Item 8. Consolidated Financial Statements and Supplementary Data

Item 8. Consolidated Financial Statements and Supplementary Data

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Description

Date of adoption

Effect on the financial statements or other significant matters

Revenue from Contracts with Customers (Topic 606) and related updates: ASU 2014-09, May 2014, Revenue from Contracts with Customers (Topic 606) ASU 2016-08, March 2016, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations ASU 2016-10, April 2016, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing ASU 2016-12, May 2016, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients ASU 2016-19, December 2016, Technical Corrections and Improvements ASU 2016-20, December 2016, Technical Corrections and Improvements to Topic 606 Revenue from Contracts With Customers ASU 2017-05, February 2017, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (Subtopic 610-20)

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers ("Topic 606"). The objective of Topic 606 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. It will supersede most of the existing revenue guidance, including industry-specific guidance. The core principal of this new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying Topic 606, companies will perform a five-step analysis of transactions to determine when and how revenue is recognized. Topic 606 applies to all contracts with customers except those that are within the scope of other topics in the FASB's accounting standards codification. As a result, Topic 606 does not apply to revenue from lease contracts until the adoption of the new leases standard, Topic 842, in January 2019. ASU 2017-05 clarifies that ASC 610-20 applies to all nonfinancial assets (including real estate) for which the counterparty is not a customer and requires an entity to derecognize a nonfinancial asset in a partial sale transaction when it ceases to have a controlling financial interest in the asset and has transferred control of the asset. Once an entity transfers control of the nonfinancial asset, the entity is required to measure any noncontrolling interest it receives or retains at fair value. Under the current guidance, a partial sale is recognized and carryover basis is used for the retained interest resulting in only partial gain recognition by the entity, however, the new guidance eliminates the use of carryover basis and generally requires the full gain be recognized. The standard allows for either "full retrospective" adoption, meaning the standard is applied to all of the periods presented, or "modified retrospective" adoption, meaning the standard is applied only to the most recent period presented in the financial statements. Additional disclosures are also required in order to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including disaggregated disclosures of revenue recognized, contract balances, and performance obligations.

January 2018

The majority of the Company's revenue originates from lease contracts and will be subject to Topic 842 to be adopted in January 2019. Upon the adoption of the new leases standard, certain recoveries from tenants may become subject to the revenue standard, which may have a different recognition pattern or presentation than under current GAAP. Beyond revenue from lease contracts, the Company's other main revenue streams, include: - Management, transaction and other fees from the Company's real estate partnerships, primarily in the form of property management fees, asset management fees, and leasing commission fees. The Company evaluated all partnership fee relationships and does not currently expect any changes in the timing of revenue recognition from these revenue streams. - Sales of real estate assets will be accounted for under Subtopic 610-20, which provides for revenue recognition based on transfer of control. For property sales where Regency has no continuing involvement, there should be no change to the Company's timing of recognition. For property sales in which Regency has continuing involvement, full gain recognition may be required, where gains may have been deferred under existing GAAP. Upon adoption of ASU 2017-05, the Company's $30.9 million of previously deferred gains from transactions with equity method investees will be recognized through opening retained earnings. The Company intends to follow the modified retrospective method of adoption, applying the standard to only 2018, and not restating prior periods presented in future financial statements.

Regency Centers Corporation and Regency Centers, L.P.

Index to Financial Statements



Reports of Independent Registered Public Accounting Firm	66

Regency Centers Corporation:
Consolidated Balance Sheets as of December 31, 2017 and 2016	70
Consolidated Statements of Operations for the years ended December 31, 2017, 2016, and 2015	71
Consolidated Statements of Comprehensive Income for the years ended December 31, 2017, 2016, and 2015	72
Consolidated Statements of Equity for the years ended December 31, 2017, 2016, and 2015	73
Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016, and 2015	75

Regency Centers, L.P.:
Consolidated Balance Sheets as of December 31, 2017 and 2016	77
Consolidated Statements of Operations for the years ended December 31, 2017, 2016, and 2015	78
Consolidated Statements of Comprehensive Income for the years ended December 31, 2017, 2016, and 2015	79
Consolidated Statements of Capital for the years ended December 31, 2017, 2016, and 2015	80
Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016, and 2015	82

Notes to Consolidated Financial Statements	84

Financial Statement Schedule
Schedule III - Consolidated Real Estate and Accumulated Depreciation - December 31, 2017	128

All other schedules are omitted because of the absence of conditions under which they are required, materiality or because information required therein is shown in the consolidated financial statements or notes thereto.

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Regency Centers Corporation:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Regency Centers Corporation and subsidiaries (the “Company”) as of December 31, 2017 and 2016, the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the years in the three‑year period ended December 31, 2017, and the related notes and the financial statement schedule III - Real Estate and Accumulated Depreciation (collectively, the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 27, 2018, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ KPMG LLP

We have served as the Company's auditor since 1993.

Jacksonville, Florida

February 27, 2018

Certified Public Accountants

Report of Independent Registered Public Accounting Firm

The Stockholders and Board of Directors

Regency Centers Corporation:

Opinion on Internal Control Over Financial Reporting

We have audited Regency Centers Corporation and subsidiaries' (the “Company”) internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2017 and 2016, the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2017, and the related notes and financial statement schedule III - Real Estate and Accumulated Depreciation (collectively, the “consolidated financial statements”), and our report dated February 27, 2018, expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

Jacksonville, Florida

February 27, 2018

Certified Public Accountants

Report of Independent Registered Public Accounting Firm

To the Partners

Regency Centers, L.P.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Regency Centers, L.P. and subsidiaries (the “Partnership”) as of December 31, 2017 and 2016, the related consolidated statements of operations, comprehensive income, capital, and cash flows for each of the years in the three‑year period ended December 31, 2017, and the related notes and the financial statement schedule III - Real Estate and Accumulated Depreciation (collectively, the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Partnership as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Partnership’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 27, 2018, expressed an unqualified opinion on the effectiveness of the Partnership’s internal control over financial reporting.

Basis for Opinion

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 are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

/s/ KPMG LLP

We have served as the Partnership's auditor since 1998.

Jacksonville, Florida

February 27, 2018

Certified Public Accountants

Report of Independent Registered Public Accounting Firm

The the Partners

Regency Centers, L.P.:

Opinion on Internal Control Over Financial Reporting

We have audited Regency Centers, L.P. and subsidiaries' (the “Partnership“) internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Partnership as of December 31, 2017 and 2016, the related consolidated statements of operations, comprehensive income, capital, and cash flows for each of the years in the three-year period ended December 31, 2017, and the related notes and financial statement schedule III - Real Estate and Accumulated Depreciation (collectively, the “consolidated financial statements”), and our report dated February 27, 2018, expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Partnership’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Partnership’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Definition and Limitations of Internal Control Over Financial Reporting

/s/ KPMG LLP

Jacksonville, Florida

February 27, 2018

Certified Public Accountants



REGENCY CENTERS CORPORATION Consolidated Balance Sheets
December 31, 2017 and 2016
(in thousands, except share data)
	2017			2016
Assets
Real estate investments at cost (notes 1, 2 and 3):
Land	$	4,667,744		1,660,424
Buildings and improvements	5,910,686			3,092,197
Properties in development	314,391			180,878
	10,892,821			4,933,499
Less: accumulated depreciation	1,339,771			1,124,391
	9,553,050			3,809,108
Investments in real estate partnerships (note 4)	386,304			296,699
Net real estate investments	9,939,354			4,105,807
Cash and cash equivalents	45,370			13,256
Restricted cash	4,011			4,623
Tenant and other receivables, net (note 1)	170,985			111,722
Deferred leasing costs, less accumulated amortization of $93,291 and $83,529 at December 31, 2017 and 2016, respectively	80,044			69,000
Acquired lease intangible assets, less accumulated amortization of $148,280 and $56,695 at December 31, 2017 and 2016, respectively (note 5)	478,826			118,831
Other assets (note 1)	427,127			65,667
Total assets	$	11,145,717		4,488,906
Liabilities and Equity
Liabilities:
Notes payable (note 7)	$	2,971,715		1,363,925
Unsecured credit facilities (note 7)	623,262			278,495
Accounts payable and other liabilities	234,272			138,936
Acquired lease intangible liabilities, less accumulated amortization of $56,550 and $23,538 at December 31, 2017 and 2016, respectively (note 5)	537,401			54,180
Tenants’ security and escrow deposits and prepaid rent	46,013			28,868
Total liabilities	4,412,663			1,864,404
Commitments and contingencies (notes 14 and 15)	—			—
Equity:
Stockholders’ equity (note 10):
Preferred stock, $0.01 par value per share, 30,000,000 shares authorized; 13,000,000 Series 6 and 7 shares issued and outstanding at December 31, 2016, with liquidation preferences of $25 per share	—			325,000
Common stock $0.01 par value per share, 220,000,000 and 150,000,000 shares authorized; 171,364,908 and 104,497,286 shares issued at December 31, 2017 and 2016, respectively	1,714			1,045
Treasury stock at cost, 366,628 and 347,903 shares held at December 31, 2017 and 2016, respectively	(18,307		)	(17,062	)
Additional paid-in capital	7,873,104			3,294,923
Accumulated other comprehensive loss	(6,289		)	(18,346	)
Distributions in excess of net income	(1,158,170		)	(994,259	)
Total stockholders’ equity	6,692,052			2,591,301
Noncontrolling interests (note 10):
Exchangeable operating partnership units, aggregate redemption value of $24,206 and $10,630 at December 31, 2017 and 2016, respectively	10,907			(1,967	)
Limited partners’ interests in consolidated partnerships	30,095			35,168
Total noncontrolling interests	41,002			33,201
Total equity	6,733,054			2,624,502
Total liabilities and equity	$	11,145,717		4,488,906

See accompanying notes to consolidated financial statements.



REGENCY CENTERS CORPORATION Consolidated Statements of Operations
For the years ended December 31, 2017, 2016, and 2015
(in thousands, except per share data)
	2017			2016		2015
Revenues:
Minimum rent	$	728,078		444,305		415,155
Percentage rent	6,635			4,128		3,750
Recoveries from tenants and other income	223,455			140,611		125,295
Management, transaction, and other fees	26,158			25,327		25,563
Total revenues	984,326			614,371		569,763
Operating expenses:
Depreciation and amortization	334,201			162,327		146,829
Operating and maintenance	143,990			95,022		82,978
General and administrative	67,624			65,327		65,600
Real estate taxes	109,723			66,395		61,855
Other operating expenses	89,225			14,081		7,836
Total operating expenses	744,763			403,152		365,098
Other expense (income):
Interest expense, net of interest income of $1,811, $1,180, and $1,590 in 2017, 2016, and 2015, respectively	132,629			90,712		102,622
Provision for impairment	—			4,200		—
Early extinguishment of debt	12,449			14,240		8,239
Net investment income, including unrealized (gains) losses of ($1,136), ($773), and $1,734 in 2017, 2016, and 2015, respectively (note 12)	(3,985		)	(1,672	)	(625	)
Loss on derivative instruments	—			40,586		—
Total other expense (income)	141,093			148,066		110,236
Income from operations before equity in income of investments in real estate partnerships and income taxes	98,470			63,153		94,429
Equity in income of investments in real estate partnerships (note 4)	43,341			56,518		22,508
Deferred income tax (benefit) of taxable REIT subsidiary	(9,737		)	—		—
Income from operations	151,548			119,671		116,937
Gain on sale of real estate, net of tax	27,432			47,321		35,606
Net income	178,980			166,992		152,543
Noncontrolling interests:
Exchangeable operating partnership units	(388		)	(257	)	(240	)
Limited partners’ interests in consolidated partnerships	(2,515		)	(1,813	)	(2,247	)
Income attributable to noncontrolling interests	(2,903		)	(2,070	)	(2,487	)
Net income attributable to the Company	176,077			164,922		150,056
Preferred stock dividends and issuance costs	(16,128		)	(21,062	)	(21,062	)
Net income attributable to common stockholders	$	159,949		143,860		128,994

Income per common share - basic (note 13)	$	1.00		1.43		1.37
Income per common share - diluted (note 13)	$	1.00		1.42		1.36

See accompanying notes to consolidated financial statements.



REGENCY CENTERS CORPORATION Consolidated Statements of Comprehensive Income
For the years ended December 31, 2017, 2016, and 2015
(in thousands)
	2017			2016		2015
Net income	$	178,980		166,992		152,543
Other comprehensive (loss) income:
Effective portion of change in fair value of derivative instruments:
Effective portion of change in fair value of derivative instruments	1,151			(10,332	)	(10,089	)
Reclassification adjustment of derivative instruments included in net income	11,103			51,139		9,152
Available for sale securities
Unrealized (loss) gain on available-for-sale securities	(8		)	24		(43	)
Other comprehensive income (loss)	12,246			40,831		(980	)
Comprehensive income	191,226			207,823		151,563
Less: comprehensive income (loss) attributable to noncontrolling interests:
Net income attributable to noncontrolling interests	2,903			2,070		2,487
Other comprehensive income (loss) attributable to noncontrolling interests	189			484		(35	)
Comprehensive income attributable to noncontrolling interests	3,092			2,554		2,452
Comprehensive income attributable to the Company	$	188,134		205,269		149,111

See accompanying notes to consolidated financial statements.



REGENCY CENTERS CORPORATION Consolidated Statements of Equity
For the years ended December 31, 2017, 2016, and 2015
(in thousands, except per share data)
														Noncontrolling Interests
		Preferred Stock	Common Stock	Treasury Stock		Additional Paid In Capital		Accumulated Other Comprehensive Loss		Distributions in Excess of Net Income		Total Stockholders’ Equity			Exchangeable Operating Partnership Units		Limited Partners’ Interest in Consolidated Partnerships		Total Noncontrolling Interests		Total Equity
Balance at December 31, 2014	$	325,000	941	(19,382	)	2,540,153		(57,748	)	(882,372	)	1,906,592			(1,914	)	31,804		29,890		1,936,482
Net income		—	—	—		—		—		150,056		150,056			240		2,247		2,487		152,543
Other comprehensive income (loss)		—	—	—		—		(945	)	—		(945	)		(2	)	(33	)	(35	)	(980	)
Deferred compensation plan, net		—	—	(276	)	276		—		—		—			—		—		—		—
Restricted stock issued, net of amortization		—	—	—		13,869		—		—		13,869			—		—		—		13,869
Common stock redeemed for taxes withheld for stock based compensation, net		—	—	—		(9,706	)	—		—		(9,706	)		—		—		—		(9,706	)
Common stock issued for dividend reinvestment plan		—	—	—		1,250		—		—		1,250			—		—		—		1,250
Common stock issued for stock offerings, net of issuance costs		—	31	—		198,463		—		—		198,494			—		—		—		198,494
Contributions from partners		—	—	—		—		—		—		—			—		717		717		717
Distributions to partners		—	—	—		(1,797	)	—		—		(1,797	)		—		(4,249	)	(4,249	)	(6,046	)
Cash dividends declared:
Preferred stock/unit		—	—	—		—		—		(21,062	)	(21,062	)		—		—		—		(21,062	)
Common stock/unit ($1.94 per share)		—	—	—		—		—		(182,642	)	(182,642	)		(299	)	—		(299	)	(182,941	)
Balance at December 31, 2015	$	325,000	972	(19,658	)	2,742,508		(58,693	)	(936,020	)	2,054,109			(1,975	)	30,486		28,511		2,082,620
Net income		—	—	—		—		—		164,922		164,922			257		1,813		2,070		166,992
Other comprehensive income (loss)		—	—	—		—		40,347		—		40,347			58		426		484		40,831
Deferred compensation plan, net		—	—	2,596		(2,596	)	—		—		—			—		—		—		—
Restricted stock issued, net of amortization		—	2	—		13,419		—		—		13,421			—		—		—		13,421
Common stock redeemed for taxes withheld for stock based compensation, net		—	—	—		(7,789	)	—		—		(7,789	)		—		—		—		(7,789	)
Common stock issued for dividend reinvestment plan		—	—	—		1,070		—		—		1,070			—		—		—		1,070
Common stock issued for stock offerings, net of issuance costs		—	71	—		548,849		—		—		548,920			—		—		—		548,920
Reallocation of limited partners' interest		—	—	—		(538	)	—		—		(538	)		—		538		538		—
Contributions from partners		—	—	—		—		—		—		—			—		8,760		8,760		8,760
Distributions to partners		—	—	—		—		—		—		—			—		(6,855	)	(6,855	)	(6,855	)
Cash dividends declared:
Preferred stock/unit		—	—	—		—		—		(21,062	)	(21,062	)		—		—		—		(21,062	)
Common stock/unit ($2.00 per share)		—	—	—		—		—		(202,099	)	(202,099	)		(307	)	—		(307	)	(202,406	)
Balance at December 31, 2016	$	325,000	1,045	(17,062	)	3,294,923		(18,346	)	(994,259	)	2,591,301			(1,967	)	35,168		33,201		2,624,502
Net income		—	—	—		—		—		176,077		176,077			388		2,515		2,903		178,980
Other comprehensive income (loss)		—	—	—		—		12,057		—		12,057			21		168		189		12,246



REGENCY CENTERS CORPORATION Consolidated Statements of Equity
For the years ended December 31, 2017, 2016, and 2015
(in thousands, except per share data)
																Noncontrolling Interests
		Preferred Stock		Common Stock		Treasury Stock		Additional Paid In Capital		Accumulated Other Comprehensive Loss		Distributions in Excess of Net Income		Total Stockholders’ Equity			Exchangeable Operating Partnership Units		Limited Partners’ Interest in Consolidated Partnerships		Total Noncontrolling Interests		Total Equity
Deferred compensation plan, net		—		—		(1,245	)	1,236		—		—		(9	)		—		—		—		(9	)
Restricted stock issued, net of amortization		—		2		—		15,293		—		—		15,295			—		—		—		15,295
Common stock redeemed for taxes withheld for stock based compensation, net		—		(1	)	—		(18,345	)	—		—		(18,346	)		—		—		—		(18,346	)
Common stock issued for dividend reinvestment plan		—		—		—		1,210		—		—		1,210			—		—		—		1,210
Common stock issued for stock offerings, net of issuance costs		—		667		—		4,559,810		—		—		4,560,477			—		—		—		4,560,477
Restricted stock issued upon Equity One merger		—		1		—		7,950		—		—		7,951			—		—		—		7,951
Redemption of preferred stock		(325,000	)	—		—		11,099		—		(11,099	)	(325,000	)		—		—		—		(325,000	)
Reallocation of limited partners' interest		—		—		—		(72	)	—		—		(72	)		—		72		72		—
Contributions from partners		—		—		—		—		—		—		—			13,100		378		13,478		13,478
Distributions to partners		—		—		—		—		—		—		—			—		(8,206	)	(8,206	)	(8,206	)
Cash dividends declared:
Preferred stock/unit		—		—		—		—		—		(5,029	)	(5,029	)		—		—		—		(5,029	)
Common stock/unit ($2.10 per share)		—		—		—		—		—		(323,860	)	(323,860	)		(635	)	—		(635	)	(324,495	)
Balance at December 31, 2017	$	—		1,714		(18,307	)	7,873,104		(6,289	)	(1,158,170	)	6,692,052			10,907		30,095		41,002		6,733,054

See accompanying notes to consolidated financial statements.



REGENCY CENTERS CORPORATION Consolidated Statements of Cash Flows
For the years ended December 31, 2017, 2016, and 2015
(in thousands)
	2017			2016		2015
Cash flows from operating activities:
Net income	$	178,980		166,992		152,543
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	334,201			162,327		146,829
Amortization of deferred loan cost and debt premium	9,509			9,762		9,677
Net accretion of above and below market lease intangibles, net	(23,144		)	(3,879	)	(1,598	)
Stock-based compensation, net of capitalization	20,549			10,652		11,081
Equity in income of investments in real estate partnerships	(43,341		)	(56,518	)	(22,508	)
Gain on sale of real estate, net of tax	(27,432		)	(47,321	)	(35,606	)
Provision for impairment	—			4,200		—
Early extinguishment of debt	12,449			14,240		8,239
Deferred income tax benefit of taxable REIT subsidiary	(9,737		)	—		—
Distribution of earnings from operations of investments in real estate partnerships	53,502			50,361		46,646
Settlement of derivative instruments	—			—		(7,267	)
Gain on derivative instruments	76			—		—
Deferred compensation expense	3,844			1,655		207
Realized and unrealized gain on investments (note 12)	(3,837		)	(1,673	)	(626	)
Changes in assets and liabilities:
Restricted cash	1,362			59		1,926
Accounts receivable, net	(7,077		)	(1,581	)	(2,059	)
Straight-line rent receivable, net	(19,004		)	(7,219	)	(8,231	)
Deferred leasing costs	(14,448		)	(10,349	)	(12,949	)
Other assets (note 1)	9,536			673		(496	)
Accounts payable and other liabilities	(2,114		)	5,543		(3,810	)
Tenants’ security and escrow deposits and prepaid rent	(2,728		)	(564	)	3,545
Net cash provided by operating activities	471,146			297,360		285,543
Cash flows from investing activities:
Acquisition of operating real estate	(124,727		)	(333,220	)	(42,983	)
Costs paid in advance of real estate acquisitions	(4,917		)	(750	)	(2,250	)
Acquisition of Equity One, net of cash acquired of $72,534	(648,763		)	—		—
Real estate development and capital improvements	(347,780		)	(234,598	)	(205,103	)
Proceeds from sale of real estate investments	112,161			135,269		108,822
(Issuance) / Collection of notes receivable	(5,236		)	—		1,719
Investments in real estate partnerships	(23,529		)	(37,879	)	(20,054	)
Distributions received from investments in real estate partnerships	36,603			58,810		23,801
Dividends on investment securities	365			330		243
Acquisition of securities	(23,535		)	(55,223	)	(31,941	)
Proceeds from sale of securities	21,378			57,590		28,400
Net cash used in investing activities	(1,007,980		)	(409,671	)	(139,346	)



REGENCY CENTERS CORPORATION Consolidated Statements of Cash Flows
For the years ended December 31, 2017, 2016, and 2015
(in thousands)
	2017			2016		2015
Cash flows from financing activities:
Net proceeds from common stock issuance	88,458			548,920		198,494
Repurchase of common shares in conjunction with tax withholdings on equity award plans	(18,649		)	(7,984	)	(9,906	)
Proceeds from sale of treasury stock	100			957		—
Acquisition of treasury stock	—			(29	)	—
Redemption of preferred stock and partnership units	(325,000		)	—		—
Distributions to limited partners in consolidated partnerships, net	(8,139		)	(4,213	)	(5,341	)
Distributions to exchangeable operating partnership unit holders	(635		)	(307	)	(299	)
Dividends paid to common stockholders	(322,650		)	(201,029	)	(181,392	)
Dividends paid to preferred stockholders	(5,029		)	(21,062	)	(21,062	)
Repayment of fixed rate unsecured notes	—			(300,000	)	(450,000	)
Proceeds from issuance of fixed rate unsecured notes, net	953,115			—		248,160
Proceeds from unsecured credit facilities	1,100,000			460,000		445,000
Repayment of unsecured credit facilities	(755,000		)	(345,000	)	(355,000	)
Proceeds from notes payable	131,069			53,446		4,316
Repayment of notes payable	(232,839		)	(72,803	)	(76,168	)
Scheduled principal payments	(10,162		)	(5,860	)	(5,878	)
Payment of loan costs	(13,271		)	(2,233	)	(5,998	)
Early redemption costs	(12,420		)	(14,092	)	(8,043	)
Net cash provided by (used in) financing activities	568,948			88,711		(223,117	)
Net increase (decrease) in cash and cash equivalents	32,114			(23,600	)	(76,920	)
Cash and cash equivalents at beginning of the year	13,256			36,856		113,776
Cash and cash equivalents at end of the year	$	45,370		13,256		36,856
Supplemental disclosure of cash flow information:
Cash paid for interest (net of capitalized interest of $7,946, $3,482, and $6,740 in 2017, 2016, and 2015, respectively)	$	109,956		82,950		101,527
Cash (received) paid for income taxes	$	(269	)	—		1,015
Supplemental disclosure of non-cash transactions:
Exchangeable operating partnership units issued for acquisition of real estate	$	13,100		—		—
Mortgage loans assumed for the acquisition of operating real estate	$	27,000		—		42,799
Change in fair value of securities available-for-sale	$	(8	)	24		(43	)
Common stock issued for dividend reinvestment plan	$	1,210		1,070		1,250
Stock-based compensation capitalized	$	3,210		2,963		2,988
Contributions from limited partners in consolidated partnerships, net	$	186		8,755		13
Common stock issued for dividend reinvestment in trust	$	557		728		833
Contribution of stock awards into trust	$	1,372		1,538		1,651
Distribution of stock held in trust	$	677		4,114		1,898
Equity One Merger:
Notes payable assumed in Equity One merger, at fair value	$	757,399		—		—
Common stock exchanged for Equity One shares	$	4,471,808		—		—
Deconsolidation of previously consolidated partnership:
Real estate, net	$	—		14,144		—
Investments in real estate partnerships	$	—		(3,355	)	—
Notes payable	$	—		(9,415	)	—
Other assets and liabilities	$	—		571		—
Limited partners' interest in consolidated partnerships	$	—		(2,099	)	—

See accompanying notes to consolidated financial statements.



REGENCY CENTERS, L.P. Consolidated Balance Sheets
December 31, 2017 and 2016
(in thousands, except unit data)
	2017			2016
Assets
Real estate investments at cost (notes 1, 2 and 3):
Land	$	4,667,744		1,660,424
Buildings and improvements	5,910,686			3,092,197
Properties in development	314,391			180,878
	10,892,821			4,933,499
Less: accumulated depreciation	1,339,771			1,124,391
	9,553,050			3,809,108
Investments in real estate partnerships (note 4)	386,304			296,699
Net real estate investments	9,939,354			4,105,807
Cash and cash equivalents	45,370			13,256
Restricted cash	4,011			4,623
Tenant and other receivables, net (note 1)	170,985			111,722
Deferred leasing costs, less accumulated amortization of $93,291 and $83,529 at December 31, 2017 and 2016, respectively	80,044			69,000
Acquired lease intangible assets, less accumulated amortization of $148,280 and $56,695 at December 31, 2017 and 2016, respectively (note 5)	478,826			118,831
Other assets (note 1)	427,127			65,667
Total assets	$	11,145,717		4,488,906
Liabilities and Capital
Liabilities:
Notes payable (note 7)	$	2,971,715		1,363,925
Unsecured credit facilities (note 7)	623,262			278,495
Accounts payable and other liabilities	234,272			138,936
Acquired lease intangible liabilities, less accumulated amortization of $56,550 and $23,538 at December 31, 2017 and 2016, respectively (note 5)	537,401			54,180
Tenants’ security and escrow deposits and prepaid rent	46,013			28,868
Total liabilities	4,412,663			1,864,404
Commitments and contingencies (notes 14 and 15)	—			—
Capital:
Partners’ capital (note 10):
Preferred units of general partner, $0.01 par value per unit, 13,000,000 units issued and outstanding at December 31, 2016, liquidation preference of $25 per unit	—			325,000
General partner; 171,364,908 and 104,497,286 units outstanding at December 31, 2017 and 2016, respectively	6,698,341			2,284,647
Limited partners; 349,902 and 154,170 units outstanding at December 31, 2017 and 2016	10,907			(1,967	)
Accumulated other comprehensive loss	(6,289		)	(18,346	)
Total partners’ capital	6,702,959			2,589,334
Noncontrolling interests (note 10):
Limited partners’ interests in consolidated partnerships	30,095			35,168
Total noncontrolling interests	30,095			35,168
Total capital	6,733,054			2,624,502
Total liabilities and capital	$	11,145,717		4,488,906

See accompanying notes to consolidated financial statements.



REGENCY CENTERS, L.P. Consolidated Statements of Operations
For the years ended December 31, 2017, 2016, and 2015
(in thousands, except per unit data)
	2017			2016		2015
Revenues:
Minimum rent	$	728,078		444,305		415,155
Percentage rent	6,635			4,128		3,750
Recoveries from tenants and other income	223,455			140,611		125,295
Management, transaction, and other fees	26,158			25,327		25,563
Total revenues	984,326			614,371		569,763
Operating expenses:
Depreciation and amortization	334,201			162,327		146,829
Operating and maintenance	143,990			95,022		82,978
General and administrative	67,624			65,327		65,600
Real estate taxes	109,723			66,395		61,855
Other operating expenses	89,225			14,081		7,836
Total operating expenses	744,763			403,152		365,098
Other expense (income):
Interest expense, net of interest income of $1,811, $1,180, and $1,590 in 2017, 2016, and 2015, respectively	132,629			90,712		102,622
Provision for impairment	—			4,200		—
Early extinguishment of debt	12,449			14,240		8,239
Net investment income, including unrealized (gains) losses of ($1,136), ($773), and $1,734 in 2017, 2016, and 2015, respectively (note 12)	(3,985		)	(1,672	)	(625	)
Loss on derivative instruments	—			40,586		—
Total other expense (income)	141,093			148,066		110,236
Income from operations before equity in income of investments in real estate partnerships and income taxes	98,470			63,153		94,429
Equity in income of investments in real estate partnerships (note 4)	43,341			56,518		22,508
Deferred income tax (benefit) of taxable REIT subsidiary	(9,737		)	—		—
Income from operations	151,548			119,671		116,937
Gain on sale of real estate, net of tax	27,432			47,321		35,606
Net income	178,980			166,992		152,543
Limited partners’ interests in consolidated partnerships	(2,515		)	(1,813	)	(2,247	)
Net income attributable to the Partnership	176,465			165,179		150,296
Preferred unit distributions and issuance costs	(16,128		)	(21,062	)	(21,062	)
Net income attributable to common unit holders	$	160,337		144,117		129,234

Income per common unit - basic (note 13):	$	1.00		1.43		1.37
Income per common unit - diluted (note 13):	$	1.00		1.42		1.36

See accompanying notes to consolidated financial statements.



REGENCY CENTERS, L.P. Consolidated Statements of Comprehensive Income
For the years ended December 31, 2017, 2016, and 2015
(in thousands)
	2017			2016		2015
Net income	$	178,980		166,992		152,543
Other comprehensive (loss) income:
Effective portion of change in fair value of derivative instruments:
Effective portion of change in fair value of derivative instruments	1,151			(10,332	)	(10,089	)
Reclassification adjustment of derivative instruments included in net income	11,103			51,139		9,152
Available for sale securities
Unrealized (loss) gain on available-for-sale securities	(8		)	24		(43	)
Other comprehensive income (loss)	12,246			40,831		(980	)
Comprehensive income	191,226			207,823		151,563
Less: comprehensive income (loss) attributable to noncontrolling interests:
Net income attributable to noncontrolling interests	2,515			1,813		2,247
Other comprehensive income (loss) attributable to noncontrolling interests	168			426		(33	)
Comprehensive income attributable to noncontrolling interests	2,683			2,239		2,214
Comprehensive income attributable to the Partnership	$	188,543		205,584		149,349

See accompanying notes to consolidated financial statements.



REGENCY CENTERS, L.P. Consolidated Statements of Capital
For the years ended December 31, 2017, 2016, and 2015
(in thousands)
		General Partner Preferred and Common Units		Limited Partners		Accumulated Other Comprehensive Loss		Total Partners’ Capital		Noncontrolling Interests in Limited Partners’ Interest in Consolidated Partnerships		Total Capital
Balance at December 31, 2014	$	1,964,340		(1,914	)	(57,748	)	1,904,678		31,804		1,936,482
Net income		150,056		240		—		150,296		2,247		152,543
Other comprehensive income (loss)		—		(2	)	(945	)	(947	)	(33	)	(980	)
Contributions from partners		—		—		—		—		717		717
Distributions to partners		(184,439	)	(299	)	—		(184,738	)	(4,249	)	(188,987	)
Preferred unit distributions		(21,062	)	—		—		(21,062	)	—		(21,062	)
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization		13,869		—		—		13,869		—		13,869
Common units issued as a result of common stock issued by Parent Company, net of repurchases		190,038		—		—		190,038		—		190,038
Balance at December 31, 2015	$	2,112,802		(1,975	)	(58,693	)	2,052,134		30,486		2,082,620
Net income		164,922		257		—		165,179		1,813		166,992
Other comprehensive income (loss)		—		58		40,347		40,405		426		40,831
Contributions from partners		—		—		—		—		8,760		8,760
Distributions to partners		(202,099	)	(307	)	—		(202,406	)	(6,855	)	(209,261	)
Reallocation of limited partners' interest		(538	)	—		—		(538	)	538		—
Preferred unit distributions		(21,062	)	—		—		(21,062	)	—		(21,062	)
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization		13,421		—		—		13,421		—		13,421
Common units issued as a result of common stock issued by Parent Company, net of repurchases		542,201		—		—		542,201		—		542,201
Balance at December 31, 2016	$	2,609,647		(1,967	)	(18,346	)	2,589,334		35,168		2,624,502



REGENCY CENTERS, L.P. Consolidated Statements of Capital
For the years ended December 31, 2017, 2016, and 2015
(in thousands)
		General Partner Preferred and Common Units		Limited Partners		Accumulated Other Comprehensive Loss		Total Partners’ Capital		Noncontrolling Interests in Limited Partners’ Interest in Consolidated Partnerships		Total Capital
Net income		176,077		388		—		176,465		2,515		178,980
Other comprehensive income (loss)		—		21		12,057		12,078		168		12,246
Deferred compensation plan, net		(9	)	—		—		(9	)	—		(9	)
Contributions from partners		—		13,100		—		13,100		378		13,478
Distributions to partners		(323,860	)	(635	)	—		(324,495	)	(8,206	)	(332,701	)
Reallocation of limited partners' interest		(72	)	—		—		(72	)	72		—
Preferred unit distributions		(5,029	)	—		—		(5,029	)	—		(5,029	)
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization		15,295		—		—		15,295		—		15,295
Preferred stock redemptions		(325,000	)	—		—		(325,000	)	—		(325,000	)
Common units issued as a result of common stock issued by Parent Company, net of repurchases		4,543,341		—		—		4,543,341		—		4,543,341
Restricted units issued as a result of restricted stock issued by Parent Company upon Equity One merger		7,951		—		—		7,951		—		7,951
Balance at December 31, 2017	$	6,698,341		10,907		(6,289	)	6,702,959		30,095		6,733,054

See accompanying notes to consolidated financial statements.



REGENCY CENTERS, L.P. Consolidated Statements of Cash Flows
For the years ended December 31, 2017, 2016, and 2015
(in thousands)
	2017			2016		2015
Cash flows from operating activities:
Net income	$	178,980		166,992		152,543
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	334,201			162,327		146,829
Amortization of deferred loan cost and debt premium	9,509			9,762		9,677
Net accretion of above and below market lease intangibles, net	(23,144		)	(3,879	)	(1,598	)
Stock-based compensation, net of capitalization	20,549			10,652		11,081
Equity in income of investments in real estate partnerships	(43,341		)	(56,518	)	(22,508	)
Gain on sale of real estate, net of tax	(27,432		)	(47,321	)	(35,606	)
Provision for impairment	—			4,200		—
Early extinguishment of debt	12,449			14,240		8,239
Deferred income tax benefit of taxable REIT subsidiary	(9,737		)	—		—
Distribution of earnings from operations of investments in real estate partnerships	53,502			50,361		46,646
Settlement of derivative instruments	—			—		(7,267	)
Gain on derivative instruments	76			—		—
Deferred compensation expense	3,844			1,655		207
Realized and unrealized gain on investments (note 12)	(3,837		)	(1,673	)	(626	)
Changes in assets and liabilities:
Restricted cash	1,362			59		1,926
Accounts receivable, net	(7,077		)	(1,581	)	(2,059	)
Straight-line rent receivable, net	(19,004		)	(7,219	)	(8,231	)
Deferred leasing costs	(14,448		)	(10,349	)	(12,949	)
Other assets (note 1)	9,536			673		(496	)
Accounts payable and other liabilities	(2,114		)	5,543		(3,810	)
Tenants’ security and escrow deposits and prepaid rent	(2,728		)	(564	)	3,545
Net cash provided by operating activities	471,146			297,360		285,543
Cash flows from investing activities:
Acquisition of operating real estate	(124,727		)	(333,220	)	(42,983	)
Costs paid in advance of real estate acquisitions	(4,917		)	(750	)	(2,250	)
Acquisition of Equity One, net of cash acquired of $72,534	(648,763		)	—		—
Real estate development and capital improvements	(347,780		)	(234,598	)	(205,103	)
Proceeds from sale of real estate investments	112,161			135,269		108,822
(Issuance) / Collection of notes receivable	(5,236		)	—		1,719
Investments in real estate partnerships	(23,529		)	(37,879	)	(20,054	)
Distributions received from investments in real estate partnerships	36,603			58,810		23,801
Dividends on investment securities	365			330		243
Acquisition of securities	(23,535		)	(55,223	)	(31,941	)
Proceeds from sale of securities	21,378			57,590		28,400
Net cash used in investing activities	(1,007,980		)	(409,671	)	(139,346	)



REGENCY CENTERS, L.P. Consolidated Statements of Cash Flows
For the years ended December 31, 2017, 2016, and 2015
(in thousands)
	2017			2016		2015
Cash flows from financing activities:
Net proceeds from common units issued as a result of common stock issued by Parent Company	88,458			548,920		198,494
Repurchase of common units in conjunction with tax withholdings on equity award plans	(18,649		)	(7,984	)	(9,906	)
Proceeds from treasury units issued as a result of treasury stock sold by Parent Company	100			957		—
Acquisition of treasury units as a result of treasury stock acquired by Parent Company	—			(29	)	—
Redemption of preferred partnership units	(325,000		)	—		—
Distributions to limited partners in consolidated partnerships, net	(8,139		)	(4,213	)	(5,341	)
Distributions to partners	(323,285		)	(201,336	)	(181,691	)
Distributions to preferred unit holders	(5,029		)	(21,062	)	(21,062	)
Repayment of fixed rate unsecured notes	—			(300,000	)	(450,000	)
Proceeds from issuance of fixed rate unsecured notes, net	953,115			—		248,160
Proceeds from unsecured credit facilities	1,100,000			460,000		445,000
Repayment of unsecured credit facilities	(755,000		)	(345,000	)	(355,000	)
Proceeds from notes payable	131,069			53,446		4,316
Repayment of notes payable	(232,839		)	(72,803	)	(76,168	)
Scheduled principal payments	(10,162		)	(5,860	)	(5,878	)
Payment of loan costs	(13,271		)	(2,233	)	(5,998	)
Early redemption costs	(12,420		)	(14,092	)	(8,043	)
Net cash provided by (used in) financing activities	568,948			88,711		(223,117	)
Net increase (decrease) in cash and cash equivalents	32,114			(23,600	)	(76,920	)
Cash and cash equivalents at beginning of the year	13,256			36,856		113,776
Cash and cash equivalents at end of the year	$	45,370		13,256		36,856
Supplemental disclosure of cash flow information:
Cash paid for interest (net of capitalized interest of $7,946, $3,482, and $6,740 in 2017, 2016, and 2015, respectively)	$	109,956		82,950		101,527
Cash paid for income taxes	$	(269	)	—		1,015
Supplemental disclosure of non-cash transactions:
Common stock issued by Parent Company for partnership units exchanged	$	13,100		—		—
Mortgage loans assumed for the acquisition of operating real estate	$	27,000		—		42,799
Change in fair value of securities available-for-sale	$	(8	)	24		(43	)
Common stock issued by Parent Company for dividend reinvestment plan	$	1,210		1,070		1,250
Stock-based compensation capitalized	$	3,210		2,963		2,988
Contributions from limited partners in consolidated partnerships, net	$	186		8,755		13
Common stock issued for dividend reinvestment in trust	$	557		728		833
Contribution of stock awards into trust	$	1,372		1,538		1,651
Distribution of stock held in trust	$	677		4,114		1,898
Equity One Merger:
Notes payable assumed in Equity One merger, at fair value	$	757,399		—		—
Common stock exchanged for Equity One shares	$	4,471,808		—		—
Deconsolidation of previously consolidated partnership:
Real estate, net	$	—		14,144		—
Investments in real estate partnerships	$	—		(3,355	)	—
Notes payable	$	—		(9,415	)	—
Other assets and liabilities	$	—		571		—
Limited partners' interest in consolidated partnerships	$	—		(2,099	)	—

See accompanying notes to consolidated financial statements.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017


1.	Summary of Significant Accounting Policies

(a) Organization and Principles of Consolidation

General

Regency Centers Corporation (the “Parent Company”) began its operations as a Real Estate Investment Trust (“REIT”) in 1993 and is the general partner of Regency Centers, L.P. (the “Operating Partnership”). The Parent Company engages in the ownership, management, leasing, acquisition, and development of retail shopping centers through the Operating Partnership, and has no other assets other than through its investment in the Operating Partnership, and its only liabilities are the unsecured notes assumed from the merger with Equity One, which are co-issued and guaranteed by the Operating Partnership. The Parent Company guarantees all of the unsecured debt of the Operating Partnership. As of December 31, 2017, the Parent Company, the Operating Partnership, and their controlled subsidiaries on a consolidated basis (the "Company” or “Regency”) owned 311 retail shopping centers and held partial interests in an additional 115 retail shopping centers through unconsolidated investments in real estate partnerships (also referred to as "joint ventures" or "co-investment partnerships").

On March 1, 2017, Regency completed its merger with Equity One, whereby Equity One merged with and into Regency, with Regency continuing as the surviving public company. Under the terms of the Merger Agreement, each Equity One stockholder received 0.45 of a newly issued share of Regency common stock for each share of Equity One common stock owned immediately prior to the effective time of the merger, resulting in the issuance of approximately 65.5 million shares of Regency common stock to effect the merger.

Estimates, Risks, and Uncertainties

The preparation of the consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires the Company'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. The most significant estimates in the Company's financial statements relate to the net carrying values of its real estate investments, accounts receivable, straight line rent receivable, goodwill, and acquired lease intangible assets and acquired lease intangible liabilities. It is possible that the estimates and assumptions that have been utilized in the preparation of the consolidated financial statements could change significantly if economic conditions were to weaken.

Consolidation

The accompanying consolidated financial statements include the accounts of the Parent Company, the Operating Partnership, its wholly-owned subsidiaries, and consolidated partnerships in which the Company has a controlling interest. Investments in real estate partnerships not controlled by the Company are accounted for under the equity method. All significant inter-company balances and transactions are eliminated in the consolidated financial statements.

The Company consolidates properties that are wholly owned or properties where it owns less than 100%, but which it controls. Control is determined using an evaluation based on accounting standards related to the consolidation of voting interest entities and variable interest entities ("VIEs"). For joint ventures that are determined to be a VIE, the Company consolidates the entity where it is deemed to be the primary beneficiary. Determination of the primary beneficiary is based on whether an entity has (1) the power to direct the activities of the VIE that most significantly impact the entity's economic performance, and (2) the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE. The Company's determination of the primary beneficiary considers all relationships between it and the VIE, including management agreements and other contractual arrangements.

Ownership of the Parent Company

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

The Parent Company has a single class of common stock outstanding. At December 31, 2016, the Company also had two series of preferred stock outstanding (“Series 6 and 7 Preferred Stock”). The dividends on the Series 6 and 7 Preferred Stock were cumulative and payable in arrears quarterly. During 2017, the Company redeemed in full the Series 6 and 7 Preferred Stock.

Ownership of the Operating Partnership

The Operating Partnership's capital includes general and limited common Partnership Units. As of December 31, 2017, the Parent Company owned approximately 99.8%, or 171,364,908, of the 171,714,810 outstanding common Partnership Units of the Operating Partnership, with the remaining limited Partnership Units held by third parties ("Exchangeable operating partnership units" or "EOP units"). The Parent Company serves as general partner of the Operating Partnership. The EOP unit holders have limited rights over the Operating Partnership such that they do not have the power to direct the activities of the Operating Partnership. As such, the Operating Partnership is considered a VIE, and the Parent Company is the primary beneficiary, which consolidates it. The Parent Company's only investment is the Operating Partnership. Net income and distributions of the Operating Partnership are allocable to the general and limited common Partnership Units in accordance with their ownership percentages.

Real Estate Partnerships

Regency has a partial ownership interest in 126 properties through partnerships, of which 11 are consolidated. These partners include institutional investors, other real estate developers and/or operators, and individual parties who help Regency source transactions for development and investment (the "Partners" or "limited partners"). Regency has a variable interest in these entities through its equity interests. As managing member, Regency maintains the books and records and typically provides leasing and property management to the partnerships. The Partners’ level of involvement varies from protective decisions (debt, bankruptcy, selling primary asset(s) of business) to involvement in approving leases, operating budgets, and capital budgets.


•	Those partnerships for which the Partners only have protective rights are considered VIEs under ASC 810, Consolidation. Regency is the primary beneficiary of these VIEs as Regency has power over these partnerships and they operate primarily for the benefit of Regency. As such, Regency consolidates these entities and reports the limited partners’ interest as noncontrolling interests.

The majority of the operations of the VIEs are funded with cash flows generated by the properties, or in the case of developments, with capital contributions or third party construction loans. Regency does not provide financial support to the VIEs.


•	Those partnerships for which the Partners are involved in the day to day decisions and do not have any other aspects that would cause them to be considered VIEs, are evaluated for consolidation using the voting interest model.


◦	Those partnerships in which Regency has a controlling financial interest are consolidated and the limited partners’ ownership interest and share of net income is recorded as noncontrolling interest.


◦	Those partnerships in which Regency does not have a controlling financial interest are accounted for using the equity method and its ownership interest is recognized through single-line presentation as Investments in Real Estate Partnerships, in the Consolidated Balance Sheet, and Equity in Income of Investments in Real Estate Partnerships, in the Consolidated Statements of Operations. Cash distributions of earnings from operations from investments in real estate partnerships are presented in cash flows provided by operating activities in the accompanying Consolidated Statements of Cash Flows. Cash distributions from the sale of a property or loan proceeds received from the placement of debt on a property included in investments in real estate partnerships are presented in cash flows provided by investing activities in the accompanying Consolidated Statements of Cash Flows. Distributed proceeds from debt refinancing and real estate sales in excess of Regency's carrying value of its investment has resulted in a negative investment balance for one partnership, which is recorded within Accounts payable and other liabilities in the Consolidated Balance Sheets.

◦

Those partnerships in which Regency does not have a controlling financial interest are accounted for using the equity method and its ownership interest is recognized through single-line presentation as Investments in Real Estate Partnerships, in the Consolidated Balance Sheet, and Equity in Income of Investments in Real Estate Partnerships, in the Consolidated Statements of Operations. Cash distributions of earnings from operations from investments in real estate partnerships are presented in cash flows provided by operating activities in the accompanying Consolidated Statements of Cash Flows. Cash distributions from the sale of a property or loan proceeds received from the placement of debt on a property included in investments in real estate partnerships are presented in cash flows provided by investing activities in the accompanying Consolidated Statements of Cash Flows. Distributed proceeds from debt refinancing and real estate sales in excess of Regency's carrying value of its investment has resulted in a negative investment balance for one partnership, which is recorded within Accounts payable and other liabilities in the Consolidated Balance Sheets.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017


◦	The net difference in the carrying amount of investments in real estate partnerships and the underlying equity in net assets is either accreted to income and recorded in equity in income of investments in real estate partnerships in the accompanying Consolidated Statements of Operations over the expected useful lives of the properties and other intangible assets, which range in lives from 10 to 40 years, or recognized at liquidation if the joint venture agreement includes a unilateral right to elect to dissolve the real estate partnership and, upon such an election, receive a distribution in-kind.

◦

The net difference in the carrying amount of investments in real estate partnerships and the underlying equity in net assets is either accreted to income and recorded in equity in income of investments in real estate partnerships in the accompanying Consolidated Statements of Operations over the expected useful lives of the properties and other intangible assets, which range in lives from 10 to 40 years, or recognized at liquidation if the joint venture agreement includes a unilateral right to elect to dissolve the real estate partnership and, upon such an election, receive a distribution in-kind.

The assets of these partnerships are restricted to the use of the partnerships and cannot be used by general creditors of the Company. And similarly, the obligations of these partnerships can only be settled by the assets of these partnerships.

The major classes of assets, liabilities, and non-controlling equity interests held by the Company's VIEs, exclusive of the Operating Partnership as a whole, are as follows:



(in thousands)	December 31, 2017	December 31, 2016
Assets
Net real estate investments	$172,736	86,440
Cash and cash equivalents	4,993	3,444
Liabilities
Notes payable	16,551	8,175
Equity
Limited partners’ interests in consolidated partnerships	17,572	17,565

Noncontrolling Interests

Noncontrolling Interests of the Parent Company

The consolidated financial statements of the Parent Company include the following ownership interests held by owners other than the preferred and common stockholders of the Parent Company: (i) the limited Partnership Units in the Operating Partnership held by third parties and (ii) the minority-owned interest held by third parties in consolidated partnerships (“Limited partners' interests in consolidated partnerships”). The Parent Company has included all of these noncontrolling interests in permanent equity, separate from the Parent Company's stockholders' equity, in the accompanying Consolidated Balance Sheets and Consolidated Statements of Equity and Comprehensive Income (Loss). The portion of net income or comprehensive income attributable to these noncontrolling interests is included in net income and comprehensive income in the accompanying Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income (Loss) of the Parent Company.

In accordance with the FASB ASC Topic 480, securities that are redeemable for cash or other assets at the option of the holder, not solely within the control of the issuer, are classified as redeemable noncontrolling interests outside of permanent equity in the Consolidated Balance Sheets. The Parent Company has evaluated the conditions as specified under the FASB ASC Topic 480 as it relates to exchangeable operating partnership units outstanding and concluded that it has the right to satisfy the redemption requirements of the units by delivering unregistered common stock. Each outstanding exchangeable operating partnership unit is exchangeable for one share of common stock of the Parent Company, and the unit holder cannot require redemption in cash or other assets. Limited partners' interests in consolidated partnerships are not redeemable by the holders. The Parent Company also evaluated its fiduciary duties to itself, its shareholders, and, as the managing general partner of the Operating Partnership, to the Operating Partnership, and concluded its fiduciary duties are not in conflict with each other or the underlying agreements. Therefore, the Parent Company classifies such units and interests as permanent equity in the accompanying Consolidated Balance Sheets and Consolidated Statements of Equity.

Noncontrolling Interests of the Operating Partnership

The Operating Partnership has determined that limited partners' interests in consolidated partnerships are noncontrolling interests. Subject to certain conditions and pursuant to the terms of the agreement, the

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

Company generally has the right, but not the obligation, to purchase the other member’s interest or sell its own interest in these consolidated partnerships. The Operating Partnership has included these noncontrolling interests in permanent capital, separate from partners' capital, in the accompanying Consolidated Balance Sheets and Consolidated Statements of Capital. The portion of net income (loss) or comprehensive income (loss) attributable to these noncontrolling interests is included in net income and comprehensive income in the accompanying Consolidated Statements of Operations and Consolidated Statements Comprehensive Income (Loss) of the Operating Partnership.

(b) Revenues and Tenant Receivable

Leasing Revenue and Receivables

The Company 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.

When the Company is the owner of the leasehold improvements, recognition of straight line lease revenue commences when the lessee is given possession of the leased space upon completion of tenant improvements. However, when the leasehold improvements are owned by the tenant, the lease inception date is the date the tenant obtains possession of the leased space for purposes of constructing its leasehold improvements.

More than half of all of the lease agreements with anchor tenants contain provisions that provide for additional rents based on tenants' sales volume ("percentage rent"). Percentage rents are recognized when the tenants achieve the specified targets as defined in their lease agreements. Most all lease agreements contain provisions for reimbursement of the tenants' share of real estate taxes, insurance and common area maintenance (“CAM”) costs. Recovery of real estate taxes, insurance, and CAM costs are recognized as the respective costs are incurred in accordance with the lease agreements.

The following table represents the components of Tenant and other receivables, net in the accompanying Consolidated Balance Sheets:



	December 31,
(in thousands)	2017			2016
Billed tenant receivables	$	25,329		15,599
Accrued CAM, insurance and tax reimbursements	14,825			9,221
Other receivables	34,472			12,058
Straight-line rent receivables	93,284			73,384
Notes receivable	15,803			10,481
Less: allowance for doubtful accounts	(8,040		)	(5,460	)
Less: straight-line rent reserves	(4,688		)	(3,561	)
Total tenant and other receivables, net	$	170,985		111,722

The Company estimates the collectibility of the accounts receivable related to base rents, straight-line rents, expense reimbursements, and other revenue taking into consideration the Company's historical write-off experience, tenant credit-worthiness, current economic trends, and remaining lease terms. The Company recorded the following provisions for doubtful accounts:



	Year ended December 31,
(in thousands)	2017		2016	2015
Gross provision for doubtful accounts	$	3,992	1,705	2,364
Provision for straight line rent reserve	$	1,129	2,271	714

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

Real Estate Sales

Profits from sales of real estate are recognized under the full accrual method by the Company when: (i) a sale is consummated; (ii) the buyer's initial and continuing investment is adequate to demonstrate a commitment to pay for the property; (iii) the Company's receivable, if applicable, is not subject to future subordination; (iv) the Company has transferred to the buyer the usual risks and rewards of ownership; and (v) the Company does not have substantial continuing involvement with the property.

Management Services

The Company is engaged under agreements with its joint venture partners to provide asset management, property management, leasing, investing, and financing services for such joint ventures' shopping centers. The fees are market-based, generally calculated as a percentage of either revenues earned or the estimated values of the properties managed or the proceeds received, and are recognized as services are rendered, when fees due are determinable, and collectibility is reasonably assured. The Company also receives transaction fees, as contractually agreed upon with each joint venture, which include fees such as acquisition fees, disposition fees, “promotes”, or “earnouts”, and are recognized as services are rendered, when fees due are determinable, and collectibility is reasonably assured.

Capitalization and Depreciation

Maintenance and repairs that do not improve or extend the useful lives of the respective assets are recorded in operating and maintenance expense.

As part of the leasing process, the Company may provide the lessee with an allowance for the construction of leasehold improvements. These leasehold improvements are capitalized and recorded as tenant improvements, and depreciated over the shorter of the useful life of the improvements or the remaining lease term. If the allowance represents a payment for a purpose other than funding leasehold improvements, or in the event the Company is not considered the owner of the improvements, the allowance is considered to be a lease incentive and is recognized over the lease term as a reduction of minimum rent. Factors considered during this evaluation include, among other things, who holds legal title to the improvements as well as other controlling rights provided by the lease agreement and provisions for substantiation of such costs (e.g. unilateral control of the tenant space during the build-out process). Determination of the appropriate accounting for the payment of a tenant allowance is made on a lease-by-lease basis, considering the facts and circumstances of the individual tenant lease.

Depreciation is computed using the straight-line method over estimated useful lives of approximately 40 years for buildings and improvements, the shorter of the useful life or the remaining lease term subject to a maximum of 10 years for tenant improvements, and three to seven years for furniture and equipment.

Development Costs

Land, buildings, and improvements are recorded at cost. All specifically identifiable costs related to development activities are capitalized into properties in development on the accompanying Consolidated Balance Sheets. The capitalized costs include pre-development costs essential to the development of the property, development costs, construction costs, interest costs, real estate taxes, and allocated direct employee costs incurred during the period of development. Interest costs are capitalized into each development project based upon applying the Company's weighted average borrowing rate to that portion of the actual development costs expended. The Company discontinues interest and real estate tax capitalization when the property is no longer being developed or is available for occupancy upon substantial completion of tenant improvements, but in no event would the Company capitalize interest on the project beyond 12 months after substantial completion of the building shell.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

Pre-development costs represent the costs the Company incurs prior to land acquisition including contract deposits, as well as legal, engineering, and other external professional fees related to evaluating the feasibility of developing a shopping center. As of December 31, 2017 and 2016, the Company had refundable deposits of approximately $3.5 million and $1.2 million, respectively, included in pre-development costs. If the Company determines that the development of a particular shopping center is no longer probable, any related pre-development costs previously capitalized are immediately expensed. During the years ended December 31, 2017, 2016, and 2015, the Company expensed pre-development costs of approximately $1.5 million, $1.5 million, and $1.7 million, respectively, in other operating expenses in the accompanying Consolidated Statements of Operations.

Acquisitions

Through June 30, 2017, the Company and its real estate partnerships accounted for operating property acquisitions as business combinations using the acquisition method. Effective July 1, 2017, upon the adoption of ASU 2017-01: Definition of a Business accounting standard, operating property acquisitions are generally considered asset acquisitions. The Company expenses transaction costs associated with business combinations in the period incurred and capitalizes transaction costs associated with asset acquisitions. Both business combinations and asset acquisitions require that the Company recognize and measure the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the operating property acquired ("acquiree").

The Company's methodology includes estimating an “as-if vacant” fair value of the physical property, which includes land, building, and improvements. In addition, the Company determines the estimated fair value of identifiable intangible assets and liabilities, considering the following categories: (i) value of in-place leases, and (ii) above and below-market value of in-place leases.

The value of in-place leases is estimated based on the value associated with the costs avoided in originating leases compared to the acquired in-place leases as well as the value associated with lost rental and recovery revenue during the assumed lease-up period. The value of in-place leases is recorded to amortization expense over the remaining expected term of the respective leases.

Above-market and below-market in-place lease values for acquired properties are recorded based on the present value of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management's estimate of fair market lease rates for comparable in-place leases, measured over a period equal to the remaining non-cancelable term of the lease, including below-market renewal options, if applicable. The value of above-market leases is amortized as a reduction of minimum rent over the remaining terms of the respective leases and the value of below-market leases is accreted to minimum rent over the remaining terms of the respective leases, including below-market renewal options, if applicable. The Company does not assign value to customer relationship intangibles if it has pre-existing business relationships with the major retailers at the acquired property since they do not provide incremental value over the Company's existing relationships.

Held for Sale

The Company classifies land, an operating property, or a property in development as held-for-sale upon satisfaction of the following criteria: (i) management commits to a plan to sell a property (or group of properties), (ii) the property is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such properties, (iii) an active program to locate a buyer and other actions required to complete the plan to sell the property have been initiated, (iv) the sale of the property is probable and transfer of the asset is expected to be completed within one year, (v) the property is being actively marketed for sale, and (vi) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Operating properties held-for-sale are carried at the lower of cost or fair value less costs to sell.

Impairment

We evaluate whether there are any indicators, including property operating performance and general market conditions, that the value of the real estate properties (including any related amortizable

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

intangible assets or liabilities) may not be recoverable. Through the evaluation, we compare the current carrying value of the asset to the estimated undiscounted cash flows that are directly associated with the use and ultimate disposition of the asset. Our estimated cash flows are based on several key assumptions, including rental rates, costs of tenant improvements, leasing commissions, anticipated hold period, and assumptions regarding the residual value upon disposition, including the exit capitalization rate. These key assumptions are subjective in nature and could differ materially from actual results. Changes in our disposition strategy or changes in the marketplace may alter the hold period of an asset or asset group which may result in an impairment loss and such loss could be material to the Company's financial condition or operating performance. To the extent that the carrying value of the asset exceeds the estimated undiscounted cash flows, an impairment loss is recognized equal to the excess of carrying value over fair value. If such indicators are not identified, management will not assess the recoverability of a property's carrying value. If a property previously classified as held and used is changed to held-for-sale, the Company estimates fair value, less expected costs to sell, which could cause the Company to determine that the property is impaired.

The fair value of real estate assets is subjective and is determined through comparable sales information and other market data if available, or through use of an income approach such as the direct capitalization method or the traditional discounted cash flow approach. Such cash flow projections consider factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors, and therefore is subject to management judgment and changes in those factors could impact the determination of fair value. In estimating the fair value of undeveloped land, the Company generally uses market data and comparable sales information.

A loss in value of investments in real estate partnerships under the equity method of accounting, other than a temporary decline, must be recognized in the period in which the loss occurs. If management identifies indicators that the value of the Company's investment in real estate partnerships may be impaired, it evaluates the investment by calculating the fair value of the investment by discounting estimated future cash flows over the expected term of the investment.

Tax Basis

The net book basis of the Company's real estate assets exceeds the net tax basis by approximately $2.8 billion at December 31, 2017, primarily due to the tax free merger with Equity One and inheriting lower carryover tax basis. The net tax basis of the Company's real estate assets exceeded the book basis by approximately $190.3 million at December 31, 2016, primarily due to the property impairments recorded for book purposes and the cost basis of the assets acquired and their carryover basis recorded for tax purposes.

(d) Cash and Cash Equivalents

Any instruments which have an original maturity of 90 days or less when purchased are considered cash equivalents. As of December 31, 2017 and 2016, $4.0 million and $4.6 million, respectively, of cash was restricted through escrow agreements and certain mortgage loans.

(e) Other Assets

The following table represents the components of Other assets in the accompanying Consolidated Balance Sheets:

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017



	December 31,
(in thousands)	2017		2016
Goodwill (1)	$	331,884	—
Investments	41,636		36,008
Prepaid and other	30,332		10,386
Derivative assets	14,515		11,622
Furniture, fixtures, and equipment, net	6,123		4,094
Deferred financing costs, net	2,637		3,557
Total other assets	$	427,127	65,667

(1) Goodwill amount is subject to provisional accounting for the purchase price allocation from the Equity One merger, as discussed in note 2.

Goodwill

Goodwill represents the excess of the purchase price consideration for the Equity One merger over the fair value of the assets acquired and liabilities assumed, and reflects expected synergies from combining Regency's and Equity One's operations. The Company accounts for goodwill in accordance with the Intangibles - Goodwill and Other Topic of the FASB ASC 350, and allocates its goodwill to the reporting units, which have been determined to be at the individual property level. The Company performs an impairment evaluation of its goodwill at least annually, in November of each year. The Company's current goodwill impairment analysis, using a qualitative approach, did not result in any indication of impairment.

The goodwill impairment evaluation may be completed through a qualitative or quantitative approach. Under a qualitative approach, the impairment review for goodwill consists of an assessment of whether it is more-likely-than-not that the property’s fair value is less than its carrying value. If a qualitative approach indicates it is more likely-than-not that the estimated carrying value of a property exceeds its fair value, or if the Company chooses to bypass the qualitative approach for any property, the Company will perform the quantitative approach described below.

The quantitative approach consists of estimating the fair value of each property using discounted projected future cash flows and comparing those estimated fair values with the carrying values, which include the allocated goodwill. If the estimated fair value is less than the carrying value, the Company would then recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to that reporting unit.

Investments

The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. Debt securities are classified as held to maturity when the Company has the positive intent and ability to hold the securities to maturity. Marketable securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in earnings. Debt and marketable equity securities not classified as held to maturity or as trading, are classified as available-for-sale, and are carried at fair value, with the unrealized gains and losses, net of tax, included in the determination of comprehensive income and reported in the Consolidated Statements of Comprehensive Income. The fair value of securities is determined using quoted market prices.

(f) Deferred Leasing Costs

Deferred leasing costs consist of internal and external commissions associated with leasing the Company's shopping centers, and are presented net of accumulated amortization. Such costs are amortized over the period through lease expiration. If the lease is terminated early, the remaining leasing costs are written off.

(g) Derivative Financial Instruments

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or future payment of known and uncertain cash amounts, the amount of which are determined by interest rates. The Company's derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company's known or expected cash payments principally related to the Company's borrowings.

All derivative instruments, whether designated in hedging relationships or not, are recorded on the accompanying Consolidated Balance Sheets at their fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

The Company uses interest rate swaps to mitigate its interest rate risk on a related financial instrument or forecasted transaction, and the Company designates these interest rate swaps as cash flow hedges. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The gains or losses resulting from changes in fair value of derivatives that qualify as cash flow hedges are recognized in other comprehensive income (“OCI”) while the ineffective portion of the derivative's change in fair value is recognized in the Statements of Operations as interest expense. Upon the settlement of a hedge, gains and losses remaining in OCI are amortized through earnings over the underlying term of the hedged transaction.

The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking various hedge transactions. The Company assesses, both at inception of the hedge and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the cash flows and/or forecasted cash flows of the hedged items.

In assessing the valuation of the hedges, the Company uses standard market conventions and techniques such as discounted cash flow analysis, option pricing models, and termination costs at each balance sheet date. All methods of assessing fair value result in a general approximation of value, and such value may never actually be realized.

The cash receipts or payments to settle interest rate swaps are presented in cash flows provided by operating activities in the accompanying Consolidated Statements of Cash Flows.

(h) Income Taxes

The Parent Company believes it qualifies, and intends to continue to qualify, as a REIT under the Code. As a REIT, the Parent Company will generally not be subject to federal income tax, provided that distributions to its stockholders are at least equal to REIT taxable income. Each wholly-owned corporate subsidiary of the Operating Partnership has elected to be a Taxable REIT Subsidiary (“TRS”) as defined in Section 856(l) of the Code. The TRS's are subject to federal and state income taxes and file separate tax returns. As a pass through entity, the Operating Partnership generally does not pay taxes, but its taxable income or loss is reported by its partners, of which the Parent Company, as general partner and approximately 99.8% owner, is allocated its pro-rata share of tax attributes.

The Company accounts for income taxes related to its TRS’s under the asset and liability approach, which requires the recognition of the amount of taxes payable or refundable for the current year and deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company records net deferred tax assets to the extent it believes it is more likely than not that these assets will be realized. A valuation allowance is recorded to reduce deferred tax assets when it is believed that it is more likely than not that all or some portion of the deferred tax asset will not be realized. The Company considers all available positive and negative evidence, including forecasts of future taxable income, the reversal of other existing temporary differences, available net operating loss carryforwards, tax planning strategies and recent results of operations in order to make that determination.

In addition, tax positions are initially recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions shall initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The Company believes that it has appropriate support for the income tax positions taken and to be taken on its tax returns and that its accruals for tax liabilities are adequate for all open tax years (2014 and forward for federal and state) based on an assessment of many factors including past experience and interpretations of tax laws applied to the facts of each matter.

The Tax Cuts and Jobs Act (the “Act”), signed into law in December 2017, includes numerous provisions that will affect businesses. Key provisions in the Act have significant financial statement effects. These effects include remeasurement of deferred taxes, recognition of liabilities for taxes on mandatory deemed repatriation and certain other foreign income, and reassessment of the realizability of deferred tax assets. Because the asset and liability approach under ASC 740 requires companies to recognize the effect of tax law changes in the period of enactment, the effects must be recognized in companies’ December 2017 financial statements, even though the effective date of the law for most provisions is January 1, 2018. To the extent that all information necessary is not available, prepared or analyzed, companies are allotted a measurement period to make adjustments for the effect of the law. The Company has calculated the tax impact of the change in tax law, most notably, the deferred tax assets and liabilities have been revalued at the appropriate tax rate. The impact resulted in a $9.7 million benefit recognized in earnings for 2017.

(i) Earnings per Share and Unit

Basic earnings per share of common stock and unit are computed based upon the weighted average number of common shares and units, respectively, outstanding during the period. Diluted earnings per share and unit reflect the conversion of obligations and the assumed exercises of securities including the effects of shares issuable under the Company's share-based payment arrangements, if dilutive. Dividends paid on the Company's share-based compensation awards are not participating securities as they are forfeitable.

(j) Stock-Based Compensation

The Company grants stock-based compensation to its employees and directors. The Company recognizes stock-based compensation based on the grant-date fair value of the award and the cost of the stock-based compensation is expensed over the vesting period.

When the Parent Company issues common shares as compensation, it receives a like number of common units from the Operating Partnership. The Company is committed to contributing to the Operating Partnership all proceeds from the exercise of stock options or other share-based awards granted under the Parent Company's Long-Term Omnibus Plan (the “Plan”). Accordingly, the Parent Company's ownership in the Operating Partnership will increase based on the amount of proceeds contributed to the Operating Partnership for the common units it receives. As a result of the issuance of common units to the Parent Company for stock-based compensation, the Operating Partnership records the effect of stock-based compensation for awards of equity in the Parent Company.

(k) Segment Reporting

The Company's business is investing in retail shopping centers through direct ownership or partnership interests. The Company 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 from sales are generally reinvested into higher quality retail shopping centers,

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

through acquisitions or new developments, which management believes will generate sustainable revenue growth and attractive returns. It is management's intent that all retail shopping centers will be owned or developed for investment purposes; however, the Company may decide to sell all or a portion of a development upon completion. The Company's revenues and net income are generated from the operation of its investment portfolio. The Company also earns fees for services provided to manage and lease retail shopping centers owned through joint ventures.

The Company's portfolio is located throughout the United States. Management does not distinguish or group its operations on a geographical basis for purposes of allocating resources or capital. The Company reviews operating and financial data for each property on an individual basis; therefore, the Company defines an operating segment as its individual properties. The individual properties have been aggregated into one reportable segment based upon their similarities with regard to both the nature and economics of the centers, tenants and operational processes, as well as long-term average financial performance.

(l) Business Concentration

Grocer anchor tenants represent approximately 18% of pro-rata annual base rent. No single tenant accounts for 5% or more of revenue and none of the shopping centers are located outside the United States.

(m) Fair Value of Assets and Liabilities

Fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement is determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, the Company uses a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from independent sources (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the Company's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). The three levels of inputs used to measure fair value are as follows:


•	Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access.


•	Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.


•	Level 3 - Unobservable inputs for the asset or liability, which are typically based on the Company's own assumptions, as there is little, if any, related market activity.

The Company also remeasures nonfinancial assets and nonfinancial liabilities, initially measured at fair value in a business combination or other new basis event, at fair value in subsequent periods if a remeasurement event occurs.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

(n) Recent Accounting Pronouncements

The following table provides a brief description of recent accounting pronouncements and expected impact on our financial statements:



Standard	Description	Date of adoption	Effect on the financial statements or other significant matters
Recently adopted:

ASU 2016-09, March 2016, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting	This ASU affects entities that issue share-based payment awards to their employees. The ASU is designed to simplify several aspects of accounting for share-based payment award transactions including income tax consequences, classification of awards as either equity or liabilities, an option to recognize stock compensation forfeitures as they occur, and changes to classification on the statement of cash flows.	January 2017	The adoption of this standard resulted in the reclassification of income taxes withheld on share-based awards out of operating activities into financing activities on the Statement of Cash Flows. As retrospective application was required for this component of the ASU, $8.0 million was reclassified on the Statements of Cash Flows for the year ended December 31, 2016.

ASU 2017-01 January 2017, Business Combinations (Topic 805): Clarifying the Definition of a Business	This ASU amends and provides a screen to determine when an integrated set of assets and activities, collectively referred to as a "set", is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. If the screen is not met, the amendments in this update (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. The amendments provide a framework to assist entities in evaluating whether both an input and a substantive process are present. Early adoption is permitted.	July 2017	This standard changed the treatment of individual operating properties from being considered a business to being considered an asset. This change results in acquisition costs being capitalized as part of asset acquisitions, whereas previous treatment had them recognized in earnings in the period incurred. The Company adopted this standard effective July 1, 2017.

ASU 2017-04, January 2017, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment	This ASU simplifies how an entity tests goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit's goodwill with the carrying amount of that goodwill. Instead, under this update, the Company will perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The Company would then recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to that reporting unit.	October 2017	The Company early adopted this ASU on October 1, 2017. The adoption of this ASU did not have an impact on the Company's financial statements and related disclosures, but rather simplified the method of evaluating goodwill for impairment.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017



Standard	Description	Date of adoption	Effect on the financial statements or other significant matters
Not yet adopted:

ASU 2017-12, August 2017, Targeted Improvements to Accounting for Hedging Activities	This ASU provides updated guidance to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. The transition guidance provides companies with the option of early adopting the new standard using a modified retrospective transition method in any interim period after issuance of the update, or alternatively requires adoption for fiscal years beginning after December 15, 2018. This adoption method will require the Company to recognize the cumulative effect of initially applying the ASU as an adjustment to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the update.	January 2018	The Company plans to early adopt this ASU on January 1, 2018. The Company has assessed the impacts of the standard and has determined that the adoption and implementation of this standard will not have a material impact on the consolidated financial statements.

ASU 2016-01, January 2016, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities	This ASU amends the guidance to classify equity securities with readily-determinable fair values into different categories and requires equity securities to be measured at fair value with changes in the fair value recognized through net income. Equity investments accounted for under the equity method are not included in the scope of this amendment. Early adoption of this amendment is not permitted.	January 2018	The Company has assessed the impacts of the standard and determined that the adoption and implementation of this standard will not have a material impact on its results of operations, financial condition or cash flows.

ASU 2016-15, August 2016, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments	This ASU makes eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows to eliminate current diversity in practice. Early adoption is permitted on a retrospective basis.	January 2018	The ASU is consistent with the Company's current treatment and the Company has determined that the adoption and implementation of this standard will not have an impact on its cash flow statement.

ASU 2016-18, November 2016, Statement of Cash Flows (Topic 230): Restricted Cash	This ASU requires entities to show the changes in the total of cash, cash equivalents, restricted cash, and restricted cash equivalents in the statement of cash flows. The amendments in this ASU should be applied using a retrospective transition method to each period presented.	January 2018	The Company has assessed the impacts of the standard and determined that the adoption will result in a change to the classification and presentation of changes in restricted cash on its cash flow statement, which is not expected to be material. There will be no change to the Company's financial condition or results of operations from the adoption of this standard.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017


2.	Real Estate Investments

Acquisitions

The following tables detail the shopping centers acquired or land acquired or leased for development.



(in thousands)		December 31, 2017
Date Purchased	Property Name	City/State	Property Type	Purchase Price		Debt Assumed, Net of Premiums	Intangible Assets	Intangible Liabilities
3/6/2017	The Field at Commonwealth	Chantilly, VA	Development	$	9,500	—	—	—
3/8/2017	Pinecrest Place (1)	Miami, FL	Development	—		—	—	—
4/13/2017	Mellody Farm (2)	Chicago, IL	Development	26,200		—	—	—
6/28/2017	Concord outparcel (3)	Miami, FL	Operating	350		—	—	—
7/20/2017	Aventura Square outparcel (4)	Miami, FL	Operating	1,750		—	90	9
11/15/2017	Indigo Square	Mount Pleasant, SC	Development	3,900		—	—	—
12/21/2017	Scripps Ranch Marketplace	San Diego, CA	Operating	81,600		27,000	4,997	9,551
12/28/2017	Roosevelt Square	Seattle, WA	Operating	68,084		—	3,842	8,002
Total property acquisitions				$	191,384	27,000	8,929	17,562

(1) The Company leased 10.67 acres for a ground up development.
(2) The Operating Partnership issued 195,732 partnership units valued at $13.1 million as partial consideration for the purchase price.
(3) The Company purchased a 0.67 acre vacant outparcel adjacent to the Company's existing operating Concord Shopping Plaza.
(4) The Company purchased a 0.06 acre outparcel improved with a leased building adjacent to the Company's existing operating Aventura Square.



(in thousands)		December 31, 2016
Date Purchased	Property Name	City/State	Property Type	Purchase Price		Debt Assumed, Net of Premiums	Intangible Assets	Intangible Liabilities
2/22/2016	Garden City Park	Garden City Park, NY	Operating	$	17,300	—	10,171	2,940
3/4/2016	The Market at Springwoods Village (1)	Houston, TX	Development	17,994		—	—	—
5/16/2016	Market Common Clarendon	Arlington, VA	Operating	280,500		—	15,428	15,662
7/15/2016	Klahanie Shopping Center	Sammamish, WA	Operating	35,988		—	2,264	539
8/4/2016	The Village at Tustin Legacy	Tustin, CA	Development	18,800		—	—	—
10/26/2016	Nocatee Phase III	Jacksonville, FL	Development	240		—	—	—
10/30/2016	Brooklyn Station Phase II	Jacksonville, FL	Development	50		—	—	—
12/6/2016	The Village at Riverstone	Houston, TX	Development	16,656		—	—	—
Total property acquisitions				$	387,528	—	27,863	19,141
(1) Regency acquired a 53% controlling interest in the Market at Springwoods Village partnership to develop a shopping center on land contributed by the partner. As a result of consolidation, the Company recorded the partner's non-controlling interest of $8.4 million in Limited partners' interests in consolidated partnerships in the accompanying Consolidated Balance Sheets.

Equity One Merger

General

On March 1, 2017, Regency completed its merger with Equity One, a NYSE listed shopping center company, whereby Equity One merged with and into Regency, with Regency continuing as the surviving public company. Under the terms of the Merger Agreement, each Equity One stockholder received 0.45 of a newly issued share of Regency common stock for each share of Equity One common stock owned immediately prior to the effective time of the merger resulting in approximately 65.5 million Regency common shares being issued to effect the merger.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

The following table provides the components that make up the total purchase price for the Equity One merger:



(in thousands, except stock price)	Purchase Price
Shares of common stock issued for merger	65,379
Closing stock price on March 1, 2017	$	68.40
Value of common stock issued for merger	$	4,471,808
Other cash payments	721,297
Total purchase price	$	5,193,105

As part of the merger, Regency acquired 121 properties, including 8 properties held through co-investment partnerships. The consolidated net assets and results of operations of Equity One are included in the consolidated financial statements from the closing date, March 1, 2017, going forward and resulted in the following impact to Revenues and Net income attributable to common stockholders:



(in thousands)	Year ended December 31, 2017
Increase in total revenues	$	337,761
Increase in net income attributable to common stockholders	$	81,766

The Company incurred $80.7 million and $6.5 million, respectively, of merger-related transaction costs during the years ended December 31, 2017 and 2016, which are recorded in Other operating expenses in the accompanying Consolidated Statements of Operations, and are not reflected in the table above.

Provisional Purchase Price Allocation of Merger

The Equity One merger has been accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations, which requires, among other things, that the assets acquired and liabilities assumed be recognized at their acquisition date fair values.

The acquired assets and assumed liabilities of an acquired operating property generally include, but are not limited to: land, buildings and improvements, identified tangible and intangible assets and liabilities associated with in-place leases, including tenant improvements, leasing costs, value of above-market and below-market leases, and value of acquired in-place leases. This methodology requires estimating an “as-if vacant” fair value of the physical property, which includes land, building, and improvements and also determining the estimated fair value of identifiable intangible assets and liabilities, considering the following categories: (i) value of in-place leases, (ii) above and below-market value of in-place leases, and deferred taxes related to the book tax difference created through purchase accounting. The excess of the purchase price consideration over the fair value of assets acquired and liabilities assumed results in goodwill in the business combination, which reflects expected synergies from combining Regency's and Equity One's operations and the deferred tax liability at one of the acquired taxable REIT subsidiaries. The goodwill is not expected to be deductible for tax purposes.

The provisional fair market value of the acquired operating properties is based on a valuation prepared by Regency with assistance of a third party valuation specialist. The third party used stabilized NOI and market specific capitalization and discount rates as the primary inputs in determining the fair value of the real estate assets. Management reviewed the inputs used by the third party specialist as well as the allocation of the purchase price to ensure reasonableness and that the procedures were performed in accordance with management's policy. Management and the third party valuation specialist have prepared their provisional fair value estimates for each of the operating properties acquired, but are still in process of reviewing all of the underlying inputs and assumptions; therefore, the purchase price and its allocation, in their entirety, are not yet complete as of the date of this filing but have been updated to reflect management's current best estimates of fair values as of the acquisition date. Once the purchase price and allocation are complete, an additional adjustment to the purchase price or allocation may occur.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

The following table summarizes the current provisional purchase price allocation based on the Company's valuation, including estimates and assumptions of the acquisition date fair value of the tangible and intangible assets acquired and liabilities assumed:



(in thousands)	Provisional Purchase Price Allocation
Land	$	2,865,053
Building and improvements	2,619,553
Properties in development	68,744
Properties held for sale	19,600
Investments in unconsolidated real estate partnerships	99,666
Real estate assets	5,672,616
Cash, accounts receivable and other assets	112,909
Intangible assets	458,554
Goodwill	331,884
Total assets acquired	6,575,963

Notes payable	757,399
Accounts payable, accrued expenses, and other liabilities	121,798
Lease intangible liabilities	503,661
Total liabilities assumed	1,382,858

Total purchase price	$	5,193,105

During the three months ended December 31, 2017, the Company adjusted the provisional purchase price allocation to reflect current best estimates of fair values of the acquired operating properties, based on the valuation process described above. These adjustments resulted in the following increases (decreases) to earnings during the three months ended December 31, 2017 that would have been recognized in previous periods if the adjustments to provisional amounts were recognized as of the acquisition date:



(in thousands)	Three months ended December 31, 2017
decrease in Minimum rent	$	(2,386	)
decrease in Depreciation and amortization	1,435
increase in Equity in income of investments in real estate partnerships	350
Net decrease to earnings of provisional purchase price allocation adjustments	$	(601	)

The allocation of the purchase price is based on management’s assessment, which may change in the future as more information becomes available. Subsequent adjustments made to the purchase price allocation upon completion of the Company's fair value assessment process will not exceed one year from the acquisition date. The allocation of the purchase price described above requires a significant amount of judgment and represents management's best estimate of the fair value as of the acquisition date.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

The following table details the provisional weighted average amortization and net accretion periods, in years, of the major classes of intangible assets and intangible liabilities arising from the Equity One merger:



(in years)		Weighted Average Amortization Period
Assets:
In-place leases		11.3
Above-market leases		7.9
Below-market ground leases		55.3
Liabilities:
Below-market leases		25.8

Pro forma Information (unaudited)

The following unaudited pro forma financial data includes the incremental revenues, operating expenses, depreciation and amortization, and costs of the Equity One acquisition as if it had occurred on January 1, 2016:



		Year ended December 31,
(in thousands, except per share data)		2017		2016
Total revenues		$	1,052,221	1,006,367
Income (loss) from operations	(1)	281,393		63,907
Net income (loss) attributable to common stockholders	(1)	262,270		40,868
Income (loss) per common share - basic		1.54		0.25
Income (loss) per common share - diluted		1.54		0.25
(1) The pro forma earnings for the year ended December 31, 2017, were adjusted to exclude $103.6 million of merger costs, while 2016 pro forma earnings were adjusted to include all merger costs during the first quarter of 2016.

The pro forma financial data is not necessarily indicative of what the actual results of operations would have been assuming the transaction had been completed as set forth above, nor does it purport to represent the results of operations for future periods.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017


3.	Property Dispositions

Dispositions

The following table provides a summary of consolidated shopping centers and land parcels disposed of:



	Year ended December 31,
(in thousands)	2017		2016		2015
Net proceeds from sale of real estate investments	$	112,161	137,479	(1)	108,822
Gain on sale of real estate, net of tax	$	27,432	47,321		35,606
Provision for impairment of real estate sold	$	—	1,700		—
Number of operating properties sold	6		11		5
Number of land out-parcels sold	9		16		2

(1) Includes cash deposits received in the previous year.


4.	Investments in Real Estate Partnerships

The Company invests in real estate partnerships, which consist of the following:



	December 31, 2017
(in thousands)	Regency's Ownership	Number of Properties	Total Investment		Total Assets of the Partnership	Net Income of the Partnership	The Company's Share of Net Income of the Partnership
GRI - Regency, LLC (GRIR)	40.00%	70	$	198,521	1,656,068	69,211	27,440
Equity One JV Portfolio, LLC (NYC)	30.00%	6	53,277		284,412	2,757	686
Columbia Regency Retail Partners, LLC (Columbia I)	20.00%	6	7,057		130,836	18,233	3,620
Columbia Regency Partners II, LLC (Columbia II)	20.00%	12	13,720		329,992	7,690	1,530
Cameron Village, LLC (Cameron)	30.00%	1	11,784		99,808	2,917	850
RegCal, LLC (RegCal)	25.00%	7	27,829		138,717	5,613	1,403
US Regency Retail I, LLC (USAA)	20.01%	7	—		90,900	22,299	4,456
Other investments in real estate partnerships	50.00%	6	74,116		154,987	11,238	3,356
Total investments in real estate partnerships		115	$	386,304	2,885,720	139,958	43,341

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017



	December 31, 2016
(in thousands)	Regency's Ownership	Number of Properties	Total Investment		Total Assets of the Partnership	Net Income of the Partnership	The Company's Share of Net Income of the Partnership
GRI - Regency, LLC (GRIR)	40.00%	70	$	201,240	1,676,134	74,758	29,791
Columbia Regency Retail Partners, LLC (Columbia I)	20.00%	7	9,687		145,192	21,024	4,180
Columbia Regency Partners II, LLC (Columbia II)	20.00%	12	14,750		338,307	16,765	3,240
Cameron Village, LLC (Cameron)	30.00%	1	11,877		99,967	2,326	695
RegCal, LLC (RegCal)	25.00%	7	21,516		141,827	4,358	1,080
US Regency Retail I, LLC (USAA)	20.01%	8	13,176		109,665	5,901	1,180
Other investments in real estate partnerships	50.00%	4	24,453		97,650	35,915	16,352
Total investments in real estate partnerships		109	$	296,699	2,608,742	161,047	56,518

The summarized balance sheet information for the investments in real estate partnerships, on a combined basis, is as follows:



	December 31,
(in thousands)	2017		2016
Investments in real estate, net	$	2,682,578	2,439,110
Acquired lease intangible assets, net	54,021		42,974
Other assets	149,121		126,658
Total assets	$	2,885,720	2,608,742

Notes payable	$	1,514,729	1,309,931
Acquired lease intangible liabilities, net	42,466		29,678
Other liabilities	70,498		64,979
Capital - Regency	445,068		405,722
Capital - Third parties	812,959		798,432
Total liabilities and capital	$	2,885,720	2,608,742

The following table reconciles the Company's capital recorded by the unconsolidated partnerships to the Company's investments in real estate partnerships reported in the accompanying consolidated balance sheet:

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017



	December 31,
(in thousands)	2017			2016
Capital - Regency	$	445,068		405,722
Basis difference	40,351			1,382
Negative investment in USAA (1)	11,290			—
Impairment of investment in real estate partnerships	(1,300		)	(1,300	)
Restricted Gain Method deferral (2)	(30,902		)	(30,902	)
Net book equity in excess of purchase price	(78,203		)	(78,203	)
Investments in real estate partnerships	$	386,304		296,699

(1) During 2017, the USAA partnership distributed proceeds from debt refinancing and real estate sales in excess of Regency's carrying value of its investment resulting in a negative investment balance, which is recorded within Accounts payable and other liabilities in the Consolidated Balance Sheets.
(2) Represents gains deferred under the Company's restricted gain method to maximize deferrals of gains associated with historic sales of shopping centers into joint ventures which contain distribution-in-kind ("DIK") provisions as a liquidation election. Regency has not sold any shopping centers into joint ventures during the years ended December 31, 2017, 2016 and 2015. As discussed further in note 1(n), the accounting for these deferred gains will change upon the adoption of ASU 2017-05 and Topic 606 on January 1, 2018.

The revenues and expenses for the investments in real estate partnerships, on a combined basis, are summarized as follows:



	Year ended December 31,
(in thousands)	2017			2016		2015
Total revenues	$	396,596		364,087		363,745
Operating expenses:
Depreciation and amortization	99,327			99,252		111,648
Operating and maintenance	58,283			52,725		51,970
General and administrative	5,582			5,342		5,292
Real estate taxes	49,904			42,813		43,769
Other operating expenses	2,923			2,356		2,989
Total operating expenses	$	216,019		202,488		215,668
Other expense (income):
Interest expense, net	73,244			69,193		79,477
Gain on sale of real estate	(34,276		)	(70,907	)	(2,766	)
Provision for impairment	—			—		9,102
Early extinguishment of debt	—			69		—
Other expense (income)	1,651			2,197		1,516
Total other expense (income)	40,619			552		87,329
Net income of the Partnerships	$	139,958		161,047		60,748
The Company's share of net income of the Partnerships	$	43,341		56,518		22,508

Acquisitions

The following table provides a summary of shopping centers and land parcels acquired through our unconsolidated real estate partnerships:

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017



(in thousands)		Year ended December 31, 2017
Date Purchased	Property Name	City/State	Property Type	Co-investment Partner	Ownership %	Purchase Price		Debt Assumed, Net of Premiums	Intangible Assets	Intangible Liabilities
10/11/2017	Midtown East	Raleigh, NC	Development	ITB Holdings, LLC	50.00%	$	15,075	—	—	—
Total property acquisitions						$	15,075	—	—	—

(in thousands)		Year ended December 31, 2016
Date Purchased	Property Name	City/State	Property Type	Co-investment Partner	Ownership %	Purchase Price		Debt Assumed, Net of Premiums	Intangible Assets	Intangible Liabilities
3/24/2016	Applewood Village Shops	Denver, CO	Operating (1)	GRIR	40.00%	$	200	—	—	—
12/20/2016	Plaza Venezia	Orlando, FL	Operating	Columbia II	20.00%	92,350		35,076	6,899	11,548
Total property acquisitions						$	92,550	35,076	6,899	11,548

(1) Land parcels purchased as additions to the operating property.

Dispositions

The following table provides a summary of shopping centers and land out-parcels disposed of through our unconsolidated real estate partnerships:



	Year ended December 31,
(in thousands)	2017		2016	2015
Proceeds from sale of real estate investments	$	73,122	174,090	39,459
Gain on sale of real estate	$	34,276	70,907	2,766
The Company's share of gain on sale of real estate	$	6,591	25,003	1,108
Number of operating properties sold	3		10	2
Number of land out-parcels sold	1		1	—

Notes Payable

Scheduled principal repayments on notes payable held by our unconsolidated investments in real estate partnerships as of December 31, 2017 were as follows:



Scheduled Principal Payments and Maturities by Year:	Scheduled Principal Payments		Mortgage Loan Maturities		Unsecured Maturities	Total		Regency’s Pro-Rata Share
2018	$	21,059	30,022		—	51,081		19,647
2019	19,852		73,259		—	93,111		24,448
2020	16,823		224,090		19,635	260,548		91,039
2021	10,818		269,942		—	280,760		100,402
2022	7,569		195,702		—	203,271		73,369
Beyond 5 Years	3,011		633,298		—	636,309		215,071
Net unamortized loan costs, debt premium / (discount)	—		(10,351	)	—	(10,351	)	(3,365	)
Total notes payable	$	79,132	1,415,962		19,635	1,514,729		520,611

These loans are all non-recourse. Maturities will be repaid from proceeds from refinancing, partner capital contributions, or a combination thereof. The Company is obligated to contribute its pro-rata share to fund maturities if the loans are not refinanced, and it has the capacity to do so from existing cash balances, availability on its line of

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

credit, and operating cash flows. The Company believes that its partners are financially sound and have sufficient capital or access thereto to fund future capital requirements. In the event that a co-investment partner was unable to fund its share of the capital requirements of the co-investment partnership, the Company would have the right, but not the obligation, to loan the defaulting partner the amount of its capital call.

Management fee income

In addition to earning our pro-rata share of net income or loss in each of these co-investment partnerships, we receive fees, as follows:



	Year ended December 31,
(in thousands)	2017		2016	2015
Asset management, property management, leasing, and investment and financing services	$	25,260	24,595	24,519

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017


5.	Acquired Lease Intangibles

The Company had the following acquired lease intangibles:



	December 31,
(in thousands)	2017 (1)			2016
In-place leases	$	470,315		96,178
Above-market leases	64,625			14,684
Below-market ground leases	92,166			64,664
Total intangible assets	$	627,106		175,526
Accumulated amortization	(148,280		)	(56,695	)
Acquired lease intangible assets, net	$	478,826		118,831

Below-market leases	$	588,850		71,996
Above-market ground leases	5,101			5,722
Total intangible liabilities	593,951			77,718
Accumulated amortization	(56,550		)	(23,538	)
Acquired lease intangible liabilities, net	$	537,401		54,180

(1) Includes estimated values for acquired lease intangibles from the Equity One merger, for which the accounting remains provisional as of December 31, 2017, as discussed in Note 2.

The following table provides a summary of amortization and net accretion amounts from acquired lease intangibles:



	Year ended December 31,
(in thousands)	2017 (4)		2016	2015
In-place lease amortization	$	88,284	11,533	9,141
Above-market lease amortization (1)	9,443		1,742	1,950
Below-market ground lease amortization (3)	1,886		1,111	351
Acquired lease intangible asset amortization	$	99,613	14,386	11,442

Below-market lease amortization (2)	$	34,786	6,827	3,940
Above-market ground lease amortization (3)	136		167	215
Acquired lease intangible liability amortization	$	34,922	6,994	4,155

(1) Amounts are recorded as a reduction to minimum rent.
(2) Amounts are recorded as an increase to minimum rent.
(3) Above and below market ground lease amortization are recorded as offsets to Operating and maintenance.
(4) Amortization and net accretion for the year ended December 31, 2017, includes amounts subject to provisional accounting from the Equity One merger, as discussed in Note 2.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

The estimated aggregate amortization and net accretion amounts from acquired lease intangibles, including provisional purchase price accounting for Equity One acquired lease intangibles, for the next five years are as follows:



(in thousands)
In Process Year Ending December 31,	Net accretion of Above / Below market lease intangibles		Amortization of In-place lease intangibles	Net amortization of Below / Above ground lease intangibles
2018	$	29,654	72,769	1,560
2019	28,754		54,743	1,550
2020	27,710		41,211	1,544
2021	27,106		32,893	1,545
2022	25,440		25,202	1,555

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

Income Taxes

The Company has elected to be taxed as a REIT under the applicable provisions of the Code with certain of its subsidiaries treated as TRS entities, which are subject to federal and state income taxes.

The following table summarizes the tax status of dividends paid on our common shares:



	Year ended December 31,
(in thousands)	2017	2016	2015
Dividend per share	$2.10	2.00	1.94
Ordinary income	86%	53%	71%
Capital gain	10%	8%	5%
Return of capital	4%	39%	19%
Qualified dividend income	—%	—%	5%

Our consolidated expense (benefit) for income taxes for the years ended December 31, 2017, 2016, and 2015 was as follows:



	Year ended December 31,
(in thousands)	2017			2016		2015
Income tax (benefit) expense:
Current	$	1,168		(153	)	(1,604	)
Deferred	(10,815		)	—		—
Total income tax (benefit) expense (1)	$	(9,647	)	(153	)	(1,604	)

(1) Includes $90 thousand of tax expense presented within Other operating expenses during the year ended December 31, 2017, and $153 thousand and $1.6 million of tax benefit presented within Gain on sale of real estate, net of tax, during the years ended December 31, 2016 and 2015, respectively.

The income tax benefit for the year ended December 31, 2017 was primarily due to the income tax benefit from revaluing the net deferred tax liability at a TRS entity acquired through the Equity One merger, as a result of the change in corporate tax rates from the 2017 Tax Cuts and Jobs Act.

The TRS entities are subject to federal and state income taxes and file separate tax returns. Income tax (benefit) expense differed from the amounts computed by applying the U.S. Federal income tax rate to pretax income of the TRS entities, as follows:



	Year ended December 31,
(in thousands)	2017			2016		2015
Computed expected tax expense (benefit)	$	1,190		933		1,730
State income tax, net of federal benefit	108			56		224
Valuation allowance	(1,512		)	(1,239	)	(3,556	)
Tax rate change	(9,737		)	—		—
All other items	304			97		(2	)
Total income tax benefit (1)	(9,647		)	(153	)	(1,604	)
Income tax benefit attributable to operations (1)	$	(9,647	)	(153	)	(1,604	)
(1) Includes $90 thousand of tax expense presented within Other operating expenses during the year ended December 31, 2017, and $153 thousand and $1.6 million of tax benefit presented within Gain on sale of real estate, net of tax, during the years ended December 31, 2016 and 2015, respectively.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

The tax effects of temporary differences and carryforwards (included in Accounts payable and other liabilities in the accompanying Consolidated Balance Sheets) are summarized as follows:



	December 31,
(in thousands)	2017			2016
Deferred tax assets
Investments in real estate partnerships	$	—		361
Provision for impairment	3,785			5,827
Deferred interest expense	2,754			2,714
Capitalized costs under Section 263A	729			1,145
Net operating loss carryforward	373			—
Employee benefits	—			44
Other	2,297			3,059
Deferred tax assets	9,938			13,150
Valuation allowance	(8,300		)	(12,507	)
Deferred tax assets, net	1,638			643
Deferred tax liabilities
Straight line rent	(528		)	643
Fixed assets	(19,757		)	—
Other	(7		)	—
Deferred tax liabilities	(20,292		)	643
Net deferred tax liabilities	$	(18,654	)	—

The net deferred tax liability increased during 2017 primarily due to the acquisition of a net deferred tax liability, from the basis difference of its real estate assets, at one TRS acquired as part of the Equity One merger, as discussed in note 2.

Due to uncertainty regarding the realization of certain deferred tax assets, the Company previously established valuation allowances, primarily in connection with the deferred interest and NOL carryforwards related to certain TRSs. As of December 31, 2017, the minimal projected future taxable income and unpredictable nature of potential property sales with built in losses support the conclusion that it is still more likely than not that some of the deferred tax assets will not be realized.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017


7.	Notes Payable and Unsecured Credit Facilities

The Company’s outstanding debt consists of the following:



	December 31,
(in thousands)	2017			2016
Notes payable:
Fixed rate mortgage loans	$	520,193		384,786
Variable rate mortgage loans	125,866		(1)	86,969
Fixed rate unsecured public and private debt	2,325,656			892,170
Total notes payable	$	2,971,715		1,363,925
Unsecured credit facilities:
Line of Credit	60,000			15,000
Term Loans	563,262			263,495
Total unsecured credit facilities	$	623,262		278,495
Total debt outstanding	$	3,594,977		1,642,420

(1) Includes five mortgages, whose interest varies on LIBOR based formulas. Three of these variable rate loans have interest rate swaps in place to fix the interest rates at a range of 2.8% to 4.1%.

Notes Payable

Notes payable consist of mortgage loans secured by properties and unsecured public and private debt. Mortgage loans may be prepaid, but could be subject to yield maintenance premiums. Mortgage loans are generally due in monthly installments of principal and interest or interest only, whereas, interest on unsecured public and private debt is payable semi-annually.

The Company is required to comply with certain financial covenants for its unsecured public debt as defined in the indenture agreements such as the following ratios: Consolidated Debt to Consolidated Assets, Consolidated Secured Debt to Consolidated Assets, Consolidated Income for Debt Service to Consolidated Debt Service, and Unencumbered Consolidated Assets to Unsecured Consolidated Debt. As of December 31, 2017, management of the Company believes it is in compliance with all financial covenants for its unsecured public debt.

As of December 31, 2017, the key interest rates of the Company's notes payables were as follows:



		Interest Rates
	Maturing Through	Minimum	Maximum	Weighted Average Effective Rate	Weighted Average Contractual Rate
Mortgage loans (1)	2036	2.39%	8.00%	4.23%	4.77%
Fixed rate unsecured public and private debt	2047	3.60%	6.00%	4.11%	4.57%

(1) Interest rates disclosed for mortgages include variable rate mortgages using the fixed interest rates from the interest rate swaps, as disclosed in Note 8.

Unsecured Credit Facilities

The Company has an unsecured line of credit commitment (the "Line") and unsecured term loan commitments (the "Term Loans") under separate credit agreements with a syndicate of banks.

The Company is required to comply with certain financial covenants as defined in the Line and Term Loan credit agreements, such as Ratio of Indebtedness to Total Asset Value ("TAV"), Ratio of Unsecured Indebtedness to Unencumbered Asset Value, Ratio of Adjusted Earnings Before Interest Taxes Depreciation and Amortization (“EBITDA”) to Fixed Charges, Ratio of Secured Indebtedness to TAV, Ratio of Unencumbered Net Operating Income to Unsecured Interest Expense, and other covenants customary with this type of unsecured financing. As of December

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

31, 2017, management of the Company believes it is in compliance with all financial covenants for the Line and Term Loan.

The key terms of the Line and Term Loans were as follows:



	December 31, 2017
(in thousands)	Total Capacity		Remaining Capacity			Maturing Through		Variable Interest Rate (4)		Fee			Weighted Average Effective Rate		Weighted Average Contractual Rate
Line (7)	$	1,000,000	$	930,600	(1)	5/13/2019	(2)	LIBOR plus 0.925%		$	75	(3) (6)	2.30	%	2.12	%
Term Loan (8)	$	265,000	$	—		1/5/2022		LIBOR plus 0.95%	(5)	$	35	(6)	2.20	%	2.00	%
Term Loan (8)	$	300,000	$	—		12/2/2020		LIBOR plus 0.95%	(9)	$	35	(6)	2.80	%	2.77	%

(1) Borrowing capacity is reduced by the balance of outstanding borrowings and commitments under outstanding letters of credit.
(2) Maturity is subject to two six month extensions at the Company's option.
(3) In addition, carries a commitment fee that is subject to adjustment based on the higher of the Company's corporate credit ratings from Moody's and S&P. At December 31, 2017, the commitment fee was 0.15%.
(4) Interest rate spread is subject to Regency maintaining its corporate credit and senior unsecured ratings at BBB+.
(5) The interest rate on the underlying debt is LIBOR + 0.95%. Effective July 7, 2016, an interest rate swap is in place to fix the interest on the entire balance at 2% through maturity.
(6) Annual fee, in thousands.
(7) Weighted average contractual and effective rates for the Line are calculated based on a fully drawn Line balance.
(8) Weighted average contractual and effective rates for the Term Loans are based on the fixed rate with the interest rate swap.
(9) The interest rate on the underlying debt is LIBOR + 0.95%, with an interest rate swap in place to fix the interest on the entire balance at 2.774% through maturity.

Scheduled principal payments and maturities on notes payable and unsecured credit facilities were as follows:



(in thousands)	December 31, 2017
Scheduled Principal Payments and Maturities by Year:	Scheduled Principal Payments		Mortgage Loan Maturities	Unsecured Maturities (1)		Total
2018	$	10,641	112,226	—		122,867
2019	9,360		21,787	60,000		91,147
2020	11,122		78,580	450,000		539,702
2021	11,426		66,751	250,000		328,177
2022	11,618		5,848	565,000		582,466
Beyond 5 Years	37,056		260,328	1,650,000		1,947,384
Unamortized debt premium/(discount) and issuance costs	—		9,316	(26,082	)	(16,766	)
Total notes payable	$	91,223	554,836	2,948,918		3,594,977

(1) Includes unsecured public and private debt and unsecured credit facilities.

The Company has $112.2 million of debt maturing over the next twelve months, all of which is in the form of non-recourse mortgage loans. The Company currently intends to payoff the maturing balances with proceeds from unsecured borrowings and leave the properties unencumbered. The Company has sufficient capacity on its Line to repay the maturing debt, if necessary.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017


8.	Derivative Financial Instruments

The following table summarizes the terms and fair values of the Company's derivative financial instruments, as well as their classification on the Consolidated Balance Sheets:



						Fair Value at December 31,
(in thousands)						Assets (Liabilities) (1)
Effective Date	Maturity Date	Notional Amount		Bank Pays Variable Rate of	Regency Pays Fixed Rate of	2017			2016
4/3/17	12/2/20	$	300,000	1 Month LIBOR with Floor	1.824%	$	1,804		—
8/1/16	1/5/22	265,000		1 Month LIBOR with Floor	1.053%	10,744			9,889
4/7/16	4/1/23	20,000		1 Month LIBOR	1.303%	801			720
12/1/16	11/1/23	33,000		1 Month LIBOR	1.490%	1,166			1,013
6/2/17	6/2/27	37,500		1 Month LIBOR with Floor	2.366%	(177		)	(580	)
Total derivative financial instruments						$	14,338		11,042

(1) Derivatives in an asset position are included within Other assets in the accompanying Consolidated Balance Sheets, while those in a liability position are included within Accounts payable and other liabilities.

These derivative financial instruments are all interest rate swaps, which are designated and qualify as cash flow hedges. The Company does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated as hedges. The Company has master netting agreements; however, the Company does not have multiple derivatives subject to a single master netting agreement with the same counterparties. Therefore none are offset in the accompanying Consolidated Balance Sheets.

The effective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedges is recorded in accumulated other comprehensive income (loss) ("AOCI") and subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings within interest expense, in the accompanying Consolidated Statements of Operations.

The following table represents the effect of the derivative financial instruments on the accompanying consolidated financial statements:



Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)							Location and Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)								Location and Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Missed Forecast)
	Year ended December 31,							Year ended December 31,								Year ended December 31,
(in thousands)	2017		2016		2015			2017			2016		2015			2017		2016		2015
Interest rate swaps	$	1,151	(10,332	)	(10,089	)	Interest expense	$	(11,103	)	(51,139	)	(9,152	)	Loss on derivative instruments	$	—	(40,586	)	—

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

As of December 31, 2017, the Company expects $6.9 million of net deferred losses on derivative instruments accumulated in other comprehensive income, including the Company's share from its Investments in real estate partnerships, to be reclassified into earnings during the next 12 months. Included in the reclass is $8.4 million which is related to previously settled swaps on the Company's ten year fixed rate unsecured loans.

Hedge Settlement

During the third quarter of 2016, the Company initiated and completed a $400.1 million equity offering for the primary purpose of funding the early redemption of its $300 million notes. The Company also used $40.6 million from the net offering proceeds to settle $220 million of forward starting swaps related to new debt previously expected to be issued in 2017 to repay the notes at maturity. As a result of the equity offering, the Company believed that the issuance of new fixed rate debt within the remaining period of the forward starting swaps was probable not to occur. Accordingly, the Company ceased hedge accounting and reclassified the $40.6 million paid to settle the forward starting swaps from Accumulated other comprehensive loss to earnings during the third quarter of 2016.

Subsequent Event

On February 9, 2018, the Company executed a ten year treasury rate lock on $285.0 million notional amount at a fixed interest rate of 2.899%, intended to designate as a cash flow hedge against changes in interest rates on anticipated future fixed-rate unsecured borrowings.


9.	Fair Value Measurements

(a) Disclosure of Fair Value of Financial Instruments

All financial instruments of the Company are reflected in the accompanying Consolidated Balance Sheets at amounts which, in management's estimation, reasonably approximates their fair values, except for the following:



	December 31,
	2017			2016
(in thousands)	Carrying Amount		Fair Value	Carrying Amount		Fair Value
Financial assets:
Notes receivable	$	15,803	15,660	$	10,481	10,380
Financial liabilities:
Notes payable	$	2,971,715	3,058,044	$	1,363,925	1,435,000
Unsecured credit facilities	$	623,262	625,000	$	278,495	279,700

The above fair values represent management's estimate of the amounts that would be received from selling those assets or that would be paid to transfer those liabilities in an orderly transaction between market participants as of December 31, 2017 and 2016. These fair value measurements maximize the use of observable inputs. However, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects the Company's own judgments about the assumptions that market participants would use in pricing the asset or liability.

The Company develops its judgments based on the best information available at the measurement date, including expected cash flows, appropriately risk-adjusted discount rates, and available observable and unobservable inputs. Service providers involved in fair value measurements are evaluated for competency and qualifications on an ongoing basis. As considerable judgment is often necessary to estimate the fair value of these financial instruments, the fair values presented above are not necessarily indicative of amounts that will be realized upon disposition of the financial instruments.

The following methods and assumptions were used to estimate the fair value of these financial instruments:

Notes Receivable

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

The fair value of the Company's notes receivable is estimated by calculating the present value of future contractual cash flows discounted at interest rates available for notes of the same terms and maturities, adjusted for counter-party specific credit risk. The fair value of notes receivable was determined primarily using Level 3 inputs of the fair value hierarchy, which considered counter-party credit risk and collateral risk of the underlying property securing the note receivable.

Notes Payable

The fair value of the Company's unsecured debt is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities. The fair value of the unsecured debt was determined using Level 2 inputs of the fair value hierarchy.

The fair value of the Company's mortgage notes payable is estimated by discounting future cash flows of each instrument at rates that reflect the current market rates available to the Company for debt of the same terms and maturities. Fixed rate loans assumed in connection with real estate acquisitions are recorded in the accompanying consolidated financial statements at fair value at the time the property is acquired. The fair value of the mortgage notes payable was determined using Level 2 inputs of the fair value hierarchy.

Unsecured Credit Facilities

The fair value of the Company's Unsecured credit facilities is estimated based on the interest rates currently offered to the Company by financial institutions. The fair value of the credit facilities was determined using Level 2 inputs of the fair value hierarchy.

The following interest rates were used by the Company to estimate the fair value of its financial instruments:



	December 31,
	2017		2016
	Low	High	Low	High
Notes receivable	3.8%	7.8%	7.2%	7.2%
Notes payable	3.0%	3.9%	2.9%	3.9%
Unsecured credit facilities	2.0%	3.0%	1.5%	1.6%

(b) Fair Value Measurements

The following financial instruments are measured at fair value on a recurring basis:

Trading Securities Held in Trust

The Company has investments in marketable securities, which are assets of the non-qualified deferred compensation plan ("NQDCP"), that are classified as trading securities held in trust on the accompanying Consolidated Balance Sheets. The fair value of the trading securities held in trust was determined using quoted prices in active markets, which are considered Level 1 inputs of the fair value hierarchy. Changes in the value of trading securities are recorded within net investment (income) loss from deferred compensation plan in the accompanying Consolidated Statements of Operations.

Available-for-Sale Securities

Available-for-sale securities consist of investments in certificates of deposit and corporate bonds, and are recorded at fair value using matrix pricing methods to estimate fair value, which are considered Level 2 inputs of the fair value hierarchy. Unrealized gains or losses on these securities are recognized through Other comprehensive income.

Interest Rate Derivatives

The fair value of the Company's interest rate derivatives is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The Company incorporates credit valuation

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty's nonperformance risk in the fair value measurements.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and its counterparties. The Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its interest rate swaps. As a result, the Company determined that its interest rate swaps valuation in its entirety is classified in Level 2 of the fair value hierarchy.

The following table presents the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a recurring basis:



	Fair Value Measurements as of December 31, 2017
				Quoted Prices in Active Markets for Identical Assets	Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)	Balance			(Level 1)	(Level 2)		(Level 3)
Assets:
Trading securities held in trust	$	31,662		31,662	—		—
Available-for-sale securities	9,974			—	9,974		—
Interest rate derivatives	14,515			—	14,515		—
Total	$	56,151		31,662	24,489		—
Liabilities:
Interest rate derivatives	$	(177	)	—	(177	)	—



	Fair Value Measurements as of December 31, 2016
				Quoted Prices in Active Markets for Identical Assets	Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)	Balance			(Level 1)	(Level 2)		(Level 3)
Assets:
Trading securities held in trust	$	28,588		28,588	—		—
Available-for-sale securities	7,420			—	7,420		—
Interest rate derivatives	11,622			—	11,622		—
Total	$	47,630		28,588	19,042		—
Liabilities:
Interest rate derivatives	$	(580	)	—	(580	)	—


10.	Equity and Capital

Preferred Stock of the Parent Company

There were no preferred stock series outstanding as of December 31, 2017. Terms and conditions of the preferred stock outstanding at December 31, 2016, which were redeemed during 2017, are summarized as follows:

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017



	Date of Issuance	Shares Issued and Outstanding	Liquidation Preference		Distribution Rate	Callable By Company
Series 6	2/16/2012	10,000,000	$	250,000,000	6.625%	2/16/2017
Series 7	8/23/2012	3,000,000	75,000,000		6.000%	8/23/2017
		13,000,000	$	325,000,000

The Series 6 and 7 preferred shares were perpetual, absent a change in control of the Parent Company, were not convertible into common stock of the Parent Company, and were redeemable at par upon the Company’s election beginning 5 years after the issuance date. None of the terms of the preferred stock contained any unconditional obligations that would have require the Company to redeem the securities at any time or for any purpose.

Preferred Shares Redemption

On February 16, 2017, the Parent Company redeemed all of the issued and outstanding 6.625% Series 6 cumulative redeemable preferred shares. The redemption price of $25.21 per share included accrued and unpaid dividends, resulting in an aggregate amount being paid of $252.0 million. The funds used to redeem the Series 6 preferred shares were provided by the January 2017 senior unsecured debt offering.

On August 23, 2017, the Parent Company also redeemed all of the issued and outstanding 6.000% Series 7 cumulative redeemable preferred stock. The redemption price of $25.22 per share included accrued and unpaid dividends resulting in an aggregate amount being paid of $75.7 million. The Company used proceeds from its senior unsecured notes issued in June 2017 to fund the redemption.

Common Stock of the Parent Company

Issuances:

At the Market ("ATM") Program

Under the Parent Company's ATM equity offering program, the Parent Company may sell up to $500.0 million of common stock at prices determined by the market at the time of sale. As of December 31, 2017, $500.0 million in common stock remained available for issuance under this ATM equity program.

The following table presents the shares that were issued under the ATM equity program, which was used to fund investment activities:



	Year ended December 31,
(dollar amounts are in thousands, except price per share data)	2017		2016
Shares issued (1)	—		182,787
Weighted average price per share	$	—	68.85
Gross proceeds	$	—	12,584
Commissions	$	—	157
Issuance costs (2)	$	349	97

(1) Reflects shares traded in December and settled in January each year.
(2) Includes legal and accounting costs associated with maintaining the ATM program.

Forward Equity Offering

In March 2016, the Parent Company entered into a forward sale agreement (the "Forward Equity Offering") to issue 3.10 million shares of its common stock at an offering price of $75.25 per share, before any underwriting discount and offering expenses.

In June 2016, the Parent Company partially settled its forward equity offering by delivering 1.85 million shares of newly issued common stock, receiving $137.5 million of net proceeds, which were used to reduce the balance on the Line.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

In December 2017, the Parent Company settled the remaining shares in its forward equity offering by delivering 1.25 million shares of newly issued common stock, receiving $89.1 million of net proceeds, which were used to reduce the balance on the Line.

Equity One merger

On March 1, 2017, Regency completed its merger with Equity One. Under the terms of the merger Agreement, each Equity One stockholder received 0.45 of a newly issued share of Regency common stock for each share of Equity One common stock that they owned immediately prior to the effective time of the Merger resulting in approximately 65.5 million shares being issued to effect the merger.

Share Repurchase Program - Subsequent Event

On February 7, 2018, the Company's Board authorized a common share repurchase program under which the Company may purchase, from time to time, up to a maximum of $250 million of shares of its outstanding common stock through open market purchases and/or in privately negotiated transactions. Any shares purchased will be retired. The program is scheduled to expire on February 6, 2020. The timing and actual number of shares purchased under the program depend upon marketplace conditions and other factors. The program remains subject to the discretion of the board. Through the date of filing, the Company has repurchased $74.2 million of shares.

Preferred Units of the Operating Partnership

All preferred units for the Parent Company were retired, as discussed above.

Common Units of the Operating Partnership

Issuances:

Common units were issued to the Parent Company in relation to the Parent Company's issuance of common stock, as discussed above.

In April 2017, the Operating Partnership issued 195,732 limited partner units, valued at $13.1 million, as partial purchase price consideration for the acquisition of land for development.

General Partners

The Parent Company, as general partner, owned the following Partnership Units outstanding:



	December 31,
(in thousands)	2017	2016
Partnership units owned by the general partner	171,365	104,497
Partnership units owned by the limited partners	350	154
Total partnership units outstanding	171,715	104,651
Percentage of partnership units owned by the general partner	99.8%	99.9%

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

Accumulated Other Comprehensive Income (Loss)

The following table presents changes in the balances of each component of AOCI:



	Controlling Interest							Noncontrolling Interest					Total
(in thousands)	Cash Flow Hedges			Unrealized gain (loss) on Available-For-Sale Securities		AOCI		Cash Flow Hedges		Unrealized gain (loss) on Available-For-Sale Securities	AOCI		AOCI
Balance as of December 31, 2014	$	(57,748	)	—		(57,748	)	(750	)	—	(750	)	(58,498	)
Other comprehensive income before reclassifications	(9,897		)	(43	)	(9,940	)	(192	)	—	(192	)	(10,132	)
Amounts reclassified from accumulated other comprehensive income	8,995			—		8,995		157		—	157		9,152
Current period other comprehensive income, net	(902		)	(43	)	(945	)	(35	)	—	(35	)	(980	)
Balance as of December 31, 2015	$	(58,650	)	(43	)	(58,693	)	(785	)	—	(785	)	(59,478	)
Other comprehensive income before reclassifications	(10,587		)	24		(10,563	)	255		—	255		(10,308	)
Amounts reclassified from accumulated other comprehensive income	50,910			—		50,910		229		—	229		51,139
Current period other comprehensive income, net	40,323			24		40,347		484		—	484		40,831
Balance as of December 31, 2016	$	(18,327	)	(19	)	(18,346	)	(301	)	—	(301	)	(18,647	)
Other comprehensive income before reclassifications	1,134			(8	)	1,126		17		—	17		1,143
Amounts reclassified from accumulated other comprehensive income	10,931			—		10,931		172		—	172		11,103
Current period other comprehensive income, net	12,065			(8	)	12,057		189		—	189		12,246
Balance as of December 31, 2017	$	(6,262	)	(27	)	(6,289	)	(112	)	—	(112	)	(6,401	)

The following represents amounts reclassified out of AOCI into income:



AOCI Component	Amount Reclassified from AOCI into Income				Affected Line Item(s) Where Net Income is Presented
	Year ended December 31,
(in thousands)	2017		2016	2015
Interest rate swaps	$	11,103	51,139	9,152	Interest expense and Loss on derivative instruments

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017


11.	Stock-Based Compensation

The Company recorded stock-based compensation in general and administrative expenses in the accompanying Consolidated Statements of Operations, the components of which are further described below:



	Year ended December 31,
(in thousands)	2017			2016		2015
Restricted stock (1)	$	15,525		13,422		13,869
Directors' fees paid in common stock (1)	303			193		200
Capitalized stock-based compensation (2)	(3,210		)	(2,963	)	(2,988	)
Stock based compensation attributable to post-combination service from Equity One merger	7,931			—		—
Stock-based compensation, net of capitalization	$	20,549		10,652		11,081

(1) Includes amortization of the grant date fair value of restricted stock awards over the respective vesting periods.
(2) Includes compensation expense specifically identifiable to development and leasing activities.

The Company established its Long Term Omnibus Plan (the "Plan") under which the Board of Directors may grant stock options and other stock-based awards to officers, directors, and other key employees. The Plan allows the Company to issue up to 4.1 million shares in the form of the Parent Company's common stock or stock options. As of December 31, 2017, there were 2.1 million shares available for grant under the Plan either through stock options or restricted stock.

Restricted Stock Awards

The Company grants restricted stock under the Plan to its employees as a form of long-term compensation and retention. The terms of each restricted stock grant vary depending upon the participant's responsibilities and position within the Company. The Company's stock grants can be categorized as either time-based awards, performance-based awards, or market-based awards. All awards are valued at fair value, earn dividends throughout the vesting period, and have no voting rights. Fair value is measured using the grant date market price for all time-based or performance-based awards. Market based awards are valued using a Monte Carlo simulation to estimate the fair value based on the probability of satisfying the market conditions and the projected stock price at the time of payout, discounted to the valuation date over a three year performance period. Assumptions include historic volatility over the previous three year period, risk-free interest rates, and Regency's historic daily return as compared to the market index. Since the award payout includes dividend equivalents and the total shareholder return includes the value of dividends, no dividend yield assumption is required for the valuation. Compensation expense is measured at the grant date and recognized on a straight-line basis over the requisite vesting period for the entire award.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

The following table summarizes non-vested restricted stock activity:



		Year ended December 31, 2017
		Number of Shares		Intrinsic Value (in thousands)		Weighted Average Grant Price
Non-vested as of December 31, 2016		561,261
Add: Time-based awards granted (1) (4)		118,339				$69.47
Add: Performance-based awards granted (2) (4)		38,494				$68.95
Add: Market-based awards granted (3) (4)		65,449				$78.54
Less: Vested and Distributed (5)		207,403				$69.32
Less: Forfeited		6,063				$66.91
Non-vested and expected to vest as of December 31, 2017 (6)		570,077		$39,438

(1) Time-based awards vest beginning on the first anniversary following the grant date over a three or four year service period. These grants are subject only to continued employment and are not dependent on future performance measures. Accordingly, if such vesting criteria are not met, compensation cost previously recognized would be reversed.
(2) Performance-based awards are earned subject to future performance measurements. Once the performance criteria are achieved and the actual number of shares earned is determined, shares vest over a required service period. The Company considers the likelihood of meeting the performance criteria based upon management's estimates from which it determines the amounts recognized as expense on a periodic basis.
(3) Market-based awards are earned dependent upon the Company's total shareholder return in relation to the shareholder return of a NAREIT index over a three-year period. Once the performance criteria are met and the actual number of shares earned is determined, the shares are immediately vested and distributed. The probability of meeting the criteria is considered when calculating the estimated fair value on the date of grant using a Monte Carlo simulation. These awards are accounted for as awards with market criteria, with compensation cost recognized over the service period, regardless of whether the performance criteria are achieved and the awards are ultimately earned. The significant assumptions underlying determination of fair values for market-based awards granted were as follows:

		Year ended December 31,
		2017		2016		2015
	Volatility	18.00%		18.50%		17.10%
	Risk free interest rate	1.48%		0.88%		0.78%

(4)The weighted-average grant price for restricted stock granted during the years is summarized below:

		Year ended December 31,
		2017		2016		2015
	Weighted-average grant price for restricted stock	$	72.05	$	79.40	$	69.80

(5) The total intrinsic value of restricted stock vested during the years is summarized below (in thousands):

		Year ended December 31,
		2017		2016		2015
	Intrinsic value of restricted stock vested	$	14,376	$	15,400	$	18,600

(6) As of December 31, 2017, there was $14.2 million of unrecognized compensation cost related to non-vested restricted stock granted under the Parent Company's Plan. When recognized, this compensation results in additional paid in capital in the accompanying Consolidated Statements of Equity of the Parent Company and in general partner preferred and common units in the accompanying Consolidated Statements of Capital of the Operating Partnership. This unrecognized compensation cost is expected to be recognized over the next three years. The Company issues new restricted stock from its authorized shares available at the date of grant.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017


12.	Saving and Retirement Plans

401(k) Retirement Plan

The Company maintains a 401(k) retirement plan covering substantially all employees, which permits participants to defer up to the maximum allowable amount determined by the IRS of their eligible compensation. This deferred compensation, together with Company matching contributions equal to 100% of employee deferrals up to a maximum of $5,000 of their eligible compensation, is fully vested and funded as of December 31, 2017. Additionally, an annual profit sharing contribution is made, which vests over a three year period. Costs for Company contributions to the plan totaled $4.1 million, $3.3 million and $3.1 million for the years ended December 31, 2017, 2016, and 2015, respectively.

Non-Qualified Deferred Compensation Plan

The Company maintains a non-qualified deferred compensation plan (“NQDCP”), which allows select employees and directors to defer part or all of their cash bonus, director fees, and vested restricted stock awards. All contributions into the participants' accounts are fully vested upon contribution to the NQDCP and are deposited in a Rabbi trust.

The following table reflects the balances of the assets and deferred compensation liabilities of the Rabbi trust in the accompanying Consolidated Balance Sheets:



Non Qualified Deferred Compensation Plan Component (1)	Year ended December 31,
(in thousands)	2017		2016
Assets:
Trading securities held in trust (2)	$	31,662	28,588
Liabilities:
Accounts payable and other liabilities	$	31,383	28,214

(1) Assets and liabilities of the Rabbi trust are exclusive of the shares of the Company's common stock.
(2) Included within Other assets in the accompanying Consolidated Balance Sheets.

Realized and unrealized gains and losses on trading securities are recognized within income from deferred compensation plan in the accompanying Consolidated Statements of Operations. Changes in participant obligations, which is based on changes in the value of their investment elections, is recognized within general and administrative expenses within the accompanying Consolidated Statements of Operations.

Investments in shares of the Company's common stock are included, at cost, as treasury stock in the accompanying Consolidated Balance Sheets of the Parent Company and as a reduction of general partner capital in the accompanying Consolidated Balance Sheets of the Operating Partnership. The participant's deferred compensation liability attributable to the participants' investments in shares of the Company's common stock are included, at cost, within additional paid in capital in the accompanying Consolidated Balance Sheets of the Parent Company and as a reduction of general partner capital in the accompanying Consolidated Balance Sheets of the Operating Partnership. Changes in participant account balances related to the Regency common stock fund are recorded directly within stockholders' equity.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017


13.	Earnings per Share and Unit

Parent Company Earnings per Share

The following summarizes the calculation of basic and diluted earnings per share:



	Year ended December 31,
(in thousands, except per share data)	2017		2016	2015
Numerator:
Income from operations attributable to common stockholders - basic	$	159,949	143,860	128,994
Income from operations attributable to common stockholders - diluted	$	159,949	143,860	128,994
Denominator:
Weighted average common shares outstanding for basic EPS	159,536		100,863	94,391
Weighted average common shares outstanding for diluted EPS (1)	159,960		101,285	94,856


Income per common share – basic	$	1.00	1.43	1.37
Income per common share – diluted	$	1.00	1.42	1.36

(1) Includes the dilutive impact of unvested restricted stock.

Amounts excluded for each because they would be anti-dilutive include:

The 1.3 million shares issuable under the forward equity offering outstanding at December 31, 2017 and 2016, using the treasury stock method .

Income allocated to noncontrolling interests of the Operating Partnership has been excluded from the numerator and exchangeable Operating Partnership units have been omitted from the denominator for the purpose of computing diluted earnings per share since the effect of including these amounts in the numerator and denominator would have no impact. Weighted average exchangeable Operating Partnership units outstanding for the years ended December 31, 2017, 2016, and 2015 were 295,054, 154,170, and 154,170 respectively.

Operating Partnership Earnings per Unit

The following summarizes the calculation of basic and diluted earnings per unit:



	Year ended December 31,
(in thousands, except per share data)	2017		2016	2015
Numerator:
Income from operations attributable to common unit holders - basic	$	160,337	144,117	129,234
Income from operations attributable to common unit holders - diluted	$	160,337	144,117	129,234
Denominator:
Weighted average common units outstanding for basic EPU	159,831		101,017	94,546
Weighted average common units outstanding for diluted EPU (1)	160,255		101,439	95,011

Income per common unit – basic	$	1.00	1.43	1.37
Income per common unit – diluted	$	1.00	1.42	1.36

(1) Includes the dilutive impact of unvested restricted stock and forward equity offering using the treasury stock method.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017


14.	Operating Leases

The Company's properties are leased to tenants under operating leases. Our leases for tenant space under 10,000 square feet generally have initial terms ranging from three to seven years. Leases greater than 10,000 square feet generally have initial 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. Future minimum rents under non-cancelable operating leases as of December 31, 2017, excluding both tenant reimbursements of operating expenses and additional percentage rent based on tenants' sales, are as follows:



In Process Year Ending December 31,	Future Minimum Rents (in thousands)
2018	$	734,157
2019	669,345
2020	589,515
2021	505,592
2022	412,924
Thereafter	1,643,594
Total	$	4,555,127

The shopping centers' tenant base primarily includes national and regional supermarkets, drug stores, discount department stores, restaurants, and other retailers and, consequently, the credit risk is concentrated in the retail industry. Grocer anchor tenants represent approximately 18% of pro-rata annual base rent. There were no tenants that individually represented more than 5% of the Company's annualized future minimum rents.

The Company has shopping centers that are subject to non-cancelable, long-term ground leases where a third party owns and has leased the underlying land to the Company to construct and/or operate a shopping center. Ground leases expire through the year 2101, and in most cases, provide for renewal options. Buildings and improvements constructed on the leased land are capitalized and depreciated over the shorter of the useful life of the improvements or the lease term.

In addition, the Company has non-cancelable operating leases pertaining to office space from which it conducts its business. Office leases expire through the year 2029, and in most cases, provide for renewal options. Leasehold improvements are capitalized, recorded as tenant improvements, and depreciated over the shorter of the useful life of the improvements or the lease term.

Operating lease expense was $18.4 million, $13.1 million, and $9.5 million for the years ended December 31, 2017, 2016, and 2015, respectively. The following table summarizes the future obligations under non-cancelable operating leases as of December 31, 2017:



In Process Year Ending December 31,	Future Obligations (in thousands)
2018	$	14,266
2019	15,329
2020	14,778
2021	13,907
2022	13,049
Thereafter	481,972
Total	$	553,301


15.	Commitments and Contingencies

Litigation

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017

The Company is involved in litigation on a number of matters and is subject to certain claims, which arise in the normal course of business, none of which, in the opinion of management, is expected to have a material adverse effect on the Company's consolidated financial position, results of operations, or liquidity. Legal fees are expensed as incurred.

After the announcement of the merger agreement on November 14, 2016, a putative class action was filed on behalf of a purported stockholder in the Circuit Court for Duval County, Florida, under the following caption: Robert Garfield on Behalf of Himself and All Others Similarly Situated vs. Regency Centers Corporation, Martin E. Stein, Jr., John C. Schweitzer, Raymond L. Bank, Bryce Blair, C. Ronald Blankenship, J. Dix Druce, Jr., Mary Lou Fiala, David P. O'Connor, and Thomas G. Wattles, No. 16-2017-CA-000688-XXXX-MA, filed February 3, 2017.

The class action alleges, among other matters, that the definitive joint proxy statement/prospectus filed by Regency and Equity One with the Securities and Exchange Commission (the “SEC”) on January 24, 2017 (the “Joint Proxy Statement/Prospectus”) omitted certain material information in connection with the merger. The complainant saught various remedies, including injunctive relief to prevent the consummation of the merger unless certain allegedly material information was disclosed and saught compensatory and rescissory damages in the event the merger was consummated without such disclosures.

On February 17, 2017, the defendants entered into a stipulation of settlement with respect to the class action, pursuant to which the parties have agreed, among other things, that Regency will make certain supplemental disclosures. The supplemental disclosures were made by Regency in the Current Report on Form 8-K filed by Regency with the SEC on February 17, 2017. The stipulation of settlement was approved by the courts and the case dismissed in January 2018.

Environmental

The Company is also subject to numerous environmental laws and regulations as they apply to real estate pertaining to chemicals used by the dry cleaning industry, the existence of asbestos in older shopping centers, and underground petroleum storage tanks. The Company believes that the ultimate disposition of currently known environmental matters will not have a material effect on its financial position, liquidity, or operations. The Company can give no assurance that existing environmental studies with respect to the shopping centers have revealed all potential environmental contaminants or liabilities; that any previous owner, occupant or tenant did not create any material environmental condition not known to it; that the current environmental condition of the shopping centers will not be affected by tenants and occupants, by the condition of nearby properties, or by unrelated third parties; or that changes in applicable environmental laws and regulations or their interpretation will not result in additional material environmental liability to the Company.

Letter of Credit

The Company has the right to issue letters of credit under the Line up to an amount not to exceed $50.0 million, which reduces the credit availability under the Line. These letters of credit are primarily issued as collateral on behalf of its captive insurance program and to facilitate the construction of development projects. As of December 31, 2017 and 2016, the Company had $9.4 million and $5.8 million in letters of credit outstanding, respectively.

Purchase Commitments

The Company enters purchase and sale agreements to buy or sell real estate assets in the normal course of business, which generally provide limited recourse if either party ends the contract. In addition, at December 31, 2017, the Company has a commitment to purchase up to 100% ownership interest in an operating property valued at $205 million by November 2019, currently expecting to acquire 30% interest by that date.


16.	Summary of Quarterly Financial Data (Unaudited)

The following table summarizes selected Quarterly Financial Data for the Company on a historical basis for the years ended December 31, 2017 and 2016:

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2017



(in thousands except per share and per unit data)	First Quarter			Second Quarter	Third Quarter	Fourth Quarter
Year ended December 31, 2017
Operating Data:
Revenue	$	196,131		261,305	262,141	264,749

Net income attributable to common stockholders	$	(33,223	)	48,368	59,666	85,138
Net income attributable to exchangeable operating partnership units	(19		)	104	132	171
Net income attributable to common unit holders	$	(33,242	)	48,472	59,798	85,309

Net income attributable to common stock and unit holders per share and unit:
Basic	$	(0.26	)	0.28	0.35	0.50
Diluted	$	(0.26	)	0.28	0.35	0.50

Year ended December 31, 2016
Operating Data:
Revenue	$	149,628		152,413	152,769	159,561

Net income attributable to common stockholders	$	47,877		34,810	5,305	55,868
Net income attributable to exchangeable operating partnership units	85			64	16	92
Net income attributable to common unit holders	$	47,962		34,874	5,321	55,960

Net income attributable to common stock and unit holders per share and unit:
Basic	$	0.49		0.36	0.05	0.53
Diluted	$	0.49		0.35	0.05	0.53



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P. Schedule III - Consolidated Real Estate and Accumulated Depreciation December 31, 2017 (in thousands)

	Initial Cost					Total Cost				Net Cost
Shopping Centers (1)	Land (3)		Building & Improvements (3)	Cost Capitalized Subsequent to Acquisition (2) (3)		Land (3)	Building & Improvements (3)	Total (3)	Accumulated Depreciation (3)	Net of Accumulated Depreciation (3)	Mortgages
101 7th Avenue	$	48,339	34,895	—		48,339	34,895	83,234	934	82,300	—
1175 Third Avenue	40,560		25,617	—		40,560	25,617	66,177	623	65,554	—
1225-1239 Second Ave	23,033		17,173	46		23,033	17,219	40,252	447	39,805	—
200 Potrero	4,860		2,251	—		4,860	2,251	7,111	87	7,024	—
22 Crescent Road	2,152		318	—		2,152	318	2,470	18	2,452	—
4S Commons Town Center	30,760		35,830	1,230		30,812	37,008	67,820	22,825	44,995	85,000
90-30 Metropolitan Avenue	16,355		24,429	79		16,355	24,508	40,863	536	40,327	—
91 Danbury Road	690		893	—		690	893	1,583	31	1,552	—
Alafaya Commons	7,388		12,690	77		7,388	12,767	20,155	557	19,598	—
Alafaya Village	2,806		6,046	63		2,806	6,109	8,915	216	8,699	—
Ambassador Row	2,572		20,457	—		2,572	20,457	23,029	819	22,210	—
Ambassador Row Courtyards	1,779		6,783	553		1,779	7,336	9,115	380	8,735	—
Amerige Heights Town Center	10,109		11,288	614		10,109	11,902	22,011	4,340	17,671	15,844
Anastasia Plaza	9,065		—	639		3,338	6,366	9,704	2,324	7,380	—
Ashburn Farm Market Center	9,835		4,812	640		9,835	5,452	15,287	4,272	11,015	—
Ashford Place	2,584		9,865	1,105		2,584	10,970	13,554	7,247	6,307	—
Atlantic Village	2,446		20,663	23		2,446	20,686	23,132	701	22,431	—
Aventura Shopping Center	2,751		10,459	9,663		8,975	13,898	22,873	121	22,752	—
Aventura Square	86,933		21,936	1,695		88,492	22,072	110,564	696	109,868	8,176
Balboa Mesa Shopping Center	23,074		33,838	13,915		27,758	43,069	70,827	9,747	61,080	—
Banco Popular Building	2,003		1,294	47		2,016	1,328	3,344	55	3,289	—
Belleview Square	8,132		9,756	3,097		8,323	12,662	20,985	7,389	13,596	—
Belmont Chase	13,881		17,193	(588	)	14,372	16,114	30,486	2,527	27,959	—
Berkshire Commons	2,295		9,551	2,247		2,965	11,128	14,093	7,351	6,742	—
Bird 107 Plaza	10,108		5,399	8		10,108	5,407	15,515	192	15,323	—
Bird Ludlam	40,945		40,200	66		40,945	40,266	81,211	1,228	79,983	—
Black Rock	22,251		20,815	301		22,250	21,117	43,367	3,535	39,832	20,000
Bloomingdale Square	3,940		14,912	3,174		4,430	17,596	22,026	9,152	12,874	—
Bluebonnet Village	3,688		10,167	533		3,688	10,700	14,388	438	13,950	—
Bluffs Square Shoppes	6,412		13,072	(165	)	6,412	12,907	19,319	527	18,792	—
Boca Village Square	42,543		11,043	30		42,543	11,073	53,616	464	53,152	—
Boulevard Center	3,659		10,787	2,268		3,659	13,055	16,714	6,647	10,067	—



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P. Schedule III - Consolidated Real Estate and Accumulated Depreciation December 31, 2017 (in thousands)

	Initial Cost				Total Cost				Net Cost
Shopping Centers (1)	Land (3)	Building & Improvements (3)	Cost Capitalized Subsequent to Acquisition (2) (3)		Land (3)	Building & Improvements (3)	Total (3)	Accumulated Depreciation (3)	Net of Accumulated Depreciation (3)	Mortgages
Boynton Lakes Plaza	2,628	11,236	4,936		3,606	15,194	18,800	6,817	11,983	—
Boynton Plaza	11,781	21,812	106		11,781	21,918	33,699	694	33,005	—
Brentwood Plaza	2,788	3,473	289		2,788	3,762	6,550	1,242	5,308	—
Briarcliff La Vista	694	3,292	495		694	3,787	4,481	2,746	1,735	—
Briarcliff Village	4,597	24,836	2,054		4,597	26,890	31,487	17,528	13,959	—
Brick Walk	25,299	41,995	1,042		25,299	43,037	68,336	5,447	62,889	33,000
BridgeMill Market	6,303	14,526	276		6,303	14,802	21,105	540	20,565	5,596
Bridgeton	3,033	8,137	485		3,067	8,588	11,655	2,226	9,429	—
Brighten Park	3,983	18,687	11,341		4,234	29,777	34,011	14,230	19,781	—
Broadway Plaza	40,391	42,281	—		40,391	42,281	82,672	1,155	81,517	—
Brooklyn Station on Riverside	7,019	8,688	(34	)	7,019	8,654	15,673	1,095	14,578	—
Brookside Plaza	33,612	19,043	151		33,612	19,194	52,806	854	51,952	—
Buckhead Court	1,417	7,432	3,371		1,417	10,803	12,220	6,232	5,988	—
Buckhead Station	69,831	35,397	2,217		69,868	37,577	107,445	1,306	106,139	—
Buckley Square	2,970	5,978	1,151		2,970	7,129	10,099	4,026	6,073	—
Caligo Crossing	2,459	4,897	39		2,546	4,849	7,395	2,536	4,859	—
Cambridge Square	774	4,347	784		774	5,131	5,905	3,109	2,796	—
Carmel Commons	2,466	12,548	5,119		3,422	16,711	20,133	9,047	11,086	—
Carriage Gate	833	4,974	3,042		1,302	7,547	8,849	5,608	3,241	—
Cashmere Corners	2,268	10,317	37		2,268	10,354	12,622	401	12,221	—
Centerplace of Greeley III	6,661	11,502	460		5,694	12,929	18,623	4,447	14,176	—
Charlotte Square	545	7,441	389		545	7,830	8,375	306	8,069	—
Chasewood Plaza	4,612	20,829	5,234		6,518	24,157	30,675	15,835	14,840	—
Chastain Square	29,501	13,217	1,278		29,501	14,495	43,996	551	43,445	—
Cherry Grove	3,533	15,862	4,063		3,533	19,925	23,458	9,494	13,964	—
Circle Center West	22,602	9,355	14		22,602	9,369	31,971	353	31,618	10,198
CityLine Market	12,208	15,839	71		12,246	15,872	28,118	1,404	26,714	—
CityLine Market Phase II	2,611	3,233	(47	)	2,611	3,186	5,797	186	5,611	—
Clayton Valley Shopping Center	24,189	35,422	2,722		24,538	37,795	62,333	22,624	39,709	—
Clocktower Plaza Shopping Ctr	48,907	20,347	64		48,907	20,411	69,318	594	68,724	—
Clybourn Commons	15,056	5,594	254		15,056	5,848	20,904	925	19,979	—
Cochran's Crossing	13,154	12,315	1,150		13,154	13,465	26,619	9,374	17,245	—



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P. Schedule III - Consolidated Real Estate and Accumulated Depreciation December 31, 2017 (in thousands)

	Initial Cost				Total Cost				Net Cost
Shopping Centers (1)	Land (3)	Building & Improvements (3)	Cost Capitalized Subsequent to Acquisition (2) (3)		Land (3)	Building & Improvements (3)	Total (3)	Accumulated Depreciation (3)	Net of Accumulated Depreciation (3)	Mortgages
Compo Acres Shopping Center	28,096	10,925	235		28,096	11,160	39,256	312	38,944	—
Concord Shopping Plaza	28,037	39,288	453		28,490	39,288	67,778	1,143	66,635	27,750
Copps Hill Plaza	28,508	41,680	194		28,508	41,874	70,382	1,285	69,097	14,221
Coral Reef Shopping Center	14,210	15,913	—		14,210	15,913	30,123	516	29,607	—
Corkscrew Village	8,407	8,004	595		8,407	8,599	17,006	3,238	13,768	—
Cornerstone Square	1,772	6,944	1,683		1,772	8,627	10,399	5,254	5,145	—
Corvallis Market Center	6,674	12,244	456		6,696	12,678	19,374	5,254	14,120	—
Costa Verde Center	12,740	26,868	1,640		12,798	28,450	41,248	15,398	25,850	—
Countryside Shops	16,667	30,087	(108	)	16,667	29,979	46,646	1,035	45,611	—
Courtyard Shopping Center	5,867	4	3		5,867	7	5,874	2	5,872	—
Crossroads Square	7,257	13,212	31		7,257	13,243	20,500	508	19,992	—
Culpeper Colonnade	15,944	10,601	4,893		16,258	15,180	31,438	9,033	22,405	—
Culver Center	108,355	32,798	144		108,355	32,942	141,297	1,157	140,140	—
Danbury Green	29,579	19,979	105		29,579	20,084	49,663	601	49,062	—
Dardenne Crossing	4,194	4,005	328		4,343	4,184	8,527	1,556	6,971	—
Darinor Plaza	—	32,832	529		—	33,361	33,361	1,006	32,355	—
Diablo Plaza	5,300	8,181	1,444		5,300	9,625	14,925	4,906	10,019	—
Dunwoody Village	3,342	15,934	4,041		3,342	19,975	23,317	13,297	10,020	—
East Pointe	1,730	7,189	2,024		1,941	9,002	10,943	5,157	5,786	—
East Washington Place	15,993	40,180	1,743		15,509	42,407	57,916	9,140	48,776	—
El Camino Shopping Center	7,600	11,538	11,954		10,000	21,092	31,092	6,317	24,775	—
El Cerrito Plaza	11,025	27,371	1,337		11,025	28,708	39,733	9,450	30,283	36,436
El Norte Parkway Plaza	2,834	7,370	3,308		3,263	10,249	13,512	4,965	8,547	—
Elmwood Oaks Shopping Center	5,139	9,542	244		5,139	9,786	14,925	534	14,391	—
Encina Grande	5,040	11,572	19,253		10,053	25,812	35,865	9,887	25,978	—
Fairfax Shopping Center	15,239	11,367	(8,807	)	10,793	7,006	17,799	6,691	11,108	—
Fairfield	6,731	29,420	610		6,731	30,030	36,761	3,695	33,066	—
Falcon Marketplace	1,340	4,168	442		1,340	4,610	5,950	2,086	3,864	—
Fellsway Plaza	30,712	7,327	10,094		34,923	13,210	48,133	3,886	44,247	37,500
Fenton Marketplace	2,298	8,510	(8,240	)	512	2,056	2,568	705	1,863	—
Fleming Island	3,077	11,587	2,979		3,111	14,532	17,643	7,240	10,403	—
Folsom Prairie City Crossing	4,164	13,032	619		4,164	13,651	17,815	5,890	11,925	—



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P. Schedule III - Consolidated Real Estate and Accumulated Depreciation December 31, 2017 (in thousands)

	Initial Cost				Total Cost				Net Cost
Shopping Centers (1)	Land (3)	Building & Improvements (3)	Cost Capitalized Subsequent to Acquisition (2) (3)		Land (3)	Building & Improvements (3)	Total (3)	Accumulated Depreciation (3)	Net of Accumulated Depreciation (3)	Mortgages
Fountain Square	29,650	28,984	21		29,719	28,936	58,655	4,835	53,820	—
French Valley Village Center	11,924	16,856	237		11,822	17,195	29,017	11,234	17,783	—
Friars Mission Center	6,660	28,021	1,730		6,660	29,751	36,411	14,164	22,247	—
Ft. Caroline	595	2,509	32		595	2,541	3,136	243	2,893	—
Gardens Square	2,136	8,273	601		2,136	8,874	11,010	4,743	6,267	—
Gateway 101	24,971	9,113	(1,356	)	24,971	7,757	32,728	2,872	29,856	—
Gateway Shopping Center	52,665	7,134	8,803		55,346	13,256	68,602	13,622	54,980	—
Gelson's Westlake Market Plaza	3,157	11,153	5,677		4,654	15,333	19,987	6,098	13,889	—
Glen Oak Plaza	4,103	12,951	557		4,103	13,508	17,611	3,386	14,225	—
Glengary Shoppes	8,170	12,715	—		8,170	12,715	20,885	555	20,330	—
Glenwood Village	1,194	5,381	290		1,194	5,671	6,865	4,094	2,771	—
Golden Hills Plaza	12,699	18,482	3,607		11,528	23,260	34,788	7,762	27,026	—
Grand Ridge Plaza	24,208	61,033	3,434		24,879	63,796	88,675	13,941	74,734	—
Greenwood Shopping Centre	6,287	26,263	360		6,287	26,623	32,910	836	32,074	—
Hammocks Town Center	26,380	27,498	—		26,380	27,498	53,878	1,018	52,860	—
Hancock	8,232	28,260	1,808		8,232	30,068	38,300	15,494	22,806	—
Harpeth Village Fieldstone	2,284	9,443	580		2,284	10,023	12,307	5,008	7,299	—
Harris Crossing	7,199	3,687	(1,631	)	5,508	3,747	9,255	2,113	7,142	—
Heritage Plaza	12,390	26,097	13,851		12,215	40,123	52,338	16,384	35,954	—
Hershey	7	808	8		7	816	823	395	428	—
Hibernia Pavilion	4,929	5,065	84		4,929	5,149	10,078	2,673	7,405	—
Hickory Creek Plaza	5,629	4,564	439		5,629	5,003	10,632	3,830	6,802	—
Hillcrest Village	1,600	1,909	51		1,600	1,960	3,560	947	2,613	—
Hilltop Village	2,995	4,581	2,966		3,104	7,438	10,542	1,672	8,870	—
Hinsdale	5,734	16,709	11,903		8,343	26,003	34,346	11,456	22,890	—
Holly Park	8,975	23,799	(177	)	8,828	23,769	32,597	3,533	29,064	—
Homestead McDonald's	2,110	119	—		2,110	119	2,229	7	2,222	—
Howell Mill Village	5,157	14,279	2,391		5,157	16,670	21,827	5,564	16,263	—
Hyde Park	9,809	39,905	2,930		9,809	42,835	52,644	23,693	28,951	—
Indian Springs	24,974	25,903	116		25,034	25,959	50,993	2,989	48,004	—
Indio Towne Center	17,946	32,617	5,394		23,105	32,852	55,957	14,848	41,109	—
Inglewood Plaza	1,300	2,159	627		1,300	2,786	4,086	1,370	2,716	—



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P. Schedule III - Consolidated Real Estate and Accumulated Depreciation December 31, 2017 (in thousands)

	Initial Cost				Total Cost				Net Cost
Shopping Centers (1)	Land (3)	Building & Improvements (3)	Cost Capitalized Subsequent to Acquisition (2) (3)		Land (3)	Building & Improvements (3)	Total (3)	Accumulated Depreciation (3)	Net of Accumulated Depreciation (3)	Mortgages
Jefferson Square	5,167	6,445	(7,220	)	1,894	2,498	4,392	660	3,732	—
Keller Town Center	2,294	12,841	596		2,404	13,327	15,731	6,380	9,351	—
Kent Place	4,855	3,586	805		5,269	3,977	9,246	789	8,457	8,250
Kirkman Shoppes	8,085	27,518	167		8,089	27,681	35,770	838	34,932	—
Kirkwood Commons	6,772	16,224	666		6,802	16,860	23,662	3,967	19,695	9,383
Klahanie Shopping Center	14,451	20,089	385		14,451	20,474	34,925	1,082	33,843	—
Kroger New Albany Center	3,844	6,599	811		3,844	7,410	11,254	5,220	6,034	—
Lake Mary Centre	19,181	62,066	792		19,181	62,858	82,039	2,142	79,897	—
Lake Pine Plaza	2,008	7,632	706		2,029	8,317	10,346	4,283	6,063	—
Lantana Outparcels	3,496	1,219	—		3,496	1,219	4,715	71	4,644	—
Lebanon/Legacy Center	3,913	7,874	53		3,913	7,927	11,840	5,648	6,192	—
Littleton Square	2,030	8,859	(3,869	)	2,423	4,597	7,020	1,951	5,069	—
Lloyd King Center	1,779	10,060	1,126		1,779	11,186	12,965	5,870	7,095	—
Lower Nazareth Commons	15,992	12,964	3,585		16,343	16,198	32,541	7,474	25,067	—
Magnolia Shoppes	16,546	8,384	42		16,546	8,426	24,972	561	24,411	—
Mandarin Landing	5,942	29,201	290		5,942	29,491	35,433	926	34,507	—
Market at Colonnade Center	6,455	9,839	69		6,160	10,203	16,363	3,377	12,986	—
Market at Preston Forest	4,400	11,445	1,211		4,400	12,656	17,056	6,483	10,573	—
Market at Round Rock	2,000	9,676	6,467		2,000	16,143	18,143	8,776	9,367	—
Market at Springwoods Village	13,457	11,346	—		13,457	11,346	24,803	261	24,542	8,569
Market Common Clarendon	154,932	126,328	806		154,932	127,134	282,066	7,561	274,505	—
Marketplace at Briargate	1,706	4,885	141		1,727	5,005	6,732	2,510	4,222	—
Marketplace Shopping Center	1,287	5,509	5,536		1,330	11,002	12,332	6,392	5,940	—
Millhopper Shopping Center	1,073	5,358	5,958		1,901	10,488	12,389	6,578	5,811	—
Mockingbird Commons	3,000	10,728	1,640		3,000	12,368	15,368	6,035	9,333	—
Monument Jackson Creek	2,999	6,765	730		2,999	7,495	10,494	5,379	5,115	—
Morningside Plaza	4,300	13,951	719		4,300	14,670	18,970	7,400	11,570	—
Murryhill Marketplace	2,670	18,401	12,799		2,903	30,967	33,870	11,309	22,561	—
Naples Walk	18,173	13,554	1,060		18,173	14,614	32,787	5,658	27,129	—
Newberry Square	2,412	10,150	765		2,412	10,915	13,327	7,943	5,384	—
Newland Center	12,500	10,697	8,081		16,179	15,099	31,278	7,033	24,245	—
Nocatee Town Center	10,124	8,691	7,106		10,478	15,443	25,921	4,216	21,705	—



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P. Schedule III - Consolidated Real Estate and Accumulated Depreciation December 31, 2017 (in thousands)

	Initial Cost				Total Cost				Net Cost
Shopping Centers (1)	Land (3)	Building & Improvements (3)	Cost Capitalized Subsequent to Acquisition (2) (3)		Land (3)	Building & Improvements (3)	Total (3)	Accumulated Depreciation (3)	Net of Accumulated Depreciation (3)	Mortgages
North Hills	4,900	19,774	1,231		4,900	21,005	25,905	10,584	15,321	—
Northgate Marketplace	5,668	13,727	(52	)	4,995	14,348	19,343	4,060	15,283	—
Northgate Marketplace Phase II	12,189	29,050	—		12,189	29,050	41,239	1,689	39,550	—
Northgate Plaza (Maxtown Road)	1,769	6,652	4,807		2,839	10,389	13,228	4,272	8,956	—
Northgate Square	5,011	8,692	1,026		5,011	9,718	14,729	3,683	11,046	—
Northlake Village	2,662	11,284	1,511		2,686	12,771	15,457	6,223	9,234	—
Oak Shade Town Center	6,591	28,966	679		6,591	29,645	36,236	6,921	29,315	8,149
Oakbrook Plaza	4,000	6,668	5,152		4,981	10,839	15,820	3,659	12,161	—
Oakleaf Commons	3,503	11,671	55		3,190	12,039	15,229	5,281	9,948	—
Ocala Corners	1,816	10,515	475		1,816	10,990	12,806	3,246	9,560	4,389
Old Kings Commons	3,350	5,678	21		3,350	5,699	9,049	262	8,787	—
Old St Augustine Plaza	2,368	11,405	7,749		3,163	18,359	21,522	6,175	15,347	—
Pablo Plaza	10,736	19,315	3,766		10,739	23,078	33,817	946	32,871	—
Paces Ferry Plaza	2,812	12,639	(462	)	2,812	12,177	14,989	7,620	7,369	—
Panther Creek	14,414	14,748	3,763		15,212	17,713	32,925	11,984	20,941	—
Pavilion	13,938	23,747	333		13,938	24,080	38,018	879	37,139	—
Peartree Village	5,197	19,746	866		5,197	20,612	25,809	11,701	14,108	—
Persimmons Place	25,975	38,114	17		26,600	37,506	64,106	5,359	58,747	—
Piedmont Peachtree Crossing	45,118	17,027	52		45,118	17,079	62,197	669	61,528	—
Pike Creek	5,153	20,652	1,962		5,251	22,516	27,767	11,740	16,027	—
Pine Island	19,358	29,641	1,501		19,358	31,142	50,500	1,276	49,224	—
Pine Lake Village	6,300	10,991	969		6,300	11,960	18,260	6,120	12,140	—
Pine Ridge Square	12,565	24,534	116		12,565	24,650	37,215	781	36,434	—
Pine Tree Plaza	668	6,220	609		668	6,829	7,497	3,471	4,026	—
Plaza Escuela	24,677	104,547	23		24,677	104,570	129,247	2,498	126,749	—
Plaza Hermosa	4,200	10,109	3,243		4,202	13,350	17,552	6,138	11,414	—
Pleasanton Plaza	20,560	26,022	14		20,560	26,036	46,596	830	45,766	—
Point Royale Shopping Center	17,246	15,738	498		17,730	15,752	33,482	716	32,766	—
Post Road Plaza	14,997	5,439	150		14,997	5,589	20,586	164	20,422	—
Potrero Center	133,422	116,758	—		133,422	116,758	250,180	2,853	247,327	—
Powell Street Plaza	8,248	30,716	2,403		8,248	33,119	41,367	14,506	26,861	—
Powers Ferry Square	3,687	17,965	6,848		5,348	23,152	28,500	14,585	13,915	—



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P. Schedule III - Consolidated Real Estate and Accumulated Depreciation December 31, 2017 (in thousands)

	Initial Cost				Total Cost				Net Cost
Shopping Centers (1)	Land (3)	Building & Improvements (3)	Cost Capitalized Subsequent to Acquisition (2) (3)		Land (3)	Building & Improvements (3)	Total (3)	Accumulated Depreciation (3)	Net of Accumulated Depreciation (3)	Mortgages
Powers Ferry Village	1,191	4,672	518		1,191	5,190	6,381	3,620	2,761	—
Preston Oaks	763	30,438	641		763	31,079	31,842	4,364	27,478	—
Prestonbrook	7,069	8,622	577		7,069	9,199	16,268	6,513	9,755	—
Prosperity Centre	10,120	27,777	25		10,120	27,802	37,922	913	37,009	—
Ralphs Circle Center	20,653	6,602	—		20,653	6,602	27,255	266	26,989	—
Red Bank Village	10,336	9,505	(89	)	10,110	9,642	19,752	2,598	17,154	—
Regency Commons	3,917	3,616	236		3,917	3,852	7,769	2,355	5,414	—
Regency Square	4,770	25,191	5,713		5,060	30,614	35,674	22,980	12,694	—
Rona Plaza	1,500	4,917	221		1,500	5,138	6,638	2,855	3,783	—
Roosevelt Square	40,371	32,108	—		40,371	32,108	72,479	—	72,479	—
Russell Ridge	2,234	6,903	1,403		2,234	8,306	10,540	4,847	5,693	—
Ryanwood Square	9,912	10,714	(63	)	9,912	10,651	20,563	446	20,117	—
Salerno Village	1,279	76	—		1,279	76	1,355	4	1,351	—
Sammamish-Highlands	9,300	8,075	8,145		9,592	15,928	25,520	7,309	18,211	—
San Carlos Marketplace	33,977	59,916	—		33,977	59,916	93,893	1,446	92,447	—
San Leandro Plaza	1,300	8,226	558		1,300	8,784	10,084	4,335	5,749	—
Sandy Springs	6,889	28,056	2,562		6,889	30,618	37,507	5,351	32,156	—
Sawgrass Promenade	10,106	13,264	115		10,106	13,379	23,485	509	22,976	—
Scripps Ranch Marketplace	59,949	26,334	—		59,949	26,334	86,283	—	86,283	27,000
Sequoia Station	9,100	18,356	1,744		9,100	20,100	29,200	9,798	19,402	—
Serramonte Center	383,465	127,304	2,991		383,465	130,295	513,760	4,608	509,152	—
Shaw's at Plymouth	3,753	8,582	—		3,753	8,582	12,335	303	12,032	—
Sheridan Plaza	76,375	103,159	730		76,375	103,889	180,264	3,122	177,142	55,875
Sherwood Crossings	2,731	6,360	690		2,731	7,050	9,781	2,887	6,894	—
Shoppes @ 104	11,193	—	1,013		6,652	5,554	12,206	2,201	10,005	—
Shoppes at Homestead (fka Loehmanns Plaza California)	5,420	9,450	1,667		5,420	11,117	16,537	5,457	11,080	—
Shoppes at Lago Mar	7,575	12,094	33		7,575	12,127	19,702	464	19,238	—
Shoppes at Sunlake Centre	13,584	18,150	48		13,584	18,198	31,782	668	31,114	—
Shoppes of Grande Oak	5,091	5,985	393		5,091	6,378	11,469	4,885	6,584	—
Shoppes of Jonathan's Landing	3,859	6,243	67		3,859	6,310	10,169	207	9,962	—
Shoppes of Oakbrook	18,130	45,400	345		18,130	45,745	63,875	1,350	62,525	5,339



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P. Schedule III - Consolidated Real Estate and Accumulated Depreciation December 31, 2017 (in thousands)

	Initial Cost				Total Cost				Net Cost
Shopping Centers (1)	Land (3)	Building & Improvements (3)	Cost Capitalized Subsequent to Acquisition (2) (3)		Land (3)	Building & Improvements (3)	Total (3)	Accumulated Depreciation (3)	Net of Accumulated Depreciation (3)	Mortgages
Shoppes of Silver Lakes	14,544	24,814	15		14,544	24,829	39,373	855	38,518	—
Shoppes of Sunset	2,678	1,497	—		2,678	1,497	4,175	73	4,102	—
Shoppes of Sunset II	2,669	880	(2	)	2,669	878	3,547	60	3,487	—
Shops at County Center	9,957	11,296	922		10,254	11,921	22,175	7,897	14,278	—
Shops at Erwin Mill	9,082	6,124	122		9,082	6,246	15,328	1,734	13,594	10,000
Shops at Johns Creek	1,863	2,014	(335	)	1,501	2,041	3,542	1,241	2,301	—
Shops at Mira Vista	11,691	9,026	104		11,691	9,130	20,821	1,423	19,398	234
Shops at Quail Creek	1,487	7,717	417		1,458	8,163	9,621	3,119	6,502	—
Shops at Saugus	19,201	17,984	(306	)	18,811	18,068	36,879	8,289	28,590	—
Shops at Skylake	80,089	43,837	37		80,099	43,864	123,963	1,597	122,366	—
Shops at Stonewall	27,511	22,123	8,717		28,633	29,718	58,351	15,450	42,901	—
Shops on Main	17,020	27,055	6,819		18,399	32,495	50,894	5,622	45,272	—
Siegen Village	5,569	12,726	74		5,569	12,800	18,369	676	17,693	—
Sope Creek Crossing (fka Delk Spectrum)	2,985	12,001	2,913		3,332	14,567	17,899	7,494	10,405	—
South Bay Village	11,714	15,580	1,712		11,776	17,230	29,006	3,342	25,664	—
South Beach Regional	25,705	55,888	98		25,705	55,986	81,691	1,936	79,755	—
South Point	6,266	8,235	16		6,266	8,251	14,517	307	14,210	—
Southbury Green	25,929	35,058	33		25,929	35,091	61,020	1,045	59,975	—
Southcenter	1,300	12,750	1,885		1,300	14,635	15,935	7,054	8,881	—
Southpark at Cinco Ranch	18,395	11,306	7,354		21,438	15,617	37,055	4,200	32,855	—
SouthPoint Crossing	4,412	12,235	831		4,382	13,096	17,478	6,384	11,094	—
Starke	71	1,683	6		71	1,689	1,760	728	1,032	—
Star's at Cambridge	30,942	13,660	—		30,942	13,660	44,602	418	44,184	—
Star's at Quincy	26,355	10,073	—		26,355	10,073	36,428	460	35,968	—
Star's at West Roxbury	21,787	13,573	(37	)	21,787	13,536	35,323	428	34,895	—
Sterling Ridge	12,846	12,162	703		12,846	12,865	25,711	9,229	16,482	—
Stroh Ranch	4,280	8,189	510		4,280	8,699	12,979	6,006	6,973	—
Summerlin Square	1,183	1,696	—		1,183	1,696	2,879	52	2,827	—
Suncoast Crossing	9,030	10,764	4,449		13,374	10,869	24,243	5,648	18,595	—
Talega Village Center	21,601	12,869	5		21,601	12,874	34,475	584	33,891	—
Tamarac Town Square	12,153	9,652	20		12,153	9,672	21,825	434	21,391	—
Tanasbourne Market	3,269	10,861	(275	)	3,269	10,586	13,855	4,511	9,344	—



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P. Schedule III - Consolidated Real Estate and Accumulated Depreciation December 31, 2017 (in thousands)

	Initial Cost				Total Cost				Net Cost
Shopping Centers (1)	Land (3)	Building & Improvements (3)	Cost Capitalized Subsequent to Acquisition (2) (3)		Land (3)	Building & Improvements (3)	Total (3)	Accumulated Depreciation (3)	Net of Accumulated Depreciation (3)	Mortgages
Tassajara Crossing	8,560	15,464	1,002		8,560	16,466	25,026	8,064	16,962	—
Tech Ridge Center	12,945	37,169	(128	)	12,945	37,041	49,986	9,990	39,996	6,769
The Collection at Harvard Square	72,910	6,086	14		72,910	6,100	79,010	155	78,855	—
The Gallery at Westbury Plaza	95,771	229,479	489		95,771	229,968	325,739	5,909	319,830	—
The Hub Hillcrest Market	18,773	61,906	4,952		19,611	66,020	85,631	10,011	75,620	—
The Marketplace Shopping Center	8,960	38,019	84		8,960	38,103	47,063	1,077	45,986	—
The Plaza at St. Lucie West	1,167	6,754	—		1,167	6,754	7,921	215	7,706	—
The Point at Garden City Park (fka Garden City Park)	741	9,764	214		741	9,978	10,719	762	9,957	—
The Shops at Hampton Oaks	822	393	72		822	465	1,287	28	1,259	—
The Village Center	43,126	13,939	2,984		43,594	16,455	60,049	469	59,580	13,930
Town and Country	4,247	5,623	5		4,247	5,628	9,875	289	9,586	—
Town Square	883	8,132	389		883	8,521	9,404	4,813	4,591	—
Treasure Coast Plaza	7,004	22,102	89		7,004	22,191	29,195	726	28,469	3,170
Tustin Legacy	14,455	23,801	—		14,455	23,801	38,256	345	37,911	—
Twin City Plaza	17,245	44,225	2,023		17,263	46,230	63,493	15,155	48,338	—
Twin Peaks	5,200	25,827	1,519		5,200	27,346	32,546	13,055	19,491	—
Unigold Shopping Center	4,744	5,890	558		4,744	6,448	11,192	276	10,916	—
University Commons	4,070	30,785	(2	)	4,070	30,783	34,853	2,982	31,871	36,994
Valencia Crossroads	17,921	17,659	1,034		17,921	18,693	36,614	15,223	21,391	—
Village at La Floresta	13,140	20,571	(266	)	13,152	20,293	33,445	2,166	31,279	—
Village at Lee Airpark	11,099	12,968	3,464		12,007	15,524	27,531	7,734	19,797	—
Village Center	3,885	14,131	8,815		5,480	21,351	26,831	8,649	18,182	—
Vons Circle Center	48,542	23,113	29		48,542	23,142	71,684	806	70,878	8,283
Walker Center	3,840	7,232	3,798		3,878	10,992	14,870	5,857	9,013	—
Walmart Norwalk	19,661	21,994	—		19,661	21,994	41,655	777	40,878	—
Waterstone Plaza	4,857	14,141	12		4,857	14,153	19,010	439	18,571	—
Welleby Plaza	1,496	7,787	1,276		1,496	9,063	10,559	7,003	3,556	—
Wellington Town Square	2,041	12,131	106		2,041	12,237	14,278	6,856	7,422	—
West Bird Plaza	11,748	19,779	8		11,748	19,787	31,535	632	30,903	—
West Lake Shopping Center	9,572	10,781	5		9,572	10,786	20,358	474	19,884	—
West Park Plaza	5,840	5,759	1,415		5,840	7,174	13,014	3,933	9,081	—



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P. Schedule III - Consolidated Real Estate and Accumulated Depreciation December 31, 2017 (in thousands)

	Initial Cost					Total Cost				Net Cost
Shopping Centers (1)	Land (3)		Building & Improvements (3)	Cost Capitalized Subsequent to Acquisition (2) (3)		Land (3)	Building & Improvements (3)	Total (3)	Accumulated Depreciation (3)	Net of Accumulated Depreciation (3)	Mortgages
Westbury Plaza	113,606		53,983	745		113,606	54,728	168,334	2,162	166,172	88,000
Westchase	5,302		8,273	509		5,302	8,782	14,084	3,279	10,805	6,286
Westchester Commons	3,366		11,751	10,802		4,894	21,025	25,919	6,483	19,436	—
Westchester Plaza	1,857		7,572	371		1,857	7,943	9,800	5,269	4,531	—
Westlake Plaza and Center	7,043		27,195	29,447		17,598	46,087	63,685	19,980	43,705	—
Westport Plaza	7,982		8,507	4		7,982	8,511	16,493	353	16,140	2,897
Westwood - Manor Care	12,736		2,493	—		12,736	2,493	15,229	54	15,175	—
Westwood Shopping Center	113,582		20,565	—		113,582	20,565	134,147	802	133,345	—
Westwood Village	19,933		25,301	(2,064	)	18,723	24,447	43,170	12,001	31,169	—
Whole Foods at Swampscott	7,083		8,638	—		7,083	8,638	15,721	261	15,460	—
Williamsburg at Dunwoody	7,108		3,996	452		7,118	4,438	11,556	198	11,358	—
Willow Festival	1,954		56,501	1,553		1,954	58,054	60,008	12,883	47,125	39,505
Willows Oaks Crossing	7,325		7,847	—		7,325	7,847	15,172	1,095	14,077	—
Willows Shopping Center	48,848		80,917	382		48,876	81,271	130,147	2,258	127,889	—
Woodcroft Shopping Center	1,419		6,284	950		1,421	7,232	8,653	4,264	4,389	—
Woodman Van Nuy	5,500		7,195	293		5,500	7,488	12,988	3,747	9,241	—
Woodmen Plaza	7,621		11,018	761		7,621	11,779	19,400	10,292	9,108	—
Woodside Central	3,500		9,288	586		3,489	9,885	13,374	4,891	8,483	—
Young Circle Shopping Center	5,666		10,714	11		5,666	10,725	16,391	360	16,031	—

Total Corporate Assets	151		—	1,931		151	1,931	2,082	1,758	324	—
Land held for future development	62,103		135	9		62,061	144	62,205	9	62,196	—
Properties in Development	—		68,744	245,647		—	314,391	314,391	—	314,391	—
	$	4,610,000	5,574,604	708,259		4,667,744	6,225,077	10,892,821	1,339,771	9,553,050	636,743

(1) See Item 2, Properties for geographic location and year each operating property was acquired.
(2) The negative balance for costs capitalized subsequent to acquisition could include out-parcels sold, provision for loss recorded, and demolition of part of the property for redevelopment.
(3) The initial and total cost of land, building and improvements, and related accumulated depreciation as of and for the year ended December 31, 2017, includes amounts subject to provisional accounting for shopping centers acquired from the Equity One merger, as discussed in Note 2.

See accompanying report of independent registered public accounting firm.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Schedule III - Consolidated Real Estate and Accumulated Depreciation, continued

December 31, 2017

(in thousands)

Depreciation and amortization of the Company's investment in buildings and improvements reflected in the statements of operations is calculated over the estimated useful lives of the assets, which are up to 40 years. The aggregate cost for federal income tax purposes was approximately $8.8 billion at December 31, 2017.

The changes in total real estate assets for the years ended December 31, 2017, 2016, and 2015 are as follows (in thousands):



	2017			2016		2015
Beginning balance	$	4,933,499		4,545,900		4,409,886
Acquired properties	5,772,265			370,010		39,850
Developments and improvements	273,871			148,904		174,972
Sale of properties	(86,814		)	(126,855	)	(78,808	)
Provision for impairment	—			(4,460	)	—
Ending balance	$	10,892,821		4,933,499		4,545,900

The changes in accumulated depreciation for the years ended December 31, 2017, 2016, and 2015 are as follows (in thousands):



	2017			2016		2015
Beginning balance	$	1,124,391		1,043,787		933,708
Depreciation expense	222,395			115,355		119,475
Sale of properties	(7,015		)	(32,791	)	(9,396	)
Provision for impairment	—			(1,960	)	—
Ending balance	$	1,339,771		1,124,391		1,043,787

See accompanying report of independent registered public accounting firm.

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