Ended December 31, 2004
3.       Statement of Operations and Pro Forma MCWR II Joint Venture (continued): Pro Forma Adjustments to MCWR II Joint Venture Operations:
(b)     Straight Line Rent:
Adjustment to reflect minimum rent recognized on a straight line basis pursuant to the acquired leases as if the lease was initiated on January 1, 2004:		$	1,181			8,155
(c)     Property Management Fees:
Adjustment to reflect property management fees in accordance with the current management agreements
3% of gross revenues per the management agreement		$	1,736			6,500
Management fees currently included in the historical amounts			(1,710	)		(6,421	)
Property management fee adjustment for the period		$	26			79
(d)     Depreciation and Amortization:
Adjustment to reflect the depreciation of the fair value of the tangible property acquired on an “as-if vacant” method, and the amortization of intangible assets, which includes in-place leases; and above- and below- market rents. The preliminary average remaining life of the fair value of the tangible property is approximately 23.5 years, and the average remaining life of fair value of intangible assets is approximately 2.5 years.
Preliminary Fair value of tangible assets acquired		$	2,650,808			2,650,808
Less: fair value allocated to land			(803,050	)		(803,050	)
Depreciable fair value of building and improvements acquired		$	1,847,758			1,847,758
Depreciation expense		$	19,605			78,417
Estimated useful life of buildings and improvements (in years)			23.6			23.6
Preliminary Fair value of intangible assets and liabilities, net		$	140,696			140,696
Amortization of above- and below- market rent intangibles			(2,648	)		(10,593	)
Amortization of the fair value of lease intangibles		$	16,880			67,521
Estimated useful life of intangible assets (in years)			2.5			2.5
Depreciation and Amortization, excluding above-market rent amortization and below-market rent accretion		$	36,485			145,938

 

F-9

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REGENCY CENTERS CORPORATION

Notes to Pro Forma Consolidated Financial Statements

March 31, 2005 and December 31, 2004

(Unaudited)

(in thousands, except per share data)

 

						Three Months Ended March 31, 2005		Year Ended December 31, 2004
3.       Statement of Operations and Pro Forma MCWR II Joint Venture (continued):
Pro Forma Adjustments to MCWR II Joint Venture Operations:
(e)     Interest Expense of Notes and Mortgages of MCWR II:
Adjustment to reflect interest expense on the mortgage loans assumed, the fixed rate mortgages issued and variable rate notes payable outstanding as of the acquisition date. Interest rates on fixed rate debt are based upon currently committed rates and variable rates are based on current LIBOR interest rates.

4.       Equity in Income (loss) from Investments in Real Estate Partnerships:
Adjustment to reflect Regency’s 35% share of the net income (loss) of MCWR II.
MCWR II pro forma net income (loss) per note 3 above						$	(12,489	)			(50,916	)
Regency equity ownership							35	%			35	%
Regency’s share of net income (loss)						$	(4,371	)			(17,821	)
5.       General and Administrative Expenses:
Adjustment to reflect new salaries and general overhead associated with hiring employees to manage the 100 properties acquired by MCWR II.						$	1,000				4,000
6.       Property Management Fee Income:
Adjustment to record property management fees paid to Regency equal to 50% of the fees incurred by MCWR II.						$	868				3,250
7.       Interest costs on new debt incurred directly by Regency exclusive of MCWR II:
Adjustment to reflect the interest expense incurred on new debt incurred to finance Regency’s equity contribution into MCWR II. Variable interest rates are based upon current LIBOR interest rates.
Bridge Loan						$	74,037				74,037
Existing Line of Credit						$	121,515				121,515
Current LIBOR rate for period							3.375	%			3.375	%
Interest rate on Bridge Loan (avg LIBOR + 65bp)							4.025	%			4.025	%
Interest rate on Existing Line of Credit (avg LIBOR+33bp)							3.705	%			3.705	%
Interest Expense to finance Regency’s equity in MCWR II						$	1,871			$	7,482

 

F-10

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REGENCY CENTERS CORPORATION

Notes to Pro Forma Consolidated Financial Statements

March 31, 2005 and December 31, 2004

(Unaudited)

(in thousands, except per share data)

 

8.       Earnings Per Share

		Three months ended March 31, 2005
		Regency Historical			Pro Forma Adjustments			Regency Pro Forma
Numerator:
Income from continuing operations		$	29,146		(6,374	)		22,772
Less: Preferred dividends paid			3,662					3,662
Less: Common dividends paid on unvested restricted stock			411					411
Net income for common stockholders – basic		$	25,073					18,699
Add: Common dividends paid on unvested restricted stock using the Treasury method			85					85
Net income for common stockholders – diluted		$	25,158					18,784
Denominator:
Weighted average common shares outstanding for basic EPS			62,328		4,313	(2)		66,641
Incremental shares to be issued under unvested restricted stock using the Treasury method			154					154
Incremental shares to be issued under common stock options using the Treasury method			80					80
Weighted average common shares outstanding for diluted EPS			62,562					66,875
Income from continuing operations per share:
Basic		$	0.40					0.28
Diluted		$	0.40					0.28
		For the year ended December 31, 2004
		Regency Historical			Pro Forma Adjustments			Regency Pro Forma
Numerator:
Income from continuing operations		$	113,309		(26,053	)		87,256
Less: Preferred dividends paid			8,633					8,633
Net income for common stockholders – basic		$	104,676					78,623
Other adjustments			—					—
Net income for common stockholders – diluted		$	104,676					78,623
Denominator:
Weighted average common shares outstanding for basic EPS			61,264		4,313	(2)		65,577
Incremental shares to be issued under common stock options using the Treasury method			217					217
Weighted average common shares outstanding for diluted EPS			61,481					65,794
Income from continuing operations per share:
Basic		$	1.71					1.20
Diluted		$	1.71					1.20

 

F-11

Exhibit 99.2

 

MACQUARIE COUNTRYWIDE-REGENCY II, LLC ACQUISITION PROPERTIES

Combined Historical Summaries

December 31, 2004

 

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MACQUARIE COUNTRYWIDE-REGENCY II, LLC ACQUISITION PROPERTIES

Index

December 31, 2004

 

		Page(s)
Report of Independent Auditors		1
Historical Summaries
Combined Revenue and Certain Expenses For the Year Ended December 31, 2004		2
Combined Revenue and Certain Expenses For the Three Months Ended March 31, 2005 and 2004 (unaudited)		3
Notes to Combined Historical Summaries		4-5

 

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MACQUARIE COUNTRYWIDE-REGENCY II, LLC ACQUISITION PROPERTIES

Combined Historical Summary of Revenue and Certain Expenses

For the year ended December 31, 2004

(In thousands)

 

Report of Independent Auditors

 

To the Board of Directors and Shareholders of Regency Centers Corporation:

 

We have audited the accompanying combined historical summary of revenue and certain expenses for the year ended December 31, 2004 of the Macquarie Countrywide-Regency II, LLC Acquisition Properties (the “Properties”) as defined in Note 1. This combined historical summary is the responsibility of the Properties’ management. Our responsibility is to express an opinion on this combined historical summary based on our audit.

 

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined historical summary is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the combined historical summary. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the combined historical summary. We believe that our audit provides a reasonable basis for our opinion.

 

The accompanying combined historical summary was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in the Current Report on Form 8-K of Regency Centers Corporation) as described in Note 2 and is not intended to be a complete presentation of the Properties’ revenue and expenses.

 

In our opinion, the combined historical summary referred to above presents fairly, in all material respects, the revenue and certain expenses of the Properties for the year ended December 31, 2004 in conformity with accounting principles generally accepted in the United States of America.

 

/s/ PricewaterhouseCoopers LLP

July 6, 2005

McLean, VA

 

1

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MACQUARIE COUNTRYWIDE-REGENCY II, LLC ACQUISITION PROPERTIES

Combined Historical Summary of Revenue and Certain Expenses

For the year ended December 31, 2004

(In thousands)

 

Revenue
Base rents		$	160,956
Tenant reimbursement revenue			50,267
Percentage rental income			3,526
Other revenue from real estate and improvements			1,902
Total revenue			216,651
Certain expenses
Property taxes			24,240
Other operating expenses			18,797
Property management			6,421
Utilities			4,182
Insurance			3,407
Bad debt			2,160
Repairs and maintenance			2,112
Total certain expenses			61,319
Revenue in excess of certain expenses		$	155,332

 

2

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MACQUARIE COUNTRYWIDE-REGENCY II, LLC ACQUISITION PROPERTIES

Combined Historical Summaries of Revenue and Certain Expenses

For the three months ended March 31, 2005 and 2004

(In thousands)

 

		Unaudited March 31, 2005			Unaudited March 31, 2004
Revenue
Base rents		$	42,260		$	39,065
Tenant reimbursement revenue			14,908			12,469
Percentage rental income			331			644
Other revenue from real estate and improvements			359			345
			57,858			52,523
Certain expenses
Property taxes			6,425			5,719
Other operating			6,603			4,776
Property management			1,710			1,551
Utilities			1,142			1,002
Insurance			797			917
Bad debt			637			539
Repairs and maintenance			607			568
			17,921			15,072
Revenue in excess of certain expenses		$	39,937		$	37,451

 

3

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MACQUARIE COUNTRYWIDE-REGENCY II, LLC ACQUISITION PROPERTIES

Notes to Combined Historical Summaries

December 31, 2004

(In thousands)

 

1.

Business

 

The accompanying combined historical summaries of revenue and certain expenses relates to the operations of the 100 properties (the “Macquarie Countrywide-Regency II, LLC Acquisition Properties” or the “Properties”) acquired for approximately $2.68 billion by Macquarie CountryWide-Regency II, LLC (the “Venture”) which is owned 35% by Regency Centers Corporation (“Regency”), a public company traded on the NYSE, and 65% by Macquarie CountryWide Trust of Australia (“Macquarie”). The Properties contain approximately 12.8 million square feet (unaudited) of gross leaseable area. Anchor tenants include national and regional supermarket chains such as Giant Food (Ahold), Safeway, Kroger, Food Lion, Albertson’s, and Shoppers Food Warehouse (Supervalu). Other anchor tenants include major drug store chains such as CVS/Pharmacy, Eckerds, Bel Air Mart, Rite Aid, Walgreens, and Longs Drugs.

 

2.	Summary of Significant Accounting Policies

 

Basis of Presentation

 

Due to the acquisition of the Properties from entities under common control, the historical summaries of the Properties have been presented on a combined basis. The combined historical summaries include the accounts of the Properties. All significant intercompany balances and transactions have been eliminated.

 

The accompanying combined historical summaries of revenue and certain expenses were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission in conjunction with the Venture’s acquisition of the Properties. The combined historical summaries are not representative of the actual operations of the Properties for the period presented nor indicative of future operations as certain expenses, primarily depreciation, amortization, and interest expense, which may not be comparable to the expenses expected to be incurred by the Venture in future operations of the Property, have been excluded.

 

Unaudited Historical Interim Information

 

The combined historical summaries of revenue and certain expenses for the three months ended March 31, 2005 and 2004 are unaudited. As a result, the interim combined historical summaries should be read in conjunction with the combined historical summary of revenue and certain expenses and the accompanying notes for the year ended December 31, 2004. The interim combined historical summaries reflect all adjustments which management believes are necessary for the fair presentation of the combined historical summaries of revenue and certain expenses for the interim periods presented. These adjustments are of a normal recurring nature. The historical summary of revenue and certain expenses for such interim period is not necessarily indicative of the results for a full year.

 

Revenue and Expense Recognition

 

Revenue is recognized on a straight-line basis over the terms of the related lease. Tenant reimbursement revenue includes payments from tenants as reimbursement for property operating expenses as stipulated in the leases. Expenses are recognized in the period in which they are incurred. Revenue from percentage rents is recognized when the tenant has reported sales in excess of the established levels of sales. Percentage rents for the Properties recognized during the year ended December 31, 2004 totaled $3,526. Most leases provide for tenant reimbursement of common area maintenance and other operating expenses, with related revenue recognized in the year the expenses are incurred. Recognition of tenant revenues is discontinued if the tenant prematurely vacates the space and ceases paying rent.

 

4

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MACQUARIE COUNTRYWIDE-REGENCY II, LLC ACQUISITION PROPERTIES

Notes to Combined Historical Summaries

December 31, 2004

(In thousands)

 

A provision for bad debts has been provided against the portion of revenues which is estimated to be uncollectible. The Company determines the provision based on historical experience.

 

There are no individual tenants that represent more than 10% of tenant receivables or revenues from real estate investments for the year ended December 31, 2004.

 

Use of Estimates

 

The preparation of this combined historical summary in conformity with generally accepted accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of revenue and expenses during the reporting period. Actual results may differ from these estimates.

 

Income and Expense Recognition

 

Income and expenses are recorded on the accrual basis of accounting.

 

Property Tax Expense

 

Property tax expenses are recognized in the period in which they are incurred.

 

3.

Rentals

 

The Properties are leased to tenants with initial lease terms expiring through the year 2030. The leases provide that tenants will share in operating expenses and real estate taxes on a pro rata basis, as defined in the leases. Many of the leases are renewable for three to five years at the lessee’s option. Future minimum rentals as of December 31, 2004 to be received under these non-cancelable operating leases are as follows:

 

2005		$	162,870
2006			146,394
2007			126,394
2008			103,854
2009			82,501
Thereafter			351,123
		$	973,136

 

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