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Section 1: 10-Q (10-Q 3.31.17)

Document

 
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 March 31, 2017
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)
2000519056_regencylogocolora02.jpg
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, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Regency Centers Corporation:
Large accelerated filer
x
Accelerated filer
o
Emerging growth company
o
Non-accelerated filer
o
Smaller reporting company
o
 
 

Regency Centers, L.P.:
Large accelerated filer
o
Accelerated filer
x
Emerging growth company
o
Non-accelerated filer
o
Smaller reporting company
o
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Regency Centers Corporation              YES  o    NO   x                    Regency Centers, L.P.              YES  o    NO  x
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 common stock was 170,077,581 as of May 9, 2017.
 




EXPLANATORY NOTE
This report combines the quarterly reports on Form 10-Q for the quarter ended March 31, 2017 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”,"Regency Centers" 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 March 31, 2017, the Parent Company owned all of the Preferred Units of the Operating Partnership and approximately 99.9% of the Units in the Operating Partnership. The remaining limited Units are owned by investors. 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 key 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. Except for the $500 million of unsecured public and private placement debt assumed with the Equity One merger on March 1, 2017, the Parent Company does not have any other indebtedness, but guarantees all of the unsecured debt of the Operating Partnership. The Operating Partnership is also the co-issuer and guarantees the debt of the Parent Company. 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, and 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 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 the 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 March 31, 2017 and December 31, 2016
 
 
 
 
Consolidated Statements of Operations for the periods ended March 31, 2017 and 2016
 
 
 
 
Consolidated Statements of Comprehensive Income for the periods ended March 31, 2017 and 2016
 
 
 
 
Consolidated Statements of Equity for the periods ended March 31, 2017 and 2016
 
 
 
 
Consolidated Statements of Cash Flows for the periods ended March 31, 2017 and 2016
 
 
 
Regency Centers, L.P.:
 
 
 
 
 
Consolidated Balance Sheets as of March 31, 2017 and December 31, 2016
 
 
 
 
Consolidated Statements of Operations for the periods ended March 31, 2017 and 2016
 
 
 
 
Consolidated Statements of Comprehensive Income for the periods ended March 31, 2017 and 2016
 
 
 
 
Consolidated Statements of Capital for the periods ended March 31, 2017 and 2016
 
 
 
 
Consolidated Statements of Cash Flows for the periods ended March 31, 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
 
 
 
 
 
 





PART I - FINANCIAL INFORMATION

Item 1. Financial Statements
REGENCY CENTERS CORPORATION
Consolidated Balance Sheets
March 31, 2017 and December 31, 2016
(in thousands, except share data)
 
 
2017
 
2016
Assets
 
(unaudited)
 
 
Real estate investments at cost:
 
 
 
 
Land
$
4,760,963

 
1,660,424

Buildings and improvements
 
5,908,653

 
3,092,197

Properties in development
 
292,480

 
180,878

 
 
10,962,096

 
4,933,499

Less: accumulated depreciation
 
1,166,657

 
1,124,391

 
 
9,795,439

 
3,809,108

Properties held for sale
 
19,600

 

Investments in real estate partnerships
 
381,691

 
296,699

Net real estate investments
 
10,196,730

 
4,105,807

Cash and cash equivalents
 
36,855

 
13,256

Restricted cash
 
7,987

 
4,623

Tenant and other receivables, net of allowance for doubtful accounts and straight-line rent reserves of $9,577 and $9,021 at March 31, 2017 and December 31, 2016, respectively
 
119,843

 
111,722

Deferred leasing costs, less accumulated amortization of $85,971 and $83,529 at March 31, 2017 and December 31, 2016, respectively
 
68,299

 
69,000

Acquired lease intangible assets, less accumulated amortization of $69,324 and $56,695 at March 31, 2017 and December 31, 2016, respectively
 
606,707

 
118,831

Trading securities held in trust
 
29,025

 
28,588

Other assets
 
70,526

 
37,079

Total assets
$
11,135,972

 
4,488,906

Liabilities and Equity
 
 
 
 
Liabilities:
 
 
 
 
Notes payable
$
2,749,202

 
1,363,925

Unsecured credit facilities
 
658,024

 
278,495

Accounts payable and other liabilities
 
242,638

 
138,936

Acquired lease intangible liabilities, less accumulated amortization of $28,689 and $23,538 at March 31, 2017 and December 31, 2016, respectively
 
680,469

 
54,180

Tenants’ security, escrow deposits and prepaid rent
 
41,136

 
28,868

Total liabilities
 
4,371,469

 
1,864,404

Commitments and contingencies
 

 

Equity:
 
 
 
 
Stockholders’ equity:
 
 
 
 
Preferred stock, $0.01 par value per share, 30,000,000 shares authorized; 3,000,000 Series 7 shares issued and outstanding at March 31, 2017, and 13,000,000 Series 6 and 7 shares issued and outstanding at December 31, 2016, with liquidation preferences of $25 per share
 
75,000

 
325,000

Common stock, $0.01 par value per share, 220,000,000 and 150,000,000 shares authorized; 170,076,671 and 104,497,286 shares issued at March 31, 2017 and December 31, 2016, respectively
 
1,701

 
1,045

Treasury stock at cost, 349,660 and 347,903 shares held at March 31, 2017 and December 31, 2016, respectively
 
(17,473
)
 
(17,062
)
Additional paid in capital
 
7,768,794

 
3,294,923

Accumulated other comprehensive loss
 
(15,791
)
 
(18,346
)
Distributions in excess of net income
 
(1,080,882
)
 
(994,259
)
Total stockholders’ equity
 
6,731,349

 
2,591,301

Noncontrolling interests:
 
 
 
 
Exchangeable operating partnership units, aggregate redemption value of $10,235 and $10,630 at March 31, 2017 and December 31, 2016, respectively
 
(2,063
)
 
(1,967
)
Limited partners’ interests in consolidated partnerships
 
35,217

 
35,168

Total noncontrolling interests
 
33,154

 
33,201

Total equity
 
6,764,503

 
2,624,502

Total liabilities and equity
$
11,135,972

 
4,488,906

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 March 31,
 
 
2017
 
2016
Revenues:
 
 
 
 
Minimum rent
$
141,240

 
107,674

Percentage rent
 
2,906

 
1,703

Recoveries from tenants and other income
 
45,279

 
33,487

Management, transaction, and other fees
 
6,706

 
6,764

Total revenues
 
196,131

 
149,628

Operating expenses:
 
 
 
 
Depreciation and amortization
 
60,053

 
38,716

Operating and maintenance
 
29,763

 
22,685

General and administrative
 
17,673

 
16,299

Real estate taxes
 
21,450

 
15,870

Other operating expenses (note 2)
 
71,512

 
2,306

Total operating expenses
 
200,451

 
95,876

Other expense (income):
 
 
 
 
Interest expense, net
 
27,199

 
24,142

Provision for impairment
 

 
1,666

Net investment (income) loss, including unrealized (gains) losses of ($852) and ($230) for the three months ended March 31, 2017 and 2016, respectively
 
(1,097
)
 
155

Total other expense (income)
 
26,102

 
25,963

(Loss) income from operations before equity in income of investments in real estate partnerships
 
(30,422
)
 
27,789

Equity in income of investments in real estate partnerships
 
9,342

 
12,920

Income tax expense of taxable REIT subsidiary
 
50

 

(Loss) income from operations
 
(21,130
)
 
40,709

Gain on sale of real estate, net of tax
 
415

 
12,868

Net (loss) income
 
(20,715
)
 
53,577

Noncontrolling interests:
 
 
 
 
Exchangeable operating partnership units
 
19

 
(85
)
Limited partners’ interests in consolidated partnerships
 
(671
)
 
(349
)
Loss attributable to noncontrolling interests
 
(652
)
 
(434
)
Net (loss) income attributable to the Company
 
(21,367
)
 
53,143

Preferred stock dividends and issuance costs
 
(11,856
)
 
(5,266
)
Net (loss) income attributable to common stockholders
$
(33,223
)
 
47,877


 
 
 
 
(Loss) income per common share - basic
$
(0.26
)
 
0.49

(Loss) income per common share - diluted
$
(0.26
)
 
0.49

See accompanying notes to consolidated financial statements.

2




REGENCY CENTERS CORPORATION
Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
 
 
Three months ended March 31,
 
 
2017
 
2016
Net (loss) income
$
(20,715
)
 
53,577

Other comprehensive (loss) income:
 
 
 
 
Effective portion of change in fair value of derivative instruments:
 
 
 
 
Effective portion of change in fair value of derivative instruments
 
(68
)
 
(16,785
)
Reclassification adjustment of derivative instruments included in net income
 
2,654

 
2,453

Unrealized gain (loss) on available-for-sale securities
 
32

 
(36
)
Other comprehensive income (loss)
 
2,618

 
(14,368
)
Comprehensive (loss) income
 
(18,097
)
 
39,209

Less: comprehensive income (loss) attributable to noncontrolling interests:
 
 
 
 
Net income attributable to noncontrolling interests
 
652

 
434

Other comprehensive income (loss) attributable to noncontrolling interests
 
65

 
(168
)
Comprehensive income attributable to noncontrolling interests
 
717

 
266

Comprehensive (loss) income attributable to the Company
$
(18,814
)
 
38,943

See accompanying notes to consolidated financial statements.


3





REGENCY CENTERS CORPORATION
Consolidated Statements of Equity
For the three months ended March 31, 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
 

 

 

 

 

 
53,143

 
53,143

 
85

 
349

 
434

 
53,577

Other comprehensive loss
 

 

 

 

 
(14,200
)
 

 
(14,200
)
 
(22
)
 
(146
)
 
(168
)
 
(14,368
)
Deferred compensation plan, net
 

 

 
1,287

 
(1,287
)
 

 

 

 

 

 

 

Restricted stock issued, net of amortization
 

 
2

 

 
3,400

 

 

 
3,402

 

 

 

 
3,402

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

 

 

 
(7,950
)
 

 

 
(7,950
)
 

 

 

 
(7,950
)
Common stock issued under dividend reinvestment plan
 

 

 

 
292

 

 

 
292

 

 

 

 
292

Common stock issued, net of issuance costs
 

 
2

 

 
12,291

 

 

 
12,293

 

 

 

 
12,293

Contributions from partners
 

 

 

 

 

 

 

 

 
8,389

 
8,389

 
8,389

Distributions to partners
 

 

 

 
(350
)
 

 

 
(350
)
 

 
(1,387
)
 
(1,387
)
 
(1,737
)
Cash dividends declared:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock
 

 

 

 

 

 
(5,266
)
 
(5,266
)
 

 

 

 
(5,266
)
Common stock/unit ($0.50 per share)
 

 

 

 

 

 
(48,802
)
 
(48,802
)
 
(77
)
 

 
(77
)
 
(48,879
)
Balance at March 31, 2016
 
$
325,000

 
976

 
(18,371
)
 
2,748,904

 
(72,893
)
 
(936,945
)
 
2,046,671

 
(1,989
)
 
37,691

 
35,702

 
2,082,373

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 loss
 

 

 

 

 

 
(21,367
)
 
(21,367
)
 
(19
)
 
671

 
652

 
(20,715
)
Other comprehensive income
 

 

 

 

 
2,555

 

 
2,555

 
2

 
63

 
65

 
2,620

Deferred compensation plan, net
 

 

 
(411
)
 
412

 

 

 
1

 

 

 

 
1

Restricted stock issued, net of amortization
 

 
2

 

 
3,731

 

 

 
3,733

 

 

 

 
3,733

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

 
(1
)
 

 
(18,219
)
 

 

 
(18,220
)
 

 

 

 
(18,220
)
Common stock issued under dividend reinvestment plan
 

 

 

 
301

 

 

 
301

 

 

 

 
301

Common stock issued, net of issuance costs
 

 
655

 

 
4,479,031

 

 

 
4,479,686

 

 

 

 
4,479,686

Redemption of preferred stock
 
(250,000
)
 

 

 
8,615

 

 
(8,615
)
 
(250,000
)
 

 

 

 
(250,000
)
Contributions from partners
 

 

 

 

 

 

 

 

 
153

 
153

 
153

Distributions to partners
 

 

 

 

 

 

 

 

 
(838
)
 
(838
)
 
(838
)
Cash dividends declared:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock
 

 

 

 

 

 
(3,241
)
 
(3,241
)
 

 

 

 
(3,241
)
Common stock/unit ($0.51 per share)
 

 

 

 

 

 
(53,400
)
 
(53,400
)
 
(79
)
 

 
(79
)
 
(53,479
)
Balance at March 31, 2017
 
$
75,000

 
1,701

 
(17,473
)
 
7,768,794

 
(15,791
)
 
(1,080,882
)
 
6,731,349

 
(2,063
)
 
35,217

 
33,154

 
6,764,503

See accompanying notes to consolidated financial statements.

4





REGENCY CENTERS CORPORATION
Consolidated Statements of Cash Flows
For the three months ended March 31, 2017 and 2016
(in thousands)
(unaudited)
 
 
2017
 
2016
Cash flows from operating activities:
 
 
 
 
Net (loss) income
$
(20,715
)
 
53,577

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
60,053

 
38,716

Amortization of deferred loan cost and debt premium
 
2,459

 
2,353

(Accretion) and amortization of above and below market lease intangibles, net
 
(3,484
)
 
(351
)
Stock-based compensation, net of capitalization
 
12,131

 
2,621

Equity in income of investments in real estate partnerships
 
(9,342
)
 
(12,920
)
Gain on sale of real estate, net of tax
 
(415
)
 
(12,868
)
Provision for impairment
 

 
1,666

Distribution of earnings from operations of investments in real estate partnerships
 
12,784

 
13,840

Deferred income tax benefit
 
(87
)
 

Deferred compensation expense
 
1,062

 
(148
)
Realized and unrealized (gain) loss on investments
 
(1,064
)
 
155

Changes in assets and liabilities:
 
 
 
 
Restricted cash
 
67

 
(109
)
Accounts receivable, net
 
8,974

 
4,371

Straight-line rent receivables, net
 
(3,439
)
 
(1,848
)
Deferred leasing costs
 
(1,355
)
 
(2,903
)
Other assets
 
(2,657
)
 
(746
)
Accounts payable and other liabilities
 
(24,370
)
 
(7,286
)
Tenants’ security, escrow deposits and prepaid rent
 
2,121

 
(1,301
)
Net cash provided by operating activities
 
32,723

 
76,819

Cash flows from investing activities:
 
 
 
 
Acquisition of operating real estate
 

 
(16,483
)
Acquisition of Equity One, net of cash acquired of $72,534
 
(648,957
)
 

Real estate development and capital improvements
 
(66,504
)
 
(38,289
)
Proceeds from sale of real estate investments
 
1,749

 
32,261

Issuance of notes receivable
 
(510
)
 

Investments in real estate partnerships
 
(1,688
)
 
(2,438
)
Distributions received from investments in real estate partnerships
 
25,428

 
18,296

Dividends on investment securities
 
55

 
59

Acquisition of securities
 
(3,334
)
 
(41,946
)
Proceeds from sale of securities
 
3,815

 
41,207

Net cash used in investing activities
 
(689,946
)
 
(7,333
)
Cash flows from financing activities:
 
 
 
 
Net proceeds from common stock issuance
 

 
12,293

Repurchase of common shares in conjunction with equity award plans
 
(18,275
)
 
(7,984
)
Proceeds from sale of treasury stock
 
76

 
904

Redemption of preferred stock and partnership units
 
(250,000
)
 

Distributions to limited partners in consolidated partnerships, net
 
(786
)
 
(1,707
)
Distributions to exchangeable operating partnership unit holders
 
(79
)
 
(77
)
Dividends paid to common stockholders
 
(53,289
)
 
(48,510
)
Dividends paid to preferred stockholders
 
(3,241
)
 
(5,266
)
Proceeds from issuance of fixed rate unsecured notes, net
 
646,424

 

Proceeds from unsecured credit facilities
 
740,000

 
10,000

Repayment of unsecured credit facilities
 
(360,000
)
 
(10,000
)
Proceeds from notes payable
 
1,577

 

Repayment of notes payable
 
(11,422
)
 
(27,281
)
Scheduled principal payments
 
(1,367
)
 
(1,572
)
Payment of loan costs
 
(8,796
)
 
(5
)
Net cash provided by (used in) financing activities
 
680,822

 
(79,205
)
Net increase (decrease) in cash and cash equivalents
 
23,599

 
(9,719
)
Cash and cash equivalents at beginning of the period
 
13,256

 
36,856

Cash and cash equivalents at end of the period
$
36,855

 
27,137


5





REGENCY CENTERS CORPORATION
Consolidated Statements of Cash Flows
For the three months ended March 31, 2017, and 2016
(in thousands)
(unaudited)
 
 
2017
 
2016
Supplemental disclosure of cash flow information:
 
 
 
 
Cash paid for interest (net of capitalized interest of $1,061 and $973 in 2017 and 2016, respectively)
$
7,687

 
7,611

Supplemental disclosure of non-cash transactions:
 
 
 
 
Common stock issued under dividend reinvestment plan
$
301

 
292

Stock-based compensation capitalized
$
778

 
814

Contributions from limited partners in consolidated partnerships, net
$
100

 
8,362

Common stock issued for dividend reinvestment in trust
$
177

 
190

Contribution of stock awards into trust
$
929

 
958

Distribution of stock held in trust
$
4,114

 
1,807

Change in fair value of securities available-for-sale
$
32

 
(36
)
Equity One Merger:
 
 
 
 
Real estate, net
$
5,985,895

 

Investments in real estate partnerships
$
103,566

 

Notes payable
$
(757,399
)
 

Other assets and liabilities, net
$
(80,693
)
 

Common stock exchanged for Equity One shares
$
(4,471,808
)
 

See accompanying notes to consolidated financial statements.


REGENCY CENTERS, L.P.
Consolidated Balance Sheets
March 31, 2017 and December 31, 2016
(in thousands, except unit data)
    
 
 
2017
 
2016
Assets
 
(unaudited)
 
 
Real estate investments at cost:
 
 
 
 
Land
$
4,760,963

 
1,660,424

Buildings and improvements
 
5,908,653

 
3,092,197

Properties in development
 
292,480

 
180,878

 
 
10,962,096

 
4,933,499

Less: accumulated depreciation
 
1,166,657

 
1,124,391

 
 
9,795,439

 
3,809,108

Properties held for sale
 
19,600

 

Investments in real estate partnerships
 
381,691

 
296,699

Net real estate investments
 
10,196,730

 
4,105,807

Cash and cash equivalents
 
36,855

 
13,256

Restricted cash
 
7,987

 
4,623

Tenant and other receivables, net of allowance for doubtful accounts and straight-line rent reserves of $9,577 and $9,021 at March 31, 2017 and December 31, 2016, respectively
 
119,843

 
111,722

Deferred leasing costs, less accumulated amortization of $85,971 and $83,529 at March 31, 2017 and December 31, 2016, respectively
 
68,299

 
69,000

Acquired lease intangible assets, less accumulated amortization of $69,324 and $56,695 at March 31, 2017 and December 31, 2016, respectively
 
606,707

 
118,831

Trading securities held in trust
 
29,025

 
28,588

Other assets
 
70,526

 
37,079

Total assets
$
11,135,972

 
4,488,906

Liabilities and Capital
 
 
 
 
Liabilities:
 
 
 
 
Notes payable
$
2,749,202

 
1,363,925

Unsecured credit facilities
 
658,024

 
278,495

Accounts payable and other liabilities
 
242,638

 
138,936

Acquired lease intangible liabilities, less accumulated amortization of $28,689 and $23,538 at March 31, 2017 and December 31, 2016, respectively
 
680,469

 
54,180

Tenants’ security, escrow deposits and prepaid rent
 
41,136

 
28,868

Total liabilities
 
4,371,469

 
1,864,404

Commitments and contingencies
 

 

Capital:
 
 
 
 
Partners’ capital:
 
 
 
 
Preferred units of general partner, $0.01 par value per unit, 3,000,000 and 13,000,000 units issued and outstanding at March 31, 2017 and December 31, 2016, liquidation preference of $25 per unit
 
75,000

 
325,000

General partner; 170,076,671 and 104,497,286 units outstanding at March 31, 2017 and December 31, 2016, respectively
 
6,672,140

 
2,284,647

Limited partners; 154,170 units outstanding at March 31, 2017 and December 31, 2016
 
(2,063
)
 
(1,967
)
Accumulated other comprehensive loss
 
(15,791
)
 
(18,346
)
Total partners’ capital
 
6,729,286

 
2,589,334

Noncontrolling interests:
 
 
 
 
Limited partners’ interests in consolidated partnerships
 
35,217

 
35,168

Total noncontrolling interests
 
35,217

 
35,168

Total capital
 
6,764,503

 
2,624,502

Total liabilities and capital
$
11,135,972

 
4,488,906

See accompanying notes to consolidated financial statements.

6





REGENCY CENTERS, L.P.
Consolidated Statements of Operations
(in thousands, except per unit data)
(unaudited)
 
 
Three months ended March 31,
 
 
2017
 
2016
Revenues:
 
 
 
 
Minimum rent
$
141,240

 
107,674

Percentage rent
 
2,906

 
1,703

Recoveries from tenants and other income
 
45,279

 
33,487

Management, transaction, and other fees
 
6,706

 
6,764

Total revenues
 
196,131

 
149,628

Operating expenses:
 
 
 
 
Depreciation and amortization
 
60,053

 
38,716

Operating and maintenance
 
29,763

 
22,685

General and administrative
 
17,673

 
16,299

Real estate taxes
 
21,450

 
15,870

Other operating expenses (note 2)
 
71,512

 
2,306

Total operating expenses
 
200,451

 
95,876

Other expense (income):
 
 
 
 
Interest expense, net
 
27,199

 
24,142

Provision for impairment
 

 
1,666

Net investment (income) loss, including unrealized (gains) losses of ($852) and ($230) for the three months ended March 31, 2017 and 2016, respectively
 
(1,097
)
 
155

Total other expense (income)
 
26,102

 
25,963

(Loss) income from operations before equity in income of investments in real estate partnerships
 
(30,422
)
 
27,789

Equity in income of investments in real estate partnerships
 
9,342

 
12,920

Income tax expense of taxable REIT subsidiary
 
50

 

(Loss) income from operations
 
(21,130
)
 
40,709

Gain on sale of real estate, net of tax
 
415

 
12,868

Net (loss) income
 
(20,715
)
 
53,577

Limited partners’ interests in consolidated partnerships
 
(671
)
 
(349
)
Net (loss) income attributable to the Partnership
 
(21,386
)
 
53,228

Preferred unit distributions and issuance costs
 
(11,856
)
 
(5,266
)
Net (loss) income attributable to common unit holders
$
(33,242
)
 
47,962


 
 
 
 
(Loss) income per common unit - basic
$
(0.26
)
 
0.49

(Loss) income per common unit - diluted
$
(0.26
)
 
0.49

See accompanying notes to consolidated financial statements.

7




REGENCY CENTERS, L.P.
Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
 
 
Three months ended March 31,
 
 
2017
 
2016
Net (loss) income
$
(20,715
)
 
53,577

Other comprehensive (loss) income:
 
 
 
 
Effective portion of change in fair value of derivative instruments:
 
 
 
 
Effective portion of change in fair value of derivative instruments
 
(68
)
 
(16,785
)
Reclassification adjustment of derivative instruments included in net income
 
2,654

 
2,453

Unrealized gain (loss) on available-for-sale securities
 
32

 
(36
)
Other comprehensive income (loss)
 
2,618

 
(14,368
)
Comprehensive (loss) income
 
(18,097
)
 
39,209

Less: comprehensive income (loss) attributable to noncontrolling interests:
 
 
 
 
Net income attributable to noncontrolling interests
 
671

 
349

Other comprehensive income (loss) attributable to noncontrolling interests
 
63

 
(146
)
Comprehensive income attributable to noncontrolling interests
 
734

 
203

Comprehensive (loss) income attributable to the Partnership
$
(18,831
)
 
39,006

See accompanying notes to consolidated financial statements.


8





REGENCY CENTERS, L.P.
Consolidated Statements of Capital
For the three months ended March 31, 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
 
53,143

 
85

 

 
53,228

 
349

 
53,577

Other comprehensive loss
 

 
(22
)
 
(14,200
)
 
(14,222
)
 
(146
)
 
(14,368
)
Contributions from partners
 

 

 

 

 
8,389

 
8,389

Distributions to partners
 
(49,152
)
 
(77
)
 

 
(49,229
)
 
(1,387
)
 
(50,616
)
Preferred unit distributions
 
(5,266
)
 

 

 
(5,266
)
 

 
(5,266
)
Restricted units issued as a result of amortization of restricted stock issued by Parent Company
 
3,402

 

 

 
3,402

 

 
3,402

Common units redeemed as a result of common stock redeemed by Parent Company, net of issuances
 
4,635

 

 

 
4,635

 

 
4,635

Balance at March 31, 2016
 
2,119,564

 
(1,989
)
 
(72,893
)
 
2,044,682

 
37,691

 
2,082,373

 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2016
 
2,609,647

 
(1,967
)
 
(18,346
)
 
2,589,334

 
35,168

 
2,624,502

Net loss
 
(21,367
)
 
(19
)
 

 
(21,386
)
 
671

 
(20,715
)
Other comprehensive income
 

 
2

 
2,555

 
2,557

 
63

 
2,620

Deferred compensation plan, net
 

 

 

 

 

 

Contributions from partners
 

 

 

 

 
153

 
153

Distributions to partners
 
(53,400
)
 
(79
)
 

 
(53,479
)
 
(838
)
 
(54,317
)
Preferred unit distributions
 
(3,241
)
 

 

 
(3,241
)
 

 
(3,241
)
Restricted units issued as a result of amortization of restricted stock issued by Parent Company
 
3,733

 

 

 
3,733

 

 
3,733

Preferred stock redemptions
 
(250,000
)
 

 

 
(250,000
)
 

 
(250,000
)
Common units issued as a result of common stock issued by Parent Company, net of repurchases
 
4,461,767

 

 

 
4,461,767

 

 
4,461,767

Balance at March 31, 2017
$
6,747,139

 
(2,063
)
 
(15,791
)
 
6,729,285

 
35,217

 
6,764,502

See accompanying notes to consolidated financial statements.


9





REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the three months ended March 31, 2017 and 2016
(in thousands)
(unaudited)
 
 
2017
 
2016
Cash flows from operating activities:
 
 
 
 
Net (loss) income
$
(20,715
)
 
53,577

Adjustments to reconcile net income to net cash provided by operating activities:
 

 

Depreciation and amortization
 
60,053

 
38,716

Amortization of deferred loan cost and debt premium
 
2,459

 
2,353

(Accretion) and amortization of above and below market lease intangibles, net
 
(3,484
)
 
(351
)
Stock-based compensation, net of capitalization
 
12,131

 
2,621

Equity in income of investments in real estate partnerships
 
(9,342
)
 
(12,920
)
Gain on sale of real estate, net of tax
 
(415
)
 
(12,868
)
Provision for impairment
 

 
1,666

Distribution of earnings from operations of investments in real estate partnerships
 
12,784

 
13,840

Deferred income tax benefit
 
(87
)
 

Deferred compensation expense
 
1,062

 
(148
)
Realized and unrealized (gain) loss on investments
 
(1,064
)
 
155

Changes in assets and liabilities:
 

 

Restricted cash
 
67

 
(109
)
Accounts receivable, net
 
8,974

 
4,371

Straight-line rent receivables, net
 
(3,439
)
 
(1,848
)
Deferred leasing costs
 
(1,355
)
 
(2,903
)
Other assets
 
(2,657
)
 
(746
)
Accounts payable and other liabilities
 
(24,370
)
 
(7,286
)
Tenants’ security, escrow deposits and prepaid rent
 
2,121

 
(1,301
)
Net cash provided by operating activities
 
32,723

 
76,819

Cash flows from investing activities:
 
 
 
 
Acquisition of operating real estate
 

 
(16,483
)
Acquisition of Equity One, net of cash acquired of $72,534
 
(648,957
)
 

Real estate development and capital improvements
 
(66,504
)
 
(38,289
)
Proceeds from sale of real estate investments
 
1,749

 
32,261

Issuance of notes receivable
 
(510
)
 

Investments in real estate partnerships
 
(1,688
)
 
(2,438
)
Distributions received from investments in real estate partnerships
 
25,428

 
18,296

Dividends on investment securities
 
55

 
59

Acquisition of securities
 
(3,334
)
 
(41,946
)
Proceeds from sale of securities
 
3,815

 
41,207

Net cash used in investing activities
 
(689,946
)
 
(7,333
)
Cash flows from financing activities:
 
 
 
 
Net proceeds from common units issued as a result of common stock issued by Parent Company
 

 
12,293

Repurchase of common shares in conjunction with equity award plans
 
(18,275
)
 
(7,984
)
Proceeds from sale of treasury stock
 
76

 
904

Redemption of preferred partnership units
 
(250,000
)
 

Distributions (to) from limited partners in consolidated partnerships, net
 
(786
)
 
(1,707
)
Distributions to partners
 
(53,368
)
 
(48,587
)
Distributions to preferred unit holders
 
(3,241
)
 
(5,266
)
Proceeds from issuance of fixed rate unsecured notes, net
 
646,424

 

Proceeds from unsecured credit facilities
 
740,000

 
10,000

Repayment of unsecured credit facilities
 
(360,000
)
 
(10,000
)
Proceeds from notes payable
 
1,577

 

Repayment of notes payable
 
(11,422
)
 
(27,281
)
Scheduled principal payments
 
(1,367
)
 
(1,572
)
Payment of loan costs
 
(8,796
)
 
(5
)
Net cash provided by (used in) financing activities
 
680,822

 
(79,205
)
Net increase (decrease) in cash and cash equivalents
 
23,599

 
(9,719
)
Cash and cash equivalents at beginning of the period
 
13,256

 
36,856

Cash and cash equivalents at end of the period
$
36,855

 
27,137




10





REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the three months ended March 31, 2017, and 2016
(in thousands)
(unaudited)
 
 
2017
 
2016
Supplemental disclosure of cash flow information:
 
 
 
 
Cash paid for interest (net of capitalized interest of $1,061 and $973 in 2017 and 2016, respectively)
$
7,687

 
7,611

Supplemental disclosure of non-cash transactions:
 
 
 
 
Common stock issued by Parent Company for dividend reinvestment plan
$
301

 
292

Stock-based compensation capitalized
$
778

 
814

Contributions from limited partners in consolidated partnerships, net
$
100

 
8,362

Common stock issued for dividend reinvestment in trust
$
177

 
190

Contribution of stock awards into trust
$
929

 
958

Distribution of stock held in trust
$
4,114

 
1,807

Change in fair value of securities available-for-sale
$
32

 
(36
)
Equity One Merger:
 


 


Real estate, net
$
5,985,895

 

Investments in real estate partnerships
$
103,566

 

Notes payable
$
(757,399
)
 

Other assets and liabilities, net
$
(80,693
)
 

Common stock exchanged for Equity One shares
$
(4,471,808
)
 

See accompanying notes to consolidated financial statements.



11




REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
March 31, 2017

1.
Organization and Principles of Consolidation
General
Regency Centers Corporation (the “Parent Company”) began its operations as a Real Estate Investment Trust (“REIT”) in 1993 and is the general partner of Regency Centers, L.P. (the “Operating Partnership”). The Parent Company engages in the ownership, management, leasing, acquisition, and development of retail shopping centers through the Operating Partnership. The Parent Company has no other assets other than through its investment in the Operating Partnership, and its only liabilities are the unsecured notes assumed from the Equity One merger, which are co-issued and guaranteed by the Operating Partnership. The Parent Company guarantees all of the unsecured debt of the Operating Partnership.
On March 1, 2017, Regency completed its merger with Equity One, Inc., whereby Equity One merged with and into Regency, with Regency continuing as the surviving public company. Under the terms of the Merger Agreement, each Equity One stockholder received 0.45 of a newly issued share of Regency common stock for each share of Equity One common stock owned immediately prior to the effective time of the Merger, resulting in the issuance of approximately 65.5 million shares of common stock to effect the merger.
As of March 31, 2017, the Parent Company, the Operating Partnership, and their controlled subsidiaries on a consolidated basis (the "Company” or “Regency”) owned 313 retail shopping centers and held partial interests in an additional 116 retail shopping centers through unconsolidated investments in real estate partnerships (also referred to as "joint ventures" or "investment partnerships").

The consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. These adjustments are considered to be of a normal recurring nature.

Consolidation
The Company consolidates properties that are wholly owned or properties where it owns less than 100%, but which it controls. Control is determined using an evaluation based on accounting standards related to the consolidation of voting interest entities and variable interest entities ("VIEs"). For joint ventures that are determined to be a VIE, the Company consolidates the entity where it is deemed to be the primary beneficiary. Determination of the primary beneficiary is based on whether an entity has (1) the power to direct the activities of the VIE that most significantly impact the entity's economic performance, and (2) the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE. The Company's determination of the primary beneficiary considers all relationships between it and the VIE, including management agreements and other contractual arrangements.
Ownership of the Operating Partnership
The Operating Partnership’s capital includes general and limited common Partnership Units. As of March 31, 2017, the Parent Company owned approximately 99.9% of the outstanding common Partnership Units of the Operating Partnership with the remaining limited Partnership Units held by third parties (“Exchangeable operating partnership units” or “EOP units”). The Parent Company serves as general partner of the Operating Partnership. The EOP unit holders have limited rights over the Operating Partnership such that they do not have the power to direct the activities of the Operating Partnership. As such, the Operating Partnership is considered a variable interest entity, and the Parent Company, which consolidates it, is the primary beneficiary. The Parent Company’s only investment is the Operating Partnership. Net income and distributions of the Operating Partnership are allocable to the general and limited common Partnership Units in accordance with their ownership percentages.
Segment Reporting 

The Company's business is investing in retail shopping centers through direct ownership or through joint ventures. The Company actively manages its portfolio of retail shopping centers and may from time to time make decisions to sell lower performing properties or developments not meeting its long-term investment

12



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
March 31, 2017

objectives. The proceeds from sales are reinvested into higher quality retail shopping centers, through acquisitions or new developments, which management believes will generate sustainable revenue growth and attractive returns. It is management's intent that all retail shopping centers will be owned or developed for investment purposes. The Company's revenues and net income are generated from the operation of its investment portfolio. The Company also earns fees for services provided to manage and lease retail shopping centers owned through joint ventures. 

The Company's portfolio is located throughout the United States. Management does not distinguish or group its operations on a geographical basis for purposes of allocating resources or capital. The Company reviews operating and financial data for each property on an individual basis; therefore, the Company defines an operating segment as its individual properties. The individual properties have been aggregated into one reportable segment based upon their similarities with regard to both the nature and economics of the centers, tenants and operational processes, as well as long-term average financial performance.

Real Estate Partnerships
Regency has an ownership interest in 127 properties through partnerships, of which 11 are consolidated. Our partners in these ventures include institutional investors, other real estate developers and/or operators, and individual parties who help Regency source transactions for development and investment (the "Partners" or "limited partners"). Regency has a variable interest in these entities through its equity interests. As managing member, Regency maintains the books and records and typically provides leasing and property management to the partnerships. The partners’ level of involvement varies from protective decisions (debt, bankruptcy, selling primary asset(s) of business) to involvement in approving leases, operating budgets, and capital budgets.
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.

The majority of the operations of the VIEs are funded with cash flows generated by the properties, or in the case of developments, with capital contributions or third party construction loans. Regency does not provide financial support to the VIEs beyond the terms stipulated in the partnership operating agreements.
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

13



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
March 31, 2017

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.

The assets of these partnerships are restricted to the use of the partnerships and cannot be used by general creditors of the Company. And similarly, the obligations of these partnerships can only be settled by the assets of these partnerships.
The major classes of assets, liabilities, and non-controlling equity interests held by the Company's VIEs, exclusive of the Operating Partnership as a whole, are as follows:
(in thousands)
March 31, 2017
December 31, 2016
Assets
 
 
Real estate assets, net
$
89,682

86,440

Cash and cash equivalents
3,516

3,444

Liabilities
 
 
Notes payable
9,757

8,175

Equity
 
 
Limited partners’ interests in consolidated partnerships
17,709

17,565



Recent Accounting Pronouncements
The following table provides a brief description of recent accounting pronouncements and expected impact on our financial statements:
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 three months ended March 31, 2016.

Not yet adopted:
 
 
 
 
 
 
ASU 2016-01, January 2016, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities
 
The standard 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.

 
 
 
 
 
 
 

14



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
March 31, 2017

Standard
 
Description
 
Date of adoption
 
Effect on the financial statements or other significant matters
ASU 2016-15, August 2016, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments
 
The standard will make 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. Early adoption is permitted on a retrospective basis.
 
January 2018
 
The Company is evaluating the alternative methods of adoption and does not expect the adoption to have a material impact on its Statements of Cash Flows.
 
 
 
 
 
 
 
ASU 2017-01
January 2017, Business Combinations (Topic 805): Clarifying the Definition of a Business
 
The amendments in this update provide 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. This screen reduces the number of transactions that need to be further evaluated.

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.

 
January 2018
 
The Company is evaluating the amendments from this update, but expects it to change the treatment of individual operating properties from being considered a business to being considered an asset.

This change will result in acquisition costs being capitalized as part of the asset acquisition, whereas current treatment has them recognized in earnings in the period incurred.

Additional changes from the update are being evaluated to identify their impact to the Company's financial statements and related disclosures.
 
 
 
 
 
 
 

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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
March 31, 2017

Standard
 
Description
 
Date of adoption
 
Effect on the financial statements or other significant matters
Revenue from Contracts with Customers (Topic 606):

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
 
The standard will replace existing revenue recognition standards and significantly expand the disclosure requirements for revenue arrangements. It may be adopted either retrospectively or on a modified retrospective basis to new contracts and existing contracts with remaining performance obligations as of the effective date.














 
January 2018
 
The Company is completing its evaluation of the new ASU's as applied to its revenue streams and contracts within the scope of Topic 606. The Company currently does not expect the adoption of these new ASU's to result in a material change to its revenue recognition policies or practices, including timing or presentation.

The Company is evaluating the adoption method to apply, which is dependent on final determination of the nature of any changes resulting from the new standard.


 
 
 
 
 
 
 

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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
March 31, 2017

Standard
 
Description
 
Date of adoption
 
Effect on the financial statements or other significant matters
ASU 2016-02, February 2016, Leases (Topic 842)
 
The standard 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 initial direct leasing costs, which no longer considers fixed internal leasing salaries as capitalizable costs.

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.
Capitalization of internal leasing salaries 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.
 
 
 
 
 
 
 
ASU 2016-13, June 2016, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
 
The amendments in this update replace 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 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.
 
 
 
 
 
 
 



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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
March 31, 2017


2.
Real Estate Investments

Acquisitions

The following table details the shopping centers acquired or land acquired or leased for development:
(in thousands)
 
Three months ended March 31, 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