x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FLORIDA (REGENCY CENTERS CORPORATION) | 59-3191743 | |
DELAWARE (REGENCY CENTERS, L.P) | 59-3429602 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
One Independent Drive, Suite 114 Jacksonville, Florida 32202 | (904) 598-7000 | |
(Address of principal executive offices) (zip code) | (Registrant's telephone number, including area code) |
Large accelerated filer | x | Accelerated filer | o | Emerging growth company | o |
Non-accelerated filer | o | Smaller reporting company | o |
Large accelerated filer | o | Accelerated filer | x | Emerging growth company | o |
Non-accelerated filer | o | Smaller reporting company | o |
• | Enhances investors' understanding of the Parent Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business; |
• | Eliminates duplicative disclosure and provides a more streamlined and readable presentation; and |
• | Creates time and cost efficiencies through the preparation of one combined report instead of two separate reports. |
Form 10-Q Report Page | ||
PART I - FINANCIAL INFORMATION | ||
Item 1. | Financial Statements (Unaudited) | |
Regency Centers Corporation: | ||
Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016 | ||
Consolidated Statements of Operations for the periods ended September 30, 2017 and 2016 | ||
Consolidated Statements of Comprehensive Income for the periods ended September 30, 2017 and 2016 | ||
Consolidated Statements of Equity for the periods ended September 30, 2017 and 2016 | ||
Consolidated Statements of Cash Flows for the periods ended September 30, 2017 and 2016 | ||
Regency Centers, L.P.: | ||
Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016 | ||
Consolidated Statements of Operations for the periods ended September 30, 2017 and 2016 | ||
Consolidated Statements of Comprehensive Income for the periods ended September 30, 2017 and 2016 | ||
Consolidated Statements of Capital for the periods ended September 30, 2017 and 2016 | ||
Consolidated Statements of Cash Flows for the periods ended September 30, 2017 and 2016 | ||
Notes to Consolidated Financial Statements | ||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | |
Item 4. | Controls and Procedures | |
PART II - OTHER INFORMATION | ||
Item 1. | Legal Proceedings | |
Item 1A. | Risk Factors | |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |
Item 3. | Defaults Upon Senior Securities | |
Item 4. | Mine Safety Disclosures | |
Item 5. | Other Information | |
Item 6. | Exhibits | |
SIGNATURES | ||
2017 | 2016 | |||||
Assets | (unaudited) | |||||
Real estate investments at cost: | ||||||
Land | $ | 4,578,145 | 1,660,424 | |||
Buildings and improvements | 5,834,405 | 3,092,197 | ||||
Properties in development | 433,707 | 180,878 | ||||
10,846,257 | 4,933,499 | |||||
Less: accumulated depreciation | 1,281,510 | 1,124,391 | ||||
9,564,747 | 3,809,108 | |||||
Properties held for sale | 27,802 | — | ||||
Investments in real estate partnerships | 380,930 | 296,699 | ||||
Net real estate investments | 9,973,479 | 4,105,807 | ||||
Cash and cash equivalents | 23,543 | 13,256 | ||||
Restricted cash | 7,098 | 4,623 | ||||
Tenant and other receivables, net of allowance for doubtful accounts and straight-line rent reserves of $12,279 and $9,021 at September 30, 2017 and December 31, 2016, respectively | 143,153 | 111,722 | ||||
Deferred leasing costs, less accumulated amortization of $91,213 and $83,529 at September 30, 2017 and December 31, 2016, respectively | 71,826 | 69,000 | ||||
Acquired lease intangible assets, less accumulated amortization of $123,662 and $56,695 at September 30, 2017 and December 31, 2016, respectively | 508,868 | 118,831 | ||||
Other assets | 390,778 | 65,667 | ||||
Total assets | $ | 11,118,745 | 4,488,906 | |||
Liabilities and Equity | ||||||
Liabilities: | ||||||
Notes payable | $ | 2,943,986 | 1,363,925 | |||
Unsecured credit facilities | 578,144 | 278,495 | ||||
Accounts payable and other liabilities | 276,363 | 138,936 | ||||
Acquired lease intangible liabilities, less accumulated amortization of $49,968 and $23,538 at September 30, 2017 and December 31, 2016, respectively | 637,217 | 54,180 | ||||
Tenants’ security, escrow deposits and prepaid rent | 46,351 | 28,868 | ||||
Total liabilities | 4,482,061 | 1,864,404 | ||||
Commitments and contingencies | — | — | ||||
Equity: | ||||||
Stockholders’ equity: | ||||||
Preferred stock, $0.01 par value per share, 30,000,000 shares authorized; 13,000,000 Series 6 and 7 shares issued and outstanding at December 31, 2016, with liquidation preferences of $25 per share | — | 325,000 | ||||
Common stock, $0.01 par value per share, 220,000,000 and 150,000,000 shares authorized; 170,109,043 and 104,497,286 shares issued at September 30, 2017 and December 31, 2016, respectively | 1,701 | 1,045 | ||||
Treasury stock at cost, 362,764 and 347,903 shares held at September 30, 2017 and December 31, 2016, respectively | (18,048 | ) | (17,062 | ) | ||
Additional paid in capital | 7,779,103 | 3,294,923 | ||||
Accumulated other comprehensive loss | (14,141 | ) | (18,346 | ) | ||
Distributions in excess of net income | (1,153,153 | ) | (994,259 | ) | ||
Total stockholders’ equity | 6,595,462 | 2,591,301 | ||||
Noncontrolling interests: | ||||||
Exchangeable operating partnership units, aggregate redemption value of $21,708 and $10,630 at September 30, 2017 and December 31, 2016, respectively | 10,906 | (1,967 | ) | |||
Limited partners’ interests in consolidated partnerships | 30,316 | 35,168 | ||||
Total noncontrolling interests | 41,222 | 33,201 | ||||
Total equity | 6,636,684 | 2,624,502 | ||||
Total liabilities and equity | $ | 11,118,745 | 4,488,906 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
Revenues: | ||||||||||||
Minimum rent | $ | 195,393 | 111,886 | $ | 532,625 | 329,506 | ||||||
Percentage rent | 1,147 | 495 | 5,509 | 2,651 | ||||||||
Recoveries from tenants and other income | 59,554 | 34,532 | 162,089 | 103,894 | ||||||||
Management, transaction, and other fees | 6,047 | 5,855 | 19,353 | 18,759 | ||||||||
Total revenues | 262,141 | 152,768 | 719,576 | 454,810 | ||||||||
Operating expenses: | ||||||||||||
Depreciation and amortization | 91,474 | 40,705 | 243,757 | 119,721 | ||||||||
Operating and maintenance | 38,020 | 23,373 | 103,888 | 69,767 | ||||||||
General and administrative | 15,199 | 16,046 | 49,618 | 48,695 | ||||||||
Real estate taxes | 29,315 | 17,058 | 79,636 | 49,697 | ||||||||
Other operating expenses (note 2) | 3,195 | 1,046 | 81,621 | 5,795 | ||||||||
Total operating expenses | 177,203 | 98,228 | 558,520 | 293,675 | ||||||||
Other expense (income): | ||||||||||||
Interest expense, net | 34,679 | 21,945 | 97,285 | 70,489 | ||||||||
Provision for impairment | — | — | — | 1,666 | ||||||||
Early extinguishment of debt | — | 13,943 | 12,404 | 13,943 | ||||||||
Net investment (income) loss, including unrealized (gains) losses of ($842) and ($383), and ($1,705) and ($888) for the three and nine months ended September 30, 2017 and 2016, respectively | (971 | ) | (821 | ) | (2,955 | ) | (1,268 | ) | ||||
Loss on derivative instruments | — | 40,586 | — | 40,586 | ||||||||
Total other expense (income) | 33,708 | 75,653 | 106,734 | 125,416 | ||||||||
Income from operations before equity in income of investments in real estate partnerships | 51,230 | (21,113 | ) | 54,322 | 35,719 | |||||||
Equity in income of investments in real estate partnerships | 12,221 | 22,647 | 33,804 | 46,618 | ||||||||
Income from operations | 63,451 | 1,534 | 88,126 | 82,337 | ||||||||
Gain on sale of real estate, net of tax | 131 | 9,580 | 4,913 | 22,997 | ||||||||
Net income | 63,582 | 11,114 | 93,039 | 105,334 | ||||||||
Noncontrolling interests: | ||||||||||||
Exchangeable operating partnership units | (132 | ) | (16 | ) | (217 | ) | (165 | ) | ||||
Limited partners’ interests in consolidated partnerships | (637 | ) | (527 | ) | (1,884 | ) | (1,380 | ) | ||||
Income attributable to noncontrolling interests | (769 | ) | (543 | ) | (2,101 | ) | (1,545 | ) | ||||
Net income attributable to the Company | 62,813 | 10,571 | 90,938 | 103,789 | ||||||||
Preferred stock dividends and issuance costs | (3,147 | ) | (5,266 | ) | (16,128 | ) | (15,797 | ) | ||||
Net income attributable to common stockholders | $ | 59,666 | 5,305 | $ | 74,810 | 87,992 | ||||||
Income per common share - basic | $ | 0.35 | 0.05 | $ | 0.48 | 0.88 | ||||||
Income per common share - diluted | $ | 0.35 | 0.05 | $ | 0.48 | 0.88 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
Net income | $ | 63,582 | 11,114 | $ | 93,039 | 105,334 | ||||||
Other comprehensive income: | ||||||||||||
Effective portion of change in fair value of derivative instruments: | ||||||||||||
Effective portion of change in fair value of derivative instruments | (39 | ) | 1,294 | (3,911 | ) | (25,338 | ) | |||||
Reclassification adjustment of derivative instruments included in net income | 2,329 | 43,111 | 8,054 | 48,063 | ||||||||
Unrealized gain on available-for-sale securities | 8 | 53 | 51 | 90 | ||||||||
Other comprehensive income | 2,298 | 44,458 | 4,194 | 22,815 | ||||||||
Comprehensive income | 65,880 | 55,572 | 97,233 | 128,149 | ||||||||
Less: comprehensive income (loss) attributable to noncontrolling interests: | ||||||||||||
Net income attributable to noncontrolling interests | 769 | 543 | 2,101 | 1,545 | ||||||||
Other comprehensive income (loss) attributable to noncontrolling interests | 5 | 158 | (11 | ) | (139 | ) | ||||||
Comprehensive income attributable to noncontrolling interests | 774 | 701 | 2,090 | 1,406 | ||||||||
Comprehensive income attributable to the Company | $ | 65,106 | 54,871 | $ | 95,143 | 126,743 |
REGENCY CENTERS CORPORATION Consolidated Statements of Equity For the nine months ended September 30, 2017 and 2016 (in thousands, except per share data) (unaudited) | ||||||||||||||||||||||||||||||||||
Noncontrolling Interests | ||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Treasury Stock | Additional Paid In Capital | Accumulated Other Comprehensive Loss | Distributions in Excess of Net Income | Total Stockholders’ Equity | Exchangeable Operating Partnership Units | Limited Partners’ Interest in Consolidated Partnerships | Total Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||
Balance at December 31, 2015 | $ | 325,000 | 972 | (19,658 | ) | 2,742,508 | (58,693 | ) | (936,020 | ) | 2,054,109 | (1,975 | ) | 30,486 | 28,511 | 2,082,620 | ||||||||||||||||||
Net income | — | — | — | — | — | 103,789 | 103,789 | 165 | 1,380 | 1,545 | 105,334 | |||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | 22,954 | — | 22,954 | 33 | (172 | ) | (139 | ) | 22,815 | |||||||||||||||||||||
Deferred compensation plan, net | — | — | 2,776 | (2,776 | ) | — | — | — | — | — | — | — | ||||||||||||||||||||||
Restricted stock issued, net of amortization | — | 2 | — | 9,965 | — | — | 9,967 | — | — | — | 9,967 | |||||||||||||||||||||||
Common stock redeemed for taxes withheld for stock based compensation, net | — | — | — | (7,835 | ) | — | — | (7,835 | ) | — | — | — | (7,835 | ) | ||||||||||||||||||||
Common stock issued under dividend reinvestment plan | — | — | — | 804 | — | — | 804 | — | — | — | 804 | |||||||||||||||||||||||
Common stock issued, net of issuance costs | — | 71 | — | 549,474 | — | — | 549,545 | — | — | — | 549,545 | |||||||||||||||||||||||
Contributions from partners | — | — | — | — | — | — | — | — | 8,675 | 8,675 | 8,675 | |||||||||||||||||||||||
Distributions to partners | — | — | — | (538 | ) | — | — | (538 | ) | — | (5,224 | ) | (5,224 | ) | (5,762 | ) | ||||||||||||||||||
Cash dividends declared: | ||||||||||||||||||||||||||||||||||
Preferred stock | — | — | — | — | — | (15,797 | ) | (15,797 | ) | — | — | — | (15,797 | ) | ||||||||||||||||||||
Common stock/unit ($1.50 per share) | — | — | — | — | — | (149,853 | ) | (149,853 | ) | (229 | ) | — | (229 | ) | (150,082 | ) | ||||||||||||||||||
Balance at September 30, 2016 | $ | 325,000 | 1,045 | (16,882 | ) | 3,291,602 | (35,739 | ) | (997,881 | ) | 2,567,145 | (2,006 | ) | 35,145 | 33,139 | 2,600,284 | ||||||||||||||||||
Balance at December 31, 2016 | $ | 325,000 | 1,045 | (17,062 | ) | 3,294,923 | (18,346 | ) | (994,259 | ) | 2,591,301 | (1,967 | ) | 35,168 | 33,201 | 2,624,502 | ||||||||||||||||||
Net income | — | — | — | — | — | 90,938 | 90,938 | 217 | 1,884 | 2,101 | 93,039 | |||||||||||||||||||||||
Other comprehensive income | — | — | — | — | 4,205 | — | 4,205 | 6 | (17 | ) | (11 | ) | 4,194 | |||||||||||||||||||||
Deferred compensation plan, net | — | — | (986 | ) | 977 | — | — | (9 | ) | — | — | — | (9 | ) | ||||||||||||||||||||
Restricted stock issued, net of amortization | — | 2 | — | 10,918 | — | — | 10,920 | — | — | — | 10,920 | |||||||||||||||||||||||
Common stock redeemed for taxes withheld for stock based compensation, net | — | (1 | ) | — | (18,431 | ) | — | — | (18,432 | ) | — | — | — | (18,432 | ) | |||||||||||||||||||
Common stock issued under dividend reinvestment plan | — | — | — | 908 | — | — | 908 | — | — | — | 908 | |||||||||||||||||||||||
Common stock issued, net of issuance costs | — | 654 | — | 4,470,759 | — | — | 4,471,413 | — | — | — | 4,471,413 | |||||||||||||||||||||||
Restricted stock issued upon Equity One merger | — | 1 | — | 7,950 | — | — | 7,951 | — | — | — | 7,951 | |||||||||||||||||||||||
Redemption of preferred stock | (325,000 | ) | — | — | 11,099 | — | (11,099 | ) | (325,000 | ) | — | — | — | (325,000 | ) | |||||||||||||||||||
Contributions from partners | — | — | — | — | — | — | — | 13,100 | 367 | 13,467 | 13,467 | |||||||||||||||||||||||
Distributions to partners | — | — | — | — | — | — | — | — | (7,086 | ) | (7,086 | ) | (7,086 | ) | ||||||||||||||||||||
Cash dividends declared: | ||||||||||||||||||||||||||||||||||
Preferred stock | — | — | — | — | — | (5,029 | ) | (5,029 | ) | — | — | — | (5,029 | ) | ||||||||||||||||||||
Common stock/unit ($1.57 per share) | — | — | — | — | — | (233,704 | ) | (233,704 | ) | (450 | ) | — | (450 | ) | (234,154 | ) | ||||||||||||||||||
Balance at September 30, 2017 | $ | — | 1,701 | (18,048 | ) | 7,779,103 | (14,141 | ) | (1,153,153 | ) | 6,595,462 | 10,906 | 30,316 | 41,222 | 6,636,684 |
2017 | 2016 | |||||
Cash flows from operating activities: | ||||||
Net income | $ | 93,039 | 105,334 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 243,757 | 119,721 | ||||
Amortization of deferred loan cost and debt premium | 7,144 | 7,242 | ||||
(Accretion) and amortization of above and below market lease intangibles, net | (18,784 | ) | (2,296 | ) | ||
Stock-based compensation, net of capitalization | 16,836 | 7,554 | ||||
Equity in income of investments in real estate partnerships | (33,804 | ) | (46,618 | ) | ||
Gain on sale of real estate, net of tax | (4,913 | ) | (22,997 | ) | ||
Provision for impairment | — | 1,666 | ||||
Early extinguishment of debt | 12,404 | 13,943 | ||||
Distribution of earnings from operations of investments in real estate partnerships | 40,817 | 39,765 | ||||
Loss on derivative instruments | 51 | — | ||||
Deferred compensation expense | 2,885 | 1,249 | ||||
Realized and unrealized (gain) loss on investments | (2,878 | ) | (1,268 | ) | ||
Changes in assets and liabilities: | ||||||
Restricted cash | (1,569 | ) | (84 | ) | ||
Accounts receivable, net | 2,574 | 3,715 | ||||
Straight-line rent receivables, net | (13,901 | ) | (4,894 | ) | ||
Deferred leasing costs | (10,294 | ) | (7,841 | ) | ||
Other assets | 8,075 | (59 | ) | |||
Accounts payable and other liabilities | 4,908 | 12,607 | ||||
Tenants’ security, escrow deposits and prepaid rent | (2,490 | ) | (1,406 | ) | ||
Net cash provided by operating activities | 343,857 | 225,333 | ||||
Cash flows from investing activities: | ||||||
Acquisition of operating real estate | (2,109 | ) | (333,220 | ) | ||
Advance deposits paid on acquisition of operating real estate | (350 | ) | 1,250 | |||
Acquisition of Equity One, net of cash acquired of $72,534 | (648,763 | ) | — | |||
Real estate development and capital improvements | (241,834 | ) | (146,773 | ) | ||
Proceeds from sale of real estate investments | 15,397 | 83,675 | ||||
Issuance of notes receivable | (3,460 | ) | — | |||
Investments in real estate partnerships | (12,296 | ) | (13,127 | ) | ||
Distributions received from investments in real estate partnerships | 36,603 | 52,536 | ||||
Dividends on investment securities | 200 | 189 | ||||
Acquisition of securities | (14,011 | ) | (53,290 | ) | ||
Proceeds from sale of securities | 11,974 | 54,176 | ||||
Net cash used in investing activities | (858,649 | ) | (354,584 | ) | ||
Cash flows from financing activities: | ||||||
Net proceeds from common stock issuance | — | 549,545 | ||||
Repurchase of common shares in conjunction with equity award plans | (19,251 | ) | (8,013 | ) | ||
Proceeds from sale of treasury stock | 100 | 957 | ||||
Redemption of preferred stock and partnership units | (325,000 | ) | — | |||
Distributions to limited partners in consolidated partnerships, net | (7,031 | ) | (3,126 | ) | ||
Distributions to exchangeable operating partnership unit holders | (450 | ) | (229 | ) | ||
Dividends paid to common stockholders | (232,796 | ) | (149,049 | ) | ||
Dividends paid to preferred stockholders | (5,029 | ) | (15,797 | ) | ||
Repayment of fixed rate unsecured notes | — | (300,000 | ) | |||
Proceeds from issuance of fixed rate unsecured notes, net | 953,115 | — | ||||
Proceeds from unsecured credit facilities | 950,000 | 395,000 | ||||
Repayment of unsecured credit facilities | (650,000 | ) | (295,000 | ) | ||
Proceeds from notes payable | 126,999 | 20,223 | ||||
Repayment of notes payable | (232,839 | ) | (41,584 | ) | ||
Scheduled principal payments | (7,452 | ) | (4,462 | ) | ||
Payment of loan costs | (12,868 | ) | (1,954 | ) | ||
Early redemption costs | (12,419 | ) | (13,214 | ) | ||
Net cash provided by financing activities | 525,079 | 133,297 | ||||
Net increase in cash and cash equivalents | 10,287 | 4,046 | ||||
Cash and cash equivalents at beginning of the period | 13,256 | 36,856 | ||||
Cash and cash equivalents at end of the period | $ | 23,543 | 40,902 |
2017 | 2016 | |||||
Supplemental disclosure of cash flow information: | ||||||
Cash paid for interest (net of capitalized interest of $5,778 and $2,622 in 2017 and 2016, respectively) | $ | 73,273 | 54,904 | |||
Cash received for income tax refunds, net of payments | $ | 670 | — | |||
Supplemental disclosure of non-cash transactions: | ||||||
Exchangeable operating partnership units issued for acquisition of real estate | $ | 13,100 | — | |||
Common stock issued under dividend reinvestment plan | $ | 908 | 804 | |||
Stock-based compensation capitalized | $ | 2,459 | 2,561 | |||
Contributions from limited partners in consolidated partnerships, net | $ | 311 | 8,674 | |||
Common stock issued for dividend reinvestment in trust | $ | 557 | 556 | |||
Contribution of stock awards into trust | $ | 1,372 | 1,513 | |||
Distribution of stock held in trust | $ | 677 | 4,096 | |||
Change in fair value of securities available-for-sale | $ | 51 | 90 | |||
Equity One Merger: | ||||||
Notes payable assumed in Equity One merger, at fair value | $ | 757,399 | — | |||
Common stock exchanged for Equity One shares | $ | (4,471,808 | ) | — | ||
Deconsolidation of previously consolidated partnership: | ||||||
Real estate, net | $ | — | 14,075 | |||
Investments in real estate partnerships | $ | — | (3,355 | ) | ||
Notes payable | $ | — | (9,415 | ) | ||
Other assets and liabilities | $ | — | 640 | |||
Limited partners' interest in consolidated partnerships | $ | — | (2,099 | ) |
2017 | 2016 | |||||
Assets | (unaudited) | |||||
Real estate investments at cost: | ||||||
Land | $ | 4,578,145 | 1,660,424 | |||
Buildings and improvements | 5,834,405 | 3,092,197 | ||||
Properties in development | 433,707 | 180,878 | ||||
10,846,257 | 4,933,499 | |||||
Less: accumulated depreciation | 1,281,510 | 1,124,391 | ||||
9,564,747 | 3,809,108 | |||||
Properties held for sale | 27,802 | — | ||||
Investments in real estate partnerships | 380,930 | 296,699 | ||||
Net real estate investments | 9,973,479 | 4,105,807 | ||||
Cash and cash equivalents | 23,543 | 13,256 | ||||
Restricted cash | 7,098 | 4,623 | ||||
Tenant and other receivables, net of allowance for doubtful accounts and straight-line rent reserves of $12,279 and $9,021 at September 30, 2017 and December 31, 2016, respectively | 143,153 | 111,722 | ||||
Deferred leasing costs, less accumulated amortization of $91,213 and $83,529 at September 30, 2017 and December 31, 2016, respectively | 71,826 | 69,000 | ||||
Acquired lease intangible assets, less accumulated amortization of $123,662 and $56,695 at September 30, 2017 and December 31, 2016, respectively | 508,868 | 118,831 | ||||
Trading securities held in trust | — | — | ||||
Other assets | 390,778 | 65,667 | ||||
Total assets | $ | 11,118,745 | 4,488,906 | |||
Liabilities and Capital | ||||||
Liabilities: | ||||||
Notes payable | $ | 2,943,986 | 1,363,925 | |||
Unsecured credit facilities | 578,144 | 278,495 | ||||
Accounts payable and other liabilities | 276,363 | 138,936 | ||||
Acquired lease intangible liabilities, less accumulated amortization of $49,968 and $23,538 at September 30, 2017 and December 31, 2016, respectively | 637,217 | 54,180 | ||||
Tenants’ security, escrow deposits and prepaid rent | 46,351 | 28,868 | ||||
Total liabilities | 4,482,061 | 1,864,404 | ||||
Commitments and contingencies | — | — | ||||
Capital: | ||||||
Partners’ capital: | ||||||
Preferred units of general partner, $0.01 par value per unit, 13,000,000 units issued and outstanding at December 31, 2016, liquidation preference of $25 per unit | — | 325,000 | ||||
General partner; 170,109,043 and 104,497,286 units outstanding at September 30, 2017 and December 31, 2016, respectively | 6,609,603 | 2,284,647 | ||||
Limited partners; 349,902 and 154,170 units outstanding at September 30, 2017 and December 31, 2016, respectively | 10,906 | (1,967 | ) | |||
Accumulated other comprehensive loss | (14,141 | ) | (18,346 | ) | ||
Total partners’ capital | 6,606,368 | 2,589,334 | ||||
Noncontrolling interests: | ||||||
Limited partners’ interests in consolidated partnerships | 30,316 | 35,168 | ||||
Total noncontrolling interests | 30,316 | 35,168 | ||||
Total capital | 6,636,684 | 2,624,502 | ||||
Total liabilities and capital | $ | 11,118,745 | 4,488,906 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
Revenues: | ||||||||||||
Minimum rent | $ | 195,393 | 111,886 | $ | 532,625 | 329,506 | ||||||
Percentage rent | 1,147 | 495 | 5,509 | 2,651 | ||||||||
Recoveries from tenants and other income | 59,554 | 34,532 | 162,089 | 103,894 | ||||||||
Management, transaction, and other fees | 6,047 | 5,855 | 19,353 | 18,759 | ||||||||
Total revenues | 262,141 | 152,768 | 719,576 | 454,810 | ||||||||
Operating expenses: | ||||||||||||
Depreciation and amortization | 91,474 | 40,705 | 243,757 | 119,721 | ||||||||
Operating and maintenance | 38,020 | 23,373 | 103,888 | 69,767 | ||||||||
General and administrative | 15,199 | 16,046 | 49,618 | 48,695 | ||||||||
Real estate taxes | 29,315 | 17,058 | 79,636 | 49,697 | ||||||||
Other operating expenses (note 2) | 3,195 | 1,046 | 81,621 | 5,795 | ||||||||
Total operating expenses | 177,203 | 98,228 | 558,520 | 293,675 | ||||||||
Other expense (income): | ||||||||||||
Interest expense, net | 34,679 | 21,945 | 97,285 | 70,489 | ||||||||
Provision for impairment | — | — | — | 1,666 | ||||||||
Early extinguishment of debt | — | 13,943 | 12,404 | 13,943 | ||||||||
Net investment (income) loss, including unrealized (gains) losses of ($842) and ($383), and ($1,705) and ($888) for the three and nine months ended September 30, 2017 and 2016, respectively | (971 | ) | (821 | ) | (2,955 | ) | (1,268 | ) | ||||
Loss on derivative instruments | — | 40,586 | — | 40,586 | ||||||||
Total other expense (income) | 33,708 | 75,653 | 106,734 | 125,416 | ||||||||
Income from operations before equity in income of investments in real estate partnerships | 51,230 | (21,113 | ) | 54,322 | 35,719 | |||||||
Equity in income of investments in real estate partnerships | 12,221 | 22,647 | 33,804 | 46,618 | ||||||||
Income from operations | 63,451 | 1,534 | 88,126 | 82,337 | ||||||||
Gain on sale of real estate, net of tax | 131 | 9,580 | 4,913 | 22,997 | ||||||||
Net income | 63,582 | 11,114 | 93,039 | 105,334 | ||||||||
Limited partners’ interests in consolidated partnerships | (637 | ) | (527 | ) | (1,884 | ) | (1,380 | ) | ||||
Net income attributable to the Partnership | 62,945 | 10,587 | 91,155 | 103,954 | ||||||||
Preferred unit distributions and issuance costs | (3,147 | ) | (5,266 | ) | (16,128 | ) | (15,797 | ) | ||||
Net income attributable to common unit holders | $ | 59,798 | 5,321 | $ | 75,027 | 88,157 | ||||||
Income per common unit - basic | $ | 0.35 | 0.05 | $ | 0.48 | 0.88 | ||||||
Income per common unit - diluted | $ | 0.35 | 0.05 | $ | 0.48 | 0.88 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
Net income | $ | 63,582 | 11,114 | $ | 93,039 | 105,334 | ||||||
Other comprehensive income: | ||||||||||||
Effective portion of change in fair value of derivative instruments: | ||||||||||||
Effective portion of change in fair value of derivative instruments | (39 | ) | 1,294 | (3,911 | ) | (25,338 | ) | |||||
Reclassification adjustment of derivative instruments included in net income | 2,329 | 43,111 | 8,054 | 48,063 | ||||||||
Unrealized gain on available-for-sale securities | 8 | 53 | 51 | 90 | ||||||||
Other comprehensive income | 2,298 | 44,458 | 4,194 | 22,815 | ||||||||
Comprehensive income | 65,880 | 55,572 | 97,233 | 128,149 | ||||||||
Less: comprehensive income (loss) attributable to noncontrolling interests: | ||||||||||||
Net income attributable to noncontrolling interests | 637 | 527 | 1,884 | 1,380 | ||||||||
Other comprehensive income (loss) attributable to noncontrolling interests | — | 91 | (17 | ) | (172 | ) | ||||||
Comprehensive income attributable to noncontrolling interests | 637 | 618 | 1,867 | 1,208 | ||||||||
Comprehensive income attributable to the Partnership | $ | 65,243 | 54,954 | $ | 95,366 | 126,941 |
REGENCY CENTERS, L.P. Consolidated Statements of Capital For the nine months ended September 30, 2017 and 2016 (in thousands) (unaudited) | ||||||||||||||||||
General Partner Preferred and Common Units | Limited Partners | Accumulated Other Comprehensive Loss | Total Partners’ Capital | Noncontrolling Interests in Limited Partners’ Interest in Consolidated Partnerships | Total Capital | |||||||||||||
Balance at December 31, 2015 | $ | 2,112,802 | (1,975 | ) | (58,693 | ) | 2,052,134 | 30,486 | 2,082,620 | |||||||||
Net income | 103,789 | 165 | — | 103,954 | 1,380 | 105,334 | ||||||||||||
Other comprehensive loss | — | 33 | 22,954 | 22,987 | (172 | ) | 22,815 | |||||||||||
Contributions from partners | — | — | — | — | 8,675 | 8,675 | ||||||||||||
Distributions to partners | (150,391 | ) | (229 | ) | — | (150,620 | ) | (5,224 | ) | (155,844 | ) | |||||||
Preferred unit distributions | (15,797 | ) | — | — | (15,797 | ) | — | (15,797 | ) | |||||||||
Restricted units issued as a result of amortization of restricted stock issued by Parent Company | 9,967 | — | — | 9,967 | — | 9,967 | ||||||||||||
Common units redeemed as a result of common stock redeemed by Parent Company, net of issuances | 542,514 | — | — | 542,514 | — | 542,514 | ||||||||||||
Balance at September 30, 2016 | 2,602,884 | (2,006 | ) | (35,739 | ) | 2,565,139 | 35,145 | 2,600,284 | ||||||||||
Balance at December 31, 2016 | 2,609,647 | (1,967 | ) | (18,346 | ) | 2,589,334 | 35,168 | 2,624,502 | ||||||||||
Net income | 90,938 | 217 | — | 91,155 | 1,884 | 93,039 | ||||||||||||
Other comprehensive income | — | 6 | 4,205 | 4,211 | (17 | ) | 4,194 | |||||||||||
Deferred compensation plan, net | (9 | ) | — | — | (9 | ) | — | (9 | ) | |||||||||
Contributions from partners | — | 13,100 | — | 13,100 | 367 | 13,467 | ||||||||||||
Distributions to partners | (233,704 | ) | (450 | ) | — | (234,154 | ) | (7,086 | ) | (241,240 | ) | |||||||
Preferred unit distributions | (5,029 | ) | — | — | (5,029 | ) | — | (5,029 | ) | |||||||||
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization | 10,920 | — | — | 10,920 | — | 10,920 | ||||||||||||
Preferred stock redemptions | (325,000 | ) | — | — | (325,000 | ) | — | (325,000 | ) | |||||||||
Common units issued as a result of common stock issued by Parent Company, net of repurchases | 4,453,889 | — | — | 4,453,889 | — | 4,453,889 | ||||||||||||
Restricted units issued as a result of restricted stock issued by Parent Company upon Equity One merger | 7,951 | — | — | 7,951 | — | 7,951 | ||||||||||||
Balance at September 30, 2017 | $ | 6,609,603 | 10,906 | (14,141 | ) | 6,606,368 | 30,316 | 6,636,684 |
2017 | 2016 | |||||
Cash flows from operating activities: | ||||||
Net income | $ | 93,039 | 105,334 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 243,757 | 119,721 | ||||
Amortization of deferred loan cost and debt premium | 7,144 | 7,242 | ||||
(Accretion) and amortization of above and below market lease intangibles, net | (18,784 | ) | (2,296 | ) | ||
Stock-based compensation, net of capitalization | 16,836 | 7,554 | ||||
Equity in income of investments in real estate partnerships | (33,804 | ) | (46,618 | ) | ||
Gain on sale of real estate, net of tax | (4,913 | ) | (22,997 | ) | ||
Provision for impairment | — | 1,666 | ||||
Early extinguishment of debt | 12,404 | 13,943 | ||||
Distribution of earnings from operations of investments in real estate partnerships | 40,817 | 39,765 | ||||
Loss on derivative instruments | 51 | — | ||||
Deferred compensation expense | 2,885 | 1,249 | ||||
Realized and unrealized (gain) loss on investments | (2,878 | ) | (1,268 | ) | ||
Changes in assets and liabilities: | ||||||
Restricted cash | (1,569 | ) | (84 | ) | ||
Accounts receivable, net | 2,574 | 3,715 | ||||
Straight-line rent receivables, net | (13,901 | ) | (4,894 | ) | ||
Deferred leasing costs | (10,294 | ) | (7,841 | ) | ||
Other assets | 8,075 | (59 | ) | |||
Accounts payable and other liabilities | 4,908 | 12,607 | ||||
Tenants’ security, escrow deposits and prepaid rent | (2,490 | ) | (1,406 | ) | ||
Net cash provided by operating activities | 343,857 | 225,333 | ||||
Cash flows from investing activities: | ||||||
Acquisition of operating real estate | (2,109 | ) | (333,220 | ) | ||
Advance deposits paid on acquisition of operating real estate | (350 | ) | 1,250 | |||
Acquisition of Equity One, net of cash acquired of $72,534 | (648,763 | ) | — | |||
Real estate development and capital improvements | (241,834 | ) | (146,773 | ) | ||
Proceeds from sale of real estate investments | 15,397 | 83,675 | ||||
Issuance of notes receivable | (3,460 | ) | — | |||
Investments in real estate partnerships | (12,296 | ) | (13,127 | ) | ||
Distributions received from investments in real estate partnerships | 36,603 | 52,536 | ||||
Dividends on investment securities | 200 | 189 | ||||
Acquisition of securities | (14,011 | ) | (53,290 | ) | ||
Proceeds from sale of securities | 11,974 | 54,176 | ||||
Net cash used in investing activities | (858,649 | ) | (354,584 | ) | ||
Cash flows from financing activities: | ||||||
Net proceeds from common units issued as a result of common stock issued by Parent Company | — | 549,545 | ||||
Repurchase of common shares in conjunction with equity award plans | (19,251 | ) | (8,013 | ) | ||
Proceeds from sale of treasury stock | 100 | 957 | ||||
Redemption of preferred partnership units | (325,000 | ) | — | |||
Distributions (to) from limited partners in consolidated partnerships, net | (7,031 | ) | (3,126 | ) | ||
Distributions to partners | (233,246 | ) | (149,278 | ) | ||
Distributions to preferred unit holders | (5,029 | ) | (15,797 | ) | ||
Repayment of fixed rate unsecured notes | — | (300,000 | ) | |||
Proceeds from issuance of fixed rate unsecured notes, net | 953,115 | — | ||||
Proceeds from unsecured credit facilities | 950,000 | 395,000 | ||||
Repayment of unsecured credit facilities | (650,000 | ) | (295,000 | ) | ||
Proceeds from notes payable | 126,999 | 20,223 | ||||
Repayment of notes payable | (232,839 | ) | (41,584 | ) | ||
Scheduled principal payments | (7,452 | ) | (4,462 | ) | ||
Payment of loan costs | (12,868 | ) | (1,954 | ) | ||
Early redemption costs | (12,419 | ) | (13,214 | ) | ||
Net cash provided by financing activities | 525,079 | 133,297 | ||||
Net increase in cash and cash equivalents | 10,287 | 4,046 | ||||
Cash and cash equivalents at beginning of the period | 13,256 | 36,856 | ||||
Cash and cash equivalents at end of the period | $ | 23,543 | 40,902 |
2017 | 2016 | |||||
Supplemental disclosure of cash flow information: | ||||||
Cash paid for interest (net of capitalized interest of $5,778 and $2,622 in 2017 and 2016, respectively) | $ | 73,273 | 54,904 | |||
Cash received for income tax refunds, net of payments | $ | 670 | — | |||
Supplemental disclosure of non-cash transactions: | ||||||
Limited partner units issued in exchange for acquisition of real estate | $ | 13,100 | — | |||
Common stock issued by Parent Company for dividend reinvestment plan | $ | 908 | 804 | |||
Stock-based compensation capitalized | $ | 2,459 | 2,561 | |||
Contributions from limited partners in consolidated partnerships, net | $ | 311 | 8,674 | |||
Common stock issued for dividend reinvestment in trust | $ | 557 | 556 | |||
Contribution of stock awards into trust | $ | 1,372 | 1,513 | |||
Distribution of stock held in trust | $ | 677 | 4,096 | |||
Change in fair value of securities available-for-sale | $ | 51 | 90 | |||
Equity One Merger: | ||||||
Notes payable assumed in Equity One merger, at fair value | $ | 757,399 | — | |||
General partner units issued to Parent Company for common stock exchanged for Equity One shares | $ | (4,471,808 | ) | — | ||
Deconsolidation of previously consolidated partnership: | ||||||
Real estate, net | $ | — | 14,075 | |||
Investments in real estate partnerships | $ | — | (3,355 | ) | ||
Notes payable | $ | — | (9,415 | ) | ||
Other assets and liabilities | $ | — | 640 | |||
Limited partners' interest in consolidated partnerships | $ | — | (2,099 | ) |
1. | Organization and Significant Accounting Policies |
• | Those partnerships for which the Partners only have protective rights are considered VIEs under ASC 810, Consolidation. Regency is the primary beneficiary of these VIEs as Regency has power over these partnerships and they operate primarily for the benefit of Regency. As such, Regency consolidates these entities and reports the limited partners’ interest as noncontrolling interests. |
• | Those partnerships for which the partners are involved in the day to day decisions and do not have any other aspects that would cause them to be considered VIEs, are evaluated for consolidation using the voting interest model. |
◦ | Those partnerships in which Regency has a controlling financial interest are consolidated and the limited partners’ ownership interest and share of net income is recorded as noncontrolling interest. |
◦ | Those partnerships in which Regency does not have a controlling financial interest are accounted for using the equity method, and its ownership interest is recognized through single-line presentation as Investments in real estate partnerships in the Consolidated Balance Sheet, and Equity in income of investments in real estate partnerships in the Consolidated Statements of Operations. Cash distributions of earnings from operations of investments in real estate partnerships are presented in cash flows provided by operating activities in the accompanying Consolidated Statements of Cash Flows. Cash distributions from the sale of a property or loan proceeds received from the placement of debt on a property included in investments in real estate partnerships are presented in cash flows provided by investing activities in the accompanying Consolidated Statements of Cash Flows. The net difference in the carrying amount of investments in real estate partnerships and the underlying equity in net assets is either (1) accreted to income and recorded in Equity in income of investments in real estate partnerships in the accompanying Consolidated Statements of Operations over the expected useful lives of the properties and other intangible assets, which range in lives from 10 to 40 years, or (2) recognized upon sale of the underlying asset(s) or settlement of underlying liabilities, or (3) recognized at liquidation if the joint venture agreement includes a unilateral right to elect to dissolve the real estate partnership and, upon such an election, receive a distribution in-kind. |
(in thousands) | September 30, 2017 | December 31, 2016 | |||
Assets | |||||
Real estate assets, net | $ | 93,821 | 86,440 | ||
Cash and cash equivalents | 4,053 | 3,444 | |||
Liabilities | |||||
Notes payable | 12,691 | 8,175 | |||
Equity | |||||
Limited partners’ interests in consolidated partnerships | 17,604 | 17,565 |
Standard | Description | Date of adoption | Effect on the financial statements or other significant matters | |||
Recently adopted: | ||||||
ASU 2016-09, March 2016, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting | This ASU affects entities that issue share-based payment awards to their employees. The ASU is designed to simplify several aspects of accounting for share-based payment award transactions including income tax consequences, classification of awards as either equity or liabilities, an option to recognize stock compensation forfeitures as they occur, and changes to classification on the statement of cash flows. | January 2017 | The adoption of this standard resulted in the reclassification of income taxes withheld on share-based awards out of operating activities into financing activities on the Statement of Cash Flows. As retrospective application was required for this component of the ASU, $8.0 million was reclassified on the Statements of Cash Flows for the nine months ended September 30, 2016. | |||
ASU 2017-01 January 2017, Business Combinations (Topic 805): Clarifying the Definition of a Business | This ASU amends and provides a screen to determine when an integrated set of assets and activities, collectively referred to as a "set", is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. If the screen is not met, the amendments in this update (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. The amendments provide a framework to assist entities in evaluating whether both an input and a substantive process are present. Early adoption is permitted. | July 2017 | This standard changed the treatment of individual operating properties from being considered a business to being considered an asset. This change results in acquisition costs being capitalized as part of asset acquisitions, whereas previous treatment had them recognized in earnings in the period incurred. The Company adopted this standard effective July 1, 2017. | |||
Not yet adopted: | ||||||
ASU 2017-04, January 2017, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment | This ASU simplifies how an entity tests goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit's goodwill with the carrying amount of that goodwill. Instead, under this update, the Company will perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The Company would then recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to that reporting unit. | October 2017 | The Company plans to early adopt this ASU on October 1, 2017. The adoption of this ASU will not have a material impact on the Company's financial statements and related disclosures. | |||
Standard | Description | Date of adoption | Effect on the financial statements or other significant matters | |||
ASU 2017-12, August 2017, Targeted Improvements to Accounting for Hedging Activities | This ASU provides updated guidance to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. The transition guidance provides companies with the option of early adopting the new standard using a modified retrospective transition method in any interim period after issuance of the update, or alternatively requires adoption for fiscal years beginning after December 15, 2018. This adoption method will require the Company to recognize the cumulative effect of initially applying the ASU as an adjustment to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the update. | January 2018 | The Company plans to early adopt this ASU on January 1, 2018. While the Company continues to assess all potential impacts of the standard, it currently does not expect the adoption and implementation of this standard to have a material impact on the consolidated financial statements. | |||
ASU 2016-01, January 2016, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities | This ASU amends the guidance to classify equity securities with readily-determinable fair values into different categories and requires equity securities to be measured at fair value with changes in the fair value recognized through net income. Equity investments accounted for under the equity method are not included in the scope of this amendment. Early adoption of this amendment is not permitted. | January 2018 | The Company does not expect the adoption and implementation of this standard to have a material impact on its results of operations, financial condition or cash flows. | |||
ASU 2016-15, August 2016, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments | This ASU makes eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. Early adoption is permitted on a retrospective basis. | January 2018 | The ASU is consistent with the Company's current treatment and the Company does not expect the adoption and implementation of this standard to have an impact on its cash flow statement. | |||
ASU 2016-18, November 2016, Statement of Cash Flows (Topic 230): Restricted Cash | This ASU requires entities to show the changes in the total of cash, cash equivalents, restricted cash, and restricted cash equivalents in the statement of cash flows. The amendments in this ASU should be applied using a retrospective transition method to each period presented. | January 2018 | The Company expects the adoption of this ASU to result in a change to the classification and presentation of changes in restricted cash on its cash flow statement, which is not expected to be material. There should be no change to the Company's financial condition or results of operations. | |||
Standard | Description | Date of adoption | Effect on the financial statements or other significant matters | |||
Revenue from Contracts with Customers (Topic 606) and related updates: ASU 2014-09, May 2014, Revenue from Contracts with Customers (Topic 606) ASU 2016-08, March 2016, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations ASU 2016-10, April 2016, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing ASU 2016-12, May 2016, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients ASU 2016-19, December 2016, Technical Corrections and Improvements ASU 2016-20, December 2016, Technical Corrections and Improvements to Topic 606 Revenue from Contracts With Customers ASU 2017-05, February 2017, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (Subtopic 610-20) | In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers ("Topic 606"). The objective of Topic 606 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. It will supersede most of the existing revenue guidance, including industry-specific guidance. The core principal of this new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying Topic 606, companies will perform a five-step analysis of transactions to determine when and how revenue is recognized. Topic 606 applies to all contracts with customers except those that are within the scope of other topics in the FASB's accounting standards codification. As a result, Topic 606 does not apply to revenue from lease contracts until the adoption of the new leases standard, Topic 842, in January 2019. ASU 2017-05 clarifies that ASC 610-20 applies to all nonfinancial assets (including real estate) for which the counterparty is not a customer and requires an entity to derecognize a nonfinancial asset in a partial sale transaction when it ceases to have a controlling financial interest in the asset and has transferred control of the asset. Once an entity transfers control of the nonfinancial asset, the entity is required to measure any noncontrolling interest it receives or retains at fair value. Under the current guidance, a partial sale is recognized and carryover basis is used for the retained interest resulting in only partial gain recognition by the entity, however, the new guidance eliminates the use of carryover basis and generally requires the full gain be recognized. The standard allows for either "full retrospective" adoption, meaning the standard is applied to all of the periods presented, or "modified retrospective" adoption, meaning the standard is applied only to the most recent period presented in the financial statements. | January 2018 | The majority of the Company's revenue originates from lease contracts and will be subject to Topic 842 to be adopted in January 2019. Upon the adoption of the new leases standard, certain recoveries from tenants may become subject to the revenue standard, which may have a different recognition pattern or presentation than under current GAAP. Beyond revenue from lease contracts, the Company's other main revenue streams, include: - Management, transaction and other fees from the Company's real estate partnerships, primarily in the form of property management fees, asset management fees, and leasing commission fees. The Company evaluated all partnership fee relationships and does not currently expect any changes in the timing of revenue recognition from these revenue streams. - Sales of real estate assets will be accounted for under Subtopic 610-20, which provides for revenue recognition based on transfer of control. For property sales where Regency has no continuing involvement, there should be no change to the Company's timing of recognition. For property sales in which Regency has continuing involvement, full gain recognition may be required, where gains may have been deferred under existing GAAP. Upon adoption of ASU 2017-05, some of the Company's $33 million of previously deferred gains from property sales to entities in which Regency had continuing involvement will remain deferred and be recognized in the future, while some will be recognized through opening retained earnings. The Company is still analyzing the disclosure requirements and intends to follow the modified retrospective method of adoption, applying the standard to only 2018, and not restating prior periods presented in future financial statements. | |||
Standard | Description | Date of adoption | Effect on the financial statements or other significant matters | |||
ASU 2016-02, February 2016, Leases (Topic 842) | This ASU amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets. It also makes targeted changes to lessor accounting, including a change to the treatment of internal leasing costs and legal costs, which can no longer be capitalized. Early adoption of this standard is permitted to coincide with adoption of ASU 2014-09. The standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. | January 2019 | The Company is evaluating the impact this standard will have on its financial statements and related disclosures. Upon adoption, the Company will recognize right of use assets and corresponding lease obligations for its office and ground leases. Capitalization of internal leasing costs and legal costs will no longer be permitted upon the adoption of this standard, which will result in an increase in Total operating expenses in the Consolidated Statements of Operations in the period of adoption and prospectively. Historic capitalization of internal leasing costs was $7.5 million and $10.5 million during the nine months ended September 30, 2017 and the year ended December 31, 2016, respectively. Historic capitalization of legal costs was $0.9 million and $0.7 million during the nine months ended September 30, 2017 and the year ended December 31, 2016, respectively, including our pro rata share recognized through Equity in income of investments in real estate partnerships. | |||
ASU 2016-13, June 2016, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments | This ASU replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This ASU also applies to how the Company determines its allowance for doubtful accounts on tenant receivables. | January 2020 | The Company is evaluating the alternative methods of adoption and the impact it will have on its financial statements and related disclosures. |
2. | Real Estate Investments |
(in thousands) | Nine months ended September 30, 2017 | |||||||||||||||
Date Purchased | Property Name | City/State | Property Type | Ownership | Purchase Price | Debt Assumed, Net of Premiums | Intangible Assets | Intangible Liabilities | ||||||||
3/6/17 | The Field at Commonwealth | Chantilly, VA | Development | 100% | $9,500 | — | — | — | ||||||||
3/8/17 | Pinecrest Place (1) | Miami, FL | Development | 100% | — | — | — | — | ||||||||
4/13/17 | Mellody Farm (2) | Chicago, IL | Development | 100% | 26,200 | — | — | |||||||||
6/28/17 | Concord outparcel (3) | Miami, FL | Operating | 100% | 350 | — | — | — | ||||||||
7/20/17 | Aventura Square outparcel (4) | Miami, FL | Operating | 100% | 1,750 | — | 90 | 9 | ||||||||
Total property acquisitions | $37,800 | — | 90 | 9 | ||||||||||||
(1) The Company leased 10.67 acres for a ground up development. | ||||||||||||||||
(2) The Operating Partnership issued 195,732 partnership units valued at $13.1 million as partial consideration for the purchase price. | ||||||||||||||||
(3) The Company purchased a 0.67 acre vacant outparcel adjacent to the Company's existing operating Concord Shopping Plaza. | ||||||||||||||||
(4) The Company purchased a 0.06 acre outparcel improved with a leased building adjacent to the Company's existing operating Aventura Square. | ||||||||||||||||
(in thousands) | Nine months ended September 30, 2016 | |||||||||||||||
Date Purchased | Property Name | City/State | Property Type | Ownership | Purchase Price | Debt Assumed, Net of Premiums | Intangible Assets | Intangible Liabilities | ||||||||
2/22/16 | Garden City Park | Garden City Park, NY | Operating | 100% | $17,300 | — | 10,171 | 2,940 | ||||||||
3/4/16 | The Market at Springwoods Village (1) | Houston, TX | Development | 53% | $17,994 | — | — | — | ||||||||
5/16/16 | Market Common Clarendon | Arlington, VA | Operating | 100% | $280,500 | — | 15,428 | 15,662 | ||||||||
7/15/16 | Klahanie Shopping Center | Sammamish, WA | Operating | 100% | $35,988 | — | 2,264 | 539 | ||||||||
8/4/16 | The Village at Tustin Legacy | Tustin, CA | Development | 100% | $18,800 | — | — | — | ||||||||
Total property acquisitions | $370,582 | — | 27,863 | 19,141 | ||||||||||||
(1) Regency acquired a 53% controlling interest in the Market at Springwoods Village partnership to develop a shopping center on land contributed by the partner. As a result of consolidation, the Company recorded the partner's non-controlling interest of $8.4 million in Limited partners' interests in consolidated partnerships in the accompanying Consolidated Balance Sheets. |
(in thousands, except stock price) | Purchase Price | ||
Shares of common stock issued for merger | 65,379 | ||
Closing stock price on March 1, 2017 | $ | 68.40 | |
Value of common stock issued for merger | $ | 4,471,808 | |
Debt repaid | 716,278 | ||
Other cash payments | 5,019 | ||
Total purchase price | $ | 5,193,105 |
September 30, 2017 | |||||
(in thousands) | Three months ended | Nine months ended | |||
Increase in total revenues | $ | 102,437 | 238,250 | ||
Increase in net income attributable to common stockholders | 23,517 | 52,981 |
(in thousands) | Provisional Purchase Price Allocation | |||
Land | $ | 2,914,790 | ||
Building and improvements | 2,699,937 | |||
Properties in development | 68,744 | |||
Properties held for sale | 19,600 | |||
Investments in unconsolidated real estate partnerships | 103,566 | |||
Real estate assets | 5,806,637 | |||
Cash, accounts receivable and other assets | 112,271 | |||
Intangible assets | 460,541 | |||
Goodwill | 302,303 | |||
Total assets acquired | 6,681,752 | |||
Notes payable | 757,399 | |||
Accounts payable, accrued expenses, and other liabilities | 121,441 | |||
Lease intangible liabilities | 609,807 | |||
Total liabilities assumed | 1,488,647 | |||
Total purchase price | $ | 5,193,105 |
(in thousands) | Three months ended September 30, 2017 | ||
decrease in Minimum rent | $ | (567 | ) |
decrease in Depreciation and amortization | 1,645 | ||
decrease in Operating and maintenance | 142 | ||
Net increase to earnings of provisional purchase price allocation adjustments | $ | 1,220 |
(in years) | Weighted Average Amortization Period | |
Assets: | ||
In-place leases | 11.0 | |
Above-market leases | 8.9 | |
Below-market ground leases | 54.6 | |
Liabilities: | ||
Acquired lease intangible liabilities | 24.8 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||
(in thousands, except per share data) | 2017 | 2016 | 2017 | 2016 | |||||||||
Total revenues | $ | 262,708 | 251,823 | 788,345 | 752,121 | ||||||||
Income (loss) from operations | (1) | 63,537 | 3,358 | 190,112 | (4,560 | ) | |||||||
Net income (loss) attributable to common stockholders | (1) | 59,621 | (1,907 | ) | 171,795 | (21,744 | ) | ||||||
Income (loss) per common share - basic | $ | 0.35 | (0.01 | ) | 1.01 | (0.13 | ) | ||||||
Income (loss) per common share - diluted | 0.35 | (0.01 | ) | 1.01 | (0.13 | ) | |||||||
(1) The pro forma earnings for the three and nine months ended September 30, 2017, were adjusted to exclude $1.2 million and $98.5 million of merger costs, respectively, while 2016 pro forma earnings were adjusted to include all merger costs during the first quarter of 2016. |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
(in thousands) | 2017 | 2016 | 2017 | 2016 | |||||||||||||
Net proceeds from sale of real estate investments | $ | 167 | $ | 47,180 | $ | 15,397 | $ | 85,885 | (1) | ||||||||
Gain on sale of real estate, net of tax | $ | 131 | $ | 9,580 | $ | 4,913 | $ | 22,997 | |||||||||
Provision for impairment of real estate sold | $ | — | $ | — | $ | — | $ | (1,666 | ) | ||||||||
Number of operating properties sold | — | 3 | 1 | 7 | |||||||||||||
Number of land parcels sold | — | 2 | 7 | 12 | |||||||||||||
Percent interest sold | — | % | 100 | % | 100 | % | 100 | % | |||||||||
(1) Includes cash deposits received in the previous year. |
(in thousands) | Weighted Average Contractual Rate | Weighted Average Effective Rate | September 30, 2017 | December 31, 2016 | ||||
Notes payable: | ||||||||
Fixed rate mortgage loans | 5.0% | 4.3% | $ | 496,869 | 384,786 | |||
Variable rate mortgage loans | 2.4% | 2.6% | 122,036 | (1) | 86,969 | |||
Fixed rate unsecured public and private debt | 3.8% | 4.2% | 2,325,081 | 892,170 | ||||
Total notes payable | 2,943,986 | 1,363,925 | ||||||
Unsecured credit facilities: | ||||||||
Line of Credit (the "Line") (2) | 2.1% | 2.2% | 15,000 | 15,000 | ||||
Term loans | 2.4% | 2.5% | 563,144 | 263,495 | ||||
Total unsecured credit facilities | 578,144 | 278,495 | ||||||
Total debt outstanding | $ | 3,522,130 | 1,642,420 | |||||
(1) Includes five mortgages whose interest rates vary on LIBOR based formulas. Three of these variable rate loans have interest rate swaps in place to fix the interest rates at a range of 2.8% to 4.07% | ||||||||
(2) Weighted average effective and contractual rate for the Line is calculated based on a fully drawn Line balance. |
• | $300.0 million of 4.4% senior unsecured public notes due in 2047, which priced at 99.110%. The Company used the net proceeds to redeem all of the outstanding shares of its $250 million 6.625% Series 6 preferred stock on February 16, 2017 and to pay down the balance of the Line. |
• | $350.0 million of 3.6% senior unsecured public notes due in 2027, which priced at 99.741%. The Company used the net proceeds to repay a $250.0 million Equity One term loan upon the effective date of the merger and to pay merger related transaction costs. |
• | $125.0 million of 4.4% senior unsecured public notes due in 2047, which priced at 100.784%, with proceeds used to redeem all of the outstanding shares of its $75.0 million 6.000% Series 7 preferred stock on August 23, 2017, with the balance used to pay down the Line. |
• | $175.0 million of 3.6% senior unsecured public notes due in 2027, which priced at 100.379%, with proceeds used to retire $112.0 million of mortgage loans with interest rates ranging from 7.0% to 7.8% on various properties, with the balance used to pay down the Line. |
• | Increased the size of its Line commitment to $1.0 billion with an accordion feature permitting the Company to request an increase in the facility of up to an additional $500 million. |
• | Completed a $300 million unsecured term loan that matures on December 2, 2020 with the option to prepay at par anytime prior to maturity without penalty. The interest rate on the term loan is equal to LIBOR plus a ratings based margin; however, the Company entered into interest rate swaps to fix the interest rate on the entire $300 million with a weighted average interest rate of 1.824% (see note 5). The proceeds of the term loan were used to repay a $300 million Equity One term loan that came due as a result of the merger. |
• | Assumed $300 million of senior unsecured public notes with an interest rate of 3.75% maturing in 2022. |
• | Assumed $200 million of the senior unsecured private placement notes issued in two $100 million tranches with interest rates of 3.81% and 3.91%, respectively, maturing in 2026. |
• | Assumed $226.3 million of fixed rate mortgage loans with interest rates ranging from 3.76% to 7.94%, and assumed a $27.8 million variable rate mortgage loan whose interest rate varies with LIBOR. |
(in thousands) | September 30, 2017 | |||||||||||
Scheduled Principal Payments and Maturities by Year: | Scheduled Principal Payments | Mortgage Loan Maturities | Unsecured Maturities (1) | Total | ||||||||
2017 | $ | 2,708 | — | — | 2,708 | |||||||
2018 | 10,641 | 139,976 | — | 150,617 | ||||||||
2019 | 13,860 | 13,216 | 15,000 | 42,076 | ||||||||
2020 | 11,122 | 51,580 | 450,000 | 512,702 | ||||||||
2021 | 11,426 | 39,001 | 250,000 | 300,427 | ||||||||
Beyond 5 Years | 48,674 | 266,179 | 2,215,000 | 2,529,853 | ||||||||
Unamortized debt premium/(discount) and issuance costs | — | 10,522 | (26,775 | ) | (16,253 | ) | ||||||
Total | $ | 98,431 | 520,474 | 2,903,225 | 3,522,130 | |||||||
(1) Includes unsecured public debt and unsecured credit facilities. |
Fair Value | ||||||||||||||||||
(in thousands) | Assets (Liabilities)(1) | |||||||||||||||||
Effective Date | Maturity Date | Notional Amount | Bank Pays Variable Rate of | Regency Pays Fixed Rate of | September 30, 2017 | December 31, 2016 | ||||||||||||
4/3/17 | 12/2/20 | $ | 300,000 | 1 Month LIBOR with Floor | 1.824% | $ | (687 | ) | — | |||||||||
8/1/16 | 1/5/22 | 265,000 | 1 Month LIBOR with Floor | 1.053% | 8,722 | 9,889 | ||||||||||||
4/7/16 | 4/1/23 | 20,000 | 1 Month LIBOR | 1.303% | 622 | 720 | ||||||||||||
12/1/16 | 11/1/23 | 33,000 | 1 Month LIBOR | 1.490% | 857 | 1,013 | ||||||||||||
6/2/17 | 6/2/27 | 37,500 | 1 Month LIBOR with Floor | 2.366% | (495 | ) | (580 | ) | ||||||||||
Total derivative financial instruments | $ | 9,019 | 11,042 | |||||||||||||||
(1) Derivatives in an asset position are included within Other assets in the accompanying Consolidated Balance Sheets, while those in a liability position are included within Accounts payable and other liabilities. |
Derivatives in FASB ASC Topic 815 Cash Flow Hedging Relationships: | Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) | Location and Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | ||||||||||||||
Three months ended September 30, | Three months ended September 30, | |||||||||||||||
(in thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Interest rate swaps | $ | (39 | ) | 1,294 | Interest expense | $ | (2,329 | ) | (43,111 | ) | ||||||
Derivatives in FASB ASC Topic 815 Cash Flow Hedging Relationships: | Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) | Location and Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | ||||||||||||||
Nine months ended September 30, | Nine months ended September 30, | |||||||||||||||
(in thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Interest rate swaps | $ | (3,911 | ) | (25,338 | ) | Interest expense | $ | (8,054 | ) | (48,063 | ) |
September 30, 2017 | December 31, 2016 | ||||||||||||
(in thousands) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||
Financial assets: | |||||||||||||
Notes receivable | $ | 13,984 | 13,869 | $ | 10,481 | 10,380 | |||||||
Financial liabilities: | |||||||||||||
Notes payable | $ | 2,943,986 | 3,027,557 | $ | 1,363,925 | 1,435,000 | |||||||
Unsecured credit facilities | $ | 578,144 | 580,000 | $ | 278,495 | 279,700 |
September 30, 2017 | December 31, 2016 | |||||||
Low | High | Low | High | |||||
Notes receivable | 3.5% | 7.4% | 7.2% | 7.2% | ||||
Notes payable | 3.1% | 3.7% | 2.9% | 3.9% | ||||
Unsecured credit facilities | 1.7% | 2.2% | 1.5% | 1.6% |
Fair Value Measurements as of September 30, 2017 | ||||||||||||
(in thousands) | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||
Assets: | Balance | (Level 1) | (Level 2) | (Level 3) | ||||||||
Trading securities held in trust | $ | 30,720 | 30,720 | — | — | |||||||
Available-for-sale securities | 10,054 | — | 10,054 | — | ||||||||
Interest rate derivatives | 10,201 | — | 10,201 | — | ||||||||
Total | $ | 50,975 | 30,720 | 20,255 | — | |||||||
Liabilities: | ||||||||||||
Interest rate derivatives | $ | (1,182 | ) | — | (1,182 | ) | — |
Fair Value Measurements as of December 31, 2016 | ||||||||||||
(in thousands) | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||
Assets: | Balance | (Level 1) | (Level 2) | (Level 3) | ||||||||
Trading securities held in trust | $ | 28,588 | 28,588 | — | — | |||||||
Available-for-sale securities | 7,420 | — | 7,420 | — | ||||||||
Interest rate derivatives | 11,622 | — | 11,622 | — | ||||||||
Total | $ | 47,630 | 28,588 | 19,042 | — | |||||||
Liabilities: | ||||||||||||
Interest rate derivatives | $ | (580 | ) | — | (580 | ) | — |
Nine months ended September 30, | |||||||
(dollar amounts are in thousands, except price per share data) | 2017 | 2016 | |||||
Shares issued (1) | — | 182,787 | |||||
Weighted average price per share | $ | — | $ | 68.85 | |||
Gross proceeds | $ | — | $ | 12,584 | |||
Commissions | $ | — | $ | 157 | |||
Issuance costs (2) | $ | 349 | $ | 80 | |||
(1) Reflects shares traded in December and settled in January. | |||||||
(2) Includes legal and accounting costs associated with maintaining the ATM program. |
Controlling Interest | Noncontrolling Interest | Total | |||||||||||||||||||
(in thousands) | Cash Flow Hedges | Unrealized gain (loss) on Available-For-Sale Securities | AOCI | Cash Flow Hedges | Unrealized gain (loss) on Available-For-Sale Securities | AOCI | AOCI | ||||||||||||||
Balance as of December 31, 2015 | $ | (58,650 | ) | (43 | ) | (58,693 | ) | (785 | ) | — | (785 | ) | (59,478 | ) | |||||||
Other comprehensive income before reclassifications | (25,015 | ) | 89 | (24,926 | ) | (322 | ) | — | (322 | ) | (25,248 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive income | 47,880 | — | 47,880 | 183 | — | 183 | 48,063 | ||||||||||||||
Current period other comprehensive income, net | 22,865 | 89 | 22,954 | (139 | ) | — | (139 | ) | 22,815 | ||||||||||||
Balance as of September 30, 2016 | $ | (35,785 | ) | 46 | (35,739 | ) | (924 | ) | — | (924 | ) | (36,663 | ) | ||||||||
Controlling Interest | Noncontrolling Interest | Total | |||||||||||||||||||
(in thousands) | Cash Flow Hedges | Unrealized gain (loss) on Available-For-Sale Securities | AOCI | Cash Flow Hedges | Unrealized gain (loss) on Available-For-Sale Securities | AOCI | AOCI | ||||||||||||||
Balance as of December 31, 2016 | $ | (18,327 | ) | (19 | ) | (18,346 | ) | (301 | ) | — | (301 | ) | (18,647 | ) | |||||||
Other comprehensive income before reclassifications | (3,768 | ) | 51 | (3,717 | ) | (143 | ) | — | (143 | ) | (3,860 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive income | 7,922 | — | 7,922 | 132 | — | 132 | 8,054 | ||||||||||||||
Current period other comprehensive income, net | 4,154 | 51 | 4,205 | (11 | ) | — | (11 | ) | 4,194 | ||||||||||||
Balance as of September 30, 2017 | $ | (14,173 | ) | 32 | (14,141 | ) | (312 | ) | — | (312 | ) | (14,453 | ) |
AOCI Component | Amount Reclassified from AOCI into income | Affected Line Item(s) Where Net Income is Presented | ||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||
(in thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||
Interest rate swaps | $ | 2,329 | 43,111 | $ | 8,054 | 48,063 | Interest expense and Loss on derivative instruments |
(in thousands) | September 30, 2017 | December 31, 2016 | ||||
Assets: | ||||||
Trading securities held in trust (1) | $ | 30,720 | 28,588 | |||
Liabilities: | ||||||
Accounts payable and other liabilities | $ | 30,423 | 28,214 | |||
(1) Included within Other assets in the accompanying Consolidated Balance Sheets. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||
(in thousands, except per share data) | 2017 | 2016 | 2017 | 2016 | ||||||||||
Numerator: | ||||||||||||||
Income from operations attributable to common stockholders - basic | $ | 59,666 | 5,305 | $ | 74,810 | 87,992 | ||||||||
Income from operations attributable to common stockholders - diluted | $ | 59,666 | 5,305 | $ | 74,810 | 87,992 | ||||||||
Denominator: | ||||||||||||||
Weighted average common shares outstanding for basic EPS | 170,105 | 103,675 | 155,881 | 99,639 | ||||||||||
Weighted average common shares outstanding for diluted EPS (1) | 170,466 | 104,255 | 156,190 | 100,128 | ||||||||||
Income per common share – basic | $ | 0.35 | 0.05 | $ | 0.48 | 0.88 | ||||||||
Income per common share – diluted | $ | 0.35 | 0.05 | $ | 0.48 | 0.88 | ||||||||
(1) Includes the dilutive impact of unvested restricted stock and shares issuable under the forward equity offering using the treasury stock method. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||
(in thousands, except per share data) | 2017 | 2016 | 2017 | 2016 | ||||||||||
Numerator: | ||||||||||||||
Income from operations attributable to common unit holders - basic | $ | 59,798 | 5,321 | $ | 75,027 | 88,157 | ||||||||
Income from operations attributable to common unit holders - diluted | $ | 59,798 | 5,321 | $ | 75,027 | 88,157 | ||||||||
Denominator: | ||||||||||||||
Weighted average common units outstanding for basic EPU | 170,455 | 103,829 | 156,158 | 99,793 | ||||||||||
Weighted average common units outstanding for diluted EPU (1) | 170,816 | 104,409 | 156,467 | 100,282 | ||||||||||
Income per common unit – basic | $ | 0.35 | 0.05 | $ | 0.48 | 0.88 | ||||||||
Income per common unit – diluted | $ | 0.35 | 0.05 | $ | 0.48 | 0.88 | ||||||||
(1) Includes the dilutive impact of unvested restricted stock and the forward equity offering using the treasury stock method. |
• | Same Property information is provided for retail operating properties that were owned and operated for the entirety of both calendar year periods being compared and excludes Non-Same Properties and Properties in Development. |
• | A Non-Same Property is a property acquired, sold, or a development completion during either calendar year period being compared. Non-retail properties and corporate activities, including activities of our captive insurance company, are part of Non-Same Property. |
• | Property In Development includes land or properties in various stages of development and redevelopment including active pre-development activities. |
• | Development Completion is a project in development that is deemed complete upon the earliest of: (i) 90% of total estimated net development costs have been incurred and percent leased equals or exceeds 95%, or (ii) the project |
• | Pro-Rata information includes 100% of our consolidated properties plus our economic share (based on our ownership interest) in our unconsolidated real estate investment partnerships. |
• | The amounts shown on the individual line items were derived by applying our overall economic ownership interest percentage determined when applying the equity method of accounting or allocating noncontrolling interests, and do not necessarily represent our legal claim to the assets and liabilities, or the revenues and expenses; and |
• | Other companies in our industry may calculate their pro-rata interests differently, limiting the comparability of pro-rata information. |
• | Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, real estate gains and losses, development and acquisition pursuit costs, straight line rental income, and above and below market rent amortization. |
• | Fixed Charge Coverage Ratio is defined as Adjusted EBITDA divided by the sum of the gross interest and scheduled mortgage principal paid to our lenders plus dividends paid to our preferred stockholders. |
• | Net Operating Income ("NOI") is the sum of minimum rent, percentage rent and recoveries from tenants and other income, less operating and maintenance, real estate taxes, and provision for doubtful accounts. NOI excludes straight-line rental income and expense, above and below market rent amortization and other fees. The Company also provides disclosure of NOI excluding termination fees, which excludes both termination fee income and expenses. |
• | NAREIT Funds from Operations ("NAREIT FFO") is a commonly used measure of REIT performance, which the National Association of Real Estate Investment Trusts ("NAREIT") defines as net income, computed in accordance with GAAP, excluding gains and losses from sales of depreciable property, net of tax, excluding operating real estate impairments, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. We compute NAREIT FFO for all periods presented in accordance with NAREIT's definition. Many companies use different depreciable lives and methods, and real estate values historically fluctuate with market conditions. Since NAREIT FFO excludes depreciation and amortization and gains and losses from depreciable property dispositions, and impairments, it provides a performance measure that, when compared year over year, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, acquisition and development activities, and financing costs. This provides a perspective of our financial performance not immediately apparent from net income determined in accordance with GAAP. Thus, NAREIT FFO is a supplemental non-GAAP financial measure of our operating performance, which does not represent cash generated from operating activities in accordance with GAAP; and, therefore, should not be considered a substitute measure of cash flows from operations. The Company provides a reconciliation of Net Income (Loss) Attributable to Common Stockholders to NAREIT FFO. |
• | Core FFO is an additional performance measure used by Regency as the computation of NAREIT FFO includes certain non-comparable items that affect the Company's period-over-period performance. Core FFO excludes from NAREIT FFO: (a) transaction related income or expenses; (b) impairments on land; (c) gains or losses from the early extinguishment of debt; and (d) other non-comparable amounts as they occur. The Company provides a reconciliation of NAREIT FFO to Core FFO. |
• | Own and manage an unequaled portfolio of high-quality neighborhood and community shopping centers anchored by market leading grocers and located in affluent suburban and near urban trade areas in the country’s most desirable metro areas. This combination produces highly desirable and attractive centers with best-in-class retailers. These centers command higher rental and occupancy rates resulting in excellent prospects to grow net operating income ("NOI"); |
• | Maintain an industry leading and disciplined development and redevelopment platform to deliver exceptional retail centers at higher margins as compared to acquisitions; |
• | Support our business activities with a strong balance sheet; and |
• | Engage a talented, dedicated team of employees, who are guided by Regency’s special culture and aligned with shareholder interests. |
• | Sustain superior same property NOI growth compared to our shopping center peers; |
• | Develop and redevelop high quality shopping centers at attractive returns on investment; |
• | Maintain a conservative balance sheet providing financial flexibility to cost effectively fund investment opportunities and debt maturities on a favorable basis, and to weather economic downturns; |
• | Attract and motivate an exceptional team of employees who operate efficiently and are recognized as industry leaders; and |
• | Generate reliable growth in earnings per share, funds from operations per share, and most importantly total shareholder returns that consistently rank among the leading shopping center REITS. |
• | We achieved pro-rata same property NOI growth, excluding termination fees, of 4.0%. |
• | We executed 1,308 leasing transactions representing 4.6 million pro-rata SF of new and renewal leasing, with trailing twelve month rent spreads of 9.4% on comparable retail operating property spaces. |
• | At September 30, 2017, our total property portfolio was 95.3% leased, while our same property portfolio was 96.1% leased. |
• | We started three new developments representing a total investment of $159.0 million upon completion, with projected weighted average returns on investment of 7.1%. |
• | Including these new projects, a total of 30 properties were in the process of development or redevelopment, representing a pro-rata investment upon completion of $598.0 million. |
• | In January 2017, we issued $300.0 million of 4.4% senior unsecured notes due February 1, 2047, the proceeds of which were used to redeem all of the $250.0 million 6.625% Series 6 preferred stock and reduce the balance of the Line. |
• | On March 1, 2017 in conjunction with the merger with Equity One, we increased the commitment amount of our line of credit to $1.0 billion. |
• | In June 2017, we issued an additional $125.0 million of 4.4% senior unsecured notes due February 1, 2047, the proceeds of which were used to redeem the $75.0 million of 6.0% Series 7 preferred stock on August 23, 2017, and to repay the line balance. |
• | Also in June 2017, the Company issued an additional $175.0 million of 3.6% senior unsecured public notes due in 2027, with proceeds used to retire $112.0 million of mortgage loans with interest rates ranging from 7.0% to 7.8% on various properties, with the balance used to pay down our line. |
• | At September 30, 2017, our annualized net debt-to-adjusted EBITDA ratio on a pro-rata basis was 5.4x. |
(in thousands, except stock price) | Purchase Price | ||
Shares of common stock issued for merger | 65,379 | ||
Closing stock price on March 1, 2017 | $ | 68.40 | |
Value of common stock issued for merger | $ | 4,471,808 | |
Debt repaid | 716,278 | ||
Other cash payments | 5,019 | ||
Total purchase price | $ | 5,193,105 |
(GLA in thousands) | September 30, 2017 | December 31, 2016 | ||
Number of Properties | 313 | 198 | ||
Properties in Development | 8 | 6 | ||
GLA | 39,090 | 23,931 | ||
% Leased – Operating and Development | 95.1% | 94.8% | ||
% Leased – Operating | 95.7% | 96.0% | ||
Weighted average annual effective rent per square foot ("PSF"), net of tenant concessions. | $20.70 | $19.70 |
(GLA in thousands) | September 30, 2017 | December 31, 2016 | ||
Number of Properties | 114 | 109 | ||
GLA | 14,977 | 13,899 | ||
% Leased –Operating | 96.2% | 96.3% | ||
Weighted average annual effective rent PSF, net of tenant concessions | $20.33 | $19.25 |
September 30, 2017 | December 31, 2016 | |||
% Leased – Operating | 95.7% | 96.0% | ||
Anchor space | 97.7% | 97.8% | ||
Shop space | 92.3% | 93.1% |
Nine months ended September 30, 2017 | ||||||||||||||||
Leasing Transactions (1,3) | SF (in thousands) | Base Rent PSF (2) | Tenant Improvements PSF (2) | Leasing Commissions PSF (2) | ||||||||||||
Anchor Leases | ||||||||||||||||
New | 27 | 628 | $ | 18.80 | $ | 8.48 | $ | 5.06 | ||||||||
Renewal | 64 | 1,946 | $ | 15.01 | $ | — | $ | 0.45 | ||||||||
Total Anchor Leases (1) | 91 | 2,574 | $ | 15.94 | $ | 2.07 | $ | 1.57 | ||||||||
Shop Space | ||||||||||||||||
New | 383 | 660 | $ | 31.77 | $ | 12.20 | $ | 12.21 | ||||||||
Renewal | 834 | 1,392 | $ | 31.42 | $ | 1.07 | $ | 2.64 | ||||||||
Total Shop Space Leases (1) | 1,217 | 2,052 | $ | 31.53 | $ | 4.65 | $ | 5.71 | ||||||||
Total Leases | 1,308 | 4,626 | $ | 22.86 | $ | 3.21 | $ | 3.41 | ||||||||
(1) Number of leasing transactions reported at 100%; all other statistics reported at pro-rata share. | ||||||||||||||||
(2) Totals for base rent, tenant improvements, and leasing commissions reflect the weighted average PSF. | ||||||||||||||||
(3) For the period ending September 30, 2107, amounts include leasing activity of properties acquired from Equity One beginning March 1, 2017. |
Nine months ended September 30, 2016 | ||||||||||||||||
Leasing Transactions (1) | SF (in thousands) | Base Rent PSF (2) | Tenant Improvements PSF (2) | Leasing Commissions PSF (2) | ||||||||||||
Anchor Leases | ||||||||||||||||
New | 11 | 312 | $ | 13.92 | $ | 4.98 | $ | 3.75 | ||||||||
Renewal | 64 | 1,302 | $ | 13.29 | $ | 0.35 | $ | 0.83 | ||||||||
Total Anchor Leases (1) | 75 | 1,614 | $ | 13.41 | $ | 1.24 | $ | 1.39 | ||||||||
Shop Space | ||||||||||||||||
New | 313 | 561 | $ | 29.93 | $ | 12.00 | $ | 13.83 | ||||||||
Renewal | 696 | 1,066 | $ | 31.57 | $ | 1.48 | $ | 4.18 | ||||||||
Total Shop Space Leases (1) | 1,009 | 1,627 | $ | 31.00 | $ | 5.11 | $ | 7.51 | ||||||||
Total Leases | 1,084 | 3,241 | $ | 22.24 | $ | 3.18 | $ | 4.46 | ||||||||
(1) Number of leasing transactions reported at 100%; all other statistics reported at pro-rata share. | ||||||||||||||||
(2) Totals for base rent, tenant improvements, and leasing commissions reflect the weighted average PSF. |
September 30, 2017 | ||||||
Grocery Anchor | Number of Stores | Percentage of Company- owned GLA (1) | Percentage of Annualized Base Rent (1) | |||
Kroger | 59 | 6.6% | 3.2% | |||
Publix | 68 | 6.2% | 3.1% | |||
Albertsons/Safeway | 46 | 4.0% | 2.8% | |||
TJX Companies | 57 | 3.2% | 2.4% | |||
Whole Foods | 26 | 2.1% | 2.2% | |||
(1) Includes Regency's pro-rata share of Unconsolidated Properties and excludes those owned by anchors. |
Three months ended September 30, | ||||||||||
(in thousands) | 2017 | 2016 | Change | |||||||
Minimum rent | $ | 195,393 | 111,886 | 83,507 | ||||||
Percentage rent | 1,147 | 495 | 652 | |||||||
Recoveries from tenants | 54,483 | 31,443 | 23,040 | |||||||
Other income | 5,071 | 3,089 | 1,982 | |||||||
Management, transaction, and other fees | 6,047 | 5,855 | 192 | |||||||
Total revenues | $ | 262,141 | 152,768 | 109,373 |
• | $1.8 million increase from development properties; |
• | $192,000 increase from new acquisitions of operating properties; |
• | $4.0 million increase from same properties rental rate growth on new and renewal leases; and |
• | $78.7 million increase from properties acquired through the Equity One merger; |
• | reduced by $874,000 from the sale of operating properties. |
• | $532,000 increase from rent commencing at development properties; |
• | $1.3 million increase from same properties associated with higher real estate taxes and improvements in recovery rates; and |
• | $21.5 million increase from properties acquired through the Equity One merger; |
• | reduced by $267,000 from the sale of operating properties. |
• | $563,000 increase from same properties primarily due to settlements and other fees; |
• | $1.4 million increase from properties acquired through the Equity One merger. |
Three months ended September 30, | ||||||||||
(in thousands) | 2017 | 2016 | Change | |||||||
Depreciation and amortization | $ | 91,474 | 40,705 | 50,769 | ||||||
Operating and maintenance | 38,020 | 23,373 | 14,647 | |||||||
General and administrative | 15,199 | 16,046 | (847 | ) | ||||||
Real estate taxes | 29,315 | 17,058 | 12,257 | |||||||
Other operating expenses | 3,195 | 1,046 | 2,149 | |||||||
Total operating expenses | $ | 177,203 | 98,228 | 78,975 |
• | $653,000 increase as we began depreciating costs at development properties where tenant spaces were completed and became available for occupancy; |
• | $808,000 increase from same properties attributable primarily to redevelopments; and |
• | $49.6 million increase from properties acquired through the Equity One merger; |
• | reduced by $348,000 from the sale of operating properties. |
• | $268,000 increase from operations commencing at development properties; |
• | $1.2 million net increase from claims losses within the company's wholly owned captive insurance program, including the impact of hurricane losses; and |
• | $14.3 million increase from properties acquired through the Equity One merger and other new acquisitions of operating properties; |
• | reduced by $1.0 million from same properties primarily attributable to a reduction in non-recoverable costs; and |
• | reduced by $185,000 from the sale of operating properties. |
• | $1.6 million net decrease primarily from higher development overhead capitalization based on the timing and size of current development projects, offset by; |
• | $709,000 increase in compensation costs primarily related to additional staffing as a result of the Equity One merger. |
• | $305,000 increase from development properties where capitalization ceased as tenant spaces became available for occupancy and new acquisitions of operating properties; |
• | $554,000 increase from same properties from increased tax assessments; and |
• | $11.6 million increase from properties acquired through the Equity One merger; |
• | reduced by $249,000 from sold properties. |
• | $432,000 increase in corporate expenses due to an increase in pursuit costs and franchise taxes; |
• | $1.4 million increase from properties acquired through the Equity One merger; |
• | reduced by $266,000 primarily due to acquisition costs incurred in the second quarter of 2016. |
Three months ended September 30, | ||||||||||
(in thousands) | 2017 | 2016 | Change | |||||||
Interest expense, net | ||||||||||
Interest on notes payable | $ | 31,577 | 19,828 | 11,749 | ||||||
Interest on unsecured credit facilities | 3,974 | 1,556 | 2,418 | |||||||
Capitalized interest | (2,488 | ) | (857 | ) | (1,631 | ) | ||||
Hedge expense | 2,102 | 1,807 | 295 | |||||||
Interest income | (486 | ) | (389 | ) | (97 | ) | ||||
Interest expense, net | 34,679 | 21,945 | 12,734 | |||||||
Early extinguishment of debt | — | 13,943 | (13,943 | ) | ||||||
Net investment income | (971 | ) | (821 | ) | (150 | ) | ||||
Loss on derivative instruments | — | 40,586 | (40,586 | ) | ||||||
Total other expense (income) | $ | 33,708 | 75,653 | (41,945 | ) |
• | $11.7 million net increase in interest on notes payable from: |
◦ | $7.6 million of additional interest on notes payable assumed with the Equity One merger; and |
◦ | $9.4 million increase from issuances of $950 million of new unsecured debt; |
◦ | offset by $3.1 million decrease in mortgage interest expense primarily due to the payoff of nine mortgages utilizing proceeds from the June 2017 debt offering; and |
◦ | $2.1 million decrease due to the early redemption of our $300 million notes in the third quarter of 2016; |
• | $2.4 million increase in interest on unsecured credit facilities related to higher average balances including a new $300 million term loan which closed on March 1, 2017; |
• | offset by $1.6 million decrease from higher capitalization of interest based on the size and progress of development and redevelopment projects in process. |
Three months ended September 30, | |||||||||||
(in thousands) | Regency's Ownership | 2017 | 2016 | Change | |||||||
GRI - Regency, LLC (GRIR) | 40.00% | $ | 6,917 | 6,862 | 55 | ||||||
New York Common Retirement Fund (NYC) | 30.00% | 183 | — | 183 | |||||||
Columbia Regency Retail Partners, LLC (Columbia I) | 20.00% | 284 | 314 | (30 | ) | ||||||
Columbia Regency Partners II, LLC (Columbia II) | 20.00% | 332 | 366 | (34 | ) | ||||||
Cameron Village, LLC (Cameron) | 30.00% | 174 | 150 | 24 | |||||||
RegCal, LLC (RegCal) | 25.00% | 331 | 205 | 126 | |||||||
US Regency Retail I, LLC (USAA) | 20.01% | 3,599 | 227 | 3,372 | |||||||
Other investments in real estate partnerships | 20.00% - 50.00% | 400 | 14,523 | (14,123 | ) | ||||||
Total equity in income of investments in real estate partnerships | $ | 12,220 | 22,647 | (10,427 | ) |
Three months ended September 30, | ||||||||||
(in thousands) | 2017 | 2016 | Change | |||||||
Income from operations | $ | 63,451 | 1,534 | 61,917 | ||||||
Gain on sale of real estate, net of tax | 131 | 9,580 | (9,449 | ) | ||||||
Income attributable to noncontrolling interests | (769 | ) | (543 | ) | (226 | ) | ||||
Preferred stock dividends and issuance costs | (3,147 | ) | (5,266 | ) | 2,119 | |||||
Net income attributable to common stockholders | $ | 59,666 | 5,305 | 54,361 | ||||||
Net income attributable to exchangeable operating partnership units | 132 | 16 | 116 | |||||||
Net income attributable to common unit holders | $ | 59,798 | 5,321 | 54,477 |
Nine months ended September 30, | ||||||||||
(in thousands) | 2017 | 2016 | Change | |||||||
Minimum rent | $ | 532,625 | 329,506 | 203,119 | ||||||
Percentage rent | 5,509 | 2,651 | 2,858 | |||||||
Recoveries from tenants | 149,811 | 94,684 | 55,127 | |||||||
Other income | 12,278 | 9,210 | 3,068 | |||||||
Management, transaction, and other fees | 19,353 | 18,759 | 594 | |||||||
Total revenues | $ | 719,576 | 454,810 | 264,766 |
• | $5.4 million increase from development properties; |
• | $5.4 million increase from new acquisitions of operating properties; |
• | $12.0 million increase from same properties reflecting a $9.8 million increase from rental rate growth on new and renewal leases, and a $2.0 million increase in straight line rent; and |
• | $184.4 million increase from properties acquired through the Equity One merger; |
• | reduced by $4.0 million from the sale of operating properties. |
• | $1.4 million increase from rent commencing at development properties; |
• | $1.8 million increase from new acquisitions of operating properties; |
• | $5.0 million increase from same properties associated with higher recoverable costs and an improvement in recovery rates; and |
• | $48.3 million increase from properties acquired through the Equity One merger; |
• | reduced by $1.3 million from the sale of operating properties. |
• | $471,000 increase from development properties; |
• | $876,000 increase from new acquisitions of operating properties; and |
• | $2.5 million from properties acquired through the Equity One merger; |
• | reduced by $691,000 decrease from same properties primarily due to other fee income. |
Nine months ended September 30, | ||||||||||
(in thousands) | 2017 | 2016 | Change | |||||||
Depreciation and amortization | $ | 243,757 | 119,721 | 124,036 | ||||||
Operating and maintenance | 103,888 | 69,767 | 34,121 | |||||||
General and administrative | 49,618 | 48,695 | 923 | |||||||
Real estate taxes | 79,636 | 49,697 | 29,939 | |||||||
Other operating expenses | 81,621 | 5,795 | 75,826 | |||||||
Total operating expenses | $ | 558,520 | 293,675 | 264,845 |
• | $2.1 million increase as we began depreciating costs at development properties where tenant spaces were completed and became available for occupancy; |
• | $3.4 million increase from new acquisitions of operating properties and corporate assets; |
• | $2.7 million increase from same properties primarily attributable to redevelopments; and |
• | $117.2 million increase from properties acquired through the Equity One merger; |
• | reduced by $1.4 million from the sale of operating properties. |
• | $1.0 million increase from operations commencing at development properties; |
• | $1.5 million increase from acquisitions of operating properties; |
• | $1.2 million net increase from claims losses within the company's wholly owned captive insurance program, including the impact of hurricane losses; |
• | $659,000 increase in recoverable costs partially offset by $264,000 in nonrecoverable costs at same properties; and |
• | $30.9 million increase from properties acquired through the Equity One merger; |
• | reduced by $882,000 from the sale of operating properties. |
• | $1.6 million increase in the value of participant obligations within the deferred compensation plan, and |
• | $3.9 million increase in compensation costs primarily related to additional staffing as a result of the Equity One merger, including a $2.4 million increase in non-compensation costs, offset by; |
• | $4.6 million net decrease primarily from greater development overhead capitalization based on the timing and size of current development projects. |
• | $542,000 increase from development properties where capitalization ceased as tenant spaces became available for occupancy; |
• | $1.2 million increase from acquisitions of operating properties; |
• | $1.9 million increase at same properties from increased tax assessments; and |
• | $27.0 million increase from properties acquired through the Equity One merger; |
• | reduced by $659,000 from sold properties. |
• | $854,000 increase in corporate expenses due to an increase in franchise taxes and pursuit costs; |
• | $77.5 million increase primarily from transaction costs related to the Equity One merger in March 2017; |
• | reduced by $2.1 million primarily due to higher acquisition costs incurred in 2016; and |
• | reduced by $495,000 at same properties primarily related to higher environmental expenses incurred in 2016. |
Nine months ended September 30, | ||||||||||
(in thousands) | 2017 | 2016 | Change | |||||||
Interest expense, net | ||||||||||
Interest on notes payable | $ | 87,492 | 63,899 | 23,593 | ||||||
Interest on unsecured credit facilities | 10,718 | 3,829 | 6,889 | |||||||
Capitalized interest | (5,778 | ) | (2,622 | ) | (3,156 | ) | ||||
Hedge expense | 6,305 | 6,306 | (1 | ) | ||||||
Interest income | (1,452 | ) | (923 | ) | (529 | ) | ||||
Interest expense, net | 97,285 | 70,489 | 26,796 | |||||||
Provision for impairment | — | 1,666 | (1,666 | ) | ||||||
Early extinguishment of debt | 12,404 | 13,943 | (1,539 | ) | ||||||
Net investment income | (2,955 | ) | (1,268 | ) | (1,687 | ) | ||||
Loss on derivative instruments | — | 40,586 | (40,586 | ) | ||||||
Total other expense (income) | $ | 106,734 | 125,416 | (18,682 | ) |
• | $23.6 million net increase in interest on notes payable due to: |
◦ | $18.3 million of additional interest on notes payable assumed with the Equity One merger; and |
◦ | $20.5 million increase from issuances of $950 million of new unsecured debt; |
◦ | offset by $4.3 million decrease in mortgage interest expense primarily due to the payoff of nine mortgages utilizing proceeds from the June 2017 debt offering; and |
◦ | $10.9 million decrease due to the early redemption of our $300 million notes in the third quarter of 2016; |
• | $6.9 million increase in interest on unsecured credit facilities related to higher average balances including a new $300 million term loan which closed on March 1, 2017; |
• | offset by $3.2 million decrease from higher capitalization of interest based on the size and progress of development and redevelopment projects in process. |
Nine months ended September 30, | |||||||||||
(in thousands) | Ownership | 2017 | 2016 | Change | |||||||
GRI - Regency, LLC (GRIR) | 40.00% | $ | 20,791 | 23,975 | (3,184 | ) | |||||
New York Common Retirement Fund (NYC) | 30.00% | 417 | — | 417 | |||||||
Columbia Regency Retail Partners, LLC (Columbia I) | 20.00% | 3,344 | 2,557 | 787 | |||||||
Columbia Regency Partners II, LLC (Columbia II) | 20.00% | 1,072 | 2,236 | (1,164 | ) | ||||||
Cameron Village, LLC (Cameron) | 30.00% | 636 | 487 | 149 | |||||||
RegCal, LLC (RegCal) | 25.00% | 1,010 | 684 | 326 | |||||||
US Regency Retail I, LLC (USAA) | 20.01% | 4,251 | 739 | 3,512 | |||||||
Other investments in real estate partnerships | 20.00% - 50.00% | 2,283 | 15,940 | (13,657 | ) | ||||||
Total equity in income of investments in real estate partnerships | $ | 33,804 | 46,618 | (12,814 | ) |
• | $3.2 million decrease within GRIR driven by gains on sale of real estate that were recognized in 2016, offset by lower depreciation expense in 2017 related to assets that became fully depreciated in 2016; |
• | $1.2 million decrease within Columbia II due to gains on sale of real estate that were recognized in 2016; |
• | $3.5 million increase within USAA due to gains on sale of real estate recognized in 2017; and |
• | $13.7 million decrease in Other investments in real estate partnerships due to gains on sale of real estate recognized in 2016. |
Nine months ended September 30, | ||||||||||
(in thousands) | 2017 | 2016 | Change | |||||||
Income from operations | $ | 88,126 | 82,337 | 5,789 | ||||||
Gain on sale of real estate, net of tax | 4,913 | 22,997 | (18,084 | ) | ||||||
Income attributable to noncontrolling interests | (2,101 | ) | (1,545 | ) | (556 | ) | ||||
Preferred stock dividends and issuance costs | (16,128 | ) | (15,797 | ) | (331 | ) | ||||
Net income attributable to common stockholders | $ | 74,810 | 87,992 | (13,182 | ) | |||||
Net income attributable to exchangeable operating partnership units | 217 | 165 | 52 | |||||||
Net income attributable to common unit holders | $ | 75,027 | 88,157 | (13,130 | ) |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||
(in thousands) | 2017 | 2016 | Change | 2017 | 2016 | Change | ||||||||||||||
Base rent (1) | $ | 197,529 | 190,618 | 6,911 | $ | 588,465 | 568,979 | 19,486 | ||||||||||||
Percentage rent (1) | 1,270 | 1,764 | (494 | ) | 7,294 | 8,093 | (799 | ) | ||||||||||||
Recovery revenue (1) | 59,033 | 56,694 | 2,339 | 178,979 | 172,084 | 6,895 | ||||||||||||||
Other income (1) | 4,357 | 3,530 | 827 | 10,438 | 11,158 | (720 | ) | |||||||||||||
Operating expenses (1) | 71,364 | 70,935 | 429 | 216,354 | 212,602 | 3,752 | ||||||||||||||
Pro-rata same property NOI, as adjusted | $ | 190,825 | 181,671 | 9,154 | $ | 568,822 | 547,712 | 21,110 | ||||||||||||
Less: Termination fees (1) | 214 | 137 | 77 | 472 | 1,038 | (566 | ) | |||||||||||||
Pro-rata same property NOI, as adjusted, excluding termination fees | $ | 190,611 | 181,534 | 9,077 | $ | 568,350 | 546,674 | 21,676 | ||||||||||||
Pro-rata same property NOI growth, as adjusted | 5.0 | % | 4.0 | % | ||||||||||||||||
(1) Adjusted for Equity One operating results prior to the merger for these periods. For additional information and details about the Equity One operating results included herein, refer to the Same Property NOI Reconciliation at the end of the Supplemental Earnings section. |
Three months ended September 30, | |||||||||
2017 | 2016 | ||||||||
(GLA in thousands) | Property Count | GLA | Property Count | GLA | |||||
Beginning same property count | 400 | 41,076 | 298 | 26,964 | |||||
Disposed properties | (1 | ) | (24 | ) | (6 | ) | (295 | ) | |
SF adjustments (1) | — | 21 | — | (33 | ) | ||||
Ending same property count | 399 | 41,073 | 292 | 26,636 | |||||
Nine months ended September 30, | |||||||||
2017 | 2016 | ||||||||
(GLA in thousands) | Property Count | GLA | Property Count | GLA | |||||
Beginning same property count | 289 | 26,392 | 300 | 26,508 | |||||
Acquired properties owned for entirety of comparable periods | 1 | 180 | 6 | 443 | |||||
Developments that reached completion by beginning of earliest comparable period presented | 2 | 331 | 2 | 342 | |||||
Disposed properties | (3 | ) | (82 | ) | (16 | ) | (660 | ) | |
SF adjustments (1) | — | 71 | — | 3 | |||||
Properties acquired through Equity One merger | 110 | 14,181 | — | — | |||||
Ending same property count | 399 | 41,073 | 292 | 26,636 | |||||
(1) SF adjustments arise from remeasurements or redevelopments. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||
(in thousands, except share information) | 2017 | 2016 | 2017 | 2016 | ||||||||||
Reconciliation of Net income to NAREIT FFO | ||||||||||||||
Net income attributable to common stockholders | $ | 59,666 | 5,305 | $ | 74,810 | 87,992 | ||||||||
Adjustments to reconcile to NAREIT FFO:(1) | ||||||||||||||
Depreciation and amortization (excluding FF&E) | 99,284 | 47,826 | 266,873 | 143,373 | ||||||||||
Provision for impairment to operating properties | — | — | — | 659 | ||||||||||
Gain on sale of operating properties, net of tax | (3,349 | ) | (23,067 | ) | (8,415 | ) | (38,016 | ) | ||||||
Exchangeable operating partnership units | 132 | 16 | 217 | 165 | ||||||||||
NAREIT FFO attributable to common stock and unit holders | $ | 155,733 | 30,080 | $ | 333,485 | 194,173 | ||||||||
Reconciliation of NAREIT FFO to Core FFO | ||||||||||||||
NAREIT FFO attributable to common stock and unit holders | $ | 155,733 | 30,080 | $ | 333,485 | 194,173 | ||||||||
Adjustments to reconcile to Core FFO:(1) | ||||||||||||||
Development pursuit costs | 202 | (47 | ) | 521 | 1,766 | |||||||||
Acquisition pursuit and closing costs | — | 287 | 138 | 907 | ||||||||||
Merger related costs | 1,175 | — | 75,584 | — | ||||||||||
Gain on sale of land | (119 | ) | (628 | ) | (2,969 | ) | (7,886 | ) | ||||||
Provision for impairment to land | — | 35 | — | 547 | ||||||||||
Loss on derivative instruments and hedge ineffectiveness | 2 | 40,586 | (12 | ) | 40,589 | |||||||||
Early extinguishment of debt | — | 13,943 | 12,404 | 13,957 | ||||||||||
Preferred redemption charge | 2,859 | — | 12,226 | — | ||||||||||
Merger related debt offering interest | — | — | 975 | — | ||||||||||
Hurricane losses | 1,852 | — | 1,852 | — | ||||||||||
Core FFO attributable to common stock and unit holders | $ | 161,704 | 84,256 | $ | 434,204 | 244,053 | ||||||||
(1) Includes Regency's pro-rate share of unconsolidated investment partnerships, net of pro-rata share attributable to noncontrolling interest. |
Three months ended September 30, | ||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||
(in thousands) | Same Property | Other (1) | Total | Same Property | Other (1) | Total | ||||||||||||||
Net income attributable to common stockholders | $ | 138,926 | (79,260 | ) | 59,666 | $ | 77,483 | (72,178 | ) | 5,305 | ||||||||||
Less: | ||||||||||||||||||||
Management, transaction, and other fees | — | 6,047 | 6,047 | — | 5,855 | 5,855 | ||||||||||||||
Gain on sale of real estate, net of tax | — | 131 | 131 | — | 9,580 | 9,580 | ||||||||||||||
Other (2) | 3,977 | 9,296 | 13,273 | 2,429 | 1,253 | 3,682 | ||||||||||||||
Plus: | ||||||||||||||||||||
Depreciation and amortization | 37,246 | 54,228 | 91,474 | 36,189 | 4,517 | 40,706 | ||||||||||||||
General and administrative | — | 15,199 | 15,199 | — | 16,046 | 16,046 | ||||||||||||||
Other operating expense, excluding provision for doubtful accounts | 149 | 1,981 | 2,130 | 79 | 420 | 499 | ||||||||||||||
Other expense (income) | 7,148 | 26,561 | 33,709 | 6,890 | 68,763 | 75,653 | ||||||||||||||
Equity in income (loss) of investments in real estate excluded from NOI (3) | 11,333 | 475 | 11,808 | 904 | (1,020 | ) | (116 | ) | ||||||||||||
Net income attributable to noncontrolling interests | — | 769 | 769 | — | 543 | 543 | ||||||||||||||
Preferred stock dividends and issuance costs | — | 3,147 | 3,147 | — | 5,266 | 5,266 | ||||||||||||||
NOI from Equity One prior to merger (4) | — | — | — | 62,555 | — | 62,555 | ||||||||||||||
Pro-rata NOI, as adjusted | $ | 190,825 | 7,626 | 198,451 | $ | 181,671 | 5,669 | 187,340 | ||||||||||||
(1) Includes revenues and expenses attributable to non-same property, sold property, development property, and corporate activities. | ||||||||||||||||||||
(2) Includes straight-line rental income and expense, net of reserves, above and below market rent amortization, other fees, and noncontrolling interest. | ||||||||||||||||||||
(3) Includes non-NOI expenses incurred at our unconsolidated real estate partnerships, including those separated out above for our consolidated properties. | ||||||||||||||||||||
(4) NOI from Equity One prior to the merger was derived from the accounting records of Equity One without adjustment. Equity One's financial information for the period ended February 28, 2017 and the period ended September 30, 2016 was subject to a limited internal review by Regency. The table below provides Same Property NOI detail for the non-ownership periods of Equity One. |
Nine months ended September 30, | ||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||
(in thousands) | Same Property | Other (1) | Total | Same Property | Other (1) | Total | ||||||||||||||
Net income attributable to common stockholders | $ | 350,221 | (275,411 | ) | 74,810 | $ | 212,329 | (124,337 | ) | 87,992 | ||||||||||
Less: | ||||||||||||||||||||
Management, transaction, and other fees | — | 19,353 | 19,353 | — | 18,759 | 18,759 | ||||||||||||||
Gain on sale of real estate, net of tax | — | 4,913 | 4,913 | — | 22,997 | 22,997 | ||||||||||||||
Other(2) | 11,607 | 24,927 | 36,534 | 8,075 | 3,096 | 11,171 | ||||||||||||||
Plus: | ||||||||||||||||||||
Depreciation and amortization | 112,690 | 131,067 | 243,757 | 109,708 | 10,013 | 119,721 | ||||||||||||||
General and administrative | — | 49,618 | 49,618 | — | 48,695 | 48,695 | ||||||||||||||
Other operating expense, excluding provision for doubtful accounts | 514 | 78,260 | 78,774 | 975 | 3,371 | 4,346 | ||||||||||||||
Other expense (income) | 37,209 | 69,525 | 106,734 | 21,212 | 104,204 | 125,416 | ||||||||||||||
Equity in income (loss) of investments in real estate excluded from NOI (3) | 36,790 | 1,729 | 38,519 | 23,500 | (1,819 | ) | 21,681 | |||||||||||||
Net income attributable to noncontrolling interests | — | 2,101 | 2,101 | — | 1,546 | 1,546 | ||||||||||||||
Preferred stock dividends and issuance costs | — | 16,128 | 16,128 | — | 15,797 | 15,797 | ||||||||||||||
NOI from Equity One prior to merger | 43,005 | — | 43,005 | 188,063 | — | 188,063 | ||||||||||||||
Pro-rata NOI, as adjusted | $ | 568,822 | 23,824 | 592,646 | $ | 547,712 | 12,618 | 560,330 | ||||||||||||
(1) Includes revenues and expenses attributable to non-same property, sold property, development property, and corporate activities. | ||||||||||||||||||||
(2) Includes straight-line rental income and expense, net of reserves, above and below market rent amortization, other fees, and noncontrolling interest. | ||||||||||||||||||||
(3) Includes non-NOI expenses incurred at our unconsolidated real estate partnerships, including those separated out above for our consolidated properties. | ||||||||||||||||||||
(4) NOI from Equity One prior to the merger was derived from the accounting records of Equity One without adjustment. Equity One's financial information for the period ended February 28, 2017 and the period ended September 30, 2016 was subject to a limited internal review by Regency. The following is Same Property NOI detail for the non-ownership periods of Equity One: |
(in thousands) | Two Months Ended February 2017 | Three Months Ended September 2016 | Nine Months Ended September 2016 | ||||||||
Base rent | $ | 44,593 | $ | 65,305 | 194,952 | ||||||
Percentage rent | 1,151 | 1,128 | 4,331 | ||||||||
Recovery revenue | 14,175 | 20,647 | 61,627 | ||||||||
Other income | 615 | 918 | 2,736 | ||||||||
Operating expenses | 17,529 | 25,443 | 75,583 | ||||||||
Pro-rata same property NOI, as adjusted (1) | $ | 43,005 | $ | 62,555 | 188,063 | ||||||
Less: Termination fees | 30 | 21 | 93 | ||||||||
Pro-rata same property NOI, as adjusted, excluding termination fees | $ | 42,975 | $ | 62,534 | 187,970 |
(in thousands) | September 30, 2017 | |||
ATM equity program | ||||
Original offering amount | $ | 500,000 | ||
Available capacity | $ | 500,000 | ||
Forward Equity Offering | ||||
Original offering amount | $ | 233,300 | ||
Available equity offering to settle (1) | $ | 94,063 | ||
Line of Credit | ||||
Total commitment amount | $ | 1,000,000 | ||
Available capacity (2) | $ | 979,100 | ||
Maturity (3) | May 13, 2019 | |||
(1) We have 1.25 million shares to settle prior to December 27, 2017 at an offering price of $75.25 per share before any underwriting discount and offering expenses. | ||||
(2) Net of letters of credit. | ||||
(3) The Company has the option to extend the maturity for two additional six-month periods. |
Nine months ended September 30, | ||||||||||
(in thousands) | 2017 | 2016 | Change | |||||||
Net cash provided by operating activities | $ | 343,857 | 225,333 | 118,524 | ||||||
Net cash used in investing activities | (858,649 | ) | (354,584 | ) | (504,065 | ) | ||||
Net cash provided by financing activities | 525,079 | 133,297 | 391,782 | |||||||
Net increase in cash and cash equivalents | $ | 10,287 | 4,046 | 6,241 | ||||||
Total cash and cash equivalents | $ | 23,543 | 40,902 | (17,359 | ) |
• | $132.1 million increase in cash from operating income; and, |
• | $1.1 million increase in operating cash flow distributions from our unconsolidated real estate partnerships; offset by |
• | $14.7 million net decrease in cash due to timing of cash receipts and payments related to operating activities. |
Nine months ended September 30, | ||||||||||
(in thousands) | 2017 | 2016 | Change | |||||||
Cash flows from investing activities: | ||||||||||
Acquisition of operating real estate | $ | (2,109 | ) | (333,220 | ) | 331,111 | ||||
Advance deposits paid on acquisition of operating real estate | (350 | ) | 1,250 | (1,600 | ) | |||||
Acquisition of Equity One, net of cash acquired of $72,534 | (648,763 | ) | — | (648,763 | ) | |||||
Real estate development and capital improvements | (241,834 | ) | (146,773 | ) | (95,061 | ) | ||||
Proceeds from sale of real estate investments | 15,397 | 83,675 | (68,278 | ) | ||||||
Issuance of notes receivable | (3,460 | ) | — | (3,460 | ) | |||||
Investments in real estate partnerships | (12,296 | ) | (13,127 | ) | 831 | |||||
Distributions received from investments in real estate partnerships | 36,603 | 52,536 | (15,933 | ) | ||||||
Dividends on investment securities | 200 | 189 | 11 | |||||||
Acquisition of securities | (14,011 | ) | (53,290 | ) | 39,279 | |||||
Proceeds from sale of securities | 11,974 | 54,176 | (42,202 | ) | ||||||
Net cash used in investing activities | $ | (858,649 | ) | (354,584 | ) | (504,065 | ) |
• | Other than those included with the merger, we acquired two real estate parcels at existing operating properties for $2.1 million during 2017 compared to $333.2 million for three operating properties in the same period in 2016. |
• | We issued 65.5 million common shares to the shareholders of Equity One valued at $4.5 billion in a stock for stock exchange and merged Equity One into the Company on March 1, 2017. As part of the merger, we paid $648.8 million, net of cash acquired, to repay Equity One credit facilities not assumed with the merger. |
• | We invested $95.1 million more in 2017 than the same period in 2016 on real estate development and capital improvements, as further detailed in a table below. |
• | We received proceeds of $15.4 million from the sale of seven land parcels and one operating property in 2017, compared to $83.7 million for seven shopping centers and twelve land parcels in the same period in 2016. |
• | We invested $12.3 million in our real estate partnerships during 2017 to fund our share of maturing mortgage debt and redevelopment activity, compared to $13.1 million during the same period in 2016. |
• | Distributions from our unconsolidated real estate partnerships include return of capital from sales or financing proceeds. The $36.6 million received in 2017 is driven by the sale of two operating properties and one land parcel plus our share of proceeds from refinancing certain operating properties within the partnerships. During the same period in 2016, we received $52.5 million from the sale of nine shopping centers within the partnerships. |
• | Acquisition of securities and proceeds from sale of securities pertain to investments held in our captive insurance company and our deferred compensation plan. |
Nine months ended September 30, | ||||||||||
(in thousands) | 2017 | 2016 | Change | |||||||
Capital expenditures: | ||||||||||
Land acquisitions for development / redevelopment | $ | 22,748 | 8,654 | 14,094 | ||||||
Building and tenant improvements | 31,130 | 19,393 | 11,737 | |||||||
Redevelopment costs | 103,395 | 35,695 | 67,700 | |||||||
Development costs | 65,688 | 71,067 | (5,379 | ) | ||||||
Capitalized interest | 5,778 | 2,622 | 3,156 | |||||||
Capitalized direct compensation | 13,095 | 9,342 | 3,753 | |||||||
Real estate development and capital improvements | $ | 241,834 | 146,773 | 95,061 |
• | During 2017 we acquired three land parcels for new development projects as compared to one land parcel acquired during 2016. |
• | Building and tenant improvements increased $11.7 million in 2017, materially related to the overall increase in the size of our portfolio from the merger with Equity One in March 2017. |
• | Redevelopment expenditures are higher in 2017 due to the timing, magnitude, and number of projects currently in process at existing centers and in process projects acquired from Equity One. We intend to continuously improve our portfolio of shopping centers through redevelopment which can include adjacent land acquisition, existing building expansion, new out-parcel building construction, and tenant improvement costs. The size and magnitude of each redevelopment project varies with each redevelopment plan. |
• | Development expenditures are higher in 2017 due to the progress towards completion of our development projects currently in process. At September 30, 2017 and December 31, 2016, we had eight and six development projects, respectively, that were either under construction or in lease up. See the tables below for more details about our development projects. |
• | Interest is capitalized on our development and redevelopment projects and is based on cumulative actual development costs expended. We cease interest capitalization when the property is no longer being |
• | We have a staff of employees who directly support our development and redevelopment programs. Internal compensation costs directly attributable to these activities are capitalized as part of each project. Changes in the level of future development and redevelopment activity could adversely impact results of operations by reducing the amount of internal costs for development and redevelopment projects that may be capitalized. A 10% reduction in development and redevelopment activity without a corresponding reduction in development related compensation costs could result in an additional charge to net income of $1.5 million per year. |
September 30, 2017 | ||||||||||||||||||
Property Name | Market | Start Date | Estimated /Actual Anchor Opening | Estimated Net Development Costs (1) | % of Costs Incurred (1) | GLA | Cost PSF of GLA (1) | |||||||||||
Northgate Marketplace Ph II | Medford, OR | Q4-15 | Oct-16 | 40,700 | 96% | 177 | 230 | |||||||||||
The Market at Springwoods Village (2) | Houston , TX | Q1-16 | May-17 | 27,492 | 75% | 89 | 309 | |||||||||||
The Village at Tustin Legacy | Los Angeles, CA | Q3-16 | Oct-17 | 37,472 | 81% | 112 | 335 | |||||||||||
Chimney Rock Crossing | New York, NY | Q4-16 | May-18 | 71,254 | 59% | 218 | 327 | |||||||||||
The Village at Riverstone | Houston, TX | Q4-16 | Oct-18 | 30,638 | 45% | 165 | 186 | |||||||||||
The Field at Commonwealth | Metro DC | Q1-17 | Aug-18 | 45,210 | 48% | 187 | 242 | |||||||||||
Pinecrest Place (3) | Miami, FL | Q1-17 | Mar-18 | 16,427 | 16% | 70 | 235 | |||||||||||
Mellody Farm | Chicago, IL | Q2-17 | Oct-18 | 97,399 | 31% | 252 | 387 | |||||||||||
Total | $ | 366,592 | 54% | 1,270 | $ | 289 | ||||||||||||
(1) Includes leasing costs and is net of tenant reimbursements. | ||||||||||||||||||
(2) Estimated Net Development Costs are reported at full project cost. Our ownership interest in this consolidated property is 53%. Anchor rent commencement date is May 2017. Expected Anchor opening date is October 2017. | ||||||||||||||||||
(3) Estimated Net Development Costs for Pinecrest Place excludes the cost of land, which the Company has leased long term. |
Nine months ended September 30, 2017 | ||||||||||||||
Property Name | Location | Completion Date | Net Development Costs (1) | GLA | Cost PSF of GLA (1) | |||||||||
Willow Oaks Crossing | Charlotte, NC | Q1-17 | $ | 13,991 | 69 | $ | 203 | |||||||
(1) Includes leasing costs and is net of tenant reimbursements. |
Nine months ended September 30, | ||||||||||
(in thousands) | 2017 | 2016 | Change | |||||||
Cash flows from financing activities: | ||||||||||
Equity issuances | $ | — | 549,545 | (549,545 | ) | |||||
Repurchase of common shares in conjunction with equity award plans | (19,251 | ) | (8,013 | ) | (11,238 | ) | ||||
Preferred stock redemption | (325,000 | ) | — | (325,000 | ) | |||||
Distributions to limited partners in consolidated partnerships, net | (7,031 | ) | (3,126 | ) | (3,905 | ) | ||||
Dividend payments | (238,275 | ) | (165,075 | ) | (73,200 | ) | ||||
Unsecured credit facilities | 300,000 | 100,000 | 200,000 | |||||||
Proceeds from debt issuance | 1,080,114 | 20,223 | 1,059,891 | |||||||
Debt repayment | (252,710 | ) | (359,260 | ) | 106,550 | |||||
Payment of loan costs | (12,868 | ) | (1,954 | ) | (10,914 | ) | ||||
Proceeds from sale of treasury stock | 100 | 957 | (857 | ) | ||||||
Net cash provided by financing activities | $ | 525,079 | 133,297 | 391,782 |
• | We raised $549.5 million during 2016 by |
◦ | issuing 182,787 shares of common stock through our ATM program at an average price of $68.85 per share resulting in net proceeds of $12.3 million, |
◦ | issuing 1,850,000 shares under our forward equity offering at an average price of $74.32 per share resulting in proceeds of $137.5 million, and |
◦ | issuing 5,000,000 shares of common stock at $79.78 per share resulting in net proceeds of $400.1 million. |
• | We repurchased for cash a portion of the common stock related to stock based compensation to satisfy employee federal and state tax withholding requirements. The repurchases increased $11.2 million in 2017 due to the vesting of Equity One's stock based compensation program as a result of the merger. |
• | We redeemed all of the issued and outstanding shares of our 6.625% Series 6 and 6.000% Series 7 cumulative redeemable preferred stock on February 16, 2017 and August 23, 2017, respectively, for $325.0 million. |
• | Net distributions to consolidated partnerships increased $3.9 million primarily due to excess proceeds from property refinancings during 2017. |
• | As a result of the common shares issued during 2016 and common shares issued as merger consideration during 2017, combined with an increase in our quarterly dividend rate, our dividend payments increased $73.2 million. |
• | We received $300.0 million in proceeds upon closing a new term loan and used the funds to repay a $300.0 million Equity One term loan that became due upon merger. |
• | We issued $1.1 billion of debt in 2017 related to the following activity: |
• | We paid $252.7 million to repay or refinance mortgage loans and pay scheduled principal payments as compared to $359.3 million in 2016. |
• | In connection with the new debt issued above, the expansion of our Line commitment, and assumption of mortgages from Equity One, we incurred $12.9 million of loan costs. |
Combined | Regency's Share (1) | |||||||||||||
(dollars in thousands) | September 30, 2017 | December 31, 2016 | September 30, 2017 | December 31, 2016 | ||||||||||
Number of Co-investment Partnerships | 12 | 11 | ||||||||||||
Regency’s Ownership | 20%-50% | 20%-50% | ||||||||||||
Number of Properties | 114 | 109 | ||||||||||||
Assets | $ | 2,880,390 | 2,608,742 | $ | 997,454 | 878,977 | ||||||||
Liabilities | 1,638,510 | 1,404,588 | 561,203 | 473,255 | ||||||||||
Equity | 1,241,880 | 1,204,154 | 436,251 | 405,722 | ||||||||||
Negative investment in US Regency Retail I, LLC (2) | 11,138 | — | ||||||||||||
Basis difference | 43,946 | 1,382 | ||||||||||||
Restricted Gain Method deferral | (30,902 | ) | (30,902 | ) | ||||||||||
Impairment of investment in real estate partnerships | (1,300 | ) | (1,300 | ) | ||||||||||
Net book equity in excess of purchase price | (78,203 | ) | (78,203 | ) | ||||||||||
Investments in real estate partnerships | $ | 380,930 | 296,699 | |||||||||||
(1) Pro-rata financial information is not, and is not intended to be, a presentation in accordance with GAAP. However, management believes that providing such information is useful to investors in assessing the impact of its investments in real estate partnership activities on our operations, which includes such items on a single line presentation under the equity method in our consolidated financial statements. | ||||||||||||||
(2) During 2017, the USAA partnership distributed proceeds from debt refinancing and real estate sales in excess of Regency's carrying value of its investment resulting in a negative investment balance, which is recorded within Accounts payable and other liabilities in the Consolidated Balance Sheets. |
(in thousands) | Regency's Ownership | September 30, 2017 | December 31, 2016 | |||||
GRI - Regency, LLC (GRIR) | 40.00% | $ | 198,106 | 201,240 | ||||
New York Common Retirement Fund (NYC) (1) | 30.00% | 57,448 | — | |||||
Columbia Regency Retail Partners, LLC (Columbia I) | 20.00% | 7,183 | 9,687 | |||||
Columbia Regency Partners II, LLC (Columbia II) | 20.00% | 13,706 | 14,750 | |||||
Cameron Village, LLC (Cameron) | 30.00% | 11,929 | 11,877 | |||||
RegCal, LLC (RegCal) | 25.00% | 27,806 | 21,516 | |||||
US Regency Retail I, LLC (USAA) (2) | 20.01% | — | 13,176 | |||||
Other investments in real estate partnerships (1) | 20.00% - 50.00% | 64,752 | 24,453 | |||||
Total investment in real estate partnerships | $ | 380,930 | 296,699 | |||||
(1) Includes investments in real estate partnerships acquired as part of the Equity One merger, which was effective on March 1, 2017. | ||||||||
(2) During 2017, the USAA partnership distributed proceeds from debt refinancing and real estate sales in excess of Regency's carrying value of its investment resulting in a negative investment balance, which is recorded within Accounts payable and other liabilities in the Consolidated Balance Sheets. |
(in thousands) | September 30, 2017 | |||||||||||||||
Scheduled Principal Payments and Maturities by Year: | Scheduled Principal Payments | Mortgage Loan Maturities | Unsecured Maturities | Total | Regency’s Pro-Rata Share | |||||||||||
2017 | $ | 5,043 | — | 19,635 | 24,678 | 5,755 | ||||||||||
2018 | 21,059 | 30,022 | — | 51,081 | 19,647 | |||||||||||
2019 | 19,852 | 73,259 | — | 93,111 | 24,448 | |||||||||||
2020 | 16,823 | 222,199 | — | 239,022 | 86,167 | |||||||||||
2021 | 10,818 | 269,942 | — | 280,760 | 100,402 | |||||||||||
Beyond 5 Years | 10,580 | 829,000 | — | 839,580 | 288,440 | |||||||||||
Net unamortized loan costs, debt premium / (discount) | — | (10,503 | ) | — | (10,503 | ) | (3,355 | ) | ||||||||
Total | $ | 84,175 | 1,413,919 | 19,635 | 1,517,729 | 521,504 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||
(in thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||
Asset management, property management, leasing, and investment and financing services | $ | 5,884 | 5,821 | $ | 18,735 | 18,415 |
Period | Total number of shares purchased (1) | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Maximum number or approximate dollar value of shares that may yet be purchased under the plans or programs | |||||
July 1 through July 31, 2017 | 2,453 | $ | 63.55 | — | — | ||||
August 1 through August 31, 2017 | 601 | $ | 65.53 | — | — | ||||
September 1 through September 30, 2017 | — | $ | — | — | — | ||||
(1) Represents shares repurchased to cover payment of withholding taxes in connection with restricted stock vesting by participants under Regency's Long-Term Omnibus Plan. |
• | should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; |
• | have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement; |
• | may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and |
• | were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments. |
* | Furnished, not filed. |
November 6, 2017 | REGENCY CENTERS CORPORATION | |
By: | /s/ Lisa Palmer Lisa Palmer, President and Chief Financial Officer (Principal Financial Officer) | |
By: | /s/ J. Christian Leavitt J. Christian Leavitt, Senior Vice President and Treasurer (Principal Accounting Officer) |
November 6, 2017 | REGENCY CENTERS, L.P. | |
By: | Regency Centers Corporation, General Partner | |
By: | /s/ Lisa Palmer Lisa Palmer, President and Chief Financial Officer (Principal Financial Officer) | |
By: | /s/ J. Christian Leavitt J. Christian Leavitt, Senior Vice President and Treasurer (Principal Accounting Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Regency Centers Corporation (“registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Martin E. Stein, Jr. |
Martin E. Stein, Jr. |
Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Regency Centers Corporation (“registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Lisa Palmer |
Lisa Palmer |
President and Chief Financial Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Regency Centers, L.P. (“registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Martin E. Stein, Jr. |
Martin E. Stein, Jr. |
Chief Executive Officer of Regency Centers Corporation, general partner of registrant |
1. | I have reviewed this Quarterly Report on Form 10-Q of Regency Centers, L.P. (“registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Lisa Palmer |
Lisa Palmer |
President and Chief Financial Officer of Regency Centers Corporation, general partner of registrant |
/s/ Martin E. Stein, Jr. |
Martin E. Stein, Jr. |
Chief Executive Officer |
/s/ Lisa Palmer |
Lisa Palmer |
President and Chief Financial Officer |
/s/ Martin E. Stein, Jr. |
Martin E. Stein, Jr. |
Chief Executive Officer of Regency Centers Corporation, general partner of registrant |
/s/ Lisa Palmer |
Lisa Palmer |
President and Chief Financial Officer of Regency Centers Corporation, general partner of registrant |