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 September 30, 2016March 31, 2017
or
oTRANSITION 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)
regencylogocolora02.jpg
59-3191743
DELAWARE (REGENCY CENTERS, L.P)59-3429602
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
  
One Independent Drive, Suite 114
Jacksonville, Florida 32202
(904) 598-7000
(Address of principal executive offices) (zip code)(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Regency Centers Corporation              YES  x    NO  o                     Regency Centers, L.P.              YES  x    NO  o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Regency Centers Corporation              YES  x    NO  o                     Regency Centers, L.P.              YES  x    NO  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” andfiler,” “smaller reporting company”company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Regency Centers Corporation:
Large accelerated filerxAccelerated fileroEmerging growth companyo
Non-accelerated fileroSmaller reporting companyo

Regency Centers, L.P.:
Large accelerated fileroAccelerated filerxEmerging growth companyo
Non-accelerated fileroSmaller reporting companyo
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Regency Centers Corporation              YES  o    NO  x                    Regency Centers, L.P.              YES  o    NO  x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Regency Centers Corporation              YES  o    NO  x                    Regency Centers, L.P.              YES  o    NO  x
The number of shares outstanding of the Regency Centers Corporation’s common stock was 104,493,307170,077,581 as of October 31, 2016.May 9, 2017.
 




EXPLANATORY NOTE
This report combines the quarterly reports on Form 10-Q for the quarter ended September 30, 2016March 31, 2017 of Regency Centers Corporation and Regency Centers, L.P. Unless stated otherwise or the context otherwise requires, references to “Regency Centers Corporation” or the “Parent Company” mean Regency Centers Corporation and its controlled subsidiaries; and references to “Regency Centers, L.P.” or the “Operating Partnership” mean Regency Centers, L.P. and its controlled subsidiaries. The term “the Company”,"Regency Centers" or “Regency” means the Parent Company and the Operating Partnership, collectively.
The Parent Company is a real estate investment trust (“REIT”) and the general partner of the Operating Partnership. The Operating Partnership's capital includes general and limited common Partnership Units (“Units”). As of September 30, 2016March 31, 2017, the Parent Company owned all of the Preferred Units of the Operating Partnership and approximately 99.9% of the Units in the Operating Partnership and thePartnership. The remaining limited Units are owned by investors. The Parent Company owns all of the Series 6 and 7 Preferred Units of the Operating Partnership. As the sole general partner of the Operating Partnership, the Parent Company has exclusive control of the Operating Partnership's day-to-day management.
The Company believes combining the quarterly reports on Form 10-Q of the Parent Company and the Operating Partnership into this single report provides the following benefits:
 
Enhances investors' understanding of the Parent Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;  

Eliminates duplicative disclosure and provides a more streamlined and readable presentation; and  

Creates time and cost efficiencies through the preparation of one combined report instead of two separate reports. 
Management operates the Parent Company and the Operating Partnership as one business. The management of the Parent Company consists of the same individuals as the management of the Operating Partnership. These individuals are officers of the Parent Company and employees of the Operating Partnership.
The Company believes it is important to understand the fewkey 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. TheExcept for the $500 million of unsecured public and private placement debt assumed with the Equity One merger on March 1, 2017, the Parent Company does not holdhave any other indebtedness, but guarantees all of the unsecured public debt of the Operating Partnership. The Operating Partnership is also the co-issuer and guarantees the debt of the Parent Company. The Operating Partnership holds all the assets of the Company and retains the ownership interests in the Company's joint ventures. Except for net proceeds from public equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generates all remaining capital required by the Company's business. These sources include the Operating Partnership's operations, its direct or indirect incurrence of indebtedness, and the issuance of partnership units.
Stockholders' equity, partners' capital, and noncontrolling interests are the main areas of difference between the consolidated financial statements of the Parent Company and those of the Operating Partnership. The Operating Partnership's capital includes general and limited common Partnership Units, and Series 6 and 7 Preferred Units owned by the Parent Company. The limited partners' units in the Operating Partnership owned by third parties are accounted for in partners' capital in the Operating Partnership's financial statements and outside of stockholders' equity in noncontrolling interests in the Parent Company's financial statements. The Series 6 and 7 Preferred Units owned by the Parent Company are eliminated in consolidation in the accompanying consolidated financial statements of the Parent Company and are classified as preferred units of the general partner in the accompanying consolidated financial statements of the Operating Partnership.
In order to highlight the differences between the Parent Company and the Operating Partnership, there are sections in this report that separately discuss the Parent Company and the Operating Partnership, including separate financial statements, controls and procedures sections, and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure for the Parent Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company. 

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











TABLE OF CONTENTS
 
  
Form 10-Q
Report Page
   
PART I - FINANCIAL INFORMATION 
   
Item 1.Financial Statements 
   
Regency Centers Corporation: 
   
 Consolidated Balance Sheets as of September 30, 2016March 31, 2017 and December 31, 20152016
1
   
 Consolidated Statements of Operations for the periods ended September 30,March 31, 2017 and 2016 and 2015
2
   
 Consolidated Statements of Comprehensive Income for the periods ended September 30,March 31, 2017 and 2016 and 2015
3
   
 Consolidated Statements of Equity for the periods ended September 30,March 31, 2017 and 2016 and 2015
4
   
 Consolidated Statements of Cash Flows for the periods ended September 30,March 31, 2017 and 2016 and 2015
5
   
Regency Centers, L.P.: 
   
 Consolidated Balance Sheets as of September 30, 2016March 31, 2017 and December 31, 20152016
76
   
 Consolidated Statements of Operations for the periods ended September 30,March 31, 2017 and 2016 and 2015
87
   
 Consolidated Statements of Comprehensive Income for the periods ended September 30,March 31, 2017 and 2016 and 2015
98
   
 Consolidated Statements of Capital for the periods ended September 30,March 31, 2017 and 2016 and 2015
109
   
 Consolidated Statements of Cash Flows for the periods ended September 30,March 31, 2017 and 2016 and 2015
1110
   
 Notes to Consolidated Financial Statements
1312
   
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
3033
   
Item 3.Quantitative and Qualitative Disclosures about Market Risk
5856
   
Item 4.Controls and Procedures
5856
   
PART II - OTHER INFORMATION 
   
Item 1.Legal Proceedings
5957
   
Item 1A.Risk Factors
5957
   
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
5957
   
Item 3.Defaults Upon Senior Securities
5957
   
Item 4.Mine Safety Disclosures
5958
   
Item 5.Other Information
5958
   
Item 6.Exhibits
6059
   
SIGNATURES
61
   
   




PART I - FINANCIAL INFORMATION

Item 1. Financial Statements
REGENCY CENTERS CORPORATION
Consolidated Balance Sheets
September 30, 2016March 31, 2017 and December 31, 20152016
(in thousands, except share data)
 2016 2015 2017 2016
Assets (unaudited)   (unaudited)  
Real estate investments at cost:        
Land, including amounts held for future development$1,654,389
 1,479,814
Land$4,760,963
 1,660,424
Buildings and improvements 3,086,287
 2,896,396
 5,908,653
 3,092,197
Properties in development 157,537
 169,690
 292,480
 180,878
 4,898,213
 4,545,900
 10,962,096
 4,933,499
Less: accumulated depreciation 1,108,221
 1,043,787
 1,166,657
 1,124,391
 3,789,992
 3,502,113
 9,795,439
 3,809,108
Properties held for sale 19,600
 —
Investments in real estate partnerships 274,940
 306,206
 381,691
 296,699
Net real estate investments 4,064,932
 3,808,319
 10,196,730
 4,105,807
Cash and cash equivalents 40,902
 36,856
 36,855
 13,256
Restricted cash 4,005
 3,767
 7,987
 4,623
Accounts receivable, net of allowance for doubtful accounts of $5,690 and $5,295 at September 30, 2016 and December 31, 2015, respectively 24,816
 32,292
Straight-line rent receivable, net of reserve of $3,688 and $1,365 at September 30, 2016 and December 31, 2015, respectively 67,931
 63,392
Notes receivable 10,480
 10,480
Deferred leasing costs, less accumulated amortization of $82,277 and $76,823 at September 30, 2016 and December 31, 2015, respectively 68,455
 66,367
Acquired lease intangible assets, less accumulated amortization of $53,878 and $45,639 at September 30, 2016 and December 31, 2015, respectively 122,738
 105,380
Trading securities held in trust, at fair value 29,280
 29,093
Tenant and other receivables, net of allowance for doubtful accounts and straight-line rent reserves of $9,577 and $9,021 at March 31, 2017 and December 31, 2016, respectively 119,843
 111,722
Deferred leasing costs, less accumulated amortization of $85,971 and $83,529 at March 31, 2017 and December 31, 2016, respectively 68,299
 69,000
Acquired lease intangible assets, less accumulated amortization of $69,324 and $56,695 at March 31, 2017 and December 31, 2016, respectively 606,707
 118,831
Trading securities held in trust 29,025
 28,588
Other assets 24,749
 26,935
 70,526
 37,079
Total assets$4,458,288
 4,182,881
$11,135,972
 4,488,906
Liabilities and Equity        
Liabilities:        
Notes payable$1,364,200
 1,699,771
$2,749,202
 1,363,925
Unsecured credit facilities 263,421
 164,514
 658,024
 278,495
Accounts payable and other liabilities 145,689
 164,515
 242,638
 138,936
Acquired lease intangible liabilities, less accumulated accretion of $22,067 and $17,555 at September 30, 2016 and December 31, 2015, respectively 56,455
 42,034
Acquired lease intangible liabilities, less accumulated amortization of $28,689 and $23,538 at March 31, 2017 and December 31, 2016, respectively 680,469
 54,180
Tenants’ security, escrow deposits and prepaid rent 28,239
 29,427
 41,136
 28,868
Total liabilities 1,858,004
 2,100,261
 4,371,469
 1,864,404
Commitments and contingencies (note 11) 
 
Commitments and contingencies —
 —
Equity:        
Stockholders’ equity:        
Preferred stock, $0.01 par value per share, 30,000,000 shares authorized; 13,000,000 Series 6 and 7 shares issued and outstanding at September 30, 2016 and December 31, 2015, with liquidation preferences of $25 per share 325,000
 325,000
Common stock, $0.01 par value per share,150,000,000 shares authorized; 104,492,738 and 97,212,638 shares issued at September 30, 2016 and December 31, 2015, respectively 1,045
 972
Treasury stock at cost, 345,359 and 417,862 shares held at September 30, 2016 and December 31, 2015, respectively (16,882) (19,658)
Preferred stock, $0.01 par value per share, 30,000,000 shares authorized; 3,000,000 Series 7 shares issued and outstanding at March 31, 2017, and 13,000,000 Series 6 and 7 shares issued and outstanding at December 31, 2016, with liquidation preferences of $25 per share
 75,000
 325,000
Common stock, $0.01 par value per share, 220,000,000 and 150,000,000 shares authorized; 170,076,671 and 104,497,286 shares issued at March 31, 2017 and December 31, 2016, respectively 1,701
 1,045
Treasury stock at cost, 349,660 and 347,903 shares held at March 31, 2017 and December 31, 2016, respectively (17,473) (17,062)
Additional paid in capital 3,291,602
 2,742,508
 7,768,794
 3,294,923
Accumulated other comprehensive loss (35,739) (58,693) (15,791) (18,346)
Distributions in excess of net income (997,881) (936,020) (1,080,882) (994,259)
Total stockholders’ equity 2,567,145
 2,054,109
 6,731,349
 2,591,301
Noncontrolling interests:        
Exchangeable operating partnership units, aggregate redemption value of $11,947 and $10,502 at September 30, 2016 and December 31, 2015, respectively (2,006) (1,975)
Exchangeable operating partnership units, aggregate redemption value of $10,235 and $10,630 at March 31, 2017 and December 31, 2016, respectively (2,063) (1,967)
Limited partners’ interests in consolidated partnerships 35,145
 30,486
 35,217
 35,168
Total noncontrolling interests 33,139
 28,511
 33,154
 33,201
Total equity 2,600,284
 2,082,620
 6,764,503
 2,624,502
Total liabilities and equity$4,458,288
 4,182,881
$11,135,972
 4,488,906
See accompanying notes to consolidated financial statements.

1




REGENCY CENTERS CORPORATION
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
 Three months ended September 30, Nine months ended September 30, Three months ended March 31,
 2016 2015 2016 2015 2017 2016
Revenues:            
Minimum rent$111,886
 105,071
$329,506
 308,766
$141,240
 107,674
Percentage rent 495
 486
 2,651
 2,593
 2,906
 1,703
Recoveries from tenants and other income 34,532
 30,725
 103,894
 94,205
 45,279
 33,487
Management, transaction, and other fees 5,855
 5,786
 18,759
 18,032
 6,706
 6,764
Total revenues 152,768
 142,068
 454,810
 423,596
 196,131
 149,628
Operating expenses:            
Depreciation and amortization 40,705
 37,032
 119,721
 109,249
 60,053
 38,716
Operating and maintenance 23,373
 19,761
 69,767
 61,119
 29,763
 22,685
General and administrative 16,046
 14,750
 48,695
 46,227
 17,673
 16,299
Real estate taxes 17,058
 16,044
 49,697
 46,842
 21,450
 15,870
Other operating expenses 1,046
 1,880
 5,795
 4,825
Other operating expenses (note 2) 71,512
 2,306
Total operating expenses 98,228
 89,467
 293,675
 268,262
 200,451
 95,876
Other expense (income):            
Interest expense, net 21,945
 25,099
 70,489
 78,407
 27,199
 24,142
Provision for impairment —
 —
 1,666
 —
 —
 1,666
Early extinguishment of debt 13,943
 —
 13,943
 (61)
Net investment (income) loss, including unrealized (gains) losses of ($383) and $1,296, and ($888) and $1,771 for the three and nine months ended September 30, 2016 and 2015, respectively (821) 1,190
 (1,268) 190
Loss on derivative instruments 40,586
 —
 40,586
 —
Total other expense 75,653
 26,289
 125,416
 78,536
Income (loss) from operations before equity in income of investments in real estate partnerships (21,113) 26,312
 35,719
 76,798
Net investment (income) loss, including unrealized (gains) losses of ($852) and ($230) for the three months ended March 31, 2017 and 2016, respectively (1,097) 155
Total other expense (income) 26,102
 25,963
(Loss) income from operations before equity in income of investments in real estate partnerships (30,422) 27,789
Equity in income of investments in real estate partnerships 22,647
 5,667
 46,618
 17,991
 9,342
 12,920
Income from operations 1,534
 31,979
 82,337
 94,789
Income tax expense of taxable REIT subsidiary 50
 —
(Loss) income from operations (21,130) 40,709
Gain on sale of real estate, net of tax 9,580
 27,755
 22,997
 34,215
 415
 12,868
Net income 11,114
 59,734
 105,334
 129,004
Net (loss) income (20,715) 53,577
Noncontrolling interests:            
Exchangeable operating partnership units (16) (94) (165) (204) 19
 (85)
Limited partners’ interests in consolidated partnerships (527) (643) (1,380) (1,619) (671) (349)
Income attributable to noncontrolling interests (543) (737) (1,545) (1,823)
Net income attributable to the Company 10,571
 58,997
 103,789
 127,181
Preferred stock dividends (5,266) (5,266) (15,797) (15,797)
Net income attributable to common stockholders$5,305
 53,731
$87,992
 111,384
Loss attributable to noncontrolling interests (652) (434)
Net (loss) income attributable to the Company (21,367) 53,143
Preferred stock dividends and issuance costs (11,856) (5,266)
Net (loss) income attributable to common stockholders$(33,223) 47,877

            
Income per common share - basic$0.05
 0.57
$0.88
 1.18
Income per common share - diluted$0.05
 0.57
$0.88
 1.18
(Loss) income per common share - basic$(0.26) 0.49
(Loss) income per common share - diluted$(0.26) 0.49
See accompanying notes to consolidated financial statements.

2



REGENCY CENTERS CORPORATION
Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
 Three months ended September 30, Nine months ended September 30, Three months ended March 31,
 2016 2015 2016 2015 2017 2016
Net income$11,114
 59,734
$105,334
 129,004
Net (loss) income$(20,715) 53,577
Other comprehensive (loss) income:            
Effective portion of change in fair value of derivative instruments:            
Effective portion of change in fair value of derivative instruments 1,294
 (15,768) (25,338) (11,274) (68) (16,785)
Reclassification adjustment of derivative instruments included in net income 43,111
 2,155
 48,063
 6,654
 2,654
 2,453
Unrealized gain (loss) on available-for-sale securities 53
 (43) 90
 (73) 32
 (36)
Other comprehensive income (loss) 44,458
 (13,656) 22,815
 (4,693) 2,618
 (14,368)
Comprehensive income 55,572
 46,078
 128,149
 124,311
Comprehensive (loss) income (18,097) 39,209
Less: comprehensive income (loss) attributable to noncontrolling interests:            
Net income attributable to noncontrolling interests 543
 737
 1,545
 1,823
 652
 434
Other comprehensive income (loss) attributable to noncontrolling interests 158
 (149) (139) (134) 65
 (168)
Comprehensive income attributable to noncontrolling interests 701
 588
 1,406
 1,689
 717
 266
Comprehensive income attributable to the Company$54,871
 45,490
$126,743
 122,622
Comprehensive (loss) income attributable to the Company$(18,814) 38,943
See accompanying notes to consolidated financial statements.


3




REGENCY CENTERS CORPORATION
Consolidated Statements of Equity
For the nine months ended September 30, 2016 and 2015
(in thousands, except per share data)
(unaudited)
REGENCY CENTERS CORPORATION
Consolidated Statements of Equity
For the three months ended March 31, 2017 and 2016
(in thousands, except per share data)
(unaudited)
REGENCY CENTERS CORPORATION
Consolidated Statements of Equity
For the three months ended March 31, 2017 and 2016
(in thousands, except per share data)
(unaudited)
               Noncontrolling Interests                 Noncontrolling Interests  
 
Preferred
Stock
 
Common
Stock
 
Treasury
Stock
 
Additional
Paid In
Capital
 
Accumulated
Other
Comprehensive
Loss
 
Distributions
in Excess of
Net Income
 
Total
Stockholders’
Equity
 
Exchangeable
Operating
Partnership
Units
 
Limited
Partners’
Interest  in
Consolidated
Partnerships
 
Total
Noncontrolling
Interests
 
Total
Equity
Balance at December 31, 2014 $325,000
 941
 (19,382) 2,540,153
 (57,748) (882,372) 1,906,592
 (1,914) 31,804
 29,890
 1,936,482
Net income —
 —
 —
 —
 —
 127,181
 127,181
 204
 1,619
 1,823
 129,004
Other comprehensive loss —
 —
 —
 —
 (4,559) —
 (4,559) (7) (127) (134) (4,693)
Deferred compensation plan, net —
 —
 (56) 56
 —
 —
 —
 —
 —
 —
 —
Restricted stock issued, net of amortization —
 —
 —
 10,441
 —
 —
 10,441
 —
 —
 —
 10,441
Common stock redeemed for taxes withheld for stock based compensation, net —
 —
 —
 (9,770) —
 —
 (9,770) —
 —
 —
 (9,770)
Common stock issued for dividend reinvestment plan —
 —
 —
 966
 —
 —
 966
 —
 —
 —
 966
Common stock issued for stock offerings, net of issuance costs —
 1
 —
 945
 —
 —
 946
 —
 —
 —
 946
Contributions from partners —
 —
 —
 —
 —
 —
 —
 —
 454
 454
 454
Distributions to partners —
 —
 —
 —
 —
 —
 —
 —
 (2,792) (2,792) (2,792)
Cash dividends declared:                      
Preferred stock —
 —
 —
 —
 —
 (15,797) (15,797) —
 —
 —
 (15,797)
Common stock/unit ($1.455 per share) —
 —
 —
 —
 —
 (136,974) (136,974) (223) —
 (223) (137,197)
Balance at September 30, 2015 $325,000
 942
 (19,438) 2,542,791
 (62,307) (907,962) 1,879,026
 (1,940) 30,958
 29,018
 1,908,044
                       
Preferred
Stock
 
Common
Stock
 
Treasury
Stock
 
Additional
Paid In
Capital
 
Accumulated
Other
Comprehensive
Loss
 
Distributions
in Excess of
Net Income
 
Total
Stockholders’
Equity
 
Exchangeable
Operating
Partnership
Units
 
Limited
Partners’
Interest  in
Consolidated
Partnerships
 
Total
Noncontrolling
Interests
 
Total
Equity
Balance at December 31, 2015 $325,000
 972
 (19,658) 2,742,508
 (58,693) (936,020) 2,054,109
 (1,975) 30,486
 28,511
 2,082,620
 $325,000
 972
 (19,658) 2,742,508
 (58,693) (936,020) 2,054,109
 (1,975) 30,486
 28,511
 2,082,620
Net income —
 —
 —
 —
 —
 103,789
 103,789
 165
 1,380
 1,545
 105,334
 —
 —
 —
 —
 —
 53,143
 53,143
 85
 349
 434
 53,577
Other comprehensive loss —
 —
 —
 —
 22,954
 —
 22,954
 33
 (172) (139) 22,815
 —
 —
 —
 —
 (14,200) —
 (14,200) (22) (146) (168) (14,368)
Deferred compensation plan, net —
 —
 2,776
 (2,776) —
 —
 —
 —
 —
 —
 —
 —
 —
 1,287
 (1,287) —
 —
 —
 —
 —
 —
 —
Restricted stock issued, net of amortization —
 2
 —
 9,965
 —
 —
 9,967
 —
 —
 —
 9,967
 —
 2
 —
 3,400
 —
 —
 3,402
 —
 —
 —
 3,402
Common stock redeemed for taxes withheld for stock based compensation, net —
 —
 —
 (7,835) —
 —
 (7,835) —
 —
 —
 (7,835) —
 —
 —
 (7,950) —
 —
 (7,950) —
 —
 —
 (7,950)
Common stock issued for dividend reinvestment plan —
 —
 —
 804
 —
 —
 804
 —
 —
 —
 804
Common stock issued for stock offerings, net of issuance costs —
 71
 —
 549,474
 —
 —
 549,545
 —
 —
 —
 549,545
Common stock issued under dividend reinvestment plan —
 —
 —
 292
 —
 —
 292
 —
 —
 —
 292
Common stock issued, net of issuance costs —
 2
 —
 12,291
 —
 —
 12,293
 —
 —
 —
 12,293
Contributions from partners —
 —
 —
 —
 —
 —
 —
 —
 8,675
 8,675
 8,675
 —
 —
 —
 —
 —
 —
 —
 —
 8,389
 8,389
 8,389
Distributions to partners —
 —
 —
 (538) —
 —
 (538) —
 (5,224) (5,224) (5,762) —
 —
 —
 (350) —
 —
 (350) —
 (1,387) (1,387) (1,737)
Cash dividends declared:                                            
Preferred stock —
 —
 —
 —
 —
 (15,797) (15,797) —
 —
 —
 (15,797) —
 —
 —
 —
 —
 (5,266) (5,266) —
 —
 —
 (5,266)
Common stock/unit ($1.50 per share) —
 —
 —
 —
 —
 (149,853) (149,853) (229) —
 (229) (150,082)
Balance at September 30, 2016 $325,000
 1,045
 (16,882) 3,291,602
 (35,739) (997,881) 2,567,145
 (2,006) 35,145
 33,139
 2,600,284
Common stock/unit ($0.50 per share) —
 —
 —
 —
 —
 (48,802) (48,802) (77) —
 (77) (48,879)
Balance at March 31, 2016 $325,000
 976
 (18,371) 2,748,904
 (72,893) (936,945) 2,046,671
 (1,989) 37,691
 35,702
 2,082,373
                      
Balance at December 31, 2016 $325,000
 1,045
 (17,062) 3,294,923
 (18,346) (994,259) 2,591,301
 (1,967) 35,168
 33,201
 2,624,502
Net loss —
 —
 —
 —
 —
 (21,367) (21,367) (19) 671
 652
 (20,715)
Other comprehensive income —
 —
 —
 —
 2,555
 —
 2,555
 2
 63
 65
 2,620
Deferred compensation plan, net —
 —
 (411) 412
 —
 —
 1
 —
 —
 —
 1
Restricted stock issued, net of amortization —
 2
 —
 3,731
 —
 —
 3,733
 —
 —
 —
 3,733
Common stock redeemed for taxes withheld for stock based compensation, net —
 (1) —
 (18,219) —
 —
 (18,220) —
 —
 —
 (18,220)
Common stock issued under dividend reinvestment plan —
 —
 —
 301
 —
 —
 301
 —
 —
 —
 301
Common stock issued, net of issuance costs —
 655
 —
 4,479,031
 —
 —
 4,479,686
 —
 —
 —
 4,479,686
Redemption of preferred stock (250,000) —
 —
 8,615
 —
 (8,615) (250,000) —
 —
 —
 (250,000)
Contributions from partners —
 —
 —
 —
 —
 —
 —
 —
 153
 153
 153
Distributions to partners —
 —
 —
 —
 —
 —
 —
 —
 (838) (838) (838)
Cash dividends declared:                      
Preferred stock —
 —
 —
 —
 —
 (3,241) (3,241) —
 —
 —
 (3,241)
Common stock/unit ($0.51 per share) —
 —
 —
 —
 —
 (53,400) (53,400) (79) —
 (79) (53,479)
Balance at March 31, 2017 $75,000
 1,701
 (17,473) 7,768,794
 (15,791) (1,080,882) 6,731,349
 (2,063) 35,217
 33,154
 6,764,503
See accompanying notes to consolidated financial statements.

4




REGENCY CENTERS CORPORATION
Consolidated Statements of Cash Flows
For the ninethree months ended September 30, 2016March 31, 2017 and 20152016
(in thousands)
(unaudited)
 2016 2015 2017 2016
Cash flows from operating activities:        
Net income$105,334
 129,004
Net (loss) income$(20,715) 53,577
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization 119,721
 109,249
 60,053
 38,716
Amortization of deferred loan cost and debt premium 7,242
 7,404
 2,459
 2,353
(Accretion) and amortization of above and below market lease intangibles, net (2,296) (1,250) (3,484) (351)
Stock-based compensation, net of capitalization 7,554
 8,379
 12,131
 2,621
Equity in income of investments in real estate partnerships (46,618) (17,991) (9,342) (12,920)
Gain on sale of real estate, net of tax (22,997) (34,215) (415) (12,868)
Provision for impairment 1,666
 —
 —
 1,666
Early extinguishment of debt 13,943
 (61)
Distribution of earnings from operations of investments in real estate partnerships 39,765
 34,527
 12,784
 13,840
Settlement of derivative instruments —
 (7,267)
Deferred income tax benefit (87) —
Deferred compensation expense 1,249
 (610) 1,062
 (148)
Realized and unrealized loss (gain) on investments (1,268) 189
Realized and unrealized (gain) loss on investments (1,064) 155
Changes in assets and liabilities:        
Restricted cash (84) 1,534
 67
 (109)
Accounts receivable, net (4,269) (4,408) 8,974
 4,371
Straight-line rent receivables, net (4,894) (6,274) (3,439) (1,848)
Deferred leasing costs (7,841) (8,268) (1,355) (2,903)
Other assets (59) (2,257) (2,657) (746)
Accounts payable and other liabilities 12,607
 10,230
 (24,370) (7,286)
Tenants’ security, escrow deposits and prepaid rent (1,406) (1,152) 2,121
 (1,301)
Net cash provided by operating activities 217,349
 216,763
 32,723
 76,819
Cash flows from investing activities:        
Acquisition of operating real estate (333,220) (42,983) —
 (16,483)
Advance deposits refunded (paid) on acquisition of operating real estate 1,250
 (2,250)
Acquisition of Equity One, net of cash acquired of $72,534 (648,957) —
Real estate development and capital improvements (146,773) (150,967) (66,504) (38,289)
Proceeds from sale of real estate investments 83,675
 93,727
 1,749
 32,261
Collection of notes receivable —
 1,000
Issuance of notes receivable (510) —
Investments in real estate partnerships (13,127) (18,644) (1,688) (2,438)
Distributions received from investments in real estate partnerships 52,536
 15,014
 25,428
 18,296
Dividends on investment securities 189
 128
 55
 59
Acquisition of securities (53,290) (25,675) (3,334) (41,946)
Proceeds from sale of securities 54,176
 22,296
 3,815
 41,207
Net cash used in investing activities (354,584) (108,354) (689,946) (7,333)
Cash flows from financing activities:        
Net proceeds from common stock issuance 549,545
 946
 —
 12,293
Repurchase of common shares in conjunction with equity award plans (18,275) (7,984)
Proceeds from sale of treasury stock 957
 51
 76
 904
Acquisition of treasury stock (29) —
Redemption of preferred stock and partnership units (250,000) —
Distributions to limited partners in consolidated partnerships, net (3,126) (2,352) (786) (1,707)
Distributions to exchangeable operating partnership unit holders (229) (223) (79) (77)
Dividends paid to common stockholders (149,049) (136,008) (53,289) (48,510)
Dividends paid to preferred stockholders (15,797) (15,797) (3,241) (5,266)
Repayment of fixed rate unsecured notes (300,000) (350,000)
Proceeds from issuance of fixed rate unsecured notes, net —
 248,160
 646,424
 —
Proceeds from unsecured credit facilities 395,000
 445,000
 740,000
 10,000
Repayment of unsecured credit facilities (295,000) (305,000) (360,000) (10,000)
Proceeds from notes payable 20,223
 3,325
 1,577
 —
Repayment of notes payable (41,584) (76,027) (11,422) (27,281)
Scheduled principal payments (4,462) (4,384) (1,367) (1,572)
Payment of loan costs (1,954) (5,996) (8,796) (5)
Early redemption costs (13,214) —
Net cash provided by (used in) financing activities 141,281
 (198,305) 680,822
 (79,205)
Net increase (decrease) in cash and cash equivalents 4,046
 (89,896) 23,599
 (9,719)
Cash and cash equivalents at beginning of the period 36,856
 113,776
 13,256
 36,856
Cash and cash equivalents at end of the period$40,902
 23,880
$36,855
 27,137

5




REGENCY CENTERS CORPORATION
Consolidated Statements of Cash Flows
For the ninethree months ended September 30, 2016,March 31, 2017, and 20152016
(in thousands)
(unaudited)
 2016 2015 2017 2016
Supplemental disclosure of cash flow information:        
Cash paid for interest (net of capitalized interest of $2,622 and $5,403 in 2016 and 2015, respectively)$54,904
 71,734
Cash paid for income taxes$—
 871
Cash paid for interest (net of capitalized interest of $1,061 and $973 in 2017 and 2016, respectively)$7,687
 7,611
Supplemental disclosure of non-cash transactions:        
Mortgage loans assumed for the acquisition of real estate$—
 42,799
Change in fair value of derivative instruments$(25,338) (10,845)
Common stock issued for dividend reinvestment plan$804
 966
Common stock issued under dividend reinvestment plan$301
 292
Stock-based compensation capitalized$2,561
 2,196
$778
 814
Contributions from limited partners in consolidated partnerships, net$8,674
 13
$100
 8,362
Common stock issued for dividend reinvestment in trust$556
 631
$177
 190
Contribution of stock awards into trust$1,513
 1,633
$929
 958
Distribution of stock held in trust$4,096
 1,898
$4,114
 1,807
Change in fair value of securities available-for-sale$90
 (73)$32
 (36)
Deconsolidation of previously consolidated partnership:    
Equity One Merger:    
Real estate, net$14,075
 —
$5,985,895
 —
Investments in real estate partnerships$(3,355) —
$103,566
 —
Notes payable$(9,415) —
$(757,399) —
Other assets and liabilities$640
 —
Limited partners' interest in consolidated partnerships$(2,099) —
Other assets and liabilities, net$(80,693) —
Common stock exchanged for Equity One shares$(4,471,808) —
See accompanying notes to consolidated financial statements.



6




REGENCY CENTERS, L.P.
Consolidated Balance Sheets
September 30, 2016March 31, 2017 and December 31, 20152016
(in thousands, except unit data)
    
 2016 2015 2017 2016
Assets (unaudited)   (unaudited)  
Real estate investments at cost:        
Land, including amounts held for future development$1,654,389
 1,479,814
Land$4,760,963
 1,660,424
Buildings and improvements 3,086,287
 2,896,396
 5,908,653
 3,092,197
Properties in development 157,537
 169,690
 292,480
 180,878
 4,898,213
 4,545,900
 10,962,096
 4,933,499
Less: accumulated depreciation 1,108,221
 1,043,787
 1,166,657
 1,124,391
 3,789,992
 3,502,113
 9,795,439
 3,809,108
Properties held for sale 19,600
 —
Investments in real estate partnerships 274,940
 306,206
 381,691
 296,699
Net real estate investments 4,064,932
 3,808,319
 10,196,730
 4,105,807
Cash and cash equivalents 40,902
 36,856
 36,855
 13,256
Restricted cash 4,005
 3,767
 7,987
 4,623
Accounts receivable, net of allowance for doubtful accounts of $5,690 and $5,295 at September 30, 2016 and December 31, 2015, respectively 24,816
 32,292
Straight-line rent receivable, net of reserve of $3,688 and $1,365 at September 30, 2016 and December 31, 2015, respectively 67,931
 63,392
Notes receivable 10,480
 10,480
Deferred leasing costs, less accumulated amortization of $82,277 and $76,823 at September 30, 2016 and December 31, 2015, respectively 68,455
 66,367
Acquired lease intangible assets, less accumulated amortization of $53,878 and $45,639 at September 30, 2016 and December 31, 2015, respectively 122,738
 105,380
Trading securities held in trust, at fair value 29,280
 29,093
Tenant and other receivables, net of allowance for doubtful accounts and straight-line rent reserves of $9,577 and $9,021 at March 31, 2017 and December 31, 2016, respectively 119,843
 111,722
Deferred leasing costs, less accumulated amortization of $85,971 and $83,529 at March 31, 2017 and December 31, 2016, respectively 68,299
 69,000
Acquired lease intangible assets, less accumulated amortization of $69,324 and $56,695 at March 31, 2017 and December 31, 2016, respectively 606,707
 118,831
Trading securities held in trust 29,025
 28,588
Other assets 24,749
 26,935
 70,526
 37,079
Total assets$4,458,288
 4,182,881
$11,135,972
 4,488,906
Liabilities and Capital        
Liabilities:        
Notes payable$1,364,200
 1,699,771
$2,749,202
 1,363,925
Unsecured credit facilities 263,421
 164,514
 658,024
 278,495
Accounts payable and other liabilities 145,689
 164,515
 242,638
 138,936
Acquired lease intangible liabilities, less accumulated accretion of $22,067 and $17,555 at September 30, 2016 and December 31, 2015, respectively 56,455
 42,034
Acquired lease intangible liabilities, less accumulated amortization of $28,689 and $23,538 at March 31, 2017 and December 31, 2016, respectively 680,469
 54,180
Tenants’ security, escrow deposits and prepaid rent 28,239
 29,427
 41,136
 28,868
Total liabilities 1,858,004
 2,100,261
 4,371,469
 1,864,404
Commitments and contingencies (note 11) 

 

Commitments and contingencies —
 —
Capital:        
Partners’ capital:        
Preferred units of general partner, $0.01 par value per unit, 13,000,000 units issued and outstanding at September 30, 2016 and December 31, 2015, liquidation preference of $25 per unit 325,000
 325,000
General partner; 104,492,738 and 97,212,638 units outstanding at September 30, 2016 and December 31, 2015, respectively 2,277,884
 1,787,802
Limited partners; 154,170 units outstanding at September 30, 2016 and December 31, 2015 (2,006) (1,975)
Preferred units of general partner, $0.01 par value per unit, 3,000,000 and 13,000,000 units issued and outstanding at March 31, 2017 and December 31, 2016, liquidation preference of $25 per unit 75,000
 325,000
General partner; 170,076,671 and 104,497,286 units outstanding at March 31, 2017 and December 31, 2016, respectively 6,672,140
 2,284,647
Limited partners; 154,170 units outstanding at March 31, 2017 and December 31, 2016 (2,063) (1,967)
Accumulated other comprehensive loss (35,739) (58,693) (15,791) (18,346)
Total partners’ capital 2,565,139
 2,052,134
 6,729,286
 2,589,334
Noncontrolling interests:        
Limited partners’ interests in consolidated partnerships 35,145
 30,486
 35,217
 35,168
Total noncontrolling interests 35,145
 30,486
 35,217
 35,168
Total capital 2,600,284
 2,082,620
 6,764,503
 2,624,502
Total liabilities and capital$4,458,288
 4,182,881
$11,135,972
 4,488,906
See accompanying notes to consolidated financial statements.

76




REGENCY CENTERS, L.P.
Consolidated Statements of Operations
(in thousands, except per unit data)
(unaudited)
 Three months ended September 30, Nine months ended September 30, Three months ended March 31,
 2016 2015 2016 2015 2017 2016
Revenues:            
Minimum rent$111,886
 105,071
$329,506
 308,766
$141,240
 107,674
Percentage rent 495
 486
 2,651
 2,593
 2,906
 1,703
Recoveries from tenants and other income 34,532
 30,725
 103,894
 94,205
 45,279
 33,487
Management, transaction, and other fees 5,855
 5,786
 18,759
 18,032
 6,706
 6,764
Total revenues 152,768
 142,068
 454,810
 423,596
 196,131
 149,628
Operating expenses:            
Depreciation and amortization 40,705
 37,032
 119,721
 109,249
 60,053
 38,716
Operating and maintenance 23,373
 19,761
 69,767
 61,119
 29,763
 22,685
General and administrative 16,046
 14,750
 48,695
 46,227
 17,673
 16,299
Real estate taxes 17,058
 16,044
 49,697
 46,842
 21,450
 15,870
Other operating expenses 1,046
 1,880
 5,795
 4,825
Other operating expenses (note 2) 71,512
 2,306
Total operating expenses 98,228
 89,467
 293,675
 268,262
 200,451
 95,876
Other expense (income):            
Interest expense, net 21,945
 25,099
 70,489
 78,407
 27,199
 24,142
Provision for impairment —
 —
 1,666
 —
 —
 1,666
Early extinguishment of debt 13,943
 —
 13,943
 (61)
Net investment (income) loss, including unrealized (gains) losses of ($383) and $1,296, and ($888) and $1,771 for the three and nine months ended September 30, 2016 and 2015, respectively (821) 1,190
 (1,268) 190
Loss on derivative instruments 40,586
 —
 40,586
 —
Total other expense 75,653
 26,289
 125,416
 78,536
Income (loss) from operations before equity in income of investments in real estate partnerships (21,113) 26,312
 35,719
 76,798
Net investment (income) loss, including unrealized (gains) losses of ($852) and ($230) for the three months ended March 31, 2017 and 2016, respectively (1,097) 155
Total other expense (income) 26,102
 25,963
(Loss) income from operations before equity in income of investments in real estate partnerships (30,422) 27,789
Equity in income of investments in real estate partnerships 22,647
 5,667
 46,618
 17,991
 9,342
 12,920
Income from operations 1,534
 31,979
 82,337
 94,789
Income tax expense of taxable REIT subsidiary 50
 —
(Loss) income from operations (21,130) 40,709
Gain on sale of real estate, net of tax 9,580
 27,755
 22,997
 34,215
 415
 12,868
Net income 11,114
 59,734
 105,334
 129,004
Net (loss) income (20,715) 53,577
Limited partners’ interests in consolidated partnerships (527) (643) (1,380) (1,619) (671) (349)
Net income attributable to the Partnership 10,587
 59,091
 103,954
 127,385
Preferred unit distributions (5,266) (5,266) (15,797) (15,797)
Net income attributable to common unit holders$5,321
 53,825
$88,157
 111,588
Net (loss) income attributable to the Partnership (21,386) 53,228
Preferred unit distributions and issuance costs (11,856) (5,266)
Net (loss) income attributable to common unit holders$(33,242) 47,962

            
Income per common unit - basic$0.05
 0.57
$0.88
 1.18
Income per common unit - diluted$0.05
 0.57
$0.88
 1.18
(Loss) income per common unit - basic$(0.26) 0.49
(Loss) income per common unit - diluted$(0.26) 0.49
See accompanying notes to consolidated financial statements.

87



REGENCY CENTERS, L.P.
Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
 Three months ended September 30, Nine months ended September 30, Three months ended March 31,
 2016 2015 2016 2015 2017 2016
Net income$11,114
 59,734
$105,334
 129,004
Net (loss) income$(20,715) 53,577
Other comprehensive (loss) income:            
Effective portion of change in fair value of derivative instruments:            
Effective portion of change in fair value of derivative instruments 1,294
 (15,768) (25,338) (11,274) (68) (16,785)
Reclassification adjustment of derivative instruments included in net income 43,111
 2,155
 48,063
 6,654
 2,654
 2,453
Unrealized gain (loss) on available-for-sale securities 53
 (43) 90
 (73) 32
 (36)
Other comprehensive income (loss) 44,458
 (13,656) 22,815
 (4,693) 2,618
 (14,368)
Comprehensive income 55,572
 46,078
 128,149
 124,311
Comprehensive (loss) income (18,097) 39,209
Less: comprehensive income (loss) attributable to noncontrolling interests:            
Net income attributable to noncontrolling interests 527
 643
 1,380
 1,619
 671
 349
Other comprehensive income (loss) attributable to noncontrolling interests 91
 86
 (172) (127) 63
 (146)
Comprehensive income attributable to noncontrolling interests 618
 729
 1,208
 1,492
 734
 203
Comprehensive income attributable to the Partnership$54,954
 45,349
$126,941
 122,819
Comprehensive (loss) income attributable to the Partnership$(18,831) 39,006
See accompanying notes to consolidated financial statements.


8




REGENCY CENTERS, L.P.
Consolidated Statements of Capital
For the three months ended March 31, 2017 and 2016
 (in thousands)
(unaudited)
  
General Partner
Preferred and
Common Units
 
Limited
Partners
 
Accumulated
Other
Comprehensive Loss
 
Total
Partners’
Capital
 
Noncontrolling
Interests in
Limited Partners’
Interest in
Consolidated
Partnerships
 
Total
Capital
Balance at December 31, 2015$2,112,802
 (1,975) (58,693) 2,052,134
 30,486
 2,082,620
Net income 53,143
 85
 —
 53,228
 349
 53,577
Other comprehensive loss —
 (22) (14,200) (14,222) (146) (14,368)
Contributions from partners —
 —
 —
 —
 8,389
 8,389
Distributions to partners (49,152) (77) —
 (49,229) (1,387) (50,616)
Preferred unit distributions (5,266) —
 —
 (5,266) —
 (5,266)
Restricted units issued as a result of amortization of restricted stock issued by Parent Company 3,402
 —
 —
 3,402
 —
 3,402
Common units redeemed as a result of common stock redeemed by Parent Company, net of issuances 4,635
 —
 —
 4,635
 —
 4,635
Balance at March 31, 2016 2,119,564
 (1,989) (72,893) 2,044,682
 37,691
 2,082,373
             
Balance at December 31, 2016 2,609,647
 (1,967) (18,346) 2,589,334
 35,168
 2,624,502
Net loss (21,367) (19) —
 (21,386) 671
 (20,715)
Other comprehensive income —
 2
 2,555
 2,557
 63
 2,620
Deferred compensation plan, net —
 —
 —
 —
 —
 —
Contributions from partners —
 —
 —
 —
 153
 153
Distributions to partners (53,400) (79) —
 (53,479) (838) (54,317)
Preferred unit distributions (3,241) —
 —
 (3,241) —
 (3,241)
Restricted units issued as a result of amortization of restricted stock issued by Parent Company 3,733
 —
 —
 3,733
 —
 3,733
Preferred stock redemptions (250,000) —
 —
 (250,000) —
 (250,000)
Common units issued as a result of common stock issued by Parent Company, net of repurchases 4,461,767
 —
 —
 4,461,767
 —
 4,461,767
Balance at March 31, 2017$6,747,139
 (2,063) (15,791) 6,729,285
 35,217
 6,764,502
See accompanying notes to consolidated financial statements.


9




REGENCY CENTERS, L.P.
Consolidated Statements of Capital
For the nine months ended September 30, 2016 and 2015
 (in thousands)
(unaudited)
  
General Partner
Preferred and
Common Units
 
Limited
Partners
 
Accumulated
Other
Comprehensive Loss
 
Total
Partners’
Capital
 
Noncontrolling
Interests in
Limited Partners’
Interest in
Consolidated
Partnerships
 
Total
Capital
Balance at December 31, 2014$1,964,340
 (1,914) (57,748) 1,904,678
 31,804
 1,936,482
Net income 127,181
 204
 —
 127,385
 1,619
 129,004
Other comprehensive loss —
 (7) (4,559) (4,566) (127) (4,693)
Contributions from partners —
 —
 —
 —
 454
 454
Distributions to partners (136,974) (223) —
 (137,197) (2,792) (139,989)
Preferred unit distributions (15,797) —
 —
 (15,797) —
 (15,797)
Restricted units issued as a result of amortization of restricted stock issued by Parent Company 10,441
 —
 —
 10,441
 —
 10,441
Common units redeemed as a result of common stock redeemed by Parent Company, net of issuances (7,858) —
 —
 (7,858) —
 (7,858)
Balance at September 30, 2015 1,941,333
 (1,940) (62,307) 1,877,086
 30,958
 1,908,044
             
Balance at December 31, 2015 2,112,802
 (1,975) (58,693) 2,052,134
 30,486
 2,082,620
Net income 103,789
 165
 —
 103,954
 1,380
 105,334
Other comprehensive loss —
 33
 22,954
 22,987
 (172) 22,815
Contributions from partners —
 —
 —
 —
 8,675
 8,675
Distributions to partners (150,391) (229) —
 (150,620) (5,224) (155,844)
Preferred unit distributions (15,797) —
 —
 (15,797) —
 (15,797)
Restricted units issued as a result of amortization of restricted stock issued by Parent Company 9,967
 —
 —
 9,967
 —
 9,967
Common units issued as a result of common stock issued by Parent Company, net of repurchases 542,514
 —
 —
 542,514
 —
 542,514
Balance at September 30, 2016$2,602,884
 (2,006) (35,739) 2,565,139
 35,145
 2,600,284
See accompanying notes to consolidated financial statements.


10




REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the ninethree months ended September 30, 2016March 31, 2017 and 20152016
(in thousands)
(unaudited)
 2016 2015 2017 2016
Cash flows from operating activities:        
Net income$105,334
 129,004
Net (loss) income$(20,715) 53,577
Adjustments to reconcile net income to net cash provided by operating activities: 
 
 
 
Depreciation and amortization 119,721
 109,249
 60,053
 38,716
Amortization of deferred loan cost and debt premium 7,242
 7,404
 2,459
 2,353
(Accretion) and amortization of above and below market lease intangibles, net (2,296) (1,250) (3,484) (351)
Stock-based compensation, net of capitalization 7,554
 8,379
 12,131
 2,621
Equity in income of investments in real estate partnerships (46,618) (17,991) (9,342) (12,920)
Gain on sale of real estate, net of tax (22,997) (34,215) (415) (12,868)
Provision for impairment 1,666
 —
 —
 1,666
Early extinguishment of debt 13,943
 (61)
Distribution of earnings from operations of investments in real estate partnerships 39,765
 34,527
 12,784
 13,840
Settlement of derivative instruments —
 (7,267)
Deferred income tax benefit (87) —
Deferred compensation expense 1,249
 (610) 1,062
 (148)
Realized and unrealized loss (gain) on investments (1,268) 189
Realized and unrealized (gain) loss on investments (1,064) 155
Changes in assets and liabilities: 
 
 
 
Restricted cash (84) 1,534
 67
 (109)
Accounts receivable, net (4,269) (4,408) 8,974
 4,371
Straight-line rent receivables, net (4,894) (6,274) (3,439) (1,848)
Deferred leasing costs (7,841) (8,268) (1,355) (2,903)
Other assets (59) (2,257) (2,657) (746)
Accounts payable and other liabilities 12,607
 10,230
 (24,370) (7,286)
Tenants’ security, escrow deposits and prepaid rent (1,406) (1,152) 2,121
 (1,301)
Net cash provided by operating activities 217,349
 216,763
 32,723
 76,819
Cash flows from investing activities:        
Acquisition of operating real estate (333,220) (42,983) —
 (16,483)
Advance deposits refunded (paid) on acquisition of operating real estate 1,250
 (2,250)
Acquisition of Equity One, net of cash acquired of $72,534 (648,957) —
Real estate development and capital improvements (146,773) (150,967) (66,504) (38,289)
Proceeds from sale of real estate investments 83,675
 93,727
 1,749
 32,261
Collection of notes receivable —
 1,000
Issuance of notes receivable (510) —
Investments in real estate partnerships (13,127) (18,644) (1,688) (2,438)
Distributions received from investments in real estate partnerships 52,536
 15,014
 25,428
 18,296
Dividends on investment securities 189
 128
 55
 59
Acquisition of securities (53,290) (25,675) (3,334) (41,946)
Proceeds from sale of securities 54,176
 22,296
 3,815
 41,207
Net cash used in investing activities (354,584) (108,354) (689,946) (7,333)
Cash flows from financing activities:        
Net proceeds from common units issued as a result of common stock issued by Parent Company 549,545
 946
 —
 12,293
Repurchase of common shares in conjunction with equity award plans (18,275) (7,984)
Proceeds from sale of treasury stock 957
 51
 76
 904
Acquisition of treasury stock (29) —
Redemption of preferred partnership units (250,000) —
Distributions (to) from limited partners in consolidated partnerships, net (3,126) (2,352) (786) (1,707)
Distributions to partners (149,278) (136,231) (53,368) (48,587)
Distributions to preferred unit holders (15,797) (15,797) (3,241) (5,266)
Repayment of fixed rate unsecured notes (300,000) (350,000)
Proceeds from issuance of fixed rate unsecured notes, net —
 248,160
 646,424
 —
Proceeds from unsecured credit facilities 395,000
 445,000
 740,000
 10,000
Repayment of unsecured credit facilities (295,000) (305,000) (360,000) (10,000)
Proceeds from notes payable 20,223
 3,325
 1,577
 —
Repayment of notes payable (41,584) (76,027) (11,422) (27,281)
Scheduled principal payments (4,462) (4,384) (1,367) (1,572)
Payment of loan costs (1,954) (5,996) (8,796) (5)
Early redemption costs (13,214) —
Net cash provided by (used in) financing activities 141,281
 (198,305) 680,822
 (79,205)
Net increase (decrease) in cash and cash equivalents 4,046
 (89,896) 23,599
 (9,719)
Cash and cash equivalents at beginning of the period 36,856
 113,776
 13,256
 36,856
Cash and cash equivalents at end of the period$40,902
 23,880
$36,855
 27,137



1110




REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the ninethree months ended September 30, 2016,March 31, 2017, and 20152016
(in thousands)
(unaudited)
 2016 2015 2017 2016
Supplemental disclosure of cash flow information:        
Cash paid for interest (net of capitalized interest of $2,622 and $5,403 in 2016 and 2015, respectively)$54,904
 71,734
Cash paid for income taxes$—
 871
Cash paid for interest (net of capitalized interest of $1,061 and $973 in 2017 and 2016, respectively)$7,687
 7,611
Supplemental disclosure of non-cash transactions:        
Mortgage loans assumed for the acquisition of real estate$—
 42,799
Change in fair value of derivative instruments$(25,338) (10,845)
Common stock issued by Parent Company for dividend reinvestment plan$804
 966
$301
 292
Stock-based compensation capitalized$2,561
 2,196
$778
 814
Contributions from limited partners in consolidated partnerships, net$8,674
 13
$100
 8,362
Common stock issued for dividend reinvestment in trust$556
 631
$177
 190
Contribution of stock awards into trust$1,513
 1,633
$929
 958
Distribution of stock held in trust$4,096
 1,898
$4,114
 1,807
Change in fair value of securities available-for-sale$90
 (73)$32
 (36)
Deconsolidation of previously consolidated partnership: 

 

Equity One Merger: 

 

Real estate, net$14,075
 —
$5,985,895
 —
Investments in real estate partnerships$(3,355) —
$103,566
 —
Notes payable$(9,415) —
$(757,399) —
Other assets and liabilities$640
 —
Limited partners' interest in consolidated partnerships$(2,099) —
Other assets and liabilities, net$(80,693) —
Common stock exchanged for Equity One shares$(4,471,808) —
See accompanying notes to consolidated financial statements.



1211



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
September 30, 2016March 31, 2017

1.Organization and Principles of Consolidation
General
Regency Centers Corporation (the “Parent Company”) began its operations as a Real Estate Investment Trust (“REIT”) in 1993 and is the general partner of Regency Centers, L.P. (the “Operating Partnership”). The Parent Company engages in the ownership, management, leasing, acquisition, and development of retail shopping centers through the Operating Partnership, andPartnership. The Parent Company has no other assets or liabilities other than through its investment in the Operating Partnership, and its only liabilities are the unsecured notes assumed from the Equity One merger, which are co-issued and guaranteed by the Operating Partnership. The Parent Company currently owns approximately 99.9%guarantees all of the outstanding common Partnership Unitsunsecured debt of the Operating Partnership.
On March 1, 2017, Regency completed its merger with Equity One, Inc., whereby Equity One merged with and into Regency, with Regency continuing as the surviving public company. Under the terms of the Merger Agreement, each Equity One stockholder received 0.45 of a newly issued share of Regency common stock for each share of Equity One common stock owned immediately prior to the effective time of the Merger, resulting in the issuance of approximately 65.5 million shares of common stock to effect the merger.
As of September 30, 2016,March 31, 2017, the Parent Company, the Operating Partnership, and their controlled subsidiaries on a consolidated basis (the "Company” or “Regency”) owned 197313 retail shopping centers and held partial interests in an additional 110116 retail shopping centers through unconsolidated investments in real estate partnerships (also referred to as "joint ventures" or "investment partnerships").

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

Consolidation
The Company consolidates properties that are wholly owned or properties where it owns less than 100%, but which it controls. Control is determined using an evaluation based on accounting standards related to the consolidation of voting interest entities and variable interest entities ("VIEs"). For joint ventures that are determined to be a VIE, the Company consolidates the entity where it is deemed to be the primary beneficiary. Determination of the primary beneficiary is based on whether an entity has (1) the power to direct the activities of the VIE that most significantly impact the entity's economic performance, and (2) the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE. The Company's determination of the primary beneficiary considers all relationships between it and the VIE, including management agreements and other contractual arrangements.
Ownership of the Operating Partnership
The Operating Partnership’s capital includes general and limited common Partnership Units. As of September 30, 2016,March 31, 2017, the Parent Company owned approximately 99.9% of the outstanding common Partnership Units of the Operating Partnership with the remaining limited Partnership Units held by third parties (“Exchangeable operating partnership units” or “EOP units”). The Parent Company serves as general partner of the Operating Partnership. The EOP unit holders have limited rights over the Operating Partnership such that they do not have characteristicsthe power to direct the activities of a controlling financial interest.the Operating Partnership. As such, the Operating Partnership is considered a variable interest entity, and the Parent Company, which consolidates it, is the primary beneficiary which consolidates it.beneficiary. The Parent Company’s only investment is the Operating Partnership. Net income and distributions of the Operating Partnership are allocable to the general and limited common Partnership Units in accordance with their ownership percentages.
Segment Reporting 

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

12


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

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

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

Real Estate Partnerships
Regency has an ownership interest in 121127 properties through partnerships, of which 11 are consolidated, withconsolidated. Our partners in these ventures include institutional investors, other real estate developers and/or operators, and individual parties who help Regency source transactions for development and investment ("the Partners",(the "Partners" or "limited partners"). Regency has a variable interest in these entities through its equity interests. As managing member, Regency maintains the books and records and typically provides leasing and property management to the partnerships. The partners’ level of involvement varies from protective decisions (debt, bankruptcy, selling primary asset(s) of business) to involvement in approving leases, operating budgets, and capital budgets.
Those partnerships for which the partners only have protective rights are considered VIEs under ASC 810, Consolidation. Regency is the primary beneficiary of these VIEs as Regency has power over these partnerships and they operate primarily for the benefit of Regency. As such, Regency consolidates these entities and reports the limited partners’ interest as noncontrolling interests.


13


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
September 30, 2016

The majority of the operations of the VIEs are funded with cash flows generated by the properties, or in the case of developments, with capital contributions or third party construction loans. Regency does not provide financial support to the VIEs.VIEs beyond the terms stipulated in the partnership operating agreements.
Those partnerships for which the partners are involved in the day to day decisions and do not have any other aspects that would cause them to be considered VIEs, are evaluated for consolidation using the voting interest model.

◦Those partnerships in which Regency has a controlling financial interest are consolidated and the limited partners’ ownership interest and share of net income is recorded as noncontrolling interest.

◦Those partnerships in which Regency does not have a controlling financial interest are accounted for using the equity method, and its ownership interest is recognized through single-line presentation as Investments in Real Estate Partnerships,real estate partnerships in the Consolidated Balance Sheet, and Equity in Incomeincome of Investmentsinvestments in Real Estate Partnerships,real estate partnerships in the Consolidated Statements of Operations. DistributionsCash distributions of earnings from operations of investments in real estate partnerships are presented in cash flows provided by operating activities in the accompanying Consolidated Statements of Cash Flows. Cash distributions from the sale of a property or loan proceeds received from thesethe placement of debt on a property included in investments in real estate partnerships are accounted for using the look-through method with returns of capital from property sales or debt financing considered investingpresented in cash flows provided by investing activities in the accompanying Consolidated Statements of Cash Flows. The net difference in the carrying amount of investments in real estate partnerships and the remaining distributions generally considered operating cash flows.underlying equity in net assets is either (1) accreted to income and recorded in Equity in income of investments in real estate partnerships in the accompanying Consolidated Statements of Operations over the expected useful lives of the properties and other intangible assets, which range in lives from 10 to 40 years, or (2) recognized upon

13


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

sale of the underlying asset(s) or settlement of underlying liabilities, or (3) recognized at liquidation if the joint venture agreement includes a unilateral right to elect to dissolve the real estate partnership and, upon such an election, receive a distribution in-kind.

The assets of these partnerships are restricted to the use of the partnerships and cannot be used by general creditors of the Company. And similarly, the obligations of these partnerships can only be settled by the assets of these partnerships.
The major classes of assets, liabilities, and non-controlling equity interests held by the Company's VIEs, exclusive of the Operating Partnership as a whole, are as follows:
(in thousands)September 30, 2016December 31, 2015
Assets  
Real estate assets, net$84,586
81,424
Cash and cash equivalents7,822
790
Liabilities  
Notes payable8,169
17,948
Equity  
Limited partners’ interests in consolidated partnerships17,374
11,058

Reclassifications
During the nine months ended September 30, 2016, the Company reclassified its land held for future development from Properties in development to Land within the accompanying Consolidated Balance Sheets. The Company reclassified prior period amounts of $47.3 million to conform to current period presentation.

14
(in thousands)March 31, 2017December 31, 2016
Assets  
Real estate assets, net$89,682
86,440
Cash and cash equivalents3,516
3,444
Liabilities  
Notes payable9,757
8,175
Equity  
Limited partners’ interests in consolidated partnerships17,709
17,565


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
September 30, 2016

Recent Accounting Pronouncements
The following table provides a brief description of recent accounting pronouncements and expected impact on our financial statements:
Standard Description Date of adoption Effect on the financial statements or other significant matters
Recently adopted:
ASU 2015-02,February 2015, Consolidation (Topic 810): Amendments to the Consolidation Analysis
ASU 2015-02 affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. ASU 2015-02 modifies the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities, eliminates the presumption that a general partner should consolidate a limited partnership, and affects the consolidation analysis of reporting entities that are involved with VIEs.January 2016The adoption of this standard resulted in five additional investment partnerships being considered variable interest entities due to the limited partners' lack of substantive participation in the partnerships. This did not result in any impact to the Company's Consolidated Balance Sheets, Statements of Operations, or Cash Flows, but did result in additional disclosures about its relationships with and exposure to variable interest entities.
ASU 2015-03, April 2015, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs

ASU 2015-03 simplifies the presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts.


January 2016
The adoption and implementation of this standard has resulted in the retrospective presentation of debt issuance costs associated with the Company's notes payable and term loans as a direct deduction from the carrying amount of the related debt instruments (previously, included in deferred costs in the consolidated balance sheets).
Unamortized debt issuance costs of $8.2 million has been reclassified to offset the related debt as of December 31, 2015.
ASU 2015-15, August 2015, Interest—Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements
ASU 2015-15 clarifies that debt issuance costs related to line-of-credit arrangements may be deferred and presented as an asset, amortized over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings.

January 2016The adoption of this standard resulted in debt issuance costs related to the Line of credit ("Line") to continue being presented as an asset in the Consolidated Balance Sheets, previously within deferred costs, and now presented within other assets.

15


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
September 30, 2016

StandardDescriptionDate of adoptionEffect on the financial statements or other significant matters
Not yet adopted:
ASU 2014-15, August 2014, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern
The standard requires management to evaluate whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern, and to provide certain disclosures when it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued.December 2016
The Company does not expect the adoption of this standard to have an impact on its Consolidated Balance Sheets, Statements of Operations, or Cash Flows but will result in more disclosure surrounding the Company's plans for addressing significant upcoming debt maturities.

      
ASU 2016-09, March 2016, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting
 This ASU affects entities that issue share-based payment awards to their employees. The ASU is designed to simplify several aspects of accounting for share-based payment award transactions including income tax consequences, classification of awards as either equity or liabilities, an option to recognize stock compensation forfeitures as they occur, and changes to classification on the statement of cash flows. January 2017 
The Company does not expect the adoption of this standard to have an impactresulted in the reclassification of income taxes withheld on its financial statements and related disclosures.share-based awards out of operating activities into financing activities on the Statement of Cash Flows. As retrospective application was required for this component of the ASU, $8.0 million was reclassified on the Statements of Cash Flows for the three months ended March 31, 2016.

Not yet adopted:      
Revenue from Contracts with Customers (Topic 606):

ASU 2014-09, May 2014, Revenue from Contracts with Customers (Topic 606)

ASU 2016-08, March 2016, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations

ASU 2016-10, April 2016, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing

ASU 2016-12, May 2016, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients


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














January 2018
The Company is currently evaluating the alternative methods of adoption and the impact it may have on its financial statements and related disclosures.



16


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
September 30, 2016

StandardDescriptionDate of adoptionEffect on the financial statements or other significant matters
ASU 2016-01, January 2016, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities
 
The standard amends the guidance to classify equity securities with readily-determinable fair values into different categories and requires equity securities to be measured at fair value with changes in the fair value recognized through net income. Equity investments accounted for under the equity method are not included in the scope of this amendment. Early adoption of this amendment is not permitted.

 January 2018 
The Company does not expect the adoption and implementation of this standard to have a material impact on its results of operations, financial condition or cash flows.

       

14


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

StandardDescriptionDate of adoptionEffect on the financial statements or other significant matters
ASU 2016-15, August 2016, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments
 The standard will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. Early adoption is permitted on a retrospective basis. January 2018 
The ASU is consistent with the Company's current treatment and the Company does not expect the adoption and implementation of this standard to have an impact on its cash flow statement.

       
ASU 2016-18, November 2016, Statement of Cash Flows (Topic 230): Restricted Cash
This ASU requires entities to show the changes in the total of cash, cash equivalents, restricted cash, and restricted cash equivalents in the statement of cash flows. Early adoption is permitted on a retrospective basis.January 2018The Company is evaluating the alternative methods of adoption and does not expect the adoption to have a material impact on its Statements of Cash Flows.
ASU 2017-01
January 2017, Business Combinations (Topic 805): Clarifying the Definition of a Business
The amendments in this update provide a screen to determine when an integrated set of assets and activities, collectively referred to as a "set", is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated.

If the screen is not met, the amendments in this update (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. The amendments provide a framework to assist entities in evaluating whether both an input and a substantive process are present. Early adoption is permitted.

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

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

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

15


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

StandardDescriptionDate of adoptionEffect on the financial statements or other significant matters
Revenue from Contracts with Customers (Topic 606):

ASU 2014-09, May 2014, Revenue from Contracts with Customers (Topic 606)

ASU 2016-08, March 2016, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations

ASU 2016-10, April 2016, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing

ASU 2016-12, May 2016, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients

ASU 2016-19, December 2016, Technical Corrections and Improvements

ASU 2016-20, December 2016, Technical Corrections and Improvements to Topic 606 Revenue from Contracts With Customers

ASU 2017-05, February 2017, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets
The standard will replace existing revenue recognition standards and significantly expand the disclosure requirements for revenue arrangements. It may be adopted either retrospectively or on a modified retrospective basis to new contracts and existing contracts with remaining performance obligations as of the effective date.














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

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



16


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

StandardDescriptionDate of adoptionEffect on the financial statements or other significant matters
ASU 2016-02, February 2016, Leases (Topic 842)
 
The standard amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets. It also makes targeted changes to lessor accounting, including a change to the treatment of initial direct leasing costs, which no longer considers fixed internal leasing salaries as capitalizable costs.

Early adoption of this standard is permitted to coincide with adoption of ASU 2014-09. The standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief.
 January 2019 
The Company is currently evaluating the alternative methods of adoption and the impact itthis standard will have on its financial statements and related disclosures.


Capitalization of internal leasing salaries and legal costs will no longer be permitted upon the adoption of this standard, which will result in an increase in Total operating expenses in the Consolidated Statements of Operations in the period of adoption and prospectively.
       
ASU 2016-13, June 2016, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
 
The amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

This ASU applies to how the Company determines its allowance for doubtful accounts on tenant receivables.
 January 2020 The Company is currently evaluating the alternative methods of adoption and the impact it will have on its financial statements and related disclosures.





17


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
September 30, 2016March 31, 2017


2.Real Estate Investments

Acquisitions

The following table details the shopping centers acquired or land acquired or leased for development:
(in thousands)(in thousands) Nine months ended September 30, 2016(in thousands) Three months ended March 31, 2017
Date Purchased Property Name City/State Property Type Ownership Purchase Price Debt Assumed, Net of Premiums Intangible Assets Intangible Liabilities Property Name City/State Property Type Ownership Purchase Price Debt Assumed, Net of Premiums Intangible Assets Intangible Liabilities
3/6/17 The Field at Commonwealth Chantilly, VA Development 100% $9,500 — — —
3/8/17 
Pinecrest Place (1)
 Miami, FL Development 100% — — — —


 $9,500 — — —
(1) The Company leased 10.67 acres for a ground up development.
(1) The Company leased 10.67 acres for a ground up development.
(in thousands)(in thousands) Three months ended March 31, 2016
Date Purchased Property Name City/State Property Type Ownership Purchase Price Debt Assumed, Net of Premiums Intangible Assets Intangible Liabilities
2/22/16 Garden City Park Garden City Park, NY Operating 100% $17,300 — 10,171 2,940 Garden City Park Garden City Park, NY Operating 100% $17,300 — 10,171 2,940
3/4/16 
The Market at Springwoods Village (1)
 Houston, TX Development 53% 17,994 — — — 
The Market at Springwoods Village (1)
 Houston, TX Development 53% $17,994 — — —
5/16/16 Market Common Clarendon Arlington, VA Operating 100% 280,500 — 15,428 15,662
7/15/2016 Klahanie Shopping Center Sammamish, WA Operating 100% 35,988 — 2,264 539
8/4/2016 The Village at Tustin Legacy Tustin, CA Development 100% 18,800 — — —
Total property acquisitionsTotal property acquisitions $370,582 — 27,863 19,141Total property acquisitions $35,294 — 10,171 2,940
(1) Regency acquired a 53% controlling interest in the Market at Springwoods Village partnership to develop a shopping center on land contributed by the partner. As a result of consolidation, the Company recorded the partner's non-controlling interest of $8.4 million in Limited partners' interests in consolidated partnerships in the accompanying Consolidated Balance Sheets.
(1) Regency acquired a 53% controlling interest in the Market at Springwoods Village partnership to develop a shopping center on land contributed by the partner. As a result of consolidation, the Company recorded the partner's non-controlling interest of $8.4 million in Limited partners' interests in consolidated partnerships in the accompanying Consolidated Balance Sheets.
(1) Regency acquired a 53% controlling interest in the Market at Springwoods Village partnership to develop a shopping center on land contributed by the partner. As a result of consolidation, the Company recorded the partner's non-controlling interest of $8.4 million in Limited partners' interests in consolidated partnerships in the accompanying Consolidated Balance Sheets.
(in thousands) Nine months ended September 30, 2015
Date Purchased Property Name City/State Property Type Ownership Purchase Price Debt Assumed, Net of Premiums Intangible Assets Intangible Liabilities
9/1/15 University Commons Boca Raton, FL Operating 100% $80,500 42,799 64,482 14,039

Equity One Merger

The resultsGeneral

On March 1, 2017, Regency completed its merger with Equity One, Inc., an NYSE shopping center company, whereby Equity One merged with and into Regency, with Regency continuing as the surviving public company. Under the terms of operations from acquisitions are included in the Consolidated StatementsMerger Agreement, each Equity One stockholder received 0.45 of Operations beginning on the acquisition date. Resultsa newly issued share of operations relatedRegency common stock for each share of Equity One common stock owned immediately prior to the material acquisitioneffective time of Market Common Clarendon resultedthe Merger resulting in approximately 65.5 million shares being issued to effect the merger. The following impact to Revenues and Net income attributable to common stockholderstable provides the components that make up the total purchase price for the three and nine months ended September 30, 2016, as follows:Equity One merger:

  September 30, 2016
(in thousands) Three months ended Nine months ended
Increase in total revenues $4,333
 6,620
Increase (decrease) in net income attributable to common stockholders (1)
 1,490
 (130)

(1) Includes $59,000 and $1.5 million of transaction costs during the three and nine months ended September 30, 2016, respectively, which are recorded in Other operating expenses in the accompanying Consolidated Statements of Operations.
(in thousands, except stock price)Purchase Price
Shares of common stock issued for merger65,495
Closing stock price on March 1, 2017$68.40
Value of common stock issued for merger$4,471,808
Debt repaid716,278
Other cash payments5,019
Total purchase price$5,193,105
  



18


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
September 30, 2016March 31, 2017

As part of the Merger, Regency acquired 121 properties, including 8 properties held through co-investment partnerships. The consolidated net assets and results of operations of Equity One are included in the consolidated financial statements from the closing date, March 1, 2017, going forward and resulted in the following impact to Revenues and Net income attributable to common stockholders for the three months ended March 31, 2017:
  March 31, 2017
(in thousands) Three months ended
Increase in total revenues$34,936
Increase (decrease) in net income attributable to common stockholders (1)
 (22,296)

(1) Includes $69.8 million of transaction costs during the three months ended March 31, 2017, which are recorded in Other operating expenses in the accompanying Consolidated Statements of Operations.

Provisional Purchase Price Allocation of Merger

The Merger has been accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations, which requires, among other things, that the assets acquired and liabilities assumed be recognized at their acquisition date fair values. The following table summarizes the provisional purchase price allocation based on the Company's initial valuation, including estimates and assumptions of the acquisition date fair value of the tangible and intangible assets acquired and liabilities assumed:
(in thousands) Preliminary Purchase Price Allocation
Land $3,093,797
Building and improvements 2,802,319
Properties in development 70,179
Properties held for sale 19,600
Investments in unconsolidated real estate partnerships 103,566
Real estate assets 6,089,461
Cash, accounts receivable and other assets 112,211
Intangible assets 500,645
Total assets acquired 6,702,317
   
Notes payable 757,399
Accounts payable, accrued expenses, and other liabilities 120,370
Lease intangible liabilities 631,443
Total liabilities assumed 1,509,212
   
Total purchase price $5,193,105

The acquired assets and assumed liabilities for an acquired operating property generally include, but are not limited to: land, buildings and improvements, identified tangible and intangible assets and liabilities associated with in-place leases, including tenant improvements, leasing costs, value of above-market and below-market leases, and value of acquired in-place leases. This methodology includes estimating an “as-if vacant” fair value of the physical property, which includes land, building, and improvements and also determines the estimated fair value of identifiable intangible assets and liabilities, considering the following categories: (i) value of in-place leases, and (ii) above and below-market value of in-place leases.
The provisional fair market value of the acquired operating properties is based on a valuation prepared by Regency with assistance of a third party valuation specialist. The third party uses stabilized NOI and market specific capitalization and discount rates as the primary inputs in determining the fair value of the real estate assets. Management reviews the inputs used by the third party specialist as well as the allocation of the purchase price to ensure reasonableness and that the procedures are performed in accordance with management's policy. Management and the third party valuation specialist have prepared their provisional fair value estimates for each of the operating

19


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

properties acquired, but are still in process of reviewing all of the underlying inputs and assumptions; therefore, the purchase price and its allocation are not yet complete as of the date of this filing. Once the purchase price and allocation are complete, an adjustment to the purchase price or allocation may occur. Additionally, any excess purchase price may result in the recognition of goodwill, the amount of which may be significant.

The allocation of the purchase price is based on management’s assessment, which may change in the future as more information becomes available. Subsequent adjustments made to the purchase price allocation upon completion of the Company's fair value assessment process will not exceed one year. The allocation of the purchase price described above requires a significant amount of judgment and represents management's best estimate of the fair value as of the acquisition date.

The following table details the provisional weighted average amortization and net accretion periods, in years, of the major classes of intangible assets and intangible liabilities arising from the Equity One merger:

(in years)Weighted Average Amortization Period
Assets:
In-place leases10.6
Above-market leases9.5
Below-market ground leases44.9
Liabilities:
Acquired lease intangible liabilities22.3


Pro forma Information

The following unaudited pro forma financial data includes the incremental revenues, operating expenses, depreciation and amortization, and costs of financing the Market Common ClarendonEquity One acquisition as if it had occurred on January 1, 2015:2016:
  (Pro Forma) (Pro Forma)
  Three months ended September 30, Nine months ended September 30,
(in thousands, except per share data) 2016 2015 2016 2015
Total revenues $152,768
 146,908
 462,562
 438,273
Income from operations
(1) 
1,592
 33,010
 85,153
 96,496
Net income attributable to common stockholders
(1) 
5,363
 54,761
 90,808
 113,091
Income per common share - basic $0.05
 0.57
 0.89
 1.17
Income per common share - diluted 0.05
 0.57
 0.89
 1.16
  Pro forma (Unaudited)
  Three months ended March 31,
(in thousands, except per share data) 2017 2016
Total revenues 265,174
 250,042
Income (loss) from operations
(1) 
67,397
 (51,437)
Net income (loss) attributable to common stockholders
(1) 
54,809
 (57,012)
Income (loss) per common share - basic 0.32
 (0.35)
Income (loss) per common share - diluted 0.32
 (0.35)

(1) The pro forma earnings for the three and nine months ended September 30, 2016March 31, 2017 were adjusted to exclude $59,000 and $1.5$69.8 million respectively, of acquisitionmerger costs, while 20152016 pro forma earnings were adjusted to include thoseall merger costs during the first quarter of 2015.2016.

The pro forma financial data is not necessarily indicative of what the actual results of operations would have been assuming the transaction had been completed as set forth above, nor does it purport to represent the results of operations for future periods.

The following table details the weighted average amortization and net accretion periods, in years, of the major classes of intangible assets and intangible liabilities arising from the Market Common Clarendon acquisition:
Nine months ended
(in years)September 30, 2016
Assets:
In-place leases7.4
Liabilities:
Acquired lease intangible liabilities7.9


3.    Property Dispositions

Dispositions

The following table provides a summary of shopping centers and land parcels disposed of:
  Three months ended September 30, Nine months ended September 30,
(in thousands) 2016 2015 2016 2015
Net proceeds from sale of real estate investments $47,180
 $67,345
 $85,885
(1 
) 
$93,727
Gain on sale of real estate, net of tax $9,580
 $27,755
 $22,997
 $34,215
Provision for impairment $—
 $—
 $(1,666) —
Number of operating properties sold 3 2 7 4
Number of land parcels sold 2 — 12 —
Percent interest sold 100% 100% 100% 100%
(1) Includes cash deposits received in the previous year.


1920


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
September 30, 2016March 31, 2017


  Three months ended March 31, 
(in thousands) 2017 2016 
Net proceeds from sale of real estate investments $1,749
 $34,321
(1) 
Gain on sale of real estate, net of tax $415
 $12,868
 
Provision for impairment of real estate sold $—
 $(866) 
Number of operating properties sold —
 3
 
Number of land parcels sold 2
 5
 
Percent interest sold 100% 100% 
(1) Includes cash deposits received in the previous year.
4.    Notes Payable and Unsecured Credit Facilities
The Company’s outstanding debt consisted of the following: 
(in thousands)September 30, 2016 December 31, 2015Weighted Average Contractual RateWeighted Average Effective RateMarch 31, 2017 December 31, 2016
Notes payable:       
Fixed rate mortgage loans$418,358
 475,214
5.6%5.7%$607,173
 384,786
Variable rate mortgage loans53,975
(1) 
34,154
2.1%2.3%116,324
(1) 
86,969
Fixed rate unsecured loans891,867
 1,190,403
Fixed rate unsecured public debt4.1%4.6%2,025,705
 892,170
Total notes payable1,364,200
 1,699,771
 2,749,202
 1,363,925
Unsecured credit facilities:       
Line of Credit (the "Line")(2)—
 —
1.8%1.9%95,000
 15,000
Term Loan263,421
 164,514
Term loans2.4%563,024
 263,495
Total unsecured credit facilities263,421
 164,514
Total unsecured credit facilities 658,024
 278,495
Total debt outstanding$1,627,621
 1,864,285
 $3,407,226
 1,642,420

(1) As of September 30, 2016, the amount consists of twoIncludes five mortgages, with variablewhose interest rates vary on LIBOR based formulas. Three of one month LIBOR plus 150 basis points and which mature on October 16, 2020 and April 1, 2023, respectively. Interestthese variable rate loans have interest rate swaps are in place fixingto fix the interest rates at 3.696% on $28.1 million and 2.803% on $20.0 million, respectively. See note 5.

Asa range of September 30, 2016 , the key interest rates of the Company's notes payables and credit facilities were as follows:
  September 30, 2016
  Weighted Average Effective Rate Weighted Average Contractual Rate
Mortgage loans 6.0% 6.0%
Fixed rate unsecured loans 5.3% 4.5%
Line (1)
 1.8%
1.4%
Term loan 2.1% 2.0%
2.8% to 3.7%.
(1)(2) Weighted average effective and contractual rate for the Line is calculated based on a fully drawn Line balance.
Significant financing activity since December 31, 2015 includes the following:
The Company has repaid three mortgages totaling $41.6 million that were scheduled to mature during 2016.
The Company issued new variable rate mortgage debt of $20.0 million, related to one of the mortgages that matured during 2016, and fixed the rate at 2.803% with an interest rate swap.
The Company amended its existing Term Loan, which increased the facility size by $100.0 million to $265.0 million, extended the maturity date to January 5, 2022 and reduced the applicable interest rate. The Term Loan now bears interest at LIBOR plus a ratings based margin of 0.95% per annum, subject to adjustment from time to time based on changes to the Company's corporate credit rating. At closing, the Company executed interest rate swaps for the full notional amount of the Term Loan, which fixed the interest rate at 2.0% through maturity.
In August, the Company redeemed the entirety of its $300 million of 5.875% senior unsecured notes due June 15, 2017 ("$300 million notes") funded from proceeds from an equity offering, as discussed in note 7. The redemption payment included a $13.2 million make-whole premium that was expensed during the three months ended September 30, 2016.

2021


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
September 30, 2016March 31, 2017

During January 2017, the Company issued $300.0 million of 4.4% senior unsecured public notes due February 1, 2047, which priced at 99.110%. The Company used the net proceeds to redeem all of the outstanding shares of its $250 million 6.625% Series 6 preferred stock on February 16, 2017 and to pay down the balance of the Company's Line.
In connection with the merger with Equity One on March 1, 2017, the Company completed the following debt transactions:
During January 2017, issued $350.0 million of senior unsecured public notes with an interest rate of 3.6% maturing in 2027, which priced at 99.741%. The Company used the net proceeds to repay a $250 million Equity One term loan that became due as a result of the merger and to pay merger related transaction costs.
During March 2017, increased the size of its Line commitment to $1.0 billion with an accordion feature permitting the Company to request an additional increase in the facility of up to $500 million.
Completed a $300 million unsecured term loan that matures on December 2, 2020 with the option to prepay at par anytime prior to maturity without penalty. The interest rate on the term loan is equal to LIBOR plus a ratings based margin; however, the Company entered into interest rate swaps to fix the interest rate on the the entire $300 million with a weighted average interest rate of 1.824% (see note 5). The proceeds of the term loan were used to repay a $300 million Equity One term loan that came due as a result of the merger.
Assumed $300 million of senior unsecured public notes with an interest rate of 3.75% maturing in 2022.
Assumed $200 million of the senior unsecured private placement notes issued in two $100 million tranches with interest rates of 3.81% and 3.91%, respectively, maturing in 2026.
Assumed $226.3 million of fixed rate mortgage loans with interest rates ranging from 3.76% to 7.94%, and assumed a $27.8 million variable rate mortgage loan whose interest rate varies with LIBOR.
The public and private unsecured notes assumed from Equity One have covenants that are similar to the Company's existing debt covenants described in Regency's latest Form 10-K.

As of September 30, 2016,March 31, 2017, scheduled principal payments and maturities on notes payable and unsecured credit facilities were as follows: 
(in thousands)September 30, 2016March 31, 2017
Scheduled Principal Payments and Maturities by Year:
Scheduled
Principal
Payments
 
Mortgage Loan
Maturities
 
Unsecured
Maturities (1)
 Total
Scheduled
Principal
Payments
 
Mortgage Loan
Maturities
 
Unsecured
Maturities (1)
 Total
2016$1,428
 —
 —
 1,428
20175,507
 117,298
 —
 122,805
$8,824
 75,511
 —
 84,335
20184,826
 57,358
 —

62,184
11,481
 139,976
 —
 151,457
20193,753
 106,000
 —
 109,753
11,251
 124,402
 95,000

230,653
20204,091
 84,222
 150,000
 238,313
10,107
 84,411
 450,000
 544,518
20219,193
 39,001
 250,000
 298,194
Beyond 5 Years11,933
 70,071
 1,015,000
 1,097,004
41,308
 154,998
 1,915,000
 2,111,306
Unamortized debt premium/(discount) and issuance costs—
 5,846
 (9,712) (3,866)—
 13,035
 (26,272) (13,237)
Total$31,538
 440,795
 1,155,288
 1,627,621
$92,164
 631,334
 2,683,728
 3,407,226
(1) Includes unsecured public debt and unsecured credit facilities.

The Company has $75.5 million of mortgage loans maturing through 2017, which it currently intends to refinance if held with a co-investment partner or pay off if wholly owned. The Company has sufficient capacity on its Line to repay maturing debt, all of which is in the form of non-recourse mortgage loans.

The Company was in compliance as of September 30, 2016March 31, 2017 with the financial and other covenants under its unsecured public and private placement debt and unsecured credit facilities.


5.    Derivative Financial Instruments

22


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

The following table summarizes the terms and fair values of the Company's derivative financial instruments, as well as their classification on the Consolidated Balance Sheets: 
            Fair Value
(in thousands)         
Assets (Liabilities)(2)
Effective Date Maturity Date 
Early Termination Date (1)
 Notional Amount Bank Pays Variable Rate of Regency Pays Fixed Rate of September 30, 2016 December 31, 2015
10/16/13 10/16/20 N/A $28,100
 1 Month LIBOR 2.196% $(1,373) (898)
8/1/16 1/5/22 N/A 200,000
 1 Month LIBOR 1.048% 423
 —
8/1/16 1/5/22 N/A 65,000
 1 Month LIBOR 1.070% 53
 —
4/7/16 4/1/23 N/A 20,000
 1 Month LIBOR 1.303% (264) —
6/15/17 6/15/27 12/15/17 20,000
 3 Month LIBOR 3.488%
(3) 
—
 (1,798)
6/15/17 6/15/27 12/15/17 100,000
 3 Month LIBOR 3.480%
(3) 
—
 (8,922)
6/15/17 6/15/27 12/15/17 100,000
 3 Month LIBOR 3.480%
(3) 
—
 (8,921)
Total derivative financial instruments $(1,161) (20,539)
           Fair Value
 (in thousands)       
Assets (Liabilities)(1)
 Effective Date Maturity Date Notional Amount Bank Pays Variable Rate of Regency Pays Fixed Rate of March 31, 2017 December 31, 2016
 10/16/13 10/16/20 $28,100
 1 Month LIBOR 2.196% $(440) (580)
 4/3/17 12/2/20 300,000
 1 Month LIBOR with Floor 1.824% (593) —
 8/1/16 1/5/22 265,000
 1 Month LIBOR with Floor 1.053% 10,469
 9,889
 4/7/16 4/1/23 20,000
 1 Month LIBOR 1.303% 770
 720
 12/1/16 11/1/23 33,000
 1 Month LIBOR 1.490% 1,101
 1,013
Total derivative financial instruments $11,307
 11,042
(1) Represents the date specified in the agreement for either optional or mandatory early termination by the counterparty, which will result in cash settlement. The Company has the option to terminate and settle at any date prior to this.
(2) Derivatives in an asset position are included within Other assets in the accompanying Consolidated Balance Sheets, while those in a liability position are included within Accounts payable and other liabilities.
(3) In 2014, the Company entered into $220 million of forward starting interest rate swaps to hedge the interest rate on new fixed rate ten year debt that the Company expected to issue in June 2017 for the specific purpose of repaying at maturity the $300 million notes. These interest rate swaps locked in a weighted average fixed rate of 3.48%, before the Company's credit spread. These swaps were settled during the during the third quarter of 2016, as further described below.
These derivative financial instruments are all interest rate swaps, which are designated and qualify as cash flow hedges. The Company does not use derivatives for trading or speculative purposes and, as of September 30, 2016,March 31, 2017, does not have any derivatives that are not designated as hedges. The Company has master netting agreements;

21


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
September 30, 2016

however, the Company does not have multiple derivatives subject to a single master netting agreement with the same counterparties. Therefore, none are offset in the accompanying Consolidated Balance Sheets.

The effective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedges is recorded in Accumulated other comprehensive income (loss) ("AOCI") and subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings within Interest expense, in the accompanying Consolidated Statements of Operations.

The following table represents the effect of the derivative financial instruments on the accompanying consolidated financial statements:
Derivatives in FASB
ASC Topic 815 Cash
Flow Hedging
Relationships:		Amount of Gain (Loss)
Recognized in OCI on
Derivative (Effective
Portion)		 Location and Amount of Gain
(Loss) Reclassified
from Accumulated
OCI into Income
(Effective Portion)		 Location and Amount of Gain or
(Loss) Recognized in
Income on  Derivative
(Ineffective Portion and
Missed Forecast)		Amount of Gain (Loss)
Recognized in OCI on
Derivative (Effective
Portion)		 Location and Amount of Gain
(Loss) Reclassified
from Accumulated
OCI into Income
(Effective Portion)		 Location and Amount of Gain or
(Loss) Recognized in
Income on  Derivative
(Ineffective Portion and
Missed Forecast)
Three months ended September 30,   Three months ended September 30,   Three months ended September 30,Three months ended March 31,   Three months ended March 31,   Three months ended March 31,
(in thousands)2016 2015   2016 2015   2016 20152017 2016   2017 2016   2017 2016
Interest rate swaps$1,294
 (15,768) Interest
expense		 $(2,525) (2,155) Loss on derivative instruments $(40,586) —
$(68) (16,785) Interest
expense		 $(2,654) (2,453) Loss on derivative instruments $—
 —
           
Derivatives in FASB
ASC Topic 815 Cash
Flow Hedging
Relationships:		Amount of Gain (Loss)
Recognized in OCI on
Derivative (Effective
Portion)		 Location and Amount of Gain
(Loss) Reclassified
from Accumulated
OCI into Income
(Effective Portion)		 Location and Amount of Gain or
(Loss) Recognized in
Income on  Derivative
(Ineffective Portion and
Missed Forecast)
Nine months ended September 30,   Nine months ended September 30,   Nine months ended September 30,
(in thousands)2016 2015   2016 2015   2016 2015
Interest rate swaps$(25,338) (11,274) Interest
expense		 $(7,477) (6,654) Loss on derivative instruments $(40,586) —

As of September 30, 2016,March 31, 2017, the Company expects $10.7$10.5 million of net deferred losses on derivative instruments accumulated in OtherAccumulated other comprehensive income,loss, including the Company's share from its Investments in real estate partnerships, to be reclassified into earnings during the next 12 months. Included in the reclassreclassification is $8.4 million which is related to previously settled swaps on the Company's ten year fixed rate unsecured loans.
Hedge Settlement

During the third quarter of 2016, the Company initiated and completed a $400.1 million equity offering, as further described in note 7, for the primary purpose of funding the early redemption of its $300 million notes.  The Company also used $40.6 million from the net offering proceeds to settle $220 million of forward starting swaps related to new debt previously expected to be issued in 2017 to repay the notes at maturity.  As a result of the equity offering, the Company believed that the issuance of new fixed rate debt within the remaining period of the forward starting swaps was probable not to occur.  Accordingly, the Company ceased hedge accounting and reclassified the $40.6 million paid to settle the forward starting swaps from Accumulated other comprehensive loss to earnings during the third quarter of 2016.



2223


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
September 30, 2016March 31, 2017

6.    Fair Value Measurements

(a) Disclosure of Fair Value of Financial Instruments

All financial instruments of the Company are reflected in the accompanying Consolidated Balance Sheets at amounts which, in management's estimation, reasonably approximate their fair values, except for the following:
September 30, 2016 December 31, 2015March 31, 2017 December 31, 2016
(in thousands)Carrying Amount Fair Value Carrying Amount Fair ValueCarrying Amount Fair Value Carrying Amount Fair Value
Financial assets:              
Notes receivable$10,480
 10,460
 $10,480
 10,620
$10,992
 10,877
 $10,481
 10,380
Financial liabilities:              
Notes payable$1,364,200
 1,478,100
 $1,699,771
 1,793,200
$2,749,202
 2,832,355
 $1,363,925
 1,435,000
Unsecured credit facilities$263,421
 264,800
 $164,514
 165,300
$658,024
 660,000
 $278,495
 279,700

The above fair values represent management's estimate of the amounts that would be received from selling those assets or that would be paid to transfer those liabilities in an orderly transaction between market participants as of September 30, 2016March 31, 2017 and December 31, 2015.2016. These fair value measurements maximize the use of observable inputs. However, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects the Company's own judgments about the assumptions that market participants would use in pricing the asset or liability.

The Company develops its judgments based on the best information available at the measurement date, including expected cash flows, appropriatelyappropriate risk-adjusted discount rates, and available observable and unobservable inputs. Service providers involved in fair value measurements are evaluated for competency and qualifications on an ongoing basis. As considerable judgment is often necessary to estimate the fair value of these financial instruments, the fair values presented above are not necessarily indicative of amounts that will be realized upon disposition of the financial instruments.

The following methods and assumptions were used to estimate the fair value of these financial instruments:

Notes Receivable

The fair value of the Company's Notes receivable is estimated by calculating the present value of future contractual cash flows discounted at interest rates available for notes of the same terms and maturities, adjusted for counter-party specific credit risk. The fair value of Notes receivable was determined primarily using Level 3 inputs of the fair value hierarchy, which considered counter-party credit risk and collateral risk of the underlying property securing the note receivable.

Notes Payable

The fair value of the Company's unsecured debt is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities. The fair value of the unsecured debt was determined using Level 2 inputs of the fair value hierarchy.

The fair value of the Company's mortgage notes payable is estimated by discounting future cash flows of each instrument at rates that reflect the current market rates available to the Company for debt of the same terms and maturities. Fixed rate loans assumed in connection with real estate acquisitions are recorded in the accompanying consolidated financial statements at fair value at the time the property is acquired. The fair value of the mortgage notes payable was determined using Level 2 inputs of the fair value hierarchy.

Unsecured Credit Facilities

The fair value of the Company's Unsecured credit facilities is estimated based on the interest rates currently offered to the Company by financial institutions. The fair value of the credit facilities was determined using Level 2 inputs of the fair value hierarchy.


2324


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
September 30, 2016March 31, 2017

The following interest rate ranges were used by the Company to estimate the fair value of its financial instruments:
 September 30, 2016 December 31, 2015 March 31, 2017 December 31, 2016
 Low High Low High Low High Low High
Notes receivable 6.8% 6.8% 6.3% 6.3% 7.3% 7.3% 7.2% 7.2%
Notes payable 2.7% 3.8% 2.8% 4.2% 3.0% 3.8% 2.9% 3.9%
Unsecured credit facilities 1.5% 1.5% 1.1% 1.1% 1.7% 1.7% 1.5% 1.6%

(b) Fair Value Measurements

The following financial instruments are measured at fair value on a recurring basis:

Trading Securities Held in Trust

The Company has investments in marketable securities, which are assets of the non-qualified deferred compensation plan ("NQDCP"), that are classified as trading securities held in trust on the accompanying Consolidated Balance Sheets. The fair value of the Trading securities held in trust was determined using quoted prices in active markets, which are considered Level 1 inputs of the fair value hierarchy. Changes in the value of trading securities are recorded within net investment (income) loss from deferred compensation plan in the accompanying Consolidated Statements of Operations.

Available-for-Sale Securities

Available-for-sale securities consist of investments in certificates of deposit and corporate bonds, and are recorded at fair value using matrix pricing methods to estimate fair value, which are considered Level 2 inputs of the fair value hierarchy. Unrealized gains or losses on these securities are recognized through Other comprehensive income.

Interest Rate Derivatives

The fair value of the Company's interest rate derivatives is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty's nonperformance risk in the fair value measurements.
Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and its counterparties. The Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its interest rate swaps. As a result, the Company determined that its interest rate swaps valuation in its entirety is classified in Level 2 of the fair value hierarchy.

2425


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
September 30, 2016March 31, 2017

The following tables present the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a recurring basis:
Fair Value Measurements as of September 30, 2016Fair Value Measurements as of March 31, 2017
(in thousands)  Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs  Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs
Assets:Balance (Level 1) (Level 2) (Level 3)Balance (Level 1) (Level 2) (Level 3)
Trading securities held in trust$29,280
 29,280
 —
 —
$29,025
 29,025
 —
 —
Available-for-sale securities8,017
 —
 8,017
 —
7,543
 —
 7,543
 —
Interest rate derivatives476
 —
 476
 —
12,340
 —
 12,340
 —
Total$37,773
 29,280
 8,493
 —
$48,908
 29,025
 19,883
 —
              
Liabilities:              
Interest rate derivatives$(1,637) —
 (1,637) —
$(1,033) —
 (1,033) —
Fair Value Measurements as of December 31, 2015Fair Value Measurements as of December 31, 2016
(in thousands)  Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs  Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs
Assets:Balance (Level 1) (Level 2) (Level 3)Balance (Level 1) (Level 2) (Level 3)
Trading securities held in trust$29,093
 29,093
 —
 —
$28,588
 28,588
 —
 —
Available-for-sale securities7,922
 —
 7,922
 —
7,420
 —
 7,420
 —
Interest rate derivatives11,622
 —
 11,622
 —
Total$37,015
 29,093
 7,922
 —
$47,630
 28,588
 19,042
 —
              
Liabilities:              
Interest rate derivatives$(20,539) —
 (20,539) —
$(580) —
 (580) —

There were no assets measured at fair value on a nonrecurring basis as of September 30, 2016 or December 31, 2015.

7.    Equity and Capital

Preferred Stock of the Parent Company

Redemption:

The Parent Company redeemed all of the issued and outstanding shares of its $250 million 6.625% Series 6 cumulative redeemable preferred stock on February 16, 2017. The redemption price of $25.21 per share includes accrued and unpaid dividends, resulting in an aggregate amount being paid of $252.0 million. The funds used to redeem the Series 6 preferred stock were provided by the $300 million 30 year senior unsecured debt offering completed in January 2017 as discussed in note 4.

Common Stock of the Parent Company

Issuances:Issuances:

At the Market ("ATM") Program

The currentCompany's ATM equity offering program, authorizeswhich expired on March 4, 2017, authorized the Parent Company to sell up to $200$200 million of common stock at prices determined by the market at the time of sale. As of September 30, 2016, $70.8 million of common stock remained available for issuance under thisMarch 31, 2017, the Company has not reinstituted an ATM equity offering program.


2526


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
September 30, 2016March 31, 2017

There were no shares issued under the ATM equity program during the three months ended September 30, 2016 or 2015.March 31, 2017. The following table presents the shares that were issued under the ATM equity program during the ninethree months ended September 30, 2016 and 2015:March 31, 2016:
  Nine months ended September 30,
(dollar amounts are in thousands, except price per share data) 2016 2015
Shares issued (1)
 182,787
 18,125
Weighted average price per share $68.85
 64.72
Gross proceeds $12,584
 1,173
Commissions $157
 15
Issuance costs $80
 —
(1) Reflects shares traded in December and settled in January each year.
Three months ended March 31,
(dollar amounts are in thousands, except price per share data)2016
Shares issued (1)
182,787
Weighted average price per share68.85
Gross proceeds12,584
Commissions157
(1) Reflects shares traded in December and settled in January.

Forward Equity Offering

In March 2016, the Parent Company entered into a forward sale agreement (the "Forward Equity Offering") to issue 3.10 million shares of its common stock at an offering price of $75.25 per share before any underwriting discount and offering expenses.

In June 2016, the Parent Company partially settled its forward equity offering by delivering 1.85 million shares of newly issued common stock thereby receiving $137.5 million of net proceeds which were used to repay the Line.

The remaining 1.25 million shares must be settled under the forward sale agreement prior to June 23, 2017.

Equity OfferingOne merger

In July 2016,On March 1, 2017, Regency completed its merger with Equity One, Inc., whereby Equity One merged with and into Regency, with Regency continuing as the Parent Companysurviving public company. Under the terms of the Merger Agreement, each Equity One stockholder received 0.45 of a newly issued 5.0share of Regency common stock for each share of Equity One common stock that they owned immediately prior to the effective time of the Merger resulting in approximately 65.5 million shares of common stock at $79.78 per share resulting in net proceeds of $400.1 million, usedbeing issued to (i) redeem, in August,effect the entire $300 million notes, including a make-whole payment, (ii) settle forward interest rate swaps, and (iii) fund investment activities, and for general corporate purposes.merger.


Common Units of the Operating Partnership

Issuances:
Common units were issued to the Parent Company in relation to the Parent Company's issuance of common stock, as discussed above.


2627


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
September 30, 2016March 31, 2017

Accumulated Other Comprehensive Loss

The following tables present changes in the balances of each component of AOCI:
Controlling Interest Noncontrolling Interest Total
(in thousands)Cash Flow Hedges Unrealized gain (loss) on Available-For-Sale Securities AOCI Cash Flow Hedges Unrealized gain (loss) on Available-For-Sale Securities AOCI AOCI
Balance as of December 31, 2014$(57,748) —
 (57,748) (750) —
 (750) (58,498)
Other comprehensive income before reclassifications(11,022) (73) (11,095) (252) —
 (252) (11,347)
Amounts reclassified from accumulated other comprehensive income6,536
 —
 6,536
 118
 —
 118
 6,654
Current period other comprehensive income, net(4,486) (73) (4,559) (134) —
 (134) (4,693)
Balance as of September 30, 2015$(62,234) (73) (62,307) (884) —
 (884) (63,191)
             
Controlling Interest Noncontrolling Interest TotalControlling Interest Noncontrolling Interest Total
(in thousands)Cash Flow Hedges Unrealized gain (loss) on Available-For-Sale Securities AOCI Cash Flow Hedges Unrealized gain (loss) on Available-For-Sale Securities AOCI AOCICash Flow Hedges Unrealized gain (loss) on Available-For-Sale Securities AOCI Cash Flow Hedges Unrealized gain (loss) on Available-For-Sale Securities AOCI AOCI
Balance as of December 31, 2015$(58,650) (43) (58,693) (785) —
 (785) (59,478)$(58,650) (43) (58,693) (785) —
 (785) (59,478)
Other comprehensive income before reclassifications(25,015) 89
 (24,926) (322) —
 (322) (25,248)(16,581) (36) (16,617) (204) —
 (204) (16,821)
Amounts reclassified from accumulated other comprehensive income47,880
 —
 47,880
 183
 —
 183
 48,063
2,417
 —
 2,417
 36
 —
 36
 2,453
Current period other comprehensive income, net22,865
 89
 22,954
 (139) —
 (139) 22,815
(14,164) (36) (14,200) (168) —
 (168) (14,368)
Balance as of September 30, 2016$(35,785) 46
 (35,739) (924) —
 (924) (36,663)
Balance as of March 31, 2016$(72,814) (79) (72,893) (953) —
 (953) (73,846)
             
Controlling Interest Noncontrolling Interest Total
(in thousands)Cash Flow Hedges Unrealized gain (loss) on Available-For-Sale Securities AOCI Cash Flow Hedges Unrealized gain (loss) on Available-For-Sale Securities AOCI AOCI
Balance as of December 31, 2016$(18,327) (19) (18,346) (301) —
 (301) (18,647)
Other comprehensive income before reclassifications(88) 32
 (56) 21
 —
 21
 (35)
Amounts reclassified from accumulated other comprehensive income2,610
 —
 2,610
 44
 —
 44
 2,654
Current period other comprehensive income, net2,522
 32
 2,554
 65
 —
 65
 2,619
Balance as of March 31, 2017$(15,805) 13
 (15,792) (236) —
 (236) (16,028)

The following represents amounts reclassified out of AOCI into income:
AOCI ComponentAmount Reclassified from AOCI into income Affected Line Item(s) Where Net Income is PresentedAmount Reclassified from AOCI into income Affected Line Item(s) Where Net Income is Presented
Three months ended September 30, Nine months ended September 30, Three months ended March 31, 
(in thousands)2016 2015 2016 2015 2017 2016 
Interest rate swaps$43,111
 2,155
 $48,063
 6,654
 Interest expense and Loss on derivative instruments$2,654
 2,453
 Interest expense and Loss on derivative instruments



8.    Stock-Based Compensation

During three months ended March 31, 2017, the Company granted 211,065 shares of restricted stock with a weighted-average grant-date fair value of $71.92 per share. The Company recordedrecords stock-based compensation inexpense within General and administrative expenses in the accompanying Consolidated Statements of Operations. During 2016, the Company granted 191,128 shares of restricted stock with a weighted-average grant-date fair value of $79.40 per share.




2728


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
September 30, 2016March 31, 2017

9.    Non-Qualified Deferred Compensation Plan ("NQDCP")

The Company maintains a NQDCP which allows select employees and directors to defer part or all of their cash bonus, director fees, and vested restricted stock awards. All contributions into the participants' accounts are fully vested upon contribution to the NQDCP and are deposited in a Rabbi trust.

The following table reflects the balances of the assets held in the Rabbi trust and related participant account obligations in the accompanying Consolidated Balance Sheets, excluding Regency stock:
(in thousands)September 30, 2016 December 31, 2015March 31, 2017 December 31, 2016
Assets:      
Trading securities held in trust$29,280
 29,093
$29,025
 28,588
Liabilities:      
Accounts payable and other liabilities$28,875
 28,632
$28,672
 28,214
The assets and liabilities presented include the trading securities held in the Rabbi trust and the related participant obligations. The Company's common stock held in the Rabbi trust, and the related participant obligation, is presented within Stockholders' equity in the accompanying Consolidated Balance Sheets as Treasury stock and part of Additional paid in capital, respectively.



2829


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
September 30, 2016March 31, 2017

10.    Earnings per Share and Unit
Parent Company Earnings per Share
The following summarizes the calculation of basic and diluted earnings per share: 
 Three months ended September 30, Nine months ended September 30, Three months ended March 31,
(in thousands, except per share data) 2016 2015 2016 2015 2017 2016
Numerator:            
Income from operations attributable to common stockholders - basic $5,305
 53,731
 $87,992
 111,384
Income from operations attributable to common stockholders - diluted $5,305
 53,731
 $87,992
 111,384
(Loss) income from operations attributable to common stockholders - basic $(33,223) 47,877
(Loss) income from operations attributable to common stockholders - diluted $(33,223) 47,877
Denominator:            
Weighted average common shares outstanding for basic EPS 103,675
 94,158
 99,639
 94,080
 126,649
 97,518
Weighted average common shares outstanding for diluted EPS (1)
 104,255
 94,595
 100,128
 94,483
 126,649
 97,891

            
Income per common share – basic $0.05
 0.57
 $0.88
 1.18
Income per common share – diluted $0.05
 0.57
 $0.88
 1.18
(Loss) income per common share – basic $(0.26) 0.49
(Loss) income per common share – diluted $(0.26) 0.49
(1) Includes2016 includes the dilutive impact of unvested restricted stock and shares issuable under the forward equity offering using the treasury stock method.
Income allocated to noncontrolling interests of the Operating Partnership has been excluded from the numerator and exchangeable Operating Partnership units have been omitted from the denominator for the purpose of computing diluted earnings per share since the effect of including these amounts in the numerator and denominator would have no impact. Weighted average exchangeable Operating Partnership units outstanding for the three and nine months ended September 30,March 31, 2017 and 2016 and 2015 were 154,170.

Operating Partnership Earnings per Unit
The following summarizes the calculation of basic and diluted earnings per unit: 
 Three months ended September 30, Nine months ended September 30, Three months ended March 31,
(in thousands, except per share data) 2016 2015 2016 2015 2017 2016
Numerator:            
Income from operations attributable to common unit holders - basic $5,321
 53,825
 $88,157
 111,588
Income from operations attributable to common unit holders - diluted $5,321
 53,825
 $88,157
 111,588
(Loss) income from operations attributable to common unit holders - basic $(33,242) 47,962
(Loss) income from operations attributable to common unit holders - diluted $(33,242) 47,962
Denominator:            
Weighted average common units outstanding for basic EPU 103,829
 94,312
 99,793
 94,234
 126,803
 97,672
Weighted average common units outstanding for diluted EPU (1)
 104,409
 94,749
 100,282
 94,637
 126,803
 98,045

            
Income per common unit – basic $0.05
 0.57
 $0.88
 1.18
Income per common unit – diluted $0.05
 0.57
 $0.88
 1.18
(Loss) income per common unit – basic $(0.26) 0.49
(Loss) income per common unit – diluted $(0.26) 0.49
(1) Includes2016 includes the dilutive impact of unvested restricted stock and the forward equity offering using the treasury stock method.



2930


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
September 30, 2016March 31, 2017

11.    Commitments and Contingencies

Litigation

The Company is involved in litigation on a number of matters and is subject to certain claims, which arise in the normal course of business, none of which, in the opinion of management, is expected to have a material adverse effect on the Company's consolidated financial position, results of operations, or liquidity. Legal fees are expensed as incurred.

After the announcement of the merger agreement on November 14, 2016, a putative class action was filed on behalf of a purported stockholder in the Circuit Court for Duval County, Florida, under the following caption: Robert Garfield on Behalf of Himself and All Others Similarly Situated vs. Regency Centers Corporation, Martin E. Stein, Jr., John C. Schweitzer, Raymond L. Bank, Bryce Blair, C. Ronald Blankenship, J. Dix Druce, Jr., Mary Lou Fiala, David P. O'Connor, and Thomas G. Wattles, No. 16-2017-CA-000688-XXXX-MA, filed February 3, 2017.

The class action alleged, among other matters, that the definitive joint proxy statement/prospectus filed by Regency and Equity One with the Securities and Exchange Commission (the “SEC”) on January 24, 2017 (the “Joint Proxy Statement/Prospectus”) omitted certain material information in connection with the Merger. The complainant sought various remedies, including injunctive relief to prevent the consummation of the Merger unless certain allegedly material information was disclosed and sought compensatory and rescissory damages in the event the Merger was consummated without such disclosures.

On February 17, 2017, the defendants entered into a stipulation of settlement with respect to the class action, pursuant to which the parties agreed, among other things, that Regency would make certain supplemental disclosures. The supplemental disclosures were made by Regency in the Current Report on Form 8-K filed by Regency with the SEC on February 17, 2017. The supplemental disclosures should be read in conjunction with the Joint Proxy Statement/Prospectus, which should be read in its entirety.

Environmental

The Company is also subject to numerous environmental laws and regulations as they apply to real estate pertaining to chemicals used by the dry cleaning industry, the existence of asbestos in older shopping centers, and underground petroleum storage tanks. The Company believes that the ultimate disposition of currently known environmental matters will not have a material effect on its financial position, liquidity, or operations. The Company can give no assurance that existing environmental studies with respect to the shopping centers have revealed all potential environmental contaminants or liabilities, that any previous owner, occupant or tenant did not create any material environmental condition not known to it, that the current environmental condition of the shopping centers will not be affected by tenants and occupants, by the condition of nearby properties, or by unrelated third parties, or that changes in applicable environmental laws and regulations or their interpretation will not result in additional environmental liability to the Company.

Letters of Credit

The Company has the right to issue letters of credit under the Line up to an amount not to exceed $50.0$50.0 million,, which reduces the credit availability under the Line. These letters of credit are primarily issued as collateral on behalf of its captive insurance program and to facilitate the construction of development projects. As of September 30, 2016March 31, 2017 and December 31, 2015,2016, the Company had $5.8$7.3 million and $5.9$5.8 million, respectively, in letters of credit outstanding. 



3031


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

12.    Guarantor Disclosure

The Parent Company and the Operating Partnership are co-issuers of the $300 million senior unsecured public notes due November, 2022 that was assumed from Equity One as a result of the merger. Certain wholly-owned subsidiaries of the Company provide full guarantees of these notes (the Guarantor Subsidiaries), which are joint and several, and unconditional. The following statements set forth the condensed consolidating financial information with respect to the guarantor subsidiaries:



Condensed Consolidating Balance Sheet


As of March 31, 2017
(in thousands)
Regency Centers Corporation
Regency Centers, L.P.
Guarantor Subsidiaries (1)

Non-Guarantor Subsidiaries (1)

Eliminating Entries
Consolidated
Assets

















Net real estate investments
—

381,691

2,848,920

6,973,201

(7,082)
10,196,730
Investment in subsidiaries
6,764,503

8,899,971

—

—

(15,664,474)
—
Other assets, net
501,581

278,521

281,315

561,104

(683,279)
939,242
Total Assets
7,266,084

9,560,183

3,130,235

7,534,305

(16,354,835)
11,135,972
Liabilities

















Total notes payable and unsecured credit facilities
500,000

2,683,728

93,153

799,463

(669,118)
3,407,226
Other liabilities
1,581

111,952

284,717

587,236

(21,243)
964,243
Total Liabilities
501,581

2,795,680

377,870

1,386,699

(690,361)
4,371,469
Equity            
Shareholders' Equity
6,731,349

6,729,286

2,752,365

6,147,606

(15,629,257)
6,731,349
Non-controlling interest 33,154
 35,217
 —
 —
 (35,217) 33,154
Total Equity 6,764,503
 6,764,503
 2,752,365
 6,147,606
 (15,664,474) 6,764,503
Total Liabilities and Equity
7,266,084

9,560,183

3,130,235

7,534,305

(16,354,835)
11,135,972

  Condensed Consolidating Statement of Income
  For the three months ended March 31, 2017
(in thousands) Regency Centers Corporation Regency Centers, L.P. 
Guarantor Subsidiaries (1)
 
Non-Guarantor Subsidiaries (1)
 Eliminating Entries Consolidated
Total revenue —
 6,646
 17,958
 171,527
 —
 196,131
Equity in subsidiaries (20,715) 67,935
 —
 —
 (47,220) —
Total costs and expenses —
 87,293
 13,605
 99,678
 (125) 200,451
Income before other income and expense and income taxes (20,715) (12,712) 4,353
 71,849
 (47,095) (4,320)
Other income (expense) (11,856) (19,859) (329) (7,938) 11,731
 (28,251)
Noncontrolling interest (652) (671) —
 —
 671
 (652)
Net income attributable to shareholders (33,223) (33,242) 4,024
 63,911
 (34,693) (33,223)
(1) The fair value of the assets acquired and liabilities assumed from the Equity One merger, and resulting depreciation and amortization, are based on provisional purchase price allocations and are subject to change, as further discussed in note 2.

32


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


  Condensed Consolidating Statement of Cash Flows
  For the three months ended March 31, 2017
(in thousands) Regency Centers Corporation Regency Centers, L.P. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated
Net cash (used in) provided by operating activities 56,531
 (41,028) 11,837
 99,153
 (93,770) 32,723
Cash flows from investing activities:            
Merger with Equity One —
 (648,957) —
 —
 —
 (648,957)
Real estate development and capital improvements —
 (5,117) —
 (61,387) —
 (66,504)
Proceeds from sale of real estate investments —
 1,749
 —
 —
 —
 1,749
Issuance of notes receivable —
 (510) —
 —
 —
 (510)
Investments in real estate partnerships —
 (1,688) —
 —
 —
 (1,688)
Distributions received from investments in real estate partnerships —
 25,428
 —
 —
 —
 25,428
Dividends on investment securities —
 55
 —
 —
 —
 55
Acquisition of securities —
 (3,334) —
 —
 —
 (3,334)
Distributions received from subsidiaries 268,274
 —
 —
 —
 (268,274) —
Proceeds from sale of securities —
 3,815
 —
 —
 —
 3,815
Net cash used in investing activities 268,274
 (628,559) —
 (61,387) (268,274) (689,946)
Cash flows from financing activities:            
Proceeds from sale of treasury stock —
 76
 —
 —
 —
 76
Repurchase of common shares in conjunction with equity award plans (18,275) (18,275) —
 —
 18,275
 (18,275)
Redemption of preferred stock and partnership units (250,000) (250,000) —
 —
 250,000
 (250,000)
Distributions to limited partners in consolidated partnerships, net —
 (786) —
 —
 —
 (786)
Distributions to exchangeable operating partnership unit holders —
 (79) —
 —
 —
 (79)
Dividends paid to common stockholders (53,289) (53,289) (11,640) (25,599) 90,528
 (53,289)
Dividends paid to preferred stockholders (3,241) (3,241) —
 —
 3,241
 (3,241)
Proceeds from issuance of fixed rate unsecured notes, net —
 646,424
 —
 —
 —
 646,424
Proceeds from unsecured credit facilities —
 740,000
 —
 —
 —
 740,000
Repayment of unsecured credit facilities —
 (360,000) —
 
 —
 (360,000)
Proceeds from notes payable —
 —
 —
 1,577
 —
 1,577
Repayment of notes payable —
 —
 (197) (11,225) —
 (11,422)
Scheduled principal payments —
 —
 —
 (1,367) —
 (1,367)
Payment of loan costs —
 (7,644) —
 (1,152) —
 (8,796)
Net cash provided by (used in) financing activities (324,805) 693,186
 (11,837) (37,766) 362,044
 680,822
Net increase (decrease) in cash and cash equivalents —
 23,599
 —
 —
 —
 23,599
Cash and cash equivalents at beginning of the period —
 13,256
 —
 —
 —
 13,256
Cash and cash equivalents at end of the period —
 36,855
 —
 —
 —
 36,855





33




Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements    

In addition to historical information, the following information contains forward-looking statements as defined under federal securities laws. These forward-looking statements include statements about anticipated changes in our revenues, the size of our development and redevelopment program, earnings per share and unit, returns and portfolio value, and expectations about our liquidity. These statements are based on current expectations, estimates and projections about the real estate industry and markets in which the Company operates, and management's beliefs and assumptions. Forward-looking statements are not guarantees of future performance and involve certain known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to, our ability to successfully integrate the business of Equity One successfully and realize the anticipated synergies and related benefits of our merger with Equity One, changes in national and local economic conditions, financial difficulties of tenants, competitive market conditions, including timing and pricing of acquisitions and sales of properties and building pads ("out-parcels"), changes in leasing activity and market rents, timing of development starts, meeting development schedules, natural disasters in geographic areas in which we operate, cost of environmental remediation, our inability to exercise voting control over the co-investment partnerships through which we own many of our properties, and technology disruptions. For additional information, see “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 20152016. The following discussion should be read in conjunction with the accompanying Consolidated Financial Statements and Notes thereto of Regency Centers Corporation and Regency Centers, L.P. appearing elsewhere herein. We do not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect events or uncertainties after the date hereof or to reflect the occurrence of uncertain events.

Defined Terms

We use certain non-GAAP performance measures, in addition to the requiredcertain performance metrics determined under 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 certain operating metrics 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 following terms, as defined, are commonly used by management and the investing public to understand and evaluate our operational results:

Same Property information is provided for retail operating properties that were owned and operated for the entirety of both calendar year periods being compared and excludes Non-Same Properties and Properties in Development.

A Non-Same Property is a property acquired, sold, or a development completion during either calendar year period being compared. CorporateNon-retail properties and corporate activities, including theactivities of our captive insurance company, are part of Non-Same Property.

Property In Development is a property ownedincludes land or properties in various stages of development and intended to be developed,redevelopment including partially operating properties acquired specifically for redevelopment and excluding land held for future development.active pre-development activities.

Development Completion is a project in development that is deemed complete upon the earliest of: (i) 90% of total estimated net development costs have been incurred and percent leased equals or exceeds 95%, or (ii) the project features at least two years of anchor operations, or (iii) three years have passed since the start of construction. Once deemed complete, the property is termed an Operating Property.a retail operating property.

Pro-Rata information includes 100% of our consolidated properties plus our economic share (based on our ownership interestinterest) in our unconsolidated real estate investment partnerships.

The pro-rata information is prepared on a basis consistent with the comparable consolidated amounts and is intended to more accurately reflect our proportionate economic interest in the operating results of properties in our portfolio. We do not control the unconsolidated investment partnerships, and the pro-rata presentations of the assets and liabilities, and revenues and expenses do not 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 interests we use to prepare our pro-rata share.

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to prepare our pro-rata share.
The presentation of pro-rata information has limitations which 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 pro-rata financial information 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 financial statements, using the pro-rata information as a supplement.
CoreAdjusted EBITDAis defined as earnings before interest, taxes, depreciation and amortization, real estate gains and losses, and development and acquisition pursuit costs.costs, straight line rental income, and above and below market rent amortization.

Fixed Charge Coverage Ratio is defined as CoreAdjusted EBITDA divided by the sum of the gross interest and scheduled mortgage principal paid to our lenders plus dividends paid to our preferred stockholders.

Net Operating Income ("NOI") is the sum of minimum rent, percentage rent and recoveries from tenants and other income, less operating and maintenance, real estate taxes, and provision for doubtful accounts. NOI excludes straight-line rental income and expense, above and below market rent amortization and other fees. The Company also provides disclosure of NOI excluding termination fees, which excludes both termination fee income and expenses.

NAREIT Funds from Operations ("NAREIT FFO") is a commonly used measure of REIT performance, which the National Association of Real Estate Investment Trusts ("NAREIT") defines as net income, computed in accordance with GAAP, excluding gains and losses from sales of depreciable property, net of tax, excluding operating real estate impairments, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. We compute NAREIT FFO for all periods presented in accordance with NAREIT's definition. Many companies use different depreciable lives and methods, and real estate values historically fluctuate with market conditions. Since NAREIT FFO excludes depreciation and amortization and gains and losses from depreciable property dispositions, and impairments, it provides a performance measure that, when compared year over year, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, acquisition and development activities, and financing costs. This provides a perspective of our financial performance not immediately apparent from net income determined in accordance with GAAP. Thus, NAREIT FFO is a supplemental non-GAAP financial measure of our operating performance, which does not represent cash generated from operating activities in accordance with GAAP; and, therefore, should not be considered a substitute measure of cash flows from operations. The Company provides a reconciliation of Net Income (Loss) Attributable to Common Stockholders to NAREIT FFO.

Core FFO is an additional performance measure used by Regency as the computation of NAREIT FFO includes certain non-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.  The Company provides a reconciliation of NAREIT FFO to Core FFO.


    




3235





Overview of Our Strategy


Regency Centers (the "Parent Company") began its operations as a publicly-traded REIT in 1993, and, currently owns directas of March 31, 2017, had full or partial ownership interests in 307 shopping centers, the majority of which429 retail properties primarily anchored by market leading grocery stores. Our properties are grocery-anchored community and neighborhood centers. Our centers areprincipally located in affluent and infill trade areas in the top marketsmost attractive metro areas of 25 statesthe United States and the District of Columbia, and contain 37.654.0 million square feet ("SF") of gross leasable area ("GLA"). All of our operating, investing, and financing activities are performed through theour Operating Partnership, itsRegency Centers, L.P., our wholly-owned subsidiaries, and through its investmentour co-investment partnerships. TheAs of March 31, 2017, the Parent Company currently owns approximately 99.9% of the outstanding common partnership units of the Operating Partnership.Partnership and has $500 million of unsecured public and private placement debt, which it assumed through the merger with Equity One.
Our mission is to be the preeminent grocery-anchorednational shopping center owner, operator and developer through:developer. Our strategy is to:
First-rate performanceOwn and manage an unequaled portfolio of our exceptionally merchandisedhigh-quality neighborhood and community shopping centers anchored by market leading grocers and located national portfolio;in affluent suburban and near urban trade areas in the country’s most desirable metro areas. This combination produces highly desirable and attractive centers to best-in-class retailers. These centers command higher rental and occupancy rates resulting in excellent prospects to grow net operating income (NOI);
Value-enhancing services of the bestMaintain an industry leading and disciplined development platform to deliver exceptional retail centers at higher margins as compared to acquisitions;
Support our business activities with a strong balance sheet; and
Engage a talented, dedicated team of professionals in the business;employees, who are guided by Regency’s special culture and
Creation of superior growth in aligned with shareholder value.interests.

OurKey goals to achieve our strategy is:are to:
Sustain average annual 3%superior same property NOI growth from a high-quality, growing portfolio of thriving community and neighborhoodcompared to our shopping centers;center peers;
Develop new, and redevelop existing, high quality shopping centers at attractive returns on investment from a disciplined development program;investment;
Maintain our stronga conservative balance sheet to provideproviding financial flexibility to cost effectively fund uses of capital,investment opportunities and debt maturities on a favorable basis, and to weather economic downturns;
Attract and
Engage a talented and dedicated motivate an exceptional team with high standards of integrity that operatesemployees who operate efficiently and isare recognized as a leaderindustry leaders;
Generate reliable growth in earnings per share, funds from operations per share, and most importantly total shareholder returns that consistently rank among the real estate industry.leading shopping center REITS.


36




Executing on our Strategy


During the ninethree months ended September 30, 2016, we executedMarch 31, 2017:
We completed the merger with Equity One on March 1, 2017 and acquired 121 properties for $5.2 billion, further enhancing the quality of our strategic objectives to further solidify Regency’s position as a leader among shopping center REITs:
Sustain average annual 3% NOI growth from a high-quality, growingoperating portfolio of thriving community and neighborhoodretail shopping centers.
We earn revenues and generate cash flow by leasing space insustained superior same property NOI growth compared to the average of our shopping centers to grocery stores, major retail anchors, restaurants, side-shop retailers, and service providers, as well as ground leasing or selling out-parcels to these same types of tenants. We experience growth in revenues by increasing occupancy and rental rates in our existing shopping centers, by acquiring and developing new shopping centers, and by redeveloping shopping centers within our portfolio. Noteworthy milestones and achievements during 2016 include:center peers:
We achieved pro-rata same property NOI growth, excluding termination fees, of 3.4% during the nine months ended September 30, 2016.
Our pro-rata same property percent leased was 96.0% at September 30, 2016, representing a small decline from 96.2% at December 31, 2015, primarily related3.7% as compared to the Sports Authority bankruptcy.same period in the prior year on the newly combined portfolio.
We executed 328 leasing transactions in our shopping centers representing 1.1 million SF of new and renewal leasing, and grew rental rates 10.7%by 8.2% on new and renewal leases of comparable size space during the nine months ended September 30, 2016.spaces.
We invested in the acquisition of three operating properties, for a gross purchase price of $333.8 million.At March 31, 2017, our total property portfolio was 95.3% leased, while our same property portfolio was 96.0% leased.

Develop new,We developed and redeveloped high quality shopping centers and redevelop existing centers at attractive returns on investment from a disciplined development program.investment:
We capitalize on our development capabilities, market presence, and anchor relationships by investing instarted two new developments representing a total investment of $61.0 million upon completion, with projected weighted average returns on investment of 7.4%.
Including these new projects, a total of 30 properties were in the process of development or redevelopment, representing a combined investment upon completion of $515 million.

We maintained a conservative balance sheet providing financial flexibility to cost effectively fund investment opportunities and redevelopments of existing centers.debt maturities:
During the nine months ended September 30, 2016,In January 2017, we started $108.5issued $300.0 million of development4.4% senior unsecured notes due February 1, 2047, the proceeds of which were used to redeem all of the $250.0 million 6.625% Series 6 preferred stock and redevelopment projects, netreduce the balance of partner funding requirements,the Line.
On March 1, 2017 in conjunction with a weighted average projected returnthe merger with Equity One, we increased the commitment amount of 8.2%.our line of credit (the "Line") to $1.0 billion, of which $95.0 million was outstanding.
At September 30, 2016, we have five ground-up developments in process, with total expectedMarch 31, 2017, our annualized net development costs of $112.0 million, net of partner funding requirements, and have $40.0 million of net costs to complete. These developments are projecting returnsdebt-to-adjusted EBITDA ratio on capital of 7.9% and are currently 85.4% leased.a pro-rata basis was 4.9x versus 4.5x at December 31, 2016.
We also have 16 redevelopments of existing centers in process with total expected net redevelopment costs of $112.3 million, with $66.3 million of costs to complete, and projected incremental returns ranging from 7.0% - 10.0%.



3337




Equity One Merger

Maintain our strong balance sheetOn March 1, 2017, Regency completed its merger with Equity One, Inc., whereby Equity One merged with and into Regency, with Regency continuing as the surviving public company. Under the terms of the Merger Agreement, each Equity One stockholder received 0.45 of a newly issued share of Regency common stock for each share of Equity One common stock owned immediately prior to provide financial flexibility,the effective time of the Merger resulting in approximately 65.5 million shares being issued to cost effectively fund uses of capital, and to weather economic downturns.
We fund acquisitions and development activities from various capital sources including operating cash flow, property sales through a disciplined match-funding strategy of selling low growth assets, equity offerings, new debt financing, and capital from our co-investment partners.
At September 30, 2016, our net debt-to-core EBITDA ratio on a pro-rata basiseffect the merger. The following table provides the components that make up the total purchase price for the trailing twelve months was 4.4x versus 5.2x at December 31, 2015. We had $40.9 million of cash and no outstanding balance on our $800.0 million Line.Equity One merger:
In June 2016, we settled 1.85 million
(in thousands, except stock price)Purchase Price
Shares of common stock issued for merger65,495
Closing stock price on March 1, 2017$68.40
Value of common stock issued for merger$4,471,808
Debt repaid716,278
Other cash payments5,019
Total purchase price$5,193,105
  


As part of the 3.1Merger, Regency acquired 121 properties representing 16.0 million sharesSF of GLA, including 8 properties held through co-investment partnerships. The consolidated net assets and results of operations of Equity One are included in the forward equity offering resulting in net proceeds of $137.5 million, which was used to partially repayconsolidated financial statements from the Line balance.closing date, March 1, 2017 through March 31, 2017.
In July 2016, we amended our existing Term Loan, which increased the facility size by $100.0 million to $265.0 million, extended the maturity date to January 5, 2022 and fixed the interest rate at 2.00%.
In July 2016, we issued 5.0 million shares of common stock resulting in net proceeds of $400.1 million, used to (i) repay in full our $300 million notes, including a make-whole payment, (ii) settle the forward interest rate swaps, and (iii) fund investment activities and general corporate purposes.

Shopping Center Portfolio

The following table summarizes general information related to the Consolidated Properties in our shopping center portfolio:
(GLA in thousands) September 30, 2016 December 31, 2015 March 31, 2017 December 31, 2016
Number of Properties 197 200 313 198
Properties in Development 5 7 7 6
GLA 23,753 23,280 40,350 23,931
% Leased – Operating and Development 95.4% 95.4% 95.2% 94.8%
% Leased – Operating 95.7% 95.9% 95.6% 96.0%
Weighted average annual effective rent per square foot ("PSF"), net of tenant concessions. $19.74 $18.95 $20.33 $19.70

The following table summarizes general information related to the Unconsolidated Properties owned in co-investment partnerships in our shopping center portfolio:
(GLA in thousands) September 30, 2016 December 31, 2015 March 31, 2017 December 31, 2016
Number of Properties 110 118 116 109
GLA 13,882 14,755 13,688 13,899
% Leased – Operating 96.4% 96.3%
% Leased –Operating 96.0% 96.3%
Weighted average annual effective rent PSF, net of tenant concessions $19.50 $18.81 $19.95 $19.25

During October 2016, the southeastern United States was hit hard by Hurricane Matthew as it moved very close to the coasts of Florida, Goergia, South Carolina and North Carolina. The Company’s shopping centers along the East Coast sustained only minor damage as a result of Hurricane Matthew. Beyond power outages at a limited number of properties, the scope of damage was limited to tree and debris removal and minor roof leaks, with no major structural damage to report.


34




For the purpose of the following disclosures of occupancy and leasing activity, anchor space"anchor space" is considered space greater than or equal to 10,000 SF and shop space"shop space" is less than 10,000 SF. The following table summarizes pro-rata occupancy rates of our combined Consolidated and Unconsolidated shopping center portfolio:
  September 30, 2016 December 31, 2015
% Leased – Operating 95.8% 95.9%
Anchor 97.7% 98.5%
Shop space 92.8% 91.7%
  March 31, 2017 December 31, 2016
% Leased – Operating (1) (2)
 95.8% 96.0%
Anchor space 98.1% 97.8%
Shop space 91.7% 93.1%
(1) Excludes properties in development.

38




(2) For the period ending March 31, 2017, percent leased includes properties acquired from Equity One on March 1, 2017.

The decline in anchorshop space percent leased is due to the Sports Authority bankruptcy and its rejectionmerger with Equity One, which at the time of two leases at our shopping centers. See additional discussion below about bankruptcies.     the merger had lower shop space occupancy than Regency.


39




The following table summarizes leasing activity, including Regency'sour pro-rata share of activity within the portfolio of our co-investment partnerships:
 Nine months ended September 30, 2016 Three months ended March 31, 2017
 
Leasing Transactions (1)
 SF (in thousands) 
Base Rent PSF
 (2)
 
Tenant Improvements PSF
 (2)
 
Leasing Commissions PSF
 (2)
 
Leasing Transactions (1,3)
 SF (in thousands) 
Base Rent PSF
 (2)
 
Tenant Improvements PSF
 (2)
 
Leasing Commissions PSF
 (2)
Anchor Leases 
 
 
 
 
 
 
 
 
 
New 11 312 $13.92
 $4.98
 $3.75
 9 301 $19.21
 $3.58
 $3.04
Renewal 64 1302 $13.29
 $0.35
 $0.83
 15 340 $15.59
 $—
 $1.17
Total Anchor Leases (1)
 75 1,614 $13.41
 $1.24
 $1.39
 24 641 $17.29
 $1.68
 $2.05
Shop Space 
 
 

 

 

 
 
 

 

 

New 313 561 $29.93
 $12.00
 $13.83
 99 143 $32.46
 $8.51
 $13.46
Renewal 696 1066 $31.57
 $1.48
 $4.18
 205 334 $31.04
 $0.59
 $3.89
Total Shop Space Leases (1)
 1009 1,627 $31.00
 $5.11
 $7.51
 304 477 $31.47
 $2.97
 $6.77
Total Leases 1084 3,241 $22.24
 $3.18
 $4.46
 328 1,118 $23.34
 $2.23
 $4.06
 Nine months ended September 30, 2015 Three months ended March 31, 2016
 
Leasing Transactions (1)
 SF (in thousands) 
Base Rent PSF
 (2)
 
Tenant Improvements PSF
 (2)
 
Leasing Commissions PSF
 (2)
 
Leasing Transactions (1)
 SF (in thousands) 
Base Rent PSF
 (2)
 
Tenant Improvements PSF
 (2)
 
Leasing Commissions PSF
 (2)
Anchor Leases            
New 8 111 $15.62
 $5.71
 $5.32
 4 174 $12.53
 $11.91
 $3.01
Renewal 33 767 $11.33
 $0.01
 $1.02
 15 302 $14.83
 $1.02
 $2.13
Total Anchor Leases (1)
 41 878 $11.87
 $0.74
 $1.56
 19 476 $13.99
 $5.00
 $2.45
Shop Space            
New 334 542 $30.59
 $10.30
 $13.65
 89 140 $29.96
 $12.54
 $12.53
Renewal 697 1079 $31.06
 $0.70
 $3.95
 201 295 $29.92
 $0.86
 $4.49
Total Shop Space Leases (1)
 1031 1,621 $30.90
 $3.91
 $7.19
 290 435 $29.93
 $4.62
 $7.08
Total Leases 1072 2,499 $24.22
 $2.79
 $5.22
 309 911 $21.60
 $4.82
 $4.66
(1) Number of leasing transactions reported at 100%; all other statistics reported at pro-rata share.     
(2) Totals for base rent, tenant improvements, and leasing commissions reflect the weighted average PSF.
(3) For the period ending March 31, 2017, amounts include leasing activity of properties acquired from Equity One beginning March 1, 2017.

Total average base rent signed on oursigned shop space leases of $31.00 increased in 2016 compared to 2015during 2017 was $31.47 and exceeds the average annual base rent of all shop space leases due to expire during the next twelve monthsremainder of $27.932017 of $28.39 PSF, by 11.0%10.9%.










3540




Significant Tenants and Concentrations of Risk

We seek to reduce our operating and leasing risks through geographic diversification and by avoiding dependence on any single property, market, or tenant. The following table summarizes our four most significant tenants, based on their percentage of annualized base rent, each of which is a grocery tenant:rent: 

 September 30, 2016 March 31, 2017
Grocery Anchor 
Number of
Stores (1)
 
Percentage of
Company-
owned GLA (2)
 
Percentage  of
Annualized
Base Rent (2) 
 
Number of
Stores (1)
 
Percentage of
Company-
owned GLA (2)
 
Percentage  of
Annualized
Base Rent (2) 
Publix 68 6.2% 3.2%
Kroger 58 9.0% 4.6% 60 6.5% 3.1%
Publix 40 5.7% 3.0%
Albertsons/Safeway 49 4.8% 2.8% 46 3.8% 2.7%
Whole Foods 20 2.3% 2.3% 25 2.0% 2.1%
TJX Companies 50 2.5% 2.0%
  
(1) Includes stores owned by grocery anchors that are attached to our centers.
(1) Includes stores owned by grocery anchors that are attached to our centers.
(1) Includes stores owned by grocery anchors that are attached to our centers.
(2) Includes Regency's pro-rata share of Unconsolidated Properties and excludes those owned by anchors.
(2) Includes Regency's pro-rata share of Unconsolidated Properties and excludes those owned by anchors.
(2) Includes Regency's pro-rata share of Unconsolidated Properties and excludes those owned by anchors.

Bankruptcies and Credit Concerns

Our management team devotes significant time to researching and monitoring retail trends, consumer preferences, customer shopping behaviors, changes in retail delivery methods, and changing demographics in order to anticipate the challenges and opportunities impacting the retail industry. Certain segments of the retail industry face reductions in sales and increased bankruptcies amid stronger competition from e-commerce. A greater shift to e-commerce, large-scale retail business failures, unemployment, and tight credit markets could negatively impact consumer spending and have an adverse effect on our results of operations. We pro-actively seek to mitigate these potential impacts through tenant diversification, re-tenanting weaker tenants with stronger operators, anchoring our centers with market leading grocery stores that drive foot traffic, and maintaining a presence in affluent suburbs and dense infill trade areas. As a result of our research and findings, we may reduce new leasing, suspend leasing, or curtail allowances for construction of leasehold improvements within a certain retail category or to a specific retailer in order to reduce our risk from bankruptcies and store closings.

We closely monitor the operating performance and rent collections of tenants in our shopping centers as well as those retailers experiencing significant changes to their business models as a result of reduced customer traffic in their stores and increased competition from e-commerce sales.  Retailers who are unable to withstand these and other business pressures may approach us to modify their lease agreement or file for bankruptcy. Although base rent is supported by long-term lease contracts, tenants who file bankruptcy maygenerally have the legal right to reject any or all of their leases and close related stores. In the event that a tenant with a significant number of leases in our shopping centers files bankruptcy and cancels its leases, we could experience a significant reduction in our revenues. We monitor the operating performance and rent collections of all tenants in our shopping centers, especially those tenants with operating retail formats that are experiencing significant changes in competition, business practice, and store closings in other locations. However,Currently, no tenant represents more than 5% of our annual base rent on a pro-rata basis.

Our management team devotes significant time to monitoring consumer preferences, shopping behaviors, and demographics to anticipate both challenges and opportunities in the changing retail industry that may affect our tenants. As a result of our findings, we may reduce new leasing, suspend leasing, or curtail the allowance for the construction of leasehold improvements within a certain retail category or to a specific retailer.

During March 2016, Sports Authority filed for Chapter 11 bankruptcy protection, at which time we had three leases in our portfolio. One of those leases has been assumed by another retailer and the remaining two have been rejected and the stores closed. Those two rejected leases represented $2.1 million, or 0.4%, of total annualized base rent on a pro-rata basis. We are currently working to re-tenant these spaces.

During 2016, Sears Holdings announced that it planned to accelerate the closing of a number of unprofitable stores due to continued poor sales.stores. Sears continues to report significant declines in operating revenues and performance, and its ability to continue operating stores in our shopping centers is uncertain. We have five Sears or Kmart leases in our portfolio, which currently represent $3.1 million, or 0.6%, of total annualized base rent on a pro-rata basis. None of the announced store closures as of this filing, are within our shopping centers.centers at this time. However, we are currently working to opportunistically re-tenant the spaces as the lease terms permit.     



Of the current bankruptcies impacting our portfolio, none of the individual retailers exceed 0.1% of our annual base rent on a pro-rata basis.



3641




Results from Operations

Results from operations for the three months ended March 31, 2017 reflect the results of our merger with Equity One on March 1, 2017. Accordingly, our results of operations will reflect the combined operations for the entire period for future quarters, unlike the quarter ended March 31, 2017, which only reflects the combined operations for one of the quarter's three months.

Comparison of the three months ended September 30, 2016March 31, 2017 to 2015:2016:

Our revenues increased as summarized in the following table: 
 Three months ended September 30,   Three months ended March 31,  
(in thousands) 2016 2015 Change 2017 2016 Change
Minimum rent $111,886
 105,071
 6,815
 $141,240
 107,674
 33,566
Percentage rent 495
 486
 9
 2,906
 1,703
 1,203
Recoveries from tenants 31,443
 28,294
 3,149
 42,087
 30,825
 11,262
Other income 3,089
 2,431
 658
 3,192
 2,662
 530
Management, transaction, and other fees 5,855
 5,786
 69
 6,706
 6,764
 (58)
Total revenues $152,768
 142,068
 10,700
 $196,131
 149,628
 46,503

Minimum rent increased as follows:

$1.9 million increase from rent commencing at development properties;

$5.13.8 million increase from new acquisitions of operating properties; and

$1.53.1 million increase in minimum rent from same properties from redevelopments,related to redevelopment completions and rental rate growth on new and renewal leases,leases; and contractual rent steps;

$26.4 million increase from properties acquired through the Equity One merger;
reduced by $1.7$1.6 million from the sale of operating properties.

Percentage rent increased $1.2 million primarily as a result of properties acquired through the Equity One merger.

Recoveries from tenants represent reimbursements to us for tenants' pro-rata share of the operating, maintenance, and real estate tax expenses that we incur to operate our shopping centers. Recoveries from tenants increased as follows:

$775,000456,000 increase from rent commencing at development properties;

$1.51.1 million increase from new acquisitions of operating properties; and

$1.42.7 million increase from same properties associated with higher recoverable costs;costs and improvements in recovery rates; and

$7.6 million increase from properties acquired through the Equity One merger;
reduced by $544,000$592,000 from the sale of operating properties.

Other income, which consists of incidental income earned at our centers, increased $658,000$530,000 primarily as a result of parking income related to the acquisition of Market Common Clarendon.

We earned fees, at market-based rates, for asset management, property management, leasing, acquisition, and financing services that we provided to our co-investment partnerships and third parties as follows:
  Three months ended September 30,  
(in thousands) 2016 2015 Change
Asset management fees $1,611
 1,573
 38
Property management fees 3,197
 3,249
 (52)
Leasing commissions and other fees 1,047
 964
 83
Total management, transaction, and other fees $5,855
 5,786
 69
Clarendon in May 2016.

    


37
42





Changes in our operating expenses are summarized in the following table: 
 Three months ended September 30,   Three months ended March 31,  
(in thousands) 2016 2015 Change 2017 2016 Change
Depreciation and amortization $40,705
 37,032
 3,673
 $60,053
 38,716
 21,337
Operating and maintenance 23,373
 19,761
 3,612
 29,763
 22,685
 7,078
General and administrative 16,046
 14,750
 1,296
 17,673
 16,299
 1,374
Real estate taxes 17,058
 16,044
 1,014
 21,450
 15,870
 5,580
Other operating expenses 1,046
 1,880
 (834) 71,512
 2,306
 69,206
Total operating expenses $98,228
 89,467
 8,761
 $200,451
 95,876
 104,575

Depreciation and amortization costs increased as follows:
$945,000732,000 increase as we began depreciating costs at development properties where tenant spaces were completed and became available for occupancy;
$3.02.3 million increase from new acquisitions of operating properties; and
$749,0001.4 million increase from same properties attributable to recent capital improvements and redevelopments; and
$17.8 million increase from properties acquired through the Equity One merger;
reduced by $1.0 million$890,000 from the sale of operating properties and other corporate asset disposals.

Operating and maintenance costs increased as follows:
$651,000324,000 increase from operations commencing at development properties;
$1.31.4 million increase from new acquisitions of operating properties; and
$2.1 million976,000 increase from same properties primarily inattributable to recoverable costs; and
$4.7 million increase from properties acquired through the Equity One merger;
reduced by $381,000$392,000 from the sale of operating properties.

General and administrative expenses increased as follows:
$2.01.2 million increase from the change in the value of participant obligations within the deferred compensation plan; and
$1.8 million increase from higher general overhead and compensations costs attributable to annual salary increases and additional staffing required for the Equity One merger;
reduced by $629,000$1.6 million of higher development overhead capitalization due to the timing of project starts.increased development and redevelopment activity.

Real estate taxes increased as follows:
$252,000767,000 increase from development properties where capitalization ceased as tenant spaces became available for occupancy; andnew acquisitions of operating properties;
$1.1 million increase from acquisitions of operating properties;same properties from increased tax assessments; and
$3.9 million increase from properties acquired through the Equity One merger;
reduced by $329,000$214,000 from sold properties.

Other operating expenses decreased $834,000 primarily dueincreased as follows:
$69.2 million increase attributable to lower acquisition and pursuit costs and less tax expenses.








Equity One merger costs.



3843




The following table presents the components of other expense (income):
 Three months ended September 30,   Three months ended March 31,  
(in thousands) 2016 2015 Change 2017 2016 Change
Interest expense, net            
Interest on notes payable $19,828
 23,552
 (3,724) $24,613
 22,252
 2,361
Interest on unsecured credit facilities 1,556
 1,064
 492
 2,430
 916
 1,514
Capitalized interest (857) (1,388) 531
 (1,257) (973) (284)
Hedge expense 1,807
 2,155
 (348) 2,102
 2,230
 (128)
Interest income (389) (284) (105) (689) (283) (406)
Interest expense, net 21,945
 25,099
 (3,154) 27,199
 24,142
 3,057
Early extinguishment of debt 13,943
 —
 13,943
Provision for impairment —
 1,666
 (1,666)
Net investment (income) loss (821) 1,190
 (2,011) (1,097) 155
 (1,252)
Loss on derivative instruments 40,586
 —
 40,586
Total other expense (income) $75,653
 26,289
 49,364
 $26,102
 25,963
 139

The $3.2$3.1 million decreaseincrease in total interest expense is due to:

$3.72.4 million decreaseincrease in interest on notes payable from refinancing and deleveraging activities in 2015 anddue to (1) $2.6 million of additional interest on notes payable assumed with the early redemption of ourEquity One merger, (2) $300 million notes in August 2016; offset by,of new 30 year unsecured debt issued to redeem our $250 million Series 6 preferred stock, and (3) $350 million of new 10 year unsecured debt issued to repay Equity One's $250 million term loan that became due upon the effective date of the merger; and

$492,0001.5 million increase in interest expense related to higher average balances on our unsecured credit facilities; andfacilities, including a new $300 million term loan closed on March 1, 2017 to repay Equity One's $300 million term loan that became due upon the effective date of the merger;
partially offset by lower interest expense from deleveraging activities that occurred during 2016.

$531,000 increase due to lower interest capitalization on our development and redevelopment projects.

In connection withWe did not recognize any impairments during the early redemption ofthree months ended March 31, 2017. During the $300 million notes,three months ended March 31, 2016, we recognized a $13.9$1.7 million charge, including a $13.2 million make-whole premiumimpairment loss on one operating property and $700,000 of unamortized debt issuance costs.one land parcel that have since been sold.

Net investment income increased $2.0$1.3 million driven by realized and unrealized gains ofon investments held by thewithin our non-qualified deferred compensation plan.

We recognized a $40.6 million charge to settle $220 million of forward starting interest rate swaps related to debt previously expected to be issued in 2017 to repay our $300 million notes due June 2017. As a result of our July 2016 equity offering and the early redemption of the notes in August 2016, the Company believed that the issuance of new fixed rate debt within the remaining period of the forward starting swaps was probable to no longer occur. Accordingly, we ceased hedge accounting and reclassified the $40.6 million paid to settle the forward starting swaps from Accumulated other comprehensive loss to earnings.

Our equity in income of investments in real estate partnerships increaseddecreased as follows: 
 Three months ended September 30,   Three months ended March 31,  
(in thousands)Ownership 2016 2015 ChangeRegency's Ownership 2017 2016 Change
GRI - Regency, LLC (GRIR)40.00% $6,862
 4,194
 2,668
40.00% $7,069
 10,772
 (3,703)
Columbia Regency Retail Partners, LLC (Columbia I)20.00% 314
 377
 (63)20.00% 317
 362
 (45)
Columbia Regency Partners II, LLC (Columbia II)20.00% 366
 158
 208
20.00% 375
 477
 (102)
Cameron Village, LLC (Cameron)30.00% 150
 115
 35
30.00% 258
 164
 94
RegCal, LLC (RegCal)25.00% 205
 115
 90
25.00% 350
 229
 121
New York Common Retirement Fund (NYC)30.00% 65
 —
 65
US Regency Retail I, LLC (USAA)20.01% 227
 198
 29
20.01% 367
 270
 97
Other investments in real estate partnerships50.00% 14,523
 510
 14,013
20.00% - 50.00% 541
 646
 (105)
Total equity in income of investments in real estate partnershipsTotal equity in income of investments in real estate partnerships $22,647
 5,667
 16,980
Total equity in income of investments in real estate partnerships $9,342
 12,920
 (3,578)

The $17.0$3.6 million increasedecrease in our equity in income of investments in real estate partnerships is largely attributed to (i) an increasea $3.7 million decrease in our sharethe GRIR partnership due to gains of $5.8 million from the gain on salessale of real estate within our Other investmentstwo operating properties in real estate partnerships; (ii) interest expense savings within GRIR resulting from decreased debt balances and refinancing activity at lower interest rates; and (iii)2016, partially offset by a decrease in depreciation expense within GRIR from fully depreciated land improvement assets.


39



expense.

The following represents the remaining components that comprised net income attributable to the common stockholders and unit holders:

44




  Three months ended September 30,  
(in thousands) 2016 2015 Change
Income from operations $1,534
 31,979
 (30,445)
Gain on sale of real estate, net of tax 9,580
 27,755
 (18,175)
Income attributable to noncontrolling interests (543) (737) 194
Preferred stock dividends (5,266) (5,266) —
Net income attributable to common stockholders $5,305
 53,731
 (48,426)
Net income attributable to exchangeable operating partnership units 16
 94
 (78)
Net income attributable to common unit holders $5,321
 53,825
 (48,504)
  Three months ended March 31,  
(in thousands) 2017 2016 Change
(Loss) income from operations $(21,130) 40,709
 (61,839)
Gain on sale of real estate, net of tax 415
 12,868
 (12,453)
Loss attributable to noncontrolling interests (652) (434) (218)
Preferred stock dividends and issuance costs (11,856) (5,266) (6,590)
Net (loss) income attributable to common stockholders $(33,223) 47,877
 (81,100)
Net income attributable to exchangeable operating partnership units (19) 85
 (104)
Net (loss) income attributable to common unit holders $(33,242) 47,962
 (81,204)

The loss from operations in 2017, as compared to income from operations for the same period in 2016, was primarily due to $69.8 million of transactions costs expensed related to the merger with Equity One.
During the three months ended September 30, 2016,March 31, 2017, we sold three operating properties and two land parcelparcels for gains totaling $9.6$0.4 million, as compared to gains of $27.8$12.9 million from the sale of twothree operating properties and five land parcels during the three months ended September 30, 2015.March 31, 2016, and

During February 2017, we expensed $8.6 million of original issuance costs upon redemption of our $250 million Series 6 preferred stock.

4045





Comparison of the nine months ended September 30, 2016 to 2015:

Our revenues increased as summarized in the following table:
  Nine months ended September 30,  
(in thousands) 2016 2015 Change
Minimum rent $329,506
 308,766
 20,740
Percentage rent 2,651
 2,593
 58
Recoveries from tenants 94,684
 87,651
 7,033
Other income 9,210
 6,554
 2,656
Management, transaction, and other fees 18,759
 18,032
 727
Total revenues $454,810
 423,596
 31,214
Minimum rent increased as follows:

$9.5 million increase from rent commencing at development properties;

$10.8 million increase from new acquisitions of operating properties; and

$5.4 million increase in minimum rent from same properties, reflecting a $7.3 million increase from redevelopments, rental rate growth on new and renewal leases, and contractual rent steps, offset by a $1.9 million charge to straight line rent primarily attributable to expected early terminations;

reduced by $4.9 million from the sale of operating properties.

Recoveries from tenants represent reimbursements to us for tenants' pro-rata share of the operating, maintenance, and real estate tax expenses that we incur to operate our shopping centers. Recoveries from tenants increased as follows:

$2.4 million increase from rent commencing at development properties;

$3.2 million increase from new acquisitions of operating properties; and

$3.4 million increase from same properties associated with higher recoverable costs;

reduced by $1.9 million from the sale of operating properties.

Other income, which consists of incidental income earned at our centers, increased $2.7 million as follows:

$1.7 million in same properties primarily as a result of lease termination and easement fees; and

$774,000 in parking income related to the acquisition of Market Common Clarendon.

We earned fees, at market-based rates, for asset management, property management, leasing, acquisition, and financing services that we provided to our co-investment partnerships and third parties as follows:
  Nine months ended September 30,  
(in thousands) 2016 2015 Change
Asset management fees $4,935
 4,694
 241
Property management fees 9,819
 9,880
 (61)
Leasing commissions and other fees 4,005
 3,458
 547
Total management, transaction, and other fees $18,759
 18,032
 727

Asset management fees increased due to higher property values in our investment partnerships. Leasing commissions and other fees increased during 2016 due to a greater number of leasing transactions.




41





Changes in our operating expenses are summarized in the following table:
  Nine months ended September 30,  
(in thousands) 2016 2015 Change
Depreciation and amortization $119,721
 109,249
 10,472
Operating and maintenance 69,767
 61,119
 8,648
General and administrative 48,695
 46,227
 2,468
Real estate taxes 49,697
 46,842
 2,855
Other operating expenses 5,795
 4,825
 970
Total operating expenses $293,675
 268,262
 25,413

Depreciation and amortization costs increased as follows:
$3.6 million increase as we began depreciating costs at development properties where tenant spaces were completed and became available for occupancy;
$5.7 million increase from new acquisitions of operating properties; and
$3.5 million increase from same properties, attributable to recent capital improvements and redevelopments;
reduced by $2.3 million from the sale of operating properties and other corporate asset disposals.

Operating and maintenance costs increased as follows:
$1.9 million increase from operations commencing at development properties;
$4.3 million increase from new acquisitions of operating properties; and
$3.6 million increase in recoverable costs at same properties;
reduced by $1.2 million from the sale of operating properties.

General and administrative expenses increased as follows:
$1.9 million increase from the change in the value of participant obligations within the deferred compensation plan; and
$694,000 increase in compensation costs.

Real estate taxes increased as follows:
$892,000 increase from development properties where capitalization ceased as tenant spaces became available for occupancy;
$2.2 million increase from new acquisitions of operating properties; and
$949,000 increase at same properties from increased tax assessments;
reduced by $1.2 million from sold properties.

Other operating expenses increased $1.0 million primarily due to higher transaction costs associated with property acquisition and pursuit costs offset by less tax expense.


42




The following table presents the components of other expense (income):
  Nine months ended September 30,  
(in thousands) 2016 2015 Change
Interest expense, net      
Interest on notes payable $63,899
 75,299
 (11,400)
Interest on unsecured credit facilities 3,829
 2,667
 1,162
Capitalized interest (2,622) (5,403) 2,781
Hedge expense 6,306
 6,656
 (350)
Interest income (923) (812) (111)
Interest expense, net 70,489
 78,407
 (7,918)
Provision for impairment 1,666
 —
 1,666
Early extinguishment of debt 13,943
 (61) 14,004
Net investment (income) loss (1,268) 190
 (1,458)
Loss on derivative instruments 40,586
 —
 40,586
     Total other expense (income) $125,416
 78,536
 46,880

The $7.9 million decrease in total interest expense is due to:
$11.4 million decrease in interest on notes payable due to lower interest rates from refinancing and deleveraging activities during 2015 and the early redemption of our $300 million notes in August 2016; offset by

$1.2 million increase related to higher average balances on unsecured credit facilities during the nine months ended September 30, 2016; and

$2.8 million increase due to lower interest capitalization on our development and redevelopment projects.

During the nine months ended September 30, 2016, we recognized a $1.7 million impairment loss on one operating property and one parcel of land that have since been sold. We did not recognize any impairments for the nine months ended September 30, 2015.

In connection with the early redemption of the $300 million notes, we recognized a $13.9 million charge, including a $13.2 million make-whole premium and $700,000 of unamortized debt issuance costs.

Net investment income increased $1.5 million, driven by unrealized losses within the non-qualified deferred compensation plan during the nine months ended September 30, 2015.

We recognized a $40.6 million charge to settle $220 million of forward starting interest rate swaps related to new debt previously expected to be issued in 2017. As a result of our July 2016 equity offering and the early redemption of the $300 million notes in August 2016, the Company believed that the issuance of new fixed rate debt within the remaining period of the forward starting swaps was probable to no longer occur. Accordingly, we ceased hedge accounting and reclassified the $40.6 million paid to settle the forward starting swaps from Accumulated other comprehensive loss to earnings.





43





Our equity in income of investments in real estate partnerships increased as follows:
   Nine months ended September 30,  
(in thousands)Ownership 2016 2015 Change
GRI - Regency, LLC (GRIR)40.00% $23,975
 13,524
 10,451
Columbia Regency Retail Partners, LLC (Columbia I)20.00% 2,557
 1,127
 1,430
Columbia Regency Partners II, LLC (Columbia II)20.00% 2,236
 452
 1,784
Cameron Village, LLC (Cameron)30.00% 487
 477
 10
RegCal, LLC (RegCal)25.00% 684
 349
 335
US Regency Retail I, LLC (USAA)20.01% 739
 606
 133
Other investments in real estate partnerships50.00% 15,940
 1,456
 14,484
Total equity in income of investments in real estate partnerships $46,618
 17,991
 28,627
The $28.6 million increase in our equity in income in investments in real estate partnerships is largely attributed to (i) an increase in our share of the gain on sales of real estate within our GRIR, Columbia I, Columbia II, and Other investments in real estate partnerships; (ii) interest expense savings within GRIR resulting from decreased debt balances and refinancing activity at lower interest rates; and (iii) and a decrease in depreciation expense within GRIR from fully depreciated land improvement assets.

The following represents the remaining components that comprise net income attributable to the common stockholders and unit holders:
  Nine months ended September 30,  
(in thousands) 2016 2015 Change
Income from operations $82,337
 94,789
 (12,452)
Gain on sale of real estate, net of tax 22,997
 34,215
 (11,218)
Income attributable to noncontrolling interests (1,545) (1,823) 278
Preferred stock dividends (15,797) (15,797) —
Net income attributable to common stockholders $87,992
 111,384
 (23,392)
Net income attributable to exchangeable operating partnership units 165
 204
 (39)
Net income attributable to common unit holders $88,157
 111,588
 (23,431)

During the nine months ended September 30, 2016, we sold seven operating properties and twelve land parcels resulting in gains of $23.0 million, compared to gains of $34.2 million from the sale of four operating properties during 2015.






44




Supplemental Earnings Information

We use certain non-GAAP performance measures, in addition to the requiredcertain performance metrics determined under GAAP, presentations, as we believe these measures improve the understanding of the Company's operationaloperating 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'may assist in comparing the Company's operating results to the Company's more meaningful.other REITs'. 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.

Pro-Rata Same Property NOI:    
For purposes of evaluating same property NOI on a comparative basis, and in light of the merger with Equity One on March 1, 2017, we are presenting our same property NOI on a pro forma basis as if the merger had occurred January 1, 2016. This perspective allows us to evaluate same property NOI growth over a comparable period. The pro forma same property NOI is not necessarily indicative of what the actual same property NOI and growth would have been if the merger had occurred on January 1, 2016, nor does it purport to represent the same property NOI and growth for future periods.
Our pro-rata same property NOI, excluding termination fees, grew from the following major components:
 Three months ended September 30, Nine months ended September 30, Three months ended March 31,
(in thousands) 2016 2015 Change 2016 2015 Change 2017 2016 Change
Base rent $122,745
 119,756
 2,989
 $366,428
 356,391
 10,037
 $194,701
 188,381
 6,320
Percentage rent 602
 623
 (21) 3,708
 3,756
 (48) 4,629
 4,801
 (172)
Recovery revenue 35,402
 34,894
 508
 108,455
 107,619
 836
 61,173
 57,492
 3,681
Other income 2,548
 2,186
 362
 8,299
 5,533
 2,766
 3,347
 3,699
 (352)
Operating expenses 44,442
 43,818
 624
 133,867
 132,482
 1,385
 74,402
 71,031
 3,371
Pro-rata same property NOI (1)
 $116,855
 113,641
 3,214
 $353,023
 340,817
 12,206
 $189,448
 183,342
 6,106
Less: Termination fees 115
 144
 (29) 945
 376
 569
 235
 798
 (563)
Pro-rata same property NOI excluding termination fees $116,740
 113,497
 3,243
 $352,078
 340,441
 11,637
 $189,213
 182,544
 6,669
Same property NOI growth     2.9%     3.4%     3.7%
(1) See the end of the Supplemental Earnings Information section for a reconciliation to the nearest GAAP measure.


Base rent increased $3.0 million and $10.0$6.3 million during the three and nine months ended September 30, 2016, respectively,March 31, 2017 driven by increases in rental rate growth on new and renewal leases and contractual rent steps from anchor leases, minimally offset by a slight decrease in our existing leases, with occupancy remaining flat.occupancy.

Recovery revenue increased $508,000 and $836,000$3.7 million during the three and nine months ended September 30, 2016, respectively,March 31, 2017, as a result of increases in recoverable costs and improvements in recovery rates, as noted below.
    
Other income increased $362,000 and $2.8$0.4 million during the three and nine months ended September 30, 2016, respectively,March 31, 2017, as a result of lease termination fees, easement sales, and settlementsancillary parking income earned at Market Common Clarendon, a center acquired in May, 2016.    

Operating expenses increased $624,000 and $1.4$3.4 million during the three and nine months ended September 30, 2016, respectively,March 31, 2017, due to higher recoverable costs.


4546




Same Property Rollforward:
Our same property pool includes the following property count, pro-rata GLA, and changes therein:
Three months ended September 30,
2016 2015
(GLA in thousands)Property CountGLA Property CountGLA
Beginning same property count298
26,964
 303
26,682
Disposed properties(6)(295) (1)(145)
SF adjustments (1)
—
—
 —
4
Ending same property count292
26,669
 302
26,541
   
Nine months ended September 30,Three months ended March 31,
2016 20152017 2016
(GLA in thousands)Property CountGLA Property CountGLAProperty CountGLA Property CountGLA
Beginning same property count300
26,508
 298
25,526
289
26,392
 300
26,508
Acquired properties owned for entirety of comparable periods6
443
 4
427
1
180
 6
443
Developments that reached completion by beginning of earliest comparable period presented2
342
 3
790
2
331
 2
342
Disposed properties(16)(660) (3)(220)—
—
 (6)(260)
SF adjustments (1)
—
3
 —
18
—
36
 —
24
Properties acquired through Equity One merger110
14,181
 —
—
Ending same property count292
26,636
 302
26,541
402
41,120
 302
27,057
(1) SF adjustments arise from remeasurements or redevelopments.





46




NAREIT FFO and Core FFO:    
Our reconciliation of net income attributable to common stock and unit holders to NAREIT FFO and Core FFO is as follows:
 Three months ended September 30, Nine months ended September 30, Three months ended March 31,
(in thousands, except share information) 2016 2015 2016 2015 2017 2016
Reconciliation of Net income to NAREIT FFO            
Net income attributable to common stockholders $5,305
 53,731
 $87,992
 111,384
Net (loss) income attributable to common stockholders $(33,223) 47,877
Adjustments to reconcile to NAREIT FFO:(1)
            
Depreciation and amortization (excluding FF&E) 47,826
 45,606
 143,373
 135,990
 67,444
 47,416
Provision for impairment to operating properties —
 —
 659
 —
 —
 659
Gain on sale of operating properties, net of tax (23,067) (27,806) (38,016) (35,281) (11) (11,641)
Exchangeable operating partnership units 16
 94
 165
 204
 (19) 85
NAREIT FFO attributable to common stock and unit holders $30,080
 71,625
 $194,173
 212,297
 $34,191
 84,396
Reconciliation of NAREIT FFO to Core FFO            
NAREIT FFO attributable to common stock and unit holders $30,080
 71,625
 $194,173
 212,297
 $34,191
 84,396
Adjustments to reconcile to Core FFO:(1)
            
Development pursuit costs (47) 213
 1,766
 303
 393
 225
Acquisition pursuit and closing costs 287
 367
 907
 800
 27
 757
Merger related costs 69,732
  
Gain on sale of land (628) 35
 (7,886) (33) (404) (7,110)
Provision for impairment to land 35
 —
 547
 —
 —
 512
Hedge ineffectiveness 40,586
 3
 40,589
 6
Early extinguishment of debt 13,943
 2
 13,957
 (58)
Gain on sale of investments —
 —
 —
 (416)
Loss on derivative instruments and hedge ineffectiveness (8) 3
Preferred redemption charge 8,614
 —
Debt offering interest for merger 1,729
 —
Core FFO attributable to common stock and unit holders $84,256
 72,245
 $244,053
 212,899
 $114,274
 78,783
(1) Includes Regency's pro-rata share of unconsolidated investment partnerships, net of pro-rata share attributable to noncontrolling interests.













47





Reconciliation of Same Property NOI to Nearest GAAP Measure:

Our reconciliation of property revenues and property expenses to Same Property NOI, on a pro-rata basis, is as follows:
 Three months ended September 30, Three months ended March 31,
 2016 2015 2017 2016
(in thousands) Same Property 
Other (1)
 Total Same Property 
Other (1)
 Total Same Property 
Other (1)
 Total Same Property 
Other (1)
 Total
Income from operations $76,502
 (74,968) 1,534
 $59,012
 (27,033) 31,979
 $72,282
 (93,412) (21,130) $69,099
 (28,390) 40,709
Less:                        
Management, transaction, and other fees —
 5,855
 5,855
 —
 5,786
 5,786
 —
 6,706
 6,706
 —
 6,764
 6,764
Other (2)
 1,020
 2,660
 3,680
 1,904
 2,764
 4,668
 5,611
 2,585
 8,196
 2,204
 1,709
 3,913
Plus:                        
Depreciation and amortization 34,967
 5,738
 40,705
 34,218
 2,814
 37,032
 55,476
 4,577
 60,053
 36,291
 2,425
 38,716
General and administrative —
 16,046
 16,046
 —
 14,750
 14,750
 —
 17,673
 17,673
 —
 16,299
 16,299
Other operating expense, excluding provision for doubtful accounts 78
 420
 498
 41
 1,153
 1,194
 331
 70,614
 70,945
 595
 1,306
 1,901
Other expense (income) 6,570
 69,083
 75,653
 7,040
 19,249
 26,289
 10,079
 16,023
 26,102
 7,345
 18,618
 25,963
Equity in income (loss) of investments in real estate excluded from NOI (3)
 (242) 126
 (116) 15,234
 1,372
 16,606
 13,886
 448
 14,334
 9,038
 753
 9,791
NOI from Equity One prior to merger 43,005
 3,369
 46,374
 63,178
 3,489
 66,667
Pro-rata NOI $116,855
 7,930
 124,785
 $113,641
 3,755
 117,396
 $189,448
 10,001
 199,449
 $183,342
 6,027
 189,369
            
 Nine months ended September 30,
 2016 2015
(in thousands) Same Property 
Other (1)
 Total Same Property 
Other (1)
 Total
Income from operations $209,303
 (126,966) 82,337
 $178,420
 (83,631) 94,789
Less:            
Management, transaction, and other fees —
 18,759
 18,759
 —
 18,032
 18,032
Other(2)
 3,183
 7,987
 11,170
 5,994
 6,190
 12,184
Plus:            
Depreciation and amortization 106,011
 13,710
 119,721
 102,070
 7,179
 109,249
General and administrative —
 48,695
 48,695
 —
 46,227
 46,227
Other operating expense, excluding provision for doubtful accounts 973
 3,373
 4,346
 29
 2,832
 2,861
Other expense (income) 20,255
 105,161
 125,416
 21,452
 57,084
 78,536
Equity in income (loss) of investments in real estate excluded from NOI (3)
 19,664
 2,017
 21,681
 44,840
 4,353
 49,193
Pro-rata NOI $353,023
 19,244
 372,267
 $340,817
 9,822
 350,639
(1) Includes revenues and expenses attributable to non-same property, sold property, development property, and corporate activities. 
(2) Includes straight-line rental income, net of reserves, above and below market rent amortization, other fees, and noncontrolling interest.
(3) Includes non-NOI expenses incurred at our unconsolidated real estate partnerships, including those separated out above for our consolidated properties.










48




Liquidity and Capital Resources

General

We utilizeuse cash flows generated from operating, investing, and financing activities to strengthen our balance sheet, and reduce risk, finance our development and redevelopment projects, fund our targeted investments,investment activities, and maintain financial flexibility. We continuously monitor the capital markets and evaluate our ability to issue new debt or equity to repay maturing debt or fund our capital commitments.

OurExcept for the $500 million of unsecured public and private placement debt assumed with the Equity One merger on March 1, 2017, our Parent Company has no capital commitments other than its guarantees of the commitments of our Operating Partnership. All remaining debt is held by our Operating Partnership or by our co-investment partnerships. The Operating Partnership is a co-issuer and guarantees the outstanding debt of our Parent Company. The Parent Company will from time to time access the capital markets for the purpose of issuing new equity and will simultaneously contribute all of the offering proceeds to the Operating Partnership in exchange for additional partnership units. All debt is held by our Operating Partnership or by our co-investment partnerships. Based upon our available sources of capital, our current credit ratings, and the number of high quality, unencumbered properties we own, we believe our available capital resources are sufficient to meet our expected capital needs.


48




In addition to its $40.9$36.9 million of cash balance, the Company has the following additional sources of capital available:

(in thousands) September 30, 2016 March 31, 2017
ATM equity program  
Original offering amount $200,000
Available capacity $70,800
  
Forward Equity Offering    
Original offering amount $233,300
 $233,300
Available equity offering to settle (1)
 $94,063
 $94,063
    
Line of Credit    
Total commitment amount $800,000
 $1,000,000
Available capacity (2)
 $794,200
 $897,700
Maturity (3)
 May 13, 2019 May 13, 2019
    
(1) We have 1.25 million shares to settle prior to June 23, 2017 at an offering price of $75.25 per share before any underwriting discount and offering expenses.
(1) We have 1.25 million shares to settle prior to June 23, 2017 at an offering price of $75.25 per share before any underwriting discount and offering expenses.
(1) We have 1.25 million shares to settle prior to June 23, 2017 at an offering price of $75.25 per share before any underwriting discount and offering expenses.
(2) Net of letters of credit.
(2) Net of letters of credit.
(2) Net of letters of credit.
(3) The Company has the option to extend the maturity for two additional six-month periods.
(3) The Company has the option to extend the maturity for two additional six-month periods.
(3) The Company has the option to extend the maturity for two additional six-month periods.
    
We operate our business such that we expect net cash provided by operating activities will provide the necessary funds to pay our distributions to our common and preferred share and unit holders, which were $165.1$56.6 million and $152.0$53.9 million for the ninethree months ended September 30, March 31, 2017 and 2016, and 2015, respectively. Net cash provided by operating activities decreased $44.1 million for the three months ended March 31, 2017 due primarily to transaction costs incurred with the merger.  We expect our future cash flows from operating activities to be sufficient to fund our distribution requirements. Our dividend distribution policy is set by our Board of Directors, who monitors our financial position. Our Board of Directors recently declared our common stock quarterly dividend of $0.50$0.53 per share, payable on November 30, 2016.May 31, 2017. Future dividends will be declared at the discretion of our Board of Directors and will be subject to capital requirements and availability. We plan to continue paying an aggregate amount of distributions to our stock and unit holders that, at a minimum, meet the requirements to continue qualifying as a REIT for Federal income tax purposes.

During the next twelve months, we estimate that we will require approximately $258.1$345.3 million of cash, including $127.4$269.8 million to complete in-process developments and redevelopments $117.3and $75.5 million to repay maturing debt, and $13.4 million to fund our pro-rata share of estimated capital contributions to our co-investment partnerships for repayment of debt. If we start new developments, or redevelop additional shopping centers, or commit to new acquisitions, our cash requirements will increase. If we refinance maturing debt, our cash requirements will decrease. To meet our cash requirements, we may utilize cash generated from operations, proceeds from the sale of real estate, available borrowings from our Line, and when the capital markets are favorable, proceeds from the sale of equity and the issuance of new long-term debt.

We endeavor to maintain a high percentage of unencumbered assets. At September 30, 2016, 83.0%March 31, 2017, 83.2% of our wholly-owned real estate assets were unencumbered. Such assets allow us to access the secured and unsecured debt markets and to maintain availability on the Line. Our annualized coverage ratio, including our pro-rata share of our partnerships, was 3.24.5 times and 2.73.2 times for the trailing four quarters ended September 30,March 31, 2017 and December 31, 2016, and 2015, respectively. We define our coverage ratio as earnings before interest, taxes, investment transaction profits net of deal costs, depreciation and amortization (“Core EBITDA”) divided by the sum of the gross interest and scheduled mortgage principal paid to our lenders plus dividends paid to our preferred stockholders.

49





Our Line, Term Loan,term loans, and unsecured loansnotes require that we remain in compliance with various covenants, which are described in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2015.2016. The debt assumed and issued in conjunction with the Equity One merger contain covenants that are consistent with our existing debt covenants. We are in compliance with these covenants at September 30, 2016March 31, 2017 and expect to remain in compliance.


49




Summary of Cash Flow Activity

The following table summarizes net cash flows related to operating, investing, and financing activities of the Company: 
 Nine months ended September 30,   Three months ended March 31,  
(in thousands) 2016 2015 Change 2017 2016 Change
Net cash provided by operating activities $217,349
 216,763
 586
 $32,723
 76,819
 (44,096)
Net cash used in investing activities (354,584) (108,354) (246,230) (689,946) (7,333) (682,613)
Net cash provided by (used in) financing activities 141,281
 (198,305) 339,586
 680,822
 (79,205) 760,027
Net increase (decrease) in cash and cash equivalents $4,046
 (89,896) 93,942
 $23,599
 (9,719) 33,318
Total cash and cash equivalents $40,902
 23,880
 17,022
 $36,855
 27,137
 9,718
    
Net cash provided by operating activities:

Net cash provided by operating activities increaseddecreased $0.644.1 million due to:
$23.632.1 million increasedecrease in cash from operating income;income largely attributable to merger related expenses;
$5.21.1 million increasedecrease in operating cash flow distributions from our unconsolidated real estate partnerships as several redevelopment projects were completed and began generating operating cash flows;partnerships; and,
$5.110.8 million net increasedecrease in cash due to timing of cash receipts and payments related to operating activities; offset by
$40.6 million and $7.3 million paid during 2016 and 2015, respectively, to settle forward starting interest rate swaps put in place to hedge changes in interest rates on expected issuance of ten year fixed rate debt. The $40.6 million paid in 2016 was recognized through net income since the previously forecasted transaction is now probable to no longer occur. The $7.3 million paid in 2015 was recognized in Other comprehensive income and is being reclassified to earnings over the period of the ten year debt issued in 2015.


50




activities.

Net cash used in investing activities:

Net cash used in investing activities increased by $246.2$682.6 million as follows:
 Nine months ended September 30,   Three months ended March 31,  
(in thousands) 2016 2015 Change 2017 2016 Change
Cash flows from investing activities:            
Acquisition of operating real estate $(333,220) (42,983) (290,237) $—
 (16,483) 16,483
Advance deposits refunded (paid) on acquisition of operating real estate 1,250
 (2,250) 3,500
Acquisition of Equity One, net of cash acquired of $72,534 (648,957)—
—
 (648,957)
Real estate development and capital improvements (146,773) (150,967) 4,194
 (66,504) (38,289) (28,215)
Proceeds from sale of real estate investments 83,675
 93,727
 (10,052) 1,749
 32,261
 (30,512)
Collection of notes receivable —
 1,000
 (1,000)
Issuance of notes receivable (510) —
 (510)
Investments in real estate partnerships (13,127) (18,644) 5,517
 (1,688) (2,438) 750
Distributions received from investments in real estate partnerships 52,536
 15,014
 37,522
 25,428
 18,296
 7,132
Dividends on investment securities 189
 128
 61
 55
 59
 (4)
Acquisition of securities (53,290) (25,675) (27,615) (3,334) (41,946) 38,612
Proceeds from sale of securities 54,176
 22,296
 31,880
 3,815
 41,207
 (37,392)
Net cash used in investing activities $(354,584) (108,354) (246,230) $(689,946) (7,333) (682,613)

Significant changes in investing activities include:

We acquired threedid not acquire any operating properties, other than those included in the merger, during 2016 for $333.2 million2017 compared to $43.0$16.5 million for one operating property in 2015.the same period in 2016.

We issued 65.5 million common shares to the shareholders of Equity One valued at $4.5 billion in a stock for stock exchange and merged Equity One into the Company on March 1, 2017. As part of the merger, we paid $649.0 million, net of cash acquired, to repay Equity One credit facilities not assumed with the merger.

We invested $4.2$28.2 million lessmore in 20162017 than 2015the same period in 2016 on real estate development and capital improvements, as further detailed in a table below.

We received proceeds of $83.7$1.7 million from the sale of seventwo land parcels in 2017, compared to $32.3 million for three shopping centers and twelvefive land parcels in 2016, compared to $93.7 million for four shopping centersthe same period in 2015.2016.

50





We invested $13.1$1.7 million in our real estate partnerships during 20162017 to fund our share of redevelopment activity, compared to $2.4 million for our share of maturing mortgage debt and redevelopment activity, compared to $18.6 million during 2015.the same period in 2016.

Distributions from our unconsolidated real estate partnerships include return of capital from sales or financing proceeds. The $52.5$25.4 million received in 20162017 is primarily driven by financing proceeds from encumbering certain operating properties within one partnership. During the same period in 2016, we received $18.3 million from the sale of ninethree shopping centers within the partnerships. During 2015, we received $15.0 million, primarily attributable to $12.7 million of proceeds from the sale of one shopping center with a co-investment partner and $2.3 million of financing proceeds.

Acquisition of securities and proceeds from sale of securities pertain to equity and debt securities held by our captive insurance company and our deferred compensation plan. The majority of our investing activity during 2016 relates to reallocation of plan assets.

        

51




We plan to continue developing and redeveloping shopping centers for long-term investment. We deployed capital of $146.8$66.5 million for the development, redevelopment, and improvement of our real estate properties, comprised of the following:
 Nine months ended September 30,   Three months ended March 31,  
(in thousands) 2016 2015 Change 2017 2016 Change
Capital expenditures:            
Land acquisitions for development $8,654
 —
 8,654
Land acquisitions for development / redevelopment $9,555
 —
 9,555
Building and tenant improvements 19,393
 22,211
 (2,818) 8,105
 9,077
 (972)
Redevelopment costs 35,695
 34,523
 1,172
 22,407
 10,624
 11,783
Development costs 71,067
 78,921
 (7,854) 19,081
 12,574
 6,507
Capitalized interest 2,622
 5,403
 (2,781) 1,061
 973
 88
Capitalized direct compensation 9,342
 9,909
 (567) 6,295
 5,041
 1,254
Real estate development and capital improvements $146,773
 150,967
 (4,194) $66,504
 38,289
 28,215

During 20162017 we acquired one land parcel for a new development project.

Building and tenant improvements decreased during 2016 primarily related to timing of capital projects.

Redevelopment expenditures are slightly higher in 20162017 due to the timing, magnitude, and number of projects currently in process.process at existing centers and in process projects acquired from Equity One. We intend to continuously improve our portfolio of shopping centers through redevelopment which can include adjacent land acquisition, existing building expansion, new out-parcel building construction, and tenant improvement costs.  The size and magnitude of each redevelopment project varies with each redevelopment plan. 

Development expenditures are lowerhigher in 20162017 due to the progress towards completion of our development projects currently in process. At September 30, 2016March 31, 2017 and December 31, 2015,2016, we had fiveseven and sevensix development projects, respectively, that were either under construction or in lease up. See the tables below for more details about our development projects.

Interest is capitalized on our development and redevelopment projects and is based on cumulative actual development costs expended. We cease interest capitalization when the property is no longer being developed or is available for occupancy upon substantial completion of tenant improvements, but in no event would we capitalize interest on the project beyond 12 months after the anchor opens for business. Capitalized interest decreased in 2016 as compared to 2015 as our development or redevelopment projects neared substantial completion and we commenced fewer new projects.

We have a staff of employees who directly support our development and redevelopment program.programs. Internal compensation costs directly attributable to these activities are capitalized as part of each project. Changes in the level of future development and redevelopment activity could adversely impact results of operations by reducing the amount of internal costs for development and redevelopment projects that may be capitalized. A 10% reduction in development and redevelopment activity without a corresponding reduction in thedevelopment related compensation costs directly related to our development and redevelopment activities could result in an additional charge to net income of $1.4$1.6 million per year.


5251




The following table detailssummarizes our development projects in process:(in thousands, except cost PSF):
(in thousands, except cost PSF) September 30, 2016
 March 31, 2017
Property Name Location Start Date Estimated /Actual Anchor Opening 
Estimated Net Development Costs (1)
 
% of Costs Incurred (1)
 GLA 
Cost PSF of GLA (1)
 Market Start Date Estimated /Actual Anchor Opening 
Estimated Net Development Costs (1)
 
% of Costs Incurred (1)
 GLA 
Cost PSF of GLA (1)
Willow Oaks Crossing Concord, NC Q2-14 Dec-15 $13,914
 97% 69 $202
CityLine Market Ph II Richardson, TX Q4-15 June-16 6,172
 80% 22 281
Northgate Marketplace Ph II Medford, OR Q4-15 Oct-16 39,165
 77% 176 223
 Medford, OR
 Q4-15
 Oct-16
 40,700
 94% 177 230
The Market at Springwoods Village (2)
 Houston , TX Q1-16 May-17 28,192
 35% 167 169
 Houston , TX
 Q1-16
 May-17
 14,698
 55% 89 165
The Village at Tustin Legacy Tustin, CA Q3-16 Oct-17 37,822
 40% 112 338
 Los Angeles, CA Q3-16
 Oct-17
 37,822
 48% 112 338
Chimney Rock Crossing New York, NY Q4-16 May-18 71,175
 37% 218 326
The Village at Riverstone Houston, TX Q4-16 Aug-18 30,638
 43% 165 186
The Field at Commonwealth Washington, DC Q1-17 Aug-18 44,611
 33% 187 239
Pinecrest Place (3)
 Miami, FL Q1-17 Mar-18 16,424
 3% 70 235
Total $125,265
 61% 546 $229
 $256,068
 46% 1,018 $252
        
(1) Includes leasing costs and is net of tenant reimbursements.
(1) Includes leasing costs and is net of tenant reimbursements.
(1) Includes leasing costs and is net of tenant reimbursements.
(2) Estimated Net Development Costs are reported at full project cost. Our ownership interest in this consolidated property is 53%.
(2) Estimated Net Development Costs are reported at full project cost. Our ownership interest in this consolidated property is 53%.
(2) Estimated Net Development Costs are reported at full project cost. Our ownership interest in this consolidated property is 53%.
(3) Estimated Net Development Costs for Pinecrest Place excludes the cost of land, which the Company has leased long term.
(3) Estimated Net Development Costs for Pinecrest Place excludes the cost of land, which the Company has leased long term.

The following table summarizes our completed development projects:projects (in thousands, except cost PSF):
(in thousands, except cost PSF) Nine months ended September 30, 2016
Property Name Location Completion Date 
Net Development
Costs (1)
 GLA 
Cost PSF
of GLA (1)
Belmont Chase Ashburn, VA Q1-16 $28,308
 91 $311
CityLine Market Richardson, TX Q1-16 27,861
 81 344
Village at La Floresta Brea, CA Q2-16 32,451
 87 373
Brooklyn Station on Riverside Jacksonville, FL Q3-16 14,987
 50 300
      $103,607
 309 $335
  Three months ended March 31, 2017
Property Name Location Completion Date 
Net Development
Costs (1)
 GLA 
Cost PSF
of GLA (1)
Willow Oaks Crossing
 Charlotte, NC
 Q1-17
 $13,991
 69 $203
      $13,991
 69 $203
(1) Includes leasing costs and is net of tenant reimbursements.


53





Net cash provided by (used in) financing activities:

Net cash flows provided by (used in)generated from financing activities increased by $339.6$760.0 million during 20162017 ,as follows:
 Nine months ended September 30,   Three months ended March 31,  
(in thousands) 2016 2015 Change 2017 2016 Change
Cash flows from financing activities:            
Equity issuances $549,545
 946
 548,599
 $—
 12,293
 (12,293)
Repurchase of common shares in conjunction with equity award plans (18,275) (7,984) (10,291)
Preferred stock redemption (250,000) —
 (250,000)
Distributions to limited partners in consolidated partnerships, net (3,126) (2,352) (774) (786) (1,707) 921
Dividend payments (165,075) (152,028) (13,047) (56,609) (53,853) (2,756)
Unsecured credit facilities 100,000
 140,000
 (40,000) 380,000
 —
 380,000
Proceeds from debt issuance 20,223
 251,485
 (231,262) 648,001
 —
 648,001
Debt repayment (359,260) (430,411) 71,151
 (12,789) (28,853) 16,064
Payment of loan costs (1,954) (5,996) 4,042
 (8,796) (5) (8,791)
Proceeds from sale of treasury stock, net 928
 51
 877
 76
 904
 (828)
Net cash provided by (used in) financing activities $141,281
 (198,305) 339,586
 $680,822
 $(79,205) $760,027

Significant financing activities during the ninethree months ended September 30,March 31, 2017 and 2016 and 2015 include the following:

We raised $549.5$12.3 million during 2016 through equity issuances:
◦We issuedby issuing 182,787 shares of common stock through our ATM program at an average price of $68.85 per share resulting in net proceeds of $12.3 million,
◦We settled 1.85 million shares under our forward equity offering at an average price of $74.32 per share resulting in proceeds of $137.5 million, and
◦We issued 5.0 million shares of common stock at $79.78 per share resulting in net proceeds of $400.1 million.

During 2015, we issued 18,125 shares of common stock through our ATM program at an average price of $64.72$68.85 per share resulting in net proceeds of $946,000.

During 2016, our dividend payments increased as a result of the greater number of common shares outstanding and an increase in our dividend rate.

We received proceeds of $100.0 million, upon expanding our Term Loan during 2016 to partially fund the acquisition of Market Common Clarendon, as compared to $140.0 million borrowed on the Line and Term Loan in 2015 to partially fund the repayment of the $300 million notes.

We received $20.2 million of mortgage proceeds in 2016 upon the encumbrance of one operating property. During 2015, debt issuance includes $250.0 million of new fixed rate ten-year unsecured public debt.

During 2016, we used $359.3 million to repay debt, including:
◦$313.2 million for the early redemption of our $300 million notes, including a $13.2 million make-whole premium, and
◦$46.1 million for scheduled principal payments and three mortgage repayments.

During 2015, we used $430.4 million to repay debt, including:
◦$350.0 million to redeem our notes that matured in 2015, and
◦$80.4 million for scheduled principal payments and three mortgage repayments.

We paid $2.0 million in loan closing costs during 2016, primarily to amend the Term Loan, while we paid $6.0 million during 2015 for the new fixed rate unsecured public debt and the modification to our Line.

$12.3 million.

5452





We repurchased for cash a portion of the common stock related to stock based compensation to satisfy employee federal and state tax withholding requirements. The repurchases increased $10.3 million in 2017 due to the vesting of Equity One's stock based compensation program as a result of the merger.

We redeemed all of the issued and outstanding shares of $250.0 million 6.625% Series 6 cumulative redeemable preferred stock on February 16, 2017.

As a result of the common shares issued during 2016 and an increase in our quarterly dividend rate from $0.50 per share in 2016 to $0.51 per share in February 2017, our dividend payments increased $2.8 million.

We expanded our credit facilities by increasing our Line commitment to $1.0 billion and closing on a $300.0 million term loan. The combined funding from the term loan and borrowings on the Line, net of repayments provided $380.0 million to repay a $300.0 million Equity One term loan that became due upon merger and to pay merger related transaction costs.

During January 2017, we issued $650.0 million of senior unsecured public notes in two tranches of which $300.0 million is due in 2047 and $350.0 million is due in 2027. The proceeds of $648.0 million were used to redeem all of our $250.0 million Series 6 preferred stock and to repay Equity One's $250.0 million term loan and outstanding Line balance that came due upon closing the merger.

During 2017, we paid $12.8 million to repay maturing mortgage loans or pay scheduled principal payments as compared to $28.9 million in 2016.

In connection with the new debt issued above, including expanding our Line commitment, we incurred $8.8 million of loan costs.

Investments in Real Estate Partnerships

At September 30, 2016 and December 31, 2015, we had investments in real estate partnerships of $274.9 million and $306.2 million, respectively. The following table is a summary of the unconsolidated combined assets and liabilities of these co-investment partnerships and our pro-rata share:
 Combined 
Regency's Share (1)
 Combined 
Regency's Share (1)
(dollars in thousands) September 30, 2016 December 31, 2015 September 30, 2016 December 31, 2015 March 31, 2017 December 31, 2016 March 31, 2017 December 31, 2016
Number of Co-investment Partnerships 11
 11
     13
 11
    
Regency’s Ownership  20%-50%
  20%-50%
      20%-50%
  20%-50%
    
Number of Properties 110
 118
     116
 109
    
Assets $2,537,966
 2,675,385
 $893,279
 936,066
 $2,924,922
 2,608,742
 $1,008,579
 878,977
Liabilities 1,439,484
 1,491,864
 509,233
 521,385
 1,669,116
 1,404,588
 569,004
 473,255
Equity 1,098,482
 1,183,521
 384,046
 414,681
 1,255,806
 1,204,154
 439,575
 405,722
less: Negative investment in US Regency Retail I, LLC (2)
less: Negative investment in US Regency Retail I, LLC (2)
   $8,183
 —
add: Basis difference     44,338
 1,382
add: Restricted Gain Method deferraladd: Restricted Gain Method deferral   (30,902) (30,902)
less: Impairment of investment in real estate partnerships     (1,300) (1,300)less: Impairment of investment in real estate partnerships   (1,300) (1,300)
less: Ownership percentage or Restricted Gain Method deferral     (29,603) (28,972)
less: Net book equity in excess of purchase price     (78,203) (78,203)less: Net book equity in excess of purchase price   (78,203) (78,203)
Investments in real estate partnerships     $274,940
 306,206
Investments in real estate partnerships   $381,691
 296,699
(1) Pro-rata financial information is not, and is not intended to be, a presentation in accordance with GAAP. However, management believes that providing such information is useful to investors in assessing the impact of its investments in real estate partnership activities on our operations, which includes such items on a single line presentation under the equity method in itsour consolidated financial statements.
(2) During the first quarter of 2017, the USAA partnership distributed proceeds from debt refinancing in excess of Regency's carrying value of its investment resulting in a negative investment balance, which is recorded within Accounts payable and other liabilities in the Consolidated Balance Sheets.

53





Our equity method investments in real estate partnerships consist of the following: 
(in thousands)Regency's Ownership September 30, 2016 December 31, 2015Regency's Ownership March 31, 2017 December 31, 2016
GRI - Regency, LLC (GRIR)40.00% $201,426
 220,099
40.00% $200,603
 201,240
New York Common Retirement Fund (NYC) (1)
30.00% 57,901
 —
Columbia Regency Retail Partners, LLC (Columbia I)20.00% 12,022
 15,255
20.00% 9,457
 9,687
Columbia Regency Partners II, LLC (Columbia II)20.00% 5,203
 8,496
20.00% 14,422
 14,750
Cameron Village, LLC (Cameron)30.00% 11,796
 11,857
30.00% 12,070
 11,877
RegCal, LLC (RegCal)25.00% 21,542
 17,967
25.00% 21,344
 21,516
US Regency Retail I, LLC (USAA)20.01% (409) 161
Other investments in real estate partnerships50.00% 23,360
 32,371
US Regency Retail I, LLC (USAA) (2)
20.01% —
 13,176
Other investments in real estate partnerships (1)
20.00% - 50.00% 65,894
 24,453
Total investment in real estate partnerships $274,940
 306,206
 $381,691
 296,699

(1) Includes investments in real estate partnerships acquired as part of the Equity One merger, which was effective on March 1, 2017.



55



(2) During the first quarter of 2017, the USAA partnership distributed proceeds from debt refinancing in excess of Regency's carrying value of its investment resulting in a negative investment balance, which is recorded within Accounts payable and other liabilities in the Consolidated Balance Sheets.

Notes Payable - Investments in Real Estate Partnerships

Scheduled principal repayments on notes payable held by our investments in real estate partnerships were as follows: 
(in thousands) September 30, 2016 March 31, 2017
Scheduled Principal Payments and Maturities by Year: 
Scheduled
Principal
Payments
 
Mortgage  Loan
Maturities
 
Unsecured
Maturities
 Total 
Regency’s
Pro-Rata
Share
 
Scheduled
Principal
Payments
 
Mortgage  Loan
Maturities
 
Unsecured
Maturities
 Total 
Regency’s
Pro-Rata
Share
2016 $4,305
 —
 —
 4,305
 1,593
2017 17,795
 66,885
 19,635
 104,315
 23,887
 $14,925
 —
 19,635
 34,560
 9,339
2018 18,983
 67,022
 —
 86,005
 27,799
 21,059
 67,022
 —
 88,081
 28,422
2019 18,231
 65,939
 —
 84,170
 21,766
 19,852
 73,259
 —
 93,111
 24,448
2020 15,133
 222,199
 —
 237,332
 85,660
 16,823
 222,199
 —
 239,022
 86,167
2021 10,818
 269,942
 —
 280,760
 100,402
Beyond 5 Years 21,254
 817,432
 —
 838,686
 319,488
 10,580
 819,000
 —
 829,580
 286,440
Net unamortized loan costs, debt premium / (discount) —
 (8,951) —
 (8,951) (3,320) —
 (11,489) —
 (11,489) (3,719)
Total $95,701
 1,230,526
 19,635
 1,345,862
 476,873
 $94,057
 1,439,933
 19,635
 1,553,625
 531,499
                    

At September 30, 2016,March 31, 2017, our investments in real estate partnerships had notes payable of $1.3$1.6 billion maturing through 2031,, of which 98.5%98.7% had a weighted average fixed interest rate of 4.9%4.7%. The remaining notes payable float over LIBOR and had a weighted average variable interest rate of 2.0%2.5%. These notes payable are all non-recourse, and our pro-rata share was $476.9$531.5 million as of September 30, 2016.March 31, 2017. As notes payable mature, we expect they will be repaid from proceeds from new borrowings and/or partner capital contributions. We are obligated to contribute our pro-rata share to fund maturities if they are not refinanced. We believe that our partners are financially sound and have sufficient capital or access thereto to fund future capital requirements. In the event that a co-investment partner was unable to fund its share of the capital requirements of the co-investment partnership, we would have the right, but not the obligation, to loan the defaulting partner the amount of its capital call. 

Management fee income

In addition to earning our pro-rata share of net income or loss in each of these co-investment partnerships, we receive fees, as shown below:
 Three months ended September 30, Nine months ended September 30, Three months ended March 31,
(in thousands) 2016 2015 2016 2015 2017 2016
Asset management, property management, leasing, and investment and financing services $5,821
 5,703
 18,415
 17,696
 6,539
 6,612

54







Recent Accounting Pronouncements

See note 1 to Consolidated Financial Statements.



56




Environmental Matters

We are subject to numerous environmental laws and regulations as they apply to our shopping centers pertaining to chemicals used by the dry cleaning industry, the existence of asbestos in older shopping centers, and underground petroleum storage tanks. We believe that the tenants who currently operate dry cleaning plants or gas stations do so in accordance with current laws and regulations. Generally, we use all legal means to cause tenants to remove dry cleaning plants from our shopping centers or convert them to more environmentally friendly systems. Where available, we have applied and been accepted into state-sponsored environmental programs. We have a blanket environmental insurance policy for third-party liabilities and remediation costs on shopping centers that currently have no known environmental contamination. We have also placed environmental insurance, where possible, on specific properties with known contamination, in order to mitigate our environmental risk. We monitor the shopping centers containing environmental issues and in certain cases voluntarily remediate the sites. We also have legal obligations to remediate certain sites and we are in the process of doing so.

As of September 30, 2016March 31, 2017 we and our Investments in real estate partnerships had accrued liabilities of $8.9$11.5 million for our pro-rata share of environmental remediation. We believe that the ultimate disposition of currently known environmental matters will not have a material effect on our financial position, liquidity, or results of operations; however, we can give no assurance that existing environmental studies on our shopping centers have revealed all potential environmental contaminants and liabilities; that any previous owner, occupant or tenant did not create any material environmental condition not known to us; that the current environmental condition of the shopping centers will not be affected by tenants and occupants, by the condition of nearby properties, or by unrelated third parties; or that changes in applicable environmental laws and regulations or their interpretation will not result in additional environmental liability to us.


Inflation/Deflation

Inflation has been historically low and has had a minimal impact on the operating performance of our shopping centers; however, inflation may become a greater concern in the near future. Substantially all of our long-term leases contain provisions designed to mitigate the adverse impact of inflation. Most of our leases require tenants to pay their pro-rata share of operating expenses, including common-area maintenance, real estate taxes, insurance and utilities, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation. In addition, many of our leases are for terms of less than ten years, which permits us to seek increased rents upon re-rental at market rates. However, during deflationary periods or periods of economic weakness, minimum rents and percentage rents willtypically decline as the supply of available retail space exceeds demand and consumer spending declines. Occupancy declines resulting from a weak economic period will also likely result in lower recovery rates of our operating expenses.


5755





Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes from the quantitative and qualitative disclosures about market risk disclosed in item 7A of Part II of our Form 10-K for the year ended December 31, 2015.2016.

Item 4. Controls and Procedures

Controls and Procedures (Regency Centers Corporation)

Under the supervision and with the participation of the Parent Company's management, including its chief executive officer and chief financial officer, the Parent Company conducted an evaluation of its disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based on this evaluation, the Parent Company's chief executive officer and chief financial officer concluded that its disclosure controls and procedures were effective as of the end of the period covered by this quarterly report on Form 10-Q to ensure information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Parent Company in the reports it files or submits is accumulated and communicated to management, including its chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

On March 1, 2017, we completed the Merger with Equity One, whereby Equity One merged with and into the Parent Company with the Parent Company continuing as the surviving corporation. As permitted by SEC guidance for newly acquired businesses, we excluded Equity One from our assessment of internal control over financial reporting, which represented total assets acquired of $6.7 billion (approximately 60% of Company Total assets) as of March 31, 2017. We are in the process of integrating Equity One's operations into our internal control structure. None of these integration activities are expected to have a material impact on our system of internal control over financial reporting.

There have been no changes in ourthe Parent Company's internal controls over financial reporting identified in connection with this evaluation that occurred during the thirdfirst quarter of 20162017 and that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Controls and Procedures (Regency Centers, L.P.)

Under the supervision and with the participation of the Operating Partnership's management, including the chief executive officer and chief financial officer of its general partner, the Operating Partnership conducted an evaluation of its disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and 15d-15(e) promulgated under the Exchange Act. Based on this evaluation, the chief executive officer and chief financial officer of its general partner concluded that its disclosure controls and procedures were effective as of the end of the period covered by this quarterly report on Form 10-Q to ensure information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Operating Partnership in the reports it files or submits is accumulated and communicated to management, including the chief executive officer and chief financial officer of its general partner, as appropriate, to allow timely decisions regarding required disclosure.

On March 1, 2017, we completed the Merger with Equity One, whereby Equity One merged with and into the Parent Company with the Parent Company continuing as the surviving corporation. As permitted by SEC guidance for newly acquired businesses, we excluded Equity One from our assessment of internal control over financial reporting, which represented total assets of $6.7 billion (approximately 60% of Company Total assets) as of March 31, 2017. We are in the process of integrating Equity One's operations into our internal control structure. None of these integration activities are expected to have a material impact on our system of internal control over financial reporting.

There have been no changes in ourthe Operating Partnership's internal controls over financial reporting identified in connection with this evaluation that occurred during the thirdfirst quarter of 20162017 and that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.


5856




PART II - OTHER INFORMATION

Item 1.    Legal Proceedings

We are a party to various legal proceedings whichthat arise in the ordinary course of our business. We are not currently involved in any litigation nor to our knowledge, is any litigation threatened against us, the outcome of which would, in our judgment based on information currently available to us, have a material adverse effect on our financial position or results of operations.

After the announcement of the merger agreement on November 14, 2016, a putative class action was filed on behalf of a purported stockholder in the Circuit Court for Duval County, Florida, under the following caption: Robert Garfield on Behalf of Himself and All Others Similarly Situated vs. Regency Centers Corporation, Martin E. Stein, Jr., John C. Schweitzer, Raymond L. Bank, Bryce Blair, C. Ronald Blankenship, J. Dix Druce, Jr., Mary Lou Fiala, David P. O'Connor, and Thomas G. Wattles, No. 16-2017-CA-000688-XXXX-MA, filed February 3, 2017.

The class action alleged, among other matters, that the definitive joint proxy statement/prospectus filed by Regency and Equity One with the Securities and Exchange Commission (the “SEC”) on January 24, 2017 (the “Joint Proxy Statement/Prospectus”) omitted certain material information in connection with the Merger. The complainant sought various remedies, including injunctive relief to prevent the consummation of the Merger unless certain allegedly material information was disclosed and sought compensatory and rescissory damages in the event the Merger was consummated without such disclosures.

On February 17, 2017, the defendants entered into a stipulation of settlement with respect to the class action, pursuant to which the parties agreed, among other things, that Regency would make certain supplemental disclosures. The supplemental disclosures were made by Regency in the Current Report on Form 8-K filed by Regency with the SEC on February 17, 2017. The supplemental disclosures should be read in conjunction with the Joint Proxy Statement/Prospectus, which should be read in its entirety.


Item 1A. Risk Factors

There have been no material changes from the risk factors disclosed in item 1A. of Part I of our Form 10-K for the year ended December 31, 2015.2016.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

There were no unregistered sales of equity securities during the quarter ended September 30, 2016.March 31, 2017.  

There were noThe following table represents information with respect to purchases by the Parent Company of its common stock during the months in the three month period ended September 30, 2016.March 31, 2017.

Period
Total number of shares purchased (1)
Average price paid per shareTotal number of shares purchased as part of publicly announced plans or programsMaximum number or approximate dollar value of shares that may yet be purchased under the plans or programs
January 1 through January 31, 2017—
—
—
—
February 1 through February 28, 2017137,305
69.76
—
—
March 1 through March 31, 2017127,147
68.39
—
—

(1) Represents shares repurchased to cover payment of withholding taxes in connection with restricted stock vesting by participants under Regency's Long-Term Omnibus Plan.

Item 3.    Defaults Upon Senior Securities
    
None.


57




Item 4.    Mine Safety Disclosures
    
None.

Item 5.    Other Information
None.

5958




Item 6. Exhibits

In reviewing any agreements included as exhibits to this report, please remember they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company, its subsidiaries or other parties to the agreements. Each agreement contains representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:
should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;
may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. We acknowledge that, notwithstanding the inclusion of the foregoing cautionary statements, we are responsible for considering whether additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this report not misleading. Additional information about the Company may be found elsewhere in this report and the Company's other public files, which are available without charge through the SEC's website at http://www.sec.gov. Unless otherwise indicated below, the Commission file number to the exhibit is No. 001-12298.
Ex #    Description
10.    Material Contracts (~ indicates management contract or compensatory plan)
~10.1    2017 Amended and Restated Severance and Change in Control Agreement
31.    Rule 13a-14(a)/15d-14(a) Certifications.
31.1    Rule 13a-14 Certification of Chief Executive Officer for Regency Centers Corporation.
31.2    Rule 13a-14 Certification of Chief Financial Officer for Regency Centers Corporation.
31.3    Rule 13a-14 Certification of Chief Executive Officer for Regency Centers, L.P.
31.4    Rule 13a-14 Certification of Chief Financial Officer for Regency Centers, L.P.
32.    Section 1350 Certifications.
32.1*    18 U.S.C. § 1350 Certification of Chief Executive Officer for Regency Centers Corporation.
32.2*    18 U.S.C. § 1350 Certification of Chief Financial Officer for Regency Centers Corporation.
32.3*    18 U.S.C. § 1350 Certification of Chief Executive Officer for Regency Centers, L.P.
32.4*    18 U.S.C. § 1350 Certification of Chief Financial Officer for Regency Centers, L.P.
101.    Interactive Data Files
101.INS        XBRL Instance Document
101.SCH    XBRL Taxonomy Extension Schema Document
101.CAL    XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF    XBRL Taxonomy Definition Linkbase Document
101.LAB    XBRL Taxonomy Extension Label Linkbase Document

59




101.PRE        XBRL Taxonomy Extension Presentation Linkbase Document
__________________________
*Furnished, not filed.

60





SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
November 4, 2016May 10, 2017REGENCY CENTERS CORPORATION
 By:

/s/ Lisa Palmer
Lisa Palmer, President and Chief Financial Officer (Principal Financial Officer)
   
 By:

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



November 4, 2016May 10, 2017REGENCY CENTERS, L.P.
 By:Regency Centers Corporation, General Partner
 By:

/s/ Lisa Palmer
Lisa Palmer, President and Chief Financial Officer (Principal Financial Officer)
   
 By:

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

61