Regency Centers(REG) - 2022 Q2 - Quarterly Report

Explanatory Note This note clarifies the combined reporting of Regency Centers Corporation and its Operating Partnership for enhanced investor understanding - The report combines the quarterly filings for Regency Centers Corporation (Parent Company, a REIT) and Regency Centers, L.P. (Operating Partnership)[4] - The Parent Company owns approximately 99.6% of the Operating Partnership's units and acts as its sole general partner, consolidating its financials[5] - The Parent Company's primary asset is its investment in the Operating Partnership, while the Operating Partnership holds all company assets and generates capital[7] - The combined report aims to enhance investor understanding, eliminate duplicative disclosure, and improve efficiency by presenting the business as a single entity[6][11] PART I - FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents the unaudited consolidated financial statements for Regency Centers Corporation and Regency Centers, L.P. for the quarter and six months ended June 30, 2022, along with detailed notes Regency Centers Corporation: Consolidated Balance Sheets Presents the consolidated balance sheets for Regency Centers Corporation as of June 30, 2022, and December 31, 2021 | Metric | June 30, 2022 (in thousands) | Dec 31, 2021 (in thousands) | | :------------------- | :----------------------------- | :---------------------------- | | Total Assets | $10,901,815 | $10,792,563 | | Real Estate Assets, Net | $9,461,117 | $9,320,618 | | Total Liabilities | $4,695,680 | $4,682,631 | | Total Equity | $6,206,135 | $6,109,932 | Regency Centers Corporation: Consolidated Statements of Operations Details the consolidated statements of operations for Regency Centers Corporation for the six months ended June 30, 2022, and 2021 | Metric | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | | :----------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total Revenues | $605,516 | $561,862 | | Net Income | $302,803 | $178,457 | | Net Income Attributable to Common Stockholders | $300,024 | $176,146 | | Income per Common Share - Diluted | $1.74 | $1.04 | - Gain on sale of real estate, net of tax, was $(106,239) thousand for the six months ended June 30, 2022, compared to $(31,479) thousand in the prior year[17] Regency Centers Corporation: Consolidated Statements of Comprehensive Income Provides the consolidated statements of comprehensive income for Regency Centers Corporation for the six months ended June 30, 2022, and 2021 | Metric | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | | :------------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net Income | $302,803 | $178,457 | | Other Comprehensive Income (Loss) | $13,918 | $5,363 | | Comprehensive Income Attributable to the Company | $312,639 | $181,113 | - The effective portion of change in fair value of derivative instruments was $13,404 thousand for the six months ended June 30, 2022, compared to $3,508 thousand in the prior year[20] Regency Centers Corporation: Consolidated Statements of Equity Outlines the consolidated statements of equity for Regency Centers Corporation as of June 30, 2022, and December 31, 2021 | Metric | June 30, 2022 (in thousands) | Dec 31, 2021 (in thousands) | | :------------------- | :----------------------------- | :---------------------------- | | Total Stockholders' Equity | $6,125,033 | $6,037,371 | | Total Equity | $6,206,135 | $6,109,932 | - Net income attributable to common stockholders for the six months ended June 30, 2022, was $300,024 thousand, up from $176,146 thousand in the prior year[26] - Common stock repurchased and retired amounted to $(75,419) thousand for the six months ended June 30, 2022[26] Regency Centers Corporation: Consolidated Statements of Cash Flows Presents the consolidated statements of cash flows for Regency Centers Corporation for the six months ended June 30, 2022, and 2021 | Metric | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | | :------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Net Cash Provided by Operating Activities | $327,757 | $325,287 | | Net Cash (Used in) Provided by Investing Activities | $(65,262) | $73,034 | | Net Cash Used in Financing Activities | $(236,332) | $(490,158) | | Net Increase (Decrease) in Cash | $26,163 | $(91,837) | | Cash and Cash Equivalents at End of Period | $121,190 | $286,613 | Regency Centers, L.P.: Consolidated Balance Sheets Presents the consolidated balance sheets for Regency Centers, L.P. as of June 30, 2022, and December 31, 2021 | Metric | June 30, 2022 (in thousands) | Dec 31, 2021 (in thousands) | | :------------------- | :----------------------------- | :---------------------------- | | Total Assets | $10,901,815 | $10,792,563 | | Real Estate Assets, Net | $9,461,117 | $9,320,618 | | Total Liabilities | $4,695,680 | $4,682,631 | | Total Capital | $6,206,135 | $6,109,932 | Regency Centers, L.P.: Consolidated Statements of Operations Details the consolidated statements of operations for Regency Centers, L.P. for the six months ended June 30, 2022, and 2021 | Metric | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | | :----------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total Revenues | $605,516 | $561,862 | | Net Income | $302,803 | $178,457 | | Net Income Attributable to Common Unit Holders | $301,339 | $176,942 | | Income per Common Unit - Diluted | $1.74 | $1.04 | - Gain on sale of real estate, net of tax, was $(106,239) thousand for the six months ended June 30, 2022, compared to $(31,479) thousand in the prior year[38] Regency Centers, L.P.: Consolidated Statements of Comprehensive Income Provides the consolidated statements of comprehensive income for Regency Centers, L.P. for the six months ended June 30, 2022, and 2021 | Metric | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | | :------------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net Income | $302,803 | $178,457 | | Other Comprehensive Income (Loss) | $13,918 | $5,363 | | Comprehensive Income Attributable to the Partnership | $314,015 | $181,932 | - The effective portion of change in fair value of derivative instruments was $13,404 thousand for the six months ended June 30, 2022, compared to $3,508 thousand in the prior year[41] Regency Centers, L.P.: Consolidated Statements of Capital Outlines the consolidated statements of capital for Regency Centers, L.P. as of June 30, 2022, and December 31, 2021 | Metric | June 30, 2022 (in thousands) | Dec 31, 2021 (in thousands) | | :------------------- | :----------------------------- | :---------------------------- | | Total Partners' Capital | $6,159,644 | $6,072,818 | | Total Capital | $6,206,135 | $6,109,932 | - Net income attributable to common unit holders for the six months ended June 30, 2022, was $301,339 thousand, up from $176,942 thousand in the prior year[47] - Common units repurchased and retired amounted to $(75,419) thousand for the six months ended June 30, 2022[47] Regency Centers, L.P.: Consolidated Statements of Cash Flows Presents the consolidated statements of cash flows for Regency Centers, L.P. for the six months ended June 30, 2022, and 2021 | Metric | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | | :------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Net Cash Provided by Operating Activities | $327,757 | $325,287 | | Net Cash (Used in) Provided by Investing Activities | $(65,262) | $73,034 | | Net Cash Used in Financing Activities | $(236,332) | $(490,158) | | Net Increase (Decrease) in Cash | $26,163 | $(91,837) | | Cash and Cash Equivalents at End of Period | $121,190 | $286,613 | Notes to Consolidated Financial Statements This section provides detailed notes to the consolidated financial statements, covering organization, accounting policies, real estate, debt, and other key financial areas 1. Organization and Significant Accounting Policies Details the organizational structure of Regency Centers and its significant accounting policies, including property ownership and macroeconomic influences - Regency Centers Corporation (Parent Company, REIT) is the general partner of Regency Centers, L.P. (Operating Partnership)[56] - As of June 30, 2022, the Company owned 308 properties and held partial interests in 96 properties through unconsolidated partnerships[57] - The Parent Company owned approximately 99.6% of the Operating Partnership's common units as of June 30, 2022[61] - The Company's success is significantly influenced by inflation, labor shortages, supply chain constraints, and potential adverse impacts from rising interest rates and economic slowdowns[59] 2. Real Estate Investments Provides details on the Company's real estate investment activities, including property acquisitions and associated debt for the six months ended June 30, 2022 | Metric | Six Months Ended June 30, 2022 (in thousands) | | :------------------- | :-------------------------------------------- | | Total Property Acquisitions (Purchase Price) | $269,173 | | Debt Assumed | $44,853 | - Acquired 6 consolidated operating properties and 1 consolidated development property, plus 2 unconsolidated properties during the six months ended June 30, 2022[71] - Acquired partner's 75% share in four RegCal partnership properties on April 1, 2022, which are now consolidated[71] 3. Property Dispositions Details the Company's property disposition activities, including net proceeds and gains on sales for the six months ended June 30, 2022, and 2021 | Metric | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net Proceeds from Sale of Real Estate | $136,421 | $107,577 | | Gain on Sale of Real Estate, Net of Tax | $106,239 | $31,479 | - Sold 1 operating property and 3 land parcels/development project interests during the six months ended June 30, 2022[72] 4. Other Assets Presents a breakdown of other assets, including derivative assets and investments, as of June 30, 2022, and December 31, 2021 | Metric | June 30, 2022 (in thousands) | Dec 31, 2021 (in thousands) | | :------------------- | :----------------------------- | :---------------------------- | | Total Other Assets | $268,600 | $266,431 | | Derivative Assets | $3,950 | — | | Investments | $55,185 | $65,112 | 5. Notes Payable and Unsecured Credit Facilities Details the Company's notes payable and unsecured credit facilities, highlighting debt maturities and compliance with financial covenants | Metric | June 30, 2022 (in thousands) | Dec 31, 2021 (in thousands) | | :------------------- | :----------------------------- | :---------------------------- | | Total Notes Payable | $3,737,380 | $3,718,944 | | Unsecured Credit Facilities | $0 | $0 | - The Company has no unsecured debt maturities until 2024 and a manageable level of secured mortgage maturities during the next twelve months[75] - The Company was in compliance with all financial and other covenants under its debt and credit facilities as of June 30, 2022[75] 6. Derivative Financial Instruments Explains the Company's use of interest rate swaps for hedging and provides fair value measurements of derivative instruments - The Company uses interest rate swaps to hedge interest rate risk, designated as cash flow hedges, and does not use derivatives for speculative purposes[76][78] | Metric | June 30, 2022 (in thousands) | Dec 31, 2021 (in thousands) | | :------------------- | :----------------------------- | :---------------------------- | | Fair Value Assets | $3,950 | — | | Fair Value Liabilities | — | $(2,858) | - Approximately $2,100 thousand of accumulated comprehensive income on derivative instruments is expected to be reclassified into earnings during the next 12 months[79] 7. Leases Describes the Company's operating leases, including fixed and variable income components, and straight-line rent receivables - All of the Company's leases are classified as operating leases, comprising both fixed and variable income components[80] | Metric | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Fixed and In-Substance Fixed Lease Income | $419,340 | $393,288 | | Variable Lease Income | $139,916 | $132,728 | | Total Lease Income | $586,509 | $543,087 | | Metric | June 30, 2022 (in thousands) | Dec 31, 2021 (in thousands) | | :------------------- | :----------------------------- | :---------------------------- | | Straight-Line Rent Receivables | $115,427 | $103,942 | 8. Fair Value Measurements Provides fair value measurements for financial instruments, including notes payable and securities, categorized by input levels | Metric | June 30, 2022 (in thousands) | Dec 31, 2021 (in thousands) | | :------------------- | :----------------------------- | :---------------------------- | | Notes Payable (Carrying Amount) | $3,737,380 | $3,718,944 | | Notes Payable (Fair Value) | $3,525,203 | $4,103,533 | - Securities are valued using Level 1 inputs, while available-for-sale debt securities and interest rate derivatives primarily use Level 2 inputs[86][87][89][91] - Unrealized losses on equity securities amounted to $8,500 thousand for the six months ended June 30, 2022[86] 9. Equity and Capital Details equity and capital activities, including common stock dividends, forward sale agreements, and share repurchases - A common stock dividend of $0.625 per share was declared on August 2, 2022, payable on October 4, 2022[92] - The Company settled 984,618 shares under forward sale agreements for approximately $61,300 thousand in April 2022, with $350,400 thousand of common stock remaining available under the ATM program[95][96] - During the three months ended June 30, 2022, the Company repurchased 1,294,201 common shares for $75,400 thousand under its Authorized Repurchase Program, with $174,600 thousand remaining under authorization[98][205] 10. Stock-Based Compensation Reports on stock-based compensation, specifically the restricted stock granted during the six months ended June 30, 2022 - During the six months ended June 30, 2022, 272,003 shares of restricted stock were granted with a weighted-average grant-date fair value of $72.88 per share[99] 11. Earnings per Share and Unit Provides diluted earnings per share and unit for the six months ended June 30, 2022, and 2021, noting anti-dilutive exclusions | Metric | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Income per Common Share - Diluted | $1.74 | $1.04 | | Income per Common Unit - Diluted | $1.74 | $1.04 | - Exchangeable Operating Partnership units were anti-dilutive and excluded from diluted earnings per share calculation[101] 12. Commitments and Contingencies Addresses the Company's commitments and contingencies, including pending litigation, environmental matters, and outstanding letters of credit - Management believes that currently pending litigation and environmental matters are not expected to have a material adverse effect on the Company's financial position, results of operations, or liquidity[103][104] - The Company had $9,400 thousand in letters of credit outstanding as of June 30, 2022, primarily for its captive insurance program and development projects[105] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Regency's financial condition and results of operations, including an overview of its strategy, key performance metrics, and a detailed analysis of revenues, expenses, and cash flows for the three and six months ended June 30, 2022. It also discusses liquidity, capital resources, and risks related to the current macroeconomic environment Forward-Looking Statements States that forward-looking statements are not guarantees of future performance and are subject to various risks and uncertainties detailed in SEC filings - Forward-looking statements are not guarantees of future performance and are subject to various risks and uncertainties detailed in SEC filings[107][108] Non-GAAP Measures Explains the Company's use of non-GAAP measures to supplement GAAP results, emphasizing their non-alternative nature and need for reconciliation - The Company uses non-GAAP measures (e.g., Core Operating Earnings, Nareit FFO, NOI, Pro-rata information) to supplement GAAP results, believing they enhance understanding of operational trends and facilitate comparisons[109] - Non-GAAP measures are not alternatives to GAAP and may exclude significant expense and income items, requiring reconciliation to comparable GAAP measures[110] Defined Terms Defines key financial terms such as Core Operating Earnings, Nareit FFO, Net Operating Income (NOI), and Pro-rata financial information - Core Operating Earnings excludes certain non-comparable items from Nareit FFO, such as transaction-related income/expenses and non-cash rent components[111] - Nareit Funds from Operations (FFO) is a key REIT performance measure, excluding gains on sales and impairments of real estate, plus depreciation and amortization, with adjustments for unconsolidated partnerships[115] - Net Operating Income (NOI) is defined as lease and property income less operating expenses, real estate taxes, ground rent, and uncollectible lease income, excluding straight-line rent and amortization[116] - Pro-rata financial information reflects the Company's proportionate economic ownership in consolidated and unconsolidated properties, used to estimate economic interest[113][116] Overview of Our Strategy Outlines Regency Centers Corporation's strategy to own and manage high-quality, grocer-anchored shopping centers in desirable suburban metro areas - Regency Centers Corporation, a REIT since 1993, focuses on owning and managing high-quality, grocer-anchored neighborhood and community shopping centers in desirable suburban metro areas[118][120] - As of June 30, 2022, the Company had full or partial ownership interests in 404 retail properties, totaling 51.1 million square feet of gross leasable area (GLA)[118] - Strategic goals include maintaining a disciplined development platform, a conservative capital structure, leading environmental, social, and governance (ESG) practices, and increasing shareholder value through earnings and dividends[124] Risks and Uncertainties Discusses challenges from inflation, labor shortages, supply chain constraints, and macroeconomic risks like rising interest rates and potential recession - The Company faces challenges from inflation, labor shortages, and supply chain constraints, which impact tenant businesses and ability to pay rent[122] - Macroeconomic and geopolitical risks, including rising interest rates, could lead to a slowing U.S. economy or recession, adversely affecting tenants and demand for shopping center space[122] Executing on our Strategy Highlights key achievements including net income, same property NOI growth, portfolio occupancy, rent spreads, and capital management for the six months ended June 30, 2022 - Net income attributable to common stockholders was $300,000 thousand for the six months ended June 30, 2022, including $106,200 thousand in gains on real estate sales[124] - Pro-rata same property NOI, excluding termination fees, increased 4.1% for the six months ended June 30, 2022, driven by improved collections, higher occupancy, and positive rent spreads[125] - The total property portfolio was 94.2% leased at June 30, 2022, with rent spreads for the trailing twelve months at a positive 8.3%[125] - The Company settled $61,300 thousand in forward equity sales and repurchased $75,400 thousand in common shares, maintaining a conservative balance sheet with a Pro-rata net debt-to-operating EBITDAre ratio of 5.0x[127] Property Portfolio Provides a detailed overview of the Company's property portfolio, including consolidated and unconsolidated properties, GLA, and leasing percentages | Metric | June 30, 2022 | Dec 31, 2021 | | :------------------------------------------ | :------------ | :----------- | | Consolidated Properties (Number) | 308 | 302 | | Consolidated GLA (in thousands) | 38,639 | 37,864 | | Consolidated % Leased (Operating & Development) | 94.3% | 94.0% | | Unconsolidated Properties (Number) | 96 | 103 | | Unconsolidated GLA (in thousands) | 12,463 | 13,300 | | Unconsolidated % Leased (Operating & Development) | 93.3% | 93.9% | | Metric | June 30, 2022 | Dec 31, 2021 | | :------------------- | :------------ | :----------- | | % Leased – All Properties | 94.2% | 94.1% | | Anchor space | 96.5% | 97.0% | | Shop space | 90.3% | 89.2% | | Lease Type | Six Months Ended June 30, 2022 (SF in thousands) | Base Rent PSF | | :------------------- | :--------------------------------------------- | :------------ | | Total Anchor Leases | 1,599 | $17.47 | | Total Shop Space Leases | 1,613 | $37.21 | | Total Leases | 3,212 | $27.39 | Significant Tenants and Concentrations of Risk Discusses the Company's diversified tenant base to mitigate risks, highlighting top tenants and strategies for risk management - The Company diversifies its tenant base to reduce operating and leasing risks, with its top five tenants (four grocers) each representing between 2.6% and 3.3% of annualized base rent[131] | Tenant | Percentage of ABR (June 30, 2022) | | :-------------------------- | :-------------------------------- | | Publix | 3.3% | | Kroger Co. | 3.2% | | Albertsons Companies, Inc. | 3.0% | | Amazon/Whole Foods | 2.7% | | TJX Companies, Inc. | 2.6% | - Strategies to mitigate risks include maintaining a high-quality portfolio, tenant diversification, replacing weaker tenants, anchoring centers with market-leading grocery stores, and focusing on suburban trade areas with compelling demographics[132] Bankruptcies and Credit Concerns Addresses the risks associated with tenant bankruptcies, including potential revenue reduction and re-leasing expenses - Tenant bankruptcies pose a risk as leases can be rejected, potentially leading to significant revenue reduction and re-leasing expenses[133] - Unsecured claims against bankrupt tenants are likely to recover substantially less than their full value[133] Results from Operations (Three months ended June 30, 2022 and 2021) Analyzes the Company's operational results for the three months ended June 30, 2022, and 2021, focusing on revenue, expenses, and investment income | Metric | Three Months Ended June 30, 2022 (in thousands) | Three Months Ended June 30, 2021 (in thousands) | Change (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------- | | Total Revenues | $302,083 | $287,159 | $14,924 | | Total Lease Income | $292,864 | $276,730 | $16,134 | | Total Operating Expenses | $182,062 | $176,594 | $5,468 | | Net Investment Loss (Income) | $5,468 | $(1,998) | $7,466 | | Equity in Income of Investments in Real Estate Partnerships | $23,842 | $435 | $23,407 | - Lease income increased by $16,100 thousand, driven by a $14,700 thousand increase in billable Base rent, a $1,700 thousand favorable change in Uncollectible lease income, and a $4,300 thousand increase in straight-line rent[135][137] - Net investment income decreased by $7,500 thousand primarily due to realized and unrealized losses on investments in the non-qualified deferred compensation plan and captive insurance company[143] Results from Operations (Six months ended June 30, 2022 and 2021) Analyzes the Company's operational results for the six months ended June 30, 2022, and 2021, focusing on revenue, expenses, and investment income | Metric | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | Change (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------- | | Total Revenues | $605,516 | $561,862 | $43,654 | | Total Lease Income | $586,509 | $543,087 | $43,422 | | Total Operating Expenses | $364,199 | $357,586 | $6,613 | | Net Investment Loss (Income) | $7,962 | $(3,484) | $11,446 | | Equity in Income of Investments in Real Estate Partnerships | $36,646 | $12,101 | $24,545 | - Lease income increased by $43,400 thousand, driven by a $25,400 thousand increase in billable Base rent, $5,400 thousand from Recoveries from tenants, $1,600 thousand from percentage rent, $2,200 thousand favorable change in Uncollectible lease income, and $9,500 thousand increase in straight-line rent[146][147][149] - Net investment loss increased by $11,400 thousand primarily due to realized and unrealized losses on investments in the non-qualified deferred compensation plan and captive insurance company[152] Supplemental Earnings Information Provides supplemental earnings information, including Pro-rata Same Property NOI, Nareit FFO, and Core Operating Earnings, with growth metrics | Metric | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | Change (in thousands) | Growth | | :------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :-------------------- | :----- | | Pro-rata Same Property NOI, excluding termination fees | $436,610 | $419,595 | $17,015 | 4.1% | | Nareit FFO attributable to common stock and unit holders | $352,108 | $321,857 | $30,251 | 9.4% | | Core Operating Earnings | $329,946 | $308,302 | $21,644 | 7.0% | - The same property pool at June 30, 2022, consisted of 390 properties with 41,446 thousand GLA, adjusted for acquisitions, developments, and dispositions[162] Liquidity and Capital Resources Discusses the Company's liquidity and capital resources, including cash, credit availability, estimated capital requirements, and debt ratios - As of June 30, 2022, the Company had $118,100 thousand in unrestricted cash, $1,240,000 thousand available under its Line of Credit, and $350,400 thousand available under its ATM equity program[169] - Estimated capital requirements for the next twelve months are approximately $382,500 thousand, covering leasing, tenant improvements, developments, redevelopments, capital contributions, and debt repayment[171] - The Company maintains 89.2% of its wholly-owned real estate assets unencumbered, with a trailing twelve-month Fixed Charge Coverage Ratio of 4.6x and a Pro-rata net debt-to-operating EBITDAre ratio of 5.0x as of June 30, 2022[174] Summary of Cash Flow Activity Summarizes the Company's cash flow activities from operating, investing, and financing for the six months ended June 30, 2022, and 2021 | Metric | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | | :------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Net Cash Provided by Operating Activities | $327,757 | $325,287 | | Net Cash (Used in) Provided by Investing Activities | $(65,262) | $73,034 | | Net Cash Used in Financing Activities | $(236,332) | $(490,158) | - Net cash used in investing activities increased by $138,300 thousand, primarily due to $139,800 thousand in acquisitions of operating real estate and $99,500 thousand in real estate development and capital improvements[178][179] - Net cash used in financing activities decreased by $253,800 thousand, largely due to lower debt repayments in 2022 compared to the $265,000 thousand term loan repayment in 2021[184][185] Investments in Real Estate Partnerships Details the Company's investments in unconsolidated co-investment partnerships, including ownership interests and pro-rata share of assets and liabilities - As of June 30, 2022, the Company had investments in 13 unconsolidated co-investment partnerships, holding partial ownership (20%-50%) in 96 properties[186] | Metric | June 30, 2022 (in thousands) | | :------------------- | :----------------------------- | | Regency's Pro-Rata Share of Assets | $947,298 | | Regency's Pro-Rata Share of Liabilities | $552,711 | - The NYC partnership sold its remaining two properties in May 2022, and Regency acquired its partner's 75% share in four RegCal properties in April 2022, which are now consolidated[190] Management fee income Reports on management fee income from asset management, property management, leasing, and other transaction fees | Metric | Three Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | | :------------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Asset management, property management, leasing, and other transaction fees | $6,499 | $13,183 | Recent Accounting Pronouncements Directs to Note 1 for details on recently adopted accounting pronouncements - Refer to Note 1 to Unaudited Financial Statements for details on recently adopted accounting pronouncements[189] Environmental Matters Addresses accrued liabilities for environmental remediation and management's assessment of their potential financial impact - The Company had accrued liabilities of $11,100 thousand for its Pro-rata share of environmental remediation as of June 30, 2022[191] - Management believes that the ultimate remediation of currently known environmental matters will not have a material effect on the Company's financial position, liquidity, or results of operations[191] Item 3. Quantitative and Qualitative Disclosures about Market Risk Regency continuously monitors capital markets and its ability to issue new debt or fund commitments, expecting to successfully issue new debt despite potential higher interest rates. The company notes that rising interest rates could increase financing costs and negatively impact real estate valuations, stock price, and equity capital raising - Rising interest rates could increase financing costs for variable-rate borrowings and future debt refinancing[192][200] - Historically, during periods of increasing interest rates, real estate valuations have generally decreased due to rising capitalization rates[200] - Prolonged higher interest rates may negatively impact the valuation of the real estate asset portfolio, stock price, and ability to raise equity capital on favorable terms[200] - Increased interest rates have impacted the market for property sales by decreasing the availability and increasing the cost of debt capital, potentially leading to fewer buyers and reduced asset prices[201] Item 4. Controls and Procedures This section confirms that both Regency Centers Corporation and Regency Centers, L.P. maintained effective disclosure controls and procedures as of June 30, 2022, and reported no material changes to internal controls over financial reporting during the second quarter of 2022 Controls and Procedures (Regency Centers Corporation) Confirms the effectiveness of Regency Centers Corporation's disclosure controls and procedures and the absence of material changes to internal controls as of June 30, 2022 - The Parent Company's disclosure controls and procedures were effective as of June 30, 2022[193] - No material changes to the Parent Company's internal controls over financial reporting occurred during the second quarter of 2022[195] Controls and Procedures (Regency Centers, L.P.) Confirms the effectiveness of Regency Centers, L.P.'s disclosure controls and procedures and the absence of material changes to internal controls as of June 30, 2022 - The Operating Partnership's disclosure controls and procedures were effective as of June 30, 2022[196] - No material changes to the Operating Partnership's internal controls over financial reporting occurred during the second quarter of 2022[197] PART II - OTHER INFORMATION Item 1. Legal Proceedings Regency is involved in various legal proceedings that arise in the ordinary course of business, but management does not anticipate any material adverse effect on its financial position or operations from currently pending or threatened litigation - The Company is a party to various legal proceedings that arise in the ordinary course of business[198] - Management does not expect any currently pending or threatened litigation to have a material adverse effect on the Company's financial position or results of operations[198] Item 1A. Risk Factors This section highlights the risks associated with inflation and rising interest rates, noting that Federal Reserve actions could lead to a slowing economy or recession. Higher interest rates could increase financing costs, decrease real estate valuations, and negatively impact the company's stock price and ability to raise equity capital - Federal Reserve's interest rate hikes could lead to adverse impacts on the U.S. economy, including slower growth or recession[199] - Increases in interest rates could raise financing costs for variable-rate borrowings and future debt refinancing[200] - Prolonged higher interest rates may negatively impact real estate valuations, stock price, and the ability to raise equity capital[200] - Rising interest rates have impacted the market for property sales by decreasing debt capital availability and increasing its cost, potentially leading to fewer buyers and reduced asset prices[201] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During Q2 2022, Regency issued 18,613 common shares in connection with the redemption of Operating Partnership units. The company also repurchased 1,294,201 common shares for $75.4 million under its Authorized Repurchase Program, with $174.6 million remaining available - Issued 18,613 shares of common stock in Q2 2022 in connection with the redemption of common units of Regency Centers, L.P.[203] | Period | Total Shares Purchased | Average Price Paid Per Share | | :-------------------------- | :--------------------- | :--------------------------- | | June 1 through June 30, 2022 | 1,294,201 | $58.25 | - As of June 30, 2022, $174,600 thousand remained available for repurchase under the Authorized Repurchase Program[205] Item 3. Defaults Upon Senior Securities No defaults upon senior securities were reported for the period - No defaults upon senior securities were reported[206] Item 4. Mine Safety Disclosures This item is not applicable to the Company's operations - This item is not applicable[207] Item 5. Other Information On August 2, 2022, Regency's Board approved Amended and Restated Bylaws, which updated provisions related to annual shareholder meetings, special meeting calls, advance notice requirements for shareholder proposals/nominations, Board size adjustments, officer duties, and compliance with Florida Business Corporation Act and SEC universal proxy rules - The Board of Directors approved Amended and Restated Bylaws, effective August 2, 2022[208] - Key amendments include removing annual meeting timing requirements, adding special meeting call conditions, implementing advance notice provisions for shareholder proposals/nominations, allowing the Board to adjust its size, and clarifying officer duties[208][212] - The Bylaws were also updated to conform with the Florida Business Corporation Act and account for the adoption of SEC's universal proxy rules[212] Item 6. Exhibits This section lists the exhibits filed with the report, including amended bylaws, certifications, and interactive data files. It also provides a cautionary note regarding representations and warranties in agreements included as exhibits - Exhibits include Amended and Restated Bylaws, Rule 13a-14/15d-14(a) Certifications, Section 1350 Certifications, and Interactive Data Files[215] - A cautionary note advises that representations and warranties in agreements included as exhibits are for the benefit of the parties and may not describe the actual state of affairs[213] SIGNATURES The report was signed on August 5, 2022, by Michael J. Mas, Executive Vice President and Chief Financial Officer, and J. Christian Leavitt, Senior Vice President and Treasurer, for both Regency Centers Corporation and Regency Centers, L.P - The report was signed on August 5, 2022, by Michael J. Mas, Executive Vice President and Chief Financial Officer, and J. Christian Leavitt, Senior Vice President and Treasurer, for both Regency Centers Corporation and Regency Centers, L.P.[218][219]