Regency Centers Corporation (“Regency” or the “Company”) (NYSE: REG) today
announced financial and operating results for the three and six months
ended June 30, 2013.
Earnings
Regency reported Core Funds From Operations (“Core FFO”) for the second
quarter of $61.8 million, or $0.67 per diluted share, compared to $62.4
million, or $0.69 per diluted share, for the same period in 2012. For
the six months ended June 30, 2013 Core FFO was $120.1 million, or $1.32
per diluted share, compared to $118.7 million, or $1.32 per diluted
share, for the same period in 2012.
Funds From Operations (“FFO”) for the second quarter was $62.1 million,
or $0.68 per diluted share. For the same period in 2012, the Company
reported FFO of $61.3 million, or $0.68 per diluted share. For the six
months ended June 30, 2013 FFO was $120.0 million, or $1.32 per diluted
share, compared to $111.2 million, or $1.24 per diluted share, for the
same period in 2012.
Regency reported net income attributable to common stockholders (“Net
Income”) for the second quarter of $31.9 million, or $0.35 per diluted
share, compared to net income of $5.7 million, or $0.06 per diluted
share, for the same period in 2012. For the six months ended June 30,
2013 Net Income was $47.4 million, or $0.52 per diluted share, compared
to $18.9 million, or $0.21 per diluted share for the same period in 2012.
Operations
For the three months ended June 30, 2013, Regency’s results for wholly
owned properties plus its pro-rata share of co-investment partnerships
were as follows:
-
Percent leased, same properties only: 94.6%
-
Percent leased, all properties: 94.3%
-
Increase in same property net operating income (“NOI”) over the same
period last year, excluding termination fees: 5.2%
-
Same space rental rate growth on a cash basis for spaces vacant less
than 12 months: 5.7%
-
Leasing transactions, including in-process developments (partnerships
at 100%): 435 new and renewal lease transactions for a total of 1.6
million square feet
For the six months ended June 30, 2013, Regency’s results for wholly
owned properties plus its pro-rata share of co-investment partnerships
were as follows:
-
Increase in same property NOI over the same period last year,
excluding termination fees: 5.1%
-
Same space rental rate growth on a cash basis for spaces vacant less
than 12 months: 5.6%
-
Leasing transactions, including in-process developments (partnerships
at 100%): 763 new and renewal lease transactions for a total of 2.7
million square feet
Investments
Property Transactions
During the quarter, the Company sold four wholly owned properties at a
gross sales price of $85.3 million and a weighted average cap rate of
6.6%. The Company also sold one co-investment property at a gross sales
price of $11.2 million and a cap rate of 8.5%. Regency’s share of the
gross sales price was $4.5 million. In addition, Regency sold three
outparcels at a gross sales price of $2.1 million.
During the quarter, Regency purchased one property, on a wholly owned
and unencumbered basis, at a gross purchase price of $27.0 million and a
cap rate of 6.1%. Subsequent to quarter end, Regency and a co-investment
partner purchased one property at a gross purchase price of $13.6
million and a cap rate of 5.9%. Regency’s share of the purchase price
was $2.7 million. At the time of the acquisition the property was
encumbered by a mortgage loan with an outstanding principal balance of
$7.2 million. Regency’s share of the assumed debt was $1.4 million.
Developments and Redevelopments
At June 30, 2013, the Company had six projects in development with
estimated net development costs of $240.8 million. The in-process
developments are 65% funded and 91% leased and committed, including
retailer-owned square footage.
Subsequent to quarter end, the Company announced the start of its first
ground-up development in Miami, Florida. Fontainebleau Square is a
320,339 square foot community shopping center co-anchored by Publix and
Target. The center, which is 86% leased and committed, including
retailer-owned square footage, has total estimated net development costs
of $52.6 million.
During the quarter, the Company started three redevelopment projects.
Highlighting the recent redevelopment starts is Greenway Town Center,
located in Portland, Oregon, where Regency has executed a lease with
Whole Foods Market to replace the existing grocer and has additional
plans for a complete renovation of the existing shopping center façade
and other common area features. At June 30, 2013, Regency had 14
redevelopment projects in process representing total estimated
incremental investment of $45.3 million.
Capital Markets
Common Stock
During the quarter the Company accessed its at-the-market common equity
program and issued 666,702 new common shares at a weighted average price
of $54.77 per share, generating gross proceeds of $36.5 million.
Dividend
On July 29, 2013, the Board of Directors declared a quarterly cash
dividend on the Company’s common stock of $0.4625 per share, payable on
August 28, 2013 to shareholders of record on August 14, 2013.
Guidance
The Company has updated certain components of its 2013 earnings
guidance. These changes are summarized below. Please refer to the
Company’s second quarter 2013 supplemental information package for the
complete list of updates.
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Full Year 2013 Guidance
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Previous Guidance
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Updated Guidance
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FFO per diluted share
|
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$2.47 – $2.54
|
|
$2.53 – $2.58
|
Core FFO per diluted share
|
|
$2.50 – $2.57
|
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$2.55 – $2.60
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Same Property % Leased at Period End
|
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94.0% - 95.0%
|
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94.3% - 95.0%
|
Same property NOI growth w/o term fees
|
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2.5% - 3.2%
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3.5% - 4.0%
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Dispositions (REG Pro-Rata)
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$200,000 - $250,000
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$250,000 - $300,000
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Acquisitions (REG Pro-Rata)
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$0 - $50,000
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$30,000 - $50,000
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Development and Redevelopment starts
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$125,000 - $175,000
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$125,000 - $200,000
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Non-GAAP Disclosure
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 dispositions of depreciable property, net of tax, 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. Core FFO is an additional performance measure used
by Regency as the computation of FFO includes certain non-cash and
non-comparable items that affect the Company's period-over-period
performance. Core FFO excludes from FFO, but is not limited to,
transaction profits, income or expense, gains or losses from the early
extinguishment of debt and other non-core items. The Company provides a
reconciliation of FFO to Core FFO.
Reconciliation of Net Income Attributable to Common Stockholders to
FFO and Core FFO — Actual (in thousands)
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For the Periods Ended June 30, 2013 and 2012
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Three Months Ended
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Year to Date
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2013
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2012
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2013
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2012
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|
|
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Net Income Attributable to Common Stockholders
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$
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31,864
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|
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5,697
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$
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47,418
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18,878
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Adjustments to reconcile to Funds From Operations:
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|
|
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|
|
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Depreciation and amortization - consolidated real estate
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26,711
|
|
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28,210
|
|
|
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53,854
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|
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56,249
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Depreciation and amortization - unconsolidated partnerships
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|
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10,971
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10,778
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|
|
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21,588
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|
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21,878
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Consolidated JV partners' share of depreciation
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|
|
(215
|
)
|
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(182
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)
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|
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(423
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)
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(362
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)
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Provision for impairment
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-
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22,509
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-
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22,509
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Amortization of leasing commissions and intangibles
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4,820
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4,027
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9,549
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8,039
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Gain on sale of operating properties, net of tax
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(12,099
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)
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(9,778
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)
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(12,099
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)
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(16,079
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)
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Noncontrolling interest of exchangeable partnership units
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|
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70
|
|
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23
|
|
|
|
109
|
|
|
77
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|
|
|
|
|
|
|
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Funds From Operations
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|
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62,122
|
|
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61,284
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|
|
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119,996
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|
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111,189
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|
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|
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|
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Dilutive effect of share-based awards
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|
|
(155
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)
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(182
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)
|
|
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(317
|
)
|
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(376
|
)
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Funds From Operations for calculating Diluted FFO per Share
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$
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61,967
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|
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61,102
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$
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119,679
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|
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110,813
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|
|
|
|
|
|
|
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Funds From Operations
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$
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62,122
|
|
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61,284
|
|
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$
|
119,996
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|
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111,189
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Adjustments to reconcile to Core Funds From Operations:
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Transaction profits, net of dead deal costs and tax
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(305
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)
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108
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|
|
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136
|
|
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(1,221
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)
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Provision for impairment to land and outparcels
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-
|
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999
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|
|
-
|
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999
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Provision for hedge ineffectiveness
|
|
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(27
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)
|
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15
|
|
|
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(20
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)
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11
|
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Loss on early debt extinguishment
|
|
|
-
|
|
|
4
|
|
|
|
-
|
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4
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Original preferred stock issuance costs expensed
|
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|
-
|
|
|
-
|
|
|
|
-
|
|
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7,835
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Gain on redemption of preferred units
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
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(1,875
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)
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One-time additional preferred dividend payment
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-
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-
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-
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1,750
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Core Funds From Operations
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61,790
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|
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62,410
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|
|
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120,112
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|
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118,692
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|
|
|
|
|
|
|
|
|
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Dilutive effect of share-based awards
|
|
|
(155
|
)
|
|
(182
|
)
|
|
|
(317
|
)
|
|
(376
|
)
|
Core Funds From Operations for calculating Diluted Core FFO per Share
|
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$
|
61,635
|
|
|
62,228
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|
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$
|
119,795
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|
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118,316
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|
|
|
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Weighted Average Shares For Diluted FFO per Share
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|
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91,664
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|
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89,717
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|
|
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90,976
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|
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89,677
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|
|
|
|
|
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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.
Reconciliation of Net Income Attributable to Common Stockholders to
FFO and Core FFO — Guidance
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Full Year
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Funds From Operations Guidance:
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2013
|
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|
|
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|
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Net income attributable to common stockholders
|
|
$
|
0.82
|
|
0.87
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|
|
|
|
|
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Adjustments to reconcile net income to FFO:
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|
|
|
|
|
|
|
|
|
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Depreciation expense, amortization and other amounts
|
|
|
1.71
|
|
1.71
|
|
|
|
|
|
|
|
|
|
|
|
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Funds From Operations
|
|
$
|
2.53
|
|
2.58
|
|
|
|
|
|
|
|
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Adjustments to reconcile FFO to Core FFO:
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|
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All other non-core amounts
|
|
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0.02
|
|
0.02
|
|
|
|
|
|
|
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Core Funds From Operations
|
|
$
|
2.55
|
|
2.60
|
|
|
|
|
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Conference Call
In conjunction with Regency’s second quarter results, you are invited to
listen to its conference call that will be broadcast live over the
internet on Thursday, August 1, 2013 at 12:00 p.m. EDT on the Company’s
website www.RegencyCenters.com.
If you are unable to participate during the live webcast, the call will
also be archived on the Company’s website.
The Company has published forward-looking statements and additional
financial information in its second quarter 2013 supplemental
information package that may help investors estimate earnings for 2013.
A copy of the Company’s second quarter 2013 supplemental information
will be available on the Company's website 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 in the Company’s
Form 10-Q for the quarter ended June 30, 2013. Regency may, but assumes
no obligation to, update information in the supplemental package from
time to time.
About Regency Centers Corporation (NYSE: REG)
Regency is the preeminent national owner, operator, and developer of
high quality grocery-anchored and community shopping centers. At June
30, 2013, the Company owned 343 retail properties, including those held
in co-investment partnerships. Including retailer-owned square footage,
the portfolio encompassed 45.9 million square feet located in top
markets throughout the United States. Since 2000, Regency has developed
211 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.
Copyright Business Wire 2013