Same Property NOI Growth of 4.3%
Regency Centers Corporation (“Regency” or the “Company”) today announced
financial and operating results for the quarter ended June 30, 2015.
Financial Results
Regency reported Core Funds From Operations (“Core FFO”) for the second
quarter of $71.2 million, or $0.75 per diluted share, compared to $65.9
million, or $0.71 per diluted share, for the same period in 2014. For
the six months ended June 30, 2015 Core FFO was $140.7 million, or $1.49
per diluted share, compared to $130.0 million, or $1.41 per diluted
share for the same period in 2014.
Funds From Operations (“FFO”) for the second quarter was $71.0 million,
or $0.75 per diluted share, compared to $65.9 million, or $0.71 per
diluted share, for the same period in 2014. For the six months ended
June 30, 2015 FFO was $140.7 million, or $1.49 per diluted share,
compared to $131.4 million or $1.42 per diluted share for the same
period in 2014.
The Company reported net income attributable to common stockholders
(“Net Income”) for the second quarter of $32.5 million, or $0.34 per
diluted share, compared to Net Income of $25.5 million, or $0.28 per
diluted share, for the same period in 2014. For the six months ended
June 30, 2015 Net Income was $57.7 million, or $0.61 per diluted share,
compared to $44.9 million, or $0.48 for the same period in 2014.
Operating Results
For the period ended June 30, 2015, Regency’s results for wholly-owned
properties plus its pro-rata share of co-investment partnerships were as
follows:
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Q2 2015
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YTD
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Percent leased, same properties
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95.9% (+40 bps YoY)
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Percent leased, all properties
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95.8% (+80 bps YoY)
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Same property NOI growth without termination fees
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4.3%
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4.4%
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Same property NOI growth without termination fees or redevelopments
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3.8%
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3.5%
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Rental rate growth(1)
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|
|
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New leases
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13.2%
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16.7%
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Renewal leases
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7.8%
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7.3%
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Blended average
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8.8%
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8.8%
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Leasing transactions
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Number of new and renewal leasing transactions
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408
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719
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Total square feet leased (000s)
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1,379
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2,227
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(1) Operating properties only. Rent growth is calculated on a
comparable-space, cash basis for new and renewal leases executed.
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Portfolio Activity
Property Transactions
As previously disclosed, the Company sold two properties during the
quarter. Year to date, Regency has sold three properties for a combined
gross sales price of $59.1 million and a blended cap rate of 7.2%.
Regency’s share of the combined gross sales price is $40.3 million.
Developments and Redevelopments
At quarter end, the Company had fifteen projects in development or under
redevelopment with estimated costs of $231.9 million. The in-process
developments were 64% funded and 92% leased and committed, including
retailer-owned square footage. Regency completed one project during the
quarter, representing $55.9 million in net development costs and a yield
of 7.6%.
Balance Sheet
Rating Agencies
During the quarter, Moody’s Investors Service upgraded the Company’s
senior unsecured rating to Baa1 and the preferred stock rating to Baa2.
The outlook for both ratings is stable.
Credit Facility
As previously disclosed, Regency amended its $800 million unsecured
revolving credit facility (the “Facility”) during the quarter. The
amendment extended the maturity date to May 13, 2019 and reduced the
applicable interest rate. Following the Company’s credit rating upgrade
by Moody’s Investors Service, the Facility now bears interest at an
annual rate of LIBOR plus 0.925% on drawn balances and includes an
annual 15 basis point facility fee on the $800 million capacity.
Further, the Company has options to extend maturity for two additional
six-month periods.
2015 Guidance
The Company updated certain components of its 2015 earnings guidance.
These changes are summarized below. Please refer to the Company’s second
quarter 2015 supplemental information package for a complete list of
updates.
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Full Year 2015 Guidance
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Previous Guidance
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Updated Guidance
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Core FFO per diluted share
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$2.93 – $2.97
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$2.95 – $2.99
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FFO per diluted share
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$2.91 – $2.95
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$2.93 – $2.97
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Same property NOI growth without termination fees (pro-rata)
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3.2% - 4.0%
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3.6% - 4.1%
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Development and redevelopment starts ($000s)
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$100,000 - $200,000
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$75,000 - $125,000
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Dividend
On August 3, 2015, Regency’s Board of Directors declared a quarterly
cash dividend on the Company’s common stock of $0.485 per share. The
dividend is payable on September 2, 2015 to shareholders of record as of
August 19, 2015.
Conference Call Information
In conjunction with Regency’s second quarter results, the Company will
host a conference call on Thursday, August 6, 2015 at 11:00 a.m. EDT.
Dial-in and webcast information is listed below.
Replay
Webcast Archive: Investor
Relations page under Webcasts
& Presentations
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 or 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: (a)
transaction related gains, income or expense; (b) impairments on land;
(c) gains or losses from the early extinguishment of debt; and (d) other
non-core amounts as they occur. 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, 2015 and 2014
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Three Months Ended
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Year to Date
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2015
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2014
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2015
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2014
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Net Income Attributable to Common Stockholders
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$
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32,480
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$
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25,482
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$
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57,653
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44,872
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Adjustments to reconcile to Funds From Operations:
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Depreciation and amortization (1)
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45,293
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46,645
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90,385
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93,383
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Provision for impairment (2)
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-
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424
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-
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424
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Gain on sale of operating properties (2)
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(6,792
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)
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(6,710
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)
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(7,475
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)
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(7,419
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)
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Exchangeable operating partnership units
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61
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53
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110
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95
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Funds From Operations
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$
|
71,042
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|
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65,894
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$
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140,673
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131,355
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Funds From Operations
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$
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71,042
|
|
|
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65,894
|
|
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$
|
140,673
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131,355
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Adjustments to reconcile to Core Funds From Operations:
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Development and acquisition pursuit costs (2)
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484
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371
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523
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1,711
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Gain on sale of land (2)
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43
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(424
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)
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(68
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)
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(3,328
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)
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Provision for impairment to land
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-
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-
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-
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225
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Hedge ineffectiveness (2)
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1
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-
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4
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-
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Early extinguishment of debt (2)
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-
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41
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(61
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)
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41
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Gain on sale of investments
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(417
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)
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-
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(417
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)
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-
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Core Funds From Operations
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|
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71,153
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65,882
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140,654
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130,004
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Weighted Average Shares For Diluted FFO per Share
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94,658
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92,180
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94,546
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92,151
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(1) Includes pro-rata share of unconsolidated
co-investment partnerships, net of pro-rata share attributable to
noncontrolling interests
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(2) Includes pro-rata share of unconsolidated
co-investment partnerships
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Same property NOI is a key measure used by management in evaluating the
operating performance of Regency’s properties. The Company provides a
reconciliation of income from operations to pro-rata same property NOI
in its supplemental information package.
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
|
FFO and Core FFO Guidance:
|
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2015
|
|
|
|
|
|
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Net income attributable to common stockholders
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$
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1.11
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1.15
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Adjustments to reconcile net income to FFO:
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Depreciation and amortization
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1.90
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1.90
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Gain on sale of operating properties
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|
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(0.07
|
)
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(0.07
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)
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All other amounts
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(0.01
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)
|
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(0.01
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)
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Funds From Operations
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$
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2.93
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2.97
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|
|
|
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Adjustments to reconcile FFO to Core FFO:
|
|
|
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Development and acquisition pursuit costs
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0.02
|
|
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0.02
|
|
|
|
|
|
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Core Funds From Operations
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$
|
2.95
|
|
|
2.99
|
|
The Company has published forward-looking statements and additional
financial information in its second quarter 2015 supplemental
information package that may help investors estimate earnings for 2015.
A copy of the Company’s second quarter 2015 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, 2015. Regency may, but assumes
no obligation to, update information in the supplemental package from
time to time.
About Regency Centers Corporation (NYSE: REG)
With more than 50 years of experience, Regency is the preeminent
national owner, operator and developer of high-quality, grocery-anchored
neighborhood and community shopping centers. The Company’s portfolio of
319 retail properties encompasses over 42.8 million square feet located
in top markets throughout the United States, including co-investment
partnerships. Regency has developed 219 shopping centers since 2000,
representing an investment at completion of more than $3 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.
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