Regency Centers Reports Third Quarter Results

  Regency Centers Reports Third Quarter Results

                       Same Property NOI Growth of 4.4%

Business Wire

JACKSONVILLE, Fla. -- November 07, 2012

Regency Centers Corporation (“Regency” or the “Company”) (NYSE: REG) 
announced today financial and operating results for the quarter ended
September 30, 2012.

Earnings

Regency reported Core Funds From Operations (Core FFO) for the third quarter
of $55.6 million, or $0.62 per diluted share, compared to $54.9 million, or
$0.61 per diluted share, for the same period in 2011. For the nine months
ended September 30, 2012 Core FFO was $174.3 million, or $1.94 per diluted
share, compared to $156.3 million, or $1.77 per diluted share, for the same
period last year.

Regency reported net income attributable to common stockholders for the third
quarter of $11.6 million, or $0.13 per diluted share, compared to net income
of $8.5 million, or $0.09 per diluted share, for the same period in 2011. Net
income attributable to common stockholders for the nine months ended September
30, 2012 was $30.5 million, or $0.34 per diluted share, compared to $23.6
million, or $0.26 per diluted share, for the same period last year.

Funds From Operations (FFO) for the third quarter was $52.0 million, or $0.58
per diluted share. For the same period in 2011, the Company reported FFO of
$56.0 million, or $0.62 per diluted share. For the nine months ended September
30, 2012 FFO was $163.2 million, or $1.81 per diluted share, compared to
$163.8 million, or $1.85 per diluted share, for the same period last year.

FFO is a commonly used measure of REIT performance, which the National
Association of Real Estate Investment Trusts (NAREIT) defines as net income,
computed in accordance with GAAP, excluding gains and losses from sales of
depreciable property, excluding operating real estate impairments, plus
depreciation and amortization, and after adjustments for unconsolidated
partnerships and joint ventures. Regency computes 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 FFO excludes depreciation and amortization and
gains and losses from depreciable property dispositions, and impairments, it
can provide 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 the Company’s financial performance not
immediately apparent from net income determined in accordance with GAAP. Thus,
FFO is a supplemental non-GAAP financial measure of the Company's operating
performance, which does not represent cash generated from operating activities
in accordance with GAAP and therefore, should not be considered an alternative
for net income as a measure of liquidity. An additional performance measure
used by Regency, Core FFO, represents FFO as defined above, excluding, but not
limited to, transaction income or expense, gains or losses from the early
extinguishment of debt, development and outparcel gains or losses and other
non-core items. The Company provides a reconciliation of FFO to Core FFO.

Operations

For the three months ended September 30, 2012, Regency’s results for wholly
owned properties plus its pro-rata share of co-investment partnerships were as
follows:

  *Percent leased at period end, same properties only: 94.3%
  *Percent leased at period end, all properties: 93.6%
  *Increase in same property net operating income (NOI) over the same period
    last year, excluding termination fees: 4.4%
  *Same space rental rate growth on a cash basis for spaces vacant less than
    12 months: 13.7%
  *Leasing transactions, including in-process developments: 396 new and
    renewal lease transactions for a total of 1.3 million square feet

For the nine months ended September 30, 2012, Regency’s results for wholly
owned properties plus its pro-rata share of co-investment partnerships were as
follows:

  *Percent leased at period end, same properties only: 94.3%
  *Percent leased at period end, all properties: 93.6%
  *Increase in same property net operating income (NOI) over the same period
    last year, excluding termination fees: 4.0%
  *Same space rental rate growth on a cash basis for spaces vacant less than
    12 months: 6.1%
  *Leasing transactions, including in-process developments: 1,343 new and
    renewal lease transactions for a total of 4.0 million square feet

Investments

Property Transactions

During the quarter, Regency sold three co-investment operating properties at a
gross sales price of $61.5 million representing a weighted average cap rate of
8.2%. Regency’s share of the gross sales price was $20.3 million. Also,
Regency sold one outparcel at a gross sales price of $725,000. As previously
reported, the Company completed the sale of a 15-property portfolio
(“Portfolio”) during the quarter to an affiliate of Blackstone Real Estate
Partners VII for total consideration of $321.0 million, representing a
weighted average cap rate of 8.1%. Regency retained a $47.5 million preferred
equity investment in the entity that owns the Portfolio, which will earn an
annual preferred return of 10.5%. This preferred investment can be redeemed
after 12 months by Regency and after 18 months by either party.

During the quarter, Regency purchased one property, on a wholly owned basis,
at a gross purchase price of $59.5 million and a cap rate on in-place income
of 5.0%. Located at one of the most desirable intersections in San Diego,
Balboa Mesa is a 189,321 square foot in-fill shopping center anchored by Vons,
Kohl’s and CVS. Regency will commence a $12 million redevelopment of the
shopping center in early 2013 that will include the addition of 16,000 square
feet of new retail space. Once the redevelopment is complete, the estimated
NOI yield increases to approximately 6.0% as a result of an estimated
incremental return on the redevelopment of more than 8.0%.

Developments and Redevelopments

At September 30, 2012, the Company had seven projects in development with
estimated net development costs of $241.7 million. Additionally, Regency had
three redevelopment projects in process with estimated net incremental costs,
including its pro-rata share of co-investment partnerships, of $13.2 million.

Capital Markets

Unsecured Credit Facility

During the quarter, Regency amended its existing unsecured revolving credit
facility (the “Facility”) and increased the Facility by $200 million to a
total of $800 million (the “Amended Facility”). The Amended Facility bears
interest at an annual rate of LIBOR plus 140 basis points (inclusive of a 22.5
basis point facility fee) and is based on the higher of the Company’s current
corporate credit ratings from Moody's and S&P. The maturity date on the
Amended Facility is extended by one year and will expire in September 2016.
Additionally, the Company retained a one-year extension option.

Preferred Stock

During the quarter, Regency issued $75 million of 6.00% Series 7 Cumulative
Redeemable Preferred Stock (“Series 7 Stock”). The Company used the proceeds
for the redemption of its 6.70% Series 5 Cumulative Redeemable Preferred Stock
(“Preferred Redemption”). Beginning in 2013, the Preferred Redemption and the
issuance of the Series 7 Stock will result in annual preferred dividend
savings of approximately $525,000.

Guidance

The Company has updated certain components of its 2012 earnings and valuation
guidance and introduced initial 2013 earnings guidance. Some of these changes
are summarized below. Please refer to the Company’s third quarter 2012
supplemental information package for the complete list of updates.

                              Full Year 2012 Guidance          Full Year
                             Previous        Updated        
                               Guidance         Guidance         2013 Guidance
Core FFO/share^(a)            $2.42 – $2.48   $2.48 – $2.52   $2.45 – $2.53
FFO/share^(a)                 $2.30 – $2.36   $2.34 – $2.39   $2.42 – $2.50
Same-property NOI growth –    2.8% – 3.8%     3.6% – 4.1%     
without termination fees^(b)
Same-property percent leased  93.5% – 94.5%   94.0% – 94.5%   
– at period end^(b)
Rental rate growth for
spaces vacant less than 12    (1.0)% – 2.5%   2.5% – 5.5%     
months^(c)

(a) Per diluted share

(b) Wholly owned and Regency’s pro-rata share of co-investment partnerships

(c) Rent growth is calculated on a same-space, cash basis

Reconciliation of Net Income Attributable to Common Stockholders to FFO and
Core FFO — Guidance

All numbers are per share except weighted average shares
                                                                
                                      Full Year              Full Year
Funds From Operations Guidance:      2012                  2013
                                                                        
Net income attributable to common     $ 0.42       0.47      $ 0.60     $ 0.68
stockholders
                                                                        
Adjustments to reconcile net income
to FFO:
Depreciation expense, amortization      1.92       1.92      $ 1.82       1.82
and other amounts
                                                                   
                                                                        
      Funds From Operations           $ 2.34     2.39     $ 2.42     2.50
                                                                        
                                                                        
Adjustments to reconcile FFO to
Core FFO:
One-time additional preferred           0.02       0.02        0.00       0.00
dividend payment
Gain on redemption of preferred         (0.02  )   (0.02 )     0.00       0.00
units
Original preferred stock issuance       0.11       0.11        0.00       0.00
costs expensed
All other non-core items               0.03     0.02      0.03     0.03
                                                                        
      Core Funds From Operations      $ 2.48     2.52     $ 2.45     2.53
                                                                        
                                                                        
      Weighted average shares           89,928                 90,838
      (000's)
                                                                        

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
Thursday, November 8, 2012 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 forward-looking statements and additional financial
information in its third quarter 2012 supplemental information package that
may help investors estimate earnings for 2012. A copy of the Company’s third
quarter 2012 supplemental information will be available on the Company's web
site at www.RegencyCenters.com or by written request to: Investor Relations,
Regency Centers Corporation, One Independent Drive, Suite 114, 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
partnerships, information pertaining to securities issued other than common
stock, property details, a significant tenant rent 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, 2012. Regency may, but assumes
no obligation to, update information in the supplemental package from time to
time.

Reconciliation of Net Income Attributable to Common Stockholders to FFO and
Core FFO — Actual (in thousands)

For the Periods Ended         Three Months Ended     Year to Date
September 30, 2012 and 2011
                               2012        2011       2012         2011
                                                                     
Net income attributable to     $ 11,637     8,510      $ 30,515      23,556
common stockholders
Adjustments to reconcile to
Funds from Operations:
Depreciation and
amortization - consolidated      25,362     28,337       81,611      85,199
real estate
Depreciation and
amortization -                   10,639     10,793       32,516      33,023
unconsolidated partnerships
Consolidated JV partners'        (184   )   (177   )     (548    )   (559    )
share of depreciation
Provision for impairment         1,146      6,699        23,655      11,279
Amortization of leasing          3,777      3,987        11,817      12,324
commissions and intangibles
Gain on sale of operating        (451   )   (2,212 )     (16,529 )   (2,237  )
properties, net of tax
Income deferrals under the
Restricted Gain Method for       -          -            -           -
GAAP
Loss from deferred               -          64           -           1,120
compensation plan, net
Noncontrolling interest of
exchangeable partnership        39       27         116       77      
units
                                                                     
Funds From Operations            51,965     56,028       163,153     163,782
                                                                     
Dilutive effect of              (144   )  (181   )    (465    )  (527    )
share-based awards
Funds From Operations for
calculating Diluted FFO per    $ 51,821   55,847    $ 162,688   163,255 
Share
                                                                     
Funds From Operations          $ 51,965     56,028     $ 163,153     163,782
Adjustments to reconcile to
Core Funds from Operations:
Development and outparcel
(gain) loss, net of dead         449        613          (773    )   (731    )
deal costs and tax
Provision for impairment         1          -            1,000       -
Provision for hedge              9          -            20          -
ineffectiveness
(Gain) loss on early debt        852        (1,738 )     856         (1,740  )
extinguishment
Restructuring charges            -          -            -           -
Original preferred stock         2,283      -            10,119      -
issuance costs expensed
Gain on redemption of            -          -            (1,875  )   -
preferred units
One-time additional              -          -            1,750       -
preferred dividend payment
Transaction fees and            -        -          -         (5,000  )
promotes
                                                                     
Core Funds From Operations       55,559     54,903       174,250     156,311
                                                                     
Dilutive effect of              (144   )  (181   )    (465    )  (527    )
share-based awards
Core Funds From Operations
for calculating Diluted Core   $ 55,415   54,722    $ 173,785   155,784 
FFO per Share
                                                                     
Weighted Average Shares For      89,839     89,694       89,713      88,236
Diluted FFO per Share
                                                                     

Reported results are preliminary and not final until the filing of the
Company’s Form 10-Q with the SEC and, therefore, remain subject to adjustment.

About Regency Centers Corporation (NYSE: REG)

Regency is the preeminent national owner, operator, and developer of dominant
grocery-anchored and community shopping centers. At September 30, 2012, the
Company owned 347 retail properties, including those held in co-investment
partnerships. Including tenant-owned square footage, the portfolio encompassed
46.1 million square feet located in top markets throughout the United States.
Since 2000, Regency has developed 209 shopping centers, including those
currently in-process, representing an investment at completion of more than
$3.0 billion. Operating as a fully integrated real estate company, Regency is
a qualified real estate investment trust that is self-administered and
self-managed.

Forward-looking statements involve risks and uncertainties. Actual future
performance, outcomes and results may differ materially from those expressed
in forward-looking statements. Please refer to the documents filed by Regency
Centers Corporation with the SEC, specifically the most recent reports on
Forms 10-K and 10-Q, which identify important risk factors which could cause
actual results to differ from those contained in the forward-looking
statements.

Contact:

Regency Centers Corporation
Patrick Johnson, 904-598-7422
PatrickJohnson@RegencyCenters.com
 
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