United States
SECURITIES AND EXCHANGE COMMISSION
Washington DC 20549
FORM 10-Q
(Mark One)
[X] For the quarterly period ended March 31, 1999
-or-
[ ]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 0-24763
REGENCY CENTERS, L.P.
(Exact name of registrant as specified in its charter)
Delaware 59-3429602
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
121 West Forsyth Street, Suite 200
Jacksonville, Florida 32202
(Address of principal executive offices) (Zip Code)
(904) 356-7000
(Registrant's telephone number, including area code)
Unchanged
(Former name, former address and former fiscal year,
if changed since last report)
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. Yes [X] No[ ]
<PAGE>
REGENCY CENTERS, L.P.
Consolidated Balance Sheets
March 31, 1999 and December 31, 1998
<TABLE>
<CAPTION>
1999 1998
---- ----
(unaudited)
<S> <C> <C>
Assets
Real estate investments, at cost:
Land $ 526,972,541 222,259,131
Buildings and improvements 1,671,645,088 795,124,798
Construction in progress - development for investment 36,399,543 15,647,659
Construction in progress - development for sale 65,917,700 20,869,915
---------------- ----------------
2,300,934,872 1,053,901,503
Less: accumulated depreciation 47,442,799 36,752,466
---------------- ----------------
2,253,492,073 1,017,149,037
Investments in real estate partnerships 33,579,438 30,630,540
---------------- ----------------
Net real estate investments 2,287,071,511 1,047,779,577
Cash and cash equivalents 26,184,563 15,536,926
Tenant receivables, net of allowance for uncollectible accounts
of $1,806,705 and $1,787,866 at March 31, 1999
and December 31, 1998, respectively 21,164,065 13,712,937
Deferred costs, less accumulated amortization of
$2,873,138 and $2,350,267 at March 31, 1999
and December 31, 1998, respectively 7,502,407 5,156,289
Other assets 4,626,799 4,251,221
---------------- ----------------
$ 2,346,549,345 1,086,436,950
================ ================
Liabilities and Partners' Capital
Liabilities:
Notes payable 487,163,019 362,744,897
Acquisition and development line of credit 441,379,310 117,631,185
Accounts payable and other liabilities 33,491,902 17,596,224
Tenants' security and escrow deposits 6,516,535 2,638,033
---------------- ----------------
Total liabilities 968,550,766 500,610,339
---------------- ----------------
Limited partners' interest in consolidated partnerships
(note 2) 11,819,557 11,558,619
---------------- ----------------
Partners' Capital:
Series A preferred units, par value $50, 1,600,000 units issued and
outstanding at March 31, 1999 and
December 31, 1998; liquidation preference $50 per unit 78,800,000 78,800,000
General partner; 58,303,006 and 24,537,723 units outstanding
at March 31, 1999 and December 31, 1998, respectively 1,247,187,150 472,748,608
Limited partners; 1,869,935 and 1,147,446 units outstanding
at March 31, 1999 and December 31, 1998, respectively 40,191,872 22,719,384
---------------- ----------------
Total partners' capital 1,366,179,022 574,267,992
---------------- ----------------
Commitments and contingencies
$ 2,346,549,345 1,086,436,950
================ ================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
REGENCY CENTERS, L.P.
Consolidated Statements of Operations
For the Three Months ended March 31, 1999 and 1998
(unaudited)
1999 1998
---- ----
Revenues:
Minimum rent $35,650,932 18,072,602
Percentage rent 327,971 550,217
Recoveries from tenants 8,498,064 3,837,231
Management, leasing and brokerage fees 1,789,853 2,728,672
Equity in income of investments in
real estate partnerships 741,103 985
----------- -----------
Total revenues 47,007,923 25,189,707
----------- -----------
Operating expenses:
Depreciation and amortization 8,506,319 4,360,659
Operating and maintenance 6,301,985 3,184,444
General and administrative 3,787,359 3,433,108
Real estate taxes 4,371,510 2,252,392
------------ -----------
Total operating expenses 22,967,173 13,230,603
------------- -----------
Interest expense (income):
Interest expense 9,657,960 4,161,258
Interest income (452,889) (318,246)
----------
------------ ----------
Net interest expense 9,205,071 3,843,012
------------ ----------
Income before minority interests and sale
of real estate investments 14,835,679 8,116,092
Gain on sale of real estate investments - 10,237,419
Minority interest of limited partners (260,939) (97,149)
------------ -----------
Net income 14,574,740 18,256,362
Preferred unit distribution (1,625,001) -
------------ ----------
Net income for common unitholders 12,949,739 18,256,362
============= ===========
Net income per common unit:
Basic $ 0.33 0.69
============= ==========
Diluted $ 0.33 0.68
============= ==========
See accompanying notes to consolidated financial statements
<PAGE>
REGENCY CENTERS, L.P.
Consolidated Statements of Changes in Capital
For the Three Months Ended March 31, 1999
(Unaudited)
Series A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Preferred General Limited Total
Units Partner Partners Capital
Balance December 31, 1998 $ 78,800,000 472,748,608 22,719,384 574,267,992
Net income 1,625,001 12,371,534 578,205 14,574,740
Cash contributions from the -
issuance of Regency stock/units - 28,601 - 28,601
Cash distributions for dividends - (13,274,870) (481,984) (13,756,854)
Preferred unit distribution (1,625,001) - - (1,625,001)
Other contributions (distributions), net - (13,853,923) - (13,853,923)
Units issued for acquisition
of real estate - 782,267,133 24,276,334 806,543,467
Units exchanged for commo
stock of Regency - 6,900,067 (6,900,067) -
--------------- ------------------ --------------- ---------------
Balance March 31, 1999 $ 78,800,000 1,247,187,150 40,191,872 1,366,179,022
=============== ================== =============== ===============
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 1999 and 1998
(unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
1999 1998
---- ----
Cash flows from operating activities:
Net income $ 14,574,740 18,256,362
Adjustments to reconcile net income to net
Cash provided by operating activities:
Depreciation and amortization 8,506,319 4,360,659
Deferred financing cost and debt premium amortization (133,434) 58,880
Stock based compensation 580,811 605,822
Minority interest of limited partners 260,939 97,149
Equity in income of investments in real estate partnerships (741,103) (985)
Gain on sale of real estate investments - (10,237,419)
Changes in assets and liabilities:
Tenant receivables (2,956,898) 97,131
Deferred leasing commissions (526,645) 329,779
Other assets 867,968 61,413
Tenants' security deposits 60,079 (41,496)
Accounts payable and other liabilities 7,554,404 (433,634)
--------------- ------------
Net cash provided by operating activities 28,047,180 13,153,661
---------------- ------------
Cash flows from investing activities:
Acquisition, development and improvements of real estate (14,589,129) 67,336,236)
Investment in real estate partnerships (3,291,401) -
Construction in progress for sale, net of reimbursement (12,316,835) (7,164,502)
Proceeds from sale of real estate investments - 26,734,955
Distributions received from real estate partnership investments 704,474 8,593
--------------- ------------
Net cash used in investing activities (29,492,891) (47,757,190)
--------------- ------------
Cash flows from financing activities:
Cash contributions form the issuance of Regency stock
and partnership units 28,601 6,769
Distributions to preferred unitholders (1,625,001) -
Cash distributions for dividends (13,756,854) (12,633,383)
Other contributions (distributions), net (13,853,923) (4,563,668)
Proceeds from acquisition and development
line of credit, net 52,148,125 42,100,000
Proceeds from mortgage loans payable - 1,774,207
Repayment of mortgage loans payable (8,870,784) (574,690)
Deferred financing costs (1,976,816) (591,622)
--------------- ------------
Net cash provided by financing activities 12,093,348 25,517,613
--------------- ------------
Net increase in cash and cash equivalents 10,647,637 (9,085,916)
Cash and cash equivalents at beginning of period 15,536,926 14,642,429
--------------- ------------
Cash and cash equivalents at end of period $26,184,563 5,556,513
=============== ============
</TABLE>
<PAGE>
REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 1999 and 1998
(unaudited)
-continued-
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Supplemental disclosure of cash flow information - cash paid for interest
(netof capitalized interest of approximately
$2,150,000 and $1,064,000 in 1999 and 1998 respectively) $ 8,714,895 3,598,239
=================== ================
Supplemental disclosure of non-cash transactions:
Mortgage loans assumed for the acquisition of Pacific and real estate $ 405,284,768 65,448,585
=================== ================
Limited and general partnership units issued
for the acquisition of Pacific and real estate $ 806,543,467 26,266,209
=================== ================
Other liabilities assumed to acquire Pacific $ 13,897,643 -
=================== ================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
March 31, 1999
1. Summary of Significant Accounting Policies
(a) Organization and Principles of Consolidation
Regency Centers, L.P. (the "Partnership") is the primary entity
through which Regency Realty Corporation ("Regency" or "Company"),
a self-administered and self-managed real estate investment trust
("REIT"), conducts substantially all of its business and owns
substantially all of its assets. In 1993, Regency was formed for
the purpose of managing, leasing, brokering, acquiring, and
developing shopping centers. The Partnership also provides
management, leasing, brokerage and development services for real
estate not owned by Regency (i.e., owned by third parties).
The Partnership was formed in 1996 for the purpose of acquiring
certain real estate properties. The historical financial
statements of the Partnership reflect the accounts of the
Partnership since its inception, together with the accounts of
certain predecessor entities (including Regency Centers, Inc., a
wholly-owned subsidiary of Regency through which Regency owned a
substantial majority of its properties), which were merged with
and into the Partnership as of February 26, 1998. At March 31,
1999, Regency owns approximately 97% of the outstanding common
units of the Partnership
The Partnership's ownership interests are represented by Units, of
which there are (i) Series A Preferred Units, (ii) Original
Limited Partnership Units (including Class A Units), all of which
were issued in connection with the Branch acquisition, (iii) Class
2 Units, all of which were issued in connection with the Midland
and other property acquisitions, and (iv) Class B Units, all of
which are owned by Regency. Each outstanding Unit other than Class
B Units and Series A Preferred Units is exchangeable, on a one
share per one Unit basis, for the common stock of Regency or for
cash at Regency's election.
The accompanying consolidated financial statements include the
accounts of the Partnership, its wholly owned subsidiaries, and
its majority owned or controlled subsidiaries and partnerships.
All significant intercompany balances and transactions have been
eliminated in the consolidated financial statements.
The Financial Statements reflect all adjustments which are of a
normal recurring nature, and in the opinion of management, are
necessary to properly state the results of operations and
financial position. Certain information and footnote disclosures
normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed
or omitted although management believes that the disclosures are
adequate to make the information presented not misleading. The
Financial Statements should be read in conjunction with the
financial statements and notes thereto included in the
Partnership's December 31, 1998 Form 10-K filed with the
Securities and Exchange Commission.
During 1999, two properties were transferred from Regency to RCLP.
The effects of such transfers were not material to the operations
or financial position of the Partnership. During 1998, Regency
transferred all of the assets and liabilities of a 100% owned
shopping center, Hyde Park, to the Partnership in exchange for
Class B units. Hyde Park was acquired by Regency on June 6, 1997,
and its operations had been included in Regency's financial
statements from that date forward. Since the Partnership and Hyde
Park are under the common control of Regency, the transfer of Hyde
Park has been accounted for at historical cost in a manner similar
to a pooling of interests, as if the Partnership had directly
acquired Hyde Park on June 6, 1997. Accordingly, the Partnership's
financial statements have been restated to include the assets,
liabilities, units issued, and results of operations of Hyde Park
from the date it was acquired.
<PAGE>
(b) Reclassifications
Certain reclassifications have been made to the 1998 amounts to
conform to classifications adopted in 1999.
2. Acquisitions
On September 23, 1998, the Company entered into an Agreement of Merger
("Agreement") with Pacific Retail Trust ("Pacific"), a privately held
real estate investment trust. The Agreement, among other matters,
provided for the merger of Pacific into Regency, and the exchange of each
Pacific common or preferred share into 0.48 shares of Regency common or
preferred stock. The stockholders approved the merger at a Special
Meeting of Stockholders held February 26, 1999. At the time of the
merger, Pacific owned 71 retail shopping centers that are operating or
under construction containing 8.4 million SF of gross leaseable area. On
February 28, 1999, the effective date of the merger, the Company issued
equity instruments valued at $770.6 million to the Pacific stockholders
in exchange for their outstanding common and preferred shares and units.
The total cost to acquire Pacific was approximately $1.157 billion based
on the value of Regency shares issued including the assumption of $379
million of outstanding debt and other liabilities of Pacific, and
estimated closing costs of $7.5 million. The price per share used to
determine the purchase price was $23.325 based on the five day average of
the closing stock price of Regency's common stock as listed on the New
York Stock Exchange immediately before, during and after the date the
terms of the merger were agreed to and announced to the public. The
merger was accounted for as a purchase with the Company as the acquiring
entity. The properties acquired from Pacific were concurrently
contributed by Regency into RCLP in exchange for additional partnership
units.
During 1998, the Partnership acquired 30 shopping centers fee simple for
approximately $341.9 million and also invested $28.4 million in 12 joint
ventures ("JV Properties"), for a total investment of $370.3 million in
42 shopping centers ("1998 Acquisitions"). Included in the 1998
Acquisitions are 32 shopping centers acquired from various entities
comprising the Midland Group ("Midland"). Of the 32 Midland centers, 31
are anchored by Kroger, and 12 are owned through joint ventures in which
the Partnership's ownership interest is 50% or less. The Partnership's
investment in the properties acquired from Midland is $236.6 million at
December 31, 1998. During 1999 and 2000, the Partnership may pay
contingent consideration of up to an estimated $23 million, through the
issuance of Partnership units and the payment of cash. The amount of such
consideration, if issued, will depend on the satisfaction of certain
performance criteria relating to the assets acquired from Midland.
Transferors who received cash at the initial Midland closing will receive
contingent future consideration in cash rather than units. On April 16,
1999, the Partnership paid $5.2 million related to this contingent
consideration.
The operating results of Pacific and the 1998 Acquisitions are included
in the Partnership's consolidated financial statements from the date each
property was acquired. The following unaudited pro forma information
presents the consolidated results of operations as if Pacific and all of
the 1998 Acquisitions had occurred on January 1, 1998. Such pro forma
information reflects adjustments to 1) increase depreciation, interest
expense, and general and administrative costs, 2) remove the office
buildings sold, and 3) adjust the weighted average common units issued to
acquire the properties. Pro forma revenues would have been $69.8 and
$66.9 million as of March 31, 1999 and 1998, respectively. Pro forma net
income for common unitholders would have been $19.9 and $19.1 million as
of March 31, 1999 and 1998, respectively. Pro forma basic net income per
common unit would have been $.32 and $.32 as of March 31, 1999 and 1998,
respectively. Pro forma diluted net income per common unit would have
been $.32 and $.31, as of March 31, 1999 and 1998, respectively. This
data does not purport to be indicative of what would have occurred had
Pacific and the 1998 Acquisitions been made on January 1, 1998, or of
results which may occur in the future.
<PAGE>
3. Segments
The Partnership was formed, and currently operates, for the purpose of 1)
operating and developing Partnership owned retail shopping centers
(Retail segment), and 2) providing services including property
management, leasing, brokerage, and construction and development
management for third-parties (Service operations segment). The
Partnership had previously operated four office buildings, all of which
have been sold during 1998 and 1997 (Office buildings segment). The
Partnership's reportable segments offer different products or services
and are managed separately because each requires different strategies and
management expertise. There are no material inter-segment sales or
transfers.
The Partnership assesses and measures operating results starting with Net
Operating Income for the Retail and Office Buildings segments and Income
for the Service operations segment and converts such amounts into a
performance measure referred to as Funds From Operations (FFO). The
operating results for the individual retail shopping centers have been
aggregated since all of the Partnership's shopping centers exhibit highly
similar economic characteristics as neighborhood shopping centers, and
offer similar degrees of risk and opportunities for growth. FFO as
defined by the National Association of Real Estate Investment Trusts
consists of net income (computed in accordance with generally accepted
accounting principles) excluding gains (or losses) from debt
restructuring and sales of income producing property held for investment,
plus depreciation and amortization of real estate, and adjustments for
unconsolidated investments in real estate partnerships and joint
ventures. The Partnership considers FFO to be the industry standard for
reporting the operations of REITs. Adjustments for investments in real
estate partnerships are calculated to reflect FFO on the same basis.
While management believes that FFO is the most relevant and widely used
measure of the Partnership's performance, such amount does not represent
cash flow from operations as defined by generally accepted accounting
principles, should not be considered an alternative to net income as an
indicator of the Partnership's operating performance, and is not
indicative of cash available to fund all cash flow needs. Additionally,
the Partnership's calculation of FFO, as provided below, may not be
comparable to similarly titled measures of other REITs.
The accounting policies of the segments are the same as those described
in note 1. The revenues, FFO, and assets for each of the reportable
segments are summarized as follows for the period ended as of March 31,
1999, and 1998.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Revenues: 1999 1998
--------- ---- ----
Retail segment 45,218,070 21,980,364
Service operations segment 1,789,853 2,728,672
Office buildings segment - 480,671
---------- -----------
Total revenues 47,007,923 25,189,707
========== ==========
Funds from Operations:
Retail segment net operating income 34,544,575 16,721,043
Service operations segment income 1,789,853 2,728,672
Office buildings segment net operating income - 303,156
Adjustments to calculate consolidated FFO:
Interest expense (9,657,960) (4,161,258)
Interest income 452,889 318,246
Earnings from recurring land sales - 901,853
General and administrative (3,787,359) (3,433,108)
Non-real estate depreciation (175,790) (133,578)
Minority interests of limited partners (260,939) (97,149)
Minority interests in depreciation
And amortization (181,594) (133,697)
Share of joint venture depreciation
and amortization 99,193 20,097
Dividends on preferred shares and units (1,625,001) -
-------------- --------------
Funds from Operations 21,197,867 13,034,277
Reconciliation to net income for common
stockholders:
Real estate related depreciation
and amortization (8,330,529) (4,227,081)
Minority interests in depreciation
and amortization 181,594 133,697
Share of joint venture depreciation
And amortization (99,193) (20,097)
Earnings from property sales - 9,335,566
------------ ------------
Net income available for common
Unitholders $ 12,949,739 18,256,362
=========== ============
</TABLE>
Assets by reportable segment as of March 31, 1999 and December 31,
1998 are as follows. Non-segment assets to reconcile to total assets
include cash, accounts receivable and deferred financing costs.
Assets (in thousands): 1999 1998
---------------------- ---- ----
Retail segment $ 2,221,154 1,026,910
Service operations segment 65,918 20,870
Office buildings segment - -
Cash and other assets 59,477 38,657
-------------- ------------
Total assets $ 2,346,549 1,086,437
============== ============
<PAGE>
4. Notes Payable and Acquisition and Development Line of Credit
The Partnership's outstanding debt at March 31, 1999 and December 31, 1998
consists of the following (in thousands):
1999 1998
---- ----
Notes Payable:
Fixed rate mortgage loans $ 341,212 230,398
Variable rate mortgage loans 24,773 11,051
Fixed rate unsecured loans 121,178 121,296
------- -------
Total notes payable 487,163 362,745
Acquisition and development line of credit 441,379 117,631
------- -------
Total $ 928,542 480,376
======= =======
During February, 1999, the Partnership modified the terms of its
unsecured line of credit (the "Line") by increasing the commitment to
$635 million. Maximum availability under the Line is based on the
discounted value of a pool of eligible unencumbered assets (determined on
the basis of capitalized net operating income) less the amount of the
Company's outstanding unsecured liabilities. The Line matures in May
2001, but may be extended annually for one year periods. The Company is
required to comply, and is in compliance, with certain financial and
other covenants customary with this type of unsecured financing. These
financial covenants include among others (i) maintenance of minimum net
worth, (ii) ratio of total liabilities to gross asset value, (iii) ratio
of secured indebtedness to gross asset value, (iv) ratio of EBITDA to
interest expense, (v) ratio of EBITDA to debt service and reserve for
replacements, and (vi) ratio of unencumbered net operating income to
interest expense on unsecured indebtedness. The Line is used primarily to
finance the acquisition and development of real estate, but is also
available for general working capital purposes.
On April 15, 1999 the Partnership completed a $250 million unsecured debt
offering in two tranches. The Company issued $200 million 7.4% notes due
April 1, 2004, priced at 99.922% to yield 7.42%, and $50 million 7.75%
notes due April 1, 2009, priced at 100%. The net proceeds of the offering
were used to reduce the balance of the Line. On April 30, 1999, the
balance of the Line was $206.9 million.
Mortgage loans are secured by certain real estate properties, but
generally may be prepaid subject to a prepayment of a yield-maintenance
premium. Mortgage loans are generally due in monthly installments of
interest and principal and mature over various terms through 2018.
Variable interest rates on mortgage loans are currently based on LIBOR
plus a spread in a range of 125 basis points to 150 basis points. Fixed
interest rates on mortgage loans range from 7.04% to 9.8%.
During 1999, the Partnership assumed debt with a fair value of $405.3
million related to the acquisition of real estate, which includes debt
premiums of $4.1 million based upon the above market interest rates of
the debt instruments. Debt premiums are being amortized over the terms of
the related debt instruments.
As of March 31, 1999, scheduled principal repayments on notes payable and
the Line were as follows (in thousands):
<PAGE>
Scheduled
Principal Term Loan Total
Scheduled Payments by Year Payments Maturities Payments
1999 $ 4,908 19,412 24,320
2000 5,519 488,946 494,465
2001 5,387 45,824 51,211
2002 4,687 44,122 48,809
2003 4,654 13,285 17,939
Beyond 5 Years 37,752 239,936 277,688
Net unamortized debt payments - 14,110 14,110
--------- --------- ---------
Total $62,907 865,635 928,542
======= ======= =======
Unconsolidated partnerships and joint ventures had mortgage loans payable
of $58.8 million at March 31, 1999, and the Partnership's proportionate
share of these loans was $25.5 million.
5. Regency's Stockholders' Equity and Partners' Capital
On June 11, 1996, the Company entered into a Stockholders Agreement (the
"Agreement") with SC-USREALTY granting it certain rights such as
purchasing common stock, nominating representatives to the Company's
Board of Directors, and subjecting SC-USREALTY to certain restrictions
including voting and ownership restrictions. In connection with the Units
and shares of common stock issued in March 1998 related to earnout
payments, SC-USREALTY acquired 435,777 shares at $22.125 per share in
accordance with their rights as provided for in the Agreement. As of
March 31, 1999, SC-USREALTY owns approximately 34.3 million shares of
common stock or 58.9% of the outstanding common shares.
In connection with the acquisition of shopping centers, the Partnership
has issued Original Limited Partnership and Class 2 Units to limited
partners convertible on a one for one basis into shares of common stock
of the Company.
There are currently 1,082,331 Original Limited Partnership Units
outstanding.
On June 29, 1998, the Partnership issued $80 million of 8.125% Series A
Cumulative Redeemable Preferred Units ("Series A Preferred Units") to an
institutional investor in a private placement. The issuance involved the
sale of 1.6 million Series A Preferred Units for $50.00 per unit. The
Series A Preferred Units, which may be called by the Partnership at par
on or after June 25, 2003, have no stated maturity or mandatory
redemption, and pay a cumulative, quarterly dividend at an annualized
rate of 8.125%. At any time after June 25, 2008, the Series A Preferred
Units may be exchanged for shares of 8.125% Series A Cumulative
Redeemable Preferred Stock of the Partnership at an exchange rate of one
share of Series A Preferred Stock for one Series A Preferred Unit. The
Series A Preferred Units and Series A Preferred Stock are not convertible
into common stock of the Company. The net proceeds of the offering were
used to reduce the acquisition and development line of credit.
As part of the acquisition of Pacific Retail Trust, the Company issued
Series 1 and Series 2 preferred shares. Series 1 preferred shares are
convertible into Series 2 preferred shares on a one-for-one basis and
contain provisions for adjustment to prevent dilution. The Series 1
preferred shares are entitled to a quarterly dividend in an amount equal
to $0.0271 less than the common dividend and are cumulative. Series 2
preferred shares are convertible into common shares on a one-for-one
basis. The Series 2 preferred shares are entitled to quarterly dividends
in an amount equal to the common dividend and are cumulative. The Company
may redeem the preferred shares any time after October 20, 2010 at a
price of $20.83 per share, plus all declared but unpaid dividends.
On March 4, 1999, the holders of Class B stock converted 1,250,000 shares
into 1,487,734 shares of common stock.
<PAGE>
6. Earnings Per Unit
The following summarizes the calculation of basic and diluted earnings
per unit for the three months ended March 31, 1999 and 1998 (in thousands
except per share data):
1999 1998
---- ----
Basic Earnings Per Unit (EPU) Calculation:
Weighted average units outstanding 34,952 24,468
====== ======
Net income for common $ 12,950 18,257
unitholders
Less: dividends paid on Class B common
stock, Series 1 and Series 2 Preferred stock 1,379 1,344
------- -----
Net income for Basic and Diluted EPU $ 11,571 16,912
======== ======
Basic EPU $ .33 .69
======== =======
Diluted Earnings Per Unit (EPU) Calculation:
Weighted average units outstanding
for Basic EP 34,952 24,468
Incremental units to be issued under
Common stock options using the Treasury
method - 54
Contingent units for the acquisition
of real estate 159 334
-------- --------
Total diluted units 35,111 24,856
======= ========
Diluted EPU $ .33 .68
========= =======
The Class B common stock dividends are deducted from income in
computing earnings per unit since the proceeds of this offering were
transferred to and reinvested by the Partnership. In addition, the
Series 1 and Series 2 Preferred stock dividends are also deducted from
net income in computing earnings per unit since the properties acquired
with these preferred shares were contributed to the Partnership.
Accordingly, the payment of Class B common, Series 1 and Series 2
Preferred stock dividends are deemed to be preferential to the
distributions made to common unitholders.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following discussion should be read in conjunction with the accompanying
Consolidated Financial Statements and Notes thereto of Regency Centers, L.P.
appearing elsewhere within. Amounts are in thousands, except per share data and
retail center statistical information.
Organization
Regency Realty Corporation ("Regency" or "Company") is a qualified real estate
investment trust ("REIT") which began operations in 1993. The Company invests in
real estate primarily through its general partnership interest in Regency
Centers, L.P., ("RCLP" or "Partnership") an operating partnership in which the
Company currently owns approximately 97% of the outstanding common partnership
units ("Units"). Of the 204 properties included in the Company's portfolio at
December 31, 1998, 186 properties were owned either fee simple or through
partnerships interests by the Partnership. At March 31, 1999, the Company had an
investment in real estate, at cost, of approximately $2.4 billion of which $2.3
billion or 94% was owned by the Partnership.
Shopping Center Business
The Partnership's principal business is owning, operating and developing grocery
anchored neighborhood infill shopping centers. Infill refers to shopping centers
within a targeted investment market offering sustainable competitive advantages
such as barriers to entry resulting from zoning restrictions, growth management
laws, or limited new competition from development or expansions. The
Partnership's properties summarized by state and in order by largest holdings
including their gross leasable areas (GLA) follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Location March 31, 1999 December 31, 1998
-------- ------------- -----------------
# Properties GLA % Leased # Properties GLA % Leased
------------ --------- -------- ------------ ----------- --------
Florida 38 4,764,640 91.0% 36 4,571,617 92.9%
California 33 3,660,085 95.2%
- - -
Georgia 25 2,552,893 92.7% 25 2,560,383 92.8%
Texas 25 3,542,442 89.7% 5 479,900 84.7%
Ohio 13 1,803,945 92.7% 1,527,510 96.8%
12
North Carolina 12 1,239,718 97.7% 1,239,783 98.3%
12
Colorado 9 872,431 94.6% 5 447,569 89.4%
Washington 8 737,310 97.1%
- - -
Oregon 6 583,704 89.8%
- - -
Tennessee 4 389,197 92.4% 4 295,179 96.8%
Arizona 2 326,984 99.8%
- - -
Virginia 2 197,324 96.1% 2 197,324 97.7%
Delaware 1 232,752 96.1% 1 232,752 94.8%
Kentucky 1 205,060 94.7% 1 205,060 95.6%
Illinois 1 178,600 86.9% 1 178,600 86.9%
Michigan 2 177,399 81.6% 2 177,929 81.5%
South Carolina 2 162,056 98.8% 2 162,056 100.0%
Missouri 1 82,498 99.8% 1 82,498 99.8%
Wyoming 1 75,000 0% -
------ -------- --------- -------- ---------- --------
Total 186 21,784,038 92.5% 109 12,358,160 93.6%
=========== ========== ========= ========= ========== ========
</TABLE>
<PAGE>
The Partnership, is focused on building a platform of grocery anchored
neighborhood shopping centers because grocery stores provide convenience
shopping of daily necessities, foot traffic for adjacent local tenants, and
should withstand adverse economic conditions. The Partnership's current
investment markets have continued to offer strong stable economies, and
accordingly, the Partnership expects to realize growth in net income as a result
of increasing occupancy in the portfolio, increasing rental rates, development
and acquisition of shopping centers in targeted markets, and redevelopment of
existing shopping centers. The following table summarizes the four largest
grocery tenants occupying the Partnership's shopping centers at December 31,
1998:
Grocery Anchor Number of % of % of Annualized
Stores Total GLA Base Rent
Kroger 39 10.8% 8.89%
Publix 30 6.1% 4.04%
Albertson's 14 3.5% 3.25%
Winn Dixie 14 3.1% 2.17%
Acquisition and Development of Shopping Centers
On September 23, 1998, the Company entered into an Agreement of Merger
("Agreement") with Pacific Retail Trust ("Pacific"), a privately held real
estate investment trust. The Agreement, among other matters, provided for the
merger of Pacific into Regency, and the exchange of each Pacific common or
preferred share into 0.48 shares of Regency common or preferred stock. The
stockholders approved the merger at a Special Meeting of Stockholders held
February 26, 1999. At the time of the merger, Pacific owned 71 retail shopping
centers that are operating or under construction containing 8.4 million SF of
gross leaseable area. On February 28, 1999, the effective date of the merger,
the Company issued equity instruments valued at $770.6 million to the Pacific
stockholders in exchange for their outstanding common and preferred shares and
units. The total cost to acquire Pacific was approximately $1.157 billion based
on the value of Regency shares issued including the assumption of $379 million
of outstanding debt and other liabilities of Pacific, and estimated closing
costs of $7.5 million. The price per share used to determine the purchase price
was $23.325 based on the five day average of the closing stock price of
Regency's common stock as listed on the New York Stock Exchange immediately
before, during and after the date the terms of the merger were agreed to and
announced to the public. The merger was accounted for as a purchase with the
Company as the acquiring entity. The properties acquired from Pacific were
concurrently contributed by Regency into RCLP in exchange for additional
partnership units.
During 1998, the Partnership acquired 30 shopping centers fee simple for
approximately $341.9 million and also invested $28.4 million in 12 joint
ventures ("JV Properties"), for a total investment of $370.3 million in 42
shopping centers ("1998 Acquisitions"). Included in the 1998 Acquisitions are 32
shopping centers acquired from various entities comprising the Midland Group
("Midland"). Of the 32 Midland centers, 31 are anchored by Kroger, and 12 are
owned through joint ventures in which the Partnership's ownership interest is
50% or less. The Partnership's investment in the properties acquired from
Midland is $236.6 million at December 31, 1998. During 1999 and 2000, the
Partnership may pay contingent consideration of up to an estimated $23 million,
through the issuance of Partnership units and the payment of cash. The amount of
such consideration, if issued, will depend on the satisfaction of certain
performance criteria relating to the assets acquired from Midland. Transferors
who received cash at the initial Midland closing will receive contingent future
consideration in cash rather than units. On April 16, 1999, the Partnership paid
$5.2 million related to this contingent consideration.
<PAGE>
Results from Operations
Comparison of 1999 to 1998
Revenues increased $21.8 million or 87% to $47.0 million in 1999. The increase
was due primarily to Pacific and the 1998 Acquisitions. At March 31, 1999, the
real estate portfolio contained approximately 21.8 million SF, and was 92.5%
leased. Minimum rent increased $17.6 million or 97%, and recoveries from tenants
increased $4.7 million or 121%. Revenues from property management, leasing,
brokerage, and development services (service operation segment) provided on
properties not owned by the Partnership were $1.8 million in 1999 compared to
$2.7 million in 1998, the decrease due primarily to a decrease in brokerage
fees. During the first quarter of 1998, the Partnership sold three office
buildings and a parcel of land for $26.7 million, and recognized a gain on the
sale of $10.2 million. As a result of these transactions the Partnership's real
estate portfolio is comprised entirely of retail shopping centers. The proceeds
from the sale were used to reduce the balance of the line of credit.
Operating expenses increased $9.7 million or 74% to $23.0 million in 1999.
Combined operating and maintenance, and real estate taxes increased $5.2 million
or 96% during 1999 to $10.7 million. The increases are due to Pacific and the
1998 Acquisitions. General and administrative expenses increased 10% during 1999
to $3.8 million due to the hiring of new employees and related office expenses
necessary to manage the shopping centers acquired during 1999 and 1998.
Depreciation and amortization increased $4.1 million during 1999 or 95%
primarily due to Pacific and the 1998 Acquisitions.
Interest expense increased to $9.7 million in 1999 from $4.2 million in 1998 or
132% due to increased average outstanding loan balances related to the financing
of Pacific and the 1998 Acquisitions on the Line and the assumption of debt.
Net income for common unit holders was $12.9 million in 1999 vs. $18.3 million
in 1997, a $5.3 million or 29% decrease the result of a $10.2 million gain
recognized in the first quarter of 1998 on the sale of three office buildings
and a parcel of land. Diluted earnings per unit in 1999 was $.32 vs. $.69 in
1998 due to the decrease in net income combined with the dilutive impact from
the increase in weighted average common units and equivalents of 10.3 million
primarily due to the acquisition of Pacific.
Funds from Operations
The Partnership considers funds from operations ("FFO"), as defined by the
National Association of Real Estate Investment Trusts as net income (computed in
accordance with generally accepted accounting principles) excluding gains (or
losses) from debt restructuring and sales of income producing property held for
investment, plus depreciation and amortization of real estate, and after
adjustments for unconsolidated investments in real estate partnerships and joint
ventures, to be the industry standard for reporting the operations of real
estate investment trusts ("REITs"). Adjustments for investments in real estate
partnerships are calculated to reflect FFO on the same basis. While management
believes that FFO is the most relevant and widely used measure of the
Partnership's performance, such amount does not represent cash flow from
operations as defined by generally accepted accounting principles, should not be
considered an alternative to net income as an indicator of the Partnership's
operating performance, and is not indicative of cash available to fund all cash
flow needs. Additionally, the Partnership's calculation of FFO, as provided
below, may not be comparable to similarly titled measures of other REITs.
<PAGE>
FFO for the periods ended March 31, 1999 and 1998 are summarized in the
following table (in thousands):
1999 1998
Net income for common stockholders $ 12,950 18,256
Add (subtract):
Real estate depreciation and amortization 8,248 4,114
Gain on sale of operating property - (9,336)
--------- ---------
Funds from operations $ 21,198 13,034
========== =========
Cash flow provided by (used in):
Operating activities $ 28,047 13,154
Investing activities (29,493) (47,757)
Financing activities 12,093 25,518
Liquidity and Capital Resources
Management anticipates that cash generated from operating activities will
provide the necessary funds on a short-term basis for its operating expenses,
interest expense and scheduled principal payments on outstanding indebtedness,
recurring capital expenditures necessary to properly maintain the shopping
centers, and distributions to share and unit holders. Net cash provided by
operating activities was $28 million and $13 million for the three months ended
March 31, 1999 and 1998, respectively. The Partnership paid scheduled principal
payments of $1.1 million and $575,000 during 1999 and 1998, respectively. The
Partnership paid distributions of $13.8 million and $4.6 million, during 1999
and 1998, respectively, to its Original Limited Partnership, Class 2 and Series
A Preferred unitholders.
Management expects to meet long-term liquidity requirements for term debt
payoffs at maturity, non-recurring capital expenditures, and acquisition,
renovation and development of shopping centers from: (i) excess cash generated
from operating activities, (ii) working capital reserves, (iii) additional debt
borrowings, and (iv) additional equity raised in the public markets. Net cash
used in investing activities was $29.5 million and $47.8 million, during 1999
and 1998, respectively, primarily for purposes discussed above under
Acquisitions and Development of Shopping Centers. Net cash provided by financing
activities was $12.1 million and $25.5 million during 1999 and 1998,
respectively, primarily related to the proceeds from the preferred unit and debt
offerings completed during 1998. At March 31, 1999, the Partnership had 14
retail properties under construction or undergoing major renovations, with costs
to date of $119.6 million. Total committed costs necessary to complete the
properties under development is estimated to be $209 million and will be
expended through 1999 and 2000.
The Partnership's outstanding debt at March 31, 1999 and December 31, 1998
consists of the following (in thousands):
1999 1998
---- ----
Notes Payable:
Fixed rate mortgage loans $ 341,212 230,398
Variable rate mortgage loans 24,773 11,051
Fixed rate unsecured loans 121,178 121,296
------- -------
Total notes payable 487,163 362,745
Acquisition and development line of credit 441,379 117,631
------- -------
Total $ 928,542 480,376
======== ========
<PAGE>
During February, 1999, the Partnership modified the terms of its unsecured line
of credit (the "Line") by increasing the commitment to $635 million. Maximum
availability under the Line is based on the discounted value of a pool of
eligible unencumbered assets (determined on the basis of capitalized net
operating income) less the amount of the Company's outstanding unsecured
liabilities. The Line matures in May 2001, but may be extended annually for one
year periods. The Company is required to comply, and is in compliance, with
certain financial and other covenants customary with this type of unsecured
financing. These financial covenants include among others (i) maintenance of
minimum net worth, (ii) ratio of total liabilities to gross asset value, (iii)
ratio of secured indebtedness to gross asset value, (iv) ratio of EBITDA to
interest expense, (v) ratio of EBITDA to debt service and reserve for
replacements, and (vi) ratio of unencumbered net operating income to interest
expense on unsecured indebtedness. The Line is used primarily to finance the
acquisition and development of real estate, but is also available for general
working capital purposes.
On June 29, 1998, the Partnership issued $80 million of 8.125% Series A
Cumulative Redeemable Preferred Units ("Series A Preferred Units") to an
institutional investor, Belair Capital Fund, LLC, in a private placement. The
issuance involved the sale of 1.6 million Series A Preferred Units for $50.00
per unit. The Series A Preferred Units, which may be called by the Partnership
at par on or after June 25, 2003, have no stated maturity or mandatory
redemption, and pay a cumulative, quarterly dividend at an annualized rate of
8.125%. At any time after June 25, 2008, the Series A Preferred Units may be
exchanged for shares of 8.125% Series A Cumulative Redeemable Preferred Stock of
the Company at an exchange rate of one share of Series A Preferred Stock for one
Series A Preferred Unit. The Series A Preferred Units and Series A Preferred
Stock are not convertible into common stock of the Company. The net proceeds of
the offering were used to reduce the Line.
On April 15, 1999 the Partnership completed a $250 million unsecured debt
offering in two tranches. The Company issued $200 million 7.4% notes due April
1, 2004, priced at 99.922% to yield 7.42%, and $50 million 7.75% notes due April
1, 2009, priced at 100%. The net proceeds of the offering were used to reduce
the balance of the Line. On April 30, 1999, the balance of the Line was $206.9
million.
Mortgage loans are secured by certain real estate properties, but generally may
be prepaid subject to a prepayment of a yield-maintenance premium. Mortgage
loans are generally due in monthly installments of interest and principal and
mature over various terms through 2018. Variable interest rates on mortgage
loans are currently based on LIBOR plus a spread in a range of 125 basis points
to 150 basis points. Fixed interest rates on mortgage loans range from 7.04% to
9.8%.
During 1999, the Partnership assumed debt with a fair value of $405.3 million
related to the acquisition of real estate, which includes debt premiums of $4.1
million based upon the above market interest rates of the debt instruments. Debt
premiums are being amortized over the terms of the related debt instruments.
As of March 31, 1999, scheduled principal repayments on notes payable and the
Line for the next five years were as follows (in thousands):
Scheduled
Principal Term Loan Total
Scheduled Payments by Year Payments Maturities Payments
1999 $ 4,908 19,412 24,320
2000 5,519 488,946 494,465
2001 5,387 45,824 51,211
2002 4,687 44,122 48,809
2003 4,654 13,285 17,939
Beyond 5 Years 37,752 239,936 277,688
Net unamortized debt payments -
14,110 14,110
------------ --------- --------
Total $62,907 865,635 928,542
============ ========== ========
<PAGE>
Unconsolidated partnerships and joint ventures had mortgage loans payable of
$58.8 million at March 31, 1999, and the Company's proportionate share of these
loans was $25.5 million.
The Company qualifies and intends to continue to qualify as a REIT under the
Internal Revenue Code. As a REIT, the Company is allowed to reduce taxable
income by all or a portion of its distributions to stockholders. As
distributions have exceeded taxable income, no provision for federal income
taxes has been made by the Company. While the Company intends to continue to pay
dividends to its stockholders, the Company and the Partnership will reserve such
amounts of cash flow as it considers necessary for the proper maintenance and
improvement of the real estate portfolio, while still maintaining the Company's
qualification as a REIT.
The Partnership's real estate portfolio has grown substantially during 1999 as a
result of the acquisitions and development discussed above. The Partnership
intends to continue to acquire and develop shopping centers in the near future,
and expects to meet the related capital requirements from borrowings on the
Line. The Partnership expects to repay the Line from time to time from
additional public and private equity and debt offerings through both the Company
and the Partnership, such as those completed in previous years. Because such
acquisition and development activities are discretionary in nature, they are not
expected to burden the Partnership's capital resources currently available for
liquidity requirements. The Partnership expects that cash provided by operating
activities, unused amounts available under the Line, and cash reserves are
adequate to meet liquidity requirements.
New Accounting Standards and Accounting Changes
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities " (FAS 133), which is effective for all fiscal quarters of all fiscal
years beginning after June 15, 1999. FAS 133 establishes accounting and
reporting standards for derivative instruments and hedging activities. FAS 133
requires entities to recognize all derivatives as either assets or liabilities
in the balance sheet and measure those instruments at fair value. The
Partnership does not believe FAS 133 will materially effect its financial
statements.
Environmental Matters
The Partnership like others in the commercial real estate industry, is subject
to numerous environmental laws and regulations and the operation of dry cleaning
plants at the Partnership's shopping centers is the principal environmental
concern. The Partnership believes that the dry cleaners are operating in
accordance with current laws and regulations and has established procedures to
monitor their operations. The Company has approximately 31 properties that will
require or are currently undergoing varying levels of environmental remediation.
These remediations are not expected to have a material financial effect on the
Company or the Partnership due to financial statement reserves and various
state-regulated programs that shift the responsibility and cost for remediation
to the state. Based on information presently available, no additional
environmental accruals were made and management believes that the ultimate
disposition of currently known matters will not have a material effect on the
financial position, liquidity, or operations of the Company or Partnership.
<PAGE>
Inflation
Inflation has remained relatively low during 1990 and 1998 and has had a minimal
impact on the operating performance of the shopping centers, however,
substantially all of the Partnership's long-term leases contain provisions
designed to mitigate the adverse impact of inflation. Such provisions include
clauses enabling the Partnership to receive percentage rentals based on tenants'
gross sales, which generally increase as prices rise, and/or escalation clauses,
which generally increase rental rates during the terms of the leases. Such
escalation clauses are often related to increases in the consumer price index or
similar inflation indices. In addition, many of the Partnership's leases are for
terms of less than ten years, which permits the Partnership to seek increased
rents upon re-rental at market rates. Most of the Partnership's leases require
the tenants to pay their share of operating expenses, including common area
maintenance, real estate taxes, insurance and utilities, thereby reducing the
Partnership's exposure to increases in costs and operating expenses resulting
from inflation.
Year 2000 System Compliance
Management recognizes the potential effect Year 2000 may have on the
Partnership's operations and, as a result, has implemented a Year 2000
Compliance Project. The term "Year 2000 compliant" means that the software,
hardware, equipment, goods or systems utilized by, or material to the physical
operations, business operations, or financial reporting of an entity will
properly perform date sensitive functions before, during and after the year
2000.
The Partnership's Year 2000 Compliance Project includes an awareness phase, an
assessment phase, a renovation phase, and a testing phase of our data processing
network, accounting and property management systems, computer and operating
systems, software packages, and building management systems. The project also
includes surveying our major tenants and financial institutions. Total costs
incurred to date associated with the Year 2000 compliance project have been
reflected in the Partnership's income statement throughout 1999 and 1998, and
were approximately $250,000.
The Partnership's computer hardware, operating systems, general accounting and
property management systems and principal desktop software applications are Year
2000 compliant as certified by the various vendors. We are currently testing
these systems, and expect to complete the testing phase by June 30, 1999. Based
on testing to date, management does not anticipate any Year 2000 issues that
will materially impact operations or operating results.
An assessment of the Partnership's building management systems has been
completed. This assessment has resulted in the identification of certain
lighting, telephone, and voice mail systems that may not be Year 2000 compliant.
Management has begun upgrading these systems and believes that the cost of these
systems will not exceed $500,000. It is anticipated that the renovation and
testing phases will be complete by June 30, 1999, and the Partnership expects to
be compliant upon completion of these phases.
The Partnership has surveyed its major tenants and financial institutions to
determine the extent to which the Company is vulnerable to third parties'
failure to resolve their Year 2000 issues. Based on the responses to surveys
received to date, no risks were identified to take additional action at this
point.
<PAGE>
Management believes its planning efforts are adequate to address the Year 2000
Issue and that its risk factors are primarily those that it cannot directly
control, including the readiness of its major tenants and financial
institutions. Failure on the part of these entities to become Year 2000
compliant could result in disruption in the Partnership's cash receipt and
disbursement functions. There can be no guarantee, however, that the systems of
unrelated entities upon which the Partnership's operations rely will be
corrected on a timely basis and will not have a material adverse effect on the
Company.
The Partnership is in the process of establishing a formal contingency plan and
expects to have a plan in place by September 30, 1999.
Item 7a. Quantitative and Qualitative Disclosures About Market Risk
Market Risk
The Partnership is exposed to interest rate changes primarily as a result of its
line of credit and long-term debt used to maintain liquidity and fund capital
expenditures and expansion of the Partnership's real estate investment portfolio
and operations. The Partnership's interest rate risk management objective is to
limit the impact of interest rate changes on earnings and cash flows and to
lower its overall borrowing costs. To achieve its objectives the Partnership
borrows primarily at fixed rates and may enter into derivative financial
instruments such as interest rate swaps, caps and treasury locks in order to
mitigate its interest rate risk on a related financial instrument. The
Partnership has no plans to enter into derivative or interest rate transactions
for speculative purposes, and at March 31, 1999, the Partnership did not have
any borrowings hedged with derivative financial instruments.
The Partnership's interest rate risk is monitored using a variety of techniques.
The table below presents the principal amounts maturing (in thousands) based
upon contractual terms, weighted average interest rates of debt remaining, and
the fair value of total debt (in thousands), by year of expected maturity to
evaluate the expected cash flows and sensitivity to interest rate changes.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1999 2000 2001 2002 2003 Thereafter Total Value
---- ---- ---- ---- ---- ---------- ----- -----
Fixed rate debt $8,467 52,954 42,423 48,809 17,939 277,689 448,280 462,390
Average interest rate for all debt 7.98% 8.01% 7.99% 7.87% 7.81% 7.8% - -
Variable rate LIBOR debt $15,853 441,511 8,788 - - - 466,152 466,152
Average interest rate for all debt 6.10% 7.30% - - - - - -
</TABLE>
As the table incorporates only those exposures that exist as of March 31, 1999,
it does not consider those exposures or positions which could arise after that
date. Moreover, because firm commitments are not presented in the table above,
the information presented therein has limited predictive value. As a result, the
Partnership's ultimate realized gain or loss with respect to interest rate
fluctuations will depend on the exposures that arise during the period, the
Company's hedging strategies at that time, and interest rates.
Forward Looking Statements
This report contains certain forward-looking statements (as such term is defined
in the Private Securities Litigation Reform Act of 1995) and information
relating to the Company that is based on the beliefs of the Company's
management, as well as assumptions made by and information currently available
to management. When used in this report, the words "estimate," "project,"
"believe," "anticipate," "intend," "expect" and similar expressions are intended
to identify forward-looking statements. Such statements involve known and
unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievements of the Company, or industry results, to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others, the following: general economic and business conditions; changes
in customer preferences; competition; changes in technology; the integration of
acquisitions, including Pacific; changes in business strategy; the indebtedness
of the Company; quality of management, business abilities and judgment of the
Company's personnel; the availability, terms and deployment of capital; and
various other factors referenced in this report. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date hereof. The Company does not undertake any obligation to publicly
release any revisions to these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
<PAGE>
Item 6 Exhibits and Reports on Form 8-K
Exhibits
3.1 Second Amended and Restated Agreement of Limited Partnership of
Regency Centers, L.P., dated as of March 5, 1998, (incorporated by
reference to Exhibit 10(a) to Regency Realty Corporation's Current
Report on Form 8-K/A filed March 19, 1998)
3.2 Amendment No. 1 to Second Amended and Restated Agreement of Limited
Partnership relating to 8.125% Series A Cumulative Redeemable
Preferred Units (incorporated by reference to Exhibit 3.2 to the
Registration Statement on Form 10 of Regency Centers, L.P.
10.1 Amended and Restated Credit Agreement dated as of February 26, 1999 by
and among Regency Centers, L.P., a Delaware limited partnership (the
"Borrower", Regency Realty Corporation, a Florida corporation (the
"Parent"), each of the financial institutions, initially a signatory
hereto together with their assignees, (the "Lenders"), and Wells Fargo
Bank, National Association, as contractual representative of the
Lenders to the extent and in the manner provided (filed as an exhibit
to Regency Realty Corporation's Form 10-K filed March 15, 1999 and
incorporated herein by reference)
10.3 Indenture dated as of July 20, 1998 among Regency Centers, L.P., the
Guarantors named therein and First Union National Bank, as trustee
(incorporated by reference to Exhibit 10.2 to the Registration
Statement on Form 10 of Regency Centers, L.P.)
10.4 Indenture dated as of March 9, 1999 between Regency Centers, L.P., the
guarantors named therein and First Union National Bank, as trustee
(incorporated by reference to Exhibit 4.1 to the registration
statement on Form S-3 of Regency Centers, L.P., No. 333-72899)
27.1 Financial Data Schedule
Reports on Form 8-K.
None
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: May 17, 1999 REGENCY CENTERS, L..P.
By: /s/ J. Christian Leavitt
Senior Vice President
and Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM REGENCY
CENTERS, L.P. QUARTERLY REPORT FOR THE PERIOD ENDED 3/31/99
</LEGEND>
<CIK> 0001066247
<NAME> REGENCY CENTERS, L.P.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 26,184,563
<SECURITIES> 0
<RECEIVABLES> 29,039,103
<ALLOWANCES> 7,875,038
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 2,334,514,310
<DEPRECIATION> 47,442,799
<TOTAL-ASSETS> 2,346,549,345
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,366,179,023
<TOTAL-LIABILITY-AND-EQUITY> 2,346,549,346
<SALES> 0
<TOTAL-REVENUES> 47,007,923
<CGS> 0
<TOTAL-COSTS> 10,673,495
<OTHER-EXPENSES> 8,506,319
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,657,960
<INCOME-PRETAX> 14,574,740
<INCOME-TAX> 0
<INCOME-CONTINUING> 14,574,740
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,949,739
<EPS-PRIMARY> 0.33
<EPS-DILUTED> 0.33
</TABLE>
