Regency Centers Corporation
Press Release
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www.RegencyCenters.com CONTACT: LISA PALMER
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(904) 598-7636
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REGENCY CENTERS ANNOUNCES SECOND QUARTER RESULTS
Core Fundamentals Healthy, Growth in Net Income and Funds From Operations
Jacksonville, Fla. (August 12, 2003) -- Regency Centers Corporation announced
today financial and operating results for the quarter ended June 30, 2003.
Income from continuing operations for the second quarter was $22.4 million, or
$0.34 per diluted share, compared to $15.3 million, or $0.25 per diluted share
in 2002. For the six months ended June 30, 2003, income from continuing
operations was $40.5 million, or $0.65 per diluted share, compared to $33.2
million and $0.54 per diluted share in 2002.
Net income for common stockholders for the quarter rose to $25.6 million or
$0.42 per diluted share, compared to $22.2 million and $0.38 per diluted share
for the same period last year. For the six months ended June 30, 2003, net
income was $43.6 million, or $0.72 per diluted share, compared to $46.7 million,
or $0.80 per diluted share last year.
Regency reports Funds From Operations (FFO) in accordance with the standards
established by the National Association of Real Estate Investment Trusts as a
supplemental earnings measure. The Company uses FFO as an important indicator of
business performance and considers this a meaningful performance measurement in
the Real Estate Investment Trust industry. For the quarter ended June 30, 2003,
FFO was $43.3 million, or $0.70 on a diluted per share basis, compared to $42.3
million and $0.69 per diluted share for the same period last year. For the six
month period, FFO was $83.6 million, or $1.35 per diluted share, up from $82.2
million, or $1.34 per diluted share.
Portfolio Results
Same property NOI growth for the second quarter was 3.2% and was 2.4% year to
date. Rent growth remained strong at 9% for the quarter and 9.3% year to date.
Occupancy of the operating portfolio increased to 95.3% at June 30, 2003 from
94.9% at March 31, 2003. During the quarter Regency completed 275 new and
renewal lease transactions totaling over 1.1 million square feet. For the year,
Regency has completed
631 transactions, leasing 2.3 million square feet. At June 30, 2003, Regency's
investment in real estate before depreciation was approximately $3.2 billion. At
quarter end, the Company owned 262 shopping centers and single tenant
properties, including those held in joint ventures, totaling 29.9 million square
feet located in top markets across the nation.
"The fundamentals of our core business are extremely healthy and position
Regency to increase our FFO per share growth rate and generate attractive
returns on equity. The quality of our portfolio has been enhanced by our Premier
Customer Initiative, development program, and capital recycling strategy whereby
we are selling lower quality and lower growth assets and reinvesting in high
quality new developments," said Martin E. Stein, Jr., Chairman and Chief
Executive Officer. "Our experience is that excellent real estate, attractive
demographics, dominant anchors, leading side-shop retailers and superior
operating capabilities and systems produce sustainable net operating income."
Investment and Development Activity
During the second quarter Regency acquired two new properties. Addison Town
Center was purchased in May through Columbia Regency Retail Partners, Regency's
joint venture with the state of Oregon. Addison is a redevelopment that is
located in the Dallas metropolitan area and is anchored by Kroger and Target.
With the second acquisition, Regency increased its presence in the Washington,
D.C. market through the purchase of Market at Opitz Crossing, a Safeway-anchored
center in Woodbridge, VA.
During the quarter Regency sold six completed shopping center developments, five
of these were sold into the joint venture with Macquarie-CountryWide. Two new
projects were started during the quarter. The additions represent $19 million in
estimated net development costs. As of June 30, 2003, the Company had 32
properties under development for an estimated total net investment at completion
of nearly $441 million. Demand for development space remains strong with over
400,000 square feet leased during the quarter. The development portfolio is 80%
leased and committed and 57% funded. "We will continue to deploy capital into
developments as a key ingredient of our business model that creates significant
value and generates attractive returns on equity," added Mr. Stein.
Capital Markets Activity
On June 19, 2003 Regency and Security Capital announced the successful
completion of an underwritten offering to sell all of GE Capital's 57% ownership
stake in Regency's shares. In connection with the transaction, Regency purchased
4,606,880 shares from Security Capital at the public offering price of $32.56
per share. Upon closing of the transaction, the Stockholders Agreement between
Security Capital and Regency terminated and Joseph E. Parsons, President, North
America Equity Holdings, GE Capital Real Estate resigned from Regency's Board of
Directors.
Commenting on the sale of GE's ownership stake, Mr. Stein said, "We are
extremely pleased to have worked with GE Capital to resolve the question of
Security Capital's ownership in Regency in a manner that we feel was beneficial
to all shareholders."
Subsequent to quarter end, Regency entered into a $96.5 million forward starting
swap transaction to partially hedge the ten-year fixed rate financing expected
to occur in April 2004. Regency locked an
underlying 10-year treasury rate of 3.9525% and a 10-year swap spread of 0.39%.
With the forward carry cost and fees, the swap fixed rate is 4.745%.
Dividend
On August 11, 2003, the Board of Directors declared a quarterly cash dividend of
$0.52 per share, payable on September 9, 2003 to shareholders of record on
August 26, 2003. The Board also declared a quarterly cash dividend of $0.46563
on the Series 3 Preferred stock, payable on September 30, 2003 to shareholders
of record on August 29, 2003.
Conference Call
In conjunction with Regency's second quarter results, you are invited to listen
to its conference call that will be broadcast live over the internet on Tuesday,
August 12, 2003 at 4:00 pm EST at the Company's web site www.RegencyCenters.com.
If you are unable to participate during the live webcast, the call will also be
archived on the web site.
The Company has published additional forward-looking statements in its second
quarter 2003 supplemental information package that may help investors estimate
earnings for 2003. A copy of the Company's second quarter 2003 supplemental
information will be available from the Company's web site at
www.RegencyCenters.com or by written request to Diane Ortolano, Investor
Relations, Regency Centers Corporation, 121 West Forsyth Street, Suite 200,
Jacksonville, Florida, 32202. The supplemental information package contains more
detailed financial and property results including financial statements, an
outstanding debt summary, acquisition and development activity, investments in
joint ventures, information pertaining to securities issued other than common
stock, property details, a significant tenant report and a lease expiration
table in addition to earnings and valuation guidance assumptions. The
information provided in the supplemental package is unaudited and there can be
no assurance that the information will not vary from the final information for
the quarter ended June 30, 2003. Regency may, but assumes no obligation to,
update information in the supplemental package from time to time.
Funds From Operations Reconciliation to Net Income--Actual Results
For the Periods Ended June 30, 2003 and 2002 Three Months Ended Year to Date
($000s) 2003 2002 2003 2002
Actual Actual Actual Actual
Funds From Operations:
Net income for common stockholders 25,632 22,232 43,556 46,750
Add (Less):
Depreciation expense - real property 17,710 16,613 35,260 32,602
Amortization of leasing commissions 1,648 1,284 3,340 2,493
(Gain) loss on sale of operating properties (4,336) (1,581) (3,533) (4,740)
Provision for loss on operating properties 1,969 2,364 1,969 2,364
Convertible preferred stock dividends 0 759 0 1,517
Preferred unit issuance costs 0 0 1,922 0
Minority interest of exchangeable partnership units 655 582 1,092 1,233
Funds from Operations 43,278 42,253 83,606 82,220
Regency reports Funds From Operations (FFO) as a supplemental earnings measure.
The Company uses FFO as an important indicator of business performance and
considers FFO to be an accurate benchmark to its peer group and a meaningful
performance measurement for the company because it excludes various items in net
income that do not relate to or are not indicative of the operating performance
of the ownership, management and development of real estate. FFO is defined by
the National Association of Real Estate Investment Trusts generally as net
earnings (computed in accordance with GAAP), (1) excluding real estate
depreciation and amortization, gains and losses from sales of properties (except
those gains and losses sold by Regency's taxable REIT subsidiary), after
adjustment for unconsolidated partnerships and joint ventures and (2) excluding
items classified by GAAP as extraordinary or unusual, along with significant
non-recurring events. Regency also adjusts for the payment of convertible
preferred stock dividends.
Regency Centers Corporation (NYSE: REG)
Regency is the leading national owner, operator, and developer focused on
grocery-anchored, neighborhood retail centers. Regency's total assets before
depreciation exceed $3.2 billion. As of June 30, 2003, the Company owned 262
retail properties, including those held in joint ventures, totaling 29.9 million
square feet located in high growth markets throughout the United States.
Operating as a fully integrated real estate company, Regency is a qualified real
estate investment trust that is self-administered and self-managed.
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In addition to historical information, the information in this press release
contains forward-looking statements under the federal securities law. These
statements are based on current expectations, estimates and projections about
the industry and markets in which Regency operates, 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 pricing of acquisitions and
sales of properties and out parcels, changes in expected leasing activity and
market rents, timing of acquisitions, development starts and sales of properties
and out parcels, weather, obtaining governmental approvals and meeting
development schedules.
During the quarter, Regency's corporate representatives may reiterate these
forward-looking statements during private meetings with investors, investment
analysts, the media and others. At the same time, Regency will keep this
information publicly available on its web site www.regencycenters.com. The
public can continue to rely on this information as still being Regency's current
expectations, unless Regency publishes a notice stating otherwise.