Company Quick10K Filing
Quick10K
Regency Centers
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$65.38 167 $10,950
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-05-07 Officers, Shareholder Vote, Exhibits
8-K 2019-05-02 Earnings, Exhibits
8-K 2019-03-21 Other Events, Exhibits
8-K 2019-02-13 Earnings, Exhibits
8-K 2018-11-13 Enter Agreement, Exhibits
8-K 2018-10-25 Exhibits
8-K 2018-10-25 Earnings, Exhibits
8-K 2018-08-02 Earnings, Exhibits
8-K 2018-04-30 Earnings, Exhibits
8-K 2018-04-26 Shareholder Vote
8-K 2018-03-23 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2018-03-05 Other Events, Exhibits
8-K 2018-02-28 Other Events, Exhibits
8-K 2018-02-14 Officers, Other Events, Exhibits
8-K 2018-02-08 Earnings, Other Events, Exhibits
8-K 2018-01-11 Regulation FD, Exhibits
STOR Store Capital 7,530
GTT GTT Communications 1,680
GSHD Goosehead Insurance 1,160
BCML Baycom 259
SACH Sachem Capital 85
ATLC Atlanticus 52
MOSY Mosys 10
OHRP OHR Pharmaceutical 8
IMUC Immunocellular Therapeutics 0
APPB Applied Biosciences 0
REG 2019-03-31
Part I - Financial Information
Item 1. 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
EX-31.1 ex-311033119.htm
EX-31.2 ex-312033119.htm
EX-31.3 ex-313033119.htm
EX-31.4 ex-314033119.htm
EX-32.1 ex-321033119.htm
EX-32.2 ex-322033119.htm
EX-32.3 ex-323033119.htm
EX-32.4 ex-324033119.htm

Regency Centers Earnings 2019-03-31

REG 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 reg10-q033119.htm 10-Q 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, 2019
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)
regencylogocolora12.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)

Securities registered pursuant to Section 12(b) of the Act:
Regency Centers Corporation
Title of each class
 
Trading Symbol
 
Name of each exchange on which registered
Common Stock, $.01 par value
 
REG
 
The Nasdaq Stock Market LLC
Regency Centers, L.P.
Title of each class
 
Trading Symbol
 
Name of each exchange on which registered
None
 
N/A
 
N/A

________________________________


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, every Interactive Data File required to be submitted 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 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   o                    Regency Centers, L.P.              YES  o    NO  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Regency Centers Corporation              YES  o    NO   x                    Regency Centers, L.P.              YES  o    NO  x

The number of shares outstanding of the Regency Centers Corporation’s common stock was 167,518,691 as of May 9, 2019.
 




EXPLANATORY NOTE
This report combines the quarterly reports on Form 10-Q for the quarter ended March 31, 2019, 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, 2019, the Parent Company owned approximately 99.8% 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 $500 million of unsecured public and private placement debt, the Parent Company does not hold any indebtedness, but guarantees all of the unsecured debt of the Operating Partnership. The Operating Partnership is also the co-issuer and guarantees $500 million of 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. 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.
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 (Unaudited)
 
 
 
 
Regency Centers Corporation:
 
 
 
 
 
Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018
 
 
 
 
Consolidated Statements of Operations for the periods ended March 31, 2019 and 2018
 
 
 
 
Consolidated Statements of Comprehensive Income for the periods ended March 31, 2019 and 2018
 
 
 
 
Consolidated Statements of Equity for the periods ended March 31, 2019 and 2018
 
 
 
 
Consolidated Statements of Cash Flows for the periods ended March 31, 2019 and 2018
 
 
 
Regency Centers, L.P.:
 
 
 
 
 
Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018
 
 
 
 
Consolidated Statements of Operations for the periods ended March 31, 2019 and 2018
 
 
 
 
Consolidated Statements of Comprehensive Income for the periods ended March 31, 2019 and 2018
 
 
 
 
Consolidated Statements of Capital for the periods ended March 31, 2019 and 2018
 
 
 
 
Consolidated Statements of Cash Flows for the periods ended March 31, 2019 and 2018
 
 
 
 
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, 2019 and December 31, 2018
(in thousands, except share data)
 
 
2019
 
2018
Assets
 
(unaudited)
 
 
Real estate assets, at cost
$
10,875,058

 
10,863,162

Less: accumulated depreciation
 
1,605,681

 
1,535,444

Real estate investments, net
 
9,269,377

 
9,327,718

Investments in real estate partnerships
 
456,733

 
463,001

Properties held for sale
 
15,275

 
60,516

Cash, cash equivalents and restricted cash (including $3,305 and $2,658 of restricted cash at March 31, 2019 and December 31, 2018, respectively)
 
42,784

 
45,190

Tenant and other receivables
 
160,635

 
172,359

Deferred leasing costs, less accumulated amortization of $102,141 and $101,093 at March 31, 2019 and December 31, 2018, respectively
 
82,477

 
84,983

Acquired lease intangible assets, less accumulated amortization of $225,693 and $219,689 at March 31, 2019 and December 31, 2018, respectively
 
280,613

 
387,069

Right of use assets, net
 
296,859

 

Other assets
 
412,851

 
403,827

Total assets
$
11,017,604

 
10,944,663

Liabilities and Equity
 
 
 
 
Liabilities:
 
 
 
 
Notes payable
$
3,009,886

 
3,006,478

Unsecured credit facilities
 
673,852

 
708,734

Accounts payable and other liabilities
 
183,983

 
224,807

Acquired lease intangible liabilities, less accumulated amortization of $99,163 and $92,746 at March 31, 2019 and December 31, 2018, respectively
 
475,065

 
496,726

Lease liabilities
 
225,122

 

Tenants’ security, escrow deposits and prepaid rent
 
46,923

 
57,750

Total liabilities
 
4,614,831

 
4,494,495

Commitments and contingencies
 

 

Equity:
 
 
 
 
Stockholders’ equity:
 
 
 
 
Common stock, $0.01 par value per share, 220,000,000 shares authorized; 167,517,243 and 167,904,593 shares issued at March 31, 2019 and December 31, 2018, respectively
 
1,675

 
1,679

Treasury stock at cost, 410,963 and 390,163 shares held at March 31, 2019 and December 31, 2018, respectively
 
(21,226
)
 
(19,834
)
Additional paid-in-capital
 
7,639,353

 
7,672,517

Accumulated other comprehensive loss
 
(6,096
)
 
(927
)
Distributions in excess of net income
 
(1,263,011
)
 
(1,255,465
)
Total stockholders’ equity
 
6,350,695

 
6,397,970

Noncontrolling interests:
 
 
 
 
Exchangeable operating partnership units, aggregate redemption value of $23,615 and $20,532 at March 31, 2019 and December 31, 2018, respectively
 
10,641

 
10,666

Limited partners’ interests in consolidated partnerships
 
41,437

 
41,532

Total noncontrolling interests
 
52,078

 
52,198

Total equity
 
6,402,773

 
6,450,168

Total liabilities and equity
$
11,017,604

 
10,944,663

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,
 
 
2019
 
2018
Revenues:
 
 
 
 
Lease income
$
277,303

 
267,510

Other property income
 
1,982

 
2,025

Management, transaction, and other fees
 
6,972

 
7,158

Total revenues
 
286,257

 
276,693

Operating expenses:
 
 
 
 
Depreciation and amortization
 
97,194

 
88,525

Operating and maintenance
 
40,638

 
42,516

General and administrative
 
21,300

 
17,606

Real estate taxes
 
34,155

 
30,425

Other operating expenses
 
1,134

 
1,632

Total operating expenses
 
194,421

 
180,704

Other expense (income):
 
 
 
 
Interest expense, net
 
37,752

 
36,785

Provision for impairment, net of tax
 
1,672

 
16,054

Gain on sale of real estate, net of tax
 
(16,490
)
 
(96
)
Early extinguishment of debt
 
10,591

 
162

Net investment income
 
(2,354
)
 
(32
)
Total other expense (income)
 
31,171

 
52,873

Income from operations before equity in income of investments in real estate partnerships
 
60,665

 
43,116

Equity in income of investments in real estate partnerships
 
30,828

 
10,349

Net income
 
91,493

 
53,465

Noncontrolling interests:
 
 
 
 
Exchangeable operating partnership units
 
(190
)
 
(111
)
Limited partners’ interests in consolidated partnerships
 
(857
)
 
(694
)
Income attributable to noncontrolling interests
 
(1,047
)
 
(805
)
Net income attributable to common stockholders
$
90,446

 
52,660


 
 
 
 
Income per common share - basic
$
0.54

 
0.31

Income per common share - diluted
$
0.54

 
0.31

See accompanying notes to consolidated financial statements.

2




REGENCY CENTERS CORPORATION
Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
 
 
Three months ended March 31,
 
 
2019
 
2018
Net income
$
91,493

 
53,465

Other comprehensive (loss) income:
 
 
 
 
Effective portion of change in fair value of derivative instruments:
 
 
 
 
Effective portion of change in fair value of derivative instruments
 
(5,489
)
 
9,505

Reclassification adjustment of derivative instruments included in net income
 
(176
)
 
2,138

Unrealized gain (loss) on available-for-sale debt securities
 
137

 
(119
)
Other comprehensive (loss) income
 
(5,528
)
 
11,524

Comprehensive income
 
85,965

 
64,989

Less: comprehensive income attributable to noncontrolling interests:
 
 
 
 
Net income attributable to noncontrolling interests
 
1,047

 
805

Other comprehensive (loss) income attributable to noncontrolling interests
 
(359
)
 
483

Comprehensive income attributable to noncontrolling interests
 
688

 
1,288

Comprehensive income attributable to the Company
$
85,277

 
63,701

See accompanying notes to consolidated financial statements.

3





REGENCY CENTERS CORPORATION
Consolidated Statements of Equity
For the three months ended March 31, 2019 and 2018
(in thousands, except per share data)
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noncontrolling Interests
 
 
 
 
Common
Stock
 
Treasury
Stock
 
Additional
Paid In
Capital
 
Accumulated
Other
Comprehensive Income (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, 2017
 
$
1,714

 
(18,307
)
 
7,873,104

 
(6,289
)
 
(1,158,170
)
 
6,692,052

 
10,907

 
30,095

 
41,002

 
6,733,054

Adjustment due to change in accounting policy (note 1)
 

 

 

 
12

 
30,889

 
30,901

 

 
2

 
2

 
30,903

Adjusted balance at January 1, 2018
 
1,714

 
(18,307
)
 
7,873,104

 
(6,277
)
 
(1,127,281
)
 
6,722,953

 
10,907

 
30,097

 
41,004

 
6,763,957

Net income
 

 

 

 

 
52,660

 
52,660

 
111

 
694

 
805

 
53,465

Other comprehensive income (loss)
 

 

 

 
11,041

 

 
11,041

 
23

 
460

 
483

 
11,524

Deferred compensation plan, net
 

 
(449
)
 
446

 

 

 
(3
)
 

 

 

 
(3
)
Restricted stock issued, net of amortization
 
1

 

 
4,120

 

 

 
4,121

 

 

 

 
4,121

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

 

 
(6,643
)
 

 

 
(6,643
)
 

 

 

 
(6,643
)
Common stock repurchased and retired
 
(21
)
 

 
(124,968
)
 

 

 
(124,989
)
 

 

 

 
(124,989
)
Common stock issued under dividend reinvestment plan
 

 

 
358

 

 

 
358

 

 

 

 
358

Common stock issued, net of issuance costs
 

 

 
10

 

 

 
10

 

 

 

 
10

Distributions to partners
 

 

 

 

 

 

 

 
(1,018
)
 
(1,018
)
 
(1,018
)
Cash dividends declared:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock/unit ($0.555 per share)
 

 

 

 

 
(95,207
)
 
(95,207
)
 
(194
)
 

 
(194
)
 
(95,401
)
Balance at March 31, 2018
 
1,694

 
(18,756
)
 
7,746,427

 
4,764

 
(1,169,828
)
 
6,564,301

 
10,847

 
30,233

 
41,080

 
6,605,381

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2018
 
1,679

 
(19,834
)
 
7,672,517

 
(927
)
 
(1,255,465
)
 
6,397,970

 
10,666

 
41,532

 
52,198

 
6,450,168

Net income
 

 

 

 

 
90,446

 
90,446

 
190

 
857

 
1,047

 
91,493

Other comprehensive income
 

 

 

 
(5,169
)
 

 
(5,169
)
 
(11
)
 
(348
)
 
(359
)
 
(5,528
)
Deferred compensation plan, net
 

 
(1,392
)
 
1,392

 

 

 

 

 

 

 

Restricted stock issued, net of amortization
 
2

 

 
3,950

 

 

 
3,952

 

 

 

 
3,952

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

 

 
(6,051
)
 

 

 
(6,051
)
 

 

 

 
(6,051
)
Common stock repurchased and retired
 
(6
)
 

 
(32,772
)
 

 

 
(32,778
)
 

 

 

 
(32,778
)
Common stock issued under dividend reinvestment plan
 

 

 
383

 

 

 
383

 

 

 

 
383

Contributions from partners
 

 

 

 

 

 

 

 
895

 
895

 
895

Distributions to partners
 

 

 

 

 

 

 

 
(1,565
)
 
(1,565
)
 
(1,565
)
Reallocation of limited partner's interest
 

 

 
(66
)
 

 

 
(66
)
 

 
66

 
66

 

Cash dividends declared:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock/unit ($0.585 per share)
 

 

 

 

 
(97,992
)
 
(97,992
)
 
(204
)
 

 
(204
)
 
(98,196
)
Balance at March 31, 2019
 
1,675

 
(21,226
)
 
7,639,353

 
(6,096
)
 
(1,263,011
)
 
6,350,695

 
10,641

 
41,437

 
52,078

 
6,402,773

See accompanying notes to consolidated financial statements.

4





REGENCY CENTERS CORPORATION
Consolidated Statements of Cash Flows
For the three months ended March 31, 2019 and 2018
(in thousands)
(unaudited)
 
 
2019
 
2018
Cash flows from operating activities:
 
 
 
 
Net income
$
91,493

 
53,465

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
97,194

 
88,525

Amortization of deferred loan costs and debt premiums
 
2,921

 
2,471

(Accretion) and amortization of above and below market lease intangibles, net
 
(13,090
)
 
(8,181
)
Stock-based compensation, net of capitalization
 
3,475

 
3,397

Equity in income of investments in real estate partnerships
 
(30,828
)
 
(10,349
)
Gain on sale of real estate, net of tax
 
(16,490
)
 
(96
)
Provision for impairment, net of tax
 
1,672

 
16,054

Early extinguishment of debt
 
10,591

 
162

Distribution of earnings from operations of investments in real estate partnerships
 
14,417

 
13,319

Settlement of derivative instruments
 
(5,719
)
 

Deferred compensation expense
 
2,314

 
40

Realized and unrealized gain on investments
 
(2,354
)
 
(30
)
Changes in assets and liabilities:
 
 
 
 
Tenant and other receivables
 
9,050

 
4,296

Deferred leasing costs
 
(2,491
)
 
(1,189
)
Other assets
 
(11,212
)
 
(476
)
Accounts payable and other liabilities
 
(8,908
)
 
(13,793
)
Tenants’ security, escrow deposits and prepaid rent
 
(10,671
)
 
2,253

Net cash provided by operating activities
 
131,364

 
149,868

Cash flows from investing activities:
 
 
 
 
Acquisition of operating real estate
 
(15,722
)
 
(20,071
)
Advance deposits paid on acquisition of operating real estate
 
(1,250
)
 

Real estate development and capital improvements
 
(39,929
)
 
(51,968
)
Proceeds from sale of real estate investments
 
82,533

 
3,227

Issuance of notes receivable
 

 
(462
)
Investments in real estate partnerships
 
(19,587
)
 
(39,330
)
Distributions received from investments in real estate partnerships
 
41,587

 
2,328

Dividends on investment securities
 
116

 
71

Acquisition of investment securities
 
(5,359
)
 
(7,543
)
Proceeds from sale of investment securities
 
4,612

 
6,542

Net cash provided by (used in) investing activities
 
47,001

 
(107,206
)
Cash flows from financing activities:
 
 
 
 
Repurchase of common shares in conjunction with equity award plans
 
(6,148
)
 
(6,755
)
Common shares repurchased through share repurchase program
 
(32,778
)
 
(124,989
)
Proceeds from sale of treasury stock
 
8

 
99

Distributions to limited partners in consolidated partnerships, net
 
(1,485
)
 
(1,018
)
Distributions to exchangeable operating partnership unit holders
 
(204
)
 
(194
)
Dividends paid to common stockholders
 
(97,608
)
 
(94,849
)
Repayment of fixed rate unsecured notes
 
(250,000
)
 

Proceeds from issuance of fixed rate unsecured notes, net
 
298,983

 
299,511

Proceeds from unsecured credit facilities
 
110,000

 
185,000

Repayment of unsecured credit facilities
 
(145,000
)
 
(245,000
)
Proceeds from notes payable
 

 
1,740

Repayment of notes payable
 
(40,315
)
 

Scheduled principal payments
 
(2,235
)
 
(2,773
)
Payment of loan costs
 
(3,342
)
 
(9,179
)
Early redemption costs
 
(10,647
)
 

Net cash (used in) provided by financing activities
 
(180,771
)
 
1,593

Net (decrease) increase in cash and cash equivalents and restricted cash
 
(2,406
)
 
44,255

Cash and cash equivalents and restricted cash at beginning of the period
 
45,190

 
49,381

Cash and cash equivalents and restricted cash at end of the period
$
42,784

 
93,636


5





Supplemental disclosure of cash flow information:
 
 
 
 
Cash paid for interest (net of capitalized interest of $1,015 and $2,179 in 2019 and 2018, respectively)
$
42,421

 
30,467

Cash paid (received) for income taxes, net
$
15

 
(407
)
Supplemental disclosure of non-cash transactions:
 
 
 
 
Mortgage loans assumed for the acquisition of real estate
$

 
9,700

Change in accrued capital expenditures
$
10,494

 

Common stock issued under dividend reinvestment plan
$
383

 
358

Stock-based compensation capitalized
$
573

 
837

Contributions from limited partners in consolidated partnerships, net
$
881

 

Common stock issued for dividend reinvestment in trust
$
238

 
205

Contribution of stock awards into trust
$
1,328

 
637

Distribution of stock held in trust
$
167

 
317

Change in fair value of debt securities available-for-sale
$
174

 
(128
)
See accompanying notes to consolidated financial statements.

6





REGENCY CENTERS, L.P.
Consolidated Balance Sheets
March 31, 2019 and December 31, 2018
(in thousands, except unit data)
 
 
2019
 
2018
Assets
 
(unaudited)
 
 
Real estate assets, at cost
$
10,875,058

 
10,863,162

Less: accumulated depreciation
 
1,605,681

 
1,535,444

Real estate investments, net
 
9,269,377

 
9,327,718

Investments in real estate partnerships
 
456,733

 
463,001

Properties held for sale
 
15,275

 
60,516

Cash, cash equivalents and restricted cash (including $3,305 and $2,658 of restricted cash at March 31, 2019 and December 31, 2018, respectively)
 
42,784

 
45,190

Tenant and other receivables
 
160,635

 
172,359

Deferred leasing costs, less accumulated amortization of $102,141 and $101,093 at March 31, 2019 and December 31, 2018, respectively
 
82,477

 
84,983

Acquired lease intangible assets, less accumulated amortization of $225,693 and $219,689 at March 31, 2019 and December 31, 2018, respectively
 
280,613

 
387,069

Right of use assets, net
 
296,859

 

Other assets
 
412,851

 
403,827

Total assets
$
11,017,604

 
10,944,663

Liabilities and Capital
 
 
 
 
Liabilities:
 
 
 
 
Notes payable
$
3,009,886

 
3,006,478

Unsecured credit facilities
 
673,852

 
708,734

Accounts payable and other liabilities
 
183,983

 
224,807

Acquired lease intangible liabilities, less accumulated amortization of $99,163 and $92,746 at March 31, 2019 and December 31, 2018, respectively
 
475,065

 
496,726

Lease liabilities
 
225,122

 

Tenants’ security, escrow deposits and prepaid rent
 
46,923

 
57,750

Total liabilities
 
4,614,831

 
4,494,495

Commitments and contingencies
 

 

Capital:
 
 
 
 
Partners’ capital:
 
 
 
 
General partner; 167,517,243 and 167,904,593 units outstanding at March 31, 2019 and December 31, 2018, respectively
 
6,356,791

 
6,398,897

Limited partners; 349,902 units outstanding at March 31, 2019 and December 31, 2018
 
10,641

 
10,666

Accumulated other comprehensive (loss)
 
(6,096
)
 
(927
)
Total partners’ capital
 
6,361,336

 
6,408,636

Noncontrolling interest: Limited partners’ interests in consolidated partnerships
 
41,437

 
41,532

Total capital
 
6,402,773

 
6,450,168

Total liabilities and capital
$
11,017,604

 
10,944,663

See accompanying notes to consolidated financial statements.

7





REGENCY CENTERS, L.P.
Consolidated Statements of Operations
(in thousands, except per unit data)
(unaudited)
 
 
Three months ended March 31,
 
 
2019
 
2018
Revenues:
 
 
 
 
Lease income
$
277,303

 
267,510

Other property income
 
1,982

 
2,025

Management, transaction, and other fees
 
6,972

 
7,158

Total revenues
 
286,257

 
276,693

Operating expenses:
 
 
 
 
Depreciation and amortization
 
97,194

 
88,525

Operating and maintenance
 
40,638

 
42,516

General and administrative
 
21,300

 
17,606

Real estate taxes
 
34,155

 
30,425

Other operating expenses
 
1,134

 
1,632

Total operating expenses
 
194,421

 
180,704

Other expense (income):
 
 
 
 
Interest expense, net
 
37,752

 
36,785

Provision for impairment, net of tax
 
1,672

 
16,054

Gain on sale of real estate, net of tax
 
(16,490
)
 
(96
)
Early extinguishment of debt
 
10,591

 
162

Net investment income
 
(2,354
)
 
(32
)
Total other expense (income)
 
31,171

 
52,873

Income from operations before equity in income of investments in real estate partnerships
 
60,665

 
43,116

Equity in income of investments in real estate partnerships
 
30,828

 
10,349

Net income
 
91,493

 
53,465

Limited partners’ interests in consolidated partnerships
 
(857
)
 
(694
)
Net income attributable to common unit holders
$
90,636

 
52,771


 
 
 
 
Income per common unit - basic
$
0.54

 
0.31

Income per common unit - diluted
$
0.54

 
0.31

See accompanying notes to consolidated financial statements.

8




REGENCY CENTERS, L.P.
Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
 
 
Three months ended March 31,
 
 
2019
 
2018
Net income
$
91,493

 
53,465

Other comprehensive (loss) income:
 
 
 
 
Effective portion of change in fair value of derivative instruments:
 
 
 
 
Effective portion of change in fair value of derivative instruments
 
(5,489
)
 
9,505

Reclassification adjustment of derivative instruments included in net income
 
(176
)
 
2,138

Unrealized gain (loss) on available-for-sale debt securities
 
137

 
(119
)
Other comprehensive (loss) income
 
(5,528
)
 
11,524

Comprehensive income
 
85,965

 
64,989

Less: comprehensive income (loss) attributable to noncontrolling interests:
 
 
 
 
Net income attributable to noncontrolling interests
 
857

 
694

Other comprehensive (loss) income attributable to noncontrolling interests
 
(348
)
 
460

Comprehensive income attributable to noncontrolling interests
 
509

 
1,154

Comprehensive income attributable to the Partnership
$
85,456

 
63,835

See accompanying notes to consolidated financial statements.

9





REGENCY CENTERS, L.P.
Consolidated Statements of Capital
For the three months ended March 31, 2019 and 2018
(in thousands)
(unaudited)
 
 
General Partner
Preferred and
Common Units
 
Limited
Partners
 
Accumulated
Other
Comprehensive Income (Loss)
 
Total
Partners’
Capital
 
Noncontrolling
Interests in
Limited Partners’
Interest in
Consolidated
Partnerships
 
Total
Capital
Balance at December 31, 2017
$
6,698,341

 
10,907

 
(6,289
)
 
6,702,959

 
30,095

 
6,733,054

Adjustment due to change in accounting policy (note 1)
 
30,889

 

 
12

 
30,901

 
2

 
30,903

Adjusted balance at January 1, 2018
 
6,729,230

 
10,907

 
(6,277
)
 
6,733,860

 
30,097

 
6,763,957

Net income
 
52,660

 
111

 

 
52,771

 
694

 
53,465

Other comprehensive loss
 

 
23

 
11,041

 
11,064

 
460

 
11,524

Deferred compensation plan, net
 
(3
)
 

 

 
(3
)
 

 
(3
)
Distributions to partners
 
(95,207
)
 
(194
)
 

 
(95,401
)
 
(1,018
)
 
(96,419
)
Restricted units issued as a result of amortization of restricted stock issued by Parent Company
 
4,121

 

 

 
4,121

 

 
4,121

Common units repurchased and retired as a result of common stock repurchased and retired by Parent Company
 
(124,989
)
 

 

 
(124,989
)
 

 
(124,989
)
Common units issued as a result of common stock issued by Parent Company, net of repurchases
 
(6,275
)
 

 

 
(6,275
)
 

 
(6,275
)
Balance at March 31, 2018
 
6,559,537

 
10,847

 
4,764

 
6,575,148

 
30,233

 
6,605,381

 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2018
 
6,398,897

 
10,666

 
(927
)
 
6,408,636

 
41,532

 
6,450,168

Net income
 
90,446

 
190

 

 
90,636

 
857

 
91,493

Other comprehensive income
 

 
(11
)
 
(5,169
)
 
(5,180
)
 
(348
)
 
(5,528
)
Contributions from partners
 

 

 

 

 
895

 
895

Distributions to partners
 
(97,992
)
 
(204
)
 

 
(98,196
)
 
(1,565
)
 
(99,761
)
Reallocation of limited partner's interest
 
(66
)
 

 

 
(66
)
 
66

 

Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization
 
3,952

 

 

 
3,952

 

 
3,952

Common units repurchased and retired as a result of common stock repurchased and retired by Parent Company
 
(32,778
)
 

 

 
(32,778
)
 

 
(32,778
)
Common units redeemed as a result of common stock redeemed by Parent Company, net of issuances
 
(5,668
)
 

 

 
(5,668
)
 

 
(5,668
)
Balance at March 31, 2019
$
6,356,791

 
10,641

 
(6,096
)
 
6,361,336

 
41,437

 
6,402,773

See accompanying notes to consolidated financial statements.

10





REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the three months ended March 31, 2019 and 2018
(in thousands)
(unaudited)
 
 
2019
 
2018
Cash flows from operating activities:
 
 
 
 
Net income
$
91,493

 
53,465

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
97,194

 
88,525

Amortization of deferred loan costs and debt premiums
 
2,921

 
2,471

(Accretion) and amortization of above and below market lease intangibles, net
 
(13,090
)
 
(8,181
)
Stock-based compensation, net of capitalization
 
3,475

 
3,397

Equity in income of investments in real estate partnerships
 
(30,828
)
 
(10,349
)
Gain on sale of real estate, net of tax
 
(16,490
)
 
(96
)
Provision for impairment, net of tax
 
1,672

 
16,054

Early extinguishment of debt
 
10,591

 
162

Distribution of earnings from operations of investments in real estate partnerships
 
14,417

 
13,319

Settlement of derivative instruments
 
(5,719
)
 

Deferred compensation expense
 
2,314

 
40

Realized and unrealized gain on investments
 
(2,354
)
 
(30
)
Changes in assets and liabilities:
 
 
 
 
Tenant and other receivables
 
9,050

 
4,296

Deferred leasing costs
 
(2,491
)
 
(1,189
)
Other assets
 
(11,212
)
 
(476
)
Accounts payable and other liabilities
 
(8,908
)
 
(13,793
)
Tenants’ security, escrow deposits and prepaid rent
 
(10,671
)
 
2,253

Net cash provided by operating activities
 
131,364

 
149,868

Cash flows from investing activities:
 
 
 
 
Acquisition of operating real estate
 
(15,722
)
 
(20,071
)
Advance deposits paid on acquisition of operating real estate
 
(1,250
)
 

Real estate development and capital improvements
 
(39,929
)
 
(51,968
)
Proceeds from sale of real estate investments
 
82,533

 
3,227

Issuance of notes receivable
 

 
(462
)
Investments in real estate partnerships
 
(19,587
)
 
(39,330
)
Distributions received from investments in real estate partnerships
 
41,587

 
2,328

Dividends on investment securities
 
116

 
71

Acquisition of investment securities
 
(5,359
)
 
(7,543
)
Proceeds from sale of investment securities
 
4,612

 
6,542

Net cash provided by (used in) investing activities
 
47,001

 
(107,206
)
Cash flows from financing activities:
 
 
 
 
Repurchase of common shares in conjunction with equity award plans
 
(6,148
)
 
(6,755
)
Common units repurchased through share repurchase program
 
(32,778
)
 
(124,989
)
Proceeds from sale of treasury stock
 
8

 
99

Distributions to limited partners in consolidated partnerships, net
 
(1,485
)
 
(1,018
)
Distributions to partners
 
(97,812
)
 
(95,043
)
Repayment of fixed rate unsecured notes
 
(250,000
)
 

Proceeds from issuance of fixed rate unsecured notes, net
 
298,983

 
299,511

Proceeds from unsecured credit facilities
 
110,000

 
185,000

Repayment of unsecured credit facilities
 
(145,000
)
 
(245,000
)
Proceeds from notes payable
 

 
1,740

Repayment of notes payable
 
(40,315
)
 

Scheduled principal payments
 
(2,235
)
 
(2,773
)
Payment of loan costs
 
(3,342
)
 
(9,179
)
Early redemption costs
 
(10,647
)
 

Net cash (used in) provided by financing activities
 
(180,771
)
 
1,593

Net (decrease) increase in cash and cash equivalents and restricted cash
 
(2,406
)
 
44,255

Cash and cash equivalents and restricted cash at beginning of the period
 
45,190

 
49,381

Cash and cash equivalents and restricted cash at end of the period
$
42,784

 
93,636


11





REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the three months ended March 31, 2019, and 2018
(in thousands)
(unaudited)
 
 
2019
 
2018
Supplemental disclosure of cash flow information:
 
 
 
 
Cash paid for interest (net of capitalized interest of $1,015 and $2,179 in 2019 and 2018, respectively)
$
42,421

 
30,467

Cash paid (received) for income taxes, net
$
15

 
(407
)
Supplemental disclosure of non-cash transactions:
 
 
 
 
Mortgage loans assumed for the acquisition of real estate
$

 
9,700

Change in accrued capital expenditures
$
10,494

 

Common stock issued by Parent Company for dividend reinvestment plan
$
383

 
358

Stock-based compensation capitalized
$
573

 
837

Contributions from limited partners in consolidated partnerships, net
$
881

 

Common stock issued for dividend reinvestment in trust
$
238

 
205

Contribution of stock awards into trust
$
1,328

 
637

Distribution of stock held in trust
$
167

 
317

Change in fair value of debt securities available-for-sale
$
174

 
(128
)
 
 
 
 
 
See accompanying notes to consolidated financial statements.


12




REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2019

1.
Organization and Significant Accounting Policies
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 primarily engages in the ownership, management, leasing, acquisition, and development and redevelopment of shopping centers through the Operating Partnership, and has no other assets other than through its investment in the Operating Partnership, and its only liabilities are $500 million of unsecured public and private placement notes, which are co-issued and guaranteed by the Operating Partnership. The Parent Company guarantees all of the unsecured debt of the Operating Partnership.
As of March 31, 2019, the Parent Company, the Operating Partnership, and their controlled subsidiaries on a consolidated basis owned 302 properties and held partial interests in an additional 117 properties 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 fairly state 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 and properties where it owns less than 100%, but which it has control over the activities most important to the overall success of the partnership. Control is determined using an evaluation based on accounting standards related to the consolidation of Variable Interest Entities ("VIEs") and voting interest entities.
Ownership of the Operating Partnership
The Operating Partnership’s capital includes general and limited common Partnership Units. As of March 31, 2019, the Parent Company owned approximately 99.8% of the outstanding common Partnership Units of the Operating Partnership with the remaining limited common Partnership Units held by third parties (“Exchangeable operating partnership units” or “EOP units”). The EOP units are exchangeable for one share of common stock of the Parent Company and the unit holder cannot require redemption in cash or other assets.  The Parent Company classifies EOP units as permanent equity in the accompanying Consolidated Balance Sheets and Consolidated Statements of Equity and Comprehensive Income. 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 VIE, 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.
Real Estate Partnerships
As of March 31, 2019, Regency had a partial ownership interest in 129 properties through partnerships, of which 12 are consolidated. Regency's partners include institutional investors, other real estate developers and/or operators, and individual parties who had a role in Regency sourcing transactions for development and investment (the "Partners" or "limited partners"). Regency has a variable interest in these entities through its equity interests, with Regency the primary beneficiary in certain of these real estate partnerships. As such, Regency consolidates the partnerships for which it is the primary beneficiary and reports the limited partners’ interests as noncontrolling interests. For those partnerships which Regency is not the primary beneficiary and does not control, but has significant influence, Regency recognizes its investment in them using the equity method of accounting.
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 the partnerships can only be settled by the assets of these partnerships.

13



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2019

The major classes of assets, liabilities, and non-controlling equity interests held by the Company's consolidated VIEs, exclusive of the Operating Partnership as a whole, are as follows:
(in thousands)
March 31, 2019
 
December 31, 2018
Assets
 
 
 
Net real estate investments
$
128,175

 
112,085

Cash, cash equivalents and restricted cash
22,274

 
7,309

Liabilities
 
 
 
Notes payable
17,640

 
18,432

Equity
 
 
 
Limited partners’ interests in consolidated partnerships
31,146

 
30,280

Leases
Lease Income and Tenant Receivables
The Company leases space to tenants under agreements with varying terms that generally provide for fixed payments of base rent, with designated increases over the term of the lease. Some of the lease agreements contain provisions that provide for additional rents based on tenants' sales volume ("percentage rent"). Percentage rents are recognized when the tenants achieve the specified targets as defined in their lease agreements. Additionally, most all lease agreements contain provisions for reimbursement of the tenants' share of actual real estate taxes, insurance and common area maintenance (“CAM”) costs (collectively "Recoverable Costs") incurred.
Lease terms generally range from three to seven years for tenant space under 10,000 square feet (“Shop Space”) and in excess of five years for spaces greater than 10,000 square feet (“Anchor Tenants”). Many leases also provide the option for the tenants to extend their lease beyond the initial term of the lease. If the tenants do not exercise renewal options and the leases mature, the tenants must relinquish their space so it can be leased to a new tenant, which generally involves some level of cost to prepare the space for re-leasing. These costs are capitalized and depreciated over the shorter of the life of the subsequent lease or the life of the improvement.
On January 1, 2019, the Company adopted the new accounting guidance in Accounting Standards Codification (“ASC”) Topic 842, Leases, including all related Accounting Standard Updates (“ASU”). The Company elected to use the alternative modified retrospective transition method provided in ASU 2018-11 (the "effective date method"). Under this method, the effective date of January 1, 2019 is the date of initial application. In connection with the adoption of Topic 842, the Company elected a package of practical expedients, transition options, and accounting policy elections as follows:
Package of practical expedients - applied to all leases, allowing the Company not to reassess (i) whether expired or existing contracts contain leases under the new definition of a lease, (ii) lease classification for expired or existing leases, and (iii) whether previously capitalized initial direct costs would qualify for capitalization under Topic 842;
For land easements, the Company elected not to assess at transition whether any expired or existing land easements are, or contain, leases if they were not previously accounted for as leases under the previous lease accounting standard ("Topic 840");
Lessor separation and allocation practical expedient - Regency elected, as lessor, to aggregate non-lease components with the related lease component if certain conditions are met, and account for the combined component based on its predominant characteristic, which generally results in combining lease and non-lease components of its tenant lease contracts to a single line shown as Lease income in the accompanying Consolidated Statements of Operations; and
The Company made an accounting policy election to continue to exclude, from contract consideration, sales tax (and similar taxes) collected from lessees.
The Company's existing leases were not re-evaluated and continue to be classified as operating leases, as per the practical expedient package elected above. New and modified leases will now require evaluation of

14



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2019

specific classification criteria, which, based on the customary terms of the Company's leases, should continue to be classified as operating leases. However, certain longer-term leases (both lessee and lessor leases) may be classified as direct financing or sales type leases, which may result in selling profit and an accelerated pattern of earnings recognition.
CAM is a non-lease component of the lease contract under Topic 842, and therefore would be accounted for under Topic 606, Revenue from Contracts with Customers, and presented separate from Lease income in the Statements of Operations, based on an allocation of the overall contract price, which is not necessarily the amount that would be billable to the tenants for CAM reimbursements per the terms of the lease contract. As the timing and pattern of providing the CAM service to the tenant is the same as the timing and pattern of the tenants' use of the underlying lease asset, the Company elected, as part of the package of practical expedients, to combine CAM with the remaining lease components, along with tenants' reimbursement of real estate taxes and insurance, and recognize them together as Lease income in the accompanying Statements of Operations.
Lease income for operating leases with fixed payment terms is recognized on a straight-line basis over the expected term of the lease for all leases for which collectibility is considered probable at the commencement date. At lease commencement, the Company expects that collectibility is probable for all of its leases due to the Company’s credit checks on tenants and other creditworthiness analysis undertaken before entering into a new lease; therefore, income from all operating leases is initially recognized on a straight-line basis. Lease income each period is reduced by amounts considered uncollectible on a lease-by-lease basis, with any changes in collectibility assessments recognized as a current period adjustment to Lease income. For operating leases in which collectibility of Lease income is not considered probable, Lease income is recognized on a cash basis and all previously recognized uncollectible Lease income is reversed in the period in which the Lease income is determined not to be probable of collection.
Topic 842 also changes the treatment of leasing costs, such that non-contingent internal leasing and legal costs associated with leasing activities can no longer be capitalized. The Company, as a lessor, may only defer as initial direct costs the incremental costs of a tenant operating lease that would not have been incurred if the lease had not been obtained. These costs generally include third party broker payments, which are capitalized to Deferred leasing costs in the accompanying Consolidated Balance Sheets and amortized over the expected term of the lease to Depreciation and amortization expense in the accompanying Consolidated Statements of Operations.
Lease Obligations
The Company has 22 properties within its consolidated real estate portfolio that are either partially or completely on land subject to ground leases with third parties, which are all classified as operating leases. Accordingly, the Company owns only a long-term leasehold or similar interest in these properties. The building and improvements constructed on the leased land are capitalized as Real estate assets in the accompanying Consolidated Balance Sheets and depreciated over the shorter of the useful life of the improvements or the lease term. These ground leases expire through the year 2101, and in most cases, provide for renewal options.
In addition, the Company has non-cancelable operating leases pertaining to office space from which it conducts its business. Office leases expire through the year 2029, and in most cases, provide for renewal options. Leasehold improvements are capitalized as tenant improvements, included in Other assets in the Consolidated Balance Sheets, and depreciated over the shorter of the useful life of the improvements or the lease term.
Upon the adoption of Topic 842 the Company has recognized Lease liabilities on its Consolidated Balance Sheets for its ground and office leases of $225.4 million at January 1, 2019, and corresponding Right of use assets of $297.8 million, net of or including the opening balance for straight line rent and above / below market ground lease intangibles related to these same ground and office leases. A key input in estimating the Lease liabilities and resulting Right of use assets is establishing the discount rate in the lease, which requires additional inputs for the longer-term ground leases, including interest rates that correspond with the remaining term of the lease, the Company's credit spread, and a securitization adjustment necessary to reflect the collateralized payment terms present in the lease. See Note 7, Leases, for additional disclosures.
The ground and office lease expenses continue to be recognized on a straight line basis over the term of the leases, including management's estimate of expected option renewal periods. For ground leases, the

15



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2019

Company generally assumes it will exercise options through the latest option date of that shopping center's anchor tenant lease.
Revenues and Other Receivables
Other property income includes incidental income from the properties and is generally recognized at the point in time that the performance obligation is met. All income from contracts with the Company's real estate partnerships is included within Management, transaction and other fees on the Consolidated Statements of Operations. The primary components of these revenue streams, the timing of satisfying the performance obligations, and amounts recognized are as follows:
 
 
 
 
Three months ended March 31,
(in thousands)
 
Timing of satisfaction of performance obligations
 
2019
 
2018
Other property income
 
Point in time
 
$
1,982

 
2,025

Management, transaction and other fees
 
 
 
 
Property management services
 
Over time
 
$
3,764

 
3,768

Asset management services
 
Over time
 
1,777

 
1,703

Leasing services
 
Point in time
 
758

 
685

Other transaction fees
 
Point in time
 
673

 
1,002

Total management, transaction, and other fees
 
$
6,972

 
7,158

The accounts receivable for the above Other property income and management services, which are included within Tenant and other receivables in the accompanying Consolidated Balance Sheets, are $11.0 million and $12.5 million, as of March 31, 2019 and December 31, 2018, respectively.
Reclassifications
Certain prior year amounts have been reclassified to conform to current year presentation, including amounts in Cash, cash equivalents, and restricted cash in the accompanying Consolidated Balance Sheets, and in Lease income and Other property income in the accompanying Consolidated Statements of Operations.

16



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2019

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:
 
 
 
 
 
 
 
 
 
 
 
 
 
Leases (Topic 842) and related updates:

ASU 2016-02, February 2016, Leases (Topic 842)

ASU 2018-10, July 2018: Codification Improvements to Topic 842, Leases

ASU 2018-11, July 2018, Leases (Topic 842): Targeted Improvements

ASU 2018-20, December 2018, Leases (Topic 842): Narrow-Scope Improvements for Lessors

ASU 2019-01, March 2019,  Leases (Topic 842): Codification Improvements

 
Topic 842 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.

The provisions of these ASUs are effective as of January 1, 2019, with early adoption permitted. Topic 842 provides 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 or an additional transition method, allowing for initial application at the date of adoption and a cumulative-effect adjustment to opening retained earnings.

See the updated Leases accounting policy disclosed earlier in Note 1 and the added Leases disclosures in Note 7.
 
January 2019
 
The Company has completed its evaluation and adoption of this standard, as discussed earlier in Note 1. The Company utilized the alternative modified retrospective transition method provided in ASU 2018-11 (the "effective date method"), under which the effective date of January 1, 2019 is also the date of initial application.
See the updated Leases accounting policy disclosed earlier in Note 1 and the added disclosures in Note 7, Leases.
Beyond the policy, presentation and disclosure changes discussed, the following changes had a direct impact to Net Income from the adoption of Topic 842:
Capitalization of indirect internal non-contingent leasing costs and legal leasing costs are no longer permitted upon the adoption of this standard, which is resulting in an increase to Total operating expenses in the Consolidated Statements of Operations.
Previous capitalization of internal leasing costs was $1.3 million and $6.5 million during the three months ended March 31, 2018 and the year ended December 31, 2018, respectively.

Previous capitalization of legal costs was $0.4 million and $1.6 million during the three months ended March 31, 2018 and the year ended December 31, 2018, respectively, including our pro rata share recognized through Equity in income of investments in real estate partnerships.
 
 
 
 
 
 
 

17



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2019

Standard
 
Description
 
Date of adoption
 
Effect on the financial statements or other significant matters
Not yet adopted:
 
 
 
 
 
 
 
 
 
 
 
 
 
ASU 2016-13, June 2016, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments


 
This ASU replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

This ASU also applies to how the Company evaluates impairments of any held to maturity debt securities.
 
January 2020
 
The Company is currently evaluating the accounting standard, but does not expect the adoption to have a material impact on its financial position, results of operations, or cash flows.
 
 
 
 
 
 
 
ASU 2018-19, November 2018:  Codification Improvements to Topic 326, Financial Instruments - Credit Losses
 
This ASU clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases.
 
January 2020
 
The Company currently does not expect the adoption of this ASU to have a material impact on its financial statements and related disclosures.
See Topic 842 for disclosure of collectibility policy over lease receivables from operating leases.
 
 
 
 
 
 
 
ASU 2018-13, August 2018, Fair Value Measurements (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement
 
This ASU modifies the disclosure requirements for fair value measurements within the scope of Topic 820, Fair Value Measurements, including the removal and modification of certain existing disclosures, and the addition of new disclosures.
 
January 2020
 
The Company is currently evaluating the impact of adopting this new accounting standard, which is expected to only impact fair value measurement disclosures and therefore should have no impact on the Company's financial position, results of operations, or cash flows.
 
 
 
 
 
 
 
ASU 2018-15, August 2018, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract.
 
The amendments in this ASU align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The ASU provides further clarification of the appropriate presentation of capitalized costs, the period over which to recognize the expense, the presentation within the Statements of Operations and Statements of Cash Flows, and the disclosure requirements.

Early adoption of the standard is permitted.
 
January 2020
 
The Company is currently evaluating the accounting standard, but does not expect the adoption to have a material impact on its financial position, results of operations, or cash flows.

18



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2019

2.
Real Estate Investments
The following table details the shopping centers acquired or land acquired or leased for development:
(in thousands)
 
Three months ended March 31, 2019
Date Purchased
 
Property Name
 
City/State
 
Property Type
 
Ownership
 
Purchase Price
 
Debt Assumed, Net of Premiums
 
Intangible Assets
 
Intangible Liabilities
1/8/19
 
Pablo Plaza (1)
 
Jacksonville, FL
 
Operating
 
100.0%
 
$600
 
 
 
2/8/19
 
Melrose Market
 
Seattle, WA
 
Operating
 
100.0%
 
15,515
 
 
941
 
358
Total property acquisitions
 
 
 
 
 
$16,115
 
 
941
 
358
(1) The Company purchased a .17 acre land parcel adjacent to the Company's existing operating Pablo Plaza for redevelopment.
 
(in thousands)
 
Three months ended March 31, 2018
Date Purchased
 
Property Name
 
City/State
 
Property Type
 
Ownership
 
Purchase Price
 
Debt Assumed, Net of Premiums
 
Intangible Assets
 
Intangible Liabilities
1/2/18
 
Ballard in Blocks I
 
Seattle, WA
 
Operating
 
49.9%
 
$54,500
 
 
3,668
 
2,350
1/2/18
 
Ballard in Blocks II
 
Seattle, WA
 
Development
 
49.9%
 
4,000
 
 
 
1/5/18
 
Metuchen
 
Metuchen, NJ
 
Operating
 
20%
 
33,830
 
 
3,147
 
1,905
1/10/18
 
Hew