# Regency Centers Corp: Form 10-Q for the period ended Sep 30, 2019

- Company: [Regency Centers Corp](/companies/reg.md) (CIK 910606)
- Form: 10-Q
- Filed: 2019-11-04
- Accepted by EDGAR: Nov 4, 2019, 16:40 ET
- Period: 2019-09-30
- Accession: 0001564590-19-039836
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/910606/000156459019039836/reg-10q_20190930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/910606/000156459019039836/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2019-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2019-07-01 to 2019-09-30 | $282.3m | us-gaap:Revenues |
| Revenue | 9 months, 2019-01-01 to 2019-09-30 | $844.4m | us-gaap:Revenues |
| Interest expense | 3 months, 2019-07-01 to 2019-09-30 | $38.3m | us-gaap:InterestExpense |
| Interest expense | 9 months, 2019-01-01 to 2019-09-30 | $113.2m | us-gaap:InterestExpense |
| Net income | 3 months, 2019-07-01 to 2019-09-30 | $57.0m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2019-01-01 to 2019-09-30 | $199.1m | us-gaap:NetIncomeLoss |
| Diluted shares (weighted) | 3 months, 2019-07-01 to 2019-09-30 | 167,944,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2019-01-01 to 2019-09-30 | 167,834,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2019-01-01 to 2019-09-30 | $469.4m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Dividends paid | 9 months, 2019-01-01 to 2019-09-30 | $292.9m | us-gaap:PaymentsOfDividendsCommonStock |
| Share repurchases | 9 months, 2019-01-01 to 2019-09-30 | $32.8m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Total assets | at 2019-09-30 | $11.17bn | us-gaap:Assets |
| Total liabilities | at 2019-09-30 | $4.83bn | us-gaap:Liabilities |
| Long-term debt | at 2019-09-30 | $3.89bn | us-gaap:LongTermDebt |
| Shareholders' equity | at 2019-09-30 | $6.26bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 79,604 characters.

### 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, 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

In addition to the required Generally Accepted Accounting Principles ("GAAP") presentations, we use certain non-GAAP performance measures as we believe these measures improve the understanding of the Company's operational results. 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:

- *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.
- *Fixed Charge Coverage Ratio* is defined as Operating EBITDA*re* divided by the sum of the gross interest and scheduled mortgage principal paid to our lenders.
- *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, excluding (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization, (iv) gains on sales of real estate, (v) impairments of real estate, and (vi) 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, 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 Attributable to Common Stockholders to NAREIT FFO.

- *Net Operating Income ("NOI")* is the sum of base rent, percentage rent, recoveries from tenants, other lease income, and other 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 part of Non-Same Property.
- *Operating EBITDAre (previously Adjusted EBITDA)* begins with NAREIT EBITDA*re* and excludes certain non-cash components of 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.

- *Property In Development* includes 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 majority of the income is generated from retail uses.
- *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.

### Overview of Our Strategy

Regency Centers Corporation began its operations as a publicly-traded REIT in 1993, and, as of September 30, 2019, had full or partial ownership interests in 422 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 53.0 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, 2019, the Parent Company owns approximately 99.6% of the outstanding common partnership units of the Operating Partnership.

Our mission is to be the preeminent national owner, operator, and developer of shopping centers connecting outstanding retailers and service providers with surrounding neighborhoods and communities. Our goals are to:

- Own and manage a 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 net operating income ("NOI");
- Maintain an industry leading and disciplined development and redevelopment platform to deliver exceptional retail centers at higher returns 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 are aligned with shareholder interests.

### Executing on our Strategy

During the nine months ended September 30, 2019:

We had Net income attributable to common stockholders of $199.1 million as compared to $170.2 million during the nine months ended September 30, 2019 and 2018, respectively.

We sustained same property NOI growth:

- We achieved pro-rata same property NOI growth, excluding termination fees, of 2.1%.
- We executed 1,237 leasing transactions representing 4.4 million pro-rata SF of new and renewal leasing, with trailing twelve month rent spreads of 7.9% on comparable retail operating property spaces.
- At September 30, 2019, our total property portfolio was 94.8% leased, while our same property portfolio was 95.2% leased.

We continued our development and redevelopment of high quality shopping centers at attractive returns on investment:

- We started a new development representing a total pro-rata project investment of $27.3 million upon completion with a projected return on investment of 6.0%.
- We started nine redevelopments representing a total incremental pro-rata project investment of $98.1 million upon completion, with a weighted average projected return on investment of 8.8%.
- Including these projects, a total of 24 properties were in the process of development or redevelopment, representing a pro-rata investment upon completion of $470.3 million.
- We completed two new developments representing a total pro-rata project investment of $40.2 million, with a weighted average return on investment of 7.9%.
- We completed three redevelopments representing a total pro-rata project investment of $7.1 million, with a weighted average return on investment of 6.7%.

We maintained a conservative balance sheet providing financial flexibility to cost effectively fund investment opportunities and debt maturities:

- On March 6, 2019, we issued $300 million of 4.65% senior unsecured public notes, which priced at 99.661%, and mature in March 2049. The net proceeds of the offering were used to repay in full our $250 million 4.8% notes due April 15, 2021, including a make-whole premium of approximately $9.6 million and accrued interest, with the remaining proceeds used toward repaying in full two mortgages for $52.7 million with interest rates ranging between 6.25% and 7.25%, including a repayment premium of $1 million.
- On August 13, 2019, we issued $425 million of 2.95% senior unsecured public notes, which priced at 99.903% and mature in September 2029. The net proceeds of the offering were used to repay in full our $300 million term loan that was due to mature in December 2020, including an interest rate swap breakage fee of approximately $1.1 million, and to reduce the outstanding balance on our Line.
- During September 2019, we entered into forward sale agreements under our ATM program through which we will issue 1,894,845 shares of common stock at an average offering price of $67.99. The shares under the forward sales agreements may be settled at any time before the settlement date, which is September 12, 2020. Proceeds from the issuance of shares are expected to be used to fund acquisitions of operating properties, to fund developments and redevelopments, and for general corporate purposes.
- At September 30, 2019, our annualized net debt-to-operating EBITDA*re* ratio on a pro-rata basis was 5.5x.

### Property Portfolio

The following table summarizes general information related to the Consolidated Properties in our portfolio:

*(GLA in thousands)*

|  | September 30, 2019 | December 31, 2018 |
| --- | ---: | ---: |
| Number of Properties | 305 | 305 |
| Properties in Development | 6 | 6 |
| GLA | 37,765 | 37,946 |
| % Leased – Operating and Development | 94.8% | 95.5% |
| % Leased – Operating | 94.9% | 95.9% |
| Weighted average annual effective rent per square foot ("PSF"), net of tenant concessions. | $22.37 | $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, 2019 | December 31, 2018 |
| --- | ---: | ---: |
| Number of Properties | 117 | 120 |
| Properties in Development | 1 | 2 |
| GLA | 15,223 | 15,622 |
| % Leased – Operating and Development | 95.0% | 95.4% |
| % Leased –Operating | 95.1% | 95.7% |
| Weighted average annual effective rent PSF, net of tenant concessions | $21.57 | $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, 2019 | December 31, 2018 |
| --- | ---: | ---: |
| % Leased – All Properties | 94.8% | 95.6% |
| Anchor space | 97.2% | 98.4% |
| Shop space | 90.8% | 90.9% |

The decline in anchor space percent leased is primarily attributable to a 100 basis point decrease from the closure of two anchor spaces as a result of the Sears bankruptcy filing.

The following table summarizes leasing activity, including our pro-rata share of activity within the portfolio of our co-investment partnerships:

| Anchor Leases | Nine months ended September 30, 2019 Leasing Transactions | SF (in thousands) | Base Rent PSF | Tenant Allowance and Landlord Work PSF | Leasing Commissions PSF (1) |
| --- | ---: | ---: | ---: | ---: | ---: |
| New | 17 | 302 | $20.91 | $49.89 | $6.21 |
| Renewal | 82 | 2,125 | 12.85 | 0.64 | 0.11 |
| Total Anchor Leases | 99 | 2,427 | $13.85 | $6.77 | $0.87 |
| Shop Space |  |  |  |  |  |
| New | 385 | 692 | $33.42 | $30.21 | $9.77 |
| Renewal | 753 | 1,283 | 32.66 | 0.97 | 0.62 |
| Total Shop Space Leases | 1,138 | 1,975 | $32.93 | $11.22 | $3.83 |
| Total Leases | 1,237 | 4,402 | $22.41 | $8.77 | $2.20 |

(1) On January 1, 2019, the Company adopted ASC Topic 842, *Leases*, under which non-contingent internal leasing costs can no longer be capitalized.

| Anchor Leases | Nine months ended September 30, 2018 Leasing Transactions | SF (in thousands) | Base Rent PSF | Tenant Allowance and Landlord Work PSF | Leasing Commissions PSF |
| --- | ---: | ---: | ---: | ---: | ---: |
| New | 20 | 338 | $18.84 | $33.66 | $6.89 |
| Renewal | 64 | 1,918 | 13.88 | 0.40 | 0.33 |
| Total Anchor Leases | 84 | 2,256 | $14.62 | $5.38 | $1.31 |
| Shop Space |  |  |  |  |  |
| New | 388 | 635 | $32.85 | $26.41 | $13.33 |
| Renewal | 869 | 1,425 | 33.11 | 0.85 | 2.15 |
| Total Shop Space Leases | 1,257 | 2,060 | $33.03 | $8.73 | $5.60 |
| Total Leases | 1,341 | 4,316 | $23.41 | $6.98 | $3.36 |

The weighted average base rent on signed shop space leases during 2019 was $32.93 and exceeds the average annual base rent of all shop space leases due to expire during the next 12 months of $31.86 PSF. In the anchor category, base rent PSF on renewal leases decreased due to the higher volume of options exercised for anchor deals in 2019 as compared to 2018. On a comparable basis, new and renewal anchor rent spreads were positive.

#### 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:

| Grocery Anchor | September 30, 2019 Number of Stores | Percentage of Company- owned GLA (1) | Percentage of Annualized Base Rent (1) |
| --- | ---: | ---: | ---: |
| Publix | 69 | 6.5% | 3.2% |
| Kroger | 56 | 6.6% | 3.0% |
| Albertsons Companies | 46 | 4.2% | 2.8% |
| Whole Foods | 33 | 2.5% | 2.4% |
| TJX Companies | 61 | 3.1% | 2.4% |

(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 and tight credit markets could negatively impact consumer spending and, along with large-scale business failures, have an adverse effect on our results from 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, such as significant debt maturities, 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 adjudicate 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 are currently in bankruptcy and continue to occupy space in our shopping centers represent an aggregate of 0.9% of our annual base rent on a pro-rata basis, which includes 50 basis points for the 57,000 SF Barneys space in New York.

### Results from Operations

#### Comparison of the three months ended September 30, 2019 and 2018:

Our revenues increased as summarized in the following table:

*(in thousands)*

|  | Three months ended September 30, 2019 | 2018 | Change |
| --- | ---: | ---: | ---: |
| Lease income (1) | $272,143 | 268,948 | 3,195 |
| Other property income | 2,780 | 2,408 | 372 |
| Management, transaction, and other fees | 7,353 | 6,954 | 399 |
| Total revenues | $282,276 | 278,310 | 3,966 |

(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 $3.2 million, driven by the following contractually billable components of rent to the tenants per the lease agreements:

$4.0 million increase from billable Base rent, as follows:

- $2.9 million increase from rent commencing at development properties;
- $2.4 million increase from acquisitions of operating properties; and
- $2.9 million net increase from same properties due to rental rate growth on new and renewal leases and rent steps in existing leases,
- reduced by $4.2 million from the sale of operating properties.

$2.3 million decrease in Straight-line rent primarily driven by timing of contractual rent steps and early lease terminations.

$4.0 million net increase in Above and below market rent accretion within our same property portfolio, primarily driven by lease term modifications.

$2.2 million decrease related to uncollectible lease income recorded as a direct charge against Lease income beginning in January 1, 2019, with the adoption of ASC 842, *Leases*. During the three months ended September 30, 2018, uncollectible lease income of $1.1 million was recorded as Provision for doubtful accounts included in Other operating expenses below. The net increase in these components is driven by changes in collection expectations within our tenant profile.

Changes in our operating expenses are summarized in the following table:

*(in thousands)*

|  | Three months ended September 30, 2019 | 2018 | Change |
| --- | ---: | ---: | ---: |
| Depreciation and amortization | $91,856 | 89,183 | 2,673 |
| Operating and maintenance | 41,695 | 40,557 | 1,138 |
| General and administrative | 16,705 | 17,564 | (859) |
| Real estate taxes | 33,601 | 35,129 | (1,528) |
| Provision for doubtful accounts (1) | — | 1,136 | (1,136) |
| Other operating expenses | 1,819 | 909 | 910 |
| Total operating expenses | $185,676 | 184,478 | 1,198 |

(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 $2.2 million during the three months ended September 30, 2019.

Depreciation and amortization costs increased, on a net basis, as follows:

- $1.1 million increase as we began depreciating costs at development properties where tenant spaces were completed and became available for occupancy;
- $2.5 million increase from acquisitions of operating properties and corporate assets; and
- $1.0 million increase from same properties, primarily attributable to additional depreciation and amortization at redevelopment properties and for early tenant move-outs;
- reduced by $2.0 million from the sale of operating properties.

Operating and maintenance costs increased, on a net basis, as follows:

- $617,000 increase from operations commencing at development properties;
- $684,000 increase from acquisitions of operating properties; and
- $619,000 net increase from same properties driven by an increase in recoverable costs;
- reduced by $782,000 from the sale of operating properties.

General and administrative costs decreased, on a net basis, as follows:

- $2.3 million decrease in compensation costs primarily driven by lower incentive compensation; and
- $845,000 decrease due to higher development overhead capitalization based on the status and progress of development and redevelopment projects during the year; offset by
- $2.2 million increase due to eliminating capitalization of non-contingent internal leasing costs and legal costs associated with leasing activities upon the adoption of ASC 842, Leases, on January 1, 2019.

Real estate taxes decreased, on a net basis, as follows:

- $374,000 increase from development properties where capitalization ceased as tenant spaces became available for occupancy; and
- $809,000 increase from acquisitions of operating properties, offset by
- $2.2 million decrease within the same property portfolio primarily from successful supplemental tax appeals that resulted in real estate tax refunds received during 2019, as compared to supplemental real estate tax assessments received in 2018 following the Equity One merger; and
- $537,000 decrease from the sale of operating properties.

Provision for doubtful accounts was $1.1 million during the three months ended September 30, 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 $2.2 million during the three months ended September 30, 2019, reflecting changes in collection expectations.

The following table presents the components of other expense (income):

*(in thousands)*

| Interest expense, net | Three months ended September 30, 2019 | 2018 | Change |
| --- | ---: | ---: | ---: |
| Interest on notes payable | $32,799 | 31,619 | 1,180 |
| Interest on unsecured credit facilities | 5,117 | 5,025 | 92 |
| Capitalized interest | (1,093) | (1,670) | 577 |
| Hedge expense | 1,650 | 2,102 | (452) |
| Interest income | (220) | (458) | 238 |
| Interest expense, net | $38,253 | 36,618 | 1,635 |
| Provision for impairment, net of tax | (14) | 855 | (869) |
| Gain on sale of real estate, net of tax | (887) | (3,228) | 2,341 |
| Early extinguishment of debt | 1,391 | - | 1,391 |
| Net investment income | (370) | (923) | 553 |
| Total other expense (income) | $38,373 | 33,322 | 5,051 |

The $1.6 million net increase in total interest expense is driven by $1.2 million net increase in Interest on notes payable due to higher borrowings to fund investing activities.

During the three months ended September 30, 2018, we recognized $855,000 of impairment losses on one operating property and one land parcel, both of which have sold.

During the three months ended September 30, 2019, we recognized gains of $887,000 upon the sale of one land parcel, one operating property, and receipt of property insurance proceeds. During the three months ended September 30, 2018, we recognized gains of $3.2 million from the sale of three operating properties.

During the three months ended September 30, 2019, we repaid early the $300 million term loan that was due to mature in December 2020, and the related interest rate swap, resulting in $1.4 million of debt extinguishment costs.

Our equity in income of investments in real estate partnerships decreased as follows:

*(in thousands)*

|  | Regency's Ownership | Three months ended September 30, 2019 | 2018 | Change |
| --- | ---: | ---: | ---: | ---: |
| GRI - Regency, LLC (GRIR) | 40.00% | $7,931 | 7,733 | 198 |
| New York Common Retirement Fund (NYC) | 30.00% | (10,795) | 207 | (11,002) |
| Columbia Regency Retail Partners, LLC (Columbia I) | 20.00% | 465 | 360 | 105 |
| Columbia Regency Partners II, LLC (Columbia II) | 20.00% | 442 | 449 | (7) |
| Cameron Village, LLC (Cameron) | 30.00% | 206 | 218 | (12) |
| RegCal, LLC (RegCal) | 25.00% | 365 | 327 | 38 |
| US Regency Retail I, LLC (USAA) | 20.01% | 271 | 233 | 38 |
| Other investments in real estate partnerships | 18.38% - 50.00% | 832 | 497 | 335 |
| Total equity in income of investments in real estate partnerships |  | $(283) | 10,024 | (10,307) |

41

The $10.3 million decrease in our equity in income of investments in real estate partnerships is largely attributed to the $10.9 million decrease at NYC due to provision for impairments of real estate resulting from changes in the expected hold periods of various properties.

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

*(in thousands)*

|  | Three months ended September 30, 2019 | 2018 | Change |
| --- | ---: | ---: | ---: |
| Net income | $57,944 | 70,534 | (12,590) |
| Income attributable to noncontrolling interests | (979) | (812) | (167) |
| Net income attributable to common stockholders | $56,965 | 69,722 | (12,757) |
| Net income attributable to exchangeable operating partnership units | (157) | (147) | (10) |
| Net income attributable to common unit holders | $57,122 | 69,869 | (12,747) |

42

#### Comparison of the nine months ended September 30, 2019 and 2018:

Our revenues increased as summarized in the following table:

*(in thousands)*

|  | Nine months ended September 30, 2019 | 2018 | Change |
| --- | ---: | ---: | ---: |
| Lease income (1) | $815,682 | 808,661 | 7,021 |
| Other property income | 6,956 | 6,755 | 201 |
| Management, transaction, and other fees | 21,768 | 20,999 | 769 |
| Total revenues | $844,406 | 836,415 | 7,991 |

(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 $7.0 million, driven by the following contractually billable components of rent from tenants per the lease agreements:

$9.9 million increase from billable Base rent, as follows:

- $10.7 million increase from rent commencing at development properties;
- $3.6 million increase from acquisitions of operating properties; and
- $12.0 million net increase from same properties due to rental rate growth on new and renewal leases and rent steps in existing leases;
- reduced by $16.3 million from the sale of operating properties.

$4.6 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:

- $3.4 million increase from rent commencing at development properties;
- $2.0 million increase from acquisitions of operating properties; and
- $3.5 million increase from same properties due to a $2.1 million increase in real estate recoveries and a $1.4 million increase in CAM recoveries, both driven by increases in recoverable costs;
- reduced by $4.4 million from the sale of operating properties.

$7.0 million decrease in Straight-line rent primarily driven by timing of contractual rent steps and expected early lease terminations.

$4.1 million increase in Above and below market rent accretion within our same property portfolio, primarily driven by lease term modifications.

$3.7 million decrease to uncollectible lease income recorded as a direct charge against Lease income beginning in January 1, 2019, with the adoption of SC 842, *Leases.* During the nine months ended September 30, 2018, uncollectible lease income of $3.7 million was recorded as Provision for doubtful accounts included in Other operating expenses below.

$894,000 decrease in Percentage rent and Other lease income due primarily to changes in lease related fees.

Changes in our operating expenses are summarized in the following table:

*(in thousands)*

|  | Nine months ended September 30, 2019 | 2018 | Change |
| --- | ---: | ---: | ---: |
| Depreciation and amortization | $282,639 | 266,812 | 15,827 |
| Operating and maintenance | 125,092 | 124,924 | 168 |
| General and administrative | 56,722 | 51,947 | 4,775 |
| Real estate taxes | 101,263 | 97,096 | 4,167 |
| Provision for doubtful accounts (1) | — | 3,651 | (3,651) |
| Other operating expenses | 4,486 | 2,825 | 1,661 |
| Total operating expenses | $570,202 | 547,255 | 22,947 |

(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 $1.4 million during the six months ended June 30, 2019.

Depreciation and amortization costs increased, on a net basis, as follows:

- $5.1 million increase as we began depreciating costs at development properties where tenant spaces were completed and became available for occupancy;
- $4.4 million increase from acquisitions of operating properties and corporate assets; and
- $15.0 million increase from same properties, primarily attributable to additional depreciation at redevelopment properties;
- reduced by $8.7 million from the sale of operating properties.

General and administrative increased, on a net basis, as follows:

- $6.1 million increase due to eliminating capitalization of non-contingent internal leasing costs and legal costs associated with leasing activities upon the adoption of ASC 842, Leases, on January 1, 2019; and
- $1.1 million net decrease in compensation-related costs, primarily due to
- $3.1 million decrease in incentive compensation costs, offset by
- $2.0 million appreciation in the value of participant obligations within the deferred compensation plan.

Real estate taxes increased, on a net basis, as follows:

- $2.2 million increase from development properties where capitalization ceased as tenant spaces became available for occupancy;
- $1.2 million increase from acquisitions of operating properties; and
- $2.8 million increase within the same property portfolio from increased tax assessments;
- reduced by $2.1 million from the sale of operating properties.

Provision for doubtful accounts was $3.7 million during the nine months ended September 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 also $3.7 million during the nine months ended September 30, 2019.

Other operating expenses increased $1.7 million, primarily attributable to environmental costs at one of our properties.

The following table presents the components of other expense (income):

*(in thousands)*

| Interest expense, net | Nine months ended September 30, 2019 | 2018 | Change |
| --- | ---: | ---: | ---: |
| Interest on notes payable | $96,786 | 97,689 | (903) |
| Interest on unsecured credit facilities | 14,435 | 14,314 | 121 |
| Capitalized interest | (3,089) | (5,820) | 2,731 |
| Hedge expense | 5,914 | 6,306 | (392) |
| Interest income | (868) | (1,012) | 144 |
| Interest expense, net | $113,178 | 111,477 | 1,701 |
| Provision for impairment, net of tax | 12,099 | 29,443 | (17,344) |
| Gain on sale of real estate, net of tax | (17,819) | (4,448) | (13,371) |
| Early extinguishment of debt | 11,982 | 11,172 | 810 |
| Net investment income | (3,690) | (1,524) | (2,166) |
| Total other expense (income) | $115,750 | 146,120 | (30,370) |

The $1.7 million net increase in total interest expense is driven by a $2.7 million increase due to lower capitalization of interest based on the size and progress of development and redevelopment projects in process, offset by a $903,000 net decrease in Interest on notes payable from several mortgage payoffs and unsecured debt offering transactions.

During the nine months ended September 30, 2019, we recognized $12.1 million of impairment losses on four operating properties, three of which have been sold. During the nine months ended September 30, 2018, we recognized $29.4 million of impairment losses on five operating properties and two land parcels, all of which have been sold.

During the nine months ended September 30, 2019, we sold three operating properties and one land parcels for gains totaling $17.8 million. During the nine months ended September 30, 2018, we sold four operating properties and two land parcel for gains totaling $4.4 million.

During the nine months ended September 30, 2019, we repaid early the $300 million term loan that was due to mature in December 2020, and the related interest rate swap, as well as early redeemed the $250 million 4.8% senior unsecured notes, and prepaid one mortgage resulting in $12.0 million of debt extinguishment costs. During the nine months ended September 30, 2018, we early redeemed the $150 million 6% senior unsecured notes and amended our Line resulting in $11.2 million of debt extinguishment costs.

Net investment income increased $2.2 million, primarily driven by changes in unrealized gains on plan assets held in the non-qualified deferred compensation plan.

Our equity in income of investments in real estate partnerships increased as follows:

*(in thousands)*

|  | Regency's Ownership | Nine months ended September 30, 2019 | 2018 | Change |
| --- | ---: | ---: | ---: | ---: |
| GRI - Regency, LLC (GRIR) | 40.00% | $28,964 | 22,471 | 6,493 |
| New York Common Retirement Fund (NYC) | 30.00% | (10,159) | 213 | (10,372) |
| Columbia Regency Retail Partners, LLC (Columbia I) | 20.00% | 1,196 | 944 | 252 |
| Columbia Regency Partners II, LLC (Columbia II) | 20.00% | 1,282 | 1,298 | (16) |
| Cameron Village, LLC (Cameron) | 30.00% | 766 | 703 | 63 |
| RegCal, LLC (RegCal) | 25.00% | 3,329 | 1,155 | 2,174 |
| US Regency Retail I, LLC (USAA) | 20.01% | 749 | 688 | 61 |
| Other investments in real estate partnerships | 18.38% - 50.00% | 17,546 | 2,076 | 15,470 |
| Total equity in income of investments in real estate partnerships |  | $43,673 | 29,548 | 14,125 |

The $14.1 million increase in our equity in income of investments in real estate partnerships is largely attributed to the following changes:

- $6.5 million increase in GRIR due to a $4.6 million increase in gains recognized during 2019 on the sale of operating real estate, coupled with reduced depreciation among the portfolio of properties within the partnership;
- $10.4 million decrease in NYC due to $10.9 million of provision for impairments of real estate resulting from changes in the expected hold periods of various properties; and
- $15.5 million increase within Other investments in real estate partnerships due to a $15.0 million gain recognized during 2019 on the sale of our ownership interest in a single operating property partnership, with the remaining increase resulting from a new development property beginning operations.

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

*(in thousands)*

|  | Nine months ended September 30, 2019 | 2018 | Change |
| --- | ---: | ---: | ---: |
| Net income | $202,127 | 172,588 | 29,539 |
| Income attributable to noncontrolling interests | (2,988) | (2,366) | (622) |
| Net income attributable to common stockholders | $199,139 | 170,222 | 28,917 |
| Net income attributable to exchangeable operating partnership units | (456) | (358) | (98) |
| Net income attributable to common unit holders | $199,595 | 170,580 | 29,015 |

46

### 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:

Our pro-rata same property NOI, excluding termination fees, changed from the following major components:

*(in thousands)*

|  | Three months ended September 30, 2019 | 2018 | Change | Nine months ended September 30, 2019 | 2018 | Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Base rent (1) | $211,271 | 207,850 | 3,421 | $632,520 | 619,232 | 13,288 |
| Recoveries from tenants (1) | 65,014 | 65,700 | (686) | 199,823 | 195,830 | 3,993 |
| Percentage rent (1) | 1,392 | 1,362 | 30 | 6,843 | 7,104 | (261) |
| Termination fees (1) | 406 | 865 | (459) | 2,390 | 2,483 | (93) |
| Uncollectible lease income (2) | (2,089) | — | (2,089) | (3,369) | — | (3,369) |
| Other lease income (1) | 2,768 | 2,792 | (24) | 7,457 | 7,721 | (264) |
| Other property income | 2,510 | 1,927 | 583 | 5,870 | 5,543 | 327 |
| Total real estate revenue | 281,272 | 280,496 | 776 | 851,534 | 837,913 | 13,621 |
| Operating and maintenance | 40,540 | 39,859 | 681 | 123,330 | 121,646 | 1,684 |
| Termination expense | 20 | - | 20 | 520 | 1,700 | (1,180) |
| Real estate taxes | 35,423 | 37,590 | (2,167) | 108,690 | 105,511 | 3,179 |
| Ground rent | 2,149 | 2,384 | (235) | 6,754 | 7,097 | (343) |
| Provision for doubtful accounts (2) | — | 1,236 | (1,236) | — | 3,578 | (3,578) |
| Total real estate operating expenses | 78,132 | 81,069 | (2,937) | 239,294 | 239,532 | (238) |
| Pro-rata same property NOI | $203,140 | 199,427 | 3,713 | $612,240 | 598,381 | 13,859 |
| Less: Termination fees | 386 | 865 | (479) | 1,870 | 783 | 1,087 |
| Pro-rata same property NOI, excluding termination fees | $202,754 | 198,562 | 4,192 | $610,370 | 597,598 | 12,772 |
| Pro-rata same property NOI growth, excluding termination fees |  |  | 2.1% |  |  | 2.1% |

(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 and nine months ended September 30, 2018.

Billable Base rent increased $3.4 million and $13.3 million during the three and nine months ended September 30, 2019, driven by increases in rental rate growth on new and renewal leases and contractual rent steps in existing leases.

Billable Recoveries from tenants decreased $686,000 and increased $4.0 million during the three and nine months ended September 30, 2019, as a result of changes in recoverable costs and real estate taxes, as noted below.

Operating and maintenance expenses increased $681,000 and $1.7 million during the three and nine months ended September 30, 2019, primarily due to increases in insurance, security, landscaping and general maintenance costs offset by decreases in snow removal costs.

Termination expense decreased $1.2 million during the nine months ended September 30, 2019, due to costs to terminate specific tenant leases.

Real estate taxes decreased $2.2 million during the three months ended September 30, 2019, due to successful supplemental tax appeal receipts and increased $3.2 million during the nine months ended September 30, 2019, due to higher real estate tax assessments.

### Same Property Rollforward:

Our same property pool includes the following property count, pro-rata GLA, and changes therein:

*(GLA in thousands)*

|  | Three months ended September 30, 2019 Property Count | GLA | 2018 Property Count | GLA |
| --- | ---: | ---: | ---: | ---: |
| Beginning same property count | 401 | 40,966 | 406 | 41,758 |
| Disposed properties | (1) | (102) | (3) | (499) |
| SF adjustments (1) | — | 10 | — | (41) |
| Ending same property count | 400 | 40,874 | 403 | 41,218 |

(1) SF adjustments arise from remeasurements or redevelopments.

*(GLA in thousands)*

|  | Nine months ended September 30, 2019 Property Count | GLA | 2018 Property Count | GLA |
| --- | ---: | ---: | ---: | ---: |
| Beginning same property count | 399 | 40,866 | 395 | 40,601 |
| Acquired properties owned for entirety of comparable periods | 6 | 415 | 7 | 917 |
| Developments that reached completion by beginning of earliest comparable period presented | 3 | 358 | 8 | 512 |
| Disposed properties | (8) | (868) | (7) | (804) |
| SF adjustments (1) | — | 103 | — | (8) |
| Ending same property count | 400 | 40,874 | 403 | 41,218 |

(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:

*(in thousands, except share information)*

| Reconciliation of Net income to NAREIT FFO | Three months ended September 30, 2019 | 2018 | Nine months ended September 30, 2019 | 2018 |
| --- | ---: | ---: | ---: | ---: |
| Net income attributable to common stockholders | $56,965 | 69,722 | $199,139 | 170,222 |
| Adjustments to reconcile to NAREIT FFO: (1) |  |  |  |  |
| Depreciation and amortization (excluding FF&E) | 98,951 | 96,795 | 303,617 | 290,182 |
| Provision for impairment to operating properties | 10,886 | 407 | 22,999 | 28,901 |
| Gain on sale of operating properties, net of tax | (408) | (3,610) | (39,871) | (3,958) |
| Gain (loss) on sale of land | (461) | — | (460) | — |
| Exchangeable operating partnership units | 157 | 147 | 456 | 358 |
| **NAREIT FFO attributable to common stock and unit holders** | $166,090 | 163,461 | $485,880 | 485,705 |

(1) Includes Regency's pro-rata share of unconsolidated investment partnerships, net of pro-rata share attributable to noncontrolling interest.

### Same Property NOI Reconciliation:

Our reconciliation of property revenues and property expenses to Same Property NOI, on a pro-rata basis, is as follows:

*(in thousands)*

|  | Three months ended September 30, 2019 Same Property | Other (1) | Total | 2018 Same Property | Other (1) | Total |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Net income attributable to common stockholders | $101,863 | (44,898) | 56,965 | $132,054 | (62,332) | 69,722 |
| Less: |  |  |  |  |  |  |
| Management, transaction, and other fees | — | 7,353 | 7,353 | — | 6,954 | 6,954 |
| Other (2) | 11,962 | 2,807 | 14,769 | 10,766 | 2,250 | 13,016 |
| Plus: |  |  |  |  |  |  |
| Depreciation and amortization | 85,124 | 6,732 | 91,856 | 75,020 | 14,163 | 89,183 |
| General and administrative | 304 | 16,401 | 16,705 | — | 17,564 | 17,564 |
| Other operating expense, excluding provision for doubtful accounts (3) | 235 | 1,584 | 1,819 | 238 | 671 | 909 |
| Other expense (income) | 2,949 | 35,424 | 38,373 | (10,324) | 43,646 | 33,322 |
| Equity in income (loss) of investments in real estate excluded from NOI (4) | 24,627 | 727 | 25,354 | 13,205 | 1,118 | 14,323 |
| Net income attributable to noncontrolling interests | — | 979 | 979 | — | 812 | 812 |
| Pro-rata NOI | $203,140 | 6,789 | 209,929 | $199,427 | 6,438 | 205,865 |

(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) 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.

*(in thousands)*

|  | Nine months ended September 30, 2019 Same Property | Other (1) | Total | 2018 Same Property | Other (1) | Total |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Net income attributable to common stockholders | $322,783 | (123,644) | 199,139 | $344,681 | (174,459) | 170,222 |
| Less: |  |  |  |  |  |  |
| Management, transaction, and other fees | — | 21,768 | 21,768 | — | 20,999 | 20,999 |
| Other (2) | 34,006 | 8,091 | 42,097 | 52,718 | (7,895) | 44,823 |
| Plus: |  |  |  |  |  |  |
| Depreciation and amortization | 266,557 | 16,082 | 282,639 | 243,876 | 22,936 | 266,812 |
| General and administrative | 854 | 55,868 | 56,722 | — | 51,947 | 51,947 |
| Other operating expense, excluding provision for doubtful accounts (3) | 1,578 | 2,908 | 4,486 | 552 | 2,273 | 2,825 |
| Other expense (income) | 25,669 | 90,081 | 115,750 | 20,268 | 125,852 | 146,120 |
| Equity in income (loss) of investments in real estate excluded from NOI (4) | 28,805 | 2,894 | 31,699 | 41,722 | 3,361 | 45,083 |
| Net income attributable to noncontrolling interests | — | 2,988 | 2,988 | — | 2,366 | 2,366 |
| Pro-rata NOI | $612,240 | 17,318 | 629,558 | $598,381 | 21,172 | 619,553 |

(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) 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.

### 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 $500 million of unsecured public and private placement debt, 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. 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 $43.3 million of unrestricted cash, we have the following additional sources of capital available:

*(in thousands)*

| ATM equity program | September 30, 2019 |
| --- | ---: |
| Original offering amount | $500,000 |
| Available capacity (1) | $500,000 |
| **Line of Credit** |  |
| Total commitment amount | $1,250,000 |
| Available capacity (2) | $1,052,510 |
| Maturity (3) | March 23, 2022 |

(1) We have 1,894,845 shares pledged under a Forward Equity Offering that must settle prior to September 12, 2020 at an average offering price of $67.99 per share before any underwriting discount and offering expenses, which will reduce capacity once settled.

(2) Net of letters of credit.

(3) The Company has the option to extend the maturity for two additional six-month periods.

Our dividend distribution policy is set by our Board of Directors, who monitors our financial position. Our Board of Directors recently declared a common stock dividend of $0.585 per share, payable on November 22, 2019, to shareholders of record as of November 12, 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.

We expect to generate sufficient cash flow from operations to fund our dividend distributions. During the nine months ended September 30, 2019 and 2018, we generated cash flow from operations of $469.4 million and $464.8 million, respectively, and paid $293.5 million and $282.9 million in dividends to our common stock and unit holders, respectively.

We estimate that we will require capital during the next twelve months of approximately $383.4 million to fund construction and related costs for in-process development and redevelopment, to repay maturing debt, and to make capital contributions to our co-investment partnerships. We expect to generate the necessary cash to fund our capital needs from future cash flow from operations after dividends paid, borrowings from our Line, proceeds from the sale of real estate, and when the capital markets are favorable, proceeds from the sale of equity or the issuance of new debt.

If we start new developments or redevelopments, commit to new acquisitions, prepay debt prior to maturity, or repurchase shares of our common stock, our cash requirements will increase. In addition, we have an agreement related to our Town and Country Center in Los Angeles, CA that provides an option for the seller to require us to purchase up to an additional 81.63% ownership interest in the center by December 2019 and we currently expect the seller to require us to purchase an additional 16.63% ownership interest by that date for approximately $17.1 million.

We endeavor to maintain a high percentage of unencumbered assets. As of September 30, 2019, 88.7% 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 4.3 and 4.2 times for each of the periods ended September 30, 2019 and December 31, 2018, respectively.

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, 2018. We are in compliance with these covenants at September 30, 2019 and expect to remain in compliance.

#### Summary of Cash Flow Activity

The following table summarizes net cash flows related to operating, investing, and financing activities of the Company:

*(in thousands)*

|  | Nine months ended September 30, 2019 | 2018 | Change |
| --- | ---: | ---: | ---: |
| Net cash provided by operating activities | $469,356 | 464,755 | 4,601 |
| Net cash used in investing activities | (266,309) | (147,181) | (119,128) |
| Net cash used in financing activities | (200,776) | (322,469) | 121,693 |
| Net increase (decrease) in cash and cash equivalents and restricted cash | $2,271 | (4,895) | 7,166 |
| Total cash and cash equivalents and restricted cash | $47,461 | 44,486 | 2,975 |

#### Net cash provided by operating activities:

Net cash provided by operating activities increased $4.6 million due to:

- $11.6 million net increase in cash due to timing of cash receipts and payments,
- $1.1 million increase in operating cash flow distributions from our unconsolidated real estate partnerships, offset by
- $6.9 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 and to settle an interest rate swap breakage on the repayment of our $300 million term loan during 2019, and
- $1.2 million decrease in cash from operating income.

#### Net cash used in investing activities:

Net cash used in investing activities changed by $119.1 million as follows:

*(in thousands)*

| Cash flows from investing activities: | Nine months ended September 30, 2019 | 2018 | Change |
| --- | ---: | ---: | ---: |
| Acquisition of operating real estate | $(222,230) | (85,766) | (136,464) |
| Advance deposits paid on acquisition of operating real estate | (600) | (150) | (450) |
| Real estate development and capital improvements | (128,085) | (174,145) | 46,060 |
| Proceeds from sale of real estate investments | 98,006 | 151,142 | (53,136) |
| Collection of notes receivable | — | 15,648 | (15,648) |
| Investments in real estate partnerships | (57,333) | (58,372) | 1,039 |
| Distributions received from investments in real estate partnerships | 46,740 | 5,488 | 41,252 |
| Dividends on investment securities | 400 | 281 | 119 |
| Acquisition of investment securities | (17,955) | (16,946) | (1,009) |
| Proceeds from sale of investment securities | 14,748 | 15,639 | (891) |
| Net cash used in investing activities | $(266,309) | (147,181) | (119,128) |

Significant changes in investing activities include:

- We acquired four operating properties for $222.2 million during 2019 and two operating properties for $85.8 million during the same period in 2018.
- We invested $46.1 million less in 2019 than the same period in 2018 on real estate development, redevelopment, and capital improvements, as further detailed in a table below.
- We sold five operating properties and five land parcels in 2019 and received proceeds of $98.0 million, compared to seven operating properties and six land parcels in 2018 for proceeds of $151.1 million.
- We received $15.6 million upon the collection of two notes in 2018.
- We invested $57.3 million in our real estate partnerships during 2019, including:
- $34.7 million to fund our share of development and redevelopment activities,
- $9.7 million to fund our share of acquiring an additional equity interest in one partnership,
- $8.2 million to fund our share of acquiring land under one shopping center that was previously under a ground lease, and
- $4.7 million to fund our share of debt refinancing and maturing debt.

During the same period in 2018, we invested $58.4 million, including:

- $39.3 million to fund our share of acquiring four operating properties,
- $15.4 million to fund our share of development and redevelopment activities,
- $2.2 million to fund our share of maturing debt, and
- $1.5 million to acquire an interest in one land parcel for development.
- Distributions from our unconsolidated real estate partnerships include return of capital from sales or financing proceeds. The $46.7 million received in 2019 is driven by the sale of two operating properties, the sale of our ownership interest in a single operating property partnership, and our share of proceeds from debt refinancing activities. During the same period in 2018, we received $5.5 million from the sale of one land parcel plus our share of financing proceeds from encumbering one property within a partnership.
- Acquisition of securities and proceeds from sale of securities pertain to investment activities held in our captive insurance company and our deferred compensation plan.

We plan to continue developing and redeveloping shopping centers for long-term investment. During 2019, we deployed capital of $128.1 million for the development, redevelopment, and improvement of our real estate properties, comprised of the following:

*(in thousands)*

| Capital expenditures: | Nine months ended September 30, 2019 | 2018 | Change |
| --- | ---: | ---: | ---: |
| Land acquisitions for development | $5,206 | — | 5,206 |
| Building and tenant improvements | 40,947 | 50,052 | (9,105) |
| Redevelopment costs | 36,081 | 39,129 | (3,048) |
| Development costs | 35,421 | 71,617 | (36,196) |
| Capitalized interest | 2,121 | 5,338 | (3,217) |
| Capitalized direct compensation | 8,309 | 8,009 | 300 |
| Real estate development and capital improvements | $128,085 | 174,145 | (46,060) |

- During 2019, we acquired two land parcels for new development projects.
- Building and tenant improvements decreased $9.1 million in 2019, primarily related to the timing of capital projects.
- Redevelopment expenditures are slightly lower in 2019 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. The timing and duration of these projects could also result in volatility in NOI.
- Development expenditures are lower in 2019 due to the progress during 2018 towards completion of our development projects currently in process. At September 30, 2019 and December 31, 2018, we had six 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. 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.

The following table summarizes our development projects:

*(in thousands, except cost PSF)*

| Property Name Market Consolidated Developments In-Process | Start Date | Estimated / Actual Project Completion | September 30, 2019 Estimated / Actual Net Development Costs (1) | GLA | Cost PSF of GLA (1) | % of Costs Incurred (1) |
| --- | --- | --- | ---: | ---: | ---: | ---: |
| Carytown Exchange (2) Richmond, VA | Q4-18 | 2021 | $26,082 | 107 | $244 | 10% |
| Culver Public Market Los Angeles, CA | Q2-19 | 2021 | 27,313 | 27 | 1,012 | 16% |
| Mellody Farm Chicago, IL | Q2-17 | 2019 | 104,163 | 259 | 402 | 91% |
| Pinecrest Place (3) Miami, FL | Q1-17 | 2019 | 16,367 | 70 | 234 | 93% |
| The Village at Hunter's Lake Tampa, FL | Q4-18 | 2020 | 22,056 | 72 | 306 | 40% |
| The Village at Riverstone Houston, TX | Q4-16 | 2019 | 30,495 | 167 | 183 | 94% |
| Total Consolidated Developments In-Process |  |  | $226,476 | 702 | $323 | 71% |
| **Unconsolidated Developments In-Process (4)** |  |  |  |  |  |  |
| Ballard Blocks II Seattle, WA | Q1-18 | 2019 | $33,054 | 57 | $580 | 87% |
| Total Developments Projects In-Process |  |  | $259,530 | 759 | $342 | 71% |
| **Consolidated Developments Completed** |  |  |  |  |  |  |
| Indigo Square Charleston, SC |  | Q2-19 | $17,111 | 51 | $336 |  |
| **Unconsolidated Developments Completed (4)** |  |  |  |  |  |  |
| Midtown East Raleigh, NC |  | Q3-19 | $23,115 | 80 | $291 |  |
| Total Development Projects Completed |  |  | $40,226 | 131 | $308 |  |

(1) Includes leasing costs and is net of tenant reimbursements.

(2) 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 for Pinecrest Place exclude the cost of land, which the Company has leased long term.

(4) Represents our pro-rata share.

#### Net cash used in financing activities:

Net cash flows from financing activities changed by $121.7 million during 2019, as follows:

*(in thousands)*

| Cash flows from financing activities: | Nine months ended September 30, 2019 | 2018 | Change |
| --- | ---: | ---: | ---: |
| Repurchase of common shares in conjunction with equity award plans | $(6,165) | (6,772) | 607 |
| Common shares repurchased through share repurchase program | (32,777) | (124,989) | 92,212 |
| Distributions to limited partners in consolidated partnerships, net | (2,223) | (3,457) | 1,234 |
| Dividend payments and operating partnership distributions | (293,535) | (282,858) | (10,677) |
| Proceeds from unsecured credit facilities, net | 40,000 | 85,000 | (45,000) |
| Proceeds from debt issuance | 723,571 | 301,251 | 422,320 |
| Debt repayment, including early redemption costs | (622,637) | (281,295) | (341,342) |
| Payment of loan costs | (7,019) | (9,448) | 2,429 |
| Proceeds from sale of treasury stock, net | 9 | 99 | (90) |
| Net cash used in financing activities | $(200,776) | $(322,469) | $121,693 |

Significant financing activities during the nine months ended September 30, 2019 and 2018 include the following:

- We repurchased for cash a portion of the common stock granted to employees for stock based compensation to satisfy employee tax withholding requirements, which totaled $6.2 million and $6.8 million during the nine months ended September 30, 2019, and 2018, respectively.
- We paid $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 nine months ended September 30, 2018, we paid $125 million to repurchase 2,145,209 common shares through the same share repurchase program.
- Distributions to limited partners, net of contributions, decreased $1.2 million in 2019 due to contributions made by a new limited partner during 2019.
- We paid $10.7 million more in dividends as a result of an increase in our dividend rate from $1.665 per share, during the nine months ended September 30, 2018, to $1.755 per share, during the nine months ended September 30, 2019, partially offset by the reduced shares outstanding in 2019.
- We had the following debt related activity during 2019:
- We borrowed, net of repayments, an additional $40 million on our Line.
- We received total proceeds of $723.6 million upon the issuance of two senior unsecured public note offerings during 2019.
- We paid $622.6 million for other debt repayments, including:
- $259.6 million to early redeem our senior unsecured public notes originally due April 2021;
- $300 million from repayment of a term loan originally due December 2020;
- $53.7 million to repay two mortgage maturities; and
- $9.3 million in principal mortgage payments.
- We paid $7.0 million of loan costs in connection with our two public note offerings above.
- We had the following debt related activity during 2018:
- We borrowed, net of payments, an additional $85 million on our Line.
- We received proceeds of $301.3 million from debt issuances, including $299.5 million senior unsecured public notes and $1.7 million from construction loan draws used to fund an in-process development project.
- We paid $281.3 million for other debt repayments, including $160.5 million to early redeem our senior unsecured public notes originally due June 2020, $113 million to repay four mortgages and $7.8 million in scheduled principal mortgage payments.
- We paid $9.4 million of loan costs in connection with our public note offering noted above and upon expanding our Line commitment.

### 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:

*(dollars in thousands)*

| Combined September 30, 2019 | December 31, 2018 | Regency's Share (1) September 30, 2019 | December 31, 2018 |
| --- | ---: | ---: | ---: |
| Number of Co-investment Partnerships 16 | 16 |  |  |
| Regency’s Ownership 18.38%-50% | 9.38%-50% |  |  |
| Number of Properties 117 | 120 |  |  |
| Assets $3,188,850 | 3,227,831 | $1,088,720 | 1,079,072 |
| Liabilities 1,730,341 | 1,749,725 | 574,723 | 580,220 |
| Equity 1,458,509 | 1,478,106 | 513,997 | 498,852 |
| Negative investment in US Regency Retail I, LLC (2) |  | 3,843 | 3,513 |
| Basis difference |  | (43,677) | (38,064) |
| Impairment of investment in real estate partnerships |  | (1,300) | (1,300) |
| Investments in real estate partnerships |  | $472,863 | 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.

(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.

Our equity method investments in real estate partnerships consist of the following:

*(in thousands)*

|  | Regency's Ownership | September 30, 2019 | December 31, 2018 |
| --- | ---: | ---: | ---: |
| GRI - Regency, LLC (GRIR) | 40.00% | $193,409 | 189,381 |
| New York Common Retirement Fund (NYC)(1) | 30.00% | 42,096 | 54,250 |
| Columbia Regency Retail Partners, LLC (Columbia I) | 20.00% | 9,153 | 13,625 |
| Columbia Regency Partners II, LLC (Columbia II) | 20.00% | 39,375 | 38,110 |
| Cameron Village, LLC (Cameron) | 30.00% | 10,766 | 11,169 |
| RegCal, LLC (RegCal) | 25.00% | 26,398 | 31,235 |
| Other investments in real estate partnerships | 18.38% - 50.00% | 151,666 | 125,231 |
| Total Investment in real estate partnerships |  | $472,863 | 463,001 |
| US Regency Retail I, LLC (USAA) (2) | 20.01% | (3,843) | (3,513) |
| Net Investment in real estate partnerships |  | $469,020 | 459,488 |

(1) During the third quarter of 2019, a $10.9 million impairment of real estate was recognized within the NYC partnership from changes in the expected hold periods of various properties.

(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.

#### 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)*

| Scheduled Principal Payments and Maturities by Year: | September 30, 2019 Scheduled Principal Payments | Mortgage Loan Maturities | Unsecured Maturities | Total | Regency’s Pro-Rata Share |
| --- | ---: | ---: | ---: | ---: | ---: |
| 2019 | $4,782 | — | — | 4,782 | 1,806 |
| 2020 | 17,043 | 338,608 | — | 355,651 | 115,953 |
| 2021 | 11,048 | 269,942 | 19,635 | 300,625 | 104,375 |
| 2022 | 7,811 | 170,702 | — | 178,513 | 68,417 |
| 2023 | 2,989 | 171,608 | — | 174,597 | 65,096 |
| Beyond 5 Years | 8,068 | 567,923 | — | 575,991 | 174,632 |
| Net unamortized loan costs, debt premium / (discount) | — | (8,735) | — | (8,735) | (2,660) |
| Total | $51,741 | 1,510,048 | 19,635 | 1,581,424 | 527,619 |

At September 30, 2019, our investments in real estate partnerships had notes payable of $1.6 billion maturing through 2034, of which 91.4% had a weighted average fixed interest rate of 4.5%. The remaining notes payable float with LIBOR and had a weighted average variable interest rate of 4.3%. These fixed and variable rate notes payable are all non-recourse, and our pro-rata share was $527.6 million as of September 30, 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.

#### 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:

*(in thousands)*

|  | Three months ended September 30, 2019 | 2018 | Nine months ended September 30, 2019 | 2018 |
| --- | ---: | ---: | ---: | ---: |
| Asset management, property management, leasing, and other transaction fees | $7,318 | 6,744 | $21,366 | 20,465 |

### Recent Accounting Pronouncements

See Note 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 been accepted into state-sponsored environmental programs. We have a blanket environmental insurance policy for third-party liabilities and remediation costs on shopping centers that currently have no known environmental contamination. We have also placed environmental insurance, where possible, on specific properties with known contamination, in order to mitigate our environmental risk. We monitor the shopping centers containing environmental issues and in certain cases voluntarily remediate the sites. We also have legal obligations to remediate certain sites and we are in the process of doing so.

As of September 30, 2019 we and our Investments in real estate partnerships had accrued liabilities of $9.7 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.

## Market risk

As filed, 2,846 characters.

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, 2018.

#### LIBOR Transition

In July 2017, the Financial Conduct Authority (“FCA”) that regulates LIBOR announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee ("ARRC") which identified the Secured Overnight Financing Rate ("SOFR") as its preferred alternative to USD-LIBOR in derivatives and other financial contracts. The Company is not able to predict when LIBOR will cease to be available or when there will be sufficient liquidity in the SOFR markets. Any changes adopted by FCA or other governing bodies in the method used for determining LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR. If that were to occur, our interest payments could change. In addition, uncertainty about the extent and manner of future changes may result in interest rates and/or payments that are higher or lower than if LIBOR were to remain available in its current form.

At September 30, 2019, the Company has contracts that are indexed to LIBOR, such as its $1.25 billion unsecured revolving credit facility, $265 million term loan, as well as a select number of mortgages and related interest rate derivatives within its consolidated and unconsolidated properties. The Company is monitoring and evaluating the related risks, which include interest on loans or amounts received and paid on derivative instruments. These risks arise in connection with transitioning contracts to a new alternative rate, including any resulting value transfer that may occur. The value of loans, securities, or derivative instruments tied to LIBOR could also be impacted if LIBOR is limited or discontinued. For some instruments, the method of transitioning to an alternative rate may be challenging, as they may require negotiation with the respective counterparty.

If a contract is not transitioned to an alternative rate and LIBOR is discontinued, the impact on our contracts is likely to vary by contract. If LIBOR is discontinued or if the methods of calculating LIBOR change from their current form, interest rates on our current or future indebtedness may be adversely affected.

While we expect LIBOR to be available in substantially its current form until the end of 2021, it is possible that LIBOR will become unavailable prior to that point. This could result, for example, if sufficient banks decline to make submissions to the LIBOR administrator. In that case, the risks associated with the transition to an alternative reference rate will be accelerated and magnified.

## Controls and procedures

As filed, 3,208 characters.

### 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.

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 third quarter of 2019 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 have been no changes in the Operating Partnership's internal controls over financial reporting identified in connection with this evaluation that occurred during the third quarter of 2019 which have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

## Risk factors

As filed, 144 characters.

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, 2018.

Filed Nov 4, 2019.
Source: SEC EDGAR, the filing index for accession 0001564590-19-039836. Last ingested by Listed: Nov 6, 2026, 14:01 ET. No prices; not investment advice.