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, 2002
( ) 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) 598-7000
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 Centers Corporation is the general partner of Regency Centers, L.P.
Portions of Regency Centers Corporation's Proxy Statement in connection with its
2003 Annual Meeting of Shareholders are incorporated by reference in Part III.
TABLE OF CONTENTS
Form 10-K
Item No. Report Page
- -------- -----------
PART I
1. Business.................................................................1
2. Properties...............................................................4
3. Legal Proceedings.......................................................20
4. Submission of Matters to a Vote of Security Holders.....................20
PART II
5. Market for the Registrant's Common Equity and Related Shareholder
Matters.................................................................20
6. Selected Consolidated Financial Data....................................22
7. Management's Discussion and Analysis of Financial Condition and
Results of Operations...................................................24
7a. Quantitative and Qualitative Disclosures about Market Risk..............32
8. Consolidated Financial Statements and Supplementary Data................33
9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure....................................................33
PART III
10. Directors and Executive Officers of the Registrant......................33
11. Executive Compensation..................................................33
12. Security Ownership of Certain Beneficial Owners and Management..........34
13. Certain Relationships and Related Transactions..........................34
14. Controls and Procedures.................................................34
PART IV
15. Exhibits, Financial Statements, Schedules and Reports on Form 8-K.......34
Forward Looking Statements
- --------------------------
In addition to historical information, the following information
contains forward-looking statements under the federal securities laws. These
statements are based on current expectations, estimates and projections about
the industry and markets in which Regency operates, and management's beliefs and
assumptions. Forward-looking statements are not guarantees of future performance
and involve certain known and unknown risks and uncertainties that could cause
actual results to differ materially from those expressed or implied by such
statements. Such risks and uncertainties include, but are not limited to,
changes in national and local economic conditions; financial difficulties of
tenants; competitive market conditions, including pricing of acquisitions and
sales of properties and out-parcels; changes in expected leasing activity and
market rents; timing of acquisitions, development starts and sales of properties
and out-parcels; weather; the ability to obtain governmental approvals; and
meeting development schedules.
PART I
Item 1. Business
Regency Centers Corporation ("Regency" or the "Company") completed its
initial public offering in 1993 (NYSE: REG) and became a qualified
self-administered, self-managed real estate investment trust ("REIT"). Through a
series of strategic acquisitions in 1997, 1998 and 1999, we expanded the scope
of our operations and became a nationally based owner, operator, and developer
of grocery-anchored retail shopping centers.
Currently, our assets total approximately $3.1 billion with 262
shopping centers in 21 states. At December 31, 2002, our gross leasable area
("GLA") totaled 29.5 million square feet and was 94.8% leased. Geographically,
21.0% of our GLA is located in Florida, 17.4% in California, 17.4% in Texas,
8.3% in Georgia, 6.5% in Ohio, and 29.4% spread throughout 16 other states.
We invest in retail shopping centers through Regency Centers, L.P.,
("RCLP" or "Partnership") an operating partnership in which Regency currently
owns approximately 98% of the outstanding common partnership units ("Common
Units"). The acquisition, development, operations and financing activity of
Regency including the issuance of Common Units or Preferred Units is executed by
RCLP, its wholly-owned subsidiaries, and joint ventures with third parties.
Operating and Investment Philosophy
Regency's primary operating and investment goal is to compound long
term growth in per share earnings and total shareholder return through:
o focusing on a strategy of owning, operating, and developing
grocery-anchored community and neighborhood shopping centers
that are anchored by market leading supermarkets and are
located in markets with attractive demographics,
o sustaining growth in the profits and intrinsic value of the
operating portfolio by:
o increasing net operating income from the high-quality
centers through intense leasing and management and
industry leading operating systems like Regency's premier
customer initiative,
o recycling the proceeds from lower quality properties and
non-core developments into high yielding, higher quality
new developments and acquisitions,
o utilizing joint ventures to cost efficiently expand the
portfolio and increase fee based income,
o realizing significant value from Regency's customer-driven
development program,
o using conservative financial management to maintain a strong
balance sheet with access to substantial capital, and
1
o attracting and motivating a top notch, talented, management
team that is committed to achieving Regency's strategic goals.
Grocery-Anchored Strategy
We focus our investment strategy on grocery-anchored retail shopping
centers that are located in attractive trade areas and are anchored by a
dominant grocer in the local market. A neighborhood center is a convenient,
cost-effective distribution platform for food retailers. Grocery-anchored
centers generate substantial daily traffic and offer sustainable competitive
advantages to their tenants. This high traffic generates increased sales,
thereby driving higher occupancy, higher rental rates, and higher rental rate
growth for Regency -- meaning that we can sustain our cash flow growth and
increase the value of our portfolio over the long term.
Research Driven Market Selection
Grocery-anchored centers are best located in neighborhood trade areas
with attractive demographics. For a typical Regency grocery-anchored center, we
target a 3-mile population of approximately 72,000 people with an average
household income in excess of $85,000 and a projected 5-year population growth
of approximately 8%. The trade areas of our centers are growing nearly twice as
fast and household incomes are more than 35% greater than the national averages,
translating into more retail buying power. Once we select specific markets, we
seek the best location within the best neighborhoods, preferably occupying the
dominant corner, close to residential communities, with excellent visibility for
our tenants and easy access for neighborhood shoppers.
Premier Customer Initiative
For the same reason we choose to anchor our centers with leading
grocers, we also seek a range of strong national, regional and local specialty
tenants. We have created a formal partnering process -- the Premier Customer
Initiative ("PCI") -- to promote mutually beneficial relationships with our
non-grocer specialty retailers. The objective of PCI is for Regency to build a
base of specialty tenants who represent the "best-in-class" operators in their
respective merchandising categories. Such tenants reinforce the consumer appeal
and other strengths of a center's grocery-anchor, help to stabilize a center's
occupancy, reduce releasing downtime, lower tenant turnover and yield higher
sustainable rents.
Customer-driven Development
Development is customer-driven, meaning we generally have an executed
lease from the anchor before we purchase the land and begin construction.
Developments serve the growth needs of our grocery and specialty retail
customers, result in modern shopping centers with long-term leases from the
grocery-anchors and produce attractive returns on invested capital.
Capital Strategy
We intend to maintain a conservative capital structure designed to fund
our growth programs without compromising our investment-grade ratings. This
approach is founded on our self-funding business model. This model utilizes
center "recycling" as a key component. Our recycling strategy calls for us to
re-deploy the proceeds from the sales of outparcels, developments and low
growth, lower quality operating properties into new higher-quality developments
and acquisitions that we expect will generate sustainable revenue growth and
more attractive returns on invested capital. Our commitment to maintaining a
high-quality portfolio dictates that we continually assess the value of all of
our properties and sell those that no longer meet our long-term investment
standards to third parties. Joint venturing of assets will also provide Regency
with a capital source for new investments and market based fees that we may earn
as the asset manager.
Risk Factors Relating to Ownership of Regency Common Stock
We are subject to 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
our major tenants could reduce cash flow,
2
o the possibility that major tenants will not renew their leases as they
expire or renew at lower rental rates could reduce cash flow,
o risks related to the internet and e-commerce reducing the demand for
shopping centers,
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 Regency owns shopping centers,
o risks relating to leverage, including uncertainty that we will be able to
refinance our indebtedness, and the risk of higher interest rates,
o unsuccessful development activities could reduce cash flow,
o Regency's inability to satisfy its cash requirements from operations and
the possibility that Regency may be required to borrow funds to meet
distribution requirements in order to maintain its 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 which
could adversely affect Regency's ability to attract and retain desirable
tenants.
Compliance with Governmental Regulations
Under various federal, state and local laws, ordinances and
regulations, we may be liable for the cost to remove or remediate certain
hazardous or toxic substances at our shopping centers. These laws often impose
liability without regard to whether the owner knew of, or was responsible for,
the presence of the hazardous or toxic substances. The cost of required
remediation and the owner's liability for remediation could exceed the value of
the property and/or the aggregate assets of the owner. The presence of such
substances, or the failure to properly remediate such substances, may adversely
affect the owner's ability to sell or rent the property or borrow using the
property as collateral. We have a number of 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 Regency due
to financial statement reserves, insurance programs designed to mitigate the
cost of remediation and various state-regulated programs that shift the
responsibility and cost to the state.
Competition
We believe the ownership of shopping centers is highly fragmented.
Regency faces competition from other REITs in the development, acquisition,
ownership and leasing of shopping centers as well as from numerous local,
regional and national real estate developers and owners.
Changes in Policies
Our Board of Directors establishes the policies that govern our
investment and operating strategies including, among others, debt and equity
financing policies, quarterly distributions to shareholders, and REIT tax
status. The Board of Directors may amend these policies at any time without a
vote of Regency's shareholders.
Employees
Our headquarters are located at 121 West Forsyth Street, Suite 200,
Jacksonville, Florida. Regency presently maintains nineteen offices in thirteen
states where it may conduct management, leasing, construction, and investment
activities. At December 31, 2002, Regency had approximately 387 employees and
believes that relations with its employees are good.
3
Company Website Access and SEC Filings
The Company's website may be accessed at www.regencycenters.com. All of
the Company's filings with the Securities and Exchange Commission can be
accessed through our website; however, in the event that the website is
inaccessible, the Company will provide paper copies of its most recent annual
report on Form 10-K, the four previous quarterly reports on Form 10-Q, and
current reports on Form 8-K, and all related amendments, excluding exhibits,
free of charge upon request.
Item 2. Properties
A list of our shopping centers including those partially owned through
joint ventures, summarized by state and in order of largest holdings, including
their GLA follows:
December 31, 2002 December 31, 2001
----------------- -----------------
Location # Properties GLA % Leased * # Properties GLA % Leased *
-------- ------------ --------- ---------- ------------ ----------- ----------
Florida 53 6,195,550 91.9% 56 6,535,254 92.0%
California 43 5,125,030 99.1% 39 4,879,051 98.8%
Texas 40 5,123,197 93.6% 36 4,579,263 92.8%
Georgia 24 2,437,712 93.9% 26 2,556,471 93.3%
Ohio 14 1,901,684 91.4% 14 1,870,079 93.5%
Colorado 15 1,538,570 98.0% 12 1,188,480 99.2%
North Carolina 12 1,225,201 97.6% 13 1,302,751 98.1%
Washington 9 986,374 98.9% 9 1,095,457 98.1%
Virginia 7 872,796 96.8% 6 408,368 97.6%
Oregon 9 822,115 93.7% 8 740,095 93.2%
Alabama 7 644,896 94.3% 7 665,440 95.3%
Arizona 6 525,701 96.3% 9 627,612 98.6%
Tennessee 6 444,234 95.3% 10 493,860 99.4%
South Carolina 5 339,256 99.1% 5 241,541 100.0%
Kentucky 2 304,659 96.6% 5 321,689 94.2%
Illinois 2 300,477 96.1% 2 300,162 91.6%
Michigan 3 279,265 92.6% 3 275,085 89.5%
Delaware 2 240,418 99.0% 2 240,418 99.3%
New Jersey 1 88,993 - 3 112,640 100.0%
Missouri 1 82,498 92.9% 2 370,176 92.9%
Pennsylvania 1 6,000 100.0% 1 6,000 100.0%
Mississippi - - - 2 185,061 98.3%
Wyoming - - - 1 87,777 100.0%
Maryland - - - 1 6,763 -
-------------- --------------- ---------------- -------------- --------------- -------------
Total 262 29,482,626 94.8% 272 29,089,493 94.9%
============== =============== ================ ============== =============== =============
* Excludes pre-stabilized properties under development
4
Item 2. Properties (continued)
The following table summarizes the largest tenants occupying our
shopping centers based upon a percentage of total annualized base rent exceeding
..5% at December 31, 2002. The table includes 100% of the base rent from leases
of properties owned by joint ventures.
Summary of Principal Tenants > .5% of Annualized Base Rent
(including Properties Under Development)
Percentage to Percentage of Number
Company Annualized of
Tenant GLA Owned GLA Rent Base Rent Stores
------ --- --------- ---- --------- ------
Kroger 3,478,669 11.8% $ 29,757,027 8.78% 59
Publix 2,442,986 8.3% 19,837,303 5.86% 53
Safeway 1,727,379 5.9% 15,230,267 4.50% 35
Albertsons 847,996 2.9% 8,310,040 2.45% 16
Blockbuster 400,977 1.4% 7,479,378 2.21% 71
Winn Dixie 579,493 2.0% 4,118,618 1.22% 12
H.E.B. Grocery 307,162 1.0% 3,865,550 1.14% 4
Hallmark 227,391 0.8% 3,424,342 1.01% 54
Walgreens 259,726 0.9% 3,083,117 0.91% 19
Eckerd 228,330 0.8% 2,923,456 0.86% 24
Long's Drugs 233,845 0.8% 2,731,163 0.81% 10
Petco 131,791 0.4% 2,143,076 0.63% 10
Starbucks 76,222 0.3% 1,990,592 0.59% 50
Harris Teeter 183,892 0.6% 1,941,870 0.57% 4
Mail Boxes, Etc. 97,153 0.3% 1,874,871 0.55% 72
T.J. Maxx /Marshalls 242,976 0.8% 1,841,634 0.54% 9
Ross Dress for Less 143,697 0.5% 1,725,798 0.51% 5
Regency's leases have 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 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.
5
Item 2. Properties (continued)
The following table sets forth a schedule of lease expirations for the
next ten years, assuming no tenants renew their leases:
Future
Percent of Minimum Percent of
Lease Total Rent Total
Expiration Expiring Company Expiring Minimum
Year GLA GLA Leases Rent (2)
---- --- --- ------ --------
(1) 334,966 1.3% $ 4,702,600 1.5%
2003 1,717,692 6.6% 25,534,931 7.9%
2004 2,314,553 8.9% 35,142,068 10.9%
2005 2,441,606 9.4% 36,590,069 11.4%
2006 2,724,729 10.5% 38,016,897 11.8%
2007 2,967,080 11.4% 41,863,440 13.0%
2008 1,345,086 5.2% 12,929,987 4.0%
2009 846,708 3.3% 9,311,921 2.9%
2010 968,946 3.7% 11,715,106 3.6%
2011 1,169,653 4.5% 13,658,836 4.2%
2012 1,186,682 4.6% 15,516,196 4.8%
--------------------------------------------------------------
10 Yr. Total 18,017,701 69.4% $ 244,982,051 76.0%
--------------------------------------------------------------
(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 Regency's properties.
6
Year Gross
Year Con- Leasable Percent Grocery
Property Name Acquired structed (1) Area (GLA) Leased (2) Anchor
- ---------------------------------------------------------- ------------ ----------- ---------------------
FLORIDA
Jacksonville / North Florida
Anastasia (5) 1993 1988 102,342 97.6% Publix
Bolton Plaza 1994 1988 172,938 96.5% --
Carriage Gate 1994 1978 76,833 87.6% --
Courtyard 1993 1987 137,256 100.0% Albertsons (4)
Fleming Island 1998 2000 136,662 95.9% Publix
Highlands Square 1998 1999 272,554 88.8% Publix/Winn-Dixie
Julington Village (5) 1999 1999 81,821 100.0% Publix
Lynnhaven 2001 2001 63,871 93.4% Publix
Millhopper 1993 1974 84,065 100.0% Publix
Newberry Square 1994 1986 180,524 99.4% Publix
Ocala Corners (5) 2000 2000 86,772 100.0% Publix
Old St. Augustine Plaza 1996 1990 175,459 95.1% Publix
Palm Harbour 1996 1991 172,758 99.2% Publix
Pine Tree Plaza 1997 1999 60,787 100.0% Publix
Regency Court 1997 1992 218,648 79.4% --
US 301 & SR 100 - Starke 2000 12,738 100.0% --
Vineyard (3) 2001 2001 62,821 81.6% Publix
Tampa / Orlando
Beneva Village Shops 1998 1987 141,532 98.0% Publix
Bloomingdale Square 1998 1987 267,935 99.6% Publix
Center of Seven Springs 1994 1986 162,580 37.8% Winn-Dixie
East Towne Shopping Center (3) 2002 69,841 64.2% Publix
Kings Crossing Sun City (5) 1999 75,020 96.8% Publix
Mainstreet Square 1997 1988 107,134 90.5% Winn-Dixie
Mariner's Village 1997 1986 117,690 79.0% Winn-Dixie
Market Place - St. Petersburg 1995 1983 90,296 97.6% Publix
Peachland Promenade 1995 1991 82,082 96.9% Publix
Regency Square 1993 1986 349,848 98.2% --
at Brandon
Regency Village (3), (5) 2000 2000 83,170 87.5% Publix
Terrace Walk 1993 1990 50,936 90.2% --
Town Square 1997 1999 44,679 99.3% --
University Collections 1996 1984 106,899 96.2% Kash N Karry (4)
Village Center-Tampa 1995 1993 181,110 98.4% Publix
Willa Springs 2000 2000 83,730 100.0% Publix
West Palm Beach /
Treasure Coast
Boynton Lakes Plaza 1997 1993 130,924 98.4% Winn-Dixie
Chasewood Plaza 1993 1986 141,178 91.6% Publix
Chasewood Storage 1993 1986 42,810 100.0% --
East Port Plaza 1997 1991 235,842 55.3% Publix
Martin Downs Village Center 1993 1985 121,946 96.7% --
Martin Downs Village Shoppes 1993 1998 49,773 92.3% --
Ocean Breeze 1993 1985 108,209 84.7% Publix
Shops of San Marco (3), (5) 2002 91,538 58.6% Publix
Tequesta Shoppes 1996 1986 109,937 88.8% Publix
Town Center at Martin Downs 1996 1996 64,546 100.0% Publix
Wellington Town Square 1996 1982 105,150 98.9% Publix
Miami / Ft. Lauderdale
Aventura 1994 1974 102,876 94.9% Publix
Berkshire Commons 1994 1992 106,354 97.6% Publix
Garden Square 1997 1991 90,258 98.6% Publix
Palm Trails Plaza 1997 1998 76,067 97.6% Winn-Dixie
Shoppes @ 104 (5) 1998 1990 108,190 98.6% Winn Dixie
Shoppes of Pebblebrooke (5) 2000 76,767 100.0% Publix
University Marketplace 1993 1990 129,121 85.7% Albertsons (4)
Welleby 1996 1982 109,949 95.4% Publix
Ft. Myers / Cape Coral
Grande Oaks 2000 2000 78,784 93.1% Publix
------------- -------
Subtotal/Weighted Average (Florida) 6,193,550 90.9%
------------- -------
CALIFORNIA
Los Angeles / Southern CA
230th & Hawthorne 2002 2002 13,860 100.0% --
Amerige Heights 2000 2000 96,679 98.5% Albertsons
Campus Marketplace (5) 2000 144,288 94.4% Ralph's
Costa Verde 1999 1988 178,621 100.0% Albertsons
7
CALIFORNIA
Los Angeles / Southern CA
- -------------------------
(continued)
El Camino Shopping Center 1995 135,883 100.0% Von's Food & Drug
El Norte Parkway Plaza 1999 1984 87,990 96.4% Von's Food & Drug
Friars Mission 1999 1989 146,898 100.0% Ralph's
Garden Village (5) 2000 2000 112,957 97.1% Albertsons
Gelson's Westlake (3) 2002 2002 82,315 90.1% Gelsons
Heritage Plaza 1999 1981 231,102 96.9% Ralph's
McBean & Valencia (5) 2002 179,227 69.2% --
Morningside Plaza 1999 1996 91,600 100.0% Stater Brothers
Newland Center 1999 1985 166,492 99.1% Albertsons
Oakbrook Plaza 1999 1982 83,279 100.0% Albertsons
Park Plaza (5) 2001 1991 193,529 96.0% Von's Food & Drug
Plaza Hermosa 1999 1984 94,940 100.0% Von's Food & Drug
Rona Plaza 1999 1989 51,754 100.0% Food 4 Less
Rosecrans & Inglewood (3) 2002 12,000 100.0% --
Santa Ana Downtown Plaza 1987 100,305 100.0% Food 4 Less
Seal Beach (5) 2002 1966 85,910 100.0% Pavilions (4)
Twin Peaks 1999 1988 198,139 99.7% Albertsons
Ventura Village 1999 1984 76,070 100.0% Von's Food & Drug
Vista Village (3) 2002 2002 129,520 69.2% --
Westlake Village Plaza 1999 1975 190,525 97.5% Von's Food & Drug
Westridge Center (3) 2001 2001 87,284 88.7% Albertsons
Woodman - Van Nuys 1999 1992 107,614 100.0% Gigante
San Francisco / Northern CA
Blossom Valley 1999 1990 93,314 100.0% Safeway
Corral Hollow (5) 2000 2000 168,238 100.0% Safeway
Country Club 1999 1994 111,251 100.0% Ralph's
Diablo Plaza 1999 1982 63,214 100.0% Safeway (4)
El Cerrito Plaza (3) 2000 2000 254,840 92.4% Albertsons/
Trader Joe's
Encina Grande 1999 1965 102,499 100.0% Safeway
Gilroy (3) 2002 2002 123,709 0.0% --
Loehmann's Plaza 1999 1983 113,310 100.0% Safeway (4)
Powell Street Plaza 2001 1987 165,920 100.0% Trader Joe's
Prairie City Crossing 1999 1999 82,503 100.0% Safeway
San Leandro 1999 1982 50,432 100.0% Safeway (4)
Sequoia Station 1999 1996 103,148 100.0% Safeway (4)
Slatten Ranch (3),(5) 2002 2002 220,162 33.6% --
Strawflower Village 1999 1985 78,827 100.0% Safeway
Tassajara Crossing 1999 1990 146,188 100.0% Safeway
West Park Plaza 1999 1996 88,103 100.0% Safeway
Woodside Central 1999 1993 80,591 100.0% --
------------- -------
Subtotal/Weighted Average (CA) 5,125,030 91.4%
------------- -------
TEXAS
Austin
Hancock Center 1999 1998 410,438 91.2% H.E.B.
Market @ Round Rock 1999 1987 123,347 98.3% Albertsons
North Hills 1999 1995 144,019 98.9% H.E.B.
Dallas / Ft. Worth
Arapaho Village 1999 1997 103,033 98.0% Tom Thumb
Bethany Park Place 1998 1998 74,067 100.0% Kroger
Casa Linda Plaza 1999 1997 324,639 83.7% Albertsons
Cooper Street 1999 1992 133,196 100.0% --
Creekside (5) 1998 1998 96,816 100.0% Kroger
Hebron Park (5) 1999 1999 46,800 94.9% Albertsons (4)
Hillcrest Village 1999 1991 14,530 100.0% --
Keller Town Center 1999 1999 114,937 95.1% Tom Thumb
Lebanon/Legacy Center (3) 2000 56,802 31.4% Albertsons (4)
MacArthur Park Phase II (5) 1999 198,443 100.0% Kroger
Main Street Center (3) 2002 2002 32,680 18.2% Albertsons (4)
8
TEXAS
Dallas / Ft. Worth (continued)
Market @ Preston Forest 1990 90,171 100.0% Tom Thumb
Matlock (3) 2000 2000 40,139 34.5% --
Mills Pointe 1999 1986 126,186 92.1% Tom Thumb
Mockingbird Commons 1987 121,564 86.3% Tom Thumb
Northview Plaza 1999 1991 116,016 91.1% Kroger
Overton Park Plaza (5) 2001 1991 350,856 99.1% Albertsons
Prestonbrook - Frisco 1998 1998 91,274 96.9% Kroger
Preston Park 1999 1985 273,396 78.5% Tom Thumb
Prestonwood 1999 1999 101,024 85.9% Albertsons (4)
Rockwall Town Center (3) 2002 65,644 0.0% Tom Thumb (4)
Shiloh Springs 1998 1998 110,040 100.0% Kroger
Southlake - Village Center (5) 1998 1998 118,092 97.0% Kroger
Southpark 1999 1997 146,758 94.4% Albertsons
Trophy Club 1999 1999 106,607 83.8% Tom Thumb
Valley Ranch Centre 1999 1997 117,187 89.0% Tom Thumb
Houston
Alden Bridge 2002 1998 138,952 100.0% Kroger
Atascocita Center (3) 2002 2002 94,180 66.6% Kroger
Champions Forest 1999 1983 115,247 94.2% Randall's Food
Cochran's Crossing 2002 1994 138,192 100.0% Kroger
Coles Center (3) 2001 2001 42,063 88.1% Randall's Food (4)
Fort Bend Market (3) 2000 2000 30,158 72.2% Kroger (4)
Indian Springs Center (3), (5) 2002 135,977 57.5% H.E.B.
Kleinwood Center (3) 2000 2000 152,959 57.6% H.E.B.
Panther Creek 2002 1994 164,080 95.1% Randall's Food
Sterling Ridge 2002 2000 128,643 100.0% Kroger
Sweetwater Plaza (5) 2001 2000 134,045 92.7% Kroger
------------- -------
Subtotal/Weighted Average (Texas) 5,123,197 88.1%
------------- -------
GEORGIA
Atlanta
Ashford Place 1997 1993 53,450 98.6% --
Briarcliff LaVista 1997 1962 39,203 89.6% --
Briarcliff Village 1997 1990 187,156 99.8% Publix
Buckhead Court 1997 1984 55,229 90.5% --
Cambridge Square 1996 1979 77,629 92.4% Kroger
Cromwell Square 1997 1990 70,282 95.1% --
Cumming 400 1997 1994 126,900 97.0% Publix
Delk Spectrum 1998 1991 100,880 100.0% Publix
Dunwoody Hall 1997 1986 89,511 98.4% Publix
Dunwoody Village 1997 1975 120,597 88.7% Fresh Market
Killian Hill Market (3) 2000 2000 113,227 78.4% Publix
Loehmann's Plaza 1997 1986 137,601 92.2% --
Lovejoy Station (5) 1997 1995 77,336 100.0% Publix
Memorial Bend 1997 1995 177,283 93.4% Publix
Orchard Square (5) 1995 1987 93,222 96.1% Publix
Paces Ferry Plaza 1997 1987 61,696 100.0% --
Powers Ferry Square 1997 1987 97,704 89.5% --
Powers Ferry Village 1997 1994 78,995 99.9% Publix
Rivermont Station 1997 1996 90,267 100.0% Kroger
Roswell Village (5) 1997 1997 145,334 79.8% Publix
Russell Ridge 1994 1995 98,558 100.0% Kroger
Sandy Plains Village 1996 1992 175,035 91.9% Kroger
Other Markets
LaGrange Marketplace 1993 1989 76,327 90.3% Winn-Dixie
Parkway Station 1996 1983 94,290 83.0% Kroger
------------- -------
Subtotal/Weighted Average (Georgia) 2,437,712 93.2%
------------- -------
9
OHIO
Cincinnati
Beckett Commons 1998 1995 121,497 100.0% Kroger
Cherry Grove 1998 1997 195,497 91.0% Kroger
Hyde Park Plaza 1997 1995 397,893 94.4% Kroger/Thriftway
Regency Milford Center 2001 2001 108,903 88.0% Kroger
Shoppes at Mason 1998 1997 80,800 97.5% Kroger
Westchester Plaza 1998 1988 88,181 98.4% Kroger
Columbus
East Pointe 1998 1993 86,524 100.0% Kroger
Kingsdale 1997 1999 270,470 65.4% Big Bear
Kroger New Albany Center (5) 1999 91,722 98.5% Kroger
North Gate/(Maxtown) 1998 1996 85,100 100.0% Kroger
Park Place 1998 1988 106,833 98.8% Big Bear
Windmiller Plaza 1998 1997 120,509 97.9% Kroger
Worthington 1998 1991 93,095 91.2% Kroger
Toledo
Cherry Street Center 2000 2000 54,660 100.0% Farmer Jack
------------- -------
Subtotal/Weighted Average (Ohio) 1,901,684 91.4%
------------- -------
COLORADO
Colorado Springs
Cheyenne Meadows (5) 1998 1998 89,893 94.1% King Soopers
Jackson Creek 1998 1999 85,263 100.0% King Soopers
Woodmen Plaza 1998 1998 104,558 100.0% King Soopers
Denver
Boulevard Center 1999 1986 88,511 96.3% Safeway (4)
Buckley Square 1999 1978 111,146 94.5% King Soopers
Centerplace of Greeley (3) 2002 148,110 39.2% Safeway
Crossroads Commons (5) 1986 144,288 100.0% Whole Foods
Hilltop Village (3) 2002 2002 99,836 67.3% King Soopers
Leetsdale Marketplace 1999 1993 119,916 100.0% Safeway
Littleton Square 1999 1997 94,257 97.7% King Soopers
Lloyd King Center 1998 1998 83,326 98.4% King Soopers
New Windsor Marketplace (3) 2002 94,950 69.0% King Soopers
Redlands Marketplace 1999 1999 14,659 80.7% Albertsons (4)
Stroh Ranch 1998 1998 93,436 98.5% King Soopers
Willow Creek Center (5) 2001 1985 166,421 98.9% Safeway
------------- -------
Subtotal/Weighted Average (Colorado) 1,538,570 88.5%
------------- -------
NORTH CAROLINA
Asheville
Oakley Plaza (5) 1997 1988 118,728 98.5% Bi-Lo
Charlotte
Carmel Commons 1997 1979 132,651 98.0% Fresh Market
Union Square 1996 1989 97,191 100.0% Harris Teeter
Greensboro
Kernersville Marketplace 1998 1997 72,590 97.9% Harris Teeter
Sedgefield Village 2000 2000 56,630 76.9% Food Lion
Raleigh / Durham
Bent Tree Plaza 1998 1994 79,503 100.0% Kroger
Garner Town Square 1998 1998 221,576 100.0% Kroger
Glenwood Village 1997 1983 42,864 86.2% Harris Teeter
Lake Pine Plaza 1998 1997 87,691 100.0% Kroger
Maynard Crossing 1998 1997 122,814 97.8% Kroger
Southpoint Crossing 1998 1998 103,128 100.0% Kroger
Woodcroft 1996 1984 89,835 98.4% Food Lion
------------- -------
Subtotal/Weighted Average (NC) 1,225,201 97.6%
------------- -------
10
WASHINGTON
Seattle
Cascade Plaza (5) 1999 1999 217,657 99.5% Safeway
Inglewood Plaza 1999 1985 17,253 100.0% --
James Center (5) 1999 1999 140,240 95.5% Fred Myer
Padden Parkway (3) 2002 2002 54,473 96.3% Albertsons
Pine Lake Village 1999 1989 102,953 100.0% Quality Foods
Sammamish Highlands 1992 101,289 100.0% Safeway (4)
South Point Plaza 1999 1997 190,355 100.0% Cost Cutters
Southcenter 1999 1990 58,282 95.2% --
Thomas Lake 1999 1998 103,872 100.0% Albertsons
------------- -------
Subtotal/Weighted Average (WA) 986,374 98.8%
------------- -------
VIRGINIA
Washington D.C.
Ashburn Farm Market 2000 2000 92,019 100.0% Giant
Chesire Station 2000 2000 97,249 97.8% Safeway
Somerset (3) 2002 2002 108,400 61.8% Shoppers Food Whse
Tall Oaks Village Center 1998 69,331 100.0% Giant
Village Center at Dulles (5) 1991 308,473 93.1% Shoppers Food Whse
Other Virgina
Brookville Plaza (5) 1998 1991 63,664 98.1% Kroger
Statler Square 1998 1996 133,660 100.0% Kroger
------------- -------
Subtotal/Weighted Average (Virginia) 872,796 92.4%
------------- -------
OREGON
Portland
Cherry Park Market (Grmr) 1997 113,518 88.6% Safeway
Hillsboro Market Center 2000 67,240 100.0% Albertsons
Hillsboro Market Center Phase II 2002 83,116 91.1% --
Murrayhill Marketplace 1999 1988 149,214 90.2% Safeway
Sherwood Crossroads 1999 1999 88,489 87.0% Safeway
Sherwood Market Center 1995 124,256 98.0% Albertsons
Sunnyside 205 1999 1988 53,094 96.3% --
Walker Center 1999 1987 89,609 100.0% --
West Hills 1999 1998 53,579 98.1% QFC
------------- -------
Subtotal/Weighted Average (Oregon) 822,115 93.7%
------------- -------
ALABAMA
Birmingham
Southgate Village Shopping Center 1988 75,392 97.3% Publix
Trace Crossing Shopping Center (3) 2001 74,130 87.2% Publix
Valleydale Village (3) 2002 2002 118,466 77.8% Publix
Villages of Trussville 1993 1987 59,281 79.9% Bruno's
Montgomery
Country Club 1993 1991 67,622 92.9% Winn-Dixie
Other Markets
Bonner's Point 1993 1985 87,282 98.6% Winn-Dixie
Marketplace - Alexander City 1993 1987 162,723 96.4% Winn-Dixie
------------- -------
Subtotal/Weighted Average (Alabama) 644,896 90.4%
------------- -------
11
ARIZONA
Phoenix
Carefree Marketplace (3) 2000 24,697 89.3% Fry's (4)
Palm Valley Marketplace (5) 1999 107,630 98.1% Safeway
Paseo Village 1999 1998 92,399 97.5% ABCO
Pima Crossing 1999 1996 236,539 99.5% --
Stonebridge Center 2000 2000 30,235 78.4% Safeway (4)
The Provinces 2000 2000 34,201 80.8% Safeway (4)
------------- -------
Subtotal/Weighted Average (Arizona) 525,701 95.9%
------------- -------
TENNESSEE
Nashville
Harpeth Village 1997 1998 70,091 100.0% Publix
Hwy 46 & Hwy 70 (Dickson) 1998 10,908 100.0% --
Nashboro Village 1998 1998 86,811 96.8% Kroger
Northlake Village 2000 1988 151,629 88.1% Kroger
Peartree Village 1997 1997 114,795 100.0% Harris Teeter
West End Avenue 1998 1998 10,000 100.0% --
------------- -------
Subtotal/Weighted Average (TN) 444,234 95.3%
------------- -------
SOUTH CAROLINA
Merchants Village (5) 1997 1997 79,724 100.0% Publix
Murray Landing (3) 2002 2002 64,041 76.6% Publix
Pelham Commons (3) 2002 2002 76,271 58.0% Publix
Queensborough (5) 1998 1993 82,333 100.0% Publix
Rosewood Shopping Center 2001 36,887 95.1% Publix
------------- -------
Subtotal/Weighted Average (SC) 339,256 85.6%
------------- -------
KENTUCKY
Franklin Square 1998 1988 205,307 95.6% Kroger
Silverlake (5) 1998 1988 99,352 98.5% Kroger
------------- -------
Subtotal/Weighted Average (KY) 304,659 96.6%
------------- -------
ILLINOIS
Hinsdale Lake Commons 1998 1986 178,975 97.3% Dominick's
Westbrook Commons 2001 1984 121,502 94.4% Dominick's
------------- -------
Subtotal/Weighted Average (IL) 300,477 96.1%
------------- -------
MICHIGAN
Fenton Marketplace 1999 1999 97,224 98.6% Farmer Jack
Lakeshore 1998 1996 85,940 87.3% Kroger
Waterford 1998 1998 96,101 91.3% Kroger
------------- -------
Subtotal/Weighted Average (MI) 279,265 96.4%
------------- -------
DELAWARE
Pike Creek 1998 1981 229,510 99.0% Acme
White Oak - Dove DE 2000 2000 10,908 100.0% --
------------- -------
Subtotal/Weighted Average (DE) 240,418 99.0%
------------- -------
12
NEW JERSEY
Echelon Village Plaza (3) 2000 2000 88,993 79.7% Genuardi's
------------- ---------
MISSOURI
St. Ann Square 1998 1986 82,498 92.9% National
------------- -------
PENNSYLVANIA
Hershey - Goodyear 2000 2000 6,000 100.0% --
------------- -------
Total Weighted Average 29,482,626 91.5%
============= =======
Drug Store & Other
Property Name Other Anchors Tenants
- ---------------------------------- -------------------------------- -----------------------------------------------
FLORIDA
Jacksonville / North Florida
Anastasia (5) -- Hallmark, Starbucks, Mail Boxes, Etc., Cato
Bolton Plaza Wal-Mart, Blockbuster Radio Shack, Payless Shoes, Mailboxes , Cato
Carriage Gate TJ Maxx Brueggers Bagels, Bedfellows, Kinko's
Courtyard Target --
Fleming Island Stein Mart Mail Boxes, Etc., Starbucks, Hallmark, GNC
Highlands Square Eckerd, Big Lots, Bealls Outlet Bailey's Gym, Hair Cuttery, Rent Way, Radio Shack
Julington Village (5) -- Mail Boxes, Etc., H&R Block, Hallmark, Radio Shack
Lynnhaven -- Hallmark, Cingular Wireless, H&R Block
Millhopper Eckerd, Jo-Ann Fabrics Book Gallery, Postal Svc., Chesapeake Bagel
Newberry Square Kmart, Jo-Ann Fabrics H & R Block, Cato Fashions, Olan Mills, Dollar Tree
Ocala Corners (5) -- Mail Boxes, Etc., GNC, Cici's Pizza, Cingular Wireless
Old St. Augustine Plaza Eckerd, Burlington Coat Factory Mail Boxes, Etc., Hallmark, Hair Cuttery, GNC
Palm Harbour Eckerd, Bealls, Blockbuster Mail Boxes, Etc., Hallmark, Cingular Wireless
Pine Tree Plaza -- Great Clips, CiCi's Pizza, Hallmark, H&R Block
Regency Court CompUSA, Office Depot H&R Block, Mail Boxes Etc., Payless Shoes
Sports Authority Pearle Vision Center, Longhorn Steakhouse
US 301 & SR 100 - Starke Eckerd --
Vineyard (3) -- Movie Gallery
Tampa / Orlando
Beneva Village Shops Walgreen's, Ross Dress for Less Movie Gallery, GNC, Hallmark, H&R Block, Subway
Bloomingdale Square Wal-Mart, Beall's, Blockbuster Video Radio Shack, H&R Block, Hallmark, Ace Hardware
Center of Seven Springs -- State Farm, H & R Block
East Towne Shopping Center (3) -- --
Kings Crossing Sun City (5) -- Hallmark, Mail Boxes Etc., Sally Beauty Supply
Mainstreet Square Walgreen's Rent-A-Center, Wells Fargo Bank, NY Pizza
Mariner's Village Walgreen's, Blockbuster Supercuts, Prudential Real Estate, Firehouse Subs
Market Place - St. Petersburg Dollar World Mail Boxes, Etc., Starbucks, Quizno's, Great Clips
Peachland Promenade -- Southern Video, Hallmark, GNC, H&R Block
Regency Square TJ Maxx, AMC Theatre Famous Footwear, Hobbytown USA, Lenscrafters
at Brandon Staples, Michaels, Marshalls S&K Famous Brands, Shoe Carnival, Quizno's
Regency Village (3), (5) -- Sony JVC Superstore, Subway, Mail Boxes, Etc.
Terrace Walk Northside Mental Health Center Cici's Pizza, Norwest Financial
Town Square Pier 1 Imports, Petco Panera Bread, Alltel, Starbucks, Matress Firm
University Collections Eckerd, Jo-Anns Fabrics Hallmark, Dockside Imports, Kinkos
Village Center-Tampa Walgreen's, Stein Mart, Blockbuster Mens Warehouse, Panera Bread, Hallmark
Willa Springs -- Hallmark, Radio Shack, Starbucks, Mail Boxes, Etc.
West Palm Beach /
Treasure Coast
Boynton Lakes Plaza World Gym, Blockbuster Hair Cuttery, Baskin Robbins, Dunkin Donuts
Chasewood Plaza Beall's, Books-A-Million Hallmark, GNC, Supercuts, Payless Shoes
Chasewood Storage -- --
East Port Plaza Walgreen's, Sears Homelife H & R Block, GNC, Subway, Cato, Hair Cuttery
Martin Downs Village Center Beall's, Coastal Care Payless Theater, Hallmark, Bank of America
Martin Downs Village Shoppes Walgreen's Allstate, Dollar Store, Quizno's
Ocean Breeze Coastal Care, Beall's Mail Box Plus, Dollar Discount
Shops of San Marco (3), (5) -- --
Tequesta Shoppes Beall's Outlet Mail Boxes, Etc., Hallmark, Radio Shack, Dollar Tree
Town Center at Martin Downs -- Mail Boxes, Etc, Prudential FL Realty, Dunkin Donuts
Wellington Town Square Eckerd Mail Boxes, Etc., State Farm, Coldwell Banker, Remax
13
FLORIDA (continued)
Miami / Ft. Lauderdale
Aventura Eckerd, Humana Footlabs, Bank United, Lady of America
Berkshire Commons Walgreen's H & R Block, Century 21, Allstate, Subway
Garden Square Eckerd, Blockbuster Subway, GNC, Hair Cuttery, Lady of America
Palm Trails Plaza -- Mail Boxes, Etc., Quizno's, Personnel One
Shoppes @ 104 (5) Navarro Pharmacies Mail Boxes Etc., GNC, Subway, Lady of America
Shoppes of Pebblebrooke (5) -- Mail Boxes Etc., Nationwide Insurance, H&R Block
University Marketplace Beverly's Pet Center, Cafe Iguana H & R Block, Mail Boxes Etc., Olan Mills, Avis
Welleby Beall's H & R Block, Mail Boxes Plus, Dollar General, GNC
Ft. Myers / Cape Coral
Grande Oaks -- Subway, Great Clips, Beef O'Brady's
Subtotal/Weighted Average (Florida)
CALIFORNIA
Los Angeles / Southern CA
230th & Hawthorne Stouds Linen Warehouse --
Amerige Heights Target(4) Starbucks, Mail Boxes, Etc., Cingular Wireless, GNC
Campus Marketplace (5) Long's Drugs, Blockbuster Radio Shack, Mail Boxes Etc., Starbucks, Subway
Costa Verde Bookstar, Blockbuster US Post Office, Subway, Starbucks, Radio Shack
El Camino Shopping Center Sav-On Drugs Kinkos, Bank of America, Subway, Radio Shack
El Norte Parkway Plaza -- Great Clips, Lens-4-Less Optical, Childrens World
Friars Mission Long's Drugs, Blockbuster H&R Block, Mail Boxes, Etc., Subway, Starbucks
Garden Village (5) Rite Aid, Blockbuster Starbucks, Supercuts, Cold Stone Creamery
Gelson's Westlake (3) -- Claridge House, Huntington Leaning Center
Heritage Plaza Sav-On Drugs, Ace Hardware Bank of America, Hollywood Video, Quizno's
Radio Shack, Mail Boxes, Etc., H&R Block
McBean & Valencia (5) Kohl's Union Bank
Morningside Plaza -- Hallmark, Subway, Mail Boxes, Etc., Radio Shack
Newland Center -- Wells Fargo Bank, Kinko's, Starbucks, Quizno's
Oakbrook Plaza Long's Drugs Century 21, TCBY Yogurt, Subway, GNC
Park Plaza (5) Sav-On Drugs, Petco, Ross Radio Shack, TCBY, Subway, Hallmark
Plaza Hermosa Sav-On Drugs, Blockbuster Hallmark, Mail Boxes, Etc., R.S.V.P.
Rona Plaza NAMS Pharmacy Home Video, Acapulco Travel, Pizza Hut
Rosecrans & Inglewood (3) CVS Drug --
Santa Ana Downtown Plaza Famsa, Inc., Blockbuster Little Caesars Pizza, Payless Shoes, Taco Bell
Seal Beach (5) Sav-On Drugs --
Twin Peaks Target Starbucks, Subway, Great Clips, Famous Footware
Ventura Village Blockbuster Papa Johns Pizza, Fantastic Sams
Vista Village (3) Krikorian Theatres --
Westlake Village Plaza Long's Drugs, Blockbuster Bank of America, Citibank, Total Woman, Starbucks
Westridge Center (3) -- Starbucks, Great Clips, Subway
Woodman - Van Nuys -- Supercuts, H&R Block, Chief Auto Parts, Radio Shack
San Francisco / Northern CA
Blossom Valley Long's Drugs US Post Office, Hallmark, Great Clips, Starbucks
Corral Hollow (5) Long's Drugs, Orchards Hardware Precision Cuts, Starbucks, Quizno's
Country Club Long's Drugs, Blockbuster Subway, GNC, Starbucks, Pizza Hut
Diablo Plaza Long's Drugs, Jo-Ann Fabrics Clothestime, Mail Boxes, Etc., Quizno's, TCBY
El Cerrito Plaza (3) Long's Drugs, Barnes & Noble Pier 1 Imports, Mail Boxes, Etc., GNC, Starbucks
Bed, Bath & Beyond, Ross, Petco Copelands Sports, Allstate Insurance, H&R Block
Encina Grande Walgreens, Blockbuster Radio Shack, Mail Boxes, Etc., Applebees, H&R Block
Gilroy (3) -- --
Loehmann's Plaza Long's Drugs, Loehmann's, Blockbuster Starbucks, Hallmark, H&R Block, Kumon Learning
Powell Street Plaza Ross, Jo-Ann Fabrics, Circuit City Copelands Sports, Pier 1 Imports, Starbucks
Prairie City Crossing -- Great Clips, Radio Shack, Starbucks
San Leandro Blockbuster Radio Shack, Hallmark, Mail Boxes Etc., GNC
Sequoia Station Long's Drugs, Wherehouse Music Starbucks, Dress Barn, Sees Candies
Barnes and Noble, Old Navy
Slatten Ranch (3),(5) Target(4), Mervyn's --
14
CALIFORNIA (continued)
Strawflower Village Long's Drugs Hallmark, Mail Boxes, Etc., Subway, GNC
Tassajara Crossing Long's Drugs, Ace Hardware Citibank, Hallmark, Parcel Plus, GNC
West Park Plaza Rite Aid, Blockbuster Starbucks, Supercuts, Kragen Auto Parks
Woodside Central Marshalls, Discovery Zone Pier 1 Imports, GNC, Men's Wharehouse
Subtotal/Weighted Average (CA)
TEXAS
Austin
Hancock Center Sears, Old Navy, Petco Hollywood Video, Radio Shack, GNC, Quizno's
Market @ Round Rock Color Tile and Carpet Radio Shack, H&R Block, Starbucks, Quizno's
North Hills Hollywood Video Goodyear, Clothestime, Subway, Cingular Wireless
Dallas / Ft. Worth
Arapaho Village Arapaho Village Pharmacy H&R Block, Hallmark, GNC, Mail Boxes, Etc.
Bethany Park Place Blockbuster Lady of America, Mr. Parcel, Fantastic Sams
Casa Linda Plaza Petco, Blockbuster Starbucks, Supercuts, H&R Block, Hallmark
24 Hour Fitness, Colberts Mail Boxes, Etc., Cingular Wireless, Schlotzsky's
Cooper Street Circuit City, Office Max, Mail Boxes, Etc., State Farm, TGI Fridays
Home Depot, Jo-Ann Fabrics
Creekside (5) -- Hollywood Video, CICI's Pizza, Lady of America, GNC
Hebron Park (5) Blockbuster Lady America, Hallmark, GNC, Starbucks, Radio Shack
Hillcrest Village Blockbuster American Airlines
Keller Town Center -- Pizza Hut, Radio Shack, Starbucks, H&R Block
Lebanon/Legacy Center (3) -- Bank of America, Great Clips, State Farm, Subway
MacArthur Park Phase II (5) Linens 'N Things, Barnes & Noble Gap, Hallmark, Great Clips, Payless Shoes
Main Street Center (3) -- Great Clips, Kumon Learning Center
Market @ Preston Forest Petco Nations Bank, Fantastic Sams
Matlock (3) Wal-Mart (4) State Farm, Subway, Great Clips, Pizza Hut
Mills Pointe Blockbuster Hallmark, H&R Block, Subway, State Farm, GNC
Mockingbird Commons -- H&R Block, GNC, Starbucks, Hallmark, Cato
Northview Plaza Blockbuster Merle Norman, SW Bell Wireless, Eagle Postal
Overton Park Plaza (5) Home Depot, Circuit City, TJ Maxx Blockbuster, Clothestime, Starbucks, Subway
Oshman's, Office Depot, Petsmart Radio Shack, TCBY Yogurt, Supercuts
Prestonbrook - Frisco -- Coldwell Banker, GNC, Supercuts, Quizno's
Preston Park Gap, Blockbuster, Williams Sonoma Bath & Body Works, Mail Boxes, Etc., Starbucks
Talbots, Banana Republic, Wolf Camera
Prestonwood Blockbuster Hallmark, Great Clips, Mail Boxes, Etc., Subway
Rockwall Town Center (3) -- --
Shiloh Springs Blockbuster GNC, Great Clips, Quizno's, Radio Shack
Southlake - Village Center (5) Blockbuster Radio Shack, Papa Johns, Quizno's, H&R Block
Southpark Bealls H&R Block, GNC, Mail Boxes, Etc., CiCi's Pizza
Trophy Club Family Medicine, Blockbuster Subway, Radio Shack, GNC, Starbuck's, Great Clips
Valley Ranch Centre -- Mail Boxes, Etc., GNC, H&R Block, Subway
Houston
Alden Bridge Walgreens, Blockbuster Hallmark, GNC, Subway, Papa John's Pizza
Atascocita Center (3) -- --
Champions Forest Eckerd Mail Boxes, Etc., GNC, Qiuzno's, Nationwide Insurance
Cochran's Crossing Eckerd , Blockbuster Mail Boxes, Etc., Honey Baked Ham, Hallmark
Coles Center (3) -- Postnet, Quizno's, Hallmark, Nationwide Insurance
Fort Bend Market (3) -- Dollar Discount, Mailbox Depot, Great Clips
Indian Springs Center (3), (5) -- --
Kleinwood Center (3) Walgreens, Blockbuster U.S. Dollar Store, RJ Goodies
Panther Creek Eckerd, Sears Paint & Hardware Starbucks, TCBY Yogurt, Subway, Stride Rite
Sterling Ridge Eckerd, Blockbuster Hallmark, Quizno's, Mail Boxes, Etc., Pizza Hut
Sweetwater Plaza (5) Walgreen's Health South, Sport Clips, TCBY Yogurt
Subtotal/Weighted Average (Texas)
GEORGIA
Atlanta
Ashford Place Pier 1 Imports Baskin Robbin, Mail Boxes, Merle Norman, Great Clips
Briarcliff LaVista Michael's Blue Ribbon Grill
Briarcliff Village TJ Maxx, Office Depot, Petco, La-Z-Boy Subway, Party City, H&R Block, Dollar Tree
Buckhead Court -- Pavillion, Outback Steakhouse, Minuteman Press
Cambridge Square -- Allstate, Dollar Tree, Starbucks, Mail Boxes, Etc.
Cromwell Square CVS Drug, Haverty's, Hancock Fabrics First Union, Bellsouth Mobility
Cumming 400 Big Lots Pizza Hut, Hair Cuttery, Autozone, Dollar Tree
Delk Spectrum Blockbuster Mail Boxes, Etc., GNC, Hallmark, Outback Steakhouse
15
GEORGIA (continued)
Dunwoody Hall Eckerd Texaco, Subway, Nations Bank, Avis
Dunwoody Village Walgreen's Wolf Camera, Jiffy Lube, Hallmark
Killian Hill Market (3) -- Nationwide Insurance, Citifinancial, Subway
Loehmann's Plaza Eckerd, Loehmann's, LA Fitness Mail Boxes, Etc., GNC, H & R Block, Great Clips
Lovejoy Station (5) Blockbuster Subway, H&R Block, Supercuts, Pak Mail
Memorial Bend TJ Maxx Hollywood Video, Pizza Hut, GNC, H & R Block, Cato
Orchard Square (5) -- Mail Boxes Unlimited, Choice Cuts, Remax
Paces Ferry Plaza Blockbuster Sherwin Williams, Nations Bank, Houston's
Powers Ferry Square CVS Drug, Pearl Arts & Crafts Domino's Pizza, Dunkin Donuts, Suntrust Bank
Powers Ferry Village CVS Drug Mail Boxes, Etc., Blimpies
Rivermont Station CVS Drug, Blockbuster Pak Mail, GNC, Wolf Camera, Hair Cuttery
Roswell Village (5) Eckerd, Blockbuster Pizza Hut, Dollar Tree, Cato, Hair Cuttery
Russell Ridge Blockbuster Pizza Hut, Pak Mail, Hallmark, GNC
Sandy Plains Village Stein Mart, Blockbuster Hallmark, Mail Boxes, Etc., Subway, Hair Cuttery
Other Markets
LaGrange Marketplace Eckerd Lee's Nails, It's Fashions, One Price Clothing
Parkway Station -- H & R Block, Pizza Hut, Super Nails, Dollar Tree
Subtotal/Weighted Average (Georgia)
OHIO
Cincinnati
Beckett Commons Stein Mart Mail Boxes, Etc., Subway, GNC
Cherry Grove TJ Maxx, Hancock Fabric Shoe Carnival, GNC, Hallmark, Sally Beauty
Hyde Park Plaza Walgreen's, Michaels, Blockbuster Radio Shack, Starbucks, Hallmark, Great Clips
Barnes & Noble, Jo-Ann Fabrics Famous Footware, US Post Office, Panera Bread
Regency Milford Center -- Dollar Tree, Goodyear, CATO, Great Clips
Shoppes at Mason Blockbuster Mail Boxes. Etc., GNC, Great Clips, H&R Block
Westchester Plaza -- Pizza Hut, Subway, GNC, Cincinnati Bell Wireless
Columbus
East Pointe Goodyear, Blockbuster Mail Boxes, Etc., Hallmark, Subway, Great Clips
Kingsdale Stein Mart, Goodyear Sally Beauty Supply, Jenny Craig, Famous Footware
Kroger New Albany Center (5) Blockbuster Great Clips, Mail Boxes, Etc., Blimpies
North Gate/(Maxtown) -- Hallmark, GNC, Great Clips, Domino's Pizza
Park Place Blockbuster Mail Boxes, Etc., Domino's, Subway
Windmiller Plaza Sears Hardware Radio Shack, Sears Optical, Great Clips, Cato
Worthington Blockbuster H&R Block, Radio Shack, Dairy Queen
Toledo
Cherry Street Center -- --
Subtotal/Weighted Average (Ohio)
COLORADO
Colorado Springs
Cheyenne Meadows (5) -- Nail Center, Cost Cutters, Cheyenne Mtn. Realty
Jackson Creek -- Subway, Pak Mail
Woodmen Plaza -- Hallmark, GNC, Mail Boxes, Etc., H&R Block
Denver
Boulevard Center One Hour Optical Bennigans, Great Clips, Mail Boxes, Etc., Quizno's
Buckley Square True Value Hardware Hollywood Video, Radio Shack, Subway, Pak Mail
Centerplace of Greeley (3) Target (4), Ross, Shoe Carnival --
Crossroads Commons (5) Barnes & Noble, Mann Theaters Wherehouse Music, Quizno's, Sally Beauty Supply
Hilltop Village (3) -- --
Leetsdale Marketplace Blockbuster Radio Shack, GNC, Checker Auto Parts, Quizno's
Littleton Square Walgreens, Blockbuster H&R Block, Radio Shack, Starbucks, Mail Boxes, Etc.
Lloyd King Center -- GNC, Cost Cutters, Hollywood Video
New Windsor Marketplace (3) -- --
Redlands Marketplace Blockbuster H&R Block, Great Clips
Stroh Ranch -- Cost Cutters, Post Net, Subway
Willow Creek Center (5) Family Fitness, Gateway Taco Bell, Starbucks, Blimpies, Mail Boxes, Etc.
Subtotal/Weighted Average (Colorado)
16
NORTH CAROLINA
Asheville
Oakley Plaza (5) CVS Drug, Western Auto Little Caesar's, Subway, Postnet
Baby Superstore Life Uniform, Household Finance
Charlotte
Carmel Commons Eckerd, Blockbuster, Piece Goods Party City, Radio Shack, Chuck E Cheese's, Blimpies
Union Square CVS Drug, Blockbuster Mail Boxes, Etc., Subway, TCBY, Rack Room
Consolidated Theatres
Greensboro
Kernersville Marketplace -- Mail Boxes, Etc., Little Caesar's, Great Clips, GNC
Sedgefield Village -- Great Clips, A-Nails
Raleigh / Durham
Bent Tree Plaza -- Pizza Hut, Manhattan Bagel, Parcel Plus, Cost Cutters
Garner Town Square Target (4), Office Max, Blockbuster Sears Optical, Friedman's Jewelers, S&K
Petsmart, Home Depot (4) United Artist H & R Block, Shoe Carnival, Dress Barn
Glenwood Village -- Domino's Pizza, Frame Wharehouse
Lake Pine Plaza Blockbuster H & R Block, GNC, Great Clips
Maynard Crossing Blockbuster Mail Boxes, Etc., GNC, Hallmark, Cingular Wireless
Southpoint Crossing Blockbuster Wolf Camera, GNC, H&R Block, Hallmark, Starbucks
Woodcroft True Value Domino's Pizza, Subway, Nationwide Insurance
Subtotal/Weighted Average (NC)
WASHINGTON
Seattle
Cascade Plaza (5) Long's Drugs, Ross, Bally Fitness Hollywood Video, Fashion Bug, Aaron's Rents
Jo-Ann Fabrics Great Clips, Cingular Wireless, Domino's
Inglewood Plaza -- Radio Shack, Subway, Great Clips
James Center (5) Rite Aid Kinko's, Hollywood Video, U.S. Bank, Starbucks
Padden Parkway (3) -- --
Pine Lake Village Rite Aid, Blockbuster Starbucks, Baskin Robbins, Sylvan Learning Center
Sammamish Highlands Bartell Drugs, Ace Hardware Hollywood Video, Starbucks, GNC, H&R Block
South Point Plaza Rite Aid, Office Depot, Outback Steakhouse, AT&T Wireless,
Pep Boys, Pacific Fabrics The UPS Store
Southcenter Target (4) Boaters World, Quizno's, Supercuts, Starbucks
Thomas Lake Rite Aid, Blockbuster Great Clips, Subway, State Farm Insurance
Subtotal/Weighted Average (WA)
VIRGINIA
Washington D.C.
Ashburn Farm Market -- Video Wharehouse, Starbucks, Subway, Supercuts
Chesire Station Petco, Blockbuster Radio Shack, Blimpies, Starbucks, GNC, Hair Cuttery
Somerset (3) -- --
Tall Oaks Village Center -- Video Wharehouse, Domino's, Great Clips
Village Center at Dulles (5) CVS Drug, Gold's Gym, Petco
Other Virgina
Brookville Plaza (5) -- H&R Block, Cost Cutters, Liberty Mutual, Quizno's
Statler Square CVS Drug, Staples Hallmark, H & R Block, Hair Cuttery, Cellular One
Subtotal/Weighted Average (Virginia)
OREGON
Portland
Cherry Park Market (Grmr) -- Hollywood Video, Subway, McDonalds, Dollar Tree
Hillsboro Market Center -- Quizno's, Starbucks, Great Clips
Hillsboro Market Center Phase II Marshalls, Petsmart Dollar Tree, Mattress Specialist
Murrayhill Marketplace Segal's Baby News Wells Fargo Bank, Great Clips, State Farm
Sherwood Crossroads -- Great Clips, Starbucks, Quizno's
Sherwood Market Center -- Hallmark, Mail Boxes, Etc., GNC, Supercuts
Sunnyside 205 -- Kinko's, Coldwell Banker, Quizno's
Walker Center Sportmart, Blockbuster Postal Annex, Quizno's, Cruise Masters
West Hills Blockbuster GNC, Starbucks, Great Clips, State Farm
Subtotal/Weighted Average (Oregon)
17
ALABAMA
Birmingham
Southgate Village Shopping Center Rite Aid Subway, Red Wing Shoes, Compass Bank
Trace Crossing Shopping Center (3) -- Lady of America, Great Clips, H&R Block
Valleydale Village (3) Pets America American Fitness, Subway, Great Clips, Pizza Hut
Villages of Trussville CVS Drug Cellular Sales, Pro Top Nails
Montgomery
Country Club Rite Aid Movie Gallery, Subway, GNC
Other Markets
Bonner's Point Wal-Mart Subway, Cato, Movie Gallery
Marketplace - Alexander City Wal-Mart, Goody's Family Clothing Domino's Pizza, Subway, Hallmark, CATO
Subtotal/Weighted Average (Alabama)
ARIZONA
Phoenix
Carefree Marketplace (3) -- Pizza Hut, Subway, Great Clips, Starbucks
Palm Valley Marketplace (5) Blockbuster Alltel, Subway, GNC, Great Clips, H&R Block
Paseo Village Walgreens, Blockbuster Fantastic Sams, McDonalds, Reflections West
Pima Crossing Stein Mart, Blockbuster Subway, Great Clips, Sherwin Williams,
Pier 1 Imports, Bally Total Fitness GNC, Mattress Firm
Stonebridge Center -- Cost Cutters, Post Net, Sally Beauty Supply
The Provinces -- Lady of America, Supercuts, New York Bagels
Subtotal/Weighted Average (Arizona)
TENNESSEE
Nashville
Harpeth Village Blockbuster Mail Boxes, Etc., Heritage Cleaners, Great Clips
Hwy 46 & Hwy 70 (Dickson) Eckerd --
Nashboro Village -- Hallmark, Fantastic Sams, Cellular Sales
Northlake Village CVS Drug, Petco GNC, Beauty Express, Olan Mills, Healthsouth
Peartree Village Eckerd, Office Max Hollywood Video, AAA Auto, Royal Thai
West End Avenue Walgreen's --
Subtotal/Weighted Average (TN)
SOUTH CAROLINA
Merchants Village (5) -- Firestone Tire, Mail Boxes, Etc., Hair Cuttery, Hallmark
Murray Landing (3) -- Great Clips, Pretty Nails, Tripp's Fine Cleaners
Pelham Commons (3) -- --
Queensborough (5) -- Pet Emporium, Mail Boxes, Etc., Supercuts, Pizza Hut
Rosewood Shopping Center -- Kings's Beauty Supply, Great Clips, Sterling Cleaners
Subtotal/Weighted Average (SC)
KENTUCKY
Franklin Square Rite Aid, JC Penney, Office Depot Mail Boxes, Etc., Baskin Robbins, Kay Jewelers
Chakers Theatre, Pier 1 Imports Radio Shack, Cato, Hibbet Sporting Goods
Silverlake (5) Blockbuster CATO, Radio Shack, H&R Block, Great Clips
Subtotal/Weighted Average (KY)
ILLINOIS
Hinsdale Lake Commons Ace Hardware, Blockbuster Hallmark, Mail Boxes, Etc., Fannie May Candies
Murray's Party Time Supplies Quizno's, Coldwell Banker
Westbrook Commons -- Radio Shack, Great Clips, GNC, Remax, Subway
Subtotal/Weighted Average (IL)
18
MICHIGAN
Fenton Marketplace Blockbuster, Michaels Supercuts, Countrywide Home Loans
Lakeshore Rite Aid Hallmark, American Travelers
Waterford -- Supercuts, Hollywood Video, Starbucks, GNC
Subtotal/Weighted Average (MI)
DELAWARE
Pike Creek Eckerd, K-mart, Blockbuster Radio Shack, H&R Block, TCBY, GNC
White Oak - Dove DE Eckerd --
Subtotal/Weighted Average (DE)
NEW JERSEY
Echelon Village Plaza (3) -- Dunkin Donuts, Hair Cuttery, KFC, Quizno's
MISSOURI
St. Ann Square Bally Total Fitness Great Clips, US Navy, US Marines, US Army
PENNSYLVANIA
Hershey - Goodyear -- Goodyear
Total Weighted Average
- --------------------------------------------------------
(1) Or latest renovation
(2) Includes development properties. If development properties are excluded,
the total percentage leased would be 94.8% for Company shopping centers.
(3) Property under development or redevelopment. (4) Tenant owns its own
building.
(5) Owned by a partnership with outside investors in which the Partnership
or an affiliate is the general partner.
19
Item 3. Legal Proceedings
Regency is a party to various legal proceedings, which arise, in the
ordinary course of its business. Regency is not currently involved in any
litigation nor, to management's knowledge, is any litigation threatened against
Regency, 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 Regency.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted for stockholder vote during the fourth
quarter of 2002.
PART II
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 Fourth Amended
and Restated Agreement of Limited Partnership (the "Partnership Agreement"). As
of December 31, 2002 there were approximately 47 holders of record in the
aggregate of Original Limited Partnership Units, Additional Units and Series A,
B, C, D, E and F 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.
Regency directly or indirectly through a subsidiary holds 98% of the Common
Units. Each outstanding Unit other than the Units held directly or indirectly by
Regency and the Series A, B, C, D, E and F Preferred Units which are convertible
into Regency preferred stock 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, C, D, E and F Preferred Units on each March 31,
June 30, September 30 and December 31 in a distribution amount equal to 8.125%,
9.0%, 9.125%, 8.75% and 8.75% of the original capital contribution per Series A,
C, D, E and F Preferred Units, respectively. The Partnership Agreement provides
that the Partnership will make priority distributions of Available Cash (as
defined in the Partnership Agreement) first to Series B Preferred Units on each
March 1, June 1, September 1 and December 1 in a distribution amount equal to
8.75% of the original capital contribution per Series B Preferred Units. Subject
to the prior right of the holders of Series A, B, C, D, E and F 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 pro-rata to the holders of common Units,
including Regency.
Regency's common stock is traded on the New York Stock Exchange
("NYSE") under the symbol "REG". Regency currently has approximately 4,000
shareholders. The following table sets forth the high and low prices and the
cash dividends declared on Regency's common stock by quarter for 2002 and 2001.
2002 2001
------------------------------------------- ---------------------------------------------
Cash Cash
Quarter High Low Dividends High Low Dividends
Ended Price Price Declared Price Price Declared
- -------------------------------------------------------------------------------------------------------------------------
March 31 $ 29.50 26.88 .51 25.00 22.63 .50
June 30 31.03 27.82 .51 25.56 23.00 .50
September 30 31.85 25.22 .51 26.35 22.72 .50
December 31 32.40 28.92 .51 27.75 24.51 .50
20
The Partnership intends to pay regular quarterly distributions to its
Unit holders in an amount per Unit identical to the per share amount distributed
to holders of Regency common stock. Regency intends to pay regular quarterly
distributions to its common stockholders. Future distributions will be declared
and paid at the discretion of the Board of Directors, and will depend upon cash
generated by operating activities, Regency's financial condition, capital
requirements, 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. Regency 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 Regency. Distributions by Regency to the extent of its current and
accumulated earnings and profits for federal income tax purposes will be taxable
to stockholders as either ordinary dividend income or capital gain income if so
declared by Regency. Distributions in excess of earnings and profits generally
will be treated as a non-taxable return of capital. Such distributions have the
effect of deferring taxation until the sale of a stockholder's common stock. In
order to maintain its qualification as a REIT, Regency must make annual
distributions to stockholders of at least 90% 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. Regency currently maintains the Regency
Centers Corporation Dividend Reinvestment and Stock Purchase Plan which enables
its stockholders to automatically reinvest distributions, as well as, make
voluntary cash payments towards the purchase of additional shares.
Under the loan agreement with the lenders of Regency'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 in Regency's consolidated financial statements.
Also, in the event of any monetary default, Regency may not make distributions
to stockholders.
There were no sales of unregistered securities during the periods
covered by this report.
Equity Compensation Plan Information
(a) (b) (c)
----------------------- ------------------------ ----------------------
Number of securities
remaining available
for future issuance
Number of securities Weighted-average under equity
to be issued upon exercise price of compensation plans
exercise of outstanding options, (excluding
Plan Category outstanding options, warrants and rights securities reflected
warrants and rights in column (a))
- ---------------------------------------- ----------------------- ------------------------ ----------------------
Equity compensation plans
approved by security holders........ 3,097,859 $27.47 1,348,880(1)
Equity compensation plans not
approved by security holders........ N/A N/A 11,992
----------------------- ------------------------ ----------------------
Total............................ 3,097,859 $27.47 1,360,872
======================= ======================== ======================
- ----------------------------------------
(1) The Company's 1993 Long Term Omnibus Plan provides for the issuance of
up to 12% of Regency's outstanding common stock and common stock
equivalents, but not to exceed 8.5 million shares. The shares shown in
column (c) as available for issuance at December 31, 2002 are based on
this 12% formula.
Regency's Stock Grant Plan for non-key employees is the only equity
compensation plan that our shareholders have not approved. This Plan provides
for the award of a stock bonus of a specified value to each non-key employee on
the 1st anniversary date and every 5th anniversary date of their employment. For
example, each non-manager employee receives $500 in shares at the specified
21
anniversary dates based on the average fair market value of Regency's common
stock for the most recent quarter prior to the anniversary date. A total of
30,000 shares of common stock have been reserved for issuance under this Plan,
of which 11,992 shares were available for issuance at December 31, 2002.
Item 6. Selected Consolidated Financial Data
(in thousands, except per share data and number of properties)
The following table sets forth Selected Financial Data on a historical
basis for the five years ended December 31, 2002, 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.
2002 2001 2000 1999 1998
---- ---- ---- ---- ----
Operating Data:
Revenues:
Rental revenues $ 354,183 323,020 306,030 258,275 120,057
Service operations revenue 20,255 31,495 27,226 18,239 11,863
Equity in income of investments
in real estate partnerships 5,765 3,439 3,139 4,688 946
------------ ----------- ----------- ----------- ------------
Total revenues 380,203 357,954 336,395 281,202 132,866
------------ ----------- ----------- ----------- ------------
Operating expenses:
Operating, maintenance and real
estate taxes 89,749 81,039 75,811 61,928 28,068
General and administrative and other expenses 24,133 24,917 21,870 19,747 15,064
Depreciation and amortization 70,443 62,435 55,537 45,278 23,395
------------ ----------- ----------- ----------- ------------
Total operating expenses 184,325 168,391 153,218 126,953 66,527
------------ ----------- ----------- ----------- ------------
Other expense (income):
Interest expense, net of interest income 81,286 63,680 63,867 56,576 26,051
(Gain) loss on sale of operating properties (5,267) (699) (4,507) 233 (10,726)
Provision for loss on operating and
development properties 4,369 1,595 12,995 - -
Other income (2,383) - - - -
------------ ----------- ----------- ----------- ------------
Total other expense 78,005 64,576 72,355 56,809 15,325
------------ ----------- ----------- ----------- ------------
Income before minority interests 117,873 124,987 110,822 97,440 51,014
Minority interest preferred unit distributions (33,475) (33,475) (29,601) (12,368) (3,358)
Minority interest of limited partners (492) (721) (2,632) (2,855) (464)
------------ ----------- ----------- ----------- ------------
Income from continuing operations 83,906 90,791 78,589 82,217 47,192
Discontinued operations, net:
Operating income from discontinued operations 10,238 12,430 11,514 10,527 5,224
Gain on sale of operating properties and
properties in development 19,177 - - - -
------------ ----------- ----------- ----------- ------------
Income from discontinued operations 29,415 12,430 11,514 10,527 5,224
------------ ----------- ----------- ----------- ------------
Net income for common unitholders $ 113,321 103,221 90,103 92,744 52,416
============ =========== =========== =========== ============
Income per common unit - Basic:
Income from continuing operations $ 1.36 1.49 1.30 1.42 1.60
Discontinued operations $ 0.49 0.21 0.19 0.19 0.20
------------ ----------- ----------- ----------- ------------
Net income for common unitholders per unit $ 1.85 1.70 1.49 1.61 1.80
============ =========== =========== =========== ============
Income per common unit - Diluted:
Income from continuing operations $ 1.35 1.49 1.30 1.43 1.56
Discontinued operations $ 0.49 0.20 0.19 0.18 0.19
----------------------------------------------------------------------
Net income for common unitholders per unit $ 1.84 1.69 1.49 1.61 1.75
======================================================================
22
2002 2001 2000 1999 1998
---- ---- ---- ---- ----
Other Data:
Common units outstanding 61,512 60,645 59,863 60,304 25,589
Preferred Units outstanding 4,640 4,640 4,640 3,700 1,600
Partnership owned GLA 29,483 29,089 27,991 24,769 14,652
Number of properties (at end of year) 262 272 261 216 129
Ratio of earnings to fixed charges 1.8 1.7 1.7 1.9 2.1
Distributions per unit $ 2.04 2.00 1.92 1.84 1.76
Balance Sheet Data:
Real estate investments at cost $ 3,088,914 3,156,831 2,943,627 2,636,193 1,250,332
Total assets $ 3,061,859 3,109,314 3,035,144 2,654,936 1,240,107
Total debt $ 1,333,524 1,396,721 1,307,072 1,011,967 548,126
General partners' capital $ 1,221,720 1,219,051 1,225,415 1,247,249 550,741
23
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
In addition to historical information, the following information
contains forward-looking statements under the federal securities laws. These
statements are based on current expectations, estimates and projections about
the industry and markets in which Regency operates, and management's beliefs and
assumptions. Forward-looking statements are not guarantees of future performance
and involve certain known and unknown risks and uncertainties that could cause
actual results to differ materially from those expressed or implied by such
statements. Such risks and uncertainties include, but are not limited to,
changes in national and local economic conditions; financial difficulties of
tenants; competitive market conditions, including pricing of acquisitions and
sales of properties and out-parcels; changes in expected leasing activity and
market rents; timing of acquisitions, development starts and sales of properties
and out-parcels; weather; the ability to obtain governmental approvals; and
meeting development schedules. The following discussion should be read in
conjunction with the accompanying Consolidated Financial Statements and Notes
thereto of Regency Centers, L.P. appearing elsewhere in the annual report on
Form 10-K.
Organization
Regency Centers Corporation ("Regency" or "Company") is a qualified
real estate investment trust ("REIT"), which began operations in 1993. We invest
in retail shopping centers through our partnership interest in Regency Centers,
L.P., ("RCLP" or "Partnership") an operating partnership in which Regency
currently owns approximately 98% of the outstanding common partnership units
("Common Units"). Regency's acquisition, development, operations and financing
activities, including the issuance of Common Units or Cumulative Redeemable
Preferred Units ("Preferred Units"), are generally executed by RCLP.
Shopping Center Business
We are a national owner, operator and developer of grocery-anchored
neighborhood retail shopping centers. A list of our shopping centers including
those partially owned through joint ventures, summarized by state and in order
of largest holdings, including their GLA follows:
December 31, 2002 December 31, 2001
----------------- -----------------
Location # Properties GLA % Leased * # Properties GLA % Leased *
-------- ------------ --- ---------- ------------ --- ----------
Florida 53 6,193,550 91.9% 56 6,535,254 92.0%
California 43 5,125,030 99.1% 39 4,879,051 98.8%
Texas 40 5,123,197 93.6% 36 4,579,263 92.8%
Georgia 24 2,437,712 93.9% 26 2,556,471 93.3%
Ohio 14 1,901,684 91.4% 14 1,870,079 93.5%
Colorado 15 1,538,570 98.0% 12 1,188,480 99.2%
North Carolina 12 1,225,201 97.6% 13 1,302,751 98.1%
Washington 9 986,374 98.9% 9 1,095,457 98.1%
Virginia 7 872,796 96.8% 6 408,368 97.6%
Oregon 9 822,115 93.7% 8 740,095 93.2%
Alabama 7 644,896 94.3% 7 665,440 95.3%
Arizona 6 525,701 96.3% 9 627,612 98.6%
Tennessee 6 444,234 95.3% 10 493,860 99.4%
South Carolina 5 339,256 99.1% 5 241,541 100.0%
Kentucky 2 304,659 96.6% 5 321,689 94.2%
Illinois 2 300,477 96.1% 2 300,162 91.6%
Michigan 3 279,265 92.6% 3 275,085 89.5%
Delaware 2 240,418 99.0% 2 240,418 99.3%
New Jersey 1 88,993 - 3 112,640 100.0%
Missouri 1 82,498 92.9% 2 370,176 92.9%
Pennsylvania 1 6,000 100.0% 1 6,000 100.0%
Mississippi - - - 2 185,061 98.3%
Wyoming - - - 1 87,777 100.0%
Maryland - - - 1 6,763 -
---------------- ---------------- --------------- ----------------- -------------- ---------------
Total 262 29,482,626 94.8% 272 29,089,493 94.9%
================ ================ =============== ================= ============== ===============
* Excludes pre-stabilized properties under development
24
We are focused on building a portfolio of grocery-anchored
neighborhood shopping centers that are positioned to withstand adverse economic
conditions by providing consumers with convenient shopping for daily necessities
and adjacent local tenants with foot traffic. Regency's current investment
markets are stable, and we expect 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 our shopping centers, including those partially owned through joint
ventures at December 31, 2002:
Percentage of Percentage of
Grocery Number of Company- Annualized Average Remaining
Anchor Stores (a) owned GLA Base Rent Lease Term
------ ---------- --------- --------- ----------
Kroger 61 11.8% 8.8% 16 years
Publix 53 8.3% 5.9% 14 years
Safeway 46 5.9% 4.5% 12 years
Albertsons 24 2.9% 2.5% 16 years
(a) Includes grocery-tenant-owned stores
On January 22, 2002, Kmart Corporation, a tenant in four of our
shopping centers, filed for protection under Chapter 11 of the U.S. Bankruptcy
Code. Under Chapter 11 bankruptcy protection, Kmart has the ability to reject
pre-petition lease agreements and cease paying rent. Kmart rejected two leases
representing $942,000 of annual base rent and closed both stores. We have two
other leases with Kmart representing $883,000 of annual base rent. Both of these
stores are open and operating, however, we have no assurance that Kmart will be
able to continue rental payments on these two stores in the future.
As a result of the Kmart store closing at one of our shopping centers,
combined with an earlier closing of an adjacent Winn-Dixie grocery store, we
determined that the value of this shopping center had been permanently impaired.
As a result, we recorded a provision for loss on operating properties of $2.4
million during 2002.
Acquisition and Development of Shopping Centers
We have implemented a growth strategy dedicated to developing and
acquiring high-quality shopping centers. Our development program makes a
significant contribution to our overall growth. Development is customer-driven,
meaning we generally have an executed lease from the grocery-anchor before we
begin construction. Developments serve the growth needs of our grocery and
specialty retail customers, result in modern shopping centers with 20-year
leases from the grocery anchors, and produce either attractive returns on
invested capital or profits from sale. This development process can require 12
to 36 months from initial land or redevelopment acquisition through
construction, lease-up and stabilization, depending upon the size and type of
project. Generally, anchor tenants begin operating their stores prior to
construction completion of the entire center, resulting in rental income during
the development phase.
During 2002, we acquired the land and began development on 21 new
projects representing estimated total costs at completion of $335 million,
compared with starting 11 new projects during 2001 with estimated costs at
completion of $156 million. At December 31, 2002, we had 34 projects under
construction or undergoing major renovations, which, when completed, are
expected to represent an investment of $635.8 million before the estimated
reimbursement of certain tenant-related costs and projected sales proceeds from
adjacent land and out-parcels of $131 million. Costs necessary to complete these
developments will be $326 million, are generally already committed as part of
existing construction contracts, and will be expended through 2005. These
developments are approximately 49% completed and 64% pre-leased.
RCLP has a 20% equity interest in and serves as property manager for
Columbia Regency Retail Partners, LLC ("Columbia"), a joint venture with the
Oregon State Treasury that was formed for the purpose of investing in retail
25
shopping centers. During 2002, Columbia acquired a shopping center from the
Partnership for $19.5 million, for which the Partnership received net proceeds
of $17.5 million. At December 31, 2002, Columbia owned 12 shopping centers with
a net book value of $284.9 million.
RCLP has a 25% equity interest in and serves as property manager for
Macquarie CountryWide-Regency, LLC, ("MCWR") a joint venture with an affiliate
of Macquarie CountryWide Trust of Australia, a Sydney, Australia-based property
trust focused on investing in grocery-anchored shopping centers. During 2002,
MCWR acquired 11 shopping centers from the Partnership for $145.2 million, for
which the Partnership received net proceeds of $94.9 million and a note
receivable of $25.1 million. MCWR is currently in the process of placing
third-party fixed-rate mortgages on the properties, the proceeds of which will
be used to repay the note receivable. In January 2003, the note was reduced by
$5.7 million, and we expect the balance of the note receivable to be repaid
during 2003. The Partnership recognized gains on these sales of $11.1 million,
which represents $5.3 million related to operating properties, recorded as a
gain on the sale of operating properties, and $5.8 million related to
development properties, recorded as service operations revenue. The recognition
of gain is recorded on only that portion of the sale to MCWR not attributable to
the Partnership's 25% joint venture interest. At December 31, 2002, MCWR owned
16 shopping centers with a net book value of $180.7 million.
Columbia and MCWR intend to continue to acquire retail shopping
centers, some of which they may acquire directly from RCLP. For those properties
acquired from third parties, RCLP is required to provide its pro rata share of
the purchase price.
Liquidity and Capital Resources
- -------------------------------
We expect that the cash generated from revenues will provide the
necessary funds on a short-term basis to pay our operating expenses, interest
expense, scheduled principal payments on outstanding indebtedness, recurring
capital expenditures necessary to maintain our shopping centers properly, and
distributions to stock and unit holders. Net cash provided by operating
activities was $173 million and $185.9 million for the years ended December 31,
2002 and 2001, respectively. During 2002 and 2001, respectively, we incurred
capital expenditures of $18.5 million and $15.8 million to improve our shopping
center portfolio, paid scheduled principal payments of $5.6 million and $6.1
million to our lenders, and paid dividends and distributions of $158.5 million
and $154.4 million to our share and unit holders.
Although base rent is supported by long-term lease contracts, tenants
who file bankruptcy have the right to cancel their leases and close the related
stores. In the event that a tenant with a significant number of leases in our
shopping centers files bankruptcy and cancels its leases, we could experience a
significant reduction in our revenues. We are not currently aware of any current
or pending bankruptcy of any of our tenants that would cause a significant
reduction in our revenues, and no tenant represents more than 10% of our annual
base-rental revenues.
We expect to meet long-term capital requirements for maturing debt, the
acquisition of real estate, and the renovation or development of shopping
centers from: (i) cash generated from operating activities after the payments
described above, (ii) proceeds from the sale of real estate, (iii) joint
venturing of real estate, (iv) increases in debt, and (v) equity raised in the
private or public markets. Additionally, we have the right to call and repay
outstanding preferred units five years after their issuance date, at our
discretion, which could begin during 2003. The sources of repaying preferred
units would include those listed above.
Our commitment to maintaining a high-quality portfolio dictates that we
continually assess the value of all of our properties and sell to third parties
those operating properties that no longer meet our long-term investment
standards. We may also sell a portion of an operating or development property to
one of our joint ventures, which may provide us with a capital source for new
development and acquisitions, as well as market-based fees that we may earn as
the asset manager. By selling a property to a joint venture, we own less than
100% of the property, generally 20% to 50%, and shares the risks and rewards of
the property with its partner.
Proceeds from the sale or joint venturing of properties are included in
net investing activities on the Consolidated Statement of Cash Flows. During
2002, net proceeds from the sale or joint venturing of real estate was $425
million, compared with $142 million during 2001, and were used primarily to
reduce the balance of the unsecured line of credit (the "Line"). Net cash
26
provided by investing activities was $110.6 million for the year ended December
31, 2002, and generally means that the net proceeds from the sale or joint
venturing of real estate was greater than the cash invested in new acquisitions
or developments. Net cash used in investing activities was $164.1 million for
the year ended December 31, 2001 and generally means that cash invested in new
acquisitions or developments was greater than the net proceeds from selling or
joint venturing real estate. Net cash used in financing activities was $255
million and $94.9 million for the years ended December 31, 2002 and 2001.
Outstanding debt at December 31, 2002 and 2001 consists of the following (in
thousands):
2002 2001
---- ----
Notes Payable:
Fixed-rate mortgage loans $ 229,551 240,091
Variable-rate mortgage loans 24,998 21,691
Fixed-rate unsecured loans 998,975 760,939
-------------- ---------------
Total notes payable 1,253,524 1,022,721
Unsecured line of credit 80,000 374,000
-------------- ---------------
Total $ 1,333,524 1,396,721
============== ===============
Mortgage loans are secured by certain real estate properties, and may
be prepaid, but could be subject to a yield-maintenance premium. Mortgage loans
are generally due in monthly installments of interest and principal, and mature
over various terms through 2019. Variable interest rates on mortgage loans are
currently based on LIBOR plus a spread in a range of 130 basis points to 175
basis points. Fixed interest rates on mortgage loans range from 6.64% to 9.5%.
Interest rates paid on the Line, which are based on LIBOR plus .85%, at
December 31, 2002 and 2001 were 2.288% and 2.913%, respectively. The spread that
we pay on the Line is dependent upon maintaining specific investment-grade
ratings. We are also required to comply, and are in compliance, with certain
financial and other 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.
During 2002, we assumed debt with a fair value of $46.7 million related
to the acquisition of five properties, which includes debt premiums of $2.7
million based upon above-market interest rates of the debt instruments. Debt
premiums are being amortized over the terms of the related debt instruments.
On January 15, 2002, we completed a $250 million unsecured debt
offering with an interest rate of 6.75%. These notes were priced at 99.85%, are
due on January 15, 2012. We used the net proceeds of these offerings to reduce
the balance of the Line. During 2001, we completed $240 million of unsecured
debt offerings with an interest rate of 7.25% to 7.95% that are due in 2011.
During 2000, we completed $160 million of unsecured debt offerings with an
interest rate of 8.0% to 8.45%, which are due in 2010.
As of December 31, 2002, 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
-------------------------- -------------- --------------- ---------------
2003 $ 5,084 22,864 27,948
2004 (includes the Line) 5,241 300,994 306,235
2005 4,045 147,742 151,787
2006 3,359 24,089 27,448
2007 2,768 25,696 28,464
Beyond Five years 19,176 766,287 785,463
Unamortized debt premiums - 6,179 6,179
-------------- --------------- ---------------
Total $ 39,673 1,293,851 1,333,524
============== =============== ===============
Unconsolidated partnerships and joint ventures in which we have an
investment had notes and mortgage loans payable of $167.1 million at December
31, 2002, and our proportionate share of these loans was $38.8 million.
27
RCLP has issued Preferred Units in various amounts since 1998, the net
proceeds of which we used to reduce the balance of the Line. RCLP sold the
issues primarily to institutional investors in private placements. The Preferred
Units, which may be called by RCLP after certain dates ranging from 2003 to
2005, have no stated maturity or mandatory redemption, and they pay a
cumulative, quarterly dividend at fixed rates ranging from 8.125% to 9.125%. At
any time after 10 years from the date of issuance, the Preferred Units may be
exchanged by the holders for Cumulative Redeemable Preferred Stock ("Preferred
Stock") at an exchange rate of one share for one unit. The Preferred Units and
the related Preferred Stock are not convertible into Regency common stock. At
December 31, 2002 and 2001, the face value of Preferred Units issued was $384
million with an average fixed distribution rate of 8.72%.
We intend to continue growing our portfolio through acquisitions and
developments, either directly or through our joint venture relationships.
Because acquisition and development activities are discretionary in nature, they
are not expected to burden the capital resources we have currently available for
liquidity requirements. Regency expects that cash provided by operating
activities, unused amounts available under the Line, and cash reserves are
adequate to meet liquidity requirements.
Critical Accounting Policies and Estimates
Knowledge about our accounting policies is necessary for a complete
understanding of our financial results, and discussions and analysis of these
results. The preparation of our financial statements requires that we make
certain estimates that impact the balance of assets and liabilities at a
financial statement date and the reported amount of income and expenses during a
financial reporting period. These accounting estimates are based upon our
judgments and are considered to be critical because of their significance to the
financial statements and the possibility that future events may differ from
those judgments, or that the use of different assumptions could result in
materially different estimates. We review these estimates on a periodic basis to
ensure reasonableness. However, the amounts we may ultimately realize could
differ from such estimates.
Capitalization of Costs - We have an investment services group with an
established infrastructure that supports the due diligence, land acquisition,
construction, leasing and accounting of our development properties. All direct
and indirect costs related to these activities are capitalized. Included in
these costs are interest and real estate taxes incurred during construction as
well as estimates for the portion of internal costs that are incremental, and
deemed directly or indirectly related to our development activity. If future
accounting standards limit the amount of internal costs that may be capitalized,
or if our development activity were to decline significantly without a
proportionate decrease in internal costs, we could incur a significant increase
in our operating expenses.
Valuation of Real Estate Investments - Our long-lived assets, primarily
real estate held for investment, are carried at cost unless circumstances
indicate that the carrying value of the assets may not be recoverable. We review
long-lived assets for impairment whenever events or changes in circumstances
indicate such an evaluation is warranted. The review involves a number of
assumptions and estimates used in determining whether impairment exists.
Depending on the asset, we use varying methods such as i) estimating future cash
flows, ii) determining resale values by market, or iii) applying a
capitalization rate to net operating income using prevailing rates in a given
market. These methods of determining fair value can fluctuate up or down
significantly as a result of a number of factors including changes in the
general economy of those markets in which we operate, tenant credit quality, and
demand for new retail stores. If we determine that impairment exists due to the
inability to recover an asset's carrying value, a provision for loss is recorded
to the extent that the carrying value exceeds estimated fair value.
Income Tax Status - The prevailing assumption underlying the operation
of our business is that we will continue to operate so as to qualify as a REIT,
defined under the Internal Revenue Code. Certain income and asset tests are
required to be met on a periodic basis to ensure we continue to qualify as a
REIT. As a REIT, we are allowed to reduce taxable income by all or a portion of
our distributions to stockholders. As we evaluate each transaction entered into,
we determine the impact that these transactions will have on our REIT status.
Determining our taxable income, calculating distributions, and evaluating
28
transactions requires us to make certain judgments and estimates as to the
positions we take in our interpretation of the Internal Revenue Code. Because
many types of transactions are susceptible to varying interpretations under
federal and state income tax laws and regulations, our positions are subject to
change at a later date upon final determination by the taxing authorities.
Results from Operations
- -----------------------
Comparison of 2002 to 2001
At December 31, 2002, we were operating or developing 262 shopping
centers. We identify our shopping centers as either development properties or
stabilized properties. Development properties are defined as properties that are
in the construction and initial lease-up process that are not yet fully leased
(fully leased generally means greater than 90% leased) and occupied. Stabilized
properties are those properties that are generally greater than 90% leased and,
if they were developed, are more than three years beyond their original
development start date. At December 31, 2002, we had 228 stabilized shopping
centers that were 94.8% leased.
Revenues increased $22.2 million, or 6%, to $380.2 million in 2002.
This increase was due primarily to our realization of a full year of revenues
from new 2001 developments and from growth in rental rates of the operating
properties. In 2002, rental rates grew by 10.8% from renewal leases and new
leases replacing previously occupied spaces in the stabilized properties.
Minimum rent increased $24 million, or 10%, and recoveries from tenants
increased $7.6 million, or 11%.
Service operations revenue includes management fees, commission income,
and gains or losses from the sale of land and development properties without
significant operations. Service operations revenue does not include gains or
losses from the sale of non-development operating properties. We account for
profit recognition on sales of real estate in accordance with Financial
Accounting Standards Board ("FASB") Statement No. 66, "Accounting for Sales of
Real Estate." Profits from sales of real estate will not be recognized by us
unless a sale has been consummated; the buyer's initial and continuing
investment is adequate to demonstrate a commitment to pay for the property; we
have transferred to the buyer the usual risks and rewards of ownership; and we
do not have substantial continuing involvement with the property.
Service operations revenue decreased $11.2 million to $20.3 million in
2002, or 36%. The decrease was due primarily to the adoption of SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets" ("Statement
144"), which requires $15.6 million of gains related to 2002 sales to be
presented under discontinued operations.
Operating expenses increased $15.9 million, or 9%, to $184.3 million in
2002. Combined operating, maintenance, and real estate taxes increased $8.7
million, or 11%, during 2002 to $89.7 million. The increase was primarily due to
new developments that incurred expenses for only a portion of the previous year,
and general increases in operating expenses on the stabilized properties.
General and administrative expenses were $22.6 million during 2002 compared with
$20.6 million in 2001, or 10% higher, as a result of the Partnership opening
several branch offices in new markets, and general salary and benefit increases.
Depreciation and amortization increased $8 million during 2002 related to higher
acquisition and development activity and the depreciation of operating
properties classified as held for sale in 2001 that no longer met the criteria
under Statement 144.
We review our real estate portfolio for impairment whenever events or
changes in circumstances indicate that we may not be able to recover the
carrying amount of an asset. We determine whether impairment has occurred by
comparing the property's carrying value to an estimate of fair value based upon
the methods described above in our Critical Accounting Policies. In the event
the properties are impaired, we write down assets to fair value for "held-and-
used" assets, and fair value less costs to sell for "held-for-sale" assets.
During 2002, we recorded a provision for loss of $4.4 million.
Net interest expense increased to $81.3 million in 2002 from $63.7
million in 2001, or 28%. The increase was primarily due to average outstanding
debt balances during 2002 exceeding 2001 by $131 million and lower interest
capitalization on new developments. Average interest rates on outstanding debt
declined to 6.93% at December 31, 2002 from 7.27% at December 31, 2001.
29
Income from discontinued operations was $29.4 million in 2002 compared
with $12.4 million in 2001, primarily due to $19.2 million in gains we
recognized on the sale of operating properties and stabilized properties in our
development portfolio.
Net income for common unitholders was $113.3 million in 2002 compared
with $103.2 million in 2001, or a 10% increase. Diluted earnings per unit were
$1.84 in 2002 compared with $1.69 in 2001, or 9% higher as a result of the
increase in net income.
Results from Operations
- -----------------------
Comparison of 2001 to 2000
Revenues increased $21.6 million, or 6%, to $358 million in 2001. The
increase was due primarily to our realization of a full year of revenues from
new 2000 developments and from growth in rental rates at the operating
properties. In 2001, rental rates grew by 10.5% from renewal leases and new
leases replacing previously occupied spaces in the stabilized properties.
Minimum rent increased $11.3 million, or 5%, and recoveries from tenants
increased $5.2 million, or 8%. At December 31, 2001, we were operating or
developing 272 shopping centers of which we had 231 stabilized shopping centers
that were 94.9% leased. At December 31, 2000, these same stabilized properties
were 95.4% leased.
Service operations revenue increased by $4.3 million to $31.5 million
in 2001, or 16%. The increase was primarily due to a $12.4 million increase in
gains from the sale of land and out-parcels, a $1.7 million increase in
management fees primarily related to the Columbia and MCWR joint ventures,
offset by a $9.8 million reduction in development profits. The reduction in
development profits was a result of selling fewer developments during 2001
compared with 2000.
Operating expenses increased $15.2 million, or 10%, to $168.4 million
in 2001. Combined operating, maintenance, and real estate taxes increased $5.2
million, or 7%, during 2001 to $81 million. The increase was primarily due to
new developments that incurred expenses for only a portion of the previous year,
and general increases in operating expenses on the stabilized properties.
General and administrative expenses were $20.6 million during 2001 compared with
$19.9 million in 2000, or 3% higher, as a result of general salary and benefit
increases. Depreciation and amortization increased $6.9 million during 2001, or
12%, primarily due to developments that only operated for part of the year
during 2000.
During 2001 and 2000, we recorded a provision for loss on operating
properties held for sale of $1.6 million and $13 million, respectively. The
provision in 2000 was directly related to an agreed-upon sale price associated
with a contract for sale of seven shopping centers.
Interest expense decreased to $63.7 million in 2001 from $63.9 million
in 2000. We had $1.4 billion and $1.3 billion of outstanding debt at December
31, 2001 and 2000, respectively. Average interest rates on outstanding debt
declined to 7.27% at December 31, 2001 from 7.94% at December 31, 2000.
Preferred unit distributions increased $3.9 million to $33.5 million
during 2001 as a result our issuance of preferred units in 2000.
Income from discontinued operations was $12.4 million in 2001, compared
with $11.5 million in 2000.
Net income for common unitholders was $103.2 million in 2001 compared
with $90.1 million in 2000, or a 15% increase. Diluted earnings per unit was
$1.69 in 2001 compared with $1.49 in 2000, or 13% higher as a result of the
increase in net income.
Stock Purchase Loans
- --------------------
In previous years, as part of our long-term incentive compensation
plan, the Company structured stock purchase plans whereby executives could
acquire common stock at fair market value by investing their own capital in
combination with loans provided by Regency. These interest-bearing,
full-recourse loans were secured by stock, which was held as collateral by
Regency. As part of the executive's compensation program, the Company granted
partial forgiveness of the unpaid principal balance based upon specified
30
performance criteria and the passage of time. The Company ceased making these
types of loans after 1998 and has not originated any new personal loans to our
employees since that date. As of September 30, 2002, all participants agreed to
repay the entire balance of their loans outstanding with a portion of the common
shares held as collateral, valued at fair market value on that day. The Company,
in return, granted the participants restricted stock and stock options that are
intended to provide them with the same level of compensation benefits that they
would have received under existing agreements for specified forgiveness amounts.
New Accounting Standards and Accounting Changes
- -----------------------------------------------
In January 2003, the FASB issued Interpretation No. 46 "Consolidation
of Variable Interest Entities" ("Interpretation 46"), which is intended to
clarify the application of Accounting Research Bulletin No. 51, "Consolidated
Financial Statements", to certain entities in which equity investors do not have
the characteristics of a controlling financial interest or do not have
sufficient equity at risk for the entity to finance its activities without
additional subordinated financial support from other parties, or variable
interest entities, as defined in the Interpretation. Interpretation 46 will
require that certain variable interest entities be consolidated into the
majority variable interest holder's financial statements and is applicable
immediately to all variable interest entities created after January 31, 2003,
and as of the first interim period beginning after June 15, 2003 to those
variable interest entities created before February 1, 2003. We have not yet
completed its evaluation of the applicability of this Interpretation to its
current structures, but does not believe its adoption will have a material
effect on the financial statements.
In November 2002, FASB issued Interpretation No. 45 "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others," ("Interpretation 45") which addresses the
disclosure to be made by a guarantor in its interim and annual financial
statements about its obligations under guarantees. The Interpretation also
requires the recognition of a liability by a guarantor at the inception of
certain guarantees. We have adopted the disclosure requirements of
Interpretation 45 and will apply the recognition and measurement provisions for
all guarantees entered into or modified after December 31, 2002.
In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure ("Statement 148").
Statement 148 provides alternative methods of transition for a voluntary change
to the fair-value-based method of accounting for stock-based employee
compensation. In addition, Statement 148 amends the disclosure requirements of
SFAS Statement No.123, "Accounting for Stock-Based Compensation" ("Statement
123"), to require more prominent and frequent disclosures in financial
statements about the effects of stock-based compensation. The transition
guidance and annual disclosure provisions of Statement 148 are effective for
fiscal years ending after December 15, 2002 and the interim disclosure
provisions are effective for periods beginning after December 15, 2002. As
permitted under Statement 123 and Statement 148, we will continue to follow the
accounting guidelines pursuant to Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" for stock-based compensation and to
furnish the pro forma disclosures as required under Statement 148.
In April 2002, the FASB issued SFAS Statement No. 145, " Rescission of
FASB Statements No. 4, 44, and 62, Amendment of FASB Statement No. 13, and
Technical Corrections" ("Statement 145"). Statement 145 rescinds FASB Statement
No. 4, "Reporting Gains and Losses from Extinguishment of Debt" ("Statement 4"),
which required all gains and losses from extinguishments of debt to be
aggregated and, if material, classified as an extraordinary item, net of related
income tax effect. Upon adoption of Statement 145, classification of these gains
and losses will be evaluated under the criteria set forth in APB Opinion No. 30,
"Reporting the Results of Operations - Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions." We elected to adopt the provisions related to the
rescission of Statement 4 during the second quarter, and reported a gain on
early extinguishment of debt totaling $2.4 million, which is included in other
income on the accompanying statements of operations.
In July 2002, the FASB issued SFAS Statement No. 146, "Accounting for
Costs Associated with Exit or Disposal Activities" ("Statement 146"). Statement
146 addresses financial accounting and reporting for costs associated with exit
or disposal activities and nullifies EITF Issue No. 94-3, "Liability Recognition
for Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring). Statement 146 is
31
effective for exit and disposal activities initiated after December 31, 2002. We
have not initiated any such exit and disposal activities since the effective
date and does not believe it will have a material effect on the financial
statements.
Environmental Matters
- ---------------------
Regency, like others in the commercial real estate industry, is subject
to numerous environmental laws and regulations. The operation of dry cleaning
plants at our shopping centers is the principal environmental concern. We
believe that the tenants who operate these plants do so in accordance with
current laws and regulations and have established procedures to monitor their
operations. Additionally, we use all legal means to cause tenants to remove dry
cleaning plants from our shopping centers. Where available, we have applied and
been accepted into state-sponsored environmental programs. We have a blanket
environmental insurance policy that covers Regency against third-party
liabilities and remediation costs on shopping centers that currently have no
known environmental contamination. We have also placed environmental insurance
on specific properties with known contamination in order to mitigate Regency's
environmental risk. We believe that the ultimate disposition of currently known
environmental matters will not have a material effect on Regency's financial
position, liquidity, or operations.
Inflation
- ---------
Inflation has remained relatively low and has had a minimal impact on
the operating performance of our shopping centers; however, substantially all of
our long-term leases contain provisions designed to mitigate the adverse impact
of inflation. Such provisions include clauses enabling us 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 our
leases are for terms of less than 10 years, which permits us to seek increased
rents upon re-rental at market rates. Most of our leases require tenants to pay
their share of operating expenses, including common area maintenance, real
estate taxes, and insurance and utilities, thereby reducing our exposure to
increases in costs and operating expenses resulting from inflation.
Item 7a. Quantitative and Qualitative Disclosures about Market Risk
Market Risk
- -----------
Regency is exposed to interest rate changes primarily as a result of
the line of credit and long-term debt used to maintain liquidity, fund capital
expenditures and expand Regency's real estate investment portfolio. Regency'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, Regency 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. Regency has no plans to enter into derivative or interest
rate transactions for speculative purposes.
Regency's interest rate risk is monitored using a variety of
techniques. The table below presents the principal cash flows (in thousands),
weighted average interest rates of remaining debt, 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.
Fair
2003 2004 2005 2006 2007 Thereafter Total Value
---- ---- ---- ---- ---- ---------- ----- -----
Fixed rate debt $ 18,223 210,962 151,787 27,448 28,464 785,463 1,222,347 1,254,501
Average interest rate for all debt 7.59% 7.62% 7.61% 7.62% 7.60% 7.63% - -
Variable rate LIBOR debt $ 9,725 95,273 - - - - 104,998 104,998
Average interest rate for all debt 2.66% 2.66% - - - - - -
32
As the table incorporates only those exposures that exist as of
December 31, 2002, 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, Regency's ultimate realized gain or loss with
respect to interest rate fluctuations will depend on the exposures that arise
during the period, its 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
Information concerning the directors of Regency is incorporated herein
by reference to Regency's definitive proxy statement to be filed with the
Securities and Exchange Commission within 120 days after the end of the fiscal
year covered by this Form 10-K with respect to its 2003 Annual Meeting of
Shareholders. Information concerning the executive officers of Regency is
provided below.
MARTIN E. STEIN, JR. Mr. Stein, age 50, is Chairman of the Board and
Chief Executive Officer of Regency. He served as President of Regency from its
initial public offering in October 1993 until December 31, 1998. Mr. Stein also
served as President of Regency's predecessor real estate division since 1981 and
Vice President from 1976 to 1981. He is a director of Florida Rock Industries,
Inc., a publicly held producer of construction aggregates, Patriot
Transportation Holdings, Inc., a publicly held transportation and real estate
company, and Stein Mart, Inc., a publicly held upscale discount retailer.
MARY LOU FIALA. Mrs. Fiala, age 51, became President and Chief
Operating Officer of Regency in January 1999. Before joining Regency she was
Managing Director - Security Capital U.S. Realty Strategic Group from March 1997
to January 1999. Mrs. Fiala was Senior Vice President and Director of Stores,
New England - Macy's East/Federated Department Stores from 1994 to March 1997.
From 1976 to 1994, Mrs. Fiala held various merchandising and store operations
positions with Macy's/Federated Department Stores.
BRUCE M. JOHNSON. Mr. Johnson, age 55, has been Managing Director and
Chief Financial Officer of Regency since its initial public offering in October
1993. Mr. Johnson also served as Executive Vice President of Regency's
predecessor real estate division since 1979. He is a director of Brooks
Rehabilitation Hospital, a private not for profit rehabilitation hospital, and
it's private parent company Brooks Health Systems.
Compliance with Section 16(a) of the Exchange Act. Information
concerning filings under Section 16(a) of the Exchange Act by the directors or
executive officers of Regency is incorporated herein by reference to Regency's
definitive proxy statement to be filed with the Securities and Exchange
Commission within 120 days after the end of the fiscal year covered by this Form
10-K with respect to its 2003 Annual Meeting of Shareholders.
Item 11. Executive Compensation
Incorporated herein by reference to Regency's definitive proxy
statement to be filed with the Securities and Exchange Commission within 120
days after the end of the fiscal year covered by this Form 10-K with respect to
its 2003 Annual Meeting of Shareholders.
33
Item 12. See Item 5 above for information on Equity Compensation Plans,
Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
Incorporated herein by reference to Regency's definitive proxy
statement to be filed with the Securities and Exchange Commission within 120
days after the end of the fiscal year covered by this Form 10-K with respect to
its 2003 Annual Meeting of Shareholders.
Item 13. Certain Relationships and Related Transactions
Incorporated herein by reference to Regency's definitive proxy
statement to be filed with the Securities and Exchange Commission within 120
days after the end of the fiscal year covered by this Form 10-K with respect to
its 2003 Annual Meeting of Shareholders.
Item 14. Controls and Procedures
Under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer, Chief Operating
Officer and Chief Financial Officer, the Company has evaluated the effectiveness
of the design and operation of its disclosure controls and procedures within 90
days of the filing date of this quarterly report, and, based on their
evaluation, the Chief Executive Officer, Chief Operating Officer and Chief
Financial Officer have concluded that these disclosure controls and procedures
are effective. There were no significant changes in our internal controls or in
other factors that could significantly affect these controls subsequent to the
date of their evaluation.
PART IV
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) Financial Statements and Financial Statement Schedules:
Regency's 2002 financial statements and financial statement schedule,
together with the report of KPMG LLP 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. Articles of Incorporation and Bylaws
(i) Restated Articles of Incorporation of Regency Centers
Corporation as amended to date (incorporated by
reference to Exhibit 3(i) to the Company's Form 10-K
filed March 22, 2002).
(ii) Restated Bylaws of Regency Centers Corporation,
(incorporated by reference to Exhibit 3 of the
Company's Form 10-Q filed November 7, 2000).
4. (a) See exhibits 3(i) and 3(ii) for provisions of the Articles
of Incorporation and Bylaws of Regency Centers Corporation
defining rights of security holders.
(b) Indenture dated July 20, 1998 between Regency Centers, L.P.,
the guarantors named therein and First Union National Bank, as
trustee (incorporated by reference to Exhibit 4.1 to the
registration statement on Form S-4 of Regency Centers, L.P.,
No. 333-63723).
34
(c) Indenture dated March 9, 1999 between Regency Centers, L.P.,
the guarantors named therein and First Union National Bank, as
trustee (incorporated by reference to Exhibit 4.1 to the
registration statement on Form S-3 of Regency Centers, L.P.,
No. 333-72899)
(d) Indenture dated December 5, 2001 between Regency Centers,
L.P., the guarantors named therein and First Union National
Bank, as trustee (incorporated by referenced to Exhibit 4.4 of
Form 8-K of Regency Centers, L.P. filed December 10, 2001,
File No. 0-24763)
10. Material Contracts
~*(a) Regency Centers Corporation 1993 Long Term Omnibus Plan, as
amended.
(i) Amendment No. 1 to Regency Centers Corporation 1993 Long Term
Omnibus Plan (incorporated by reference to Exhibit 10(a) to
the Company's Form 10-Q filed August 11, 1999)
~(b) Form of Stock Rights Award Agreement
~(c) Form on Nonqualified Stock Option Agreement
~(d) Stock Rights Award Agreement dated as of December 17, 2002 between
the Company and Martin E. Stein, Jr.
~(e) Stock Rights Award Agreement dated as of December 17, 2002 between
the Company Mary Lou Fiala
- ------------------------
~ Management contract or compensatory plan or arrangement filed pursuant
to S-K 601(10)(iii)(A).
* Included as an exhibit to Pre-effective Amendment No. 2 to the
Company's registration statement on Form S-11 filed October 5, 1993
(33-67258), and incorporated herein by reference
++ Filed as appendices to the Company's definitive proxy statement dated
August 2, 1996 and incorporated herein by reference.
@ Filed as an exhibit to the Company's Form 10-K filed March 25, 1997 and
incorporated herein by reference.
~(f) Stock Rights Award Agreement dated as of December 17, 2002 between
the Company and Bruce M. Johnson
~*(g) Form of Option Award Agreement for Key Employees
~*(h) Form of Option Award Agreement for Non-Employee Directors
~*(i) Annual Incentive for Management Plan
~*(j) Form of Director/Officer Indemnification Agreement
~*(k) Form of Non-Competition Agreement between Regency Centers
Corporation and Joan W. Stein, Robert L. Stein, Richard W.
Stein, the Martin E. Stein Testamentary Trust A and the Martin
E. Stein Testamentary Trust B.
(l) The following documents relating to the purchase by Security
Capital U.S. Realty and Security Capital Holdings, S.A. of up
to 45% of the Registrant's outstanding common stock:
++ (i) Stock Purchase Agreement dated June 11, 1996.
35
++ (ii) Stockholders' Agreement dated July 10, 1996.
(A) First Amendment of Stockholders'
Agreement dated February 10, 1997
(incorporated by reference to the
Company's Form 8-K report filed
March 14, 1997)
(B) Amendment No. 2 to Stockholders'
Agreement dated December 4, 1997
(incorporated by reference to
Exhibit 6.2 to Schedule 13D/A filed
by Security Capital U.S. Realty on
December 11, 1997)
(C) Amendment No. 3 to Stockholders
Agreement dated September 23, 1998
(incorporated by reference to
Exhibit 8.2 to Schedule 13D/A filed
by Security Capital U.S. Realty on
October 2, 1998)
(D) Letter Agreement dated June 14, 2000
to Stockholders Agreement dated
September 23, 1998 (incorporated by
reference to Exhibit 10.2 to
Schedule 13D/A filed by Security
Capital U.S. Realty on September 27,
2000)
++ (iii) Registration Rights Agreement dated July 10,
1996.
(n) Stock Grant Plan adopted on January 31, 1994 to grant
stock to employees (incorporated by reference to the
Company's Form 10-Q filed May 12, 1994).
(o) Fourth Amended and Restated Agreement of Limited
Partnership of Regency Centers, L.P., as amended
(incorporated by reference to Exhibit 3(i) to Regency
Centers, L.P.'s Form 10-K filed March 26, 2002).
- --------------------------
~ Management contract or compensatory plan or arrangement filed pursuant
to S-K 601(10)(iii)(A).
* Included as an exhibit to Pre-effective Amendment No. 2 to the
Company's registration statement on Form S-11 filed October 5, 1993
(33-67258), and incorporated herein by reference
++ Filed as appendices to the Company's definitive proxy statement dated
August 2, 1996 and incorporated herein by reference.
@ Filed as an exhibit to the Company's Form 10-K filed March 25, 1997 and
incorporated herein by reference.
36
(p) Second Amended and Restated Credit Agreement dated as
of July 21, 2000 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, (incorporated by reference to Exhibit 10 of
the Company's Form 10-Q filed November 7, 2000).
~(q) Amended and Restated Severance and Change of Control
Agreement dated as of March, 2002 by and between the
Company and Martin E. Stein, Jr. (incorporated by
reference to Exhibit 10(r) of the Company's Form
10-K/A filed April 15, 2002)
~(r) Amended and Restated Severance and Change of Control
Agreement dated as of March, 2002 by and between the
Company and Mary Lou Fiala (incorporated by reference
to Exhibit 10(s) of the Company's Form 10-K/A filed
April 15, 2002)
~(s) Amended and Restated Severance and Change of Control
Agreement dated as of March, 2002 by and between the
Company and Bruce M. Johnson (incorporated by
reference to Exhibit 10(t) of the Company's Form
10-K/A filed April 15, 2002)
21. Subsidiaries of the Registrant
23. Consent of KPMG LLP
99.1 Written Statement of Chief Executive Officer
99.2 Written Statement of Chief Financial Officer
99.3 Written Statement of Chief Operating Officer
37
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 Centers Corporation,
General Partner
Date: March 13, 2003 By: /s/ Martin E. Stein, Jr.
-----------------------------------
Martin E Stein, Jr., Chairman of
the Board and Chief Executive
Officer
Date: March 13, 2003 By: /s/ Bruce M. Johnson
----------------------------------
Bruce M. Johnson, Managing
Director and Principal Financial
Officer
Date: March 13, 2003 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 13, 2003 /s/ Martin E. Stein, Jr.
----------------------------------------
Martin E. Stein, Jr., Chairman of the
Board and Chief Executive Officer
Date: March 13, 2003 /s/ Mary Lou Fiala
----------------------------------------
Mary Lou Fiala, President, Chief
Operating Officer and Director
Date: March 13, 2003 /s/ Raymond L. Bank
----------------------------------------
Raymond L. Bank, Director
Date: March 13, 2003 /s/ C. Ronald Blankenship
----------------------------------------
C. Ronald Blankenship, Director
Date: March 13, 2003 /s/ A. R. Carpenter
----------------------------------------
A. R. Carpenter, Director
Date: March 13, 2003 /s/ J. Dix Druce, Jr.
----------------------------------------
J. Dix Druce, Jr., Director
Date: March 13, 2003 /s/ Douglas S. Luke
----------------------------------------
Douglas S. Luke, Director
Date: March 13, 2003 /s/ Joseph E. Parsons
----------------------------------------
Joseph E. Parsons, Director
Date: March 13, 2003 /s/ John C. Schweitzer
----------------------------------------
John C. Schweitzer, Director
Date: March 13, 2003 /s/ Thomas G. Wattles
----------------------------------------
Thomas G. Wattles, Director
Date: March 13, 2003 /s/ Terry N. Worrell
----------------------------------------
Terry N. Worrell, Director
38
CERTIFICATION
I, Martin E. Stein, Jr., Chairman and Chief Executive Officer of Regency Centers
L.P. (the "registrant"), certify that:
1. I have reviewed this annual report on Form 10-K of Regency Centers
L.P.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation Date");
and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's Board of Directors (or persons
performing the equivalent function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
/s/ Martin E. Stein, Jr.
- ------------------------
Martin E. Stein, Jr.
March 13, 2003
39
CERTIFICATION
I, Bruce M. Johnson, Managing Director and Chief Financial Officer of Regency
Centers L.P. (the "registrant"), certify that:
1. I have reviewed this annual report on Form 10-K of Regency Centers
L.P.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation Date");
and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's Board of Directors (or persons
performing the equivalent function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
/s/ Bruce M. Johnson
Bruce M. Johnson
March 13, 2003
40
CERTIFICATION
I, Mary Lou Fiala, President and Chief Operating Officer of Regency Centers L.P.
(the "registrant"), certify that:
1. I have reviewed this annual report on Form 10-K of Regency Centers
L.P.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation Date");
and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's Board of Directors (or persons
performing the equivalent function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
/s/ Mary Lou Fiala
Mary Lou Fiala
March 13, 2003
41
REGENCY CENTERS, L.P.
INDEX TO FINANCIAL STATEMENTS
Regency Centers, L.P.
Independent Auditors' Report F-2
Consolidated Balance Sheets as of December 31, 2002 and 2001 F-3
Consolidated Statements of Operations for the years ended
December 31, 2002, 2001, and 2000 F-4
Consolidated Statements of Partners' Capital for the years ended
December 31, 2002, 2001 and 2000 F-5
Consolidated Statements of Cash Flows for the years ended
December 31, 2002, 2001, and 2000 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, 2002 S-2
All other schedules are omitted because they are not applicable or because
information required therein is shown in the consolidated financial statements
or notes thereto.
F-1
Independent Auditors' Report
The Unitholders of Regency Centers, L.P. and the Board of Directors of
Regency Centers Corporation:
We have audited the accompanying consolidated balance sheets of Regency Centers,
L.P. as of December 31, 2002 and 2001, and the related consolidated statements
of operations, partners' capital, and cash flows for each of the years in the
three-year period ended December 31, 2002. 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 auditing standards generally accepted
in the United States of America. 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, 2002 and 2001, and the results of their operations and
their cash flows for each of the years in the three-year period ended December
31, 2002 in conformity with accounting principles generally accepted in the
United States of America.
As discussed in Note 1(c) to the financial statements, the Partnership adopted
Statement of Financial Accounting Standards No. 144 "Accounting for the
Impairment or Disposal of Long-Lived Assets" effective January 1, 2002.
/s/ KPMG LLP
Jacksonville, Florida
January 31, 2003
F-2
REGENCY CENTERS, L.P.
Consolidated Balance Sheets
December 31, 2002 and 2001
2002 2001
---- ----
Assets
Real estate investments at cost (notes 4 and 9):
Land $ 715,255,513 600,081,672
Buildings and improvements 1,966,432,051 1,914,961,155
----------------- -----------------
2,681,687,564 2,515,042,827
Less: accumulated depreciation 244,595,928 202,325,324
----------------- -----------------
2,437,091,636 2,312,717,503
Properties in development 276,085,435 408,437,476
Operating properties held for sale 5,658,905 158,121,462
Investments in real estate partnerships (note 4) 125,482,151 75,229,636
----------------- -----------------
Net real estate investments 2,844,318,127 2,954,506,077
Cash and cash equivalents 56,447,329 27,853,264
Notes receivable 56,630,876 32,504,941
Tenant receivables, net of allowance for uncollectible accounts
of $4,258,891 and $4,980,335 at December 31, 2002
and 2001, respectively 47,983,160 47,723,145
Deferred costs, less accumulated amortization of $25,588,464 and
$20,402,059 at December 31, 2002 and 2001, respectively 37,367,196 34,399,242
Other assets 19,112,148 12,327,567
----------------- -----------------
$ 3,061,858,836 3,109,314,236
================= =================
Liabilities and Partners' Capital
Liabilities:
Notes payable (note 5) $ 1,253,524,045 1,022,720,748
Unsecured line of credit (note 5) 80,000,000 374,000,000
Accounts payable and other liabilities 76,908,233 73,434,322
Tenants' security and escrow deposits 8,847,603 8,656,456
----------------- -----------------
Total liabilities 1,419,279,881 1,478,811,526
----------------- -----------------
Limited partners' interest in consolidated partnerships 14,825,256 3,940,011
----------------- -----------------
Partners' Capital:
Series A preferred units, par value $50: 1,600,000 units issued and
outstanding at December 31, 2002 and 2001, respectively 78,800,000 78,800,000
Series B preferred units, par value $100: 850,000 units issued and
outstanding at December 31, 2002 and 2001, respectively 82,799,720 82,799,720
Series C preferred units, par value $100: 750,000 units issued and
outstanding at December 31, 2002 and 2001, respectively 73,058,577 73,058,577
Series D preferred units, par value $100: 500,000 units issued and
outstanding at December 31, 2002 and 2001, respectively 49,157,977 49,157,977
Series E preferred units, par value $100: 700,000 units issued and
outstanding at December 31, 2002 and 2001, respectively 68,221,579 68,221,579
Series F preferred units, par value $100: 240,000 units issued and
outstanding at December 31, 2002 and 2001, respectively 23,365,799 23,365,799
General partner; 60,007,436 and 59,088,958 units outstanding
at December 31, 2002 and 2001, respectively 1,221,720,073 1,219,050,856
Limited partners; 1,504,458 and 1,555,636 units outstanding
at December 31, 2002 and 2001, respectively 30,629,974 32,108,191
----------------- -----------------
Total partners' capital 1,627,753,699 1,626,562,699
----------------- -----------------
Commitments and contingencies (notes 9 and 10)
$ 3,061,858,836 3,109,314,236
================= =================
See accompanying notes to consolidated financial statements.
F-3
REGENCY CENTERS, L.P.
Consolidated Statements of Operations
For the Years ended December 31, 2002, 2001, and 2000
2002 2001 2000
---- ---- ----
Revenues:
Minimum rent (note 9) $ 271,690,493 247,675,325 236,355,805
Percentage rent 5,224,068 5,671,352 5,157,931
Recoveries from tenants 77,268,533 69,673,565 64,516,692
Service operations revenue 20,254,979 31,494,739 27,226,411
Equity in income of investments in
real estate partnerships 5,764,909 3,439,397 3,138,553
---------------- ---------------- ----------------
Total revenues 380,202,982 357,954,378 336,395,392
---------------- ---------------- ----------------
Operating expenses:
Depreciation and amortization 70,442,817 62,435,315 55,536,587
Operating and maintenance 51,319,575 45,863,660 43,655,133
General and administrative 22,567,414 20,560,939 19,932,609
Real estate taxes 38,429,684 35,174,399 32,157,123
Other expenses 1,565,823 4,356,384 1,936,686
---------------- ---------------- ----------------
Total operating expenses 184,325,313 168,390,697 153,218,138
---------------- ---------------- ----------------
Other expense (income):
Interest expense, net of interest income of $2,334,329
$5,574,572 and $4,795,154 in 2002, 2001 and 2000, respectively 81,285,413 63,680,792 63,866,321
Gain on sale of operating properties (5,266,765) (699,376) (4,506,982)
Provision for loss on operating and development properties 4,369,480 1,595,136 12,995,412
Other income (note 5) (2,383,524) - -
---------------- ---------------- ----------------
Total other expense 78,004,604 64,576,552 72,354,751
---------------- ---------------- ----------------
Income before minority interests 117,873,065 124,987,129 110,822,503
Minority interest of limited partners (492,137) (721,090) (2,631,721)
---------------- ---------------- ----------------
Income from continuing operations 117,380,928 124,266,039 108,190,782
Discontinued operations:
Operating income from discontinued operations 10,237,712 12,430,178 11,513,653
Gain on sale of operating properties and properties in development 19,177,679 - -
---------------- ---------------- ----------------
Income from discontinued operations 29,415,391 12,430,178 11,513,653
---------------- ---------------- ----------------
Net income 146,796,319 136,696,217 119,704,435
Preferred unit distributions (33,475,008) (33,475,007) (29,601,184)
---------------- ---------------- ----------------
Net income for common unitholders $ 113,321,311 103,221,210 90,103,251
================ ================ ================
Income per common unit - Basic (note 7):
Income from continuing operations $ 1.36 1.49 1.30
Discontinued operations $ 0.49 0.21 0.19
---------------- ---------------- ----------------
Net income for common unitholders per unit $ 1.85 1.70 1.49
================ ================ ================
Income per common unit - Diluted (note 7):
Income from continuing operations $ 1.35 1.49 1.30
Discontinued operations $ 0.49 0.20 0.19
---------------- ---------------- ----------------
Net income for common unitholders per unit $ 1.84 1.69 1.49
================ ================ ================
See accompanying notes to consolidated financial statements
F-4
REGENCY CENTERS, L.P.
Consolidated Statements of Changes in Partners' Capital
For the Years Ended December 31, 2002, 2001 and 2000
Total
Partners'
Preferred General Limited Capital
--------- ------- ------- -------
Balance at
December 31, 1999 $ 283,816,274 1,247,449,384 39,800,401 1,571,066,059
Net income 29,601,184 87,610,832 2,492,419 119,704,435
Proceeds from the issuance of
preferred units, net 91,591,503 - - 91,591,503
Cash distributions for dividends - (111,896,164) (3,241,249) (115,137,413)
Preferred unit distribution (29,601,184) - - (29,601,184)
Purchase of Regency stock and
corresponding units (note 6) - (11,088,419) - (11,088,419)
Other distributions, net - (132,019) - (132,019)
Units issued for acquisition
of real estate or investments in
real estate partnerships - 88,924 1,632,020 1,720,944
Units converted for cash - - (1,435,694) (1,435,694)
Units issued as a result of common
stock issued by Regency - 4,723,849 - 4,723,849
Units exchanged for common
stock of Regency - 9,811,877 (9,811,877) -
Reallocation of limited partners' interest - (973,350) 973,350 -
Reallocation of minority interest - (179,948) - (179,948)
---------------- ---------------- ---------------- ----------------
Balance at
December 31, 2000 375,407,777 1,225,414,966 30,409,370 1,631,232,113
Net income 33,475,007 100,664,207 2,557,003 136,696,217
Costs from the issuance of
preferred units (4,125) - - (4,125)
Cash distributions for dividends - (117,825,613) (3,038,012) (120,863,625)
Preferred unit distribution (33,475,007) - - (33,475,007)
Units issued to acquire limited
partners' interest in
consolidated partnerships - - 4,383,468 4,383,468
Units converted for cash - - (110,487) (110,487)
Units issued as a result of
common stock issued by Regency,
net of repurchases - 8,162,261 - 8,162,261
Units exchanged for common
stock of Regency - 3,220,453 (3,220,453) -
Units issued for acquisition
of real estate or investments in
real estate partnerships - 43,196 498,688 541,884
Reallocation of limited partners' interest - (628,614) 628,614 -
---------------- ---------------- ---------------- ----------------
Balance at
December 31, 2001 375,403,652 1,219,050,856 32,108,191 1,626,562,699
Net income 33,475,008 110,524,668 2,796,643 146,796,319
Cash distributions for dividends - (121,828,367) (3,157,241) (124,985,608)
Preferred unit distribution (33,475,008) - - (33,475,008)
Purchase of Regency stock and
corresponding units - (2,725,000) - (2,725,000)
Units converted for cash - - (83,232) (83,232)
Units issued as a result of
common stock issued by Regency,
net of repurchases - 15,663,529 - 15,663,529
Units exchanged for common
stock of Regency - 1,287,607 (1,287,607) -
Reallocation of limited partners' interest - (253,220) 253,220 -
---------------- ---------------- ---------------- ----------------
Balance at
December 31, 2002 $ 375,403,652 1,221,720,073 30,629,974 1,627,753,699
================ ================ ================ ================
See accompanying notes to consolidated financial statements
F-5
REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the Years ended December 31, 2002, 2001 and 2000
2002 2001 2000
---- ---- ----
Cash flows from operating activities:
Net income $ 146,796,319 136,696,217 119,704,435
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 74,379,661 67,505,587 59,430,262
Deferred loan cost and debt premium amortization 1,635,944 1,136,734 609,107
Services provided by Regency in exchange for units 9,517,193 8,096,997 4,698,573
Minority interest of limited partners 492,137 721,090 2,631,721
Equity in income of investments in real estate partnerships (5,764,909) (3,439,397) (3,138,553)
Gain on sale of operating properties (24,444,444) (699,376) (4,506,982)
Provision for loss on operating and development properties 4,369,480 1,595,136 12,995,412
Other income (2,383,524) - -
Distributions from operations of investments in real
estate partnership 5,522,475 1,801,340 -
Changes in assets and liabilities:
Tenant receivables (863,731) (9,304,128) (4,170,897)
Deferred leasing costs (12,917,755) (11,691,159) (10,454,805)
Other assets (8,206,803) (4,213,411) (4,732,220)
Tenants' security and escrow deposits 698,881 303,740 248,331
Accounts payable and other liabilities (15,795,052) (2,650,730) 5,217,507
--------------- --------------- ---------------
Net cash provided by operating activities 173,035,872 185,858,640 178,531,891
--------------- --------------- ---------------
Cash flows from investing activities:
Acquisition and development of real estate (301,813,396) (332,702,732) (432,545,686)
Proceeds from sale of real estate 425,419,173 142,016,541 165,926,227
Acquisition of partners' interest in investments
in real estate partnerships, net of cash acquired - 2,416,621 (1,402,371)
Investment in real estate partnerships (46,018,670) (45,562,955) (66,890,477)
Capital improvements (18,533,603) (15,837,052) (19,134,500)
Proceeds from sale of real estate partnerships 2,388,319 2,967,481 -
Repayment of notes receivable, net 37,363,312 67,582,696 15,673,125
Distributions received from investments in real estate partnerships 11,784,071 15,010,552 3,109,586
--------------- --------------- ---------------
Net cash provided by (used in) investing activities 110,589,206 (164,108,848) (335,264,096)
--------------- --------------- ---------------
Cash flows from financing activities:
Net proceeds from the issuance of Regency stock
and exchangeable operating partnership units 9,932,137 65,264 25,276
Repurchase of Regency stock and corresponding units (2,725,000) (155,381) (11,088,419)
Purchase of limited partner's interest in consolidated partnership - - (2,925,158)
Redemption of partnership units (83,232) (110,487) (1,435,694)
Net distributions to limited partners in consolidated partnerships (384,000) (5,354,985) (2,418,650)
Distributions to preferred unit holders (33,475,008) (33,475,007) (29,601,184)
Cash distributions for dividends (124,985,608) (120,863,625) (115,137,413)
Other distributions, net - (132,019)
Net proceeds from fixed rate unsecured notes 249,625,000 239,582,400 159,728,500
(Additional costs) net proceeds from issuance of preferred units - (4,125) 91,591,503
(Repayment) proceeds of unsecured line of credit, net (294,000,000) (92,000,000) 218,820,690
Proceeds from notes payable 7,082,128 - 18,153,368
Repayment of notes payable (58,306,361) (67,273,620) (112,669,554)
Scheduled principal payments (5,629,822) (6,146,318) (6,230,191)
Deferred loan costs (2,081,247) (9,148,539) (3,078,398)
--------------- --------------- ---------------
Net cash (used in) provided by financing activities (255,031,013) (94,884,423) 203,602,657
--------------- --------------- ---------------
Net increase (decrease) in cash and cash equivalents 28,594,065 (73,134,631) 46,870,452
Cash and cash equivalents at beginning of year 27,853,264 100,987,895 54,117,443
--------------- --------------- ---------------
Cash and cash equivalents at end of year $ 56,447,329 27,853,264 100,987,895
=============== =============== ===============
F-6
REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the Years ended December 31, 2002, 2001 and 2000
continued
2002 2001 2000
---- ---- ----
Supplemental disclosure of cash flow information - cash paid for
interest (net of capitalized interest of $13,752,848, $21,195,419
and $14,552,628 in 2002, 2001 and 2000, respectively) $ 74,213,519 67,546,988 66,261,518
=============== =============== ===============
Supplemental disclosure of non-cash transactions:
Mortgage loans assumed for the acquisition of real estate $ 46,747,196 8,120,912 19,947,565
=============== =============== ===============
Notes receivable taken in connection with sales of operating properties
and properties in development $ 61,489,247 33,663,744 66,423,893
=============== =============== ===============
Real estate contributed as investment in real estate partnerships $ 18,708,641 12,418,278 4,500,648
=============== =============== ===============
Real estate contributed from limited partners in consolidated
partnerships $ 10,777,108 - -
=============== =============== ===============
Mortgage debt assumed by purchaser on sale of real estate $ 4,569,703 - -
=============== =============== ===============
Common stock redeemed to pay off stock loans $ 6,089,273 - -
=============== =============== ===============
Exchangeable operating partnership units and common stock
issued for the acquisition of partners' interest in investments in
real estate partnerships $ - 9,754,225 1,287,111
=============== =============== ===============
Exchangeable operating partnership units and common stock
issued for investments in real estate partnerships $ - - 329,948
=============== =============== ===============
Exchangeable operating partnership units and common stock
issued for the acquisition of real estate $ - - 103,885
=============== =============== ===============
See accompanying notes to consolidated financial statements.
F-7
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2002
1. Summary of Significant Accounting Policies
(a) Organization and Principles of Consolidation
Regency Centers, L.P. ("RCLP" or "Partnership") is the primary
entity through which Regency Centers Corporation ("Regency" or
"Company"), a self-administered and self-managed real estate
investment trust ("REIT"), conducts all of its business and owns
all of its assets.
The Partnership was formed in 1996 for the purpose of acquiring
certain real estate properties. At December 31, 2002, Regency owns
approximately 98% of the outstanding common units of the
Partnership.
The Partnership's ownership interests are represented by Units, of
which there are i) six series of preferred Units, ii) common Units
owned by the limited partners and iii) common Units owned by
Regency which serves as the general partner. Each outstanding
common Unit owned by a limited partner 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
also partnerships in which it has voting control. All significant
intercompany balances and transactions have been eliminated in the
consolidated financial statements.
(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 that
provide additional rents based on tenants' sales volume
(contingent or percentage rent) and reimbursement of the tenants'
share of real estate taxes and certain common area maintenance
("CAM") costs. Percentage rents are recognized when the tenants
achieve the specified targets as defined in their lease agreements
and recovery of real estate taxes and CAM costs are recognized
when earned.
Service operations revenue includes management fees, commission
income, and gains or losses from the sale of land and development
properties without significant operations. Service operations
revenue does not include gains or losses from the sale of
operating properties. The Partnership accounts for profit
recognition on sales of real estate in accordance with the
Financial Accounting Standards Board ("FASB") Statement No. 66,
"Accounting for Sales of Real Estate." In summary, profits from
sales will not be recognized by the Partnership unless a sale has
been consummated; the buyer's initial and continuing investment is
adequate to demonstrate a commitment to pay for the property; the
Partnership has transferred to the buyer the usual risks and
rewards of ownership; and the Partnership does not have
substantial continuing involvement with the property.
F-8
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2002
(c) Real Estate Investments
Land, buildings and improvements are recorded at cost. All direct
and indirect costs related to development activities are
capitalized. Included in these costs are interest and real estate
taxes incurred during construction as well as estimates for the
portion of internal costs that are incremental, and deemed
directly or indirectly related to development activity.
Maintenance and repairs that do not improve or extend the useful
lives of the respective assets are reflected in operating and
maintenance expense.
Depreciation is computed using the straight-line method over
estimated useful lives of up to forty years for buildings and
improvements, term of lease for tenant improvements, and three to
seven years for furniture and equipment.
On January 1, 2002, the Partnership adopted SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets"
("Statement 144"). Prior to January 1, 2002, operating properties
held for sale included properties that no longer met the
Partnership's long-term investment standards, such as expected
growth in revenue or market dominance. Once identified and
marketed for sale, these properties were segregated on the balance
sheet as operating properties held for sale. The Partnership also
develops shopping centers and stand-alone retail stores for
resale. Once completed, these developments were also included in
operating properties held for sale.
As of December 31, 2001, $158 million of operating properties were
classified as held for sale on the balance sheet. With the
adoption of Statement 144, we determined that these assets did not
meet the six criteria set forth in Statement 144 and
recharacterized them as properties to be held and used. Subsequent
to January 1, 2002, and in accordance with Statement 144,
operating properties held for sale includes only those properties
available for immediate sale in their present condition and for
which management believes it is probable that a sale of the
property will be completed within one year. Operating properties
held for sale are carried at the lower of cost or fair value less
costs to sell. Depreciation and amortization are suspended during
the period held for sale.
The Partnership reviews its real estate portfolio for impairment
whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. RCLP determines whether
impairment has occurred by comparing the property's carrying value
to an estimate of the future undiscounted cash flows. In the event
impairment exists, assets are written down to fair value for held
and used assets and fair value less costs to sell for held for
sale assets. During 2002, the Partnership recorded a provision for
impairment loss to its Retail segment of $2.5 million on an
operating property as a result of a Kmart store closing combined
with an earlier closing of an adjacent Winn-Dixie grocery store.
During 2002, the Partnership also recorded a provision for
impairment loss to its Service operations segment of $1.9 million
related to adjusting four undeveloped parcels of land and a
development property down to estimated fair value if sold. The
fair values of the operating property and development properties
were determined by using prices for similar assets in their
respective markets.
The Partnership's properties have operations and cash flows that
can be clearly distinguished from the rest of the Partnership.
Beginning in 2002, in accordance with Statement 144, the
operations and gains on sales reported in discontinued operations
include those operating properties and properties in development
for
F-9
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2002
(c) Real Estate Investments (continued)
which operations and cash flows can be clearly distinguished. The
operations from these properties have been eliminated from ongoing
operations and the Partnership will not have continuing
involvement after disposition. Prior periods have been restated to
reflect the operations of these properties as discontinued
operations. The operations and gains on sales of operating
properties sold to real estate partnerships in which the
Partnership has some continuing involvement are reported as income
from continuing operations.
(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.
The Company believes it qualifies, and intends to continue to
qualify, as a REIT under the Internal Revenue Code (the "Code").
As a REIT, the Company is allowed to reduce taxable income by all
or a portion of its distributions to stockholders. As
distributions have exceeded taxable income, no provision for
federal income taxes has been made in the accompanying
consolidated financial statements.
Earnings and profits, which determine the taxability of dividends
to stockholders, differs from net income reported for financial
reporting purposes primarily because of differences in depreciable
lives and cost bases of the shopping centers, as well as, other
timing differences.
Regency Realty Group, Inc., ("RRG"), a wholly-owned subsidiary of
the Partnership is subject to federal and state income taxes and
files separate tax returns. RRG recognized a (benefit) provision
for federal income taxes of ($391,400), $2 million, and $1.2
million in 2002, 2001 and 2000, respectively, which are included
in other expenses.
Effective January 1, 2001, the Partnership and RRG jointly elected
for RRG to be treated as a Taxable REIT Subsidiary of the
Partnership as such term is defined in Section 856(l) of the Code.
Such election is not expected to impact the tax treatment of
either the Partnership or RRG.
The net book basis of real estate assets exceeds the tax basis by
approximately $110 and $109 million at December 31, 2002 and 2001,
respectively, primarily due to the difference between the cost
basis of the assets acquired and their carryover basis recorded
for tax purposes.
The following summarizes the tax status of dividends paid by the
Company during the years ended December 31 (unaudited):
2002 2001 2000
---- ---- ----
Dividend per share $ 2.04 2.00 1.92
Ordinary income 71% 83% 82%
Capital gain 1% 3% 5%
Return of capital 22% 13% 11%
Unrecaptured Section
1250 gain 4% 1% 2%
Qualified 5-year gain 2% - -
F-10
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2002
(e) Deferred Costs
Deferred costs include deferred leasing costs, leasing intangibles
acquired in business combinations and deferred loan costs, net of
amortization. Such costs are amortized over the periods through
lease expiration or loan maturity. Deferred leasing costs consist
of internal and external commissions associated with leasing the
Partnership's shopping centers. Leasing intangibles represent
costs associated with acquiring properties with in-place leases.
Net deferred leasing costs and leasing intangibles were $26.5
million and $22.2 million at December 31, 2002 and 2001,
respectively. Deferred loan costs consist of initial direct and
incremental costs associated with financing activities. Net
deferred loan costs were $10.9 million and $12.2 million at
December 31, 2002 and 2001, respectively.
(f) Earnings per Unit and Treasury stock
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 stock options, exchangeable operating partnership units, and
preferred stock when dilutive. See note 7 for the calculation of
earnings per unit.
Repurchases of the Company's common stock (net of shares retired)
are recorded at cost and are reflected as Treasury stock in the
Company's consolidated statements of stockholders' equity.
Concurrent with the Treasury stock repurchases by Regency, the
Partnership repurchases the same amount of general partnership
units from Regency.
(g) Cash and Cash Equivalents
Any instruments which have an original maturity of ninety days or
less when purchased are considered cash equivalents. Cash
distributions of normal operating earnings from investments in
real estate partnerships are included in cash flows from
operations in the consolidated statements of cash flows.
(h) Estimates
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America 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.
F-11
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2002
(i) Stock-Based Compensation
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.
In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure" ("Statement
148"). Statement 148 provides alternative methods of transition
for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition,
Statement 148 amends the disclosure requirements of Statement No.
123, "Accounting for Stock-Based Compensation" ("Statement 123"),
to require more prominent and frequent disclosures in financial
statements about the effects of stock-based compensation. The
transition guidance and annual disclosure provisions of Statement
148 are effective for fiscal years ending after December 15, 2002
and the interim disclosure provisions are effective for periods
beginning after December 15, 2002. As permitted under Statement
123 and Statement 148, the Partnership will continue to follow the
accounting guidelines pursuant to Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees"
("Opinion 25"), for stock-based compensation and to furnish the
pro forma disclosures as required under Statement 148. See note 8
for further discussion of stock options.
The Company has a Long-Term Omnibus Plan (the "Plan") pursuant to
which the board of directors may grant stock options and other
stock-based awards to officers, directors and other key employees.
The Plan provides for the issuance of up to 12% of the Company's
common shares outstanding (diluted) not to exceed 8.5 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, contain vesting terms of one
to five years from the date of grant and may have certain dividend
equivalent rights. Restricted stock generally vests over a period
of four years, although certain grants cliff vest after eight
years, but contain a provision that allows for accelerated vesting
over a shorter term if certain performance criteria are met.
Restricted stock grants also have certain dividend equivalent
rights under the Plan. Compensation expense is measured at the
grant date and recognized ratably over the expected vesting
period. At December 31, 2002, there were approximately 1.3 million
shares available for grant under the Plan.
On December 17, 2002, 336,350 shares of restricted stock were
granted under the Plan of which 232,758 shares vest at the rate of
25% per year for four years, and 103,592 cliff vest after eight
years, but have the ability to accelerate vesting under the terms
described above. The fair value of the Company's stock at the date
of grant was $31.27. The Company also granted 45,195 shares on
September 30, 2002 in connection with the repayment of certain
stock purchase loans further discussed below. The fair value of
the Company's stock at the date of grant was $31.00. On December
14, 2001, 328,960 shares of restricted stock were granted under
the Plan of which 222,508 shares vest at the rate of 25% per year
for four years, and 106,452 cliff vest after eight years, but have
the ability to accelerate vesting under the terms described above.
The fair value of the Company's stock at the date of grant was
$26.40. Based on achieving certain performance criteria, 18.75% of
the eight-year vesting options vested during 2002. Based upon
restricted stock vesting in 2002, 2001 and 2000, the Partnership
recorded compensation expense of $5.6 million, $2.5 million and
$1.1 million, respectively, for restricted stock. During 2002,
2001 and 2000 the Partnership recorded compensation expense for
dividend equivalents of $3.2 million, $3.1 million and $1.8
million, respectively, for undistributed restricted stock and
unexercised stock options.
F-12
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2002
(i) Stock-Based Compensation
In previous years, as part of the Plan, the Company structured
stock purchase plans ("SPP loans") whereby executives could
acquire common stock at fair market value by investing their own
capital in combination with loans provided by Regency. These
interest-bearing, full recourse loans were secured by stock, which
was held as collateral by Regency. These loans provided for
partial forgiveness of the unpaid principal balance over time
based upon specified performance criteria and the passage of time.
The Company ceased making these types of loans after 1998 and has
not originated any new personal loans to employees since that
date. Effective September 30, 2002, all participants agreed to
repay the entire balance of their loans outstanding with a portion
of the common shares held as collateral, valued at fair market
value as of September 30, 2002. The Company, in return, granted
the participants restricted stock and stock options that are
intended to provide them with the same level of compensation
benefits that they would have received under existing agreements
for specified forgiveness amounts. These grants were made in
accordance with the existing Plan. During 2002, $240,491 of unpaid
principal was repaid in cash, $6 million was repaid through the
surrendering of shares held as collateral, and $575,741 was
forgiven and recorded as compensation expense. The per share
weighted-average fair value of stock options granted during 2002,
2001 and 2000 was $1.94, $2.32 and $2.18, respectively, on the
date of grant using the Black Scholes option-pricing model with
the following weighted-average assumptions: 2002 - expected
dividend yield 6.8%, risk-free interest rate of 2%, expected
volatility 19.1%, and an expected life of 2.5 years; 2001 -
expected dividend yield 7.3%, risk-free interest rate of 5.2%,
expected volatility 20%, and an expected life of 6 years; 2000 -
expected dividend yield 8.1%, risk-free interest rate of 6.7%,
expected volatility 20%, and an expected life of 6 years. The
Partnership applies Opinion 25 in accounting for its 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 Statement 123,
the Partnership's net income for common unitholders would have
been reduced to the pro forma amounts indicated below (in
thousands except per unit data):
2002 2001 2000
---- ---- ----
Net income for common unitholders
as reported: $ 113,321 103,221 90,103
Add: stock-based employee compensation
expense included in reported net income 9,517 6,218 4,719
Deduct: total stock-based employee
compensation expense determined under
fair value based methods for all awards (10,237) (7,141) (5,649)
--------------- -------------- ---------------
Pro forma net income $ 112,601 102,298 89,173
=============== ============== ===============
Earnings per unit:
Basic - as reported $ 1.85 1.70 1.49
=============== ============== ===============
Basic - pro forma $ 1.84 1.68 1.48
=============== ============== ===============
Diluted - as reported $ 1.84 1.69 1.49
=============== ============== ===============
Diluted - pro forma $ 1.83 1.68 1.47
=============== ============== ===============
F-13
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2002
(j) Recent Accounting Pronouncements
In January 2003, the FASB issued Interpretation No. 46
"Consolidation of Variable Interest Entities" ("Interpretation
46"), which is intended to clarify the application of Accounting
Research Bulletin No. 51, "Consolidated Financial Statements", to
certain entities in which equity investors do not have the
characteristics of a controlling financial interest or do not have
sufficient equity at risk for the entity to finance its activities
without additional subordinated financial support from other
parties, or variable interest entities, as defined in the
interpretation. Interpretation 46 will require that certain
variable interest entities be consolidated into the majority
variable interest holder's financial statements and is applicable
immediately to all variable interest entities created after
January 31, 2003, and as of the first interim period beginning
after June 15, 2003 to those variable interest entities created
before February 1, 2003. The Partnership has not yet completed its
evaluation of the applicability of this interpretation to its
current structures, but does not believe its adoption will have a
material effect on the financial statements.
In November 2002, the FASB issued Interpretation No. 45
"Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of
Others" ("Interpretation 45") which addresses the disclosures to
be made by a guarantor in its interim and annual financial
statements about its obligations under guarantees. Interpretation
45 also requires the recognition of a liability by a guarantor at
the inception of certain guarantees. The Partnership has adopted
the disclosure requirements of Interpretation 45 and will apply
the recognition and measurement provisions for all guarantees
entered into or modified after December 31, 2002.
In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities" ("Statement 146").
Statement 146 addresses financial accounting and reporting for
costs associated with exit or disposal activities and nullifies
EITF Issue No. 94-3, "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring)". Statement
146 is effective for exit and disposal activities initiated after
December 31, 2002. The Partnership has not initiated any such exit
and disposal activities since the effective date and does not
believe it will have a material effect on the financial
statements.
In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB
Statements No. 4, 44, and 62, Amendment of FASB Statement No. 13,
and Technical Corrections" ("Statement 145"). This statement
rescinds FASB Statement No. 4, "Reporting Gains and Losses from
Extinguishment of Debt" which required all gains and losses from
extinguishments of debt to be aggregated and, if material,
classified as an extraordinary item, net of related income tax
effect. Upon adoption of Statement 145, classification of these
gains and losses will be evaluated under the criteria set forth in
APB Opinion No. 30, "Reporting the Results of Operations -
Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and
Transactions". The Partnership elected to adopt the provisions
related to the rescission of SFAS No. 4 and reported a gain on
early extinguishment of debt totaling $2.4 million (note 5), which
is included in other income on the accompanying statements of
operations for the year ended December 31, 2002.
(k) Reclassifications
Certain reclassifications have been made to the 2001 and 2000
amounts to conform to classifications adopted in 2002
F-14
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2002
2. Segments
The Partnership was formed, and currently operates, for the purpose of 1)
operating retail shopping centers (Retail segment), and 2) developing
properties intended for sale or partial sale to a joint venture
(including shopping centers, outparcels and build-to-suit properties) and
providing management services to both affiliate and non-affiliate third
parties (Service operations 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 inter-segment sales or transfers.
The Partnership assesses and measures operating results starting with net
operating income for the Retail segment and income for the Service
operations segment and converts such amounts into a performance measure
referred to as Funds from Operations ("FFO"). Net operating income for
the Retail segment and income for the Service operations segment includes
gains and losses on the sale of operating properties and properties in
development, as well as, the related operating income that is reported as
discontinued operations in the accompanying consolidated statements of
operations, as required by Statement 144. 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, and offer similar degrees of risk and opportunities for
growth. FFO as defined by the National Association of Real Estate
Investment Trusts ("NAREIT") means net income (computed in accordance
with accounting principles generally accepted in the United States of
America) excluding gains (or losses) from sales of property, plus
depreciation and amortization, and after adjustments for unconsolidated
partnerships and joint ventures. Adjustments for unconsolidated
partnerships and joint ventures are calculated to reflect FFO on the same
basis. The Partnership includes gains or losses related to developments
and land that are included in the Service operations segment in its
calculation of FFO. The Partnership also adjusts FFO for distributions
made to holders of Preferred Units or preferred stock when the underlying
securities are convertible into common stock of the Company and are
dilutive to FFO. While management believes that diluted 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
accounting principles generally accepted in the United States of America,
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 diluted FFO, as provided on the following page, may not be
comparable to similarly titled measures of other REITs.
The accounting policies of the segments are the same as those described
in note 1. The revenues, diluted FFO, and assets for each of the
reportable segments are summarized as follows for the years ended
December 31, 2002, 2001 and 2000. Assets not attributable to a particular
segment consist primarily of cash and deferred costs.
F-15
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2002
2. Segments (continued)
2002 2001 2000
---- ---- ----
Revenues:
Retail segment $ 359,948,003 326,459,639 309,168,981
Service operations segment 20,254,979 31,494,739 27,226,411
---------------- ----------------- -----------------
Total revenues $ 380,202,982 357,954,378 336,395,392
================ ================= =================
Funds from Operations:
Retail segment net operating income $ 290,205,393 258,551,134 249,377,360
Service operations segment income 34,930,486 31,494,739 27,226,411
Adjustments to calculate diluted FFO:
Interest expense, net (81,285,413) (63,680,792) (63,866,321)
Other income 2,383,524 - -
General and administrative and other (24,133,237) (24,917,323) (21,869,295)
Non-real estate depreciation (1,904,573) (2,194,623) (1,459,326)
Minority interest of limited partners (492,137) (721,090) (2,631,721)
Provision for loss on development
properties and land (1,845,000) - -
Gain on sale of operating properties including
depreciation on developments sold (7,264,144) (1,692,843) (3,082,625)
Gain on sale of operating properties -
discontinued operations (3,562,533) - -
Depreciation and amortization of
discontinued operations 3,936,844 5,070,272 3,893,675
Minority interest in depreciation
and amortization (205,808) (228,320) (481,184)
Share of joint venture depreciation
and amortization 1,665,943 750,470 1,287,793
Distributions on preferred units (33,475,008) (33,475,007) (29,601,184)
---------------- ----------------- -----------------
Funds from Operations - diluted 178,954,337 168,956,617 158,793,583
---------------- ----------------- -----------------
Reconciliation to net income for common unitholders:
Real estate related depreciation
and amortization (72,475,088) (65,310,964) (57,970,936)
Minority interest in depreciation
and amortization 205,808 228,320 481,184
Share of joint venture depreciation
and amortization (1,665,943) (750,470) (1,287,793)
Provision for loss on operating properties (2,524,480) (1,595,136) (12,995,412)
Gain on sale of operating properties 7,264,144 1,692,843 3,082,625
Gain on sale of operating properties -
discontinued operations 3,562,533 - -
---------------- ----------------- -----------------
Net income $ 113,321,311 103,221,210 90,103,251
================ ================= =================
Assets (in thousands):
Retail segment $ 2,650,795 2,631,592 2,454,476
Service operations segment 298,137 403,142 447,929
Cash and other assets 112,927 74,580 132,739
---------------- ----------------- -----------------
Total assets $ 3,061,859 3,109,314 3,035,144
================= ================ =================
F-16
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2002
3. Discontinued Operations
During 2002, the Partnership sold 41 operating properties for proceeds of
$308.6 million and their net income is included in discontinued
operations. These sales resulted in a net gain of $19.2 million, which is
reported as a gain on sale in discontinued operations. The revenues from
the properties disposed of were $23.9 million, $30.6 million and $25.2
million for the three years ended December 31, 2002, 2001, and 2000,
respectively. The operating income from these properties was $10.2
million, $12.4 million and $11.5 million for the three years ended
December 31, 2002, 2001, and 2000 respectively. Income from discontinued
operations for the Retail segment was $17.8 million, $13.2 million and
$11.8 million for the years ended December 31, 2002, 2001 and 2000,
respectively. Income (loss) from discontinued operations for the Service
operations segment was $11.6 million, ($776,032) and ($242,583) for the
years ended December 31, 2002, 2001 and 2000, respectively.
4. Investments in Real Estate and Real Estate Partnerships
During 2002, the Partnership acquired five grocery-anchored shopping
centers for $106.9 million. During 2001, the Partnership acquired three
grocery-anchored shopping centers for $72.8 million. The 2002 and 2001
acquisitions were accounted for as purchases and the results of their
operations are included in the consolidated financial statements from the
date of the acquisition. Acquisitions (either individually or in the
aggregate) were not significant to the operations of the Partnership in
the year in which they were acquired or the year preceding the
acquisition.
The Partnership accounts for all investments in which it owns 50% or less
and does not have a controlling financial interest using the equity
method. The Partnership's combined investment in these partnerships was
$125.5 million and $75.2 million at December 31, 2002 and 2001,
respectively. Net income, which includes all operating results, as well
as, gains and losses on sales of properties within the joint ventures, is
allocated to the Partnership in accordance with the respective
partnership agreements. Such allocations of net income are recorded in
equity in income of investments in real estate partnerships in the
accompanying consolidated statements of operations.
During 2002, the Partnership sold eleven assets for net proceeds of $94.9
million to Macquarie CountryWide-Regency, LLC, ("MCWR"), a joint venture
with an affiliate of Macquarie CountryWide Trust of Australia, a Sydney,
Australia-based property trust focused on investing in grocery-anchored
shopping centers, in which the Partnership has a 25% interest. The
Partnership holds a note receivable of $25.1 million related to the sale
of four of the assets in December 2002. The note receivable has an
interest rate of LIBOR plus 1.5% and matures on April 30, 2003. The gain
recognition is recorded on only that portion of the sale to MCWR not
owned by the Partnership. The Partnership recognized gains on these sales
of $11.1 million which represents $5.3 million recorded as gain on sale
of operating properties and $5.8 million related to properties in
development, recorded as service operations revenue in the Partnership's
consolidated statements of operations.
During 2002, the Partnership sold an asset for net proceeds of $17.5
million to Columbia Regency Retail Partners, LLC ("Columbia"), a joint
venture with the Oregon State Treasury that was formed for the purpose of
investing in retail shopping centers in which the Partnership has a 20%
interest.
With the exception of Columbia and MCWR, both of which intend to continue
expanding their investment in shopping centers, the investments in real
estate partnerships represent single asset entities formed for the
purpose of developing or owning retail based commercial real estate.
F-17
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2002
4. Investments in Real Estate and Real Estate Partnerships (continued)
The Partnership's investments in real estate partnerships as of December
31, 2002 and 2001 consist of the following (in thousands):
Ownership 2002 2001
--------- ---- ----
Columbia Regency Retail Partners, LLC 20% $ 42,413 31,092
RRG-RMC Tracy, LLC 50% 23,269 12,339
Macquarie CountryWide-Regency, LLC 25% 22,281 4,180
OTR/Regency Texas Realty Holdings, L.P. 30% 15,992 16,590
Tinwood, LLC 50% 10,983 7,177
Regency Woodlands/Kuykendahl, Ltd. 50% 7,973 -
Jog Road, LLC 50% 2,571 -
Regency Ocean East Partnership, Ltd. 25% - 2,783
GME/RRG I, LLC 50% - 1,069
-------------- --------------
$ 125,482 75,230
============== ==============
Summarized financial information for the unconsolidated investments on a
combined basis, is as follows (in thousands):
December 31, December 31,
2002 2001
---- ----
Balance Sheet:
Investment in real estate, net $ 553,118 286,096
Other assets 15,721 8,581
------------- -------------
Total assets $ 568,839 294,677
============= =============
Notes payable $ 167,071 67,489
Other liabilities 10,386 5,983
Equity and partners' capital 391,382 221,205
------------- -------------
Total liabilities and equity $ 568,839 294,677
============= =============
The revenues and expenses on a combined basis are summarized as follows
for the years ended December 31, 2002, 2001 and 2000:
2002 2001 2000
---- ---- ----
Statement of Operations:
Total revenues $ 44,823 26,896 19,235
Total expenses 24,916 14,066 13,147
------------- --------------- ------------
Net income $ 19,907 12,830 6,088
============= =============== ============
Unconsolidated partnerships and joint ventures had notes payable of
$167.1 million at December 31, 2002 and the Partnership's proportionate
share of these loans was $38.8 million.
F-18
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2002
5. Notes Payable and Unsecured Line of Credit
The Partnership's outstanding debt at December 31, 2002 and 2001 consists
of the following (in thousands):
2002 2001
---- ----
Notes Payable:
Fixed rate mortgage loans $ 229,551 240,091
Variable rate mortgage loans 24,998 21,691
Fixed rate unsecured loans 998,975 760,939
-------------- ---------------
Total notes payable 1,253,524 1,022,721
Unsecured line of credit 80,000 374,000
-------------- ---------------
Total $ 1,333,524 1,396,721
============== ===============
Interest rates paid on the unsecured line of credit (the "Line"), which
are based on LIBOR plus .85%, were 2.288% and 2.913% at December 31, 2002
and 2001, respectively. The spread that the Partnership pays on the Line
is dependent upon maintaining specific investment grade ratings. The
Partnership is required to comply, and is in compliance with, certain
financial and other 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 January 15, 2002 RCLP completed a $250 million unsecured debt offering
with an interest rate of 6.75%. These notes were priced at 99.850%, are
due on January 15, 2012 and are guaranteed by the Company. The net
proceeds of these offerings were used to reduce the balance of the Line.
Mortgage loans are secured by certain real estate properties, and may be
prepaid, but could be subject to a yield-maintenance premium. Mortgage
loans are generally due in monthly installments of interest and principal
and mature over various terms through 2019. Variable interest rates on
mortgage loans are currently based on LIBOR plus a spread in a range of
130 basis points to 175 basis points. Fixed interest rates on mortgage
loans range from 6.64% to 9.5%.
As of December 31, 2002, 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
-------------------------- --------------------------------------------
2003 $ 5,084 22,864 27,948
2004 (includes the Line) 5,241 300,994 306,235
2005 4,045 147,742 151,787
2006 3,359 24,089 27,448
2007 2,768 25,696 28,464
Beyond 5 Years 19,176 766,287 785,463
Unamortized debt premiums - 6,179 6,179
--------------------------------------------
Total $ 39,673 1,293,851 1,333,524
============================================
During 2002, the Partnership assumed debt with a fair value of $46.7
million related to the acquisition of five properties, which includes
debt premiums of $2.7 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 on the effective interest rate method.
F-19
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2002
5. Notes Payable and Unsecured Line of Credit (continued)
During 2002, the Partnership extinguished the debt on Worthington Park
Centre for the face amount of the note, resulting in the recognition of a
gain of $2.4 million on early extinguishment representing the remaining
unamortized premium recorded upon assumption of the debt. The gain has
been recorded in other income on the accompanying consolidated statements
of operations.
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 terms and remaining maturities. Variable rate notes payable and the
Line are considered to be at fair value, since the interest rates on such
instruments reprice based on current market conditions. Fixed rate loans
assumed in connection with real estate acquisitions are recorded in the
accompanying financial statements at fair value. Based on the borrowing
rates currently available to the Partnership for loans with similar terms
and average maturities, the fair value of long-term debt is $1.4 billion.
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
partners holding common units (including Regency) are made in the same
amount as the dividends declared and paid on Regency common stock.
(a) The Partnership has issued Cumulative Redeemable Preferred Units
("Preferred Units") in various amounts since 1998. The issues were sold
primarily to institutional investors in private placements for $100 per
unit. The Preferred Units, which may be called by RCLP at par after
certain dates, have no stated maturity or mandatory redemption, and pay a
cumulative, quarterly dividend at fixed rates. At any time after ten
years from the date of issuance, the Preferred Units may be exchanged by
the holder for Cumulative Redeemable Preferred Stock ("Preferred Stock")
at an exchange rate of one share for one unit. The Preferred Units and
the related Preferred Stock are not convertible into common stock of the
Company. The net proceeds of these offerings were used to reduce the
Line. At December 31, 2002 and 2001 the face value of total Preferred
Units issued was $384 million with an average fixed distribution rate of
8.72%.
Terms and conditions of the Preferred Units are summarized as follows:
Units Issue Issuance Distribution Callable Exchangeable
Series Issued Price Amount Rate by Partnership by Unitholder
- --------------------------- --- --------------- -- ---------------- --------------- ----------------- ------------------
Series A 1,600,000 $ 50.00 $ 80,000,000 8.125% 06/25/03 06/25/08
Series B 850,000 100.00 85,000,000 8.750% 09/03/04 09/03/09
Series C 750,000 100.00 75,000,000 9.000% 09/03/04 09/03/09
Series D 500,000 100.00 50,000,000 9.125% 09/29/04 09/29/09
Series E 700,000 100.00 70,000,000 8.750% 05/25/05 05/25/10
Series F 240,000 100.00 24,000,000 8.750% 09/08/05 09/08/10
---------------
-------------
4,640,000 $ 384,000,000
============= ================
(b) Security Capital owns approximately 57.5% of the outstanding common stock
of Regency; however, its ability to exercise voting control over these
shares is limited by the Stockholders Agreement by and among Regency,
Security Capital Holdings S.A., Security Capital U.S. Realty and The
Regency Group, Inc. dated as of July 10, 1996, as amended,
F-20
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2002
6. Stockholders' Equity and Partners' Capital (continued)
including amendments to reflect Security Capital's purchase of Security
Capital Holdings S.A. and the liquidation of Security Capital U.S. Realty
(as amended, the "Stockholders Agreement").
The Stockholders Agreement provides that during the standstill period
Security Capital will vote all of its shares of Regency in accordance
with the recommendations of Regency's board of directors or
proportionally in accordance with the votes of the other holders of
Regency common stock. This broad voting restriction is subject to a
limited qualified exception pursuant to which Security Capital can vote
its shares of Regency in its sole and absolute discretion with regard to
amendments to Regency's charter or by-laws that would materially
adversely affect Security Capital and with regard to "Extraordinary
Transactions" (which include mergers, consolidations, sale of a material
portion of Regency's assets, issuances of securities in an amount which
requires a shareholder vote and other similar transactions out of the
ordinary course of business). However, the limited exception is itself
further qualified. Even with respect to charter and by-law amendments and
Extraordinary Transactions, Security Capital may only vote shares
representing ownership of 49% of the outstanding Regency common stock at
its discretion, any shares owned by Security Capital in excess of 49%
must be voted in accordance with the recommendations of Regency's board
of directors or proportionally in accordance with the votes of the other
holders of Regency common stock. With regard to Extraordinary
Transactions which require a 2/3rds vote (i.e. where Security Capital
could block the outcome if it voted 49% of the stock), Security Capital
may only vote shares representing ownership of 32% of the outstanding
Regency common stock. Security Capital may vote its shares to elect a
certain number of nominees to the Regency board of directors, however
this right is similarly limited. Security Capital has the right to
nominate the greater of three directors or the number of directors
proportionate to its ownership, however Security Capital may not nominate
more than 49% of the Regency board of directors.
The effect of these limitations is such that notwithstanding the fact
that Security Capital owns more than a majority of the currently
outstanding shares of Regency common stock, Security Capital may not, in
compliance with the standstill provisions of the Stockholders Agreement,
exercise voting control with respect to more than 49% of the outstanding
shares of Regency (and may vote those shares in its discretion only with
respect to the limited matters listed above).
Effective May 14, 2002, an indirect wholly-owned subsidiary of GE Capital
merged into Security Capital with Security Capital surviving as an
indirect wholly-owned subsidiary of GE Capital. On July 12, 2002,
Security Capital advised Regency that, pursuant to the terms of the
Stockholders Agreement, Security Capital has elected to cancel the
otherwise automatic extension of the standstill period effective April
10, 2003.
(c) During 2002, the holder of Regency's Series 2 preferred stock converted
1,037,107 preferred shares into common stock at a conversion ratio of
1:1.
During 1999, the board of directors authorized the repurchase of
approximately $65 million of the Company's outstanding shares through
periodic open market transactions or privately negotiated transactions.
During 2000, the Company completed the program by purchasing 3.25 million
shares.
F-21
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2002
7. Earnings per Unit
The following summarizes the calculation of basic and diluted earnings
per unit for the years ended December 31, 2002, 2001, and 2000 (in
thousands except per unit data):
2002 2001 2000
---- ---- ----
Numerator:
Income from continuing operations $ 117,381 124,266 108,191
Discontinued operations 29,415 12,430 11,513
------------- ----------------- -------------
Net income 146,796 136,696 119,704
Less: Preferred unit distributions 33,475 33,475 29,601
------------- ----------------- -------------
Net income for common unitholders 113,321 103,221 90,103
Less: preferred stock dividends 2,275 2,965 2,817
Net income for common unitholders - ------------- ----------------- -------------
Basic and Diluted $ 111,046 100,256 87,286
============= ================= =============
Denominator:
- -------------
Weighted average common units
outstanding for Basic EPU 59,716 59,058 58,605
Incremental units to be issued under
common stock using the Treasury Method 378 216 54
Convertible series 2 preferred stock 344 - -
-------------- ----------------- -------------
Weighted average common units outstanding
for Diluted EPU 60,438 59,274 58,659
============== ================= =============
Income per common unit - Basic
Income from continuing operations $ 1.36 1.49 1.30
Discontinued operations $ 0.49 0.21 0.19
-------------- ----------------- -------------
Net income for common unitholders
per unit $ 1.85 1.70 1.49
============== ================= =============
Income per common unit - Diluted
Income from continuing operations $ 1.35 1.49 1.30
Discontinued operations $ 0.49 0.20 0.19
-------------- ----------------- -------------
Net income for common unitholders
per unit $ 1.84 1.69 1.49
============== ================= =============
The Series 2 Preferred stock dividends are deducted from net income in
computing earnings per unit since the properties acquired with these
preferred shares were contributed to the Partnership. Accordingly, the
payment of Series 2 Preferred stock dividends are deemed to be
preferential to the distributions made to common unitholders.
8. Stock Option Plan
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.
Under the Plan, the Company may grant stock options to its officers,
directors and other key employees. Options are granted at fair market
value on the date of grant, vest 25% per year, and expire after ten
years. Stock option grants also receive dividend equivalents for a
specified period of time equal to the Company's dividend yield less the
average dividend yield of the S&P 500 as of the grant date. Dividend
equivalents are funded in Regency common stock, and vest at the same rate
as the options upon which they are based.
F-22
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2002
8. Stock Option Plan (continued)
The following table reports stock option activity during the periods
indicated:
Weighted
Number of Average
Shares Exercise Price
---------------- --------------------
Outstanding, December 31, 1999 3,729,668 $ 23.61
-------------- --------------------
Granted 52,924 21.59
Forfeited (170,798) 25.52
Exercised (21,017) 21.69
-------------- --------------------
Outstanding, December 31, 2000 3,590,777 23.50
-------------- --------------------
Granted 591,614 25.01
Forfeited (79,009) 24.11
Exercised (420,420) 21.62
-------------- --------------------
Outstanding, December 31, 2001 3,682,962 23.94
-------------- --------------------
Granted 1,710,093 30.19
Forfeited (177,819) 24.07
Exercised (2,117,376) 23.68
-------------- --------------------
Outstanding, December 31, 2002 3,097,860 $ 27.47
============== ====================
The following table presents information regarding all options
outstanding at December 31, 2002:
Weighted
Average Weighted
Number of Remaining Range of Average
Options Contractual Exercise Exercise
Outstanding Life (in years) Prices Price
- --------------------------------------------------------------------------------------------
735,734 6.62 $ 19.81 - 25.76 $ 22.24
2,362,126 7.32 26.13 - 31.80 29.10
- --------------------------------------------------------------------------------------------
3,097,860 7.16 $ 19.81 - 31.80 $ 27.47
============================================================================================
The following table presents information regarding options currently
exercisable at December 31, 2002:
Weighted
Number of Range of Average
Options Exercise Exercise
Exercisable Prices Price
- -----------------------------------------------------------------------------------------
438,141 $ 19.81 - 25.76 $ 22.62
2,195,253 26.13 - 31.80 29.25
- -----------------------------------------------------------------------------------------
2,633,394 $ 19.81 - 31.80 $ 28.15
=========================================================================================
F-23
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2002
9. Operating Leases
The Partnership's properties are leased to tenants under operating leases
with expiration dates extending to the year 2032. Future minimum rents
under noncancelable operating leases as of December 31, 2002, excluding
tenant reimbursements of operating expenses and excluding additional
contingent rentals based on tenants' sales volume are as follows (in
thousands):
Year Ending December 31, Amount
------------------------------------------------------------
2003 $ 262,429
2004 250,045
2005 221,898
2006 187,718
2007 154,413
Thereafter 79,470
-----------------
Total $ 1,155,973
=================
The shopping centers' tenant base includes primarily national and
regional supermarkets, drug stores, discount department stores and other
retailers and, consequently, the credit risk is concentrated in the
retail industry. There were no tenants that individually represented 10%
or more of the Partnership's combined minimum rent.
10. Contingencies
The Partnership, like others in the commercial real estate industry, is
subject to numerous environmental laws and regulations. The operation of
dry cleaning plants at the Partnership's shopping centers is the
principal environmental concern. The Partnership believes that the
tenants who operate these plants do so in accordance with current laws
and regulations and has established procedures to monitor their
operations. Additionally, the Partnership uses all legal means to cause
tenants to remove dry cleaning plants from its shopping centers. Where
available, the Partnership has applied and been accepted into state-
sponsored environmental programs. The Partnership has a blanket
environmental insurance policy that covers it against third-party
liabilities and remediation costs on shopping centers that currently have
no known environmental contamination. The Partnership has also placed
environmental insurance on specific properties with known contamination
in order to mitigate its environmental risk. Management believes that the
ultimate disposition of currently known environmental matters will not
have a material effect on the financial position, liquidity, or
operations of the Partnership. At December 31, 2002 and 2001, the
Partnership had recorded environmental liabilities of $1.6 million and
$1.8 million, respectively.
F-24
REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2002
11. Market and Dividend Information (Unaudited)
The Company's common stock is traded on the New York Stock Exchange
("NYSE") under the symbol "REG". The Company currently has approximately
4,000 shareholders. The following table sets forth the high and low
prices and the cash dividends declared on the Company's common stock by
quarter for 2002 and 2001:
2002 2001
------------------------------------------- ---------------------------------------------
Cash Cash
Quarter High Low Dividends High Low Dividends
Ended Price Price Declared Price Price Declared
- -------------------------------------------------------------------------------------------------------------------------
March 31 $ 29.50 26.88 .51 25.00 22.63 .50
June 30 31.03 27.82 .51 25.56 23.00 .50
September 30 31.85 25.22 .51 26.35 22.72 .50
December 31 32.40 28.92 .51 27.75 24.51 .50
12. Summary of Quarterly Financial Data (Unaudited)
Presented below is a summary of the consolidated quarterly financial data
for the years ended December 31, 2002 and 2001 (amounts in thousands,
except per unit data):
First Second Third Fourth
Quarter Quarter Quarter Quarter
2002:
Revenues as originally reported $ 94,591 95,332 104,232 101,942
Reclassified to discontinued operations (7,145) (4,893) (3,856) -
-------------------------------------------------------
Adjusted Revenues $ 87,446 90,439 100,376 101,942
-------------------------------------------------------
Net income for common unitholders $ 25,927 23,572 28,139 35,683
=======================================================
Net income per unit:
Basic $ .42 .38 .46 .58
=======================================================
Diluted $ .42 .38 .46 .58
=======================================================
2001:
Revenues as originally reported $ 92,992 95,270 97,717 102,570
Reclassified to discontinued operations (7,121) (7,447) (7,517) (8,510)
-------------------------------------------------------
Adjusted Revenues $ 85,871 87,823 90,200 94,060
-------------------------------------------------------
Net income for common unitholders $ 23,706 24,967 27,329 27,219
=======================================================
Net income per unit:
Basic $ .39 .41 .45 .45
=======================================================
Diluted $ .39 .41 .45 .45
=======================================================
F-25
Independent Auditors' Report
On Financial Statement Schedule
The Unitholders of Regency Centers, L.P. and the Board of Directors
of Regency Centers Corporation
Under date of January 31, 2003, we reported on the consolidated balance sheets
of Regency Centers, L.P. as of December 31, 2002 and 2001, and the related
consolidated statements of operations, partners' capital, and cash flows for
each of the years in the three-year period ended December 31, 2002, as contained
in the annual report on Form 10-K for the year 2002. 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 2002. 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.
/s/ KPMG LLP
Jacksonville, Florida
January 31, 2003
S-1
REGENCY CENTERS, L.P.
Combined Real Estate and Accumulated Depreciation
December 31, 2002
Initial Cost Total Cost
------------------------------------- Cost Capitalized ------------------------------
Building & Subsequent to Building &
Land Improvements Acquisition Land Improvements
------------------ ---------------- ----------------- -------------- --------------
ALDEN BRIDGE 12,936,975 10,598,201 - 12,936,975 10,598,201
AMERIGE HEIGHTS TOWN CENTER 13,204,812 9,207,060 - 13,204,812 9,207,060
ARAPAHO VILLAGE 837,148 8,031,688 277,463 837,148 8,309,151
ASHBURN FARM MARKET CENTER 9,868,511 5,037,198 (276,486) 9,868,511 4,760,712
ASHFORD PLACE 2,803,998 9,943,994 (398,876) 2,583,998 9,765,118
AVENTURA SHOPPING CENTER 2,751,094 9,317,790 774,438 2,751,094 10,092,228
BECKETT COMMONS 1,625,242 5,844,871 2,714,591 1,625,242 8,559,462
BENEVA 2,483,547 8,851,199 590,079 2,483,547 9,441,278
BENT TREE PLAZA 1,927,712 6,659,082 10,197 1,927,712 6,669,279
BERKSHIRE COMMONS 2,294,960 8,151,236 189,094 2,294,960 8,340,330
BETHANY PARK PLACE 4,604,877 5,791,750 71,859 4,604,877 5,863,609
BLOOMINGDALE 3,861,759 14,100,891 491,392 3,861,759 14,592,283
BLOSSOM VALLEY 7,803,568 10,320,913 173,642 7,803,568 10,494,555
BOLTON PLAZA 2,660,227 6,209,110 1,522,775 2,634,664 7,757,448
BONNERS POINT 859,854 2,878,641 259,800 859,854 3,138,441
BOULEVARD CENTER 3,659,040 9,658,227 448,804 3,659,040 10,107,031
BOYNTON LAKES PLAZA 2,783,000 10,043,027 1,339,353 2,783,000 11,382,380
BRIARCLIFF LA VISTA 694,120 2,462,819 685,587 694,120 3,148,406
BRIARCLIFF VILLAGE 4,597,018 16,303,813 8,059,603 4,597,018 24,363,416
BUCKHEAD COURT 1,737,569 6,162,941 1,722,211 1,627,569 7,995,152
BUCKLEY SQUARE 2,970,000 5,126,240 186,982 2,970,000 5,313,222
CAMBRIDGE SQUARE 792,000 2,916,034 1,360,694 792,000 4,276,728
CARMEL COMMONS 2,466,200 8,903,187 2,161,174 2,466,200 11,064,361
CARRIAGE GATE 740,960 2,494,750 1,758,643 740,960 4,253,393
CASA LINDA PLAZA 4,515,000 30,809,330 334,305 4,515,000 31,143,635
CENTER OF SEVEN SPRINGS 1,737,994 6,290,048 (4,435,382) 1,757,440 1,835,220
CHAMPIONS FOREST 2,665,875 8,678,603 107,282 2,665,875 8,785,885
CHASEWOOD PLAZA 1,675,000 11,390,727 6,869,731 2,304,926 17,630,532
CHERRY GROVE 3,533,146 12,710,297 2,032,861 3,533,146 14,743,158
CHERRY PARK MARKET 2,400,000 16,162,934 506,127 2,400,000 16,669,061
CHERRY STREET 2,850,727 4,102,215 (119,998) 2,850,727 3,982,217
CHESIRE STATION 10,181,822 8,442,783 (263,674) 10,181,822 8,179,109
COCHRAN'S CROSSING 13,154,094 10,551,126 - 13,154,094 10,551,126
COOPER STREET 2,078,891 10,682,189 43,933 2,078,891 10,726,122
COSTA VERDE 12,740,000 25,261,188 391,621 12,740,000 25,652,809
COUNTRY CLUB 1,105,201 3,709,452 220,323 1,105,201 3,929,775
COUNTRY CLUB CALIF 3,000,000 11,657,200 124,422 3,000,000 11,781,622
COURTYARD SHOPPING CENTER 1,761,567 4,187,039 (82,028) 5,866,578 -
CREEKSIDE PHASE II 390,802 1,397,415 420,051 370,527 1,837,741
CROMWELL SQUARE 1,771,892 6,285,288 435,854 1,771,892 6,721,142
CUMMING 400 2,374,562 8,420,776 694,554 2,374,562 9,115,330
DELK SPECTRUM 2,984,577 11,048,896 135,303 2,984,577 11,184,199
DIABLO PLAZA 5,300,000 7,535,866 270,586 5,300,000 7,806,452
DICKSON TN 675,000 1,568,495 - 675,000 1,568,495
DUNWOODY HALL 1,819,209 6,450,922 5,547,884 2,528,599 11,289,416
DUNWOODY VILLAGE 2,326,063 7,216,045 5,647,952 2,326,063 12,863,997
EAST POINTE 1,868,120 6,742,983 907,314 2,523,307 6,995,110
EAST PORT PLAZA 3,257,023 11,611,363 (1,877,437) 3,257,023 9,733,926
EL CAMINO 7,600,000 10,852,428 460,012 7,600,000 11,312,440
EL NORTE PARKWAY PLA 2,833,510 6,332,078 131,391 2,833,510 6,463,469
ENCINA GRANDE 5,040,000 10,378,539 284,279 5,040,000 10,662,818
FENTON MARKETPLACE 3,020,000 10,368,796 (215,385) 3,020,000 10,153,411
FLEMING ISLAND 3,076,701 6,291,505 4,807,055 3,076,701 11,098,560
S-2
Initial Cost Total Cost
------------------------------------- Cost Capitalized ------------------------------
Building & Subsequent to Building &
Land Improvements Acquisition Land Improvements
------------------ ---------------- ----------------- -------------- --------------
FOLSOM PRAIRIE CITY 3,944,033 11,257,933 - 3,944,033 11,257,933
FRANKLIN SQUARE 2,584,025 9,379,749 4,488,285 2,733,139 13,718,920
FRIARS MISSION 6,660,000 27,276,992 155,285 6,660,000 27,432,277
FRISCO PRESTONBROOK 4,703,516 10,761,732 (2,659,127) 4,292,623 8,513,498
GARDEN SQUARE 2,073,500 7,614,748 527,316 2,136,135 8,079,429
GARNER FESTIVAL 5,591,099 19,897,197 1,873,872 5,591,099 21,771,069
GLENWOOD VILLAGE 1,194,198 4,235,476 528,629 1,194,198 4,764,105
GRANDE OAK 5,568,971 5,899,762 (125,493) 5,568,971 5,774,269
HAMPSTEAD VILLAGE 2,769,901 6,379,103 1,194,985 3,844,152 6,499,837
HANCOCK 8,231,581 24,248,620 1,380,199 8,231,581 25,628,819
HARPETH VILLAGE FIELDSTONE 2,283,874 5,559,498 3,746,115 2,283,874 9,305,613
HERITAGE LAND 12,390,000 - - 12,390,000 -
HERITAGE PLAZA - 23,675,957 1,146,075 - 24,822,032
HERSHEY 6,533 824,232 (16,264) 6,533 807,968
HIGHLAND SQUARE 2,615,250 9,359,722 10,564,414 3,378,750 19,160,636
HILLCREST VILLAGE 1,600,000 1,797,686 56,011 1,600,000 1,853,697
HILLSBORO MARKET CENTER 260,420 2,982,137 3,436,730 260,420 6,418,867
HILLSBORO MARKET CTR PHASE II 2,266,350 6,608,986 - 2,266,350 6,608,986
HINSDALE LAKE COMMONS 4,217,840 15,039,854 2,018,209 5,729,008 15,546,895
HYDE PARK 9,240,000 33,340,181 4,425,049 9,735,102 37,270,128
INGLEWOOD PLAZA 1,300,000 1,862,406 161,926 1,300,000 2,024,332
KELLER TOWN CENTER 2,293,527 12,239,464 313,877 2,293,527 12,553,341
KERNERSVILLE PLAZA 1,741,562 6,081,020 538,639 1,741,562 6,619,659
KINGSDALE SHOPPING CENTER 3,866,500 14,019,614 5,439,651 4,027,691 19,298,074
LAGRANGE MARKETPLACE 983,923 3,294,003 133,933 983,923 3,427,936
LAKE PINE PLAZA 2,008,110 6,908,986 612,580 2,008,110 7,521,566
LAKESHORE 1,617,940 5,371,499 98,565 1,617,940 5,470,064
LEETSDALE MARKETPLACE 3,420,000 9,933,701 42,567 3,420,000 9,976,268
LITTLETON SQUARE 2,030,000 8,254,964 48,723 2,030,000 8,303,687
LLOYD KING CENTER 1,779,180 8,854,803 24,280 1,779,180 8,879,083
LOEHMANNS PLAZA 3,981,525 14,117,891 946,677 3,981,525 15,064,568
LOEHMANNS PLAZA CALIFORNIA 5,420,000 8,679,135 353,800 5,420,000 9,032,935
LYNNHAVEN 2,880,885 4,405,706 99,558 2,880,885 4,505,264
MAINSTREET SQUARE 1,274,027 4,491,897 175,788 1,274,027 4,667,685
MARINERS VILLAGE 1,628,000 5,907,835 380,202 1,628,000 6,288,037
MARKET AT PRESTON FOREST 4,400,000 10,752,712 54,347 4,400,000 10,807,059
MARKET AT ROUND ROCK 2,000,000 9,676,170 120,503 2,000,000 9,796,673
MARKETPLACE ST PETE 1,287,000 4,662,740 423,669 1,287,000 5,086,409
MARTIN DOWNS VILLAGE CENTER 2,000,000 5,133,495 4,150,182 2,437,664 8,846,013
MARTIN DOWNS VILLAGE SHOPPES 700,000 1,207,861 3,399,487 817,135 4,490,213
MAXTOWN ROAD (NORTHGATE) 1,753,136 6,244,449 74,877 1,753,136 6,319,326
MAYNARD CROSSING 4,066,381 14,083,800 1,310,764 4,066,381 15,394,564
MEMORIAL BEND SHOPPING CENTER 3,256,181 11,546,660 2,481,610 3,366,181 13,918,270
MILLHOPPER 1,073,390 3,593,523 1,508,566 1,073,390 5,102,089
MILLS POINTE 2,000,000 11,919,176 98,833 2,000,000 12,018,009
MOCKINGBIRD COMMON 3,000,000 9,675,600 282,843 3,000,000 9,958,443
MONUMENT JACKSON CREEK 2,999,482 6,476,151 11,406 2,999,482 6,487,557
MORNINGSIDE PLAZA 4,300,000 13,119,929 149,119 4,300,000 13,269,048
MURRAYHILL MARKETPLACE 2,600,000 15,753,034 1,850,439 2,669,805 17,533,668
NASHBORO 1,824,320 7,167,679 432,712 1,824,320 7,600,391
NEWBERRY SQUARE 2,341,460 8,466,651 1,382,282 2,341,460 9,848,933
NEWLAND CENTER 12,500,000 12,221,279 650,513 12,500,000 12,871,792
NORTH HILLS 4,900,000 18,972,202 157,984 4,900,000 19,130,186
S-3
Initial Cost Total Cost
------------------------------------- Cost Capitalized ------------------------------
Building & Subsequent to Building &
Land Improvements Acquisition Land Improvements
------------------ ---------------- ----------------- -------------- --------------
NORTHLAKE VILLAGE I 2,662,000 9,684,740 340,259 2,662,000 10,024,999
NORTHVIEW PLAZA 1,956,961 8,694,879 138,899 1,956,961 8,833,778
OAKBROOK PLAZA 4,000,000 6,365,704 133,553 4,000,000 6,499,257
OCEAN BREEZE 1,250,000 3,341,199 3,685,306 1,527,400 6,749,105
OLD ST AUGUSTINE PLAZA 2,047,151 7,355,162 1,424,429 2,107,151 8,719,591
PACES FERRY PLAZA 2,811,522 9,967,557 2,233,332 2,811,622 12,200,789
PALM HARBOUR SHOPPING VILLAGE 2,899,928 10,998,230 1,528,452 2,924,399 12,502,211
PALM TRAILS PLAZA 2,438,996 5,818,523 (183,158) 2,022,455 6,051,906
PANTHER CREEK 14,413,781 12,630,199 - 14,413,781 12,630,199
PARK PLACE 2,231,745 7,974,362 157,370 2,231,745 8,131,732
PARKWAY STATION 1,123,200 4,283,917 1,172,632 1,123,200 5,456,549
PASEO VILLAGE 2,550,000 7,780,102 475,253 2,550,000 8,255,355
PEACHLAND PROMENADE 1,284,562 5,143,564 223,965 1,284,561 5,367,530
PEARTREE VILLAGE 5,196,653 8,732,711 10,768,493 5,196,653 19,501,204
PIKE CREEK 5,077,406 18,860,183 1,151,836 5,077,406 20,012,019
PIMA CROSSING 5,800,000 24,891,690 284,931 5,800,000 25,176,621
PINE LAKE VILLAGE 6,300,000 10,522,041 74,288 6,300,000 10,596,329
PINE TREE PLAZA 539,000 1,995,927 3,473,980 539,000 5,469,907
PLAZA HERMOSA 4,200,000 9,369,630 230,836 4,200,000 9,600,466
POWELL STREET PLAZA 8,247,800 29,279,275 70,464 8,247,800 29,349,739
POWERS FERRY SQUARE 3,607,647 12,790,749 4,353,881 3,607,647 17,144,630
POWERS FERRY VILLAGE 1,190,822 4,223,606 287,187 1,190,822 4,510,793
PRESTON PARK 6,400,000 46,896,071 2,103,751 6,400,000 48,999,822
PRESTONWOOD PARK 8,076,836 14,938,333 - 8,076,836 14,938,333
QUEENSBOROUGH 1,826,000 6,501,056 (759,623) 1,357,797 6,209,636
REDLANDS 363,994 3,489,243 (209,543) 198,245 3,445,449
REGENCY COURT 3,571,337 12,664,014 (1,320,288) 3,571,337 11,343,726
REGENCY MILFORD 1,085,922 4,409,129 (22,161) 1,085,922 4,386,968
REGENCY SQUARE BRANDON 577,975 18,156,719 10,357,613 4,770,279 24,322,028
RIVERMONT STATION 2,887,213 10,445,109 138,900 2,887,213 10,584,009
RONA PLAZA 1,500,000 4,356,480 21,191 1,500,000 4,377,671
ROSEWOOD SHOPPING CENTER 2,904,182 2,648,862 178,476 2,904,182 2,827,338
RUSSELL RIDGE 2,153,214 - 6,642,278 2,215,341 6,580,151
SAMMAMISH HIGHLAND 9,300,000 7,553,288 127,436 9,300,000 7,680,724
SAN LEANDRO 1,300,000 7,891,091 131,293 1,300,000 8,022,384
SANDY PLAINS VILLAGE 2,906,640 10,412,440 1,865,465 2,906,640 12,277,905
SANTA ANA DOWTOWN 4,240,000 7,319,468 819,555 4,240,000 8,139,023
SEDGEFIELD VILLAGE 2,328,658 2,335,895 (94,730) 2,328,658 2,241,165
SEQUOIA STATION 9,100,000 17,899,819 102,824 9,100,000 18,002,643
SHERWOOD CROSSROADS 2,731,038 3,611,502 1,549,241 2,731,038 5,160,743
SHERWOOD MARKET CENTER 3,475,000 15,897,972 80,972 3,475,000 15,978,944
SHILOH PHASE II 288,135 1,822,692 (672,692) 494,498 943,637
SHILOH SPRINGS 4,968,236 7,859,381 1,147,071 5,244,084 8,730,604
SHOPPES AT MASON 1,576,656 5,357,855 - 1,576,656 5,357,855
SOUTH POINT PLAZA 5,000,000 10,085,995 92,365 5,000,000 10,178,360
SOUTH POINTE CROSSING 4,399,303 11,116,491 924,186 4,399,303 12,040,677
SOUTHCENTER 1,300,000 12,250,504 6,206 1,300,000 12,256,710
SOUTHGATE VILLAGE 1,335,335 5,193,599 467,358 1,398,991 5,597,301
SOUTHPARK 3,077,667 9,399,976 130,557 3,077,667 9,530,533
ST ANN SQUARE 1,541,883 5,597,282 24,976 1,541,883 5,622,258
STARKE 71,306 1,709,066 (34,578) 71,306 1,674,488
STATLER SQUARE 2,227,819 7,479,952 757,814 2,227,819 8,237,766
STERLING RIDGE 12,845,777 10,508,771 - 12,845,777 10,508,771
S-4
Initial Cost Total Cost
------------------------------------- Cost Capitalized ------------------------------
Building & Subsequent to Building &
Land Improvements Acquisition Land Improvements
------------------ ---------------- ----------------- -------------- --------------
STONEBRIDGE CENTER 1,598,336 3,020,759 (84,103) 1,598,336 2,936,656
STRAWFLOWER VILLAGE 4,060,228 7,232,936 196,628 4,060,228 7,429,564
STROH RANCH 4,138,423 7,110,856 944,607 4,279,745 7,914,141
SUNNYSIDE 205 1,200,000 8,703,281 214,173 1,200,000 8,917,454
TALL OAKS 1,857,680 6,736,045 - 1,857,680 6,736,045
TASSAJARA CROSSING 8,560,000 14,899,929 101,614 8,560,000 15,001,543
TEQUESTA SHOPPES 1,782,000 6,426,042 (2,549,137) - -
TERRACE WALK 1,196,286 2,935,683 347,039 1,196,286 3,282,722
THE MARKETPLACE 1,211,605 4,056,242 2,996,750 1,758,434 6,506,163
THE PROVINCES 2,224,650 3,943,811 (96,930) 2,224,650 3,846,881
THOMAS LAKE 6,000,000 10,301,811 5,660 6,000,000 10,307,471
TORRANCE STROUDS 1,849,423 1,741,690 - 1,849,423 1,741,690
TOWN CENTER AT MARTIN DOWNS 1,364,000 4,985,410 98,264 1,364,000 5,083,674
TOWN SQUARE 438,302 1,555,481 6,422,821 882,895 7,533,709
TROPHY CLUB 2,595,158 10,467,465 - 2,595,158 10,467,465
TWIN PEAKS 5,200,000 25,119,758 128,311 5,200,000 25,248,069
UNION SQUARE SHOPPING CENTER 1,578,654 5,933,889 432,411 1,578,656 6,366,298
UNIVERSITY COLLECTION 2,530,000 8,971,597 629,677 2,530,000 9,601,274
UNIVERSITY MARKETPLACE 3,250,562 7,044,579 (3,487,946) 3,532,046 3,275,149
VALLEY RANCH CENTRE 3,021,181 10,727,623 14,526 3,021,181 10,742,149
VENTURA VILLAGE 4,300,000 6,351,012 149,521 4,300,000 6,500,533
VILLAGE CENTER 6 3,885,444 10,799,316 910,411 3,885,444 11,709,727
VILLAGE IN TRUSSVILLE 973,954 3,260,627 317,865 973,954 3,578,492
WALKER CENTER 3,840,000 6,417,522 200,486 3,840,000 6,618,008
WATERFORD TOWNE CENTER 5,650,058 6,843,671 1,486,871 6,493,010 7,487,590
WELLEBY 1,496,000 5,371,636 1,883,781 1,496,000 7,255,417
WELLINGTON TOWN SQUARE 1,914,000 7,197,934 988,532 1,914,000 8,186,466
WEST END 32,500 1,888,211 (29,810) 32,500 1,858,401
WEST HILLS 2,200,000 6,045,233 7,105 2,200,000 6,052,338
WEST PARK PLAZA 5,840,225 4,991,746 230,797 5,840,225 5,222,543
WESTBROOK COMMONS 3,366,000 11,928,393 57,730 3,366,000 11,986,123
WESTCHESTER PLAZA 1,857,048 6,456,178 692,058 1,857,048 7,148,236
WESTLAKE VILLAGE CENTER 7,042,728 25,744,011 765,909 7,042,728 26,509,920
WHITE OAK - DOVER DE 2,146,550 2,995,295 55,196 2,143,656 3,053,385
WILLA SPRINGS SHOPPING CENTER 2,004,438 9,266,550 (972,620) 2,004,438 8,293,930
WINDMILLER PLAZA PHASE I 2,620,355 11,190,526 1,115,240 2,620,355 12,305,766
WOODCROFT SHOPPING CENTER 1,419,000 5,211,981 541,423 1,419,000 5,753,404
WOODMAN VAN NUYS 5,500,000 6,835,246 209,857 5,500,000 7,045,103
WOODMEN PLAZA 6,014,033 10,077,698 (102,327) 6,645,284 9,344,120
WOODSIDE CENTRAL 3,500,000 8,845,697 78,174 3,500,000 8,923,871
WORTHINGTON PARK CENTRE 3,346,203 10,053,858 986,644 3,346,203 11,040,502
OPERATING BUILD TO SUIT PROPERTIES 17,833,494 7,381,587 - 17,833,494 7,381,587
-----------------------------------------------------------------------------------------
699,756,405 1,806,967,608 180,622,456 715,255,513 1,966,432,051
=========================================================================================
S-5
Total Cost Total Cost
----------------------------------- Net of
Properties held Accumulated Accumulated
for Sale Total Depreciation Depreciation Mortgages
----------------- -------------- --------------- ---------------- -----------
ALDEN BRIDGE - 23,535,176 238,391 23,296,785 10,429,774
AMERIGE HEIGHTS TOWN CENTER - 22,411,872 1,063,253 21,348,619 -
ARAPAHO VILLAGE - 9,146,299 858,832 8,287,467 -
ASHBURN FARM MARKET CENTER - 14,629,223 276,321 14,352,902 -
ASHFORD PLACE - 12,349,116 1,922,423 10,426,693 4,186,394
AVENTURA SHOPPING CENTER - 12,843,322 4,170,225 8,673,097 -
BECKETT COMMONS - 10,184,704 918,058 9,266,646 -
BENEVA - 11,924,825 996,105 10,928,720 -
BENT TREE PLAZA - 8,596,991 892,045 7,704,946 -
BERKSHIRE COMMONS - 10,635,290 2,035,589 8,599,701 -
BETHANY PARK PLACE - 10,468,486 1,190,928 9,277,558 -
BLOOMINGDALE - 18,454,042 1,876,168 16,577,874 -
BLOSSOM VALLEY - 18,298,123 1,040,618 17,257,505 -
BOLTON PLAZA - 10,392,112 1,926,693 8,465,419 -
BONNERS POINT - 3,998,295 968,180 3,030,115 -
BOULEVARD CENTER - 13,766,071 994,325 12,771,746 -
BOYNTON LAKES PLAZA - 14,165,380 1,446,078 12,719,302 -
BRIARCLIFF LA VISTA - 3,842,526 780,214 3,062,312 -
BRIARCLIFF VILLAGE - 28,960,434 4,217,870 24,742,564 12,531,048
BUCKHEAD COURT - 9,622,721 1,479,647 8,143,074 -
BUCKLEY SQUARE - 8,283,222 616,851 7,666,371 -
CAMBRIDGE SQUARE - 5,068,728 630,643 4,438,085 -
CARMEL COMMONS - 13,530,561 1,630,245 11,900,316 -
CARRIAGE GATE - 4,994,353 1,454,401 3,539,952 -
CASA LINDA PLAZA - 35,658,635 3,078,273 32,580,362 -
CENTER OF SEVEN SPRINGS - 3,592,660 346,327 3,246,333 -
CHAMPIONS FOREST - 11,451,760 867,564 10,584,196 -
CHASEWOOD PLAZA - 19,935,458 4,599,899 15,335,559 -
CHERRY GROVE - 18,276,304 1,760,830 16,515,474 -
CHERRY PARK MARKET - 19,069,061 1,834,955 17,234,106 -
CHERRY STREET - 6,832,944 165,046 6,667,898 -
CHESIRE STATION - 18,360,931 401,450 17,959,481 -
COCHRAN'S CROSSING - 23,705,220 240,095 23,465,125 5,816,004
COOPER STREET - 12,805,013 1,046,021 11,758,992 -
COSTA VERDE - 38,392,809 3,259,351 35,133,458 -
COUNTRY CLUB - 5,034,976 1,044,164 3,990,812 -
COUNTRY CLUB CALIF - 14,781,622 1,138,349 13,643,273 -
COURTYARD SHOPPING CENTER - 5,866,578 - 5,866,578 -
CREEKSIDE PHASE II - 2,208,268 111,004 2,097,264 -
CROMWELL SQUARE - 8,493,034 1,239,028 7,254,006 -
CUMMING 400 - 11,489,892 1,679,829 9,810,063 6,101,134
DELK SPECTRUM - 14,168,776 1,449,280 12,719,496 9,563,345
DIABLO PLAZA - 13,106,452 854,103 12,252,349 -
DICKSON TN 2,243,495 125,748 2,117,747
DUNWOODY HALL - 13,818,015 1,602,685 12,215,330 -
DUNWOODY VILLAGE - 15,190,060 1,788,037 13,402,023 -
EAST POINTE - 9,518,417 1,015,840 8,502,577 4,566,501
EAST PORT PLAZA - 12,990,949 321,298 12,669,651 -
EL CAMINO - 18,912,440 1,174,897 17,737,543 -
EL NORTE PARKWAY PLA - 9,296,979 669,835 8,627,144 -
ENCINA GRANDE - 15,702,818 1,075,315 14,627,503 -
FENTON MARKETPLACE - 13,173,411 360,448 12,812,963 -
FLEMING ISLAND - 14,175,261 953,648 13,221,613 2,995,516
S-6
Total Cost Total Cost
----------------------------------- Net of
Properties held Accumulated Accumulated
for Sale Total Depreciation Depreciation Mortgages
----------------- -------------- --------------- ---------------- -----------
FOLSOM PRAIRIE CITY - 15,201,966 433,124 14,768,842
FRANKLIN SQUARE - 16,452,059 1,702,365 14,749,694 -
FRIARS MISSION - 34,092,277 2,599,697 31,492,580 16,712,289
FRISCO PRESTONBROOK - 12,806,121 1,107,323 11,698,798 -
GARDEN SQUARE - 10,215,564 1,116,382 9,099,182 -
GARNER FESTIVAL - 27,362,168 2,286,183 25,075,985 -
GLENWOOD VILLAGE - 5,958,303 865,220 5,093,083 1,803,015
GRANDE OAK 11,343,240 122,490 11,220,750
HAMPSTEAD VILLAGE - 10,343,989 854,399 9,489,590 9,088,701
HANCOCK - 33,860,400 2,652,899 31,207,501 -
HARPETH VILLAGE FIELDSTONE - 11,589,487 1,147,613 10,441,874 -
HERITAGE LAND - 12,390,000 - 12,390,000 -
HERITAGE PLAZA - 24,822,032 2,492,913 22,329,119 -
HERSHEY - 814,501 41,966 772,535 -
HIGHLAND SQUARE - 22,539,386 2,078,074 20,461,312 3,455,408
HILLCREST VILLAGE - 3,453,697 178,434 3,275,263 -
HILLSBORO MARKET CENTER 6,679,287 129,095 6,550,192 -
HILLSBORO MARKET CTR PHASE II 8,875,336 13,248 8,862,088
HINSDALE LAKE COMMONS - 21,275,903 1,620,169 19,655,734 -
HYDE PARK - 47,005,230 5,148,977 41,856,253 -
INGLEWOOD PLAZA - 3,324,332 213,568 3,110,764 -
KELLER TOWN CENTER 14,846,868 978,902 13,867,966 -
KERNERSVILLE PLAZA - 8,361,221 785,323 7,575,898 4,890,002
KINGSDALE SHOPPING CENTER - 23,325,765 2,524,215 20,801,550 -
LAGRANGE MARKETPLACE - 4,411,859 924,549 3,487,310 -
LAKE PINE PLAZA - 9,529,676 899,511 8,630,165 5,546,430
LAKESHORE - 7,088,004 694,345 6,393,659 3,455,153
LEETSDALE MARKETPLACE - 13,396,268 979,471 12,416,797 -
LITTLETON SQUARE - 10,333,687 796,451 9,537,236 -
LLOYD KING CENTER - 10,658,263 925,884 9,732,379 -
LOEHMANNS PLAZA - 19,046,093 2,877,056 16,169,037 -
LOEHMANNS PLAZA CALIFORNIA - 14,452,935 937,674 13,515,261 -
LYNNHAVEN 7,386,149 9,856 7,376,293
MAINSTREET SQUARE - 5,941,712 715,657 5,226,055 -
MARINERS VILLAGE - 7,916,037 983,913 6,932,124 -
MARKET AT PRESTON FOREST - 15,207,059 1,023,080 14,183,979 -
MARKET AT ROUND ROCK - 11,796,673 966,694 10,829,979 6,865,056
MARKETPLACE ST PETE - 6,373,409 959,526 5,413,883 -
MARTIN DOWNS VILLAGE CENTER - 11,283,677 2,334,101 8,949,576 -
MARTIN DOWNS VILLAGE SHOPPES - 5,307,348 1,162,062 4,145,286 -
MAXTOWN ROAD (NORTHGATE) - 8,072,462 797,990 7,274,472 4,989,474
MAYNARD CROSSING - 19,460,945 1,828,282 17,632,663 10,974,680
MEMORIAL BEND SHOPPING CENTER - 17,284,451 2,785,982 14,498,469 7,221,233
MILLHOPPER - 6,175,479 1,839,423 4,336,056 -
MILLS POINTE - 14,018,009 1,192,072 12,825,937 -
MOCKINGBIRD COMMON - 12,958,443 1,038,897 11,919,546 -
MONUMENT JACKSON CREEK - 9,487,039 833,723 8,653,316 -
MORNINGSIDE PLAZA - 17,569,048 1,336,936 16,232,112 -
MURRAYHILL MARKETPLACE - 20,203,473 1,791,162 18,412,311 7,613,250
NASHBORO - 9,424,711 723,973 8,700,738 -
NEWBERRY SQUARE - 12,190,393 2,652,667 9,537,726 -
NEWLAND CENTER - 25,371,792 1,410,374 23,961,418 -
NORTH HILLS - 24,030,186 1,840,335 22,189,851 7,740,499
S-7
Total Cost Total Cost
----------------------------------- Net of
Properties held Accumulated Accumulated
for Sale Total Depreciation Depreciation Mortgages
----------------- -------------- --------------- ---------------- -----------
NORTHLAKE VILLAGE I - 12,686,999 587,938 12,099,061 6,648,152
NORTHVIEW PLAZA - 10,790,739 858,738 9,932,001 -
OAKBROOK PLAZA - 10,499,257 743,306 9,755,951 -
OCEAN BREEZE - 8,276,505 1,693,420 6,583,085 -
OLD ST AUGUSTINE PLAZA - 10,826,742 1,615,741 9,211,001 -
PACES FERRY PLAZA - 15,012,411 2,208,679 12,803,732 -
PALM HARBOUR SHOPPING VILLAGE - 15,426,610 2,085,516 13,341,094 -
PALM TRAILS PLAZA - 8,074,361 726,494 7,347,867 -
PANTHER CREEK - 27,043,980 273,188 26,770,792 10,489,641
PARK PLACE - 10,363,477 869,269 9,494,208 -
PARKWAY STATION - 6,579,749 913,855 5,665,894 -
PASEO VILLAGE - 10,805,355 858,694 9,946,661 -
PEACHLAND PROMENADE - 6,652,091 1,216,828 5,435,263 -
PEARTREE VILLAGE - 24,697,857 2,806,081 21,891,776 12,027,522
PIKE CREEK - 25,089,425 2,386,412 22,703,013 11,497,054
PIMA CROSSING - 30,976,621 2,435,186 28,541,435 -
PINE LAKE VILLAGE - 16,896,329 1,025,954 15,870,375 -
PINE TREE PLAZA - 6,008,907 625,002 5,383,905 -
PLAZA HERMOSA - 13,800,466 956,111 12,844,355 -
POWELL STREET PLAZA 37,597,539 766,362 36,831,177 -
POWERS FERRY SQUARE - 20,752,277 3,069,440 17,682,837 -
POWERS FERRY VILLAGE - 5,701,615 850,709 4,850,906 2,773,243
PRESTON PARK - 55,399,822 4,618,099 50,781,723 -
PRESTONWOOD PARK - 23,015,169 1,195,402 21,819,767
QUEENSBOROUGH - 7,567,433 662,946 6,904,487 -
REDLANDS - 3,643,694 163,223 3,480,471
REGENCY COURT - 14,915,063 356,576 14,558,487 -
REGENCY MILFORD - 5,472,890 158,466 5,314,424
REGENCY SQUARE BRANDON - 29,092,307 9,006,534 20,085,773 -
RIVERMONT STATION - 13,471,222 1,482,920 11,988,302 -
RONA PLAZA - 5,877,671 420,188 5,457,483 -
ROSEWOOD SHOPPING CENTER - 5,731,520 5,086 5,726,434 -
RUSSELL RIDGE - 8,795,492 1,374,806 7,420,686 -
SAMMAMISH HIGHLAND - 16,980,724 760,032 16,220,692 -
SAN LEANDRO - 9,322,384 816,498 8,505,886 -
SANDY PLAINS VILLAGE - 15,184,545 2,042,950 13,141,595 -
SANTA ANA DOWTOWN - 12,379,023 849,974 11,529,049 -
SEDGEFIELD VILLAGE - 4,569,823 215,367 4,354,456 -
SEQUOIA STATION - 27,102,643 1,732,455 25,370,188 -
SHERWOOD CROSSROADS - 7,891,781 138,146 7,753,635 -
SHERWOOD MARKET CENTER - 19,453,944 1,618,185 17,835,759 -
SHILOH PHASE II - 1,438,135 104,131 1,334,004 -
SHILOH SPRINGS - 13,974,688 2,737,594 11,237,094 -
SHOPPES AT MASON - 6,934,511 656,765 6,277,746 3,637,003
SOUTH POINT PLAZA - 15,178,360 997,169 14,181,191 -
SOUTH POINTE CROSSING - 16,439,980 1,236,425 15,203,555 -
SOUTHCENTER - 13,556,710 1,169,332 12,387,378 -
SOUTHGATE VILLAGE - 6,996,292 187,504 6,808,788 5,309,307
SOUTHPARK - 12,608,200 919,357 11,688,843 -
ST ANN SQUARE - 7,164,141 964,229 6,199,912 4,488,979
STARKE - 1,745,794 84,013 1,661,781 -
STATLER SQUARE - 10,465,585 1,062,101 9,403,484 5,111,624
STERLING RIDGE - 23,354,548 236,404 23,118,144 10,839,265
S-8
Total Cost Total Cost
----------------------------------- Net of
Properties held Accumulated Accumulated
for Sale Total Depreciation Depreciation Mortgages
----------------- -------------- --------------- ---------------- -----------
STONEBRIDGE CENTER - 4,534,992 122,160 4,412,832 -
STRAWFLOWER VILLAGE - 11,489,792 749,990 10,739,802 -
STROH RANCH - 12,193,886 927,756 11,266,130 -
SUNNYSIDE 205 - 10,117,454 891,375 9,226,079 -
TALL OAKS - 8,593,725 121,383 8,472,342 6,373,672
TASSAJARA CROSSING - 23,561,543 1,444,118 22,117,425 -
TEQUESTA SHOPPES 5,658,905 5,658,905 - 5,658,905 -
TERRACE WALK - 4,479,008 975,731 3,503,277 -
THE MARKETPLACE - 8,264,597 1,606,893 6,657,704 -
THE PROVINCES - 6,071,531 157,870 5,913,661 -
THOMAS LAKE - 16,307,471 981,901 15,325,570 -
TORRANCE STROUDS - 3,591,113 11,860 3,579,253 -
TOWN CENTER AT MARTIN DOWNS - 6,447,674 778,316 5,669,358 -
TOWN SQUARE - 8,416,604 689,711 7,726,893 -
TROPHY CLUB - 13,062,623 626,227 12,436,396 -
TWIN PEAKS - 30,448,069 2,472,872 27,975,197 -
UNION SQUARE SHOPPING CENTER - 7,944,954 1,093,623 6,851,331 -
UNIVERSITY COLLECTION - 12,131,274 1,549,780 10,581,494 -
UNIVERSITY MARKETPLACE - 6,807,195 105,829 6,701,366 -
VALLEY RANCH CENTRE - 13,763,330 1,054,937 12,708,393 -
VENTURA VILLAGE - 10,800,533 628,684 10,171,849 -
VILLAGE CENTER 6 - 15,595,171 2,189,149 13,406,022 -
VILLAGE IN TRUSSVILLE - 4,552,446 938,063 3,614,383 -
WALKER CENTER - 10,458,008 658,360 9,799,648 -
WATERFORD TOWNE CENTER - 13,980,600 1,027,549 12,953,051 -
WELLEBY - 8,751,417 1,651,250 7,100,167 -
WELLINGTON TOWN SQUARE - 10,100,466 1,374,667 8,725,799 -
WEST END - 1,890,901 155,329 1,735,572 -
WEST HILLS - 8,252,338 575,993 7,676,345 5,031,871
WEST PARK PLAZA - 11,062,768 506,537 10,556,231 -
WESTBROOK COMMONS - 15,352,123 515,072 14,837,051 -
WESTCHESTER PLAZA - 9,005,284 1,116,144 7,889,140 5,348,002
WESTLAKE VILLAGE CENTER - 33,552,648 2,929,200 30,623,448 -
WHITE OAK - DOVER DE - 5,197,041 124,114 5,072,927
WILLA SPRINGS SHOPPING CENTER - 10,298,368 500,551 9,797,817
WINDMILLER PLAZA PHASE I - 14,926,121 1,362,933 13,563,188
WOODCROFT SHOPPING CENTER - 7,172,404 998,559 6,173,845
WOODMAN VAN NUYS - 12,545,103 696,545 11,848,558 5,299,635
WOODMEN PLAZA - 15,989,404 1,540,049 14,449,355
WOODSIDE CENTRAL - 12,423,871 864,066 11,559,805
WORTHINGTON PARK CENTRE - 14,386,705 1,585,106 12,801,599
OPERATING BUILD TO SUIT PROPERTIES - 25,215,081 2,568,229 22,646,852
--------------------------------------------------------------------------------------------
5,658,905 2,687,346,469 244,595,928 2,442,750,541 241,419,876
============================================================================================
S-9
REGENCY CENTERS CORPORATION
Combined Real Estate and Accumulated Depreciation
December 31, 2002
Depreciation and amortization of the Company's investment in buildings and
improvements reflected in the statements 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
$2.6 billion at December 31, 2002.
The changes in total real estate assets for the period ended December 31, 2002,
2001 and 2000:
2002 2001 2000
---------------- ---------------- ------------------
Balance, beginning of period $ 2,673,164,289 2,561,795,627 2,401,953,304
Developed or acquired properties 396,879,130 187,979,361 219,887,989
Sale of properties (397,202,939) (88,410,037) (56,037,062)
Provision for loss on operating and
development properties (4,369,480) (1,595,136) (12,995,412)
Reclass accumulated depreciation
to adjust building basis (7,021,279) (1,627,178) -
Reclass accumulated depreciation related
to properties held for sale recharacterized
in 2002 to properties to be held and used 7,363,145 (815,400) (10,147,692)
Improvements 18,533,603 15,837,052 19,134,500
---------------- ---------------- ------------------
Balance, end of period $ 2,687,346,469 2,673,164,289 2,561,795,627
================ ================ ==================
The changes in accumulated depreciation for the period ended December 31, 2002,
2001 and 2000:
2002 2001 2000
---------------- ---------------- ------------------
Balance, beginning of period $ 202,325,324 147,053,900 104,467,176
Prior depreciation Midland JV'S transferred in - 2,433,269 1,662,125
Sale of properties (23,593,423) (5,052,051) (3,800,803)
Reclass accumulated depreciation
to adjust building basis (7,021,279) (1,627,178) -
Reclass accumulated depreciation related
to properties held for sale recharacterized
in 2002 to properties to be held and used 7,363,145 (815,400) (10,147,692)
Depreciation for period 65,522,161 60,332,784 54,873,094
---------------- ---------------- ------------------
Balance, end of period $ 244,595,928 202,325,324 147,053,900
================ ================ ==================
S-10