United States
SECURITIES AND EXCHANGE COMMISSION
Washington DC 20549
FORM 10-Q
(Mark One)
[X] For the quarterly period ended June 30, 2003
-or-
[ ]Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ________ to ________
Commission File Number 0-24763
REGENCY CENTERS, L.P.
---------------------
(Exact name of registrant as specified in its charter)
Delaware 59-3429602
-------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
121 West Forsyth Street, Suite 200
Jacksonville, Florida 32202
---------------------------
(Address of principal executive offices) (Zip Code)
(904) 598-7000
--------------
(Registrant's telephone number, including area code)
Unchanged
---------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No[ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
REGENCY CENTERS, L.P.
Consolidated Balance Sheets
(unaudited)
June 30, December 31,
2003 2002
---- ----
Assets
Real estate investments at cost:
Land $ 732,184,833 715,255,513
Buildings and improvements 2,011,795,946 1,973,501,081
----------------- -----------------
2,743,980,779 2,688,756,594
Less: accumulated depreciation 273,193,132 244,595,928
----------------- -----------------
2,470,787,647 2,444,160,666
Properties in development 288,396,034 276,085,435
Operating properties held for sale 10,685,396 5,658,905
Investments in real estate partnerships 131,599,044 125,482,151
----------------- -----------------
Net real estate investments 2,901,468,121 2,851,387,157
Cash and cash equivalents 45,926,882 56,447,329
Notes receivable 11,400,667 56,630,876
Tenant receivables, net of allowance for uncollectible accounts
of $3,968,360 and $4,258,891 at June 30, 2003
and December 31, 2002, respectively 32,449,975 47,983,160
Deferred costs, less accumulated amortization of $29,814,279 and
$25,588,464 at June 30, 2003 and December 31, 2002, respectively 36,439,470 37,367,196
Other assets 17,004,287 19,112,148
----------------- -----------------
$ 3,044,689,402 3,068,927,866
================= =================
Liabilities and Partners' Capital
Liabilities:
Notes payable $ 1,257,822,840 1,253,524,045
Unsecured line of credit 228,000,000 80,000,000
Accounts payable and other liabilities 74,589,988 83,977,263
Tenants' security and escrow deposits 9,393,165 8,847,603
----------------- -----------------
Total liabilities 1,569,805,993 1,426,348,911
----------------- -----------------
Limited partners' interest in consolidated partnerships 16,697,663 14,825,256
----------------- -----------------
Partners' Capital:
Series A preferred units, par value $50: 1,600,000 units issued and
outstanding at June 30, 2003 and December 31, 2002 78,800,000 78,800,000
Series B preferred units, par value $100: 850,000 units issued and
outstanding at June 30, 2003 and December 31, 2002 82,799,720 82,799,720
Series C preferred units, par value $100: 750,000 units issued, 400,000 and
750,000 units outstanding at June 30, 2003 and December 31, 2002, 38,964,575 73,058,577
Series D preferred units, par value $100: 500,000 units issued and
outstanding at June 30, 2003 and December 31, 2002 49,157,977 49,157,977
Series E preferred units, par value $100: 700,000 units issued, 300,000 and
700,000 units outstanding at June 30, 2003 and December 31, 2002, 29,237,820 68,221,579
Series F preferred units, par value $100: 240,000 units issued and
outstanding at June 30, 2003 and December 31, 2002 23,365,799 23,365,799
Series 3 cumulative redeemable preferred units, par value $0.01:
300,000 units issued and outstanding at June 30, 2003;
liquidation preference $250 75,000,000 -
General partner; 58,918,293 and 60,007,436 units outstanding
at June 30, 2003 and December 31, 2002, respectively 1,053,874,474 1,221,720,073
Limited partners; 1,431,837 and 1,504,458 units outstanding
at June 30, 2003 and December 31, 2002, respectively 26,985,381 30,629,974
----------------- -----------------
Total partners' capital 1,458,185,746 1,627,753,699
----------------- -----------------
Commitments and contingencies
$ 3,044,689,402 3,068,927,866
================= =================
See accompanying notes to consolidated financial statements.
2
REGENCY CENTERS, L.P.
Consolidated Statements of Operations
For the Three Months ended June 30, 2003, and 2002
(unaudited)
2003 2002
---- ----
Revenues:
Minimum rent $ 70,253,844 65,965,120
Percentage rent 460,837 338,004
Recoveries from tenants 19,458,337 18,609,279
Service operations revenue 9,311,296 2,420,368
Equity in income of investments in
real estate partnerships 1,984,089 1,819,700
------------------ ------------------
Total revenues 101,468,403 89,152,471
------------------ ------------------
Operating expenses:
Depreciation and amortization 18,670,025 16,618,214
Operating and maintenance 13,435,961 12,274,526
General and administrative 6,165,875 5,221,559
Real estate taxes 9,849,357 9,406,449
Other expenses 677,699 350,249
------------------ ------------------
Total operating expenses 48,798,917 43,870,997
------------------ ------------------
Other expense (income):
Interest expense, net of interest income of $385,200
and $602,530 in 2003 and 2002, respectively 20,902,459 21,166,320
Provision for loss on operating properties 1,968,520 2,364,480
Other income - (2,383,524)
------------------ ------------------
Total other expense 22,870,979 21,147,276
------------------ ------------------
Income before minority interests 29,798,507 24,134,198
Minority interest of limited partners (140,415) (125,873)
------------------ ------------------
Income from continuing operations 29,658,092 24,008,325
Discontinued operations:
Operating (loss) income from discontinued operations (72,880) 5,063,435
Gain on sale of operating properties and properties in development 4,768,170 2,869,449
------------------ ------------------
Income from discontinued operations 4,695,290 7,932,884
------------------ ------------------
Net income 34,353,382 31,941,209
Preferred unit distributions (8,066,131) (8,368,752)
------------------ ------------------
Net income for common unit holders $ 26,287,251 23,572,457
================== ==================
Income per common unit - Basic:
Income from continuing operations $ 0.35 0.25
Discontinued operations $ 0.08 0.13
------------------ ------------------
Net income for common unit holders per unit $ 0.43 0.38
================== ==================
Income per common unit - Diluted:
Income from continuing operations $ 0.34 0.25
Discontinued operations $ 0.08 0.13
------------------ ------------------
Net income for common unit holders per unit $ 0.42 0.38
================== ==================
See accompanying notes to consolidated financial statements
3
REGENCY CENTERS, L.P.
Consolidated Statements of Operations
For the Six Months ended June 30, 2003, and 2002
(unaudited)
2003 2002
---- ----
Revenues:
Minimum rent $ 139,434,434 130,086,563
Percentage rent 767,638 931,035
Recoveries from tenants 40,173,705 37,311,177
Service operations revenue 13,248,411 4,134,738
Equity in income of investments in
real estate partnerships 4,320,068 2,885,210
------------------ ------------------
Total revenues 197,944,256 175,348,723
------------------ ------------------
Operating expenses:
Depreciation and amortization 37,202,820 32,543,397
Operating and maintenance 26,596,379 23,347,831
General and administrative 10,300,774 9,211,154
Real estate taxes 20,005,375 19,016,729
Other expenses 1,104,438 709,592
------------------ ------------------
Total operating expenses 95,209,786 84,828,703
------------------ ------------------
Other expense (income):
Interest expense, net of interest income of $1,277,866
and $1,444,168 in 2003 and 2002, respectively 41,570,463 41,029,660
Gain on sale of operating properties - (1,494,225)
Provision for loss on operating properties 1,968,520 2,364,480
Other income - (2,383,524)
------------------ ------------------
Total other expense 43,538,983 39,516,391
------------------ ------------------
Income before minority interests 59,195,487 51,003,629
Minority interest of limited partners (204,123) (234,985)
------------------ ------------------
Income from continuing operations 58,991,364 50,768,644
Discontinued operations:
Operating income from discontinued operations 379,497 10,626,857
Gain on sale of operating properties and properties in development 4,126,054 4,841,901
------------------ ------------------
Income from discontinued operations 4,505,551 15,468,758
------------------ ------------------
Net income 63,496,915 66,237,402
Preferred unit distributions (18,848,510) (16,737,504)
------------------ ------------------
Net income for common unit holders $ 44,648,405 49,499,898
================== ==================
Income per common unit - Basic:
Income from continuing operations $ 0.65 0.55
Discontinued operations $ 0.07 0.26
------------------ ------------------
Net income for common unit holders per unit $ 0.72 0.81
================== ==================
Income per common unit - Diluted:
Income from continuing operations $ 0.65 0.54
Discontinued operations $ 0.07 0.26
------------------ ------------------
Net income for common unit holders per unit $ 0.72 0.80
================== ==================
See accompanying notes to consolidated financial statements
4
REGENCY CENTERS, L.P.
Consolidated Statement of Changes in Partners' Capital
For the Six Months Ended June 30, 2003
(unaudited)
Total
Series A-F Series 3 General Limited Partners'
Preferred Units Preferred Units Partner Partner Capital
Balance at
December 31, 2002 $ 375,403,652 - 1,221,720,073 30,629,974 1,627,753,699
Net income 17,488,630 1,359,880 43,556,467 1,091,938 63,496,915
Partial redemption of preferred units,
at par plus premium (75,000,000) - - - (75,000,000)
Cash distributions for dividends - - (62,835,305) (1,462,466) (64,297,771)
Preferred unit distributions (15,566,391) (1,359,880) - - (16,926,271)
Purchase of Regency stock and
corresponding units - - (153,107,076) - (153,107,076)
Units converted for cash - - - (973,504) (973,504)
Series 3 Preferred units issued - 75,000,000 - - 75,000,000
Common Units issued as a result of
common stock issued by Regency,
net of repurchases - - 2,239,754 - 2,239,754
Common Units exchanged for common
stock of Regency - - 1,163,543 (1,163,543) -
Reallocation of limited partners' interest - - 1,137,018 (1,137,018) -
----------------- --------------- --------------- ------------- ---------------
Balance at
June 30, 2003 $ 302,325,891 75,000,000 1,053,874,474 26,985,381 1,458,185,746
================= =============== =============== ============= ===============
See accompanying notes to consolidated financial statements
5
REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the Six Months ended June 30, 2003 and 2002
(unaudited)
2003 2002
---- ----
Cash flows from operating activities:
Net income $ 63,496,915 66,237,402
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 37,762,851 35,345,863
Deferred loan cost and debt premium amortization 1,063,333 579,760
Services provided by Regency in exchange for common Units 5,770,037 3,814,580
Minority interest of limited partners 204,123 234,985
Equity in income of investments in real estate partnerships (4,320,068) (2,885,210)
Gain on sale of operating properties (4,126,054) (6,336,126)
Provision for loss on operating properties 1,968,520 2,364,480
Other income - gain on early extinguishment of debt - (2,383,524)
Distributions from operations of investments in real estate partnerships 4,928,871 2,445,123
Changes in assets and liabilities:
Tenant receivables 14,715,870 4,846,288
Deferred leasing costs (5,404,589) (5,743,087)
Other assets 3,389,085 (909,558)
Accounts payable and other liabilities (23,070,267) (8,617,706)
Tenants' security and escrow deposits 771,372 492,752
----------------- -----------------
Net cash provided by operating activities 97,149,999 89,486,022
----------------- -----------------
Cash flows from investing activities:
Acquisition and development of real estate (156,511,018) (122,942,817)
Proceeds from sale of real estate 97,849,071 152,570,119
Investments in real estate partnerships (6,476,771) (19,452,091)
Capital improvements (6,501,585) (8,065,785)
Proceeds from sale of investments in real estate partnerships - 2,388,319
Repayment (funding) of notes receivable, net 45,230,209 15,147,713
Distributions received from investments in real estate partnerships 10,303,375 5,901,647
----------------- -----------------
Net cash (used in) provided by investing activities (16,106,719) 25,547,105
----------------- -----------------
Cash flows from financing activities:
Net proceeds from the issuance of Regency stock
and common Units 968,460 3,500,499
Repurchase of Regency stock and corresponding common Units (150,501,883) (2,725,000)
Partial redemption of preferred units, at par plus premium (75,000,000) -
Conversion of commonrUnitsubytlimited partner (973,504) (83,232)
Net distributions to limited partners in consolidated partnerships (89,000) -
Distributions to preferred unit holders (16,926,271) (16,737,504)
Cash distributions for dividends (64,297,771) (62,216,945)
Net proceeds from issuance of Series 3 Preferred units 72,394,807 -
Net proceeds from fixed rate unsecured notes - 249,625,000
Proceeds (repayment) of unsecured line of credit, net 148,000,000 (194,000,000)
Repayment of notes payable (2,257,943) (46,339,199)
Scheduled principal payments (2,880,622) (2,615,870)
Deferred loan costs - (2,070,986)
----------------- -----------------
Net cash used in financing activities (91,563,727) (73,663,237)
----------------- -----------------
Net (decrease) increase in cash and cash equivalents (10,520,447) 41,369,890
Cash and cash equivalents at beginning of period 56,447,329 27,853,264
----------------- -----------------
Cash and cash equivalents at end of period $ 45,926,882 69,223,154
================= =================
6
REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the Six Months ended June 30, 2003 and 2002
(unaudited)
continued
2003 2002
---- ----
Supplemental disclosure of cash flow information - cash paid for interest (net
of capitalized interest of $6,192,236 and $7,870,311
in 2003 and 2002, respectively) $ 41,799,073 34,747,465
================= =================
Supplemental disclosure of non-cash transactions:
Mortgage loans assumed for the acquisition of real estate $ 15,341,889 6,400,000
================= =================
Real estate contributed as investment in real estate partnerships $ 12,646,495 3,887,445
================= =================
Real estate contributed from limited partners' in consolidated partnerships $ 1,757,284 -
================= =================
Mortgage debt assumed by purchaser on sale of real estate $ 5,253,767 -
================= =================
Notes receivable taken in connection with sales of operating properties
and properties in development $ - 4,852,700
================= =================
See accompanying notes to consolidated financial statements.
7
Regency Centers, L.P.
Notes to Consolidated Financial Statements
June 30, 2003
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 June 30, 2003, 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
directly of indirectly 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.
The financial statements reflect all adjustments that are of a
normal recurring nature, and in the opinion of management, are
necessary to properly state the results of operations and
financial position. Certain information and footnote disclosures
normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United
States of America have been condensed or omitted although
management believes that the disclosures are adequate to make the
information presented not misleading. The financial statements
should be read in conjunction with the financial statements and
notes thereto included in the Partnership's December 31, 2002
Form 10-K filed with the Securities and Exchange Commission.
(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."
8
Regency Centers, L.P.
Notes to Consolidated Financial Statements
June 30, 2003
(b) Revenues (continued)
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.
(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"). 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. Regency 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 the second quarter, the
Partnership recorded a provision for loss of $2 million related
to adjusting three operating properties down to estimated fair
value. The fair values of the operating properties were
determined by using prices for similar assets in their respective
markets.
The Partnership's properties generally have operations and cash
flows that can be clearly distinguished from the rest of the
Partnership. In accordance with Statement 144, the operations and
gains on sales reported in discontinued operations include those
operating properties and properties in development for 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.
9
Regency Centers, L.P.
Notes to Consolidated Financial Statements
June 30, 2003
(d) 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 the
allocation of purchase price value to in-place leases of acquired
properties. Net deferred leasing costs and leasing intangibles
were $27.3 million and $26.5 million at June 30, 2003 and
December 31, 2002, respectively. Deferred loan costs consist of
initial direct and incremental costs associated with financing
activities. Net deferred loan costs were $9.1 million and $10.9
million at June 30, 2003 and December 31, 2002, respectively.
(e) Earnings per Unit
Basic net income per unit is computed based upon the weighted
average number of common units outstanding during the year.
Diluted net income per unit also includes common share
equivalents for stock options, exchangeable operating partnership
units, and preferred stock when dilutive. See note 6 for the
calculation of earnings per unit.
(f) 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.
The Partnership applies Opinion 25 in accounting for its
stock-based compensation plans, 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-based employee awards under Statement 123, the
Partnership's net income for common unit holders for the three
month and six month periods ended June 30, 2003 and 2002 would
have been reduced to the pro forma amounts indicated on the
following page (in thousands except per unit data):
10
Regency Centers, L.P.
Notes to Consolidated Financial Statements
June 30, 2003
(f) Stock-Based Compensation (continued)
For the three months ended
June 30,
2003 2002
---- ----
Net income for common unit holders
as reported: $ 26,287 23,572
Add: stock-based employee compensation
expense included in reported net income 2,901 2,049
Deduct: total stock-based employee
compensation expense determined under
fair value based methods for all awards 3,520 3,071
-------------- ---------------
Pro forma net income $ 25,668 22,550
============== ===============
Earnings per unit:
Basic - as reported $ 0.43 0.38
============== ===============
Basic - pro forma $ 0.42 0.36
============== ===============
Diluted - as reported $ 0.42 0.38
============== ===============
Diluted - pro forma $ 0.41 0.36
============== ===============
For the six months ended
June 30,
2003 2002
---- ----
Net income for common unit holders
as reported: $ 44,648 49,500
Add: stock-based employee compensation
expense included in reported net income 5,770 4,061
Deduct: total stock-based employee
compensation expense determined under
fair value based methods for all awards 7,615 6,105
-------------- ---------------
Pro forma net income $ 42,803 47,456
============== ===============
Earnings per unit:
Basic - as reported $ 0.72 0.81
============== ===============
Basic - pro forma $ 0.69 0.77
============== ===============
Diluted - as reported $ 0.72 0.80
============== ===============
Diluted - pro forma $ 0.69 0.77
============== ===============
(g) Consolidation of Variable Interest Entities
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
11
Regency Centers, L.P.
Notes to Consolidated Financial Statements
June 30, 2003
(g) Consolidation of Variable Interest Entities (continued)
the interpretation. Interpretation 46 requires 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 did not create any
variable interest entities after January 31, 2003. The
Partnership has completed its evaluation of the applicability of
this interpretation to its structures created before February 1,
2003 and its adoption will not have a material effect on the
financial statements.
(h) Segment reporting
The Partnership's business is investing in retail shopping
centers through direct ownership or through joint ventures. The
Partnership actively manages its portfolio of retail shopping
centers and may from time to time make decisions to sell lower
performing properties, or developments not meeting its long-term
investment objectives. The proceeds of sales are invested into
higher quality retail shopping centers through acquisitions or
new developments, which management believes will meet its planned
rate of return. It is management's intent that all retail
shopping centers will be owned or developed for investment
purposes. The Partnership's revenue and net income is generated
from the operation of its investment portfolio. The Partnership
will also earn incidental fees from third parties for services
provided to manage and lease retail shopping centers owned
through joint ventures.
The Partnership's portfolio is located throughout the United
States; however, management does not distinguish or group its
operations on a geographical basis for purposes of allocating
resources or measuring performance. The Partnership reviews
operating and financial data for each property on an individual
basis, therefore, the Partnership defines its operating segment
as its individual properties. No individual property constitutes
more than 10% of the Partnership's combined revenue, net income
or assets, and thus the individual properties have been
aggregated into one reportable segment based upon their
similarities with regard to both the nature of the centers,
tenants and operational processes, as well as, long-term average
financial performance. In addition, no single tenant accounts for
10% or more of revenue and none of the shopping centers are
located outside the United States.
(i) Reclassifications
Certain reclassifications have been made to the 2002 amounts to
conform to classifications adopted in 2003.
2. Discontinued Operations
During 2003, the Partnership sold 100% of its interest in five
operating properties for proceeds of $39.1 million and the combined net
income and gain on these sales of $4.5 million is included in
discontinued operations. The revenues from properties included in
discontinued operations, including properties sold in 2003 and 2002, as
well as, operating properties held for sale, were $1.8 million and $18
million for the six months ended June 30, 2003 and 2002, respectively.
The operating income from these properties was $379,497 and $10.6
million for the six months ended June 30, 2003 and 2002, respectively.
12
Regency Centers, L.P.
Notes to Consolidated Financial Statements
June 30, 2003
2. Discontinued Operations (continued)
The revenues for the two properties categorized as held for sale were
$736,091 and $976,077 as of June 30, 2003 and 2002, respectively. The
operating (loss) income for the properties held for sale was ($13,292)
and $487,559 as of June 30, 2003 and 2002, respectively. It is
anticipated that these properties will be sold in the third quarter of
2003.
3. Investments in Real Estate and Real Estate Partnerships
During 2003, the Partnership acquired two grocery-anchored shopping
centers for $35 million. The 2003 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 periods in
which they were acquired or the period 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 $131.6 million and $125.5 million at June 30, 2003 and
December 31, 2002, 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.
The Partnership has a 25% equity interest in 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. As of June 30, 2003, MCWR acquired five shopping centers from
the Partnership for $55.3 million, for which the Partnership received
net proceeds of $37.1 million. Since the Partnership has a continuing
involvement in these properties, the development gains recognized by
the Partnership on these sales represents gain recognition on only that
portion of the sale to MCWR not owned by the Partnership and are not
included in discontinued operations. The gains on these sales of $5.9
million are recorded in service operations revenue in the Partnership's
consolidated statements of operations.
The Partnership also has a 20% equity interest in 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. During the second quarter, Columbia purchased a
shopping center for $20 million.
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.
13
Regency Centers, L.P.
Notes to Consolidated Financial Statements
June 30, 2003
3. Investments in Real Estate and Real Estate Partnerships (continued)
The Partnership's investments in real estate partnerships as of June
30, 2003 and December 31, 2002 consist of the following (in thousands):
Ownership 2003 2002
--------- ---- ----
Columbia Regency Retail Partners, LLC 20% $ 46,301 42,413
RRG-RMC Tracy, LLC 50% 23,640 23,269
Macquarie CountryWide-Regency, LLC 25% 23,535 22,281
OTR/Regency Texas Realty Holdings, L.P. 30% 16,024 15,992
Tinwood, LLC 50% 10,478 10,983
Regency Woodlands/Kuykendahl, Ltd. 50% 8,682 7,973
Jog Road, LLC 50% 2,939 2,571
------------- -------------
$ 131,599 125,482
============= =============
Summarized financial information for the unconsolidated investments on
a combined basis, is as follows (in thousands):
June 30, December 31,
2003 2002
---- ----
Balance Sheet:
Investment in real estate, net $ 621,061 553,118
Other assets 19,165 15,721
-------------------- -------------------
Total assets $ 640,226 568,839
==================== ===================
Notes payable $ 204,534 167,071
Other liabilities 13,062 10,386
Equity and partners' capital 422,630 391,382
-------------------- -------------------
Total liabilities and equity $ 640,226 568,839
==================== ===================
Unconsolidated partnerships and joint ventures had notes payable of
$204.5 million at June 30, 2003 and the Partnership's proportionate
share of these loans was $49.5 million.
The revenues and expenses on a combined basis are summarized as follows
for the three months ended June 30, 2003 and 2002:
2003 2002
---- ----
Statement of Operations:
Total revenues $ 17,110 11,200
Total expenses 10,975 5,538
------------------- ------------------
Net income $ 6,135 5,662
=================== ==================
The revenues and expenses on a combined basis are summarized as follows
for the six months ended June 30, 2003 and 2002:
2003 2002
---- ----
Statement of Operations:
Total revenues $ 33,356 20,472
Total expenses 20,552 10,048
------------------- ------------------
Net income $ 12,804 10,424
=================== ==================
14
Regency Centers, L.P.
Notes to Consolidated Financial Statements
June 30, 2003
4. Notes Payable and Unsecured Line of Credit
The Partnership's outstanding debt at June 30, 2003 and December 31,
2002 consists of the following (in thousands):
2003 2002
---- ----
Notes Payable:
Fixed rate mortgage loans $ 234,373 229,551
Variable rate mortgage loans 24,389 24,998
Fixed rate unsecured loans 999,061 998,975
-------------------------------
Total notes payable 1,257,823 1,253,524
Unsecured line of credit 228,000 80,000
-------------------------------
Total $ 1,485,823 1,333,524
===============================
Interest rates paid on the unsecured line of credit (the "Line"), which
are based on LIBOR plus .85%, were 1.9125% and 2.2880% at June 30, 2003
and December 31, 2002, 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.
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 to 150 basis points. Fixed interest rates on
mortgage loans range from 6.64% to 9.5%.
During the second quarter, the Partnership assumed debt with a fair
value of $13.3 million related to the acquisition of a property, which
includes a debt premium of $797,303 based upon the above market
interest rate of the debt instrument. The debt premium is being
amortized over the terms of the related debt instrument.
As of June 30, 2003, 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 $ 2,862 20,802 23,664
2004 (includes the Line) 5,253 450,558 455,811
2005 4,060 147,630 151,690
2006 3,377 24,043 27,420
2007 2,787 25,647 28,434
Beyond 5 Years 19,707 772,858 792,565
Unamortized debt premiums - 6,239 6,239
----------------------------------------------
Total $ 38,046 1,447,777 1,485,823
==============================================
15
Regency Centers, L.P.
Notes to Consolidated Financial Statements
June 30, 2003
5. Stockholders' Equity and Partners' Capital
(a) RCLP 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 June 30, 2003 and December 31, 2002 the face
value of total Preferred Units issued was $309 million and $384
million, respectively with an average fixed distribution rate of
8.68% and 8.72%, respectively.
During the first quarter of 2003, the Partnership redeemed $35
million of Series C 9% Preferred Units and $40 million of Series
E 8.75% Preferred Units. The redemptions were portions of each
series and the Partnership paid a 1% premium on the face value of
the redeemed units totaling $750,000. The redemption was funded
from proceeds from our Line.
Terms and conditions of the Preferred Units outstanding as of
June 30, 2003 are summarized as follows:
Units Issue Amount Distribution Callable Exchangeable
Series Outstanding Price Outstanding Rate by Partnership By Unit holder
- ------------------------------------------------------------------------------------------------------------------------
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 400,000 100.00 40,000,000 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 300,000 100.00 30,000,000 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
--------------- --------------
3,890,000 $ 309,000,000
=============== ==============
(b) Until June 24, 2003, Security Capital beneficially owned
34,273,236 shares, representing 56.6% of the voting stock
outstanding of Regency. On June 24, 3002, Security Capital sold
common stock through (1) an underwritten public offering (the
"Secondary Offering"), and (2) the sale of shares to Regency
pursuant to a Purchase and Sale Agreement dated June 11, 2003
(the "Purchase and Sale Agreement"), and also agreed to sell the
balance of the shares pursuant to forward sales contracts.
Security Capital sold 9,666,356 shares of common stock in the
Secondary Offering. On June 24, 2003, it also sold 4,606,880
shares of common stock to Regency at the public offering price of
$32.56 per share pursuant to the Purchase and Sale Agreement. The
purchase price of $150 million was funded from the Partnership's
Line. Currently, Security Capital owns 20,000,000 shares of
common stock (constituting approximately 35.8% of Regency's
outstanding common stock) all of which are subject to forward
sales contracts. Upon settlement of all of the forward sales
contracts, which provide for settlement at various times during
the first half of 2004, or earlier at the election of Security
Capital, Security Capital will
16
Regency Centers, L.P.
Notes to Consolidated Financial Statements
June 30, 2003
5. Stockholders' Equity and Partners' Capital (continued)
(b) no longer own any shares of Regency common stock, unless Security
Capital elects to settle one or more of the forward contracts in
cash rather than by delivery of shares of common stock.
Concurrently with the closing of the Secondary Offering and the
sale of common stock to Regency, Security Capital and Regency
terminated the Stockholders Agreement dated as of July 10, 1996,
as amended. This termination was pursuant to an Agreement
Relating to Disposition of Shares dated as of June 11, 2003 (the
"Disposition Agreement"). Under the Disposition Agreement,
Security Capital also agreed that, following the closing of the
Secondary Offering, it will vote any shares of common stock that
are subject to forward contracts and over which it has voting
power in the same proportion as shares are voted by other
shareholders of Regency. In addition, Security Capital agreed
that, if it settles forward contracts in cash rather than shares,
within 100 trading days thereafter, it will sell a sufficient
number of shares so that it will no longer beneficially own
shares with a value in excess of 7% of the total value of
Regency's capital stock.
Security Capital also agreed in the Disposition Agreement to
waive the special ownership limit created for it in Regency's
articles of incorporation. Once Security Capital reduces its
ownership to 7% or less after the forward contracts settle in
2004, it will be subject to the same 7% ownership limit in
Regency's articles of incorporation that applies to other
shareholders.
(c) During the first quarter of 2003, the holder of the Series 2
preferred stock converted all of its remaining 450,400 preferred
shares into common stock at a conversion ratio of 1:1.
(d) On April 3, 2003, the Company received proceeds from a $75
million offering of 3,000,000 depositary shares representing
300,000 shares of Regency Series 3 Cumulative Redeemable
Preferred Stock. The depositary shares are not convertible into
common stock of the Company and are redeemable at par upon
Regency's election on or after April 3, 2008, pay a 7.45% annual
dividend and have a liquidation value of $25 per depositary
share. The proceeds from this transaction were contributed to
the Partnership in exchange for 300,000 of Series 3 Preferred
Units issued to and held by Regency with terms exactly the same
as the Series 3 Cumulative Redeemable Preferred Stock. The
proceeds from this offering were used to reduce the Line.
17
Regency Centers, L.P.
Notes to Consolidated Financial Statements
June 30, 2003
6. Earnings per Unit
The following summarizes the calculation of basic and diluted earnings
per unit for the three months ended June 30, 2003 and 2002 (in
thousands except per unit data):
2003 2002
---- ----
Numerator:
Income from continuing operations $ 29,658 24,008
Discontinued operations 4,695 7,933
------------------ ------------------
Net income 34,353 31,941
Less: Preferred unit distributions 8,066 8,369
------------------ ------------------
Net income for common unit holders 26,287 23,572
Less: Preferred stock dividends - 758
------------------ ------------------
Net income for common unit holders -
Basic and Diluted $ 26,287 22,814
================== ==================
Denominator:
-------------
Weighted average common units
outstanding for Basic EPU 61,625 59,640
Incremental units to be issued under common
stock options using the Treasury stock method 386 459
------------------ ------------------
Weighted average common units outstanding
for Diluted EPU 62,011 60,099
================== ==================
Income per common unit - Basic
Income from continuing operations $ 0.35 0.25
Discontinued operations $ 0.08 0.13
------------------ ------------------
Net income for common unit holders
per unit $ 0.43 0.38
================== ==================
Income per common unit - Diluted
Income from continuing operations $ 0.34 0.25
Discontinued operations $ 0.08 0.13
------------------ ------------------
Net income for common unit holders
per unit $ 0.42 0.38
================== ==================
The Series 2 Preferred stock dividends are deducted in 2002 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 is deemed to be
preferential to the distributions made to common unit holders.
18
Regency Centers, L.P.
Notes to Consolidated Financial Statements
June 30, 2003
6. Earnings per Unit (continued)
The following summarizes the calculation of basic and diluted earnings
per unit for the six months ended June 30, 2003 and 2002 (in thousands
except per unit data):
2003 2002
---- ----
Numerator:
Income from continuing operations $ 58,991 50,768
Discontinued operations 4,506 15,469
------------------ ------------------
Net income 63,497 66,237
Less: Preferred unit distributions 18,849 16,737
------------------ ------------------
Net income for common unit holders 44,648 49,500
Less: Preferred stock dividends - 1,517
------------------ ------------------
Net income for common unit holders
Basic and Diluted $ 44,648 47,983
================== ==================
Denominator:
-------------
Weighted average common units
outstanding for Basic EPU 61,647 59,482
Incremental units to be issued under common
stock options using the Treasury stock method 412 425
------------------ ------------------
Weighted average common units outstanding
for Diluted EPU 62,059 59,907
================== ==================
Income per common unit - Basic
Income from continuing operations $ 0.65 0.55
Discontinued operations $ 0.07 0.26
------------------ ------------------
Net income for common unit holders
per unit $ 0.72 0.81
================== ==================
Income per common unit - Diluted
Income from continuing operations $ 0.65 0.54
Discontinued operations $ 0.07 0.26
------------------ ------------------
Net income for common unit holders
per unit $ 0.72 0.80
================== ==================
The Series 2 Preferred stock dividends are deducted in 2002 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 is deemed to be
preferential to the distributions made to common unit holders.
19
Item 2. 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. ("RCLP" or "Partnership") appearing elsewhere
within.
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 RCLP, 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 gross leasable areas ("GLA") follows:
June 30, 2003 December 31, 2002
------------- -----------------
Location # Properties GLA % Leased * # Properties GLA % Leased *
-------- ------------ --- ---------- ------------ --- ----------
Florida 52 6,100,705 93.6% 53 6,193,550 91.9%
California 45 5,450,014 98.6% 43 5,125,030 99.1%
Texas 41 5,311,782 93.4% 40 5,123,197 93.6%
Georgia 23 2,255,993 94.0% 24 2,437,712 93.9%
Ohio 14 1,901,604 90.0% 14 1,901,684 91.4%
Colorado 14 1,524,427 97.7% 15 1,538,570 98.0%
North Carolina 10 1,050,043 98.7% 12 1,225,201 97.6%
Virginia 8 1,017,101 99.4% 7 872,796 96.8%
Washington 9 986,374 99.1% 9 986,374 98.9%
Oregon 9 891,853 94.5% 9 822,115 93.7%
Alabama 8 698,235 95.2% 7 644,896 94.3%
Arizona 5 501,005 96.4% 6 525,701 96.3%
Tennessee 6 444,234 98.3% 6 444,234 95.3%
Illinois 3 408,211 95.4% 2 300,477 96.1%
South Carolina 5 339,926 99.1% 5 339,256 99.1%
Kentucky 2 301,025 96.9% 2 304,659 96.6%
Michigan 3 279,265 93.2% 3 279,265 92.6%
Delaware 2 240,418 99.5% 2 240,418 99.0%
New Jersey 1 88,993 - 1 88,993 -
Missouri 1 82,498 92.9% 1 82,498 92.9%
Pennsylvania 1 6,000 100.0% 1 6,000 100.0%
----------------- --------------- ---------------- ---------------- --------------- ---------------
Total 262 29,879,706 95.3% 262 29,482,626 94.8%
================= =============== ================ ================ =============== ===============
* Excludes pre-stabilized properties under development
20
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 June 30, 2003:
Percentage of Percentage of
Grocery Number of Company- Annualized Average Remaining
Anchor Stores(a) owned GLA Base Rent Lease Term
------ --------- --------- --------- ----------
Kroger 61 12.0% 8.7% 15 yrs
Publix 52 7.1% 4.9% 13 yrs
Safeway 46 6.0% 4.6% 11 yrs
Albertsons 25 3.2% 2.6% 15 yrs
(a) Includes grocery-tenant-owned stores
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 long-term
leases from grocery and other anchors, and produce either attractive returns on
invested capital or profits from sale. This development process can require up
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.
At June 30, 2003, we had 32 projects under construction or undergoing
major renovations, which, when completed, are expected to represent an
investment of $561.1 million before the estimated reimbursement of certain
tenant-related costs and projected sales proceeds from adjacent land and
out-parcels of $120.2 million. Costs necessary to complete these developments
will be $241.7 million, are generally already committed as part of existing
construction contracts, and will be expended through 2005. These developments
are approximately 57% complete and 72% 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
shopping centers. At June 30, 2003, Columbia owned 13 shopping centers with a
net book value of $304.6 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. At
June 30, 2003, MCWR owned 20 shopping centers with a net book value of $225.2
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.
21
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 $97.1 million and $89.5 million for the six months ended June 30,
2003 and 2002, respectively. During the first six months of 2003 and 2002,
respectively, we incurred capital expenditures of $6.5 million and $8.1 million
to improve our shopping center portfolio, paid scheduled principal payments of
$2.9 million and $2.6 million to our lenders, and paid dividends and
distributions of $80.5 million and $79.0 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, the Company has the right to call and
repay at par outstanding preferred units five years after their issuance date,
at the Company's discretion. The sources of repaying preferred units would
include those listed above.
We have $200 million of 7.4% unsecured debt maturing April 1, 2004. Our
risk management objective and strategy is to mitigate the risk of changes in our
interest-related cash outflows on a forecasted 10 year issuance of long-term
debt which will partially replace the amount maturing on April 1, 2004. We have
met this objective by entering into a $96.5 million interest rate swap that
began on July 17, 2003 and matures on April 1, 2004. The swap fixed rate is
4.745% and we are the fixed rate payor. We have designated this swap transaction
as a cash flow hedge of interest payments on the forecasted 10 year issuance and
it will be subject to SFAS No. 133/138, Accounting for Derivative Instruments
and Hedging Activities. The gain or loss that we realize on the swap at maturity
will be amortized as a component of interest expense over the term of the newly
issued 10 year debt.
On June 24, 2003, we purchased 4,606,880 shares of stock for $150
million from Security Capital pursuant to a Purchase and Sale Agreement dated
June 11, 2003. The purchase was funded from the Line and the shares are held as
Treasury shares..
On April 3, 2003, we received proceeds from a $75 million offering of
3,000,000 depositary shares representing Series 3 Cumulative Redeemable
Preferred Stock. The shares are redeemable at par at Regency's election on or
after April 3, 2008, pay a 7.45% annual dividend and have a liquidation value of
$25 per depositary share. The proceeds from this transaction were contributed to
the Partnership in exchange for 300,000 of Series 3 Preferred Units issued to
and held by Regency with terms exactly the same as the Series 3 Cumulative
Redeemable Preferred Stock. The proceeds from this offering were used to reduce
the Line.
During the first quarter, we redeemed $35 million of Series C 9%
Preferred Units and $40 million of Series E 8.75% Preferred Units in a
negotiated transaction. The redemptions were portions of each series and we paid
a 1% premium on the face value of the redeemed units totaling $750,000 which is
recorded as minority interest preferred units. At the time of redemption, $1.9
million of previously deferred costs related to the original preferred units'
issuance were recognized in minority interest preferred units. The redemption
was funded from proceeds from the Line.
22
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 Regency with a capital source for
new development and acquisitions. By selling a property to a joint venture, RCLP
owns 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 Statements of Cash Flows. During
2003 net proceeds from the sale or joint venturing of real estate was $97.8
million, compared to $152.6 million during the first six months of 2002. Net
cash used in investing activities was $16.1 million for the six months ended
June 30, 2003. Net cash provided by investing activities was $25.5 million for
the six months ended June 30, 2002. Net cash used in financing activities was
$91.6 million and $73.7 million for the six months ended June 30, 2003 and 2002,
respectively.
Outstanding debt at June 30, 2003 and December 31, 2002 consists of the
following (in thousands):
2003 2002
---- ----
Notes Payable:
Fixed-rate mortgage loans $ 234,373 229,551
Variable-rate mortgage loans 24,389 24,998
Fixed-rate unsecured loans 999,061 998,975
-------------- ---------------
Total notes payable 1,257,823 1,253,524
Unsecured line of credit 228,000 80,000
-------------- ---------------
Total $ 1,485,823 1,333,524
============== ===============
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 to 150 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
June 30, 2003 and December 31, 2002 were 1.9125% and 2.2880%, 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.
As of June 30, 2003, 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 $ 2,862 20,802 23,664
2004 (includes the Line) 5,253 450,558 455,811
2005 4,060 147,630 151,690
2006 3,377 24,043 27,420
2007 2,787 25,647 28,434
Beyond Five years 19,707 772,858 792,565
Unamortized debt premiums - 6,239 6,239
----------------------------------------------
Total $ 38,046 1,447,777 1,485,823
==============================================
23
Unconsolidated partnerships and joint ventures in which we have an
investment had notes and mortgage loans payable of $204.5 million at June 30,
2003 and the Company's proportionate share of these loans was $49.5 million.
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
June 30, 2003 and December 31, 2002 the face value of total Preferred Units
issued was $309 million and $384 million, respectively with an average fixed
distribution rate of 8.68% and 8.72%, respectively.
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.
24
Discontinued Operations - The application of current accounting
principles that govern the classification of any of our properties as held for
sale on the balance sheet, or the presentation of results of operations and
gains on the sale of these properties as discontinued, requires management to
make certain significant judgments. In evaluating whether a property meets the
criteria set forth in FASB Statement No. 144 "Accounting for the Impairment and
Disposal of Long-Lived Assets" (Statement 144), the Company makes a
determination as to the point in time that it can be reasonably certain that a
sale will be consummated. Given the nature of all real estate sales contracts,
not only those entered into by the Company, it is not unusual for such contracts
to allow potential buyers a period of time to evaluate the property prior to
formal acceptance of the contract. In addition, certain other matters critical
to the final sale, such as financing arrangements, often remain pending even
upon contract acceptance. As a result, properties under contract may not close
within the expected time period, if at all. Due to these uncertainties, it is
not likely that the Company can meet the criteria of Statement 144 prior to the
sale formally closing. Therefore, any properties categorized as held for sale
represent only those properties that management has determined are probable to
close within the requirements set forth in Statement 144. The Company also makes
judgments regarding the extent of involvement it will have with a property
subsequent to its sale, in order to determine if the results of operations and
gain/loss on sale should be reflected as discontinued. Consistent with Statement
144, any property sold to an entity in which the Company has significant
continuing involvement (most often joint ventures) are not considered to be
discontinued. In addition, any property which the Company sells to an unrelated
third party, but retains a property or asset management function, are also not
considered discontinued. Thus, only properties sold, or to be sold, to unrelated
third parties for which the Company, in its judgment, has no continuing
involvement are classified as discontinued.
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
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 the six months ended June 30, 2003 to June 30, 2002
At June 30, 2003, 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 and are not yet fully leased (fully
leased generally means greater than 90% leased) or 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 June 30, 2003, we had 230 stabilized shopping centers
that were 95.3% leased.
Revenues increased $22.6 million, or 13%, to $197.9 million in 2003.
This increase was due primarily to our realization of a full year of revenues
from new 2002 developments and from growth in rental rates of the operating
properties. In 2003, rental rates grew by 9.3% from renewal leases and new
leases replacing previously occupied spaces in the stabilized properties.
Minimum rent increased $9.3 million, or 7%, and recoveries from tenants
increased $2.9 million, or 8%.
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. The Company
accounts 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
25
real estate will not be recognized by the Company 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 Company has transferred to
the buyer the usual risks and rewards of ownership; and the Company does not
have substantial continuing involvement with the property.
Service operations revenue increased $9.1 million to $13.2 million in
2003, or 220%. The increase was primarily due to a $5.8 million increase in
development sales during 2003, a $1.7 million increase in gains from the sale of
land and outparcels and a $1.6 million increase in management fees primarily
related to the Columbia and MCWR joint ventures.
Operating expenses increased $10.4 million, or 12%, to $95.2 million in
2003. Combined operating, maintenance, and real estate taxes increased $4.2
million, or 10%, during 2003 to $46.6 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 $10.3 million during 2003 compared with
$9.2 million in 2002, or 12% higher, as a result of general salary and benefit
increases. Depreciation and amortization increased $4.7 million during 2003
related to higher acquisition and development activity.
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. RCLP determines whether impairment has occurred by
comparing the property's carrying value to an estimate of fair value based upon
methods described 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 the
six months ended June 30, 2003 and 2002, we recorded a provision for loss of $2
million and $2.4 million, respectively.
Net interest expense increased to $41.6 million in 2003 from $41.0
million in 2002, or 1%. Weighted average interest rates on outstanding debt
declined to 6.58% at June 30, 2003 from 7.09% at June 30, 2002.
Income from discontinued operations was $4.5 million in 2003 primarily
due to the sale of five properties to unrelated parties with a combined gain on
sale of $4.3 million. The restated 2002 income from discontinued operations is
$15.5 million compared to $8.6 million originally reported in 2002 due to the
reclassification of $6.9 million of operating income for properties sold
subsequent to June 30, 2002 in compliance with the adoption of SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets" ("Statement
144") in January 2002.
Net income for common unit holders was $44.6 million in 2003 compared
with $49.5 million in 2002, or a 10% decrease primarily due to reasons
previously discussed and a reduction of gain on sale of operating properties of
$1.5 million and $2.4 million recorded in other income in 2002 resulting from
the early extinguishment of debt. Diluted earnings per unit were $0.72 in 2003
compared with $.80 in 2002, or 10% lower.
Comparison of the three months ended June 30, 2003 to June 30, 2002
Revenues increased $12.3 million, or 14%, to $101.5 million in 2003.
Minimum rent increased $4.3 million, or 7%, and recoveries from tenants
increased $849,000, or 5%. This increase was due to revenues from 2002
developments and 2002 acquisitions not operating at June 30, 2002 along with
rental rate growth on the existing portfolio.
Service operations revenue increased $6.9 million to $9.3 million in
2003, or 285%. The increase was primarily due to a $6.7 million dollar increase
in development sales during 2003, and an $847,000 increase in management fees
primarily related to the Columbia and MCWR joint ventures, offset by a $628,000
decrease resulting from selling fewer outparcels during 2003 than in 2002.
26
Operating expenses increased $4.9 million, or 11%, to $48.8 million in
2003. Combined operating, maintenance, and real estate taxes increased $1.6
million, or 7%, during 2003 to $23.3 million. This increase is due to new
developments and acquisitions which were not operating at June 30, 2002. General
and administrative expenses were $6.2 million during 2003 compared with $5.2
million in 2002, or 18% higher, as a result of general salary and benefit
increases. Depreciation and amortization increased $2.1 million during 2003
related to higher acquisition and development activity.
During the second quarter of 2003 and 2002, we recorded a provision for
loss of $2 million and $2.4 million, respectively.
Net interest expense decreased to $20.9 in 2003 from $21.2 million in
2002, or 1%. Weighted average interest rates on outstanding debt declined to
6.58% at June 30, 2003 from 7.09% at June 30, 2002.
Income from discontinued operations was $4.7 for the three months ended
June 30, 2003 primarily due to the gain recorded on the sale of two properties.
The restated income from discontinued operations for the three months ended June
30, 2002 is $7.9 million compared to $3.8 million originally reported in 2002
due to the reclassification of $4.1 million of operating income for properties
sold subsequent to June 30, 2002 in compliance with the adoption of Statement
144.
Net income for common unit holders was $26.3 million in 2003 compared
with $23.6 million in 2002, or a 12% increase. Diluted earnings per unit were
$0.42 in 2003 compared with $.38 in 2002, or 11% higher.
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.
27
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Market Risk
- -----------
RCLP 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 $ 14,121 212,965 151,690 27,420 28,434 792,565 1,227,195 1,277,078
Average interest rate for all debt 7.59% 7.62% 7.61% 7.62% 7.60% 7.62% - -
Variable rate LIBOR debt $ 9,543 242,846 - - - - 252,389 252,389
Average interest rate for all debt 2.04% 2.04% - - - - - -
As the table incorporates only those exposures that exist as of June
30, 2003, 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 4. 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 as of the
end of the period covered by 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 has been no significant change in our internal controls
over financial reporting identified in connection with the foregoing evaluation
that occurred during the last quarter and that has materially affected, or is
reasonably likely to material affect, our internal controls over financial
reporting.
28
Part II
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 Second Amendment to Credit Agreement dated as of March 31,
2003, by and among Regency Centers, L.P., Regency Realty
Group, Inc., Regency Centers Corporation, and Wells Fargo
Bank, National Association, as Agent, filed August 12,
2003 as Exhibit 10.1 to Form 10-Q of Regency Centers
Corporation and incorporated herein by reference.
10.2 Revolving Note dated as of April 1, 2002, by and among
Regency Centers, L.P., and Commercebank, N.A., in care of
Wells Fargo Bank, National Association, as Agent, filed
August 12, 2003 as Exhibit 10.2 to Form 10-Q of Regency
Centers Corporation and incorporated herein by reference.
10.3 Bid Rate Note dated as of April 1, 2003, by and among
Regency Centers, L.P., Commercebank, N.A., in care of
Wells Fargo Bank, National Association, as Agent, filed
August 12, 2003 as Exhibit 10.3 to Form 10-Q of Regency
Centers Corporation and incorporated herein by reference.
10.4 Revolving Note dated as of April 1, 2003, by and among
Regency Centers, L.P., Wachovia Bank, National
Association, in care of Wells Fargo Bank, National
Association, as Agent, filed August 12, 2003 as Exhibit
10.4 to Form 10-Q of Regency Centers Corporation and
incorporated herein by reference.
31.1 Certification of the Chief Executive Officer of Regency
Centers Corporation, the General Partner of Regency
Centers, L.P., Pursuant to Section 302 of the
Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under
the Securities Act of 1934.
31.2 Certification of the Chief Financial Officer of Regency
Centers Corporation, the General Partner of Regency
Centers, L.P., Pursuant to Section 302 of the
Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under
the Securities Act of 1934.
31.3 Certification of the Chief Operating Officer of Regency
Centers Corporation, the General Partner of Regency
Centers, L.P., Pursuant to Section 302 of the
Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under
the Securities Act of 1934.
32.1 Certification of the Chief Executive Officer of Regency
Centers Corporation, the General Partner of Regency
Centers, L.P., Pursuant to 18 U.S.C. Section 1350 (as
adopted by Section 906 of the Sarbanes-Oxley Act of 2002)
32.2 Certification of the Chief Financial Officer of Regency
Centers Corporation, the General Partner of Regency
Centers, L.P., Pursuant to 18 U.S.C. Section 1350 (as
adopted by Section 906 of the Sarbanes-Oxley Act of 2002)
32.3 Certification of the Chief Operating Officer of Regency
Centers Corporation, the General Partner of Regency
Centers, L.P., Pursuant to 18 U.S.C. Section 1350 (as
adopted by Section 906 of the Sarbanes-Oxley Act of 2002)
(b) Reports on Form 8-K
None
29
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: August 14, 2003 REGENCY CENTERS, L.P.
By: /s/ J. Christian Leavitt
------------------------------------
Senior Vice President,
and Chief Accounting Officer
30