10-K 1 reg10-k123112.htm 10-K REG 10-K 12.31.12
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2012
or
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             

Commission File Number 1-12298 (Regency Centers Corporation)
Commission File Number 0-24763 (Regency Centers, L.P.)

REGENCY CENTERS CORPORATION
REGENCY CENTERS, L.P.
(Exact name of registrant as specified in its charter)
FLORIDA (REGENCY CENTERS CORPORATION)
 
59-3191743
DELAWARE (REGENCY CENTERS, L.P.)
 
59-3429602
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
 
 
One Independent Drive, Suite 114
Jacksonville, Florida 32202
 
(904) 598-7000
(Address of principal executive offices) (zip code)
 
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Regency Centers Corporation
Title of each class
 
Name of each exchange on which registered
Common Stock, $.01 par value
 
New York Stock Exchange
6.625% Series 6 Cumulative Redeemable Preferred Stock, $.01 par value
 
New York Stock Exchange
6.000% Series 7 Cumulative Redeemable Preferred Stock, $.01 par value
 
New York Stock Exchange
 
 
 
 
 
 
Regency Centers, L.P.
Title of each class
 
Name of each exchange on which registered
None
 
N/A
________________________________
Securities registered pursuant to Section 12(g) of the Act:
Regency Centers Corporation: None
Regency Centers, L.P.: Class B Units of Partnership Interest
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Regency Centers Corporation              YES  x    NO  o                     Regency Centers, L.P.              YES  x    NO  o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act
Regency Centers Corporation              YES  o    NO   x                    Regency Centers, L.P.              YES  o    NO  x


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Regency Centers Corporation              YES  x    NO  o                     Regency Centers, L.P.              YES  x    NO  o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Regency Centers Corporation              YES  x    NO  o                     Regency Centers, L.P.              YES  x    NO  o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
Regency Centers Corporation                  o                     Regency Centers, L.P.                  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Regency Centers Corporation:
Large accelerated filer
x
 
Accelerated filer
o
Non-accelerated filer
o
 
Smaller reporting company
o
Regency Centers, L.P.:
Large accelerated filer
o
  
Accelerated filer
x
Non-accelerated filer
o
  
Smaller reporting company
o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Regency Centers Corporation              YES  o    NO   x                    Regency Centers, L.P.              YES  o    NO  x
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrants' most recently completed second fiscal quarter.
Regency Centers Corporation              $ 4,187,374,700                    Regency Centers, L.P.              N/A
The number of shares outstanding of the Regency Centers Corporation’s voting common stock was 90,395,745 as of February 21, 2013.
Documents Incorporated by Reference
Portions of Regency Centers Corporation's proxy statement in connection with its 2013 Annual Meeting of Stockholders are incorporated by reference in Part III.
 




EXPLANATORY NOTE
This report combines the annual reports on Form 10-K for the year ended December 31, 2012 of Regency Centers Corporation and Regency Centers, L.P. Unless stated otherwise or the context otherwise requires, references to “Regency Centers Corporation” or the “Parent Company” mean Regency Centers Corporation and its controlled subsidiaries; and references to “Regency Centers, L.P.” or the “Operating Partnership” mean Regency Centers, L.P. and its controlled subsidiaries. The term “the Company” or “Regency” means the Parent Company and the Operating Partnership, collectively.
The Parent Company is a real estate investment trust (“REIT”) and the general partner of the Operating Partnership. The Operating Partnership's capital includes general and limited common Partnership Units (“Units”). As of December 31, 2012, the Parent Company owned approximately 99.8% of the Units in the Operating Partnership and the remaining limited Units are owned by investors. The Parent Company owns all of the Series 6 and 7 Preferred Units of the Operating Partnership. As the sole general partner of the Operating Partnership, the Parent Company has exclusive control of the Operating Partnership's day-to-day management.
The Company believes combining the annual reports on Form 10-K of the Parent Company and the Operating Partnership into this single report provides the following benefits:
 
•
enhances investors' understanding of the Parent Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;  

•
eliminates duplicative disclosure and provides a more streamlined and readable presentation; and  

•
creates time and cost efficiencies through the preparation of one combined report instead of two separate reports. 
Management operates the Parent Company and the Operating Partnership as one business. The management of the Parent Company consists of the same individuals as the management of the Operating Partnership. These individuals are officers of the Parent Company and employees of the Operating Partnership.
The Company believes it is important to understand the few differences between the Parent Company and the Operating Partnership in the context of how the Parent Company and the Operating Partnership operate as a consolidated company. The Parent Company is a REIT, whose only material asset is its ownership of partnership interests of the Operating Partnership. As a result, the Parent Company does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public equity from time to time and guaranteeing certain debt of the Operating Partnership. The Parent Company does not hold any indebtedness, but guarantees all of the unsecured public debt and approximately 18% of the secured debt of the Operating Partnership. The Operating Partnership holds all the assets of the Company and retains the ownership interests in the Company's joint ventures. Except for net proceeds from public equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generates all remaining capital required by the Company's business. These sources include the Operating Partnership's operations, its direct or indirect incurrence of indebtedness, and the issuance of partnership units.
Stockholders' equity, partners' capital, and noncontrolling interests are the main areas of difference between the consolidated financial statements of the Parent Company and those of the Operating Partnership. The Operating Partnership's capital includes general and limited common Partnership Units, as well as Series 6 and 7 Preferred Units owned by the Parent Company. The limited partners' units in the Operating Partnership owned by third parties are accounted for in partners' capital in the Operating Partnership's financial statements and outside of stockholders' equity in noncontrolling interests in the Parent Company's financial statements. The Series 6 and 7 Preferred Units owned by the Parent Company are eliminated in consolidation in the accompanying consolidated financial statements of the Parent Company and are classified as preferred units of general partner in the accompanying consolidated financial statements of the Operating Partnership.
In order to highlight the differences between the Parent Company and the Operating Partnership, there are sections in this report that separately discuss the Parent Company and the Operating Partnership, including separate financial statements, controls and procedures sections, and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure for the Parent Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company. 

As general partner with control of the Operating Partnership, the Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have assets other than its investment in the Operating Partnership. Therefore, while stockholders' equity and partners' capital differ as discussed above, the assets and liabilities of the Parent Company and the Operating Partnership are the same on their respective financial statements.



TABLE OF CONTENTS
 
Item No.
 
Form 10-K
Report Page
 
 
 
 
PART I
 
 
 
 
1.
 
 
 
1A.
 
 
 
1B.
 
 
 
2.
 
 
 
3.
 
 
 
4.
 
 
 
 
PART II
 
 
 
 
5.
 
 
 
6.
 
 
 
7.
 
 
 
7A.
 
 
 
8.
 
 
 
9.
 
 
 
9A.
 
 
 
9B.
 
 
 
 
PART III
 
 
 
 
10.
 
 
 
11.
 
 
 
12.
 
 
 
13.
 
 
 
14.
 
 
 
 
PART IV
 
 
 
 
15.
 
 
 
 
SIGNATURES
 
 
 
 
16.





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 potential changes in our revenues, the size of our development 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 Parent Company and the Operating Partnership, collectively “Regency” or “the Company”, operate, 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 out-parcels; changes in leasing activity and market rents; timing of development starts; meeting development schedules; our inability to exercise voting control over the co-investment partnerships through which we own many of our properties; consequences of any armed conflict or terrorist attack against the United States; and the ability to obtain governmental approvals. We do not undertake any obligation to release publicly any revision to such forward-looking statements to reflect events or uncertainties after the date hereof or to reflect the occurrence of uncertain events. For additional information, see “Risk Factors” elsewhere herein. 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.

PART I
Item 1.    Business

Regency Centers Corporation began its operations as a real estate investment trust ("REIT") in 1993 and is the managing general partner in Regency Centers, L.P. We endeavor to be the preeminent, best-in-class national shopping center company distinguished by sustaining growth in shareholder value and compounding total shareholder return in excess of our peers. We work to achieve these goals through reliable growth in net operating income from a portfolio of dominant, infill shopping centers, balance sheet strength, value-added development capabilities and an engaged team of talented and dedicated people. All of our operating, investing, and financing activities are performed through the Operating Partnership, its wholly-owned subsidiaries, and through its investments in real estate partnerships with third parties (also referred to as "co-investment partnerships" or "joint ventures"). The Parent Company currently owns approximately 99.8% of the outstanding common partnership units of the Operating Partnership.

At December 31, 2012, we directly owned 204 shopping centers (the “Consolidated Properties”) located in 24 states representing 22.5 million square feet of gross leasable area (“GLA”). Through co-investment partnerships, we own partial ownership interests in 144 shopping centers (the “Unconsolidated Properties”) located in 24 states and the District of Columbia representing 17.8 million square feet of GLA.
We earn revenues and generate cash flow by leasing space in our shopping centers to grocery stores, major retail anchors, restaurants, side-shop retailers, and service providers, as well as ground leasing or selling building pads ("out-parcels") to these same types of tenants. Historically, we have experienced growth in revenues by increasing occupancy and rental rates in our existing shopping centers and by acquiring and developing new shopping centers. At December 31, 2012, the consolidated shopping centers were 94.1% leased, as compared to 92.2% at December 31, 2011.
We monitor the operating performance and rent collections of all tenants in our shopping centers, especially those tenants operating retail formats that are experiencing significant changes in competition, business practice, and store closings in other locations. We also evaluate consumer preferences, shopping behaviors, and demographics to anticipate both challenges and opportunities in the changing retail industry that may affect our tenants.
We grow our shopping center portfolio through acquisitions of operating centers and new shopping center development. We will continue to use our development capabilities, market presence, and anchor relationships to invest in value-added new development and redevelopments of existing centers. Development is customer driven, meaning we generally have an executed lease from the anchor before we start construction. Developments serve the growth needs of our anchors and retailers, resulting in modern shopping centers with long-term anchor leases that produce attractive returns on our invested capital. This development process typically requires two to three years once construction has commenced, but can vary subject to the size and complexity of the project. We fund our acquisition and development activity from various capital sources including property sales, equity offerings, and new debt.
 

1


Co-investment partnerships provide us with an additional capital source for shopping center acquisitions, as well as the opportunity to earn fees for asset management, property management, and other investing and financing services. As asset manager, we are engaged by our partners to apply similar operating, investment and capital strategies to the portfolios owned by the co-investment partnerships as those applied to the portfolio that we wholly-own. Co-investment partnerships grow their shopping center investments through acquisitions from third parties or direct purchases from us.  Although selling properties to co-investment partnerships reduces our direct ownership interest, it provides a source of capital that further strengthens our balance sheet while we continue to share, to the extent of our ownership interest, in the risks and rewards of shopping centers that meet our high quality standards and long-term investment strategy.

We  recognize the importance of continually improving the environmental sustainability performance  of our real estate assets.  To date we have received LEED (Leadership in Energy and Environmental Design) certifications by the U.S. Green Building Council at seven shopping centers and have four additional in-process developments targeting certification.  We also continue to implement best practices in our operating portfolio to reduce our power and water consumption, in addition to other sustainability initiatives. We believe that the design, construction and operation of environmentally efficient shopping centers will contribute to our key strategic goals.

Competition
 
We are among the largest owners of shopping centers in the nation based on revenues, number of properties, gross leasable area, and market capitalization. There are numerous companies and private individuals engaged in the ownership, development, acquisition, and operation of shopping centers that compete with us in our targeted markets, including grocery store chains that also anchor some of our shopping centers. This results in competition for attracting anchor tenants, as well as the acquisition of existing shopping centers and new development sites. We believe that our competitive advantages are driven by our locations within our market areas, the design and high quality of our shopping centers, the strong demographics surrounding our shopping centers, our relationships with our anchor tenants and our side-shop and out-parcel retailers, our practice of maintaining and renovating our shopping centers, and our ability to source and develop new shopping centers.
  
Employees
 
Our headquarters are located at One Independent Drive, Suite 114, Jacksonville, Florida. We presently maintain 17 market offices nationwide where we conduct management, leasing, construction, and investment activities. At December 31, 2012, we had 368 employees and we believe that our relations with our employees are good.

 Compliance with Governmental Regulations
 
Under various federal, state and local laws, ordinances and regulations, we may be liable for the cost to remove or remediate certain hazardous or toxic substances at our shopping centers. These laws often impose liability without regard to whether the owner knew of, or was responsible for, the presence of the hazardous or toxic substances. The cost of required remediation and the owner's liability for remediation could exceed the value of the property and/or the aggregate assets of the owner. The presence of such substances, or the failure to properly remediate such substances, may adversely affect our ability to sell or lease the property or borrow using the property as collateral. While we have a number of properties that could require or are currently undergoing varying levels of environmental remediation, environmental remediation is not currently expected to have a material financial impact on us due to reserves for remediation, insurance programs designed to mitigate the cost of remediation, and various state-regulated programs that shift the responsibility and cost to the state.
 

2


Executive Officers
 
The executive officers of the Company are appointed each year by the Board of Directors. Each of the executive officers has been employed by the Company in the position indicated in the list or positions indicated in the pertinent notes below. Each of the executive officers has been employed by the Company for more than five years.
Name
Age
Title
Executive Officer in Position Shown Since
Martin E. Stein, Jr.
60
Chairman and Chief Executive Officer
1993
Brian M. Smith
57
President and Chief Operating Officer
    2009 (1)
Lisa Palmer
44
Executive Vice President and Chief Financial Officer
    2013 (2)
Dan M. Chandler, III
46
Managing Director - West
    2009 (3)
John S. Delatour
54
Managing Director - Central
1999
James D. Thompson
59
Managing Director - East
1993

(1) In February 2009, Brian M. Smith, Managing Director and Chief Investment Officer of the Company since 2005, was appointed to the position of President. Prior to serving as our Managing Director and Chief Investment Officer, from March 1999 to September 2005, Mr. Smith served as Managing Director of Investments for our Pacific, Mid-Atlantic, and Northeast divisions.

(2) Lisa Palmer is our Executive Vice President and Chief Financial Officer. Ms. Palmer served as Senior Manager of Investment Services in 1996 and assumed the role of Vice President of Capital Markets in 1999. She served as Senior Vice President of Capital Markets from 2003 to 2012 until assuming the role of Chief Financial Officer in January 2013.

(3) Dan M. Chandler, III, has served as our Managing Director - West since August 2009. From August 2007 to April 2009, Mr. Chandler was a principal with Chandler Partners, a private commercial and residential real estate developer in Southern California. During 2009, Mr. Chandler was also affiliated with Urban|One, a real estate development and management firm in Los Angeles. Mr. Chandler was a Managing Director for us from 2006 to July 2007, Senior Vice President of Investments from 2002 to 2006, and Vice President of Investments from 1997 to 2002.

Company Website Access and SEC Filings

The Company's website may be accessed at www.regencycenters.com. All of our filings with the Securities and Exchange Commission (“SEC”) can be accessed free of charge through our website promptly after filing; however, in the event that the website is inaccessible, we will provide paper copies of our most recent annual report on Form 10-K, the most recent quarterly report on Form 10-Q, current reports filed or furnished on Form 8-K, and all related amendments, excluding exhibits, free of charge upon request. These filings are also accessible on the SEC's website at www.sec.gov.

General Information

The Company's registrar and stock transfer agent is Wells Fargo Bank, N.A. (“Wells Fargo Shareowner Services”), Mendota Heights, MN. The Company offers a dividend reinvestment plan (“DRIP”) that enables its stockholders to reinvest dividends automatically, as well as to make voluntary cash payments toward the purchase of additional shares. For more information, contact Wells Fargo toll free at (800) 468-9716 or the Company's Shareholder Relations Department at (904) 598-7000.
The Company's Independent Registered Public Accounting Firm is KPMG LLP, Jacksonville, Florida. The Company's legal counsel is Foley & Lardner LLP, Jacksonville, Florida.
Annual Meeting

The Company's annual meeting will be held at The Ponte Vedra Inn & Club, 200 Ponte Vedra Blvd, Ponte Vedra Beach, Florida, at 11:00 a.m. on Tuesday, May 7, 2013.


3



Item 1A. Risk Factors
Risk Factors Related to Our Industry and Real Estate Investments
Downturns in the retail industry likely will have a direct adverse impact on our revenues and cash flow.
Our properties consist primarily of grocery-anchored shopping centers. Our performance therefore is generally linked to economic conditions in the market for retail space. The market for retail space has been or could be adversely affected by any of the following:
•
weakness in the national, regional and local economies, which could adversely impact consumer spending and retail sales and in turn tenant demand for space and lead to increased store closings;
•
adverse financial conditions for grocery and retail anchors;
•
the ongoing consolidation in the retail sector;
•
the excess amount of retail space in a number of markets;
•
reduction in the demand by tenants to occupy our shopping centers as a result of reduced consumer demand for certain retail formats such as video rental stores;
•
a shift in retail shopping from brick and mortar stores to Internet retailers and catalogs;
•
the growth of super-centers and warehouse club retailers, such as those operated by Wal-Mart and Costco, and their adverse effect on traditional grocery chains;
•
the impact of increased energy costs on consumers and its consequential effect on the number of shopping visits to our centers; and
•
consequences of any armed conflict involving, or terrorist attack against, the United States.

To the extent that any of these conditions occur, they are likely to impact market rents for retail space, occupancy in the operating portfolios, our ability to sell, acquire or develop properties, and our cash available for distributions to stock and unit holders.

Our revenues and cash flow could be adversely affected by poor economic or market conditions where our properties are geographically concentrated, which may impede our ability to generate sufficient income to pay expenses and maintain our properties.
The economic conditions in markets in which our properties are concentrated greatly influence our financial performance. During the year ended December 31, 2012, our properties in California, Florida, and Texas accounted for 30.6%, 11.1%, and 11.0%, respectively, of our net income. Our revenues and cash available to pay expenses, maintain our properties, and for distributions to stock and unit holders could be adversely affected by this geographic concentration if market conditions, such as supply of or demand for retail space, deteriorate in California, Florida, or Texas relative to other geographic areas.
Loss of revenues from significant tenants could reduce distributions to stock and unit holders.

We derive significant revenues from anchor tenants such as Kroger, Publix, Safeway and Supervalu, which are our four most significant anchor tenants as they account for 4.3%, 4.2%, 3.3% and 2.1% respectively, of our total annualized base rent from Consolidated Properties plus our pro-rata share of annualized base rent from Unconsolidated Properties ("pro-rata basis"), which is recognized in equity in income (loss) of investment in real estate partnerships, for the year ended December 31, 2012. Distributions to stock and unit holders could be adversely affected by the loss of revenues in the event a significant tenant:
•
becomes bankrupt or insolvent;
•
experiences a downturn in its business;
•
materially defaults on its leases;
•
does not renew its leases as they expire; or
•
renews at lower rental rates.

Vacated anchor space, including space owned by the anchor, can reduce rental revenues generated by the shopping center because of the loss of the departed anchor tenant's customer drawing power. Some anchors have the right to vacate and prevent re-tenanting by paying rent for the balance of the lease term. If significant tenants vacate a property, then other tenants may be entitled to terminate their leases at the property.

4


Our net income depends on the success and continued occupancy of our tenants.
Our net income could be adversely affected in the event of bankruptcy or insolvency of any of our anchors or a significant number of our non-anchor tenants within a shopping center, or if we fail to lease significant portions of our new developments. The adverse impact on our net income may be greater than the loss of rent from the resulting unoccupied space because co-tenancy clauses in select centers may allow other tenants to modify or terminate their rent or lease obligations. Co-tenancy clauses have several variants: they may allow a tenant to postpone a store opening if certain other tenants fail to open their stores; they may allow a tenant to close its store prior to lease expiration if another tenant closes its store prior to lease expiration; or more commonly, they may allow a tenant to pay reduced levels of rent until a certain number of tenants open their stores within the same shopping center.
A large percentage of our revenues are derived from smaller shop tenants and our net income could be adversely impacted if our smaller shop tenants are not successful.
A large percentage of our revenues are derived from smaller shop tenants (those occupying less than 10,000 square feet). Smaller shop tenants may be more vulnerable to negative economic conditions as they have more limited resources than larger tenants. The types of smaller shop tenants vary from retail shops to service providers. If we are unable to attract the right type or mix of smaller shop tenants into our centers, our net income could be adversely impacted.
We may be unable to collect balances due from tenants in bankruptcy.
Although minimum rent is supported by long-term lease contracts, tenants who file bankruptcy have the legal right to reject any or all of their leases and close related stores. In the event that a tenant with a significant number of leases in our shopping centers files bankruptcy and rejects its leases, we could experience a significant reduction in our revenues and may not be able to collect all pre-petition amounts owed by that party.
Our real estate assets may be subject to impairment charges.
Our long-lived assets, primarily real estate held for investment, are carried at cost unless circumstances indicate that the carrying value of the assets may not be recoverable. We evaluate whether there are any indicators, including property operating performance and general market conditions, that the value of the real estate properties (including any related amortizable intangible assets or liabilities) may not be recoverable. Through the evaluation, we compare the current carrying value of the asset to the estimated undiscounted cash flows that are directly associated with the use and ultimate disposition of the asset. Our estimated cash flows are based on several key assumptions, including rental rates, costs of tenant improvements, leasing commissions, anticipated hold periods, and assumptions regarding the residual value upon disposition, including the exit capitalization rate. These key assumptions are subjective in nature and could differ materially from actual results. Changes in our disposition strategy or changes in the marketplace may alter the hold period of an asset or asset group, which may result in an impairment loss and such loss could be material to the Company's financial condition or operating performance. To the extent that the carrying value of the asset exceeds the estimated undiscounted cash flows, an impairment loss is recognized equal to the excess of carrying value over fair value. If such indicators, as described above, are not identified, management will not assess the recoverability of a property's carrying value.

The fair value of real estate assets is highly subjective and is determined through comparable sales information and other market data if available, or through use of an income approach such as the direct capitalization method or the traditional discounted cash flow approach. Such cash flow projections consider factors, including expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors, and therefore are subject to a significant degree of management judgment. Changes in those factors could impact the determination of fair value. In estimating the fair value of undeveloped land, we generally use market data and comparable sales information.

These subjective assessments have a direct impact on our net income because recording an impairment charge results in an immediate negative adjustment to net income. There can be no assurance that we will not take additional charges in the future related to the impairment of our assets. Any future impairment could have a material adverse effect on our results of operations in the period in which the charge is taken.


5


Adverse global market and economic conditions may adversely affect us and could cause us to recognize additional impairment charges or otherwise harm our performance.
We are unable to predict the timing, severity, and length of adverse market and economic conditions. Adverse market and economic conditions may impede our ability to generate sufficient operating cash flow to pay expenses, maintain properties, pay distributions to our stock and unit holders, and refinance debt. During adverse periods, there may be significant uncertainty in the valuation of our properties and investments that could result in a substantial decrease in their value. No assurance can be given that we would be able to recover the current carrying amount of all of our properties and investments in the future. Our failure to do so would require us to recognize additional impairment charges for the period in which we reached that conclusion, which could materially and adversely affect us and the market price of our common stock.
Our acquisition activities may not produce the returns that we expect.
Our investment strategy includes investing in high-quality shopping centers that are leased to market-dominant grocers, category-leading anchors, specialty retailers, or restaurants located in areas with high barriers to entry and above average household incomes and population densities. The acquisition of properties entails risks that include, but are not limited to, the following, any of which could adversely affect our results of operations and our ability to meet our obligations:
•
we may not be able to identify suitable properties to acquire or may be unable to complete the acquisition of the properties we identify;
•
properties we acquire may fail to achieve the occupancy or rental rates we project, within the time frames we project, at the time we make the decision to invest, which may result in the properties' failure to achieve the returns we projected;
•
our pre-acquisition evaluation of the physical condition of each new investment may not detect certain defects or identify necessary repairs until after the property is acquired, which could significantly increase our total acquisition costs or decrease cash flow from the property;
•
our investigation of a property or building prior to our acquisition, and any representations we may receive from the seller of such building or property, may fail to reveal various liabilities, which could reduce the cash flow from the property or increase our acquisition costs;
•
our estimate of the costs to improve, reposition or redevelop a property may prove to be too low, or the time we estimate to complete the improvement, repositioning or redevelopment may be too short, either of which could result in the property failing to achieve the returns we have projected, either temporarily or for a longer time; and
•
we may not be able to integrate an acquisition into our existing operations successfully.

Unsuccessful development activities or a slowdown in development activities could have a direct impact on our revenues and our revenue growth.

We actively pursue development activities as opportunities arise. Development activities require various government and other approvals for entitlements and any delay in such approvals may significantly delay the development process. We may not recover our investment in development projects for which approvals are not received. We incur other risks associated with development activities, including:
•
the ability to lease developments to full occupancy on a timely basis;
•
the risk that occupancy rates and rents of a completed project will not be sufficient to make the project profitable;
•
the risk that development costs of a project may exceed original estimates, possibly making the project unprofitable;
•
delays in the development and construction process;
•
the risk that we may abandon development opportunities and lose our investment in these developments;
•
the risk that the current size of our development pipeline will strain the organization's capacity to complete the developments within the targeted timelines and at the expected returns on invested capital; and
•
the lack of cash flow during the construction period.

If our developments are unsuccessful or we experience a slowdown in development activities, our revenue growth and/or operating expenses may be adversely impacted.

6


We may experience difficulty or delay in renewing leases or re-leasing space.
We derive most of our revenue directly or indirectly from rent received from our tenants. We are subject to the risks that, upon expiration or termination of leases, leases for space in our properties may not be renewed, space may not be re-leased, or the terms of renewal or re-lease, including the cost of required renovations or concessions to tenants, may be less favorable than current lease terms. As a result, our results of operations and our net income could be adversely impacted.
We may be unable to sell properties when appropriate because real estate investments are illiquid.
Real estate investments generally cannot be sold quickly. Our inability to respond promptly to unfavorable changes in the performance of our investments could have an adverse effect on our ability to meet our obligations and make distributions to our stock and unit holders.
Geographic concentration of our properties makes our business vulnerable to natural disasters and severe weather conditions, which could have an adverse effect on our cash flow and operating results.
A significant portion of our property gross leasable area is located in areas that are susceptible to the harmful effects of earthquakes, tropical storms, hurricanes, tornadoes, wildfires, and similar natural disasters. As of December 31, 2012, approximately 23.4%, 14.9%, and 9.5% of our property gross leasable area, on a pro-rata basis, was located in California, Florida, and Texas, respectively. Intense weather conditions during the last decade have caused our cost of property insurance to increase significantly. While much of the cost of this insurance is passed on to our tenants as reimbursable property costs, some tenants do not pay a pro rata share of these costs under their leases. These weather conditions also disrupt our business and the business of our tenants, which could affect the ability of some tenants to pay rent and may reduce the willingness of residents to remain in or move to the affected area. Therefore, as a result of the geographic concentration of our properties, we face demonstrable risks, including higher costs, such as uninsured property losses and higher insurance premiums, and disruptions to our business and the businesses of our tenants.
An uninsured loss or a loss that exceeds the insurance policies on our properties could subject us to loss of capital or revenue on those properties.
We carry comprehensive liability, fire, flood, extended coverage, rental loss, and environmental insurance for our properties with policy specifications and insured limits customarily carried for similar properties. We believe that the insurance carried on our properties is adequate and consistent with industry standards. There are, however, some types of losses, such as from hurricanes, terrorism, wars or earthquakes, which may be uninsurable, or the cost of insuring against such losses may not be economically justifiable. In addition, tenants generally are required to indemnify and hold us harmless from liabilities resulting from injury to persons or damage to personal or real property, on or off the premises, due to activities conducted by tenants or their agents on the properties (including without limitation any environmental contamination), and at the tenant's expense, to obtain and keep in full force during the term of the lease, liability and property damage insurance policies. However, our tenants may not properly maintain their insurance policies or have the ability to pay the deductibles associated with such policies. Should a loss occur that is uninsured or in an amount exceeding the combined aggregate limits for the policies noted above, or in the event of a loss that is subject to a substantial deductible under an insurance policy, we could lose all or part of our capital invested in, and anticipated revenue from, one or more of the properties, which could have a material adverse effect on our operating results and financial condition, as well as our ability to make distributions to stock and unit holders.
Loss of our key personnel could adversely affect the value of our Parent Company's stock price.
We depend on the efforts of our key executive personnel. Although we believe qualified replacements could be found for our key executives, the loss of their services could adversely affect our Parent Company's stock price.
We face competition from numerous sources, including other real estate investment trusts and small real estate owners.
The ownership of shopping centers is highly fragmented. We face competition from other real estate investment trusts as well as from numerous small owners in the acquisition, ownership, and leasing of shopping centers. We compete to develop shopping centers with other real estate investment trusts engaged in development activities as well as with local, regional, and national real estate developers. If we cannot successfully compete in our targeted markets, our cash flow, and therefore distributions to stock and unit holders, may be adversely affected.

7


Costs of environmental remediation could reduce our cash flow available for distribution to stock and unit holders.
Under various federal, state and local laws, an owner or manager of real property may be liable for the costs of removal or remediation of hazardous or toxic substances on the property. These laws often impose liability without regard to whether the owner knew of, or was responsible for, the presence of hazardous or toxic substances. The cost of any required remediation could exceed the value of the property and/or the aggregate assets of the owner or the responsible party. The presence of, or the failure to properly remediate, hazardous or toxic substances may adversely affect our ability to sell or lease a contaminated property or to borrow using the property as collateral. Any of these developments could reduce cash flow and our ability to make distributions to stock and unit holders.
Compliance with the Americans with Disabilities Act and fire, safety and other regulations may require us to make unintended expenditures that adversely affect our cash flows.
All of our properties are required to comply with the Americans with Disabilities Act (“ADA”). The ADA has separate compliance requirements for “public accommodations” and “commercial facilities,” but generally requires that buildings be made accessible to people with disabilities. Compliance with the ADA requirements could require removal of access barriers, and noncompliance could result in imposition of fines by the U.S. government or an award of damages to private litigants, or both. While the tenants to whom we lease properties are obligated by law to comply with the ADA provisions, and typically under tenant leases are obligated to cover costs associated with compliance, if required changes involve greater expenditures than anticipated, or if the changes must be made on a more accelerated basis than anticipated, the ability of these tenants to cover costs could be adversely affected. In addition, we are required to operate the properties in compliance with fire and safety regulations, building codes and other land use regulations, as they may be adopted by governmental entities and become applicable to the properties. We may be required to make substantial capital expenditures to comply with these requirements, and these expenditures could have a material adverse effect on our ability to meet our financial obligations and make distributions to our stock and unit holders.
If we do not maintain the security of tenant-related information, we could incur substantial additional costs and become subject to litigation.
We have implemented an online payment system where we receive certain information about our tenants that depends upon secure transmissions of confidential information over public networks, including information permitting cashless payments. A compromise of our security systems that results in information being obtained by unauthorized persons could adversely affect our operations, results of operations, financial condition and liquidity, and could result in litigation against us or the imposition of penalties. In addition, a security breach could require that we expend significant additional resources related to our information security systems and could result in a disruption of our operations.
We rely extensively on computer systems to process transactions and manage our business. Disruptions in both our primary and secondary (back-up) systems could harm our ability to run our business.
Although we have independent, redundant and physically separate primary and secondary computer systems, it is critical that we maintain uninterrupted operation of our business-critical computer systems. Our computer systems, including our back-up systems, are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, security breaches, catastrophic events such as fires, tornadoes and hurricanes, and usage errors by our employees. If our computer systems and our back-up systems are damaged or cease to function properly, we may have to make a significant investment to repair or replace them, and we may suffer interruptions in our operations in the interim. Any material interruption in both of our computer systems and back-up systems may have a material adverse effect on our business or results of operations.
Risk Factors Related to Our Co-investment Partnerships and Acquisition Structure
We do not have voting control over our joint venture investments, so we are unable to ensure that our objectives will be pursued.
We have invested as a partner in a number of joint venture investments for the acquisition or development of properties. These investments involve risks not present in a wholly-owned project. We do not have voting control over the ventures. The other partner might (i) have interests or goals that are inconsistent with our interests or goals or (ii) otherwise impede our objectives. The other partner also might become insolvent or bankrupt. These factors could limit the return that we receive from such investments or cause our cash flows to be lower than our estimates.

8


The termination of our co-investment partnerships could adversely affect our cash flow, operating results, and our ability to make distributions to stock and unit holders.
If co-investment partnerships owning a significant number of properties were dissolved for any reason, we would lose the asset and property management fees from these co-investment partnerships, which could adversely affect our operating results and our cash available for distribution to stock and unit holders.
Risk Factors Related to Funding Strategies and Capital Structure
Higher market capitalization rates for our properties could adversely impact our ability to sell properties and fund developments and acquisitions, and could dilute earnings.

As part of our funding strategy, we sell operating properties that no longer meet our investment standards. These sales proceeds are used to fund the construction of new developments. An increase in market capitalization rates could cause a reduction in the value of centers identified for sale, which would have an adverse impact on the amount of cash generated. In order to meet the cash requirements of our development program, we may be required to sell more properties than initially planned, which could have a negative impact on our earnings.

We depend on external sources of capital, which may not be available in the future on favorable terms or at all.
To qualify as a REIT, the Parent Company must, among other things, distribute to its stockholders each year at least 90% of its REIT taxable income (excluding any net capital gains). Because of these distribution requirements, we will likely not be able to fund all future capital needs, including capital for acquisitions or developments, with income from operations. We therefore will have to rely on third-party sources of capital, which may or may not be available on favorable terms or at all. Our access to third-party sources of capital depends on a number of things, including the market's perception of our growth potential and our current and potential future earnings. Our access to debt depends on our credit rating, the willingness of creditors to lend to us and conditions in the capital markets.  In addition to finding creditors willing to lend to us, we are dependent upon our joint venture partners to contribute their share of any amount needed to repay or refinance existing debt when lenders reduce the amount of debt our joint ventures are eligible to refinance.
In addition, our existing debt arrangements also impose covenants that limit our flexibility in obtaining other financing, such as a prohibition on negative pledge agreements. Additional equity offerings may result in substantial dilution of stockholders' interests and additional debt financing may substantially increase our degree of leverage.
Without access to external sources of capital, we would be required to pay outstanding debt with our operating cash flows and proceeds from property sales.  Our operating cash flows may not be sufficient to pay our outstanding debt as it comes due and real estate investments generally cannot be sold quickly at a return we believe is appropriate.  If we are required to deleverage our business with operating cash flows and proceeds from property sales, we may be forced to reduce the amount of, or eliminate altogether, our distributions to stock and unit holders or refrain from making investments in our business.
Our debt financing may reduce distributions to stock and unit holders.

Our organizational documents do not limit the amount of debt that we may incur. In addition, we do not expect to generate sufficient funds from operations to make balloon principal payments on our debt when due. If we are unable to refinance our debt on acceptable terms, we might be forced (i) to dispose of properties, which might result in losses, or (ii) to obtain financing at unfavorable terms. Either could reduce the cash flow available for distributions to stock and unit holders. If we cannot make required mortgage payments, the mortgagee could foreclose on the property securing the mortgage, causing the loss of cash flow from that property.

9


Covenants in our debt agreements may restrict our operating activities and adversely affect our financial condition.
Our unsecured notes, unsecured term loan, and unsecured line of credit contain customary covenants, including compliance with financial ratios, such as ratio of total debt to gross asset value and fixed charge coverage ratio. Fixed charge coverage ratio is defined as earnings before interest, taxes, depreciation and amortization ("EBITDA") divided by the sum of interest expense and scheduled mortgage principal paid to our lenders plus dividends paid to our preferred stockholders. Our debt arrangements also restrict our ability to enter into a transaction that would result in a change of control. These covenants may limit our operational flexibility and our acquisition activities. Moreover, if we breach any of the covenants in our debt agreements, and did not cure the breach within the applicable cure period, our lenders could require us to repay the debt immediately, even in the absence of a payment default. Many of our debt arrangements, including our unsecured notes, unsecured term loan, and unsecured line of credit are cross-defaulted, which means that the lenders under those debt arrangements can put us in default and require immediate repayment of their debt if we breach and fail to cure a default under certain of our other material debt obligations. As a result, any default under our debt covenants could have an adverse effect on our financial condition, our results of operations, our ability to meet our obligations, and the market value of our stock.
Increases in interest rates would cause our borrowing costs to rise and negatively impact our results of operations.
    
While a significant amount of our outstanding debt has fixed interest rates, we do borrow funds at variable interest rates under our credit facilities. Increases in interest rates would increase our interest expense on any variable rate debt, in addition, increases in interest rates will affect the terms under which we refinance our existing debt as it matures.
This would reduce our future earnings and cash flows, which could adversely affect our ability to service our debt and meet our other obligations and also could reduce the amount we are able to distribute to our stock and unit holders.

Risk Factors Related to Interest Rates and the Market Price for Our Stock

Changes in economic and market conditions could adversely affect the Parent Company's stock price.
The market price of our common stock may fluctuate significantly in response to many factors, many of which are out of our control, including:
•
actual or anticipated variations in our operating results or dividends;
•
changes in our funds from operations or earnings estimates;
•
publication of research reports about us or the real estate industry in general and recommendations by financial analysts or actions taken by rating agencies with respect to our securities or those of other REIT's;
•
the ability of our tenants to pay rent and meet their other obligations to us under current lease terms and our ability to re-lease space as leases expire;
•
increases in market interest rates that drive purchasers of our stock to demand a higher dividend yield;
•
changes in market valuations of similar companies;
•
adverse market reaction to any additional debt we incur in the future;
•
any future issuances of equity securities;
•
additions or departures of key management personnel;
•
strategic actions by us or our competitors, such as acquisitions or restructurings;
•
actions by institutional stockholders;
•
speculation in the press or investment community; and
•
general market and economic conditions.

These factors may cause the market price of our common stock to decline, regardless of our financial condition, results of operations, business or prospects. It is impossible to ensure that the market price of our common stock will not fall in the future. A decrease in the market price of our common stock could reduce our ability to raise additional equity in the public markets. Selling common stock at a decreased market price would have a dilutive impact on existing stockholders.

10


Risk Factors Related to Federal Income Tax Laws
If the Parent Company fails to qualify as a REIT for federal income tax purposes, it would be subject to federal income tax at regular corporate rates.
We believe that we qualify for taxation as a REIT for federal income tax purposes, and we plan to operate so that we can continue to meet the requirements for taxation as a REIT. If we qualify as a REIT, we generally will not be subject to federal income tax on our income that we distribute currently to our stockholders. Many of the REIT requirements, however, are highly technical and complex. The determination that we are a REIT requires an analysis of various factual matters and circumstances, some of which may not be totally within our control and some of which involve questions of interpretation. For example, to qualify as a REIT, at least 95% of our gross income must come from specific passive sources, like rent, that are itemized in the REIT tax laws. There can be no assurance that the Internal Revenue Service (“IRS”) or a court would agree with the positions we have taken in interpreting the REIT requirements. We are also required to distribute to our stockholders at least 90% of our REIT taxable income, excluding capital gains. The fact that we hold many of our assets through co-investment partnerships and their subsidiaries further complicates the application of the REIT requirements. Even a technical or inadvertent mistake could jeopardize our REIT status. Furthermore, Congress and the IRS might make changes to the tax laws and regulations, and the courts might issue new rulings, that make it more difficult, or impossible, for us to remain qualified as a REIT.
Also, unless the IRS granted us relief under certain statutory provisions, we would remain disqualified as a REIT for four years following the year we first failed to qualify. If we failed to qualify as a REIT (currently and/or with respect to any tax years for which the statute of limitations has not expired), we would have to pay significant income taxes, reducing cash available to pay dividends, which would likely have a significant adverse effect on the value of our securities. In addition, we would no longer be required to pay any dividends to stockholders. Although we believe that we qualify as a REIT, we cannot assure you that we will continue to qualify or remain qualified as a REIT for tax purposes.
Even if we qualify as a REIT for federal income tax purposes, we are required to pay certain federal, state and local taxes on our income and property. For example, if we have net income from “prohibited transactions,” that income will be subject to a 100% tax. In general, prohibited transactions include sales or other dispositions of property held primarily for sale to customers in the ordinary course of business. The determination as to whether a particular sale is a prohibited transaction depends on the facts and circumstances related to that sale. While we have undertaken a significant number of asset sales in recent years, we do not believe that those sales should be considered prohibited transactions, but there can be no assurance that the IRS would not contend otherwise.
Risk Factors Related to Our Ownership Limitations and the Florida Business Corporation Act
Restrictions on the ownership of the Parent Company's capital stock to preserve our REIT status could delay or prevent a change in control.
Ownership of more than 7% by value of our outstanding capital stock is prohibited, with certain exceptions, by our articles of incorporation, for the purpose of maintaining our qualification as a REIT. This 7% limitation may discourage a change in control and may also (i) deter tender offers for our capital stock, which offers may be attractive to our stockholders, or (ii) limit the opportunity for our stockholders to receive a premium for their capital stock that might otherwise exist if an investor attempted to assemble a block in excess of 7% of our outstanding capital stock or to affect a change in control.
The issuance of the Parent Company's capital stock could delay or prevent a change in control.
Our articles of incorporation authorize our Board of Directors to issue up to 30,000,000 shares of preferred stock and 10,000,000 shares of special common stock and to establish the preferences and rights of any shares issued. The issuance of preferred stock or special common stock could have the effect of delaying or preventing a change in control. The provisions of the Florida Business Corporation Act regarding control share acquisitions and affiliated transactions could also deter potential acquisitions by preventing the acquiring party from voting the common stock it acquires or consummating a merger or other extraordinary corporate transaction without the approval of our disinterested stockholders.
Item 1B. Unresolved Staff Comments
None.


11


Item 2.    Properties
The following table is a list of the shopping centers summarized by state and in order of largest holdings presented for Consolidated Properties (excludes properties owned by unconsolidated co-investment partnerships):
 
 
 
December 31, 2012
 
December 31, 2011
Location
 
#
Properties
 
GLA (in thousands)
 
% of Total
GLA
 
%
Leased
 
#
Properties
 
GLA (in thousands)
 
% of Total
GLA
 
%
Leased
California
 
43

 
5,544

 
24.6
%
 
95.1
%
 
44

 
5,521

 
23.3
%
 
91.1
%
Florida
 
39

 
3,961

 
17.6
%
 
93.0
%
 
45

 
4,550

 
19.2
%
 
92.6
%
Texas
 
18

 
2,324

 
10.3
%
 
95.2
%
 
22

 
2,932

 
12.4
%
 
93.5
%
Ohio
 
10

 
1,402

 
6.2
%
 
97.1
%
 
12

 
1,592

 
6.7
%
 
96.3
%
Georgia
 
15

 
1,386

 
6.2
%
 
93.1
%
 
14

 
1,269

 
5.3
%
 
89.1
%
Colorado
 
14

 
1,163

 
5.2
%
 
94.3
%
 
14

 
1,162

 
4.9
%
 
91.6
%
Virginia
 
7

 
951

 
4.2
%
 
94.2
%
 
7

 
951

 
4.0
%
 
92.9
%
Illinois
 
4

 
748

 
3.3
%
 
97.3
%
 
5

 
863

 
3.6
%
 
95.0
%
North Carolina
 
9

 
743

 
3.3
%
 
91.8
%
 
9

 
837

 
3.5
%
 
92.6
%
Oregon
 
8

 
741

 
3.3
%
 
91.2
%
 
8

 
741

 
3.1
%
 
90.8
%
Washington
 
6

 
683

 
3.0
%
 
92.8
%
 
5

 
357

 
1.5
%
 
94.1
%
Missouri
 
4

 
408

 
1.8
%
 
99.0
%
 
4

 
408

 
1.7
%
 
98.7
%
Tennessee
 
5

 
392

 
1.7
%
 
95.9
%
 
6

 
479

 
2.0
%
 
94.1
%
Arizona
 
3

 
387

 
1.7
%
 
88.1
%
 
3

 
389

 
1.6
%
 
84.0
%
Massachusetts
 
2

 
357

 
1.6
%
 
94.6
%
 
2

 
360

 
1.5
%
 
94.6
%
Nevada
 
1

 
331

 
1.5
%
 
91.1
%
 
1

 
331

 
1.4
%
 
88.7
%
Pennsylvania
 
4

 
325

 
1.5
%
 
99.1
%
 
4

 
322

 
1.4
%
 
98.4
%
Delaware
 
2

 
243

 
1.1
%
 
94.2
%
 
2

 
243

 
1.0
%
 
89.6
%
Michigan
 
2

 
118

 
0.5
%
 
43.9
%
 
2

 
118

 
0.5
%
 
39.2
%
Maryland
 
1

 
88

 
0.4
%
 
100.0
%
 
1

 
88

 
0.4
%
 
97.2
%
Alabama
 
1

 
85

 
0.4
%
 
86.2
%
 
1

 
85

 
0.4
%
 
86.2
%
South Carolina
 
2

 
74

 
0.3
%
 
100.0
%
 
2

 
74

 
0.3
%
 
98.1
%
Indiana
 
3

 
55

 
0.2
%
 
89.8
%
 
3

 
55

 
0.2
%
 
82.3
%
Kentucky
 
1

 
23

 
0.1
%
 
100.0
%
 
1

 
23

 
0.1
%
 
93.9
%
Total
 
204

 
22,532

 
100.0
%
 
94.1
%
 
217

 
23,750

 
100.0
%
 
92.2
%
Certain Consolidated Properties are encumbered by mortgage loans of $474.0 million as of December 31, 2012.
The weighted average annual effective rent for the consolidated portfolio of properties, net of tenant concessions, is $16.95 per square foot as of December 31, 2012.



12


The following table is a list of the shopping centers summarized by state and in order of largest holdings presented for Unconsolidated Properties (includes properties owned by unconsolidated co-investment partnerships, excluding the properties of BRE Throne, LLC ("BRET") as the property holdings of BRET do not impact the rate of return on Regency's preferred stock investment):
 
 
 
December 31, 2012
 
December 31, 2011
Location
 
#
Properties
 
GLA (in thousands)
 
% of Total
GLA
 
%
Leased
 
#
Properties
 
GLA (in thousands)
 
% of Total
GLA
 
%
Leased
California
 
25

 
3,265

 
18.4
%
 
95.7
%
 
27

 
3,551

 
19.3
%
 
95.5
%
Virginia
 
22

 
2,789

 
15.7
%
 
96.3
%
 
21

 
2,780

 
15.1
%
 
94.8
%
Maryland
 
14

 
1,577

 
8.9
%
 
92.9
%
 
15

 
1,727

 
9.4
%
 
92.9
%
North Carolina
 
8

 
1,276

 
7.2
%
 
96.4
%
 
7

 
1,192

 
6.5
%
 
95.8
%
Texas
 
9

 
1,227

 
6.9
%
 
95.9
%
 
9

 
1,227

 
6.7
%
 
96.0
%
Illinois
 
8

 
1,067

 
6.0
%
 
97.1
%
 
10

 
1,328

 
7.2
%
 
97.5
%
Pennsylvania
 
7

 
982

 
5.5
%
 
96.1
%
 
7

 
982

 
5.3
%
 
95.9
%
Colorado
 
6

 
962

 
5.4
%
 
93.0
%
 
6

 
941

 
5.1
%
 
95.5
%
Florida
 
11

 
841

 
4.7
%
 
93.7
%
 
11

 
841

 
4.6
%
 
93.2
%
Minnesota
 
5

 
675

 
3.8
%
 
97.5
%
 
5

 
675

 
3.7
%
 
98.4
%
Washington
 
5

 
577

 
3.3
%
 
94.5
%
 
5

 
577

 
3.1
%
 
90.9
%
Ohio
 
2

 
532

 
3.0
%
 
90.2
%
 
2

 
532

 
2.9
%
 
93.3
%
South Carolina
 
4

 
286

 
1.6
%
 
96.3
%
 
4

 
286

 
1.6
%
 
96.3
%
Wisconsin
 
2

 
269

 
1.5
%
 
96.9
%
 
2

 
269

 
1.5
%
 
93.5
%
Georgia
 
3

 
244

 
1.4
%
 
95.3
%
 
3

 
243

 
1.3
%
 
92.0
%
Connecticut
 
1

 
180

 
1.0
%
 
99.8
%
 
1

 
180

 
1.0
%
 
99.8
%
New Jersey
 
2

 
157

 
0.9
%
 
94.0
%
 
2

 
157

 
0.9
%
 
96.6
%
Massachusetts
 
1

 
149

 
0.8
%
 
95.4
%
 
1

 
185

 
1.0
%
 
98.1
%
New York
 
1

 
141

 
0.8
%
 
100.0
%
 
—

 
—

 
—
%
 
—
%
Indiana
 
2

 
139

 
0.8
%
 
91.9
%
 
2

 
139

 
0.7
%
 
93.1
%
Alabama
 
1

 
119

 
0.7
%
 
71.6
%
 
1

 
119

 
0.6
%
 
64.6
%
Arizona
 
1

 
108

 
0.6
%
 
89.2
%
 
1

 
108

 
0.6
%
 
92.1
%
Oregon
 
1

 
93

 
0.5
%
 
94.8
%
 
1

 
93

 
0.5
%
 
92.5
%
Delaware
 
1

 
67

 
0.4
%
 
100.0
%
 
2

 
227

 
1.2
%
 
89.3
%
Dist. of Columbia
 
2

 
40

 
0.2
%
 
100.0
%
 
2

 
40

 
0.2
%
 
100.0
%
    Total
 
144

 
17,762

 
100.0
%
 
95.2
%
 
147

 
18,399

 
100.0
%
 
94.8
%

Certain Unconsolidated Properties are encumbered by mortgage loans of $1.8 billion as of December 31, 2012.

The weighted average annual effective rent for the unconsolidated portfolio of properties, net of tenant concessions, is $17.03 per square foot as of December 31, 2012.














13




The following table summarizes the largest tenants occupying our shopping centers for Consolidated Properties plus Regency's pro-rata share of Unconsolidated Properties, excluding the properties of BRET, as of December 31, 2012, based upon a percentage of total annualized base rent exceeding or equal to 0.5% (GLA and dollars in thousands):
Tenant
 
GLA
 
Percent of Company Owned GLA
 
Rent
 
Percentage of Annualized Base Rent
 
Number of Leased Stores
 
Anchor Owned Stores (1)
Kroger
 
1,987

 
7.0
%
$
19,182

 
4.3
%
 
40

 
7

Publix
 
1,948

 
6.9
%
 
19,041

 
4.2
%
 
53

 
1

Safeway
 
1,535

 
5.4
%
 
14,696

 
3.3
%
 
45

 
6

Supervalu
 
774

 
2.7
%
 
9,559

 
2.1
%
 
25

 
1

CVS
 
501

 
1.8
%
 
8,051

 
1.8
%
 
47

 
—

TJX Companies
 
573

 
2.0
%
 
7,081

 
1.6
%
 
27

 
—

Whole Foods
 
252

 
0.9
%
 
5,485

 
1.2
%
 
9

 
—

PETCO
 
264

 
0.9
%
 
5,450

 
1.2
%
 
32

 
—

Ahold
 
361

 
1.3
%
 
5,134

 
1.1
%
 
13

 
—

Ross Dress For Less
 
273

 
1.0
%
 
4,341

 
1.0
%
 
16

 
—

H.E.B.
 
295

 
1.0
%
 
4,326

 
1.0
%
 
5

 
—

Walgreens
 
150

 
0.5
%
 
3,906

 
0.9
%
 
13

 
—

JPMorgan Chase Bank
 
66

 
0.2
%
 
3,599

 
0.8
%
 
25

 
—

Sears Holdings
 
426

 
1.5
%
 
3,445

 
0.8
%
 
8

 
1

Trader Joe's
 
124

 
0.4
%
 
3,373

 
0.7
%
 
14

 
—

Starbucks
 
92

 
0.3
%
 
3,335

 
0.7
%
 
78

 
—

Wells Fargo Bank
 
72

 
0.3
%
 
3,329

 
0.7
%
 
34

 
—

Rite Aid
 
207

 
0.7
%
 
3,206

 
0.7
%
 
24

 
—

Bank of America
 
70

 
0.2
%
 
3,183

 
0.7
%
 
25

 
—

Sports Authority
 
141

 
0.5
%
 
3,063

 
0.7
%
 
4

 
—

Harris Teeter
 
248

 
0.9
%
 
2,929

 
0.7
%
 
8

 
—

Target
 
350

 
1.2
%
 
2,884

 
0.6
%
 
4

 
14

Subway
 
93

 
0.3
%
 
2,832

 
0.6
%
 
107

 
—

Toys "R" Us
 
176

 
0.6
%
 
2,750

 
0.6
%
 
7

 
—

Michael's
 
169

 
0.6
%
 
2,579

 
0.6
%
 
10

 
—

Wal-Mart
 
435

 
1.5
%
 
2,466

 
0.5
%
 
4

 
5

Hallmark
 
133

 
0.5
%
 
2,406

 
0.5
%
 
40

 
—

(1) Stores owned by anchor tenant that are attached to our centers.

Regency's leases for tenant space under 5,000 square feet generally have terms ranging from three to five years. Leases greater than 10,000 square feet generally have lease terms in excess of five years, mostly comprised of anchor tenants. Many of the anchor leases contain provisions allowing the tenant the option of extending the term of the lease at expiration. The leases provide for the monthly payment in advance of fixed minimum rent, additional rents calculated as a percentage of the tenant's sales, the tenant's pro-rata share of real estate taxes, insurance, and common area maintenance (“CAM”) expenses, and reimbursement for utility costs if not directly metered.






14




The following table sets forth a schedule of lease expirations for the next ten years and thereafter, assuming no tenants renew their leases (GLA and dollars in thousands):
Lease Expiration Year
 
Number of Tenants with Expiring Leases
 
Expiring GLA (2)
 
Percent of Total Company GLA (2)
 
Minimum Rent Expiring Leases (3)
 
Percent of Minimum Rent (3)
(1)
 
173

 
218

 
0.8
%
$
4,697

 
1.0
%
2013
 
936

 
1,854

 
7.3
%
 
37,980

 
8.4
%
2014
 
1,057

 
2,610

 
10.2
%
 
52,016

 
11.6
%
2015
 
1,059

 
2,312

 
9.1
%
 
47,824

 
10.6
%
2016
 
936

 
2,758

 
10.8
%
 
48,383

 
10.8
%
2017
 
1,011

 
3,303

 
12.9
%
 
64,138

 
14.2
%
2018
 
316

 
1,780

 
7.0
%
 
28,336

 
6.3
%
2019
 
158

 
1,271

 
5.0
%
 
20,302

 
4.5
%
2020
 
144

 
1,493

 
5.8
%
 
22,711

 
5.0
%
2021
 
174

 
1,245

 
4.9
%
 
20,094

 
4.5
%
2022
 
222

 
1,666

 
6.5
%
 
25,845

 
5.8
%
Thereafter
 
274

 
5,028

 
19.7
%
 
78,048

 
17.3
%
Total
 
6,460

 
25,538

 
100.0
%
 
$
450,374

 
100.0
%
(1) Leases currently under month-to-month rent or in process of renewal.
(2) Represents GLA for Consolidated Properties plus Regency's pro-rata share of Unconsolidated Properties.
(3) Minimum rent includes current minimum rent and future contractual rent steps for the Consolidated Properties plus Regency's pro-rata share from Unconsolidated Properties, but excludes additional rent such as percentage rent, common area maintenance, real estate taxes and insurance reimbursements.


15


See the following property table and also see Item 7, Management's Discussion and Analysis for further information about Regency's properties.
Property Name (1)
 
Year
Acquired
 
Year
Con-
structed (2)
 
Gross Leasable Area
(GLA)
 
Percent
Leased (3)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Drug Stores & Other Junior Anchors > 10,000 Sq Ft
CALIFORNIA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Los Angeles / Southern CA
 
 
 
 
 
 
 
 
 
 
 
 
Amerige Heights Town Center
 
2000
 
2000
 
89,181

 
100.0
%
 
Albertsons, (Target)
 
—
Brea Marketplace (5)
 
2005
 
1987
 
352,226

 
98.1
%
 
Sprout's Markets, Target
 
24 Hour Fitness, Big 5 Sporting Goods, Beverages & More!, Childtime Childcare, Golfsmith
El Camino Shopping Center
 
1999
 
1995
 
135,728

 
95.1
%
 
Von's Food & Drug
 
Sav-On Drugs
Granada Village (5)
 
2005
 
1965
 
225,528

 
97.9
%
 
Sprout's Markets
 
Rite Aid, TJ Maxx, Stein Mart, PETCO, Homegoods
Hasley Canyon Village (5)
 
2003
 
2003
 
65,801

 
100.0
%
 
Ralphs
 
—
Heritage Plaza
 
1999
 
1981
 
230,163

 
99.4
%
 
Ralphs
 
CVS, Daiso, Mitsuwa Marketplace, Total Woman
Laguna Niguel Plaza (5)
 
2005
 
1985
 
41,943

 
96.4
%
 
(Albertsons)
 
CVS
Marina Shores (5)
 
2008
 
2001
 
67,727

 
100.0
%
 
Whole Foods
 
PETCO
Morningside Plaza
 
1999
 
1996
 
91,212

 
97.4
%
 
Stater Bros.
 
—
Newland Center
 
1999
 
1985
 
149,140

 
96.0
%
 
Albertsons
 
—
Plaza Hermosa
 
1999
 
1984
 
94,777

 
100.0
%
 
Von's Food & Drug
 
Sav-On Drugs
Rona Plaza
 
1999
 
1989
 
51,760

 
100.0
%
 
Superior Super Warehouse
 
—
Seal Beach (5)
 
2002
 
1966
 
96,858

 
97.8
%
 
Von's Food & Drug
 
CVS
South Bay Village
 
2012
 
2012
 
107,706

 
100.0
%
 
Orchard Supply Hardware
 
Homegoods
Twin Oaks Shopping Center (5)
 
2005
 
1978
 
98,399

 
100.0
%
 
Ralphs
 
Rite Aid
Valencia Crossroads
 
2002
 
2003
 
172,856

 
98.8
%
 
Whole Foods, Kohl's
 
—
Vine at Castaic
 
2005
 
2005
 
27,314

 
70.4
%
 
—
 
—
Westridge Village
 
2001
 
2003
 
92,287

 
96.6
%
 
Albertsons
 
Beverages & More!
Woodman Van Nuys
 
1999
 
1992
 
107,614

 
99.1
%
 
El Super
 
—
Silverado Plaza (5)
 
2005
 
1974
 
84,916

 
100.0
%
 
Nob Hill
 
Longs Drug
Gelson's Westlake Market Plaza
 
2002
 
2002
 
84,975

 
95.5
%
 
Gelson's Markets
 
—
Oakbrook Plaza
 
1999
 
1982
 
83,286

 
99.3
%
 
Albertsons
 
(Longs Drug)
Ventura Village
 
1999
 
1984
 
76,070

 
91.3
%
 
Von's Food & Drug
 
—
Westlake Village Plaza and Center
 
1999
 
1975
 
190,529

 
90.2
%
 
Von's Food & Drug and Sprouts
 
(CVS), Longs Drug, Total Woman
Falcon Ridge Town Center Phase I (5)
 
2003
 
2004
 
232,754

 
88.0
%
 
Stater Bros., (Target)
 
Sports Authority, Ross Dress for Less, Michaels, Party City
Falcon Ridge Town Center Phase II (5)
 
2005
 
2005
 
66,864

 
100.0
%
 
24 Hour Fitness
 
CVS
French Valley Village Center
 
2004
 
2004
 
98,752

 
95.3
%
 
Stater Bros.
 
CVS
Indio Towne Center
 
2006
 
2010
 
179,505

 
85.6
%
 
(Home Depot), (WinCo), Toys R Us
 
CVS, 24 Hour Fitness, PETCO, Party City
Jefferson Square
 
2007
 
2007
 
38,013

 
81.4
%
 
Fresh & Easy
 
CVS
4S Commons Town Center
 
2004
 
2004
 
240,060

 
92.2
%
 
Ralphs, Jimbo's...Naturally!
 
Bed Bath & Beyond, Cost Plus World Market, CVS, Griffin Ace Hardware
Balboa Mesa Shopping Center
 
2012
 
1974
 
189,321

 
96.5
%
 
Von's Food & Drug, Kohl's
 
CVS
Costa Verde Center
 
1999
 
1988
 
178,623

 
94.7
%
 
Bristol Farms
 
Bookstar, The Boxing Club
El Norte Pkwy Plaza
 
1999
 
1984
 
90,549

 
84.2
%
 
Von's Food & Drug
 
CVS
Friars Mission Center
 
1999
 
1989
 
146,897

 
100.0
%
 
Ralphs
 
Longs Drug

16


Property Name (1)
 
Year
Acquired
 
Year
Con-
structed (2)
 
Gross Leasable Area
(GLA)
 
Percent
Leased (3)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Drug Stores & Other Junior Anchors > 10,000 Sq Ft
Navajo Shopping Center (5)
 
2005
 
1964
 
102,139

 
95.5
%
 
Albertsons
 
Rite Aid, O'Reilly Auto Parts
Point Loma Plaza (5)
 
2005
 
1987
 
212,415

 
94.0
%
 
Von's Food & Drug
 
Sport Chalet 5, 24 Hour Fitness, Jo-Ann Fabrics
Rancho San Diego Village (5)
 
2005
 
1981
 
153,256

 
87.6
%
 
Von's Food & Drug
 
(Longs Drug), 24 Hour Fitness
Twin Peaks
 
1999
 
1988
 
198,139

 
99.4
%
 
Albertsons, Target
 
—
Uptown District
 
2012
 
1990
 
148,638

 
96.7
%
 
Ralphs, Trader Joe's
 
—
Vista Village IV
 
2006
 
2006
 
11,000

 
45.5
%
 
—
 
—
Vista Village Phase I (5)
 
2002
 
2003
 
129,009

 
96.7
%
 
Krikorian Theaters, (Lowe's)
 
—
Vista Village Phase II (5)
 
2002
 
2003
 
55,000

 
45.5
%
 
Frazier Farms
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
San Francisco / Northern CA
 
 
 
 
 
 
 
 
 
 
 
 
Auburn Village (5)
 
2005
 
1990
 
133,944

 
85.4
%
 
Bel Air Market
 
Dollar Tree, Goodwill Industries, (CVS)
Bayhill Shopping Center (5)
 
2005
 
1990
 
121,846

 
100.0
%
 
Mollie Stone's Market
 
CVS
Clayton Valley Shopping Center
 
2003
 
2004
 
260,205

 
92.9
%
 
Fresh & Easy, Orchard Supply Hardware
 
Longs Drugs, Dollar Tree, Ross Dress For Less
Diablo Plaza
 
1999
 
1982
 
63,265

 
94.3
%
 
(Safeway)
 
(CVS), Beverages & More
El Cerrito Plaza
 
2000
 
2000
 
256,035

 
98.9
%
 
(Lucky's), Trader Joe's
 
(Longs Drug), Bed Bath & Beyond, Barnes & Noble, Jo-Ann Fabrics, PETCO, Ross Dress For Less
Encina Grande
 
1999
 
1965
 
102,413

 
95.8
%
 
Safeway
 
Walgreens
Folsom Prairie City Crossing
 
1999
 
1999
 
90,237

 
92.4
%
 
Safeway
 
—
Gateway 101
 
2008
 
2008
 
92,110

 
100.0
%
 
(Home Depot), (Best Buy), Sports Authority, Nordstrom Rack
 
—
Oak Shade Town Center
 
2011
 
1998
 
103,762

 
92.3
%
 
Safeway
 
Office Max, Rite Aid
Pleasant Hill Shopping Center (5)
 
2005
 
1970
 
227,681

 
100.0
%
 
Target, Toys "R" Us
 
Barnes & Noble, Ross Dress for Less
Powell Street Plaza
 
2001
 
1987
 
165,928

 
100.0
%
 
Trader Joe's
 
PETCO, Beverages & More!, Ross Dress For Less, DB Shoe Company, Marshalls
Raley's Supermarket (5)
 
2007
 
1964
 
62,827

 
100.0
%
 
Raley's
 
—
San Leandro Plaza
 
1999
 
1982
 
50,432

 
100.0
%
 
(Safeway)
 
(Longs Drug)
Sequoia Station
 
1999
 
1996
 
103,148

 
94.2
%
 
(Safeway)
 
Longs Drug, Barnes & Noble, Old Navy, Pier 1
Strawflower Village
 
1999
 
1985
 
78,827

 
95.3
%
 
Safeway
 
(Longs Drug)
Tassajara Crossing
 
1999
 
1990
 
146,140

 
96.4
%
 
Safeway
 
Longs Drug, Tassajara Valley Hardware
Woodside Central
 
1999
 
1993
 
80,591

 
100.0
%
 
(Target)
 
Chuck E. Cheese, Marshalls
Ygnacio Plaza (5)
 
2005
 
1968
 
109,701

 
100.0
%
 
Fresh & Easy
 
Sports Basement
Blossom Valley (5)
 
1999
 
1990
 
93,316

 
98.4
%
 
Safeway
 
CVS
Loehmanns Plaza California
 
1999
 
1983
 
113,310

 
96.9
%
 
(Safeway)
 
Longs Drug, Loehmann's
Mariposa Shopping Center (5)
 
2005
 
1957
 
126,658

 
100.0
%
 
Safeway
 
Longs Drug, Ross Dress for Less
Snell & Branham Plaza (5)
 
2005
 
1988
 
92,352

 
100.0
%
 
Safeway
 
—
West Park Plaza
 
1999
 
1996
 
88,104

 
98.4
%
 
Safeway
 
Rite Aid
Golden Hills Promenade
 
2006
 
2006
 
241,846

 
95.8
%
 
Lowe's
 
Bed Bath & Beyond, TJ Maxx
Five Points Shopping Center (5)
 
2005
 
1960
 
144,553

 
98.5
%
 
Albertsons
 
Longs Drug, Ross Dress for Less, Big 5 Sporting Goods, PETCO
East Washington Place (4)
 
2011
 
2011
 
203,155

 
81.8
%
 
(Target), Dick's Sporting Goods, TJ Maxx
 
—
Corral Hollow (5)
 
2000
 
2000
 
167,184

 
98.3
%
 
Safeway, Orchard Supply & Hardware
 
Longs Drug

17


Property Name (1)
 
Year
Acquired
 
Year
Con-
structed (2)
 
Gross Leasable Area
(GLA)
 
Percent
Leased (3)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Drug Stores & Other Junior Anchors > 10,000 Sq Ft
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (CA)
 
 
 
 
 
8,808,500

 
95.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FLORIDA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ft. Myers / Cape Coral
 
 
 
 
 
 
 
 
 
 
 
 
Corkscrew Village
 
2007
 
1997
 
82,011

 
98.3
%
 
Publix
 
—
Grande Oak
 
2000
 
2000
 
78,784

 
94.7
%
 
Publix
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Jacksonville / North Florida
 
 
 
 
 
 
 
 
 
 
 
 
Anastasia Plaza
 
1993
 
1988
 
102,342

 
96.5
%
 
Publix
 
—
Canopy Oak Center (5)
 
2006
 
2006
 
90,042

 
88.7
%
 
Publix
 
—
Carriage Gate
 
1994
 
1978
 
76,784

 
86.8
%
 
—
 
Leon County Tax Collector, TJ Maxx
Courtyard Shopping Center
 
1993
 
1987
 
137,256

 
100.0
%
 
(Publix), Target
 
—
Fleming Island
 
1998
 
2000
 
136,663

 
77.5
%
 
Publix, (Target)
 
PETCO
Hibernia Pavilion
 
2006
 
2006
 
51,298

 
97.4
%
 
Publix
 
—
Hibernia Plaza
 
2006
 
2006
 
8,400

 
16.7
%
 
—
 
(Walgreens)
Horton's Corner
 
2007
 
2007
 
14,820

 
100.0
%
 
—
 
Walgreens
John's Creek Center (5)
 
2003
 
2004
 
75,101

 
80.5
%
 
Publix
 
—
Julington Village (5)
 
1999
 
1999
 
81,820

 
98.3
%
 
Publix
 
(CVS)
Lynnhaven (5)
 
2001
 
2001
 
63,871

 
100.0
%
 
Publix
 
—
Millhopper Shopping Center
 
1993
 
1974
 
80,421

 
100.0
%
 
Publix
 
CVS
Newberry Square
 
1994
 
1986
 
180,524

 
91.1
%
 
Publix, K-Mart
 
Jo-Ann Fabrics
Nocatee Town Center
 
2007
 
2007
 
69,679

 
100.0
%
 
Publix
 
—
Oakleaf Commons
 
2006
 
2006
 
73,717

 
82.9
%
 
Publix
 
(Walgreens)
Ocala Corners
 
2000
 
2000
 
86,772

 
98.6
%
 
Publix
 
—
Old St Augustine Plaza
 
1996
 
1990
 
232,459

 
93.5
%
 
Publix, Burlington Coat Factory, Hobby Lobby
 
—
Pine Tree Plaza
 
1997
 
1999
 
63,387

 
100.0
%
 
Publix
 
—
Plantation Plaza (5)
 
2004
 
2004
 
77,747

 
88.0
%
 
Publix
 
—
Seminole Shoppes
 
2009
 
2009
 
73,241

 
98.1
%
 
Publix
 
—
Shoppes at Bartram Park (5)
 
2005
 
2004
 
119,958

 
94.3
%
 
Publix, (Kohl's)
 
(Tutor Time)
Shops at John's Creek
 
2003
 
2004
 
15,490

 
83.3
%
 
—
 
—
Starke
 
2000
 
2000
 
12,739

 
100.0
%
 
—
 
CVS
Vineyard Shopping Center (5)
 
2001
 
2002
 
62,821

 
84.7
%
 
Publix
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Miami / Fort Lauderdale
 
 
 
 
 
 
 
 
 
 
 
 
Aventura Shopping Center
 
1994
 
1974
 
102,876

 
76.8
%
 
Publix
 
CVS
Berkshire Commons
 
1994
 
1992
 
110,062

 
97.8
%
 
Publix
 
Walgreens
Caligo Crossing
 
2007
 
2007
 
10,763

 
87.9
%
 
(Kohl's)
 
—
Five Corners Plaza (5)
 
2005
 
2001
 
44,647

 
100.0
%
 
Publix
 
—

18


Property Name (1)
 
Year
Acquired
 
Year
Con-
structed (2)
 
Gross Leasable Area
(GLA)
 
Percent
Leased (3)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Drug Stores & Other Junior Anchors > 10,000 Sq Ft
Garden Square
 
1997
 
1991
 
90,258

 
100.0
%
 
Publix
 
CVS
Naples Walk Shopping Center
 
2007
 
1999
 
125,390

 
88.2
%
 
Publix
 
—
Pebblebrook Plaza (5)
 
2000
 
2000
 
76,767

 
100.0
%
 
Publix
 
(Walgreens)
Shoppes @ 104
 
1998
 
1990
 
108,192

 
96.7
%
 
Winn-Dixie
 
Navarro Discount Pharmacies
Welleby Plaza
 
1996
 
1982
 
109,949

 
91.7
%
 
Publix
 
Bealls
 
 
 
 
 
 
 
 
 
 
 
 
 
Tampa / Orlando
 
 
 
 
 
 
 
 
 
 
 
 
Bloomingdale Square
 
1998
 
1987
 
267,736

 
98.6
%
 
Publix, Wal-Mart, Bealls
 
 Ace Hardware
East Towne Center
 
2002
 
2003
 
69,841

 
90.0
%
 
Publix
 
—
Kings Crossing Sun City
 
1999
 
1999
 
75,020

 
98.7
%
 
Publix
 
—
Marketplace Shopping Center
 
1995
 
1983
 
90,296

 
77.3
%
 
LA Fitness
 
—
Northgate Square
 
2007
 
1995
 
75,495

 
95.8
%
 
Publix
 
—
Regency Square
 
1993
 
1986
 
349,848

 
96.8
%
 
AMC Theater, Michaels, (Best Buy), (Macdill)
 
Dollar Tree, Marshalls, Shoe Carnival, Staples, TJ Maxx, PETCO, Ulta
Suncoast Crossing Phase I
 
2007
 
2007
 
108,434

 
94.8
%
 
Kohl's
 
—
Suncoast Crossing Phase II
 
2008
 
2008
 
9,451

 
44.5
%
 
(Target)
 
—
Town Square
 
1997
 
1999
 
44,380

 
95.7
%
 
—
 
PETCO, Pier 1 Imports
Village Center
 
1995
 
1993
 
181,110

 
86.8
%
 
Publix
 
Walgreens, Stein Mart
Westchase
 
2007
 
1998
 
78,998

 
95.2
%
 
Publix
 
—
Willa Springs (5)
 
2000
 
2000
 
89,930

 
100.0
%
 
Publix
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
West Palm Beach / Treasure Cove
 
 
 
 
 
 
 
 
 
 
 
 
Boynton Lakes Plaza
 
1997
 
1993
 
111,625

 
88.5
%
 
Publix
 
Citi Trends, Pet Supermarket
Chasewood Plaza
 
1993
 
1986
 
157,403

 
95.1
%
 
Publix
 
Bealls, Books-A-Million
Island Crossing (5)
 
2007
 
1996
 
58,456

 
97.6
%
 
Publix
 
—
Wellington Town Square
 
1996
 
1982
 
107,325

 
93.6
%
 
Publix
 
CVS
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (FL)
 
 
 
 
 
4,802,399

 
93.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
VIRGINIA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Richmond
 
 
 
 
 
 
 
 
 
 
 
 
Gayton Crossing (5)
 
2005
 
1983
 
156,917

 
92.7
%
 
Martin's, (Kroger)
 
—
Hanover Village Shopping Center (5)
 
2005
 
1971
 
88,006

 
86.6
%
 
—
 
Tractor Supply Company, Floor Trader
Village Shopping Center (5)
 
2005
 
1948
 
111,177

 
96.7
%
 
Martin's
 
CVS
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Virginia
 
 
 
 
 
 
 
 
 
 
 
 
Ashburn Farm Market Center
 
2000
 
2000
 
91,905

 
100.0
%
 
Giant Food
 
—
Ashburn Farm Village Center (5)
 
2005
 
1996
 
88,897

 
98.2
%
 
Shoppers Food Warehouse
 
—
Braemar Shopping Center (5)
 
2004
 
2004
 
96,439

 
96.9
%
 
Safeway
 
—

19


Property Name (1)
 
Year
Acquired
 
Year
Con-
structed (2)
 
Gross Leasable Area
(GLA)
 
Percent
Leased (3)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Drug Stores & Other Junior Anchors > 10,000 Sq Ft
Centre Ridge Marketplace (5)
 
2005
 
1996
 
104,100

 
100.0
%
 
Shoppers Food Warehouse
 
Sears
Cheshire Station
 
2000
 
2000
 
97,156

 
97.5
%
 
Safeway
 
PETCO
Culpeper Colonnade
 
2006
 
2006
 
131,707

 
94.0
%
 
Martin's, (Target)
 
PetSmart, Staples
Fairfax Shopping Center
 
2007
 
1955
 
75,711

 
89.2
%
 
—
 
Direct Furniture
Festival at Manchester Lakes (5)
 
2005
 
1990
 
165,130

 
100.0
%
 
Shoppers Food Warehouse
 
—
Fortuna Center Plaza (5)
 
2004
 
2004
 
104,694

 
100.0
%
 
Shoppers Food Warehouse, (Target)
 
Rite Aid
Fox Mill Shopping Center (5)
 
2005
 
1977
 
103,269

 
100.0
%
 
Giant Food
 
—
Greenbriar Town Center (5)
 
2005
 
1972
 
339,939

 
96.0
%
 
Giant Food
 
CVS, HMY Roomstore, Total Beverage, Ross Dress for Less, Marshalls, PETCO
Hollymead Town Center (5)
 
2003
 
2004
 
153,739

 
95.0
%
 
Harris Teeter, (Target)
 
Petsmart
Kamp Washington Shopping Center (5)
 
2005
 
1960
 
71,924

 
100.0
%
 
—
 
Golfsmith
Kings Park Shopping Center (5)
 
2005
 
1966
 
74,496

 
100.0
%
 
Giant Food
 
CVS
Lorton Station Marketplace (5)
 
2006
 
2005
 
132,445

 
100.0
%
 
Shoppers Food Warehouse
 
Advanced Design Group
Lorton Town Center (5)
 
2006
 
2005
 
51,807

 
88.4
%
 
—
 
ReMax
Market at Opitz Crossing
 
2003
 
2003
 
149,791

 
80.2
%
 
Safeway
 
Hibachi Grill & Supreme Buffet
Saratoga Shopping Center (5)
 
2005
 
1977
 
113,013

 
100.0
%
 
Giant Food
 
—
Shops at County Center
 
2005
 
2005
 
96,695

 
92.6
%
 
Harris Teeter
 
—
Shops at Stonewall
 
2007
 
2011
 
307,845

 
100.0
%
 
Wegmans, Dick's Sporting Goods
 
Staples, Ross Dress For Less, Bed Bath & Beyond, Michaels
Signal Hill (5)
 
2003
 
2004
 
95,172

 
100.0
%
 
Shoppers Food Warehouse
 
—
Town Center at Sterling Shopping Center (5)
 
2005
 
1980
 
186,531

 
98.2
%
 
Giant Food
 
Direct Furniture, Party Depot
Tysons Corner CVS (5)
 
2012
 
2012
 
12,900

 
100.0
%
 
—
 
CVS
Village Center at Dulles (5)
 
2002
 
1991
 
297,572

 
92.1
%
 
Shoppers Food Warehouse, Gold's Gym
 
CVS, Advance Auto Parts, Chuck E. Cheese, Staples, Goodwill, Tuesday Morning
Willston Centre I (5)
 
2005
 
1952
 
105,376

 
84.5
%
 
—
 
CVS, Baileys Health Care
Willston Centre II (5)
 
2005
 
1986
 
135,862

 
98.6
%
 
Safeway, (Target)
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (VA)
 
 
 
 
 
3,740,215

 
95.7
%
 
 
 
 
 
 
 
 
 
 


 
 
 
 
 
 
TEXAS
 
 
 
 
 


 
 
 
 
 
 
 
 
 
 
 
 


 
 
 
 
 
 
Austin
 
 
 
 
 
 
 
 
 
 
 
 
Hancock
 
1999
 
1998
 
410,438

 
97.9
%
 
H.E.B., Sears
 
Twin Liquors, PETCO, 24 Hour Fitness
Market at Round Rock
 
1999
 
1987
 
122,646

 
88.3
%
 
Sprout's Markets
 
Office Depot
North Hills
 
1999
 
1995
 
144,020

 
99.8
%
 
H.E.B.
 
—
Tech Ridge Center
 
2011
 
2001
 
187,350

 
92.7
%
 
H.E.B.
 
Office Depot, Petco
 
 
 
 
 
 
 
 
 
 
 
 
 
Dallas / Fort Worth
 
 
 
 
 
 
 
 
 
 
 
 
Bethany Park Place (5)
 
1998
 
1998
 
98,906

 
98.0
%
 
Kroger
 
—
Hickory Creek Plaza
 
2006
 
2006
 
28,134

 
77.6
%
 
(Kroger)
 
—
Hillcrest Village
 
1999
 
1991
 
14,530

 
100.0
%
 
—
 
—
Keller Town Center
 
1999
 
1999
 
114,938

 
88.2
%
 
Tom Thumb
 
—

20


Property Name (1)
 
Year
Acquired
 
Year
Con-
structed (2)
 
Gross Leasable Area
(GLA)
 
Percent
Leased (3)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Drug Stores & Other Junior Anchors > 10,000 Sq Ft
Lebanon/Legacy Center
 
2000
 
2002
 
56,435

 
89.2
%
 
(Wal-Mart)
 
—
Market at Preston Forest
 
1999
 
1990
 
96,353

 
100.0
%
 
Tom Thumb
 
—
Mockingbird Common
 
1999
 
1987
 
120,321

 
93.1
%
 
Tom Thumb
 
Ogle School of Hair Design
Prestonbrook
 
1998
 
1998
 
91,537

 
98.8
%
 
Kroger
 
—
Rockwall Town Center
 
2002
 
2004
 
46,095

 
91.3
%
 
(Kroger)
 
(Walgreens)
Shiloh Springs (5)
 
1998
 
1998
 
110,040

 
85.3
%
 
Kroger
 
—
Signature Plaza
 
2003
 
2004
 
32,415

 
72.3
%
 
(Kroger)
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Houston
 
 
 
 
 
 
 
 
 
 
 
 
Alden Bridge (5)
 
2002
 
1998
 
138,953

 
99.0
%
 
Kroger
 
Walgreens
Cochran's Crossing
 
2002
 
1994
 
138,192

 
98.8
%
 
Kroger
 
CVS
Indian Springs Center (5)
 
2002
 
2003
 
136,625

 
100.0
%
 
H.E.B.
 
—
Kleinwood Center (5)
 
2002
 
2003
 
148,964

 
90.3
%
 
H.E.B.
 
(Walgreens)
Panther Creek
 
2002
 
1994
 
166,077

 
100.0
%
 
Randall's Food
 
CVS, Sears Paint & Hardware (Sublease Morelands), The Woodlands Childrens Museum
Southpark at Cinco Ranch (4)
 
2012
 
2012
 
242,687

 
92.0
%
 
Kroger, Academy
 
—
Sterling Ridge
 
2002
 
2000
 
128,643

 
100.0
%
 
Kroger
 
CVS
Sweetwater Plaza (5)
 
2001
 
2000
 
134,045

 
94.5
%
 
Kroger
 
Walgreens
Weslayan Plaza East (5)
 
2005
 
1969
 
169,693

 
100.0
%
 
—
 
Berings, Ross Dress for Less, Michaels, Berings Warehouse, Chuck E. Cheese, The Next Level Fitness, Spec's Liquor, Bike Barn
Weslayan Plaza West (5)
 
2005
 
1969
 
185,964

 
98.4
%
 
Randall's Food
 
Walgreens, PETCO, Jo Ann's, Office Max, Tuesday Morning
Westwood Village
 
2006
 
2006
 
183,547

 
96.7
%
 
(Target)
 
Gold's Gym, PetSmart, Office Max, Ross Dress For Less, TJ Maxx
Woodway Collection (5)
 
2005
 
1974
 
103,796

 
93.8
%
 
Randall's Food
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (TX)
 
 
 
 
 
3,551,344

 
95.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
COLORADO
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Colorado Springs
 
 
 
 
 
 
 
 
 
 
 
 
Falcon Marketplace
 
2005
 
2005
 
22,491

 
84.9
%
 
(Wal-Mart Supercenter)
 
—
Marketplace at Briargate
 
2006
 
2006
 
29,075

 
91.8
%
 
(King Soopers)
 
—
Monument Jackson Creek
 
1998
 
1999
 
85,263

 
100.0
%
 
King Soopers
 
—
Woodmen Plaza
 
1998
 
1998
 
116,233

 
92.4
%
 
King Soopers
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Denver
 
 
 
 
 
 
 
 
 
 
 
 
Applewood Shopping Center (5)
 
2005
 
1956
 
381,041

 
94.1
%
 
King Soopers, Wal-Mart
 
Applejack Liquors, PetSmart, Wells Fargo Bank
Arapahoe Village (5)
 
2005
 
1957
 
159,237

 
79.3
%
 
Safeway
 
Jo-Ann Fabrics, PETCO, Pier 1 Imports
Belleview Square
 
2004
 
1978
 
117,331

 
100.0
%
 
King Soopers
 
—
Boulevard Center
 
1999
 
1986
 
80,320

 
95.9
%
 
(Safeway)
 
One Hour Optical
Buckley Square
 
1999
 
1978
 
116,147

 
98.0
%
 
King Soopers
 
Ace Hardware
Cherrywood Square (5)
 
2005
 
1978
 
96,667

 
98.4
%
 
King Soopers
 
—
Crossroads Commons (5)
 
2001
 
1986
 
142,589

 
98.7
%
 
Whole Foods
 
Barnes & Noble, Bicycle Village

21


Property Name (1)
 
Year
Acquired
 
Year
Con-
structed (2)
 
Gross Leasable Area
(GLA)
 
Percent
Leased (3)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Drug Stores & Other Junior Anchors > 10,000 Sq Ft
Hilltop Village (5)
 
2002
 
2003
 
100,030

 
93.8
%
 
King Soopers
 
—
Kent Place
 
2011
 
2011
 
48,168

 
94.6
%
 
King Soopers
 
—
Littleton Square
 
1999
 
1997
 
94,222

 
80.7
%
 
King Soopers
 
—
Lloyd King Center
 
1998
 
1998
 
83,326

 
98.3
%
 
King Soopers
 
—
Ralston Square Shopping Center (5)
 
2005
 
1977
 
82,750

 
96.7
%
 
King Soopers
 
—
Shops at Quail Creek
 
2008
 
2008
 
37,585

 
100.0
%
 
(King Soopers)
 
—
South Lowry Square
 
1999
 
1993
 
119,916

 
93.9
%
 
Safeway
 
—
Stroh Ranch
 
1998
 
1998
 
93,436

 
96.8
%
 
King Soopers
 
—
Centerplace of Greeley III
 
2007
 
2007
 
119,090

 
88.8
%
 
Sports Authority
 
Best Buy, TJ Maxx
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (CO)
 
 
 
 
 
2,124,917

 
93.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NORTH CAROLINA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Charlotte
 
 
 
 
 
 
 
 
 
 
 
 
Carmel Commons
 
1997
 
1979
 
132,651

 
94.1
%
 
Fresh Market
 
Chuck E. Cheese, Party City, Rite Aid, Planet Fitness
Cochran Commons (5)
 
2007
 
2003
 
66,020

 
100.0
%
 
Harris Teeter
 
(Walgreens)
Phillips Place (5)
 
2012
 
1996
 
133,059

 
99.3
%
 
Dean & Deluca
 
Phillips Place Theater, Dean & Deluca
Providence Commons (5)
 
2010
 
1994
 
77,315

 
100.0
%
 
Harris Teeter
 
Rite Aid
 
 
 
 
 
 
 
 
 
 
 
 
 
Greensboro
 
 
 
 
 
 
 
 
 
 
 
 
Harris Crossing
 
2007
 
2007
 
65,150

 
92.9
%
 
Harris Teeter
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Raleigh / Durham
 
 
 
 
 
 
 
 
 
 
 
 
Erwin Square (4)
 
2012
 
2012
 
89,830

 
67.9
%
 
Harris Teeter
 
—
Southpoint Crossing
 
1998
 
1998
 
103,128

 
95.9
%
 
Kroger
 
—
Woodcroft Shopping Center
 
1996
 
1984
 
89,833

 
95.4
%
 
Food Lion
 
Triangle True Value Hardware
Cameron Village (5)
 
2004
 
1949
 
552,541

 
97.5
%
 
Harris Teeter, Fresh Market
 
Eckerd, Talbots, Wake County Public Library, Great Outdoor Provision Co., York Properties, The Bargain Box, K&W Cafeteria, Johnson-Lambe Sporting Goods, Pier 1 Imports, Bevello, The Cheshire Cat Gallery
Colonnade Center
 
2009
 
2009
 
57,637

 
96.0
%
 
Whole Foods
 
—
Glenwood Village
 
1997
 
1983
 
42,864

 
96.8
%
 
Harris Teeter
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Lake Pine Plaza
 
1998
 
1997
 
87,690

 
95.2
%
 
Kroger
 
—
Maynard Crossing (5)
 
1998
 
1997
 
122,782

 
84.5
%
 
Kroger
 
—
Middle Creek Commons
 
2006
 
2006
 
73,634

 
95.1
%
 
Lowes Foods
 
—
Shoppes of Kildaire (5)
 
2005
 
1986
 
145,101

 
96.5
%
 
Trader Joe's
 
Home Comfort Furniture, Fitness Connection, Staples
Sutton Square (5)
 
2006
 
1985
 
101,025

 
97.1
%
 
Fresh Market
 
Rite Aid
Village Plaza (5)
 
2012
 
1970
 
78,182

 
95.3
%
 
Whole Foods
 
PTA Thrift Shop
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (NC)
 
 
 
 
 
2,018,442

 
94.7
%
 
 
 
 

22


Property Name (1)
 
Year
Acquired
 
Year
Con-
structed (2)
 
Gross Leasable Area
(GLA)
 
Percent
Leased (3)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Drug Stores & Other Junior Anchors > 10,000 Sq Ft
 
 
 
 
 
 
 
 
 
 
 
 
 
OHIO
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cincinnati
 
 
 
 
 
 
 
 
 
 
 
 
Beckett Commons
 
1998
 
1995
 
121,318

 
95.7
%
 
Kroger
 
—
Cherry Grove
 
1998
 
1997
 
195,513

 
98.0
%
 
Kroger
 
Hancock Fabrics, Shoe Carnival, TJ Maxx
Hyde Park
 
1997
 
1995
 
396,861

 
97.5
%
 
Kroger, Biggs
 
Walgreens, Jo-Ann Fabrics, Ace Hardware, Michaels, Staples
Indian Springs Market Center (5)
 
2005
 
2005
 
141,063

 
100.0
%
 
Kohl's, (Wal-Mart Supercenter)
 
Office Depot, HH Gregg Appliances
Red Bank Village
 
2006
 
2006
 
164,317

 
98.0
%
 
Wal-Mart
 
—
Regency Commons
 
2004
 
2004
 
30,770

 
94.5
%
 
—
 
—
Sycamore Crossing & Sycamore Plaza (5)
 
2008
 
1966
 
390,957

 
86.6
%
 
Fresh Market, Macy's Furniture Gallery, Toys 'R Us, Dick's Sporting Goods
 
Barnes & Noble, Old Navy, Staples, Identity Salon & Day Spa
Westchester Plaza
 
1998
 
1988
 
88,181

 
93.8
%
 
Kroger
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Columbus
 
 
 
 
 
 
 
 
 
 
 
 
East Pointe
 
1998
 
1993
 
86,503

 
96.8
%
 
Kroger
 
—
Kroger New Albany Center
 
1999
 
1999
 
93,286

 
94.1
%
 
Kroger
 
—
Maxtown Road (Northgate)
 
1998
 
1996
 
85,100

 
100.0
%
 
Kroger, (Home Depot)
 
—
Windmiller Plaza Phase I
 
1998
 
1997
 
140,437

 
98.5
%
 
Kroger
 
Sears Hardware
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (OH)
 
 
 
 
 
1,934,306

 
95.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ILLINOIS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Chicago
 
 
 
 
 
 
 
 
 
 
 
 
Civic Center Plaza (5)
 
2005
 
1989
 
264,973

 
98.9
%
 
Super H Mart, Home Depot
 
O'Reilly Automotive, King Spa
Geneva Crossing (5)
 
2004
 
1997
 
123,182

 
98.8
%
 
Dominick's
 
Goodwill
Glen Oak Plaza
 
2010
 
1967
 
62,616

 
100.0
%
 
Trader Joe's
 
Walgreens, ENH Medical Offices
Hinsdale
 
1998
 
1986
 
178,960

 
97.2
%
 
 Dominick's
 
Goodwill, Cardinal Fitness
McHenry Commons Shopping Center (5)
 
2005
 
1988
 
99,448

 
92.6
%
 
Hobby Lobby
 
Goodwill
Riverside Sq & River's Edge (5)
 
2005
 
1986
 
169,435

 
96.5
%
 
Dominick's
 
Ace Hardware, Party City
Roscoe Square (5)
 
2005
 
1981
 
140,426

 
94.9
%
 
Mariano's
 
Walgreens, Toys "R" Us
Shorewood Crossing (5)
 
2004
 
2001
 
87,705

 
93.4
%
 
Dominick's
 
—
Shorewood Crossing II (5)
 
2007
 
2005
 
86,276

 
100.0
%
 
—
 
Babies R Us, Staples, PETCO, Factory Card Outlet
Stonebrook Plaza Shopping Center (5)
 
2005
 
1984
 
95,825

 
100.0
%
 
Dominick's
 
—
Westbrook Commons
 
2001
 
1984
 
123,855

 
92.4
%
 
Dominick's
 
Goodwill
Willow Festival
 
2010
 
2007
 
382,837

 
98.4
%
 
Whole Foods, Lowe's
 
CVS, DSW Warehouse, HomeGoods, Recreational Equipment, Best Buy
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (IL)
 
 
 
 
 
1,815,538

 
97.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

23


Property Name (1)
 
Year
Acquired
 
Year
Con-
structed (2)
 
Gross Leasable Area
(GLA)
 
Percent
Leased (3)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Drug Stores & Other Junior Anchors > 10,000 Sq Ft
MARYLAND
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Baltimore
 
 
 
 
 
 
 
 
 
 
 
 
Elkridge Corners (5)
 
2005
 
1990
 
73,529

 
97.6
%
 
Green Valley Markets
 
Rite Aid
Festival at Woodholme (5)
 
2005
 
1986
 
81,016

 
95.3
%
 
Trader Joe's
 
—
Parkville Shopping Center (5)
 
2005
 
1961
 
161,735

 
92.5
%
 
Giant Food
 
Parkville Lanes, Castlewood Realty (Sub: Herit)
Southside Marketplace (5)
 
2005
 
1990
 
125,146

 
96.1
%
 
Shoppers Food Warehouse
 
Rite Aid
Valley Centre (5)
 
2005
 
1987
 
219,549

 
100.0
%
 
—
 
TJ Maxx, Ross Dress for Less, HomeGoods, Staples, PetSmart
Village at Lee Airpark
 
2005
 
2005
 
87,557

 
100.0
%
 
Giant Food, (Sunrise)
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Maryland
 
 
 
 
 
 
 
 
 
 
 
 
Bowie Plaza (5)
 
2005
 
1966
 
102,904

 
97.9
%
 
—
 
CVS, Fitness 4 Less
Clinton Park (5)
 
2003
 
2003
 
206,050

 
96.3
%
 
G-Mart, Sears, (Toys "R" Us)
 
Fitness For Less
Cloppers Mill Village (5)
 
2005
 
1995
 
137,035

 
91.2
%
 
Shoppers Food Warehouse
 
CVS
Firstfield Shopping Center (5)
 
2005
 
1978
 
22,328

 
75.4
%
 
—
 
—
Goshen Plaza (5)
 
2005
 
1987
 
42,906

 
84.1
%
 
—
 
CVS
King Farm Village Center (5)
 
2004
 
2001
 
118,326

 
96.3
%
 
Safeway
 
—
Takoma Park (5)
 
2005
 
1960
 
104,079

 
100.0
%
 
Shoppers Food Warehouse
 
—
Watkins Park Plaza (5)
 
2005
 
1985
 
113,443

 
56.5
%
 
—
 
CVS
Woodmoor Shopping Center (5)
 
2005
 
1954
 
68,887

 
98.1
%
 
—
 
CVS
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (MD)
 
 
 
 
 
1,664,490

 
93.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GEORGIA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Atlanta
 
 
 
 
 
 
 
 
 
 
 
 
Ashford Place
 
1997
 
1993
 
53,449

 
98.1
%
 
—
 
Harbor Freight Tools
Briarcliff La Vista
 
1997
 
1962
 
39,204

 
100.0
%
 
—
 
Michaels
Briarcliff Village
 
1997
 
1990
 
189,551

 
94.2
%
 
Publix
 
Office Depot, Party City, Shoe Carnival, TJ Maxx
Buckhead Court
 
1997
 
1984
 
48,317

 
97.5
%
 
—
 
—
Cambridge Square
 
1996
 
1979
 
71,429

 
100.0
%
 
Kroger
 
—
Cornerstone Square
 
1997
 
1990
 
80,406

 
95.7
%
 
Aldi
 
CVS, Hancock Fabrics, Concentra
Delk Spectrum
 
1998
 
1991
 
100,539

 
69.2
%
 
Publix
 
Eckerd
Dunwoody Hall (5)
 
1997
 
1986
 
89,551

 
100.0
%
 
Publix
 
Eckerd
Dunwoody Village
 
1997
 
1975
 
120,169

 
86.2
%
 
Fresh Market
 
Walgreens, Dunwoody Prep
Howell Mill Village
 
2004
 
1984
 
92,280

 
91.9
%
 
Publix
 
Eckerd
King Plaza (5)
 
2007
 
1998
 
81,432

 
90.8
%
 
Publix
 
—
Loehmanns Plaza Georgia
 
1997
 
1986
 
137,139

 
98.5
%
 
—
 
Loehmann's, Office Max, Dance 101
Lost Mountain Crossing (5)
 
2007
 
1994
 
72,568

 
94.7
%
 
Publix
 
—
Paces Ferry Plaza
 
1997
 
1987
 
61,698

 
93.5
%
 
—
 
Harry Norman Realtors

24


Property Name (1)
 
Year
Acquired
 
Year
Con-
structed (2)
 
Gross Leasable Area
(GLA)
 
Percent
Leased (3)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Drug Stores & Other Junior Anchors > 10,000 Sq Ft
Powers Ferry Square
 
1997
 
1987
 
97,897

 
94.9
%
 
—
 
CVS, PETCO
Powers Ferry Village
 
1997
 
1994
 
78,896

 
100.0
%
 
Publix
 
Mardi Gras, Brush Creek Package
Russell Ridge
 
1994
 
1995
 
98,559

 
93.8
%
 
Kroger
 
—
Sandy Springs
 
2012
 
1959
 
116,094

 
94.4
%
 
—
 
Trader Joe's, Pier 1, Party City
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (GA)
 
 
 
 
 
1,629,178

 
93.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PENNSYLVANIA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allentown / Bethlehem
 
 
 
 
 
 
 
 
 
 
 
 
Allen Street Shopping Center (5)
 
2005
 
1958
 
46,228

 
100.0
%
 
Ahart Market
 
—
Lower Nazareth Commons
 
2007
 
2007
 
90,210

 
98.2
%
 
(Target), Sports Authority
 
PETCO
Stefko Boulevard Shopping Center (5)
 
2005
 
1976
 
133,899

 
88.3
%
 
Valley Farm Market
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Harrisburg
 
 
 
 
 
 
 
 
 
 
 
 
Silver Spring Square (5)
 
2005
 
2005
 
314,450

 
99.0
%
 
Wegmans, (Target)
 
Ross Dress For Less, Bed Bath and Beyond, Best Buy, Office Max, Ulta, PETCO
 
 
 
 
 
 
 
 
 
 
 
 
 
Philadelphia
 
 
 
 
 
 
 
 
 
 
 
 
City Avenue Shopping Center (5)
 
2005
 
1960
 
159,406

 
94.2
%
 
—
 
Ross Dress for Less, TJ Maxx, Sears
Gateway Shopping Center
 
2004
 
1960
 
214,213

 
99.3
%
 
Trader Joe's
 
Staples, TJ Maxx, Famous Footwear, Jo-Ann Fabrics
Kulpsville Village Center
 
2006
 
2006
 
14,820

 
100.0
%
 
—
 
Walgreens
Mercer Square Shopping Center (5)
 
2005
 
1988
 
91,400

 
96.7
%
 
Wies Markets
 
—
Newtown Square Shopping Center (5)
 
2005
 
1970
 
146,959

 
94.9
%
 
Acme Markets
 
Rite Aid
Warwick Square Shopping Center (5)
 
2005
 
1999
 
89,680

 
100.0
%
 
Giant Food
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Pennsylvania
 
 
 
 
 
 
 
 
 
 
 
 
Hershey
 
2000
 
2000
 
6,000

 
100.0
%
 
—
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (PA)
 
 
 
 
 
1,307,265

 
96.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
WASHINGTON
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Portland
 
 
 
 
 
 
 
 
 
 
 
 
Orchards Market Center I (5)
 
2002
 
2004
 
100,663

 
100.0
%
 
Wholesale Sports
 
Jo-Ann Fabrics, PETCO, (Rite Aid)
Orchards Market Center II
 
2005
 
2005
 
77,478

 
92.1
%
 
LA Fitness
 
Office Depot
 
 
 
 
 
 
 
 
 
 
 
 
 
Seattle
 
 
 
 
 
 
 
 
 
 
 
 
Aurora Marketplace (5)
 
2005
 
1991
 
106,921

 
97.5
%
 
Safeway
 
TJ Maxx
Cascade Plaza (5)
 
1999
 
1999
 
211,072

 
91.7
%
 
Safeway
 
Fashion Bug, Jo-Ann Fabrics, Ross Dress For Less, Big Lots, Fitness Evolution
Eastgate Plaza (5)
 
2005
 
1956
 
78,230

 
97.3
%
 
Albertsons
 
Rite Aid

25


Property Name (1)
 
Year
Acquired
 
Year
Con-
structed (2)
 
Gross Leasable Area
(GLA)
 
Percent
Leased (3)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Drug Stores & Other Junior Anchors > 10,000 Sq Ft
Grand Ridge (4)
 
2012
 
2012
 
326,022

 
88.6
%
 
Safeway, Regal Cinemas
 
Port Blakey
Inglewood Plaza
 
1999
 
1985
 
17,253

 
88.4
%
 
—
 
—
Overlake Fashion Plaza (5)
 
2005
 
1987
 
80,555

 
88.5
%
 
(Sears)
 
Marshalls
Pine Lake Village
 
1999
 
1989
 
102,900

 
100.0
%
 
Quality Foods
 
Rite Aid
Sammamish-Highlands
 
1999
 
1992
 
101,289

 
98.1
%
 
(Safeway)
 
Bartell Drugs, Ace Hardware
Southcenter
 
1999
 
1990
 
58,282

 
97.0
%
 
(Target)
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (WA)
 
 
 
 
 
1,260,665

 
93.6
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OREGON
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Portland
 
 
 
 
 
 
 
 
 
 
 
 
Greenway Town Center (5)
 
2005
 
1979
 
93,101

 
94.8
%
 
Lamb's Thriftway
 
Rite Aid, Dollar Tree
Murrayhill Marketplace
 
1999
 
1988
 
148,967

 
81.2
%
 
Safeway
 
—
Sherwood Crossroads
 
1999
 
1999
 
87,966

 
92.0
%
 
Safeway
 
—
Sherwood Market Center
 
1999
 
1995
 
124,259

 
93.5
%
 
Albertsons
 
—
Sunnyside 205
 
1999
 
1988
 
53,547

 
74.8
%
 
—
 
—
Tanasbourne Market
 
2006
 
2006
 
71,000

 
100.0
%
 
Whole Foods
 
—
Walker Center
 
1999
 
1987
 
89,610

 
91.4
%
 
Bed Bath and Beyond
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Oregon
 
 
 
 
 
 
 
 
 
 
 
 
Corvallis Market Center
 
2006
 
2006
 
84,548

 
100.0
%
 
Trader Joe's
 
TJ Maxx, Michael's
Northgate Marketplace
 
2011
 
2011
 
80,953

 
98.8
%
 
Trader Joe's
 
REI, PETCO, Ulta Salon
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (OR)
 
 
 
 
 
833,951

 
91.6
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MINNESOTA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Minneapolis
 
 
 
 
 
 
 
 
 
 
 
 
Apple Valley Square (5)
 
2006
 
1998
 
184,841

 
100.0
%
 
Rainbow Foods, Jo-Ann Fabrics, (Burlington Coat Factory)
 
Savers, PETCO
Calhoun Commons (5)
 
2011
 
1999
 
66,150

 
100.0
%
 
Whole Foods
 
—
Colonial Square (5)
 
2005
 
1959
 
93,248

 
100.0
%
 
Lund's
 
—
Rockford Road Plaza (5)
 
2005
 
1991
 
205,479

 
95.1
%
 
Rainbow Foods
 
PetSmart, HomeGoods, TJ Maxx
Rockridge Center (5)
 
2011
 
2006
 
125,213

 
94.6
%
 
Cub Foods
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (MN)
 
 
 
 
 
674,931

 
97.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MASSACHUSETTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

26


Property Name (1)
 
Year
Acquired
 
Year
Con-
structed (2)
 
Gross Leasable Area
(GLA)
 
Percent
Leased (3)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Drug Stores & Other Junior Anchors > 10,000 Sq Ft
Boston
 
 
 
 
 
 
 
 
 
 
 
 
Shops at Saugus
 
2006
 
2006
 
86,855

 
94.4
%
 
Trader Joe's
 
La-Z-Boy, PetSmart
Twin City Plaza
 
2006
 
2004
 
270,242

 
94.6
%
 
Shaw's, Marshall's
 
Rite Aid, K&G Fashion, Dollar Tree, Gold's Gym, Extra Space Storage
Speedway Plaza (5)
 
2006
 
1988
 
148,767

 
95.4
%
 
Stop & Shop, Burlington Coat Factory
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (MA)
 
 
 
 
 
505,864

 
94.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ARIZONA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Phoenix
 
 
 
 
 
 
 
 
 
 
 
 
Anthem Marketplace
 
2003
 
2000
 
113,293

 
91.4
%
 
Safeway
 
—
Palm Valley Marketplace (5)
 
2001
 
1999
 
107,633

 
89.2
%
 
Safeway
 
—
Pima Crossing
 
1999
 
1996
 
238,275

 
93.6
%
 
Golf & Tennis Pro Shop, Inc.
 
Life Time Fitness, E & J Designer Shoe Outlet, Paddock Pools Store, Pier 1 Imports, Stein Mart
Shops at Arizona
 
2003
 
2000
 
35,710

 
41.0
%
 
—
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (AZ)
 
 
 
 
 
494,911

 
88.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MISSOURI
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
St. Louis
 
 
 
 
 
 
 
 
 
 
 
 
Brentwood Plaza
 
2007
 
2002
 
60,452

 
96.5
%
 
Schnucks
 
—
Bridgeton
 
2007
 
2005
 
70,762

 
97.3
%
 
Schnucks, (Home Depot)
 
—
Dardenne Crossing
 
2007
 
1996
 
67,430

 
100.0
%
 
Schnucks
 
—
Kirkwood Commons
 
2007
 
2000
 
209,703

 
100.0
%
 
Wal-Mart, (Target), (Lowe's)
 
TJ Maxx, HomeGoods, Famous Footwear
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (MO)
 
 
 
 
 
408,347

 
99.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TENNESSEE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nashville
 
 
 
 
 
 
 
 
 
 
 
 
Harpeth Village Fieldstone
 
1997
 
1998
 
70,091

 
97.7
%
 
Publix
 
—
Lebanon Center
 
2006
 
2006
 
63,800

 
94.0
%
 
Publix
 
—
Northlake Village
 
2000
 
1988
 
137,807

 
92.2
%
 
Kroger
 
PETCO
Peartree Village
 
1997
 
1997
 
109,506

 
100.0
%
 
Harris Teeter
 
PETCO, Office Max
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Tennessee
 
 
 
 
 
 
 
 
 
 
 
 
Dickson Tn
 
1998
 
1998
 
10,908

 
100.0
%
 
—
 
Eckerd
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (TN)
 
 
 
 
 
392,112

 
95.9
%
 
 
 
 

27


Property Name (1)
 
Year
Acquired
 
Year
Con-
structed (2)
 
Gross Leasable Area
(GLA)
 
Percent
Leased (3)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Drug Stores & Other Junior Anchors > 10,000 Sq Ft
 
 
 
 
 
 
 
 
 
 
 
 
 
SOUTH CAROLINA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Charleston
 
 
 
 
 
 
 
 
 
 
 
 
Merchants Village (5)
 
1997
 
1997
 
79,649

 
97.0
%
 
Publix
 
—
Orangeburg
 
2006
 
2006
 
14,820

 
100.0
%
 
—
 
Walgreens
Queensborough Shopping Center (5)
 
1998
 
1993
 
82,333

 
93.9
%
 
Publix
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Columbia
 
 
 
 
 
 
 
 
 
 
 
 
Murray Landing (5)
 
2002
 
2003
 
64,359

 
100.0
%
 
Publix
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Other South Carolina
 
 
 
 
 
 
 
 
 
 
 
 
Buckwalter Village
 
2006
 
2006
 
59,601

 
100.0
%
 
Publix
 
—
Surfside Beach Commons (5)
 
2007
 
1999
 
59,881

 
94.7
%
 
Bi-Lo
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (SC)
 
 
 
 
 
360,643

 
97.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nevada
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Las Vegas
 
 
 
 
 
 
 
 
 
 
 
 
Deer Springs Town Center
 
2007
 
2007
 
330,907

 
91.1
%
 
(Target), Home Depot, Toys "R" Us
 
Michaels, PetSmart, Ross Dress For Less, Staples
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (NV)
 
 
 
 
 
330,907

 
91.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
DELAWARE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dover
 
 
 
 
 
 
 
 
 
 
 
 
White Oak - Dover, DE
 
2000
 
2000
 
10,908

 
100.0
%
 
—
 
Eckerd
 
 
 
 
 
 
 
 
 
 
 
 
 
Wilmington
 
 
 
 
 
 
 
 
 
 
 
 
Pike Creek
 
1998
 
1981
 
232,031

 
94.0
%
 
Acme Markets, K-Mart
 
Rite Aid
Shoppes of Graylyn (5)
 
2005
 
1971
 
66,808

 
100.0
%
 
—
 
Rite Aid
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (DE)
 
 
 
 
 
309,747

 
95.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
WISCONSIN
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Whitnall Square Shopping Center (5)
 
2005
 
1989
 
133,421

 
98.4
%
 
Pick 'N' Save
 
Harbor Freight Tools, Dollar Tree
Racine Centre Shopping Center (5)
 
2005
 
1988
 
135,827

 
95.4
%
 
Piggly Wiggly
 
Golds Gym, Factory Card Outlet, Dollar Tree
 
 
 
 
 
 
 
 
 
 
 
 
 

28


Property Name (1)
 
Year
Acquired
 
Year
Con-
structed (2)
 
Gross Leasable Area
(GLA)
 
Percent
Leased (3)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Drug Stores & Other Junior Anchors > 10,000 Sq Ft
Subtotal/Weighted Average (WI)
 
 
 
 
 
269,248

 
96.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ALABAMA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shoppes at Fairhope Village
 
2008
 
2008
 
84,740

 
86.2
%
 
Publix
 
—
Valleydale Village Shop Center (5)
 
2002
 
2003
 
118,466

 
71.6
%
 
Publix
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (AL)
 
 
 
 
 
203,206

 
77.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INDIANA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Indianapolis
 
 
 
 
 
 
 
 
 
 
 
 
Greenwood Springs
 
2004
 
2004
 
28,028

 
85.1
%
 
(Gander Mountain), (Wal-Mart Supercenter)
 
—
Willow Lake Shopping Center (5)
 
2005
 
1987
 
85,923

 
90.5
%
 
(Kroger)
 
Party City
Willow Lake West Shopping Center (5)
 
2005
 
2001
 
52,961

 
94.3
%
 
Trader Joe's
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Indiana
 
 
 
 
 
 
 
 
 
 
 
 
Airport Crossing
 
2006
 
2006
 
11,924

 
88.6
%
 
(Kohl's)
 
—
Augusta Center
 
2006
 
2006
 
14,533

 
100.0
%
 
(Menards)
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (IN)
 
 
 
 
 
193,369

 
91.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CONNECTICUT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corbin's Corner (5)
 
2005
 
1962
 
179,865

 
99.8
%
 
Trader Joe's
 
Toys "R" Us, Best Buy, Old Navy, Office Depot, Pier 1 Imports
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (CT)
 
 
 
 
 
179,865

 
99.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NEW JERSEY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Plaza Square (5)
 
2005
 
1990
 
103,891

 
97.2
%
 
Shop Rite
 
—
Haddon Commons (5)
 
2005
 
1985
 
52,640

 
87.7
%
 
Acme Markets
 
CVS
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (NJ)
 
 
 
 
 
156,531

 
94.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NEW YORK
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lake Grove Commons (5)
 
2012
 
2008
 
141,382

 
100.0
%
 
Whole Foods, LA Fitness
 
PETCO
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (NY)
 
 
 
 
 
141,382

 
100.0
%
 
 
 
 

29


Property Name (1)
 
Year
Acquired
 
Year
Con-
structed (2)
 
Gross Leasable Area
(GLA)
 
Percent
Leased (3)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Drug Stores & Other Junior Anchors > 10,000 Sq Ft
 
 
 
 
 
 
 
 
 
 
 
 
 
MICHIGAN
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
State Street Crossing
 
2006
 
2006
 
21,049

 
86.7
%
 
(Wal-Mart)
 
—
Fenton Marketplace
 
1999
 
1999
 
97,224

 
34.7
%
 
—
 
Michaels
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (MI)
 
 
 
 
 
118,273

 
43.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
DISTRICT OF COLUMBIA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shops at The Columbia (5)
 
2006
 
2006
 
22,812

 
100.0
%
 
Trader Joe's
 
—
Spring Valley Shopping Center (5)
 
2005
 
1930
 
16,835

 
100.0
%
 
—
 
CVS
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (DC)
 
 
 
 
 
39,647

 
100.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
KENTUCKY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Walton Towne Center
 
2007
 
2007
 
23,186

 
100.0
%
 
(Kroger)
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (KY)
 
 
 
 
 
23,186

 
100.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total/Weighted Average
 
 
 
 
 
40,293,379

 
94.6
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) This table includes both Regency's Consolidated and Unconsolidated Properties ("Combined Portfolio") and excludes the properties of BRET as the property holdings of BRET do not impact the rate of return on Regency's preferred stock investment
(2) Or latest renovation.
(3) Includes properties where the Company has not yet incurred at least 90% of the expected costs to complete and the anchor has not yet been open for at least two calendar years ("development properties" or "properties in development"). If development properties are excluded, the total percentage leased would be 94.8% for Company's Combined Portfolio of shopping centers.
(4) Property in development.
(5) Owned by a co-investment partnership with outside investors in which RCLP or an affiliate is the general partner or has a voting interest.
(6) A retailer that supports the Company's shopping center and in which the Company has no ownership is indicated by parentheses.

30


Item 3.    Legal Proceedings

We are a party to various legal proceedings that arise in the ordinary course of our business. We are not currently involved in any litigation nor to our knowledge, is any litigation threatened against us, the outcome of which would, in our judgment based on information currently available to us, have a material adverse effect on our financial position or results of operations.

Item 4.    Mine Safety Disclosures
    
None.

PART II

Item 5.
Market for the Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

Our common stock (NYSE: REG) is traded on the New York Stock Exchange. The following table sets forth the high and low sales prices and the cash dividends declared on our common stock by quarter for 2012 and 2011.
 
 
2012
 
2011
 
 
 
 
Cash
 
 
 
Cash
Quarter
 
High
Low
Dividends
 
High
Low
Dividends
Ended
 
Price
Price
Declared
 
Price
Price
Declared
March 31
$
44.78

40.90

0.4625

$
45.36

40.90

0.4625

June 30
 
47.99

41.65

0.4625

 
47.51

41.00

0.4625

September 30
 
51.38

45.81

0.4625

 
47.90

34.11

0.4625

December 31
 
50.40

36.30

0.4625

 
41.64

32.30

0.4625


The Company has determined that the dividends paid during 2012 and 2011 on our common stock qualify for the following tax treatment:
 
Total Distribution per Share
Ordinary Dividends
Total Capital Gain Distributions
Nontaxable Distributions
2012
$
1.8500

1.3135

0.0185

0.5180

2011
$
1.8500

0.6105

0.0185

1.2210

As of February 22, 2013, there were approximately 15,000 holders of common equity.
We intend to pay regular quarterly distributions to Regency Centers Corporations' common stockholders. Future distributions will be declared and paid at the discretion of our Board of Directors, and will depend upon cash generated by operating activities, our financial condition, capital requirements, annual dividend requirements under the REIT provisions of the Internal Revenue Code of 1986, as amended, and such other factors as our Board of Directors deems relevant. In order to maintain Regency Centers Corporation's qualification as a REIT for federal income tax purposes, we are generally required to make annual distributions at least equal to 90% of our real estate investment trust taxable income for the taxable year. Under certain circumstances, which we do not expect to occur, we could be required to make distributions in excess of cash available for distributions in order to meet such requirements. The Company has a dividend reinvestment plan under which shareholders may elect to reinvest their dividends automatically in common stock. Under the plan, the Company may elect to purchase common stock in the open market on behalf of shareholders or may issue new common stock to such shareholders.
 
Under the loan agreement of our line of credit, in the event of any monetary default, we may not make distributions to stockholders except to the extent necessary to maintain our REIT status.

There were no unregistered sales of equity securities during the quarter ended December 31, 2012. The Company did not repurchase any of its equity securities during the quarter-ended December 31, 2012.


31


The performance graph furnished below shows Regency's cumulative total stockholder return to the S&P 500 Index and the FTSE NAREIT Equity REIT Index since December 31, 2007. The stock performance graph should not be deemed filed or incorporated by reference into any other filing made by us under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that we specifically incorporate the stock performance graph by reference in another filing.


Item 6.    Selected Financial Data
(in thousands, except per share and unit data, number of properties, and ratio of earnings to fixed charges)

The following table sets forth Selected Financial Data for the Company on a historical basis for the five years ended December 31, 2012. This historical Selected Financial Data has been derived from the audited consolidated financial statements as reclassified for discontinued operations. This information should be read in conjunction with the consolidated financial statements of Regency Centers Corporation and Regency Centers, L.P. (including the related notes thereto) and Management's Discussion and Analysis of the Financial Condition and Results of Operations, each included elsewhere in this Form 10-K.


32


Parent Company
 
 
 
2012
 
2011
 
2010
 
2009
 
2008
Operating Data:
 
 
 
 
 
 
 
 
 
 
 
Revenues
 $
496,920

 
493,098

 
468,191

 
470,593

 
479,467

 
Operating expenses
 
321,258

 
318,128

 
306,100

 
294,802

 
258,789

 
Other expense
 
185,740

 
136,275

 
147,434

 
210,085

 
117,061

 
(Loss) Income before equity in income (loss) of investments in real estate partnerships
 
(10,078
)
 
38,695

 
14,657

 
(34,294
)
 
103,617

 
Equity in income (loss) of investments in real estate partnerships
 
23,807

 
9,643

 
(12,884
)
 
(26,373
)
 
5,292

 
Income (loss) from continuing operations before tax
 
13,729

 
48,338

 
1,773

 
(60,667
)
 
108,909

 
Income tax expense (benefit) of taxable REIT subsidiary
 
13,224

 
2,994

 
(1,333
)
 
1,883

 
(1,600
)
 
Income (loss) from continuing operations
 
505

 
45,344

 
3,106

 
(62,550
)
 
110,509

 
Income from discontinued operations
 
23,546

 
8,040

 
8,902

 
14,157

 
16,629

 
Income (loss) before gain on sale of real estate
 
24,051

 
53,384

 
12,008

 
(48,393
)
 
127,138

 
Gain on sale of real estate
 
2,158

 
2,404

 
993

 
19,357

 
20,346

 
Net income (loss)
 
26,209

 
55,788

 
13,001

 
(29,036
)
 
147,484

 
Net income attributable to noncontrolling interests
 
(342
)
 
(4,418
)
 
(4,185
)
 
(3,961
)
 
(5,333
)
 
Net income (loss) attributable to the Company
 
25,867

 
51,370

 
8,816

 
(32,997
)
 
142,151

 
Preferred stock dividends
 
(32,531
)
 
(19,675
)
 
(19,675
)
 
(19,675
)
 
(19,675
)
 
Net (loss) income attributable to common stockholders
 
(6,664
)
 
31,695

 
(10,859
)
 
(52,672
)
 
122,476

 
 
 
 
 
 
 
 
 
 
 
 
 
Funds from operations (1)
 
222,100

 
220,318

 
151,321

 
85,758

 
263,848

 
Core funds from operations (1)
 
230,937

 
213,148

 
199,357

 
207,971

 
240,449

 
 
 
 
 
 
 
 
 
 
 
 
Income per Common Share - diluted:
 
 
 
 
 
 
 
 
 
 
 
(Loss) income from continuing operations
 $
(0.34
)
 
0.26

 
(0.25
)
 
(0.89
)
 
1.52

 
Income from discontinued operations
 
0.26

 
0.09

 
0.11

 
0.19

 
0.24

 
Net (loss) income attributable to common stockholders
 $
(0.08
)
 
0.35

 
(0.14
)
 
(0.70
)
 
1.76

 
 
 
 
 
 
 
 
 
 
 
 
Other Information:
 
 
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
 $
257,215

 
217,633

 
138,459

 
195,804

 
211,314

 
Net cash provided by (used in) investing activities
 
3,623

 
(77,723
)
 
(184,457
)
 
51,545

 
(105,006
)
 
Net cash used in financing activities
 
(249,891
)
 
(145,569
)
 
(32,797
)
 
(164,279
)
 
(105,144
)
 
Distributions paid to common stockholders
 
164,747

 
160,478

 
149,117

 
159,670

 
199,528

 
Common dividends declared per share
 
1.85

 
1.85

 
1.85

 
2.11

 
2.90

 
Common stock outstanding including exchangeable operating partnership units
 
90,572

 
90,099

 
81,717

 
81,670

 
70,091

 
Ratio of earnings to fixed charges (3)
 
1.1

 
1.4

 
1.2

 
0.8

(2) 
1.6

 
 
 
 
 
 
 
 
 
 
 
 
Balance Sheet Data:
 
 
 
 
 
 
 
 
 
 
 
Real estate investments before accumulated depreciation
 $
4,352,839

 
4,488,794

 
4,417,746

 
4,259,990

 
4,425,895

 
Total assets
 
3,853,458

 
3,987,071

 
3,994,539

 
3,992,228

 
4,158,568

 
Total debt
 
1,941,891

 
1,982,440

 
2,094,469

 
1,886,380

 
2,135,571

 
Total liabilities
 
2,107,547

 
2,117,417

 
2,250,137

 
2,061,621

 
2,416,824

 
Stockholders' equity
 
1,730,765

 
1,808,355

 
1,685,177

 
1,862,380

 
1,676,323

 
Noncontrolling interests
 
15,146

 
61,299

 
59,225

 
68,227

 
65,421

(1) FFO is a commonly used measure of REIT performance, which the National Association of Real Estate Investment Trusts ("NAREIT") defines as net income, computed in accordance with GAAP, excluding gains and losses from sales of depreciable property, net of tax, excluding operating real estate impairments, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Core FFO represents FFO, excluding, but not limited to, transaction income or expense, gains or losses from the early extinguishment of debt, development and outparcel gains or losses and other non-core items. See Supplemental Earnings Information within Item 7 for additional information and a reconciliation to the nearest GAAP measure.
(2) The Company's ratio of earnings to fixed charges was deficient in 2009 by $26.2 million in earnings, due to significant non-cash charges for impairment of real estate investments of $97.5 million.
(3) See Exhibit 12.1 for additional information regarding the computation of ratio of earnings to fixed charges.

33


Operating Partnership
 
 
 
2012
 
2011
 
2010
 
2009
 
2008
Operating Data:
 
 
 
 
 
 
 
 
 
 
 
Revenues
 $
496,920

 
493,098

 
468,191

 
470,593

 
479,467

 
Operating expenses
 
321,258

 
318,128

 
306,100

 
294,802

 
258,789

 
Other expense
 
185,740

 
136,275

 
147,434

 
210,085

 
117,061

 
(Loss) income before equity in income (loss) of investments in real estate partnerships
 
(10,078
)
 
38,695

 
14,657

 
(34,294
)
 
103,617

 
Equity in income (loss) of investments in real estate partnerships
 
23,807

 
9,643

 
(12,884
)
 
(26,373
)
 
5,292

 
Income (loss) from continuing operations before tax
 
13,729

 
48,338

 
1,773

 
(60,667
)
 
108,909

 
Income tax expense (benefit) of taxable REIT subsidiary
 
13,224

 
2,994

 
(1,333
)
 
1,883

 
(1,600
)
 
Income (loss) from continuing operations
 
505

 
45,344

 
3,106

 
(62,550
)
 
110,509

 
Income from discontinued operations
 
23,546

 
8,040

 
8,902

 
14,157

 
16,629

 
Income (loss) before gain on sale of real estate
 
24,051

 
53,384

 
12,008

 
(48,393
)
 
127,138

 
Gain on sale of real estate
 
2,158

 
2,404

 
993

 
19,357

 
20,346

 
Net income (loss)
 
26,209

 
55,788

 
13,001

 
(29,036
)
 
147,484

 
Net income attributable to noncontrolling interests
 
(865
)
 
(590
)
 
(376
)
 
(452
)
 
(701
)
 
Net income (loss) attributable to the Partnership
 
25,344

 
55,198

 
12,625

 
(29,488
)
 
146,783

 
Preferred unit distributions
 
(31,902
)
 
(23,400
)
 
(23,400
)
 
(23,400
)
 
(23,400
)
 
Net (loss) income attributable to common unit holders
 
(6,558
)
 
31,798

 
(10,775
)
 
(52,888
)
 
123,383

 
 
 
 
 
 
 
 
 
 
 
 
 
Funds from operations (1)
 
222,100

 
220,318

 
151,321

 
85,758

 
263,848

 
Core funds from operations (1)
 
230,937

 
213,148

 
199,357

 
207,971

 
240,449

 
 
 
 
 
 
 
 
 
 
 
 
Income per common unit - diluted:
 
 
 
 
 
 
 
 
 
 
 
(Loss) income from continuing operations
 $
(0.34
)
 
0.26

 
(0.25
)
 
(0.89
)
 
1.52

 
Income from discontinued operations
 
0.26

 
0.09

 
0.11

 
0.19

 
0.24

 
Net (loss) income attributable to common unit holders
 $
(0.08
)
 
0.35

 
(0.14
)
 
(0.70
)
 
1.76

 
 
 
 
 
 
 
 
 
 
 
 
Other Information:
 
 
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
 $
257,215

 
217,633

 
138,459

 
195,804

 
211,314

 
Net cash provided by (used in) investing activities
 
3,623

 
(77,723
)
 
(184,457
)
 
51,545

 
(105,006
)
 
Net cash used in financing activities
 
(249,891
)
 
(145,569
)
 
(32,797
)
 
(164,279
)
 
(105,144
)
 
Distributions paid on common units
 
164,747

 
160,478

 
149,117

 
159,670

 
199,528

 
Ratio of earnings to fixed charges (3)
 
1.1

 
1.4

 
1.2

 
0.8

(2) 
1.6

 
 
 
 
 
 
 
 
 
 
 
 
Balance Sheet Data:
 
 
 
 
 
 
 
 
 
 
 
Real estate investments before accumulated depreciation
 $
4,352,839

 
4,488,794

 
4,417,746

 
4,259,990

 
4,425,895

 
Total assets
 
3,853,458

 
3,987,071

 
3,994,539

 
3,992,228

 
4,158,568

 
Total debt
 
1,941,891

 
1,982,440

 
2,094,469

 
1,886,380

 
2,135,571

 
Total liabilities
 
2,107,547

 
2,117,417

 
2,250,137

 
2,061,621

 
2,416,824

 
Partners' capital
 
1,729,612

 
1,856,550

 
1,733,573

 
1,918,859

 
1,733,764

 
Noncontrolling interests
 
16,299

 
13,104

 
10,829

 
11,748

 
7,980

(1) FFO is a commonly used measure of REIT performance, which the National Association of Real Estate Investment Trusts ("NAREIT") defines as net income, computed in accordance with GAAP, excluding gains and losses from sales of depreciable property, net of tax, excluding operating real estate impairments, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Core FFO represents FFO, excluding, but not limited to, transaction income or expense, gains or losses from the early extinguishment of debt, development and outparcel gains or losses and other non-core items. See Supplemental Earnings Information within Item 7 for additional information and a reconciliation to the nearest GAAP measure.
(2) The Company's ratio of earnings to fixed charges was deficient in 2009 by $26.2 million in earnings, due to significant non-cash charges for impairment of real estate investments of $97.5 million.
(3) See Exhibit 12.1 for additional information regarding the computation of ratio of earnings to fixed charges.


34



Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview

Regency Centers Corporation began its operations as a REIT in 1993 and is the managing general partner in Regency Centers, L.P. We endeavor to be the preeminent, best-in-class national shopping center company distinguished by sustaining growth in shareholder value and compounding total shareholder return in excess of our peers. We work to achieve these goals through reliable growth in net operating income from a portfolio of dominant, infill shopping centers, balance sheet strength, value-added development capabilities and an engaged team of talented and dedicated people. All of our operating, investing, and financing activities are performed through the Operating Partnership, its wholly-owned subsidiaries, and through its investments in real estate partnerships with third parties (also referred to as "co-investment partnerships" or "joint ventures"). The Parent Company currently owns approximately 99.8% of the outstanding common partnership units of the Operating Partnership.

At December 31, 2012, we directly owned 204 shopping centers (the “Consolidated Properties”) located in 24 states representing 22.5 million square feet of gross leasable area (“GLA”). Through co-investment partnerships, we own partial ownership interests in 144 shopping centers (the “Unconsolidated Properties”) located in 24 states and the District of Columbia representing 17.8 million square feet of GLA.
We earn revenues and generate cash flow by leasing space in our shopping centers to grocery stores, major retail anchors, restaurants, side-shop retailers, and service providers, as well as by ground leasing or selling building pads ("out-parcels") to these same types of tenants. We experience growth in revenues by increasing occupancy and rental rates in our existing shopping centers and by acquiring and developing new shopping centers. At December 31, 2012, the consolidated shopping centers were 94.1% leased, as compared to 92.2% at December 31, 2011.
We monitor the operating performance and rent collections of all tenants in our shopping centers, especially those tenants operating retail formats that are experiencing significant changes in competition, business practice, and store closings in other locations. We also evaluate consumer preferences, shopping behaviors, and demographics to anticipate both challenges and opportunities in the changing retail industry that may affect our tenants.
We grow our shopping center portfolio through acquisitions of operating centers and new shopping center development. We will continue to use our development capabilities, market presence, and anchor relationships to invest in value-added new developments and redevelopments of existing centers. Development is customer driven, meaning we generally have an executed lease from the anchor before we start construction. Developments serve the growth needs of our anchors and retailers, resulting in modern shopping centers with long-term anchor leases that produce attractive returns on our invested capital. This development process typically requires two to three years once construction has commenced, but can vary subject to the size and complexity of the project. We fund our acquisition and development activity from various capital sources including property sales, equity offerings, and new debt.
Co-investment partnerships provide us with an additional capital source for shopping center acquisitions, as well as the opportunity to earn fees for asset management, property management, and other investing and financing services. As asset manager, we are engaged by our partners to apply similar operating, investment and capital strategies to the portfolios owned by the co-investment partnerships as those applied to the portfolio that we wholly-own. Co-investment partnerships grow their shopping center investments through acquisitions from third parties or direct purchases from us.  Although selling properties to co-investment partnerships reduces our direct ownership interest, it provides a source of capital that further strengthens our balance sheet while we continue to share, to the extent of our ownership interest, in the risks and rewards of shopping centers that meet our high quality standards and long-term investment strategy.



35


Critical Accounting Policies and Estimates

Knowledge about our accounting policies is necessary for a complete understanding of our financial statements. The preparation of our financial statements requires that we make certain estimates that impact the balance of assets and liabilities at a financial statement date and the reported amount of income and expenses during a financial reporting period. These accounting estimates are based upon, but not limited to, our judgments about historical results, current economic activity, and industry accounting standards. They are considered to be critical because of their significance to the financial statements and the possibility that future events may differ from those judgments, or that the use of different assumptions could result in materially different estimates. We review these estimates on a periodic basis to ensure reasonableness; however, the amounts we may ultimately realize could differ from such estimates.

Accounts Receivable

Minimum rent, percentage rent, and expense recoveries from tenants for common area maintenance costs, insurance and real estate taxes are the Company's principal source of revenue. As a result of generating this revenue, we will routinely have accounts receivable due from tenants. We are subject to tenant defaults and bankruptcies that may affect the collection of outstanding receivables. To address the collectability of these receivables, we analyze historical write-off experience, tenant credit-worthiness and current economic trends when evaluating the adequacy of our allowance for doubtful accounts. Although we estimate uncollectible receivables and provide for them through charges against income, actual experience may differ from those estimates.

Real Estate Investments

Acquisition of Real Estate Investments

Upon acquisition of real estate operating properties, the Company estimates the fair value of acquired tangible assets (consisting of land, building, building improvements and tenant improvements) and identified intangible assets and liabilities (consisting of above and below-market leases, in-place leases and tenant relationships), assumed debt, and any noncontrolling interest in the acquiree at the date of acquisition, based on evaluation of information and estimates available at that date. Based on these estimates, the Company allocates the estimated fair value to the applicable assets and liabilities. Fair value is determined based on an exit price approach, which contemplates the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. If, up to one year from the acquisition date, information regarding fair value of the assets acquired and liabilities assumed is received and estimates are refined, appropriate adjustments are made to the purchase price allocation on a retrospective basis. The Company expenses transaction costs associated with business combinations in the period incurred.

We strategically invest in entities that own, manage, acquire, develop and redevelop operating properties. We analyze our investments in real estate partnerships in order to determine whether the entity should be consolidated. If it is determined that these investments do not require consolidation because the entities are not variable interest entities (“VIEs”), we are not considered the primary beneficiary of the entities determined to be VIEs, we do not have voting control, and/or the limited partners (or non-managing members) have substantive participatory rights, then the selection of the accounting method used to account for our investments in real estate partnerships is generally determined by our voting interests and the degree of influence we have over the entity. Management uses its judgment when making these determinations. We use the equity method of accounting for investments in real estate partnerships when we own 20% or more of the voting interests and have significant influence but do not have a controlling financial interest, or if we own less than 20% of the voting interests but have determined that we have significant influence. Under the equity method, we record our investments in and advances to these entities in our consolidated balance sheets, and our proportionate share of earnings or losses earned by the joint venture is recognized in equity in income (loss) of investments in real estate partnerships in our consolidated statements of operations.
 
Development of Real Estate Assets and Cost Capitalization

We capitalize the acquisition of land, the construction of buildings and other specifically identifiable development costs incurred by recording them into properties in development in our accompanying Consolidated Balance Sheets. Once a development property is substantially complete and held available for occupancy, costs are no longer capitalized. Other specifically identifiable development costs include pre-development costs essential to the development process, as well as, interest, real estate taxes, and direct employee costs incurred during the development period. Pre-development costs are incurred prior to land acquisition during the due diligence phase and include contract deposits, legal, engineering, and other professional fees related to evaluating the feasibility of developing a shopping center. At December 31, 2012 and 2011, the Company had capitalized pre-development costs of $3.5 million and $2.1 million, respectively, of which $2.3 million and $1.0 million, respectively, were refundable deposits. If we determine it is probable that a specific project undergoing due diligence will not be developed, we immediately expense all

36


related capitalized pre-development costs not considered recoverable. During the years ended December 31, 2012, 2011, and 2010, we expensed pre-development costs of approximately $1.5 million, $241,000, and $520,000, respectively, recorded in other expenses in the accompanying Consolidated Statements of Operations. Interest costs are capitalized into each development project based on applying our weighted average borrowing rate to that portion of the actual development costs expended. We cease interest cost 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 substantial completion of the building shell. During the years ended December 31, 2012, 2011, and 2010, we capitalized interest of $3.7 million, $1.5 million, and $5.1 million, respectively, on our development projects. We have a staff of employees who directly support our development program. All direct internal costs attributable to these development activities are capitalized as part of each development project. During the years ended December 31, 2012, 2011, and 2010, we capitalized $10.3 million, $5.5 million, and $2.7 million, respectively, of direct internal costs incurred to support our development program. The capitalization of costs is directly related to the actual level of development activity occurring.

Valuation of Real Estate Investments

We evaluate whether there are any indicators that have occurred, including property operating performance and general market conditions, that would result in us determining that the carrying value of our real estate properties (including any related amortizable intangible assets or liabilities) may not be recoverable. If such indicators occur, we compare the current carrying value of the asset to the estimated undiscounted cash flows that are directly associated with the use and ultimate disposition of the asset. Our estimated cash flows are based on several key assumptions, including rental rates, costs of tenant improvements, leasing commissions, anticipated hold period, and assumptions regarding the residual value upon disposition, including the exit capitalization rate. These key assumptions are subjective in nature and the resulting impairment, if any, could differ from the actual gain or loss recognized upon ultimate sale in an arms length transaction. If the carrying value of the asset exceeds the estimated undiscounted cash flows, an impairment loss is recognized equal to the excess of carrying value over fair value. Changes in our disposition strategy or changes in the marketplace may alter the hold period of an asset or asset group, which may result in an impairment loss and such loss could be material to the Company's financial condition or operating performance.

We evaluate our investments in real estate partnerships for impairment whenever there are indicators, including underlying property operating performance and general market conditions, that the value of our investments in real estate partnerships may be impaired. An investment in a real estate partnerships is considered impaired only if we determine that its fair value is less than the net carrying value of the investment in that real estate partnerships on an other-than-temporary basis. Cash flow projections for the investments consider property level factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors. We consider various qualitative factors to determine if a decrease in the value of our investment is other-than-temporary. These factors include the age of the real estate partnerships, our intent and ability to retain our investment in the entity, the financial condition and long-term prospects of the entity and relationships with our partners and banks. If we believe that the decline in the fair value of the investment is temporary, no impairment charge is recorded. If our analysis indicates that there is an other-than-temporary impairment related to the investment in a particular real estate partnerships, the carrying value of the investment will be adjusted to an amount that reflects the estimated fair value of the investment.

The fair value of real estate investments is highly subjective and is determined through comparable sales information and other market data if available, or through use of an income approach such as the direct capitalization or the traditional discounted cash flow methods. Such cash flow projections consider factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors, and therefore are subject to a significant degree of management judgment and changes in those factors could impact the determination of fair value. In estimating the fair value of undeveloped land, we generally use market data and comparable sales information.

Recent Accounting Pronouncements

See Note 1 to Consolidated Financial Statements.

37



Shopping Center Portfolio
The following table summarizes general information related to the Consolidated Properties in our shopping center portfolio (GLA in thousands):
 
 
December 31,
2012
 
December 31,
2011
Number of Properties
 
204

 
217

Properties in Development
 
4

 
7

Gross Leasable Area
 
22,532
 
23,750
% Leased – Operating and Development
 
94.1
%
 
92.2
%
% Leased – Operating
 
94.4
%
 
93.2
%
The following table summarizes general information related to the Unconsolidated Properties owned in co-investment partnerships in our shopping center portfolio, excluding the properties held by BRET (GLA in thousands):
 
 
December 31,
2012
 
December 31,
2011
Number of Properties
 
144

 
147

Gross Leasable Area
 
17,762

 
18,399

% Leased – Operating
 
95.2
%
 
94.8
%
 
 
 
 
 
We seek to reduce our operating and leasing risks through geographic diversification, avoiding dependence on any single property, market, or tenant, and owning a portion of our shopping centers through co-investment partnerships.
The following table summarizes leasing activity for the year ended December 31, 2012, including Regency's pro-rata share of activity within the portfolio of our co-investment partnerships, except for the BRET portfolio:
 
Leasing Transactions
GLA (in thousands)
Base Rent / SF
Tenant Improvements / SF
Leasing Commissions / SF
New leases
695
2,143
$19.68
$4.33
$7.70
Renewals
1,105
2,967
$18.27
$0.32
$2.15
Total
1,800
5,110
$18.86
$2.00
$4.48
    
The following table summarizes our four most significant tenants, each of which is a grocery retailer, occupying our shopping centers at December 31, 2012: 
Grocery Anchor
 
Number of
Stores (1)
 
Percentage of
Company-
owned GLA (2)
 
Percentage  of
Annualized
Base Rent (2) 
Kroger
 
47
 
7.0%
 
4.3%
Publix
 
54
 
6.9%
 
4.2%
Safeway
 
51
 
5.4%
 
3.3%
Supervalu (3)
 
26
 
2.7%
 
2.1%
(1) Includes stores owned by grocery anchors that are attached to our centers.
(2) Includes Regency's pro-rata share of Unconsolidated Properties and excludes those owned by anchors and the properties of BRET.
(3) On January 10, 2013, SUPERVALU announced that it had entered into an agreement to sell its four largest grocery chains to an investor consortium. We will continue to closely monitor the pending sale and the impact, if any, on its shopping centers.

    

38


Although base rent is supported by long-term lease contracts, tenants who file bankruptcy may have the legal right to reject any or all of their leases and close related stores. 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. We monitor industry trends and sales data to help us identify declines in retail categories or tenants who might be experiencing financial difficulties as a result of slowing sales, lack of credit, changes in retail formats or increased competition. As a result of our findings, we may reduce new leasing, suspend leasing, or curtail the allowance for the construction of leasehold improvements within a certain retail category or to a specific retailer.
We monitor the financial condition of our tenants. We communicate often with those tenants who have announced store closings or filed bankruptcy. We are not currently aware of the pending bankruptcy or announced store closings of any tenants in our shopping centers that would individually cause a material reduction in our revenues, and no tenant represents more than 5% of our total annualized base rent on a pro-rata basis.



39


Liquidity and Capital Resources
Our Parent Company has no capital commitments other than its guarantees of the commitments of our Operating Partnership. 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. All debt is issued by our Operating Partnership or by our co-investment partnerships. On December 31, 2012, our cash balance was $22.3 million. We have an $800.0 million Line of Credit commitment (the "Line"), which matures in September 2016, that had an outstanding balance of $70.0 million at December 31, 2012 with remaining available borrowings of $730.0 million. As of December 31, 2012, we had the capacity to issue $128.0 million in common stock under various equity distribution agreements.
The following table summarizes net cash flows related to operating, investing, and financing activities of the Company for the years ended December 31, 2012, 2011, and 2010 (in thousands): 
 
 
2012
 
2011
 
2010
Net cash provided by operating activities
$
257,215

 
217,633

 
138,459

Net cash provided by (used in) investing activities
 
3,623

 
(77,723
)
 
(184,457
)
Net cash used in financing activities
 
(249,891
)
 
(145,569
)
 
(32,797
)
Net increase (decrease) in cash and cash equivalents
$
10,947

 
(5,659
)
 
(78,795
)
Net cash provided by operating activities:
Net cash provided by operating activities increased by $39.6 million for the year ended December 31, 2012 as compared to the year ended December 31, 2011 due primarily to increased operating income, driven by higher occupancy, a decrease in interest expense, and timing of cash receipts and payments.
Our dividend distribution policy is set by our Board of Directors who monitor our financial position. Our Board of Directors recently declared our quarterly dividend of $0.4625 per share, paid on February 27, 2013. Our dividend has remained unchanged since May 2009 and 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 operate our business such that we expect net cash provided by operating activities will provide the necessary funds to pay our distributions to our share and unit holders, which were $188.4 million and $183.9 million for the years ended December 31, 2012 and 2011, respectively.
Net cash provided by (used in) investing activities:
Net cash provided by investing activities increased by $81.3 million for the year ended December 31, 2012, as compared to the year ended December 31, 2011. Significant investing activity during the year ended December 31, 2012 included:
•
Receiving proceeds of $352.7 million from the sale of real estate including $273.5 million from the sale of a 15-property portfolio to a partnership in which Regency retained a non-controlling interest;
•
Contributing $14.2 million to a co-investment partnership for our pro rata ownership interest in Lake Grove Commons, a shopping center acquired in January 2012;
•
Contributing $37.6 million to a co-investment partnership for our pro rata share to repay maturing debt;
•
Contributing $6.6 million to a co-investment partnership for our pro rata share of redevelopment costs;
•
Contributing $1.7 million to a new co-investment partnership for our pro rata share of the acquisition of land;
•
Contributing $6.2 million to a new co-investment partnership for our pro rata ownership interest in Phillips Place, a shopping center acquired in December 2012; and

40


•
Capital expenditures incurred for the acquisition, development, redevelopment, improvement and leasing of our real estate properties was $320.6 million and $152.7 million for the years ended December 31, 2012, and 2011 (in thousands), respectively as follows: 
 
 
2012
 
2011
 
Change
Capital expenditures:
 
 
 
 
 
 
Acquisition of operating real estate
$
156,026

 
70,629

 
85,397

 
 
 
 
 
 
 
Acquisition of land for development / redevelopment
$
27,100

 
2,308

 
24,792

Development costs
 
71,702

 
24,813

 
46,889

Redevelopment costs
 
10,944

 
11,552

 
(608
)
Tenant allowances
 
8,664

 
9,501

 
(837
)
Capitalized interest
 
3,686

 
1,480

 
2,206

Capitalized direct compensation
 
10,312

 
5,538

 
4,774

Building improvements and other
 
32,180

 
26,877

 
5,303

Real estate development and capital improvements
$
164,588

 
82,069

 
82,519

Total
$
320,614

 
152,698

 
167,916

•
During the year ended December 31, 2012, we acquired five operating properties and five land parcels for $156.0 million and $27.1 million, respectively, compared to acquiring three operating properties and two land parcels for $70.6 million and $2.3 million, respectively, during the year ended December 31, 2011.
•
The increase in building improvements and other capital expenditures is due to normal ongoing improvements that may be capitalized for our existing centers.
•
During 2012, we started five new developments and one redevelopment as compared to starting four new developments and four redevelopments during 2011; however, two of the developments started in 2011 occurred during the fourth quarter of 2011 and contributed to the increased capitalization in 2012.
At December 31, 2012, we had four development projects that were either under construction or in lease up, compared to seven such development projects at December 31, 2011. The following table details our development projects as of December 31, 2012 (in thousands, except cost per square foot):
Property Name
Start Date
Estimated / Actual Anchor Opening
 
Estimated Net Development Costs After Partner Participation(1)
 
Estimated Net Costs to Complete (1)
 
Company Owned GLA
 
Cost per square foot of GLA (1)
 
East Washington Place
Q4-11
Aug-13
$
60,562

$
36,191

 
203

$
298

 
Southpark at Cinco Ranch
Q1-12
Oct-12
 
31,532

 
7,730

 
243

 
130

 
Shops at Erwin Mill
Q2-12
Dec-13
 
14,384

 
5,448

 
90

 
160

 
Grand Ridge Plaza
Q2-12
Jun-13
 
81,074

 
50,151

 
326

 
249

 
Total
 
 
$
187,552

$
99,520

 
862

$
218

(2)
 
 
 
 
 
 
 
 
 
 
 
 
(1)  Amount represents costs, including leasing costs, net of tenant reimbursements.
 
(2)  Amount represents a weighted average
 

41


The following table details our developments completed during 2012 (in thousands, except cost per square foot):
Property Name
Completion Date
 
Net Development Costs (1)
 
Company Owned GLA
 
Cost per square foot of GLA (1)
Centerplace of Greeley III Ph II
Q2-12
$
2,110

 
25

$
84

Village at Lee Airpark
Q2-12
 
24,107

 
88

 
274

Nocatee Town Center
Q3-12
 
14,304

 
70

 
204

Suncoast Crossing Ph II (2)
Q3-12
 
7,253

 
9

 
806

Harris Crossing
Q3-12
 
8,407

 
65

 
129

Market at Colonnade
Q3-12
 
15,270

 
58

 
263

South Bay Village
Q4-12
 
28,419

 
108

 
263

Kent Place
Q4-12
 
9,119

 
48

 
190

Northgate Marketplace
Q4-12
 
19,448

 
81

 
240

Total
 
$
128,437

 
552

$
233

 
 
 
 
 
 
 
 
(1)  Includes leasing costs, net of tenant reimbursements.
(2) Suncoast Crossing Phase II net development costs include land improvements that will benefit a third phase, for which development has not yet commenced.
We plan to continue developing projects for long-term investment purposes and have a staff of employees who directly support our development program. Internal costs attributable to these development activities are capitalized as part of each development project. During the year ended December 31, 2012, we capitalized $3.7 million of interest expense and $10.3 million of internal costs for direct compensation for development and redevelopment activity. 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 the compensation costs directly related to our development activities could result in an additional charge to net income of approximately $859,000.
Net cash provided or used in financing activities:
Net cash used in financing activities increased by $104.3 million for the year ended December 31, 2012, as compared to the year ended December 31, 2011. Significant financing activities during the year ended December 31, 2012 include:
•
On January 15, 2012, the Operating Partnership repaid $192.4 million of maturing 6.75% ten-year unsecured notes;
•
On February 9, 2012, the Operating Partnership purchased all of its issued and outstanding 7.45% Series D Preferred Units, at a 3.75% discount to par, for net redemption costs of $48.1 million;
•
On February 16, 2012, the Parent Company issued 10 million shares of 6.625% Series 6 Cumulative Redeemable Preferred Shares with a liquidation preference of $25 per share, resulting in proceeds of $241.4 million, net of issuance costs;
•
On March 31, 2012, the Parent Company redeemed all issued and outstanding shares of 7.45% Series 3 and 7.25% Series 4 Cumulative Redeemable Preferred Shares for $200.0 million;
•
On August 23, 2012, the Parent Company issued 3 million shares of 6.00% Series 7 Cumulative Redeemable Preferred Shares with a liquidation preference of $25 per share, resulting in proceeds of $72.5 million, net of issuance costs;
•
On September 13, 2012, the Parent Company redeemed all issued and outstanding shares of 6.70% Series 5 Cumulative Redeemable Preferred Shares for $75.0 million;
•
During the third quarter of 2012, the Parent Company issued 442,786 shares of common stock through its at-the-market ("ATM") common equity issuance program resulting in proceeds, net of commissions and issuance costs, of $21.5 million;

42


•
During 2012, we borrowed $250.0 million available under a Term Loan and repaid $150 million using the proceeds from the sale of real estate previously discussed. Our Term Loan has no remaining borrowing capacity and matures in December 2016.
We endeavor to maintain a high percentage of unencumbered assets. At December 31, 2012, 76.8% of our wholly-owned real estate assets were unencumbered. Such assets allow us to access the secured and unsecured debt markets and to maintain significant availability on the Line. Our coverage ratio, including our pro-rata share of our partnerships, was 2.5 times for the year ended December 31, 2012 as compared to 2.3 times for the year ended December 31, 2011. We define our coverage ratio as earnings before interest, taxes, depreciation and amortization (“EBITDA”) divided by the sum of the gross interest and scheduled mortgage principal paid to our lenders plus dividends paid to our preferred stockholders.
Through 2013, we estimate that we will require approximately $130.5 million to repay $16.7 million of maturing debt (excluding scheduled principal payments), $110.5 million to complete currently in-process developments and redevelopments, and $3.3 million to fund our pro-rata share of estimated capital contributions to our co-investment partnerships for repayment of debt. If we start new development or redevelop additional shopping centers, our cash requirements will increase. At December 31, 2012, our joint ventures had $24.4 million of scheduled secured mortgage loans and credit lines maturing through 2013. To meet our cash requirements, we will utilize cash generated from operations, borrowings from our Line, proceeds from the sale of real estate, and when the capital markets are favorable, proceeds from the sale of common equity and the issuance of debt.

43


Investments in Real Estate Partnerships

At December 31, 2012 and 2011, we had investments in real estate partnerships of $442.9 million and $386.9 million, respectively. The following table is a summary of unconsolidated combined assets and liabilities of these co-investment partnerships and our pro-rata share at December 31, 2012 and 2011 (dollars in thousands): 
 
 
2012
 
2011
Number of Co-investment Partnerships
 
19

 
16

Regency’s Ownership
 
 20%-50%

 
 20%-50%

Number of Properties
 
144

 
147

Combined Assets (1)
$
3,434,954

 
3,501,775

Combined Liabilities (1)
$
1,933,488

 
1,992,213

Combined Equity (1)
$
1,501,466

 
1,509,562

Regency’s Share of (1)(2)(3):
 
 
 
 
Assets
$
1,154,387

 
1,160,954

Liabilities
$
635,882

 
648,533

(1) Excludes the assets and liabilities of BRET as the property holdings of BRET do not impact the rate of return on Regency's preferred stock investment.
(2) 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 the operations of Regency, which includes such items on a single line presentation under the equity method in its consolidated financial statements.
(3) The difference between Regency's share of the net assets of the co-investment partnerships and the Company's investments in real estate partnerships per the accompanying Consolidated Balance Sheets relates primarily to differences in inside/outside basis as further described in Note 4 to the Consolidated Financial Statements.
Investments in real estate partnerships are primarily comprised of co-investment partnerships in which we currently invest with six co-investment partners and a closed-end real estate fund (“Regency Retail Partners” or the “Fund”), as further summarized below. In addition to earning our pro-rata share of net income or loss in each of these co-investment partnerships, we receive recurring market-based fees for asset management, property management, and leasing as well as fees for investment and financing services, which were $25.4 million, $29.0 million and $25.1 million for the years ended December 31, 2012, 2011, and 2010 respectively. During the years ended December 31, 2011 and 2010 we received transaction fees from our co-investment partnerships of $5.0 million and $2.6 million, respectively, with no such fees received during 2012.
Our equity method investments in real estate partnerships as of December 31, 2012 and 2011 consist of the following (in thousands): 
 
Regency's Ownership
 
2012
 
2011
GRI - Regency, LLC (GRIR)
40.00
%
$
272,044

 
262,018

Macquarie CountryWide-Regency III, LLC (MCWR III)
24.95
%
 
29

 
195

Columbia Regency Retail Partners, LLC (Columbia I)
20.00
%
 
17,200

 
20,335

Columbia Regency Partners II, LLC (Columbia II)
20.00
%
 
8,660

 
9,686

Cameron Village, LLC (Cameron)
30.00
%
 
16,708

 
17,110

RegCal, LLC (RegCal)
25.00
%
 
15,602

 
18,128

Regency Retail Partners, LP (the Fund)
20.00
%
 
15,248

 
16,430

US Regency Retail I, LLC (USAA)
20.01
%
 
2,173

 
3,093

BRE Throne Holdings, LLC (BRET)
47.80
%
 
48,757

 
—

Other investments in real estate partnerships
50.00
%
 
46,506

 
39,887

    Total (1)
 
$
442,927

 
386,882

(1) The difference between Regency's share of the net assets of the co-investment partnerships and the Company's investments in real estate partnerships per the accompanying Consolidated Balance Sheets relates primarily to differences in inside/outside basis as further described in Note 4 to the Consolidated Financial Statements.


44


Contractual Obligations

We have debt obligations related to our mortgage loans, unsecured notes, and our unsecured credit facilities as described further below and in Note 8 to the Consolidated Financial Statements. We have shopping centers that are subject to non-cancelable long-term ground leases where a third party owns and has leased the underlying land to us to construct and/or operate a shopping center. In addition, we have non-cancelable operating leases pertaining to office space from which we conduct our business. The table below excludes:
•
Reserves for $9.3 million related to our pro-rata share of environmental remediation as discussed herein under Environmental Matters as the timing of the remediation payments is not currently known;
•
Obligations related to construction or development contracts, since payments are only due upon satisfactory performance under the contracts;
•
Letters of credit of $20.8 million issued to cover performance obligations on certain development projects, which will be satisfied upon completion of the development projects; and
•
Obligations for retirement savings plans due to uncertainty around timing of participant withdrawals, which are solely within the control of the participant, and are further discussed in Note 13 to the Consolidated Financial Statements.   

The following table of Contractual Obligations summarizes our debt maturities including interest, excluding recorded debt premiums or discounts that are not obligations, and our obligations under non-cancelable operating leases, sub-leases, and ground leases as of December 31, 2012, including our pro-rata share of obligations within co-investment partnerships (in thousands):
 
 
 
Payments Due by Period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beyond 5
 
 
 
 
 
2013
 
2014
 
2015
 
2016
 
2017
 
Years
 
Total
Notes Payable:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Regency (1)
 
$
125,525

 
276,553

 
488,153

 
255,663

 
554,975

 
632,762

 
2,333,631

Regency's share of JV (1)
 
 
46,560

 
57,212

 
77,676

 
150,348

 
69,264

 
380,510

 
781,570

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Regency
 
 
4,786

 
4,070

 
3,999

 
3,406

 
1,891

 
58

 
18,210

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subleases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Regency
 
 
(229
)
 
(117
)
 
(94
)
 
(32
)
 
—

 
—

 
(472
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ground Leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Regency
 
 
3,175

 
3,183

 
2,808

 
2,807

 
2,758

 
101,555

 
116,286

Regency's share of JV
 
 
208

 
208

 
208

 
208

 
208

 
10,534

 
11,574

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
$
180,025

 
341,109

 
572,750

 
412,400

 
629,096

 
1,125,419

 
3,260,799

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Amounts include interest payments.

Off-Balance Sheet Arrangements
We do not have off-balance sheet arrangements, financings, or other relationships with other unconsolidated entities (other than our co-investment partnerships) or other persons, also known as variable interest entities, not previously discussed. Our co-investment partnership properties have been financed with non-recourse loans. The Company has no guarantees related to these loans.



45


Results from Operations
Comparison of the years ended December 31, 2012 to 2011:
Our revenues increased by $3.8 million or 0.8% in 2012, as compared to 2011, as summarized in the following table (in thousands): 
 
 
2012
 
2011
 
Change
Minimum rent
$
359,350

 
350,223

 
9,127

Percentage rent
 
3,327

 
2,996

 
331

Recoveries from tenants and other income
 
107,732

 
105,899

 
1,833

Management, transaction, and other fees
 
26,511

 
33,980

 
(7,469
)
Total revenues
$
496,920

 
493,098

 
3,822

Minimum rent increased $9.1 million for the year ended December 31, 2012 compared to the year ended December 31, 2011 despite a $13.2 million decrease attributable to the sale of a 15-property portfolio on July 25, 2012. This portfolio was sold for total consideration of $273.5 million, net of a $47.5 million retained investment in the acquiring real estate partnership. As of December 31, 2012, this asset group did not meet the definition of discontinued operations, in accordance with FASB ASC Topic 205-20, Presentation of Financial Statements - Discontinued Operations, based on our continuing involvement.
The increase in minimum rent is due to increased average occupancy levels at our consolidated properties from 92.2% leased at December 31, 2011 to 94.1% leased at December 31, 2012, combined with an increase in average base rent per square foot (psf) from $16.59 psf for the year ended December 31, 2011 to $16.86 psf for the year ended December 31, 2012. Minimum rent also increased $2.9 million due to the acquisition of five operating properties and four development properties since December 31, 2011.
Recoveries from tenants represent their share of the operating, maintenance, and real estate tax expenses that we incur to operate our shopping centers, as well as other income. Recoveries increased during the year ended December 31, 2012 as compared to the year ended December 31, 2011 primarily due to increased average occupancy, although recoveries were partially offset by declines in recovery revenue from the sale of real estate.
We earned fees, at market-based rates, for asset management, property management, leasing, acquisition, and financing services that we provided to our co-investment partnerships and third parties as follows (in thousands): 
    
 
 
2012
 
2011
 
Change
Asset management fees
$
6,488

 
6,705

 
(217
)
Property management fees
 
14,224

 
14,910

 
(686
)
Leasing commissions and other fees
 
5,799

 
7,365

 
(1,566
)
Transaction fees
 
—

 
5,000

 
(5,000
)

$
26,511

 
33,980

 
(7,469
)
    
The decrease in fees in 2012 was primarily the result of the liquidation of the DESCO co-investment partnership during 2011, which included a $5.0 million disposition fee and a $1.0 million consulting fee we received as a result of the liquidation. Asset management fees, property management fees, and leasing commissions also declined as a result of the sale of properties held by our co-investment partnerships since December 31, 2011.
    

46


Our operating expenses increased by $3.1 million or 1.0% in 2012, as compared to 2011. The following table summarizes our operating expenses (in thousands): 
 
 
2012
 
2011
 
Change
Depreciation and amortization
$
126,808

 
128,963

 
(2,155
)
Operating and maintenance
 
69,900

 
71,707

 
(1,807
)
General and administrative
 
61,700

 
56,117

 
5,583

Real estate taxes
 
55,604

 
54,622

 
982

Other expenses
 
7,246

 
6,719

 
527

Total operating expenses
$
321,258

 
318,128

 
3,130


Depreciation and amortization expense and operating and maintenance expense decreased $2.2 million and $1.8 million, respectively, for the year ended December 31, 2012, as compared to the year ended December 31, 2011, due to mild winter weather and a net reduction in the number of shopping centers owned during 2012 . General and administrative expense increased $5.6 million primarily due to an increase in incentive compensation expense as a result of exceeding performance targets.
The following table presents the components of other expense (income) (in thousands):
 
 
2012
 
2011
 
Change
Interest expense, net
$
112,129

 
123,645

 
(11,516
)
Provision for impairment
 
74,816

 
12,424

 
62,392

Early extinguishment of debt
 
852

 
—

 
852

Net investment (income) loss from deferred compensation plan
 
(2,057
)
 
206

 
(2,263
)
 
$
185,740

 
136,275

 
49,465

As discussed above, we sold a 15-property portfolio during 2012, and as a result of this sale, we recognized a net impairment loss of $18.1 million during the year ended December 31, 2012. Additional impairment of $56.7 million was recognized related to two operating properties and three land parcels. The majority of this impairment, $50.0 million, related to one operating property, which we determined was more likely than not to be sold before the end of its previously estimated hold period, which led to the impairment. This property is located in a master planned community of North Los Vegas, a market that was significantly impacted by the housing market crash.  This is the only property owned by us in this market, and we currently do not intend to hold the property for a term that we estimate would be necessary for us to recover our investment. The other operating property exhibited weak operating fundamentals, including low economic occupancy for an extended period of time, which led to a $4.5 million impairment.
During the year ended December 31, 2011, a $12.4 million provision for impairment was recognized related to two operating properties, that exhibited weak operating fundamentals, including low economic occupancy for an extended period of time, which lead to the impairment.
On July 20, 2012, we repaid $150 million of our Term Loan, and as a result of this early extinguishment of debt, we expensed approximately $852,000 in loan costs.
The $2.3 million increase in net investment income from deferred compensation plan related to the change in the fair value of plan assets from December 31, 2011 to December 31, 2012 and is consistent with the change in plan liabilities.

47


The following table presents the change in net interest expense (in thousands): 
 
 
2012
 
2011
 
Change
Interest on notes payable
$
103,610

 
116,343

 
(12,733
)
Interest on unsecured credit facilities
 
4,388

 
1,746

 
2,642

Capitalized interest
 
(3,686
)
 
(1,480
)
 
(2,206
)
Hedge interest
 
9,492

 
9,478

 
14

Interest income
 
(1,675
)
 
(2,442
)
 
767

 
$
112,129

 
123,645

 
(11,516
)
Interest on notes payable decreased and interest on unsecured credit facilities increased during the year ended December 31, 2012, as compared to the year ended December 31, 2011, as a result of the repayment of $192.4 million of 6.75% unsecured debt in January 2012 using proceeds from our Term Loan and $800 million Line of Credit at lower interest rates. Additional interest was capitalized during 2012 due to increased development activity.
Our equity in income (loss) of investments in real estate partnerships increased by $14.2 million in 2012, as compared to 2011 as follows (in thousands): 
 
Regency's Ownership
 
2012
 
2011
 
Change
GRI - Regency, LLC (GRIR)
40.00
%
$
9,311

 
7,266

 
2,045

Macquarie CountryWide-Regency III, LLC (MCWR III)
24.95
%
 
(22
)
 
(123
)
 
101

Macquarie CountryWide-Regency-DESCO, LLC (MCWR-DESCO)(1)
—

 
—

 
(293
)
 
293

Columbia Regency Retail Partners, LLC (Columbia I)
20.00
%
 
8,480

 
2,775

 
5,705

Columbia Regency Partners II, LLC (Columbia II)
20.00
%
 
290

 
179

 
111

Cameron Village, LLC (Cameron)
30.00
%
 
596

 
322

 
274

RegCal, LLC (RegCal)
25.00
%
 
540

 
1,904

 
(1,364
)
Regency Retail Partners, LP (the Fund)
20.00
%
 
297

 
268

 
29

US Regency Retail I, LLC (USAA)
20.01
%
 
297

 
243

 
54

BRE Throne Holdings, LLC (BRET)
47.80
%
 
2,211

 
—

 
2,211

Other investments in real estate partnerships
50.00
%
 
1,807

 
(2,898
)
 
4,705

    Total
 
$
23,807

 
9,643

 
14,164

(1) At December 2010, our ownership interest in MCWR-DESCO was 16.35%. The liquidation of MCWR-DESCO was complete effective May 4, 2011. Our ownership interest in MCWR-DESCO was 0.00% at both December 2012 and 2011.
The increase in our equity in income (loss) in investments in real estate partnerships for the year ended December 31, 2012, as compared to the year ended December 31, 2011, is primarily due to the recognition of our pro-rata share of the $34.5 million gain on sale of an operating property in the Columbia I partnership during second quarter of 2012, the new ownership joint venture interest retained in BRET as part of the portfolio sale during the three months ended December 31, 2012, and a $4.6 million impairment recognized on one investment in a real estate partnership during the first quarter of 2011.
    
    

48


The following represents the remaining components to determine net income attributable to the common stockholders and unit holders for the year ended December 31, 2012, as compared to the year ended December 31, 2011 (in thousands):
 
 
2012
 
2011
 
Change
Income from continuing operations before tax
$
13,729

 
48,338

 
(34,609
)
Income tax expense (benefit) of taxable REIT subsidiary
 
13,224

 
2,994

 
10,230

Income from discontinued operations
 
23,546

 
8,040

 
15,506

Gain on sale of real estate
 
2,158

 
2,404

 
(246
)
Income attributable to noncontrolling interests
 
(342
)
 
(4,418
)
 
4,076

Preferred stock dividends
 
(32,531
)
 
(19,675
)
 
(12,856
)
Net (loss) income attributable to common stockholders
$
(6,664
)
 
31,695

 
(38,359
)
Net income attributable to exchangeable operating partnership units
 
(106
)
 
(103
)
 
(3
)
Net (loss) income attributable to common unit holders
$
(6,558
)
 
31,798

 
(38,356
)

Income tax expense increased $10.2 million for the year ended December 31, 2012, as compared to the year ended December 31, 2011. During 2012, we identified four core operating properties within the Taxable REIT Subsidiary (“TRS”) and sold them to the REIT, which generated taxable gains enabling us to use a significant amount of the net operating losses created during the portfolio sale from July 2012.  Based on the remaining properties within the TRS and future taxable income sources, the remaining deferred tax assets are not likely to be realized and a full valuation allowance was established on the balance. 
Income from discontinued operations was $23.5 million for the year ended December 31, 2012 and includes $21.9 million in gains, net of taxes, from the sale of five properties and the operations of the shopping centers sold. Income from discontinued operations was $8.0 million for the year ended December 31, 2011 and includes $5.9 million in gains, net of taxes, from the sale of seven properties and the operations, including impairment, of the shopping centers sold.
Gain on sale of real estate decreased approximately $246,000 for the year ended December 31, 2012, as compared to the year ended December 31, 2011. During the year ended December 31, 2012, we sold seven out-parcels for a gain of $2.2 million, whereas during the year ended December 31, 2011, we sold eight out-parcels for no gain, and we sold two operating properties, which did not meet the definition of discontinued operations due to our continuing involvement, for a gain of $2.4 million.
The income attributable to noncontrolling interests decreased during the year ended December 31, 2012 related to the redemption of preferred units in February 2012, resulting in expense recognition of the original preferred unit issuance costs of approximately $842,000 offset by the redemption discount of $1.9 million.
Preferred stock dividends increased $12.9 million during the year ended December 31, 2012, from $19.7 million during the year ended December 31, 2011 to $32.5 million during the year ended December 31, 2012. The increase is attributable to the $9.3 million of non-cash charges for the deemed distribution recognized upon redemption of the Series 3, 4 and 5 Preferred Stock during the year ended December 31, 2012, as well as the impact of additional dividends on the Series 6 Preferred Stock issued in February 2012 and Series 7 Preferred Stock issued in September 2012.
Related to our Parent Company's results, our net loss attributable to common stockholders for the year ended December 31, 2012 was $6.7 million, a decrease of $38.4 million as compared to net income of $31.7 million for the year ended December 31, 2011. The lower net income was primarily related to an increase in impairment provisions of $62.4 million, offset by a decrease in interest expense of $11.5 million and an increase in equity in income of investments in real estate partnerships of $14.2 million. Our diluted net loss per share was $0.08 for the year ended December 31, 2012 as compared to diluted net income per share of $0.35 for the year ended December 31, 2011.
Related to our Operating Partnership results, our net loss attributable to common unit holders for the year ended December 31, 2012 was $6.6 million, a decrease of $38.4 million as compared to net income of $31.8 million for the year ended December 31, 2011 for the same reasons stated above. Our diluted net loss per unit was $0.08 for the year ended December 31, 2012 as compared to diluted net income per unit of $0.35 for the year ended December 31, 2011.

49


Comparison of the years ended December 31, 2011 to 2010:
Our revenues increased by $24.9 million or 5.3% in 2011, as compared to 2010, as summarized in the following table (in thousands):
 
 
2011
 
2010
 
Change
Minimum rent
$
350,223

 
332,159

 
18,064

Percentage rent
 
2,996

 
2,540

 
456

Recoveries from tenants and other income
 
105,899

 
104,092

 
1,807

Management, transaction, and other fees
 
33,980

 
29,400

 
4,580

Total revenues
$
493,098

 
468,191

 
24,907

Minimum rent increased $18.1 million for the year ended December 31, 2011 compared to the year ended December 31, 2010 due to an increase in average base rent per square foot (psf) from $16.55 psf for the year ended December 31, 2010 to $16.59 psf for the year ended December 31, 2011, despite consistent average occupancy levels at our consolidated properties of 92.2% at December 31, 2011 and 2010. Minimum rent also increased due to the acquisition of two operating properties in the latter part of the fourth quarter of 2010, the acquisition of three operating properties during 2011, and four properties received through a distribution-in-kind ("DIK") of one interest in MCWR-DESCO ("DESCO DIK") in May 2011.
Recoveries from tenants increased as a result of increases in our operating and maintenance expenses, and real estate taxes for the year ended December 31, 2011 as compared to the year ended December 31, 2010 as summarized further below. In addition, other income increased due to increased contingency income earned from prior year sales of $1.4 million.
We earned fees, at market-based rates, for asset management, property management, leasing, acquisition, disposition and financing services that we provided to our co-investment partnerships and third parties as follows (in thousands): 
 
 
2011
 
2010
 
Change
Asset management fees
$
6,705

 
6,695

 
10

Property management fees
 
14,910

 
15,599

 
(689
)
Transaction fees
 
5,000

 
2,594

 
2,406

Leasing commissions and other fees
 
7,365

 
4,512

 
2,853

 
$
33,980

 
29,400

 
4,580

The increase in transaction and other fees was due to the $5.0 million disposition fee and a $1.0 million consulting fee we received as a result of the DESCO DIK liquidation during the the year ended December 31, 2011, as compared to the $2.6 million disposition fee we received related to GRI's acquisition of Macquarie CountryWide's ("MCW") investment during the year ended December 31, 2010.
Our operating expenses increased by $12.0 million or 3.9% in 2011, as compared to 2010. The following table summarizes our operating expenses (in thousands): 
 
 
2011
 
2010
 
Change
Depreciation and amortization
$
128,963

 
118,398

 
10,565

Operating and maintenance
 
71,707

 
67,514

 
4,193

General and administrative
 
56,117

 
61,505

 
(5,388
)
Real estate taxes
 
54,622

 
52,386

 
2,236

Other expenses
 
6,719

 
6,297

 
422

Total operating expenses
$
318,128

 
306,100

 
12,028

    
Depreciation and amortization expense, operating and maintenance expense, and real estate tax expense increased primarily due to the acquisition of two operating properties in the latter part of the fourth quarter of 2010, the acquisition of three operating properties during 2011, and the four properties received through the DESCO DIK in May 2011. General and administrative expense decreased $5.4 million primarily due to a decrease in salary expense, including incentive compensation and certain employee benefits.

50


The following table presents the components of other expense (income) (in thousands):
 
 
2011
 
2010
 
Change
Interest expense, net
$
123,645

 
125,287

 
(1,642
)
Provision for impairment
 
12,424

 
19,886

 
(7,462
)
Early extinguishment of debt
 
—

 
4,243

 
(4,243
)
Net investment (income) loss from deferred compensation plan
 
206

 
(1,982
)
 
2,188

 
$
136,275

 
147,434

 
(11,159
)
During the year ended December 31, 2011, a $12.4 million provision for impairment was recognized related to two operating properties that exhibited weak operating fundamentals, including low economic occupancy for an extended period of time, which lead to the impairment.
During the year ended December 31, 2010, a $19.9 million provision for impairment was recognized as a result of identifying properties that had been previously considered held for long term investment and determining that they no longer met our long term investment strategy. As a result of this re-evaluation, we changed our expected investment holding period and reduced our carrying value to estimated fair value.
    On October 29, 2010, RCLP completed a tender offer for outstanding debt by purchasing $11.8 million of its $173.5 million 7.95% unsecured notes maturing in January 2011, and $57.6 million of its $250.0 million 6.75% unsecured notes maturing in January 2012 (collectively, the “Notes”). The Company recognized a $4.2 million expense for the early extinguishment of this debt.
The $2.2 million increase in net investment income from deferred compensation plan related to the change in the fair value of plan assets from December 31, 2010 to December 31, 2011 and is consistent with the change in plan liabilities.
The following table presents the change in interest expense (in thousands): 
 
 
2011
 
2010
 
Change
Interest on notes payable
$
116,343

 
125,788

 
(9,445
)
Interest on unsecured credit facilities
 
1,746

 
1,430

 
316

Capitalized interest
 
(1,480
)
 
(5,099
)
 
3,619

Hedge interest
 
9,478

 
5,576

 
3,902

Interest income
 
(2,442
)
 
(2,408
)
 
(34
)
 
$
123,645

 
125,287

 
(1,642
)
Interest on notes payable decreased during the year ended December 31, 2011, as compared to the year ended December 31, 2010, as a result of the repayment of $161.7 million and $20.0 million of unsecured debt in January 2011 and December 2011, respectively. Capitalized interest decreased as a result of reduced development activity during the year ended December 31, 2011, as compared to 2010. Hedge interest increased as a result of $36.7 million of hedges settled on September 30, 2010, with the realized loss being amortized over a ten year period beginning October 2010.

    


51


Our equity in income (loss) of investments in real estate partnerships increased by $22.5 million in 2011, as compared to 2010 as follows (in thousands): 
 
Ownership
 
2011
 
2010
 
Change
GRI - Regency, LLC (GRIR)
40.00
%
$
7,266

 
(6,672
)
 
13,938

Macquarie CountryWide-Regency III, LLC (MCWR III)
24.95
%
 
(123
)
 
(108
)
 
(15
)
Macquarie CountryWide-Regency-DESCO, LLC (MCWR-DESCO)(1)
—
%
 
(293
)
 
(817
)
 
524

Columbia Regency Retail Partners, LLC (Columbia I)
20.00
%
 
2,775

 
(2,970
)
 
5,745

Columbia Regency Partners II, LLC (Columbia II)
20.00
%
 
179

 
(69
)
 
248

Cameron Village, LLC (Cameron)
30.00
%
 
322

 
(221
)
 
543

RegCal, LLC (RegCal)
25.00
%
 
1,904

 
194

 
1,710

Regency Retail Partners, LP (the Fund)
20.00
%
 
268

 
(3,565
)
 
3,833

US Regency Retail I, LLC (USAA)
20.01
%
 
243

 
(88
)
 
331

Other investments in real estate partnerships
50.00
%
 
(2,898
)
 
1,432

 
(4,330
)
    Total
 
$
9,643

 
(12,884
)
 
22,527

(1) At December 31, 2010, our ownership interest in MCWR-DESCO was 16.35%. The liquidation of MCWR-DESCO was complete effective May 4, 2011.
The increase in our equity in income (loss) in investments in real estate partnerships for the year ended December 31, 2011, as compared to the year ended December 31, 2010, is related to our pro-rata share of the decrease in depreciation expense of $5.7 million, the decrease in interest expense of $5.9 million, the decrease in impairment provisions of $18.5 million, and the net gain on extinguishment of debt of $1.7 million, offset by a decrease in net operating income of $7.8 million and a gain on sale of properties of approximately $700,000 at the individual real estate partnerships.
The following represents the remaining components to determine net income attributable to the common stockholders and unit holders for the year ended December 31, 2011, as compared to the year ended December 31, 2010 (in thousands):
 
 
2011
 
2010
 
Change
Income from continuing operations before tax
$
48,338

 
1,773

 
46,565

Income tax expense (benefit) of taxable REIT subsidiary
 
2,994

 
(1,333
)
 
4,327

Income from discontinued operations
 
8,040

 
8,902

 
(862
)
Gain on sale of real estate
 
2,404

 
993

 
1,411

Income attributable to noncontrolling interests
 
(4,418
)
 
(4,185
)
 
(233
)
Preferred stock dividends
 
(19,675
)
 
(19,675
)
 
—

Net income (loss) attributable to common stockholders
$
31,695

 
(10,859
)
 
42,554

Net income attributable to exchangeable operating partnership units
 
(103
)
 
(84
)
 
(19
)
Net income (loss) attributable to common unit holders
$
31,798

 
(10,775
)
 
42,573


Income tax expense increased $4.3 million for the year ended December 31, 2011, as compared to the year ended December 31, 2010, primarily due to the increase in deferred income taxes in 2011 and a tax benefit recognized in 2010.
Income from discontinued operations was $8.0 million for the year ended December 31, 2011 and includes $5.9 million in gains, net of taxes, from the sale of seven properties and the operations of the shopping centers sold. Income from discontinued operations was $8.9 million for the year ended December 31, 2010 and includes $7.6 million in gains, net of taxes, from the sale of three properties and the operations, including impairment, of the shopping centers sold.
Gain on sale of real estate increased approximately $1.4 million for the year ended December 31, 2011, as compared to the year ended December 31, 2010. During the year ended December 31, 2011, we sold eight out-parcels for no gain, and we sold two operating properties that did not meet the definition of discontinued operations due to our continuing involvement, for a gain of $2.4 million. During the year ended December 31, 2010 we sold eleven out-parcels for a gain of approximately $661,000, and we sold three operating properties for a gain of approximately $332,000. These properties did not meet the definition of discontinued operations due to our continuing involvement.

52


The income attributable to noncontrolling interests remained relatively consistent for the year ended December 31, 2011, as compared to the year ended December 31, 2010, increasing approximately $233,000. Preferred stock dividends also remained consistent between 2011 and 2010.
Related to our Parent Company's results, our net income attributable to common stockholders for the year ended December 31, 2011 was $31.7 million, an increase of $42.6 million as compared to net loss of $10.9 million for the year ended December 31, 2010. The higher net income was primarily related to the increase in revenue, offset partially by the increase in operating expenses, from 2010 to 2011 as discussed above, a decrease in impairment provisions of $7.5 million, the $4.2 million net loss on extinguishment of debt incurred in 2010, and an increase in equity in income of investments in real estate partnerships of $22.5 million. Our diluted net income per share was $0.35 for the year ended December 31, 2011 as compared to diluted net loss per share of $0.14 for the year ended December 31, 2010.
Related to our Operating Partnership results, our net income attributable to common unit holders for the year ended December 31, 2011 was $31.8 million an increase of $42.6 million as compared to net loss of $10.8 million for the year ended December 31, 2010 for the same reasons stated above. Our diluted net income per unit was $0.35 for the year ended December 31, 2011 as compared to diluted net loss per unit of $0.14 for the year ended December 31, 2010.

Supplemental Earnings Information

We use certain non-GAAP performance measures, in addition to the required GAAP presentations, as we believe these measures are beneficial to us in improving the understanding of the Company's operational results among the investing public. We believe such measures make comparisons of other REITs' operating results to the Company's more meaningful. We continually evaluate the usefulness, relevance, 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 are our definitions of Same Property Net Operating Income ("NOI"), Funds from Operations ("FFO"), and Core FFO, which we believe to be beneficial non-GAAP performance measures used in understanding our operational results:
Ÿ
Same Property NOI includes only the net operating income of comparable operating properties that were owned and operated for the entirety of both periods being compared and this excludes all Properties in Development and Non-Same Properties. A Non-Same Property is a property acquired during either period being compared or a development completion that is less than 90% funded or features less than two years of anchor operations. In no event can a development completion be termed a non-same property for more than two years. As such, Same Property NOI assists in eliminating disparities in net income due to the development, acquisition or disposition of properties during the particular period presented, and thus provides a more consistent performance measure for the comparison of our properties.
Ÿ
NOI is calculated as total property revenues (minimum rent, percentage rents, and recoveries from tenants and other income) less direct property operating expenses (operating and maintenance and real estate taxes) from the properties owned by the Company, and excludes corporate-level income (including management, transaction, and other fees), for the entirety of the periods presented.
Ÿ
FFO is a commonly used measure of REIT performance, which the National Association of Real Estate Investment Trusts ("NAREIT") defines as net income, computed in accordance with GAAP, excluding gains and losses from sales of depreciable property, net of tax, excluding operating real estate impairments, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. We compute 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 our financial performance not immediately apparent from net income determined in accordance with GAAP. Thus, 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 an alternative for net income as a measure of liquidity.
Ÿ
Core FFO is an additional performance measure we use as the computation of FFO includes certain non-cash and non-comparable items that affect our period-over-period performance. Core FFO excludes from FFO, but is not limited to, transaction income or expense, gains or losses from the early extinguishment of debt, development and outparcel gains and losses and other non-core items. We provide a reconciliation of FFO to Core FFO as shown below.


53


The Company's reconciliation of property revenues and property expenses to Same Property NOI for the years ended December 31, 2012 and 2011 is as follows (in thousands):
 
 
2012
 
2011
 
 
Same Property
 
Other (1)
 
Total
 
Same Property
 
Other (1)
 
Total
Income (loss) from continuing operations
$
140,054

 
(139,549
)
 
505

 
160,784

 
(115,440
)
 
45,344

Less:
 
 
 
 
 
 
 
 
 
 
 
 
Management, transaction, and other fees
 
—

 
26,511

 
26,511

 
—

 
33,980

 
33,980

Other (2)
 
5,511

 
1,685

 
7,196

 
5,169

 
1,125

 
6,294

Plus:
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
103,775

 
23,033

 
126,808

 
103,294

 
25,669

 
128,963

General and administrative
 
—

 
61,700

 
61,700

 
—

 
56,117

 
56,117

Other operating expense, excluding provision for doubtful accounts
 
9

 
4,230

 
4,239

 
328

 
3,376

 
3,704

Other expense (income)
 
82,499

 
103,241

 
185,740

 
41,659

 
94,616

 
136,275

Equity in income (loss) of investments in real estate excluded from NOI (3)
 
63,053

 
3,489

 
66,542

 
69,079

 
10,060

 
79,139

Income tax expense of taxable REIT subsidiary
 
—

 
13,224

 
13,224

 
—

 
2,994

 
2,994

NOI from properties sold
 
—

 
2,781

 
2,781

 
—

 
10,203

 
10,203

NOI
$
383,879

 
43,953

 
427,832

 
369,975

 
52,490

 
422,465

(1) Includes revenues and expenses attributable to non-same property, development, and corporate activities. 
(2) Includes straight-line rental income, net of reserves, above and below market rent amortization, banking charges, and other fees.
(3) Excludes non-operating related expenses. 


54


The Company's reconciliation of net income available to common shareholders to FFO and Core FFO for the years ended December 31, 2012 and 2011 is as follows (in thousands, except share information):
 
 
2012
 
2011
Reconciliation of Net income to Funds from Operations
 
 
 
 
  Net income (loss) attributable to common stockholders
$
(6,664
)
 
31,695

   Adjustments to reconcile to Funds from Operations:
 
 
 
 
    Depreciation and amortization - consolidated real estate
 
108,057

 
113,384

    Depreciation and amortization - unconsolidated partnerships
 
43,162

 
43,750

    Consolidated JV partners' share of depreciation
 
(755
)
 
(739
)
    Provision for impairment (1)
 
75,326

 
19,614

    Amortization of leasing commissions and intangibles
 
16,055

 
16,427

    Gain on sale of operating properties, net of tax (1)
 
(13,187
)
 
(4,916
)
    Loss from deferred compensation plan, net
 
—

 
1,000

    Noncontrolling interest of exchangeable partnership units
 
106

 
103

Funds From Operations
$
222,100

 
220,318

Reconciliation of FFO to Core FFO
 
 
 
 
  Funds from operations
$
222,100

 
220,318

   Adjustments to reconcile to Core Funds from Operations:
 
 
 
 
    Development and outparcel gain, net of dead deal costs and tax (1)
 
(3,415
)
 
(1,328
)
    Provision for impairment to land and outparcels (1)
 
1,000

 
849

    Provision for hedge ineffectiveness (1)
 
20

 
54

    Loss (gain) on early debt extinguishment (1)
 
1,238

 
(1,745
)
    Original preferred stock issuance costs expensed
 
10,119

 
—

    Gain on redemption of preferred units
 
(1,875
)
 
—

    One-time additional preferred dividend
 
1,750

 
—

    Transaction fees and promotes
 
—

 
(5,000
)
Core Funds From Operations
$
230,937

 
213,148

 
 
 
 
 
(1) Includes Regency's pro-rata share of unconsolidated co-investment partnerships.



55


Environmental Matters
We are subject to numerous environmental laws and regulations as they apply to our shopping centers pertaining 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 applied and 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. At December 31, 2012 we had reserves of $9.3 million for our pro-rata share of environmental remediation, primarily from property acquisitions. 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 future. Substantially all of our long-term leases contain provisions designed to mitigate the adverse impact of inflation. Most of our leases 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 may decline as the supply of available retail space exceeds demand and consumer spending declines. Occupancy declines resulting from a weak economic period will also likely result in lower recovery rates of our operating expenses.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Market Risk
We are exposed to two significant components of interest rate risk:
•
We have a $800.0 million Line commitment and a $100.0 million Term Loan commitment, as further described in Note 8 to the Consolidated Financial Statements. Our Line commitment has a variable interest rate that is based upon a annual rate of LIBOR plus 117.5 basis points and our Term Loan has a variable interest rate of LIBOR plus 145 basis points. LIBOR rates charged on our Line commitment and our Term Loan (collectively our "unsecured credit facilities") change monthly. The spread on the unsecured credit facilities is dependent upon maintaining specific credit ratings. If our credit ratings are downgraded, the spread on the unsecured credit facilities would increase, resulting in higher interest costs.
•
We are also exposed to changes in interest rates when we refinance our existing long-term fixed rate debt. The objective of our interest rate risk management program is to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, we borrow primarily at fixed interest rates and may enter into derivative financial instruments such as interest rate swaps, caps, or treasury locks in order to mitigate our interest rate risk on a related financial instrument. We do not enter into derivative or interest rate transactions for speculative purposes. Our interest rate swaps are structured solely for the purpose of interest rate protection.
We have $181.6 million of fixed rate debt maturing in 2013 and 2014 that has a weighted average fixed interest rate of 5.22%, which includes $150.0 million of unsecured long-term debt that matures in April 2014.  We also have $350.0 million of unsecured long-term debt that matures in 2015. In order to mitigate the risk of interest rates rising before we obtain new unsecured borrowings in 2014 and 2015, we entered into five forward-starting interest rate swaps during December 2012, for

56


the same ten year periods we expect for our future borrowings. These swaps total $300.0 million of notional value, with weighted average fixed ten year swap rates of 2.09% for those starting in 2014 and 2.48% for those starting in 2015, as discussed in note 9 to the Consolidated Financial Statements. We continuously monitor the capital markets and evaluate our ability to issue new debt to repay maturing debt or fund our commitments. Based upon the current capital markets, our current credit ratings, our current capacity under our Line and Term Loan, and the number of high quality, unencumbered properties that we own which could collateralize borrowings, we expect that we will be able to successfully issue new secured or unsecured debt to fund these debt obligations.
Our interest rate risk is monitored using a variety of techniques. The table below presents the principal cash flows (in thousands, excluding interest expense), weighted average interest rates of remaining debt, and the fair value of total debt (in thousands) as of December 31, 2012, by year of expected maturity to evaluate the expected cash flows and sensitivity to interest rate changes. Although the average interest rate for variable rate debt is included in the table, those rates represent rates that existed at December 31, 2012 and are subject to change on a monthly basis.
The table below incorporates only those exposures that exist as of December 31, 2012 and does not consider exposures or positions that could arise after that date. Since firm commitments are not presented, the table has limited predictive value. As a result, our ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during the period, our hedging strategies at that time, and actual interest rates. 

 
 
2013
 
2014
 
2015
 
2016
 
2017
 
Thereafter
 
Total
 
Fair Value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed rate debt
$
23,987

 
172,545

 
418,181

 
19,648

 
488,960

 
632,762

 
1,756,083

 
1,997,561

Average interest rate for all fixed rate debt (1)
 
5.67
%
 
5.74
%
 
5.89
%
 
5.89
%
 
5.89
%
 
5.89
%
 
—

 
—

Variable rate LIBOR debt
$
204

 
11,837

 
—

 
170,000

 
—

 
—

 
182,041

 
182,390

Average interest rate for all variable rate debt (1)
 
1.71
%
 
1.61
%
 
1.61
%
 
—

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Average interest rates at the end of each year presented.


57


Item 8.    Consolidated Financial Statements and Supplementary Data

Regency Centers Corporation and Regency Centers, L.P.

Index to Financial Statements

 
 
Regency Centers Corporation:
 
 
 
Regency Centers, L.P.:
 
 
 
 
 
Financial Statement Schedule
 

All other schedules are omitted because of the absence of conditions under which they are required, materiality or because information required therein is shown in the consolidated financial statements or notes thereto.




58



Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders
Regency Centers Corporation:

We have audited the accompanying consolidated balance sheets of Regency Centers Corporation and subsidiaries (the Company) as of December 31, 2012 and 2011, and the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the years in the three-year period ended December 31, 2012. In connection with our audits of the consolidated financial statements, we also have audited financial statement Schedule III. These consolidated financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Regency Centers Corporation and subsidiaries as of December 31, 2012 and 2011, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2012, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Regency Centers Corporation's internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 1, 2013 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.
/s/ KPMG LLP

March 1, 2013
Jacksonville, Florida
Certified Public Accountants

59


Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders
Regency Centers Corporation:

We have audited Regency Centers Corporation's (the Company's) internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Regency Centers Corporation's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, Regency Centers Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Regency Centers Corporation and subsidiaries as of December 31, 2012 and 2011, and the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the years in the three-year period ended December 31, 2012, and our report dated March 1, 2013 expressed an unqualified opinion on those consolidated financial statements.
/s/ KPMG LLP

March 1, 2013
Jacksonville, Florida
Certified Public Accountants

60


Report of Independent Registered Public Accounting Firm
The Unit Holders of Regency Centers, L.P. and
the Board of Directors and Stockholders of
Regency Centers Corporation:

We have audited the accompanying consolidated balance sheets of Regency Centers, L.P. and subsidiaries (the Partnership) as of December 31, 2012 and 2011, and the related consolidated statements of operations, comprehensive income (loss), capital, and cash flows for each of the years in the three-year period ended December 31, 2012. In connection with our audits of the consolidated financial statements, we also have audited financial statement Schedule III. These consolidated financial statements and financial statement schedule are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Regency Centers, L.P. and subsidiaries as of December 31, 2012 and 2011, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2012, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Regency Centers, L.P.'s internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 1, 2013 expressed an unqualified opinion on the effectiveness of the Partnership's internal control over financial reporting.
/s/ KPMG LLP

March 1, 2013
Jacksonville, Florida
Certified Public Accountants

61



Report of Independent Registered Public Accounting Firm
The Unit Holders of Regency Centers, L.P. and
the Board of Directors and Stockholders of
Regency Centers Corporation:

We have audited Regency Centers, L.P.'s (the Partnership's) internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Regency Centers, L.P.'s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Partnership's internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, Regency Centers, L.P. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Regency Centers, L.P. and subsidiaries as of December 31, 2012 and 2011, and the related consolidated statements of operations, comprehensive income (loss), capital, and cash flows for each of the years in the three-year period ended December 31, 2012, and our report dated March 1, 2013 expressed an unqualified opinion on those consolidated financial statements.
/s/ KPMG LLP

March 1, 2013
Jacksonville, Florida
Certified Public Accountants

62



REGENCY CENTERS CORPORATION
Consolidated Balance Sheets
December 31, 2012 and 2011
(in thousands, except share data)
 
 
2012
 
2011
Assets
 
 
 
 
Real estate investments at cost (notes 2 and 3):
 
 
 
 
Land
$
1,215,659

 
1,273,606

Buildings and improvements
 
2,502,186

 
2,604,229

Properties in development
 
192,067

 
224,077

 
 
3,909,912

 
4,101,912

Less: accumulated depreciation
 
782,749

 
791,619

 
 
3,127,163

 
3,310,293

Investments in real estate partnerships (note 4)
 
442,927

 
386,882

Net real estate investments
 
3,570,090

 
3,697,175

Cash and cash equivalents
 
22,349

 
11,402

Restricted cash
 
6,472

 
6,050

Accounts receivable, net of allowance for doubtful accounts of $3,915 and $3,442 at December 31, 2012 and 2011, respectively
 
26,601

 
37,733

Straight-line rent receivable, net of reserve of $870 and $2,075 at December 31, 2012 and 2011, respectively
 
49,990

 
48,132

Notes receivable (note 5)
 
23,751

 
35,784

Deferred costs, less accumulated amortization of $69,224 and $71,265 at December 31, 2012 and 2011, respectively
 
69,506

 
70,204

Acquired lease intangible assets, less accumulated amortization of $19,148 and $15,588 at December 31, 2012 and 2011, respectively (note 6)
 
42,459

 
27,054

Trading securities held in trust, at fair value (note 13)
 
23,429

 
21,713

Other assets (note 9)
 
18,811

 
31,824

Total assets
$
3,853,458

 
3,987,071

Liabilities and Equity
 
 
 
 
Liabilities:
 
 
 
 
Notes payable (note 8)
$
1,771,891

 
1,942,440

Unsecured credit facilities (note 8)
 
170,000

 
40,000

Accounts payable and other liabilities (note 9 and 13)
 
127,185

 
101,899

Acquired lease intangible liabilities, less accumulated accretion of $6,636 and $4,750 at December 31, 2012 and 2011, respectively (note 6)
 
20,325

 
12,662

Tenants’ security and escrow deposits and prepaid rent
 
18,146

 
20,416

Total liabilities
 
2,107,547

 
2,117,417

Commitments and contingencies (notes 15 and 16)
 
 
 
 
Equity:
 
 
 
 
Stockholders’ equity (notes 11 and 12):
 
 
 
 
Preferred stock, $0.01 par value per share, 30,000,000 shares authorized; 13,000,000 and 11,000,000 Series 3-7 shares issued and outstanding at December 31, 2012 and 2011, respectively, with liquidation preferences of $25 per share
 
325,000

 
275,000

Common stock $0.01 par value per share,150,000,000 shares authorized; 90,394,486 and 89,921,858 shares issued at December 31, 2012 and 2011, respectively
 
904

 
899

Treasury stock at cost, 335,347 and 338,714 shares held at December 31, 2012 and 2011, respectively
 
(14,924
)
 
(15,197
)
Additional paid in capital
 
2,312,310

 
2,281,817

Accumulated other comprehensive loss
 
(57,715
)
 
(71,429
)
Distributions in excess of net income
 
(834,810
)
 
(662,735
)
Total stockholders’ equity
 
1,730,765

 
1,808,355

Noncontrolling interests (note 11):
 
 
 
 
Series D preferred units, aggregate redemption value of $50,000 at December 31, 2011
 
—

 
49,158

Exchangeable operating partnership units, aggregate redemption value of $8,348 and $6,665 at December 31, 2012 and 2011, respectively
 
(1,153
)
 
(963
)
Limited partners’ interests in consolidated partnerships
 
16,299

 
13,104

Total noncontrolling interests
 
15,146

 
61,299

Total equity
 
1,745,911

 
1,869,654

Total liabilities and equity
$
3,853,458

 
3,987,071

See accompanying notes to consolidated financial statements.

63


REGENCY CENTERS CORPORATION
Consolidated Statements of Operations
For the years ended December 31, 2012, 2011, and 2010
(in thousands, except per share data)
 
 
2012
 
2011
 
2010
Revenues:
 
 
 
 
 
 
Minimum rent
$
359,350

 
350,223

 
332,159

Percentage rent
 
3,327

 
2,996

 
2,540

Recoveries from tenants and other income
 
107,732

 
105,899

 
104,092

Management, transaction, and other fees
 
26,511

 
33,980

 
29,400

Total revenues
 
496,920

 
493,098

 
468,191

Operating expenses:
 
 
 
 
 
 
Depreciation and amortization
 
126,808

 
128,963

 
118,398

Operating and maintenance
 
69,900

 
71,707

 
67,514

General and administrative
 
61,700

 
56,117

 
61,505

Real estate taxes
 
55,604

 
54,622

 
52,386

Other expenses
 
7,246

 
6,719

 
6,297

Total operating expenses
 
321,258

 
318,128

 
306,100

Other expense (income):
 
 
 
 
 
 
Interest expense, net of interest income of $1,675, $2,442, and $2,408 in 2012, 2011, and 2010, respectively (note 9)
 
112,129

 
123,645

 
125,287

Provision for impairment
 
74,816

 
12,424

 
19,886

Early extinguishment of debt
 
852

 
—

 
4,243

Net investment (income) loss from deferred compensation plan, including unrealized (gains) losses of $(888), $567, and $(1,342) in 2012, 2011, and 2010, respectively (note 13)
 
(2,057
)
 
206

 
(1,982
)
Total other expense (income)
 
185,740

 
136,275

 
147,434

(Loss) income before equity in income (loss) of investments in real estate partnerships
 
(10,078
)
 
38,695

 
14,657

Equity in income (loss) of investments in real estate partnerships (note 4)
 
23,807

 
9,643

 
(12,884
)
Income from continuing operations before tax
 
13,729

 
48,338

 
1,773

Income tax expense (benefit) of taxable REIT subsidiary
 
13,224

 
2,994

 
(1,333
)
Income from continuing operations
 
505

 
45,344

 
3,106

Discontinued operations, net (note 3):
 
 
 
 
 
 
Operating income
 
1,691

 
2,098

 
1,325

Gain on sale of operating properties, net
 
21,855

 
5,942

 
7,577

Income from discontinued operations
 
23,546

 
8,040

 
8,902

Income before gain on sale of real estate
 
24,051

 
53,384

 
12,008

Gain on sale of real estate
 
2,158

 
2,404

 
993

Net income
 
26,209

 
55,788

 
13,001

Noncontrolling interests:
 
 
 
 
 
 
Preferred units
 
629

 
(3,725
)
 
(3,725
)
Exchangeable operating partnership units
 
(106
)
 
(103
)
 
(84
)
Limited partners’ interests in consolidated partnerships
 
(865
)
 
(590
)
 
(376
)
Income attributable to noncontrolling interests
 
(342
)
 
(4,418
)
 
(4,185
)
Net income attributable to the Company
 
25,867

 
51,370

 
8,816

Preferred stock dividends
 
(32,531
)
 
(19,675
)
 
(19,675
)
Net (loss) income attributable to common stockholders
$
(6,664
)
 
31,695

 
(10,859
)
(Loss) income per common share - basic (note 14):
 
 
 
 
 
 
Continuing operations
$
(0.34
)
 
0.26

 
(0.25
)
Discontinued operations
 
0.26

 
0.09

 
0.11

Net (loss) income attributable to common stockholders
$
(0.08
)
 
0.35

 
(0.14
)
(Loss) income per common share - diluted (note 14):
 
 
 
 
 
 
Continuing operations
$
(0.34
)
 
0.26

 
(0.25
)
Discontinued operations
 
0.26

 
0.09

 
0.11

Net (loss) income attributable to common stockholders
$
(0.08
)
 
0.35

 
(0.14
)

See accompanying notes to consolidated financial statements.

64


REGENCY CENTERS CORPORATION
Consolidated Statements of Comprehensive Income (Loss)
For the years ended December 31, 2012, 2011, and 2010
(in thousands)

 
 
2012
 
2011
 
2010
Net income
$
26,209

 
55,788

 
13,001

Other comprehensive income (loss):
 
 
 
 
 
 
Loss on settlement of derivative instruments:
 
 
 
 
 
 
Unrealized loss on derivative instruments
 
—

 
—

 
(61,625
)
Amortization of loss on settlement of derivative instruments recognized in net income
 
9,466

 
9,467

 
5,575

Effective portion of change in fair value of derivative instruments:
 
 
 
 
 
 
Effective portion of change in fair value of derivative instruments
 
4,220

 
11

 
28,363

Less: reclassification adjustment for change in fair value of derivative instruments included in net income
 
25

 
7

 
(3,294
)
Other comprehensive income (loss)
 
13,711

 
9,485

 
(30,981
)
Comprehensive income (loss)
 
39,920

 
65,273

 
(17,980
)
Less: comprehensive income (loss) attributable to noncontrolling interests:
 
 
 
 
 
 
Net income attributable to noncontrolling interests
 
342

 
4,418

 
4,185

Other comprehensive (loss) income attributable to noncontrolling interests
 
(3
)
 
29

 
(69
)
Comprehensive income attributable to noncontrolling interests
 
339

 
4,447

 
4,116

Comprehensive income (loss) attributable to the Company
$
39,581

 
60,826

 
(22,096
)
See accompanying notes to consolidated financial statements.
 
 
 
 
 
 



65



REGENCY CENTERS CORPORATION
Consolidated Statements of Equity
For the years ended December 31, 2012, 2011, and 2010 
(in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noncontrolling Interests
 
 
 
 
Preferred
Stock
 
Common
Stock
 
Treasury
Stock
 
Additional
Paid In
Capital
 
Accumulated
Other
Comprehensive
Loss
 
Distributions
in Excess of
Net Income
 
Total
Stockholders’
Equity
 
Preferred Units
 
Exchangeable
Operating
Partnership
Units
 
Limited
Partners’
Interest  in
Consolidated
Partnerships
 
Total
Noncontrolling
Interests
 
Total
Equity

Balance at December 31, 2009
$
275,000

 
815

 
(16,509
)
 
2,024,883

 
(49,973
)
 
(371,836
)
 
1,862,380

 
49,158

 
7,321

 
11,748

 
68,227

 
1,930,607

Net income
 
—

 
—

 
—

 
—

 
—

 
8,816

 
8,816

 
3,725

 
84

 
376

 
4,185

 
13,001

Other comprehensive loss
 
—

 
—

 
—

 
—

 
(30,912
)
 
—

 
(30,912
)
 
—

 
(69
)
 
—

 
(69
)
 
(30,981
)
Deferred compensation plan, net (note 13)
 
—

 
—

 
334

 
(607
)
 
—

 
—

 
(273
)
 
—

 
—

 
—

 
—

 
(273
)
Amortization of restricted stock issued
 
—

 
—

 
—

 
7,236

 
—

 
—

 
7,236

 
—

 
—

 
—

 
—

 
7,236

Common stock redeemed for taxes withheld for stock based compensation, net
 
—

 
—

 
—

 
(1,374
)
 
—

 
—

 
(1,374
)
 
—

 
—

 
—

 
—

 
(1,374
)
Common stock issued for dividend reinvestment plan
 
—

 
1

 
—

 
1,847

 
—

 
—

 
1,848

 
—

 
—

 
—

 
—

 
1,848

Common stock issued for partnership units exchanged
 
—

 
3

 
—

 
7,627

 
—

 
—

 
7,630

 
—

 
(7,630
)
 
—

 
(7,630
)
 
—

Contributions from partners
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
161

 
161

 
161

Distributions to partners
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(1,456
)
 
(1,456
)
 
(1,456
)
Cash dividends declared:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock/unit
 
—

 
—

 
—

 
—

 
—

 
(19,675
)
 
(19,675
)
 
(3,725
)
 
—

 
—

 
(3,725
)
 
(23,400
)
Common stock/unit ($1.85 per share)
 
—

 
—

 
—

 
—

 
—

 
(150,499
)
 
(150,499
)
 
—

 
(468
)
 
—

 
(468
)
 
(150,967
)
Balance at December 31, 2010
$
275,000

 
819

 
(16,175
)
 
2,039,612

 
(80,885
)
 
(533,194
)
 
1,685,177

 
49,158

 
(762
)
 
10,829

 
59,225

 
1,744,402

Net income
 
—

 
—

 
—

 
—

 
—

 
51,370

 
51,370

 
3,725

 
103

 
590

 
4,418

 
55,788

Other comprehensive income
 
—

 
—

 
—

 
—

 
9,456

 
—

 
9,456

 
—

 
20

 
9

 
29

 
9,485

Deferred compensation plan, net
 
—

 
—

 
978

 
16,865

 
—

 
—

 
17,843

 
—

 
—

 
—

 
—

 
17,843

Amortization of restricted stock issued
 
—

 
—

 
—

 
10,659

 
—

 
—

 
10,659

 
—

 
—

 
—

 
—

 
10,659

Common stock redeemed for taxes withheld for stock based compensation, net
 
—

 
—

 
—

 
(1,689
)
 
—

 
—

 
(1,689
)
 
—

 
—

 
—

 
—

 
(1,689
)
Common stock issued for dividend reinvestment plan
 
—

 
—

 
—

 
1,081

 
—

 
—

 
1,081

 
—

 
—

 
—

 
—

 
1,081

Common stock issued for stock offerings, net of issuance costs
 
—

 
80

 
—

 
215,289

 
—

 
—

 
215,369

 
—

 
—

 
—

 
—

 
215,369

Contributions from partners
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
2,787

 
2,787

 
2,787

Distributions to partners
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(1,111
)
 
(1,111
)
 
(1,111
)
Cash dividends declared:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock/unit
 
—

 
—

 
—

 
—

 
—

 
(19,675
)
 
(19,675
)
 
(3,725
)
 
—

 
—

 
(3,725
)
 
(23,400
)

66


REGENCY CENTERS CORPORATION
Consolidated Statements of Equity
For the years ended December 31, 2012, 2011, and 2010 
(in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noncontrolling Interests
 
 
 
 
Preferred
Stock
 
Common
Stock
 
Treasury
Stock
 
Additional
Paid In
Capital
 
Accumulated
Other
Comprehensive
Loss
 
Distributions
in Excess of
Net Income
 
Total
Stockholders’
Equity
 
Preferred Units
 
Exchangeable
Operating
Partnership
Units
 
Limited
Partners’
Interest  in
Consolidated
Partnerships
 
Total
Noncontrolling
Interests
 
Total
Equity

Common stock/unit ($1.85 per share)
 
—

 
—

 
—

 
—

 
—

 
(161,236
)
 
(161,236
)
 
—

 
(324
)
 
—

 
(324
)
 
(161,560
)
Balance at December 31, 2011
$
275,000

 
899

 
(15,197
)
 
2,281,817

 
(71,429
)
 
(662,735
)
 
1,808,355

 
49,158

 
(963
)
 
13,104

 
61,299

 
1,869,654

Net income
 
—

 
—

 
—

 
—

 
—

 
25,867

 
25,867

 
(629
)
 
106

 
865

 
342

 
26,209

Other comprehensive income (loss)
 
—

 
—

 
—

 
—

 
13,714

 
—

 
13,714

 
—

 
28

 
(31
)
 
(3
)
 
13,711

Deferred compensation plan, net
 
—

 
—

 
273

 
(261
)
 
—

 
—

 
12

 
—

 
—

 
—

 
—

 
12

Amortization of restricted stock issued
 
—

 
—

 
—

 
11,526

 
—

 
—

 
11,526

 
—

 
—

 
—

 
—

 
11,526

Common stock redeemed for taxes withheld for stock based compensation, net
 
—

 
—

 
—

 
(1,474
)
 
—

 
—

 
(1,474
)
 
—

 
—

 
—

 
—

 
(1,474
)
Common stock issued for dividend reinvestment plan
 
—

 
—

 
—

 
988

 
—

 
—

 
988

 
—

 
—

 
—

 
—

 
988

Common stock issued for stock offerings, net of issuance costs
 
—

 
5

 
—

 
21,537

 
—

 
—

 
21,542

 
—

 
—

 
—

 
—

 
21,542

Redemption of preferred units
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(48,125
)
 
—

 
—

 
(48,125
)
 
(48,125
)
Issuance of preferred stock, net of issuance costs
 
325,000

 
—

 
—

 
(11,100
)
 
—

 
—

 
313,900

 
—

 
—

 
—

 
—

 
313,900

Redemption of preferred stock
 
(275,000
)
 
—

 
—

 
9,277

 
—

 
(9,277
)
 
(275,000
)
 
—

 
—

 
—

 
—

 
(275,000
)
Contributions from partners
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
3,362

 
3,362

 
3,362

Distributions to partners
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(1,001
)
 
(1,001
)
 
(1,001
)
Cash dividends declared:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock/unit
 
—

 
—

 
—

 
—

 
—

 
(23,254
)
 
(23,254
)
 
(404
)
 
—

 
—

 
(404
)
 
(23,658
)
Common stock/unit ($1.85 per share)
 
—

 
—

 
—

 
—

 
—

 
(165,411
)
 
(165,411
)
 
—

 
(324
)
 
—

 
(324
)
 
(165,735
)
Balance at December 31, 2012
$
325,000

 
904

 
(14,924
)
 
2,312,310

 
(57,715
)
 
(834,810
)
 
1,730,765

 
—

 
(1,153
)
 
16,299

 
15,146

 
1,745,911

See accompanying notes to consolidated financial statements.


67


RREGENCY CENTERS CORPORATION
Consolidated Statements of Cash Flows
For the years ended December 31, 2012, 2011, and 2010
(in thousands)
 
 
2012
 
2011
 
2010
Cash flows from operating activities:
 
 
 
 
 
 
Net income
$
26,209

 
55,788

 
13,001

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
Depreciation and amortization
 
127,839

 
133,756

 
123,933

Amortization of deferred loan cost and debt premium
 
12,759

 
12,327

 
8,533

Amortization and (accretion) of above and below market lease intangibles, net
 
(1,043
)
 
(931
)
 
(1,161
)
Stock-based compensation, net of capitalization
 
9,806

 
9,824

 
6,615

Equity in (income) loss of investments in real estate partnerships
 
(23,807
)
 
(9,643
)
 
12,884

Net gain on sale of properties
 
(24,013
)
 
(8,346
)
 
(8,648
)
Provision for impairment
 
74,816

 
15,883

 
26,615

Early extinguishment of debt
 
852

 
—

 
4,243

Deferred income tax expense (benefit) of taxable REIT subsidiary
 
13,727

 
2,422

 
(860
)
Distribution of earnings from operations of investments in real estate partnerships
 
44,809

 
43,361

 
41,054

Settlement of derivative instruments
 
—

 
—

 
(63,435
)
(Gain) loss on derivative instruments
 
(22
)
 
54

 
(1,419
)
Deferred compensation expense (income)
 
2,069

 
(2,136
)
 
5,068

Realized and unrealized (gain) loss on trading securities held in trust
 
(2,095
)
 
184

 
(2,009
)
Changes in assets and liabilities:
 
 
 
 
 
 
Restricted cash
 
(423
)
 
(651
)
 
(1,778
)
Accounts receivable
 
6,157

 
(3,108
)
 
2,657

Straight-line rent receivables, net
 
(6,059
)
 
(4,642
)
 
(6,202
)
Deferred leasing costs
 
(12,642
)
 
(15,013
)
 
(15,563
)
Other assets
 
(1,079
)
 
(3,393
)
 
(3,821
)
Accounts payable and other liabilities
 
10,994

 
(17,892
)
 
(1,281
)
Tenants’ security and escrow deposits and prepaid rent
 
(1,639
)
 
9,789

 
33

Net cash provided by operating activities
 
257,215

 
217,633

 
138,459

Cash flows from investing activities:
 
 
 
 
 
 
Acquisition of operating real estate
 
(156,026
)
 
(70,629
)
 
(24,569
)
Real estate development and capital improvements
 
(164,588
)
 
(82,069
)
 
(65,889
)
Proceeds from sale of real estate investments
 
352,707

 
86,233

 
47,333

(Issuance) collection of notes receivable
 
(552
)
 
(78
)
 
883

Investments in real estate partnerships
 
(66,663
)
 
(198,688
)
 
(231,847
)
Distributions received from investments in real estate partnerships
 
38,353

 
188,514

 
90,092

Dividends on trading securities held in trust
 
245

 
225

 
297

Acquisition of trading securities held in trust
 
(17,930
)
 
(19,377
)
 
(10,312
)
Proceeds from sale of trading securities held in trust
 
18,077

 
18,146

 
9,555

Net cash provided by (used in) investing activities
 
3,623

 
(77,723
)
 
(184,457
)
Cash flows from financing activities:
 
 
 
 
 
 
Net proceeds from common stock issuance
 
21,542

 
215,369

 
—

Net proceeds from issuance of preferred stock
 
313,900

 
—

 
—

Proceeds from sale of treasury stock
 
338

 
2,128

 
1,431

Acquisition of treasury stock
 
(4
)
 
(14
)
 
—

Redemption of preferred stock and partnership units
 
(323,125
)
 
—

 
—

Distributions to limited partners in consolidated partnerships, net
 
1,375

 
(735
)
 
(1,427
)
Distributions to exchangeable operating partnership unit holders
 
(324
)
 
(324
)
 
(468
)
Distributions to preferred unit holders
 
(404
)
 
(3,725
)
 
(3,725
)
Dividends paid to common stockholders
 
(164,423
)
 
(160,154
)
 
(148,649
)
Dividends paid to preferred stockholders
 
(23,254
)
 
(19,675
)
 
(19,675
)
Repayment of fixed rate unsecured notes
 
(192,377
)
 
(181,691
)
 
(209,879
)
Proceeds from issuance of fixed rate unsecured notes, net
 
—

 
—

 
398,599

Proceeds from unsecured credit facilities
 
750,000

 
455,000

 
250,000

Repayment of unsecured credit facilities
 
(620,000
)
 
(425,000
)
 
(240,000
)
Proceeds from notes payable
 
—

 
1,940

 
6,068

Repayment of notes payable
 
(1,332
)
 
(16,919
)
 
(51,687
)
Scheduled principal payments
 
(7,259
)
 
(5,699
)
 
(5,024
)
Payment of loan costs
 
(4,544
)
 
(6,070
)
 
(4,361
)
Payment of premium on tender offer
 
—

 
—

 
(4,000
)
Net cash used in financing activities
 
(249,891
)
 
(145,569
)
 
(32,797
)
Net increase (decrease) in cash and cash equivalents
 
10,947

 
(5,659
)
 
(78,795
)
Cash and cash equivalents at beginning of the year
 
11,402

 
17,061

 
95,856

Cash and cash equivalents at end of the year
$
22,349

 
11,402

 
17,061


68





REGENCY CENTERS CORPORATION
Consolidated Statements of Cash Flows
For the years ended December 31, 2012, 2011, and 2010
(in thousands)

 
 
2012
 
2011
 
2010
Supplemental disclosure of cash flow information:
 
 
 
 
 
 
Cash paid for interest (net of capitalized interest of $3,686, $1,480, and $5,099 in 2012, 2011, and 2010, respectively)
$
115,879

 
128,649

 
127,591

Supplemental disclosure of non-cash transactions:
 
 
 
 
 
 
Common stock issued for partnership units exchanged
$
—

 
—

 
7,630

Real estate received through distribution in kind
$
—

 
47,512

 
—

Mortgage loans assumed through distribution in kind
$
—

 
28,760

 
—

Mortgage loans assumed for the acquisition of real estate
$
30,467

 
31,292

 
58,981

Real estate contributed for investments in real estate partnerships
$
47,500

 
—

 
—

Real estate received through foreclosure on notes receivable
$
12,585

 
—

 
990

Change in fair value of derivative instruments
$
(4,285
)
 
18

 
28,363

Common stock issued for dividend reinvestment plan
$
988

 
1,081

 
1,847

Stock-based compensation capitalized
$
1,979

 
1,104

 
852

Contributions from limited partners in consolidated partnerships, net
$
986

 
2,411

 
132

Common stock issued for dividend reinvestment in trust
$
440

 
631

 
640

Contribution of stock awards into trust
$
819

 
1,132

 
1,142

Distribution of stock held in trust
$
1,191

 
—

 
51

See accompanying notes to consolidated financial statements.



69


REGENCY CENTERS, L.P.
Consolidated Balance Sheets
December 31, 2012 and 2011
(in thousands, except unit data)
    
 
 
2012
 
2011
Assets
 
 
 
 
Real estate investments at cost (notes 2 and 3):
 
 
 
 
Land
$
1,215,659

 
1,273,606

Buildings and improvements
 
2,502,186

 
2,604,229

Properties in development
 
192,067

 
224,077


 
3,909,912

 
4,101,912

Less: accumulated depreciation
 
782,749

 
791,619


 
3,127,163

 
3,310,293

Investments in real estate partnerships (note 4)
 
442,927

 
386,882

Net real estate investments
 
3,570,090

 
3,697,175

Cash and cash equivalents
 
22,349

 
11,402

Restricted cash
 
6,472

 
6,050

Accounts receivable, net of allowance for doubtful accounts of $3,915 and $3,442 at December 31, 2012 and 2011, respectively
 
26,601

 
37,733

Straight-line rent receivable, net of reserve of $870 and $2,075 at December 31, 2012 and 2011, respectively
 
49,990

 
48,132

Notes receivable (note 5)
 
23,751

 
35,784

Deferred costs, less accumulated amortization of $69,224 and $71,265 at December 31, 2012 and 2011, respectively
 
69,506

 
70,204

Acquired lease intangible assets, less accumulated amortization of $19,148 and $15,588 at December 31, 2012 and 2011, respectively (note 6)
 
42,459

 
27,054

Trading securities held in trust, at fair value (note 13)
 
23,429

 
21,713

Other assets (note 9)
 
18,811

 
31,824

Total assets
$
3,853,458

 
3,987,071

Liabilities and Capital
 
 
 
 
Liabilities:
 
 
 
 
Notes payable (note 8)
$
1,771,891

 
1,942,440

Unsecured credit facilities (note 8)
 
170,000

 
40,000

Accounts payable and other liabilities (note 9 and 13)
 
127,185

 
101,899

Acquired lease intangible liabilities, less accumulated accretion of $6,636 and $4,750 at December 31, 2012 and 2011, respectively (note 6)
 
20,325

 
12,662

Tenants’ security and escrow deposits and prepaid rent
 
18,146

 
20,416

Total liabilities
 
2,107,547

 
2,117,417

Commitments and contingencies (notes 15 and 16)
 
 
 
 
Capital:
 
 
 
 
Partners’ capital (notes 11 and 12):
 
 
 
 
Series D preferred units, par value $100: 500,000 units issued and outstanding at December 31, 2011
 
—

 
49,158

Preferred units of general partner, $0.01 par value per unit, 13,000,000 and 11,000,000 units issued and outstanding at December 31, 2012 and 2011, respectively, liquidation preference of $25 per unit
 
325,000

 
275,000

General partner; 90,394,486 and 89,921,858 units outstanding at December 31, 2012 and 2011, respectively
 
1,463,480

 
1,604,784

Limited partners; 177,164 units outstanding at December 31, 2012 and 2011
 
(1,153
)
 
(963
)
Accumulated other comprehensive loss
 
(57,715
)
 
(71,429
)
Total partners’ capital
 
1,729,612

 
1,856,550

Noncontrolling interests (note 11):
 
 
 
 
Limited partners’ interests in consolidated partnerships
 
16,299

 
13,104

Total noncontrolling interests
 
16,299

 
13,104

Total capital
 
1,745,911

 
1,869,654

Total liabilities and capital
$
3,853,458

 
3,987,071


See accompanying notes to consolidated financial statements.

70


REGENCY CENTERS, L.P.
Consolidated Statements of Operations
For the years ended December 31, 2012, 2011, and 2010
(in thousands, except per unit data)
 
 
2012
 
2011
 
2010
Revenues:
 
 
 
 
 
 
Minimum rent
$
359,350

 
350,223

 
332,159

Percentage rent
 
3,327

 
2,996

 
2,540

Recoveries from tenants and other income
 
107,732

 
105,899

 
104,092

Management, transaction, and other fees
 
26,511

 
33,980

 
29,400

Total revenues
 
496,920

 
493,098

 
468,191

Operating expenses:
 
 
 
 
 
 
Depreciation and amortization
 
126,808

 
128,963

 
118,398

Operating and maintenance
 
69,900

 
71,707

 
67,514

General and administrative
 
61,700

 
56,117

 
61,505

Real estate taxes
 
55,604

 
54,622

 
52,386

Other expenses
 
7,246

 
6,719

 
6,297

Total operating expenses
 
321,258

 
318,128

 
306,100

Other expense (income):
 
 
 
 
 
 
Interest expense, net of interest income of $1,675, $2,442, and $2,408 in 2012, 2011, and 2010, respectively (note 9)
 
112,129

 
123,645

 
125,287

Provision for impairment
 
74,816

 
12,424

 
19,886

Early extinguishment of debt
 
852

 
—

 
4,243

Net investment (income) loss from deferred compensation plan, including unrealized (gains) losses of $(888), $567, and $(1,342) in 2012, 2011, and 2010, respectively (note 13)
 
(2,057
)
 
206

 
(1,982
)
Total other expense (income)
 
185,740

 
136,275

 
147,434

(Loss) income before equity in income (loss) of investments in real estate partnerships
 
(10,078
)
 
38,695

 
14,657

Equity in income (loss) of investments in real estate partnerships (note 4)
 
23,807

 
9,643

 
(12,884
)
Income from continuing operations before tax
 
13,729

 
48,338

 
1,773

Income tax expense (benefit) of taxable REIT subsidiary
 
13,224

 
2,994

 
(1,333
)
Income from continuing operations
 
505

 
45,344

 
3,106

Discontinued operations, net (note 3):
 
 
 
 
 
 
Operating income
 
1,691

 
2,098

 
1,325

Gain on sale of operating properties, net
 
21,855

 
5,942

 
7,577

Income from discontinued operations
 
23,546

 
8,040

 
8,902

Income before gain on sale of real estate
 
24,051

 
53,384

 
12,008

Gain on sale of real estate
 
2,158

 
2,404

 
993

Net income
 
26,209

 
55,788

 
13,001

Noncontrolling interests:
 
 
 
 
 
 
Limited partners’ interests in consolidated partnerships
 
(865
)
 
(590
)
 
(376
)
Income attributable to noncontrolling interests
 
(865
)
 
(590
)
 
(376
)
Net income attributable to the Partnership
 
25,344

 
55,198

 
12,625

Preferred unit distributions
 
(31,902
)
 
(23,400
)
 
(23,400
)
Net (loss) income attributable to common unit holders
$
(6,558
)
 
31,798

 
(10,775
)
(Loss) income per common unit - basic (note 14):
 
 
 
 
 
 
Continuing operations
$
(0.34
)
 
0.26

 
(0.25
)
Discontinued operations
 
0.26

 
0.09

 
0.11

Net (loss) income attributable to common unit holders
$
(0.08
)
 
0.35

 
(0.14
)
(Loss) income per common unit - diluted (note 14):
 
 
 
 
 
 
Continuing operations
$
(0.34
)
 
0.26

 
(0.25
)
Discontinued operations
 
0.26

 
0.09

 
0.11

Net (loss) income attributable to common unit holders
$
(0.08
)
 
0.35

 
(0.14
)

See accompanying notes to consolidated financial statements.

71


REGENCY CENTERS, L.P.
Consolidated Statements of Comprehensive Income (Loss)
For the years ended December 31, 2012, 2011, and 2010
(in thousands)

 
 
2012
 
2011
 
2010
Net income
$
26,209

 
55,788

 
13,001

Other comprehensive income (loss):
 
 
 
 
 
 
Loss on settlement of derivative instruments:
 
 
 
 
 
 
Unrealized loss on derivative instruments
 
—

 
—

 
(61,625
)
Amortization of loss on settlement of derivative instruments recognized in net income
 
9,466

 
9,467

 
5,575

Effective portion of change in fair value of derivative instruments:
 
 
 
 
 
 
Effective portion of change in fair value of derivative instruments
 
4,220

 
11

 
28,363

Less: reclassification adjustment for change in fair value of derivative instruments included in net income
 
25

 
7

 
(3,294
)
Other comprehensive income (loss)
 
13,711

 
9,485

 
(30,981
)
Comprehensive income (loss)
 
39,920

 
65,273

 
(17,980
)
Less: comprehensive income (loss) attributable to noncontrolling interests:
 
 
 
 
 
 
Net income attributable to noncontrolling interests
 
865

 
590

 
376

Other comprehensive (loss) income attributable to noncontrolling interests
 
(31
)
 
9

 
—

Comprehensive income attributable to noncontrolling interests
 
834

 
599

 
376

Comprehensive income (loss) attributable to the Partnership
$
39,086

 
64,674

 
(18,356
)
See accompanying notes to consolidated financial statements.
 
 
 
 
 
 




72



REGENCY CENTERS, L.P.
Consolidated Statements of Capital
For the years ended December 31, 2012, 2011, and 2010 
 (in thousands)


 
 
Preferred
Units
 
General Partner
Preferred and
Common Units
 
Limited
Partners
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Total
Partners’
Capital
 
Noncontrolling
Interests in
Limited Partners’
Interest in
Consolidated
Partnerships
 
Total
Capital
Balance at December 31, 2009
$
49,158

 
1,912,353

 
7,321

 
(49,973
)
 
1,918,859

 
11,748

 
1,930,607

Net income
 
3,725

 
8,816

 
84

 
—

 
12,625

 
376

 
13,001

Other comprehensive loss
 
—

 
—

 
(69
)
 
(30,912
)
 
(30,981
)
 
—

 
(30,981
)
Deferred compensation plan, net (note 13)
 
—

 
(273
)
 
—

 
—

 
(273
)
 
—

 
(273
)
Contributions from partners
 
—

 
—

 
—

 
—

 
—

 
161

 
161

Distributions to partners
 
—

 
(150,499
)
 
(468
)
 
—

 
(150,967
)
 
(1,456
)
 
(152,423
)
Preferred unit distributions
 
(3,725
)
 
(19,675
)
 
—

 
—

 
(23,400
)
 
—

 
(23,400
)
Restricted units issued as a result of amortization of restricted stock issued by Parent Company
 
—

 
7,236

 
—

 
—

 
7,236

 
—

 
7,236

Common units issued as a result of common stock issued by Parent Company, net of repurchases
 
—

 
474

 
—

 
—

 
474

 
—

 
474

Common units exchanged for common stock of Parent Company
 
—

 
7,630

 
(7,630
)
 
—

 
—

 
—

 
—

Balance at December 31, 2010
$
49,158

 
1,766,062

 
(762
)
 
(80,885
)
 
1,733,573

 
10,829

 
1,744,402

Net income
 
3,725

 
51,370

 
103

 
—

 
55,198

 
590

 
55,788

Other comprehensive income
 
—

 
—

 
20

 
9,456

 
9,476

 
9

 
9,485

Deferred compensation plan, net
 
—

 
17,843

 
—

 
—

 
17,843

 
—

 
17,843

Contributions from partners
 
—

 
—

 
—

 
—

 
—

 
2,787

 
2,787

Distributions to partners
 
—

 
(161,236
)
 
(324
)
 
—

 
(161,560
)
 
(1,111
)
 
(162,671
)
Preferred unit distributions
 
(3,725
)
 
(19,675
)
 
—

 
—

 
(23,400
)
 
—

 
(23,400
)
Restricted units issued as a result of amortization of restricted stock issued by Parent Company
 
—

 
10,659

 
—

 
—

 
10,659

 
—

 
10,659

Common units issued as a result of common stock issued by Parent Company, net of repurchases
 
—

 
214,761

 
—

 
—

 
214,761

 
—

 
214,761

Balance at December 31, 2011
$
49,158

 
1,879,784

 
(963
)
 
(71,429
)
 
1,856,550

 
13,104

 
1,869,654

Net income
 
(629
)
 
25,867

 
106

 
—

 
25,344

 
865

 
26,209

Other comprehensive income (loss)
 
—

 
—

 
28

 
13,714

 
13,742

 
(31
)
 
13,711

Deferred compensation plan, net
 
—

 
12

 
—

 
—

 
12

 
—

 
12

Contributions from partners
 
—

 
—

 
—

 
—

 
—

 
3,362

 
3,362


73


REGENCY CENTERS, L.P.
Consolidated Statements of Capital
For the years ended December 31, 2012, 2011, and 2010 
 (in thousands)


 
 
Preferred
Units
 
General Partner
Preferred and
Common Units
 
Limited
Partners
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Total
Partners’
Capital
 
Noncontrolling
Interests in
Limited Partners’
Interest in
Consolidated
Partnerships
 
Total
Capital
Distributions to partners
 
—

 
(165,411
)
 
(324
)
 
—

 
(165,735
)
 
(1,001
)
 
(166,736
)
Redemption of preferred units
 
(48,125
)
 
—

 
—

 
—

 
(48,125
)
 
—

 
(48,125
)
Preferred unit distributions
 
(404
)
 
(23,254
)
 
—

 
—

 
(23,658
)
 
—

 
(23,658
)
Restricted units issued as a result of amortization of restricted stock issued by Parent Company
 
—

 
11,526

 
—

 
—

 
11,526

 
—

 
11,526

Preferred units issued as a result of preferred stock issued by Parent Company, net of issuance costs
 
—

 
313,900

 
—

 
—

 
313,900

 
—

 
313,900

Preferred stock redemptions
 
—

 
(275,000
)
 
—

 
—

 
(275,000
)
 
—

 
(275,000
)
Common units issued as a result of common stock issued by Parent Company, net of repurchases
 
—

 
21,056

 
—

 
—

 
21,056

 
—

 
21,056

Balance at December 31, 2012
$
—

 
1,788,480

 
(1,153
)
 
(57,715
)
 
1,729,612

 
16,299

 
1,745,911


See accompanying notes to consolidated financial statements.

74


REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the years ended December 31, 2012, 2011, and 2010
(in thousands)
 
 
2012
 
2011
 
2010
Cash flows from operating activities:
 
 
 
 
 
 
Net income
$
26,209

 
55,788

 
13,001

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
Depreciation and amortization
 
127,839

 
133,756

 
123,933

Amortization of deferred loan cost and debt premium
 
12,759

 
12,327

 
8,533

Amortization and (accretion) of above and below market lease intangibles, net
 
(1,043
)
 
(931
)
 
(1,161
)
Stock-based compensation, net of capitalization
 
9,806

 
9,824

 
6,615

Equity in (income) loss of investments in real estate partnerships
 
(23,807
)
 
(9,643
)
 
12,884

Net gain on sale of properties
 
(24,013
)
 
(8,346
)
 
(8,648
)
Provision for impairment
 
74,816

 
15,883

 
26,615

Early extinguishment of debt
 
852

 
—

 
4,243

Deferred income tax expense (benefit) of taxable REIT subsidiary
 
13,727

 
2,422

 
(860
)
Distribution of earnings from operations of investments in real estate partnerships
 
44,809

 
43,361

 
41,054

Settlement of derivative instruments
 
—

 
—

 
(63,435
)
(Gain) loss on derivative instruments
 
(22
)
 
54

 
(1,419
)
Deferred compensation expense (income)
 
2,069

 
(2,136
)
 
5,068

Realized and unrealized (gain) loss on trading securities held in trust
 
(2,095
)
 
184

 
(2,009
)
Changes in assets and liabilities:
 
 
 
 
 
 
Restricted cash
 
(423
)
 
(651
)
 
(1,778
)
Accounts receivable
 
6,157

 
(3,108
)
 
2,657

Straight-line rent receivables, net
 
(6,059
)
 
(4,642
)
 
(6,202
)
Deferred leasing costs
 
(12,642
)
 
(15,013
)
 
(15,563
)
Other assets
 
(1,079
)
 
(3,393
)
 
(3,821
)
Accounts payable and other liabilities
 
10,994

 
(17,892
)
 
(1,281
)
Tenants’ security and escrow deposits and prepaid rent
 
(1,639
)
 
9,789

 
33

Net cash provided by operating activities
 
257,215

 
217,633

 
138,459

Cash flows from investing activities:
 
 
 
 
 
 
Acquisition of operating real estate
 
(156,026
)
 
(70,629
)
 
(24,569
)
Real estate development and capital improvements
 
(164,588
)
 
(82,069
)
 
(65,889
)
Proceeds from sale of real estate investments
 
352,707

 
86,233

 
47,333

(Issuance) collection of notes receivable
 
(552
)
 
(78
)
 
883

Investments in real estate partnerships
 
(66,663
)
 
(198,688
)
 
(231,847
)
Distributions received from investments in real estate partnerships
 
38,353

 
188,514

 
90,092

Dividends on trading securities held in trust
 
245

 
225

 
297

Acquisition of trading securities held in trust
 
(17,930
)
 
(19,377
)
 
(10,312
)
Proceeds from sale of trading securities held in trust
 
18,077

 
18,146

 
9,555

Net cash provided by (used in) investing activities
 
3,623

 
(77,723
)
 
(184,457
)
Cash flows from financing activities:
 
 
 
 
 
 
Net proceeds from common units issued as a result of common stock issued by Parent Company
 
21,542

 
215,369

 
—

Net proceeds from preferred units issued as a result of preferred stock issued by Parent Company
 
313,900

 
—

 
—

Proceeds from sale of treasury stock
 
338

 
2,128

 
1,431

Acquisition of treasury stock
 
(4
)
 
(14
)
 
—

Redemption of preferred partnership units
 
(323,125
)
 
—

 
—

Distributions to limited partners in consolidated partnerships, net
 
1,375

 
(735
)
 
(1,427
)
Distributions to partners
 
(164,747
)
 
(160,478
)
 
(149,117
)
Distributions to preferred unit holders
 
(23,658
)
 
(23,400
)
 
(23,400
)
Repayment of fixed rate unsecured notes
 
(192,377
)
 
(181,691
)
 
(209,879
)
Proceeds from issuance of fixed rate unsecured notes, net
 
—

 
—

 
398,599

Proceeds from unsecured credit facilities
 
750,000

 
455,000

 
250,000

Repayment of unsecured credit facilities
 
(620,000
)
 
(425,000
)
 
(240,000
)
Proceeds from notes payable
 
—

 
1,940

 
6,068

Repayment of notes payable
 
(1,332
)
 
(16,919
)
 
(51,687
)
Scheduled principal payments
 
(7,259
)
 
(5,699
)
 
(5,024
)
Payment of loan costs
 
(4,544
)
 
(6,070
)
 
(4,361
)
Payment of premium on tender offer
 
—

 
—

 
(4,000
)
Net cash used in financing activities
 
(249,891
)
 
(145,569
)
 
(32,797
)
Net increase (decrease) in cash and cash equivalents
 
10,947

 
(5,659
)
 
(78,795
)
Cash and cash equivalents at beginning of the year
 
11,402

 
17,061

 
95,856

Cash and cash equivalents at end of the year
$
22,349

 
11,402

 
17,061


75



REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the years ended December 31, 2012, 2011, and 2010
(in thousands)
 
 
2012
 
2011
 
2010
Supplemental disclosure of cash flow information:
 
 
 
 
 
 
Cash paid for interest (net of capitalized interest of $3,686, $1,480, and $5,099 in 2012, 2011, and 2010, respectively)
$
115,879

 
128,649

 
127,591

Supplemental disclosure of non-cash transactions:
 
 
 
 
 
 
Common stock issued by Parent Company for partnership units exchanged
$
—

 
—

 
7,630

Real estate received through distribution in kind
$
—

 
47,512

 
—

Mortgage loans assumed through distribution in kind
$
—

 
28,760

 
—

Mortgage loans assumed for the acquisition of real estate
$
30,467

 
31,292

 
58,981

Real estate contributed for investments in real estate partnerships
$
47,500

 
—

 
—

Real estate received through foreclosure on notes receivable
$
12,585

 
—

 
990

Change in fair value of derivative instruments
$
(4,285
)
 
18

 
28,363

Common stock issued by Parent Company for dividend reinvestment plan
$
988

 
1,081

 
1,847

Stock-based compensation capitalized
$
1,979

 
1,104

 
852

Contributions from limited partners in consolidated partnerships, net
$
986

 
2,411

 
132

Common stock issued for dividend reinvestment in trust
$
440

 
631

 
640

Contribution of stock awards into trust
$
819

 
1,132

 
1,142

Distribution of stock held in trust
$
1,191

 
—

 
51

See accompanying notes to consolidated financial statements.



76

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012

1.
Summary of Significant Accounting Policies

(a)    Organization and Principles of Consolidation
General
Regency Centers Corporation (the “Parent Company”) began its operations as a Real Estate Investment Trust (“REIT”) in 1993 and is the general partner of Regency Centers, L.P. (the “Operating Partnership”). At December 31, 2012, the Parent Company owned approximately 99.8% of the outstanding common Partnership Units of the Operating Partnership. The Parent Company engages in the ownership, management, leasing, acquisition, and development of retail shopping centers through the Operating Partnership, and has no other assets or liabilities other than through its investment in the Operating Partnership. At December 31, 2012, the Parent Company, the Operating Partnership and their controlled subsidiaries on a consolidated basis (the "Company” or “Regency”) directly owned 204 retail shopping centers and held partial interests in an additional 144 retail shopping centers through investments in real estate partnerships (also referred to as joint ventures or co-investment partnerships).
Estimates, Risks, and Uncertainties
The preparation of the consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates in the Company's financial statements relate to the carrying values of its investments in real estate including its shopping centers, properties in development and its investments in real estate partnerships, and accounts receivable, net. Although the U.S. economy is recovering, economic conditions remain challenging, and therefore, it is possible that the estimates and assumptions that have been utilized in the preparation of the consolidated financial statements could change significantly, if economic conditions were to weaken.
Consolidation
The accompanying consolidated financial statements include the accounts of the Parent Company, the Operating Partnership, its wholly-owned subsidiaries, and consolidated partnerships in which the Company has a controlling interest. Investments in real estate partnerships not controlled by the Company are accounted for under the equity method. All significant inter-company balances and transactions are eliminated in the consolidated financial statements.
Ownership of the Parent Company
The Parent Company has a single class of common stock outstanding and two series of preferred stock outstanding (“Series 6 and 7 Preferred Stock”). The dividends on the Series 6 and 7 Preferred Stock are cumulative and payable in arrears on the last day of each calendar quarter.
Ownership of the Operating Partnership
The Operating Partnership's capital includes general and limited common Partnership Units. At December 31, 2012, the Parent Company owned approximately 99.8% or 90,394,486 of the total 90,571,650 Partnership Units outstanding. Net income and distributions of the Operating Partnership are allocable to the general and limited common Partnership Units in accordance with their ownership percentages.
Investments in Real Estate Partnerships
Investments in real estate partnerships not controlled by the Company are accounted for under the equity method. The accounting policies of the real estate partnerships are similar to the Company's accounting policies. Income or loss from these real estate partnerships, which includes all operating results (including impairment losses) and gains on sales of properties within the joint ventures, is allocated to the Company in accordance with the respective partnership agreements. Such allocations of net income or loss are recorded in equity in income (loss) of investments in real estate partnerships in the accompanying Consolidated Statements of Operations. The net difference in the

77
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



carrying amount of investments in real estate partnerships and the underlying equity in net assets is either accreted to income and recorded in equity in income (loss) of investments in real estate partnerships in the accompanying Consolidated Statements of Operations over the expected useful lives of the properties and other intangible assets, which range in lives from 10 to 40 years, or recognized at liquidation if the joint venture agreement includes a unilateral right to elect to dissolve the real estate partnership and, upon such an election, receive a distribution in-kind, as discussed further below.
Cash distributions of earnings from operations from investments in real estate partnerships are presented in cash flows provided by operating activities in the accompanying Consolidated Statements of Cash Flows. Cash distributions from the sale of a property or loan proceeds received from the placement of debt on a property included in investments in real estate partnerships are presented in cash flows provided by investing activities in the accompanying Consolidated Statements of Cash Flows.
The Company evaluates the structure and the substance of its investments in the real estate partnerships to determine if they are variable interest entities. The Company has concluded that these partnership investments are not variable interest entities. Further, the joint venture partners in the real estate partnerships have significant ownership rights, including approval over operating budgets and strategic plans, capital spending, sale or financing, and admission of new partners. Upon formation of the joint ventures, the Company, through the Operating Partnership, also became the managing member, responsible for the day-to-day operations of the real estate partnerships. In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, the Company evaluated its investment in each real estate partnership and concluded that the other partners have kick-out rights and/or substantive participating rights and, therefore, the Company has concluded that the equity method of accounting is appropriate for these investments and they do not require consolidation. Under the equity method of accounting, investments in real estate partnerships are initially recorded at cost, subsequently increased for additional contributions and allocations of income, and reduced for distributions received and allocations of loss. These investments are included in the consolidated financial statements as investments in real estate partnerships.
Noncontrolling Interests
The Company consolidates all entities in which it has a controlling ownership interest. A controlling ownership interest is typically attributable to the entity with a majority voting interest. Noncontrolling interest is the portion of equity, in a subsidiary or consolidated entity, not attributable, directly or indirectly to the Company. Such noncontrolling interests are reported on the Consolidated Balance Sheets within equity or capital, but separately from stockholders' equity or partners' capital. On the Consolidated Statements of Operations, all of the revenues and expenses from less-than-wholly-owned consolidated subsidiaries are reported in net income (loss), including both the amounts attributable to the Company and noncontrolling interests. The amounts of consolidated net income (loss) attributable to the Company and to the noncontrolling interests are clearly identified on the accompanying Consolidated Statements of Operations.
Noncontrolling Interests of the Parent Company
The consolidated financial statements of the Parent Company include the following ownership interests held by owners other than the preferred and common stockholders of the Parent Company: (i) the limited Partnership Units in the Operating Partnership held by third parties (“Exchangeable operating partnership units”) and (ii) the minority-owned interest held by third parties in consolidated partnerships (“Limited partners' interests in consolidated partnerships”). The Parent Company has included all of these noncontrolling interests in permanent equity, separate from the Parent Company's stockholders' equity, in the accompanying Consolidated Balance Sheets and Consolidated Statements of Equity and Comprehensive Income (Loss). The portion of net income (loss) or comprehensive income (loss) attributable to these noncontrolling interests is included in net income (loss) and comprehensive income (loss) in the accompanying Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income (Loss) of the Parent Company.
In accordance with the FASB ASC Topic 480, securities that are redeemable for cash or other assets at the option of the holder, not solely within the control of the issuer, are classified as redeemable noncontrolling interests outside of permanent equity in the Consolidated Balance Sheets. The Parent Company has evaluated the conditions as specified under the FASB ASC Topic 480 as it relates to exchangeable operating partnership units outstanding and concluded that it has the right to satisfy the redemption requirements of the units by delivering unregistered common stock. Each

78
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



outstanding exchangeable operating partnership unit is exchangeable for one share of common stock of the Parent Company, and the unit holder cannot require redemption in cash or other assets. Limited partners' interests in consolidated partnerships are not redeemable by the holders. The Parent Company also evaluated its fiduciary duties to itself, its shareholders, and, as the managing general partner of the Operating Partnership, to the Operating Partnership, and concluded its fiduciary duties are not in conflict with each other or the underlying agreements. Therefore, the Parent Company classifies such units and interests as permanent equity in the accompanying Consolidated Balance Sheets and Consolidated Statements of Equity and Comprehensive Income (Loss).
Noncontrolling Interests of the Operating Partnership
The Operating Partnership has determined that Limited partners' interests in consolidated partnerships are noncontrolling interests. The Operating Partnership has included these noncontrolling interests in permanent capital, separate from partners' capital, in the accompanying Consolidated Balance Sheets and Consolidated Statements of Capital and Comprehensive Income (Loss). The portion of net income (loss) or comprehensive income (loss) attributable to these noncontrolling interests is included in net income (loss) and comprehensive income (loss) in the accompanying Consolidated Statements of Operations and Consolidated Statements Comprehensive Income (Loss) of the Operating Partnership.
(b)    Revenues 
The Company leases space to tenants under agreements with varying terms. Leases are accounted for as operating leases with minimum rent recognized on a straight-line basis over the term of the lease regardless of when payments are due. The Company estimates the collectibility of the accounts receivable related to base rents, straight-line rents, expense reimbursements, and other revenue taking into consideration the Company's historical write-off experience, tenant credit-worthiness, current economic trends, and remaining lease terms.
During the years ended December 31, 2012, 2011, and 2010, the Company recorded provisions for doubtful accounts of $3.0 million, $3.2 million, and $4.0 million, respectively, of which approximately $151,000 and $56,000 is included in discontinued operations for 2011 and 2010, respectively. There were no provisions for doubtful accounts included in discontinued operations in 2012.
The following table represents the components of accounts receivable, net of allowance for doubtful accounts, as of December 31, 2012 and 2011 in the accompanying Consolidated Balance Sheets (in thousands):
 
 
2012
 
2011
Tenant receivables
$
4,043

 
4,654

CAM and tax reimbursements
 
17,891

 
26,355

Other receivables
 
8,582

 
10,166

Less: allowance for doubtful accounts
 
(3,915
)
 
(3,442
)
Total
$
26,601

 
37,733


Substantially all of the lease agreements with anchor tenants contain provisions that provide for additional rents based on tenants' sales volume ("percentage rent"). Percentage rents are recognized when the tenants achieve the specified targets as defined in their lease agreements. Substantially all lease agreements contain provisions for reimbursement of the tenants' share of real estate taxes, insurance and common area maintenance (“CAM”) costs. Recovery of real estate taxes, insurance, and CAM costs are recognized as the respective costs are incurred in accordance with the lease agreements.
As part of the leasing process, the Company may provide the lessee with an allowance for the construction of leasehold improvements. These leasehold improvements are capitalized and recorded as tenant improvements, and depreciated over the shorter of the useful life of the improvements or the remaining lease term. If the allowance represents a payment for a purpose other than funding leasehold improvements, or in the event the Company is not considered the owner of the improvements, the allowance is considered to be a lease incentive and is recognized over the lease term as a reduction of minimum rent. Factors considered during this evaluation include, among other things, who holds legal title to the improvements as well as other controlling rights provided by the lease agreement and

79
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



provisions for substantiation of such costs (e.g. unilateral control of the tenant space during the build-out process). Determination of the appropriate accounting for the payment of a tenant allowance is made on a lease-by-lease basis, considering the facts and circumstances of the individual tenant lease. When the Company is the owner of the leasehold improvements, recognition of lease revenue commences when the lessee is given possession of the leased space upon completion of tenant improvements. However, when the leasehold improvements are owned by the tenant, the lease inception date is the date the tenant obtains possession of the leased space for purposes of constructing its leasehold improvements.
Profits from sales of real estate are recognized under the full accrual method by the Company when: (i) a sale is consummated; (ii) the buyer's initial and continuing investment is adequate to demonstrate a commitment to pay for the property; (iii) the Company's receivable, if applicable, is not subject to future subordination; (iv) the Company has transferred to the buyer the usual risks and rewards of ownership; and (v) the Company does not have substantial continuing involvement with the property.
The Company sells shopping centers to joint ventures in exchange for cash equal to the fair value of the ownership interest of its partners. The Company accounts for those sales as “partial sales” and recognizes gains on those partial sales in the period the properties were sold to the extent of the percentage interest sold, and in the case of certain real estate partnerships, applies a more restrictive method of recognizing gains, as discussed further below. The gains and operations associated with properties sold to these real estate partnerships are not classified as discontinued operations because the Company continues to partially own and manage these shopping centers.
As of December 31, 2012, six of the Company's joint ventures (“DIK-JV”) give each partner the unilateral right to elect to dissolve the real estate partnership and, upon such an election, receive a distribution in-kind (“DIK”) of the assets of the real estate partnership equal to their respective capital account, which could include properties the Company previously sold to the real estate partnership. The liquidation provisions require that all of the properties owned by the real estate partnership be appraised to determine their respective fair values. As a general rule, if the Company initiates the liquidation process, its partner has the right to choose the first property that it will receive with the Company choosing the next property that it will receive in liquidation. If the Company's partner initiates the liquidation process, the order of the selection process is reversed. The process then continues with an alternating selection of properties by each partner until the balance of each partner's capital account, on a fair value basis, has been distributed. After the final selection, to the extent that the fair value of properties in the DIK-JV are not distributable in a manner that equals the balance of each partner's capital account, a cash payment would be made to the other partner by the partner receiving a property distribution in excess of its capital account. The partners may also elect to liquidate some or all of the properties through sales rather than through the DIK process.
Because the contingency associated with the possibility of receiving a particular property back upon liquidation is not satisfied at the property level, but at the aggregate level, no deferred gain is recognized on property sold by the DIK-JV to a third party or received by the Company upon actual dissolution. Instead, the property received upon dissolution is recorded at the carrying value of the Company's investment in the DIK-JV on the date of dissolution.

The Company is engaged under agreements with its joint venture partners to provide asset management, property management, leasing, investing, and financing services for such joint ventures' shopping centers. The fees are market-based, generally calculated as a percentage of either revenues earned or the estimated values of the properties managed or the proceeds received, and are recognized as services are rendered, when fees due are determinable, and collectibility is reasonably assured. The Company also receives transaction fees, as contractually agreed upon with a joint venture, which include fees such as acquisition fees, disposition fees, “promotes”, or “earnouts”.

(c)    Real Estate Investments
 
Land, buildings, and improvements are recorded at cost. All specifically identifiable costs related to development activities are capitalized into properties in development on the accompanying Consolidated Balance Sheets. Properties in development are defined as properties that are in the construction or initial lease-up phase and have not reached their initial full occupancy. Once a development property is substantially complete and held available for occupancy, costs are no longer capitalized. The capitalized costs include pre-development costs essential to the development of the property, development costs, construction costs, interest costs, real estate taxes, and allocated direct employee costs incurred during the period of development. Interest costs are capitalized into each development

80
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



project based upon applying the Company's weighted average borrowing rate to that portion of the actual development costs expended. The Company discontinues interest cost 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 the Company capitalize interest on the project beyond 12 months after substantial completion of the building shell. 
The following table represents the components of properties in development as of December 31, 2012 and 2011 in the accompanying Consolidated Balance Sheets (in thousands): 
 
 
2012
 
2011
Construction in process
$
133,153

 
50,903

Construction complete and in lease-up
 
—

 
76,301

Land held for future development
 
58,914

 
96,873

Total
$
192,067

 
224,077


Construction in process represents developments where the Company has not yet incurred at least 90% of the expected costs to complete and the anchor tenant has not yet been open for at least two calendar years. Construction complete and in lease-up represents developments where the Company has incurred at least 90% of the estimated costs to complete and the anchor tenant has not yet been open for at least two calendar years, but is still completing lease-up and final tenant build out. Land held for future development represents projects not in construction, but identified and available for future development if and when the market demand for a new shopping center exists.
The Company incurs costs prior to land acquisition including contract deposits, as well as legal, engineering, and other external professional fees related to evaluating the feasibility of developing a shopping center. These pre-development costs are included in properties in development in the accompanying Consolidated Balance Sheets. At December 31, 2012 and 2011, the Company had capitalized pre-development costs of $3.5 million and $2.1 million, respectively, of which $2.3 million and $1.0 million, respectively, were refundable deposits. If the Company determines that the development of a particular shopping center is no longer probable, any related pre-development costs previously capitalized are immediately expensed in other expenses in the accompanying Consolidated Statements of Operations. During the years ended December 31, 2012, 2011, and 2010, the Company expensed pre-development costs of approximately $1.5 million, $241,000, and $520,000, respectively, in other expenses in the accompanying Consolidated Statements of Operations.
Maintenance and repairs that do not improve or extend the useful lives of the respective assets are recorded in operating and maintenance expense.
Depreciation is computed using the straight-line method over estimated useful lives of approximately 40 years for buildings and improvements, the shorter of the useful life or the remaining lease term subject to a maximum of 10 years for tenant improvements, and three to seven years for furniture and equipment.
The Company and the real estate partnerships account for business combinations using the acquisition method by recognizing and measuring the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at their acquisition date fair values. The Company expenses transaction costs associated with business combinations in the period incurred.
The Company's methodology includes estimating an “as-if vacant” fair value of the physical property, which includes land, building, and improvements. In addition, the Company determines the estimated fair value of identifiable intangible assets, considering the following three categories: (i) value of in-place leases, (ii) above and below-market value of in-place leases, and (iii) customer relationship value. 
The value of in-place leases is estimated based on the value associated with the costs avoided in originating leases compared to the acquired in-place leases as well as the value associated with lost rental and recovery revenue during the assumed lease-up period. The value of in-place leases is recorded to amortization expense over the remaining initial term of the respective leases.
Above-market and below-market in-place lease values for acquired properties are recorded based on the present value of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management's

81
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



estimate of fair market lease rates for comparable in-place leases, measured over a period equal to the remaining non-cancelable term of the lease. The value of above-market leases is amortized as a reduction of minimum rent over the remaining terms of the respective leases and the value of below-market leases is accreted to minimum rent over the remaining terms of the respective leases, including below-market renewal options, if applicable. The Company does not assign value to customer relationship intangibles if it has pre-existing business relationships with the major retailers at the acquired property since they do not provide incremental value over the Company's existing relationships.
The Company classifies an operating property or a property in development as held-for-sale upon satisfaction of the following criteria: (i) management commits to a plan to sell a property (or group of properties), (ii) the property is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such properties, (iii) an active program to locate a buyer and other actions required to complete the plan to sell the property have been initiated, (iv) the sale of the property is probable and transfer of the asset is expected to be completed within one year, (v) the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (vi) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
Given the nature of all real estate sales contracts, it is not unusual for such contracts to allow prospective buyers a period of time to evaluate the property prior to formal acceptance of the contract. In addition, certain other matters critical to the final sale, such as financing arrangements, often remain pending even upon contract acceptance. As a result, properties under contract may not close within the expected time period, or may not close at all. Therefore, any properties categorized as held-for-sale represent only those properties that management has determined are probable to close within the requirements set forth above. Operating properties held-for-sale are carried at the lower of cost or fair value less costs to sell. The recording of depreciation and amortization expense is suspended during the held-for-sale period. If circumstances arise that previously were considered unlikely and, as a result, the Company decides not to sell a property previously classified as held-for-sale, the property is reclassified as held and used and is measured individually at the lower of its (i) carrying amount before the property was classified as held-for-sale, adjusted for any depreciation and amortization expense that would have been recognized had the property been continuously classified as held and used or (ii) the fair value at the date of the subsequent decision not to sell. Any required adjustment to the carrying amount of the property reclassified as held and used is included in income from continuing operations in the period of the subsequent decision not to sell and the results of operations previously reported in discontinued operations are reclassified and included in income from continuing operations for all periods presented.
When the Company sells a property or classifies a property as held-for-sale and will not have significant continuing involvement in the operation of the property, the operations of the property are eliminated from ongoing operations and classified in discontinued operations. Its operations, including any mortgage interest and gain on sale, are reported in discontinued operations so that the operations are clearly distinguished. Prior periods are also reclassified to reflect the operations of the property as discontinued operations. When the Company sells an operating property to a joint venture or to a third party, and will continue to manage the property, the operations and gain on sale are included in income from continuing operations.
We evaluate whether there are any indicators, including property operating performance and general market conditions, that the value of the real estate properties (including any related amortizable intangible assets or liabilities) may not be recoverable. Through the evaluation, we compare the current carrying value of the asset to the estimated undiscounted cash flows that are directly associated with the use and ultimate disposition of the asset. Our estimated cash flows are based on several key assumptions, including rental rates, costs of tenant improvements, leasing commissions, anticipated hold period, and assumptions regarding the residual value upon disposition, including the exit capitalization rate. These key assumptions are subjective in nature and could differ materially from actual results. Changes in our disposition strategy or changes in the marketplace may alter the hold period of an asset or asset group which may result in an impairment loss and such loss could be material to the Company's financial condition or operating performance. To the extent that the carrying value of the asset exceeds the estimated undiscounted cash flows, an impairment loss is recognized equal to the excess of carrying value over fair value. If such indicators are not identified, management will not assess the recoverability of a property's carrying value. If a property previously classified as held and used is changed to held-for-sale, the Company estimates fair value, less expected costs to sell, which could cause the Company to determine that the property is impaired.

82
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



The fair value of real estate assets is highly subjective and is determined through comparable sales information and other market data if available, or through use of an income approach such as the direct capitalization method or the traditional discounted cash flow approach. Such cash flow projections consider factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors, and therefore is subject to a significant degree of management judgment and changes in those factors could impact the determination of fair value. In estimating the fair value of undeveloped land, the Company generally uses market data and comparable sales information.
During the years ended December 31, 2012, 2011, and 2010, the Company established a provision for impairment on Consolidated Properties of $74.8 million, $15.9 million, and $23.9 million, respectively, of which $3.5 million and $6.7 million was included in discontinued operations for 2011 and 2010, respectively. There were no impairments included in discontinued operations in 2012. Further, the Company evaluated its property portfolio and did not identify any properties that would meet the above mentioned criteria for held-for-sale as of December 31, 2012 and 2011.
A loss in value of investments in real estate partnerships under the equity method of accounting, other than a temporary decline, must be recognized in the period in which the loss occurs. If management identifies indicators that the value of the Company's investment in real estate partnerships may be impaired, it evaluates the investment by calculating the fair value of the investment by discounting estimated future cash flows over the expected term of the investment. As a result of this evaluation, the Company established no provision for impairment during the year ended December 31, 2012, and established a provision for impairment of $4.6 million on one investment in real estate partnership during the year ended December 31, 2011 and $2.7 million on another investment in real estate partnership during the year ended December 31, 2010 .
The net tax basis of the Company's real estate assets exceeds the book basis by approximately $247.6 million and $95.1 million at December 31, 2012 and 2011, respectively, primarily due to the property impairments recorded for book purposes and the cost basis of the assets acquired and their carryover basis recorded for tax purposes.
(d)    Cash and Cash Equivalents 
Any instruments which have an original maturity of 90 days or less when purchased are considered cash equivalents. At December 31, 2012 and 2011, $6.5 million and $6.0 million, respectively, of cash was restricted through escrow agreements and certain mortgage loans.
(e)    Notes Receivable 
The Company records notes receivable at cost on the accompanying Consolidated Balance Sheets and interest income is accrued as earned and netted against interest expense in the accompanying Consolidated Statements of Operations. If a note receivable is past due, meaning the debtor is past due per contractual obligations, the Company ceases to accrue interest. However, in the event the debtor subsequently becomes current, the Company will resume accruing interest and record the interest income accordingly. The Company evaluates the collectibility of both interest and principal for all notes receivable to determine whether impairment exists using the present value of expected cash flows discounted at the note receivable's effective interest rate or, alternatively, at the observable market price of the loan or the fair value of the collateral if the loan is collateral dependent. In the event the Company determines a note receivable or a portion thereof is considered uncollectible, the Company records a provision for impairment. The Company estimates the collectibility of notes receivable taking into consideration the Company's experience in the retail sector, available internal and external credit information, payment history, market and industry trends, and debtor credit-worthiness.

83
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



(f)    Deferred Costs 
Deferred costs include leasing costs and loan costs, net of accumulated amortization. Such costs are amortized over the periods through lease expiration or loan maturity, respectively. If the lease is terminated early, or if the loan is repaid prior to maturity, the remaining leasing costs or loan costs are written off. Deferred leasing costs consist of internal and external commissions associated with leasing the Company's shopping centers. Net deferred leasing costs were $55.5 million and $56.5 million at December 31, 2012 and 2011, respectively. Deferred loan costs consist of initial direct and incremental costs associated with financing activities. Net deferred loan costs were $14.0 million and $13.7 million at December 31, 2012 and 2011, respectively.
(g)    Derivative Financial Instruments
The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or future payment of known and uncertain cash amounts, the amount of which are determined by interest rates. The Company's derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company's known or expected cash payments principally related to the Company's borrowings.
All derivative instruments, whether designated in hedging relationships or not, are recorded on the accompanying Consolidated Balance Sheets at their fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.
The Company uses interest rate swaps to mitigate its interest rate risk on a related financial instrument or forecasted transaction, and the Company designates these interest rate swaps as cash flow hedges. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The gains or losses resulting from changes in fair value of derivatives that qualify as cash flow hedges are recognized in other comprehensive income (“OCI”) while the ineffective portion of the derivative's change in fair value is recognized in the Statements of Operations as a gain or loss on derivative instruments. Upon the settlement of a hedge, gains and losses remaining in OCI are amortized over the underlying term of the hedged transaction.
The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking various hedge transactions. The Company assesses, both at inception of the hedge and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the cash flows and/or forecasted cash flows of the hedged items.
In assessing the valuation of the hedges, the Company uses standard market conventions and techniques such as discounted cash flow analysis, option pricing models, and termination costs at each balance sheet date. All methods of assessing fair value result in a general approximation of value, and such value may never actually be realized.
The settlement of interest rate swap terminations is presented in cash flows provided by operating activities in the accompanying Consolidated Statements of Cash Flows.

84
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



(h)    Income Taxes 
The Parent Company believes it qualifies, and intends to continue to qualify, as a REIT under the Internal Revenue Code (the “Code”). As a REIT, the Parent Company will generally not be subject to federal income tax, provided that distributions to its stockholders are at least equal to REIT taxable income. Regency Realty Group, Inc. (“RRG”), a wholly-owned subsidiary of the Operating Partnership, is a Taxable REIT Subsidiary (“TRS”) as defined in Section 856(l) of the Code. RRG is subject to federal and state income taxes and files separate tax returns. As a pass through entity, the Operating Partnership's taxable income or loss is reported by its partners, of which the Parent Company, as general partner and approximately 99.8% owner, is allocated its pro-rata share of tax attributes.
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates in effect for the year in which these temporary differences are expected to be recovered or settled.
Earnings and profits, which determine the taxability of dividends to stockholders, differs from net income reported for financial reporting purposes primarily because of differences in depreciable lives and cost bases of the shopping centers, as well as other timing differences.

Tax positions are initially recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions shall initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The Company believes that it has appropriate support for the income tax positions taken and to be taken on its tax returns and that its accruals for tax liabilities are adequate for all open tax years (2009 and forward for federal and state) based on an assessment of many factors including past experience and interpretations of tax laws applied to the facts of each matter.
  
(i)    Earnings per Share and Unit 
Basic earnings per share of common stock and unit are computed based upon the weighted average number of common shares and units, respectively, outstanding during the period. Diluted earnings per share and unit reflect the conversion of obligations and the assumed exercises of securities including the effects of shares issuable under the Company's share-based payment arrangements, if dilutive. Dividends paid on the Company's share-based compensation awards are not participating securities as they are forfeitable.
(j)    Stock-Based Compensation 
The Company grants stock-based compensation to its employees and directors. The Company recognizes stock-based compensation based on the grant-date fair value of the award and the cost of the stock-based compensation is expensed over the vesting period.
When the Parent Company issues common shares as compensation, it receives a like number of common units from the Operating Partnership. The Company is committed to contributing to the Operating Partnership all proceeds from the exercise of stock options or other share-based awards granted under the Parent Company's Long-Term Omnibus Plan (the “Plan”). Accordingly, the Parent Company's ownership in the Operating Partnership will increase based on the amount of proceeds contributed to the Operating Partnership for the common units it receives. As a result of the issuance of common units to the Parent Company for stock-based compensation, the Operating Partnership accounts for stock-based compensation in the same manner as the Parent Company.
(k)    Segment Reporting 
The Company's business is investing in retail shopping centers through direct ownership or through joint ventures. The Company actively manages its portfolio of retail shopping centers and may from time to time make decisions to sell lower performing properties or developments not meeting its long-term investment objectives. The proceeds from sales are reinvested into higher quality retail shopping centers, through acquisitions or new developments, which management believes will generate sustainable revenue growth and attractive returns. It is management's intent that

85
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



all retail shopping centers will be owned or developed for investment purposes; however, the Company may decide to sell all or a portion of a development upon completion. The Company's revenues and net income are generated from the operation of its investment portfolio. The Company also earns fees for services provided to manage and lease retail shopping centers owned through joint ventures. 
The Company's portfolio is located throughout the United States; however, management does not distinguish or group its operations on a geographical basis for purposes of allocating resources or capital. The Company reviews operating and financial data for each property on an individual basis; therefore, the Company defines an operating segment as its individual properties. The individual properties have been aggregated into one reportable segment based upon their similarities with regard to both the nature and economics of the centers, tenants and operational processes, as well as long-term average financial performance. In addition, no single tenant accounts for 5% or more of revenue and none of the shopping centers are located outside the United States.
(l)    Fair Value of Assets and Liabilities
Fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement is determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, the Company uses a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from independent sources (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the Company's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). The three levels of inputs used to measure fair value are as follows:

•
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access.
•
Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.
•
Level 3 - Unobservable inputs for the asset or liability, which are typically based on the Company's own assumptions, as there is little, if any, related market activity. 
The Company also remeasures nonfinancial assets and nonfinancial liabilities, initially measured at fair value in a business combination or other new basis event, at fair value in subsequent periods.

(m)    Recent Accounting Pronouncements
Recently Adopted
On January 1, 2012, the Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Update (“ASU”) No. 2011-04, "Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure requirements in U.S. GAAP and IFRSs" ("ASU 2011-04"). ASU 2011-04 provides new guidance concerning fair value measurements and disclosure. The new guidance is the result of joint efforts by the FASB and the International Accounting Standards Board ("IASB") to develop a single, converged fair value framework on how to measure fair value and the necessary disclosures concerning fair value measurements. The guidance is applied prospectively. The adoption by the Company resulted in expanded disclosures over fair value measurements, included in note 6.
On January 1, 2012, the Company adopted FASB ASU No. 2011-05, "Comprehensive Income (Topic 220): Presentation of Comprehensive Income" ("ASU 2011-05"). ASU 2011-05 revised guidance over the manner in which entities present comprehensive income in the financial statements. This guidance removes the previous presentation options and provides that entities must report comprehensive income in either a continuous statement of comprehensive income or two separate but consecutive statements. This guidance does not change the items that must be reported in other comprehensive income. The adoption by the Company resulted in a new Statement of Comprehensive Income (Loss), presented immediately following the Statements of Operations.

86
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



In February 2013, the FASB issued ASU No. 2013-02, "Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income" ("ASU 2013-02"). ASU 2013-02 does not change the current requirements for reporting net income or other comprehensive income in financial statements. This ASU requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under U.S. GAAP to be reclassified in its entirety to net income. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. This guidance is effective prospectively for reporting periods beginning after December 15, 2012 and early adoption is permitted. The Company has adopted this guidance as of December 31, 2012. The adoption by the Company did not have any impact on our financial results, rather resulted in adding parenthetical cross-references in our Consolidated Statements of Operations to related footnote disclosures.
Recently Issued But Not Yet Adopted
In December 2011, the FASB issued ASU No. 2011-11, "Disclosures about Offsetting Assets and Liabilities" ("ASU 2011-11"). ASU 2011-11 requires disclosures to allow investors to better compare financial statements prepared under U.S. GAAP with financial statements prepared under IFRS. The FASB expects to issue an ASU to clarify that the scope of the new disclosures is intended to be limited to derivative instruments, repurchase and reverse repurchase agreements, and securities lending arrangements. This guidance is effective for annual periods beginning January 1, 2013, and interim periods within those annual periods. Retrospective application is required. The Company does not expect this ASU to have a material effect on the Company's consolidated financial statements, rather will result in additional disclosures.
(n)    Reclassifications and other
Certain prior period amounts have been reclassified to conform to current period presentation.



87
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



2.
Real Estate Investments

Acquisitions
The following table provides a summary of shopping centers acquired during the year ended December 31, 2012 (in thousands):
Date Purchased
Property Name
City/State
 
Purchase Price
Debt Assumed, Net of Premiums
Intangible Assets
Intangible Liabilities
Contingent Liabilities (1)
5/31/2012
Shops at Erwin Mill (2)
Durham, NC
$
358

—

—

—

—

6/21/2012
Grand Ridge Plaza (3)
Issaquah, WA
 
11,761

12,810

2,346

144

—

8/31/2012
Balboa Mesa Shopping Center
San Diego, CA
 
59,500

—

9,711

6,977

145

12/21/2012
Sandy Springs
Sandy Springs, GA
 
35,250

17,657

2,761

1,386

60

12/27/2012
Uptown District
San Diego, CA
 
81,115

—

5,833

1,154

4,058

 
 
 
$
187,984

30,467

20,651

9,661

4,263


(1) These balances represent environmental liability contingencies, which were measured at fair value at the acquisition date.
(2) Shops at Erwin Mill was acquired on May 31, 2012 for a total purchase price of $5.8 million and included both an operating component and a development component. The Company completed a purchase price allocation at the date of acquisition and determined that approximately $358,000 related to the existing operating center, with the remaining balance allocated to properties in development at the time of acquisition.
(3) Grand Ridge Plaza was acquired on June 21, 2012 for a total purchase price of $20.0 million and included both an operating component and a development component. The Company completed a purchase price allocation at the date of acquisition and determined that $11.8 million related to the existing operating center, with the remaining balance allocated to properties in development at the time of acquisition.
The following table provides a summary of shopping centers acquired during the year ended December 31, 2011 (in thousands):
Date Purchased
Property Name
City/State
 
Purchase Price
Debt Assumed, Net of Premiums
Intangible Assets
Intangible Liabilities
Contingent Liabilities
6/2/2011
Ocala Corners
Tallahassee, FL
$
11,129

5,937

1,724

2,558

—

8/18/2011
Oak Shade Town Center
Davis, CA
 
34,871

12,456

2,320

1,658

—

9/26/2011
Tech Ridge Center
Austin, TX
 
55,400

12,899

4,519

936

—

 
 
 
$
101,400

31,292

8,563

5,152

—

 
In addition to the above shopping center acquisitions, on May 4, 2011, the Company entered into an agreement with the DESCO Group ("DESCO") to redeem its entire 16.35% interest in Macquarie CountryWide-Regency-DESCO, LLC ("MCWR-DESCO"). The agreement allowed for a distribution-in-kind ("DIK") of the assets in the co-investment partnership. The assets were distributed as 100% ownership interests to DESCO and to Regency after a selection process, as provided for by the agreement. Regency selected four assets, all in the St. Louis market. The properties which the Company received through the DIK were recorded at the carrying value of the Company's equity investment of $18.8 million. Additionally, as part of the agreement, Regency received a $5.0 million disposition fee at closing on May 4, 2011 to buyout its asset, property, and leasing management contracts, and received $1.0 million for transition services provided through 2011.
The acquisitions were accounted for as purchase business combinations, and the results are included in the consolidated financial statements from the date of acquisition. During the years ended December 31, 2012, 2011, and 2010, the Company expensed approximately $1.2 million, $707,000, and $448,000, respectively, of acquisition-related costs in

88
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



connection with the Company's property acquisitions, which are included in other operating expenses in the accompanying Consolidated Statements of Operations. The actual, or pro-forma, impact of the Company's acquired properties is not considered significant to the Company's operating results for the years ended December 31, 2012, 2011, and 2010.

3.    Discontinued Operations
               
Dispositions

The following table provides a summary of shopping centers disposed of during the years ended December 31, 2012, 2011, and 2010 (in thousands):
 
 
2012
 
2011
 
2010
Net proceeds
$
73,576

 
66,009

 
34,918

Gain on sale of properties
 
21,855

 
5,942

 
7,577

Number of properties sold
 
5
 
7
 
3
Percent interest sold
 
100%
 
100%
 
100%

The following table provides a summary of revenues and expenses from properties included in discontinued operations for the years ended December 31, 2012, 2011, and 2010 (in thousands):
 
 
2012
 
2011
 
2010
Revenues
$
3,423

 
15,030

 
19,374

Operating expenses
 
1,750

 
9,368

 
11,553

Other (income) expense
 
—

 
3,458

 
6,729

Income tax expense (benefit) (1)
 
(18
)
 
106

 
(233
)
Operating income from discontinued operations
$
1,691

 
2,098

 
1,325

(1) The operating income and gain on sales of properties included in discontinued operations are reported net of income taxes, if the property is sold by Regency Realty Group, Inc., a wholly owned subsidiary of the Operating Partnership, which is a Taxable REIT subsidiary as defined by in Section 856(1) of the Internal Revenue Code.

4.
Investments in Real Estate Partnerships

The Company invests in real estate partnerships, which primarily include six co-investment partners and a closed-end real estate fund (“Regency Retail Partners” or the “Fund”). In addition to earning its pro-rata share of net income or loss in each of these real estate partnerships, the Company received recurring market-based fees for asset management, property management, and leasing as well as fees for investment and financing services, of $25.4 million, $29.0 million, and $25.1 million for the years ended December 31, 2012, 2011, and 2010, respectively. The Company also received non-recurring transaction fees of $5.0 million and $2.6 million for the years ended December 31, 2011 and 2010, respectively, with no such fees received during 2012.

89
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012




Investments in real estate partnerships as of December 31, 2012 consist of the following (in thousands): 

Ownership
 
Total Investment
 
Total Assets of the Partnership
 
Net Income (Loss) of the Partnership
 
The Company's Share of Net Income (Loss) of the Partnership
GRI - Regency, LLC (GRIR)(1)
40.00
%
$
272,044

 
1,939,659

 
23,357

 
9,311

Macquarie CountryWide-Regency III, LLC (MCWR III)(1)
24.95
%
 
29

 
60,496

 
(75
)
 
(22
)
Columbia Regency Retail Partners, LLC (Columbia I)(2)
20.00
%
 
17,200

 
210,490

 
42,399

 
8,480

Columbia Regency Partners II, LLC (Columbia II)(2)
20.00
%
 
8,660

 
326,649

 
1,467

 
290

Cameron Village, LLC (Cameron)
30.00
%
 
16,708

 
102,930

 
2,021

 
596

RegCal, LLC (RegCal)(2)
25.00
%
 
15,602

 
164,106

 
2,160

 
540

Regency Retail Partners, LP (the Fund)
20.00
%
 
15,248

 
323,406

 
407

 
297

US Regency Retail I, LLC (USAA)(2)
20.01
%
 
2,173

 
123,053

 
1,484

 
297

BRE Throne Holdings, LLC (BRET)(3)
47.80
%
 
48,757

 
—

 
2,211

 
2,211

Other investments in real estate partnerships
50.00
%
 
46,506

 
184,165

 
3,833

 
1,807

Total
 
$
442,927

 
3,434,954

 
79,264

 
23,807

(1) Effective January 1, 2010, this partnership agreement was amended to include a unilateral right to elect to dissolve the partnership and receive a DIK upon liquidation; therefore, the Company has applied the Restricted Gain Method for additional properties sold to this partnership on or after January 1, 2010. During 2012, the Company did not sell any properties to this real estate partnership.
(2) This partnership agreement has a unilateral right for election to dissolve the partnership and receive a DIK upon liquidation; therefore, the Company has applied the Restricted Gain Method to determine the amount of gain recognized on property sales to this partnership. During 2012, the Company did not sell any properties to this real estate partnership.
(3) On July 25, 2012, the Company sold a 15-property portfolio and retained a $47.5 million, 10.5% preferred stock investment in the entity that owns the portfolio. Following the 12-month anniversary of the closing date, Regency may call for the redemption of its investment in whole or in part, at par. Following the 18-month anniversary of the closing date, either Regency or the other member may initiate the redemption of Regency’s investment, in whole or in part. As the property holdings of BRET do not impact the rate of return on Regency's preferred stock investment, BRET's portfolio information is not included.



90
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012




Investments in real estate partnerships as of December 31, 2011 consist of the following (in thousands): 
 
Ownership
 
Total Investment
 
Total Assets of the Partnership
 
Net Income (Loss) of the Partnership
 
The Company's Share of Net Income (Loss) of the Partnership
GRI - Regency, LLC (GRIR)(1)
40.00
%
$
262,018

 
2,001,526

 
18,244

 
7,266

Macquarie CountryWide-Regency III, LLC (MCWR III)(1)
24.95
%
 
195

 
61,867

 
(493
)
 
(123
)
Macquarie CountryWide-Regency-DESCO, LLC (MCWR-DESCO)(3)
—
%
 
—

 
—

 
(1,752
)
 
(293
)
Columbia Regency Retail Partners, LLC (Columbia I)(2)
20.00
%
 
20,335

 
259,225

 
14,554

 
2,775

Columbia Regency Partners II, LLC (Columbia II)(2)
20.00
%
 
9,686

 
317,720

 
910

 
179

Cameron Village, LLC (Cameron)
30.00
%
 
17,110

 
104,314

 
1,101

 
322

RegCal, LLC (RegCal)(2)
25.00
%
 
18,128

 
180,490

 
7,615

 
1,904

Regency Retail Partners, LP (the Fund)
20.00
%
 
16,430

 
333,013

 
265

 
268

US Regency Retail I, LLC (USAA)(2)
20.01
%
 
3,093

 
127,763

 
1,215

 
243

Other investments in real estate partnerships
50.00
%
 
39,887

 
115,857

 
3,601

 
(2,898
)
Total
 
$
386,882

 
3,501,775

 
45,260

 
9,643

(1) As noted above, effective January 1, 2010, this partnership agreement was amended to include a unilateral right to elect to dissolve the partnership and receive a DIK upon liquidation; therefore, the Company will apply the Restricted Gain Method for additional properties sold to this partnership on or after January 1, 2010. During 2011, the Company did not sell any properties to this real estate partnership.
(2) As noted above, this partnership agreement has a unilateral right for election to dissolve the partnership and receive a DIK upon liquidation; therefore, the Company has applied the Restricted Gain Method to determine the amount of gain recognized on property sales to this partnership. During 2011, the Company did not sell any properties to this real estate partnership.
(3) At December 2010, our ownership interest in MCWR-DESCO was 16.35%. The liquidation of MCWR-DESCO was complete effective May 4, 2011. Our ownership interest in MCWR-DESCO was 0.00% at December 31, 2011.


91
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012




Summarized financial information for the investments in real estate partnerships on a combined basis, is as follows (in thousands): 
 
 
December 31,
2012
 
December 31,
2011
 
 
 
 
 
Investments in real estate, net
$
3,213,984

 
3,263,704

Acquired lease intangible assets, net
 
74,986

 
85,232

Other assets
 
145,984

 
152,839

      Total assets
$
3,434,954

 
3,501,775

 
 
 
 
 
Notes payable
$
1,816,648

 
1,874,780

Acquired lease intangible liabilities, net
 
46,264

 
49,938

Other liabilities
 
70,576

 
67,495

Capital - Regency
 
518,505

 
512,421

Capital - Third parties
 
982,961

 
997,141

      Total liabilities and capital
$
3,434,954

 
3,501,775


The following table reconciles the Company's capital in unconsolidated partnerships to the Company's investments in real estate partnerships (in thousands):

 
 
December 31,
2012
 
December 31,
2011
Capital - Regency
$
518,505

 
512,421

add: Preferred equity investment in BRET
 
47,500

 
—

  less: Impairment
 
(5,880
)
 
(5,880
)
  less: Ownership percentage or Restricted Gain Method deferral
 
(38,995
)
 
(41,456
)
  less: Net book equity in excess of purchase price
 
(78,203
)
 
(78,203
)
Investments in real estate partnerships
$
442,927

 
386,882


Acquisitions
The following table provides a summary of shopping centers acquired through our unconsolidated co-investment partnerships during the year ended December 31, 2012 (in thousands):
Date Purchased
Property Name
City/State
Co-investment Partner
Ownership %
 
Purchase Price
Debt Assumed, Net of Premiums
Intangible Assets
Intangible Liabilities
1/17/2012
Lake Grove Commons
Lake Grove, NY
GRIR
40%
$
72,500

31,813

5,397

4,342

11/28/2012
Applewood Village Shops
Wheat Ridge, CO
GRIR
40%
 
3,700

—

363

34

12/19/2012
Village Plaza
Chapel Hill, NC
Columbia II
20%
 
19,200

—

2,242

686

12/28/2012
Phillips Place
Charlotte, NC
Other
50%
 
55,400

44,500

—

—

 
 
 
 
 
$
150,800

76,313

8,002

5,062


92
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



The following table provides a summary of shopping centers acquired through our unconsolidated co-investment partnerships during the year ended December 31, 2011 (in thousands):
Date Purchased
Property Name
City/State
Co-investment Partner
Ownership %
 
Purchase Price
Debt Assumed, Net of Premiums
Intangible Assets
Intangible Liabilities
7/1/2011
Calhoun Commons
Minneapolis, MN
RegCal
25%
$
21,020

6,052

2,130

303

8/8/2011
Rockridge Center
Plymouth, MN
Columbia II
20%
 
20,500

16,459

2,116

2,059

 
 
 
 
 
$
41,520

22,511

4,246

2,362


Dispositions
On July 25, 2012, the Company sold a 15-property portfolio for total consideration of $321.0 million. As a result of entering into this agreement, the Company recognized a net impairment loss of $18.1 million during the year ended December 31, 2012. The Company retained a $47.5 million, 10.5% preferred stock investment in the entity that owns the portfolio. As of December 31, 2012, this asset group did not meet the definition of discontinued operations, in accordance with FASB ASC Topic 205-20. Following the 12-month anniversary of the closing date, Regency may call for the redemption of its investment in whole or in part, at par. Following the 18-month anniversary of the closing date, either Regency or the other member may initiate the redemption of Regency’s investment, in whole or in part. Regency does not provide leasing or management services for the Portfolio after closing.

Notes Payable
The Company’s proportionate share of notes payable of the investments in real estate partnerships was $597.4 million and $610.4 million at December 31, 2012 and 2011, respectively. The Company does not guarantee these loans.
As of December 31, 2012, scheduled principal repayments on notes payable of the investments in real estate partnerships were as follows (in thousands): 
Scheduled Principal Payments by Year:
 
Scheduled
Principal
Payments
 
Mortgage Loan
Maturities
 
Unsecured
Maturities
 
Total
 
Regency’s
Pro-Rata
Share
2013
$
19,176

 
24,373

 
—

 
43,549

 
15,949

2014
 
21,289

 
53,015

 
21,660

 
95,964

 
27,254

2015
 
21,895

 
130,796

 
—

 
152,691

 
49,619

2016
 
19,139

 
374,257

 
—

 
393,396

 
127,888

2017
 
18,437

 
200,635

 
—

 
219,072

 
51,610

Beyond 5 Years
 
77,039

 
833,680

 
—

 
910,719

 
325,272

Unamortized debt premiums (discounts), net
 
—

 
1,257

 
—

 
1,257

 
(169
)
Total
$
176,975

 
1,618,013

 
21,660

 
1,816,648

 
597,423




93
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



The revenues and expenses for the investments in real estate partnerships on a combined basis are summarized as follows (in thousands): 
 
 
For the years ended December 31,
 
 
2012
 
2011
 
2010
 Total revenues
$
387,908

 
399,091

 
437,029

 Operating expenses:
 
 
 
 
 
 
   Depreciation and amortization
 
128,946

 
134,236

 
155,146

   Operating and maintenance
 
55,394

 
62,442

 
67,541

   General and administrative
 
7,549

 
7,905

 
7,383

   Real estate taxes
 
46,395

 
49,103

 
55,926

   Other expenses
 
3,521

 
3,477

 
3,666

     Total operating expenses
 
241,805

 
257,163

 
289,662

 Other expense (income):
 
 
 
 
 
 
   Interest expense, net
 
104,694

 
112,099

 
129,581

   Gain on sale of real estate
 
(40,437
)
 
(7,464
)
 
(8,976
)
   Loss (gain) on extinguishment of debt
 
967

 
(8,743
)
 
—

   Loss on hedge ineffectiveness
 
51

 
—

 
—

   Provision for impairment
 
3,775

 
—

 
78,908

   Preferred return on equity investment
 
(2,211
)
 
—

 
—

   Other expense (income)
 
—

 
776

 
(383
)
      Total other expense
 
66,839

 
96,668

 
199,130

      Net income (loss)
$
79,264

 
45,260

 
(51,763
)
Regency's share of net income (loss)
$
23,807

 
9,643

 
(12,884
)

5.
Notes Receivable
The Company had notes receivable outstanding of $23.8 million and $35.8 million at December 31, 2012 and 2011, respectively. The loans have fixed interest rates ranging from 6.0% to 9.0% with maturity dates through January 2019 and are secured by real estate held as collateral. 

6.
Acquired Lease Intangibles

The Company had the following acquired lease intangibles, net of accumulated amortization and accretion, at December 31, 2012 and 2011, respectively (in thousands):
 
 
2012
 
2011
In-place leases, net
$
31,314

 
21,900

Above-market leases, net
 
9,440

 
3,427

Above-market ground leases, net
 
1,705

 
1,727

Acquired lease intangible assets, net
$
42,459

 
27,054

 
 
 
 
 
Acquired lease intangible liabilities, net
$
20,325

 
12,662



94
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



The following table provides a summary of amortization and net accretion amounts from acquired lease intangibles for the years ended December 31, 2012, 2011, and 2010:
 
 
2012
 
2011
 
2010
 
Remaining Weighted Average Amortization/Accretion Period
 
 
(in thousands)
 
(in thousands)
 
(in thousands)
 
(in years)
In-place lease amortization
$
4,307

$
3,436

$
2,317

 
6.70
Above-market lease amortization (1)
 
739

 
319

 
108

 
9.70
Above-market ground lease amortization (1)
 
23

 
17

 
1

 
84.50
Acquired lease intangible asset amortization
$
5,069

$
3,772

$
2,426

 
 
 
 
 
 
 
 
 
 
 
Acquired lease intangible liability accretion (2)
$
1,950

$
1,375

$
1,303

 
9.91

(1) Amounts are recorded as a reduction to minimum rent.
(2) Amounts are recorded as an increase to minimum rent.
The estimated aggregate amortization and net accretion amounts from acquired lease intangibles for the next five years are as follows (in thousands):
 Year Ending December 31,
 
Amortization Expense
 
Net Accretion
2013
 
$
6,607

 
2,035

2014
 
5,076

 
1,588

2015
 
3,999

 
947

2016
 
3,238

 
675

2017
 
2,441

 
672

7.    Income Taxes
    
The following summarizes the tax status of dividends paid on our common shares during the respective years:             
 
 
2012
 
2011
 
2010
Dividend per share
$
1.85

 
1.85

 
1.85

Ordinary income
 
71
%
 
33
%
 
40
%
Capital gain
 
1
%
 
1
%
 
2
%
Return of capital
 
28
%
 
66
%
 
58
%

RRG is subject to federal and state income taxes and files separate tax returns. Income tax expense consists of the following for the years ended December 31, 2012, 2011, and 2010 (in thousands):
 
 
2012
 
2011
 
2010
Income tax expense (benefit):
 
 
 
 
 
 
Current
$
97

 
283

 
(639
)
Deferred
 
13,727

 
2,422

 
(860
)
Total income tax expense (benefit)
$
13,824

 
2,705

 
(1,499
)


95
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



Income tax expense (benefit) is included in either income tax expense (benefit) of taxable REIT subsidiaries, if the related income is from continuing operations, or is included in operating income from discontinued operations, if from discontinued operations, on the Consolidated Statements of Operations as follows for the years ended December 31, 2012, 2011, and 2010 (in thousands):
 
 
2012
 
2011
 
2010
Income tax expense (benefit) from:
 
 
 
 
 
 
Continuing operations
$
13,224

 
2,994

 
(1,333
)
Discontinued operations
 
600

 
(289
)
 
(166
)
Total income tax expense (benefit)
$
13,824

 
2,705

 
(1,499
)

Income tax expense (benefit) differed from the amounts computed by applying the U.S. Federal income tax rate of 34% to pretax income from continuing operations of RRG for the years ended December 31, 2012, 2011, and 2010, respectively as follows (in thousands):

 
 
2012
 
2011
 
2010
Computed expected tax (benefit) expense
$
(2,099
)
 
1,089

 
(3,368
)
(Decrease) increase in income tax resulting from state taxes
 
(122
)
 
126

 
(392
)
Valuation allowance
 
15,635

 
1,438

 
286

All other items
 
410

 
52

 
1,975

Total income tax expense (benefit)
 
13,824

 
2,705

 
(1,499
)
Amounts attributable to discontinued operations
 
600

 
(289
)
 
(166
)
Amounts attributable to continuing operations
$
13,224

 
2,994

 
(1,333
)

For 2012, all other items principally represent permanent differences related to deferred compensation and meals and entertainment. For 2011, all other items principally represent permanent differences related to impairments and the effect of the change in state tax rate. For 2010, all other items principally represent straight line rents. Included in the income tax expense (benefit) disclosed above, the Company has approximately $600,000 of state income tax expense at the Operating Partnership for the Texas Gross Margin Tax recorded in income tax expense (benefit) of taxable REIT subsidiaries in the accompanying Consolidated Statements of Operations for each of the years ended December 31, 2012, 2011, and 2010.


96
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



The following table represents the Company's net deferred tax assets as of December 31, 2012 and 2011 recorded in other assets in the accompanying Consolidated Balance Sheets (in thousands):

 
 
2012
 
2011
Deferred tax assets
 
 
 
 
Investments in real estate partnerships
$
8,116

 
8,124

Provision for impairment
 
5,667

 
4,047

Deferred interest expense
 
4,507

 
4,507

Capitalized costs under Section 263A
 
2,637

 
3,828

Net operating loss carryforward
 
1,033

 
280

Employee benefits
 
838

 
683

Other
 
435

 
791

Deferred tax assets
 
23,233

 
22,260

Valuation allowance
 
(22,114
)
 
(6,479
)
Deferred tax assets, net
 
1,119

 
15,781

Deferred tax liabilities
 
 
 
 
Straight line rent
 
519

 
1,916

Depreciation
 
600

 
138

Deferred tax liabilities
 
1,119

 
2,054

Net deferred tax assets
$
—

 
13,727


During 2012 and 2011, the net change in the total valuation allowance was $15.6 million and $1.4 million, respectfully. The Company has federal and state net operating loss carryforwards totaling $2.9 million, which expire between 2027 and 2032.

The evaluation of the recoverability of the deferred tax assets and the need for a valuation allowance requires the Company to weigh all positive and negative evidence to reach a conclusion that it is more likely than not that all or some portion of the deferred tax assets will not be realized. The Company's framework for assessing the recoverability of deferred tax assets includes weighing recent taxable income (loss), projected future taxable income (loss) of the character necessary to realize the deferred tax assets, the carryforward periods for the net operating loss, including the effect of reversing taxable temporary differences, and prudent feasible tax planning strategies that would be implemented, if necessary, to protect against the loss of deferred tax assets. At December 31, 2012, the cumulative history of taxable losses and projected future taxable income within the TRS caused the Company to determine that it is more likely than not that the net deferred tax assets will not be realized. As a result, a valuation allowance has been established for the entire amount of the deferred tax asset.

The Company accounts for uncertainties in income tax law in accordance with FASB ASC Topic 740, under which tax positions shall initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions shall initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The Company believes that it has appropriate support for the income tax positions taken and to be taken on its tax returns and that its accruals for tax liabilities are adequate for all open tax years based on an assessment of many factors including past experience and interpretations of tax laws applied to the facts of each matter. Federal and state tax returns are open from 2009 and forward for the Company.


97
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



8.    Notes Payable and Unsecured Credit Facilities
The Parent Company does not have any indebtedness, but guarantees all of the unsecured debt and 17.6% of the secured debt of the Operating Partnership.
Notes Payable
Notes payable consist of mortgage loans secured by properties and unsecured public debt. Mortgage loans may be prepaid, but could be subject to yield maintenance premiums. Mortgage loans are generally due in monthly installments of principal and interest or interest only and mature over various terms through 2028, whereas, interest on unsecured public debt is payable semi-annually and matures over various terms through 2021. Fixed interest rates on mortgage loans range from 5.22% to 8.40% with a weighted average rate of 6.30%. Fixed interest rates on unsecured public debt range from 4.80% to 6.00% with a weighted average rate of 5.46%. As of December 31, 2012, the Company had two variable rate mortgage loans, one in the amount of $9.0 million with a variable interest rate of LIBOR plus 160 basis points maturing on September 1, 2014 and one in the amount of $3.0 million with a variable interest rate equal to LIBOR plus 380 basis points maturing on October 1, 2014.
On January 15, 2012, the Company repaid the maturing balance of $192.4 million of 6.75% ten-year unsecured notes. The Company assumed debt, net of premiums, of $12.8 million and $17.7 million in connection with the acquisition of Grand Ridge Plaza on June 21, 2012 and Sandy Springs on December 21, 2012, respectively.
The Company is required to comply with certain financial covenants for its unsecured public debt as defined in the indenture agreements such as the following ratios: Consolidated Debt to Consolidated Assets, Consolidated Secured Debt to Consolidated Assets, Consolidated Income for Debt Service to Consolidated Debt Service, and Unencumbered Consolidated Assets to Unsecured Consolidated Debt. As of December 31, 2012, management of the Company believes it is in compliance with all financial covenants for its unsecured public debt.
Unsecured Credit Facilities
The Company has an $800.0 million unsecured line of credit (the "Line") commitment under an agreement (the "Credit Agreement") with Wells Fargo Bank and a syndicate of other banks, which was amended on September 13, 2012 to increase the borrowing capacity by $200.0 million to a total of $800.0 million. The maturity date was extended by one year, and the Line will expire in September 2016, subject to a one-year extension at the Company's option. The amended Line bears interest at an annual rate of LIBOR plus 117.5 basis points and a facility fee of 22.5 basis points, subject to adjustment based on the higher of the Company's corporate credit ratings from Moody's and S&P. In addition, the Company has the ability to increase the Line through an accordion feature to $1.0 billion. Borrowing capacity is reduced by the balance of outstanding borrowings and commitments under outstanding letters of credit. The balance on the Line was $70.0 million and $40.0 million at December 31, 2012 and 2011, respectively. The proceeds from the Line are used to finance the acquisition and development of real estate and for general working-capital purposes.
The Company is required to comply with certain financial covenants as defined in the Credit Agreement such as Minimum Tangible Net Worth, Ratio of Indebtedness to Total Asset Value ("TAV"), Ratio of Unsecured Indebtedness to Unencumbered Asset Value, Ratio of Adjusted Earnings Before Interest Taxes Depreciation and Amortization (“EBITDA”) to Fixed Charges, Ratio of Secured Indebtedness to TAV, Ratio of Unencumbered Net Operating Income to Unsecured Interest Expense, and other covenants customary with this type of unsecured financing. As of December 31, 2012, management of the Company believes it is in compliance with all financial covenants for the Line.
On November 17, 2011, the Company entered into an unsecured term loan (the "Term Loan") commitment under an agreement (the "Term Loan Agreement") with Wells Fargo Bank and a syndicate of other banks, which matures on December 15, 2016. During 2012, the Company borrowed the $250.0 million available under the Term Loan and repaid $150.0 million, which resulted in the Company writing-off approximately $852,000 in loan costs and reducing the remaining commitment to $100.0 million. There was $100.0 million and no balance outstanding on the Term Loan as of December 31, 2012 and December 31, 2011, respectively. The Term Loan has a variable interest rate of LIBOR plus 145 basis points subject to Regency maintaining its corporate credit and senior unsecured ratings at BBB. In addition, the Company has the ability to increase the Term Loan up to an amount not to exceed an additional $150.0 million subject to the provisions of the Term Loan Agreement.

98
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



The Term Loan includes financial covenants relating to minimum tangible net worth, ratio of indebtedness to total asset value, ratio of unsecured indebtedness to unencumbered asset value, ratio of adjusted EBITDA to fixed charges, ratio of secured indebtedness to total asset value, and ratio of unencumbered NOI to unsecured interest expense. The Term Loan also includes customary events of default for agreements of this type (with customary grace periods, as applicable). As of December 31, 2012, management of the Company believes it is in compliance with all financial covenants for its Term Loan.
The Company’s outstanding debt at December 31, 2012 and 2011 consists of the following (in thousands): 
 
 
2012
 
2011
Notes payable:
 
 
 
 
Fixed rate mortgage loans
$
461,914

 
439,880

Variable rate mortgage loans
 
12,041

 
12,665

Fixed rate unsecured loans
 
1,297,936

 
1,489,895

Total notes payable
 
1,771,891

 
1,942,440

Unsecured credit facilities
 
170,000

 
40,000

Total
$
1,941,891

 
1,982,440


As of December 31, 2012, scheduled principal payments and maturities on notes payable were as follows (in thousands): 
Scheduled Principal Payments and Maturities by Year:
 
Scheduled
Principal
Payments
 
Mortgage Loan
Maturities
 
Unsecured
Maturities (1)
 
Total
2013
$
7,872

 
16,319

 
—

 
24,191

2014
 
7,383

 
26,999

 
150,000

 
184,382

2015
 
5,746

 
62,435

 
350,000

 
418,181

2016
 
5,487

 
14,161

 
170,000

 
189,648

2017
 
4,584

 
84,375

 
400,000

 
488,959

Beyond 5 Years
 
20,021

 
212,743

 
400,000

 
632,764

Unamortized debt premiums (discounts), net
 
—

 
5,830

 
(2,064
)
 
3,766

Total
$
51,093

 
422,862

 
1,467,936

 
1,941,891

 
 
 
 
 
 
 
 
 
(1) Includes unsecured public debt and unsecured credit facilities balances outstanding at December 31, 2012.
The Company continuously monitors the capital markets and evaluates its ability to issue new debt to repay maturing debt or fund its commitments. Based upon the current capital markets, the Company's current credit ratings, and the number of high quality, unencumbered properties that it owns which could collateralize borrowings, the Company expects that it will successfully issue new secured or unsecured debt to fund its obligations.


99
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



9.    Derivative Financial Instruments
The following table summarizes the terms and fair values of the Company's derivative financial instruments, as well as their classification on the Consolidated Balance Sheets, at December 31, 2012 and 2011 (in thousands): 
 
 
 
 
 
 
 
 
 
 
 
Fair Value
 
Effective Date
 
Maturity Date
 
Notional Amount
 
Bank Pays Variable Rate of
 
Regency Pays Fixed Rate of
 
2012
 
2011
Assets:
 
April 15, 2014
 
April 15, 2024
$
75,000

 
3 Month LIBOR
 
2.087
%
 
1,022

 
—

 
April 15, 2014
 
April 15, 2024
$
50,000

 
3 Month LIBOR
 
2.088
%
 
672

 
—

 
August 1, 2015
 
August 1, 2025
$
75,000

 
3 Month LIBOR
 
2.479
%
 
1,131

 
—

 
August 1, 2015
 
August 1, 2025
$
50,000

 
3 Month LIBOR
 
2.479
%
 
729

 
—

 
August 1, 2015
 
August 1, 2025
$
50,000

 
3 Month LIBOR
 
2.479
%
 
753

 
—

Other Assets
 
 
 

 
 
4,307

 
—

Liabilities:
 
October 1, 2011
 
September 1, 2014
$
9,000

 
1 Month LIBOR
 
0.76
%
 
76

 
37

Accounts payable and other liabilities

 
 
76

 
37

These derivative financial instruments are comprised of interest rate swaps, which are designated and qualify as cash flow hedges. The Company does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated as hedges.
The effective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedges is recorded in accumulated other comprehensive income (loss) and subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings as a gain or loss on derivative instruments.

The following table represents the effect of the derivative financial instruments on the accompanying consolidated financial statements for the years ended December 31, 2012, 2011, and 2010 (in thousands):
 
Derivatives in FASB
ASC Topic 815 Cash
Flow Hedging
Relationships:
Amount of Gain (Loss)
Recognized in OCI on
Derivative (Effective
Portion)
 
Location of Gain
(Loss) Reclassified
from Accumulated
OCI into Income
(Effective Portion)
 
Amount of Gain (Loss)
Reclassified from
Accumulated OCI into
Income (Effective
Portion)
 
Location of Gain or
(Loss) Recognized in
Income on  Derivative
(Ineffective Portion and
Amount Excluded from
Effectiveness Testing)
 
Amount of Gain or
(Loss) Recognized in
Income on Derivative
(Ineffective Portion and
Amount Excluded from
Effectiveness Testing)
 
December 31,
 
 
 
December 31,
 
 
 
December 31,
 
2012
 
2011
 
2010
 
 
 
2012
 
2011
 
2010
 
 
 
2012
 
2011
 
2010
Interest rate swaps
$
4,245

 
18

 
(36,556
)
 
Interest
expense
 
$
(9,491
)
 
(9,467
)
 
(5,575
)
 
Other expenses
 
$
—

 
(54
)
 
1,419

The unamortized balance of the settled interest rate swaps at December 31, 2012 and 2011 was $62.6 million and $72.0 million, respectively. As of December 31, 2012, the Company expects $9.5 million of deferred losses (gains) on derivative instruments accumulated in other comprehensive income to be reclassified into earnings during the next 12 months.

On October 7, 2010, the Company paid $36.7 million to settle the remaining $140.7 million of interest rate swaps then outstanding. On October 7, 2010, the Company closed on $250.0 million of 4.80% ten-year senior unsecured notes. The Company began amortizing the $36.7 million loss realized from the swap settlement in October 2010 over a ten year period; therefore, the effective interest rate on these notes was 6.26%.


100
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



On June 1, 2010, the Company paid $26.8 million to settle and partially settle $150.0 million of its interest rate swaps then outstanding of $290.7 million. On June 2, 2010 the Company also closed on $150.0 million of ten-year senior unsecured notes with an interest rate of 6.00%. The Company began amortizing the $26.8 million loss realized from the swap settlement in June 2010 over a ten year period; therefore, the effective interest rate on these notes was 7.67%.

Realized gains and losses associated with the settled interest rate swaps have been included in accumulated other comprehensive loss in the accompanying Consolidated Statements of Equity of the Parent Company and the accompanying Consolidated Statements of Capital of the Operating Partnership and are amortized as the corresponding hedged interest payments are made in future periods.

10.    Fair Value Measurements

(a) Disclosure of Fair Value of Financial Instruments

All financial instruments of the Company are reflected in the accompanying Consolidated Balance Sheets at amounts which, in management's estimation, reasonably approximates their fair values, except those listed below. The following provides information about the methods and assumptions used to estimate the fair value of the Company's financial instruments, including their estimated fair values.
    
Notes Receivable
The fair value of the Company's notes receivable is estimated by calculating the present value of future contractual cash flows discounted at an interest rate available for notes of the same terms and maturities adjusted for customer specific credit risk. The interest rates range from 7.0% to 8.1% and 7.1% to 8.1% at December 31, 2012 and 2011, respectively, based on the Company's estimates. The fair value of notes receivable was determined primarily using Level 3 inputs of the fair value hierarchy. Based on the estimates made by the Company, the fair value of notes receivable was $23.7 million and $35.3 million at December 31, 2012 and 2011, respectively.
Notes Payable
The fair value of the Company's notes payable is estimated by discounting future cash flows of each instrument at rates that reflect the current market rates available to the Company for debt of the same terms and maturities. These rates range from 2.4% to 3.3% and 2.4% to 4.3% at December 31, 2012 and 2011, respectively, based on the Company's estimates. Fixed rate loans assumed in connection with real estate acquisitions are recorded in the accompanying consolidated financial statements at fair value at the time the property is acquired including those loans assumed in distribution-in-kind liquidations. The fair value of the notes payable was determined using Level 2 inputs of the fair value hierarchy. Based on the estimates used by the Company, the fair value of notes payable was $2.0 billion and $2.1 billion at December 31, 2012 and 2011, respectively.
Unsecured Credit Facilities
The fair value of the Company's unsecured credit facilities is estimated based on the interest rates currently offered to the Company by the Company's third partylenders, which is estimated to be 1.6% and 1.5% at December 31, 2012 and 2011, respectively. The fair value of the unsecured credit facilities was determined using Level 2 inputs of the fair value hierarchy. Based on the estimates used by the Company, the fair value of the unsecured credit facilities was $170.2 million and $40.0 million at December 31, 2012 and 2011, respectively.
(b) Fair Value Measurements
Internally developed fair value measurements, including the unobservable inputs, are evaluated for reasonableness based on current transactions and experience in the real estate and capital markets. Service providers involved in fair value measurements are evaluated for competency and qualifications on an ongoing basis. The Company's valuation policies and procedures are determined by its Finance Group, which reports to the Chief Financial Officer, and the results of significant fair value measurements are discussed with the Audit Committee of the Board of Directors on a quarterly basis. The following describe valuation methods for each of our financial instruments required to be measured at fair value on a recurring basis.

101
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



Trading Securities Held in Trust

The Company has investments in marketable securities that are classified as trading securities held in trust on the accompanying Consolidated Balance Sheets. The fair value of the trading securities held in trust was determined using quoted prices in active markets, considered Level 1 inputs of the fair value hierarchy. Changes in the value of trading securities are recorded within net investment (income) loss from deferred compensation plan in the accompanying Consolidated Statements of Operations.
Derivative Financial Instruments
The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty's nonperformance risk in the fair value measurements.
Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and its counterparties. Changes in these credit valuation adjustments are not expected to result in a significant change in the valuation of the Company's derivatives.
The following are fair value measurements recorded on a recurring basis at December 31, 2012 and 2011, respectively (in thousands):
 
 
Fair Value Measurements at December 31, 2012
 
 
 
 
Quoted Prices in Active Markets for Identical Assets
 
Significant Other Observable Inputs
 
Significant Unobservable Inputs
Assets
 
Balance
 
(Level 1)
 
(Level 2)
 
(Level 3)
Trading securities held in trust
$
23,429

 
23,429

 
—

 
—

Interest rate derivatives
 
4,307

 
—

 
4,412

 
(105
)
Total
$
27,736

 
23,429

 
4,412

 
(105
)
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
Interest rate derivatives
$
(76
)
 
—

 
(77
)
 
1

 
 
Fair Value Measurements at December 31, 2011
 
 
 
 
Quoted Prices in Active Markets for Identical Assets
 
Significant Other Observable Inputs
 
Significant Unobservable Inputs
Assets
 
Balance
 
(Level 1)
 
(Level 2)
 
(Level 3)
Trading securities held in trust
$
21,713

 
21,713

 
—

 
—

 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
Interest rate derivatives
$
(37
)
 
—

 
(38
)
 
1



102
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



The following are fair value measurements recorded on a nonrecurring basis at December 31, 2012 and 2011, respectively (in thousands):
 
 
Fair Value Measurements at December 31, 2012
 
 
 
 
Quoted Prices in Active Markets for Identical Assets
 
Significant Other Observable Inputs
 
Significant Unobservable Inputs
 
Total Losses(1)
Assets
 
Balance
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
Long-lived assets held and used
 
 
 
 
 
 
 
 
 
 
Operating and development properties
$
49,673

 
—

 
—

 
49,673

 
(54,500
)
(1) Excludes impairments for properties sold during the year ended December 31, 2012.
 
 
Fair Value Measurements at December 31, 2011
 
 
 
 
Quoted Prices in Active Markets for Identical Assets
 
Significant Other Observable Inputs
 
Significant Unobservable Inputs
 
Total Losses(1)
Assets
 
Balance
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
Long-lived assets held and used
 
 
 
 
 
 
 
 
 
 
Operating and development properties
$
5,520

 
—

 
—

 
5,520

 
(11,843
)
Investment in real estate partnerships
 
1,893

 
—

 
—

 
1,893

 
(4,580
)
Total
$
7,413

 
—

 
—

 
7,413

 
(16,423
)
(1) Excludes impairments for properties sold during the year ended December 31, 2011.
Long-lived assets held and used are comprised primarily of real estate. The Company recognized a $54.5 million impairment loss related to two operating properties during the year ended December 31, 2012. The Company has determined that it is more likely than not that one of the properties will be sold before the end of its previously estimated useful life, and the other property was exhibiting weak operating fundamentals including low economic occupancy for an extended period of time, which led to the impairments. As a result, the Company estimated the fair value of the properties and recorded the impairment losses. As discussed in Note 1, the Company considers a property to be held-for-sale when the property is under contract, significant non-refundable deposits have been made by the potential buyer, the assets are immediately available for transfer, and there are no contingencies related to the sale that may prevent the transaction from closing. Given the nature of all real estate sales contracts, these conditions or criteria are typically not satisfied until the actual closing of the transaction. However, each potential transaction is evaluated based on its separate facts and circumstances. The Company evaluated these properties and determined that they did not meet the criteria for held-for-sale as of December 31, 2012.
In addition, the Company recognized a $16.4 million impairment loss related to one operating property and the Company's investment in a real estate partnership during the year ended December 31, 2011. This operating property exhibited weak operating fundamentals, including low economic occupancy for an extended period of time, which lead to the impairment. As a result, the Company estimated the fair value of the properties and recorded an impairment loss.

103
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



Fair value for those assets measured using Level 3 inputs was determined through the use of an income approach. The income approach estimates an income stream for a property (typically 10 years) and discounts this income plus a reversion (presumed sale) into a present value at a risk adjusted rate. Overall cap rates and growth assumptions utilized in this approach are derived from market transactions as well as other financial and industry data. The terminal cap rate and discount rate are significant inputs to this valuation. The following are ranges of key inputs used in determining the fair value of real estate measured using Level 3 inputs as of December 31, 2012 and 2011:
 
2012
 
2011
 
Low
 
High
 
Low
 
High
Overall cap rates
8.3%
 
8.5%
 
7.5%
 
9.0%
Rental growth rates
(8.3)%
 
2.5%
 
2.0%
 
3.0%
 
 
 
 
 
 
 
 
Discount rates
10.5%
 
10.5%
 
8.5%
 
10.0%
Terminal cap rates
8.8%
 
8.8%
 
8.0%
 
9.5%
Changes in these inputs could result in a significant change in the valuation of the real estate and a change in the impairment loss recognized during the period.

104
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



11.    Equity and Capital
Preferred Stock of the Parent Company
Issuances:
On February 16, 2012, the Parent Company issued 10 million shares of 6.625% Series 6 Cumulative Redeemable Preferred Stock with a liquidation preference of $25 per share resulting in proceeds of $241.4 million, net of issuance costs, which were subsequently contributed to the Operating Partnership to redeem similar preferred unit interests as further discussed below.
On August 23, 2012, the Parent Company issued 3 million shares of 6.00% Series 7 Cumulative Redeemable Preferred Stock with a liquidation preference of $25 per share resulting in proceeds of $72.5 million, net of issuance costs, which were subsequently used to redeem the Company's Series 5 Cumulative Redeemable Preferred Stock as further discussed below.
The Series 6 and 7 preferred shares are perpetual, absent a change in control of the Parent Company, are not convertible into common stock of the Parent Company, and are redeemable at par upon the Company’s election beginning five years after the issuance date. None of the terms of the preferred stock contain any unconditional obligations that would require the Company to redeem the securities at any time or for any purpose.
Redemptions:
On March 31, 2012, the Parent Company redeemed all issued and outstanding shares of its Series 3 and Series 4 Cumulative Redeemable Preferred Stock and on September 13, 2012, the Parent Company redeemed all issued and outstanding shares of its Series 5 Cumulative Redeemable Preferred Stock. These redemptions resulted in a reduction to net income available to common stockholders through non-cash charges of $7.0 million and $2.3 million, respectively, related to original issuance costs, which are included within the following financial statement line items:
Parent Company
Financial Statement Line Item
Consolidated Statements of Operations
Preferred stock dividends
Consolidated Statements of Equity
Redemption of preferred stock
Operating Partnership
 
Consolidated Statements of Operations
Preferred unit distributions
Consolidated Statements of Capital
Preferred units issued as a result of preferred stock issued by Parent Company, net of redemptions and issuance costs
Terms and conditions of the preferred stock outstanding at December 31, 2012 and 2011 are summarized as follows: 
 
 
Preferred Stock Outstanding at December 31, 2012
Series
 
Shares
Outstanding
 
Liquidation
Preference
 
Distribution
Rate
 
Callable
By Company
Series 6
 
10,000,000

 
$
250,000,000

 
6.625
%
 
2/16/2017
Series 7
 
3,000,000

 
75,000,000

 
6.000
%
 
8/23/2017
 
 
13,000,000

 
$
325,000,000

 
 
 
 


105
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



 
 
Preferred Stock Outstanding at December 31, 2011
Series
 
Shares
Outstanding
 
Liquidation
Preference
 
Distribution
Rate
 
Callable
By Company
Series 3
 
3,000,000

 
$
75,000,000

 
7.450
%
 
4/3/2008
Series 4
 
5,000,000

 
125,000,000

 
7.250
%
 
8/31/2009
Series 5
 
3,000,000

 
75,000,000

 
6.700
%
 
8/2/2010
 
 
11,000,000

 
$
275,000,000

 
 
 
 

Common Stock of the Parent Company
Issuances:
On August 10, 2012, the Parent Company entered into an at-the-market ("ATM") equity distribution agreement under which the Company may from time to time offer and sell up to $150.0 million of our common stock. The net proceeds are expected to fund potential acquisition opportunities, fund our development or redevelopment activities, repay amounts outstanding under our revolving credit facility and/or for general corporate purposes. During the year ended December 31, 2012, 442,786 shares were issued and sold at a weighted average price per share of $49.70 for proceeds of $21.5 million, net of commissions of approximately $331,000 and issuance costs of approximately $135,000. As of December 31, 2012, we had the capacity to issue $128.0 million in common stock under our ATM equity program.
On March 9, 2011, the Parent Company settled its forward sale agreements dated December 4, 2009 (the "Forward Equity Offering") with J.P. Morgan and Wells Fargo Securities by delivering an aggregate 8 million shares of common stock. Upon physical settlement of the Forward Equity Offering, the Company received net proceeds of$215.4 million. The Company used a portion of the proceeds to repay the Line, which had been drawn upon to repay unsecured notes of $161.7 million that matured in January 2011.
Preferred Units of the Operating Partnership
Issuances:
Series 6 and Series 7 preferred unit interests were issued to the Parent Company in relation to the Parent Company's issuance of 6.625% Series 6 Cumulative Redeemable Preferred Stock and 6.00% Series 7 Cumulative Redeemable Preferred Stock as discussed above.
Redemptions:
On February 9, 2012, the Operating Partnership purchased all of its issued and outstanding Series D Preferred Units at 3.75% discount to par, resulting in an increase to net income available to common stockholders of $1.0 million, related to the discount offset by the write-off of the original issuance costs. This amount is included in preferred unit loss attributable to noncontrolling interests in the parent company's consolidated statements of operations and in preferred unit distributions in the operating partnership's consolidated statement of operations.
Terms and conditions for the Series D preferred units outstanding as of December 31, 2011 are summarized as follows: 
Units Outstanding
 
Amount
Outstanding
 
Distribution
Rate
 
Callable by
Company
 
Exchangeable
by Unit holder
500,000
 
$
50,000,000

 
7.45
%
 
9/29/2009
 
1/1/2014
The Series 3, 4 and 5 preferred unit interests owned by the Parent Company, as general partner, were redeemed in conjunction with the Parent Company's redemption of its Series 3, Series 4, and Series 5 Cumulative Redeemable Preferred Stock as discussed above.

 

106
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



Common Units of the Operating Partnership
Issuances:
Common units were issued to the Parent Company in relation to the Parent Company's issuance of common stock, as discussed above.

General Partner
As of December 31, 2012 and 2011, the Parent Company, as general partner, owned approximately 99.8% or 90,394,486 of the total 90,571,650 Partnership Units outstanding and approximately 99.8% or 89,921,858 of the total 90,099,022 Partnership Units outstanding, respectively.
Limited Partners
The Operating Partnership had 177,164 limited Partnership Units outstanding as of December 31, 2012 and 2011.
Noncontrolling Interests of Limited Partners' Interests in Consolidated Partnerships
Limited partners’ interests in consolidated partnerships not owned by the Company are classified as noncontrolling interests on the accompanying Consolidated Balance Sheets of the Parent Company. Subject to certain conditions and pursuant to the conditions of the agreement, the Company has the right, but not the obligation, to purchase the other member’s interest or sell its own interest in these consolidated partnerships. At December 31, 2012 and 2011, the Company’s noncontrolling interest in these consolidated partnerships was $16.3 million and $13.1 million, respectively.

Accumulated Other Comprehensive Loss

The following table presents changes in the balances of each component of accumulated other comprehensive loss for the year ended December 31, 2012 (in thousands):

 
 
Loss on Settlement of Derivative Instruments
 
Fair Value of Derivative Instruments
 
Accumulated Other Comprehensive Income (Loss)
Beginning balance
$
(71,438
)
 
9

 
(71,429
)
Net gain on cash flow derivative instruments
 
—

 
4,255

 
4,255

Amounts reclassified from accumulated other comprehensive income
 
9,447

 
12

 
9,459

Net current-period other comprehensive income
 
9,447

 
4,267

 
13,714

Ending balance
$
(61,991
)
 
4,276

 
(57,715
)

12.    Stock-Based Compensation
The Company recorded stock-based compensation in general and administrative expenses in the accompanying Consolidated Statements of Operations, the components of which are further described below for the years ended December 31, 2012, 2011, and 2010 (in thousands): 
 
 
2012
 
2011
 
2010
Restricted stock
$
11,526

 
10,659

 
7,236

Directors' fees paid in common stock
 
259

 
269

 
231

Less: Amount capitalized
 
(1,979
)
 
(1,104
)
 
(852
)
Total
$
9,806

 
9,824

 
6,615


107
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012




The recorded amounts of stock-based compensation expense represent amortization of the grant date fair value of restricted stock awards over the respective vesting periods. Compensation expense specifically identifiable to development and leasing activities is capitalized and included above.

The Company established the Plan under which the Board of Directors may grant stock options and other stock-based awards to officers, directors, and other key employees. The Plan allows the Company to issue up to approximately 4.1 million shares in the form of the Parent Company's common stock or stock options. At December 31, 2012, there were approximately 3.1 million shares available for grant under the Plan either through options or restricted stock.

Stock options are granted under the Plan with an exercise price equal to the Parent Company's stock's price at the date of grant. All stock options granted have ten-year lives, contain vesting terms of one to five years from the date of grant and some have dividend equivalent rights.

The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton closed-form (“Black-Scholes”) option valuation model. The Company believes that the use of the Black-Scholes model meets the fair value measurement objectives of FASB ASC Topic 718 and reflects all substantive characteristics of the instruments being valued.

The following table reports stock option activity during the year ended December 31, 2012: 
 
Number of
Options
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Term
(in years)
 
Aggregate
Intrinsic
Value
(in thousands)
Outstanding December 31, 2011
386,149

$
52.12

 
3.0
$
(5,598
)
Less: Exercised
7,619

 
34.34

 
 
 
 
Less: Forfeited
57,952

 
51.36

 
 
 
 
Less: Expired
4,654

 
72.29

 
 
 
 
Outstanding December 31, 2012
315,924

$
52.39

 
2.1
$
(1,664
)
Vested and expected to vest - December 31, 2012
315,924

$
52.39

 
2.1
$
(1,664
)
Exercisable December 31, 2012
315,924

$
52.39

 
2.1
$
(1,664
)

There were no stock options granted during 2012, 2011, or 2010. The total intrinsic value of options exercised during the years ended December 31, 2012, 2011, and 2010 was approximately $92,000, $130,000, and $1,000, respectively. The Company issues new shares to fulfill option exercises from its authorized shares available.

The Company grants restricted stock under the Plan to its employees as a form of long-term compensation and retention. The terms of each grant vary depending upon the participant's responsibilities and position within the Company. The Company's stock grants can be categorized as either time-based awards, performance-based awards, or market-based awards. All awards were valued at the fair market value, earn dividends throughout the vesting period, and have no voting rights. Fair value is measured using the grant date market price for all time-based or performance-based awards. Market based awards are valued using a Monte Carlo simulation to estimate the fair value based on the probability of satisfying the market conditions and the projected stock price at the time of payout, discounted to the valuation date over the three year performance period.   Assumptions include historic volatility over the previous three year period, risk-free interest rates, and Regency's historic daily return as compared to the market index. Because the award payout includes dividend equivalents and the total shareholder return includes the value of dividends, no dividend yield assumption is required for the valuation. Compensation expense is measured at the grant date and recognized over the vesting period.

•
Time-based awards vest 25% per year beginning on the first anniversary following the grant date. These grants are subject only to continued employment and not dependent on future performance measures; and accordingly, if such vesting criteria are not met, compensation cost previously recognized would be reversed. During 2012, the Company granted 112,496 shares of time-based awards.

108
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012




•
Performance-based awards are earned subject to future performance measurements, including individual goals, annual growth in earnings, and compounded three-year growth in earnings. Once the performance criteria are achieved and the actual number of shares earned is determined, shares will vest over a required service period. If such performance criteria are not met, compensation cost previously recognized would be reversed. The Company considers the likelihood of meeting the performance criteria based upon management's estimates from which it determines the amounts recognized as expense on a periodic basis. During 2012, the Company granted 25,435 shares of performance-based awards.

•
Market-based awards are earned dependent upon the Company's total shareholder return in relation to the shareholder return of peer indices over a three-year period (“TSR Grant”). Once the market criteria are met and the actual number of shares earned is determined, 100% of the earned shares vest. The probability of meeting the market criteria is considered when calculating the estimated fair market value on the date of grant using a Monte Carlo simulation. These awards were accounted for as awards with market criteria, with compensation cost recognized over the service period, regardless of whether the market criteria are achieved and the awards are ultimately earned and vest. During 2012, the Company granted 128,302 shares of market-based awards. The significant assumptions underlying determination of fair values for market-based awards granted during the years ended December 31, 2012, 2011, and 2010 were
 
 
2012
 
2011
 
2010
Volatility
 
48.80
%
 
66.50
%
 
66.40
%
Risk free interest rate
 
0.32
%
 
0.98
%
 
1.41
%
The following table reports non-vested restricted stock activity during the year ended December 31, 2012: 
 
Number of
Shares
 
Intrinsic
Value
(in thousands)
 
Weighted
Average
Grant
Price
Non-vested at December 31, 2011
562,259

 
 
 
 
Add: Time-based awards granted
112,496

 
 
$
40.05
Add: Performance-based awards granted
25,435

 
 
$
39.00
Add: Market-based awards granted
128,302

 
 
$
39.00
Less: Vested and Distributed
152,019

 
 
$
43.13
Less: Forfeited
1,982

 
 
$
40.34
Non-vested at December 31, 2012
674,491

$
31,782
 
 

The weighted-average grant price for restricted stock granted during the years ended December 31, 2012, 2011, and 2010 was $39.44, $41.81, and $35.65, respectively. The total intrinsic value of restricted stock vested during the years ended December 31, 2012, 2011, and 2010 was $6.6 million, $7.5 million, and $6.1 million, respectively.

As of December 31, 2012, there was $12.8 million of unrecognized compensation cost related to non-vested restricted stock granted under the Parent Company's Long-Term Omnibus Plan. When recognized, this compensation results in additional paid in capital in the accompanying Consolidated Statements of Equity of the Parent Company and in general partner preferred and common units in the accompanying Consolidated Statements of Capital of the Operating Partnership. This unrecognized compensation cost is expected to be recognized over the next three years, through 2015. The Company issues new restricted stock from its authorized shares available at the date of grant.

109
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012




13.    Saving and Retirement Plans

401 (k) Retirement Plan

The Company maintains a 401(k) retirement plan covering substantially all employees, which permits participants to defer up to the maximum allowable amount determined by the IRS of their eligible compensation. This deferred compensation, together with Company matching contributions equal to 100% of employee deferrals up to a maximum of $5,000 of their eligible compensation, is fully vested and funded as of December 31, 2012. Costs related to matching portion of the plan were $1.4 million, $1.2 million, and $1.1 million for the years ended December 31, 2012, 2011, and 2010, respectively.

Non-Qualified Deferred Compensation Plan

The Company maintains a non-qualified deferred compensation plan (“NQDCP”) which allows select employees and directors to defer part or all of their salary, cash bonus, and restricted stock awards. Restricted stock awards that are designated to be deferred into the NQDCP upon vesting are classified as liabilities from the grant date through the vesting date. All contributions into the participants' accounts are fully vested upon contribution to the NQDCP and are deposited in a Rabbi trust.

The Company accounts for the NQDCP in accordance with FASB Accounting Standards Codification ASC Topic 710 and the restricted stock awards under Topic 718. The assets in the Rabbi trust remain subject to the claims of creditors of the Company and are not the property of the participant. The NQDCP allows participants to allocate their account balance among various investments, including several mutual funds and the Company's common stock. Effective June 20, 2011, the Company amended its NQDCP such that participant account balances held in the Regency common stock fund, including future deferrals of Regency common stock, must remain allocated to the Regency common stock fund and may only be distributed to the participant in the form of Regency common stock upon termination from the plan.  Additionally, participant account balances allocated to various diversified mutual funds are prohibited from being allocated into the Regency common stock fund. The assets of the Rabbi trust, exclusive of the shares of the Company's common stock, are classified as trading securities on the accompanying Consolidated Balance Sheets, and accordingly, realized and unrealized gains and losses are recognized within income from deferred compensation plan in the accompanying Consolidated Statements of Operations. Investments in shares of the Company's common stock are included, at cost, as treasury stock in the accompanying Consolidated Balance Sheets of the Parent Company and as a reduction of general partner capital in the accompanying Consolidated Balance Sheets of the Operating Partnership. The participants' deferred compensation liability, exclusive of the shares of the Company's common stock after the June 20, 2011 amendment, is included within accounts payable and other liabilities in the accompanying Consolidated Balance Sheets and was $22.8 million and $21.1 million at December 31, 2012 and 2011, respectively. Increases or decreases in the deferred compensation liability, exclusive of amounts attributable to participant investments in the shares of the Company's common stock, are recorded as general and administrative expense within the accompanying Consolidated Statements of Operations. Changes in participant account balances related to the Regency common stock fund are recorded directly within stockholders' equity.



110
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



14.    Earnings per Share and Unit
Parent Company Earnings per Share
The following summarizes the calculation of basic and diluted earnings per share for the years ended December 31, 2012, 2011, and 2010, respectively (in thousands except per share data): 
 
 
2012
 
2011
 
2010
Numerator:
 
 
 
 
 
 
Income from continuing operations
$
505

 
45,344

 
3,106

Income from discontinued operations
 
23,546

 
8,040

 
8,902

Gain on sale of real estate
 
2,158

 
2,404

 
993

Net income
 
26,209

 
55,788

 
13,001

Less: preferred stock dividends
 
32,531

 
19,675

 
19,675

Less: income attributable to noncontrolling interests
 
342

 
4,418

 
4,185

Net (loss) income attributable to common stockholders
 
(6,664
)
 
31,695

 
(10,859
)
Less: dividends paid on unvested restricted stock
 
572

 
615

 
542

Net income attributable to common stockholders - basic
 
(7,236
)
 
31,080

 
(11,401
)
Add: dividends paid on Treasury Method restricted stock
 
—

 
18

 
—

Net (loss) income for common stockholders - diluted
$
(7,236
)
 
31,098

 
(11,401
)
Denominator:
 
 
 
 
 
 
Weighted average common shares outstanding for basic EPS
 
89,630

 
87,825

 
81,068

Incremental shares to be issued under unvested restricted stock
 
39

 
—

 
—

Incremental shares under Forward Equity Offering
 
—

 
424

 
1,534

Weighted average common shares outstanding for diluted EPS
 
89,669

 
88,249

 
82,602

(Loss) income per common share – basic
 
 
 
 
 
 
Continuing operations
$
(0.34
)
 
0.26

 
(0.25
)
Discontinued operations
 
0.26

 
0.09

 
0.11

Net (loss) income attributable to common stockholders
$
(0.08
)
 
0.35

 
(0.14
)
(Loss) income per common share – diluted
 
 
 
 
 
 
Continuing operations
$
(0.34
)
 
0.26

 
(0.25
)
Discontinued operations
 
0.26

 
0.09

 
0.11

Net (loss) income attributable to common stockholders
$
(0.08
)
 
0.35

 
(0.14
)

Income (loss) allocated to noncontrolling interests of the Operating Partnership has been excluded from the numerator and Exchangeable Operating Partnership units have been omitted from the denominator for the purpose of computing diluted earnings per share since the effect of including these amounts in the numerator and denominator would have no impact. Weighted average Exchangeable Operating Partnership units outstanding for the years ended December 31, 2012, 2011, and 2010 were 177,164, 177,164, and 270,706, respectively.
    

111
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



Operating Partnership Earnings per Unit
The following summarizes the calculation of basic and diluted earnings per unit for the periods ended December 31, 2012, 2011, and 2010 respectively (in thousands except per unit data): 
 
 
2012
 
2011
 
2010
Numerator:
 
 
 
 
 
 
Income from continuing operations
$
505

 
45,344

 
3,106

Income from discontinued operations
 
23,546

 
8,040

 
8,902

Gain on sale of real estate
 
2,158

 
2,404

 
993

Net income
 
26,209

 
55,788

 
13,001

Less: preferred unit distributions
 
31,902

 
23,400

 
23,400

Less: income attributable to noncontrolling interests
 
865

 
590

 
376

Net (loss) income attributable to common unit holders
 
(6,558
)
 
31,798

 
(10,775
)
Less: dividends paid on unvested restricted stock
 
572

 
615

 
542

Net income attributable to common unit holders - basic
 
(7,130
)
 
31,183

 
(11,317
)
Add: dividends paid on Treasury Method restricted stock
 
—

 
18

 
—

Net income for common unit holders - diluted
$
(7,130
)
 
31,201

 
(11,317
)
Denominator:
 
 
 
 
 
 
Weighted average common units outstanding for basic EPU
 
89,808

 
88,002

 
81,339

Incremental shares to be issued under unvested restricted stock
 
39

 
—

 
—

Incremental units under Forward Equity Offering
 
—

 
424

 
1,534

Weighted average common units outstanding for diluted EPU
 
89,847

 
88,426

 
82,873

(Loss) income per common unit – basic
 
 
 
 
 
 
Continuing operations
$
(0.34
)
 
0.26

 
(0.25
)
Discontinued operations
 
0.26

 
0.09

 
0.11

Net (loss) income attributable to common unit holders
$
(0.08
)
 
0.35

 
(0.14
)
(Loss) income per common unit – diluted
 
 
 
 
 
 
Continuing operations
$
(0.34
)
 
0.26

 
(0.25
)
Discontinued operations
 
0.26

 
0.09

 
0.11

Net (loss) income attributable to common unit holders
$
(0.08
)
 
0.35

 
(0.14
)




112
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



15.    Operating Leases
    
The Company's properties are leased to tenants under operating leases with expiration dates extending to the year 2099. Future minimum rents under non-cancelable operating leases as of December 31, 2012, excluding both tenant reimbursements of operating expenses and additional percentage rent based on tenants' sales volume, are as follows (in thousands):
Year Ending December 31,
 
Amount
2013
$
332,351

2014
 
311,905

2015
 
276,784

2016
 
240,376

2017
 
196,098

Thereafter
 
991,272

Total
$
2,348,786


The shopping centers' tenant base includes primarily national and regional supermarkets, drug stores, discount department stores and other retailers and, consequently, the credit risk is concentrated in the retail industry. There were no tenants that individually represented more than 5% of the Company's annualized future minimum rents.

The Company has shopping centers that are subject to non-cancelable long-term ground leases where a third party owns and has leased the underlying land to the Company to construct and/or operate a shopping center. Ground leases expire through the year 2058 and in most cases provide for renewal options. In addition, the Company has non-cancelable operating leases pertaining to office space from which it conducts its business. Office leases expire through the year 2018 and in most cases provide for renewal options. Leasehold improvements are capitalized, recorded as tenant improvements, and depreciated over the shorter of the useful life of the improvements or the lease term. Operating lease expense, including capitalized ground lease payments on properties in development, was $9.1 million, $9.2 million and $8.1 million for the years ended December 31, 2012, 2011, and 2010, respectively. The following table summarizes the future obligations under non-cancelable operating leases as of December 31, 2012, (in thousands):

Year Ending December 31,
 
Amount
2013
$
7,732

2014
 
7,136

2015
 
6,713

2016
 
6,181

2017
 
4,649

Thereafter
 
101,613

Total
$
134,024


16.    Commitments and Contingencies
The Company is involved in litigation on a number of matters and is subject to certain claims which arise in the normal course of business, none of which, in the opinion of management, is expected to have a material adverse effect on the Company's consolidated financial position, results of operations, or liquidity. Legal fees are expensed as incurred.
The Company is also subject to numerous environmental laws and regulations as they apply to real estate pertaining to chemicals used by the dry cleaning industry, the existence of asbestos in older shopping centers, and underground petroleum storage tanks. The Company believes that the ultimate disposition of currently known environmental matters will not have a material effect on its financial position, liquidity, or operations; however, it can give no assurance that existing environmental studies with respect to the 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 it; that the current environmental condition of the shopping centers will not be affected by tenants and occupants, by the condition of

113
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2012



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 the Company.
The Company has the right to issue letters of credit under the Line up to an amount not to exceed $80.0 million which reduces the credit availability under the Line. These letters of credit are primarily issued as collateral to facilitate the construction of development projects. As of December 31, 2012 and 2011, the Company had $20.8 million and $17.4 million letters of credit outstanding, respectively. 

17.    Summary of Quarterly Financial Data (Unaudited)

The following table sets forth selected Quarterly Financial Data for the Company on a historical basis for each of the years ended December 31, 2012 and 2011 and has been derived from the accompanying consolidated financial statements as reclassified for discontinued operations (in thousands except per share and per unit data):
2012:
 
First
 
Second
 
Third
 
Fourth
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
Operating Data:
 
 
 
 
 
 
 
 
Revenues as originally reported
$
127,389

 
129,767

 
120,013

 
122,002

Reclassified to discontinued operations
 
(1,146
)
 
(524
)
 
(581
)
 
—

Adjusted Revenues
$
126,243

 
129,243

 
119,432

 
122,002

 
 
 
 
 
 
 
 
 
Net income (loss) attributable to common stockholders
$
13,181

 
5,697

 
11,637

 
(37,179
)
Net income (loss) of limited partners
 
54

 
23

 
39

 
(10
)
Net income (loss) attributable to common unit holders
$
13,235

 
5,720

 
11,676

 
(37,189
)
 
 
 
 
 
 
 
 
 
Net income (loss) attributable to common stock and unit holders per share and unit:
 
 
 
 
 
 
  Basic
$
0.14

 
0.06

 
0.13

 
(0.41
)
  Diluted
$
0.14

 
0.06

 
0.13

 
(0.41
)
 
 
 
 
 
 
 
 
 
2011:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Data:
 
 
 
 
 
 
 
 
Revenues as originally reported
$
127,114

 
128,382

 
125,747

 
125,322

Reclassified to discontinued operations
 
(4,069
)
 
(4,344
)
 
(3,328
)
 
(1,726
)
Adjusted Revenues
$
123,045

 
124,038

 
122,419

 
123,596

 
 
 
 
 
 
 
 
 
Net income attributable to common stockholders
$
2,185

 
12,861

 
8,510

 
8,139

Net income of limited partners
 
13

 
37

 
27

 
26

Net income attributable to common unit holders
$
2,198

 
12,898

 
8,537

 
8,165

 
 
 
 
 
 
 
 
 
Net income attributable to common stock and unit holders per share and unit:
 
 
 
 
 
 
  Basic
$
0.02

 
0.14

 
0.09

 
0.10

  Diluted
$
0.02

 
0.14

 
0.09

 
0.10



114



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Schedule III - Consolidated Real Estate and Accumulated Depreciation
December 31, 2012
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Initial Cost
 
 
 
 Total Cost
 
 
 
 Total Cost
 
 
Shopping Centers (1)
 
 Land
 
 Building & Improvements
 
 Cost Capitalized
 Subsequent to
 Acquisition (2)
 
 Land
 
 Building & Improvements
 
  Properties held for Sale
 
 Total
 
 Accumulated Depreciation
 
 Net of Accumulated Depreciation
 
 Mortgages
 4S Commons Town Center
 
30,760

 
35,830

 
(379
)
 
30,812

 
35,399

 
—

 
66,211

 
11,743

 
54,468

 
62,500

 Airport Crossing
 
1,748

 
1,690

 
85

 
1,744

 
1,780

 
—

 
3,524

 
426

 
3,098

 
—

 Amerige Heights Town Center
 
10,109

 
11,288

 
247

 
10,109

 
11,536

 
—

 
21,645

 
1,830

 
19,815

 
17,000

 Anastasia Plaza
 
9,065

 
—

 
120

 
3,338

 
5,847

 
—

 
9,185

 
739

 
8,446

 
—

 Anthem Marketplace
 
6,714

 
13,696

 
204

 
6,714

 
13,899

 
—

 
20,613

 
4,675

 
15,938

 
—

 Ashburn Farm Market Center
 
9,835

 
4,812

 
369

 
9,835

 
5,181

 
—

 
15,016

 
2,943

 
12,073

 
—

 Ashford Perimeter
 
2,584

 
9,865

 
514

 
2,584

 
10,379

 
—

 
12,963

 
5,217

 
7,746

 
—

 Augusta Center
 
5,142

 
2,720

 
(5,456
)
 
1,547

 
859

 
—

 
2,406

 
(3
)
 
2,409

 
—

 Aventura Shopping Center
 
2,751

 
10,459

 
29

 
2,751

 
10,488

 
—

 
13,239

 
9,561

 
3,678

 
—

 Balboa Mesa Shopping Center
 
23,074

 
33,838

 
—

 
23,074

 
33,838

 
—

 
56,912

 
495

 
56,417

 
—

 Beckett Commons
 
1,625

 
10,960

 
2,570

 
1,748

 
13,407

 
—

 
15,155

 
4,155

 
11,000

 
—

 Belleview Square
 
8,132

 
9,756

 
1,965

 
8,298

 
11,555

 
—

 
19,853

 
4,188

 
15,665

 
7,208

 Berkshire Commons
 
2,295

 
9,551

 
1,447

 
2,965

 
10,328

 
—

 
13,293

 
5,510

 
7,783

 
7,500

 Bloomingdale Square
 
3,940

 
14,912

 
871

 
3,940

 
15,783

 
—

 
19,723

 
6,242

 
13,481

 
—

 Boulevard Center
 
3,659

 
10,787

 
936

 
3,659

 
11,723

 
—

 
15,382

 
4,609

 
10,773

 
—

 Boynton Lakes Plaza
 
2,628

 
11,236

 
3,436

 
3,464

 
13,836

 
—

 
17,300

 
4,185

 
13,115

 
—

 Brentwood Plaza
 
2,788

 
3,473

 
18

 
2,788

 
3,491

 
—

 
6,279

 
267

 
6,012

 
—

 Briarcliff La Vista
 
694

 
3,292

 
154

 
694

 
3,446

 
—

 
4,140

 
2,038

 
2,102

 
—

 Briarcliff Village
 
4,597

 
24,836

 
1,069

 
4,597

 
25,905

 
—

 
30,502

 
13,223

 
17,279

 
—

 Bridgeton
 
3,033

 
8,137

 
34

 
3,067

 
8,137

 
—

 
11,204

 
546

 
10,658

 
—

 Buckhead Court
 
1,417

 
7,432

 
231

 
1,417

 
7,663

 
—

 
9,080

 
4,333

 
4,747

 
—

 Buckley Square
 
2,970

 
5,978

 
583

 
2,970

 
6,561

 
—

 
9,531

 
2,802

 
6,729

 
—

 Buckwalter Place Shopping Ctr
 
6,563

 
6,590

 
123

 
6,592

 
6,684

 
—

 
13,276

 
1,746

 
11,530

 
—

 Caligo Crossing
 
2,459

 
4,897

 
441

 
2,459

 
5,338

 
—

 
7,797

 
1,181

 
6,616

 
—

 Cambridge Square
 
774

 
4,347

 
634

 
774

 
4,982

 
—

 
5,756

 
2,207

 
3,549

 
—

 Carmel Commons
 
2,466

 
12,548

 
3,819

 
3,406

 
15,426

 
—

 
18,832

 
5,551

 
13,281

 
—

 Carriage Gate
 
833

 
4,974

 
268

 
835

 
5,240

 
—

 
6,075

 
3,665

 
2,410

 
—

 Centerplace of Greeley III
 
6,661

 
11,502

 
2,255

 
6,796

 
13,623

 
—

 
20,419

 
2,364

 
18,055

 
—

 Chasewood Plaza
 
4,612

 
20,829

 
307

 
4,681

 
21,067

 
—

 
25,748

 
12,241

 
13,507

 
—


115


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Schedule III - Consolidated Real Estate and Accumulated Depreciation
December 31, 2012
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Initial Cost
 
 
 
 Total Cost
 
 
 
 Total Cost
 
 
Shopping Centers (1)
 
 Land
 
 Building & Improvements
 
 Cost Capitalized
 Subsequent to
 Acquisition (2)
 
 Land
 
 Building & Improvements
 
  Properties held for Sale
 
 Total
 
 Accumulated Depreciation
 
 Net of Accumulated Depreciation
 
 Mortgages
 Cherry Grove
 
3,533

 
15,862

 
1,424

 
3,581

 
17,238

 
—

 
20,819

 
6,540

 
14,279

 
—

 Cheshire Station
 
9,896

 
8,344

 
(22
)
 
9,896

 
8,322

 
—

 
18,218

 
5,994

 
12,224

 
—

 Clayton Valley Shopping Center
 
24,189

 
35,422

 
1,892

 
24,538

 
36,965

 
—

 
61,503

 
12,759

 
48,744

 
—

 Cochran's Crossing
 
13,154

 
12,315

 
632

 
13,154

 
12,947

 
—

 
26,101

 
6,195

 
19,906

 
—

 Corkscrew Village
 
8,407

 
8,004

 
89

 
8,407

 
8,094

 
—

 
16,501

 
1,759

 
14,742

 
8,436

 Cornerstone Square
 
1,772

 
6,944

 
955

 
1,764

 
7,907

 
—

 
9,671

 
3,638

 
6,033

 
—

 Corvallis Market Center
 
6,674

 
12,244

 
34

 
6,696

 
12,256

 
—

 
18,952

 
2,481

 
16,471

 
—

 Costa Verde Center
 
12,740

 
26,868

 
984

 
12,798

 
27,794

 
—

 
40,592

 
11,523

 
29,069

 
—

 Courtyard Landcom
 
5,867

 
4

 
3

 
5,867

 
7

 
—

 
5,874

 
1

 
5,873

 
—

 Culpeper Colonnade
 
15,944

 
10,601

 
206

 
15,947

 
10,803

 
—

 
26,750

 
4,060

 
22,690

 
—

 Dardenne Crossing
 
4,194

 
4,005

 
73

 
4,195

 
4,078

 
—

 
8,273

 
355

 
7,918

 
—

 Deer Springs Town Center
 
41,031

 
42,841

 
(56,572
)
 
6,214

 
21,085

 
—

 
27,299

 
1,919

 
25,380

 
—

 Delk Spectrum
 
2,985

 
12,001

 
386

 
3,000

 
12,372

 
—

 
15,372

 
4,992

 
10,380

 
—

 Diablo Plaza
 
5,300

 
8,181

 
765

 
5,300

 
8,946

 
—

 
14,246

 
3,313

 
10,933

 
—

 Dickson Tn
 
675

 
1,568

 
—

 
675

 
1,568

 
—

 
2,243

 
518

 
1,725

 
—

 Dunwoody Village
 
3,342

 
15,934

 
1,302

 
3,342

 
17,236

 
—

 
20,578

 
9,127

 
11,451

 
—

 East Pointe
 
1,730

 
7,189

 
338

 
1,730

 
7,527

 
—

 
9,257

 
3,335

 
5,922

 
—

 East Towne Center
 
2,957

 
4,938

 
(101
)
 
2,957

 
4,837

 
—

 
7,794

 
2,212

 
5,582

 
—

 El Camino Shopping Center
 
7,600

 
11,538

 
204

 
7,600

 
11,742

 
—

 
19,342

 
4,349

 
14,993

 
—

 El Cerrito Plaza
 
11,025

 
27,371

 
618

 
11,025

 
27,989

 
—

 
39,014

 
4,039

 
34,975

 
39,976

 El Norte Parkway Plaza
 
2,834

 
7,370

 
110

 
2,840

 
7,474

 
—

 
10,314

 
3,084

 
7,230

 
—

 Encina Grande
 
5,040

 
11,572

 
—

 
5,040

 
11,572

 
—

 
16,612

 
4,523

 
12,089

 
—

 Fairfax Shopping Center
 
15,239

 
11,367

 
(5,523
)
 
13,175

 
7,908

 
—

 
21,083

 
1,078

 
20,005

 
—

 Falcon
 
1,340

 
4,168

 
26

 
1,340

 
4,194

 
—

 
5,534

 
1,002

 
4,532

 
—

 Fenton Marketplace
 
2,298

 
8,510

 
(8,709
)
 
512

 
1,588

 
—

 
2,100

 
138

 
1,962

 
—

 Fleming Island
 
3,077

 
11,587

 
2,296

 
3,111

 
13,849

 
—

 
16,960

 
4,604

 
12,356

 
786

 French Valley Village Center
 
11,924

 
16,856

 
5

 
11,822

 
16,963

 
—

 
28,785

 
6,211

 
22,574

 
—

 Friars Mission Center
 
6,660

 
28,021

 
509

 
6,660

 
28,530

 
—

 
35,190

 
10,061

 
25,129

 
393

 Gardens Square
 
2,136

 
8,273

 
334

 
2,136

 
8,606

 
—

 
10,742

 
3,452

 
7,290

 
—

 Gateway 101
 
24,971

 
9,113

 
671

 
24,971

 
9,785

 
—

 
34,756

 
1,726

 
33,030

 
—

 Gateway Shopping Center
 
52,665

 
7,134

 
1,510

 
52,672

 
8,637

 
—

 
61,309

 
7,376

 
53,933

 
16,652


116


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Schedule III - Consolidated Real Estate and Accumulated Depreciation
December 31, 2012
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Initial Cost
 
 
 
 Total Cost
 
 
 
 Total Cost
 
 
Shopping Centers (1)
 
 Land
 
 Building & Improvements
 
 Cost Capitalized
 Subsequent to
 Acquisition (2)
 
 Land
 
 Building & Improvements
 
  Properties held for Sale
 
 Total
 
 Accumulated Depreciation
 
 Net of Accumulated Depreciation
 
 Mortgages
 Gelson's Westlake Market Plaza
 
3,157

 
11,153

 
331

 
3,157

 
11,484

 
—

 
14,641

 
3,664

 
10,977

 
—

 Glen Oak Plaza
 
4,103

 
12,951

 
228

 
4,103

 
13,179

 
—

 
17,282

 
1,087

 
16,195

 
3,555

 Glenwood Village
 
1,194

 
5,381

 
132

 
1,194

 
5,513

 
—

 
6,707

 
3,108

 
3,599

 
—

 Golden Hills Plaza
 
12,699

 
18,482

 
3,023

 
12,699

 
21,505

 
—

 
34,204

 
2,659

 
31,545

 
—

 Grand Ridge Plaza
 
2,240

 
8,454

 
—

 
2,240

 
8,454

 
—

 
10,694

 
195

 
10,499

 
12,653

 Greenwood Springs
 
2,720

 
3,059

 
(3,695
)
 
889

 
1,195

 
—

 
2,084

 
156

 
1,928

 
—

 Hancock
 
8,232

 
28,260

 
866

 
8,232

 
29,127

 
—

 
37,359

 
11,388

 
25,971

 
—

 Harpeth Village Fieldstone
 
2,284

 
9,443

 
178

 
2,284

 
9,621

 
—

 
11,905

 
3,660

 
8,245

 
—

 Harris Crossing
 
7,199

 
3,677

 
—

 
7,199

 
3,677

 
—

 
10,876

 
684

 
10,192

 
—

 Heritage Land
 
12,390

 
—

 
—

 
12,390

 
—

 
—

 
12,390

 
—

 
12,390

 
—

 Heritage Plaza
 
—

 
26,097

 
12,882

 
108

 
38,871

 
—

 
38,979

 
10,662

 
28,317

 
—

 Hershey
 
7

 
808

 
5

 
7

 
814

 
—

 
821

 
249

 
572

 
—

 Hibernia Pavilion
 
4,929

 
5,065

 
25

 
4,929

 
5,089

 
—

 
10,018

 
1,260

 
8,758

 
—

 Hibernia Plaza
 
267

 
230

 
1

 
267

 
231

 
—

 
498

 
32

 
466

 
—

 Hickory Creek Plaza
 
5,629

 
4,564

 
279

 
5,629

 
4,842

 
—

 
10,471

 
1,604

 
8,867

 
—

 Hillcrest Village
 
1,600

 
1,909

 
—

 
1,600

 
1,909

 
—

 
3,509

 
691

 
2,818

 
—

 Hinsdale
 
5,734

 
16,709

 
1,415

 
5,734

 
18,125

 
—

 
23,859

 
6,899

 
16,960

 
—

 Horton's Corner
 
3,137

 
2,779

 
31

 
3,216

 
2,731

 
—

 
5,947

 
693

 
5,254

 
—

 Howell Mill Village
 
5,157

 
14,279

 
829

 
5,157

 
15,108

 
—

 
20,265

 
1,974

 
18,291

 
—

 Hyde Park
 
9,809

 
39,905

 
1,306

 
9,809

 
41,211

 
—

 
51,020

 
17,450

 
33,570

 
—

 Indio Towne Center
 
17,946

 
31,985

 
204

 
17,949

 
32,186

 
—

 
50,135

 
6,197

 
43,938

 
—

 Inglewood Plaza
 
1,300

 
2,159

 
109

 
1,300

 
2,268

 
—

 
3,568

 
866

 
2,702

 
—

 Jefferson Square
 
5,167

 
6,445

 
78

 
5,225

 
6,464

 
—

 
11,689

 
1,066

 
10,623

 
—

 Keller Town Center
 
2,294

 
12,841

 
47

 
2,294

 
12,888

 
—

 
15,182

 
4,580

 
10,602

 
—

 Kent Place
 
4,855

 
3,544

 
—

 
4,855

 
3,544

 
—

 
8,399

 
41

 
8,358

 
—

 Kings Crossing Sun City
 
515

 
1,246

 
109

 
515

 
1,356

 
—

 
1,871

 
292

 
1,579

 
—

 Kirkwood Commons
 
6,772

 
16,224

 
339

 
6,802

 
16,533

 
—

 
23,335

 
977

 
22,358

 
13,103

 Kroger New Albany Center
 
3,844

 
6,599

 
356

 
3,844

 
6,955

 
—

 
10,799

 
3,852

 
6,947

 
3,041

 Kulpsville
 
5,518

 
3,756

 
139

 
5,600

 
3,813

 
—

 
9,413

 
763

 
8,650

 
—

 Lake Pine Plaza
 
2,008

 
7,632

 
276

 
2,029

 
7,887

 
—

 
9,916

 
2,967

 
6,949

 
—

 Lebanon Center
 
3,865

 
5,751

 
30

 
3,865

 
5,781

 
—

 
9,646

 
1,419

 
8,227

 
—


117


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Schedule III - Consolidated Real Estate and Accumulated Depreciation
December 31, 2012
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Initial Cost
 
 
 
 Total Cost
 
 
 
 Total Cost
 
 
Shopping Centers (1)
 
 Land
 
 Building & Improvements
 
 Cost Capitalized
 Subsequent to
 Acquisition (2)
 
 Land
 
 Building & Improvements
 
  Properties held for Sale
 
 Total
 
 Accumulated Depreciation
 
 Net of Accumulated Depreciation
 
 Mortgages
 Lebanon/Legacy Center
 
3,913

 
7,874

 
136

 
3,913

 
8,010

 
—

 
11,923

 
4,012

 
7,911

 
—

 Littleton Square
 
2,030

 
8,859

 
324

 
2,030

 
9,183

 
—

 
11,213

 
3,320

 
7,893

 
—

 Lloyd King
 
1,779

 
10,060

 
740

 
1,779

 
10,800

 
—

 
12,579

 
3,963

 
8,616

 
—

 Loehmann's Plaza
 
3,983

 
18,687

 
557

 
3,983

 
19,244

 
—

 
23,227

 
9,087

 
14,140

 
—

 Loehmanns Plaza California
 
5,420

 
9,450

 
490

 
5,420

 
9,940

 
—

 
15,360

 
3,770

 
11,590

 
—

 Lower Nazareth Commons
 
15,992

 
12,964

 
3,154

 
16,361

 
15,749

 
—

 
32,110

 
3,066

 
29,044

 
—

 Market at Colonnade Center
 
6,455

 
9,839

 
—

 
6,455

 
9,839

 
—

 
16,294

 
817

 
15,477

 
—

 Market at Opitz Crossing
 
9,902

 
9,248

 
(5,836
)
 
6,597

 
6,717

 
—

 
13,314

 
1,017

 
12,297

 
—

 Market at Preston Forest
 
4,400

 
11,445

 
820

 
4,400

 
12,265

 
—

 
16,665

 
4,416

 
12,249

 
—

 Market at Round Rock
 
2,000

 
9,676

 
5,386

 
2,000

 
15,062

 
—

 
17,062

 
4,546

 
12,516

 
—

 Marketplace Shopping Center
 
1,287

 
5,509

 
5,125

 
1,330

 
10,591

 
—

 
11,921

 
3,158

 
8,763

 
—

 Marketplace at Briargate
 
1,706

 
4,885

 
5

 
1,727

 
4,869

 
—

 
6,596

 
1,424

 
5,172

 
—

 Middle Creek Commons
 
5,042

 
8,100

 
151

 
5,091

 
8,202

 
—

 
13,293

 
2,097

 
11,196

 
—

 Millhopper Shopping Center
 
1,073

 
5,358

 
4,529

 
1,796

 
9,164

 
—

 
10,960

 
4,917

 
6,043

 
—

 Mockingbird Common
 
3,000

 
10,728

 
461

 
3,000

 
11,189

 
—

 
14,189

 
4,353

 
9,836

 
10,300

 Monument Jackson Creek
 
2,999

 
6,765

 
608

 
2,999

 
7,373

 
—

 
10,372

 
3,878

 
6,494

 
—

 Morningside Plaza
 
4,300

 
13,951

 
432

 
4,300

 
14,383

 
—

 
18,683

 
5,376

 
13,307

 
—

 Murryhill Marketplace
 
2,670

 
18,401

 
420

 
2,670

 
18,821

 
—

 
21,491

 
7,372

 
14,119

 
7,284

 Naples Walk
 
18,173

 
13,554

 
224

 
18,173

 
13,778

 
—

 
31,951

 
2,833

 
29,118

 
15,844

 Newberry Square
 
2,412

 
10,150

 
220

 
2,412

 
10,370

 
—

 
12,782

 
6,182

 
6,600

 
—

 Newland Center
 
12,500

 
10,697

 
575

 
12,500

 
11,272

 
—

 
23,772

 
4,655

 
19,117

 
—

 Nocatee Town Center
 
10,124

 
8,691

 
—

 
10,124

 
8,691

 
—

 
18,815

 
1,339

 
17,476

 
—

 North Hills
 
4,900

 
19,774

 
755

 
4,900

 
20,529

 
—

 
25,429

 
7,392

 
18,037

 
—

 Northgate Marketplace
 
5,668

 
13,727

 
—

 
5,668

 
13,727

 
—

 
19,395

 
211

 
19,184

 
—

 Northgate Plaza (Maxtown Road)
 
1,769

 
6,652

 
150

 
1,769

 
6,802

 
—

 
8,571

 
2,785

 
5,786

 
—

 Northgate Square
 
5,011

 
8,692

 
183

 
5,011

 
8,875

 
—

 
13,886

 
1,823

 
12,063

 
5,711

 Northlake Village
 
2,662

 
11,284

 
483

 
2,662

 
11,767

 
—

 
14,429

 
4,098

 
10,331

 
—

 Oak Shade Town Center
 
6,591

 
28,966

 
24

 
6,591

 
28,990

 
—

 
35,581

 
1,403

 
34,178

 
11,771

 Oakbrook Plaza
 
4,000

 
6,668

 
203

 
4,000

 
6,871

 
—

 
10,871

 
2,675

 
8,196

 
—

 Oakleaf Commons
 
3,503

 
11,671

 
40

 
3,503

 
11,711

 
—

 
15,214

 
2,698

 
12,516

 
—

 Ocala Corners
 
1,816

 
10,515

 
79

 
1,816

 
10,594

 
—

 
12,410

 
736

 
11,674

 
5,640


118


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Schedule III - Consolidated Real Estate and Accumulated Depreciation
December 31, 2012
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Initial Cost
 
 
 
 Total Cost
 
 
 
 Total Cost
 
 
Shopping Centers (1)
 
 Land
 
 Building & Improvements
 
 Cost Capitalized
 Subsequent to
 Acquisition (2)
 
 Land
 
 Building & Improvements
 
  Properties held for Sale
 
 Total
 
 Accumulated Depreciation
 
 Net of Accumulated Depreciation
 
 Mortgages
 Old St Augustine Plaza
 
2,368

 
11,405

 
364

 
2,368

 
11,769

 
—

 
14,137

 
5,167

 
8,970

 
—

 Orangeburg & Central
 
2,071

 
2,384

 
(84
)
 
2,071

 
2,300

 
—

 
4,371

 
518

 
3,853

 
—

 Orchards Market Center II
 
6,602

 
9,690

 
(2,922
)
 
5,497

 
7,873

 
—

 
13,370

 
805

 
12,565

 
—

 Paces Ferry Plaza
 
2,812

 
12,639

 
181

 
2,812

 
12,820

 
—

 
15,632

 
6,453

 
9,179

 
—

 Panther Creek
 
14,414

 
14,748

 
2,366

 
15,212

 
16,317

 
—

 
31,529

 
7,627

 
23,902

 
—

 Peartree Village
 
5,197

 
19,746

 
776

 
5,197

 
20,522

 
—

 
25,719

 
8,521

 
17,198

 
8,575

 Pike Creek
 
5,153

 
20,652

 
505

 
5,153

 
21,157

 
—

 
26,310

 
8,396

 
17,914

 
—

 Pima Crossing
 
5,800

 
28,143

 
1,032

 
5,800

 
29,175

 
—

 
34,975

 
11,232

 
23,743

 
—

 Pine Lake Village
 
6,300

 
10,991

 
545

 
6,300

 
11,536

 
—

 
17,836

 
4,270

 
13,566

 
—

 Pine Tree Plaza
 
668

 
6,220

 
155

 
668

 
6,375

 
—

 
7,043

 
2,498

 
4,545

 
—

 Plaza Hermosa
 
4,200

 
10,109

 
600

 
4,224

 
10,685

 
—

 
14,909

 
3,710

 
11,199

 
13,800

 Powell Street Plaza
 
8,248

 
30,716

 
1,435

 
8,248

 
32,152

 
—

 
40,400

 
9,343

 
31,057

 
—

 Powers Ferry Square
 
3,687

 
17,965

 
4,503

 
5,090

 
21,065

 
—

 
26,155

 
9,575

 
16,580

 
—

 Powers Ferry Village
 
1,191

 
4,672

 
236

 
1,191

 
4,908

 
—

 
6,099

 
2,499

 
3,600

 
—

 Prairie City Crossing
 
4,164

 
13,032

 
366

 
4,164

 
13,398

 
—

 
17,562

 
4,048

 
13,514

 
—

 Prestonbrook
 
7,069

 
8,622

 
115

 
7,069

 
8,737

 
—

 
15,806

 
4,946

 
10,860

 
6,800

 Red Bank
 
10,336

 
9,505

 
(178
)
 
10,105

 
9,558

 
—

 
19,663

 
971

 
18,692

 
—

 Regency Commons
 
3,917

 
3,616

 
44

 
3,917

 
3,659

 
—

 
7,576

 
1,455

 
6,121

 
—

 Regency Solar (Saugus)
 

 

 
758

 
6

 
752

 
—

 
758

 
21

 
737

 
—

 Regency Square
 
4,770

 
25,191

 
2,741

 
4,777

 
27,925

 
—

 
32,702

 
17,753

 
14,949

 
—

 Rockwall Town Center
 
4,438

 
5,140

 
(48
)
 
4,438

 
5,092

 
—

 
9,530

 
1,809

 
7,721

 
—

 Rona Plaza
 
1,500

 
4,917

 
118

 
1,500

 
5,035

 
—

 
6,535

 
2,100

 
4,435

 
—

 Russell Ridge
 
2,234

 
6,903

 
698

 
2,234

 
7,601

 
—

 
9,835

 
3,456

 
6,379

 
—

 Sammamish
 
9,300

 
8,075

 
768

 
9,300

 
8,843

 
—

 
18,143

 
3,162

 
14,981

 
—

 San Leandro Plaza
 
1,300

 
8,226

 
61

 
1,300

 
8,287

 
—

 
9,587

 
3,052

 
6,535

 
—

 Sandy Springs
 
6,889

 
28,056

 
—

 
6,889

 
28,056

 
—

 
34,945

 
88

 
34,857

 
17,624

 Saugus
 
19,201

 
17,984

 
(1,130
)
 
18,805

 
17,250

 
—

 
36,055

 
3,576

 
32,479

 
—

 Seminole Shoppes
 
8,593

 
7,523

 
53

 
8,629

 
7,540

 
—

 
16,169

 
718

 
15,451

 
9,000

 Sequoia Station
 
9,100

 
18,356

 
1,023

 
9,100

 
19,379

 
—

 
28,479

 
6,748

 
21,731

 
21,100

 Sherwood II
 
2,731

 
6,360

 
(10
)
 
2,731

 
6,350

 
—

 
9,081

 
1,731

 
7,350

 
—

 Sherwood Market Center
 
3,475

 
16,362

 
77

 
3,475

 
16,439

 
—

 
19,914

 
6,246

 
13,668

 
—


119


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Schedule III - Consolidated Real Estate and Accumulated Depreciation
December 31, 2012
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Initial Cost
 
 
 
 Total Cost
 
 
 
 Total Cost
 
 
Shopping Centers (1)
 
 Land
 
 Building & Improvements
 
 Cost Capitalized
 Subsequent to
 Acquisition (2)
 
 Land
 
 Building & Improvements
 
  Properties held for Sale
 
 Total
 
 Accumulated Depreciation
 
 Net of Accumulated Depreciation
 
 Mortgages
 Shoppes @ 104
 
11,193

 
—

 
—

 
6,652

 
4,540

 
—

 
11,192

 
673

 
10,519

 
—

 Shoppes at Fairhope Village
 
6,920

 
11,198

 
132

 
6,920

 
11,330

 
—

 
18,250

 
1,875

 
16,375

 
—

 Shoppes of Grande Oak
 
5,091

 
5,985

 
123

 
5,091

 
6,107

 
—

 
11,198

 
3,289

 
7,909

 
—

 Shops at Arizona
 
3,063

 
3,243

 
51

 
3,063

 
3,294

 
—

 
6,357

 
1,497

 
4,860

 
—

 Shops at County Center
 
9,957

 
11,269

 
322

 
10,160

 
11,388

 
—

 
21,548

 
3,894

 
17,654

 
—

 Shops at Erwin Mill
 
236

 
131

 
—

 
236

 
131

 
—

 
367

 
4

 
363

 
—

 Shops at Johns Creek
 
1,863

 
2,014

 
(309
)
 
1,501

 
2,068

 
—

 
3,569

 
772

 
2,797

 
—

 Shops at Quail Creek
 
1,487

 
7,717

 
184

 
1,486

 
7,902

 
—

 
9,388

 
1,204

 
8,184

 
—

 Signature Plaza
 
2,396

 
3,898

 
244

 
2,396

 
4,142

 
—

 
6,538

 
1,861

 
4,677

 
—

 South Bay Village
 
11,714

 
15,580

 
—

 
11,714

 
15,580

 
—

 
27,294

 
344

 
26,950

 
—

 South Lowry Square
 
3,434

 
10,445

 
772

 
3,434

 
11,217

 
—

 
14,651

 
4,036

 
10,615

 
—

 Southcenter
 
1,300

 
12,750

 
787

 
1,300

 
13,537

 
—

 
14,837

 
4,754

 
10,083

 
—

 SouthPoint Crossing
 
4,412

 
12,235

 
211

 
4,412

 
12,445

 
—

 
16,857

 
4,494

 
12,363

 
—

 Starke
 
71

 
1,683

 
1

 
71

 
1,684

 
—

 
1,755

 
513

 
1,242

 
—

 State Street Crossing
 
1,283

 
1,970

 
33

 
1,283

 
2,003

 
—

 
3,286

 
197

 
3,089

 
—

 Sterling Ridge
 
12,846

 
12,162

 
432

 
12,846

 
12,594

 
—

 
25,440

 
6,146

 
19,294

 
13,900

 Stonewall
 
27,511

 
22,123

 
5,267

 
28,127

 
26,774

 
—

 
54,901

 
6,736

 
48,165

 
—

 Strawflower Village
 
4,060

 
8,084

 
204

 
4,060

 
8,287

 
—

 
12,347

 
3,239

 
9,108

 
—

 Stroh Ranch
 
4,280

 
8,189

 
250

 
4,280

 
8,439

 
—

 
12,719

 
4,513

 
8,206

 
—

 Suncoast Crossing
 
4,057

 
5,545

 
10,229

 
9,030

 
10,800

 
—

 
19,830

 
2,177

 
17,653

 
—

 Sunnyside 205
 
1,200

 
9,459

 
1,246

 
1,200

 
10,705

 
—

 
11,905

 
3,588

 
8,317

 
—

 Tanasbourne Market
 
3,269

 
10,861

 
(45
)
 
3,269

 
10,816

 
—

 
14,085

 
2,219

 
11,866

 
—

 Tassajara Crossing
 
8,560

 
15,464

 
388

 
8,560

 
15,852

 
—

 
24,412

 
5,789

 
18,623

 
19,800

 Tech Ridge Center
 
12,945

 
37,169

 
61

 
12,945

 
37,231

 
—

 
50,176

 
2,000

 
48,176

 
11,888

 Town Square
 
883

 
8,132

 
236

 
883

 
8,368

 
—

 
9,251

 
3,614

 
5,637

 
—

 Twin City Plaza
 
17,245

 
44,225

 
1,328

 
17,263

 
45,535

 
—

 
62,798

 
8,966

 
53,832

 
41,112

 Twin Peaks
 
5,200

 
25,827

 
393

 
5,200

 
26,220

 
—

 
31,420

 
9,363

 
22,057

 
—

 Uptown District
 
18,773

 
61,906

 
—

 
18,773

 
61,906

 
—

 
80,679

 
154

 
80,525

 
—

 Valencia Crossroads
 
17,921

 
17,659

 
257

 
17,921

 
17,916

 
—

 
35,837

 
11,090

 
24,747

 
—

 Ventura Village
 
4,300

 
6,648

 
418

 
4,300

 
7,066

 
—

 
11,366

 
2,536

 
8,830

 
—

 Village at Lee Airpark
 
11,099

 
12,955

 
—

 
11,099

 
12,955

 
—

 
24,054

 
2,070

 
21,984

 
—


120


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Schedule III - Consolidated Real Estate and Accumulated Depreciation
December 31, 2012
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Initial Cost
 
 
 
 Total Cost
 
 
 
 Total Cost
 
 
Shopping Centers (1)
 
 Land
 
 Building & Improvements
 
 Cost Capitalized
 Subsequent to
 Acquisition (2)
 
 Land
 
 Building & Improvements
 
  Properties held for Sale
 
 Total
 
 Accumulated Depreciation
 
 Net of Accumulated Depreciation
 
 Mortgages
 Village Center
 
3,885

 
14,131

 
481

 
3,885

 
14,611

 
—

 
18,496

 
6,416

 
12,080

 
—

 Vine at Castaic
 
4,799

 
5,884

 
(5,801
)
 
2,170

 
2,712

 
—

 
4,882

 
147

 
4,735

 
—

 Vista Village IV
 
2,287

 
2,765

 
(933
)
 
2,287

 
1,832

 
—

 
4,119

 
931

 
3,188

 
—

 Walker Center
 
3,840

 
7,232

 
2,830

 
3,864

 
10,038

 
—

 
13,902

 
2,956

 
10,946

 
—

 Walton Towne Center
 
3,872

 
3,298

 
34

 
3,872

 
3,332

 
—

 
7,204

 
667

 
6,537

 
—

 Welleby Plaza
 
1,496

 
7,787

 
454

 
1,496

 
8,241

 
—

 
9,737

 
5,049

 
4,688

 
—

 Wellington Town Square
 
2,041

 
12,131

 
213

 
2,041

 
12,344

 
—

 
14,385

 
4,931

 
9,454

 
12,800

 West Park Plaza
 
5,840

 
5,759

 
723

 
5,840

 
6,482

 
—

 
12,322

 
2,318

 
10,004

 
—

 Westbrook Commons
 
3,366

 
11,751

 
(1,047
)
 
3,091

 
10,979

 
—

 
14,070

 
3,566

 
10,504

 
—

 Westchase
 
5,302

 
8,273

 
208

 
5,302

 
8,481

 
—

 
13,783

 
1,648

 
12,135

 
7,493

 Westchester Plaza
 
1,857

 
7,572

 
239

 
1,857

 
7,811

 
—

 
9,668

 
3,847

 
5,821

 
—

 Westlake Plaza and Center
 
7,043

 
27,195

 
1,410

 
7,043

 
28,605

 
—

 
35,648

 
10,717

 
24,931

 
—

 Westridge Village
 
9,529

 
11,397

 
100

 
9,529

 
11,496

 
—

 
21,025

 
4,574

 
16,451

 
—

 Westwood Village
 
19,933

 
25,301

 
317

 
20,135

 
25,416

 
—

 
45,551

 
6,084

 
39,467

 
—

 White Oak
 
2,144

 
3,069

 
2

 
2,144

 
3,071

 
—

 
5,215

 
1,940

 
3,275

 
—

 Willow Festival
 
1,954

 
56,501

 
294

 
1,954

 
56,795

 
—

 
58,749

 
3,772

 
54,977

 
40,710

 Windmiller Plaza Phase I
 
2,638

 
13,241

 
35

 
2,638

 
13,276

 
—

 
15,914

 
5,436

 
10,478

 
—

 Woodcroft Shopping Center
 
1,419

 
6,284

 
300

 
1,421

 
6,582

 
—

 
8,003

 
2,967

 
5,036

 
—

 Woodman Van Nuy
 
5,500

 
7,195

 
166

 
5,500

 
7,361

 
—

 
12,861

 
2,713

 
10,148

 
—

 Woodmen and Rangewood
 
7,621

 
11,018

 
416

 
7,621

 
11,434

 
—

 
19,055

 
7,819

 
11,236

 
—

 Woodside Central
 
3,500

 
9,288

 
389

 
3,500

 
9,677

 
—

 
13,177

 
3,554

 
9,623

 
—

 
 

 

 

 

 

 

 
—

 

 
—

 

Corporately Held Assets
 

 

 
264

 
—

 
264

 
—

 
264

 
2,999

 
(2,735
)
 
—

Properties in Development
 
(200
)
 
1,078,886

 
(886,619
)
 
—

 
192,067

 
—

 
192,067

 
—

 
192,067

 
—

 
 
1,264,741

 
3,491,039

 
(845,868
)
 
1,215,659

 
2,694,253

 
—

 
3,909,912

 
782,749

 
3,127,163

 
473,955

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) See Item 2. Properties for geographic location and year each operating property was acquired.
(2) The negative balance for costs capitalized subsequent to acquisition could include out-parcels sold, provision for loss recorded and development transfers subsequent to the initial costs.

See accompanying report of independent registered public accounting firm.

121


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Schedule III - Consolidated Real Estate and Accumulated Depreciation, continued
December 31, 2012
(in thousands)


Depreciation and amortization of the Company's investment in buildings and improvements reflected in the statements of operations is calculated over the estimated useful lives of the assets, which are up to 40 years. The aggregate cost for Federal income tax purposes was approximately $3.4 billion at December 31, 2012.

The changes in total real estate assets for the years ended December 31, 2012, 2011, and 2010 are as follows:

 
2012
2011
2010
Balance, beginning of year
$
4,101,912

3,989,154

3,933,778

Developed or acquired properties
324,142

198,836

93,759

Improvements
38,005

21,727

18,772

Sale of properties
(491,438
)
(92,872
)
(14,503
)
Provision for impairment
(62,709
)
(14,933
)
(42,652
)
Balance, end of year
$
3,909,912

4,101,912

3,989,154



The changes in accumulated depreciation for the years ended December 31, 2012, 2011, and 2010 are as follows:

 
2012
2011
2010
Balance, beginning of year
$
791,619

700,878

622,163

Depreciation for year
104,087

107,932

99,554

Sale of properties
(104,748
)
(14,101
)
(2,052
)
Provision for impairment
(8,209
)
(3,090
)
(18,787
)
Balance, end of year
$
782,749

791,619

700,878


See accompanying report of independent registered public accounting firm.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.

Item 9A. Controls and Procedures

Controls and Procedures (Regency Centers Corporation)
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
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 annual report on Form 10-K 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.

122


Management's Report on Internal Control over Financial Reporting
The Parent Company's management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of its management, including its chief executive officer and chief financial officer, the Parent Company conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its evaluation under the framework in Internal Control - Integrated Framework, the Parent Company's management concluded that its internal control over financial reporting was effective as of December 31, 2012.
KPMG LLP, an independent registered public accounting firm, has audited the consolidated financial statements included in this annual report on Form 10-K and, as part of their audit, has issued a report, included herein, on the effectiveness of the Parent Company's internal control over financial reporting.
The Parent Company's system of internal control over financial reporting was designed to provide reasonable assurance regarding the preparation and fair presentation of published financial statements in accordance with accounting principles generally accepted in the United States. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance and may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Changes in Internal Controls
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 fourth quarter of 2012 and that have materially affected, or are reasonably likely to materially affect, its internal controls over financial reporting.

Controls and Procedures (Regency Centers, L.P.)
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
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 Securities Exchange Act of 1934, as amended (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 annual report on Form 10-K 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.
Management's Report on Internal Control over Financial Reporting
The Operating Partnership's management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of its management, including the chief executive officer and chief financial officer of its general partner, the Operating Partnership conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its evaluation under the framework in Internal Control - Integrated Framework, the Operating Partnership's management concluded that its internal control over financial reporting was effective as of December 31, 2012.
KPMG LLP, an independent registered public accounting firm, has audited the consolidated financial statements included in this annual report on Form 10-K and, as part of their audit, has issued a report, included herein, on the effectiveness of the Operating Partnership's internal control over financial reporting.
The Operating Partnership's system of internal control over financial reporting was designed to provide reasonable assurance regarding the preparation and fair presentation of published financial statements in accordance with accounting principles generally accepted in the United States. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance and may not

123


prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Changes in Internal Controls
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 fourth quarter of 2012 and that have materially affected, or are reasonably likely to materially affect, its internal controls over financial reporting.

Item 9B. Other Information
Not applicable


PART III
Item 10. Directors, Executive Officers, and Corporate Governance

Information concerning the directors of Regency is incorporated herein by reference to Regency's definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K with respect to its 2013 Annual Meeting of Stockholders.
 
Information regarding executive officers is included in Part I of this Form 10-K as permitted by General Instruction G(3).
 
Audit Committee, Independence, Financial Experts. Incorporated herein by reference to Regency's definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10‑K with respect to its 2013 Annual Meeting of Stockholders.
 
Compliance with Section 16(a) of the Exchange Act.   Information concerning filings under Section 16(a) of the Exchange Act by the directors or executive officers of Regency is incorporated herein by reference to Regency's definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K with respect to its 2013 Annual Meeting of Stockholders.
 
Code of Ethics. We have adopted a code of ethics applicable to our Board of Directors, principal executive officers, principal financial officer, principal accounting officer and persons performing similar functions. The text of this code of ethics may be found on our web site at www.regencycenters.com. We intend to post notice of any waiver from, or amendment to, any provision of our code of ethics on our web site.

Item 11. Executive Compensation

Incorporated herein by reference to Regency's definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K with respect to its 2013 Annual Meeting of Stockholders.

124




Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Equity Compensation Plan Information
 
 
(a)
 
(b)
 
(c)
Plan Category
 
Number of securities to be issued upon exercise of outstanding options, warrants and rights
 



Weighted-average exercise price of outstanding options, warrants and rights(1)
 
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (2)
Equity compensation plans
approved by security holders
 
315,924

 
$
52.39

 
3,058,399

Equity compensation plans not approved by security holders
 
N/A
 
N/A
 
N/A
Total
 
315,924

 
$
52.39

 
3,058,399

(1) The weighted average exercise price excludes stock rights awards, which we sometimes refer to as unvested restricted stock.

(2) The Regency Centers Corporation 2011 Omnibus Incentive Plan, (“Omnibus Plan”), as approved by stockholders at our 2011 annual meeting, provides that an aggregate maximum of 4.1 million shares of our common stock are reserved for issuance under the Omnibus Plan.

Information about security ownership is incorporated herein by reference to Regency's definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K with respect to its 2013 Annual Meeting of Stockholders.

Item 13.     Certain Relationships and Related Transactions, and Director Independence

Incorporated herein by reference to Regency's definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K with respect to its 2013 Annual Meeting of Stockholders.

Item 14.     Principal Accountant Fees and Services
    
Incorporated herein by reference to Regency's definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K with respect to its 2013 Annual Meeting of Stockholders.    


PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)    Financial Statements and Financial Statement Schedules:
Regency Centers Corporation and Regency Centers, L.P. 2012 financial statements and financial statement schedule, together with the reports of KPMG LLP are listed on the index immediately preceding the financial statements in Item 8, Consolidated Financial Statements and Supplemental Data.
(b)    Exhibits:
In reviewing the agreements included as exhibits to this report, please remember they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company, its subsidiaries or other parties to the agreements. The Agreements contain representations and warranties by each of the parties

125


to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:
•
should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
•
have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;
•
may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
•
were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. We acknowledge that, notwithstanding the inclusion of the foregoing cautionary statements, we are responsible for considering whether additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this report not misleading. Additional information about the Company may be found elsewhere in this report and the Company's other public files, which are available without charge through the SEC's website at http://www.sec.gov.
Unless otherwise indicated below, the Commission file number to the exhibit is No. 001-12298.
1. Underwriting Agreement

(a)
Equity Distribution Agreement (the “Wells Agreement”) among the Company, Regency Centers, L.P. and Wells Fargo Securities, LLC dated August 10, 2012 (incorporated by reference to Exhibit 1.1 to the Company's report on Form 8-K filed on August 10, 2012).

The Equity Distribution Agreements listed below are substantially identical in all material respects to the Wells Agreement except for the identities of the parties, and have not been filed as exhibits to the Company's 1934 Act reports pursuant to Instruction 2 to Item 601 of Regulation S-K:

(i)
Equity Distribution Agreement among the Company, Regency Centers, L.P. and Merrill Lynch, Pierce, Fenner & Smith Incorporated dated August 10, 2012; and

(ii)
Equity Distribution Agreement among the Company, Regency Centers, L.P. and J.P. Morgan Securities LLC dated August 10, 2012.

3.    Articles of Incorporation and Bylaws
(a)
Restated Articles of Incorporation of Regency Centers Corporation (incorporated by reference to Exhibit 3.1 to the Company's Form 8-K filed on February 19, 2008).
(i)
Amendment designating the preferences, rights and limitations of 10,000,000 shares of 6.625% Series 6 Cumulative Preferred Stock (incorporated by reference to Exhibit 3.2 to the Company's Form 8-A filed on February 14, 2012).
(ii)
Amendment designating the preferences, rights and limitations of 3,000,000 shares of 6.0% Series 7 Cumulative Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company's report on Form 8-K filed on August 16, 2012).
(b)
Amended and Restated Bylaws of Regency Centers Corporation (incorporated by reference to Exhibit 3.2(b) to the Company's Form 8-K filed on November 7, 2008).
(c)
Fourth Amended and Restated Certificate of Limited Partnership of Regency Centers, L.P. (incorporated by reference to Exhibit 3(a) to Regency Centers, L.P.'s Form 10-K filed on March 17, 2009).
(d)
Fourth Amended and Restated Agreement of Limited Partnership of Regency Centers, L.P., as amended (incorporated by reference to Exhibit 10(m) to the Company's Form 10-K filed on March 12, 2004).

126


(i)
Amendment to Fourth Amended and Restated Agreement of Limited Partnership relating to 6.625% Series 6 Cumulative Redeemable Preferred Units (incorporated by reference to Exhibit 3.2 to the Company's report on Form 8-K filed on February 16, 2012).
(ii)
Amendment to Fourth Amended and Restated Agreement of Limited Partnership relating to 6.0% Series 7 Cumulative Redeemable Preferred Units (incorporated by reference to Exhibit 3.2 to the Company's report on Form 8-K filed on August 16, 2012).
4.    Instruments Defining Rights of Security Holders
(a)
See Exhibits 3(a) and 3(b) for provisions of the Articles of Incorporation and Bylaws of the Company defining the rights of security holders. See Exhibit 3(d) for provisions of the Partnership Agreement of Regency Centers, L.P. defining rights of security holders.
(b)
Indenture dated December 5, 2001 between Regency Centers, L.P., the guarantors named therein and First Union National Bank, as trustee (incorporated by reference to Exhibit 4.4 to Regency Centers, L.P.'s Form 8-K filed on December 10, 2001).
(i)
First Supplemental Indenture dated as of June 5, 2007 among Regency Centers, L.P., the Company as guarantor and U.S. Bank National Association, as successor to Wachovia Bank, National Association (formerly known as First Union National Bank), as trustee (incorporated by reference to Exhibit 4.1 to Regency Centers, L.P.'s Form 8-K filed on June 5, 2007).
(c)
Indenture dated July 18, 2005 between Regency Centers, L.P., the guarantors named therein and Wachovia Bank, National Bank, as trustee (incorporated by reference to Exhibit 4.1 to Regency Centers, L.P's registration statement on Form S-4 filed on August 5, 2005, No. 333-127274).
10.    Material Contracts (~ indicates management contract or compensatory plan)
~(a)
Regency Centers Corporation Long Term Omnibus Plan (incorporated by reference to Exhibit 10.9 to the Company's Form 10-Q filed on May 8, 2008).
~(i)
Form of Stock Rights Award Agreement pursuant to the Company's Long Term Omnibus Plan (incorporated by reference to Exhibit 10(b) to the Company's Form 10-K filed on March 10, 2006).
~(ii)
Form of 409A Amendment to Stock Rights Award Agreement (incorporated by reference to Exhibit 10(b)(i) to the Company's Form 10-K filed on March on 17, 2009).
~(iii)
Form of Nonqualified Stock Option Agreement pursuant to the Company's Long Term Omnibus Plan (incorporated by reference to Exhibit 10(c) to the Company's Form 10-K filed on March 10, 2006).
~(iv)
Form of 409A Amendment to Stock Option Agreement (incorporated by reference to Exhibit 10(c)(i) to the Company's Form 10-K filed on March 17, 2009).
~(v)
Amended and Restated Deferred Compensation Plan dated May 6, 2003 (incorporated by reference to Exhibit 10(k) to the Company's Form 10-K filed on March 12, 2004).
~(vi)
Regency Centers Corporation 2005 Deferred Compensation Plan (incorporated by reference to Exhibit 10(s) to the Company's Form 8-K filed on December 21, 2004).

127


~(vii)
First Amendment to Regency Centers Corporation 2005 Deferred Compensation Plan dated December 2005 (incorporated by reference to Exhibit 10(q)(i) to the Company's Form 10-K filed on March 10, 2006).
~(viii)
Second Amendment to the Regency Centers Corporation Amended and Restated Deferred Compensation Plan (incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed on June 13, 2011).
~(ix)
Third Amendment to the Regency Centers Corporation 2005 Deferred Compensation Plan (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on June 13, 2011).
~(b)
Regency Centers Corporation 2011 Omnibus Plan (incorporated by reference to Annex A to the Company's 2011 Annual Meeting Proxy Statement filed on March 24, 2011).
~(c)
Form of Director/Officer Indemnification Agreement (filed as an Exhibit to Pre-effective Amendment No. 2 to the Company's registration statement on Form S-11 filed on October 5, 1993 (33-67258), and incorporated by reference).
~(d)
2011 Amended and Restated Severance and Change of Control Agreement dated as of January 1, 2011 by and between the Company and Martin E. Stein, Jr. (incorporated by reference to Exhibit 10.1 of the Company's Form 8-K filed on January 3, 2011).
~(e)
2011 Amended and Restated Severance and Change of Control Agreement dated as of January 1, 2011 by and between the Company and Bruce M. Johnson (incorporated by reference to Exhibit 10.3 of the Company's Form 8-K filed on January 3, 2011).
~(f)
2011 Amended and Restated Severance and Change of Control Agreement dated as of January 1, 2011 by and between the Company and Brian M. Smith (incorporated by reference to Exhibit 10.4 of the Company's Form 8-K filed on January 3, 2011).
(g)
Third Amended and Restated Credit Agreement dated as of September 7, 2011 by and among Regency Centers, , L.P., the Company, each of the financial institutions party thereto, and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q filed on November 8, 2011).
(i)
First Amendment to Third Amended and Restated Credit Agreement dated September 13, 2012 (incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q filed on November 9, 2012).
(h)
Term Loan Agreement dated as of November 17, 2011 by and among Regency Centers, L.P., the Company, each of the financial institutions party thereto and Wells Fargo Securities, LLC (incorporated by reference to Exhibit 10.1 to the Company's Form 10-K filed on February 29, 2012).
(i)
First Amendment to Term Loan Agreement dated as of June 19, 2012.
(ii)
Second Amendment to Term Loan Agreement dated as of December 19, 2012.
(i)
Second Amended and Restated Limited Liability Company Agreement of Macquarie CountryWide-Regency II, LLC dated as of July 31, 2009 by and among Global Retail Investors, LLC, Regency Centers, L.P. and Macquarie CountryWide (US) No. 2 LLC (incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q filed on November 6, 2009).
(i)
Amendment No. 1 to Second Amended and Restate Limited Liability Company Agreement of GRI-Regency, LLC (formerly Macquarie CountryWide-Regency II, LLC).
(j)
Limited Partnership Agreement dated as of December 21, 2006 of RRP Operating, LP (incorporated by reference to Exhibit 10(u) to the Company's Form 10-K filed on February 27, 2007).

128


(k)
Equity Distribution Agreement among the Company, the Operating Partnership and Wells Fargo Securities, LLC dated August 10, 2012 (incorporated by reference to the Company's Form 8-K filed on August 10, 2012).
12.    Computation of ratios
12.1    Computation of Ratio of Earnings to Fixed Charges
21.    Subsidiaries of Regency Centers Corporation.
23.    Consents of Independent Accountants
23.1    Consent of KPMG LLP for Regency Centers Corporation.
23.2    Consent of KPMG LLP for Regency Centers, L.P.
31.    Rule 13a-14(a)/15d-14(a) Certifications.
31.1    Rule 13a-14 Certification of Chief Executive Officer for Regency Centers Corporation.
31.2    Rule 13a-14 Certification of Chief Financial Officer for Regency Centers Corporation.
31.3    Rule 13a-14 Certification of Chief Executive Officer for Regency Centers, L.P.
31.4    Rule 13a-14 Certification of Chief Financial Officer for Regency Centers, L.P.
32.    Section 1350 Certifications.
The certifications in this exhibit 32 are being furnished solely to accompany this report pursuant to 18 U.S.C. § 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by reference into any of the Company's filings, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
32.1
18 U.S.C. § 1350 Certification of Chief Executive Officer for Regency Centers Corporation.
32.2
18 U.S.C. § 1350 Certification of Chief Financial Officer for Regency Centers Corporation.
32.3    18 U.S.C. § 1350 Certification of Chief Executive Officer for Regency Centers, L.P.
32.4    18 U.S.C. § 1350 Certification of Chief Financial Officer for Regency Centers, L.P.
101.    Interactive Data Files
101.INS+    XBRL Instance Document
101.SCH+    XBRL Taxonomy Extension Schema Document
101.CAL+    XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF+    XBRL Taxonomy Definition Linkbase Document
101.LAB+    XBRL Taxonomy Extension Label Linkbase Document
101.PRE+    XBRL Taxonomy Extension Presentation Linkbase Document
__________________________
+    Submitted electronically with this Annual Report

129



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
March 1, 2013
REGENCY CENTERS CORPORATION
 
By:

/s/ Martin E. Stein, Jr.
Martin E. Stein. Jr., Chairman of the Board and Chief Executive Officer



March 1, 2013
REGENCY CENTERS, L.P.
 
By:
Regency Centers Corporation, General Partner
 
By:

/s/ Martin E. Stein, Jr.
Martin E. Stein. Jr., Chairman of the Board and Chief Executive Officer


130




Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
March 1, 2013
 

/s/ Martin E. Stein, Jr.
Martin E. Stein. Jr., Chairman of the Board and Chief Executive Officer
March 1, 2013
 

/s/ Brian M. Smith
Brian M. Smith, President, Chief Operating Officer and Director
March 1, 2013
 

/s/ Lisa Palmer
Lisa Palmer, Executive Vice President, Chief Financial Officer (Principal Financial Officer), and Director
March 1, 2013
 

/s/ J. Christian Leavitt
J. Christian Leavitt, Senior Vice President and Treasurer (Principal Accounting Officer)
March 1, 2013
 

/s/ Raymond L. Bank
Raymond L. Bank, Director
March 1, 2013
 

/s/ C. Ronald Blankenship
C. Ronald Blankenship, Director
March 1, 2013
 

/s/ A.R. Carpenter
A.R. Carpenter, Director
March 1, 2013
 

/s/ J. Dix Druce
J. Dix Druce, Director
March 1, 2013
 

/s/ Mary Lou Fiala
Mary Lou Fiala, Director
March 1, 2013
 

/s/ David P. O'Connor
David P. O'Connor, Director
March 1, 2013
 

/s/ Douglas S. Luke
Douglas S. Luke, Director
March 1, 2013
 

/s/ John C. Schweitzer
John C. Schweitzer, Director
March 1, 2013
 

/s/ Thomas G. Wattles
Thomas G. Wattles, Director


131