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, 2018March 31, 2019
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)
regencylogocolora12.jpg
59-3191743
DELAWARE (REGENCY CENTERS, L.P)59-3429602
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
  
One Independent Drive, Suite 114
Jacksonville, Florida 32202
(904) 598-7000
(Address of principal executive offices) (zip code)(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Regency Centers Corporation
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $.01 par valueREGThe Nasdaq Stock Market LLC
Regency Centers, L.P.
Title of each classTrading SymbolName of each exchange on which registered
NoneN/AN/A



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Regency Centers Corporation              YES  x    NO  o                     Regency Centers, L.P.              YES  x    NO  o

Indicate by check mark whether the registrant has submitted electronically, and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Regency Centers Corporation              YES  x    NO  o                     Regency Centers, L.P.              YES  x    NO  o


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Regency Centers Corporation:
Large accelerated 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  o                    Regency Centers, L.P.              YES  o    NO  o

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

The number of shares outstanding of the Regency Centers Corporation’s common stock was 169,443,126167,518,691 as of October 31, 2018.May 9, 2019.
 



EXPLANATORY NOTE
This report combines the quarterly reports on Form 10-Q for the quarter ended September 30, 2018,March 31, 2019, of Regency Centers Corporation and Regency Centers, L.P. Unless stated otherwise or the context otherwise requires, references to “Regency Centers Corporation” or the “Parent Company” mean Regency Centers Corporation and its controlled subsidiaries; and references to “Regency Centers, L.P.” or the “Operating Partnership” mean Regency Centers, L.P. and its controlled subsidiaries. The term “the Company”,"Regency Centers" or “Regency” means the Parent Company and the Operating Partnership, collectively.
The Parent Company is a real estate investment trust (“REIT”) and the general partner of the Operating Partnership. The Operating Partnership's capital includes general and limited common Partnership Units (“Units”). As of September 30, 2018,March 31, 2019, the Parent Company owned approximately 99.8% of the Units in the Operating Partnership. The remaining limited Units are owned by investors. As the sole general partner of the Operating Partnership, the Parent Company has exclusive control of the Operating Partnership's day-to-day management.
The Company believes combining the quarterly reports on Form 10-Q of the Parent Company and the Operating Partnership into this single report provides the following benefits:
Enhances investors' understanding of the Parent Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;
Eliminates duplicative disclosure and provides a more streamlined and readable presentation; and
Creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.
Management operates the Parent Company and the Operating Partnership as one business. The management of the Parent Company consists of the same individuals as the management of the Operating Partnership. These individuals are officers of the Parent Company and employees of the Operating Partnership.
The Company believes it is important to understand the key differences between the Parent Company and the Operating Partnership in the context of how the Parent Company and the Operating Partnership operate as a consolidated company. The Parent Company is a REIT, whose only material asset is its ownership of partnership interests of the Operating Partnership. As a result, the Parent Company does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public equity from time to time and guaranteeing certain debt of the Operating Partnership. Except for 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 hold any indebtedness, but guarantees all of the unsecured debt of the Operating Partnership. The Operating Partnership is also the co-issuer and guarantees the $500 million of debt of the Parent Company assumed in the Equity One merger.Company. The Operating Partnership holds all the assets of the Company and retains the ownership interests in the Company's joint ventures. Except for net proceeds from public equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generates all remaining capital required by the Company's business. These sources include the Operating Partnership's operations, its direct or indirect incurrence of indebtedness, and the issuance of partnership units.
Stockholders' equity, partners' capital, and noncontrolling interests are the main areas of difference between the consolidated financial statements of the Parent Company and those of the Operating Partnership. The Operating Partnership's capital includes general and limited common Partnership Units. The limited partners' units in the Operating Partnership owned by third parties are accounted for in partners' capital in the Operating Partnership's financial statements and outside of stockholders' equity in noncontrolling interests in the Parent Company's financial statements.
In order to highlight the differences between the Parent Company and the Operating Partnership, there are sections in this report that separately discuss the Parent Company and the Operating Partnership, including separate financial statements, controls and procedures sections, and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure for the Parent Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company.
As general partner with control of the Operating Partnership, the Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have assets other than its investment in the Operating Partnership. Therefore, while stockholders' equity and partners' capital differ as discussed above, the assets and liabilities of the Parent Company and the Operating Partnership are the same on their respective financial statements.



TABLE OF CONTENTS
  
Form 10-Q
Report Page
   
PART I - FINANCIAL INFORMATION 
   
Item 1.Financial Statements (Unaudited) 
   
Regency Centers Corporation: 
   
 Consolidated Balance Sheets as of September 30, 2018March 31, 2019 and December 31, 20172018
1
   
 Consolidated Statements of Operations for the periods ended September 30,March 31, 2019 and 2018 and 2017
2
   
 Consolidated Statements of Comprehensive Income for the periods ended September 30,March 31, 2019 and 2018 and 2017
3
   
 Consolidated Statements of Equity for the periods ended September 30,March 31, 2019 and 2018 and 2017
4
   
 Consolidated Statements of Cash Flows for the periods ended September 30,March 31, 2019 and 2018 and 2017
5
   
Regency Centers, L.P.: 
   
 Consolidated Balance Sheets as of September 30, 2018March 31, 2019 and December 31, 20172018
7
   
 Consolidated Statements of Operations for the periods ended September 30,March 31, 2019 and 2018 and 2017
8
   
 Consolidated Statements of Comprehensive Income for the periods ended September 30,March 31, 2019 and 2018 and 2017
9
   
 Consolidated Statements of Capital for the periods ended September 30,March 31, 2019 and 2018 and 2017
10
   
 Consolidated Statements of Cash Flows for the periods ended September 30,March 31, 2019 and 2018 and 2017
11
   
 Notes to Consolidated Financial Statements
13
   
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
3533
   
Item 3.Quantitative and Qualitative Disclosures about Market Risk
5954
   
Item 4.Controls and Procedures
5954
   
PART II - OTHER INFORMATION 
   
Item 1.Legal Proceedings
6055
   
Item 1A.Risk Factors
6055
   
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
6055
   
Item 3.Defaults Upon Senior Securities
6155
   
Item 4.Mine Safety Disclosures
6156
   
Item 5.Other Information
6156
   
Item 6.Exhibits
6156
   
SIGNATURES
6358
   
   




PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

REGENCY CENTERS CORPORATION
Consolidated Balance Sheets
September 30, 2018March 31, 2019 and December 31, 20172018
(in thousands, except share data)
 2018 2017 2019 2018
Assets (unaudited)   (unaudited)  
Real estate investments at cost:    
Land, building and improvements$10,854,283
 10,578,430
Properties in development 36,707
 314,391
 10,890,990
 10,892,821
Real estate assets, at cost$10,875,058
 10,863,162
Less: accumulated depreciation 1,474,769
 1,339,771
 1,605,681
 1,535,444
 9,416,221
 9,553,050
Real estate investments, net 9,269,377
 9,327,718
Investments in real estate partnerships 458,051
 386,304
 456,733
 463,001
Net real estate investments 9,874,272
 9,939,354
Properties held for sale 51,892
 —
 15,275
 60,516
Cash and cash equivalents 40,365
 45,370
Restricted cash 4,121
 4,011
Tenant and other receivables, net of uncollectible reserves of $14,332 and $12,728 at September 30, 2018 and December 31, 2017, respectively 160,709
 170,985
Deferred leasing costs, less accumulated amortization of $98,829 and $93,291 at September 30, 2018 and December 31, 2017, respectively 85,292
 80,044
Acquired lease intangible assets, less accumulated amortization of $206,378 and $148,280 at September 30, 2018 and December 31, 2017, respectively 412,653
 478,826
Cash, cash equivalents and restricted cash (including $3,305 and $2,658 of restricted cash at March 31, 2019 and December 31, 2018, respectively) 42,784
 45,190
Tenant and other receivables 160,635
 172,359
Deferred leasing costs, less accumulated amortization of $102,141 and $101,093 at March 31, 2019 and December 31, 2018, respectively 82,477
 84,983
Acquired lease intangible assets, less accumulated amortization of $225,693 and $219,689 at March 31, 2019 and December 31, 2018, respectively 280,613
 387,069
Right of use assets, net 296,859
 —
Other assets 427,726
 427,127
 412,851
 403,827
Total assets$11,057,030
 11,145,717
$11,017,604
 10,944,663
Liabilities and Equity        
Liabilities:        
Notes payable$3,008,592
 2,971,715
$3,009,886
 3,006,478
Unsecured credit facilities 708,616
 623,262
 673,852
 708,734
Accounts payable and other liabilities 236,250
 234,272
 183,983
 224,807
Acquired lease intangible liabilities, less accumulated amortization of $84,435 and $56,550 at September 30, 2018 and December 31, 2017, respectively 507,341
 537,401
Acquired lease intangible liabilities, less accumulated amortization of $99,163 and $92,746 at March 31, 2019 and December 31, 2018, respectively 475,065
 496,726
Lease liabilities 225,122
 —
Tenants’ security, escrow deposits and prepaid rent 43,988
 46,013
 46,923
 57,750
Total liabilities 4,504,787
 4,412,663
 4,614,831
 4,494,495
Commitments and contingencies —
 —
 —
 —
Equity:        
Stockholders’ equity:        
Common stock, $0.01 par value per share, 220,000,000 shares authorized; 169,441,714 and 171,364,908 shares issued at September 30, 2018 and December 31, 2017, respectively 1,694
 1,714
Treasury stock at cost, 385,652 and 366,628 shares held at September 30, 2018 and December 31, 2017, respectively (19,550) (18,307)
Additional paid in capital 7,756,215
 7,873,104
Accumulated other comprehensive income (loss) 14,066
 (6,289)
Common stock, $0.01 par value per share, 220,000,000 shares authorized; 167,517,243 and 167,904,593 shares issued at March 31, 2019 and December 31, 2018, respectively 1,675
 1,679
Treasury stock at cost, 410,963 and 390,163 shares held at March 31, 2019 and December 31, 2018, respectively (21,226) (19,834)
Additional paid-in-capital 7,639,353
 7,672,517
Accumulated other comprehensive loss (6,096) (927)
Distributions in excess of net income (1,240,331) (1,158,170) (1,263,011) (1,255,465)
Total stockholders’ equity 6,512,094
 6,692,052
 6,350,695
 6,397,970
Noncontrolling interests:        
Exchangeable operating partnership units, aggregate redemption value of $22,628 and $24,206 at September 30, 2018 and December 31, 2017, respectively 10,726
 10,907
Exchangeable operating partnership units, aggregate redemption value of $23,615 and $20,532 at March 31, 2019 and December 31, 2018, respectively 10,641
 10,666
Limited partners’ interests in consolidated partnerships 29,423
 30,095
 41,437
 41,532
Total noncontrolling interests 40,149
 41,002
 52,078
 52,198
Total equity 6,552,243
 6,733,054
 6,402,773
 6,450,168
Total liabilities and equity$11,057,030
 11,145,717
$11,017,604
 10,944,663
See accompanying notes to consolidated financial statements.

1




REGENCY CENTERS CORPORATION
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
 Three months ended September 30, Nine months ended September 30, Three months ended March 31,
 2018 2017 2018 2017 2019 2018
Revenues:            
Minimum rent$204,005
 195,393
$614,224
 532,625
Percentage rent 1,224
 1,147
 6,292
 5,509
Recoveries from tenants and other income 66,127
 59,554
 194,900
 162,089
Lease income$277,303
 267,510
Other property income 1,982
 2,025
Management, transaction, and other fees 6,954
 6,047
 20,999
 19,353
 6,972
 7,158
Total revenues 278,310
 262,141
 836,415
 719,576
 286,257
 276,693
Operating expenses:            
Depreciation and amortization 89,183
 91,474
 266,812
 243,757
 97,194
 88,525
Operating and maintenance 40,557
 38,020
 124,924
 103,888
 40,638
 42,516
General and administrative 17,564
 15,199
 51,947
 49,618
 21,300
 17,606
Real estate taxes 35,129
 29,315
 97,096
 79,636
 34,155
 30,425
Other operating expenses (note 2) 2,045
 3,195
 6,476
 81,621
Other operating expenses 1,134
 1,632
Total operating expenses 184,478
 177,203
 547,255
 558,520
 194,421
 180,704
Other expense (income):            
Interest expense, net 36,618
 34,679
 111,477
 97,285
 37,752
 36,785
Provision for impairment, net of tax 855
 —
 29,443
 —
 1,672
 16,054
Gain on sale of real estate, net of tax (16,490) (96)
Early extinguishment of debt —
 —
 11,172
 12,404
 10,591
 162
Net investment (income) loss, including unrealized (gains) losses of ($484) and ($400), and ($842) and ($1,705) for the three and nine months ended September 30, 2018 and 2017, respectively (923) (971) (1,524) (2,955)
Net investment income (2,354) (32)
Total other expense (income) 36,550
 33,708
 150,568
 106,734
 31,171
 52,873
Income from operations before equity in income of investments in real estate partnerships 57,282
 51,230
 138,592
 54,322
 60,665
 43,116
Equity in income of investments in real estate partnerships 10,024
 12,221
 29,548
 33,804
 30,828
 10,349
Income from operations 67,306
 63,451
 168,140
 88,126
Gain on sale of real estate, net of tax 3,228
 131
 4,448
 4,913
Net income 70,534
 63,582
 172,588
 93,039
 91,493
 53,465
Noncontrolling interests:            
Exchangeable operating partnership units (147) (132) (358) (217) (190) (111)
Limited partners’ interests in consolidated partnerships (665) (637) (2,008) (1,884) (857) (694)
Income attributable to noncontrolling interests (812) (769) (2,366) (2,101) (1,047) (805)
Net income attributable to the Company 69,722
 62,813
 170,222
 90,938
Preferred stock dividends and issuance costs —
 (3,147) —
 (16,128)
Net income attributable to common stockholders$69,722
 59,666
$170,222
 74,810
$90,446
 52,660

            
Income per common share - basic$0.41
 0.35
$1.00
 0.48
$0.54
 0.31
Income per common share - diluted$0.41
 0.35
$1.00
 0.48
$0.54
 0.31
See accompanying notes to consolidated financial statements.

2



REGENCY CENTERS CORPORATION
Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
 Three months ended September 30, Nine months ended September 30, Three months ended March 31,
 2018 2017 2018 2017 2019 2018
Net income$70,534
 63,582
$172,588
 93,039
$91,493
 53,465
Other comprehensive income (loss):        
Other comprehensive (loss) income:    
Effective portion of change in fair value of derivative instruments:            
Effective portion of change in fair value of derivative instruments 2,717
 (39) 16,511
 (3,911) (5,489) 9,505
Reclassification adjustment of derivative instruments included in net income 1,148
 2,329
 4,701
 8,054
 (176) 2,138
Unrealized gain (loss) on available-for-sale debt securities 24
 8
 (51) 51
 137
 (119)
Other comprehensive income 3,889
 2,298
 21,161
 4,194
Other comprehensive (loss) income (5,528) 11,524
Comprehensive income 74,423
 65,880
 193,749
 97,233
 85,965
 64,989
Less: comprehensive income attributable to noncontrolling interests:            
Net income attributable to noncontrolling interests 812
 769
 2,366
 2,101
 1,047
 805
Other comprehensive income (loss) attributable to noncontrolling interests 140
 5
 818
 (11)
Other comprehensive (loss) income attributable to noncontrolling interests (359) 483
Comprehensive income attributable to noncontrolling interests 952
 774
 3,184
 2,090
 688
 1,288
Comprehensive income attributable to the Company$73,471
 65,106
$190,565
 95,143
$85,277
 63,701
See accompanying notes to consolidated financial statements.

3




REGENCY CENTERS CORPORATION
Consolidated Statements of Equity
For the nine months ended September 30, 2018 and 2017
(in thousands, except per share data)
(unaudited)
REGENCY CENTERS CORPORATION
Consolidated Statements of Equity
For the three months ended March 31, 2019 and 2018
(in thousands, except per share data)
(unaudited)
REGENCY CENTERS CORPORATION
Consolidated Statements of Equity
For the three months ended March 31, 2019 and 2018
(in thousands, except per share data)
(unaudited)
               Noncontrolling Interests               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, 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 income —
 —
 —
 —
 —
 90,938
 90,938
 217
 1,884
 2,101
 93,039
Other comprehensive income (loss) —
 —
 —
 —
 4,205
 —
 4,205
 6
 (17) (11) 4,194
Deferred compensation plan, net —
 —
 (986) 977
 —
 —
 (9) —
 —
 —
 (9)
Restricted stock issued, net of amortization —
 2
 —
 10,918
 —
 —
 10,920
 —
 —
 —
 10,920
Common stock redeemed for taxes withheld for stock based compensation, net —
 (1) —
 (18,431) —
 —
 (18,432) —
 —
 —
 (18,432)
Common stock issued under dividend reinvestment plan —
 —
 —
 908
 —
 —
 908
 —
 —
 —
 908
Common stock issued, net of issuance costs —
 654
 —
 4,470,759
 —
 —
 4,471,413
 —
 —
 —
 4,471,413
Restricted stock issued upon Equity One merger —
 1
 —
 7,950
 —
 —
 7,951
 —
 —
 —
 7,951
Redemption of preferred stock (325,000) —
 —
 11,099
 —
 (11,099) (325,000) —
 —
 —
 (325,000)
Contributions from partners —
 —
 —
 —
 —
 —
 —
 13,100
 367
 13,467
 13,467
Distributions to partners —
 —
 —
 —
 —
 —
 —
 —
 (7,086) (7,086) (7,086)
Cash dividends declared:                      
Preferred stock —
 —
 —
 —
 —
 (5,029) (5,029) —
 —
 —
 (5,029)
Common stock/unit ($1.57 per share) —
 —
 —
 —
 —
 (233,704) (233,704) (450) —
 (450) (234,154)
Balance at September 30, 2017 $—
 1,701
 (18,048) 7,779,103
 (14,141) (1,153,153) 6,595,462
 10,906
 30,316
 41,222
 6,636,684
                       
Common
Stock
 
Treasury
Stock
 
Additional
Paid In
Capital
 
Accumulated
Other
Comprehensive Income (Loss)
 
Distributions
in Excess of
Net Income
 
Total
Stockholders’
Equity
 
Exchangeable
Operating
Partnership
Units
 
Limited
Partners’
Interest  in
Consolidated
Partnerships
 
Total
Noncontrolling
Interests
 
Total
Equity
Balance at December 31, 2017 $—
 1,714
 (18,307) 7,873,104
 (6,289) (1,158,170) 6,692,052
 10,907
 30,095
 41,002
 6,733,054
 $1,714
 (18,307) 7,873,104
 (6,289) (1,158,170) 6,692,052
 10,907
 30,095
 41,002
 6,733,054
Adjustment due to change in accounting policy (note 1) —
 —
 —
 —
 12
 30,889
 30,901
 —
 2
 2
 30,903
 —
 —
 —
 12
 30,889
 30,901
 —
 2
 2
 30,903
Adjusted balance at January 1, 2018 —
 1,714
 (18,307) 7,873,104
 (6,277) (1,127,281) 6,722,953
 10,907
 30,097
 41,004
 6,763,957
 1,714
 (18,307) 7,873,104
 (6,277) (1,127,281) 6,722,953
 10,907
 30,097
 41,004
 6,763,957
Net income —
 —
 —
 —
 —
 170,222
 170,222
 358
 2,008
 2,366
 172,588
 —
 —
 —
 —
 52,660
 52,660
 111
 694
 805
 53,465
Other comprehensive income —
 —
 —
 —
 20,343
 —
 20,343
 43
 775
 818
 21,161
Other comprehensive income (loss) —
 —
 —
 11,041
 —
 11,041
 23
 460
 483
 11,524
Deferred compensation plan, net —
 —
 (1,243) 1,229
 —
 —
 (14) —
 —
 —
 (14) —
 (449) 446
 —
 —
 (3) —
 —
 —
 (3)
Restricted stock issued, net of amortization —
 1
 —
 12,307
 —
 —
 12,308
 —
 —
 —
 12,308
 1
 —
 4,120
 —
 —
 4,121
 —
 —
 —
 4,121
Common stock redeemed for taxes withheld for stock based compensation, net —
 —
 —
 (6,463) —
 —
 (6,463) —
 —
 —
 (6,463) —
 —
 (6,643) —
 —
 (6,643) —
 —
 —
 (6,643)
Common stock repurchased and retired —
 (21) —
 (124,968) —
 —
 (124,989) —
 —
 —
 (124,989) (21) —
 (124,968) —
 —
 (124,989) —
 —
 —
 (124,989)
Common stock issued under dividend reinvestment plan —
 —
 —
 996
 —
 —
 996
 —
 —
 —
 996
 —
 —
 358
 —
 —
 358
 —
 —
 —
 358
Common stock issued, net of issuance costs —
 —
 —
 10
 —
 —
 10
 —
 —
 —
 10
 —
 —
 10
 —
 —
 10
 —
 —
 —
 10
Distributions to partners —
 —
 —
 —
 —
 —
 —
 —
 (3,457) (3,457) (3,457) —
 —
 —
 —
 —
 —
 —
 (1,018) (1,018) (1,018)
Cash dividends declared:                                          
Common stock/unit ($1.665 per share) —
 —
 —
 —
 —
 (283,272) (283,272) (582) —
 (582) (283,854)
Balance at September 30, 2018 $—
 1,694
 (19,550) 7,756,215
 14,066
 (1,240,331) 6,512,094
 10,726
 29,423
 40,149
 6,552,243
Common stock/unit ($0.555 per share) —
 —
 —
 —
 (95,207) (95,207) (194) —
 (194) (95,401)
Balance at March 31, 2018 1,694
 (18,756) 7,746,427
 4,764
 (1,169,828) 6,564,301
 10,847
 30,233
 41,080
 6,605,381
                    
Balance at December 31, 2018 1,679
 (19,834) 7,672,517
 (927) (1,255,465) 6,397,970
 10,666
 41,532
 52,198
 6,450,168
Net income —
 —
 —
 —
 90,446
 90,446
 190
 857
 1,047
 91,493
Other comprehensive income —
 —
 —
 (5,169) —
 (5,169) (11) (348) (359) (5,528)
Deferred compensation plan, net —
 (1,392) 1,392
 —
 —
 —
 —
 —
 —
 —
Restricted stock issued, net of amortization 2
 —
 3,950
 —
 —
 3,952
 —
 —
 —
 3,952
Common stock redeemed for taxes withheld for stock based compensation, net —
 —
 (6,051) —
 —
 (6,051) —
 —
 —
 (6,051)
Common stock repurchased and retired (6) —
 (32,772) —
 —
 (32,778) —
 —
 —
 (32,778)
Common stock issued under dividend reinvestment plan —
 —
 383
 —
 —
 383
 —
 —
 —
 383
Contributions from partners —
 —
 —
 —
 —
 —
 —
 895
 895
 895
Distributions to partners —
 —
 —
 —
 —
 —
 —
 (1,565) (1,565) (1,565)
Reallocation of limited partner's interest —
 —
 (66) —
 —
 (66) —
 66
 66
 —
Cash dividends declared:                    
Common stock/unit ($0.585 per share) —
 —
 —
 —
 (97,992) (97,992) (204) —
 (204) (98,196)
Balance at March 31, 2019 1,675
 (21,226) 7,639,353
 (6,096) (1,263,011) 6,350,695
 10,641
 41,437
 52,078
 6,402,773
See accompanying notes to consolidated financial statements.

4




REGENCY CENTERS CORPORATION
Consolidated Statements of Cash Flows
For the ninethree months ended September 30,March 31, 2019 and 2018 and 2017
(in thousands)
(unaudited)
 2018 2017 2019 2018
Cash flows from operating activities:        
Net income$172,588
 93,039
$91,493
 53,465
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization 266,812
 243,757
 97,194
 88,525
Amortization of deferred loan costs and debt premiums 7,599
 7,144
 2,921
 2,471
(Accretion) and amortization of above and below market lease intangibles, net (26,031) (18,784) (13,090) (8,181)
Stock-based compensation, net of capitalization 10,012
 16,836
 3,475
 3,397
Equity in income of investments in real estate partnerships (29,548) (33,804) (30,828) (10,349)
Gain on sale of real estate, net of tax (4,448) (4,913) (16,490) (96)
Provision for impairment, net of tax 29,443
 —
 1,672
 16,054
Early extinguishment of debt 11,172
 12,404
 10,591
 162
Distribution of earnings from operations of investments in real estate partnerships 40,366
 40,817
 14,417
 13,319
Loss on derivative instruments —
 51
Settlement of derivative instruments (5,719) —
Deferred compensation expense 1,475
 2,885
 2,314
 40
Realized and unrealized gain on investments (1,524) (2,878) (2,354) (30)
Changes in assets and liabilities:        
Tenant and other receivables, net (13,326) (11,327)
Tenant and other receivables 9,050
 4,296
Deferred leasing costs (6,259) (10,294) (2,491) (1,189)
Other assets (6,565) 8,075
 (11,212) (476)
Accounts payable and other liabilities 15,100
 4,908
 (8,908) (13,793)
Tenants’ security, escrow deposits and prepaid rent (2,111) (2,490) (10,671) 2,253
Net cash provided by operating activities 464,755
 345,426
 131,364
 149,868
Cash flows from investing activities:        
Acquisition of operating real estate (85,766) (2,109) (15,722) (20,071)
Advance deposits paid on acquisition of operating real estate (150) (350) (1,250) —
Acquisition of Equity One, net of cash and restricted cash acquired of $74,507 —
 (646,790)
Real estate development and capital improvements (174,145) (240,827) (39,929) (51,968)
Proceeds from sale of real estate investments 151,142
 13,323
 82,533
 3,227
Proceeds from (issuance of) notes receivable 15,648
 (3,460)
Issuance of notes receivable —
 (462)
Investments in real estate partnerships (58,372) (12,296) (19,587) (39,330)
Distributions received from investments in real estate partnerships 5,488
 36,603
 41,587
 2,328
Dividends on investment securities 281
 200
 116
 71
Acquisition of investment securities (16,946) (14,011) (5,359) (7,543)
Proceeds from sale of investment securities 15,639
 11,974
 4,612
 6,542
Net cash used in investing activities (147,181) (857,743)
Net cash provided by (used in) investing activities 47,001
 (107,206)
Cash flows from financing activities:        
Repurchase of common shares in conjunction with equity award plans (6,772) (19,251) (6,148) (6,755)
Common shares repurchased through share repurchase program (124,989) —
 (32,778) (124,989)
Proceeds from sale of treasury stock 99
 100
 8
 99
Redemption of preferred stock and partnership units —
 (325,000)
Distributions to limited partners in consolidated partnerships, net (3,457) (7,031) (1,485) (1,018)
Distributions to exchangeable operating partnership unit holders (582) (450) (204) (194)
Dividends paid to common stockholders (282,276) (232,796) (97,608) (94,849)
Dividends paid to preferred stockholders —
 (5,029)
Repayment of fixed rate unsecured notes (150,000) —
 (250,000) —
Proceeds from issuance of fixed rate unsecured notes, net 299,511
 953,115
 298,983
 299,511
Proceeds from unsecured credit facilities 455,000
 950,000
 110,000
 185,000
Repayment of unsecured credit facilities (370,000) (650,000) (145,000) (245,000)
Proceeds from notes payable 1,740
 126,999
 —
 1,740
Repayment of notes payable (113,037) (232,839) (40,315) —
Scheduled principal payments (7,767) (7,452) (2,235) (2,773)
Payment of loan costs (9,448) (12,868) (3,342) (9,179)
Early redemption costs (10,491) (12,419) (10,647) —
Net cash (used in) provided by financing activities (322,469) 525,079
 (180,771) 1,593
Net (decrease) increase in cash and cash equivalents and restricted cash (4,895) 12,762
 (2,406) 44,255
Cash and cash equivalents and restricted cash at beginning of the period 49,381
 17,879
 45,190
 49,381
Cash and cash equivalents and restricted cash at end of the period$44,486
 30,641
$42,784
 93,636

5




REGENCY CENTERS CORPORATION
Consolidated Statements of Cash Flows
For the nine months ended September 30, 2018, and 2017
(in thousands)
(unaudited)
 2018 2017
Supplemental disclosure of cash flow information:        
Cash paid for interest (net of capitalized interest of $5,820 and $5,778 in 2018 and 2017, respectively)$104,210
 73,273
Cash paid for interest (net of capitalized interest of $1,015 and $2,179 in 2019 and 2018, respectively)$42,421
 30,467
Cash paid (received) for income taxes, net$4,771
 (670)$15
 (407)
Supplemental disclosure of non-cash transactions:        
Exchangeable operating partnership units issued for acquisition of real estate$—
 13,100
Mortgage loans assumed for the acquisition of real estate$9,700
 —
$—
 9,700
Change in accrued capital expenditures$10,494
 —
Common stock issued under dividend reinvestment plan$996
 908
$383
 358
Stock-based compensation capitalized$2,606
 2,459
$573
 837
Contributions from limited partners in consolidated partnerships, net$—
 311
$881
 —
Common stock issued for dividend reinvestment in trust$627
 557
$238
 205
Contribution of stock awards into trust$1,244
 1,372
$1,328
 637
Distribution of stock held in trust$524
 677
$167
 317
Change in fair value of debt securities available-for-sale$5
 51
$174
 (128)
Equity One Merger:    
Notes payable assumed in Equity One merger, at fair value$—
 757,399
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, 2018March 31, 2019 and December 31, 20172018
(in thousands, except unit data)
 2018 2017 2019 2018
Assets (unaudited)   (unaudited)  
Real estate investments at cost:    
Land, building and improvements$10,854,283
 10,578,430
Properties in development 36,707
 314,391
 10,890,990
 10,892,821
Real estate assets, at cost$10,875,058
 10,863,162
Less: accumulated depreciation 1,474,769
 1,339,771
 1,605,681
 1,535,444
 9,416,221
 9,553,050
Real estate investments, net 9,269,377
 9,327,718
Investments in real estate partnerships 458,051
 386,304
 456,733
 463,001
Net real estate investments 9,874,272
 9,939,354
Properties held for sale 51,892
 —
 15,275
 60,516
Cash and cash equivalents 40,365
 45,370
Restricted cash 4,121
 4,011
Tenant and other receivables, net of uncollectible reserves of $14,332 and $12,728 at September 30, 2018 and December 31, 2017, respectively 160,709
 170,985
Deferred leasing costs, less accumulated amortization of $98,829 and $93,291 at September 30, 2018 and December 31, 2017, respectively 85,292
 80,044
Acquired lease intangible assets, less accumulated amortization of $206,378 and $148,280 at September 30, 2018 and December 31, 2017, respectively 412,653
 478,826
Cash, cash equivalents and restricted cash (including $3,305 and $2,658 of restricted cash at March 31, 2019 and December 31, 2018, respectively) 42,784
 45,190
Tenant and other receivables 160,635
 172,359
Deferred leasing costs, less accumulated amortization of $102,141 and $101,093 at March 31, 2019 and December 31, 2018, respectively 82,477
 84,983
Acquired lease intangible assets, less accumulated amortization of $225,693 and $219,689 at March 31, 2019 and December 31, 2018, respectively 280,613
 387,069
Right of use assets, net 296,859
 —
Other assets 427,726
 427,127
 412,851
 403,827
Total assets$11,057,030
 11,145,717
$11,017,604
 10,944,663
Liabilities and Capital        
Liabilities:        
Notes payable$3,008,592
 2,971,715
$3,009,886
 3,006,478
Unsecured credit facilities 708,616
 623,262
 673,852
 708,734
Accounts payable and other liabilities 236,250
 234,272
 183,983
 224,807
Acquired lease intangible liabilities, less accumulated amortization of $84,435 and $56,550 at September 30, 2018 and December 31, 2017, respectively 507,341
 537,401
Acquired lease intangible liabilities, less accumulated amortization of $99,163 and $92,746 at March 31, 2019 and December 31, 2018, respectively 475,065
 496,726
Lease liabilities 225,122
 —
Tenants’ security, escrow deposits and prepaid rent 43,988
 46,013
 46,923
 57,750
Total liabilities 4,504,787
 4,412,663
 4,614,831
 4,494,495
Commitments and contingencies —
 —
 —
 —
Capital:        
Partners’ capital:        
General partner; 169,441,714 and 171,364,908 units outstanding at September 30, 2018 and December 31, 2017, respectively 6,498,028
 6,698,341
Limited partners; 349,902 units outstanding at September 30, 2018 and December 31, 2017 10,726
 10,907
Accumulated other comprehensive income (loss) 14,066
 (6,289)
General partner; 167,517,243 and 167,904,593 units outstanding at March 31, 2019 and December 31, 2018, respectively 6,356,791
 6,398,897
Limited partners; 349,902 units outstanding at March 31, 2019 and December 31, 2018 10,641
 10,666
Accumulated other comprehensive (loss) (6,096) (927)
Total partners’ capital 6,522,820
 6,702,959
 6,361,336
 6,408,636
Noncontrolling interest: Limited partners’ interests in consolidated partnerships 29,423
 30,095
 41,437
 41,532
Total capital 6,552,243
 6,733,054
 6,402,773
 6,450,168
Total liabilities and capital$11,057,030
 11,145,717
$11,017,604
 10,944,663
See accompanying notes to consolidated financial statements.

7




REGENCY CENTERS, L.P.
Consolidated Statements of Operations
(in thousands, except per unit data)
(unaudited)
 Three months ended September 30, Nine months ended September 30, Three months ended March 31,
 2018 2017 2018 2017 2019 2018
Revenues:            
Minimum rent$204,005
 195,393
$614,224
 532,625
Percentage rent 1,224
 1,147
 6,292
 5,509
Recoveries from tenants and other income 66,127
 59,554
 194,900
 162,089
Lease income$277,303
 267,510
Other property income 1,982
 2,025
Management, transaction, and other fees 6,954
 6,047
 20,999
 19,353
 6,972
 7,158
Total revenues 278,310
 262,141
 836,415
 719,576
 286,257
 276,693
Operating expenses:            
Depreciation and amortization 89,183
 91,474
 266,812
 243,757
 97,194
 88,525
Operating and maintenance 40,557
 38,020
 124,924
 103,888
 40,638
 42,516
General and administrative 17,564
 15,199
 51,947
 49,618
 21,300
 17,606
Real estate taxes 35,129
 29,315
 97,096
 79,636
 34,155
 30,425
Other operating expenses (note 2) 2,045
 3,195
 6,476
 81,621
Other operating expenses 1,134
 1,632
Total operating expenses 184,478
 177,203
 547,255
 558,520
 194,421
 180,704
Other expense (income):            
Interest expense, net 36,618
 34,679
 111,477
 97,285
 37,752
 36,785
Provision for impairment, net of tax 855
 —
 29,443
 —
 1,672
 16,054
Gain on sale of real estate, net of tax (16,490) (96)
Early extinguishment of debt —
 —
 11,172
 12,404
 10,591
 162
Net investment (income) loss, including unrealized (gains) losses of ($484) and ($400), and ($842) and ($1,705) for the three and nine months ended September 30, 2018 and 2017, respectively (923) (971) (1,524) (2,955)
Net investment income (2,354) (32)
Total other expense (income) 36,550
 33,708
 150,568
 106,734
 31,171
 52,873
Income from operations before equity in income of investments in real estate partnerships 57,282
 51,230
 138,592
 54,322
 60,665
 43,116
Equity in income of investments in real estate partnerships 10,024
 12,221
 29,548
 33,804
 30,828
 10,349
Income from operations 67,306
 63,451
 168,140
 88,126
Gain on sale of real estate, net of tax 3,228
 131
 4,448
 4,913
Net income 70,534
 63,582
 172,588
 93,039
 91,493
 53,465
Limited partners’ interests in consolidated partnerships (665) (637) (2,008) (1,884) (857) (694)
Net income attributable to the Partnership 69,869
 62,945
 170,580
 91,155
Preferred unit distributions and issuance costs —
 (3,147) —
 (16,128)
Net income attributable to common unit holders$69,869
 59,798
$170,580
 75,027
$90,636
 52,771

            
Income per common unit - basic$0.41
 0.35
$1.00
 0.48
$0.54
 0.31
Income per common unit - diluted$0.41
 0.35
$1.00
 0.48
$0.54
 0.31
See accompanying notes to consolidated financial statements.

8



REGENCY CENTERS, L.P.
Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
 Three months ended September 30, Nine months ended September 30, Three months ended March 31,
 2018 2017 2018 2017 2019 2018
Net income$70,534
 63,582
$172,588
 93,039
$91,493
 53,465
Other comprehensive income (loss):        
Other comprehensive (loss) income:    
Effective portion of change in fair value of derivative instruments:            
Effective portion of change in fair value of derivative instruments 2,717
 (39) 16,511
 (3,911) (5,489) 9,505
Reclassification adjustment of derivative instruments included in net income 1,148
 2,329
 4,701
 8,054
 (176) 2,138
Unrealized gain (loss) on available-for-sale debt securities 24
 8
 (51) 51
 137
 (119)
Other comprehensive income 3,889
 2,298
 21,161
 4,194
Other comprehensive (loss) income (5,528) 11,524
Comprehensive income 74,423
 65,880
 193,749
 97,233
 85,965
 64,989
Less: comprehensive income (loss) attributable to noncontrolling interests:            
Net income attributable to noncontrolling interests 665
 637
 2,008
 1,884
 857
 694
Other comprehensive income (loss) attributable to noncontrolling interests 132
 —
 775
 (17)
Other comprehensive (loss) income attributable to noncontrolling interests (348) 460
Comprehensive income attributable to noncontrolling interests 797
 637
 2,783
 1,867
 509
 1,154
Comprehensive income attributable to the Partnership$73,626
 65,243
$190,966
 95,366
$85,456
 63,835
See accompanying notes to consolidated financial statements.

9




REGENCY CENTERS, L.P.
Consolidated Statements of Capital
For the nine months ended September 30, 2018 and 2017
(in thousands)
(unaudited)
REGENCY CENTERS, L.P.
Consolidated Statements of Capital
For the three months ended March 31, 2019 and 2018
(in thousands)
(unaudited)
REGENCY CENTERS, L.P.
Consolidated Statements of Capital
For the three months ended March 31, 2019 and 2018
(in thousands)
(unaudited)
 
General Partner
Preferred and
Common Units
 
Limited
Partners
 
Accumulated
Other
Comprehensive Loss
 
Total
Partners’
Capital
 
Noncontrolling
Interests in
Limited Partners’
Interest in
Consolidated
Partnerships
 
Total
Capital
Balance at December 31, 2016$2,609,647
 (1,967) (18,346) 2,589,334
 35,168
 2,624,502
Net income 90,938
 217
 —
 91,155
 1,884
 93,039
Other comprehensive loss —
 6
 4,205
 4,211
 (17) 4,194
Deferred compensation plan, net (9) —
 —
 (9) —
 (9)
Contributions from partners —
 13,100
 —
 13,100
 367
 13,467
Distributions to partners (233,704) (450) —
 (234,154) (7,086) (241,240)
Preferred unit distributions (5,029) —
 —
 (5,029) —
 (5,029)
Restricted units issued as a result of amortization of restricted stock issued by Parent Company 10,920
 —
 —
 10,920
 —
 10,920
Redemption of preferred stock (325,000) —
 —
 (325,000) —
 (325,000)
Common units issued as a result of common stock issued by Parent Company, net of repurchases 4,453,889
 —
 —
 4,453,889
 —
 4,453,889
Restricted units issued as a result of restricted stock issued by Parent Company upon Equity One merger 7,951
 —
 —
 7,951
 —
 7,951
Balance at September 30, 2017 6,609,603
 10,906
 (14,141) 6,606,368
 30,316
 6,636,684
             
General Partner
Preferred and
Common Units
 
Limited
Partners
 
Accumulated
Other
Comprehensive Income (Loss)
 
Total
Partners’
Capital
 
Noncontrolling
Interests in
Limited Partners’
Interest in
Consolidated
Partnerships
 
Total
Capital
Balance at December 31, 2017 6,698,341
 10,907
 (6,289) 6,702,959
 30,095
 6,733,054
$6,698,341
 10,907
 (6,289) 6,702,959
 30,095
 6,733,054
Adjustment due to change in accounting policy (note 1) 30,889
 —
 12
 30,901
 2
 30,903
 30,889
 —
 12
 30,901
 2
 30,903
Adjusted balance at January 1, 2018 6,729,230
 10,907
 (6,277) 6,733,860
 30,097
 6,763,957
 6,729,230
 10,907
 (6,277) 6,733,860
 30,097
 6,763,957
Net income 170,222
 358
 —
 170,580
 2,008
 172,588
 52,660
 111
 —
 52,771
 694
 53,465
Other comprehensive income —
 43
 20,343
 20,386
 775
 21,161
Other comprehensive loss —
 23
 11,041
 11,064
 460
 11,524
Deferred compensation plan, net (14) —
 —
 (14) —
 (14) (3) —
 —
 (3) —
 (3)
Distributions to partners (283,272) (582) —
 (283,854) (3,457) (287,311) (95,207) (194) —
 (95,401) (1,018) (96,419)
Restricted units issued as a result of amortization of restricted stock issued by Parent Company 4,121
 —
 —
 4,121
 —
 4,121
Common units repurchased and retired as a result of common stock repurchased and retired by Parent Company (124,989) —
 —
 (124,989) —
 (124,989)
Common units issued as a result of common stock issued by Parent Company, net of repurchases (6,275) —
 —
 (6,275) —
 (6,275)
Balance at March 31, 2018 6,559,537
 10,847
 4,764
 6,575,148
 30,233
 6,605,381
            
Balance at December 31, 2018 6,398,897
 10,666
 (927) 6,408,636
 41,532
 6,450,168
Net income 90,446
 190
 —
 90,636
 857
 91,493
Other comprehensive income —
 (11) (5,169) (5,180) (348) (5,528)
Contributions from partners —
 —
 —
 —
 895
 895
Distributions to partners (97,992) (204) —
 (98,196) (1,565) (99,761)
Reallocation of limited partner's interest (66) —
 —
 (66) 66
 —
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization 12,308
 —
 —
 12,308
 —
 12,308
 3,952
 —
 —
 3,952
 —
 3,952
Common units repurchased and retired as a result of common stock repurchased and retired by Parent Company (124,989) —
 —
 (124,989) —
 (124,989) (32,778) —
 —
 (32,778) —
 (32,778)
Common units redeemed as a result of common stock redeemed by Parent Company, net of issuances (5,457) —
 —
 (5,457) —
 (5,457) (5,668) —
 —
 (5,668) —
 (5,668)
Balance at September 30, 2018$6,498,028
 10,726
 14,066
 6,522,820
 29,423
 6,552,243
Balance at March 31, 2019$6,356,791
 10,641
 (6,096) 6,361,336
 41,437
 6,402,773
See accompanying notes to consolidated financial statements.

10




REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the ninethree months ended September 30,March 31, 2019 and 2018 and 2017
(in thousands)
(unaudited)
 2018 2017 2019 2018
Cash flows from operating activities:        
Net income$172,588
 93,039
$91,493
 53,465
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization 266,812
 243,757
 97,194
 88,525
Amortization of deferred loan costs and debt premiums 7,599
 7,144
 2,921
 2,471
(Accretion) and amortization of above and below market lease intangibles, net (26,031) (18,784) (13,090) (8,181)
Stock-based compensation, net of capitalization 10,012
 16,836
 3,475
 3,397
Equity in income of investments in real estate partnerships (29,548) (33,804) (30,828) (10,349)
Gain on sale of real estate, net of tax (4,448) (4,913) (16,490) (96)
Provision for impairment, net of tax 29,443
 —
 1,672
 16,054
Early extinguishment of debt 11,172
 12,404
 10,591
 162
Distribution of earnings from operations of investments in real estate partnerships 40,366
 40,817
 14,417
 13,319
Loss on derivative instruments —
 51
Settlement of derivative instruments (5,719) —
Deferred compensation expense 1,475
 2,885
 2,314
 40
Realized and unrealized gain on investments (1,524) (2,878) (2,354) (30)
Changes in assets and liabilities:        
Tenant and other receivables, net (13,326) (11,327)
Tenant and other receivables 9,050
 4,296
Deferred leasing costs (6,259) (10,294) (2,491) (1,189)
Other assets (6,565) 8,075
 (11,212) (476)
Accounts payable and other liabilities 15,100
 4,908
 (8,908) (13,793)
Tenants’ security, escrow deposits and prepaid rent (2,111) (2,490) (10,671) 2,253
Net cash provided by operating activities 464,755
 345,426
 131,364
 149,868
Cash flows from investing activities:        
Acquisition of operating real estate (85,766) (2,109) (15,722) (20,071)
Advance deposits paid on acquisition of operating real estate (150) (350) (1,250) —
Acquisition of Equity One, net of cash and restricted cash acquired of $74,507 —
 (646,790)
Real estate development and capital improvements (174,145) (240,827) (39,929) (51,968)
Proceeds from sale of real estate investments 151,142
 13,323
 82,533
 3,227
Proceeds from (issuance of) notes receivable 15,648
 (3,460)
Issuance of notes receivable —
 (462)
Investments in real estate partnerships (58,372) (12,296) (19,587) (39,330)
Distributions received from investments in real estate partnerships 5,488
 36,603
 41,587
 2,328
Dividends on investment securities 281
 200
 116
 71
Acquisition of investment securities (16,946) (14,011) (5,359) (7,543)
Proceeds from sale of investment securities 15,639
 11,974
 4,612
 6,542
Net cash used in investing activities (147,181) (857,743)
Net cash provided by (used in) investing activities 47,001
 (107,206)
Cash flows from financing activities:        
Repurchase of common shares in conjunction with equity award plans (6,772) (19,251) (6,148) (6,755)
Common units repurchased through share repurchase program (124,989) —
 (32,778) (124,989)
Proceeds from sale of treasury stock 99
 100
 8
 99
Redemption of preferred partnership units —
 (325,000)
Distributions to limited partners in consolidated partnerships, net (3,457) (7,031) (1,485) (1,018)
Distributions to partners (282,858) (233,246) (97,812) (95,043)
Distributions to preferred unit holders —
 (5,029)
Repayment of fixed rate unsecured notes (150,000) —
 (250,000) —
Proceeds from issuance of fixed rate unsecured notes, net 299,511
 953,115
 298,983
 299,511
Proceeds from unsecured credit facilities 455,000
 950,000
 110,000
 185,000
Repayment of unsecured credit facilities (370,000) (650,000) (145,000) (245,000)
Proceeds from notes payable 1,740
 126,999
 —
 1,740
Repayment of notes payable (113,037) (232,839) (40,315) —
Scheduled principal payments (7,767) (7,452) (2,235) (2,773)
Payment of loan costs (9,448) (12,868) (3,342) (9,179)
Early redemption costs (10,491) (12,419) (10,647) —
Net cash (used in) provided by financing activities (322,469) 525,079
 (180,771) 1,593
Net (decrease) increase in cash and cash equivalents and restricted cash (4,895) 12,762
 (2,406) 44,255
Cash and cash equivalents and restricted cash at beginning of the period 49,381
 17,879
 45,190
 49,381
Cash and cash equivalents and restricted cash at end of the period$44,486
 30,641
$42,784
 93,636

11




REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the ninethree months ended September 30,March 31, 2019, and 2018 and 2017
(in thousands)
(unaudited)
 2018 2017 2019 2018
Supplemental disclosure of cash flow information:        
Cash paid for interest (net of capitalized interest of $5,820 and $5,778 in 2018 and 2017, respectively)$104,210
 73,273
Cash paid for interest (net of capitalized interest of $1,015 and $2,179 in 2019 and 2018, respectively)$42,421
 30,467
Cash paid (received) for income taxes, net$4,771
 (670)$15
 (407)
Supplemental disclosure of non-cash transactions:        
Limited partner units issued in exchange for acquisition of real estate$—
 13,100
Mortgage loans assumed for the acquisition of real estate$9,700
 —
$—
 9,700
Change in accrued capital expenditures$10,494
 —
Common stock issued by Parent Company for dividend reinvestment plan$996
 908
$383
 358
Stock-based compensation capitalized$2,606
 2,459
$573
 837
Contributions from limited partners in consolidated partnerships, net$—
 311
$881
 —
Common stock issued for dividend reinvestment in trust$627
 557
$238
 205
Contribution of stock awards into trust$1,244
 1,372
$1,328
 637
Distribution of stock held in trust$524
 677
$167
 317
Change in fair value of debt securities available-for-sale$5
 51
$174
 (128)
        
Equity One Merger:    
Notes payable assumed in Equity One merger, at fair value$—
 757,399
General partner units issued to Parent Company for common stock exchanged for Equity One shares$—
 4,471,808
See accompanying notes to consolidated financial statements.


12



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2018March 31, 2019

1.Organization and Significant Accounting Policies
General
Regency Centers Corporation (the “Parent Company”) began its operations as a Real Estate Investment Trust (“REIT”) in 1993 and is the general partner of Regency Centers, L.P. (the “Operating Partnership”). The Parent Company primarily engages in the ownership, management, leasing, acquisition, and development and redevelopment of shopping centers through the Operating Partnership, and has no other assets other than through its investment in the Operating Partnership, and its only liabilities are the$500 million of unsecured public and private placement notes, assumed from the merger with Equity One, Inc. ("Equity One"), which are co-issued and guaranteed by the Operating Partnership. The Parent Company guarantees all of the unsecured debt of the Operating Partnership.
As of September 30, 2018,March 31, 2019, the Parent Company, the Operating Partnership, and their controlled subsidiaries on a consolidated basis owned 306302 properties and held partial interests in an additional 120117 properties through unconsolidated investments in real estate partnerships (also referred to as "joint ventures" or "investment partnerships").
The consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to fairly state the results for the interim periods presented. These adjustments are considered to be of a normal recurring nature.
Consolidation
The Company consolidates properties that are wholly ownedwholly-owned and properties where it owns less than 100%, but which it controls.has control over the activities most important to the overall success of the partnership. Control is determined using an evaluation based on accounting standards related to the consolidation of Variable Interest Entities ("VIEs") and voting interest entities 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.entities.
Ownership of the Operating Partnership
The Operating Partnership’s capital includes general and limited common Partnership Units. As of September 30, 2018,March 31, 2019, the Parent Company owned approximately 99.8% of the outstanding common Partnership Units of the Operating Partnership with the remaining limited common Partnership Units held by third parties (“Exchangeable operating partnership units” or “EOP units”). The EOP units are exchangeable for one share of common stock of the Parent Company and the unit holder cannot require redemption in cash or other assets.  The Parent Company classifies EOP units as permanent equity in the accompanying Consolidated Balance Sheets and Consolidated Statements of Equity and Comprehensive Income. The Parent Company serves as general partner of the Operating Partnership. The EOP unit holders have limited rights over the Operating Partnership such that they do not have the power to direct the activities of the Operating Partnership. As such, the Operating Partnership is considered a VIE, and the Parent Company, which consolidates it, is the primary beneficiary. The Parent Company’s only investment is the Operating Partnership. Net income and distributions of the Operating Partnership are allocable to the general and limited common Partnership Units in accordance with their ownership percentages.
Real Estate Partnerships
As of September 30, 2018,March 31, 2019, Regency had a partial ownership interest in 131129 properties through partnerships, of which 1112 are consolidated. Regency's partners include institutional investors, other real estate developers and/or operators, and individual parties who had a role in Regency sourcing transactions for development and investment (the "Partners" or "limited partners"). Regency has a variable interest in these entities through its equity interests. As managing member,interests, with 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 the business) to involvement in approving leases, operating budgets, and capital budgets.

13


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2018

Those partnerships for which the Partners only have protective rights are considered VIEs under ASC 810, Consolidation. Regency is the primary beneficiary in certain of these VIEs as Regency has power over these partnerships and they operate primarily for the benefit of Regency.real estate partnerships. As such, Regency consolidates these entitiesthe partnerships for which it is the primary beneficiary and reports the limited partners’ interestinterests as noncontrolling interests.
The majority of For those partnerships which Regency is not 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. Regencyprimary beneficiary and does not provide financial support to the VIEs.
Those partnerships for which the partners are involvedcontrol, but has significant influence, Regency recognizes its investment 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.equity method of accounting.
◦Those partnerships in which Regency has a controlling financial interest are consolidated; and the limited partners’ ownership interest and share of net income is recorded as noncontrolling interest.
◦Those partnerships in which Regency does not have a controlling financial interest are accounted for using the equity method, and its ownership interest is recognized through single-line presentation as Investments in real estate partnerships in the Consolidated Balance Sheets, and Equity in income of investments in real estate partnerships in the Consolidated Statements of Operations. Cash distributions of earnings from operations from investments in real estate partnerships are presented in cash flows provided by operating activities in the accompanying Consolidated Statements of Cash Flows. Cash distributions from the sale of a property or loan proceeds received from the placement of debt on a property included in investments in real estate partnerships are presented in cash flows provided by investing activities in the accompanying Consolidated Statements of Cash Flows. Distributed proceeds from debt refinancing and real estate sales in excess of Regency's carrying value of its investment has resulted in a negative investment balance for one partnership, which is recorded within accounts payable and other liabilities in the Consolidated Balance Sheets.
◦The net difference in the carrying amount of investments in real estate partnerships and the underlying equity in net assets is 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 from 10 to 40 years.
The assets of these partnerships are restricted to the use of the partnerships and cannot be used by general creditors of the Company. And similarly, the obligations of the partnerships can only be settled by the assets of these partnerships.

13


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

The major classes of assets, liabilities, and non-controlling equity interests held by the Company's consolidated VIEs, exclusive of the Operating Partnership as a whole, are as follows:
(in thousands)September 30, 2018 December 31, 2017March 31, 2019 December 31, 2018
Assets      
Net real estate investments$163,283
 172,736
$128,175
 112,085
Cash and cash equivalents4,635
 4,993
Cash, cash equivalents and restricted cash22,274
 7,309
Liabilities      
Notes payable18,403
 16,551
17,640
 18,432
Equity      
Limited partners’ interests in consolidated partnerships17,263
 17,572
31,146
 30,280
Leases
Lease Income and Tenant Receivables
The Company leases space to tenants under agreements with varying terms that generally provide for fixed payments of base rent, with designated increases over the term of the lease. Some of the lease agreements contain provisions that provide for additional rents based on tenants' sales volume ("percentage rent"). Percentage rents are recognized when the tenants achieve the specified targets as defined in their lease agreements. Additionally, most all lease agreements contain provisions for reimbursement of the tenants' share of actual real estate taxes, insurance and common area maintenance (“CAM”) costs (collectively "Recoverable Costs") incurred.
Lease terms generally range from three to seven years for tenant space under 10,000 square feet (“Shop Space”) and in excess of five years for spaces greater than 10,000 square feet (“Anchor Tenants”). Many leases also provide the option for the tenants to extend their lease beyond the initial term of the lease. If the tenants do not exercise renewal options and the leases mature, the tenants must relinquish their space so it can be leased to a new tenant, which generally involves some level of cost to prepare the space for re-leasing. These costs are capitalized and depreciated over the shorter of the life of the subsequent lease or the life of the improvement.
On January 1, 2019, the Company adopted the new accounting guidance in Accounting Standards Codification (“ASC”) Topic 842, Leases, including all related Accounting Standard Updates (“ASU”). The Company elected to use the alternative modified retrospective transition method provided in ASU 2018-11 (the "effective date method"). Under this method, the effective date of January 1, 2019 is the date of initial application. In connection with the adoption of Topic 842, the Company elected a package of practical expedients, transition options, and accounting policy elections as follows:
Package of practical expedients - applied to all leases, allowing the Company not to reassess (i) whether expired or existing contracts contain leases under the new definition of a lease, (ii) lease classification for expired or existing leases, and (iii) whether previously capitalized initial direct costs would qualify for capitalization under Topic 842;
For land easements, the Company elected not to assess at transition whether any expired or existing land easements are, or contain, leases if they were not previously accounted for as leases under the previous lease accounting standard ("Topic 840");
Lessor separation and allocation practical expedient - Regency elected, as lessor, to aggregate non-lease components with the related lease component if certain conditions are met, and account for the combined component based on its predominant characteristic, which generally results in combining lease and non-lease components of its tenant lease contracts to a single line shown as Lease income in the accompanying Consolidated Statements of Operations; and
The Company made an accounting policy election to continue to exclude, from contract consideration, sales tax (and similar taxes) collected from lessees.
The Company's existing leases were not re-evaluated and continue to be classified as operating leases, as per the practical expedient package elected above. New and modified leases will now require evaluation of

14


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2018March 31, 2019

Revenuesspecific classification criteria, which, based on the customary terms of the Company's leases, should continue to be classified as operating leases. However, certain longer-term leases (both lessee and Tenantlessor leases) may be classified as direct financing or sales type leases, which may result in selling profit and Other Receivablesan accelerated pattern of earnings recognition.
On January 1, 2018,CAM is a non-lease component of the Company adopted the new accounting guidancelease contract under Topic 842, and therefore would be accounted for revenue recognition (Topicunder Topic 606, Revenue from Contracts with Customers, “Topic 606”), as discussed furtherand presented separate from Lease income in the section below, Recent Accounting Pronouncements. Upon adoptionStatements of Operations, based on an allocation of the new standard, certainoverall contract price, which is not necessarily the amount that would be billable to the tenants for CAM reimbursements per the terms of the Company's significant accounting policies subjectlease contract. As the timing and pattern of providing the CAM service to the tenant is the same as the timing and pattern of the tenants' use of the underlying lease asset, the Company elected, as part of the package of practical expedients, to combine CAM with the remaining lease components, along with tenants' reimbursement of real estate taxes and insurance, and recognize them together as Lease income in the accompanying Statements of Operations.
Lease income for operating leases with fixed payment terms is recognized on a straight-line basis over the expected term of the lease for all leases for which collectibility is considered probable at the commencement date. At lease commencement, the Company expects that collectibility is probable for all of its leases due to the Company’s credit checks on tenants and other creditworthiness analysis undertaken before entering into a new lease; therefore, income from all operating leases is initially recognized on a straight-line basis. Lease income each period is reduced by amounts considered uncollectible on a lease-by-lease basis, with any changes in collectibility assessments recognized as a current period adjustment to Lease income. For operating leases in which collectibility of Lease income is not considered probable, Lease income is recognized on a cash basis and all previously recognized uncollectible Lease income is reversed in the period in which the Lease income is determined not to be probable of collection.
Topic 606842 also changes the treatment of leasing costs, such that non-contingent internal leasing and legal costs associated with leasing activities can no longer be capitalized. The Company, as a lessor, may only defer as initial direct costs the incremental costs of a tenant operating lease that would not have been updated.incurred if the lease had not been obtained. These costs generally include third party broker payments, which are capitalized to Deferred leasing costs in the accompanying Consolidated Balance Sheets and amortized over the expected term of the lease to Depreciation and amortization expense in the accompanying Consolidated Statements of Operations.
Lease Obligations
The Company adopted Topic 606 using a modified retrospective approach and applied the transition practical expedients allowed by the standard. Additionally,has 22 properties within its consolidated real estate portfolio that are either partially or completely on land subject to ground leases with third parties, which are all classified as operating leases. Accordingly, the Company appliedowns only a long-term leasehold or similar interest in these properties. The building and improvements constructed on the practical expedient related toleased land are capitalized as Real estate assets in the remaining performance obligations, because all of its performance obligations are satisfied at a point in time, are part of a contract that has an original expected duration of one year or less, or are considered to be a series of performance obligations where variable consideration is allocated entirely to a wholly unsatisfied distinct day of service that forms partaccompanying Consolidated Balance Sheets and depreciated over the shorter of the series, such thatuseful life of the improvements or the lease term. These ground leases expire through the year 2101, and in most cases, provide for renewal options.
In addition, the Company does not needhas non-cancelable operating leases pertaining to estimate variable consideration to recognize revenue.office space from which it conducts its business. Office leases expire through the year 2029, and in most cases, provide for renewal options. Leasehold improvements are capitalized as tenant improvements, included in Other assets in the Consolidated Balance Sheets, and depreciated over the shorter of the useful life of the improvements or the lease term.
Subsequent toUpon the adoption of Topic 606,842 the Company recognizes revenue whenhas recognized Lease liabilities on its Consolidated Balance Sheets for its ground and office leases of $225.4 million at January 1, 2019, and corresponding Right of use assets of $297.8 million, net of or as controlincluding the opening balance for straight line rent and above / below market ground lease intangibles related to these same ground and office leases. A key input in estimating the Lease liabilities and resulting Right of use assets is establishing the discount rate in the lease, which requires additional inputs for the longer-term ground leases, including interest rates that correspond with the remaining term of the promised services are transferredlease, the Company's credit spread, and a securitization adjustment necessary to its customers,reflect the collateralized payment terms present in an amount that reflects the consideration the Company expectslease. See Note 7, Leases, for additional disclosures.
The ground and office lease expenses continue to be entitled to in exchange for those services. The following isrecognized on a descriptionstraight line basis over the term of the Company's revenue from contracts with customers which is inleases, including management's estimate of expected option renewal periods. For ground leases, the scope of Topic 606.
Property and Asset Management Services
The Company is engaged under agreements with its joint venture partnerships, which are generally perpetual in nature and cancellable through unanimous partner approval, absent an event of default. Under these agreements, the Company is to provide asset management, property management, and leasing services for the joint ventures' shopping centers. The fees are market-based, generally calculated as a percentage of either revenues earned or the estimated values of the properties managed or the proceeds received, and are recognized over the monthly or quarterly periods as services are rendered. Property management and asset management services represent a series of distinct daily services. Accordingly, the Company satisfies its performance obligation as service is rendered each day and the variability associated with that compensation is resolved each day. Amounts due from the partnerships for such services are paid during the month following the monthly or quarterly service periods.
Several of the Company’s partnership agreements provide for incentive payments, generally referred to as “promotes” or “earnouts,” to Regency for appreciation in property values in Regency's capacity as manager. The terms of these promotes are based on appreciation in real estate value over designated time intervals. The Company evaluates its expected promote payout at each reporting period, which generally does not result in revenue recognition until the measurement period has completed, when the amount can be reasonably determined and the amount is not probable of significant reversal. The Company did not recognize any promote revenue during the nine months ended September 30, 2018 or 2017.
Leasing Services
Leasing service fees are based on a percentage of the total rent due under the lease. The leasing service is considered performed upon successful execution of an acceptable tenant lease for the joint ventures’ shopping centers, at which time revenue is recognized. Payment of the first half of the fee is generally due upon lease execution and the second half is generally due upon tenant opening or rent payments commencing.
Transaction Services
The Company also receives transaction fees, as contractually agreed upon with each joint venture, which include acquisition fees, disposition fees, and financing service fees. Control of these services is generally transferred at the time the related transaction closes, which is the point in time when the Company recognizes the related fee revenue. Any unpaid amounts related to transaction-based fees are included in Accounts receivable.

15


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2018March 31, 2019

Company generally assumes it will exercise options through the latest option date of that shopping center's anchor tenant lease.
Revenues and Other Receivables
Other property income includes incidental income from the properties and is generally recognized at the point in time that the performance obligation is met. All income from contracts with the Company's real estate partnerships is included within Management, transaction and other fees on the Consolidated Statements of Operations,Operations. The primary components of these revenue streams, the timing of satisfying the performance obligations, and amounts recognized are as follows:
 Three months ended September 30, Nine months ended September 30, Three months ended March 31,
(in thousands) Timing of satisfaction of performance obligations 2018 2017 2018 2017 Timing of satisfaction of performance obligations 2019 2018
Other property income Point in time $1,982
 2,025
Management, transaction and other feesManagement, transaction and other fees    
Property management services Over time $3,588
 3,446
 $11,008
 10,452
 Over time $3,764
 3,768
Asset management services Over time 1,840
 1,762
 5,347
 5,314
 Over time 1,777
 1,703
Leasing services Point in time 969
 669
 2,726
 2,285
 Point in time 758
 685
Other transaction fees Point in time 557
 170
 1,918
 1,302
 Point in time 673
 1,002
Total management, transaction, and other feesTotal management, transaction, and other fees $6,954
 6,047
 $20,999
 19,353
Total management, transaction, and other fees $6,972
 7,158
The accounts receivable for the above Other property income and management services, which are included within Tenant and other receivables in the accompanying Consolidated Balance Sheets, are $10.1$11.0 million and $8.7$12.5 million, as of September 30, 2018March 31, 2019 and December 31, 2017,2018, respectively.
Real Estate SalesReclassifications
On January 1, 2018, the Company adopted the new accounting guidance for sales of nonfinancial assets (“Subtopic 610-20”), as discussed furtherCertain prior year amounts have been reclassified to conform to current year presentation, including amounts in Cash, cash equivalents, and restricted cash in the section below, Recent Accounting Pronouncements. Upon adoption of the new standard, the Company's accounting policy for real estate sales subject to Subtopic 610-20 has been updated. The Company now derecognizes real estateaccompanying Consolidated Balance Sheets, and recognizes a gain or loss on sales of real estate when a contract existsin Lease income and control of theOther property has transferred to the buyer. Control of the property, including controlling financial interest, is generally considered to transfer upon closing through transfer of the legal title and possession of the property. Any retained non-controlling interest is measured at fair value. This change in accounting policy resultedincome in the recognition, through opening retained earnings on January 1, 2018,accompanying Consolidated Statements of $30.9 million of previously deferred gains from property sales to the Company's Investments in real estate partnerships.
Goodwill
Goodwill represents the excess of the purchase price consideration for the Equity One merger over the fair value of the assets acquired and liabilities assumed, which amount reflects expected synergies from combining Regency's and Equity One's operations and the deferred tax liability at one of the acquired taxable REIT subsidiaries. The Company accounts for goodwill in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 350, Intangibles - Goodwill and Other, and allocates its goodwill to its reporting units, which have been determined to be at the individual property level. The Company performs an impairment evaluation of its goodwill at least annually, in November of each year, or more frequently as triggers occur.
The goodwill impairment evaluation may be completed through a qualitative or quantitative approach. Under a qualitative approach, the impairment review for goodwill consists of an assessment of whether it is more-likely-than-not that the reporting unit’s fair value is less than its carrying value, including goodwill. If a qualitative approach indicates it is more likely-than-not that the estimated carrying value of a reporting unit (including goodwill) exceeds its fair value, or if the Company chooses to bypass the qualitative approach for any reporting unit, the Company will perform the quantitative approach described below.
The quantitative approach consists of estimating the fair value of each reporting unit using discounted projected future cash flows and comparing those estimated fair values with the carrying values, which include the allocated goodwill. If the estimated fair value is less than the carrying value, the Company would then recognize a goodwill impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to that reporting unit.

Operations.

16


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2018March 31, 2019

Recent Accounting Pronouncements
The following table provides a brief description of recent accounting pronouncements and expected impact on our financial statements:
Standard Description Date of adoption Effect on the financial statements or other significant matters
Recently adopted:      
Accounting Standards Update ("ASU") 2017-12, August 2017, Targeted Improvements to Accounting for Hedging Activities
This ASU provides updated guidance to better align a company’s financial reporting for hedging activities with the economic objectives of those activities.

The adoption method requires the Company to recognize the cumulative effect of initially applying the ASU as an adjustment to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the update.		January 2018
The Company adopted this ASU using a modified retrospective transition method, which resulted in an immaterial adjustment to opening retained earnings and accumulated other comprehensive income for previously recognized hedge ineffectiveness from off-market hedges.

ASU 2016-01, January 2016, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities
This ASU 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.

January 2018
The Company's adoption of this standard did not have a significant impact on its results of operations, financialcondition or cash flows as the company has an insignificant amount of equity securities within the scope of this standard.
The adoption resulted in reduced disclosure requirements around methodology and significant assumptions used in fair value measurements.

ASU 2016-15, August 2016, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments
This ASU makes eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows.

January 2018The adoption of this ASU did not result in a change to the Company's Consolidated Statements of Cash Flows.
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. The amendments in this ASU are applied using a retrospective transition method to each period presented.

January 2018
The adoption of this ASU resulted in a change to the classification and presentation of changes in restricted cash on its cash flow statement, which was not material. There was no change to the Company's financial condition or results of operations as a result of adopting this ASU.

Upon adoption, and for the nine months ended September 30, 2017, net cash provided by operating activities increased by $1.6 million and net cash used in investing activities decreased by $1.0 million, with a corresponding increase in cash and cash equivalents and restricted cash within the Consolidated Statements of Cash Flows.


17


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2018

StandardDescriptionDate of adoptionEffect on the financial statements or other significant matters
ASU 2017-05, February 2017, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (Subtopic 610-20)

ASU 2017-05 clarifies that ASC 610-20 applies to all nonfinancial assets (including real estate) for which the counterparty is not a customer and requires an entity to derecognize a nonfinancial asset in a partial sale transaction when it ceases to have a controlling financial interest in the asset and has transferred control of the asset. Once an entity transfers control of the nonfinancial asset, the entity is required to measure any non-controlling interest it receives or retains at fair value.

Under the current guidance, a partial sale is recognized and carryover basis is used for the retained interest resulting in only partial gain recognition by the entity, however, the new guidance eliminates the use of carryover basis and generally requires the full gain be recognized.

January 2018
Sales of real estate assets are now accounted for under Subtopic 610-20, which provides for revenue recognition based on transfer of control.

For normal arms length property sales to unrelated parties, where Regency has no retained interest in the property, the Company will continue to recognize the full gain or loss upon transfer of control. For property sales in which Regency retains a noncontrolling interest in the property, fair value recognition for the retained noncontrolling interest is now required, which will result in full gain recognition upon loss of control.

The Company applied the modified retrospective adoption method, and on January 1, 2018, recognized through opening retained earnings $30.9 million of previously deferred gains from property sales to entities in which Regency had continuing involvement, resulting in a corresponding increase to the value of the Company's investment in those partnerships.

18


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2018

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

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
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers ("Topic 606"). The objective of Topic 606 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. It supersedes most of the existing revenue guidance, including industry-specific guidance. The core principal of this new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying Topic 606, companies will perform a five-step analysis of transactions to determine when and how revenue is recognized.

Topic 606 applies to all contracts with customers except those that are within the scope of other topics in the FASB's accounting standards codification. As a result, Topic 606 does not apply to revenue from lease contracts. The Company's lease contracts will be subject to Topic 842, in January 2019.
January 2018
 The Company utilized the modified retrospective method of adoption, applying the standard to only 2018, and not restating prior periods presented in future financial statements.

The majority of the Company's revenue originates from lease contracts and will be subject to Topic 842 to be adopted in January 2019.

Beyond revenue from lease contracts, the Company's primary revenue stream subject to Topic 606 is Management, transaction, and other fees from the Company's real estate partnerships, primarily in the form of property management services, asset management services, and leasing services. The Company evaluated all partnership service relationships and did not identify any changes in the timing or amount of revenue recognition from these revenue streams.

The adoption of Topic 606 resulted in additional disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

19


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2018

StandardDescriptionDate of adoptionEffect on the financial statements or other significant matters
Not yet adopted:
       
Leases (Topic 842) and related updates:

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

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

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

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

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

 
Topic 842 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets. It also makes targeted changes to lessor accounting.

The provisions of these ASUs are effective as of January 1, 2019, with early adoption permitted. Topic 842 provides a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief or an additional transition method, allowing for initial application at the date of adoption and a cumulative-effect adjustment to opening retained earnings.

See the updated Leases accounting policy disclosed earlier in Note 1 and the added Leases disclosures in Note 7.
 January 2019 
The Company continues to evaluate the impacthas completed its evaluation and adoption of this standard, will have on its financial statements and related disclosures. Based on adoption and implementation efforts toas discussed earlier in Note 1. The Company utilized the alternative modified retrospective transition method provided in ASU 2018-11 (the "effective date management has identified expected changes frommethod"), under which the new standard from its perspective as both a lessee and a lessor, as noted below:
Lessee Accounting:
The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

An entity may choose to use either (1) its effective date or (2)of January 1, 2019 is also the beginning of the earliest comparable period presented in the financial statements as its date of initial application.

See the updated Leases accounting policy disclosed earlier in Note 1 and the added disclosures in Note 7, Leases.
The newBeyond the policy, presentation and disclosure changes discussed, the following changes had a direct impact to Net Income from the adoption of Topic 842:
Capitalization of indirect internal non-contingent leasing costs and legal leasing costs are no longer permitted upon the adoption of this standard, provides a number of optional practical expedientswhich is resulting in transition. The Company expectsan increase to elect the “package of practical expedients”, which allows the Company not to reassess under the new standard prior conclusions about lease identification, lease classification, and initial direct costs.

The new standard will also provide significant new disclosures about the Company’s leasing activities.


The Company has ground lease agreements in which the Company is the lessee for land beneath all or a portion of the buildings at certain consolidated shopping centers. The Company also has office leases for its headquarters and field offices.

Based on current estimates, which include interest rate assumptions subject to change, the Company anticipates recognizingTotal operating lease liabilities for its ground and office leases, with a corresponding ROU asset, of less than 5% of total assets. For these existing operating leases, the Company will continue to recognize a single lease expense for its existing ground and office operating leases, currently included in Operating and maintenance expenses and General and administrative expenses, respectively, in the Consolidated Statements of Operations.
Previous capitalization of internal leasing costs was $1.3 million and $6.5 million during the three months ended March 31, 2018 and the year ended December 31, 2018, respectively.

Future ground leases entered into or acquired subsequent toPrevious capitalization of legal costs was $0.4 million and $1.6 million during the adoption date may be classified as operating or finance leases, based on specific classification criteria. Finance leases would resultthree months ended March 31, 2018 and the year ended December 31, 2018, respectively, including our pro rata share recognized through Equity in a slightly accelerated impact to earnings, using the effective interest method, and different classificationincome of the expense.

investments in real estate partnerships.
       

2017


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2018March 31, 2019

Standard Description Date of adoption Effect on the financial statements or other significant matters
Topic 842, Leases (continued)
Lessor Accounting
Topic 842 requires lessors to classify leases as a sales-type, direct financing, or operating lease. A lease is a sales-type lease if any one of five criteria are met, each of which indicate that the lease, in effect, transfers control of the underlying asset to the lessee. If none of those five criteria are met, but two additional criteria are both met, indicating that the lessor has transferred substantially all the risks and benefits of the underlying asset to the lessee and a third party, the lease is a direct financing lease. All leases that are not sales-type or direct financing leases are operating leases.

The new standard also includes a change to the treatment of internal leasing costs and legal costs, which can no longer be capitalized. Only incremental costs of a lease that would not have been incurred if the lease had not been obtained may be deferred as initial direct costs.

Additionally, the new standard requires lessors to allocate the consideration in a contract between the lease component (right to use an underlying asset) and non-lease component (transfer of a good or service that is not a lease). However, lessors are provided with a practical expedient, elected by class of underlying asset, to account for lease and non-lease components of a contract as a single lease component if certain criteria are met. Lessors that make these elections will be required to provide additional disclosures.

Not yet adopted:		   
ASU 2016-13, June 2016, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments


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

This ASU also applies to how the Company evaluates impairments of any held to maturity debt securities.
January 2020The Company's existing leases will continue to be classified as operating leases. Leases entered into afterCompany is currently evaluating the effective date ofaccounting standard, but does not expect the new standard may be classified as operating or sales-type leases, based on specific classification criteria. Operating leases will continueadoption to have a similar pattermaterial impact on its financial position, results of recognition as under current GAAP. Sales-type lease accounting, however, will resultoperations, or cash flows.
ASU 2018-19, November 2018:  Codification Improvements to Topic 326, Financial Instruments - Credit Losses
This ASU clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in the recognition of selling-profit at lease commencement,accordance with interest income recognized over the life of the lease.Topic 842, Leases.January 2020
Capitalization of indirect internal leasing costs and legal costs will no longer be permitted uponThe Company currently does not expect the adoption of this standard, which will result in an increase in TotalASU to have a material impact on its financial statements and related disclosures.
See Topic 842 for disclosure of collectibility policy over lease receivables from operating expenses in the Consolidated Statements of Operations in the period of adoption and prospectively.
Previous capitalization of internal leasing costs was $4.9 million and $10.4 million during the nine months ended September 30, 2018 and the year ended December 31, 2017, respectively.

Previous capitalization of legal costs was $1.2 million during both the nine months ended September 30, 2018 and the year ended December 31, 2017, including our pro rata share recognized through Equity in income of investments in real estate partnerships.

The terms of the Company's leases generally provide that the Company is entitled to receive reimbursements from tenants for operating expenses such as real estate taxes, insurance and common area maintenance ("CAM"), in addition to the base rental payments for use of the underlying asset (e.g. unit of the shopping center). Under the new standard, CAM is considered a non-lease component of a lease contract, which would be accounted for under Topic 606. However, the Company expects to apply the practical expedient to account for its lease and non-lease components as a single, combined operating lease component. While the timing of recognition should remain the same, the Company expects to no longer present Minimum rent and Recoveries from tenants separately in our Consolidated Statements of Operations beginning January 1, 2019.

The Company will continue its evaluation of the accounting standard, additional impacts of adoption, and changes in presentation and disclosure requirements.

leases.
       

21


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2018

Standard
ASU 2018-13, August 2018, Fair Value Measurements (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement
 Description
This ASU modifies the disclosure requirements for fair value measurements within the scope of Topic 820, Fair Value Measurements, including the removal and modification of certain existing disclosures, and the addition of new disclosures.
 Date of adoptionJanuary 2020 EffectThe Company is currently evaluating the impact of adopting this new accounting standard, which is expected to only impact fair value measurement disclosures and therefore should have no impact on the Company's financial statementsposition, results of operations, or other significant matterscash flows.
ASU 2018-15, August 2018, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Isis a Service ContractContract.
 
The amendments in this ASU align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The ASU provides further clarification of the appropriate presentation of capitalized costs, the period over which to recognize the expense, the presentation within the Statements of Operations and Statements of Cash Flows, and the disclosure requirements.


Early adoption of the standard is permitted.
 January 2020 The Company is currently evaluating the accounting standard, but does not expect the adoption to have a material impact on its financial position, results of operations, or cash flows.
ASU 2016-13, June 2016, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
This ASU replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

This ASU also applies to how the Company determines its allowance for doubtful accounts on tenant receivables.
January 2020The Company is evaluating the alternative methods of adoption and the impact it will have on its financial statements and related disclosures.
ASU 2018-13, August 2018, Fair Value Measurements (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement
This ASU modifies the disclosure requirements for fair value measurements within the scope of Topic 820, Fair Value Measurement, including the removal and modification of certain existing disclosures, and the addition of new disclosures.January 2020The Company is currently evaluating the impact of adopting this new accounting standard, which is expected to only impact fair value measurement disclosures and therefore should have no impact on the Company's financial position, results of operations, or cash flows.

2218


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2018March 31, 2019

2.Real Estate Investments
The following table details the components of Land, building and improvements in the Consolidated Balance Sheets:
(in thousands) September 30, 2018 December 31, 2017
Land $4,215,399
 4,235,032
Land improvements 626,787
 556,140
Buildings 5,126,219
 4,999,378
Building and tenant improvements 885,878
 787,880
Total Land, building and improvements $10,854,283
 10,578,430
Acquisitions
The following table details the shopping centers acquired or land acquired or leased for development:
(in thousands) Nine months ended September 30, 2018
Date Purchased Property Name City/State Property Type Ownership Purchase Price Debt Assumed, Net of Premiums Intangible Assets Intangible Liabilities
1/2/18 Ballard Blocks I Seattle, WA Operating 49.9% $54,500 — 3,668 2,350
1/2/18 Ballard Blocks II Seattle, WA Development 49.9% 4,000 — — —
1/5/18 The District at Metuchen Metuchen, NJ Operating 20% 33,830 — 3,147 1,905
1/10/18 Hewlett Crossing I & II Hewlett, NY Operating 100% 30,900 9,700 3,114 1,868
4/3/2018 Rivertowns Square Dobbs Ferry, NY Operating 100% 68,933 — 4,993 5,554
5/18/2018 Crossroads Commons II Boulder, CO Operating 20% 10,500 — 447 769
9/7/2018 Ridgewood Shopping Center Raleigh, NC Operating 20% 45,800 10,233 3,372 2,278
Total property acquisitions     $248,463 19,933 18,741 14,724
 
(in thousands) Nine months ended September 30, 2017
Date Purchased Property Name City/State Property Type Ownership Purchase Price Debt Assumed, Net of Premiums Intangible Assets Intangible Liabilities
3/6/17 The Field at Commonwealth Chantilly, VA Development 100% $9,500 — — —
3/8/17 
Pinecrest Place (1)
 Miami, FL Development 100% — — — —
4/13/17 
Mellody Farm (2)
 Chicago, IL Development 100% 26,200 — — —
6/28/17 
Concord outparcel (3)
 Miami, FL Operating 100% 350 — — —
7/20/17 
Aventura Square outparcel (4)
 Miami, FL Operating 100% 1,750 — 90 9
Total property acquisitions     $37,800 — 90 9
(1) The Company leased 10.67 acres for a ground up development.
(2) The Operating Partnership issued 195,732 partnership units valued at $13.1 million as partial consideration for the purchase.
(3) The Company purchased a 0.67 acre vacant outparcel adjacent to the Company's existing operating Concord Shopping Plaza.
(4) The Company purchased a 0.06 acre outparcel improved with a leased building adjacent to the Company's existing operating Aventura Square shopping center.
Equity One Merger
General
On March 1, 2017, Regency completed its merger with Equity One, a NYSE listed shopping center company, 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

23


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2018

common stock for each share of Equity One common stock owned immediately prior to the effective time of the merger resulting in approximately 65.5 million Regency common shares being issued to effect the merger.
The following table provides the components that made up the total purchase price for the Equity One merger:
(in thousands, except stock price)Purchase Price
Shares of common stock issued for merger65,379
Closing stock price on March 1, 2017$68.40
Value of common stock issued for merger$4,471,808
Other cash payments721,297
Total purchase price$5,193,105
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.
Final Purchase Price Allocation of Merger
The Equity One 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, and allows a measurement period, not to exceed one year from the acquisition date, to finalize the acquisition date fair values.
The acquired assets and assumed liabilities of 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 requires estimating an “as-if vacant” fair value of the physical property, which includes land, building, and improvements and also determining 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, and deferred taxes related to the book tax difference created through purchase accounting. The excess of the purchase price consideration over the fair value of assets acquired and liabilities assumed results in goodwill in the business combination, which reflects expected synergies from combining Regency's and Equity One's operations and the deferred tax liability at one of the acquired taxable REIT subsidiaries. The goodwill is not deductible for tax purposes.
The fair 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 used stabilized Net Operating Income (“NOI”) and market specific capitalization and discount rates as the primary inputs in determining the fair value of the real estate assets. Management reviewed the inputs used by the third party specialist as well as the allocation of the purchase price to ensure reasonableness and that the procedures were performed in accordance with management's policy. Management and the third party valuation specialist have prepared their fair value estimates for each of the operating properties acquired, and completed the purchase price allocation during the measurement period.

24


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2018

The following table summarizes the final purchase price allocation based on the Company's valuation, including estimates and assumptions of the acquisition date fair value of the tangible and intangible assets acquired and liabilities assumed:
(in thousands) Final Purchase Price Allocation
Land $2,865,053
Building and improvements 2,619,163
Properties in development 68,744
Properties held for sale 19,600
Investments in unconsolidated real estate partnerships 99,666
Real estate assets 5,672,226
Cash, accounts receivable and other assets 112,909
Intangible assets 458,877
Goodwill 332,384
Total assets acquired 6,576,396
Notes payable 757,399
Accounts payable, accrued expenses, and other liabilities 122,217
Lease intangible liabilities 503,675
Total liabilities assumed 1,383,291
Total purchase price $5,193,105
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 Equity One merger:
(in years)Weighted Average Amortization / Accretion Period
Assets:
In-place leases10.8
Above-market leases7.8
Below-market ground leases55.3
Liabilities:
Below-market leases24.9
Pro forma Information
The following unaudited pro forma financial data includes the incremental revenues, operating expenses, depreciation and amortization, and costs of the Equity One acquisition as if it had occurred on January 1, 2016:
  Three months ended September 30, Nine months ended September 30,
(in thousands, except per share data) 2017 2017
Total revenues $262,708
 $788,345
Income from operations (1)
 63,537
 190,112
Net income attributable to common stockholders (1)
 59,621
 171,795
Income per common share - basic 0.35
 1.01
Income per common share - diluted 0.35
 1.01
(1) The pro forma earnings for the three and nine months ended September 30, 2017, were adjusted to exclude $1.2 million and $98.5 million of merger costs, respectively, as if they had occurred in 2016.

25


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2018

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.
(in thousands) Three months ended March 31, 2019
Date Purchased Property Name City/State Property Type Ownership Purchase Price Debt Assumed, Net of Premiums Intangible Assets Intangible Liabilities
1/8/19 
Pablo Plaza (1)
 Jacksonville, FL Operating 100.0% $600 — — —
2/8/19 Melrose Market Seattle, WA Operating 100.0% 15,515 — 941 358
Total property acquisitions     $16,115 — 941 358
(1) The Company purchased a .17 acre land parcel adjacent to the Company's existing operating Pablo Plaza for redevelopment.
 
(in thousands) Three months ended March 31, 2018
Date Purchased Property Name City/State Property Type Ownership Purchase Price Debt Assumed, Net of Premiums Intangible Assets Intangible Liabilities
1/2/18 Ballard in Blocks I Seattle, WA Operating 49.9% $54,500 — 3,668 2,350
1/2/18 Ballard in Blocks II Seattle, WA Development 49.9% 4,000 — — —
1/5/18 Metuchen Metuchen, NJ Operating 20% 33,830 — 3,147 1,905
1/10/18 Hewlett Crossing I & II Hewlett, NY Operating 100% 30,900 9,700 3,114 1,868
Total property acquisitions     $123,230 9,700 9,929 6,123
 

3.    Property Dispositions
Dispositions
The following table provides a summary of consolidated shopping centers and land parcels disposed of during the periods set forth below:
 Three months ended September 30, Nine months ended September 30, Three months ended March 31,
(in thousands, except number sold data) 2018 2017 2018 2017 2019 2018
Net proceeds from sale of real estate investments $108,634
 167
 $151,142
 15,397
 $82,533
 3,227
Gain on sale of real estate, net of tax $3,228
 131
 $4,448
 4,913
 $16,490
 96
Provision for impairment of real estate sold $855
 —
 $29,443
 —
 $1,672
 374
Number of operating properties sold 3
 —
 7
 1
 4
 1
Number of land parcels sold 3
 —
 6
 7
 2
 —
Percent interest sold 100% —% 100% 100% 100% 100%
At September 30, 2018,March 31, 2019, the Company also had three propertiesone property classified aswithin Properties held for sale on the Consolidated Balance Sheets, which have sold or are expectedSheets.


19


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to sell subsequent to September 30, 2018.Unaudited Consolidated Financial Statements
March 31, 2019

4.    Other Assets
The following table represents the components of Other assets in the accompanying Consolidated Balance Sheets:
(in thousands)September 30, 2018 December 31, 2017March 31, 2019 December 31, 2018
Goodwill$318,710
 331,884
Goodwill, net$314,143
 314,143
Investments44,014
 41,636
44,400
 41,287
Prepaid and other24,093
 30,332
30,099
 17,937
Derivative assets26,802
 14,515
11,909
 17,482
Furniture, fixtures, and equipment, net6,715
 6,123
5,990
 6,127
Deferred financing costs, net7,392
 2,637
6,310
 6,851
Total other assets$427,726
 427,127
$412,851
 403,827
The following table presents the goodwill balances and activity during the year to date periods ended:
March 31, 2019 December 31, 2018
(in thousands)September 30, 2018
 December 31, 2017
GoodwillAccumulated Impairment LossesTotal GoodwillAccumulated Impairment LossesTotal
Beginning of year balance$331,884
 —
$316,858
(2,715)314,143
 $331,884
—
331,884
Goodwill resulting from Equity One merger500
 331,884
—
—
—
 500
—
500
Goodwill allocated to Provision for impairment—
—
—
 —
(12,628)(12,628)
Goodwill allocated to Properties held for sale—
—
—
 (1,159)—
(1,159)
Goodwill associated with disposed reporting units:     
Goodwill allocated to Provision for impairment(1,779)1,779
—
 (9,913)9,913
—
Goodwill allocated to Gain on sale of real estate(2,525) —
(527)527
—
 (4,454)—
(4,454)
Goodwill allocated to Provision for impairment(9,220) —
Goodwill allocated to properties held for sale(1,929) —
End of period balance$318,710
 331,884
$314,552
(409)314,143
 $316,858
(2,715)314,143

26


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2018

During the nine months ended September 30, 2018, the Company recognized a $29.4 million provision for impairment, net of tax, on five operating properties that sold during the year, including $9.2 million of goodwill. As the Company identifies properties ("reporting units") that no longer meet its investment criteria, it will evaluate the property for potential sale. A decision to sell a reporting unit results in the need to evaluate its goodwill for recoverability and may result in impairment. If events occur that trigger an impairment evaluation at multiple reporting units, a goodwill impairment may or may not be significant.


20


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

5.    Notes Payable and Unsecured Credit Facilities
The Company’s outstanding debt consisted of the following:
(in thousands)Weighted Average Contractual RateWeighted Average Effective RateSeptember 30, 2018 December 31, 2017Weighted Average Contractual RateWeighted Average Effective RateMarch 31, 2019 December 31, 2018
Notes payable:        
Fixed rate mortgage loans4.8%4.3%$406,072
 520,193
4.5%4.1%$360,865
 403,306
Variable rate mortgage loans3.3%3.6%127,796
(1) 
125,866
3.5%3.6%127,081
(1) 
127,850
Fixed rate unsecured public and private debt4.0%4.4%2,474,724
 2,325,656
4.0%4.4%2,521,940
 2,475,322
Total notes payable 3,008,592
 2,971,715
 3,009,886
 3,006,478
Unsecured credit facilities:        
Line of Credit (the "Line") (2)
2.9%3.1%145,000
 60,000
3.5%3.7%110,000
 145,000
Term loans2.4%2.5%563,616
 563,262
2.4%2.5%563,852
 563,734
Total unsecured credit facilities 708,616
 623,262
 673,852
 708,734
Total debt outstanding $3,717,208
 3,594,977
 $3,683,738
 3,715,212
        
(1) Includes five mortgages whose interest rates vary on LIBOR based formulas. Three of these variable rate loans have interest rate swaps in place to fix the interest rates at a range of 2.8% to 4.1%.
(1) Includes five mortgages whose interest rates vary on LIBOR based formulas. Three of these variable rate loans have interest rate swaps in place to fix the interest rates at a range of 2.8% to 4.1%.
(1) Includes five mortgages whose interest rates vary on LIBOR based formulas. Three of these variable rate loans have interest rate swaps in place to fix the interest rates at a range of 2.8% to 4.1%.
(2) Weighted average effective and contractual rate for the Line is calculated based on a fully drawn Line balance.
(2) Weighted average effective and contractual rate for the Line is calculated based on a fully drawn Line balance.
(2) Weighted average effective and contractual rate for the Line is calculated based on a fully drawn Line balance.
Significant financing activity during 20182019 includes:
On March 9, 2018,6, 2019, the Company received proceeds from issuing $300.0issued $300 million of 4.125%4.65% senior unsecured public notes, which priced at 99.837%99.661%, and mature in March 2028. $60.0 million2049. The net proceeds of the proceedsoffering were used (i) to repay our Line and $163.2a $39.5 million was usedmortgage maturing in 2020 with an interest rate of 7.3%, including a prepayment premium of $1 million, (ii) to early redeem, onrepay in full its outstanding $250 million 4.8% notes due April 2, 2018, the $150.0 million 6% senior unsecured public notes originally due June 2020,15, 2021, including accrued and unpaid interest through the redemption date and a make-whole amount. The remainderpremium of the proceeds were used to repay 2018 mortgage maturitiesapproximately $9.6 million and accrued interest, and (iii) for general corporate purposes.
On March 26, 2018, the Company amended and restated its unsecured revolving credit facility (the “Line”). The amendment and restatement increases the size of the Line to $1.25 billion from $1.0 billion and extends the maturity date to March 23, 2022, with options to extend the maturity for two additional six-month periods. Borrowings will bear interest at an annual rate of LIBOR plus 87.5 basis points, subject to the Company’s credit ratings, compared to a rate of 92.5 basis points under its previous facility. An annual facility fee of 15 basis points, subject to the Company’s credit ratings, applies to the Line.

2721


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2018March 31, 2019

As of September 30, 2018,March 31, 2019, scheduled principal payments and maturities on notes payable and unsecured credit facilities were as follows:
(in thousands)September 30, 2018
Scheduled Principal Payments and Maturities by Year:
Scheduled
Principal
Payments
 
Mortgage
Loan
Maturities
 
Unsecured
Maturities (1)
 Total
2018$2,196
 —
 —
 2,196
20199,519
 13,216
 —
 22,735
202011,287
 78,580
 300,000

389,867
202111,600
 77,060
 250,000
 338,660
202211,799
 5,848
 710,000
 727,647
Beyond 5 Years37,056
 269,217
 1,950,000
 2,256,273
Unamortized debt premium/(discount) and issuance costs—
 6,490
 (26,660) (20,170)
Total$83,457
 450,411
 3,183,340
 3,717,208
        
(1) Includes unsecured public and private debt and unsecured credit facilities.
The Company has $13.2 million of mortgage loans maturing through 2019, which it currently intends to repay if wholly owned, or refinance if held within a consolidated real estate investment partnership. The Company has sufficient capacity on its Line to repay this maturing debt, all of which is in the form of non-recourse mortgage loans.
(in thousands)March 31, 2019
Scheduled Principal Payments and Maturities by Year:
Scheduled
Principal
Payments
 
Mortgage
Loan
Maturities
 
Unsecured
Maturities (1)
 Total
2019$7,284
 13,216
 —
 20,500
202011,287
 39,074
 300,000
 350,361
202111,599
 76,251
 —

87,850
202211,798
 5,848
 675,000
 692,646
202310,043
 59,375
 —
 69,418
Beyond 5 Years27,013
 209,843
 2,250,000
 2,486,856
Unamortized debt premium/(discount) and issuance costs—
 5,315
 (29,208) (23,893)
Total$79,024
 408,922
 3,195,792
 3,683,738
        
(1) Includes unsecured public and private debt and unsecured credit facilities.
The Company was in compliance as of September 30, 2018March 31, 2019 with the financial and other covenants under its unsecured public and private placement debt and unsecured credit facilities.

6.    Derivative Financial Instruments
The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors, and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for speculative or other purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company and its affiliates may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations.
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

2822


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2018March 31, 2019

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   Fair Value
(in thousands)(in thousands)       
Assets (Liabilities)(1)
(in thousands)       
Assets (Liabilities)(1)
Effective Date Maturity Date Notional Amount Counterparty Pays Variable Rate of Regency Pays Fixed Rate of September 30, 2018 December 31, 2017 Maturity Date Notional Amount Counterparty Pays Variable Rate of Regency Pays Fixed Rate of March 31, 2019 December 31, 2018
12/6/18 6/28/19 $250,000
 30 year U.S. Treasury 3.147%
(2) 
$—
 (5,491)
4/3/17 12/2/20 $300,000
 1 Month LIBOR with Floor 1.824% $6,410
 1,804
 12/2/20 $300,000
 1 Month LIBOR with Floor 1.824% 2,255
 3,759
8/1/16 1/5/22 265,000
 1 Month LIBOR with Floor 1.053% 15,286
 10,744
 1/5/22 265,000
 1 Month LIBOR with Floor 1.053% 8,110
 10,838
4/7/16 4/1/23 20,000
 1 Month LIBOR 1.303% 1,310
 801
 4/1/23 20,000
 1 Month LIBOR 1.303% 626
 880
12/1/16 11/1/23 33,000
 1 Month LIBOR 1.490% 2,151
 1,166
 11/1/23 33,000
 1 Month LIBOR 1.490% 918
 1,376
6/2/17 6/2/27 37,500
 1 Month LIBOR with Floor 2.366% 1,645
 (177) 6/2/27 37,500
 1 Month LIBOR with Floor 2.366% (224) 629
 $26,802
 14,338
  $11,685
 11,991
            
(1) 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.
(1) 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.
(1) 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.
(2) On March 7, 2019, the Company settled its 30 year Treasury rate lock in connection with its issuance of the $300 million 4.65% unsecured notes due March 2049 for $5.7 million, which is included in the balance of AOCI and will be reclassified to earnings over the 30 year term of the hedged transaction.(2) On March 7, 2019, the Company settled its 30 year Treasury rate lock in connection with its issuance of the $300 million 4.65% unsecured notes due March 2049 for $5.7 million, which is included in the balance of AOCI and will be reclassified to earnings over the 30 year term of the hedged transaction.
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, 2018,March 31, 2019, does not have any derivatives that are not designated as hedges. The Company has master netting agreements; 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 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 following table represents the effect of the derivative financial instruments on the accompanying consolidated financial statements:
Location and Amount of Gain (Loss) Recognized in OCI on DerivativeLocation and Amount of Gain (Loss) Recognized in OCI on Derivative Location and Amount of Gain (Loss) Reclassified from AOCI into Income Total Interest Expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recordedLocation and Amount of Gain (Loss) Recognized in OCI on Derivative Location and Amount of Gain (Loss) Reclassified from AOCI into Income Total amounts presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded
 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) 2018 2017   2018 2017   2018 2017 2019 2018   2019 2018   2019 2018
Interest rate swaps $2,717
 (39) Interest expense $(1,148) (2,329) Interest expense, net $36,618
 34,679
 $(5,489) 9,505
 Interest expense $(176) 2,138
 Interest expense, net $37,752
 36,785
            
Location and Amount of Gain (Loss) Recognized in OCI on Derivative Location and Amount of Gain (Loss) Reclassified from AOCI into Income Total Interest Expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded
 Nine months ended September 30,   Nine months ended September 30,   Nine months ended September 30,
(in thousands) 2018 2017   2018 2017   2018 2017
Interest rate swaps $16,511
 (3,911) Interest expense $(4,701) (8,054) Interest expense, net $111,477
 97,285
As of September 30, 2018,March 31, 2019, the Company expects approximately $600,000$1.6 million of net deferred losses on derivative instruments in AOCI, 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 $7.9$7.1 million which is related to previously settled swaps on the Company's ten and thirty year fixed rate unsecured loans.debt.

23


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


7.    Leases

Lessor Accounting
The Company's Lease income is comprised of both fixed and variable income, as follows:
Fixed and in-substance fixed lease income includes stated amounts per the lease contract, which are primarily related to base rent, and in some cases stated amounts for CAM, real estate taxes, and insurance. Income for these amounts is recognized on a straight line basis.
Variable lease income includes the following two main items in the lease contracts:
Recoveries from tenants represents amounts which tenants are contractually obligated to reimburse the Company for the tenants’ portion of actual Recoverable Costs incurred. Generally the Company’s leases provide for the tenants to reimburse the Company based on the tenants’ share of the actual costs incurred in proportion to the tenants’ share of leased space in the property.
Percentage rent represents amounts billable to tenants based on the tenants' actual sales volume in excess of levels specified in the lease contract.
The following table provides a disaggregation of lease income recognized during the three months ended March 31, 2019, under ASC Topic 842, Leases, as either fixed or variable lease income based on the criteria specified in ASC 842:
  Three months ended March 31,
  2019
Operating lease income  
Fixed and in-substance fixed lease income$201,878
Variable lease income 62,835
Other lease related income, net  
Above/below market rent amortization 13,454
Uncollectible amounts in lease income (864)
Total lease income$277,303
Future minimum rents under non-cancelable operating leases as of March 31, 2019 and December 31, 2018, excluding variable lease payments, are as follows:
  
Future Minimum Rents as of
(in thousands)
Year Ending December 31, March 31, 2019 December 31, 2018
2019$578,963
(1 
) 
761,151
2020 713,553
 693,848
2021 629,638
 608,587
2022 537,753
 516,369
2023 437,109
 414,424
Thereafter 1,778,839
 1,691,203
Total$4,675,855
 4,685,582
(1)  The future minimum rental income for 2019 as of March 31, 2019 includes amounts due between April 1, 2019 and December 31, 2019.

24


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

Lessee Accounting
The Company has shopping centers that are subject to non-cancelable, long-term ground leases where a third party owns the underlying land and has leased the land to the Company to construct and/or operate a shopping center.
The Company has 22 properties within its consolidated real estate portfolio that are either partially or completely on land subject to ground leases with third parties. Accordingly, the Company owns only a long-term leasehold or similar interest in these properties. These ground leases expire through the year 2101, and in most cases, provide for renewal options. Buildings and improvements constructed on the leased land are capitalized as Real estate assets in the accompanying Consolidated Balance Sheets and depreciated over the shorter of the useful life of the improvements or the lease term.
In addition, the Company has non-cancelable operating leases pertaining to office space from which it conducts its business. Office leases expire through the year 2029, and in most cases, provide for renewal options. Leasehold improvements are capitalized as tenant improvements, included in Other assets in the Consolidated Balance Sheets, and depreciated over the shorter of the useful life of the improvements or the lease term.
The ground and office lease expense continues to be recognized on a straight line basis over the term of the leases, including management's estimate of expected option renewal periods. Operating lease expense under the Company's ground and office leases was as follows, including straight lined rent expense and variable lease expenses such as CPI increases, performance based rent and reimbursements of landlord costs:
  Three months ended March 31,
  2019
Operating lease expense  
Ground leases$3,673
Office leases 1,042
Total fixed operating lease expense$4,715
Variable lease expense  
Ground leases$428
Office leases 143
Total variable lease expense$571
Total Lease Expense$5,286
Cash paid for amounts included in the measurement of operating lease liabilities  
Operating cash flows from operating leases$3,692
Operating lease expense under the Company's ground and office leases was $5.3 million and $4.2 million during the three months ended March 31, 2019 and 2018, respectively, which includes fixed and variable rent expense.

25


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

The following table summarizes the undiscounted future cash flows by year attributable to the operating lease liabilities under ground and office leases as of March 31, 2019, and provides a reconciliation to the Lease liability included in the accompanying Consolidated Balance Sheets:
  
Lease liabilities
(in thousands)
Year Ending
December 31,		 Ground LeasesOffice LeasesTotal
   2019 (1)
$8,004
3,807
11,811
2020 10,706
4,976
15,682
2021 10,674
3,863
14,537
2022 10,698
2,893
13,591
2023 10,914
2,188
13,102
Thereafter 598,327
5,955
604,282
Total undiscounted lease liabilities$649,323
23,682
673,005
Present value discount (445,324)(2,559)(447,883)
Lease liabilities 203,999
21,123
225,122
Weighted average discount rate 5.2%4.0% 
Weighted average remaining term 49.9 years
5.9 years
 
     
(1)  The undiscounted lease liability maturities shown for 2019 are as of March 31, 2019, and includes amounts due between April 1, 2019 and December 31, 2019.
The following table summarizes the future obligations under non-cancelable operating leases, excluding unexercised renewal options, as of December 31, 2018:
  
Future Lease Obligations
(in thousands)
Year Ending December 31, Ground LeasesOffice LeasesTotal Future Lease Obligations
2019$10,672
4,405
15,077
2020 10,439
4,294
14,733
2021 10,344
3,549
13,893
2022 10,258
2,893
13,151
2023 10,369
2,189
12,558
Thereafter 461,762
5,944
467,706
Total$513,844
23,274
537,118


2926


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2018March 31, 2019

7.8.    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, 2018 December 31, 2017March 31, 2019 December 31, 2018
(in thousands)Carrying Amount Fair Value Carrying Amount Fair ValueCarrying Amount Fair Value Carrying Amount Fair Value
Financial assets:       
Notes receivable$—
 —
 $15,803
 15,660
Financial liabilities:              
Notes payable$3,008,592
 2,952,604
 $2,971,715
 3,058,044
$3,009,886
 3,066,580
 $3,006,478
 2,961,769
Unsecured credit facilities$708,616
 710,000
 $623,262
 625,000
$673,852
 675,769
 $708,734
 710,902
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, 2018March 31, 2019 and December 31, 2017,2018, respectively. 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, appropriate 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.
(b) Fair Value Measurements
The following financial instruments are measured at fair value on a recurring basis:
Securities
The Company has investments in marketable securities that are included within other assets on the accompanying Consolidated Balance Sheets. The fair value of the securities was determined using quoted prices in active markets, which are considered Level 1 inputs of the fair value hierarchy. Changes in the value of securities are recorded within Net investment (income) loss in the accompanying Consolidated Statements of Operations.Operations, and include unrealized gains of $2.2 million and unrealized losses of $384,000, during the three months ended March 31, 2019 and 2018, respectively.
Available-for-Sale Debt Securities
Available-for-sale debt 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 debt 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

30


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2018

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

27


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

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.
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, 2018Fair Value Measurements as of March 31, 2019
(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)
Securities$36,027
 36,027
 —
 —
$36,318
 36,318
 —
 —
Available-for-sale debt securities7,987
 —
 7,987
 —
8,082
 —
 8,082
 —
Interest rate derivatives26,802
 —
 26,802
 —
11,909
 —
 11,909
 —
Total$70,816
 36,027
 34,789
 —
$56,309
 36,318
 19,991
 —
       
Liabilities:       
Interest rate derivatives$(224) —
 (224) —
Fair Value Measurements as of December 31, 2017Fair Value Measurements as of December 31, 2018
(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)
Securities$31,662
 31,662
 —
 —
$33,354
 33,354
 —
 —
Available-for-sale debt securities9,974
 —
 9,974
 —
7,933
 —
 7,933
 —
Interest rate derivatives14,515
 —
 14,515
 —
17,482
 —
 17,482
 —
Total$56,151
 31,662
 24,489
 —
$58,769
 33,354
 25,415
 —
              
Liabilities:              
Interest rate derivatives$(177) —
 (177) —
$(5,491) —
 (5,491) —
There were no assets measured at fair value on a nonrecurring basis as of September 30, 2018 orMarch 31, 2019. The following tables present the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a non-recurring basis as of December 31, 2017.2018:
 Fair Value Measurements as of December 31, 2018  
   Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total Gains
(in thousands)Balance (Level 1) (Level 2) (Level 3) (Losses)
Properties held for sale42,760
 —
 42,760
 —
 (6,579)
During the year-ended December 31, 2018, the Company remeasured three properties, classified as held for sale, to fair value based on the expected selling price. Two of these three properties have been sold and the third continues to be classified as held for sale in the accompanying Consolidated Balance Sheets.


28


8.
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2019

9.    Equity and Capital
Common Stock of the Parent Company
At the Market ("ATM") Program
Under the Parent Company's ATM equity offering program, the Parent Company may sell up to $500 million of common stock at prices determined by the market at the time of sale. There were no shares issued under the ATM equity program during the ninethree months ended September 30, 2018March 31, 2019 or 2017.2018. As of September 30, 2018,March 31, 2019, all $500 million of common stock remained available for issuance under this ATM equity program.
Share Repurchase Program
On February 7, 2018, the Company's Board authorized a common share repurchase program under which the Company may repurchase, from time to time, up to $250 million worth of shares of its outstanding common stock through open market purchases and/or in privately negotiated transactions. Any shares purchased will be retired. In January 2019, the Company settled 563,229 shares, repurchased in December 2018, for $32.8 million at an average price of $58.17 per share, under this repurchase program. The program iswas scheduled to expire on February 6, 2020; however, the program was closed upon the authorization by the Company's Board of a new share repurchase program, as further discussed below.
On February 5, 2019, the Company's Board authorized a new common share repurchase program under which the Company, may purchase, from time to time, up to a maximum of $250 million of shares of its outstanding common stock through open market purchases and/or in privately negotiated transactions. Any shares purchased will be retired. The program is set to expire on February 4, 2020. The timing and actual number of shares repurchased

31


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2018

purchased under the program depend upon marketplace conditions and other factors. The program remains subject to the discretion of the Board. As of September 30, 2018, the Company hadThrough March 31, 2019, no shares have been repurchased 2,145,209 shares for $125.0 million at an average price of $58.24 per share.
Subsequent Event - Transfer of Listing
On October 25, 2018, the Company's Board approved the transfer of the Company's common stock from listing on the New York Stock Exchange ("NYSE") to The NASDAQ Global Select Market ("NASDAQ"). The Company expects the last day of trading on the NYSE to be November 12, 2018. The Company's common stock has been approved for listing on NASDAQ, is expected to commence trading on November 13, 2018, and will continue to trade under the stock symbol "REG".this new program.
Common Units of the Operating Partnership
Common units of the operating partnership are issued or redeemed and retired for each of the shares of Parent Company common stock issued or repurchased and retired, as described above.
Accumulated Other Comprehensive LossIncome (Loss) ("AOCI")
The following tables present changes in the balances of each component of AOCI:
 Controlling Interests Noncontrolling Interests Total
(in thousands)Cash Flow Hedges Unrealized gain (loss) on Available-For-Sale Debt Securities AOCI Cash Flow Hedges Unrealized gain (loss) on Available-For-Sale Debt Securities AOCI AOCI
Balance as of December 31, 2016$(18,327) (19) (18,346) (301) —
 (301) (18,647)
Other comprehensive income before reclassifications(3,768) 51
 (3,717) (143) —
 (143) (3,860)
Amounts reclassified from AOCI (1)
7,922
 —
 7,922
 132
 —
 132
 8,054
Current period other comprehensive income, net4,154
 51
 4,205
 (11) —
 (11) 4,194
Balance as of September 30, 2017$(14,173) 32
 (14,141) (312) —
 (312) (14,453)
              
(1) Amounts reclassified from AOCI into income are presented within Interest expense, net in the Consolidated Statement of Operations.
      
 Controlling Interests Noncontrolling Interests Total
(in thousands)Cash Flow Hedges Unrealized gain (loss) on Available-For-Sale Debt Securities AOCI Cash Flow Hedges Unrealized gain (loss) on Available-For-Sale Debt Securities AOCI AOCI
Balance as of December 31, 2017$(6,262) (27) (6,289) (112) —
 (112) (6,401)
Opening adjustment due to change in accounting policy (2)
12
 —
 12
 2
 —
 2
 14
Adjusted balance as of January 1, 2018(6,250) (27) (6,277) (110) —
 (110) (6,387)
Other comprehensive income before reclassifications15,731
 (51) 15,680
 780
 —
 780
 16,460
Amounts reclassified from AOCI (1)
4,663
 —
 4,663
 38
 —
 38
 4,701
Current period other comprehensive income, net20,394
 (51) 20,343
 818
 —
 818
 21,161
Balance as of September 30, 2018$14,144
 (78) 14,066
 708
 —
 708
 14,774
              
(1) Amounts recelassified from AOCI into income are presented within Interest expense, net in the Consolidated Statement of Operations.
(2) Upon adoption of ASU 2017-12, the Company recognized the immaterial adjustment to opening retained earnings and AOCI for previously recognized hedge ineffectiveness from off-market hedges, as further discussed in note 1.

 Controlling Interests Noncontrolling Interests Total
 Cash Flow Hedges Unrealized gain (loss) on Available-For-Sale Debt Securities AOCI Cash Flow Hedges AOCI AOCI
Balance as of December 31, 2018$(805) (122) (927) 189
 189
 (738)
Other comprehensive income before reclassifications(5,154) 137
 (5,017) (335) (335) (5,352)
Amounts reclassified from AOCI (1)
(152) —
 (152) (24) (24) (176)
Current period other comprehensive income, net(5,306) 137
 (5,169) (359) (359) (5,528)
Balance as of March 31, 2019$(6,111) 15
 (6,096) (170) (170) (6,266)
            
(1)  Amounts reclassified from AOCI into income are presented within Interest expense, net in the Consolidated Statements of Operations.

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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2018March 31, 2019

9.
      
 Controlling Interests Noncontrolling Interests Total
(in thousands)Cash Flow Hedges Unrealized gain (loss) on Available-For-Sale Debt Securities AOCI Cash Flow Hedges AOCI AOCI
Balance as of December 31, 2017$(6,262) (27) (6,289) (112) (112) (6,401)
Opening adjustment due to change in accounting policy (2)
12
 —
 12
 2
 2
 14
Adjusted balance as of January 1, 2018(6,250) (27) (6,277) (110) (110) (6,387)
Other comprehensive income before reclassifications9,003
 (119) 8,884
 502
 502
 9,386
Amounts reclassified from AOCI (1)
2,157
 —
 2,157
 (19) (19) 2,138
Current period other comprehensive income, net11,160
 (119) 11,041
 483
 483
 11,524
Balance as of March 31, 2018$4,910
 (146) 4,764
 373
 373
 5,137
            
(1) Amounts reclassified from AOCI into income are presented within Interest expense, net in the Consolidated Statement of Operations.
(2) Upon adoption of ASU 2017-12, the Company recognized the immaterial adjustment to opening retained earnings and AOCI for previously recognized hedge ineffectiveness from off-market hedges, as further discussed in note 1.


10.    Stock-Based Compensation
During ninethe three months ended September 30, 2018,March 31, 2019, the Company granted 259,356233,237 shares of restricted stock with a weighted-average grant-date fair value of $63.50$65.02 per share. The Company records stock-based compensation expense within generalGeneral and administrative expenses in the accompanying Consolidated Statements of Operations.

10.11.    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 and deferred compensation liabilities of the Rabbi trust and related participant account obligations in the accompanying Consolidated Balance Sheets, excluding Regency stock:
(in thousands)September 30, 2018 December 31, 2017March 31, 2019 December 31, 2018 Location in Consolidated Balance Sheets
Assets:       
Equity securities (1)
$33,907
 31,662
Securities$34,278
 31,351
 Other assets
Liabilities:       
Accounts payable and other liabilities$33,716
 31,383
(1) Included within Other assets in the accompanying Consolidated Balance Sheets.
Deferred compensation obligation$34,115
 31,166
 Accounts payable and other liabilities


30


11.
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2019

12.    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) 2018 2017 2018 2017 2019 2018
Numerator:            
Income from operations attributable to common stockholders - basic $69,722
 59,666
 $170,222
 74,810
 $90,446
 52,660
Income from operations attributable to common stockholders - diluted $69,722
 59,666
 $170,222
 74,810
 $90,446
 52,660
Denominator:            
Weighted average common shares outstanding for basic EPS 169,438
 170,105
 169,847
 155,881
 167,440
 170,704
Weighted average common shares outstanding for diluted EPS (1)
 169,839
 170,466
 170,166
 156,190
 167,717
 170,959

            
Income per common share – basic $0.41
 0.35
 $1.00
 0.48
 $0.54
 0.31
Income per common share – diluted $0.41
 0.35
 $1.00
 0.48
 $0.54
 0.31
(1) Includes the dilutive impact of unvested restricted stock and shares issuable under the forward equity offering, that were fully settled on December 14, 2017, using the treasury stock method.
(1) Includes the dilutive impact of unvested restricted stock using the treasury stock method.
(1) Includes the dilutive impact of unvested restricted stock 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 be anti-dilutive. Weighted average exchangeable Operating Partnership units outstanding for both the three and nine months ended September 30,March 31, 2019 and 2018 were 349,902 and were 349,902 and 276,503, respectively, during the same periods in 2017.

33


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2018

for both periods.
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) 2018 2017 2018 2017 2019 2018
Numerator:            
Income from operations attributable to common unit holders - basic $69,869
 59,798
 $170,580
 75,027
 $90,636
 52,771
Income from operations attributable to common unit holders - diluted $69,869
 59,798
 $170,580
 75,027
 $90,636
 52,771
Denominator:            
Weighted average common units outstanding for basic EPU 169,788
 170,455
 170,197
 156,158
 167,790
 171,054
Weighted average common units outstanding for diluted EPU (1)
 170,189
 170,816
 170,516
 156,467
 168,067
 171,309

            
Income per common unit – basic $0.41
 0.35
 $1.00
 0.48
 $0.54
 0.31
Income per common unit – diluted $0.41
 0.35
 $1.00
 0.48
 $0.54
 0.31
(1) Includes the dilutive impact of unvested restricted stock and shares issuable under the forward equity offering, that were fully settled on December 14, 2017, using the treasury stock method.
(1) Includes the dilutive impact of unvested restricted stock using the treasury stock method.
(1) Includes the dilutive impact of unvested restricted stock using the treasury stock method.

12.13.    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.

31


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

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 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, 2018March 31, 2019 and December 31, 2017,2018, the Company had $12.6 million and $9.4 million, respectively in letters of credit outstanding.
Purchase Commitments
The Company enters into purchase and sale agreements to buy or sell real estate assets in the normal course of business, which generally provide limited recourse if either party ends the contract. At September 30, 2018,March 31, 2019, the Company has a contractual commitmentan option to purchase up to a 100%an additional 81.63% ownership interest in an operating property valued at $205 millionshopping center by NovemberDecember 2019 at the option of the seller. The Companyand currently expects the seller to require the Company to purchase a 30%acquire an additional 16.63% interest in such property by November 2019that date for approximately $61.5$16.7 million.


3432




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 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, 2017.2018. 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
WeIn addition to the required Generally Accepted Accounting Principles ("GAAP") presentations, we use certain non-GAAP performance measures in addition to the required GAAP presentation, 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 is a Retail Operating Property that was owned and operated for the entirety of both calendar year periods being compared. This term excludes all developments and Non-Same Properties.
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 considering properties acquired through the Equity One merger as Same Property if those properties would have met that criteria from Equity One's ownership of the properties. See Supplemental Earnings Information, later in this document, for further discussion and use of Equity One information for pro-rata same property NOI, as adjusted.
A Non-Same Property is a property acquired, sold, or a Development Completion during either calendar year period being compared. Non-retail properties and corporate activities, including the captive insurance program, are part of Non-Same Property.
A Retail Operating Property is any retail property not termed a Property in Development. A retail property is any property where the majority of the income is generated from retail uses.
Property In Development includes properties in various stages of development and redevelopment including active pre-development activities. The Properties in development line item of the Consolidated Balance Sheets includes development and redevelopment costs incurred but not yet placed in service. Development and redevelopment costs incurred for assets that have been placed in service are included in Land, building and improvements in the Consolidated Balance Sheets.
Development Completion is a property 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 property 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 a Retail Operating Property the following calendar year. For
Fixed Charge Coverage Ratio is defined as Operating EBITDAre divided by the sum of the gross interest and scheduled mortgage principal paid to our lenders plus dividends paid to our preferred stockholders.
NAREIT EBITDAre is a measure of REIT performance, which the National Association of Real Estate Investment Trusts ("NAREIT") defines as net income, computed in accordance with GAAP, purposes, however,excluding (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization, (iv) gains on sales and impairments of real estate, and (v) adjustments to reflect the Company's share of unconsolidated partnerships and joint ventures.
NAREIT Funds from Operations ("NAREIT FFO") is a commonly used measure of REIT performance, which NAREIT defines as net income, computed in accordance with GAAP, excluding gains on sales and impairments of real estate, net of tax, 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 in effect during that period. Effective January 1, 2019, we prospectively adopted the NAREIT FFO White Paper - 2018 Restatement ("2018 FFO White Paper"), and elected the option of excluding gains on sale and impairments of land, which are considered incidental to our main business. Prior period amounts were not restated to conform to the current year presentation, and therefore are calculated as described above, and also include gains on sale and impairments of land.
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 on sale and impairments of real estate, 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, incurred foracquisition and development properties are transferredactivities, and begin depreciating when they are
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,

3533




placed in servicetherefore, should not be considered a substitute measure of cash flows from operations. The Company provides a reconciliation of Net Income Attributable to Common Stockholders to NAREIT FFO.
Net Operating Income ("NOI") is the sum of base rent, percentage rent, and recoveries from tenants and other leasing and property income, less operating and maintenance expenses, real estate taxes, ground rent, and uncollectible lease income / provision for doubtful accounts. NOI excludes straight-line rental income and expense, above and below market rent and ground rent amortization, tenant lease inducement amortization, and other fees. The Company also provides disclosure of NOI excluding termination fees, which excludes both termination fee income and expenses.
A Non-Same Property is a property acquired, sold, or a Development Completion during either calendar year period being compared. Non-retail properties and corporate activities, including the captive insurance program, are therefore included in Land, buildingspart of Non-Same Property.
Operating EBITDAre (previously Adjusted EBITDA) begins with the NAREIT EBITDAre and improvements in the Consolidated Balance Sheets, regardlessexcludes certain non-cash components of the completion thresholds described above.earnings derived from above and below market rent amortization and straight-line rents.
Pro-Rata information includes 100% of our consolidated properties plus our economic share (based on our ownership interest) in our unconsolidated real estate investment partnerships.
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, along with other non-GAAP measures, makes comparisons of other REITs' operating results to the Company's more meaningful.
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.
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 comparability of pro-rata information.
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.
Operating EBITDAreProperty In Development (previously Adjusted EBITDA) begins withincludes properties in various stages of development and redevelopment including active pre-development activities.
A Retail Operating Property is any retail property not termed a Property in Development. A retail property is any property where the National Associationmajority of Real Estate Investment Trusts ("NAREIT") EBITDAre and excludes certain non-cash components of earnings derivedthe income is generated from above and below market rent amortization and straight-line rents. NAREIT EBITDAretail uses.
reSame Property is a measureRetail Operating Property that was owned and operated for the entirety of REIT performance, which NAREIT defines as net income, computed in accordance with GAAP, excluding interest expense, income tax expense, depreciationboth calendar year periods being compared. This term excludes all developments and amortization, gains and losses from sales of depreciable property, operating real estate impairments, and adjustments to reflect the Company's share of unconsolidated partnerships and joint ventures. The NAREIT EBITDAre performance measure was adopted for reporting periods beginning after December 31, 2017.
Fixed Charge Coverage Ratio is defined as Operating EBITDAre 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 base rent, percentage rent, and recoveries from tenants and other income, less operating and maintenance, real estate taxes, ground rent, and provision for doubtful accounts. NOI excludes straight-line rental income and expense, above and below market rent and ground rent amortization, tenant lease inducement 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 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.Non-Same Properties.



36
34




Overview of Our Strategy
Regency Centers Corporation began its operations as a publicly-traded REIT in 1993, and, as of September 30, 2018,March 31, 2019, had full or partial ownership interests in 426419 retail properties primarily anchored by market leading grocery stores. Our properties are principally located in affluent and infill trade areas of the United States, and contain 53.652.6 million square feet ("SF") of gross leasable area ("GLA"). All of our operating, investing, and financing activities are performed through our Operating Partnership, Regency Centers, L.P., our wholly-owned subsidiaries, and through our co-investment partnerships.
As of September 30, 2018,March 31, 2019, the Parent Company owns approximately 99.8% of the outstanding common partnership units of the Operating Partnership.
Our mission is to be the preeminent national shopping center owner, operator, and developer.developer of shopping centers connecting outstanding retailers and service providers with surrounding neighborhoods and communities. Our strategy isgoals are to:

Own and manage an unequaleda portfolio of high-quality neighborhood and community shopping centers anchored by market leading grocers and located in affluent suburban and near urban trade areas in the country’s most desirable metro areas. We expect that this combination will produce highly desirable and attractive centers with best-in-class retailers. These centers should command higher rental and occupancy rates resulting in excellent prospects to grow NOI;net operating income ("NOI");

Maintain an industry leading and disciplined development and redevelopment platform to deliver exceptional retail centers at higher marginsreturns as compared to acquisitions;

Support our business activities with a strong balance sheet; and

Engage a talented, dedicated team of employees, who are guided by Regency’s strong values and special culture, which isare aligned with shareholder interests.
Executing on our Strategy
During the ninethree months ended September 30, 2018:March 31, 2019:
We had Net income attributable to common stockholders of $170.2$90.4 million as compared to $74.8$52.7 million net of $75.6 million of merger costs, during the ninethree months ended September 30, 2017.March 31, 2018.
We sustained superior same property NOI growth:
We achieved pro-rata same property NOI growth, as adjusted, excluding termination fees, of 3.8%2.9%.
We executed 1,341289 leasing transactions representing 4.31.0 million pro-rata SF of new and renewal leasing, with trailing twelve month rent spreads of 7.4%8.4% on comparable retail operating property spaces.
At September 30, 2018,March 31, 2019, our total property portfolio was 95.4%94.6% leased, while our same property portfolio was 95.9%95.0% leased.
We developedcontinued our development and redevelopedredevelopment of high quality shopping centers at attractive returns on investment:
We started onetwo new developmentredevelopments representing a total pro-rata project investment of $32.2$13.5 million upon completion, with a weighted average projected return on investment of 6.3%6.4%.
Including the onetwo new development project,redevelopment projects, a total of 2221 properties were in the process of development or redevelopment, representing a pro-rata investment upon completion of $354.4$403.3 million.
We completed two new developments representing a total pro-rata project investment of $110.9 million with a return on investment of 7.0%.
We maintained a conservative balance sheet providing financial flexibility to cost effectively fund investment opportunities and debt maturities:
On March 9, 2018,6, 2019, the Company received proceeds from $300.0issued $300 million of 4.125%4.65% senior unsecured public notes, which priced at 99.837% and mature in March 2028. $60 million of the proceeds were used to repay our Line and $163.2 million was used, in April, to early redeem our $150.0 million 6.0% senior unsecured public notes originally due June 2020, including accrued and unpaid interest through the redemption date and a make-whole amount. We used the remainder of2049, using the proceeds to repay 2018$39.5 million of mortgage debt with an interest rate of 7.3% and to repay $250 million of 4.8% senior unsecured notes due April 2021. This offering further enhanced our financial flexibility and increased the duration of our average maturities and for general corporate purposes.to over 10 years while maintaining our weighted average interest rate.
On
At March 26, 2018, we amended and restated31, 2019, our unsecured revolving credit facility (the “Line”). The amendment and restatement increases the size of the Line to $1.25 billion from $1.0 billion and extends the maturity date to March 23, 2022, with options to extend maturity for two additional six-month periods. Borrowings will bear interest at anannualized net debt-to-operating EBITDAre ratio on a pro-rata basis was 5.3x.

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annual rate of LIBOR plus 87.5 basis points, subject to our credit ratings, compared to a rate of 92.5 basis points under the previous facility. An annual facility fee of 15 basis points, subject to our credit ratings, applies to the Line.
At September 30, 2018, our annualized net debt-to-operating EBITDAre ratio on a pro-rata basis was 5.4x.

Property Portfolio
The following table summarizes general information related to the Consolidated Properties in our portfolio:
(GLA in thousands) September 30, 2018 December 31, 2017 March 31, 2019 December 31, 2018
Number of Properties 306 311 302 305
Properties in Development 6 8 6 6
GLA 38,095 38,743 37,393 37,946
% Leased – Operating and Development 95.6% 95.5% 94.4% 95.5%
% Leased – Operating 95.9% 96.0% 94.7% 95.9%
Weighted average annual effective rent per square foot ("PSF"), net of tenant concessions. $21.55 $21.01 $21.67 $21.51
The following table summarizes general information related to the Unconsolidated Properties owned in co-investment partnerships in our portfolio:
(GLA in thousands) September 30, 2018 December 31, 2017 March 31, 2019 December 31, 2018
Number of Properties 120 115 117 120
Properties in Development 2 1 2 2
GLA 15,552 15,138 15,211 15,622
% Leased – Operating and Development 94.5% 95.9% 95.4% 95.4%
% Leased –Operating 94.9% 96.2% 95.7% 95.7%
Weighted average annual effective rent PSF, net of tenant concessions $21.23 $20.63 $21.26 $21.46
For the purpose of the following disclosures of occupancy and leasing activity, "anchor space" is considered space greater than or equal to 10,000 SF and "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, 2018 December 31, 2017 March 31, 2019 December 31, 2018
% Leased – Operating 95.8% 96.2%
% Leased – All Properties 94.6% 95.6%
Anchor space 97.9% 98.3% 96.9% 98.4%
Shop space 92.2% 92.5% 90.5% 90.9%
The decline in anchor space percent leased is primarily attributable to anchor move-outs, including Toys-R-Usthe closure of one Sears and certain other junior anchors. The decline in shop space percent leased is driven by seasonal move-outs and strategic vacancies in preparation for redevelopments.one K-Mart location as a result of the Sears bankruptcy filing.

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The following table summarizes leasing activity, including our pro-rata share of activity within the portfolio of our co-investment partnerships:
 Nine months ended September 30, 2018 Three months ended March 31, 2019
 
Leasing
Transactions (1)
 SF (in thousands) 
Base Rent
PSF
 
Tenant Allowance and Landlord Work
PSF
 
Leasing Commissions
PSF
 
Leasing
Transactions (1)
 SF (in thousands) 
Base Rent
PSF
 
Tenant Allowance and Landlord Work
PSF
 
Leasing Commissions
PSF
Anchor Leases 
 
 
 
 
      
New 20 338 $18.84
 $33.66
 $6.89
 3 75 $14.80
 $42.63
 $4.47
Renewal 64 1,918 $13.88
 $0.40
 $0.33
 20 445 $12.80
 $0.26
 $0.08
Total Anchor Leases (1)
 84 2,256 $14.62
 $5.38
 $1.31
 23 520 $13.09
 $6.36
 $0.71
Shop Space 
 
 

 

 

      
New 388 635 $32.85
 $26.41
 $13.33
 86 147 $33.78
 $27.49
 $7.63
Renewal 869 1,425 $33.11
 $0.85
 $2.15
 180 334 $32.29
 $1.72
 $0.49
Total Shop Space Leases (1)
 1,257 2,060 $33.03
 $8.73
 $5.60
 266 481 $32.75
 $9.59
 $2.67
Total Leases 1,341 4,316 $23.41
 $6.98
 $3.36
 289 1,001 $22.54
 $7.91
 $1.65
            
(1) Number of leasing transactions reported at 100%; all other statistics reported at pro-rata share.
(1) Number of leasing transactions reported at 100%; all other statistics reported at pro-rata share.
(1) Number of leasing transactions reported at 100%; all other statistics reported at pro-rata share.
 Nine months ended September 30, 2017 Three months ended March 31, 2018
 
Leasing
Transactions (1,2)
 SF (in thousands) 
Base Rent
PSF
 
Tenant Allowance and Landlord Work
PSF
 
Leasing Commissions
PSF
 
Leasing
Transactions (1,2)
 SF (in thousands) 
Base Rent
PSF
 
Tenant Allowance and Landlord Work
PSF
 
Leasing Commissions
PSF
Anchor Leases            
New 27 628 $18.80
 $26.83
 $5.06
 6 78 $24.54
 $26.11
 $9.89
Renewal 64 1,946 $15.01
 $—
 $0.45
 15 313 $14.21
 $0.16
 $0.47
Total Anchor Leases (1)
 91 2,574 $15.94
 $6.55
 $1.57
 21 391 $16.27
 $5.32
 $2.34
Shop Space            
New 383 660 $31.77
 $25.56
 $12.21
 109 178 $31.40
 $25.11
 $14.06
Renewal 834 1,392 $31.42
 $1.67
 $2.64
 223 397 $32.61
 $0.79
 $2.12
Total Shop Space Leases (1)
 1,217 2,052 $31.53
 $9.35
 $5.71
 332 575 $32.24
 $8.31
 $5.81
Total Leases 1,308 4,626 $22.86
 $7.79
 $3.41
 353 966 $25.78
 $7.10
 $4.41
            
(1) Number of leasing transactions reported at 100%; all other statistics reported at pro-rata share.
(1) Number of leasing transactions reported at 100%; all other statistics reported at pro-rata share.
(1) Number of leasing transactions reported at 100%; all other statistics reported at pro-rata share.
(2) For the period ending September 30, 2017, amounts include leasing activity of properties acquired from Equity One beginning March 1, 2017.
The weighted average base rent on signed shop space leases during 20182019 was $33.03$32.75 and exceeds the average annual base rent of all shop space leases due to expire during the next 12 months of $30.87$31.50 PSF. In the anchor category, base rent PSF on new leases decreased due to the limited volume and geographic location of anchor deals in 2019 as compared to 2018. On a comparable basis, new anchor deal rent spreads were positive.

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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 most significant tenants, based on their percentage of annualized base rent:
 September 30, 2018 March 31, 2019
Grocery Anchor 
Number of
Stores
 
Percentage of
Company-
owned GLA (1)
 
Percentage  of
Annualized
Base Rent (1) 
 
Number of
Stores
 
Percentage of
Company-
owned GLA (1)
 
Percentage  of
Annualized
Base Rent (1) 
Publix 69 6.3% 3.2% 70 6.6% 3.3%
Kroger 57 6.6% 3.1% 56 6.7% 3.1%
Albertsons/Safeway 46 4.1% 2.8%
Albertsons Companies 46 4.3% 2.8%
Whole Foods 32 2.5% 2.5%
TJX Companies 57 3.2% 2.3% 59 3.0% 2.4%
Whole Foods 29 2.3% 2.3%
  
(1) Includes Regency's pro-rata share of Unconsolidated Properties and excludes those owned by anchors.
(1) Includes Regency's pro-rata share of Unconsolidated Properties and excludes those owned by anchors.
(1) 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. A greater shift to e-commerce, large-scale retail business failures, and tight credit markets could negatively impact consumer spending and have an adverse effect on our results of operations. We seek to mitigate these potential impacts through tenant diversification, replacing 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 file for bankruptcy. Although base rent is supported by long-term lease contracts, tenants who file bankruptcy generally have the legal right to reject any or all of their leases and close related stores. Any unsecured claim we hold against a bankrupt tenant for unpaid rent might be paid only to the extent that funds are available and only in the same percentage as is paid to all other holders of unsecured claims. As a result, it is likely that we would recover substantially less than the full value of any unsecured claims we hold. Additionally, we may incur significant expense to recover our claim and to release the vacated space. 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. Tenants who have filed forare in bankruptcy and continue to occupy space in our shopping centers at September 30, 2018March 31, 2019 represent an aggregate of 0.6%0.2% of our annual base rent on a pro-rata basis, including three Sears/Kmart locations.basis.


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Results from Operations    
Comparison of the three months ended September 30, 2018March 31, 2019 and 2017:2018:
Our revenues increased as summarized in the following table:
  Three months ended September 30,  
(in thousands) 2018 2017 Change
Minimum rent $204,005
 195,393
 8,612
Percentage rent 1,224
 1,147
 77
Recoveries from tenants 60,393
 54,483
 5,910
Other income 5,734
 5,071
 663
Management, transaction, and other fees 6,954
 6,047
 907
Total revenues $278,310
 262,141
 16,169
  Three months ended March 31,  
(in thousands) 2019 2018 Change
Lease income (1)
 $277,303
 267,510
 9,793
Other property income 1,982
 2,025
 (43)
Management, transaction, and other fees 6,972
 7,158
 (186)
Total revenues $286,257
 276,693
 9,564
Minimum(1) As discussed in Note 1 to the Consolidated Financial Statements, Regency adopted ASC Topic 842, Leases, using the modified retrospective adoption method as of January 1, 2019, and elected to apply the transition provisions of the standard at the beginning of the period of adoption. As such, the prior period amounts prepared and presented under the former ASC Topic 840, Leases, were not restated, but were reclassified to conform with the current year presentation. Part of the practical expedients in ASC Topic 842 allow management to avoid separating lease and non-lease components of Lease income, therefore all lease income earned pursuant to tenant leases, including recoveries from tenants and percentage rent, in 2019 and as reclassified for 2018, is reflected in Lease income in the accompanying Consolidated Statements of Operations.
Lease income increased on a net basis,$9.8 million, driven by the following contractually billable components of rent to the tenants per the lease agreements:
$5.0 million increase from billable base rent, as follows:
$4.04.6 million increase from rent commencing at development properties;
$3.51.0 million increase from acquisitions of operating properties; and
$6.15.4 million increase from same properties including:due to rental rate growth on new and renewal leases, rent steps in existing leases, and rent commencements,
◦$7.1 million increase in base rent from redevelopments, rental rate growth on new and renewal leases, rent steps in existing leases, and rent commencements, offset by
◦$1.0 million decrease in other above/below market lease intangibles and straight line rent;
reduced by $5.0$6.0 million from the sale of operating properties.
$2.3 million increase from billable Recoveries from tenants, which represent amounts contractually billable to tenants per the terms of the leases for their reimbursements to us for the 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, on a net basis, as follows:
$1.21.5 million increase from rent commencing at development properties;
$755,000362,000 increase from acquisitions of operating properties; and
$5.42.1 million increase from same properties due to increasesa $2.5 million increase in real estate taxes and other recoverable costs;recoveries offset by a $0.4 million decrease in CAM recoveries;
reduced by $1.4$1.7 million from the sale of operating properties.
$632,000 decrease in Percentage rent primarily due to timing of tenant sales reporting.
$5.0 million increase in Above and below market rent amortization within our same property portfolio, primarily driven by accelerated amortization related to 2019 tenant move-outs.
$1.0 million decrease in Other lease income which consists of incidental income earned at our centers, increased $663,000 from higherlower termination and assignment fees.
Management, transaction, and other fees increased $907,000 due partially$0.9 million decrease from uncollectible lease income. Beginning with the adoption of ASC 842, Leases, on January 1, 2019, uncollectible lease income is recorded as a direct charge against Lease income. The uncollectible lease income was $0.9 million during the three months ended March 31, 2019, as compared to an increase$1.2 million of Provision for doubtful accounts during the three months ended March 31, 2018, which is included in development fees from two active developments within unconsolidated partnerships, along with an increaseOther operating expenses in leasing fees earned from unconsolidated partnerships.the accompanying Consolidated Statements of Operations.


39




Changes in our operating expenses are summarized in the following table:
  Three months ended September 30,  
(in thousands) 2018 2017 Change
Depreciation and amortization $89,183
 91,474
 (2,291)
Operating and maintenance 40,557
 38,020
 2,537
General and administrative 17,564
 15,199
 2,365
Real estate taxes 35,129
 29,315
 5,814
Other operating expenses 2,045
 3,195
 (1,150)
Total operating expenses $184,478
 177,203
 7,275

41




  Three months ended March 31,  
(in thousands) 2019 2018 Change
Depreciation and amortization $97,194
 88,525
 8,669
Operating and maintenance 40,638
 42,516
 (1,878)
General and administrative 21,300
 17,606
 3,694
Real estate taxes 34,155
 30,425
 3,730
Provision for doubtful accounts (1)
 —
 1,195
 (1,195)
Other operating expenses 1,134
 437
 697
Total operating expenses $194,421
 180,704
 13,717
(1) Beginning with the adoption of ASC 842, Leases, on January 1, 2019, uncollectible lease income is a direct charge against Lease income, which totaled $0.9 million during the three months ended March 31, 2019.
Depreciation and amortization costs decreased,increased, on a net basis, as follows:
$1.92.1 million increase as we began depreciating costs at development properties where tenant spaces were completed and became available for occupancy; and
$1.5 million763,000 increase from acquisitions of operating properties and corporate assets; offset byand
$2.98.9 million decreaseincrease from same properties, primarily attributable to additional depreciation at redevelopment properties; and
$2.8reduced by $3.1 million decrease from the sale of operating properties.
Operating and maintenance costs increased,decreased, on a net basis, as follows:
$1.91.7 million increase from operations commencing at development properties; andoffset by
$2.5775,000 decrease is primarily due to a $1.2 million decrease related to hail storm losses incurred in 2018 offset by $400,000 increase from the acquisition of operating properties;
$1.6 million decrease from same properties primarily attributable to an increasea decrease in recoverablesnow removal costs;
reduced by $828,000 due to hurricane losses recognized in 2017; and
$1.11.2 million decrease from the sale of operating properties.
General and administrative increased, on a net basis, as follows:
$1.62.0 million net increase in compensation-related costs, primarily from lower development overhead capitalization based ondue to appreciation in the timing and sizevalue of current development projects;participant obligations within the deferred compensation plan; and
$811,0001.7 million increase due to decreasedeliminating capitalization of non-contingent internal leasing overheard capitalization due tocosts and legal costs associated with leasing activities upon the different mixadoption of leasing transactions during the respective quarter.ASC 842, Leases, on January 1, 2019.
Real estate taxes increased, on a net basis, as follows:
$1.0 million increase from development properties where capitalization ceased as tenant spaces became available for occupancy;
$523,000309,000 increase from acquisitions of operating properties; and
$4.83.1 million increase within the same property portfolio resulting from increased tax assessments, including $3.4 million from Equity One properties;assessments;
reduced by $526,000$719,000 from soldthe sale of operating properties.
Provision for doubtful accounts was $1.2 million during the three months ended March 31, 2018. Beginning with the adoption of ASC 842, Leases, on January 1, 2019, uncollectible lease income is a direct charge against Lease income. The uncollectible lease income was $0.9 million during the three months ended March 31, 2019, as compared to $1.2 million of Provision for doubtful accounts during the three months ended March 31, 2018.


40




Other operating expenses decreased $1.2 million, primarilyincreased $697,000, attributable to transactionan increase in taxes, legal, and abandoned pursuit costs recognized from the Equity One merger in 2017.2019.
The following table presents the components of other expense (income):
  Three months ended September 30,  
(in thousands) 2018 2017 Change
Interest expense, net      
Interest on notes payable $31,619
 31,577
 42
Interest on unsecured credit facilities 5,025
 3,974
 1,051
Capitalized interest (1,670) (2,488) 818
Hedge expense 2,102
 2,102
 —
Interest income (458) (486) 28
Interest expense, net $36,618
 34,679
 1,939
Provision for impairment, net of tax 855
 —
 855
Net investment income (923) (971) 48
Total other expense (income) $36,550
 33,708
 2,842

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  Three months ended March 31,  
(in thousands) 2019 2018 Change
Interest expense, net      
Interest on notes payable $32,513
 32,968
 (455)
Interest on unsecured credit facilities 4,543
 4,288
 255
Capitalized interest (1,015) (2,179) 1,164
Hedge expense 2,115
 2,102
 13
Interest income (404) (394) (10)
Interest expense, net $37,752
 36,785
 967
Provision for impairment, net of tax 1,672
 16,054
 (14,382)
Gain on sale of real estate, net of tax (16,490) (96) (16,394)
Early extinguishment of debt 10,591
 162
 10,429
Net investment income (2,354) (32) (2,322)
Total other expense (income) $31,171
 52,873
 (21,702)
The $1.9$1.0 million net increase in total interest expense is primarily due to:
$1.1driven by $1.2 million increase in interest on unsecured credit facilities related to higher average balances and interest rates; and
$818,000 increase due to lower capitalization of interest based on the size and progress of development and redevelopment projects in process.
During the three months ended September 30, 2018,March 31, 2019, we recognized $855,000$1.7 million of impairment losses on onetwo operating propertyproperties which were sold. During the three months ended March 31, 2018, we recognized $16.1 million of impairment losses on two operating properties, both of which have been sold.
During the three months ended March 31, 2019, we sold 2 operating properties and one2 land parcel that sold.parcels for gains totaling $16.5 million.
During the three months ended March 31, 2019, we early redeemed the $250 million 4.8% senior unsecured notes resulting in $10.6 million of debt extinguishment costs. During the same period in 2018, we modified our Line, resulting in $162,000 of debt extinguishment costs.
Net investment income increased $2.3 million, primarily driven by changes in unrealized gains of plan assets held in the non-qualified deferred compensation plan.
Our equity in income of investments in real estate partnerships decreasedincreased as follows:
 Three months ended September 30,   Three months ended March 31,  
(in thousands)Regency's Ownership 2018 2017 ChangeRegency's Ownership 2019 2018 Change
GRI - Regency, LLC (GRIR)40.00% $7,733
 6,917
 816
40.00% $10,736
 7,518
 3,218
New York Common Retirement Fund (NYC)30.00% 207
 183
 24
30.00% 271
 (28) 299
Columbia Regency Retail Partners, LLC (Columbia I)20.00% 360
 284
 76
20.00% 403
 238
 165
Columbia Regency Partners II, LLC (Columbia II)20.00% 449
 332
 117
20.00% 482
 464
 18
Cameron Village, LLC (Cameron)30.00% 218
 174
 44
30.00% 256
 244
 12
RegCal, LLC (RegCal)25.00% 327
 331
 (4)25.00% 2,619
 436
 2,183
US Regency Retail I, LLC (USAA)20.01% 233
 3,599
 (3,366)20.01% 255
 235
 20
Other investments in real estate partnerships49.90% - 50.00% 497
 401
 96
18.38% - 50.00% 15,806
 1,242
 14,564
Total equity in income of investments in real estate partnershipsTotal equity in income of investments in real estate partnerships $10,024
 12,221
 (2,197)Total equity in income of investments in real estate partnerships $30,828
 10,349
 20,479
The $2.2$20.5 million decreaseincrease in our equity in income of investments in real estate partnerships is largely attributed to the following changes:

41




$816,0003.2 million increase at GRIR from greater rental income primarily due to rent growth and rent commencements at several shopping centers held in this partnership; offset by
$3.4 million decrease at USAA due to a $3.3$3.0 million gain recognized during 20172019 on the sale of an operating property within the partnership;
$2.2 million increase at RegCal due to a $2.5 million gain recognized during 2019 on the sale of an operating property within the partnership; and
$14.6 million increase within Other investments in real estate partnerships due to a $15.1 million gain recognized during 2019 on the sale of our ownership interest in a single operating property partnership.
The following represents the remaining components that comprised net income attributable to the common stockholders and unit holders:
  Three months ended September 30,  
(in thousands) 2018 2017 Change
Income from operations $67,306
 63,451
 3,855
Gain on sale of real estate, net of tax 3,228
 131
 3,097
Income attributable to noncontrolling interests (812) (769) (43)
Preferred stock dividends and issuance costs —
 (3,147) 3,147
Net income attributable to common stockholders $69,722
 59,666
 10,056
Net income attributable to exchangeable operating partnership units 147
 132
 15
Net income attributable to common unit holders $69,869
 59,798
 10,071
During the three months ended September 30, 2018, we sold three operating properties and three land parcels for gains totaling $3.2 million, while we did not have any operating property or land parcel sales during the three months ended September 30, 2017.
Preferred stock dividends decreased $3.1 million due to the redemption of our Series 7 preferred stock in August 2017.

  Three months ended March 31,  
(in thousands) 2019 2018 Change
Net income $91,493
 53,465
 38,028
Income attributable to noncontrolling interests (1,047) (805) (242)
Net income attributable to common stockholders $90,446
 52,660
 37,786
Net income attributable to exchangeable operating partnership units 190
 111
 79
Net income attributable to common unit holders $90,636
 52,771
 37,865

4342




Comparison of the nine months ended September 30, 2018 and 2017:
Results from operations for the nine months ended September 30, 2018, reflect the results of our merger with Equity One on March 1, 2017, and therefore excludes the results of operations for Equity One for the non-ownership period of 2017 prior to March 1, 2017.
Our revenues increased as summarized in the following table:
  Nine months ended September 30,  
(in thousands) 2018 2017 Change
Minimum rent $614,224
 532,625
 81,599
Percentage rent 6,292
 5,509
 783
Recoveries from tenants 178,865
 149,811
 29,054
Other income 16,035
 12,278
 3,757
Management, transaction, and other fees 20,999
 19,353
 1,646
Total revenues $836,415
 719,576
 116,839
Minimum rent increased as follows:
$9.6 million increase from rent commencing at development properties;
$9.5 million increase from new acquisitions of operating properties; and
$70.6 million increase from same properties, including:
◦$64.4 million increase in base rent, including $52.5 million from properties acquired through the Equity One merger, as follows:
▪$13.4 million from redevelopments, including $9.2 million from Equity One; and
▪$51.0 million, including $43.3 million from properties acquired through the Equity One merger, from rental rate growth on new and renewal leases, rent steps in existing leases, and rent commencements;
◦$6.2 million increase in other above/below market lease intangibles;
reduced by $8.1 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:
$2.7 million increase from rent commencing at development properties;
$1.9 million increase from new acquisitions of operating properties; and
$26.4 million increase from same properties, including $20.6 million from properties acquired through the Equity One merger, driven by increases in recoverable costs;
reduced by $2.0 million from the sale of operating properties.
Other income, which consists of incidental income earned at our centers, increased $3.8 million from same properties, including $2.2 million from properties acquired through the Equity One merger, primarily from termination, assignment and settlement fees.
Management, transaction, and other fees increased $1.6 million primarily due to an increase in development fees from two active developments within unconsolidated partnerships, along with an increase in leasing fees earned from unconsolidated partnerships.

44




Changes in our operating expenses are summarized in the following table:
  Nine months ended September 30,  
(in thousands) 2018 2017 Change
Depreciation and amortization $266,812
 243,757
 23,055
Operating and maintenance 124,924
 103,888
 21,036
General and administrative 51,947
 49,618
 2,329
Real estate taxes 97,096
 79,636
 17,460
Other operating expenses 6,476
 81,621
 (75,145)
Total operating expenses $547,255
 558,520
 (11,265)
Depreciation and amortization costs increased as follows:
$4.3 million increase as we began depreciating costs at development properties where tenant spaces were completed and became available for occupancy;
$4.3 million net increase from acquisitions of operating properties and corporate assets; and
$16.4 million increase from same properties, including $14.4 million from properties acquired through the Equity One merger;
reduced by $1.9 million from the sale of operating properties.
Operating and maintenance costs increased as follows:
$4.4 million increase from operations commencing at development properties;
$756,000 increase from acquisitions of operating properties; and
$17.3 million increase from same properties, including $15.1 million from properties acquired through the Equity One merger;
reduced by $1.4 million from the sale of operating properties.
General and administrative increased, on a net basis, as follows:
$1.8 million increase primarily from lower development overhead capitalization based on the timing and size of current development projects; and
$2.5 million increase due to decreased leasing overheard capitalization due to the different mix of leasing transactions; offset by
$1.4 million decrease in the value of participant obligations within the deferred compensation plan;
$634,000 decrease in compensation and non-compensation costs.
Real estate taxes increased as follows:
$2.1 million increase from development properties where capitalization ceased as tenant spaces became available for occupancy;
$1.4 million increase from acquisitions of operating properties; and
$14.9 million increase at same properties, including $10.8 million from properties acquired through the Equity One merger, from increased tax assessments; offset by
$888,000 decrease from the sale of operating properties.
Other operating expenses decreased $75.1 million primarily attributable to transaction costs related to the Equity One merger in 2017.

45




The following table presents the components of other expense (income):
  Nine months ended September 30,  
(in thousands) 2018 2017 Change
Interest expense, net      
Interest on notes payable $97,689
 87,492
 10,197
Interest on unsecured credit facilities 14,314
 10,718
 3,596
Capitalized interest (5,820) (5,778) (42)
Hedge expense 6,306
 6,305
 1
Interest income (1,012) (1,452) 440
Interest expense, net $111,477
 97,285
 14,192
Provision for impairment, net of tax 29,443
 —
 29,443
Early extinguishment of debt 11,172
 12,404
 (1,232)
Net investment income (1,524) (2,955) 1,431
Total other expense (income) $150,568
 106,734
 43,834
The $14.2 million net increase in total interest expense is primarily due to:
$10.2 million net increase in interest on notes payable is primarily due to:
◦$7.6 million increase from issuances of $950 million of new unsecured debt during 2017;
◦$7.0 million increase from issuance of $300 million of new unsecured debt in March 2018; and
◦$3.2 million of additional interest on notes payable assumed with the Equity One merger; offset by
◦$4.5 million decrease from redemption of $150 million unsecured debt in April 2018; and
◦$3.1 million decrease in mortgage interest expense due mortgage payoffs during 2018 and 2017.
further increased by $3.6 million in interest on unsecured credit facilities related to higher average balances and interest rates.
During the nine months ended September 30, 2018, we recognized $29.4 million of impairment losses, including $9.2 million of goodwill impairment, on five operating properties and two land parcels, each of which have been sold.
During the nine months ended September 30, 2018, we early redeemed the $150 million 6% senior unsecured notes resulting in $11.0 million of debt extinguishment costs. During the nine months ended September 30, 2017, we repaid nine mortgages with a portion of the proceeds from an unsecured public debt offering, and recognized $12.4 million of debt extinguishment costs.
Net investment income decreased $1.4 million driven by valuation changes in the stock market.

46




Our equity in income of investments in real estate partnerships decreased as follows:
   Nine months ended September 30,  
(in thousands)Ownership 2018 2017 Change
GRI - Regency, LLC (GRIR)40.00% $22,471
 20,791
 1,680
New York Common Retirement Fund (NYC)30.00% 213
 417
 (204)
Columbia Regency Retail Partners, LLC (Columbia I)20.00% 944
 3,344
 (2,400)
Columbia Regency Partners II, LLC (Columbia II)20.00% 1,298
 1,072
 226
Cameron Village, LLC (Cameron)30.00% 703
 636
 67
RegCal, LLC (RegCal)25.00% 1,155
 1,010
 145
US Regency Retail I, LLC (USAA)20.01% 688
 4,251
 (3,563)
Other investments in real estate partnerships49.90% 2,076
 2,283
 (207)
Total equity in income of investments in real estate partnerships $29,548
 33,804
 (4,256)
The $4.3 million decrease in our equity in income of investments in real estate partnerships is largely attributed to the following changes:
$1.7 million increase at GRIR from greater rental income from rent growth and rent commencements at several shopping centers held in this partnership; offset by
$2.4 million decrease at Columbia I due to a $2.4 million gain on the sale of an operating property within the partnership during 2017; and
$3.6 million decrease at USAA due to a $3.3 million gain recognized during 2017 on the sale of an operating property within the partnership.
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) 2018 2017 Change
Income from operations $168,140
 88,126
 80,014
Gain on sale of real estate, net of tax 4,448
 4,913
 (465)
Income attributable to noncontrolling interests (2,366) (2,101) (265)
Preferred stock dividends and issuance costs —
 (16,128) 16,128
Net income attributable to common stockholders $170,222
 74,810
 95,412
Net income attributable to exchangeable operating partnership units 358
 217
 141
Net income attributable to common unit holders $170,580
 75,027
 95,553
During the nine months ended September 30, 2018, we sold four operating properties and four land parcels resulting in gains of $4.4 million, compared to gains of $4.9 million from the sale of one operating property and seven land parcels during the same period in 2017.
Preferred stock dividends decreased $16.1 million due to the redemption of our Series 6 and Series 7 preferred stock in February and August of 2017, respectively.

47




Supplemental Earnings Information
We use certain non-GAAP performance measures, in addition to certain performance metrics determined under GAAP, as we believe these measures improve the understanding of the Company's operating 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, may assist in comparing the Company's operating results to 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. See "Defined Terms" at the beginning of this Management's Discussion and Analysis.
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 for the nine months ended September 30, 2017 as if the merger had occurred January 1, 2017. This perspective allows us to evaluate same property NOI growth over a comparable period. The pro forma same property NOI as adjusted is not necessarily indicative of what the actual same property NOI and growth would have been if the merger had occurred on January 1, 2017, nor does it purport to represent the same property NOI and growth for future periods.
Our pro-rata same property NOI, as adjusted, excluding termination fees, changed from the following major components:
  Three months ended September 30, Nine months ended September 30,
(in thousands) 2018 2017 Change 2018 
2017 (1)
 Change
Base rent $208,247
 200,866
 7,381
 $620,762
 598,763
 21,999
Percentage rent 1,353
 1,274
 79
 7,243
 7,799
 (556)
Recoveries from tenants 65,785
 60,184
 5,601
 196,175
 182,323
 13,852
Other income 5,645
 5,039
 606
 15,838
 12,770
 3,068
Operating expenses 81,108
 73,650
 7,458
 239,803
 223,126
 16,677
Pro-rata same property NOI, as adjusted $199,922
 193,713
 6,209
 $600,215
 578,529
 21,686
Less: Termination fees 882
 264
 618
 672
 768
 (96)
Pro-rata same property NOI, as adjusted, excluding termination fees $199,040
 193,449
 5,591
 $599,543
 577,761
 21,782
Pro-rata same property NOI growth, as adjusted, excluding termination fees     2.9%     3.8%
             
(1) Adjusted for Equity One operating results prior to the merger for these periods. For additional information and details about the Equity One operating results included herein, refer to the Same Property NOI Reconciliation at the end of the Supplemental Earnings section.
  Three months ended March 31,
(in thousands) 2019 2018 Change
Base rent (1)
 $211,025
 205,282
 5,743
Recoveries from tenants (1)
 67,167
 65,007
 2,160
Percentage rent (1)
 3,764
 4,263
 (499)
Termination fees (1)
 486
 1,180
 (694)
Uncollectible lease income (2)
 (657) —
 (657)
Other lease income (1)
 2,178
 2,552
 (374)
Other property income 1,567
 1,686
 (119)
Total real estate revenue 285,530
 279,970
 5,560
Operating and maintenance 40,749
 42,342
 (1,593)
Real estate taxes 36,844
 33,495
 3,349
Ground rent 2,315
 2,481
 (166)
Provision for doubtful accounts (2)
 —
 1,141
 (1,141)
Total real estate operating expenses 79,908
 79,459
 449
Pro-rata same property NOI $205,622
 200,511
 5,111
Less: Termination fees 486
 1,180
 (694)
Pro-rata same property NOI, excluding termination fees $205,136
 199,331
 5,805
Pro-rata same property NOI growth, excluding termination fees     2.9%
       
(1)  Represents amounts included within Lease income, in the accompanying Consolidated Statements of Operations and further discussed in Note 1, that are contractually billable to the tenants per the terms of the lease agreements
(2) Beginning with the adoption of ASC 842, Leases, on January 1, 2019, uncollectible lease income is a direct charge against Lease income. Provision for doubtful accounts was included in Total real estate operating expenses during the three months ended March 31, 2018.
Billable Base rent increased $7.4 million and $22.0$5.7 million during the three and nine months ended September 30, 2018,March 31, 2019, driven by increases in rental rate growth on new and renewal leases, and contractual rent steps from leases, andoffset by fewer rent commencements.
Billable Recoveries from tenants increased $5.6 million and $13.9$2.2 million during the three and nine months ended September 30, 2018,March 31, 2019, as a result of increases in recoverable costs,real estate taxes, as noted below.
Other income increased $0.6 millionOperating and $3.1maintenance expenses decreased $1.6 million during the three and nine months ended September 30, 2018,March 31, 2019, primarily due to the timing of termination, assignment and settlement fee income.lower snow removal costs.
Operating expensesReal estate taxes increased $7.5 million and $16.7$3.3 million during the three and nine months ended September 30, 2018, primarilyMarch 31, 2019, due to higher real estate tax assessments.

4843




Same Property Rollforward:
Our same property pool includes the following property count, pro-rata GLA, and changes therein:
Three months ended September 30,
2018 2017
(GLA in thousands)Property CountGLA Property CountGLA
Beginning same property count406
41,758
 400
41,076
Disposed properties(3)(499) (1)(24)
SF adjustments (1)
—
(41) —
21
Ending same property count403
41,218
 399
41,073
   
Nine months ended September 30,Three months ended March 31,
2018 20172019 2018
(GLA in thousands)Property CountGLA Property CountGLAProperty CountGLA Property CountGLA
Beginning same property count395
40,601
 289
26,392
399
40,866
 395
40,600
Acquired properties owned for entirety of comparable periods7
917
 1
180
6
415
 7
917
Developments that reached completion by beginning of earliest comparable period presented8
512
 2
331
3
358
 8
512
Disposed properties(7)(804) (3)(82)(7)(766) (1)(77)
SF adjustments (1)
—
(8) —
71
—
32
 —
9
Properties acquired through Equity One merger—
—
 110
14,181
Ending same property count403
41,218
 399
41,073
401
40,905
 409
41,961
      
(1) SF adjustments arise from remeasurements or redevelopments.
(1) SF adjustments arise from remeasurements or redevelopments.
(1) SF adjustments arise from remeasurements or redevelopments.
NAREIT FFO:
Our reconciliation of net income attributable to common stock and unit holders to NAREIT FFO is as follows:
 Three months ended September 30, Nine months ended September 30, Three months ended March 31,
(in thousands, except share information) 2018 2017 2018 2017 2019 2018
Reconciliation of Net income to NAREIT FFO            
Net income attributable to common stockholders $69,722
 59,666
 $170,222
 74,810
 $90,446
 52,660
Adjustments to reconcile to NAREIT FFO:(1)
            
Depreciation and amortization (excluding FF&E) 96,795
 99,284
 290,182
 266,873
 104,498
 96,197
Provision for impairment to operating properties 407
 —
 28,901
 —
 1,672
 16,054
Gain on sale of operating properties, net of tax (3,610) (3,349) (3,958) (8,415) (37,070) (102)
Provision for impairment to land 18
 —
Exchangeable operating partnership units 147
 132
 358
 217
 190
 111
NAREIT FFO attributable to common stock and unit holders $163,461
 155,733
 $485,705
 333,485
 $159,754
 164,920
            
(1) Includes Regency's pro-rate share of unconsolidated investment partnerships, net of pro-rata share attributable to noncontrolling interest.
(1) Includes Regency's pro-rate share of unconsolidated investment partnerships, net of pro-rata share attributable to noncontrolling interest.
(1) Includes Regency's pro-rate share of unconsolidated investment partnerships, net of pro-rata share attributable to noncontrolling interest.

4944




Same Property NOI Reconciliation:
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,
 2018 2017 2019 2018
(in thousands) Same Property 
Other (1)
 Total Same Property 
Other (1)
 Total Same Property 
Other (1)
 Total Same Property 
Other (1)
 Total
Net income attributable to common stockholders $105,470
 (35,748) 69,722
 $140,194
 (80,528) 59,666
 $128,398
 (37,952) 90,446
 $129,221
 (76,561) 52,660
Less:                        
Management, transaction, and other fees —
 6,954
 6,954
 —
 6,047
 6,047
 —
 6,972
 6,972
 —
 7,158
 7,158
Gain on sale of real estate, net of tax —
 3,228
 3,228
 —
 131
 131
Other (2)
 9,867
 3,149
 13,016
 5,025
 8,248
 13,273
 16,187
 2,780
 18,967
 27,193
 (13,020) 14,173
Plus:                        
Depreciation and amortization 84,344
 4,839
 89,183
 39,515
 51,959
 91,474
 92,891
 4,303
 97,194
 77,211
 11,314
 88,525
General and administrative —
 17,564
 17,564
 (104) 15,303
 15,199
 250
 21,050
 21,300
 —
 17,606
 17,606
Other operating expense, excluding provision for doubtful accounts 237
 672
 909
 247
 1,883
 2,130
Other operating expense, excluding provision for doubtful accounts (3)
 253
 881
 1,134
 72
 365
 437
Other expense (income) 5,949
 30,601
 36,550
 7,321
 26,387
 33,708
 6,021
 25,150
 31,171
 7,371
 45,502
 52,873
Equity in income (loss) of investments in real estate excluded from NOI (3)
 13,789
 534
 14,323
 11,565
 244
 11,809
Equity in income (loss) of investments in real estate excluded from NOI (4)
 (6,004) 374
 (5,630) 13,829
 1,264
 15,093
Net income attributable to noncontrolling interests —
 812
 812
 —
 769
 769
 —
 1,047
 1,047
 —
 805
 805
Preferred stock dividends and issuance costs —
 —
 —
 —
 3,147
 3,147
Pro-rata NOI, as adjusted $199,922
 5,943
 205,865
 $193,713
 4,738
 198,451
 $205,622
 5,101
 210,723
 $200,511
 6,157
 206,668
                        
(1) Includes revenues and expenses attributable to non-same property, sold property, development property, and corporate activities.
(1) Includes revenues and expenses attributable to non-same property, sold property, development property, and corporate activities.
(1) Includes revenues and expenses attributable to non-same property, sold property, development property, and corporate activities.
(2) Includes straight-line rental income and expense, net of reserves, above and below market rent amortization, other fees, and noncontrolling interest.
(2) Includes straight-line rental income and expense, net of reserves, above and below market rent amortization, other fees, and noncontrolling interest.
(2) Includes straight-line rental income and expense, 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.
(3) Provision for doubtful accounts is applicable only to 2018 amounts. Beginning January 1, 2019, with the adoption of Topic 842, Leases, uncollectible amounts are presented net within Lease income.
(3) Provision for doubtful accounts is applicable only to 2018 amounts. Beginning January 1, 2019, with the adoption of Topic 842, Leases, uncollectible amounts are presented net within Lease income.
(4) Includes non-NOI income earned and expenses incurred at our unconsolidated real estate partnerships, including those separated out above for our consolidated properties.
(4) Includes non-NOI income earned and expenses incurred at our unconsolidated real estate partnerships, including those separated out above for our consolidated properties.

50




  Nine months ended September 30,
  2018 2017
(in thousands) Same Property 
Other (1)
 Total Same Property 
Other (1)
 Total
Net income attributable to common stockholders $322,738
 (152,516) 170,222
 $253,544
 (178,734) 74,810
Less:            
Management, transaction, and other fees —
 20,999
 20,999
 —
 19,353
 19,353
Gain on sale of real estate, net of tax —
 4,448
 4,448
 —
 4,913
 4,913
Other (2)
 35,791
 9,031
 44,822
 29,758
 6,776
 36,534
Plus:            
Depreciation and amortization 248,574
 18,238
 266,812
 236,570
 7,187
 243,757
General and administrative —
 51,947
 51,947
 (313) 49,931
 49,618
Other operating expense, excluding provision for doubtful accounts 532
 2,293
 2,825
 807
 77,967
 78,774
Other expense (income) 20,773
 129,795
 150,568
 37,205
 69,529
 106,734
Equity in income (loss) of investments in real estate excluded from NOI (3)
 43,389
 1,694
 45,083
 37,463
 1,056
 38,519
Net income attributable to noncontrolling interests —
 2,366
 2,366
 —
 2,101
 2,101
Preferred stock dividends and issuance costs —
 —
 —
 —
 16,128
 16,128
NOI from Equity One prior to merger (4)
 —
 —
 —
 43,011
 —
 43,011
Pro-rata NOI, as adjusted $600,215
 19,339
 619,554
 $578,529
 14,123
 592,652
             
(1)  Includes revenues and expenses attributable to non-same property, sold property, development property, and corporate activities.
(2)  Includes straight-line rental income and expense, 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.
(4)  NOI from Equity One prior to the merger was derived from the accounting records of Equity One without adjustment. Equity One's financial information for the two month period ended February 28, 2017 was subject to a limited internal review by Regency.
The following is Same Property NOI detail for the non-ownership period of Equity One:
(in thousands) Two Months Ended
February 2017
Base rent $44,644
Percentage rent 1,265
Recoveries from tenants 13,970
Other income 612
Operating expenses 17,480
Pro-rata same property NOI, as adjusted $43,011
Less: Termination fees 30
Pro-rata same property NOI, as adjusted, excluding termination fees $42,981


5145




Liquidity and Capital Resources
General
We use cash flows generated from operating, investing, and financing activities to strengthen our balance sheet, finance our development and redevelopment projects, fund our 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.
Except for the $500 million of unsecured public and private placement debt, assumed with the Equity One merger in 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 a guarantor of the $500 million of outstanding debt of our Parent Company assumed in the Equity One merger.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. 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.
In addition to our $40.4$39.5 million of unrestricted cash, we have the following additional sources of capital available:
(in thousands) September 30, 2018 March 31, 2019
ATM equity program    
Original offering amount $500,000
 $500,000
Available capacity $500,000
 $500,000
    
Line of Credit    
Total commitment amount $1,250,000
 $1,250,000
Available capacity (1)
 $1,095,600
 $1,127,400
Maturity (2)
 March 23, 2022
 March 23, 2022
    
(1) Net of letters of credit.
(1) Net of letters of credit.
(1) Net of letters of credit.
(2) The Company has the option to extend the maturity for two additional six-month periods.
(2) The Company has the option to extend the maturity for two additional six-month periods.
(2) 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 $282.9 million and $238.3 million for the nine months ended September 30, 2018 and 2017, respectively. In March 2018, we expanded our line of credit to $1.25 billion with a maturity date of May 23, 2022. We currently do not have any preferred shares issued and outstanding. Our dividend distribution policy is set by our Board of Directors, who monitors our financial position. Our Board of Directors recently declared oura common stock dividend of $0.555$0.585 per share, payable on November 28, 2018.May 23, 2019, to shareholders of record as of May 13, 2019. 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.
DuringWe expect to generate sufficient cash flow from operations to fund our dividend distributions. We generated cash flow from operations of approximately $131.4 million and $149.9 million for the three months ended March 31, 2019 and 2018, respectively. We paid $97.8 million and $95.0 million to our common stock and unit holders for the three months ended March 31, 2019 and 2018, respectively.
To meet our additional cash requirements beyond our dividend, we will utilize the following:
remaining cash generated from operations after dividends paid,
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 or the issuance of new long-term debt.

46




We also expect to generate sufficient cash flow from operations, after dividends paid, to fund our cash requirements during the next twelve months, which we estimate that we will requiretotal approximately $163.6$182.0 million of cash, including $123.5to fund the following:
$163.8 million to complete in-process developments and redevelopments, $13.2
$13.2 million to repay maturing debt, and $26.9
$5.0 million to fund our pro-rata share of estimated capital contributions to our co-investment partnerships for repayment of maturing debt.
If we start new developments, redevelop additional shopping centers, commit to new acquisitions, prepay debt prior to maturity, or repurchase shares of our common stock, our cash requirements will increase. If we refinance maturing debt, our cash requirements will decrease. To meet our cash requirements, we will 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 or the issuance of new long-term debt. In addition, we have a contractual commitmentan option to purchase, through NovemberDecember 2019, up to a 100%an additional 81.63% ownership interest in an operating shopping center valued at $205.0 million, at the option of the seller.center. We are currently expectingexpect the seller to require us to purchase a 30%an additional 16.63% ownership interest in the property by NovemberDecember 2019 for approximately $61.5$16.7 million.
We endeavor to maintain a high percentage of unencumbered assets. At September 30,As of December 31, 2018, 87.8%87.7% 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 Fixed charge coverage ratio, including our pro-rata share of our partnerships, was 4.14.2 times for each of the periods ended September 30, 2018March 31, 2019 and December 31, 2017, respectively.

52




2018.
Our Line, Term Loans, and unsecured loans 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, 2017.2018. We are in compliance with these covenants at September 30, 2018March 31, 2019 and expect to remain in compliance.
On October 25, 2018, the Company's Board approved the transfer of the Company's common stock from listing on the New York Stock Exchange ("NYSE") to The NASDAQ Global Select Market ("NASDAQ"). The Company expects the last day of trading on the NYSE to be November 12, 2018. The Company's common stock has been approved for listing on NASDAQ, is expected to commence trading on November 13, 2018, and will continue to trade under the stock symbol "REG".
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) 2018 2017 Change 2019 2018 Change
Net cash provided by operating activities $464,755
 345,426
 119,329
 $131,364
 149,868
 (18,504)
Net cash used in investing activities (147,181) (857,743) 710,562
Net cash provided by (used in) investing activities 47,001
 (107,206) 154,207
Net cash (used in) provided by financing activities (322,469) 525,079
 (847,548) (180,771) 1,593
 (182,364)
Net (decrease) increase in cash and cash equivalents and restricted cash $(4,895) 12,762
 (17,657) $(2,406) 44,255
 (46,661)
Total cash and cash equivalents and restricted cash $44,486
 30,641
 13,845
 $42,784
 93,636
 (50,852)
Net cash provided by operating activities:
Net cash provided by operating activities increased $119.3decreased $18.5 million due to:
$121.8 million increase in cash from operating income including the additional cash flow from properties acquired through the Equity One merger in March 2017, net of merger costs;
$451,000 decrease in operating cash flow distributions from our unconsolidated real estate partnerships; and,
$2.015.3 million net decrease in cash due to timing of cash receipts and payments, relatedand
$5.7 million decrease from cash paid to settle treasury rate locks put in place in 2018 to hedge changes in interest rates on a 30 year fixed rate debt offering completed during 2019; offset by,
$1.1 million increase in operating activities.cash flow distributions from our unconsolidated real estate partnerships, and
$1.4 million increase in cash from operating income.

47




Net cash used in investing activities:
Net cash used inprovided by (used in) investing activities decreasedchanged by $710.6$154.2 million as follows:
 Nine months ended September 30,   Three months ended March 31,  
(in thousands) 2018 2017 Change 2019 2018 Change
Cash flows from investing activities:            
Acquisition of operating real estate $(85,766) (2,109) (83,657) $(15,722) (20,071) 4,349
Advance deposits paid on acquisition of operating real estate (150) (350) 200
 (1,250) —
 (1,250)
Acquisition of Equity One, net of cash and restricted cash acquired of $74,507 —
 (646,790) 646,790
Real estate development and capital improvements (174,145) (240,827) 66,682
 (39,929) (51,968) 12,039
Proceeds from sale of real estate investments 151,142
 13,323
 137,819
 82,533
 3,227
 79,306
Proceeds from (issuance of) notes receivable 15,648
 (3,460) 19,108
Issuance of notes receivable —
 (462) 462
Investments in real estate partnerships (58,372) (12,296) (46,076) (19,587) (39,330) 19,743
Distributions received from investments in real estate partnerships 5,488
 36,603
 (31,115) 41,587
 2,328
 39,259
Dividends on investment securities 281
 200
 81
 116
 71
 45
Acquisition of investment securities (16,946) (14,011) (2,935) (5,359) (7,543) 2,184
Proceeds from sale of investment securities 15,639
 11,974
 3,665
 4,612
 6,542
 (1,930)
Net cash used in investing activities $(147,181) (857,743) 710,562
Net cash provided by (used in) investing activities $47,001
 (107,206) 154,207
Significant changes in investing activities include:

53




We acquired two operating properties for $85.8$15.7 million during 20182019 and other than those included in the merger, we acquired two real estate parcels at existingone operating propertiesproperty for $2.1$20.1 million during the same period in 2017.
We issued 65.5 million shares of common stock 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 $646.8 million, net of cash and restricted cash acquired, to repay Equity One credit facilities not assumed with the merger.2018.
We invested $66.7$12.0 million less in 20182019 than the same period in 20172018 on real estate development, redevelopment, and capital improvements, as further detailed in a table below.
We sold sevenfour operating properties and sixtwo land parcels in 20182019 and received proceeds of $151.1$82.5 million, compared to one operating property and seven land parcels in 20172018 for proceeds of $13.3$3.2 million.
We received $15.6 million upon the collection of two notes in 2018, compared to the issuance of $3.5 million in 2017.
We invested $58.4$19.6 million in our real estate partnerships during 2018, including2019, including:
◦$39.39.2 million to fund our share of acquiring an additional equity interest in one partnership,
◦$8.1 million to fund our share of development and redevelopment activities, and
◦$2.3 million to fund our share of debt refinancing.
During the same period in 2018, we invested $39.3 million,including:
◦$32.7 million to fund our share of acquiring four operating properties,
◦$1.53.4 million to acquire an interest in one land parcel for development,
◦$15.43.2 million to fund our share of development and redevelopment activities, andactivities.
◦$2.2 million to fund our share of maturing debt.
During the same period in 2017, we invested $12.3 million in our real estate partnerships to fund our share of maturing mortgage debt and redevelopment activity.
Distributions from our unconsolidated real estate partnerships include return of capital from sales or financing proceeds. The $5.5$41.6 million received in 20182019 is driven by the sale of one land parceltwo operating properties, the sale of our ownership interest in a single operating property partnership, and our share of financing proceeds from encumbering one operating property.debt refinancing activities. During the same period in 2017,2018, we received $36.6$2.3 million from the sale of two operating properties and one land parcel plus our share of financing proceeds from encumbering certain operating properties within the partnerships.parcel.
Acquisition of securities and proceeds from sale of securities pertain to investmentsinvestment activities held in our captive insurance company and our deferred compensation plan.

48




We plan to continue developing and redeveloping shopping centers for long-term investment. During 2018,2019, we deployed capital of $174.1$39.9 million for the development, redevelopment, and improvement of our real estate properties, comprised of the following:
  Nine months ended September 30,  
(in thousands) 2018 2017 Change
Capital expenditures:      
Land acquisitions for development / redevelopment $—
 20,834
 (20,834)
Building and tenant improvements 50,052
 31,130
 18,922
Redevelopment costs 39,129
 103,395
 (64,266)
Development costs 71,617
 66,595
 5,022
Capitalized interest 5,338
 5,778
 (440)
Capitalized direct compensation 8,009
 13,095
 (5,086)
Real estate development and capital improvements $174,145
 240,827
 (66,682)
During 2018 we acquired no land parcels for new development projects as compared to three land parcels acquired during 2017.
  Three months ended March 31,  
(in thousands) 2019 2018 Change
Capital expenditures:      
Building and tenant improvements 10,141
 11,922
 (1,781)
Redevelopment costs 8,570
 15,551
 (6,981)
Development costs 15,863
 18,447
 (2,584)
Capitalized interest 739
 2,062
 (1,323)
Capitalized direct compensation 4,616
 3,986
 630
Real estate development and capital improvements $39,929
 51,968
 (12,039)
Building and tenant improvements increased $18.9decreased $1.8 million in 2018,2019, primarily related to the overall increase in the sizetiming of our portfolio from the merger with Equity One in March 2017.

54




capital projects.
Redevelopment expenditures are lower in 20182019 due to the timing, magnitude, and number of projects currently in process. We intend to continuously improve our portfolio of shopping centers through redevelopment which can include adjacent land acquisition, existing building expansion, facade renovation, new out-parcel building construction, and redevelopment related tenant improvement costs.  The size and magnitude of each redevelopment project varies with each redevelopment plan.
Development expenditures are higherlower in 20182019 due to the progress during 2018 towards completion of our development projects currently in process. At September 30, 2018March 31, 2019 and December 31, 2017,2018, we had six and eight consolidated development projects 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 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.
We have a staff of employees who directly support our development program, which includes redevelopment of our existing properties. We currently expect that our development activity will approximate our recent historical averages, although the amount of activity by type will vary and likely shift towards more redevelopment in the near future. Internal compensation costs directly attributable to these activities are capitalized as part of each project. Changes in the level of future development activity could adversely impact results of operations by reducing the amount of internal costs for development projects that may be capitalized. A 10% reduction in development activity without a corresponding reduction in development related compensation costs could result in an additional charge to net income of $1.5 million per year.

49




The following table summarizes our in-process consolidated development projects:
(in thousands, except cost PSF)(in thousands, except cost PSF) September 30, 2018(in thousands, except cost PSF) March 31, 2019
Property Name Market 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 Project Completion 
Estimated Net Development Costs (1)
 
% of Costs Incurred (1)
 GLA 
Cost PSF of GLA (1)
The Market at Springwoods Village (2)
 Houston , TX
 Q1-16
 Nov-17 $25,373
 95% 167 $152
Carytown Exchange (3)
 Richmond, VA Q4-18 2021 $25,580
 2% 68 $376
Indigo Square Charleston, SC Q4-17 2019 16,931
 89% 51 332
Mellody Farm Chicago, IL Q2-17 2019 103,939
 86% 259 401
Pinecrest Place (3)(2)
 Miami, FL Q1-17 2019 16,375
 91% 70 234
The Village at Hunter's Lake Tampa, FL Q4-18 2020 22,067
 10% 72 306
The Village at Riverstone Houston, TX Q4-16 Sept-18 30,658
 80% 167 184
 Houston, TX Q4-16 2019 30,638
 91% 167 183
The Field at Commonwealth Metro DC Q1-17 June-18 43,744
 90% 167 262
Pinecrest Place (3)(2)
 Miami, FL Q1-17 Jan-18 16,429
 81% 67 245
Mellody Farm Chicago, IL Q2-17 Sept-18 102,932
 73% 268 384
Indigo Square Charleston, SC Q4-17 March-19 16,606
 65% 51 326
Total $235,742
 78% 887 $266
 $215,530
 72% 687 $314
        
(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%. Anchor rent commencement date was May 2017.
(3) Estimated Net Development Costs for Pinecrest Place excludes the cost of land, which the Company has leased long term.
(2) Estimated Net Development Costs for Pinecrest Place excludes the cost of land, which the Company has leased long term.
(2) Estimated Net Development Costs for Pinecrest Place excludes the cost of land, which the Company has leased long term.
(3) Estimated Net Development Costs and GLA reported based on Regency's ownership interest in the partnership at project completion, which is currently estimated to be 64%.
(3) Estimated Net Development Costs and GLA reported based on Regency's ownership interest in the partnership at project completion, which is currently estimated to be 64%.
The following table summarizes our pro-rata share of in-process unconsolidated development projects:
(in thousands, except cost PSF)     September 30, 2018
Property Name Market Start Date Estimated /Actual Anchor Opening 
Estimated Net Development Costs (1)
 
% of Costs Incurred (1)
 GLA 
Cost PSF of GLA (1)
Midtown East Raleigh, NC Q4-17 Sept-19 $22,298
 53% 87 $256
Ballard Blocks II Seattle, WA Q1-18 Sept-19 32,170
 31% 57 564
Total       $54,468
 40% 144 $378
               
(1)  Includes leasing costs and is net of tenant reimbursements.

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The following table summarizes our completed consolidated development projects:
(in thousands, except cost PSF)(in thousands, except cost PSF) September 30, 2018(in thousands, except cost PSF) March 31, 2019
Property Name Location Completion Date 
Net Development Costs (1)
 GLA 
Cost per square foot GLA (1)
 Market Start Date Estimated Project Completion 
Estimated Net Development Costs (1)
 
% of Costs Incurred (1)
 GLA 
Cost PSF of GLA (1)
Northgate Marketplace Ph II Medford, OR Q2-18 $40,791
 177 $230
Chimney Rock Crossing New York, NY Q2-18 70,105
 218 322
Ballard Blocks II Seattle, WA Q1-18 2019 $32,524
 55% 56 $581
Midtown East Raleigh, NC Q4-17 2019 22,682
 75% 87 261
Total  $110,896

395
$281
 $55,206
 64% 143 $386
    
(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.
Net cash (used in) provided by financing activities:
Net cash flows generated from financing activities decreasedchanged by $847.5$182.4 million during 2018,2019, as follows:
 Nine months ended September 30,   Three months ended March 31,  
(in thousands) 2018 2017 Change 2019 2018 Change
Cash flows from financing activities:            
Repurchase of common shares in conjunction with equity award plans $(6,772) (19,251) 12,479
 $(6,148) (6,755) 607
Common shares repurchased through share repurchase program (124,989) —
 (124,989) (32,778) (124,989) 92,211
Preferred stock redemption —
 (325,000) 325,000
Distributions to limited partners in consolidated partnerships, net (3,457) (7,031) 3,574
 (1,485) (1,018) (467)
Dividend payments (282,858) (238,275) (44,583)
Unsecured credit facilities 85,000
 300,000
 (215,000)
Dividend payments and operating partnership distributions (97,812) (95,043) (2,769)
Repayments of unsecured credit facilities, net (35,000) (60,000) 25,000
Proceeds from debt issuance 301,251
 1,080,114
 (778,863) 298,983
 301,251
 (2,268)
Debt repayment (281,295) (252,710) (28,585)
Debt repayment, including early redemption costs (303,197) (2,773) (300,424)
Payment of loan costs (9,448) (12,868) 3,420
 (3,342) (9,179) 5,837
Proceeds from sale of treasury stock 99
 100
 (1)
Proceeds from sale of treasury stock, net 8
 99
 (91)
Net cash (used in) provided by financing activities $(322,469) 525,079
 (847,548) $(180,771) 1,593
 (182,364)


50




Significant financing activities during the ninethree months ended September 30,March 31, 2019 and 2018 and 2017 include the following:
We repurchased for cash a portion of the common stock relatedgranted to employees for stock based compensation to satisfy employee federal and state tax withholding requirements. The 2017 repurchases were higher due to the vesting of Equity One's stock-based compensation program as a result of the merger.
We paid $125.0$32.8 million to repurchase 563,229 common shares through our share repurchase program that were executed in December 2018 but not settled until January 2019. During the three months ended March 31, 2018, we paid $125 million to repurchase 2,145,209 common shares through the same share repurchase program.
We redeemed all of the issued and outstanding shares of our 6.625% Series 6 and 6.000% Series 7 cumulative redeemable preferred stock on February 16, 2017 and August 23, 2017, respectively, for $325.0 million.
We paid $44.6$2.8 million more in dividends as a result of the additional common shares outstanding, as common shares were issued as merger consideration during 2017, combined with an increase in our dividend rate from $1.57$0.555 per share, during the ninethree months ended September 30, 2017,March 31, 2018, to $1.665$0.585 per share, during the ninethree months ended September 30, 2018.March 31, 2019, partially offset by the reduced shares outstanding in 2019.
We had the following debt related activity during 2019:
▪We repaid, net of draws, $35 million on our Line.
▪We received proceeds of $299 million upon issuance, in March, of $300 million of senior unsecured public notes.
▪We paid $259.6 million, including a make-whole premium, to early redeem our senior unsecured public notes originally due April 2021, $40.5 million, including prepayment penalty, to repay a 2020 mortgage maturity with an interest rate of 7.3%, and $3.0 million in principal mortgage payments.
▪We paid $3.3 million of loan costs in connection with our public note offering above.
We had the following debt related activity during 2018:
▪We borrowed,repaid, net of payments, an additional $85.0draws, $60 million on our Line.
▪We received proceeds of $299.5 million upon issuance, in March, of $300.0issued $300 million of senior unsecured public notes and drew $1.7 million on a construction loan to fund an in-process development project.

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▪We paid $160.5 million, including a make-whole premium, to early redeem our senior unsecured public notes originally due June 2020 and $120.8 million to pay scheduled principal mortgage payments and mortgages maturities.
▪We paid $9.4 million of loan costs in connection with our public note offering above and expanding our Line commitment.
We had the following debt related activity during 2017:
▪We received proceeds of $300.0 million upon closing a new term loan.$299.5 million.
▪We received proceeds of $1.1 billion from debt issuances including
*$953.1 million, including debt premiums, from our $950.0 million senior unsecured public note issuances in January and June,
*$122.5$1.7 million from mortgage loans, and
*$4.5 million in construction loan proceeds.draws used to fund an in-process development project.
▪We paid $252.7$2.8 million to repay or refinance mortgage loans and pay scheduled principal payments.
▪We paid $12.9mortgage payments and $9.2 million of loan costs in connection with the new debt issuedour $300 million public note offering noted above includingand upon expanding our Line commitment.


51




Investments in Real Estate Partnerships
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)
(dollars in thousands) September 30, 2018 December 31, 2017 September 30, 2018 December 31, 2017
Number of Co-investment Partnerships 15
 13
    
Regency’s Ownership 20%-50%
  20%-50%
    
Number of Properties 120
 115
    
Assets $3,062,855
 2,885,720
 $1,066,725
 1,002,767
Liabilities 1,677,944
 1,627,693
 572,826
 557,699
Equity 1,384,911
 1,258,027
 493,899
 445,068
Negative investment in US Regency Retail I, LLC   3,464
 11,290
Basis difference   40,191
 40,351
Restricted Gain Method deferral (2)
   —
 (30,902)
Impairment of investment in real estate partnerships   (1,300) (1,300)
Net book equity in excess of purchase price   (78,203) (78,203)
Investments in real estate partnerships   $458,051
 386,304
         
(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 our consolidated financial statements.
(2)  Upon adoption of ASU 2017-05 (ASC Subtopic 610-20) on January 1, 2018, the Company recognized $30.9 million of previously deferred gains through opening retained earnings, as discussed in Note 1 to the unaudited Consolidated Financial Statements.

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  Combined 
Regency's Share (1)
(dollars in thousands) March 31, 2019 December 31, 2018 March 31, 2019 December 31, 2018
Number of Co-investment Partnerships 15
 16
    
Regency’s Ownership 18.38%-50%
 9.38%-50%
    
Number of Properties 117
 120
    
Assets $3,158,911
 3,227,831
 $1,069,854
 1,079,071
Liabilities 1,743,717
 1,749,725
 578,671
 580,219
Equity 1,415,194
 1,478,106
 491,183
 498,852
Negative investment in US Regency Retail I, LLC   3,619
 3,513
Basis difference   (36,769) (38,064)
Impairment of investment in real estate partnerships   (1,300) (1,300)
Investments in real estate partnerships   $456,733
 463,001
         
(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 our consolidated financial statements.
Our equity method investments in real estate partnerships consist of the following:
(in thousands)Regency's Ownership September 30, 2018 December 31, 2017Regency's Ownership March 31, 2019 December 31, 2018
GRI - Regency, LLC (GRIR)40.00% $199,644
 198,521
40.00% $182,221
 189,381
New York Common Retirement Fund (NYC)30.00% 54,679
 53,277
30.00% 53,846
 54,250
Columbia Regency Retail Partners, LLC (Columbia I) (1)
20.00% 13,420
 7,057
20.00% 9,279
 13,625
Columbia Regency Partners II, LLC (Columbia II) (1)
20.00% 37,097
 13,720
20.00% 40,020
 38,110
Cameron Village, LLC (Cameron)30.00% 11,317
 11,784
30.00% 11,035
 11,169
RegCal, LLC (RegCal)25.00% 31,296
 27,829
25.00% 23,858
 31,235
Other investments in real estate partnerships49.90% - 50.00% 110,598
 74,116
18.38% - 50.00% 136,474
 125,231
Total Investment in real estate partnerships $458,051
 386,304
 $456,733
 463,001
US Regency Retail I, LLC (USAA) (2)(1)
20.01% (3,464) (11,290)20.01% (3,619) (3,513)
Net Investment in real estate partnerships $454,587
 375,014
 $453,114
 459,488
(1) Upon adoption of ASU 2017-05 (ASC Subtopic 610-20) on January 1, 2018, the Company recognized $30.9 million of previously deferred gains with these partnerships through opening retained earnings and our investment in the partnerships, as discussed in Note 1 to the unaudited Consolidated Financial Statements.
(2) The USAA partnership has distributed proceeds from debt financing and real estate sales in excess of Regency's carrying value of its investment, resulting in a negative investment balance, which is classified within Accounts payable and other liabilities in the Consolidated Balance Sheets.
(1) The USAA partnership has distributed proceeds from debt financing and real estate sales in excess of Regency's carrying value of its investment, resulting in a negative investment balance, which is classified within Accounts payable and other liabilities in the Consolidated Balance Sheets.
(1) The USAA partnership has distributed proceeds from debt financing and real estate sales in excess of Regency's carrying value of its investment, resulting in a negative investment balance, which is classified within Accounts payable and other liabilities in the Consolidated Balance Sheets.

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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, 2018 March 31, 2019
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
2018 $5,164
 30,022
 —
 35,186
 13,877
2019 20,062
 65,939
 —
 86,001
 22,294
 $14,382
 16,186
 —
 30,568
 10,340
2020 17,043
 235,002
 —
 252,045
 92,613
 17,043
 330,615
 —
 347,658
 111,957
2021 11,048
 269,942
 32,835
 313,825
 107,015
 11,048
 269,942
 19,635
 300,625
 104,375
2022 7,811
 195,702
 —
 203,513
 73,417
 7,811
 170,702
 —
 178,513
 68,417
2023 2,989
 171,608
 —
 174,597
 65,095
Beyond 5 Years 6,793
 654,795
 —
 661,588
 220,127
 7,353
 549,637
 —
 556,990
 167,032
Net unamortized loan costs, debt premium / (discount) —
 (8,888) —
 (8,888) (2,797) —
 (9,960) —
 (9,960) (2,962)
Total $67,921
 1,442,514
 32,835
 1,543,270
 526,546
 $60,626
 1,498,730
 19,635
 1,578,991
 524,254
At September 30, 2018,March 31, 2019, our investments in real estate partnerships had notes payable of $1.5$1.6 billion maturing through 2034, of which 97.1%92.0% had a weighted average fixed interest rate of 4.6%4.5%. The remaining notes payable float over LIBOR and had a weighted average variable interest rate of 3.8%4.7%. These fixed and variable rate notes payable are all non-recourse, and our pro-rata share was $526.5$524.3 million as of September 30, 2018.March 31, 2019. As notes payable mature, we expect they will be repaid from proceeds from new borrowings and/or partner capital contributions.
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.

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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) 2018 2017 2018 2017 2019 2018
Asset management, property management, leasing, and investment and financing services $6,744
 5,884
 $20,465
 18,735
Asset management, property management, leasing, and other transaction fees $6,658
 7,056

Recent Accounting Pronouncements
See noteNote 1 to Consolidated Financial Statements.

Environmental Matters
We are subject to numerous environmental laws and regulations as they apply to our shopping centers pertaining primarily 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.

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As of September 30, 2018March 31, 2019 we and our Investments in real estate partnerships had accrued liabilities of $9.1$9.0 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 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, which 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 will decline as the supply of available retail space exceeds demand and consumer spending declines. Occupancy declines will result in lower recovery rates of our operating expenses.

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, 2017.2018.

Item 4. Controls and Procedures

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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.
ThereOther than the implementation of ASC Topic 842, Leases, there have been no changes in the Parent Company's internal controls over financial reporting identified in connection with this evaluation that occurred during the thirdfirst quarter of 20182019 which 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.
There
54




Other than the implementation of ASC Topic 842, Leases, there have been no changes in the Operating Partnership's internal controls over financial reporting identified in connection with this evaluation that occurred during the thirdfirst quarter of 20182019 which have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1.    Legal Proceedings
We are a party to various legal proceedings that 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.

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, 2017.2018.

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, 2018.March 31, 2019.
The following table represents information with respect to purchases by the Parent Company of its common stock, by month, during the three months ended September 30, 2018.

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March 31, 2019.
Period
Total number of shares purchased (1)
Average price paid per shareTotal number of shares purchased as part of publicly announced plans or programs
Maximum number or approximate dollar value of shares that may yet be purchased under the plans or programs (2)
July 1 through July 31, 2018—
$—
—
$125,009,963
August 1 through August 31, 2018261
$65.06
—
$125,009,963
September 1 through September 30, 2018—
$—
—
$125,009,963
     
(1) Includes 261 shares repurchased at an average price of $65.06 to cover payment of withholding taxes in connection with restricted stock vesting by participants under Regency's Long-Term Omnibus Plan.
(2) On February 7, 2018, the Company's Board authorized a common share repurchase program under which the Company may purchase, from time to time, up to a maximum of $250 million of its outstanding common stock through open market purchases and/or in privately negotiated transactions. Any shares purchased will be retired. The program is scheduled to expire on February 6, 2020. Through September 30, 2018, the Company has repurchased 2,145,209 shares for $125.0 million.
Period
Total number of shares purchased (1)
Average price paid per shareTotal number of shares purchased as part of publicly announced plans or programs
Maximum number or approximate dollar value of shares that may yet be purchased under the plans or programs (2)
January 1 through January 31, 2019563,229
$58.20
563,229
$3,371,220
February 1 through February 28, 201995,191
$64.52
—
$250,000,000
March 1 through March 31, 2019108
$66.11
—
$250,000,000
     
(1) Includes 95,299 shares repurchased at an average price of $64.52 to cover payment of withholding taxes in connection with restricted stock vesting by participants under Regency's Long-Term Omnibus Plan.
(2) On February 7, 2018, the Company's Board authorized a common share repurchase program under which the Company may purchase, from time to time, up to a maximum of $250 million of its outstanding common stock through open market purchases and/or in privately negotiated transactions. Any shares purchased will be retired. Through January 2019, the Company has repurchased 4,252,333 shares for $246.6 million under this existing repurchase program. The program was scheduled to expire on February 6, 2020; however, the program was closed upon the authorization by the Company's Board of a new share repurchase program, as further discussed below.

On February 5, 2019, the Company's Board authorized a new common share repurchase program under which the Company, may purchase, from time to time, up to a maximum of $250 million of shares of its outstanding common stock through open market purchases and/or in privately negotiated transactions. Any shares purchased will be retired. The program is set to expire on February 4, 2020. The timing and actual number of shares purchased under the program depend upon marketplace conditions and other factors. The program remains subject to the discretion of the Board. Through March 31, 2019, no shares have been repurchased under this new program.

Item 3.    Defaults Upon Senior Securities
None.


55





Item 4.    Mine Safety Disclosures    
None.

Item 5.    Other Information
None.

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.

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Ex #    Description
31.    Rule 13a-14(a)/15d-14(a) Certifications.
31.1Rule 13a-14 Certification of Chief Executive Officer for Regency Centers Corporation.
31.2Rule 13a-14 Certification of Chief Financial Officer for Regency Centers Corporation.
31.3Rule 13a-14 Certification of Chief Executive Officer for Regency Centers, L.P.
31.4Rule 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

56




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

6257




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 5, 2018May 10, 2019REGENCY 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 5, 2018May 10, 2019REGENCY 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)

6358