XNYS:REG Regency Centers Corp Quarterly Report 10-Q Filing - 6/30/2012

Effective Date 6/30/2012

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012
or
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             

Commission File Number 1-12298 (Regency Centers Corporation)
Commission File Number 0-24763 (Regency Centers, L.P.)

REGENCY CENTERS CORPORATION
REGENCY CENTERS, L.P.
(Exact name of registrant as specified in its charter)
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)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Regency Centers Corporation              YES  x    NO  o                     Regency Centers, L.P.              YES  x    NO  o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Regency Centers Corporation              YES  x    NO  o                     Regency Centers, L.P.              YES  x    NO  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Regency Centers Corporation:
Large accelerated filer
x
 
Accelerated filer
o
Non-accelerated filer
o
 
Smaller reporting company
o
Regency Centers, L.P.:
Large accelerated filer
o
  
Accelerated filer
x
Non-accelerated filer
o
  
Smaller reporting company
o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Regency Centers Corporation              YES  o    NO   x                    Regency Centers, L.P.              YES  o    NO  x
The number of shares outstanding of the Regency Centers Corporation’s voting common stock was 89,940,026 as of July 31, 2012.
 





EXPLANATORY NOTE
This report combines the quarterly reports on Form 10-Q for the quarter ended June 30, 2012 of Regency Centers Corporation and Regency Centers, L.P. Unless stated otherwise or the context otherwise requires, references to “Regency Centers Corporation” or the “Parent Company” mean Regency Centers Corporation and its controlled subsidiaries; and references to “Regency Centers, L.P.” or the “Operating Partnership” mean Regency Centers, L.P. and its controlled subsidiaries. The term “the Company” or “Regency” means the Parent Company and the Operating Partnership, collectively.
The Parent Company is a real estate investment trust (“REIT”) and the general partner of the Operating Partnership. The Operating Partnership's capital includes general and limited common Partnership Units (“Units”). As of June 30, 2012, the Parent Company owned approximately 99.8% of the Units in the Operating Partnership and the remaining limited Units are owned by investors. The Parent Company owns all of the Series 5 and 6 Preferred Units of the Operating Partnership. As the sole general partner of the Operating Partnership, the Parent Company has exclusive control of the Operating Partnership's day-to-day management.
The Company believes combining the quarterly reports on Form 10-Q of the Parent Company and the Operating Partnership into this single report provides the following benefits:
 
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. 
Management operates the Parent Company and the Operating Partnership as one business. The management of the Parent Company consists of the same individuals as the management of the Operating Partnership. These individuals are officers of the Parent Company and employees of the Operating Partnership.
The Company believes it is important to understand the few differences between the Parent Company and the Operating Partnership in the context of how the Parent Company and the Operating Partnership operate as a consolidated company. The Parent Company is a REIT, whose only material asset is its ownership of partnership interests of the Operating Partnership. As a result, the Parent Company does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public equity from time to time and guaranteeing certain debt of the Operating Partnership. The Parent Company does not hold any indebtedness, but guarantees all of the unsecured public debt and approximately 13% of the secured debt of the Operating Partnership. The Operating Partnership holds all the assets of the Company and retains the ownership interests in the Company's joint ventures. Except for net proceeds from public equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generates all remaining capital required by the Company's business. These sources include the Operating Partnership's operations, its direct or indirect incurrence of indebtedness, and the issuance of partnership units.
Stockholders' equity, partners' capital, and noncontrolling interests are the main areas of difference between the consolidated financial statements of the Parent Company and those of the Operating Partnership. The Operating Partnership's capital includes general and limited common Partnership Units, Series 5 and 6 Preferred Units owned by the Parent Company. The limited partners' units in the Operating Partnership owned by third parties are accounted for in partners' capital in the Operating Partnership's financial statements and outside of stockholders' equity in noncontrolling interests in the Parent Company's financial statements. The Series 5 and 6 Preferred Units owned by the Parent Company are eliminated in consolidation in the accompanying consolidated financial statements of the Parent Company and are classified as preferred units of general partner in the accompanying consolidated financial statements of the Operating Partnership.
In order to highlight the differences between the Parent Company and the Operating Partnership, there are sections in this report that separately discuss the Parent Company and the Operating Partnership, including separate financial statements, controls and procedures sections, and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure for the Parent Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company. 

As general partner with control of the Operating Partnership, the Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have assets other than its investment in the Operating Partnership. Therefore, while stockholders' equity and partners' capital differ as discussed above, the assets and liabilities of the Parent Company and the Operating Partnership are the same on their respective financial statements.




TABLE OF CONTENTS
 
 
 
Form 10-Q
Report Page
 
 
 
PART I - FINANCIAL INFORMATION
 
 
 
 
Item 1.
Financial Statements
 
 
 
 
Regency Centers Corporation:
 
 
 
 
 
Consolidated Balance Sheets as of June 30, 2012 and December 31, 2011
 
 
 
 
Consolidated Statements of Operations for the periods ended June 30, 2012 and 2011
 
 
 
 
Consolidated Statements of Comprehensive Income for the periods ended June 30, 2012 and 2011
 
 
 
 
Consolidated Statements of Changes in Equity for the six months ended June 30, 2012 and 2011
 
 
 
 
Consolidated Statements of Cash Flows for the six months ended June 30, 2012 and 2011
 
 
 
Regency Centers, L.P.:
 
 
 
 
 
Consolidated Balance Sheets as of June 30, 2012 and December 31, 2011
 
 
 
 
Consolidated Statements of Operations for the periods ended June 30, 2012 and 2011
 
 
 
 
Consolidated Statements of Comprehensive Income for the periods ended June 30, 2012 and 2011
 
 
 
 
Consolidated Statements of Changes in Capital for the six months ended June 30, 2012 and 2011
 
 
 
 
Consolidated Statements of Cash Flows for the six months ended June 30, 2012 and 2011
 
 
 
 
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
 
 
 
 
 
 





PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
REGENCY CENTERS CORPORATION
Consolidated Balance Sheets
June 30, 2012 and December 31, 2011
(in thousands, except share data)
 
 
2012
 
2011
Assets
 
(unaudited)
 
 
Real estate investments at cost:
 
 
 
 
Land
$
1,276,966

 
1,273,606

Buildings and improvements
 
2,614,724

 
2,604,229

Properties in development
 
249,509

 
224,077

 
 
4,141,199

 
4,101,912

Less: accumulated depreciation
 
834,681

 
791,619

 
 
3,306,518

 
3,310,293

Investments in real estate partnerships
 
424,726

 
386,882

Net real estate investments
 
3,731,244

 
3,697,175

Cash and cash equivalents
 
23,030

 
11,402

Restricted cash
 
6,075

 
6,050

Accounts receivable, net of allowance for doubtful accounts of $3,322 and $3,442 at June 30, 2012 and December 31, 2011, respectively
 
37,681

 
37,733

Straight-line rent receivable, net of reserve of $1,648 and $2,075 at June 30, 2012 and December 31, 2011, respectively
 
50,934

 
48,132

Notes receivable
 
23,865

 
35,784

Deferred costs, less accumulated amortization of $73,609 and $71,265 at June 30, 2012 and December 31, 2011, respectively
 
71,597

 
70,204

Acquired lease intangible assets, less accumulated amortization of $17,339 and $15,588 at June 30, 2012 and December 31, 2011, respectively
 
26,835

 
27,054

Trading securities held in trust, at fair value
 
22,455

 
21,713

Other assets
 
32,150

 
31,824

Total assets
$
4,025,866

 
3,987,071

Liabilities and Equity
 
 
 
 
Liabilities:
 
 
 
 
Notes payable
$
1,758,299

 
1,942,440

Unsecured credit facilities
 
305,000

 
40,000

Accounts payable and other liabilities
 
111,995

 
101,862

Derivative instruments, at fair value
 
73

 
37

Acquired lease intangible liabilities, less accumulated accretion of $5,452 and $4,750 at June 30, 2012 and December 31, 2011, respectively
 
11,971

 
12,662

Tenants’ security and escrow deposits and prepaid rent
 
20,929

 
20,416

Total liabilities
 
2,208,267

 
2,117,417

Commitments and contingencies (note 10)
 

 

Equity:
 
 
 
 
Stockholders’ equity:
 
 
 
 
Preferred stock, $0.01 par value per share, 30,000,000 shares authorized; 13,000,000 and 11,000,000 Series 3-6 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively, with liquidation preferences of $25 per share
 
325,000

 
275,000

Common stock $0.01 par value per share,150,000,000 shares authorized; 89,938,760 and 89,921,858 shares issued at June 30, 2012 and December 31, 2011, respectively
 
899

 
899

Treasury stock at cost, 328,330 and 338,714 shares held at June 30, 2012 and December 31, 2011, respectively
 
(14,792
)
 
(15,197
)
Additional paid in capital
 
2,284,464

 
2,281,817

Accumulated other comprehensive loss
 
(66,731
)
 
(71,429
)
Distributions in excess of net income
 
(726,444
)
 
(662,735
)
Total stockholders’ equity
 
1,802,396

 
1,808,355

Noncontrolling interests:
 
 
 
 
Series D preferred units, aggregate redemption value of $50,000 at December 31, 2011
 

 
49,158

Exchangeable operating partnership units, aggregate redemption value of $8,428 and $6,665 at June 30, 2012 and December 31, 2011, respectively
 
(1,041
)
 
(963
)
Limited partners’ interests in consolidated partnerships
 
16,244

 
13,104

Total noncontrolling interests
 
15,203

 
61,299

Total equity
 
1,817,599

 
1,869,654

Total liabilities and equity
$
4,025,866

 
3,987,071

See accompanying notes to consolidated financial statements.

1



REGENCY CENTERS CORPORATION
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
 
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2012

2011
 
2012
 
2011
Revenues:
 
 
 
 
 
 
 
 
Minimum rent
$
92,725

 
87,000

$
184,602

 
173,728

Percentage rent
 
398

 
151

 
1,558

 
1,058

Recoveries from tenants and other income
 
30,175

 
25,299

 
56,742

 
53,493

Management, transaction, and other fees
 
6,469

 
12,193

 
13,618

 
20,053

Total revenues
 
129,767

 
124,643

 
256,520

 
248,332

Operating expenses:
 
 
 
 
 
 
 
 
Depreciation and amortization
 
33,045

 
31,219

 
65,710

 
65,550

Operating and maintenance
 
17,806

 
17,232

 
36,327

 
36,141

General and administrative
 
14,020

 
15,177

 
30,142

 
32,130

Real estate taxes
 
14,143

 
13,712

 
29,322

 
27,956

Other expenses
 
269

 
2,255

 
1,858

 
1,936

Total operating expenses
 
79,283

 
79,595

 
163,359

 
163,713

Other expense (income):
 
 
 
 
 
 
 
 
Interest expense, net of interest income of $377 and $587, and $913 and $1,188 for the three and six months ended June 30, 2012 and 2011, respectively
 
28,377

 
30,563

 
57,335

 
61,428

Loss (gain) on sale of real estate
 
21

 

 
(1,814
)
 

Provision for impairment
 
23,508

 

 
23,508

 

Net investment income (loss) from deferred compensation plan, including unrealized (loss) gains of ($499) and $88, and $725 and $731 for the three and six months ended June 30, 2012 and 2011, respectively
 
444

 
(143
)
 
(1,084
)
 
(888
)
Total other expense (income)
 
52,350

 
30,420

 
77,945

 
60,540

(Loss) income before equity in income (loss) of investments in real estate partnerships
 
(1,866
)
 
14,628

 
15,216

 
24,079

Equity in income (loss) of investments in real estate partnerships
 
10,804

 
2,688

 
13,770

 
(37
)
Income from continuing operations
 
8,938

 
17,316

 
28,986

 
24,042

Discontinued operations, net:
 
 
 
 
 
 
 
 
Operating income
 
106

 
1,621

 
492

 
3,025

Gain on sale of operating properties, net
 
2,304

 

 
8,605

 

Income from discontinued operations
 
2,410

 
1,621

 
9,097

 
3,025

Net income
 
11,348

 
18,937

 
38,083

 
27,067

Noncontrolling interests:
 
 
 
 
 
 
 
 
Preferred units
 

 
(931
)
 
629

 
(1,862
)
Exchangeable operating partnership units
 
(23
)
 
(37
)
 
(77
)
 
(50
)
Limited partners’ interests in consolidated partnerships
 
(232
)
 
(189
)
 
(424
)
 
(271
)
(Income) loss attributable to noncontrolling interests
 
(255
)
 
(1,157
)
 
128

 
(2,183
)
Net income attributable to controlling interests
 
11,093

 
17,780

 
38,211

 
24,884

Preferred stock dividends
 
(5,396
)
 
(4,919
)
 
(19,333
)
 
(9,838
)
Net income attributable to common stockholders
$
5,697

 
12,861

$
18,878

 
15,046

Income per common share - basic:
 
 
 
 
 
 
 
 
Continuing operations
$
0.03

 
0.12

$
0.11

 
0.13

Discontinued operations
 
0.03

 
0.02

 
0.10

 
0.04

Net income attributable to common stockholders
$
0.06

 
0.14

$
0.21

 
0.17

Income per common share - diluted:
 
 
 
 
 
 
 
 
Continuing operations
$
0.03

 
0.12

$
0.11

 
0.13

Discontinued operations
 
0.03

 
0.02

 
0.10

 
0.04

Net income attributable to common stockholders
$
0.06

 
0.14

$
0.21

 
0.17


See accompanying notes to consolidated financial statements.

2


REGENCY CENTERS CORPORATION
Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)

 
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2012
 
2011
 
2012
 
2011
Net income
$
11,348

 
18,937

 
38,083

 
27,067

Other comprehensive income (loss):
 
 
 
 
 
 
 
 
Loss on settlement of derivative instruments:
 
 
 
 
 
 
 
 
Amortization of loss on settlement of derivative instruments recognized in net income
 
2,366

 
2,366

 
4,733

 
4,733

Effective portion of change in fair value of derivative instruments:
 
 
 
 
 
 
 
 
Effective portion of change in fair value of derivative instruments
 
(26
)
 

 
(60
)
 

Less: reclassification adjustment for change in fair value of derivative instruments included in net income
 
7

 

 
9

 

Other comprehensive income
 
2,347

 
2,366

 
4,682

 
4,733

Comprehensive income
 
13,695

 
21,303

 
42,765

 
31,800

Less: comprehensive income (loss) attributable to noncontrolling interests:
 
 
 
 
 
 
 
 
Net income (loss) attributable to noncontrolling interests
 
255

 
1,157

 
(128
)
 
2,183

Other comprehensive (loss) income attributable to noncontrolling interests
 
(6
)
 
5

 
(16
)
 
10

Comprehensive income (loss) attributable to noncontrolling interests
 
249

 
1,162

 
(144
)
 
2,193

Comprehensive income attributable to the Company
$
13,446

 
20,141

 
42,909

 
29,607


See accompanying notes to consolidated financial statements.


3




REGENCY CENTERS CORPORATION
Consolidated Statements of Changes in Equity
For the six months ended June 30, 2012 and 2011 
(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
 
Preferred Units
 
Exchangeable
Operating
Partnership
Units
 
Limited
Partners’
Interest  in
Consolidated
Partnerships
 
Total
Noncontrolling
Interests
 
Total
Equity

Balance at December 31, 2010
$
275,000

 
819

 
(16,175
)
 
2,039,612

 
(80,885
)
 
(533,194
)
 
1,685,177

 
49,158

 
(762
)
 
10,829

 
59,225

 
1,744,402

Net income
 

 

 

 

 

 
24,884

 
24,884

 
1,862

 
50

 
271

 
2,183

 
27,067

Other comprehensive income (loss)
 

 

 

 

 
4,723

 

 
4,723

 

 
10

 

 
10

 
4,733

Deferred compensation plan, net
 

 

 
1,190

 
715

 

 

 
1,905

 

 

 

 

 
1,905

Amortization of restricted stock issued
 

 

 

 
5,391

 

 

 
5,391

 

 

 

 

 
5,391

Common stock redeemed for taxes withheld for stock based compensation, net
 

 

 

 
(1,824
)
 

 

 
(1,824
)
 

 

 

 

 
(1,824
)
Common stock issued for dividend reinvestment plan
 

 

 

 
562

 

 

 
562

 

 

 

 

 
562

Common stock issued for stock offerings, net of issuance costs
 

 
80

 

 
215,289

 

 

 
215,369

 

 

 

 

 
215,369

Contributions from partners
 

 

 

 

 

 

 

 

 

 
2,509

 
2,509

 
2,509

Distributions to partners
 

 

 

 

 

 

 

 

 

 
(810
)
 
(810
)
 
(810
)
Cash dividends declared:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock/unit
 

 

 

 

 

 
(9,838
)
 
(9,838
)
 
(1,862
)
 

 

 
(1,862
)
 
(11,700
)
Common stock/unit ($.925 per share)
 

 

 

 

 

 
(78,750
)
 
(78,750
)
 

 
(160
)
 

 
(160
)
 
(78,910
)
Balance at June 30, 2011
$
275,000

 
899

 
(14,985
)
 
2,259,745

 
(76,162
)
 
(596,898
)
 
1,847,599

 
49,158

 
(862
)
 
12,799

 
61,095

 
1,908,694

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2011
$
275,000

 
899

 
(15,197
)
 
2,281,817

 
(71,429
)
 
(662,735
)
 
1,808,355

 
49,158

 
(963
)
 
13,104

 
61,299

 
1,869,654

Net income
 

 

 

 

 

 
38,211

 
38,211

 
(629
)
 
77

 
424

 
(128
)
 
38,083

Other comprehensive income (loss)
 

 

 

 

 
4,698

 

 
4,698

 

 
9

 
(25
)
 
(16
)
 
4,682

Deferred compensation plan, net
 

 

 
405

 
(405
)
 

 

 

 

 

 

 

 

Amortization of restricted stock issued
 

 

 

 
5,726

 

 

 
5,726

 

 

 

 

 
5,726

Common stock redeemed for taxes withheld for stock based compensation, net
 

 

 

 
(1,548
)
 

 

 
(1,548
)
 

 

 

 

 
(1,548
)
Common stock issued for dividend reinvestment plan
 

 

 

 
495

 

 

 
495

 

 

 

 

 
495

Redemption of preferred units
 

 

 

 

 

 

 

 
(48,125
)
 

 

 
(48,125
)
 
(48,125
)

4



REGENCY CENTERS CORPORATION
Consolidated Statements of Changes in Equity
For the six months ended June 30, 2012 and 2011 
(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
 
Preferred Units
 
Exchangeable
Operating
Partnership
Units
 
Limited
Partners’
Interest  in
Consolidated
Partnerships
 
Total
Noncontrolling
Interests
 
Total
Equity

Issuance of preferred stock, net of issuance costs
 
250,000

 

 

 
(8,614
)
 

 

 
241,386

 

 

 

 

 
241,386

Redemption of preferred stock
 
(200,000
)
 

 

 
6,993

 

 
(6,993
)
 
(200,000
)
 

 

 

 

 
(200,000
)
Contributions from partners
 

 

 

 

 

 

 

 

 

 
3,317

 
3,317

 
3,317

Distributions to partners
 

 

 

 

 

 

 

 

 

 
(576
)
 
(576
)
 
(576
)
Cash dividends declared:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock/unit
 

 

 

 

 

 
(12,340
)
 
(12,340
)
 
(404
)
 

 

 
(404
)
 
(12,744
)
Common stock/unit ($.925 per share)
 

 

 

 

 

 
(82,587
)
 
(82,587
)
 

 
(164
)
 

 
(164
)
 
(82,751
)
Balance at June 30, 2012
$
325,000

 
899

 
(14,792
)
 
2,284,464

 
(66,731
)
 
(726,444
)
 
1,802,396

 

 
(1,041
)
 
16,244

 
15,203

 
1,817,599

See accompanying notes to consolidated financial statements.


5



REGENCY CENTERS CORPORATION
Consolidated Statements of Cash Flows
For the six months ended June 30, 2012 and 2011
(in thousands)
(unaudited)
 
 
2012
 
2011
Cash flows from operating activities:
 
 
 
 
Net income
$
38,083

 
27,067

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
66,062

 
67,247

Amortization of deferred loan cost and debt premium
 
6,461

 
6,140

Accretion of above and below market lease intangibles, net
 
(437
)
 
(390
)
Stock-based compensation, net of capitalization
 
4,903

 
5,010

Equity in (income) loss of investments in real estate partnerships
 
(13,770
)
 
37

Net gain on sale of properties
 
(10,419
)
 

Provision for impairment
 
23,508

 

Distribution of earnings from operations of investments in real estate partnerships
 
17,580

 
22,872

Gain on derivative instruments
 
(13
)
 

Deferred compensation expense
 
1,073

 
1,724

Realized and unrealized gains on trading securities held in trust
 
(1,083
)
 
(903
)
Changes in assets and liabilities:
 
 
 
 
Restricted cash
 
(25
)
 
(1,215
)
Accounts receivable
 
(3,084
)
 
7,375

Straight-line rent receivables, net
 
(3,365
)
 
(2,526
)
Deferred leasing costs
 
(6,146
)
 
(7,003
)
Other assets
 
(2,227
)
 
(6,833
)
Accounts payable and other liabilities
 
(6,393
)
 
(17,220
)
Tenants’ security and escrow deposits and prepaid rent
 
563

 
310

Net cash provided by operating activities
 
111,271

 
101,692

Cash flows from investing activities:
 
 
 
 
Acquisition of operating real estate
 
(586
)
 
(5,415
)
Development of real estate including acquisition of land
 
(79,755
)
 
(32,066
)
Proceeds from sale of real estate investments
 
48,927

 
2,067

Issuance of notes receivable
 
(666
)
 

Investments in real estate partnerships
 
(53,587
)
 
(188,132
)
Distributions received from investments in real estate partnerships
 
12,495

 
149,357

Dividends on trading securities held in trust
 
77

 
98

Acquisition of trading securities held in trust
 
(11,120
)
 
(10,274
)
Proceeds from sale of trading securities held in trust
 
11,385

 
8,685

Net cash used in investing activities
 
(72,830
)
 
(75,680
)
Cash flows from financing activities:
 
 
 
 
Net proceeds from common stock issuance
 

 
215,369

Net proceeds from issuance of preferred stock
 
241,386

 

Proceeds from sale of treasury stock
 
339

 
2,096

Acquisition of treasury stock
 
(4
)
 

     Redemption of preferred stock and partnership units
 
(248,125
)
 

Distributions to limited partners in consolidated partnerships, net
 
1,801

 
(633
)
Distributions to exchangeable operating partnership unit holders
 
(164
)
 
(160
)
Distributions to preferred unit holders
 
(404
)
 
(1,862
)
Dividends paid to common stockholders
 
(82,093
)
 
(78,188
)
Dividends paid to preferred stockholders
 
(6,943
)
 
(9,838
)
Proceeds from unsecured credit facilities
 
450,000

 
321,790

Repayment of unsecured credit facilities
 
(185,000
)
 
(300,000
)
Repayment of notes payable
 
(192,375
)
 
(177,251
)
Scheduled principal payments
 
(3,513
)
 
(2,470
)
Payment of loan costs
 
(1,718
)
 
(132
)
Net cash used in financing activities
 
(26,813
)
 
(31,279
)
Net increase (decrease) in cash and cash equivalents
 
11,628

 
(5,267
)
Cash and cash equivalents at beginning of the period
 
11,402

 
16,889

Cash and cash equivalents at end of the period
$
23,030

 
11,622






6



REGENCY CENTERS CORPORATION
Consolidated Statements of Cash Flows
For the six months ended June 30, 2012, and 2011
(in thousands)
(unaudited)

 
 
2012
 
2011
Supplemental disclosure of cash flow information:
 
 
 
 
Cash paid for interest (net of capitalized interest of $1,246 and $957 in 2012 and 2011, respectively)
$
61,901

 
67,052

Supplemental disclosure of non-cash transactions:
 
 
 
 
Preferred unit and stock distribution declared and not paid
$
5,397

 

Real estate received through distribution in kind
$

 
46,157

Mortgage loans assumed through distribution in kind
$

 
27,405

Mortgage loans assumed for the acquisition of real estate
$
11,710

 
5,937

Real estate acquired through elimination of note receivable
$
12,585

 

Change in fair value of derivative instruments
$
(49
)
 

Common stock issued for dividend reinvestment plan
$
495

 
562

Stock-based compensation capitalized
$
960

 
515

Contributions from limited partners in consolidated partnerships, net
$
940

 
2,332

Common stock issued for dividend reinvestment in trust
$
287

 
323

Contribution of stock awards into trust
$
806

 
1,105

Distribution of stock held in trust
$
1,191

 

See accompanying notes to consolidated financial statements.



7



REGENCY CENTERS, L.P.
Consolidated Balance Sheets
June 30, 2012 and December 31, 2011
(in thousands, except unit data)
    
 
 
2012
 
2011
Assets
 
(unaudited)
 
 
Real estate investments at cost:
 
 
 
 
Land
$
1,276,966

 
1,273,606

Buildings and improvements
 
2,614,724

 
2,604,229

Properties in development
 
249,509

 
224,077


 
4,141,199

 
4,101,912

Less: accumulated depreciation
 
834,681

 
791,619


 
3,306,518

 
3,310,293

Investments in real estate partnerships
 
424,726

 
386,882

Net real estate investments
 
3,731,244

 
3,697,175

Cash and cash equivalents
 
23,030

 
11,402

Restricted cash
 
6,075

 
6,050

Accounts receivable, net of allowance for doubtful accounts of $3,322 and $3,442 at June 30, 2012 and December 31, 2011, respectively
 
37,681

 
37,733

Straight-line rent receivable, net of reserve of $1,648 and $2,075 at June 30, 2012 and December 31, 2011, respectively
 
50,934

 
48,132

Notes receivable
 
23,865

 
35,784

Deferred costs, less accumulated amortization of $73,609 and $71,265 at June 30, 2012 and December 31, 2011, respectively
 
71,597

 
70,204

Acquired lease intangible assets, less accumulated amortization of $17,339 and $15,588 at June 30, 2012 and December 31, 2011, respectively
 
26,835

 
27,054

Trading securities held in trust, at fair value
 
22,455

 
21,713

Other assets
 
32,150

 
31,824

Total assets
$
4,025,866

 
3,987,071

Liabilities and Capital
 
 
 
 
Liabilities:
 
 
 
 
Notes payable
$
1,758,299

 
1,942,440

Unsecured credit facilities
 
305,000

 
40,000

Accounts payable and other liabilities
 
111,995

 
101,862

Derivative instruments, at fair value
 
73

 
37

Acquired lease intangible liabilities, less accumulated accretion of $5,452 and $4,750 at June 30, 2012 and December 31, 2011, respectively
 
11,971

 
12,662

Tenants’ security and escrow deposits and prepaid rent
 
20,929

 
20,416

Total liabilities
 
2,208,267

 
2,117,417

Commitments and contingencies (note 10)
 
 
 
 
Capital:
 
 
 
 
Partners’ capital:
 
 
 
 
Series D preferred units, par value $100: 500,000 units issued and outstanding at December 31, 2011
 

 
49,158

Preferred units of general partner, $0.01 par value per unit, 13,000,000 and 11,000,000 units issued and outstanding at June 30, 2012 and December 31, 2011, respectively, liquidation preference of $25 per unit
 
325,000

 
275,000

General partner; 89,938,760 and 89,921,858 units outstanding at June 30, 2012 and December 31, 2011, respectively
 
1,544,127

 
1,604,784

Limited partners; 177,164 units outstanding at June 30, 2012 and December 31, 2011
 
(1,041
)
 
(963
)
Accumulated other comprehensive loss
 
(66,731
)
 
(71,429
)
Total partners’ capital
 
1,801,355

 
1,856,550

Noncontrolling interests:
 
 
 
 
Limited partners’ interests in consolidated partnerships
 
16,244

 
13,104

Total noncontrolling interests
 
16,244

 
13,104

Total capital
 
1,817,599

 
1,869,654

Total liabilities and capital
$
4,025,866

 
3,987,071

See accompanying notes to consolidated financial statements.

8



REGENCY CENTERS, L.P.
Consolidated Statements of Operations
(in thousands, except per unit data)
(unaudited)
 
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2012
 
2011
 
2012
 
2011
Revenues:
 
 
 
 
 
 
 
 
Minimum rent
$
92,725

 
87,000

$
184,602

 
173,728

Percentage rent
 
398

 
151

 
1,558

 
1,058

Recoveries from tenants and other income
 
30,175

 
25,299

 
56,742

 
53,493

Management, transaction, and other fees
 
6,469

 
12,193

 
13,618

 
20,053

Total revenues
 
129,767

 
124,643

 
256,520

 
248,332

Operating expenses:
 
 
 
 
 
 
 
 
Depreciation and amortization
 
33,045

 
31,219

 
65,710

 
65,550

Operating and maintenance
 
17,806

 
17,232

 
36,327

 
36,141

General and administrative
 
14,020

 
15,177

 
30,142

 
32,130

Real estate taxes
 
14,143

 
13,712

 
29,322

 
27,956

Other expenses
 
269

 
2,255

 
1,858

 
1,936

Total operating expenses
 
79,283

 
79,595

 
163,359

 
163,713

Other expense (income):
 
 
 
 
 
 
 
 
Interest expense, net of interest income of $377 and $587, and $913 and $1,188 for the three and six months ended June 30, 2012 and 2011, respectively
 
28,377

 
30,563

 
57,335

 
61,428

Loss (gain) on sale of real estate
 
21

 

 
(1,814
)
 

Provision for impairment
 
23,508

 

 
23,508

 

Net investment income (loss) from deferred compensation plan, including unrealized (loss) gains of ($499) and $88, and $725 and $731 for the three and six months ended June 30, 2012 and 2011, respectively
 
444

 
(143
)
 
(1,084
)
 
(888
)
Total other expense (income)
 
52,350

 
30,420

 
77,945

 
60,540

(Loss) income before equity in income (loss) of investments in real estate partnerships
 
(1,866
)
 
14,628

 
15,216

 
24,079

Equity in income (loss) of investments in real estate partnerships
 
10,804

 
2,688

 
13,770

 
(37
)
Income from continuing operations
 
8,938


17,316

 
28,986


24,042

Discontinued operations, net:
 
 
 
 
 
 
 
 
Operating income
 
106

 
1,621

 
492

 
3,025

Gain on sale of operating properties, net
 
2,304

 

 
8,605

 

Income from discontinued operations
 
2,410


1,621

 
9,097


3,025

Net income
 
11,348

 
18,937

 
38,083

 
27,067

Noncontrolling interests:
 
 
 
 
 
 
 
 
Limited partners’ interests in consolidated partnerships
 
(232
)
 
(189
)
 
(424
)
 
(271
)
Income attributable to noncontrolling interests
 
(232
)
 
(189
)
 
(424
)
 
(271
)
Net income attributable to controlling interests
 
11,116

 
18,748

 
37,659

 
26,796

Preferred unit distributions
 
(5,396
)

(5,850
)
 
(18,704
)
 
(11,700
)
Net income attributable to common unit holders
$
5,720

 
12,898

$
18,955

 
15,096

Income per common unit - basic:
 
 
 
 
 
 
 
 
Continuing operations
$
0.03

 
0.12

$
0.11

 
0.13

Discontinued operations
 
0.03

 
0.02

 
0.10

 
0.04

Net income attributable to common unit holders
$
0.06

 
0.14

$
0.21

 
0.17

Income per common unit - diluted:
 
 
 
 
 
 
 
 
Continuing operations
$
0.03

 
0.12

$
0.11

 
0.13

Discontinued operations
 
0.03

 
0.02

 
0.10

 
0.04

Net income attributable to common unit holders
$
0.06

 
0.14

$
0.21

 
0.17


See accompanying notes to consolidated financial statements.

9


REGENCY CENTERS, L.P.
Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)

 
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2012
 
2011
 
2012
 
2011
Net income
$
11,348

 
18,937

 
38,083

 
27,067

Other comprehensive income (loss):
 
 
 
 
 
 
 
 
Loss on settlement of derivative instruments:
 
 
 
 
 
 
 
 
Amortization of loss on settlement of derivative instruments recognized in net income
 
2,366

 
2,366

 
4,733

 
4,733

Effective portion of change in fair value of derivative instruments:
 
 
 
 
 
 
 
 
Effective portion of change in fair value of derivative instruments
 
(26
)
 

 
(60
)
 

Less: reclassification adjustment for change in fair value of derivative instruments included in net income
 
7

 

 
9

 

Other comprehensive income
 
2,347

 
2,366

 
4,682

 
4,733

Comprehensive income
 
13,695

 
21,303

 
42,765

 
31,800

Less: comprehensive income (loss) attributable to noncontrolling interests:
 
 
 
 
 
 
 
 
Net income attributable to noncontrolling interests
 
232

 
189

 
424

 
271

Other comprehensive loss attributable to noncontrolling interests
 
(10
)
 

 
(25
)
 

Comprehensive income attributable to noncontrolling interests
 
222

 
189

 
399

 
271

Comprehensive income attributable to the Partnership
$
13,473

 
21,114

 
42,366

 
31,529


See accompanying notes to consolidated financial statements.


10




REGENCY CENTERS, L.P.
Consolidated Statements of Changes in Capital
For the six months ended June 30, 2012, and 2011 
 (in thousands)
(unaudited)

 
 
Preferred
Units
 
General Partner
Preferred and
Common Units
 
Limited
Partners
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Total
Partners’
Capital
 
Noncontrolling
Interests in
Limited Partners’
Interest in
Consolidated
Partnerships
 
Total
Capital
Balance at December 31, 2010
$
49,158

 
1,766,062

 
(762
)
 
(80,885
)
 
1,733,573

 
10,829

 
1,744,402

Net income
 
1,862

 
24,884

 
50

 

 
26,796

 
271

 
27,067

Other comprehensive income (loss)
 

 

 
10

 
4,723

 
4,733

 

 
4,733

Deferred compensation plan, net
 

 
1,905

 

 

 
1,905

 

 
1,905

Contributions from partners
 

 

 

 

 

 
2,509

 
2,509

Distributions to partners
 

 
(78,750
)
 
(160
)
 

 
(78,910
)
 
(810
)
 
(79,720
)
Preferred unit distributions
 
(1,862
)
 
(9,838
)
 

 

 
(11,700
)
 

 
(11,700
)
Restricted units issued as a result of amortization of restricted stock issued by Parent Company
 

 
5,391

 

 

 
5,391

 

 
5,391

Common units issued as a result of common stock issued by Parent Company, net of repurchases
 

 
214,107

 

 

 
214,107

 

 
214,107

Balance at June 30, 2011
$
49,158

 
1,923,761

 
(862
)
 
(76,162
)
 
1,895,895

 
12,799

 
1,908,694

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2011
$
49,158

 
1,879,784

 
(963