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, 1998
( ) 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 (I.R.S. Employer
incorporation or organization) identification No.)
121 West Forsyth Street, Suite 200 (904) 356-7000
Jacksonville, Florida 32202 (Registrant's telephone No.)
(Address of principal
executive offices) (zip code)
Securities registered pursuant to Section 12(b) of the Act:
None
(Title of Class)
Not Applicable
(Name of exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act:
Class B Units of Partnership Interest
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 and (2) has been subject to such filing requirements for
the past 90 days. YES (X) NO ( )
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K 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. (X)
The aggregate market value of the voting and non-voting common stock held by
non-affiliates of the Registrant and the number of shares of Registrant's voting
common stock outstanding is not applicable.
Documents Incorporated by Reference
Regency Realty Corporation is the general partner of Regency Centers, L.P.
Portions of Regency Realty Corporation's Proxy Statement in connection with its
1999 Annual Meeting of Shareholders are incorporated by reference in Part III.
<PAGE>
TABLE OF CONTENTS
Form 10-K
Item No. Report Page
- -------- -----------
PART I
1. Business................................................................1
2. Properties..............................................................6
3. Legal Proceedings......................................................13
4. Submission of Matters to a Vote of Security Holders....................13
PART II
5. Market for the Registrant's Common Equity and
Related Shareholder Matters............................................13
6. Selected Consolidated Financial Data...................................15
7. Management's Discussion and Analysis of Financial Condition and
Results of Operations..................................................16
7a. Quantitative and Qualitative Disclosures About Market Risk.............22
8. Consolidated Financial Statements and Supplementary Data...............23
9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure...................................................23
PART III
10. Directors and Executive Officers of the Registrant.....................23
11. Executive Compensation.................................................24
12. Security Ownership of Certain Beneficial Owners and Management.........24
13. Certain Relationships and Related Transactions.........................25
PART IV
14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K......25
<PAGE>
PART I
Item 1. Business
Regency Realty Corporation ("Regency" or "Company") acquires, owns, develops and
manages neighborhood shopping centers in targeted infill markets. Regency formed
Regency Centers, L.P. ("RCLP" or the "Partnership"), a limited partnership and a
public registrant, in 1996, and consolidated substantially all of its retail
shopping centers into the Partnership during 1998. The Partnership is now the
primary entity through which Regency owns its properties, conducts its business
and through which Regency intends to expand its ownership and operation of
retail shopping centers. The Company believes that the tax deferral advantages
offered by the Partnership increase the attractiveness of the Partnership's
units as consideration for property acquisitions.
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; and accordingly,
Regency's philosophies related to shareholder value include these Unit holders.
See Item 5. Market for the Registrant's Common Equity and Related Shareholder
Matters for further discussion of these transactions. At December 31, 1998,
Regency owned approximately 96% of the outstanding common operating partnership
units of RCLP.
Regency, the general partner of RCLP, fully controls the operating and investing
decisions of RCLP; and accordingly, the following business discussion is
identical for both Regency and the Partnership, except that the number of
properties owned by Regency is greater than the number of properties owned by
the Partnership. As of December 31, 1998, Regency owned, directly or indirectly,
129 properties in the eastern half of the United States, containing
approximately 14.7 million square feet of gross leasable area ("GLA"). As of
December 31, 1998, the Partnership owned, directly or indirectly, 109 properties
in the eastern half of the United States, containing approximately 12.4 million
square feet of gross leasable area ("GLA").
As of December 31, 1998, Regency had an investment in real estate of
approximately $1.3 billion and approximately 58% of Regency's GLA was located in
Georgia and Florida. Regency's shopping centers (excluding centers under
development) were approximately 93% leased as of December 31, 1998. At December
31, 1998, the Partnership had an investment in real estate of $1.1 billion,
which was 93.6% leased (excluding centers under development).
On February 26, 1999, Regency's shareholders approved the merger of Pacific
Retail Trust ("Pacific") into the Company, in a stock for stock transaction
(0.48 Regency share for 1 Pacific share). Regency concurrently contributed all
the properties into the Partnership for additional Class B Units. At December
31, 1998, Pacific owned 71 retail shopping centers that are operating or under
construction containing 8.4 million SF of GLA. The total cost to acquire Pacific
is expected to be $1.157 billion based on the value of Regency shares issued,
the assumption of $379 million of outstanding debt and other liabilities, and
estimated transaction costs. Pacific's shopping centers are located primarily in
California and Texas.
Regency, a Florida corporation organized in 1993, commenced operations as a real
estate investment trust (REIT) in 1993 with the completion of its initial public
offering, and was the successor to the real estate business of The Regency
Group, Inc. which had operated since 1963.
Operating and Investment Philosophy
Regency's key operating and investment objective is to create long-term
shareholder value by:
o growing its high quality real estate portfolio of grocery-anchored
neighborhood shopping centers in attractive infill markets,
o maximizing the value of the portfolio through its "Retail
Operating System," developed in conjunction with Security Capital
Holdings, S.A. ("SC-USREALTY"), which incorporates research based
investment strategies, value-added leasing and management systems,
and customer-driven development programs, and
o using conservative financial management and Regency's substantial
capital base to access the most cost effective capital to fund
Regency's growth.
Management believes that the key to achieving its objective is its single focus
on, and growing critical mass of, quality grocery-anchored neighborhood shopping
centers. In the opinion of management, the Company's premier platform of
shopping centers in targeted markets, its proprietary research capabilities, its
value enhancing Retail Operating System, its cohesive and experienced management
team and its access to competitively priced capital enable it to maintain a
competitive advantage over other operators.
Regency believes that ownership of the approximately 30,000 shopping centers
throughout the United States is highly fragmented, with less than 10% owned by
REITs, and that many centers are held by unsophisticated and undercapitalized
owners. Regency has identified approximately 1,000 centers in its target markets
as potential acquisition opportunities, of which less than 10% are owned by
REITs. As a result, Regency believes that an opportunity exists for it to be a
consolidating force in the industry. In addition, Regency believes that through
proprietary demographic research and targeting, its portfolio and tenant mix can
be customized for and marketed to national and regional retailers, thereby
producing greater sales and a value-added shopping environment for both retailer
and shopper.
Regency's shopping center properties feature some of the most attractive
characteristics in the industry:
o an average age of 8 years,
o an average remaining grocery-anchor lease term of 14 years, and
o an average grocery-anchor size of 49,000 square feet (43% of the square
footage of the grocery-anchored centers on average).
Grocery-Anchored Infill Strategy
Regency focuses its investment strategy on grocery-anchored infill shopping
centers. Infill locations are situated in densely populated residential
communities where there are significant barriers to entry, such as zoning
restrictions, growth management laws or limited availability of sites for
development or expansions. Regency is focused on building a platform of
grocery-anchored neighborhood shopping centers because grocery stores provide
convenience shopping for daily necessities, generate foot traffic for adjacent
"side shop" tenants and should be better able to withstand adverse economic
conditions. By developing close relationships with the leading supermarket
chains, Regency believes it can attract the best "side shop" merchants and
enhance revenue potential.
Research Driven Market Selection
Regency has identified 21 markets in the eastern half of the United States as
target markets. These markets were selected because, in general, they offer
greater growth in population, household income and employment than the national
averages. In addition, Regency believes that it can achieve "critical mass" in
these markets (defined as owning or managing 4 to 5 shopping centers) and that
it can generate sustainable competitive advantages, through long-term leases to
the predominant grocery-anchor and other barriers to entry from competition.
Within these markets, Regency's research staff further defines and selects
submarkets and trade areas based on additional analysis of the above data.
Regency then identifies target properties and their owners (including
development opportunities) within these submarkets and trade areas based on
3-mile radius demographic data and ranks potential properties for purchase. The
properties currently owned by Regency are in submarkets with an average 3-mile
population of 69,000, average household income of $62,000 and projected 5-year
population growth of 12%.
Retail Operating System
Regency's Retail Operating System drives its value-added operating strategy. Its
Retail Operating System is characterized by:
o proactive leasing and management;
o value enhancing remerchandising initiatives;
o Regency's "preferred customer initiative"; and
o a customer-driven development and redevelopment program.
Proactive leasing and management
Regency's integrated approach to property management strengthens its leasing and
management efforts. Property managers are an integral component of the
acquisition and integration teams. Thorough, candid tenant interviews by
property managers during acquisition due diligence allow Regency to quickly
assess both problem areas as well as opportunities for revenue enhancement prior
to closing. Property managers are responsible not only for the general
operations of their centers, but also for coordinating leasing efforts, thereby
aligning their interests with Regency's. In addition, Regency's information
systems allow managers to spot future lease expirations and to proactively
market and remerchandise spaces several years in advance of such expirations.
Value enhancing remerchandising initiatives
Regency believes that certain shopping centers under serve their customers,
reducing foot traffic and negatively affecting the tenants located in the
shopping center. In response, Regency is initiating a remerchandising program
directed at obtaining the optimum mix of tenants offering goods, personal
services and entertainment and dining options in each of its shopping centers.
By re-tenanting shopping centers with tenants that more effectively service the
community, Regency expects to increase sales, and therefore the value of its
shopping centers.
Preferred customer initiative
Regency has established a preferred customer initiative with dedicated personnel
whose goal is to establish new or strengthen existing strategic relationships
with successful retailers at the national, regional and local levels. Regency
achieves this goal by establishing corporate relationships, negotiating standard
lease forms and working with the preferred customers to match expansion plans
with future availability in Regency's shopping centers. Regency monitors retail
trends and the operating performance of these preferred customers. Management
expects the benefits of the preferred customer initiative to improve the
merchandising and performance of the shopping centers, establish brand
recognition among leading operators, reduce turnover of tenants and reduce
vacancies. Regency currently has identified and is developing relationships with
45 preferred customers, including Radio Shack, GNC, Hallmark Cards, Mailboxes,
Etc. and Starbucks Coffee, and continues to target additional tenants with which
to establish preferred customer relationships.
Customer-driven development and redevelopment program
Regency conducts its development and redevelopment program in close cooperation
with its major customers, including Kroger, Publix and Eckerd. Regency uses its
development capabilities to service its customer's growth needs by building or
re-developing modern properties with state of the art supermarket formats that
generate higher returns for Regency under new long-term leases. In 1998, Regency
through RCLP began development on 21 retail projects, including new
developments, redevelopments and build-to-suits and upon completion, Regency
will have invested $152 million in these projects. During 1997, Regency through
RCLP began development on 16 retail projects, including new developments,
redevelopments and build-to-suits and upon completion, Regency will have
invested $87 million in these projects. Regency manages its development risk by
obtaining signed anchor leases prior to beginning construction.
Acquisition Track Record
Regency has grown its asset base significantly through acquisitions over the
last several years, acquiring properties totaling $384.3 million in 1998, $395.7
million in 1997 and $107.1 million in 1996. With the exception of two properties
representing $31.9 million of invested capital, all of these acquisitions are
owned by RCLP. Through these acquisitions, Regency has diversified
geographically from its predominantly Florida-based portfolio and established a
presence in many of its target markets. Upon identifying an acquisition target,
Regency utilizes expertise from all of its functional areas, including
acquisitions, due diligence and property management, to determine the
appropriate purchase price and to develop a business plan for the center and
design an integration plan for the management of the center. Regency believes
that its established acquisition and integration procedures produce higher
returns on its portfolio, reduce risk and position Regency to capitalize on
consolidation in the shopping center industry.
Capital Strategy
Regency intends to maintain a conservative capital structure designed to enhance
access to capital on favorable terms, to allow growth through development and
acquisition and to promote future earnings growth, however, neither Regency nor
the Partnership's organizational documents limit the amount of debt that may be
incurred. Limitations have been established within the covenants of certain loan
agreements related to the Partnership's line of credit and medium term notes.
As of December 31, 1998, the Partnership had secured and unsecured debt of
$241.5 million and $238.9 million, respectively. Substantially all of the
Partnership's debt is cross-defaulted, but not cross-collateralized. Pursuant to
the Partnership's $300 million unsecured line of credit (increased to $635
million with the merger of Pacific Retail Trust), the Partnership is required to
comply, and is complying with certain financial and other covenants customary
with this type of unsecured financing. These financial covenants include (1)
maintenance of minimum net worth, (2) ratio of total liabilities to gross asset
value, (3) ratio of secured indebtedness to gross asset value, (4) ratio of
EBITDA to interest expense, (5) ratio of EBITDA to debt service and reserve for
replacements, and (6) ratio of unencumbered net operating income to interest
expense on unsecured indebtedness. In addition, the Partnership may not enter
into a negative pledge agreement with another lender and may not incur other
floating rate debt in excess of 25% of gross asset value without interest rate
protection. The line is used primarily to finance the acquisition and
development of real estate, but is also available for general working capital
purposes.
Since Regency's initial public offering in 1993, Regency has financed its growth
in part through a series of public and private offerings of Regency equity and
RCLP units totaling, as of December 31, 1998, approximately $677 million,
including the utilization by RCLP of its units as consideration for
acquisitions.
Risk Factors Relating to Ownership of Regency Common Stock or Partnership Units
The Company and the Partnership are subject to certain business risks arising in
connection with owning real estate which include, among others:
o the bankruptcy or insolvency of, or a downturn in the business of,
any of its major tenants could reduce cash flow,
o the possibility that such tenants will not renew their leases as
they expire or renew at lower rental rates could reduce cash flow,
o vacated anchor space will affect the entire shopping center because of
the loss of the departed anchor tenant's customer drawing power,
o poor market conditions could create an over supply of space or a
reduction in demand for real estate in markets where the Company owns
shopping centers,
o the Company's rapid growth could place strains on its resources,
o risks relating to leverage, including uncertainty that the Company
or the Partnership will be able to refinance its indebtedness, and
the risk of higher interest rates,
o unsuccessful development activities could reduce cash flow,
o the Company or Partnership's inability to satisfy its cash
requirements for operations and the possibility that they may be
required to borrow funds to meet distribution requirements in
order to maintain the Company's qualification as a REIT,
o potential liability for unknown or future environmental matters
and costs of compliance with the Americans with Disabilities Act,
o the risk of uninsured losses, and
o unfavorable economic conditions could also result in the inability
of tenants in certain retail sectors to meet their lease obligations
and otherwise could adversely affect the Company's or Partnership's
ability to attract and retain desirable tenants.
Compliance with Governmental Regulations
Under various federal, state and local laws, ordinances and regulations, an
owner or manager of real estate may be liable for the costs of removal or
remediation of certain hazardous or toxic substances on such property. 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 the owner's ability to sell or rent the property or borrow
using the property as collateral. Regency 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 due to financial statement reserves and various
state-regulated programs that shift the responsibility and cost for remediation
to the state.
Competition
The Company believes the ownership of shopping centers is highly fragmented,
with less than 10% owned by REITs. Regency faces competition from other REITs in
the acquisition, ownership and leasing of shopping centers as well as from
numerous small owners. Regency competes for the development of shopping centers
with other REITs engaged in development activities as well as with local,
regional and national real estate developers. Regency develops properties by
applying its proprietary research methods to identify development and leasing
opportunities and by pre-leasing an average of 85% of a center before beginning
construction. Regency competes for the acquisition of properties through
proprietary research that identifies opportunities in markets with high barriers
to entry and higher-than-average population growth and household income. Regency
seeks to maximize rents per square foot by establishing relationships with
supermarket chains that are first or second in their markets and leasing
non-anchor space in multiple centers to national or regional tenants. There can
be no assurance, however, that other real estate owners or developers will not
utilize similar research methods and target the same markets and anchor tenants
that Regency targets or that such entities will successfully control these
markets and tenants to the exclusion of Regency.
Changes in Policies
The Company, as general partner, determines RCLP's policies with respect to
certain activities, including its debt capitalization, growth, distributions,
and investment and operating strategies. The Company has no present intention to
amend or revise these policies. However, the Company may do so at any time
without a vote of the unitholders.
Employees
The Company's headquarters are located in Jacksonville, Florida. The Company
presently maintains offices in which it conducts management and leasing
activities located in Florida, Georgia, North Carolina, Ohio, and Missouri. As
of December 31, 1998, the Company had approximately 240 employees and believes
that relations with its employees are good.
<PAGE>
Item 2. Properties
<TABLE>
The Partnerships's properties summarized by state including their gross
leasable areas (GLA) follows:
<CAPTION>
December 31, 1998 December 31, 1997
----------------- -----------------
Location # Properties GLA % Leased # Properties GLA % Leased
-------- ------------ ---------- -------- ------------ ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Florida 36 4,571,617 92.9% 35 4,111,279 93.5%
Georgia 25 2,560,383 92.8% 24 2,463,180 92.6%
Ohio 12 1,527,510 96.8% 1 374,743 96.1%
North Carolina 12 1,239,783 98.3% 6 554,332 99.0%
Texas 5 479,900 84.7% - - -
Colorado 5 447,569 89.4% - - -
Tennessee 4 295,179 96.8% 3 208,386 98.5%
Virginia 2 197,324 97.7% - - -
Michigan 2 177,929 81.5% - - -
South Carolina 2 162,056 100.0% 1 79,743 84.3%
Delaware 1 232,752 94.8% - - -
Kentucky 1 205,060 95.6% - - -
Illinois 1 178,600 86.9% - - -
Missouri 1 82,498 99.8% - - -
------------- ---------- ------- ----------- --------- -------
Total 109 12,358,160 93.6% 70 7,791,663 93.8%
============= ========== ======= =========== ========= =======
</TABLE>
<PAGE>
<TABLE>
The following table summarizes the largest tenants occupying the Partnership's
shopping centers based upon a percentage of total annualized base rent exceeding
.5% at December 31, 1998:
<CAPTION>
Summary of Principal Tenants > .5% of Annualized Base Rent
(including Properties Under Development)
% of % of Annualized # of
Tenant SF Owned GLA Rent Base Rent Stores
------ -- --------- ---- --------------- ------
<S> <C> <C> <C> <C> <C>
Kroger 2,180,363 17.6% $18,496,049 17.3% 36
Publix 1,258,351 10.2% 8,313,059 7.8% 28
Winn Dixie 589,079 4.8% 4,243,457 4.0% 12
Blockbuster 208,418 1.7% 3,014,616 2.8% 34
K-Mart 507,645 4.1% 2,615,359 2.4% 6
Harris Teeter 187,363 1.5% 2,261,650 2.1% 4
Walgreens 151,865 1.2% 1,504,772 1.4% 11
Wal-Mart 224,169 1.8% 1,026,993 1.0% 2
Eckerd 176,891 1.4% 1,509,377 1.4% 18
A & P 71,622 0.6% 418,873 0.4% 2
CVS Drugs 94,206 0.8% 760,221 0.7% 10
Albertsons 55,377 0.4% 630,772 0.6% 1
Delchamps 47,786 0.4% 376,474 0.4% 1
</TABLE>
The Partnership's leases have lease terms generally ranging from three to five
years for tenant space under 5,000 square feet. 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
Partnership's leases provide for the monthly payment in advance of fixed minimum
rentals, 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 expenses, and reimbursement for utility costs if not directly
metered.
The following table sets forth a schedule of lease expirations for the next ten
years, assuming that no tenants exercise renewal options:
Future
Percent of Minimum Percent of
Lease Total Rent Total
Expiration Expiring Partnership Expiring Minimum
Year GLA GLA Leases Rent (2)
---- --- --- ------ --------
(1) 173,291 1.7% $ 2,194,372 2.1%
1999 675,246 6.5% 8,216,499 8.0%
2000 758,976 7.3% 9,051,013 8.8%
2001 1,017,905 9.9% 12,592,774 12.2%
2002 981,518 9.5% 10,615,179 10.3%
2003 743,734 7.2% 9,131,742 8.8%
2004 591,152 5.7% 5,586,383 5.4%
2005 179,063 1.7% 1,864,461 1.8%
2006 488,689 4.7% 3,983,914 3.9%
2007 438,902 4.2% 4,172,640 4.0%
2008 547,828 5.3% 4,189,606 4.1%
-----------------------------------------------------------
10 Yr Total 6,596,304 63.84% $ 71,598,583 69.31%
-----------------------------------------------------------
(1) leased currently under month to month rent or in process of renewal
(2) total minimum rent includes current minimum rent and future contractual
rent steps for all properties, but excludes additional rent such as
percentage rent, common area maintenance, real estate taxes and insurance
reimbursements.
See the property table below and also see Item 7, Management's Discussion and
Analysis for further information about the Partnership's properties.
<PAGE>
<TABLE>
<CAPTION>
Gross
Year Leasable
Year Con- Area Percent Grocery
Property Name Acquired structed (1) (GLA) Leased (2) Anchor
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FLORIDA
Jacksonville /
North Florida
Anastasia 1993 1988 102,342 95.1% Publix
Bolton Plaza 1994 1988 172,938 100.0% --
Carriage Gate 1994 1978 76,833 100.0% --
Courtyard (3) 1993 1987 67,794 45.8% Albertsons(4)
Ensley Square (5) 1997 1977 62,361 100.0% Delchamps
Fleming Island 1998 1994 80,205 98.9% Publix
Highlands Square (6) 1998 1999 226,682 87.1% Publix/Winn-Dixie
Millhopper (3) 1993 1974 84,064 97.0% Publix
Newberry Square 1994 1986 180,524 98.0% Publix
Old St. Augustine Plaza 1996 1990 170,220 98.2% Publix
Palm Harbour 1996 1991 171,891 94.6% Publix
Pine Tree Plaza (6) 1997 1999 60,752 94.1% Publix
Regency Court 1997 1992 218,665 78.3% --
South Monroe 1996 1998 80,187 97.0% Winn-Dixie
Tampa / Orlando
Beneva 1998 1987 141,532 97.1% Publix
Bloomingdale Square 1998 1987 267,935 99.0% Publix
Mainstreet Square 1997 1988 107,159 90.5% Winn-Dixie
Mariner's Village 1997 1986 117,665 94.4% Winn-Dixie
Market Place - St. Petersburg 1995 1983 90,296 100.0% Publix
Peachland Promenade 1995 1991 82,082 96.5% Publix
Regency Square 1993 1986 341,446 87.3% --
at Brandon (3)
Seven Springs 1994 1986 162,580 93.1% Winn-Dixie
Terrace Walk (3) 1993 1990 50,926 40.4% --
Town Square 1997 1986 42,969 40.2% --
University Collections 1996 1984 106,627 96.8% Kash N Karry(4)
Village Center-Tampa 1995 1993 181,110 95.5% Publix
West Palm Beach /
Treasure Coast
Boynton Lakes Plaza 1997 1993 130,724 91.0% Winn-Dixie
Chasewood Plaza (3) 1993 1986 141,034 87.5% Publix
Chasewood Storage (3) 1993 1986 42,810 99.9% --
East Port Plaza 1997 1991 235,842 94.9% Publix
Martin Downs Village Center(3) 1993 1985 121,956 90.9% --
Martin Downs 1993 1998 49,773 94.0% --
Village Shop (3)(6)
Ocean Breeze (3) 1993 1985 111,551 83.9% Publix
Ocean East (5) 1996 1997 112,894 60.5% Stuart Foods
Tequesta Shoppes 1996 1986 109,766 92.9% Publix
Town Center at Martin Downs 1996 1996 64,546 93.5% Publix
Wellington Market Place 1995 1990 178,155 94.1% Winn-Dixie
Wellington Town Square 1996 1982 105,150 98.2% Publix
Miami / Ft. Lauderdale
Aventura (3) 1994 1974 102,876 96.4% Publix
Berkshire Commons 1994 1992 106,534 99.8% Publix
Garden Square 1997 1991 90,258 97.1% Publix
North Miami (3) 1993 1988 42,500 100.0% Publix
Palm Trails Plaza 1997 1998 76,067 95.9% Winn-Dixie
Shoppes @ 104 1998 1990 108,189 95.4% Winn Dixie
Tamiami Trail 1997 1987 110,867 100.0% Publix
University Market Place 1993 1990 129,121 73.3% Albertsons(4)
Welleby 1996 1982 109,949 93.5% Publix
------------------------------
Subtotal/Weighted
Average(Florida) 5,728,347 91.4%
------------------------------
<PAGE>
GEORGIA
Atlanta
Ashford Place 1997 1993 53,345 100.0% --
Braelin Village (5) 1997 1991 226,522 98.8% Kroger
Briarcliff LaVista 1997 1962 39,201 100.0% --
Briarcliff Village (6) 1997 1990 192,660 89.0% Publix
Buckhead Court 1997 1984 55,227 93.9% --
Cambridge Square 1996 1979 68,725 77.8% --
Cromwell Square 1997 1990 81,826 81.7% --
Cumming 400 1997 1994 126,899 94.8% Publix
Delk Spectrum (3)(5) 1998 1991 100,880 100.0% A&P
Dunwoody Hall 1997 1986 82,525 97.6% A&P
Dunwoody Village (5) 1997 1975 114,657 94.1% Ingles
Loehmann's Plaza 1997 1986 137,635 90.8% --
Lovejoy Station 1997 1995 77,336 98.3% Publix
Memorial Bend 1997 1995 182,778 93.9% Publix
Orchard Square 1995 1987 85,940 94.6% A&P
Paces Ferry Plaza 1997 1987 61,693 91.4% --
Powers Ferry Square 1997 1987 97,809 96.1% Harry's
Powers Ferry Village 1997 1994 78,995 100.0% Publix
Rivermont Station 1997 1996 90,267 100.0% Harris Teeter
Roswell Village (6) 1997 1997 143,980 97.2% Publix
Russell Ridge 1994 1995 98,556 96.6% Kroger
Sandy Plains Village 1996 1992 175,034 94.4% Kroger
Sandy Springs Village 1997 1997 48,245 11.2% --
Trowbridge Crossing (5) 1997 1997 62,558 86.8% Publix
Other Markets
Evans Crossing 1998 1993 83,680 100.0% Kroger
LaGrangeMarketplace(3) 1993 1989 76,327 95.5% Winn-Dixie
Parkway Station (5) 1996 1983 94,290 94.5% Kroger
------------------------------
Subtotal/Weighted
Average(Georgia) 2,737,590 93.1%
------------------------------
OHIO
Cincinnati
Beckett Commons 1998 1995 80,434 100.0% Kroger
Cherry Grove 1998 1997 186,040 93.5% Kroger
Hamilton Meadows 1998 1989 126,251 97.8% Kroger(4)
Hyde Park Plaza (5) 1997 1995 374,743 97.4% Kroger/Winn-Dixie
Shoppes at Mason 1998 1997 80,880 95.1% Kroger
Silverlake 1998 1988 100,245 91.0% Kroger
Westchester Plaza 1998 1988 88,181 100.0% Kroger
Columbus
East Pointe 1998 1993 86,520 100.0% Kroger
Kingsdale (3)(6) 1997 1999 259,011 73.0% Big Bear
North Gate/(Maxtown) 1998 1996 85,100 95.9% Kroger
Park Place 1998 1988 106,832 96.2% Big Bear
Windmiller Plaza 1998 1997 119,192 97.1% Kroger
Worthington 1998 1991 93,092 100.0% Kroger
------------------------------
Subtotal/Weighted
Average(Ohio) 1,786,521 93.4%
------------------------------
<PAGE>
NORTH CAROLINA
Asheville
Oakley Plaza 1997 1988 118,727 98.7% Bi-Lo
Charlotte
Carmel Commons 1997 1979 132,648 95.3% Fresh Market
City View 1996 1993 77,550 100.0% Winn-Dixie
Union Square 1996 1989 97,191 100.0% Harris Teeter
Raleigh / Durham
Bent Tree Plaza 1998 1994 79,503 100.0% Kroger
Garner Town Square 1998 1998 221,450 100.0% Kroger
Glenwood Village 1997 1983 42,864 100.0% Harris Teeter
Lake Pine Plaza 1998 1997 87,690 97.6% Kroger
Maynard Crossing 1998 1997 122,813 100.0% Kroger
Southpoint Crossing (7) 1998 1998 101,404 89.4% Kroger
Woodcroft 1996 1984 85,353 100.0% Food Lion
Winston-Salem
Kernersville Marketplace 1998 1997 72,590 100.0% Kroger
------------------------------
Subtotal/Weighted
Average(North Carolina) 1,239,783 98.3%
- -------------------------------------------------------------------------------------------------------------
ALABAMA
Birmingham
Villages of Trussville (3) 1993 1987 69,280 97.7% Bruno's
West County Marketplace (3) 1993 1987 129,155 100.0% Food World (4)
Montgomery
Country Club (3) 1993 1991 67,622 96.3% Winn-Dixie
Other Markets
Bonner's Point (3) 1993 1985 87,280 98.6% Winn-Dixie
Marketplace - 1993 1987 162,723 100.0% Winn-Dixie
Alexander City (3)
------------------------------
Subtotal/Weighted
Average(Alabama) 516,060 99.0%
------------------------------
COLORADO
Colorado Springs
Cheyenne Meadows (5) 1998 1998 89,085 97.6% King Soopers
Jackson Creek (6)(7) 1998 1999 85,259 89.4% Kroger
Woodman Plaza (6)(7) 1998 1998 103,313 70.4% King Soopers
Denver
Lloyd King Center (5) 1998 1998 83,286 98.4% King Soopers
Stroh Ranch (6)(7) 1998 1998 86,626 95.2% King Soopers
------------------------------
Subtotal/Weighted
Average(Colorado) 447,569 89.4%
------------------------------
<PAGE>
TEXAS
Dallas
Bethany Lake (5)(6) 1998 1998 91,674 68.3% Kroger
Creekside (5) 1998 1998 96,816 94.2% Kroger
Preston Brook - Frisco (5)(6) 1998 1998 91,373 77.8% Kroger
Shiloh Springs (7) 1998 1998 81,865 94.0% Kroger
Village Center - Southlake (5) 1998 1998 118,172 88.6% Kroger
------------------------------
Subtotal/Weighted
Average(Texas) 479,900 84.7%
------------------------------
TENNESSEE
Nashville
Harpeth Village (5) 1997 1998 70,091 100.0% Albertsons
Marketplace - 1997 1997 23,500 100.0% --
Murphreesburo (5)
Nashboro Village (7) 1998 1998 86,793 89.1% Kroger
Peartree Village 1997 1997 114,795 100.0% Harris Teeter
------------------------------
Subtotal/Weighted
Average(Tennessee) 295,179 96.8%
------------------------------
VIRGINIA
Brookville Plaza 1998 1991 63,664 97.6% Kroger
Statler Square 1998 1996 133,660 97.7% Kroger
------------------------------
Subtotal/Weighted
Average(Virginia) 197,324 97.7%
------------------------------
MISSISSIPPI
Columbia Marketplace(3) 1993 1988 136,002 98.7% Winn-Dixie
Lucedale Marketplace(3) 1993 1989 49,059 94.7% Delchamps
------------------------------
Subtotal/Weighted
Average(Mississippi) 185,061 97.6%
------------------------------
MICHIGAN
Lakeshore 1998 1996 85,478 99.0% Kroger
Waterford 1998 1998 92,451 65.3% Kroger
------------------------------
Subtotal/Weighted
Average(Michigan) 177,929 81.5%
------------------------------
SOUTH CAROLINA
Merchants Village 1997 1997 79,723 100.0% Publix
Queensborough (5) 1998 1993 82,333 100.0% Publix
------------------------------
Subtotal/Weighted
Average(South Carolina) 162,056 100.0%
-----------------------------
<PAGE>
DELAWARE
Pike Creek 1998 1981 232,752 94.8% Acme
KENTUCKY
Franklin Square 1998 1988 205,060 95.6% Kroger
ILLINOIS
Hinsdale Lake Commons 1998 1986 178,600 86.9% Dominick's
MISSOURI
St. Ann Square 1998 1986 82,498 99.8% National
------------------------------
Total Weighted Average 14,652,229 92.9%
==============================
<CAPTION>
Drug Store & Other
Property Name Other Anchors Tenants
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FLORIDA
Jacksonville /
North Florida
Anastasia -- Hallmark, Schmagel's Bagels, Mailboxes
Bolton Plaza Wal-Mart Radio Shack, Payless Shoes, Mailboxes
Carriage Gate TJ Maxx Brueggers Bagels, Bedfellows, Alterations
Courtyard (3) -- Olan Mills, Heavenly Ham, Beauty Warehouse
Ensley Square (5) -- Radio Shack, Hallmark, Amsouth Bank
Fleming Island -- Mail Boxes, Etc., Radio Shack, GNC
Highlands Square (6) Eckerd, Consolidated Stores Hair Cuttery, Rent Way, Precision Printing
Millhopper (3) Eckerd Book Gallery, Postal Svc., Chesapeake Bagel
Newberry Square Kmart H & R Block, Cato Fashions, Olan Mills
Old St. Augustine Plaza Eckerd, Waccamaw Mail Boxes, Etc., Hallmark, Hair Cuttery
Palm Harbour Eckerd, Bealls Mail Boxes, Etc., Hallmark, Meale Norman
Pine Tree Plaza (6) -- Great Clips, CiCi's Pizza, Soupersalad
Regency Court CompUSA, Office Depot H & R Block, Mail Boxes Etc.
Sports Authority Loop Restaurant
South Monroe Eckerd Rent-A-Center, H & R Block
Tampa / Orlando
Beneva Walgreen's Stride Rite, GNC, Subway
Bloomingdale Square Eckerd, Wal-Mart, Beall's Radio Shack, H&R Block, Hallmark
Mainstreet Square Walgreen's Rent-A-Center, Discount Auto Parts, Norwest
Mariner's Village Walgreen's Supercuts. Pak Mail, Allstate Insurance
Market Place - St. Petersburg Eckerd Mail Boxes, Etc., Republic, Weight Watchers
Peachland Promenade Ace Hardware State Farm, Subway, GNC
Regency Square TJ Maxx, AMC, Pak Mail, Lens Crafter
at Brandon (3) Staples, Marshalls Famous Footware
Seven Springs Kmart State Farm, Subway, H & R Block
Terrace Walk (3) -- Olan Mills, Norwest, Cellular Mart
Town Square -- Baskin Robbins, Coldwell Banker, Hallmark
University Collections Eckerd Hallmark, Pak Mail, Dockside Imports
Village Center-Tampa Walgreen's, Stein Mart Hallmark, Pak Mail, Mens Warehouse
West Palm Beach /
Treasure Coast
Boynton Lakes Plaza Walgreen's Radio Shack, Baskin Robbins, Dunkin Donuts
Chasewood Plaza (3) Walgreen's Hallmark, GNC, Supercuts
Chasewood Storage (3) --
East Port Plaza Walgreen's, Kmart, Sears H & R Block, Pak Mail, Subway
Martin Downs Village Center(3) Coastal Care Burger King, Hallmark, Barnett Bank
Martin Downs Walgreen's Mailbox Plus, Allstate, Optical Outlet
Village Shop (3)(6)
Ocean Breeze (3) Walgreen's, Coastal Care Mail Boxes, Barnett Bank, World Travel
Ocean East (5) Coastal Care Mail Boxes, Nations Bank, Ocean Cleaners
Tequesta Shoppes Walgreen's Mail Boxes, Etc., Hallmark, Radio Shack
Town Center at Martin Downs -- Mail Boxes, Health Exchange, Champs Hair
Wellington Market Place Walgreen's, United Artists Pak Mail, Subway, Papa John's
Wellington Town Square Eckerd Mail Boxes, Hallmark, Coldwell Banker
Miami / Ft. Lauderdale
Aventura (3) Eckerd, Humana Pak Mail, Bank United, City of Aventura
Berkshire Commons Walgreen's H & R Block, Century 21, Postal Station
Garden Square Eckerd Subway, GNC, Hair Cuttery
North Miami (3) Eckerd
Palm Trails Plaza -- Mail Boxes, Sal's Pizza, Personnel One
Shoppes @ 104 Rite Aid Mail Boxes Etc., GNC, Pet Superstore
Tamiami Trail Eckerd Mail Boxes, Etc., Radio Shack, Pizza Hut
University Market Place -- H & R Block, Mail Boxes Etc., Olan Mills
Welleby Walgreen's H & R Block, Mail Boxes Plus, Pizza Hut
Subtotal/Weighted
Average(Florida)
<PAGE>
GEORGIA
Atlanta
Ashford Place Pier 1 Imports Baskin Robbin, Mail Boxes Merle Norman
Braelin Village (5) Kmart Baskin Robbins, Mail Boxes Etc.,
Manhattan Bagel
Briarcliff LaVista Drug Emporium Supercuts, Trust Company Bank
Briarcliff Village (6) Eckerd, TJ Maxx, Office Depot Subway, Hair Cuttery, Famous Footware
Buckhead Court -- Hallmark, Bellsouth Mobility
Outback Steakhouse
Cambridge Square -- Papa John's, AAA Mail & Pkg., Wachovia
Cromwell Square CVS Drug First Union, Bellsouth Mobility
Haverty's Furniture Hancock Fabrics
Cumming 400 Big Lots Pizza Hut, Hair Cuttery, Autozone
Delk Spectrum (3)(5) -- Mail Boxes, Etc., GNC, Wolf Camera
Dunwoody Hall Eckerd Texaco, Blimpie, Nations Bank
Dunwoody Village (5) -- Federal Express, Jiffy Lube, Hallmark
Loehmann's Plaza Eckerd, Loehmann's Mail Boxes, Etc., GNC, H & R Block
Lovejoy Station -- State Farm, Pizza Hut, Supercuts
Memorial Bend TJ Maxx Pizza Hut, GNC, H & R Block
Orchard Square CVS Drug Mail Boxes Unlimited, State Farm, Remax
Paces Ferry Plaza -- Chapter 11 Bookstore, Banksouth
Sherwin Williams
Powers Ferry Square Drugs for Less Domino's Pizza, Dunkin Donuts, Supercuts
Powers Ferry Village CVS Drug Mail Boxes, Etc., Southtrust Bank, Blimpies
Rivermont Station CVS Drug Pak Mail, GNC, Wolf Camera
Roswell Village (6) Eckerd, Ace Hardware Hallmark, Pizza Hut, Scholtzyky's
Russell Ridge -- Pizza Hut, Pak Mail, Hallmark
Sandy Plains Village Ace Hardware H & R Block, Mail Boxes Etc., Subway
Sandy Springs Village -- Air Touch
Trowbridge Crossing (5) -- Domino's, Postal Services, Hair Cuttery
Other Markets
Evans Crossing -- Subway, Hair Cuttery, Dollar Tree
LaGrangeMarketplace(3) Eckerd Lee's Nails, It's Fashions, One Price Clothing
Parkway Station (5) -- H & R Block, Pizza Hut, Olan Mills
Subtotal/Weighted
Average(Georgia)
OHIO
Cincinnati
Beckett Commons -- Mail Boxes, Etc., Subway, Taco Bell
Cherry Grove CVS Drug, TJ Maxx GNC, Hallmark, Sally Beauty Supply
Hancock Fabrics
Hamilton Meadows Kmart Radio Shack, H&R Block, GNC
Hyde Park Plaza (5) Walgreen's, Micheals Radio Shack, H&R Block, Hallmark
Barnes & Noble, Old Navy
Shoppes at Mason -- Pizza Hut, GNC, Great Clips
Silverlake -- Radio Shack, H&R Block, Great Clips
Westchester Plaza -- Pizza Hut, Subway, GNC
Columbus
East Pointe -- Mail Boxes, Etc., Hallmark, Liberty Mutual
Kingsdale (3)(6) Stein Mart, Limited Hallmark, Sherwin Williams
S&K Menswear Famous Footware
North Gate/(Maxtown) -- Domino's Pizza, GNC, Great Clips
Park Place -- Mail Boxes, Etc., Domino's, Subway
Windmiller Plaza Sears Hardware Radio Shack, Sears Optical, Great Clips
Worthington CVS Drug Little Caesar's, Hallmark, Radio Shack
Subtotal/Weighted
Average(Ohio)
<PAGE>
NORTH CAROLINA
Asheville
Oakley Plaza CVS Drug, Western Auto Little Caesar's, Subway
Baby Superstore Life Uniform
Charlotte
Carmel Commons Eckerd, Piece Goods Little Caesar's, Radio Shack, Blimpies
City View VS Drug, Public Library Little Caesar's, Bellsouth, Willie's
Union Square CVS Drug Mail Boxes, Etc., Subway, TCBY
Consolidated Theatres
Raleigh / Durham
Bent Tree Plaza Pizza Hut, Manhattan Bagel, Parcel Plus
Garner Town Square United Artists, Office Max Sears Optical, Friedman's Jewelers
Petsmart H & R Block
Glenwood Village -- Domino's Pizza, Threadbenders II
Lake Pine Plaza -- H & R Block, GNC, Great Clips
Maynard Crossing -- Mail Boxes, Etc., GNC, Hallmark
Southpoint Crossing (7) -- Wolf Camera, GNC, Manhattan Bagel
Woodcroft Eckerd, True Value Domino's Pizza, Subway, Allstate
Winston-Salem
Kernersville Marketplace -- Mail Boxes, Little Caesar's, Great Clips
Subtotal/Weighted
Average(North Carolina)
ALABAMA
Birmingham
Villages of Trussville (3) CVS Drug Head Start, Cellular One, Mattress Max
West County Marketplace (3) Harco, Wal-Mart Domino's Pizza, GNC, Cato Plus
Montgomery
Country Club (3) Rite Aid Radio Shack, Subway, Beltone
Other Markets
Bonner's Point (3) Wal-Mart Subway, Domino's Pizza, It's Fashion
Marketplace - Wal-Mart Domino's Pizza, Subway, Hallmark
Alexander City (3)
Subtotal/Weighted
Average(Alabama)
COLORADO
Colorado Springs
Cheyenne Meadows (5) -- Hallmark, Nail Center, Cost Cutters
Jackson Creek (6)(7) -- Cost Cutters, Polo Cleaners
Woodman Plaza (6)(7) -- Cost Cutters
Denver
Lloyd King Center (5) -- GNC, Cost Cutters, Hollywood Video
Stroh Ranch (6)(7) -- Cost Cutters, Post Net, Dry Clean Station
Subtotal/Weighted
Average(Colorado)
<PAGE>
TEXAS
Dallas
Bethany Lake (5)(6) -- Boss Cleaners, Mr. Parcel, Fantastic Sams
Creekside (5) -- Hollywood Video, CICI's,Fantastic Sams
Preston Brook - Frisco (5)(6) -- Coldwell Banker
Shiloh Springs (7) -- GNC, Great Clips, Cardsmart
Village Center - Southlake (5) -- Radio Shack, Papa Johns, Smoothie King
Subtotal/Weighted
Average(Texas)
TENNESSEE
Nashville
Harpeth Village (5) -- Mail Boxes, Etc., Heritage Cleaners, Cat's
Marketplace - Office Max Shoe Carnival
Murphreesburo (5)
Nashboro Village (7) -- Hallmark, Fantastic Sams, Cellular
Peartree Village Eckerd, Office Max Hollywood Video, AAA Auto, Royal Thai
Subtotal/Weighted
Average(Tennessee)
VIRGINIA
Brookville Plaza -- H&R Block, House of Frames, Jenny Craig
Statler Square CVS Drugs, Staples Hallmark, H & R Block, Hair Cuttery
Subtotal/Weighted
Average(Virginia)
MISSISSIPPI
Columbia Marketplace(3) Wal-Mart GNC, Radio Shack, Cato
Lucedale Marketplace(3) Wal-Mart(4) Subway, First Family Financial, Byrd's Cleaners
Subtotal/Weighted
Average(Mississippi)
MICHIGAN
Lakeshore Rite Aid Hallmark, Subway, Baskin Robins
Waterford --
Subtotal/Weighted
Average(Michigan)
SOUTH CAROLINA
Merchants Village -- Mail Boxes, Hollywood Video, Hallmark
Queensborough (5) -- Mail Boxes, Etc., Supercuts, Pizza Hut
Subtotal/Weighted
Average(South Carolina)
<PAGE>
DELAWARE
Pike Creek Eckerd, K-mart Radio Shack, H & R Block, TCBY
KENTUCKY
Franklin Square Rite Aid, JC Penney Mail Boxes, Baskin Robbins, Kay Jewelers
ILLINOIS
Hinsdale Lake Commons Ace Hardware Hallmark, McDonalds, Fannie Mae
MISSOURI
St. Ann Square Vic Tanny Great Clips, US Navy, US Marines
Total Weighted Average
</TABLE>
- -------------------------------------------------------
(1) Or latest renovation
(2) Includes development properties. If development properties are excluded,
the total percentage leased would be 94.6% for Partnership shopping centers
and 94.0% for Company shopping centers.
(3) Company-owned property not owned by the the Partnership.
(4) Tenant owns its own building.
(5) Owned by a partnership with outside investors in which the Partnership
(or the Company in the case of a property referred to in note (3)
above) or an affiliate is the general partner.
(6) Property under development or redevelopment.
(7) Owned by a joint venture in which the Partnership owns less than a 100%
interest.
<PAGE>
Item 3. Legal Proceedings
The Partnership is, from time to time, a party to legal proceedings which arise
in the ordinary course of its business. The Partnership is not currently
involved in any litigation nor, to management's knowledge, is any litigation
threatened against the Partnership, the outcome of which would, in management's
judgement based on information currently available, have a material adverse
effect on the financial position or results of operations of the Partnership.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted for partnership unit vote during the fourth quarter of
1998.
PART Il
Item 5. Market for the Registrant's Common Equity and Related Shareholder
Matters
There is no established public trading market for the units of partnership
interest in the Partnership ("Units"), and Units may be transferred only with
the consent of the general partner as provided in the Second Amended and
Restated Agreement of Limited Partnership (the "Partnership Agreement"). As of
December 31, 1998, Regency was the only holder of Class B Units, and there were
approximately 70 holders of record in the aggregate of Original Limited
Partnership Units (including Class A Units), Class 2 Units and Series A
Preferred Units, determined in accordance with Rule 12g5-1 under the Securities
Exchange Act of 1934, as amended. To the Partnership's knowledge, there have
been no bids for the Units and, accordingly, there is no available information
with respect to the high and low quotation of the Units for any quarter since
Regency became the general partner of the Partnership. Each outstanding Unit
other than Class B Units and Series A Preferred Units may be exchangeable by its
holder on a one share per one Unit basis, for the common stock of Regency or for
cash, at Regency's election.
The Partnership Agreement provides that the Partnership will make priority
distributions of Available Cash (as defined in the Partnership Agreement) first
to Series A Preferred Units on each March 31, June 30, September 30 and December
31 in a distribution amount equal to 8.125% of the original capital contribution
per Series A Preferred Unit. Subject to the prior right of the holders of Series
A Preferred Units to receive all distributions accumulated on such Units in
full, at the time of each distribution to holders of common stock of Regency,
distributions of Available Cash will then be made to the holders of Class A
Units, first, and to the holders of Class 2 Units, second, in an amount per Unit
identical to the amount that is distributed with respect to each share of common
stock. The Partnership Agreement provides that all remaining Available Cash will
be distributed to the General Partner.
Regency's common stock is traded on the New York Stock Exchange under the symbol
"REG". The following table sets forth the high and low prices and the cash
dividends declared on Regency's common stock by quarter for 1998 and 1997. All
amounts are in thousands except per share data. Quarterly distributions to
limited partners (other than holders of Series A Preferred Units) have been
declared and paid at the same rate as the Regency cash dividends since Regency
or its affiliate has been the general partner of the Partnership.
<TABLE>
<CAPTION>
1998 1997
------------------------------------- -----------------------------------
Cash Cash
High Low Dividends High Low Dividends
Price Price Declared Price Price Declared
----- ----- --------- ----- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
March 31 $ 27.812 24.750 .44 28.000 25.000 .42
June 30 26.687 24.062 .44 28.125 24.875 .42
September 30 26.500 20.500 .44 28.250 24.875 .42
December 31 23.437 20.250 .44 28.000 24.250 .42
</TABLE>
The Partnership intends to pay regular quarterly distributions to its Unit
holders in an amount per Unit identical to the amount distributed to each share
of Regency common stock. Future distributions will be declared and paid at the
discretion of Regency's Board of Directors, and will depend upon cash generated
by operating activities, the Partnership's financial condition, capital
requirements, Regency's annual distribution requirements under the REIT
provisions of the Internal Revenue Code of 1986, as amended, and such other
factors as the Board of Directors deems relevant. The Partnership anticipates
that for the foreseeable future cash available for distribution will be greater
than earnings and profits due to non-cash expenses, primarily depreciation and
amortization, to be incurred by the Partnership. In order to maintain its
qualification as a REIT, Regency must make annual distributions to shareholders
of at least 95% of its taxable income. Under certain circumstances, which
management does not expect to occur, Regency could be required to make
distributions in excess of cash available for distributions in order to meet
such requirements.
Under the loan agreement with the lenders of the Partnership's line of credit,
distributions may not exceed 95% of Funds from Operations ("FFO") based on the
immediately preceding four quarters. FFO is defined in accordance with the
NAREIT definition as described under Item 7., Management's Discussion and
Analysis. Also in the event of any monetary default, Regency will not make
distributions to shareholders and limited partners.
The following describes the registrant's sales of unregistered securities during
the periods covered by this report, each sold in reliance on Rule 506 of the
Securities Act.
In November 1998, the Partnership acquired Park Place shopping center in
exchange for 79,466 Class 2 Units valued at $26 per Unit plus the assumption of
debt secured by Park Place.
On June 29, 1998, the Partnership issued $80 million of 8.125% Series A
Cumulative Redeemable Preferred Units ("Series A Preferred Units") to 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 Regency 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 Regency.
During 1998, the Partnership acquired 32 shopping centers from various entities
comprising the Midland Group ("Midland"). The Partnership's investment in the
properties acquired from Midland is $236.6 million at December 31, 1998. As
part of the acquisition of Midland, the Partnership issued 425,982 Class 2
Units to the Midland principals. In addition, during 1999 and 2000, the
Partnership may pay contingent consideration of up to an estimated $23 million,
through the issuance of 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. The acquisition of Midland is discussed further in
note 2, Acquisitions of Shopping Centers, of the notes to the 1998 consolidated
financial statements.
The Partnership acquired 34 shopping centers during 1997 (the "1997
Acquisitions") for approximately $377.8 million. Included in the 1997
Acquisitions are 26 shopping centers acquired from Branch Properties ("Branch")
for $232.4 million. During 1998, the Partnership issued 721,997 additional Class
A Units and shares of common stock valued at $18.2 million to Branch as
contingent consideration for the satisfaction of certain performance criteria of
the properties acquired. The Partnership expects to issue the remaining
contingent consideration, 298,064 Units, during 1999. The acquisition of Branch
is discussed further in note 2, Acquisitions of Shopping Centers, of the notes
to the 1998 consolidated financial statements.
<PAGE>
Item 6. Selected Consolidated Financial Data
(in thousands, except per share data and number of properties)
<TABLE>
The following table sets forth Selected Financial Data on a historical basis for
the five years ended December 31, 1998, for the Partnership. This information
should be read in conjunction with the financial statements of the Partnership
(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. This historical Selected Financial Data has been derived from
the audited financial statements.
<CAPTION>
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Operating Data:
Revenues:
Rental revenues $ 108,586 69,748 24,899 14,362 10,209
Management, leasing and
brokerage fees 11,863 8,448
3,444 2,426 2,332
Equity in income of investments
in real estate partnerships
946 33 70 4 17
---------- -------- -------- -------- --------
Total revenues 121,395 78,229 28,413 16,792 2,558
---------- -------- -------- -------- --------
Operating expenses:
Operating, maintenance and
real estate taxes 25,078 17,755 7,211 4,130 3,279
General and administrative 15,064 9,964 6,049 4,895 4,531
Depreciation and amortization 20,652 12,401 4,345 2,573 1,895
---------- -------- -------- -------- --------
Total operating expenses 60,794 40,120 17,605 11,598 9,705
---------- -------- -------- -------- --------
Interest expense, net of income 21,564 13,827 5,866 4,398 2,276
---------- -------- -------- -------- --------
Income before minority interests
and sale of real estate investments 39,037 24,282 4,942 796 577
Gain on sale of real estate investments 10,726 451 - - -
---------- -------- -------- -------- --------
Income before minority interests 49,763 24,733 4,942 796 577
Minority interest (464) (505) - - -
---------- -------- -------- -------- --------
Net income 49,299 24,228 4,942 796 577
Preferred unit distributions (3,359) - - - -
---------- -------- -------- -------- --------
Net income for common unitholders $ 45,940 24,228 4,942 796 577
========================================================================
Income per common unit:
Basic $ 1.62 1.20 0.19 0.04 0.09
========================================================================
Diluted $ 1.58 1.13 0.19 0.04 0.09
========================================================================
Other Data:
Class A, Class 2, and
Class B Units Outstanding 25,685 23,335 10,283 6,740 3,867
Series A Preferred Units Outstanding 1,600 - - - -
Partnership owned gross leasable area 12,358 7,792 3,638 2,019 1,401
Number of properties (at end of period) 109 70 28 13 8
Ratio of earnings to fixed charges 2.0 2.3 1.7 1.1 1.1
Balance Sheet Data:
Real estate investments at cost $ 1,084,532 679,370 257,066 149,735 92,649
Total assets 1,086,437 683,849 258,184 145,997 90,404
Total debt 480,376 218,337 107,982 55,686 56,998
Partners' capital 574,268 445,547 143,724 85,863 30,385
</TABLE>
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 96% of the outstanding common partnership
units ("Units"). Of the 129 properties included in the Company's portfolio at
December 31, 1998, 109 properties were owned either fee simple or through
partnerships interests by the Partnership. At December 31, 1998, the Company had
an investment in real estate, at cost, of approximately $1.3 billion of which
$1.1 billion or 86% 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 Partner-
ship's properties summarized by state and in order by largest holdings including
their gross leasable areas (GLA) follows:
<TABLE>
<CAPTION>
December 31, 1998 December 31, 1997
----------------- -----------------
Location # Properties GLA % Leased # Properties GLA % Leased
-------- ------------ ---------- -------- ------------ ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Florida 36 4,571,617 92.9% 35 4,111,279 93.5%
Georgia 25 2,560,383 92.8% 24 2,463,180 92.6%
Ohio 12 1,527,510 96.8% 1 374,743 96.1%
North Carolina 12 1,239,783 98.3% 6 554,332 99.0%
Texas 5 479,900 84.7% - - -
Colorado 5 447,569 89.4% - - -
Tennessee 4 295,179 96.8% 3 208,386 98.5%
Virginia 2 197,324 97.7% - - -
Michigan 2 177,929 81.5% - - -
South Carolina 2 162,056 100.0% 1 79,743 84.3%
Delaware 1 232,752 94.8% - - -
Kentucky 1 205,060 95.6% - - -
Illinois 1 178,600 86.9% - - -
Missouri 1 82,498 99.8% - - -
------------- ---------- ------- ----------- --------- -------
Total 109 12,358,160 93.6% 70 7,791,663 93.8%
============= ========== ======= =========== ========= =======
</TABLE>
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:
<TABLE>
<CAPTION>
Grocery Number of % of % of Annualized Avg Remaining
Anchor Stores Total GLA Base Rent Lease Term
------ ------ --------- --------- ----------
<S> <C> <C> <C> <C>
Kroger 36 17.6% 17.3% 19 yrs
Publix 28 10.2% 7.8% 13 yrs
Winn-Dixie 12 4.8% 4.0% 13 yrs
Harris Teeter 4 1.5% 2.1% 11 yrs
</TABLE>
Acquisition and Development of Shopping Centers
- -----------------------------------------------
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. The Partnership expects to
acquire all of the interests in two of the JV Properties for approximately $20.3
million during 1999 which will increase its total investment in the Midland
properties to $256.9 million. In addition, 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.
The Partnership acquired 34 shopping centers during 1997 (the "1997 Acquisi-
tions") for approximately $377.8 million. Included in the 1997 Acquisitions are
26 shopping centers acquired from Branch Properties ("Branch") for $232.4
million. During 1998, the Partnership issued 721,997 additional Class A Units
valued at $18.2 million to Branch as contingent consideration for the
satisfaction of certain performance criteria of the properties acquired. The
Partnership expects to issue the remaining contingent consideration, 298,064
Class A Units, during 1999.
Results from Operations
- -----------------------
Comparison of 1998 to 1997
Revenues increased $43.2 million or 55% to $121.4 million in 1998. The increase
was due primarily to the 1998 and 1997 Acquisitions. At December 31, 1998, the
real estate portfolio contained approximately 12.4 million SF, and was 93.6%
leased. Minimum rent increased $31.3 million or 56%, and recoveries from tenants
increased $6.9 million or 53%. Revenues from property management, leasing,
brokerage, and development services (service operation segment) provided on
properties not owned by the Partnership were $11.9 million in 1998 compared to
$8.4 million in 1997, the increase due primarily to increased brokerage fees and
increased activity in construction and development for third parties. During
1998, the Partnership sold four office buildings and a parcel of land for $30.7
million, and recognized a gain on the sale of $10.7 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 $20.6 million or 52% to $60.8 million in 1998.
Combined operating and maintenance, and real estate taxes increased $7.3 million
or 41% during 1998 to $25.1 million. The increases are due to the 1998 and 1997
Acquisitions. General and administrative expenses increased 51% during 1998 to
$15.1 million due to the hiring of new employees and related office expenses
necessary to manage the shopping centers acquired during 1998 and 1997, as well
as, the shopping centers the Partnership began managing for third parties during
1998 and 1997. Depreciation and amortization increased $8.3 million during 1998
or 67% primarily due to the 1998 and 1997 Acquisitions.
Interest expense increased to $23.5 million in 1998 from $14.8 million in 1997
or 59% due to increased average outstanding loan balances related to the
financing of the 1998 and 1997 Acquisitions on the Line and the assumption of
debt. Weighted average interest rates increased 0.1% during 1998. See further
discussion under Acquisition and Development of Shopping Centers and Liquidity
and Capital Resources.
Net income for common unit holders was $45.9 million in 1998 vs. $24.2 million
in 1997, a $21.7 million or 90% increase for the reasons previously described.
Diluted earnings per unit in 1998 was $1.58 vs. $1.13 in 1997 due to the
increase in net income combined with the dilutive impact from the increase
in weighted average common units and equivalents of 8.6 million primarily due to
the acquisition of Branch and Midland. (see notes 2, 6 and 7, to the 1998
consolidated financial statements for related discussions).
Comparison of 1997 to 1996
Revenues increased $49.8 million or 175% to $78.2 million in 1997. The increase
was due primarily to the 1997 Acquisitions and properties acquired in 1996,
("1996 Acquisitions"). At December 31, 1997, the real estate portfolio contained
approximately 7.8 million SF, and was 93.8%. Minimum rent increased $35.1
million or 171%, and recoveries from tenants increased $8.8 million or 206%.
Revenues from property management, leasing, brokerage, and development services
provided on properties not owned by the Partnership were $8.4 million in 1997
compared to $3.4 million in 1996, the increase due to fees earned from third
property management and leasing contracts acquired as part of the acquisition of
Branch.
Operating expenses increased $22.5 million or 128% to $40.1 million in 1997.
Combined operating and maintenance, and real estate taxes increased $10.5
million or 146% during 1997 to $17.8 million. The increases are due to the 1997
and 1996 Acquisitions. General and administrative expense increased 64.7% during
1997 to $10.0 million due to the hiring of new employees and related office
expenses necessary to manage the shopping centers acquired during 1996 and 1997,
as well as, the shopping centers that the Partnership began managing for third
parties during 1997. Depreciation and amortization increased $8.1 million during
1997 or 185% primarily due to the 1997 and 1996 Acquisitions.
Interest expense increased to $14.8 million in 1997 from $6.5 million in 1996 or
128% due primarily to increased average outstanding loan balances related to the
financing of the 1997 and 1996 Acquisitions on the Line and the assumption of
debt. Weighted average interest rates decreased 0.2% during 1997. See further
discussion under Acquisition and Development of Shopping Centers andLiquidity
and Capital Resources.
Net income for common unitholders was $24.2 million in 1997 vs. $4.9 million in
1996, a $19.3 million or 390% increase for the reasons previously described.
Diluted earnings per unit in 1997 was $1.13 vs. $0.19 in 1996, due to the
increase in net income combined with the dilutive impact from the increase
in weighted average common units and equivalents of 11.7 million primarily due
to the Acquisition of the Branch Properties.
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.
FFO increased by 50% from 1997 to 1998 as a result of the activity discussed
above under "Results of Operations". FFO for the periods ended December 31,
1998, 1997 and 1996 are summarized in the following table (in thousands):
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Net income for common stockholders $ 45,940 24,228 4,942
Add (subtract):
Real estate depreciation and amortization 20,135 11,769 4,335
Gain on sale of operating property (9,824) (451) -
--------- --------- ---------
Funds from operations $ 56,251 35,546 9,277
========= ========= =========
Cash flow provided by (used in):
Operating activities $ 51,804 31,376 8,042
Investing activities (235,679) (154,006) (107,261)
Financing activities 185,769 130,805 104,453
</TABLE>
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 $50.8 million and $31.4 million for the years ended
December 31, 1998 and 1997, respectively. The Partnership incurred recurring and
non-recurring capital expenditures (non-recurring expenditures pertain to
immediate building improvements on new acquisitions and anchor tenant
improvements on new leases) of $6.9 million and $4.1 million, during 1998 and
1997, respectively. The Partnership paid scheduled principal payments of $3.1
million and $2.1 million during 1998 and 1997, respectively. The Partnership
paid distributions of $5.3 million and $1.9 million, during 1998 and 1997,
respectively, to its Class A, 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 $235.7 million and $154.0 million, during 1998
and 1997, respectively, primarily for purposes discussed above under
Acquisitions and Development of Shopping Centers. Net cash provided by financing
activities was $185.8 million and $130.8 million during 1998 and 1997,
respectively, primarily related to the proceeds from the preferred unit and debt
offerings completed during 1998, and the proceeds from Regency's common stock
offering in 1997, further discussed below. At December 31, 1998, the Partnership
had 12 shopping centers under construction or undergoing major renovations, with
costs to date of $103.5 million. Total committed costs necessary to complete the
properties under development is estimated to be $47.4 million and will be
expended through 1999.
The Partnership's outstanding debt at December 31, 1998 and 1997 consists of the
following (in thousands):
1998 1997
---- ----
Notes Payable:
Fixed rate mortgage loans $ 230,398 139,365
Variable rate mortgage loans 11,051 30,841
Fixed rate unsecured loans 121,296 -
--------- ---------
Total notes payable 362,745 170,206
Acquisition and development line of credit 117,631 48,131
--------- ---------
Total $ 480,376 218,337
========= =========
The weighted average interest rate on total debt at December 31, 1998 and 1997
was 7.63% and 7.88%, respectively. The Partnership's debt is typically
cross-defaulted, but not cross-collateralized, and includes usual and customary
affirmative and negative covenants.
The Partnership is a party to a credit agreement dated as of March 27, 1998,
providing for an unsecured line of credit (the "Line") from a group of lenders
currently consisting of Wells Fargo, First Union, Wachovia Bank, NationsBank,
AmSouth Bank, Commerzbank AG, PNC Bank, and Star Bank. This credit agreement
provides for a $300 million commitment, and incorporates a competitive bid
facility of up to $150 million of the commitment amount. 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 March 2001, but may be extended annually for one year periods.
Borrowings under the Line bear interest at a variable rate based on LIBOR plus a
specified spread, (.875% at 12-31-98), which is dependent on the Company's
investment grade rating. The Company's ratings are currently Baa2 from Moody's
Investor Service, BBB from Duff and Phelps, and BBB- from Standard and Poors.
The Company, including the Partnership, 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) main-
tenance 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 February 26, 1999, the Partnership entered into an agreement with various
banks that provide the Line to increase the unsecured commitment amount to $635
million.
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 July 17, 1998 the Partnership completed a $100 million offering of seven year
term notes at an effective interest rate of 7.17%. The Notes were priced at
162.5 basis points over the current yield for seven year US Treasury Bonds. The
net proceeds of the offering were used to reduce the balance of the Line.
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 1998, the Partnership assumed mortgage loans with a fair value of $124.4
million related to the acquisition of shopping centers, which includes debt
premiums of $12.3 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.
<PAGE>
As of December 31, 1998, 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 $ 3,639 13,440 17,079
2000 3,851 123,674 127,525
2001 3,751 41,928 45,679
2002 3,098 35,951 39,049
2003 2,914 13,291 16,205
Beyond 5 Years 17,812 206,606 224,418
Net unamortized debt payments - 10,421 10,421
------- -------- --------
Total $ 35,065 445,311 480,376
======= ======= =======
Unconsolidated partnerships and joint ventures had mortgage loans payable of
$76.7 million at December 31, 1998, and the Company's proportionate share of
these loans was $34.4 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 distribu-
tions have exceeded taxable income, no provision for federal income taxes has
been made. While the Company intends to continue to pay dividends to its stock-
holders, 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.
<PAGE>
The Partnership's real estate portfolio has grown substantially during 1998 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 during 1997 and 1998. 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.
Pacific Retail Trust Merger
- ---------------------------
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, provides 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
shareholders in exchange for their outstanding common and preferred shares, and
units. The total cost to acquire Pacific is expected to be $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
is $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 properties acquired from Pacific will be contributed by Regency into
the Partnership in exchange for additional partnership Units. The merger will be
accounted for as a purchase with the Company as the acquiring entity.
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. i.
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.
Inflation
- ---------
Inflation has remained relatively low during 1998 and 1997 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.
<PAGE>
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 1998 and 1997, 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 initial testing, 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.
While we have not yet begun renovations, Management believes that the cost of
upgrading 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 Partnership is vulnerable to third parties'
failure to resolve their Year 2000 issues. The Partnership will be able to more
adequately assess its third party risk when responses are received from the
majority of the entities contacted.
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's does not have a formal contingency plan or a timetable for
implementing one. Contingency plans will be established, if they are deemed
necessary, after the Partnership has adequately assessed the impact on
operations should third parties fail to properly respond to their Year 2000
issues.
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 December 31, 1998, the Partnership did not have
any borrowings hedged with derivative financial instruments.
<PAGE>
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>
Fair
1999 2000 2001 2002 2003 Thereafter Total Value
---- ---- ---- ---- ---- ---------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fixed rate debt $14,972 9,761 36,867 39,049 16,205 224,418 341,273 351,694
Average interest rate for all debt 7.93% 7.87% 7.87% 7.82% 7.70% 7.62% - -
Variable rate LIBOR debt $ 2,107 117,763 8,813 - - - 128,682 128,682
Average interest rate for all debt 6.16% 6.16% 6.55% - - - - -
</TABLE>
As the table incorporates only those exposures that exist as of December 31,
1998, 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.
Item 8. Consolidated Financial Statements and Supplementary Data
The Consolidated Financial Statements and supplementary data included in this
Report are listed in Part IV, Item 14(a).
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
The Partnership is managed by Regency, its general partner. Consequently, the
information required by this item is reflected in and is hereby incorporated by
reference to the information contained in Regency's definitive proxy statement
for its 1999 Annual Meeting of Shareholders, to be filed with the Securities and
Exchange Commission within 120 days after the end of its fiscal year. The
following table provides information concerning the executive officers of
Regency.
Executive Officer Positions with the Company
(Age) Principal Occupations During the Past Five Years
----- ------------------------------------------------
Martin E. Stein, Jr. Chairman, Chief Executive Officer, and Director
(age 46) of the Company since its initial public offering
in October 1993; previously President of the
Company's predecessor real estate division since
1976.
Mary Lou Rogers President and Chief Operating Officer since
(age 47) January, 1999 and Director of the Company since
March, 1997; Managing Director - Security Capital
U.S. Realty Strategic Group From March 1997 to
January 1999; Senior Vice President and Director
of Stores, New England - Macy's East/Federated
Department Stores from 1994 to March 1997; various
retailing positions since joining Macy's in 1977,
including Senior Vice President for Federated's
Burdines Division and Henri Bendel.
James G. Buis Managing Director - Southwestern U.S. Invest-
(age 54) ments of the Company since February 1999; Managing
Director - Pacific Retail Trust from October,
1995 to February 1999; Executive Vice President -
Madison Property Corporation from 1993 to October,
1995; Executive Vice President - Rosewood Property
Company from 1989 to 1993; Retail Partner -
Lincoln Property Company from 1979 to 1989.
John S. Delatour Managing Director - Western U.S. Operations of the
(age 40) Company since February, 1999; Managing Director -
Pacific Retail Trust from June, 1996 to February
1999; Senior Vice President - Lincoln Property
Company from 1983 to June, 1996.
Robert C. Gillander Managing Director - Eastern U.S. Investments of
(age 45) the Company since its initial public offering in
October 1993, and Vice President of the Company's
predecessor real estate division since 1978.
Bruce M. Johnson Managing Director and Chief Financial Officer of
(age 51) the Company since its initial public offering in
October 1993, and Executive Vice President of the
Company's predecessor real estate division since
1979.
Brian M. Smith Managing Director - Pacific Investments of the
(age 44) Company since February, 1999; Managing Director -
Pacific Retail Trust from February, 1997 to
February 1999; Senior Vice President - Lowe
Enterprises, Inc. from 1994 to February 1997;
Managing Director - Trammell Crow Company
from 1983 to 1994.
James D. Thompson Managing Director - Eastern Operations of the
(age 42) Company since its initial public offering in
October 1993, and Vice President of the Company's
predecessor real estate division since 1981.
Lee S. Wielansky Managing Director - Investments and Director of
(age 48) the Company since March 1998; President and Chief
Executive Officer - Midland Development Group
from 1983 to March 1998.
Item 11. Executive Compensation
The Partnership is managed by Regency, its general partner. Consequently, the
information required by this item is reflected in and is hereby incorporated by
reference to the information contained in Regency's definitive proxy statement
for its 1999 Annual Meeting of Shareholders, to be filed with the Securities and
Exchange Commission within 120 days after the end of its fiscal year.
Item 12. Security Ownership of Certain Beneficial Owner and Management
Information known to the Partnership with respect to beneficial ownership (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of
more than 5% of the outstanding Class B Units as of March 10, 1999 is as follows
NO. OF UNITS BENEFICIALLY
CLASS BENEFICIAL OWNER OWNED % OF CLASS
- --------------------------------------------------------------------------------
Class B Units Regency Realty Corporation 56,789,000 100%
121 W. Forsyth St., Suite 200
Jacksonville, Florida 32202
The Partnership has no directors or executive officers and is managed by Regency
as the general partner of the Partnership. Other than Lee S. Wielansky, no
director or executive officer of Regency personally owns any Units of the
Partnership as of March 10, 1999.
Information concerning the beneficial ownership of shares of common stock of
Regency by its directors and executive officers, as well as by persons believed
to be the beneficial owner of more than 5% of Regency's outstanding common
stock, is hereby incorporated by reference to the information contained in
Regency's definitive proxy statement for its 1999 Annual Meeting of
Shareholders.
Item 13. Certain Relationships and Related Transactions
The Partnership is managed by Regency, its general partner. Consequently, the
information required by this item is reflected in and is hereby incorporated by
reference to the information contained in Regency's definitive proxy statement
for its 1999 Annual Meeting of Shareholders, to be filed with the Securities and
Exchange Commission within 120 days after the end of its fiscal year.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) Financial Statements and Financial Statement Schedules:
The Partnership's 1998 financial statements and financial statement schedule,
together with the report of KPMG LLP dated February 1, 1999, except for Note 12
as to which the date is March 1, 1999, are listed on the index immediately
preceding the financial statements at the end of this report.
(b) Reports on Form 8-K:
None
(c) 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.)
4.1 Amended and Restated Redemption Agreement dated as of March 5,
1998 by and among Regency Centers, L.P., Regency Realty Corpora-
tion and the limited partners party thereto (incorporated by
reference to Exhibit 10(c) to Regency Realty Corporation's
Current Report on form 8-K/A filed March 19, 1998)
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)
10.2 Assignment and Acceptance Agreement dated as of February 26,
1999 by and among Regency Centers, L.P., Regency Realty
Corporation and Wells Fargo Bank, National Association, as
Agent (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.)
21.1 Subsidiaries of the Registrant
23.0 Consent of KPMG LLP
27.1 Financial Data Schedule
<PAGE>
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.
REGENCY CENTERS, L.P.
By: REGENCY REALTY CORPORATION,
Its General Partner
Date: March 18, 1999 By: /s/ Martin E. Stein, Jr.
-----------------------------------------
Martin E Stein, Jr., Chairman of the Board
and Chief Executive Officer
Date: March 18, 1999 By: /s/ Bruce M. Johnson
------------------------------------------
Bruce M. Johnson, Managing Director and
Principal Financial Officer
Date: March 18, 1999 By: /s/ J. Christian Leavitt
------------------------------------------
J. Christian Leavitt, Senior Vice
President, Finance and Principal
Accounting Officer
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:
Date: March 18, 1999 /s/ Martin E. Stein, Jr.
---------------------------------------------
Martin E. Stein, Jr., Chairman of the Board
and Chief Executive Officer
Date: March 18, 1999 /s/ Mary Lou Rogers
---------------------------------------------
Mary Lou Rogers, President, Chief Operating
Officer and Director
Date: March 18, 1999 /s/ Thomas B. Allin
---------------------------------------------
Thomas B. Allin, Director
Date: March 18, 1999 /s/ Raymond L. Bank
---------------------------------------------
Raymond L. Bank, Director
Date: March 18, 1999 /s/ A. R. Carpenter
---------------------------------------------
A. R. Carpenter, Director
Date: March 18, 1999 /s/ Jeffrey A. Cozad
---------------------------------------------
Jeffrey A. Cozad, Director
Date: March 18, 1999 /s/ J. Dix Druce, Jr.
---------------------------------------------
J. Dix Druce, Jr., Director
Date: March 18, 1999 /s/ John T. Kelley
---------------------------------------------
John T. Kelley, Director
Date: March 18, 1999 /s/ Douglas S. Luke
---------------------------------------------
Douglas S. Luke, Director
Date: March 18, 1999 /s/ John C. Schweitzer
---------------------------------------------
John C. Schweitzer, Director
Date: March 18, 1999 /s/ Lee Wielansky
---------------------------------------------
Lee Wielansky, Director
Date: March 18, 1999 /s/ Terry N. Worrell
---------------------------------------------
Terry N. Worrell, Director
<PAGE> F-1
REGENCY CENTERS, L.P.
INDEX TO FINANCIAL STATEMENTS
Regency Centers, L.P.
Independent Auditors' Report F-2
Consolidated Balance Sheets as of December 31, 1998 and 1997 F-3
Consolidated Statements of Operations for the years ended
December 31, 1998, 1997, and 1996 F-4
Consolidated Statements of Changes in Capital for the years ended
December 31, 1998, 1997 and 1996 F-5
Consolidated Statements of Cash Flows for the years ended
December 31, 1998, 1997, and 1996 F-6
Notes to Consolidated Financial Statements F-8
Financial Statement Schedule
Independent Auditors' Report on Financial Statement Schedule S-1
Schedule III - Regency Centers, L.P. Combined Real Estate and
Accumulated Depreciation - December 31, 1998 S-2
All other schedules are omitted because they are not applicable or
because information required therein is shown in the financial
statements or notes thereto.
<PAGE> F-2
Independent Auditors' Report
The Unitholders of Regency Centers, L.P. and the Board of Directors of
Regency Realty Corporation:
We have audited the accompanying consolidated balance sheets of Regency Centers,
L.P. as of December 31, 1998 and 1997, and the related consolidated statements
of operations, changes in capital, and cash flows for each of the years in the
three-year period ended December 31, 1998. These consolidated financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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. as of December 31, 1998 and 1997, and the results of their operations and
their cash flows for each of the years in the three-year period ended December
31, 1998 in conformity with generally accepted accounting principles.
KPMG LLP
Jacksonville, Florida
February 1, 1999, except for Note 12,
as to which the date is March 1, 1999
<PAGE> F-3
<TABLE>
REGENCY CENTERS, L.P.
Consolidated Balance Sheets
December 31, 1998 and 1997
<CAPTION>
1998 1997
---- ----
Assets
- ------
<S> <C> <C>
Real estate investments, at cost (notes 2, 5 and 9):
Land $ 222,259,131 143,697,274
Buildings and improvements 795,124,798 501,072,840
Construction in progress - development for investment 15,647,659 13,427,370
Construction in progress - development for sale 20,869,915 20,173,039
------------- -------------
1,053,901,503 678,370,523
Less: accumulated depreciation 36,752,466 22,537,454
------------- -------------
1,017,149,037 655,833,069
Investments in real estate partnerships (note 4) 30,630,540 999,730
------------- -------------
Net real estate investments 1,047,779,577 656,832,799
Cash and cash equivalents 15,536,926 14,642,429
Tenant receivables, net of allowance for uncollectible accounts
of $1,787,686 and $1,162,570 at December 31, 1998
and 1997, respectively 13,712,937 7,840,882
Deferred costs, less accumulated amortization of
$2,350,267 and $1,456,933 at December 31, 1998
and 1997, respectively 5,156,289 2,236,170
Other assets 4,251,221 2,296,783
------------- -------------
$1,086,436,950 683,849,063
============= =============
Liabilities and Partners' Capital
Liabilities:
Notes payable (note 5) 362,744,897 170,205,989
Acquisition and development line of credit (note 5) 117,631,185 48,131,185
Accounts payable and other liabilities 17,596,224 10,607,261
Tenants' security and escrow deposits 2,638,033 1,880,819
------------- -------------
------------- -------------
Total liabilities 500,610,339 230,825,254
------------- -------------
Limited partners' interest in consolidated partnerships 11,558,619 7,477,181
------------- -------------
Partners' Capital (notes, 2, 6, 7 and 8):
Series A preferred units, par value $50, 1,600,000 units
issued and outstanding at December 31, 1998,
liquidation value of $80 million 78,800,000 -
General partner; 24,537,723 and 22,789,897 units outstanding
at December 31, 1998 and 1997, respectively 472,748,608 432,229,494
Limited partners; 1,147,446 and 545,347 units outstanding
at December 31, 1998 and 1997, respectively 22,719,384 13,317,134
------------- -------------
Commitments and contingencies (notes 9, 10, 12) 574,267,992 445,546,628
------------- -------------
$1,086,436,950 683,849,063
============= =============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> F-4
<TABLE>
REGENCY CENTERS, L.P.
Consolidated Statements of Operations
Years ended December 31, 1998, 1997 and 1996
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Revenues:
Minimum rent (note 9) $ 86,945,086 55,610,184 20,537,939
Percentage rent 1,652,560 1,078,692 91,233
Recoveries from tenants 19,988,640 13,058,816 4,269,126
Management, leasing and brokerage fees 11,862,784 8,447,615 3,444,287
Equity in income of investments in
real estate partnerships (note 4) 946,271 33,311 69,990
Total revenues 121,395,341 78,228,618 28,412,575
-------------- ------------- ------------
Operating expenses:
Depreciation and amortization 20,652,375 12,401,128 4,344,985
Operating and maintenance 14,875,587 10,950,495 4,528,222
General and administrative 15,064,148 9,963,928 6,048,141
Real estate taxes 10,202,308 6,803,927 2,683,144
-------------- ------------- ------------
Total operating expenses 60,794,418 40,119,478 17,604,492
-------------- ------------- ------------
Interest expense (income):
Interest expense 23,464,311 14,761,774 6,475,909
Interest income (1,900,136) (934,473) (609,892)
-------------- ------------- ------------
Net interest expense 21,564,175 13,827,301 5,866,017
-------------- ------------- ------------
Income before minority interests and gain
on sale of real estate investments 39,036,748 24,281,839 4,942,066
-------------- ------------- ------------
Gain on sale of real estate investments 10,725,975 450,902 -
Minority interest of limited partners (464,098) (504,957) -
-------------- ------------- ------------
Net income 49,298,625 24,227,784 4,942,066
Preferred unit distributions (3,358,333) - -
-------------- ------------- ------------
Net income for common unitholders $ 45,940,292 24,227,784 4,942,066
============== ============= ============
Net income per common unit (note 7):
Basic $ 1.62 1.20 0.19
============== ============= ============
Diluted $ 1.58 1.13 0.19
============== ============= ============
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE> F-5
<TABLE>
REGENCY CENTERS, L.P.
Consolidated Statements of Changes in Capital
Years Ended December 31, 1998, 1997 and 1996
<CAPTION>
Series A
Predecessor Preferred General Limited Total
Equity Units Partner Partners Capital
------ ----- ------- -------- -------
<S> <C> <C> <C> <C> <C>
Balance December 31, 1995 $ 85,862,793 - - - 85,862,793
Net income 4,942,066 - - - 4,942,066
Cash contributions from the
issuance of Regency stock 63,617,263 - - - 63,617,263
Cash distributions for dividends (16,196,364) - - - (16,196,364)
Other contributions (distributions), net 5,498,463 - - - 5,498,463
------------- ----------- ----------- ------------ ------------
Balance December 31, 1996 143,724,221 - - - 143,724,221
Reclassification of predecessor equity
upon formation of the Partnership (143,724,221) - 143,724,221 - -
Net income - - 22,185,961 2,041,823 24,227,784
Units issued for acquisition
of real estate - - 16,227,869 96,380,706 112,608,575
Units issued for cash - - - 2,255,140 2,255,140
Cash contributions from the -
issuance of Regency stock - - 225,094,980 - 225,094,980
Cash distributions for dividends - - (35,093,345) (1,900,288) (36,993,633)
Other contributions (distributions), net - - (25,370,439) - (25,370,439)
Units exchanged for common
stock of Regency - 85,460,247 (85,460,247) -
------------- ----------- ----------- ------------ ------------
Balance December 31, 1997 - - 432,229,494 13,317,134 445,546,628
Net income - 3,358,333 44,114,019 1,826,273 49,298,625
Units issued for acquisition
of real estate - - - - -
Cash received for issuance of
preferred units, net - 78,800,000 - - 78,800,000
Cash contributions from the -
issuance of Regency stock/units - - 10,225,529 7,694 10,233,223
Cash distributions for dividends - - (50,295,345) (1,891,368) (52,186,713)
Preferred unit distribution - (3,358,333) - - (3,358,333)
Other contributions (distributions), net - - 10,782,032 - 10,782,032
Units issued for acquisition
of real estate - 3,102,555 32,049,975 35,152,530
Units exchanged for common
stock of Regency - - 15,940,506 (15,940,506) -
Reallocation of limited partners interest - - 6,649,818 (6,649,818) -
Balance December 31, 1998 $ - 78,800,000 472,748,608 22,719,384 574,267,992
============= =========== =========== ============ ============
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE> F-6
<TABLE>
REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
Years Ended December 31, 1998, 1997 and 1996
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 49,298,625 24,227,784 4,942,066
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 20,652,375 12,401,128 4,344,985
Deferred financing cost and debt premium amortization (1,152,250) 434,826 227,026
Stock based compensation 2,422,547 2,561,139 2,940,414
Minority interest of limited partners 464,098 504,957 -
Equity in income of investments in real estate partnerships (946,271) (33,311) (69,990)
Gain on sale of real estate investments (10,725,975) (450,902) -
Changes in assets and liabilities:
Tenant receivables (4,245,674) (4,232,165) (2,532,102)
Deferred leasing commissions (2,079,252) (870,857) (254,073)
Other assets (4,003,247) (1,701,232) (644,864)
Tenants' security deposits 484,181 892,917 427,192
Accounts payable and other liabilities 635,376 (2,358,114) (1,338,685)
------------- -------------- --------------
Net cash provided by operating activities 50,804,533 31,376,170 8,041,969
------------- -------------- --------------
Cash flows from investing activities:
Acquisition, development and improvements of real estate (236,959,860) (132,942,830) (103,251,016)
Investment in real estate partnerships (29,068,392) - (881,309)
Construction in progress for sale, net of reimbursement (696,876) (23,776,953) (3,360,206)
Proceeds from sale of real estate investments 30,662,197 2,645,229 -
Distributions received from real estate partnership investments 383,853 68,688 231,581
------------- -------------- --------------
Net cash used in investing activities (235,679,078) (154,005,866) (107,260,950)
------------- -------------- --------------
Cash flows from financing activities:
Cash contributions from the issuance of Regency stock
and Partnership units 10,233,223 227,350,120 63,617,263
Contributions from limited partners in consolidated partnerships 4,289,995 - -
Distributions to preferred unitholders (3,358,333) - -
Cash distributions for dividends (52,186,713) (36,993,633) (16,196,364)
Other contributions (distributions), net 10,782,032 (25,370,439) 5,498,463
Net proceeds from issuance of Series A preferred units 78,800,000 - -
Net proceeds from term notes 99,758,000 - -
Proceeds (repayment) of acquisition and development
line of credit, net 69,500,000 (25,570,000) 51,361,382
Proceeds from mortgage loans payable 7,345,000 15,972,920 1,518,331
Repayment of mortgage loans payable (37,092,341) (24,015,293) (583,130)
Deferred financing costs (2,301,821) (568,449) (762,771)
------------- -------------- --------------
Net cash provided by financing activities 185,769,042 130,805,226 104,453,174
------------- -------------- --------------
Net increase in cash and cash equivalents 894,497 8,175,530 5,234,193
Cash and cash equivalents at beginning of the year 14,642,429 6,466,899 1,232,706
------------- -------------- --------------
Cash and cash equivalents at end of the year $ 15,536,926 14,642,429 6,466,899
============= ============== ==============
</TABLE>
<PAGE> F-7
<TABLE>
REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
Years Ended December 31, 1998, 1997 and 1996
-continued-
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Supplemental disclosure of cash flow information - cash paid
for interest (net of capitalized interest of approximately
$3,417,000, $1,896,000 and $381,000 in 1998, 1997
and 1996, respectively) $ 19,841,375 14,395,279 5,999,587
============= ============== ==============
Supplemental disclosure of non-cash transactions:
Mortgage loans assumed to acquire real estate $ 124,391,131 142,448,966 -
============= ============== ==============
Limited and general partnership units
issued to acquire real estate $ 35,152,530 112,608,575 -
============= ============== ================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 1998
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 December 31, 1998, Regency owns approximately
96% 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.
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> F-9
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 1998
(b) Revenues
The Partnership 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. Accrued rents are
included in tenant receivables. Minimum rent has been adjusted to
reflect the effects of recognizing rent on a straight line basis.
Substantially all of the lease agreements contain provisions which
provide additional rents based on tenants' sales volume (contingent
or percentage rent) or reimbursement of the tenants' share of real
estate taxes and certain common area maintenance (CAM) costs. These
additional rents are reflected on the accrual basis. On May 22,
1998, the Emerging Issues Task Force (EITF) reached a consensus on
Issue 98-9 "Accounting for Contingent Rent in Interim Financial
Periods". The EITF has stated that lessors should defer recognition
of contingent rent that is based on meeting specified targets until
those specified targets are met and not ratably throughout the year.
The Partnership has previously recognized contingent rent ratably
over the year based on the historical trends of its tenants.
Although the EITF subsequently reversed its original consensus
related to contingent rent, the Partnership has adopted the
provisions of Issue 98-9 prospectively and has ceased the recogni-
tion of contingent rents until such time as its tenants have
achieved their specified target. The effect of the adoption was not
material to the financial statements during 1998, since most of the
Partnership's tenants had met their specified targets prior to year
end and contingent rents were appropriately recognized.
Management, leasing, brokerage and development fees are recognized
as revenue when earned.
(c) Real Estate Investments
Land, buildings and improvements are recorded at cost. All direct
and indirect costs clearly associated with the acquisition,
development and construction of real estate projects owned by the
Partnership are capitalized as buildings and improvements except
for operating properties acquired. Effective March 19, 1998, the
EITF ruled in Issue 97-11, "Accounting for Internal Costs Relating
to Real Estate Property Acquisitions", that only internal costs of
identifying and acquiring non-operating properties that are
directly identifiable with the acquired properties should be
capitalized, and that all internal costs associated with
identifying and acquiring operating properties should be expensed
as incurred. The Partnership had previously capitalized direct
costs associated with the acquisition of operating properties as a
cost of the real estate. The Partnership has adopted EITF 97-11
effective March 19, 1998. During 1997, the Partnership capitalized
approximately $1.5 million of internal costs related to acquiring
operating properties. Through the effective date of EITF 97-11,
the Partnership has capitalized $855,000 of internal acquisition
costs. For the remainder of 1998, the Partnership incurred
approximately $1.5 million of internal costs related to acquiring
operating properties which was expensed.
<PAGE> F-10
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 1998
(c) Real Estate Investments (continued)
Maintenance and repairs which do not improve or extend the useful
lives of the respective assets are reflected in operating and
maintenance expense. The property cost includes the capitalization
of interest expense incurred during construction in accordance
with generally accepted accounting principles.
Depreciation is computed using the straight line method over
estimated useful lives up to forty years for buildings and
improvements, term of lease for tenant improvements, and five to
seven years for furniture and equipment.
(d) Income Taxes
The Partnership is not liable for federal income taxes and each
partner reports its allocable share of income and deductions on
its respective return; accordingly no provision for income taxes
is required in the consolidated financial statements.
Regency Realty Group, Inc., the Partnership's management company
subsidiary ("RRG"), is subject to Federal and State income taxes
and files separate tax returns. RRG had taxable income of
$1,052,233, $918,763 and $0 for the years ended December 31, 1998,
1997 and 1996, respectively. RRG incurred Federal and State income
tax of $344,833 and $327,021 in 1998 and 1997, respectively, and
paid no tax in 1996.
At December 31, 1998 and 1997, the net book basis of real estate
assets exceeds the tax basis by approximately $168.6 million and
$25.4 million, respectively, primarily due to the difference
between the cost basis of the assets acquired and their carryover
basis recorded for tax purposes.
(e) Deferred Costs
Deferred costs consist of internal and external commissions
associated with leasing the rental property and loan costs
incurred in obtaining financing which are limited to initial
direct and incremental costs. The net leasing commission balance
was $2.5 and $1.1 million at December 31, 1998 and 1997,
respectively. The net loan cost balance was $2.6 and $1.1 million
at December 31, 1998 and 1997, respectively. Such costs are
deferred and amortized over the terms of the respective leases and
loans.
(f) Earnings Per Unit
The Partnership applies the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 128, "Earnings per Share" to the
computation, presentation, and disclosure requirements of earnings
per unit. Basic net income per unit is computed based upon the
weighted average number of common units outstanding during the
year. Diluted net income per unit also includes common unit
equivalents for options to purchase additional units and
contingently issuable units when dilutive. See note 7 for the
calculation of earnings per unit.
<PAGE> F-11
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 1998
(g) Cash and Cash Equivalents
Any instruments which have an original maturity of ninety days or
less when purchased are considered cash equivalents.
(h) Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires the
Partnership'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.
(i) Impairment of Long-Lived Assets
The Partnership applies the provisions of SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of". This Statement requires that
long-lived assets and certain identifiable intangibles be reviewed
for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is
measured by a comparison of the carrying amount of an asset to
future net cash flows expected to be generated by the asset. If
such assets are considered to be impaired, the impairment to be
recognized is measured by the amount by which the carrying amount
of the assets exceed the fair value of the assets. Adoption of
this Statement did not have a material impact on the Partnership's
financial position, results of operations, or liquidity.
(j) Stock Option Plan
The Company and the Partnership apply the provisions of SFAS No.
123, "Accounting for Stock Based Compensation", which allows
companies a choice in the method of accounting for stock options.
Entities may recognize as expense over the vesting period the fair
value of all stock-based awards on the date of grant or SFAS No.
123 also permits entities to continue to apply the provisions of
APB Opinion No. 25 and provide pro forma net income and pro forma
earnings per share disclosures for employee stock option grants
made as if the fair-value-based method defined in SFAS No. 123 had
been applied. APB Opinion No. 25 "Accounting for Stock Issued to
Employees", and related interpretations states that compensation
expense would be recorded on the date of grant only if the current
market price of the underlying stock exceeded the exercise price.
The Company and the Partnership have elected to continue to apply
the provisions of APB Opinion No. 25 and provide the pro forma
disclosure provisions of SFAS No. 123.
(k) Allocation of Expenses
All general and administrative expenses incurred by Regency and the
Partnership have been paid by the Partnership. All other expenses
have been allocated between Regency and the Partnership based upon
the direct relationship to the real estate asset for which they were
incurred. The Partnership provides property management
<PAGE> F-12
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 1998
(k) Allocation of Expenses (continuted)
services for the real estate properties within the Partnership as
well as other entities, and earns a fee for these services. Such
fees are recorded as management fee revenue for third parties or as
a reduction of general and administrative expenses for properties
owned by Regency. These fees are charged based on a percentage of
total revenues, as defined.
(l) Statement of Financial Accounting Standards No. 131
The FASB issued Statement of Financial Accounting Standards No.
131, "Disclosures about Segments of an Enterprise and Related
Information" ("FAS 131"), which is effective for fiscal years
beginning after December 15, 1997. FAS 131 establishes standards
for the way that public business enterprises report information
about operating segments in annual financial statements and
requires that those enterprises report selected information about
operating segments in interim and annual financial reports. The
Partnership adopted FAS 131 as disclosed in note 3.
(m) Reclassifications
Certain reclassifications have been made to the 1997 amounts to
conform to classifications adopted in 1998.
2. Acquisitions of Shopping Centers
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. The Partnership expects to acquire all of the
interests in two of the JV Properties for approximately $20.3 million
during 1999 which will increase its total investment in the Midland
properties to $256.9 million. In addition, 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.
The Partnership acquired 34 shopping centers during 1997 (the "1997
Acquisitions") for approximately $377.8 million. Included in the
1997 Acquisitions are 26 shopping centers acquired from Branch Properties
("Branch") for $232.4 million. During 1998, the Partnership issued
721,997 additional Class A Units and shares of common stock valued at
$18.2 million to Branch as contingent consideration for the satisfaction
of certain performance criteria of the properties acquired. The
Partnership expects to issue the remaining contingent consideration,
298,064 Class A Units, during 1999.
<PAGE> F-13
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 1998
2. Acquisitions of Shopping Centers (continued)
The operating results of the 1998 and 1997 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 all 1998 and 1997
Acquisitions had occurred on January 1, 1997. 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 $134.5 and $120.0 million
in 1998 and 1997, respectively. Pro forma net income for common unit-
holders would have been $35.6 and $23.7 million in 1998 and 1997,
respectively. Pro forma basic net income per common unit would have been
$1.21 and $1.17 in 1998 and 1997, respectively. Pro forma diluted net
income per common unit would have been $1.18 and $1.10, in 1998 and 1997,
respectively. This data does not purport to be indicative of what would
have occurred had the Acquisitions been made on January 1, 1997, or of
results which may occur in the future.
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 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> F-14
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 1998
3. Segments (continued)
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 years ended as of December 31,
1998, 1997, and 1996. Non-segment assets to reconcile to total assets
include cash, accounts receivable and deferred financing costs.
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Revenues:
---------
Retail segment $ 109,000,125 65,096,009 20,469,939
Service operations segment 11,862,784 8,447,615 3,444,287
Office buildings segment 532,432 4,684,994 4,498,349
------------- ------------- ------------
Total revenues $ 121,395,341 78,228,618 28,412,575
============= ============= ============
Funds from Operations:
----------------------
Retail segment net operating income $ 84,105,501 49,098,456 14,971,150
Service operations segment income 11,862,784 8,447,615 3,444,287
Office buildings segment net operating income 349,161 2,928,125 2,785,772
Adjustments to calculate consolidated FFO:
Interest expense (23,464,311) (14,761,774) (6,475,909)
Interest income 1,900,136 934,473 609,892
Earnings from recurring land sales 901,853 - -
General and administrative (15,064,148) (9,963,928) (6,048,140)
Non-real estate depreciation (679,740) (406,113) (49,200)
Minority interests of limited partners (464,098) (504,957) -
Minority interests in depreciation
and amortization (526,018) (285,280) -
Share of joint venture depreciation
and amortization 688,686 59,038 39,626
Dividends on preferred shares and units (3,358,333) - -
------------- ------------- ------------
Funds from Operations 56,251,473 35,545,655 9,277,477
------------- ------------- ------------
Reconciliation to net income for common
stockholders:
Real estate related depreciation
and amortization (19,972,635) (11,995,015) (4,295,785)
Minority interests in depreciation
and amortization 526,018 285,280 -
Share of joint venture depreciation
and amortization (688,686) (59,038) (39,626)
Earnings from property sales 9,824,122 450,902 -
------------- ------------- ------------
Net income available for common
Unitholders $ 45,940,292 24,227,784 4,942,066
============= ============= ============
As of December 31
-----------------
Assets (in thousands): 1998 1997 1996
---------------------- ---- ---- ----
Retail segment $ 1,026,910 617,402 222,142
Service operations segment 20,870 20,173 1,695
Office buildings segment - 19,258 21,559
Cash and other assets 38,657 27,016 12,788
============= ============= ===========
Total assets $ 1,086,437 683,849 258,184
============= ============= ===========
</TABLE>
<PAGE>
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 1998
4. Investments in Real Estate Partnerships
The Partnership accounts for all investments in which it owns less than
50% and does not have controlling financial interest, using the equity
method. The Partnership's combined investment in these partnerships was
$30.6 million and $999,730 at December 31, 1998 and 1997, respectively.
Net income is allocated in accordance with each of the partnership
agreements.
5. Notes Payable and Acquisition and Development Line of Credit
The Partnership's outstanding debt at December 31, 1998 and 1997 consists
of the following (in thousands):
1998 1997
---- ----
Notes Payable:
Fixed rate mortgage loans $ 230,398 139,365
Variable rate mortgage loans 11,051 30,841
Fixed rate unsecured loans 121,296 -
-------- --------
Total notes payable 362,745 170,206
Acquisition and development line of credit 117,631 48,131
------- --------
Total $ 480,376 218,337
======== ========
The Partnership has an acquisition and development line of credit (the
"Line") which provides for a commitment up to $300 million, and
incorporates a competitive bid facility of up to $150 million of the
commitment amount. Maximum availability under the Line is based on the
discounted value of a pool of eligible unencumbered assets less the
amount of the Partnership's outstanding unsecured liabilities. The Line,
which is unsecured, matures in May 2000, but may be extended annually for
one year periods. Borrowings under the Line bear interest at a variable
rate based on LIBOR plus a specified spread, (.875% currently), which is
dependent on the Company's investment grade rating. The interest rate on
the Line was 6.56% at December 31, 1998. The Company's ratings are
currently Baa2 from Moody's Investor Service, BBB from Duff and Phelps,
and BBB- from Standard and Poors. The Partnership is required to comply,
and is in compliance, with certain financial covenants customary with
this type of unsecured financing. The Line is used primarily to finance
the acquisition and development of real estate, but is also available for
general working capital purposes.
On July 17, 1998 the Partnership completed a $100 million offering of
seven year term notes at an effective interest rate of 7.17%. The Notes
were priced at 162.5 basis points over the current yield for seven year
US Treasury Bonds. The notes are unsecured and mature on July 15, 2005.
The net proceeds of the offering were used to repay borrowings under the
Line.
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%.
<PAGE> F-16
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 1998
5. Notes Payable and Acquisitions and Development Line of Credit (continue)
During 1998, the Partnership assumed mortgage loans with a fair value of
$124.4 million related to the acquisition of shopping centers, which
includes debt premiums of $12.3 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 December 31, 1998, scheduled principal repayments on notes payable
and the Line were as follows (in thousands):
Scheduled
Principal Term Loan Total
Scheduled Payments by Year Payments Maturities Payments
-------------------------- --------- ---------- --------
1999 $ 3,639 13,440 17,079
2000 3,851 123,674 127,525
2001 3,751 41,928 45,679
2002 3,098 35,951 39,049
2003 2,914 13,291 16,205
Beyond 5 Years 17,812 206,606 224,418
Net unamortized debt payments - 10,421 10,421
------- -------- --------
Total $ 35,065 445,311 480,376
======= ======= =======
Unconsolidated partnerships and joint ventures had mortgage loans payable
of $76.7 million at December 31, 1998, and the Partnership's
proportionate share of these loans was $34.4 million.
The fair value of the Partnership's notes payable and Line are estimated
based on the current rates available to the Partnership for debt of the
same remaining maturities. Variable rate notes payable, and the
Partnership's Line, are considered to be at fair value since the interest
rates on such instruments reprice based on current market conditions.
Notes payable with fixed rates, that have been assumed in connection with
acquisitions, are recorded in the accompanying financial statements at
fair value. The Partnership considers the carrying value of all other
fixed rate notes payable to be a reasonable estimation of their fair
value based on the fact that the rates of such notes are similar to rates
available to the Partnership for debt of the same terms.
6. Regency's Stockholders' Equity and Partners' Capital
Allocation of profits and losses and distributions to unitholders are
made in accordance with the partnership agreement. Distributions to
Limited Partners are made in the same amount as the dividends declared
and paid on Regency common stock. Distributions to the General Partner
are made at the General Partner's discretion.
The following represent equity transactions initiated by Regency. The
proceeds from such transactions are the primary source of capital from
which the Partnership acquires and develops new real estate.
<PAGE> F-17
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 1998
6. Regency's Stockholders' Equity and Partners' Capital (continued)
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. The Agreement primarily
granted SC-USREALTY (i) the right to acquire 7,499,400 shares for
approximately $132 million and also participation rights entitling it
to purchase additional equity in the Company, at the same price as that
offered to other purchasers, each time that the Company sells additional
shares of capital stock or options or other rights to acquire capital
stock, in order to preserve SC-USREALTY's pro rata ownership position;
and (ii) the right to nominate a proportionate number of directors on the
Company's Board, rounded down to the nearest whole number, based upon
SC-USREALTY's percentage ownership of outstanding common stock (but not
to exceed 49% of the Board). SC-USREALTY has acquired all of the
7,499,400 shares related to the Agreement. In connection with the Units
and shares of common stock issued in exchange for Branch's assets.
SC-USREALTY acquired 1,750,000 shares during August and December, 1997 at
$22.125 per share in accordance with their rights as provided for in the
Agreement. In connection with the Units and shares of common stock issued
for Branch in March 1998, SC-USREALTY acquired 435,777 shares at $22.125
per share in accordance with their rights as provided for in the Agree-
ment. The acquisition of Branch is discussed further in note 2.
For a period of at least five years (subject to certain exceptions),
SC-USREALTY is precluded from, among other things, (i) acquiring more
than 45% of the outstanding common stock on a diluted basis, (ii)
transferring shares without the Company's approval in a negotiated
transaction that would result in any transferee beneficially owning more
than 9.8% of the Company's capital stock, or (iii) acting in concert with
any third parties as part of a 13D group. Subject to certain exceptions,
SC-USREALTY is required to vote its shares either as recommended by the
Board of Directors or proportionately in accordance with the vote of the
other stockholders.
On July 11, 1997, the Company sold 2,415,000 shares to the public at
$27.25 per share. In connection with that offering, SC-USREALTY purchased
an additional 1,785,000 shares at $27.25 directly from the Company. On
August 11, 1997, the Underwriters exercised the over-allotment option and
the Company issued an additional 129,800 shares to the public and 95,939
shares to SC-USREALTY at $27.25 per share. Total proceeds from the sale
of common stock to the public and SC-USREALTY of approximately $117
million net of offering expenses was used to reduce the balance of the
Line.
In connection with the acquisition of shopping centers, the Partnership
has issued Series A and Series 2 Units to limited partners convertible on
a one for one basis into shares of common stock of the Company. There are
currently 1,361,396 Series A and Series 2 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
<PAGE> F-18
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 1998
6. Regency's Stockholder's Equity and Partners' Capital (continued)
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.
7. Earnings Per Unit
The following summarizes the calculation of basic and diluted earnings
per unit for the years ended, December 31, 1998, 1997 and 1996 (in
thousands except per share data):
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Basic Earnings Per Unit (EPU) Calculation:
------------------------------------------
Weighted average units outstanding 24,991 15,891 5,191
======= ======= ======
Net income for common unitholders $ 45,940 24,228 4,942
Less: dividends paid on Class B common
Stock 5,378 5,140 3,937
------- ------- ------
Net income for Basic and Diluted EPU 40,562 19,088 1,005
======= ======= ======
Basic EPU $ 1.62 1.20 0.19
======= ======= ======
Diluted Earnings Per Unit (EPU) Calculation:
--------------------------------------------
Weighted average units outstanding for
Basic EPU 24,991 15,891 5,191
Incremental units to be issued under
common stock options using the Treasury
method 14 80 3
Contingent units for the acquisition
of real estate 511 955 -
------- ------- ------
Total diluted units 25,516 16,926 5,194
======= ======= ======
Diluted EPU $ 1.58 1.13 0.19
======= ======= ======
</TABLE>
The Class B common stock dividends are deducted from income in
computing earnings per unit since the proceeds of this offering was
transferred to an reinvested by the Partnership. Accordingly, payment
of such dividends is dependent upon the operations of the Partnership.
8. Long-Term Stock Incentive Plans
Regency is committed to contribute to the Partnership all proceeds from
the exercise of options or other stock-based awards granted under
Regency's Stock Option and Incentive Plan. Regency's ownership in the
Partnership will be increased based on the amount of proceeds contributed
to the Partnership.
<PAGE> F-19
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 1998
8. Long-Term Stock Incentive Plans (continued)
In 1993, the Company adopted a Long-Term Omnibus Plan (the "Plan")
pursuant to which the Board of Directors may grant stock and stock
options to officers, directors and other key employees. The Plan provides
for the issuance of up to 12% of the Company's common shares outstanding
not to exceed 3.0 million shares. Stock options are granted with an
exercise price equal to the stock's fair market value at the date of
grant. All stock options granted have ten year terms, and with respect to
officers and other key employees, become fully exercisable after four
years from the date of grant, and with respect to directors, become fully
exercisable after one year.
At December 31, 1998, there were approximately 300,000 shares available
for grant under the Plan. The per share weighted-average fair value of
stock options granted during 1998 and 1997 was $2.22 and $3.26 on the
date of grant using the Black Scholes option-pricing model with the
following weighted-average assumptions: 1998 - expected dividend yield
7.5%, risk-free interest rate of 4.8%, expected volatility 21%, and an
expected life of 6.5 years; 1997 - expected dividend yield 6.3%,
risk-free interest rate of 6.3%, expected volatility 21%, and an expected
life of 5.7 years; The Company and the Partnership apply APB Opinion No.
25 in accounting for this Plan and, accordingly, no compensation cost has
been recognized for its stock options in the consolidated financial
statements.
Had the Partnership determined compensation cost based on the fair value
at the grant date for its stock options under SFAS No. 123, the
Partnership's net income for common unitholders would have been reduced
to the pro forma amounts indicated below (in thousands except per share
data):
<TABLE>
<CAPTION>
Net income for
Common unitholders 1998 1997 1996
------------------ ---- ---- ----
<S> <C> <C> <C>
As reported: $45,940 $24,228 $4,942
Net income per unit:
Basic $1.62 $1.20 $0.19
Diluted $1.58 $1.13 $0.19
Pro forma: $44,915 $22,603 $4,932
Net income per unit:
Basic $1.58 $1.09 $0.19
Diluted $1.55 $1.03 $0.19
</TABLE>
Pro forma net income for common unitholders reflects only
options granted subsequent to the issuance of SFAS 123 in
1995. Therefore, the full impact of calculating compensation
cost for stock options under SFAS No. 123 is not reflected in
the pro forma net income for common unitholders amounts
presented above because compensation cost is reflected over
the options' vesting period and compensation cost for options
granted prior to January 1, 1995 is not considered.
<PAGE> F-20
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 1998
8. Long-Term Stock Incentive Plans (continued)
Stock option activity during the periods indicated is as follows:
<TABLE>
<CAPTION>
Number of Weighted-Average
Shares Exercise Price
------ --------------
<S> <C> <C>
Outstanding, December 31, 1995 186,000 $19.09
Granted 12,000 24.67
----------
Outstanding, December 31, 1996 198,000 19.43
----------
Granted 1,252,276 25.39
Forfeited (7,000) 23.54
Exercised (124,769) 19.25
----------
Outstanding, December 31, 1997 1,318,507 25.08
----------
Granted 741,265 24.39
Forfeited (123,495) 25.33
Exercised (227,700) 24.97
----------
Outstanding, December 31, 1998 1,708,577 $24.71
==========
</TABLE>
<TABLE>
The following table presents information regarding all options outstanding at
December 31, 1998.
<CAPTION>
Weighted
Average Weighted
Number of Remaining Range of Average
Options Contractual Exercise Exercise
Outstanding Life Prices Price
----------- ----------- -------- --------
<S> <C> <C> <C> <C>
51,731 5.0 years $ 16.75 - 19.25 $ 18.93
1,231,578 8.6 years 22.25 - 25.25 24.26
425,268 8.4 years 26.19 - 27.75 26.69
----------- --------- ----------------- ----------
1,708,577 8.5 years $ 16.75 - 27.75 $ 24.71
========== ========== ================= ===========
</TABLE>
The following table presents information regarding options currently
exercisable at December 31, 1998:
Weighted
Number of Range of Average
Options Exercise Exercise
Exercisable Prices Price
51,731 $ 16.75 - 19.25 $ 18.93
98,300 25.25 25.25
88,881 26.25 - 27.75 26.99
-------- -------------- ----------
238,912 $ 16.75 - 27.75 $ 24.53
======== =============== ==========
<PAGE> F-21
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 1998
8. Long-Term Stock Incentive Plans (continued)
Also as part of the Plan, in 1993, 1996 and 1998, certain officers and
employees purchased common stock at fair market value directly from the
Company, of which 90%, 95% and 95%, respectively, was financed by a stock
purchase loan provided by the Plan. These recourse loans are fully
secured by stock, bear interest at fixed rates of 6% to 7.79% and mature
after ten years. The Board of Directors may authorize the forgiveness of
all or a portion of the principal balance based on the Company's
achievement of specified financial objectives, and total stockholder
return performance targets. During 1998, 1997, and 1996, $662,196,
$601,516, and $646,598 was forgiven, respectively, and is included as a
charge to income on the Partnership's consolidated statements of
operations. The Company also has a performance based restricted stock
plan for officers whereby a portion of the shares authorized under the
Plan may be granted upon the achievement of certain total stockholder
return performance targets. Shares granted under the plan become fully
vested by January 1, 2000. During 1998, 1997 and 1996, the Company
charged $250,000, $259,600 and $809,400 to income on the consolidated
statement of operations related to the restricted stock plan. In
addition, the Company provided it's officers, directors and employees
with other stock based compensation totaling $1.5, $1.7, and $1.5 million
during 1998, 1997 and 1996, respectively.
9. Operating Leases
The Partnership's properties are leased to tenants under operating leases
with expiration dates extending to the year 2028. Future minimum rent
under noncancelable operating leases as of December 31,1998, excluding
tenant reimbursements of operating expenses and excluding additional
contingent rentals based on tenants' sales volume are as follows:
Year ending December 31, Amount
1999 91,865,075
2000 88,110,560
2001 75,138,672
2002 63,475,706
2003 55,335,158
Thereafter 429,626,646
-------------
Total $ 803,551,817
=============
At December 31, 1998, the real estate portfolio as a whole was approxi-
mately 94% leased.
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 which individually represented 10%
or more of the Partnership's combined minimum rent.
<PAGE> F-22
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 1998
10. Contingencies
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. While the
Partnership has registered the plants located in Florida under a state
funded program designed to substantially fund the clean up, if necessary,
of any environmental issues, the owner or operator is not relieved from
the ultimate responsibility for clean up. The Partnership also has
established due diligence procedures to identify and evaluate potential
environmental issues on properties under consideration for acquisition.
In connection with acquisitions during 1998 and 1997, the Partnership has
established environmental reserves which amounted to $2.2 million and
$1.9 million at December 31, 1998 and 1997, respectively. While it is not
possible to predict with certainty, management believes that the reserves
are adequate to cover future clean-up costs related to these sites. The
Partnership's policy is to accrue environmental clean-up costs when it is
probable that a liability has been incurred and that amount is reasonably
estimable. 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
Partnership.
11. Summary of Quarterly Financial Data (Unaudited)
Presented below is a summary of the consolidated quarterly financial data
for the years ended December 31, 1998 and 1997 (amounts in thousands,
except per share data):
<TABLE>
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
<S> <C> <C> <C> <C>
1998:
Revenues $ 25,147 29,269 31,853 35,126
Net income for
common unitholders 18,555 9,473 9,162 8,750
Net income per unit:
Basic .70 .33 .31 .29
Diluted .69 .32 .30 .28
1997:
Revenues $ 12,991 19,468 22.290 23,480
Net income for
common unitholders 3,320 4,049 7,979 8,880
Net income per unit:
Basic .20 .20 .35 .37
Diluted .20 .19 .33 .35
</TABLE>
<PAGE> F-23
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 1998
12. Subsequent Events
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,
provides 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 is $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 is $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 properties acquired from
Pacific will be contributed by Regency into the Partnership in exchange
for additional partnership units. The merger will be accounted for as a
purchase with the Company as the acquiring entity.
On February 26, 1999, the Partnership entered into an agreement with the
various banks that provide the Line to increase the unsecured commitment
amount to $635 million.
<PAGE> S-1
Independent Auditors' Report
On Financial Statement Schedule
The Unitholders of Regency Centers, L.P. and the Board of Directors of
Regency Realty Corporation
Under date of February 1, 1999, except for Note 12 as to which the date is March
1, 1999, we reported on the consolidated balance sheets of Regency Centers, L.P.
as of December 31, 1998 and 1997, and the related consolidated statements of
operations, changes in capital, and cash flows for each of the years in the
three-year period ended December 31, 1998, as contained in the annual report on
Form 10-K for the year 1998. In connection with our audits of the aforementioned
consolidated financial statements, we also audited the related financial
statement schedule as listed in the accompanying index on page F-1 of the annual
report on Form 10-K for the year 1998. This financial statement schedule is the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on the financial statement schedule based on our audits.
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.
KPMG LLP
Jacksonville, Florida
February 1, 1999
<PAGE> S-2
<TABLE>
REGENCY CENTERS, L.P. Schedule III
Combined Real Estate and Accumulated Depreciation
December 31, 1998
<CAPTION>
Initial Cost Total Cost
------------ Cost Capitalized ---------------------------------------
Building & Subsequent to Building &
Land Improvements Acquisition Land Improvements Total
---- ------------ ----------- ---- ------------ -----
<S> <C> <C> <C> <C> <C> <C>
ANASTASIA SHOPPING PLAZA 1,072,451 3,617,493 159,607 1,072,451 3,777,100 4,849,551
ASHFORD PLACE 2,803,998 9,943,994 (761,970) 2,583,998 9,402,024 11,986,022
BECKETT COMMONS 1,625,242 5,844,871 - 1,625,242 5,844,871 7,470,113
BENEVA 2,483,547 8,851,199 - 2,483,547 8,851,199 11,334,746
BENT TREE PLAZA 1,927,712 6,659,082 - 1,927,712 6,659,082 8,586,794
BERKSHIRE COMMONS 2,294,960 8,151,236 76,079 2,294,960 8,227,315 10,522,275
BLOOMINGDALE 3,861,759 14,100,891 - 3,861,759 14,100,891 17,962,650
BOLTON PLAZA 2,660,227 6,209,110 1,219,398 2,634,664 7,454,071 10,088,735
BOYNTON LAKES PLAZA 2,783,000 10,043,027 37,669 2,783,000 10,080,696 12,863,696
BRAELINN VILLAGE EQUIPORT 4,191,214 12,389,585 876,936 4,191,214 13,266,521 17,457,735
BRIARCLIFF LA VISTA 694,120 2,462,819 - 694,120 2,462,819 3,156,939
BRIARCLIFF VILLAGE 4,597,018 16,303,813 334,677 4,597,018 16,638,490 21,235,508
BROOKVILLE PLAZA 1,208,012 4,205,994 - 1,208,012 4,205,994 5,414,006
BUCKHEAD COURT 1,737,569 6,162,941 1,229,361 1,627,569 7,502,302 9,129,871
CAMBRIDGE SQUARE 792,000 2,916,034 59,747 792,000 2,975,781 3,767,781
CARMEL COMMONS 2,466,200 8,903,187 1,526,996 2,466,200 10,430,183 12,896,383
CARRIAGE GATE 740,960 2,494,750 1,101,049 740,960 3,595,799 4,336,759
CENTER OF SEVEN SPRINGS 1,737,994 6,290,048 1,452,432 1,757,440 7,723,034 9,480,474
CHERRY GROVE 3,533,146 12,710,297 - 3,533,146 12,710,297 16,243,443
CITY VIEW SHOPPING CENTER 1,207,204 4,341,304 46,444 1,207,204 4,387,748 5,594,952
CROMWELL SQUARE 1,771,892 6,285,288 27,249 1,771,892 6,312,537 8,084,429
CUMMING 400 2,374,562 8,420,776 134,871 2,374,562 8,555,647 10,930,209
DUNWOODY HALL 1,819,209 6,450,922 329,740 1,819,209 6,780,662 8,599,871
DUNWOODY VILLAGE 2,326,063 7,216,045 2,064,462 2,326,063 9,280,507 11,606,570
EAST POINTE 1,868,120 6,742,983 - 1,868,120 6,742,983 8,611,103
EAST PORT PLAZA 3,257,023 11,611,363 164,282 3,257,023 11,775,645 15,032,668
ENSLEY SQUARE 915,493 3,120,928 410,219 915,493 3,531,147 4,446,640
EVANS CROSSING 1,468,743 5,123,617 - 1,468,743 5,123,617 6,592,360
FLEMING ISLAND 3,076,701 6,291,505 - 3,076,701 6,291,505 9,368,206
FRANKLIN SQUARE 2,584,025 9,379,749 - 2,584,025 9,379,749 11,963,774
GARDEN SQUARE 2,073,500 7,614,748 361,367 2,136,135 7,913,480 10,049,615
GARNER FESTIVAL 5,591,099 19,897,197 - 5,591,099 19,897,197 25,488,296
GLENWOOD VILLAGE 1,194,198 4,235,476 81,175 1,194,198 4,316,651 5,510,849
HAMILTON MEADOWS 2,034,566 6,582,429 - 2,034,566 6,582,429 8,616,995
HARPETH VILLAGE FIELDSTONE 2,283,874 5,559,498 3,537,926 2,283,874 9,097,424 11,381,298
HIGHLAND SQUARE 2,615,250 9,359,722 - 2,615,250 9,359,722 11,974,972
HINSDALE LAKE COMMONS 4,217,840 15,039,854 - 4,217,840 15,039,854 19,257,694
HYDE PARK 9,240,000 33,340,181 2,625,631 9,735,102 35,470,710 45,205,812
KERNERSVILLE PLAZA 1,741,562 6,081,020 - 1,741,562 6,081,020 7,822,582
LAKE PINE PLAZA 2,008,110 6,908,986 - 2,008,110 6,908,986 8,917,096
LAKESHORE 1,617,940 5,371,499 - 1,617,940 5,371,499 6,989,439
LOEHMANNS PLAZA 3,981,525 14,117,891 11,371 3,981,525 14,129,262 18,110,787
LOVEJOY STATION 1,540,000 5,581,468 1,654 1,540,000 5,583,122 7,123,122
MAINSTREET SQUARE 1,274,027 4,491,897 34,392 1,274,027 4,526,289 5,800,316
MARINERS VILLAGE 1,628,000 5,907,835 134,497 1,628,000 6,042,332 7,670,332
MARKETPLACE ST PETE 1,287,000 4,662,740 223,490 1,287,000 4,886,230 6,173,230
MARKETPLACE CENTER OLD FORT 2,432,942 1,755,643 1,813,070 2,432,942 3,568,713 6,001,655
MAXTOWN ROAD (NORTHGATE) 1,753,136 6,244,449 - 1,753,136 6,244,449 7,997,585
<PAGE> S-3
MAYNARD CROSSING 4,066,381 14,083,800 - 4,066,381 14,083,800 18,150,181
MEMORIAL BEND SHOPPING CENTER 3,256,181 11,546,660 1,481,282 3,366,181 12,917,942 16,284,123
MERCHANTS VILLAGE 1,054,306 3,162,919 3,185,485 1,054,306 6,348,404 7,402,710
NEWBERRY SQUARE 2,341,460 8,466,651 784,841 2,341,460 9,251,492 11,592,952
OAKLEY PLAZA 1,772,540 6,406,975 65,103 1,772,540 6,472,078 8,244,618
OLD ST AUGUSTINE PLAZA 2,047,151 7,355,162 233,330 2,047,151 7,588,492 9,635,643
ORCHARD SQUARE 1,155,000 4,135,353 252,060 1,155,000 4,387,413 5,542,413
PACES FERRY PLAZA 2,811,522 9,967,557 1,627,529 2,811,622 11,594,986 14,406,608
PALM HARBOUR SHOPPING VILLAGE 2,899,928 10,998,230 1,058,599 2,899,928 12,056,829 14,956,757
PALM TRAILS PLAZA 2,438,996 5,818,523 - 2,438,996 5,818,523 8,257,519
PARAGON BRANDON JV 570,000 2,472,537 (3,042,537) - - -
PARK PLACE 2,231,745 7,974,362 - 2,231,745 7,974,362 10,206,107
PARKWAY STATION 1,123,200 4,283,917 142,744 1,123,200 4,426,661 5,549,861
PEACHLAND PROMENADE 1,284,562 5,143,564 61,087 1,284,561 5,204,652 6,489,213
PEARTREE VILLAGE 5,196,653 8,732,711 10,122,933 5,196,653 18,855,644 24,052,297
PIKE CREEK 5,077,406 18,860,183 - 5,077,406 18,860,183 23,937,589
PINE TREE PLAZA 539,000 1,995,927 (84,927) 539,000 1,911,000 2,450,000
POWERS FERRY SQUARE 3,607,647 12,790,749 3,253,948 3,607,647 16,044,697 19,652,344
POWERS FERRY 1,190,822 4,223,606 19,564 1,190,822 4,243,170 5,433,992
QUADRANT AT SOUTHPOINT I 2,342,823 15,541,967 (17,884,790) - - -
QUEENSBOROUGH 1,826,000 6,501,056 - 1,826,000 6,501,056 8,327,056
REGENCY COURT 3,571,337 12,664,014 285,562 3,571,337 12,949,576 16,520,913
RIVERMONT STATION 2,887,213 10,445,109 79,795 2,887,213 10,524,904 13,412,117
ROSWELL VILLAGE 2,304,345 6,777,200 181,066 2,304,345 6,958,266 9,262,611
RUSSELL RIDGE 2,153,214 - 6,565,264 2,215,341 6,503,137 8,718,478
SANDY PLAINS VILLAGE 2,906,640 10,412,440 433,698 2,906,640 10,846,138 13,752,778
SANDY SPRINGS VILLAGE 733,126 2,565,411 168,915 733,126 2,734,326 3,467,452
SHOPPES @ 104 2,651,000 9,523,429 - 2,651,000 9,523,429 12,174,429
SHOPPES AT MASON 1,576,656 5,357,855 - 1,576,656 5,357,855 6,934,511
SILVERLAKE 2,004,860 7,161,869 - 2,004,860 7,161,869 9,166,729
SOUTH MONROE 1,200,000 6,566,974 - 1,200,000 6,566,974 7,766,974
SOUTH POINTE CROSSING - 13,000 - - 13,000 13,000
ST ANN SQUARE 1,541,883 5,597,282 - 1,541,883 5,597,282 7,139,165
STATLER SQUARE 2,227,819 7,479,952 - 2,227,819 7,479,952 9,707,771
TAMIAMI TRAILS 2,046,286 7,462,646 108,330 2,046,286 7,570,976 9,617,262
TEQUESTA SHOPPES 1,782,000 6,426,042 235,213 1,782,000 6,661,255 8,443,255
THE MARKETPLACE 546,828 2,187,314 1,951 546,829 2,189,264 2,736,093
TOWN CENTER AT MARTIN DOWNS 1,364,000 4,985,410 17,547 1,364,000 5,002,957 6,366,957
TOWN SQUARE 438,302 1,555,481 1,501,322 768,302 2,726,803 3,495,105
TROWBRIDGE CROSSING EQUIPORT 910,263 1,914,551 1,050,010 910,263 2,964,561 3,874,824
UNION SQUARE SHOPPING CENTER 1,578,654 5,933,889 386,260 1,578,656 6,320,147 7,898,803
UNIVERSITY COLLECTION 2,530,000 8,971,597 108,317 2,530,000 9,079,914 11,609,914
UNIVERSITY MARKETPLACE 3,250,562 7,044,579 2,409,463 3,532,046 9,172,558 12,704,604
VILLAGE CENTER 6 3,010,586 10,799,316 337,899 3,010,586 11,137,215 14,147,801
WELLEBY 1,496,000 5,371,636 346,882 1,496,000 5,718,518 7,214,518
WELLINGTON MARKET PLACE 5,070,384 13,308,972 319,657 5,070,384 13,628,629 18,699,013
WELLINGTON TOWN SQUARE 1,914,000 7,197,934 609,258 1,914,000 7,807,192 9,721,192
WESTCHESTER PLAZA 1,857,048 6,456,178 - 1,857,048 6,456,178 8,313,226
<PAGE> S-4
WESTLAND I 198,344 1,747,391 (1,945,735) - - -
WINDMILLER PLAZA PHASE I 2,620,355 11,190,526 - 2,620,355 11,190,526 13,810,881
WOODCROFT SHOPPING CENTER 1,419,000 5,211,981 384,592 1,419,000 5,596,573 7,015,573
WORTHINGTON PARK CENTRE 3,346,203 10,053,858 - 3,346,203 10,053,858 13,400,061
-----------------------------------------------------------------------------------------
224,364,964 758,843,629 34,175,338 222,259,131 795,124,798 1,017,383,929
=========================================================================================
<CAPTION>
Total Cost
Net of
Accumulated Accumulated Secured
Depreciation Depreciation Mortgages
------------ ------------ ---------
<S> <C> <C> <C>
ANASTASIA SHOPPING PLAZA 575,105 4,274,446 -
ASHFORD PLACE 580,642 11,405,380 4,651,887
BECKETT COMMONS 128,560 7,341,553 -
BENEVA - 11,334,746 -
BENT TREE PLAZA 148,955 8,437,839 5,615,296
BERKSHIRE COMMONS 1,062,021 9,460,254 7,784,755
BLOOMINGDALE 300,874 17,661,776 -
BOLTON PLAZA 928,470 9,160,265 -
BOYNTON LAKES PLAZA 251,445 12,612,251 -
BRAELINN VILLAGE EQUIPORT 729,122 16,728,613 12,356,039
BRIARCLIFF LA VISTA 139,030 3,017,909 1,649,897
BRIARCLIFF VILLAGE 968,021 20,267,487 13,282,120
BROOKVILLE PLAZA 103,342 5,310,664 3,668,969
BUCKHEAD COURT 389,391 8,740,480 -
CAMBRIDGE SQUARE 151,176 3,616,605 -
CARMEL COMMONS 434,794 12,461,589 -
CARRIAGE GATE 735,440 3,601,319 -
CENTER OF SEVEN SPRINGS 1,115,924 8,364,550 -
CHERRY GROVE 265,335 15,978,108 -
CITY VIEW SHOPPING CENTER 273,129 5,321,823 -
CROMWELL SQUARE 372,007 7,712,422 4,464,426
CUMMING 400 501,697 10,428,512 6,419,476
DUNWOODY HALL 387,763 8,212,108 -
DUNWOODY VILLAGE 459,895 11,146,675 7,264,800
EAST POINTE 129,414 8,481,689 5,267,546
EAST PORT PLAZA 534,694 14,497,974 -
ENSLEY SQUARE 206,478 4,240,162 -
EVANS CROSSING 117,619 6,474,741 4,379,981
FLEMING ISLAND 78,219 9,289,987 3,522,104
FRANKLIN SQUARE 198,248 11,765,526 9,136,752
GARDEN SQUARE 244,096 9,805,519 6,516,686
GARNER FESTIVAL 124,404 25,363,892 -
GLENWOOD VILLAGE 257,101 5,253,748 2,211,233
HAMILTON MEADOWS 167,943 8,449,052 5,612,141
HARPETH VILLAGE FIELDSTONE 213,202 11,168,096 -
HIGHLAND SQUARE 135,556 11,839,416 3,942,071
HINSDALE LAKE COMMONS 31,394 19,226,300 -
HYDE PARK 1,381,919 43,823,893 24,750,000
KERNERSVILLE PLAZA 123,771 7,698,811 5,218,476
LAKE PINE PLAZA 144,204 8,772,892 5,986,557
LAKESHORE 113,706 6,875,733 3,729,331
LOEHMANNS PLAZA 835,982 17,274,805 -
LOVEJOY STATION 209,663 6,913,459 -
MAINSTREET SQUARE 204,362 5,595,954 -
MARINERS VILLAGE 273,727 7,396,605 -
MARKETPLACE ST PETE 375,700 5,797,530 -
MARKETPLACE CENTER OLD FORT 167,760 5,833,895 1,986,409
MAXTOWN ROAD (NORTHGATE) 107,300 7,890,285 5,440,112
MAYNARD CROSSING 286,993 17,863,188 11,711,134
MEMORIAL BEND SHOPPING CENTER 696,953 15,587,170 8,335,963
MERCHANTS VILLAGE 196,291 7,206,419 -
NEWBERRY SQUARE 1,366,907 10,226,045 -
OAKLEY PLAZA 290,343 7,954,275 -
OLD ST AUGUSTINE PLAZA 440,733 9,194,910 -
ORCHARD SQUARE 332,356 5,210,057 -
PACES FERRY PLAZA 630,953 13,775,655 -
PALM HARBOUR SHOPPING VILLAGE 700,457 14,256,300 -
PALM TRAILS PLAZA 84,337 8,173,182 -
PARAGON BRANDON JV - - -
PARK PLACE 33,228 10,172,879 -
PARKWAY STATION 319,124 5,230,737 -
PEACHLAND PROMENADE 571,096 5,918,117 -
PEARTREE VILLAGE 673,528 23,378,769 12,777,420
PIKE CREEK 226,061 23,711,528 12,442,166
PINE TREE PLAZA 48,350 2,401,650 -
POWERS FERRY SQUARE 798,322 18,854,022 -
POWERS FERRY 238,707 5,195,285 2,917,943
QUADRANT AT SOUTHPOINT I - - -
QUEENSBOROUGH 13,544 8,313,512 -
REGENCY COURT 718,475 15,802,438 -
RIVERMONT STATION 395,653 13,016,464 -
ROSWELL VILLAGE 300,168 8,962,443 -
RUSSELL RIDGE 633,539 8,084,939 -
SANDY PLAINS VILLAGE 640,709 13,112,069 -
SANDY SPRINGS VILLAGE 131,641 3,335,811 -
SHOPPES @ 104 138,509 12,035,920 -
SHOPPES AT MASON 111,748 6,822,763 3,925,611
SILVERLAKE 104,315 9,062,414 -
SOUTH MONROE 54,424 7,712,550 -
SOUTH POINTE CROSSING - 13,000 -
ST ANN SQUARE 143,068 6,996,097 4,972,117
STATLER SQUARE 157,923 9,549,848 5,472,654
TAMIAMI TRAILS 275,743 9,341,519 -
TEQUESTA SHOPPES 385,668 8,057,587 -
THE MARKETPLACE 209,679 2,526,414 -
TOWN CENTER AT MARTIN DOWNS 260,896 6,106,061 -
TOWN SQUARE 97,568 3,397,537 -
TROWBRIDGE CROSSING EQUIPORT 109,285 3,765,539 1,800,000
UNION SQUARE SHOPPING CENTER 374,850 7,523,953 -
UNIVERSITY COLLECTION 502,408 11,107,506 -
UNIVERSITY MARKETPLACE 1,826,835 10,877,769 -
VILLAGE CENTER 6 878,291 13,269,510 -
WELLEBY 554,962 6,659,556 -
WELLINGTON MARKET PLACE 1,127,296 17,571,717 -
WELLINGTON TOWN SQUARE 486,760 9,234,432 -
WESTCHESTER PLAZA 172,301 8,140,925 5,815,752
WESTLAND I - - -
WINDMILLER PLAZA PHASE I 141,017 13,669,864 -
WOODCROFT SHOPPING CENTER 299,819 6,715,754 -
WORTHINGTON PARK CENTRE 192,029 13,208,032 4,967,081
---------------------------------------------
36,752,466 980,631,463 229,994,905
=============================================
</TABLE>
<PAGE> S-5
REGENCY CENTERS, L.P.
Combined Real Estate and Accumulated Depreciation
December 31, 1998
Depreciation and amortization of the Company's investment in buildings and
improvements reflected in the statement of operation is calculated over the
estimated useful lives of the assets as follows:
Buildings and improvements up to 40 years
The aggregate cost for Federal income tax purposes was approximately $865
million at December 31, 1998.
The changes in total real estate assets for the period ended December 31, 1998,
1997 and 1996:
1998 1997 1996
------------- ------------ ------------
Balance, beginning of period 644,770,114 252,670,199 149,419,123
Developed or acquired
properties 389,940,413 390,902,973 101,924,556
Sale of property (24,248,801) (2,907,503) -
Improvements 6,922,203 4,104,445 1,326,520
------------- ------------ ------------
Balance, end of period 1,017,383,929 644,770,114 252,670,199
============= ============ ============
The changes in accumulated depreciation for the period ended December 31, 1998,
1997 and 1996:
1998 1997 1996
------------- ------------ ------------
Balance, beginning of period 22,537,454 11,669,690 7,647,935
Sale of property (5,121,929) (713,176) -
Depreciation for period 19,336,941 11,580,940 4,021,755
------------- ------------ ------------
Balance, end of period 36,752,466 22,537,454 11,669,690
============= ============ ============
<TABLE>
Subsidiaries of Regency Centers, L.P. and Equity Ownership Thereof
NATURE OF % OF
<CAPTION>
ENTITY JURISDICTION OWNER(S) INTEREST OWNERSHIP
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Regency Centers, L.P. Delaware Regency Realty Corporation General Partnership 95%
Outside Investors Limited Partnership 5%
Regency Realty Group, Inc Florida The Regency Group, Inc. Common Stock 93%
(formerly Regency Realty Regency Centers, L.P. Common Stock 7%
Group II, Inc.) Regency Centers, L.P. Preferred Stock 100%
RRC Lender, Inc. Florida Regency Realty Group, Inc. Common Stock 100%
Chestnut Powder, LLC Georgia Regency Realty Group, Inc. Member 100%
Marietta Outparcel, Inc. Georgia Regency Realty Group, Inc. Common Stock 100%
Barnett Shoales, LLC Georgia Regency Realty Group, Inc. Member 100%
Panama Cove, Inc. Florida Regency Realty Group, Inc. Common Stock 100%
Thompson-Nolensville, LLC Florida Regency Realty Group, Inc. Member 100%
Dixon, LLC Florida Regency Realty Group, Inc. Member 100%
Rhett-Remount, LLC Florida Regency Realty Group, Inc. Member 100%
Dunn & Briarcliff, Inc. Florida Regency Realty Group, Inc. Common Stock 100%
Edmunson Orange Corp. Tennessee Regency Realty Group, Inc. Common Stock 100%
Tulip Grove, LLC Florida Edmunson Orange Corp. Member 100%
Hermitage Development, LLC Florida Edmunson Orange Corp. Member 100%
West End Property, LLC Florida Edmunson Orange Corp. Member 100%
Regency Office Partnership, L.P. Delaware Regency Centers, L.P. General Partnership 99%
Regency Realty Corporation Limited Partnership 1%
Equiport Associates, L.P. Georgia Regency Centers, L.P. General Partnership 55%
Outside Investors Limited Partnership 45%
Branch/HOP Associates, l.P. Georgia Regency Centers, L.P. General Partnership 50.01%
Outside Investors Limited Partnership 49.99%
Old Fort Associates, L.P. Georgia Regency Centers, L.P. General Partnership 66.70%
Outside Investors Limited Partnership 33.30%
Fieldstone Associates, L.P. Georgia Regency Centers, L.P. General Partnership 7%
Outside Investors Limited Partnership 30%
RRC Operating Partnership of Georgia Regency Centers, L.P. General Partnership 16%
Georgia, L.P. Outside Investors Limited Partnership 84%
Regency Ocean East Partnership Florida Regency Centers, L.P. General Partnership 25%
Limited Outside Investors Limited Partnership 75%
R&M Western Partnership, L.P. Delaware Regency Realty Group, Inc. General Partnership 24.00%
Regency Centers, L.P. Limited Partnership 1.00%
OTR/Regency Colorado Realty Ohio R&M Western Partnership, L.P. General Partnership 30%
Holdings, L.P.
OTR/Regency Texas Realty Holdings, Ohio R&M Western Partnership, L.P. General Partnership 30%
L.P.
T&M Allen Development Company Texas R&M Western Partnership, L.P. General Partnership 50%
Topvalco
T&M Arlington Development Company Texas R&M Western Partnership, L.P. General Partnership 50%
Topvalco General Partnership 50%
M&KS Arvada Development, LLC Colorado R&M Western Partnership, L.P. Member 50%
Dillon Real Estate Member 50%
M&KS Parker Development, LLC Colorado R&M Western Partnership, L.P. Member 50%
Dillon Real Estate Member 50%
M&KS Cheyenne Meadows Development, Colorado R&M Western Partnership, L.P. Member 50%
LLC Dillon Real Estate Member 50%
Woodmen Development, LLC Colorado R&M Western Partnership, L.P. Member 50%
Outside Investors Members 50%
R&KS Dell Range, LLC Wyoming R&M Western Partnership, L.P. Member 50%
Dillon Real Estate Member 50%
T&M Frisco Development Company Texas R&M Western Partnership, L.P. General Partnership 50%
Topvalco General Partnership 50%
T&M Shiloh Development Company Texas R&M Western Partnership, L.P. General Partnership 50%
Topvalco General Partnership 50%
T&M Realty No. 1, LLC Georgia Regency Centers, L.P. Member 50%
Topvalco Member 50%
Queensboro Associates, L.P. Delaware Regency Centers, L.P. General Partnership 50%
Outside Investors Limited Partnership 50%
</TABLE>
Exhibit 23.0
Independent Auditors' Consent
The Unitholders of Regency Centers, L.P. and the
Board of Directors of Regency Realty Corporation:
We consent to incorporation by reference in the registration statements (No.
333-72899) on Form S-3 and (No. 333-63723) on Form S-4 of Regency Centers, L.P.,
of our reports dated February 1, 1999, except for Note 12 as to which the date
is March 1, 1999, relating to the consolidated balance sheets of Regency
Centers, L.P. as of December 31, 1998 and 1997, and the related consolidated
statements of operations, changes in capital, and cash flows for each of the
years in the three year period ended December 31, 1998, and related schedule,
which reports appear in the December 31,1998, annual report on Form 10-K of
Regency Centers, L.P.
KPMG LLP
Jacksonville, Florida
March 18, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM REGENCY
CENTERS, L.P. ANNUAL REPORT FOR THE YEAR ENDED 12/31/98
</LEGEND>
<CIK> 0001066247
<NAME> REGENCY CENTERS, L.P.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 15,536,926
<SECURITIES> 0
<RECEIVABLES> 15,500,623
<ALLOWANCES> 1,787,686
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,084,532,043
<DEPRECIATION> 36,752,466
<TOTAL-ASSETS> 1,086,436,950
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 574,267,992
<TOTAL-LIABILITY-AND-EQUITY> 1,086,436,950
<SALES> 0
<TOTAL-REVENUES> 121,395,341
<CGS> 0
<TOTAL-COSTS> 25,077,895
<OTHER-EXPENSES> 20,652,375
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 23,464,311
<INCOME-PRETAX> 45,940,292
<INCOME-TAX> 0
<INCOME-CONTINUING> 45,940,292
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 45,940,292
<EPS-PRIMARY> 1.62
<EPS-DILUTED> 1.58
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