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Section 1: 8-K (8-K)

Document
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM 8-K
 

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

February 8, 2017
Date of Report (Date of earliest event reported)
 
 
 
REGENCY CENTERS CORPORATION
(Exact name of registrant as specified in its charter)
 
37967190_reglogocover123116.jpg
 
Florida
59-3191743
(State or other jurisdiction
of incorporation)
001-12298
(IRS Employer
Identification No.)
 
(Commission
File Number)
 
 
 
 
One Independent Drive, Suite 114
Jacksonville, Florida 32202
(Address of principal executive offices) (Zip Code)
 
 
 
 (904) 598-7000
(Registrant's telephone number, including area code)
 
Not Applicable
(Former name or former address, if changed since last report)
 
 
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230 .425)
 o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 






Item 2.02    Disclosure of Results of Operations and Financial Condition

On February 8, 2017, Regency issued an earnings release for the three months and year ended December 31, 2016, which is attached as Exhibit 99.1.

On February 8, 2017, Regency posted on its website, at www.regencycenters.com, the supplemental information for the three months and year ended December 31, 2016, which is attached as Exhibit 99.2.


Item 9.01    Financial Statements and Exhibits

(d) Exhibits

Exhibit 99.1     Earnings release issued by Regency on February 8, 2017, for the three months and year ended
December 31, 2016.

Exhibit 99.2
Supplemental information posted on its website on February 8, 2017, for the three months and year ended December 31, 2016.
    





SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
REGENCY CENTERS CORPORATION
February 8, 2017
By:

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



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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
EXHIBIT 99.1


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Regency Centers Reports Fourth Quarter and Full Year 2016 Results


JACKSONVILLE, Fla. (February 8, 2017) - Regency Centers Corporation (“Regency” or the “Company”) today reported financial and operating results for the period ended December 31, 2016.


Full-Year 2016 Highlights:

Net Income attributable to common stockholders (“Net Income”) of $1.42 per diluted share.
NAREIT Funds From Operations (“NAREIT FFO”) of $2.73 per diluted share.
Core Funds From Operations (“Core FFO”) of $3.29 per diluted share, representing per share growth of 8.2% over 2015.
Same property Net Operating Income (“NOI”), net of termination fees, increased 3.5%.
Signed 1,282 new and renewal leases representing 5.0 million rentable square feet on a comparable basis, resulting in a blended rental rate increase of 11.3%.
At December 31, 2016, the Company’s total portfolio was 95.4% leased, and its same property portfolio was 96.2% leased.
Started $218.2 million of developments and redevelopments at attractive returns.
Acquired four properties for $352.3 million.
Successfully executed two underwritten public offerings of common stock, resulting in $633 million of gross proceeds.
On November 14, 2016, the Company and Equity One, Inc. (“Equity One”) entered into a definitive Agreement and Plan of Merger (the “Merger Agreement”) providing for the merger of Equity One with and into Regency (the “Merger”), which is expected to close on or around March 1, 2017.

“2016 was a significant year of growth for Regency, and I am extremely proud of our achievements. We finished the year with strong fourth quarter performance, which allowed us to accomplish a 3.5% increase in Same property NOI for the full year, marking the fifth consecutive year of Same property NOI growth at 3.5%, or greater,” stated Martin E. “Hap” Stein, Jr., Chairman and Chief Executive Officer. “During the year, we continued to grow the Company, acquiring over $350 million of high quality shopping centers in target markets, and starting nearly $220 million of accretive development and redevelopment projects. Additionally, we further strengthened our balance sheet, reducing leverage and lowering interest costs. Our experienced and motivated team enters 2017 as focused as ever, and our pending merger with Equity One will further establish Regency as the premier national shopping center company, with superior economies of scale and an unmatched pipeline of growth opportunities to drive NOI, NAV and earnings growth and create long term value for our shareholders.”

Financial Results

Regency reported Net Income for the fourth quarter of $55.9 million, or $0.53 per diluted share, compared to Net Income of $17.6 million, or $0.18 per diluted share, for the same period in 2015. For the twelve months ended December 31, 2016 Net Income was $143.9 million, or $1.42 per diluted share, compared to $129.0 million, or $1.36 per diluted share for the same period in 2015.

The Company reported NAREIT FFO for the fourth quarter of $83.1 million, or $0.79 per diluted share, compared to $64.2 million, or $0.67 per diluted share, for the same period in 2015. For the twelve months ended December 31, 2016 NAREIT FFO was $277.3 million, or $2.73 per diluted share, compared to $276.5 million, or $2.91 per diluted share for the same period in 2015.


1

EXHIBIT 99.1

Core FFO for the fourth quarter was $89.9 million, or $0.86 per diluted share, compared to $76.0 million, or $0.79 per diluted share, for the same period in 2015. For the twelve months ended December 31, 2016 Core FFO was $334.0 million, or $3.29 per diluted share, compared to $288.9 million, or $3.04 per diluted share for the same period in 2015.


Operating Results

For the period ended December 31, 2016, Regency’s results for wholly-owned properties plus its pro-rata share of co-investment partnerships were as follows:


 
Q4 2016
FY 2016
Percent leased, same properties, at period end
96.2%
96.2%
Percent leased, all properties, at period end
95.4%
95.4%
Same property NOI growth without termination fees
3.9%
3.5%
Same property NOI growth without termination fees or redevelopments
3.5%
3.1%
Rental rate growth(1)
 
 
     New leases
21.4%
26.0%
     Renewal leases
9.7%
8.2%
     Blended average
12.7%
11.3%
Leasing transactions(2)
 
 
     Number of new and renewal leasing transactions
452
1,536
     Total square feet leased (000s)
1,862
6,185
(1) 
Operating properties only. Rent growth is calculated on a comparable-space, cash basis.
(2) 
Total of comparable and non-comparable transactions. Square footage for co-investment partnerships at 100%. Includes developments.


Portfolio Activity

Property Transactions

During the quarter and as previously disclosed, Regency and a co-investment partner acquired Plaza Venezia located in Orlando, FL for a gross purchase price of $92.5 million. Regency’s share of the gross purchase price was $18.5 million. A secured mortgage of $36.5 million was assumed at closing. Regency’s share of the debt was $7.3 million. In 2016, the Company acquired four properties for a combined gross purchase price of $426.3 million. Regency’s share of the gross purchase price was $352.3 million.

Additionally during the quarter and as previously disclosed, Regency sold one wholly-owned property and one co-investment property for a combined gross sales price of $78.7 million. Regency’s share of the gross sales price was $58.7 million. In 2016, the Company sold 18 properties for a combined $296.1 million. Regency’s share of the gross sales proceeds was $168.4 million

Developments and Redevelopments

During the quarter and as previously announced, the Company started the development of two projects with estimated net development costs totaling $101.8 million. The first, Chimney Rock Crossing, is a 218,000 square foot center located in the New York metro area, within the affluent Somerset County, NJ. With estimated net development costs of $71.2 million, Chimney Rock Crossing will be anchored by Whole Foods Market, Nordstrom Rack, and Saks Off 5th. The second development start, The Village at Riverstone, is a 165,000 square foot center located within Houston’s fastest growing master-planned community of Riverstone. Anchored by Kroger, The Village at Riverstone has estimated net development costs of $30.6 million.

At year end, the Company had 21 properties in development or redevelopment with combined, estimated costs of $290.9 million. In-process developments were a combined 52% funded and 85% leased and committed.


2

EXHIBIT 99.1


Balance Sheet

Debt Offering

Subsequent to year end, on January 26, 2017, Regency completed the sale of two tranches of senior unsecured notes: $350 million 3.6% notes due 2027 (the “2027 Notes”) and $300 million 4.4% notes due 2047 (the “2047 Notes”). The 2027 Notes are due February 1, 2027 and the 2047 Notes are due February 1, 2047. Interest on both tranches is payable semiannually on February 1st and August 1st of each year, with the first payment on August 1, 2017.

Preferred Redemption

Subsequent to year end, on January 17, 2017, Regency announced that it intends to redeem all of the issued and outstanding 6.625% Series 6 Cumulative Redeemable Preferred Shares. The 10,000,000 shares of Preferred Stock will be redeemed on February 16, 2017 (the “Redemption Date”). The redemption price for the Preferred Stock will be $25.21163 per share, which is equal to $25.00 plus accrued and unpaid dividends to, but excluding, the Redemption Date. The aggregate amount being paid to effect the redemption of the Preferred Stock is $252,116,300.


Merger-Related Activities

Both Regency and Equity One have announced that special stockholder meetings of their respective stockholders will be held on February 24, 2017 to vote on the Merger Agreement and the transactions contemplated thereby, including the Merger. During the fourth quarter, Regency incurred $6.5 million of merger-related costs, or $0.06 per diluted share, which were primarily legal and advisory costs.


Guidance

The Company has updated certain components of its 2017 earnings guidance in light of its recently announced bond offerings. These changes are summarized below. Please refer to the Company’s fourth quarter 2017 supplemental information package for a complete list of updates.

 
Full Year 2017 Guidance
 
Previous Guidance
Updated Guidance
Net Income per diluted share
$1.41 - $1.47
$1.34 - $1.40
NAREIT FFO per diluted share
$3.40 - $3.46
$3.33 - $3.39
Core FFO per diluted share
$3.42- $3.48
$3.44 - $3.50

The Company’s Guidance disclosure only reflects information related to the Company as a stand-alone entity, and is not meant to reflect or give effect to, in any manner, the Merger. For information related to the Merger, refer to the Company’s filings with the Securities and Exchange Commission (SEC).

Dividend

On February 7, 2017, Regency’s Board of Directors (the “Board”) declared a quarterly cash dividend on the Company’s common stock of $0.51 per share. The dividend was increased from the Company’s normal dividend of $0.50 per share to reflect the additional period up to the shareholder meeting to approve the Merger. The dividend is payable March 1, 2017 to shareholders of record as of February 24, 2017.









3

EXHIBIT 99.1

Conference Call Information

In conjunction with Regency’s fourth quarter results, the Company will host a conference call on Thursday, February 9, 2017 at 11:00 a.m. ET. Dial-in and webcast information is listed below.

Fourth Quarter Conference Call
Date:
 
Thursday, February 9, 2017
Time:
 
11:00 a.m. ET
Dial#:
 
877-407-0789 or 201-689-8562
Webcast:
 
www.regencycenters.com under Investor Relations
Replay

Webcast Archive:     Investor Relations page under Webcasts & Presentations


Non-GAAP Disclosure

The Company uses certain non-GAAP performance measures, in addition to the required GAAP presentations, as it believes these measures improve the understanding of the Company's operational results. Regency manages its entire real estate portfolio without regard to ownership structure, although certain decisions impacting properties owned through partnerships require partner approval. Therefore, the Company believes presenting its pro-rata share of operating results regardless of ownership structure, along with other non-GAAP measures, makes comparisons of other REITs' operating results to the Company's more meaningful. Management continually evaluates the usefulness, relevance, limitations, and calculation of the Company’s reported non-GAAP performance measures to determine how best to provide relevant information to the public, and thus such reported measures could change.

NAREIT FFO is a commonly used measure of REIT performance, which the National Association of Real Estate Investment Trusts (“NAREIT”) defines as net income, computed in accordance with GAAP, excluding gains and losses from dispositions of depreciable property, net of tax, excluding operating real estate impairments, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Regency computes NAREIT FFO for all periods presented in accordance with NAREIT's definition. Many companies use different depreciable lives and methods, and real estate values historically fluctuate with market conditions. Since NAREIT FFO excludes depreciation and amortization and gains and losses from depreciable property dispositions, and impairments, it can provide a performance measure that, when compared year over year, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, acquisition and development activities, and financing costs. This provides a perspective of the Company’s financial performance not immediately apparent from net income determined in accordance with GAAP. Thus, NAREIT FFO is a supplemental non-GAAP financial measure of the Company's operating performance, which does not represent cash generated from operating activities in accordance with GAAP and therefore, should not be considered a substitute measure of cash flows from operations. Core FFO is an additional performance measure used by Regency as the computation of NAREIT FFO includes certain non-cash and non-comparable items that affect the Company's period-over-period performance. Core FFO excludes from NAREIT FFO, but is not limited to: (a) transaction related gains, income or expense; (b) impairments on land; (c) gains or losses from the early extinguishment of debt; and (d) other non-core amounts as they occur. NAREIT FFO and Core FFO are non-GAAP financial measures and should not be considered independently, or as substitutes, for financial information presented in accordance with GAAP. The Company provides a reconciliation of Net Income to NAREIT FFO and Core FFO.











4

EXHIBIT 99.1

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


For the Periods Ended December 31, 2016 and 2015
 
Three Months Ended
 
Year to Date
 
 
 
 
2016
2015
 
2016
2015
  Net Income Attributable to Common Stockholders
 
$
55,869

17,608

 
$
143,860

128,994

   Adjustments to reconcile to Funds From Operations:(1)
 
 
 
 
 
 
Depreciation and amortization (excluding FF&E)
 
50,077

46,114

 
193,451

182,103

Provision for impairment to operating properties
 
2,500

1,820

 
3,159

1,820

Gain on sale of operating properties
 
(25,410
)
(1,361
)
 
(63,426
)
(36,642
)
Exchangeable operating partnership units
 
92

37

 
257

240

NAREIT Funds From Operations
 
$
83,128

64,218

 
$
277,301

276,515

 
 
 
 
 
 
 
NAREIT Funds From Operations
 
$
83,128

64,218

 
277,301

276,515

   Adjustments to reconcile to Core Funds From Operations:(1)
 
 
 
 
 
 
Acquisition pursuit and closing costs
 
242

367

 
2,007

675

Development pursuit costs
 
596

938

 
1,503

1,734

Merger related costs
 
6,539


 
6,539


Gain on sale of land
 
(883
)
(40
)
 
(8,769
)
(73
)
Provision for impairment to land
 
33


 
580


Hedge ineffectiveness
 
(1
)
(1
)
 
40,589

5

Early extinguishment of debt
 
250

8,298

 
14,207

8,239

Change in executive management included in gross G&A
 

2,193

 

2,193

Gain on sale of investments
 
$


 
$

(416
)
Core Funds From Operations
 
$
89,904

75,973

 
$
333,957

288,872

 
 
 
 
 
 
 
 
 
Weighted Average Shares For Earnings per Share
 
104,971

95,858

 
101,285

94,857

Weighted Average Shares For Diluted NAREIT FFO and Core FFO per Share
 
105,125

96,013

 
101,439

95,011

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

5

EXHIBIT 99.1

Same property NOI is a key non-GAAP measure used by management in evaluating the operating performance of Regency’s properties. The Company provides a reconciliation of income from operations to pro-rata same property NOI.

Reconciliation of Income from Operations to Pro-Rata Same Property NOI - Actual (in thousands)
For the Periods Ended December 31, 2016 and 2015
 
Three Months Ended
 
Year to Date
 
 
 
 
2016
2015
 
2016
2015
Income from operations
 
$
37,335

22,146

 
$
119,671

116,937

Less:
 
 
 
 
 
 
Management, transaction, and other fees
 
(6,568
)
(7,531
)
 
(25,327
)
(25,563
)
Other (1)
 
(4,976
)
(3,980
)
 
(16,144
)
(16,189
)
Plus:
 
 
 
 
 
 
Depreciation and amortization
 
42,606

37,580

 
162,327

146,829

General and administrative
 
16,631

19,373

 
65,327

65,600

Other operating expense, excluding provision for doubtful accounts
 
8,033

2,612

 
12,376

5,472

Other expense (income)
 
22,646

31,701

 
148,066

110,236

Equity in income of investments in real estate excluded from NOI (2)
 
12,271

17,979

 
33,952

67,172

NOI
 
127,978

119,880

 
500,248

470,494

 
 
 
 
 
 
 
Less pro-rata non-same property NOI (3)
 
(8,756
)
(6,048
)
 
(30,750
)
(18,462
)
 
 
 
 
 
 
 
Same Property NOI
 
$
119,222

113,832

 
$
469,498

452,032

 
 




 




Same Property NOI without termination fees
 
$
118,943

114,527

 
$
468,274

452,351

 
 
 
 
 
 
 
Same Property NOI without termination fees or redevelopments
 
$
100,754

97,339

 
$
398,049

385,978

 
(1)  Includes straight-line rental income, net of reserves, above and below market rent amortization, other fees, and noncontrolling interests.
(2) Includes non-NOI expenses incurred at our unconsolidated real estate partnerships, such as, but not limited to, straight-line rental income, above and below market rent amortization, depreciation and amortization, and interest expense.
(3) Includes revenues and expenses attributable to Non-Same Property, Projects in Development, corporate activities, and noncontrolling interests.

Reported results are preliminary and not final until the filing of the Company’s Form 10-K with the SEC and, therefore, remain subject to adjustment.

















6

EXHIBIT 99.1

Reconciliation of Net Income Attributable to Common Stockholders to NAREIT FFO and Core FFO - Guidance
 
 
 
Full Year
NAREIT FFO and Core FFO Guidance:
 
2017
Net income attributable to common stockholders
 
$
1.34

1.40

Adjustments to reconcile net income to NAREIT FFO:
 
 
 
Depreciation and amortization
 
1.99

1.99

Gain on sale of operating properties
 


All other amounts
 


NAREIT Funds From Operations
 
$
3.33

3.39

 
 
 
 
Adjustments to reconcile NAREIT FFO to Core FFO:
 
 
 
Development pursuit costs
 
0.02

0.02

Acquisition pursuit and closing costs
 
0.01

0.01

REdemption of Series 6 Preferred Stock costs
 
0.08

0.08

All other non-core amounts
 


Core Funds From Operations
 
$
3.44

3.50


The Company has published forward-looking statements and additional financial information in its fourth quarter 2016 supplemental information package that may help investors estimate earnings for 2016. A copy of the Company’s fourth quarter 2016 supplemental information is available on the Company's website at www.RegencyCenters.com or by written request to: Investor Relations, Regency Centers Corporation, One Independent Drive, Suite 114, Jacksonville, Florida, 32202. The supplemental information package contains more detailed financial and property results including financial statements, an outstanding debt summary, acquisition and development activity, investments in partnerships, information pertaining to securities issued other than common stock, property details, a significant tenant rent report and a lease expiration table in addition to earnings and valuation guidance assumptions. The information provided in the supplemental package is unaudited and there can be no assurance that the information will not vary from the final information in the Company’s Form 10-K for the year ended December 31, 2016. Regency may, but assumes no obligation to, update information in the supplemental package from time to time.



About Regency Centers Corporation (NYSE: REG)

With more than 50 years of experience, Regency is the preeminent national owner, operator and developer of high-quality, grocery anchored neighborhood and community shopping centers. The Company’s portfolio of 307 retail properties encompasses over 42.2 million square feet located in top markets throughout the United States, including co-investment partnerships. Regency has developed 225 shopping centers since 2000, representing an investment at completion of more than $3.5 billion. Operating as a fully integrated real estate company, Regency is a qualified real estate investment trust that is self-administered and self-managed.


###

Forward-looking statements involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements. Please refer to the documents filed by Regency Centers Corporation with the SEC, specifically the most recent reports on Forms 10-K and 10-Q, which identify important risk factors which could cause actual results to differ from those contained in the forward-looking statements.


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Section 3: EX-99.2 (EXHIBIT 99.2)

Exhibit
EXHIBIT 99.2

37967190_regcoverimg123116.jpg



37967190_graphicvalue123116.jpg

At Regency Centers, we have lived our values
for 50 years by executing and successfully
meeting our commitments to our people, our
customers, and our communities. We hold
ourselves to that high standard every day.
Our exceptional culture will set us apart
for the next 50 years through our unending
dedication to these beliefs:

We are our people.
We believe our people are our most
fundamental asset - the best professionals
in the business who bring our culture to life.
We are the company you want to work for and
the people you want to do business with.

We work together to sustain
superior results.
We believe that, by partnering with each other
and with our customers, our talented team
will sustain superior results over the long
term. We believe that when you are passionate
about what you are doing and who you are
working with in a results-oriented, family
atmosphere, you do it better.

We provide exceptional service
to our customers.
We believe in putting our customers first.
This starts by owning, operating, and
developing dominant shopping centers
that are exceptionally merchandised and
maintained and most preferred by the
neighborhoods and communities where our
best-in-class retailers will thrive.



 
We add value.
We believe in creating value from every
transaction. We realize the critical importance
of executing, performing and delivering on our
commitments.

We perform for our investors.
We believe that the capital that our investors
have entrusted to us is precious. We are
open and transparent. We are committed
to enhancing the investments of our
shareholders, bond and mortgage holders,
lenders, and co-investment partners.

We connect to our communities.
We believe in contributing to the betterment
of our communities. We strive to develop
and operate thriving shopping centers that
are connected to our neighborhoods. We are
continuously reducing our environmental
impact through our greengenuity® program.

We do what is right.
We believe in unwavering standards of
honesty and integrity. Since 1963, our
Company has built its reputation by
maintaining the highest ethical principles.
You will find differentiation in our character –
we do what is right and you can take us at
our word.

We are the industry leader.
We believe that through dedication to
excellence, innovation, and ongoing process
improvements, and by remaining focused on
our core values, we will continue to be the
industry leader in a highly competitive and
ever-changing market.


Our Mission is to enhance our standing as the preeminent national shopping center company through the first-rate performance of our exceptionally merchandised portfolio of dominant grocery-anchored shopping centers, the value-added service from the best team of professionals in the business to our top-performing retailers, and profitable growth and development.



Table of Contents
December 31, 2016

 
 
 
Non-GAAP Disclosures..............................................................................................................................................
 
 
 
Earnings Press Release................................................................................................................................................
 
 
 
Summary Information:
 
 
 
 
Summary Financial Information..................................................................................................................................
 
 
 
Summary Real Estate Information..............................................................................................................................
 
 
 
Financial Information:
 
 
 
 
Consolidated Balance Sheets.......................................................................................................................................
 
 
 
Consolidated Statements of Operations.......................................................................................................................
 
 
 
Supplemental Details of Operations............................................................................................................................
 
 
 
Supplemental Details of Assets and Liabilities (Real Estate Partnerships Only)........................................................
 
 
 
Supplemental Details of Operations (Real Estate Partnerships Only)........................................................................
 
 
 
Supplemental Details of Same Property NOI and Capital Expenditures (Pro-Rata)..................................................
 
 
Reconciliations of Non-GAAP Financial Measures....................................................................................................
 
 
 
Summary of Consolidated Debt .................................................................................................................................
 
 
Summary of Debt Covenants and Leverage Ratios.....................................................................................................
 
 
 
Summary of Unconsolidated Debt..............................................................................................................................
 
 
 
Summary of Preferred Stock.......................................................................................................................................
 
 
 
Investment Activity:
 
 
 
 
Property Transactions..................................................................................................................................................
 
 
 
Summary of Development, Redevelopment, and Land Held......................................................................................
 
 
 
Co-investment Partnerships:
 
 
 
 
Unconsolidated Investments........................................................................................................................................
 
 
 
Real Estate Information:
 
 
 
 
Leasing Statistics.........................................................................................................................................................
 
 
 
Average Base Rent by CBSA......................................................................................................................................
 
 
 
Significant Tenant Rents..............................................................................................................................................
 
 
 
Tenant Lease Expiration..............................................................................................................................................
 
 
Portfolio Summary Report by State............................................................................................................................
 
 
 
Forward-Looking Information:
 
 
 
 
Earnings and Valuation Guidance................................................................................................................................
 
 
 
Reconciliation of NAREIT FFO and Core FFO Guidance to Net Income................................................................
 
 
 
Glossary of Terms........................................................................................................................................................






Non-GAAP Disclosures
December 31, 2016

We use certain non-GAAP performance measures, in addition to the required GAAP presentations, as we believe these measures improve the understanding of the Company's operational results. We manage our entire real estate portfolio without regard to ownership structure, although certain decisions impacting properties owned through partnerships require partner approval. Therefore, we believe presenting our pro-rata share of operating results regardless of ownership structure, along with other non-GAAP measures, makes comparisons of other REITs' operating results to the Company's more meaningful. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP performance measures to determine how best to provide relevant information to the public, and thus such reported measures could change.

The pro-rata information provided is not, and is not intended to be, presented in accordance with GAAP. The pro- rata supplemental details of assets and liabilities and supplemental details of operations reflect our proportionate economic ownership of the assets, liabilities and operating results of the properties in our portfolio, regardless of ownership structure.

The items labeled as "Consolidated" are prepared on a basis consistent with the Company's consolidated financial statements as filed with the SEC on the most recent Form 10-Q or 10-K, as applicable.

The columns labeled "Share of JVs" represent our ownership interest in our unconsolidated (equity method) investments in real estate partnerships, and was derived on a partnership by partnership basis by applying to each financial statement line item our ownership percentage interest used to arrive at our share of investments in real estate partnerships and equity in income or loss of investments in real estate partnerships during the period when applying the equity method of accounting to each of our unconsolidated co-investment partnerships.

A similar calculation was performed for the amounts in columns labeled ''Noncontrolling Interests”, which represent the limited partners’ interests in consolidated partnerships attributable to each financial statement line item.

We do not control the unconsolidated investment partnerships, and the presentations of the assets and liabilities and revenues and expenses do not necessarily represent our legal claim to such items. The partners are entitled to profit or loss allocations and distributions of cash flows according to the operating agreements, which provide for such allocations according to their invested capital. Our share of invested capital establishes the ownership interest we
use to prepare our pro-rata share.

The presentation of pro-rata financial information has limitations as an analytical tool. Some of these limitations include, but are not limited to the following:

The amounts shown on the individual line items were derived by applying our overall economic ownership interest percentage determined when applying the equity method of accounting or allocating noncontrolling interests, and do not necessarily represent our legal claim to the assets and liabilities, or the revenues and expenses; and

Other companies in our industry may calculate their pro-rata interest differently, limiting the usefulness as a comparative measure.

Because of these limitations, the supplemental details of assets and liabilities and supplemental details of operations should not be considered independently or as a substitute for our financial statements as reported under GAAP. We compensate for these limitations by relying primarily on our GAAP results and using the pro-rata details as a supplement.


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The following non-GAAP measures, as defined in the Glossary of Terms, are commonly used by management and the investing public to understand and evaluate our operating results and performance:

Net Operating Income (NOI): The Company believes NOI provides useful information to investors to measure the operating performance of its portfolio properties. The Company provides a reconciliation of GAAP Income from Operations to pro-rata NOI.

Same Property NOI: The Company provides disclosure of NOI on a same property basis because it believes the measure provides investors with additional information regarding the operating performances of comparable assets. Same Property NOI excludes all development, non-same property and corporate level revenue and expenses. The Company provides a reconciliation of GAAP Income from Operations to pro-rata Same Property NOI.

NAREIT Funds From Operations (NAREIT FFO): The Company believes NAREIT FFO provides a performance measure that, when compared year over year, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, acquisition and development activities, and financing costs. The Company provides a reconciliation of Net Income Attributable to Common Stockholders to NAREIT FFO.

Core Funds From Operations (Core FFO): The Company believes Core FFO, which excludes certain non-cash and non-comparable items from the computation of NAREIT FFO that affect the Company's period-over-period performance, is useful to investors because it is more reflective of the core operating performance of its portfolio of properties. The Company provides a reconciliation of NAREIT FFO to Core FFO.

Adjusted Core Funds From Operations (AFFO): The Company believes AFFO provides useful information to investors to measure the Company’s ability to fund cash needs, including cash distributions to shareholders. The Company provides a reconciliation of Core FFO to AFFO
   




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Regency Centers Reports Fourth Quarter and Full Year 2016 Results


JACKSONVILLE, Fla. (February 8, 2017) - Regency Centers Corporation (“Regency” or the “Company”) today reported financial and operating results for the period ended December 31, 2016.


Full-Year 2016 Highlights:

Net Income attributable to common stockholders (“Net Income”) of $1.42 per diluted share.
NAREIT Funds From Operations (“NAREIT FFO”) of $2.73 per diluted share.
Core Funds From Operations (“Core FFO”) of $3.29 per diluted share, representing per share growth of 8.2% over 2015.
Same property Net Operating Income (“NOI”), net of termination fees, increased 3.5%.
Signed 1,282 new and renewal leases representing 5.0 million rentable square feet on a comparable basis, resulting in a blended rental rate increase of 11.3%.
At December 31, 2016, the Company’s total portfolio was 95.4% leased, and its same property portfolio was 96.2% leased.
Started $218.2 million of developments and redevelopments at attractive returns.
Acquired four properties for $352.3 million.
Successfully executed two underwritten public offerings of common stock, resulting in $633 million of gross proceeds.
On November 14, 2016, the Company and Equity One, Inc. (“Equity One”) entered into a definitive Agreement and Plan of Merger (the “Merger Agreement”) providing for the merger of Equity One with and into Regency (the “Merger”), which is expected to close on or around March 1, 2017.

“2016 was a significant year of growth for Regency, and I am extremely proud of our achievements. We finished the year with strong fourth quarter performance, which allowed us to accomplish a 3.5% increase in Same property NOI for the full year, marking the fifth consecutive year of Same property NOI growth at 3.5%, or greater,” stated Martin E. “Hap” Stein, Jr., Chairman and Chief Executive Officer. “During the year, we continued to grow the Company, acquiring over $350 million of high quality shopping centers in target markets, and starting nearly $220 million of accretive development and redevelopment projects. Additionally, we further strengthened our balance sheet, reducing leverage and lowering interest costs. Our experienced and motivated team enters 2017 as focused as ever, and our pending merger with Equity One will further establish Regency as the premier national shopping center company, with superior economies of scale and an unmatched pipeline of growth opportunities to drive NOI, NAV and earnings growth and create long term value for our shareholders.”

Financial Results

Regency reported Net Income for the fourth quarter of $55.9 million, or $0.53 per diluted share, compared to Net Income of $17.6 million, or $0.18 per diluted share, for the same period in 2015. For the twelve months ended December 31, 2016 Net Income was $143.9 million, or $1.42 per diluted share, compared to $129.0 million, or $1.36 per diluted share for the same period in 2015.

The Company reported NAREIT FFO for the fourth quarter of $83.1 million, or $0.79 per diluted share, compared to $64.2 million, or $0.67 per diluted share, for the same period in 2015. For the twelve months ended December 31, 2016 NAREIT FFO was $277.3 million, or $2.73 per diluted share, compared to $276.5 million, or $2.91 per diluted share for the same period in 2015.


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Core FFO for the fourth quarter was $89.9 million, or $0.86 per diluted share, compared to $76.0 million, or $0.79 per diluted share, for the same period in 2015. For the twelve months ended December 31, 2016 Core FFO was $334.0 million, or $3.29 per diluted share, compared to $288.9 million, or $3.04 per diluted share for the same period in 2015.


Operating Results

For the period ended December 31, 2016, Regency’s results for wholly-owned properties plus its pro-rata share of co-investment partnerships were as follows:


 
Q4 2016
FY 2016
Percent leased, same properties, at period end
96.2%
96.2%
Percent leased, all properties, at period end
95.4%
95.4%
Same property NOI growth without termination fees
3.9%
3.5%
Same property NOI growth without termination fees or redevelopments
3.5%
3.1%
Rental rate growth(1)
 
 
     New leases
21.4%
26.0%
     Renewal leases
9.7%
8.2%
     Blended average
12.7%
11.3%
Leasing transactions(2)
 
 
     Number of new and renewal leasing transactions
452
1,536
     Total square feet leased (000s)
1,862
6,185
(1) 
Operating properties only. Rent growth is calculated on a comparable-space, cash basis.
(2) 
Total of comparable and non-comparable transactions. Square footage for co-investment partnerships at 100%. Includes developments.


Portfolio Activity

Property Transactions

During the quarter and as previously disclosed, Regency and a co-investment partner acquired Plaza Venezia located in Orlando, FL for a gross purchase price of $92.5 million. Regency’s share of the gross purchase price was $18.5 million. A secured mortgage of $36.5 million was assumed at closing. Regency’s share of the debt was $7.3 million. In 2016, the Company acquired four properties for a combined gross purchase price of $426.3 million. Regency’s share of the gross purchase price was $352.3 million.

Additionally during the quarter and as previously disclosed, Regency sold one wholly-owned property and one co-investment property for a combined gross sales price of $78.7 million. Regency’s share of the gross sales price was $58.7 million. In 2016, the Company sold 18 properties for a combined $296.1 million. Regency’s share of the gross sales proceeds was $168.4 million.

Developments and Redevelopments

During the quarter and as previously announced, the Company started the development of two projects with estimated net development costs totaling $101.8 million. The first, Chimney Rock Crossing, is a 218,000 square foot center located in the New York metro area, within the affluent Somerset County, NJ. With estimated net development costs of $71.2 million, Chimney Rock Crossing will be anchored by Whole Foods Market, Nordstrom Rack, and Saks Off 5th. The second development start, The Village at Riverstone, is a 165,000 square foot center located within Houston’s fastest growing master-planned community of Riverstone. Anchored by Kroger, The Village at Riverstone has estimated net development costs of $30.6 million.

At year end, the Company had 21 properties in development or redevelopment with combined, estimated costs of $290.9 million. In-process developments were a combined 52% funded and 85% leased and committed.


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Balance Sheet

Debt Offering

Subsequent to year end, on January 26, 2017, Regency completed the sale of two tranches of senior unsecured notes: $350 million 3.6% notes due 2027 (the “2027 Notes”) and $300 million 4.4% notes due 2047 (the “2047 Notes”). The 2027 Notes are due February 1, 2027 and the 2047 Notes are due February 1, 2047. Interest on both tranches is payable semiannually on February 1st and August 1st of each year, with the first payment on August 1, 2017.


Preferred Redemption

Subsequent to year end, on January 17, 2017, Regency announced that it intends to redeem all of the issued and outstanding 6.625% Series 6 Cumulative Redeemable Preferred Shares. The 10,000,000 shares of Preferred Stock will be redeemed on February 16, 2017 (the “Redemption Date”). The redemption price for the Preferred Stock will be $25.21163 per share, which is equal to $25.00 plus accrued and unpaid dividends to, but excluding, the Redemption Date. The aggregate amount being paid to effect the redemption of the Preferred Stock is $252,116,300.


Merger-Related Activities

Both Regency and Equity One have announced that special stockholder meetings of their respective stockholders will be held on February 24, 2017 to vote on the Merger Agreement and the transactions contemplated thereby, including the Merger. During the fourth quarter, Regency incurred $6.5 million of merger-related costs, or $0.06 per diluted share, which were primarily legal and advisory costs.


Guidance

The Company has updated certain components of its 2017 earnings guidance in light of its recently announced bond offerings. These changes are summarized below. Please refer to the Company’s fourth quarter 2017 supplemental information package for a complete list of updates.

 
Full Year 2017 Guidance
 
Previous Guidance
Updated Guidance
Net Income per diluted share
$1.41 - $1.47
$1.34 - $1.40
NAREIT FFO per diluted share
$3.40 - $3.46
$3.33 - $3.39
Core FFO per diluted share
$3.42- $3.48
$3.44 - $3.50

The Company’s Guidance disclosure only reflects information related to the Company as a stand-alone entity, and is not meant to reflect or give effect to, in any manner, the Merger. For information related to the Merger, refer to the Company’s filings with the Securities and Exchange Commission (SEC).


Dividend

On February 7, 2017, Regency’s Board of Directors (the “Board”) declared a quarterly cash dividend on the Company’s common stock of $0.51 per share. The dividend was increased from the Company’s normal dividend of $0.50 per share to reflect the additional period up to the shareholder meeting to approve the Merger. The dividend is payable March 1, 2017 to shareholders of record as of February 24, 2017.







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Conference Call Information

In conjunction with Regency’s fourth quarter results, the Company will host a conference call on Thursday, February 9, 2017 at 11:00 a.m. ET. Dial-in and webcast information is listed below.

Fourth Quarter Conference Call
Date:
 
Thursday, February 9, 2017
Time:
 
11:00 a.m. ET
Dial#:
 
877-407-0789 or 201-689-8562
Webcast:
 
www.regencycenters.com under Investor Relations
Replay

Webcast Archive:     Investor Relations page under Webcasts & Presentations


Non-GAAP Disclosure

The Company uses certain non-GAAP performance measures, in addition to the required GAAP presentations, as it believes these measures improve the understanding of the Company's operational results. Regency manages its entire real estate portfolio without regard to ownership structure, although certain decisions impacting properties owned through partnerships require partner approval. Therefore, the Company believes presenting its pro-rata share of operating results regardless of ownership structure, along with other non-GAAP measures, makes comparisons of other REITs' operating results to the Company's more meaningful. Management continually evaluates the usefulness, relevance, limitations, and calculation of the Company’s reported non-GAAP performance measures to determine how best to provide relevant information to the public, and thus such reported measures could change.

NAREIT FFO is a commonly used measure of REIT performance, which the National Association of Real Estate Investment Trusts (“NAREIT”) defines as net income, computed in accordance with GAAP, excluding gains and losses from dispositions of depreciable property, net of tax, excluding operating real estate impairments, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Regency computes NAREIT FFO for all periods presented in accordance with NAREIT's definition. Many companies use different depreciable lives and methods, and real estate values historically fluctuate with market conditions. Since NAREIT FFO excludes depreciation and amortization and gains and losses from depreciable property dispositions, and impairments, it can provide a performance measure that, when compared year over year, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, acquisition and development activities, and financing costs. This provides a perspective of the Company’s financial performance not immediately apparent from net income determined in accordance with GAAP. Thus, NAREIT FFO is a supplemental non-GAAP financial measure of the Company's operating performance, which does not represent cash generated from operating activities in accordance with GAAP and therefore, should not be considered a substitute measure of cash flows from operations. Core FFO is an additional performance measure used by Regency as the computation of NAREIT FFO includes certain non-cash and non-comparable items that affect the Company's period-over-period performance. Core FFO excludes from NAREIT FFO, but is not limited to: (a) transaction related gains, income or expense; (b) impairments on land; (c) gains or losses from the early extinguishment of debt; and (d) other non-core amounts as they occur. NAREIT FFO and Core FFO are non-GAAP financial measures and should not be considered independently, or as substitutes, for financial information presented in accordance with GAAP. The Company provides a reconciliation of Net Income to NAREIT FFO and Core FFO.











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


For the Periods Ended December 31, 2016 and 2015
 
Three Months Ended
 
Year to Date
 
 
 
 
2016
2015
 
2016
2015
  Net Income Attributable to Common Stockholders
 
$
55,869

17,608

 
$
143,860

128,994

   Adjustments to reconcile to Funds From Operations:(1)
 
 
 
 
 
 
Depreciation and amortization (excluding FF&E)
 
50,077

46,114

 
193,451

182,103

Provision for impairment to operating properties
 
2,500

1,820

 
3,159

1,820

Gain on sale of operating properties
 
(25,410
)
(1,361
)
 
(63,426
)
(36,642
)
Exchangeable operating partnership units
 
92

37

 
257

240

NAREIT Funds From Operations
 
$
83,128

64,218

 
$
277,301

276,515

 
 
 
 
 
 
 
NAREIT Funds From Operations
 
$
83,128

64,218

 
277,301

276,515

   Adjustments to reconcile to Core Funds From Operations:(1)
 
 
 
 
 
 
Acquisition pursuit and closing costs
 
242

367

 
2,007

675

Development pursuit costs
 
596

938

 
1,503

1,734

Merger related costs
 
6,539


 
6,539


Gain on sale of land
 
(883
)
(40
)
 
(8,769
)
(73
)
Provision for impairment to land
 
33


 
580


Loss on derivative instruments and hedge ineffectiveness
 
(1
)
(1
)
 
40,589

5

Early extinguishment of debt
 
250

8,298

 
14,207

8,239

Change in executive management included in gross G&A
 

2,193

 

2,193

Gain on sale of investments
 
$


 
$

(416
)
Core Funds From Operations
 
$
89,904

75,973

 
$
333,957

288,872

 
 
 
 
 
 
 
 
 
Weighted Average Shares For Earnings per Share
 
104,971

95,858

 
101,285

94,857

Weighted Average Shares For Diluted NAREIT FFO and Core FFO per Share
 
105,125

96,013

 
101,439

95,011

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

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Same property NOI is a key non-GAAP measure used by management in evaluating the operating performance of Regency’s properties. The Company provides a reconciliation of income from operations to pro-rata same property NOI.

Reconciliation of Income from Operations to Pro-Rata Same Property NOI - Actual (in thousands)
For the Periods Ended December 31, 2016 and 2015
 
Three Months Ended
 
Year to Date
 
 
 
 
2016
2015
 
2016
2015
Income from operations
 
$
37,335

22,146

 
$
119,671

116,937

Less:
 
 
 
 
 
 
Management, transaction, and other fees
 
(6,568
)
(7,531
)
 
(25,327
)
(25,563
)
Other (1)
 
(4,976
)
(3,980
)
 
(16,144
)
(16,189
)
Plus:
 
 
 
 
 
 
Depreciation and amortization
 
42,606

37,580

 
162,327

146,829

General and administrative
 
16,631

19,373

 
65,327

65,600

Other operating expense, excluding provision for doubtful accounts
 
8,033

2,612

 
12,376

5,472

Other expense (income)
 
22,646

31,701

 
148,066

110,236

Equity in income of investments in real estate excluded from NOI (2)
 
12,271

17,979

 
33,952

67,172

NOI
 
127,978

119,880

 
500,248

470,494

 
 
 
 
 
 
 
Less pro-rata non-same property NOI (3)
 
(8,756
)
(6,048
)
 
(30,750
)
(18,462
)
 
 
 
 
 
 
 
Same Property NOI
 
$
119,222

113,832

 
$
469,498

452,032

 
 




 




Same Property NOI without termination fees
 
$
118,943

114,527

 
$
468,274

452,351

 
 
 
 
 
 
 
Same Property NOI without termination fees or redevelopments
 
$
100,754

97,339

 
$
398,049

385,978

 
(1)  Includes straight-line rental income, net of reserves, above and below market rent amortization, other fees, and noncontrolling interests.
(2) Includes non-NOI expenses incurred at our unconsolidated real estate partnerships, such as, but not limited to, straight-line rental income, above and below market rent amortization, depreciation and amortization, and interest expense.
(3) Includes revenues and expenses attributable to Non-Same Property, Projects in Development, corporate activities, and noncontrolling interests.

Reported results are preliminary and not final until the filing of the Company’s Form 10-K with the SEC and, therefore, remain subject to adjustment.

















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Reconciliation of Net Income Attributable to Common Stockholders to NAREIT FFO and Core FFO - Guidance
 
 
 
Full Year
NAREIT FFO and Core FFO Guidance:
 
2017
Net income attributable to common stockholders
 
$
1.34

1.40

Adjustments to reconcile net income to NAREIT FFO:
 
 
 
Depreciation and amortization
 
1.99

1.99

Gain on sale of operating properties
 


All other amounts
 


NAREIT Funds From Operations
 
$
3.33

3.39

 
 
 
 
Adjustments to reconcile NAREIT FFO to Core FFO:
 
 
 
Development pursuit costs
 
0.02

0.02

Acquisition pursuit and closing costs
 
0.01

0.01

REdemption of Series 6 Preferred Stock costs
 
0.08

0.08

All other non-core amounts
 


Core Funds From Operations
 
$
3.44

3.50


The Company has published forward-looking statements and additional financial information in its fourth quarter 2016 supplemental information package that may help investors estimate earnings for 2016. A copy of the Company’s fourth quarter 2016 supplemental information is available on the Company's website at www.RegencyCenters.com or by written request to: Investor Relations, Regency Centers Corporation, One Independent Drive, Suite 114, Jacksonville, Florida, 32202. The supplemental information package contains more detailed financial and property results including financial statements, an outstanding debt summary, acquisition and development activity, investments in partnerships, information pertaining to securities issued other than common stock, property details, a significant tenant rent report and a lease expiration table in addition to earnings and valuation guidance assumptions. The information provided in the supplemental package is unaudited and there can be no assurance that the information will not vary from the final information in the Company’s Form 10-K for the year ended December 31, 2016. Regency may, but assumes no obligation to, update information in the supplemental package from time to time.



About Regency Centers Corporation (NYSE: REG)

With more than 50 years of experience, Regency is the preeminent national owner, operator and developer of high-quality, grocery anchored neighborhood and community shopping centers. The Company’s portfolio of 307 retail properties encompasses over 42.2 million square feet located in top markets throughout the United States, including co-investment partnerships. Regency has developed 225 shopping centers since 2000, representing an investment at completion of more than $3.5 billion. Operating as a fully integrated real estate company, Regency is a qualified real estate investment trust that is self-administered and self-managed.


###

Forward-looking statements involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements. Please refer to the documents filed by Regency Centers Corporation with the SEC, specifically the most recent reports on Forms 10-K and 10-Q, which identify important risk factors which could cause actual results to differ from those contained in the forward-looking statements.


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Summary Financial Information
December 31, 2016
(in thousands, except per share information)
 
 
Three Months Ended
 
Year to Date
Financial Results
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
 
Net income attributable to common stockholders
 
$
55,869

 
$
17,608

 
$
143,860

 
$
128,994

      Net income per share (diluted)
 
$
0.53

 
$
0.18

 
$
1.42

 
$
1.36

 
 
 
 
 
 
 
 
 
NAREIT Funds From Operations (NAREIT FFO)
 
$
83,128

 
$
64,218

 
$
277,301

 
$
276,515

NAREIT FFO per share (diluted)
 
$
0.79

 
$
0.67

 
$
2.73

 
$
2.91

 
 
 
 
 
 
 
 
 
Core Funds From Operations (Core FFO)
 
$
89,904

 
$
75,973

 
$
333,957

 
$
288,872

Core FFO per share (diluted)
 
$
0.86

 
$
0.79

 
$
3.29

 
$
3.04

 
 
 
 
 
 
 
 
 
Diluted share and unit count
 
 
 
 
 
 
 
 
Weighted average shares (diluted) - Net income
 
104,971

 
95,858

 
101,285

 
94,857

Weighted average shares (diluted) - NAREIT FFO and Core FFO
 
105,125

 
96,013

 
101,439

 
95,011

 
 
 
 
 
 
 
 
 
Dividends paid per share and unit
 
$
0.500

 
$
0.485

 
$
2.000

 
$
1.940

Payout ratio of Core FFO per share (diluted)
 
58.1
%
 
61.4
%
 
60.8
%
 
63.8
%
 
 
 
 
 
 
 
 
 
Debt metrics (pro-rata; trailing twelve months "TTM")
 
 
 
 
 
 
 
 
Net Debt-to-Core EBITDA
 
 
 
 
 
4.4x

 
5.2x

Fixed charge coverage
 
 
 
 
 
3.3x

 
2.8x

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of
 
As of
 
As of
 
As of
Capital Information
 
12/31/2016
 
12/31/2015
 
12/31/2014
 
12/31/2013
Market price per common share
 
$
68.95

 
$
68.12

 
$
63.78

 
$
46.30

 
 
 
 
 
 
 
 
 
Market equity value of common and convertible shares
 
$
7,215,718

 
$
6,632,627

 
$
6,012,045

 
$
4,282,702

Non-convertible preferred stock
 
$
325,000

 
$
325,000

 
$
325,000

 
$
325,000

Outstanding debt
 
$
2,111,450

 
$
2,363,238

 
$
2,528,137

 
$
2,388,837

Total market capitalization
 
$
9,652,168

 
$
9,320,865

 
$
8,865,182

 
$
6,996,538

 
 
 
 
 
 
 
 
 
Total real estate at cost before depreciation
 
$
5,230,199

 
$
4,852,106

 
$
4,743,053

 
$
4,385,380

Total assets at cost before depreciation
 
$
5,613,297

 
$
5,234,861

 
$
5,130,878

 
$
4,758,390

 
 
 
 
 
 
 
 
 
Outstanding Classes of Stock and Partnership Units
 
 
 
 
 
 
 
 
Common shares outstanding
 
104,497

 
97,213

 
94,108

 
92,333

Exchangeable units held by noncontrolling interests
 
154

 
154

 
154

 
166

Common shares and equivalents issued and outstanding
 
104,651

 
97,367

 
94,262

 
92,499




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Summary Real Estate Information
December 31, 2016
(GLA in thousands)
Wholly Owned and 100% of Co-investment Partnerships
 
12/31/2016
 
9/30/2016
 
6/30/2016
 
3/31/2016
 
12/31/2015
Number of shopping centers - All properties
 
307
 
307
 
311
 
314
 
318
Number of shopping centers - Operating properties
 
301
 
302
 
306
 
308
 
311
Number of shopping centers - Same properties
 
289
 
292
 
298
 
302
 
300
Number of projects in development
 
6
 
5
 
5
 
6
 
7
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross Leasable Area (GLA) - All properties
 
37,831
 
37,635
 
37,864
 
37,849
 
38,034
GLA including retailer-owned stores - All properties
 
42,246
 
42,050
 
42,300
 
42,335
 
42,824
GLA - Operating properties
 
36,923
 
37,090
 
37,380
 
37,279
 
37,457
GLA - Same properties
 
35,316
 
35,707
 
36,113
 
36,492
 
36,049
GLA - Projects in development
 
908
 
545
 
483
 
570
 
577
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wholly Owned and Pro-Rata Share of Co-investment Partnerships
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GLA - All properties
 
28,745
 
28,565
 
28,714
 
28,414
 
28,381
GLA including retailer-owned stores - All properties
 
33,160
 
32,979
 
33,150
 
32,899
 
33,170
GLA - Operating properties
 
27,837
 
28,020
 
28,231
 
27,844
 
27,804
GLA - Same properties
 
26,392
 
26,636
 
26,964
 
27,057
 
26,508
Spaces ≥ 10,000 sf
 
16,113
 
16,298
 
16,501
 
16,536
 
16,270
Spaces < 10,000 sf
 
10,279
 
10,338
 
10,463
 
10,521
 
10,238
GLA - Projects in development
 
908
 
545
 
483
 
570
 
577
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% leased - All properties
 
95.4%
 
95.6%
 
95.8%
 
95.8%
 
95.6%
% leased - Operating properties
 
96.0%
 
95.8%
 
96.0%
 
96.2%
 
95.9%
% leased - Same properties (1)
 
96.2%
 
96.0%
 
96.3%
 
96.3%
 
96.2%
Spaces ≥ 10,000 sf (1)
 
98.3%
 
98.1%
 
98.7%
 
99.0%
 
98.8%
Spaces < 10,000 sf (1)
 
93.0%
 
92.7%
 
92.5%
 
92.1%
 
92.0%
Average % leased - Same properties (1)
 
96.1%
 
96.2%
 
96.3%
 
96.2%
 
96.2%
% commenced - Same properties(1)(2)
 
94.3%
 
94.5%
 
94.4%
 
94.7%
 
94.8%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Same property NOI growth - YTD
 
3.9%
 
3.6%
 
4.0%
 
4.6%
 
4.1%
Same property NOI growth without termination fees - YTD
 
3.5%
 
3.4%
 
3.7%
 
4.1%
 
4.4%
Same property NOI growth without termination fees or redevelopments - YTD
 
3.1%
 
3.0%
 
3.2%
 
3.2%
 
3.2%
Rental rate growth - YTD(3)
 
11.3%
 
10.7%
 
13.7%
 
15.9%
 
9.6%
Rental rate growth for spaces vacant less than 12 months - YTD(3)
 
9.9%
 
10.3%
 
13.3%
 
16.2%
 
9.3%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)  Prior periods adjusted for current same property pool.
 
 
 
 
 
 
 
(2)  Excludes leases that are signed but have not yet commenced.
 
 
 
 
 
 
 
(3)  Operating properties only. Rent growth is calculated on a comparable-space, cash basis for new and renewal leases executed.

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Consolidated Balance Sheets
December 31, 2016 and 2015
(in thousands)
 
2016
 
2015
 
(unaudited)
 

Assets
 
 
 
Real estate investments at cost:
 
 
 
Land, building and improvements
$
4,752,621

 
$
4,376,210

Properties in development
180,878

 
169,690

 
4,933,499

 
4,545,900

Less: accumulated depreciation
1,124,391

 
1,043,787

 
3,809,108

 
3,502,113

Investments in real estate partnerships
296,699

 
306,206

Net real estate investments
4,105,807

 
3,808,319

 
 
 
 
Cash and cash equivalents
17,879

 
40,623

Accounts receivable, net
31,418

 
32,292

Straight line rent receivables, net
69,823

 
63,392

Notes receivable
10,481

 
10,480

Deferred leasing costs, net
69,000

 
66,367

Acquired lease intangible assets, net
118,831

 
105,380

Trading securities held in trust, at fair value
28,588

 
29,093

Other assets
37,079

 
26,935

Total assets
$
4,488,906

 
$
4,182,881

 
 
 
 
Liabilities and Equity
 
 
 
Liabilities:
 
 
 
Notes payable
$
1,363,925

 
$
1,699,771

Unsecured credit facilities
278,495

 
164,514

Total notes payable
1,642,420

 
1,864,285

 
 
 
 
Accounts payable and other liabilities
138,936

 
164,515

Acquired lease intangible liabilities, net
54,180

 
42,034

Tenants' security and escrow deposits
28,868

 
29,427

Total liabilities
1,864,404

 
2,100,261

 
 
 
 
Equity:


 

Stockholders' Equity:
 
 
 
Preferred stock
325,000

 
325,000

Common stock, $.01 par
1,045

 
972

Additional paid in capital
3,277,861

 
2,722,850

Accumulated other comprehensive loss
(18,346
)
 
(58,693
)
Distributions in excess of net income
(994,259
)
 
(936,020
)
Total stockholders' equity
2,591,301

 
2,054,109

Noncontrolling Interests:
 
 
 
Exchangeable operating partnership units
(1,967
)
 
(1,975
)
Limited partners' interest
35,168

 
30,486

Total noncontrolling interests
33,201

 
28,511

Total equity
2,624,502

 
2,082,620

Total liabilities and equity
$
4,488,906

 
$
4,182,881

 
 
 
 
These consolidated balance sheets should be read in conjunction with the Company's most recent Form 10-Q and Form 10-K filed with the Securities and Exchange Commission.

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Consolidated Statements of Operations
For the Periods Ended December 31, 2016 and 2015
(in thousands)
unaudited
 
Three Months Ended
 
Year to Date
 
2016
 
2015
 
2016
 
2015
Revenues:
 
 
 
 
 
 
 
  Minimum rent
$
114,800

 
106,389

 
$
444,305

 
415,155

  Percentage rent
1,476

 
1,157

 
4,128

 
3,750

  Recoveries from tenants and other income
36,717

 
31,091

 
140,611

 
125,295

  Management, transaction, and other fees
6,568

 
7,531

 
25,327

 
25,563

        Total revenues
159,561

 
146,168

 
614,371

 
569,763

Operating Expenses:
 
 
 
 
 
 
 
  Depreciation and amortization
42,606

 
37,580

 
162,327

 
146,829

  Operating and maintenance
25,256

 
21,860

 
95,022

 
82,978

  General and administrative
16,631

 
19,373

 
65,327

 
65,600

  Real estate taxes
16,698

 
15,013

 
66,395

 
61,855

  Other operating expense
8,289

 
3,012

 
14,081

 
7,836

        Total operating expenses
109,480

 
96,838

 
403,152

 
365,098

Other Expense (Income):
 
 
 
 
 
 
 
  Interest expense, net of interest income
20,222

 
24,215

 
90,712

 
102,622

  Provision for impairment
2,533

 

 
4,200

 

  Early extinguishment of debt
296

 
8,301

 
14,240

 
8,239

  Net investment (income) loss
(405
)
 
(815
)
 
(1,672
)
 
(625
)
  Loss on derivative instruments

 

 
40,586

 

       Total other expense
22,646

 
31,701

 
148,066

 
110,236

        Income from operations before equity in income of
        investments in real estate partnerships
27,435

 
17,629

 
63,153

 
94,429

  Equity in income of investments in real estate partnerships
9,900

 
4,517

 
56,518

 
22,508

        Income from operations
37,335

 
22,146

 
119,671

 
116,937

  Gain on sale of real estate, net of tax
24,324

 
1,392

 
47,321

 
35,606

        Net income
61,659

 
23,538

 
166,992

 
152,543

Noncontrolling Interests:
 
 
 
 
 
 
 
  Exchangeable operating partnership units
(92
)
 
(37
)
 
(257
)
 
(240
)
  Limited partners' interests in consolidated partnerships
(432
)
 
(627
)
 
(1,813
)
 
(2,247
)
        Net income attributable to noncontrolling interests
(524
)
 
(664
)
 
(2,070
)
 
(2,487
)
        Net income attributable to controlling interests
61,135

 
22,874

 
164,922

 
150,056

  Preferred stock dividends
(5,266
)
 
(5,266
)
 
(21,062
)
 
(21,062
)
        Net income attributable to common stockholders
$
55,869

 
17,608

 
$
143,860

 
128,994

 
 
 
 
 
 
 
 
These consolidated statements of operations should be read in conjunction with the Company's most recent Form 10-Q and Form 10-K filed with the Securities and Exchange Commission.

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Supplemental Details of Operations (Consolidated Only)
For the Periods Ended December 31, 2016 and 2015
(in thousands)
 
Three Months Ended
 
Year to Date
 
2016
2015
 
2016
2015
Real Estate Revenues:
 
 
 
 
 
Base rent
$
110,650

103,891

 
$
432,296

405,184

Recoveries from tenants
32,993

29,685

 
127,677

120,205

Percentage rent
1,476

1,157

 
4,128

3,750

Termination fees
267

88

 
878

433

Other income
3,457

2,460

 
12,056

8,626

Total real estate revenues
148,843

137,281

 
577,035

538,198

 
 
 
 
 
 
Real Estate Operating Expenses:
 
 
 
 
 
Operating and maintenance
22,906

20,513

 
86,034

80,712

Real estate taxes
16,698

15,013

 
66,395

61,855

Ground rent
1,798

1,449

 
7,049

525

Provision for doubtful accounts
256

400

 
1,705

2,364

Total real estate operating expenses
41,658

38,225

 
161,183

151,031

 
 
 
 
 
 
Other Rent Amounts:
 
 
 
 
 
Straight line rent, net
2,015

1,957

 
6,165

8,231

Above/below market rent amortization, net
1,583

352

 
3,905

1,605

Total other rent amounts
3,598

2,309

 
10,070

9,836

 
 
 
 
 
 
Fee Income:
 
 
 
 
 
Property management fees
3,256

3,243

 
13,075

13,124

Asset management fees
1,811

1,722

 
6,745

6,416

Leasing commissions and other fees
1,501

2,566

 
5,507

6,023

Total fee income
6,568

7,531

 
25,327

25,563

 
 
 
 
 
 
Interest Expense, net:
 
 
 
 
 
Gross interest expense
18,817

23,913

 
85,611

100,702

Derivative amortization
2,102

2,244

 
8,408

8,900

Debt cost and premium/discount amortization
418

171

 
1,355

1,350

Capitalized interest
(859
)
(1,336
)
 
(3,482
)
(6,740
)
Interest income
(256
)
(777
)
 
(1,180
)
(1,590
)
Total interest expense, net
20,222

24,215

 
90,712

102,622

 
 
 
 
 
 
General & Administrative, net:
 
 
 
 
 
Gross general & administrative
20,874

24,851

 
73,672

76,185

Stock-based compensation
3,455

3,294

 
13,422

13,869

Capitalized direct leasing compensation costs
(2,495
)
(3,348
)
 
(10,545
)
(10,917
)
Capitalized direct development compensation costs
(5,637
)
(6,254
)
 
(12,981
)
(13,798
)
Total general & administrative, net
16,197

18,543

 
63,568

65,339

 
 
 
 
 
 
Real Estate (Gains) Losses:
 
 
 
 
 
Gain on sale of operating properties
(23,438
)
(1,361
)
 
(38,573
)
(35,533
)
Provision for impairment of operating properties
2,500


 
3,366


Gain on sale of land
(886
)
(30
)
 
(8,748
)
(73
)
Provision for impairment of land
33


 
834


Total real estate (gains) losses
(21,791
)
(1,391
)
 
(43,121
)
(35,606
)
 
 
 
 
 
 
Depreciation, Transaction and Other Expense (Income):
 
 
 
 
 
Depreciation and amortization (including FF&E)
42,606

37,580

 
162,327

146,829

Acquisition pursuit and closing costs
158

367

 
1,924

671

Development pursuit costs
591

930

 
1,487

1,702

Merger related costs
6,539


 
6,539


Income tax benefit


 


Loss from deferred compensation plan, net
29

15

 
87

52

Early extinguishment of debt
296

8,301

 
14,240

8,239

Loss on derivative instruments and hedge ineffectiveness


 
40,586


Gain on sale of investments


 

(416
)
Other expenses
745

1,315

 
2,426

3,099

Total depreciation, transaction and other expense (income)
50,964

48,508

 
229,616

160,176


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These consolidated supplemental details of operations should be read in conjunction with the Company's most recent Form 10-Q and Form 10-K filed with the Securities and Exchange Commission.

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Supplemental Details of Assets and Liabilities (Real Estate Partnerships Only)
December 31, 2016 and 2015
(in thousands)
 
Noncontrolling Interests
 
Share of JVs
 
 
 
 
 
 
 
2016
2015
 
2016
2015
Assets
 
 
 
 
 
Land, building and improvements
$
(67,245
)
$
(72,835
)
 
$
1,084,975

$
1,096,187

Properties in development
(7,655
)
(2,583
)
 
1,858

3,202

 
(74,900
)
(75,418
)
 
1,086,833

1,099,389

Less: accumulated depreciation
(9,127
)
(8,512
)
 
347,074

331,724

Net real estate investments
(65,773