Real Estate Investments

Acquisitions

The following table details the shopping centers acquired or land acquired or leased for development:



(in thousands)		Six months ended June 30, 2017
Date Purchased	Property Name	City/State	Property Type	Ownership	Purchase Price	Debt Assumed, Net of Premiums	Intangible Assets	Intangible Liabilities
3/6/17	The Field at Commonwealth	Chantilly, VA	Development	100%	$9,500	—	—	—
3/8/17	Pinecrest Place ⁽¹⁾	Miami, FL	Development	100%	—	—	—	—
4/13/17	Mellody Farm ⁽²⁾	Chicago, IL	Development	100%	26,200	—	—
6/28/17	Concord outparcel ⁽³⁾	Miami, FL	Operating	100%	350	—	—	—
					$36,050	—	—	—
⁽¹⁾ The Company leased 10.67 acres for a ground up development.
⁽²⁾ The Operating Partnership issued 195,732 partnership units valued at $13.1 million as partial consideration for the purchase price.
⁽³⁾ The Company purchased a 0.67 acre vacant outparcel adjacent to the Company's existing operating Concord Shopping Plaza.

(in thousands)		Six months ended June 30, 2016
Date Purchased	Property Name	City/State	Property Type	Ownership	Purchase Price	Debt Assumed, Net of Premiums	Intangible Assets	Intangible Liabilities
2/22/16	Garden City Park	Garden City Park, NY	Operating	100%	$17,300	—	10,171	2,940
3/4/16	The Market at Springwoods Village⁽¹⁾	Houston, TX	Development	53%	$17,994	—	—	—
5/16/16	Market Common Clarendon	Arlington, VA	Operating	100%	$280,500	—	15,428	15,662
Total property acquisitions					$315,794	—	25,599	18,602
⁽¹⁾ Regency acquired a 53% controlling interest in the Market at Springwoods Village partnership to develop a shopping center on land contributed by the partner. As a result of consolidation, the Company recorded the partner's non-controlling interest of $8.4 million in Limited partners' interests in consolidated partnerships in the accompanying Consolidated Balance Sheets.

Equity One Merger

General

On March 1, 2017, Regency completed its merger with Equity One, a NYSE shopping center company, whereby Equity One merged with and into Regency, with Regency continuing as the surviving public company. Under the terms of the Merger Agreement, each Equity One stockholder received 0.45 of a newly issued share of Regency common stock for each share of Equity One common stock owned immediately prior to the effective time of the merger resulting in approximately 65.5 million shares being issued to effect the merger.

The following table provides the components that make up the total purchase price for the Equity One merger:



(in thousands, except stock price)	Purchase Price
Shares of common stock issued for merger	65,379
Closing stock price on March 1, 2017	$	68.40
Value of common stock issued for merger	$	4,471,808
Debt repaid	716,278
Other cash payments	5,019
Total purchase price	$	5,193,105

As part of the merger, Regency acquired 121 properties, including 8 properties held through co-investment partnerships. The consolidated net assets and results of operations of Equity One are included in the consolidated financial statements from the closing date, March 1, 2017, going forward and resulted in the following impact to Revenues and Net income attributable to common stockholders for the three and six months ended June 30, 2017:



		June 30, 2017
(in thousands)		Three months ended	Six months ended
Increase in total revenues	$	100,864	135,813
Increase in net income attributable to common stockholders		23,695	29,464

The Company incurred $4.7 million and $74.4 million of merger-related transaction costs during the three and six months ended June 30, 2017, respectively, which are recorded in Other operating expenses in the accompanying Consolidated Statements of Operations. There were no such merger costs incurred during the same periods of 2016 .

Provisional Purchase Price Allocation of Merger

The Equity One merger has been accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations, which requires, among other things, that the assets acquired and liabilities assumed be recognized at their acquisition date fair values.

The following table summarizes the provisional purchase price allocation based on the Company's initial valuation, including estimates and assumptions of the acquisition date fair value of the tangible and intangible assets acquired and liabilities assumed:



(in thousands)	Preliminary Purchase Price Allocation
Land	$	3,019,448
Building and improvements	2,651,506
Properties in development	70,179
Properties held for sale	19,600
Investments in unconsolidated real estate partnerships	103,566
Real estate assets	5,864,299
Cash, accounts receivable and other assets	112,271
Intangible assets	463,882
Goodwill	246,619
Total assets acquired	6,687,071

Notes payable	757,399
Accounts payable, accrued expenses, and other liabilities	120,616
Lease intangible liabilities	615,951
Total liabilities assumed	1,493,966

Total purchase price	$	5,193,105

The acquired assets and assumed liabilities of an acquired operating property generally include, but are not limited to: land, buildings and improvements, identified tangible and intangible assets and liabilities associated with in-place leases, including tenant improvements, leasing costs, value of above-market and below-market leases, and value of acquired in-place leases. This methodology included estimating an “as-if vacant” fair value of the physical property, which includes land, building, and improvements and also determined the estimated fair value of identifiable intangible assets and liabilities, considering the following categories: (i) value of in-place leases, and (ii) above and below-market value of in-place leases. The excess of the purchase price consideration over the fair value of assets acquired and liabilities assumed resulted in goodwill in the business combination, which reflects expected synergies from combining Regency's and Equity One's operations. The goodwill is not expected to be deductible for tax purposes.

The provisional fair market value of the acquired operating properties is based on a valuation prepared by Regency with assistance of a third party valuation specialist. The third party used stabilized NOI and market specific capitalization and discount rates as the primary inputs in determining the fair value of the real estate assets. Management reviewed the inputs used by the third party specialist as well as the allocation of the purchase price to ensure reasonableness and that the procedures were performed in accordance with management's policy. Management and the third party valuation specialist have prepared their provisional fair value estimates for each of the operating properties acquired, but are still in process of reviewing all of the underlying inputs and assumptions; therefore, the purchase price and its allocation, in its entirety, are not yet complete as of the date of this filing. Once the purchase price and allocation are complete, an adjustment to the purchase price or allocation may occur.

The allocation of the purchase price is based on management’s assessment, which may change in the future as more information becomes available. Subsequent adjustments made to the purchase price allocation upon completion of the Company's fair value assessment process will not exceed one year. The allocation of the purchase price described above requires a significant amount of judgment and represents management's best estimate of the fair value as of the acquisition date.

The following table details the provisional weighted average amortization and net accretion periods, in years, of the major classes of intangible assets and intangible liabilities arising from the Equity One merger:



(in years)		Weighted Average Amortization Period
Assets:
In-place leases		10.0
Above-market leases		8.9
Below-market ground leases		52.3
Liabilities:
Acquired lease intangible liabilities		22.6

Pro forma Information

The following unaudited pro forma financial data includes the incremental revenues, operating expenses, depreciation and amortization, and costs of the Equity One acquisition as if it had occurred on January 1, 2016:



		Pro forma (Unaudited)
		Three months ended June 30,			Six months ended June 30,
(in thousands, except per share data)		2017		2016	2017	2016
Total revenues		$	261,314	251,107	526,488	501,149
Income (loss) from operations	⁽¹⁾	56,435		42,409	123,832	(9,029	)
Net income (loss) attributable to common stockholders	⁽¹⁾	54,624		36,596	109,434	(20,416	)
Income (loss) per common share - basic		$	0.32	0.22	0.64	(0.13	)
Income (loss) per common share - diluted		0.32		0.22	0.64	(0.12	)
⁽¹⁾The pro forma earnings for the three and six months ended June 30, 2017, were adjusted to exclude $4.7 million and $97.3 million of merger costs, respectively, while 2016 pro forma earnings were adjusted to include all merger costs during the first quarter of 2016.

The pro forma financial data is not necessarily indicative of what the actual results of operations would have been assuming the transaction had been completed as set forth above, nor does it purport to represent the results of operations for future periods.