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Regency Centers Corporation
Press Release
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www.RegencyCenters.com CONTACT: LISA PALMER
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REGENCY CENTERS REPORTS HEALTHY THIRD QUARTER RESULTS
Strong fundamentals drive 6.8% FFO growth
Jacksonville, Fla. (November 4, 2003) -- Regency Centers Corporation announced
today financial and operating results for the quarter ended September 30, 2003.
Net income for common stockholders for the quarter was $29.8 million, $0.51 per
diluted share, compared to $26.7 million and $0.46 per diluted share for the
same period last year, a 10.9% per share growth rate. Net income for common
stockholders for the nine months ended September 30, 2003 was $73.3 million,
$1.23 per diluted share, compared to $73.4 million and $1.26 per diluted share
for the first nine months of 2002.
On October 21, 2003, Regency announced that the Financial Accounting Standards
Board's (FASB) issuance of Statement 150 (SFAS 150), "Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity,"
would impact Regency's calculation of net income. Subsequently, on October 29,
2003, the FASB met to review concerns about the implementation of SFAS 150 and,
in that meeting, agreed to defer certain narrow provisions of SFAS 150. As a
result of the deferral of these provisions, the SFAS 150 impact that was
discussed in the October 21 press release is no longer applicable.
Regency reports Funds From Operations (FFO) for common stockholders in
accordance with the standards established by the National Association of Real
Estate Investment Trusts (NAREIT) as a supplemental earnings measure. The
Company considers this a meaningful performance measurement in the Real Estate
Investment Trust industry. For the third quarter, FFO was $46.2 million, or
$0.78 per diluted share, compared to $44.9 million and $0.73 per diluted share
for the same period last year, representing per share growth of 6.8%. Year to
date FFO as of September 30, 2003 was $125.9 million, or $2.06 per diluted
share, compared to $124.7 million and $2.04 per diluted share for the same
period in 2002.
On October 1, 2003, NAREIT provided clarification regarding the calculation of
FFO. This announcement clarified that original issuance costs associated with
the redemption of preferred stock and impairment write-downs should be included
in the calculation of FFO. The Company has historically added these items back
to GAAP net income in calculating FFO. In the quarter ended March 31, 2003, the
Company reduced net income for common stockholders by $1.9 million for the
original issuance costs associated with the redemption of $75 million of
preferred units. In the quarter ended June 30, 2003 the Company recognized a
provision for loss on the sale of operating properties, an impairment
write-down, totaling $2.0 million. Both of these items were added back to GAAP
net income in calculating FFO for previous quarters. In accordance
with NAREIT's recent announcement, these adjustments have been excluded from FFO
for the year to date period ended September 30, 2003. During the quarter ended
September 30, 2003 the Company also redeemed $80 million of preferred units and
approximately $1.2 million of issuance costs related to this redemption were not
added back to GAAP net income in calculating FFO for the third quarter.
Portfolio Results
At September 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.
Occupancy of the operating portfolio at September 30, 2003 was 95.3%. Same
property NOI growth was 3.0% for the quarter and 2.6% year to date. On a same
space, cash basis, rent growth climbed to 11.2% for the quarter and 10% year to
date. During the quarter Regency completed 352 new and renewal lease
transactions, including development properties, for nearly 1.1 million square
feet. For the year, Regency has completed 982 transactions, leasing or renewing
close to 3.4 million square feet.
"The fundamentals of our core business continue to be strong and profitable,"
said Martin E. Stein, Jr., Chairman and Chief Executive Officer. "Our experience
continues to demonstrate that shopping centers that are anchored by dominant
supermarket chains and that are well located in markets with attractive
demographics benefit from these sustainable competitive advantages. As a result,
we expect sustained growth from our operating portfolio. In addition we will
continue to create substantial value through disciplined execution of our
development and capital recycling strategies."
Capital Recycling - Investment and Disposition Activity
Regency completed three developments and started six new projects during the
quarter. The six new projects represent an estimated $52 million of invested
capital at completion with an estimated stabilized net operating income yield of
10.6%. As of September 30, 2003, the Company had 34 properties under development
for an estimated total net investment at completion of $450 million. The
in-process developments are a robust 81% leased and 65% funded.
During the third quarter Regency expanded its joint venture relationship with
Macquarie CountryWide Trust of Australia through the sale of three previously
stabilized Regency developments. Regency will maintain a 25% ownership interest
and will manage the properties on behalf of the joint venture. The gross sales
price of the properties was $103.3 million and represented a first year yield of
7.6%.
Regency also sold three operating properties to unrelated parties during the
quarter at a gross sales price of $18.7 million and a 9.3% average cap rate.
Corporate Governance Initiatives
Regency announced that the Company's Board of Directors approved additional
enhancements to its corporate governance practices reflecting the Company's
commitment to being proactive stewards by making meaningful improvements to
corporate governance. The enhancements include the elimination of staggered
terms for Regency's directors, the adoption of limits on other board memberships
for directors and officers of the Company and the amendment of stock ownership
guidelines. The stock ownership guidelines were
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amended by increasing the minimum ownership requirement for independent
directors to the greater of five times their annual retainer or $250,000.
Dividend
On November 4, 2003, the Board of Directors declared a quarterly cash dividend
of $0.52 per share, payable on December 3, 2003 to shareholders of record on
November 19, 2003. The Board also declared a quarterly cash dividend of $0.46563
on the Series 3 Preferred stock, payable on December 31, 2003 to shareholders of
record on November 30, 2003.
Conference Call
In conjunction with Regency's third quarter results, you are invited to listen
to its conference call that will be broadcast live over the internet on
Wednesday, November 5, 2003 at 10:00 a.m. EST on 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 third
quarter 2003 supplemental information package that may help investors estimate
earnings for 2003. A copy of the Company's third 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 September 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 September 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 29,769 26,690 73,325 73,440
Add (Less):
Depreciation and amortization expense - real property 16,555 17,105 51,816 49,707
Amortization of leasing commissions 1,693 1,465 5,032 3,959
(Gain) loss on sale of operating properties (2,546) (1,830) (6,080) (6,569)
Convertible preferred stock dividends 0 759 0 2,276
Minority interest of exchangeable partnership units 750 689 1,842 1,922
Funds from Operations 46,221 44,878 125,935 124,735
Weighted Average Shares
For Diluted FFO Per Share (000s) 59,442 61,658 61,161 61,267
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Regency reports Funds From Operations (FFO) as a supplemental earnings measure.
The Company 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), excluding real estate
depreciation and amortization, gains and losses from sales of properties (except
those gains and losses sold by the Company's taxable REIT subsidiary), after
adjustment from unconsolidated partnerships and joint ventures and 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 September 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.
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