Item 8. Consolidated Financial Statements and Supplementary Data

302K characters. Original on sec.gov · Markdown

Item 8. Consolidated Financial Statements and Supplementary Data

Regency Centers Corporation and Regency Centers, L.P.

Index to Financial Statements


Reports of Independent Registered Public Accounting Firm	59

Regency Centers Corporation:
Consolidated Balance Sheets as of December 31, 2019 and 2018	65
Consolidated Statements of Operations for the years ended December 31, 2019, 2018, and 2017	66
Consolidated Statements of Comprehensive Income for the years ended December 31, 2019, 2018, and 2017	67
Consolidated Statements of Equity for the years ended December 31, 2019, 2018, and 2017	68
Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2019, and 2017	70

Regency Centers, L.P.:
Consolidated Balance Sheets as of December 31, 2019 and 2018	72
Consolidated Statements of Operations for the years ended December 31, 2019, 2018, and 2017	73
Consolidated Statements of Comprehensive Income for the years ended December 31, 2019, 2018, and 2017	74
Consolidated Statements of Capital for the years ended December 31, 2019, 2018, and 2017	75
Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018, and 2017	77

Notes to Consolidated Financial Statements	79

Financial Statement Schedule
Schedule III - Consolidated Real Estate and Accumulated Depreciation - December 31, 2019	115

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, 2019 and 2018, 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, 2019, and the related notes and financial statement schedule III – Consolidated 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, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2019, 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, 2019, 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 14, 2020 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting for leases as of January 1, 2019 due to the adoption of Accounting Standards Codification Topic 842, Leases.

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.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Evaluation of real estate properties for impairment

As discussed in Note 1 to the consolidated financial statements and presented on the consolidated balance sheet, real estate assets, less accumulated depreciation was $9.3 billion as of December 31, 2019. The Company evaluates real estate properties for impairment whenever there are indicators that the carrying value of the real estate properties may not be recoverable. To the extent that the carrying value of a real estate property exceeds the estimate of its undiscounted cash flows, an impairment loss is recognized equal to the excess of carrying value over its fair value. Fair value of real estate properties is determined through a comparable sales approach or a discounted cash flow approach. As discussed in Note 11 to the consolidated financial statements, the Company determined that one property’s carrying value exceeded its fair value through the use of a discounted cash flow analysis, and recorded an impairment charge of $40.3 million.

We identified the evaluation of real estate properties for impairment as a critical audit matter. Evaluating the Company’s judgments regarding the identification of potential indicators that the carrying value of the real estate properties may not be recoverable involved a high degree of subjective auditor judgment. Changes in assumptions regarding property conditions, occupancy rates, net operating income, and anticipated hold periods could have an impact on the determination of the existence of impairment indicators and the need to further evaluate the real estate properties for impairment. In addition, the evaluation of the fair value of the real estate property that resulted in the $40.3 million impairment charge, in particular, the key assumptions over the property’s highest and best use, terminal capitalization rate, and the hold period, required a high degree of auditor judgment. The evaluation of these key assumptions required an increased extent of effort, including the need to involve valuation professionals with specialized skills and knowledge.

The primary procedures we performed to address these critical audit matters included the following. We tested certain internal controls over the Company’s process to evaluate real estate properties for impairment, including the identification of potential indicators of impairment and the fair value measurement of impaired real estate properties. Internal controls tested included the evaluation of changes in property condition, occupancy rates, net operating income and anticipated hold periods, as well as the development of the key assumptions used in the discounted cash flow analysis. Using property financial information, we performed an independent assessment of changes in occupancy rates and net operating income for individual real estate properties and compared the results to the Company’s assessment. In addition, to identify a change in property condition or a shortened hold period we inquired of Company officials, attended Company quarterly meetings and inspected documents such as meeting minutes of the board of directors. With respect to the property impairment, our valuation professionals evaluated the Company’s highest and best use conclusion for the impaired property based on the location of the property and current market conditions. Further, our valuation professionals independently developed an estimated range of fair values for the property based on market information and published third-party industry reports with consideration of property specific factors such as location and development requirements. We compared the Company’s estimated fair value of the impaired property to the range of fair values independently developed by our valuation professionals.

Evaluation of the discount rates used to initially measure the operating lease liabilities upon adoption of ASC 842.

As discussed in Note 1 and Note 7 to the consolidated financial statements, the Company’s operating lease liabilities related to leases of land upon adoption of Accounting Standards Codification Topic 842, Leases (“ASC 842”) on January 1, 2019, were approximately $204 million. To measure the operating lease liabilities for the Company’s 22 properties with ground leases, it is necessary for the Company to determine a discount rate for each operating lease and apply that discount rate to the remaining unpaid minimum rental payments for each lease.

We identified the evaluation of the discount rates used to initially measure the operating lease liabilities related to leases of land upon adoption of ASC 842 as a critical audit matter. The Company determined that the rates implicit in the lease contracts were not readily determinable and therefore developed discount rates using Company and market-based interest rates that correspond with the remaining term of the respective leases. The Company made adjustments to those market-based interest rates to reflect the Company’s credit spread and collateralized payment terms present in the respective leases. Evaluating the information used to develop the discount rates and the adjustments made to the market-based interest rates required auditor judgment and the use of valuation professionals with specialized skills and knowledge.

The primary procedures we performed to address this critical audit matter included the following. We tested certain internal controls over the Company’s process for developing the discount rates. We involved valuation professionals with specialized skills and knowledge, who assisted in evaluating the Company’s discount rates. The valuation professionals independently developed a range of reasonable discount rates using market-based interest rates for the Company and other similar companies, and then made adjustments to those market-based interest rates to reflect the maturities of the respective leases, level of collateral, and the Company’s credit spread. We evaluated the discount rates used by the Company by comparing those rates to the ranges of discount rates independently developed by the valuation professionals.

/s/ KPMG LLP

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

Jacksonville, Florida

February 14, 2020

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Regency Centers Corporation:

Opinion on Internal Control Over Financial Reporting

We have audited Regency Centers Corporation’s (the Company) internal control over financial reporting as of December 31, 2019, 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, 2019, 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, 2019 and 2018, 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, 2019, and the related notes and financial statement schedule III – Consolidated Real Estate and Accumulated Depreciation (collectively, the consolidated financial statements), and our report dated February 14, 2020 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 14, 2020

Report of Independent Registered Public Accounting Firm

The Board of Directors and Partners,

Regency Centers Corporation, and

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, 2019 and 2018, 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, 2019, and the related notes and financial statement schedule III – Consolidated 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, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2019, 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, 2019, 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 14, 2020 expressed an unqualified opinion on the effectiveness of the Partnership’s internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial statements, the Partnership has changed its method of accounting for leases as of January 1, 2019 due to the adoption of Accounting Standards Codification Topic 842, Leases.

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.

Critical Audit Matters

Evaluation of real estate properties for impairment

As discussed in Note 1 to the consolidated financial statements and presented on the consolidated balance sheet, real estate assets, less accumulated depreciation was $9.3 billion as of December 31, 2019. The Partnership evaluates real estate properties for impairment whenever there are indicators that the carrying value of the real estate properties may not be recoverable. To the extent that the carrying value of a real estate property exceeds the estimate of its undiscounted cash flows, an impairment loss is recognized equal to the excess of carrying value over its fair value. Fair value of real estate properties is determined through a comparable sales approach or a discounted cash flow approach. As discussed in Note 11 to

the consolidated financial statements, the Partnership determined that one property’s carrying value exceeded its fair value through the use of a discounted cash flow analysis, and recorded an impairment charge of $40.3 million.

We identified the evaluation of real estate properties for impairment as a critical audit matter. Evaluating the Partnership’s judgments regarding the identification of potential indicators that the carrying value of the real estate properties may not be recoverable involved a high degree of subjective auditor judgment. Changes in assumptions regarding property conditions, occupancy rates, net operating income, and anticipated hold periods could have an impact on the determination of the existence of impairment indicators and the need to further evaluate the real estate properties for impairment. In addition, the evaluation of the fair value of the real estate property that resulted in the $40.3 million impairment charge, in particular, the key assumptions over the property’s highest and best use, terminal capitalization rate, and the hold period, required a high degree of auditor judgment. The evaluation of these key assumptions required an increased extent of effort, including the need to involve valuation professionals with specialized skills and knowledge.

The primary procedures we performed to address these critical audit matters included the following. We tested certain internal controls over the Partnership’s process to evaluate real estate properties for impairment, including the identification of potential indicators of impairment and the fair value measurement of impaired real estate properties. Internal controls tested included the evaluation of changes in property condition, occupancy rates, net operating income and anticipated hold periods, as well as the development of the key assumptions used in the discounted cash flow analysis. Using property financial information, we performed an independent assessment of changes in occupancy rates and net operating income for individual real estate properties and compared the results to the Partnership’s assessment. In addition, to identify a change in property condition or a shortened hold period we inquired of Partnership officials, attended Partnership quarterly meetings and inspected documents such as meeting minutes of the general partners' board of directors. With respect to the property impairment, our valuation professionals evaluated the Partnership’s highest and best use conclusion for the impaired property based on the location of the property and current market conditions. Further, our valuation professionals independently developed an estimated range of fair values for the property based on market information and published third-party industry reports with consideration of property specific factors such as location and development requirements. We compared the Partnership’s estimated fair value of the impaired property to the range of fair values independently developed by our valuation professionals.

Evaluation of the discount rates used to initially measure the operating lease liabilities upon adoption of ASC 842.

As discussed in Note 1 and Note 7 to the consolidated financial statements, the Partnership’s operating lease liabilities related to leases of land upon adoption of Accounting Standards Codification Topic 842, Leases (“ASC 842”) on January 1, 2019, were approximately $204 million. To measure the operating lease liabilities for the Partnership’s 22 properties with ground leases, it is necessary for the Partnership to determine a discount rate for each operating lease and apply that discount rate to the remaining unpaid minimum rental payments for each lease.

We identified the evaluation of the discount rates used to initially measure the operating lease liabilities related to leases of land upon adoption of ASC 842 as a critical audit matter. The Partnership determined that the rates implicit in the lease contracts were not readily determinable and therefore developed discount rates using Partnership and market-based interest rates that correspond with the remaining term of the respective leases. The Partnership made adjustments to those market-based interest rates to reflect the Partnership’s credit spread and collateralized payment terms present in the respective leases. Evaluating the information used to develop the discount rates and the adjustments made to the market-based interest rates required auditor judgment and the use of valuation professionals with specialized skills and knowledge.

The primary procedures we performed to address this critical audit matter included the following. We tested certain internal controls over the Partnership’s process for developing the discount rates. We involved valuation professionals with specialized skills and knowledge, who assisted in evaluating the Partnership’s discount rates. The valuation professionals independently developed a range of reasonable discount rates using market-based interest rates for the Partnership and other similar companies, and then made adjustments to those market-based interest rates to reflect the maturities of the respective leases, level of collateral, and the Partnership’s credit spread. We evaluated the discount rates used by the Partnership by comparing those rates to the ranges of discount rates independently developed by the valuation professionals.

/s/ KPMG LLP

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

Jacksonville, Florida

February 14, 2020

Report of Independent Registered Public Accounting Firm

The Board of Directors and Partners,

Regency Centers Corporation, and

Regency Centers, L.P.:

Opinion on Internal Control Over Financial Reporting

We have audited Regency Centers, L.P.’s (the Partnership) internal control over financial reporting as of December 31, 2019, 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, 2019, 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, 2019 and 2018, 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, 2019, and the related notes and financial statement schedule III – Consolidated Real Estate and Accumulated Depreciation (collectively, the consolidated financial statements), and our report dated February 14, 2020 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 14, 2020

REGENCY CENTERS CORPORATION

Consolidated Balance Sheets

December 31, 2019 and 2018

(in thousands, except share data)

	2019
Assets
Real estate assets, at cost (note 1):	$	11,095,294		10,863,162
Less: accumulated depreciation		1,766,162		1,535,444
Real estate assets, net		9,329,132		9,327,718
Investments in real estate partnerships (note 4)		469,522		463,001
Properties held for sale		45,565		60,516
Cash, cash equivalents, and restricted cash, including $2,542 and $2,658 of restricted cash at December 31, 2019 and 2018, respectively (note 1)		115,562		45,190
Tenant and other receivables (note 1)		169,337		172,359
Deferred leasing costs, less accumulated amortization of $108,381 and $101,093 at December 31, 2019 and 2018, respectively		76,798		84,983
Acquired lease intangible assets, less accumulated amortization of $259,310 and $219,689 at December 31, 2019 and 2018, respectively (note 6)		242,822		387,069
Right of use assets, net		292,786		—
Other assets (note 5)		390,729		403,827
Total assets	$	11,132,253		10,944,663
Liabilities and Equity
Liabilities:
Notes payable (note 9)	$	3,435,161		3,006,478
Unsecured credit facilities (note 9)		484,383		708,734
Accounts payable and other liabilities		213,705		224,807
Acquired lease intangible liabilities, less accumulated amortization of $131,676 and $92,746 at December 31, 2019 and 2018, respectively (note 6)		427,260		496,726
Lease liabilities		222,918		—
Tenants’ security, escrow deposits and prepaid rent		58,865		57,750
Total liabilities		4,842,292		4,494,495
Commitments and contingencies (note 16)		—		—
Equity:
Stockholders’ equity (note 12):
Common stock $0.01 par value per share, 220,000,000 shares authorized; 167,571,218 and 167,904,593 shares issued at December 31, 2019 and 2018, respectively		1,676		1,679
Treasury stock at cost, 440,574 and 390,163 shares held at December 31, 2019 and 2018, respectively		(23,199	)	(19,834	)
Additional paid-in capital		7,654,930		7,672,517
Accumulated other comprehensive loss		(11,997	)	(927	)
Distributions in excess of net income		(1,408,062	)	(1,255,465	)
Total stockholders’ equity		6,213,348		6,397,970
Noncontrolling interests (note 12):
Exchangeable operating partnership units, aggregate redemption value of $47,092 and $20,532 at December 31, 2019 and 2018, respectively		36,100		10,666
Limited partners’ interests in consolidated partnerships (note 1)		40,513		41,532
Total noncontrolling interests		76,613		52,198
Total equity		6,289,961		6,450,168
Total liabilities and equity	$	11,132,253		10,944,663

See accompanying notes to consolidated financial statements.

REGENCY CENTERS CORPORATION

Consolidated Statements of Operations

For the years ended December 31, 2019, 2018, and 2017

(in thousands, except per share data)

	2019
Revenues:
Lease income	$	1,094,301		1,083,770		950,186
Other property income		9,201		8,711		7,982
Management, transaction, and other fees		29,636		28,494		26,158
Total revenues		1,133,138		1,120,975		984,326
Operating expenses:
Depreciation and amortization		374,283		359,688		334,201
Operating and maintenance		169,909		168,034		143,990
General and administrative		74,984		65,491		67,624
Real estate taxes		136,236		137,856		109,723
Other operating expenses		7,814		9,737		89,225
Total operating expenses		763,226		740,806		744,763
Other expense (income):
Interest expense, net		151,264		148,456		132,629
Provision for impairment, net of tax		54,174		38,437		—
Gain on sale of real estate, net of tax		(24,242	)	(28,343	)	(27,432	)
Early extinguishment of debt		11,982		11,172		12,449
Net investment (income) loss		(5,568	)	1,096		(3,985	)
Total other expense (income)		187,610		170,818		113,661
Income from operations before equity in income of investments in real estate partnerships and income taxes		182,302		209,351		125,902
Equity in income of investments in real estate partnerships (note 4)		60,956		42,974		43,341
Deferred income tax benefit of taxable REIT subsidiary		—		—		(9,737	)
Net income		243,258		252,325		178,980
Noncontrolling interests:
Exchangeable operating partnership units		(634	)	(525	)	(388	)
Limited partners’ interests in consolidated partnerships		(3,194	)	(2,673	)	(2,515	)
Income attributable to noncontrolling interests		(3,828	)	(3,198	)	(2,903	)
Net income attributable to the Company		239,430		249,127		176,077
Preferred stock dividends and issuance costs		—		—		(16,128	)
Net income attributable to common stockholders	$	239,430		249,127		159,949
Income per common share - basic (note 15)	$	1.43		1.47		1.00
Income per common share - diluted (note 15)	$	1.43		1.46		1.00

See accompanying notes to consolidated financial statements.

REGENCY CENTERS CORPORATION

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2019, 2018, and 2017

(in thousands)

	2019
Net income	$	243,258		252,325		178,980
Other comprehensive income:
Effective portion of change in fair value of derivative instruments:
Effective portion of change in fair value of derivative instruments		(15,585	)	402		1,151
Reclassification adjustment of derivative instruments included in net income		3,269		5,342		11,103
Unrealized gain (loss) on available-for-sale securities		315		(95	)	(8	)
Other comprehensive income		(12,001	)	5,649		12,246
Comprehensive income		231,257		257,974		191,226
Less: comprehensive income attributable to noncontrolling interests:
Net income attributable to noncontrolling interests		3,828		3,198		2,903
Other comprehensive income attributable to noncontrolling interests		(931	)	299		189
Comprehensive income attributable to noncontrolling interests		2,897		3,497		3,092
Comprehensive income attributable to the Company	$	228,360		254,477		188,134

See accompanying notes to consolidated financial statements.

REGENCY CENTERS CORPORATION

Consolidated Statements of Equity

For the years ended December 31, 2019, 2018, and 2017

(in thousands, except per share data)

	Stockholders' Equity																					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, 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:
Other comprehensive income before reclassifications		—			—			—			—			1,126			—			1,126			2			15			17			1,143
Amounts reclassified from accumulated other comprehensive income		—			—			—			—			10,931			—			10,931			19			153			172			11,103
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 issued for stock based compensation, net of repurchases		—			(1	)		—			(18,345	)		—			—			(18,346	)		—			—			—			(18,346	)
Common stock issued under 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
Adjustment due to change in accounting policy (note 1)		—			—			—			—			12			30,889			30,901			—			2			2			30,903
Adjusted balance at January 1, 2018		—			1,714			(18,307	)		7,873,104			(6,277	)		(1,127,281	)		6,722,953			10,907			30,097			41,004			6,763,957
Net income		—			—			—			—			—			249,127			249,127			525			2,673			3,198			252,325
Other comprehensive income:
Other comprehensive income before reclassifications		—			—			—			—			36			—			36			—			271			271			307
Amounts reclassified from accumulated other comprehensive income		—			—			—			—			5,314			—			5,314			11			17			28			5,342
Deferred compensation plan, net		—			—			(1,527	)		1,514			—			—			(13	)		—			—			—			(13	)
Restricted stock issued, net of amortization		—			2			—			16,743			—			—			16,745			—			—			—			16,745
Common stock issued for stock based compensation, net of repurchases		—						—			(6,373	)		—			—			(6,373	)		—			—			—			(6,373	)
Common stock issued under dividend reinvestment plan		—			—			—			1,333			—			—			1,333			—			—			—			1,333
Common stock issued for stock offerings, net of issuance costs		—			—			—			10			—			—			10			—			—			—			10
Common stock repurchased and retired		—			(37	)		—			(213,814	)		—			—			(213,851	)		—			—			—			(213,851	)
Contributions from partners		—			—			—			—			—			—			—			—			13,000			13,000			13,000
Distributions to partners		—			—			—			—			—			—			—			—			(4,526	)		(4,526	)		(4,526	)
Cash dividends declared:
Common stock/unit ($2.22 per share)		—			—			—			—			—			(377,311	)		(377,311	)		(777	)		—			(777	)		(378,088	)
Balance at December 31, 2018	$	—			1,679			(19,834	)		7,672,517			(927	)		(1,255,465	)		6,397,970			10,666			41,532			52,198			6,450,168

	Stockholders' Equity																				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, 2018	$	—		1,679			(19,834	)		7,672,517			(927	)		(1,255,465	)		6,397,970			10,666			41,532			52,198			6,450,168
Net income		—		—			—			—			—			239,430			239,430			634			3,194			3,828			243,258
Other comprehensive income
Other comprehensive income before reclassifications		—		—			—			—			(14,388	)		—			(14,388	)		(31	)		(851	)		(882	)		(15,270	)
Amounts reclassified from accumulated other comprehensive income		—		—			—			—			3,318			—			3,318			12			(61	)		(49	)		3,269
Deferred compensation plan, net		—		—			(3,365	)		3,365			—			—			—			—			—			—			—
Restricted stock issued, net of amortization		—		2			—			16,252			—			—			16,254			—			—			—			16,254
Common stock issued for stock based compensation, net of repurchases		—		—			—			(5,794	)		—			—			(5,794	)		—			—			—			(5,794	)
Common stock issued under dividend reinvestment plan		—		1			—			1,428			—			—			1,429			—			—			—			1,429
Common stock issued for stock offerings, net of issuance costs		—		—			—			—			—			—			—			—			—			—			—
Common stock repurchased and retired		—		(6	)		—			(32,772	)		—			—			(32,778	)		—			—			—			(32,778	)
Reallocation of limited partners' interest		—		—			—			(66	)		—			—			(66	)		—			66			66			—
Contributions from partners		—		—			—			—			—			—			—			—			2,151			2,151			2,151
Issuance of exchangeable operating partnership units		—		—			—			—			—			—			—			25,870			—			25,870			25,870
Distributions to partners		—		—			—			—			—			—			—			—			(5,518	)		(5,518	)		(5,518	)
Cash dividends declared:
Common stock/unit ($2.34 per share)		—		—			—			—			—			(392,027	)		(392,027	)		(1,051	)		—			(1,051	)		(393,078	)
Balance at December 31, 2019	$	—		1,676			(23,199	)		7,654,930			(11,997	)		(1,408,062	)		6,213,348			36,100			40,513			76,613			6,289,961

See accompanying notes to consolidated financial statements.

REGENCY CENTERS CORPORATION

Consolidated Statements of Cash Flows

For the years ended December 31, 2019, 2018, and 2017

(in thousands)

	2019
Cash flows from operating activities:
Net income	$	243,258		252,325			178,980
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		374,283		359,688			334,201
Amortization of deferred loan costs and debt premiums		11,170		10,476			9,509
(Accretion) and amortization of above and below market lease intangibles, net		(43,867	)	(33,330	)		(23,144	)
Stock-based compensation, net of capitalization		14,339		13,635			20,549
Equity in income of investments in real estate partnerships		(60,956	)	(42,974	)		(43,341	)
Gain on sale of real estate, net of tax		(24,242	)	(28,343	)		(27,432	)
Provision for impairment, net of tax		54,174		38,437			—
Early extinguishment of debt		11,982		11,172			12,449
Deferred income tax benefit of taxable REIT subsidiary		—		—			(9,737	)
Distribution of earnings from investments in real estate partnerships		56,297		54,266			53,502
Settlement of derivative instrument		(6,870	)	—			76
Deferred compensation expense		5,169		(1,085	)		3,844
Realized and unrealized gain on investments		(5,433	)	1,177			(3,837	)
Changes in assets and liabilities:
Tenant and other receivables		(4,690	)	(26,374	)		(26,081	)
Deferred leasing costs		(6,777	)	(8,366	)		(14,448	)
Other assets		(1,570	)	(1,410	)		9,536
Accounts payable and other liabilities		4,175		(760	)		(2,114	)
Tenants’ security, escrow deposits and prepaid rent		829		11,793			(2,728	)
Net cash provided by operating activities		621,271		610,327			469,784
Cash flows from investing activities:
Acquisition of operating real estate		(222,444	)	(85,289	)		(124,727	)
Advance deposits paid toward the acquisition of operating real estate		(125	)	—			(4,917	)
Acquisition of Equity One, net of cash and restricted cash acquired of $74,507		—		—			(646,790	)
Real estate development and capital improvements		(200,012	)	(226,191	)		(346,857	)
Proceeds from sale of real estate investments		137,572		250,445			110,015
Proceeds from property insurance casualty claims		9,350		—			—
(Issuance)/Collection of notes receivable		(547	)	15,648		.	(5,236	)
Investments in real estate partnerships		(66,921	)	(74,238	)		(23,529	)
Return of capital from investments in real estate partnerships		63,693		14,647			36,603
Dividends on investment securities		660		531			365
Acquisition of investment securities		(23,458	)	(23,164	)		(23,535	)
Proceeds from sale of investment securities		19,539		21,587			21,378
Net cash used in investing activities		(282,693	)	(106,024	)		(1,007,230	)

	2019
Cash flows from financing activities:
Net proceeds from common stock issuance		—		—		88,458
Repurchase of common shares in conjunction with equity award plans		(6,204	)	(6,772	)	(18,649	)
Proceeds from sale of treasury stock		9		99		100
Acquisition of treasury stock		—		—		—
Common shares repurchased through share repurchase program		(32,778	)	(213,851	)	—
Redemption of preferred stock and partnership units		—		—		(325,000	)
Distributions to limited partners in consolidated partnerships, net		(3,367	)	(4,526	)	(8,139	)
Distributions to exchangeable operating partnership unit holders		(1,051	)	(777	)	(635	)
Dividends paid to common stockholders		(390,598	)	(375,978	)	(322,650	)
Dividends paid to preferred stockholders		—		—		(5,029	)
Repayment of fixed rate unsecured notes		(250,000	)	(150,000	)	—
Proceeds from issuance of fixed rate unsecured notes, net		723,571		299,511		953,115
Proceeds from unsecured credit facilities		560,000		575,000		1,100,000
Repayment of unsecured credit facilities		(785,000	)	(490,000	)	(755,000	)
Proceeds from notes payable		—		1,740		131,069
Repayment of notes payable		(55,680	)	(113,037	)	(232,839	)
Scheduled principal payments		(9,442	)	(9,964	)	(10,162	)
Payment of loan costs		(7,019	)	(9,448	)	(13,271	)
Early redemption costs		(10,647	)	(10,491	)	(12,420	)
Net cash (used in) provided by financing activities		(268,206	)	(508,494	)	568,948
Net increase (decrease) in cash, cash equivalents, and restricted cash		70,372		(4,191	)	31,502
Cash, cash equivalents, and restricted cash at beginning of the year		45,190		49,381		17,879
Cash, cash equivalents, and restricted cash at end of the year	$	115,562		45,190		49,381
Supplemental disclosure of cash flow information:
Cash paid for interest (net of capitalized interest of $4,192, $7,020, and $7,946 in 2019, 2018, and 2017, respectively)	$	136,139		136,645		109,956
Cash paid (received) for income taxes, net of refunds	$	1,225		5,455		(269	)
Supplemental disclosure of non-cash transactions:
Exchangeable operating partnership units issued for acquisition of real estate	$	25,870		—		13,100
Mortgage loans for the acquisition of real estate	$	26,152		9,700		27,000
Change in fair value of securities	$	660		(206	)	(8	)
Change in accrued capital expenditures	$	10,704		—		—
Common stock issued for dividend reinvestment plan	$	1,429		1,333		1,210
Stock-based compensation capitalized	$	2,325		3,509		3,210
Contributions from limited partners in consolidated partnerships, net	$	66		13,000		186
Common stock issued for dividend reinvestment in trust	$	987		841		557
Contribution of stock awards into trust	$	2,582		1,314		1,372
Distribution of stock held in trust	$	197		524		677
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

See accompanying notes to consolidated financial statements.

REGENCY CENTERS, L.P.

Consolidated Balance Sheets

December 31, 2019 and 2018

(in thousands, except unit data)

	2019
Assets
Real estate assets, at cost (note 1):	$	11,095,294		10,863,162
Less: accumulated depreciation		1,766,162		1,535,444
Real estate assets, net		9,329,132		9,327,718
Investments in real estate partnerships (note 4)		469,522		463,001
Properties held for sale		45,565		60,516
Cash, cash equivalents, and restricted cash, including $2,542 and $2,658 of restricted cash at December 31, 2019 and 2018, respectively (note 1)		115,562		45,190
Tenant and other receivables (note 1)		169,337		172,359
Deferred leasing costs, less accumulated amortization of $108,381 and $101,093 at December 31, 2019 and 2018, respectively		76,798		84,983
Acquired lease intangible assets, less accumulated amortization of $259,310 and $219,689 at December 31, 2019 and 2018, respectively (note 6)		242,822		387,069
Right of use assets, net		292,786		—
Other assets (note 5)		390,729		403,827
Total assets	$	11,132,253		10,944,663
Liabilities and Capital
Liabilities:
Notes payable (note 9)	$	3,435,161		3,006,478
Unsecured credit facilities (note 9)		484,383		708,734
Accounts payable and other liabilities		213,705		224,807
Acquired lease intangible liabilities, less accumulated amortization of $131,676 and $92,746 at December 31, 2019 and 2018, respectively (note 6)		427,260		496,726
Lease liabilities		222,918		—
Tenants’ security, escrow deposits and prepaid rent		58,865		57,750
Total liabilities		4,842,292		4,494,495
Commitments and contingencies (note 16)		—		—
Capital:
Partners’ capital (note 12):
General partner; 167,571,218 and 167,904,593 units outstanding at December 31, 2019 and 2018, respectively		6,225,345		6,398,897
Limited partners; 746,433 and 349,902 units outstanding at December 31, 2019 and 2018		36,100		10,666
Accumulated other comprehensive loss		(11,997	)	(927	)
Total partners’ capital		6,249,448		6,408,636
Noncontrolling interests: Limited partners’ interests in consolidated partnerships		40,513		41,532
Total capital		6,289,961		6,450,168
Total liabilities and capital	$	11,132,253		10,944,663

See accompanying notes to consolidated financial statements.

REGENCY CENTERS, L.P.

Consolidated Statements of Operations

For the years ended December 31, 2019, 2018, and 2017

(in thousands, except per unit data)

	2019
Revenues:
Lease income	$	1,094,301		1,083,770		950,186
Other property income		9,201		8,711		7,982
Management, transaction, and other fees		29,636		28,494		26,158
Total revenues		1,133,138		1,120,975		984,326
Operating expenses:
Depreciation and amortization		374,283		359,688		334,201
Operating and maintenance		169,909		168,034		143,990
General and administrative		74,984		65,491		67,624
Real estate taxes		136,236		137,856		109,723
Other operating expenses		7,814		9,737		89,225
Total operating expenses		763,226		740,806		744,763
Other expense (income):
Interest expense, net		151,264		148,456		132,629
Provision for impairment, net of tax		54,174		38,437		—
Gain on sale of real estate, net of tax		(24,242	)	(28,343	)	(27,432	)
Early extinguishment of debt		11,982		11,172		12,449
Net investment (income) loss		(5,568	)	1,096		(3,985	)
Total other expense (income)		187,610		170,818		113,661
Income from operations before equity in income of investments in real estate partnerships and income taxes		182,302		209,351		125,902
Equity in income of investments in real estate partnerships (note 4)		60,956		42,974		43,341
Deferred income tax benefit of taxable REIT subsidiary		—		—		(9,737	)
Net income		243,258		252,325		178,980
Limited partners’ interests in consolidated partnerships		(3,194	)	(2,673	)	(2,515	)
Net income attributable to the Partnership		240,064		249,652		176,465
Preferred unit distributions and issuance costs		—		—		(16,128	)
Net income attributable to common unit holders	$	240,064		249,652		160,337
Income per common unit - basic (note 15):	$	1.43		1.47		1.00
Income per common unit - diluted (note 15):	$	1.43		1.46		1.00

See accompanying notes to consolidated financial statements.

REGENCY CENTERS, L.P.

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2019, 2018, and 2017

(in thousands)

	2019
Net income	$	243,258		252,325		178,980
Other comprehensive income:
Effective portion of change in fair value of derivative instruments:
Effective portion of change in fair value of derivative instruments		(15,585	)	402		1,151
Reclassification adjustment of derivative instruments included in net income		3,269		5,342		11,103
Unrealized gain (loss) on available-for-sale securities		315		(95	)	(8	)
Other comprehensive income		(12,001	)	5,649		12,246
Comprehensive income		231,257		257,974		191,226
Less: comprehensive income attributable to noncontrolling interests:
Net income attributable to noncontrolling interests		3,194		2,673		2,515
Other comprehensive income attributable to noncontrolling interests		(912	)	288		168
Comprehensive income attributable to noncontrolling interests		2,282		2,961		2,683
Comprehensive income attributable to the Partnership	$	228,975		255,013		188,543

See accompanying notes to consolidated financial statements.

REGENCY CENTERS, L.P.

Consolidated Statements of Capital

For the years ended December 31, 2019, 2018, and 2017

(in thousands)

	General Partner Preferred and Common Units
Balance at December 31, 2016	$	2,609,647		(1,967	)	(18,346	)	2,589,334		35,168		2,624,502
Net income		176,077		388		—		176,465		2,515		178,980
Other comprehensive income
Other comprehensive income before reclassifications		—		2		1,126		1,128		15		1,143
Amounts reclassified from accumulated other comprehensive income		—		19		10,931		10,950		153		11,103
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
Adjustment due to change in accounting policy (note 1)		30,889		—		12		30,901		2		30,903
Adjusted balance at January 1, 2018		6,729,230		10,907		(6,277	)	6,733,860		30,097		6,763,957
Net income		249,127		525		—		249,652		2,673		252,325
Other comprehensive income
Other comprehensive income before reclassifications		—		—		36		36		271		307
Amounts reclassified from accumulated other comprehensive income		—		11		5,314		5,325		17		5,342
Deferred compensation plan, net		(13	)	—		—		(13	)	—		(13	)
Contributions from partners		—		—		—		—		13,000		13,000
Distributions to partners		(377,311	)	(777	)	—		(378,088	)	(4,526	)	(382,614	)
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization		16,745		—		—		16,745		—		16,745
Common units repurchased and retired as a result of common stock repurchased and retired by Parent Company		(213,851	)	—		—		(213,851	)	—		(213,851	)
Common units issued as a result of common stock issued by Parent Company, net of repurchases		(5,030	)	—		—		(5,030	)	—		(5,030	)
Balance at December 31, 2018	$	6,398,897		10,666		(927	)	6,408,636		41,532		6,450,168

	General Partner Preferred and Common Units
Balance at December 31, 2018	$	6,398,897		10,666		(927	)	6,408,636		41,532		6,450,168
Net income		239,430		634		—		240,064		3,194		243,258
Other comprehensive income
Other comprehensive income before reclassifications		—		(31	)	(14,388	)	(14,419	)	(851	)	(15,270	)
Amounts reclassified from accumulated other comprehensive income		—		12		3,318		3,330		(61	)	3,269
Deferred compensation plan, net		—		—		—		—		—		—
Contributions from partners		—		—		—		—		2,151		2,151
Issuance of exchangeable operating partnership units		—		25,870		—		25,870		—		25,870
Distributions to partners		(392,027	)	(1,051	)	—		(393,078	)	(5,518	)	(398,596	)
Reallocation of limited partners' interest		(66	)	—		—		(66	)	66		—
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization		16,254		—		—		16,254		—		16,254
Common units repurchased and retired as a result of common stock repurchased and retired by Parent Company		(32,778	)	—		—		(32,778	)	—		(32,778	)
Common units issued as a result of common stock issued by Parent Company, net of repurchases		(4,365	)	—		—		(4,365	)	—		(4,365	)
Balance at December 31, 2019	$	6,225,345		36,100		(11,997	)	6,249,448		40,513		6,289,961

See accompanying notes to consolidated financial statements.

REGENCY CENTERS, L.P.

Consolidated Statements of Cash Flows

For the years ended December 31, 2019, 2018, and 2017

(in thousands)

	2019
Cash flows from operating activities:
Net income	$	243,258		252,325		178,980
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		374,283		359,688		334,201
Amortization of deferred loan costs and debt premiums		11,170		10,476		9,509
(Accretion) and amortization of above and below market lease intangibles, net		(43,867	)	(33,330	)	(23,144	)
Stock-based compensation, net of capitalization		14,339		13,635		20,549
Equity in income of investments in real estate partnerships		(60,956	)	(42,974	)	(43,341	)
Gain on sale of real estate, net of tax		(24,242	)	(28,343	)	(27,432	)
Provision for impairment, net of tax		54,174		38,437		—
Early extinguishment of debt		11,982		11,172		12,449
Deferred income tax benefit of taxable REIT subsidiary		—		—		(9,737	)
Distribution of earnings from investments in real estate partnerships		56,297		54,266		53,502
Settlement of derivative instrument		(6,870	)	—		76
Deferred compensation expense		5,169		(1,085	)	3,844
Realized and unrealized gain on investments		(5,433	)	1,177		(3,837	)
Changes in assets and liabilities:
Tenant and other receivables		(4,690	)	(26,374	)	(26,081	)
Deferred leasing costs		(6,777	)	(8,366	)	(14,448	)
Other assets		(1,570	)	(1,410	)	9,536
Accounts payable and other liabilities		4,175		(760	)	(2,114	)
Tenants’ security, escrow deposits and prepaid rent		829		11,793		(2,728	)
Net cash provided by operating activities		621,271		610,327		469,784
Cash flows from investing activities:
Acquisition of operating real estate		(222,444	)	(85,289	)	(124,727	)
Advance deposits paid toward the acquisition of operating real estate		(125	)	—		(4,917	)
Acquisition of Equity One, net of cash and restricted cash acquired of $74,507		—		—		(646,790	)
Real estate development and capital improvements		(200,012	)	(226,191	)	(346,857	)
Proceeds from sale of real estate investments		137,572		250,445		110,015
Proceeds from property insurance casualty claims		9,350		—		—
(Issuance)/Collection of notes receivable		(547	)	15,648		(5,236	)
Investments in real estate partnerships		(66,921	)	(74,238	)	(23,529	)
Return of capital from investments in real estate partnerships		63,693		14,647		36,603
Dividends on investment securities		660		531		365
Acquisition of investment securities		(23,458	)	(23,164	)	(23,535	)
Proceeds from sale of investment securities		19,539		21,587		21,378
Net cash used in investing activities		(282,693	)	(106,024	)	(1,007,230	)

	2019
Cash flows from financing activities:
Net proceeds from common units issued as a result of common stock issued by Parent Company		—		—		88,458
Repurchase of common units in conjunction with tax withholdings on equity award plans		(6,204	)	(6,772	)	(18,649	)
Proceeds from treasury units issued as a result of treasury stock sold by Parent Company		9		99		100
Common shares repurchased through share repurchase program		(32,778	)	(213,851	)	—
Redemption of preferred partnership units		—		—		(325,000	)
Distributions to limited partners in consolidated partnerships, net		(3,367	)	(4,526	)	(8,139	)
Distributions to partners		(391,649	)	(376,755	)	(323,285	)
Distributions to preferred unit holders		—		—		(5,029	)
Repayment of fixed rate unsecured notes		(250,000	)	(150,000	)	—
Proceeds from issuance of fixed rate unsecured notes, net		723,571		299,511		953,115
Proceeds from unsecured credit facilities		560,000		575,000		1,100,000
Repayment of unsecured credit facilities		(785,000	)	(490,000	)	(755,000	)
Proceeds from notes payable		—		1,740		131,069
Repayment of notes payable		(55,680	)	(113,037	)	(232,839	)
Scheduled principal payments		(9,442	)	(9,964	)	(10,162	)
Payment of loan costs		(7,019	)	(9,448	)	(13,271	)
Early redemption costs		(10,647	)	(10,491	)	(12,420	)
Net cash (used in) provided by financing activities		(268,206	)	(508,494	)	568,948
Net increase (decrease) in cash and cash equivalents and restricted cash		70,372		(4,191	)	31,502
Cash, cash equivalents, and restricted cash at beginning of the year		45,190		49,381		17,879
Cash, cash equivalents, and restricted cash at end of the year	$	115,562		45,190		49,381
Supplemental disclosure of cash flow information:
Cash paid for interest (net of capitalized interest of $4,192, $7,020, and $7,946 in 2019, 2018, and 2017, respectively)	$	136,139		136,645		109,956
Cash paid (received) for income taxes, net of refunds	$	1,225		5,455		(269	)
Supplemental disclosure of non-cash transactions:
Common stock issued by Parent Company for partnership units exchanged	$	25,870		—		13,100
Mortgage loans for the acquisition of real estate	$	26,152		9,700		27,000
Change in fair value of securities available-for-sale	$	660		(206	)	(8	)
Change in accrued capital expenditures	$	10,704		—		—
Common stock issued by Parent Company for dividend reinvestment plan	$	1,429		1,333		1,210
Stock-based compensation capitalized	$	2,325		3,509		3,210
Contributions from limited partners in consolidated partnerships, net	$	66		13,000		186
Common stock issued for dividend reinvestment in trust	$	987		841		557
Contribution of stock awards into trust	$	2,582		1,314		1,372
Distribution of stock held in trust	$	197		524		677
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

See accompanying notes to consolidated financial statements.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

1.	Summary of Significant Accounting Policies

	(a)	Organization and Principles of Consolidation

General

Regency Centers Corporation (the “Parent Company”) began its operations as a REIT in 1993 and is the general partner of Regency Centers, L.P. (the “Operating Partnership”). The Parent Company primarily engages in the ownership, management, leasing, acquisition, development and redevelopment of shopping centers through the Operating Partnership, has no other assets other than through its investment in the Operating Partnership, and its only liabilities are $500 million of unsecured public and private placement notes, 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, 2019, the Parent Company, the Operating Partnership, and their controlled subsidiaries on a consolidated basis (the “Company” or “Regency”) owned 303 properties and held partial interests in an additional 116 properties 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.

Estimates, Risks, and Uncertainties

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of commitments and 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, collectability of accounts receivable and 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 has control over the activities most important to the overall success of the partnership. Control is determined using an evaluation based on accounting standards related to the consolidation of VIEs and voting interest entities. 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.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

Ownership of the Parent Company

The Parent Company has a single class of common stock outstanding.

Ownership of the Operating Partnership

The Operating Partnership's capital includes general and limited common Partnership Units. As of December 31, 2019, the Parent Company owned approximately 99.6%, or 167,571,218, of the 168,317,651 outstanding common Partnership Units of the Operating Partnership, with the remaining limited common 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, which consolidates it, is the primary beneficiary. 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 127 properties through partnerships, of which 11 are consolidated. Regency's partners include institutional investors, other real estate developers and/or operators. 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 in these partnerships varies from protective decisions (debt, bankruptcy, selling primary asset(s) of business) to involvement in approving leases, operating budgets, and capital budgets. 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 or additional contributions by the partners.

	•	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.

	o	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.

	o	Those partnerships in which Regency does not have a controlling financial interest are accounted for using the equity method and Regency's 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.

The net difference in the carrying amount of investments in real estate partnerships and the underlying equity in net assets is accreted to earnings 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.

	•	Those partnerships for which the Partners only have protective rights are considered VIEs under ASC Topic 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.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

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.

The major classes of assets, liabilities, and noncontrolling equity interests held by the Company's consolidated VIEs, exclusive of the Operating Partnership, are as follows:

(in thousands)	December 31, 2019
Assets
Net real estate investments	$	325,464	112,085
Cash, cash equivalents, and restricted cash		57,269	7,309
Liabilities
Notes payable		17,740	18,432
Equity
Limited partners’ interests in consolidated partnerships		30,655	30,280

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 common stockholders of the Parent Company: (i) the limited Partnership Units in the Operating Partnership held by third parties (“Exchangeable operating partnership units”) 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. 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 of the Parent Company.

In accordance with ASC Topic 480, Distinguishing Liabilities from Equity, securities that are redeemable for cash or other assets at the option of the holder, not solely within the control of the issuer, are to be classified as redeemable noncontrolling interests outside of permanent equity in the Consolidated Balance Sheets. The Parent Company has evaluated the conditions as specified under 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 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 of the Operating Partnership.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

	(b)	Revenues and Tenant Receivable

Leasing Income and Tenant Receivables

The Company leases space to tenants under agreements with varying terms that generally provide for fixed payments of base rent, with designated increases over the term of the lease. Some of the lease agreements 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. Additionally, most lease agreements contain provisions for reimbursement of the tenants' share of actual real estate taxes, insurance and common area maintenance (“CAM”) costs (collectively “Recoverable Costs”) incurred.

Lease terms generally range from three to seven years for tenant space under 10,000 square feet (“Shop Space”) and in excess of five years for spaces greater than 10,000 square feet (“Anchor Tenants”). Many leases also provide the option for the tenants to extend their lease beyond the initial term of the lease. If a tenant does not exercise its option or otherwise negotiate to renew, the lease expires and the lease contains an obligation for the tenant to relinquish its space so it can be leased to a new tenant. This generally involves some level of cost to prepare the space for re-leasing, which is capitalized and depreciated over the shorter of the life of the subsequent lease or the life of the improvement.

On January 1, 2019, the Company adopted the new accounting guidance in Accounting Standards Codification (“ASC”) Topic 842, Leases, including all related Accounting Standard Updates (“ASU”). The Company elected to use the alternative modified retrospective transition method provided in ASU 2018-11 (the “effective date method”). Under this method, the effective date of January 1, 2019 is the date of initial application. In connection with the adoption of Topic 842, the Company elected a package of practical expedients, transition options, and accounting policy elections as follows:

	•	Package of practical expedients is applied to all leases, allowing the Company not to reassess (i) whether expired or existing contracts contain leases under the new definition of a lease, (ii) lease classification for expired or existing leases, and (iii) whether previously capitalized initial direct costs would qualify for capitalization under Topic 842;

	•	For land easements, the Company elected not to assess at transition whether any expired or existing land easements are, or contain, leases if they were not previously accounted for as leases under the previous lease accounting standard (Topic 840);

	•	Lessor separation and allocation practical expedient - Regency elected, as lessor, to aggregate non-lease components with the related lease component if certain conditions are met, and account for the combined component based on its predominant characteristic, which generally results in combining lease and non-lease components of its tenant lease contracts to a single line shown as Lease income in the accompanying Consolidated Statements of Operations; and

	•	The Company made an accounting policy election to continue to exclude, from contract consideration, sales tax (and similar taxes) collected from lessees.

The Company's existing leases were not re-evaluated and continue to be classified as operating leases, as per the practical expedient package elected above. New and modified leases will now require evaluation of specific classification criteria, which, based on the customary terms of the Company's leases, should continue to be classified as operating leases. However, certain longer-term leases (both lessee and lessor leases) may be classified as direct financing or sales type leases, which may result in selling profit and an accelerated pattern of earnings recognition. At December 31, 2019, all of the Company’s leases were classified as operating leases.

CAM is a non-lease component of the lease contract under Topic 842, and therefore would be accounted for under Topic 606, Revenue from Contracts with Customers, and presented separate from Lease income in the Consolidated Statements of Operations, based on an allocation of the overall consideration in the lease contract, which is not necessarily the amount that would be billable to the tenants for CAM reimbursements per the terms of the lease contract. As the timing and pattern of providing the CAM service to the tenant is the same as the timing and pattern of the tenants' use of the underlying lease asset, the Company elected, as part of a practical expedient referred to above, to combine CAM with the remaining lease components, along with tenants' reimbursement of real estate taxes and insurance, and recognize them together as Lease income in the accompanying Consolidated Statements of Operations.

Lease income for operating leases with fixed payment terms is recognized on a straight-line basis over the expected term of the lease for all leases for which collectibility is considered probable at the commencement date. At lease commencement,

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

the Company generally expects that collectibility is probable due to the Company’s credit checks on tenants and other creditworthiness analysis undertaken before entering into a new lease; therefore, income from most operating leases is initially recognized on a straight-line basis. For operating leases in which collectibility of Lease income is not considered probable, Lease income is recognized on a cash basis and all previously recognized uncollectible Lease income is reversed in the period in which the Lease income is determined not to be probable of collection. In addition to the lease-specific collectibility assessment performed under Topic 842, the Company also recognizes a general reserve, as a reduction to Lease income, for its portfolio of operating lease receivables which are not expected to be fully collectible based on the Company’s historical collection experience.

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

	December 31,
(in thousands)	2019		2018
Billed tenant receivables	$	24,906		25,590
Accrued CAM, insurance and tax reimbursements		10,620		25,305
Other receivables		26,724		30,953
Straight-line rent receivables		107,087		105,677
Less: allowance for doubtful accounts (1)		—		(10,100	)
Less: straight-line rent reserves (1)		—		(5,066	)
Total tenant and other receivables, net	$	169,337		172,359

	(1)	Beginning with the adoption of ASC 842, Leases, on January 1, 2019, uncollectible lease income is a direct charge against Lease income and the related receivable. Prior to 2019, uncollectible lease income was recorded as Provision for doubtful accounts included in Other operating expenses.

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. Beginning with the adoption of ASC 842, Leases, on January 1, 2019, uncollectible lease income is a direct charge against Lease income. Prior to 2019, uncollectible lease income was recorded as Provision for doubtful accounts included in Other operating expenses and Provision for straight line rent reserve included as a charge to Lease income. The Company recorded the following provisions for doubtful accounts:

	Year ended December 31,
(in thousands)	2018		2017
Gross provision for doubtful accounts		4,993		3,992
Provision for straight line rent reserve		1,741		1,129

Real Estate Sales

On January 1, 2018, the Company adopted the new accounting guidance for sales of nonfinancial assets (“Subtopic 610-20”). Beginning January 1, 2018, the Company derecognizes real estate and recognizes a gain or loss on sales of real estate when a contract exists and control of the property has transferred to the buyer. Control of the property, including controlling financial interest, is generally considered to transfer upon closing through transfer of the legal title and possession of the property. Any retained noncontrolling interest is measured at fair value. This change in accounting policy resulted in the recognition, through opening retained earnings on January 1, 2018, of $30.9 million of previously deferred gains from property sales to the Company's Investments in real estate partnerships.

Prior to January 1, 2018, the Company recognized profits from sales of real estate under the full accrual method by the Company when: (i) a sale was consummated; (ii) the buyer's initial and continuing investment was adequate to demonstrate a commitment to pay for the property; (iii) the Company's receivable, if applicable, was not subject to future subordination; (iv) the Company had transferred to the buyer the usual risks and rewards of ownership; and (v) the Company did not have substantial continuing involvement with the property.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

Management Services

On January 1, 2018, the Company adopted the new accounting guidance for revenue recognition (Topic 606 Revenue from Contracts with Customers, “Topic 606”) using a modified retrospective approach and applied the transition practical expedients allowed by the standard.

Subsequent to the adoption of Topic 606, the Company recognizes revenue when or as control of the promised services are transferred to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. The following is a description of the Company's revenue from contracts with customers within the scope of Topic 606.

Property and Asset Management Services

The Company is engaged under agreements with its joint venture partnerships, which are generally perpetual in nature and cancellable through unanimous partner approval, absent an event of default. Under these agreements, the Company is to provide asset management, property management, and leasing services for the 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 over the monthly or quarterly periods as services are rendered. Property management and asset management services represent a series of distinct daily services. Accordingly, the Company satisfies its performance obligation as service is rendered each day and the variability associated with that compensation is resolved each day. Amounts due from the partnerships for such services are paid during the month following the monthly or quarterly service periods.

Several of the Company’s partnership agreements provide for incentive payments, generally referred to as “promotes” or “earnouts,” to Regency for appreciation in property values in Regency's capacity as manager. The terms of these promotes are based on appreciation in real estate value over designated time intervals. The Company evaluates its expected promote payout at each reporting period, which generally does not result in revenue recognition until the measurement period has completed, when the amount can be reasonably determined and the amount is not probable of significant reversal. The Company did not recognize any promote revenue during the years ended December 31, 2019, 2018, or 2017.

Leasing Services

Leasing service fees are based on a percentage of the total rent due under the lease. The leasing service is considered performed upon successful execution of an acceptable tenant lease for the joint ventures’ shopping centers, at which time revenue is recognized. Payment of the first half of the fee is generally due upon lease execution and the second half is generally due upon tenant opening or rent payments commencing.

Transaction Services

The Company also receives transaction fees, as contractually agreed upon with each joint venture, which include acquisition fees, disposition fees, and financing service fees. Control of these services is generally transferred at the time the related transaction closes, which is the point in time when the Company recognizes the related fee revenue. Any unpaid amounts related to transaction-based fees are included in Tenant and other receivables, net, within the Consolidated Balance Sheets.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

All income from management service contracts is included within Management, transaction and other fees on the Consolidated Statements of Operations. Additionally, Other property income, which includes incidental income from the properties, is generally recognized at the point in time that the performance obligation is met. The primary components of these revenue streams, the timing of satisfying the performance obligations, and amounts recognized are as follows:

		Year ended December 31,
(in thousands)	Timing of satisfaction of performance obligations	2019		2018		2017
Other property income	Point in time	$	9,201		8,711		7,982
Management, transaction, and other fees:
Property management services	Over time		14,744		14,663		13,917
Asset management services	Over time		7,135		7,213		7,090
Leasing services	Point in time		3,692		4,044		3,573
Other transaction fees	Point in time		4,065		2,574		1,578
Total management, transaction, and other fees		$	29,636		28,494		26,158

The accounts receivable for management services, which is included within Tenant and other receivables in the accompanying Consolidated Balance Sheets, are $11.6 million and $12.5 million, as of December 31, 2019 and 2018.

	(c)	Real Estate Investments

The following table details the components of Real estate assets in the Consolidated Balance Sheets:

(in thousands)	December 31, 2019		December 31, 2018
Land	$	4,288,695	$	4,205,445
Land improvements		607,624		613,847
Buildings		5,101,061		5,088,102
Building and tenant improvements		946,034		901,596
Construction in progress		151,880		54,172
Total real estate assets	$	11,095,294		10,863,162

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 Lease income. 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 15 years for land improvements, 40 years for buildings and improvements, and 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 and Redevelopment Costs

Land, buildings, and improvements are recorded at cost. All specifically identifiable costs related to development and redevelopment activities are capitalized into Real estate assets in the accompanying Consolidated Balance Sheets, and are included in Construction in progress within the above table. The capitalized costs include pre-development costs essential to the development or redevelopment of the property, development / redevelopment costs, construction costs, interest costs, real estate taxes, and allocated direct employee costs incurred during the period of development or redevelopment. Interest

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

costs are capitalized into each development and redevelopment project based upon applying the Company's weighted average borrowing rate to that portion of the actual development or redevelopment 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.

Pre-development costs represent the costs the Company incurs prior to land acquisition or pursuing a redevelopment including contract deposits, as well as legal, engineering, and other external professional fees related to evaluating the feasibility of developing or redeveloping a shopping center. As of December 31, 2019 and 2018, the Company had nonrefundable deposits and other pre development costs of approximately $17.7 million and $10.6 million, respectively. If the Company determines that the development or redevelopment 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, 2019, 2018, and 2017, the Company expensed pre-development costs of approximately $2.5 million, $1.9 million, and $1.5 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 Accounting Standards Update (“ASU”) 2017-01: Business Combinations (Topic 805) - Clarifying the Definition of a Business, 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 Depreciation and amortization expense in the Consolidated Statements of Operations 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 Lease income over the remaining terms of the respective leases and the value of below-market leases is accreted to Lease income 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. 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 intangible assets or liabilities) may not be recoverable. For those properties with such indicators, management evaluates recoverability of the property's carrying amount. Through the evaluation, we compare the current carrying value of the asset to the estimated undiscounted cash

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

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, expected leasing activity, 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 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 both December 31, 2019 and 2018, primarily due to the tax free merger with Equity One and inheriting lower carryover tax basis.

	(d)	Cash, Cash Equivalents, and Restricted Cash

Any instruments which have an original maturity of 90 days or less when purchased are considered cash equivalents. As of December 31, 2019 and 2018, $2.5 million and $2.7 million, respectively, of cash was restricted through escrow agreements and certain mortgage loans.

	(e)	Other Assets

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. The Company accounts for goodwill in accordance with ASC Topic 350, Intangibles - Goodwill and Other, and allocates its goodwill to its 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, or more frequently as triggers occur.

The goodwill impairment evaluation is completed using either 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 reporting unit’s fair value is less than its carrying value, including goodwill. If a qualitative approach indicates it is more likely-than-not that the estimated carrying value of a reporting unit (including goodwill) exceeds its fair value, or if the Company chooses to bypass the qualitative approach for any reporting unit, the Company will perform the quantitative approach described below.

The quantitative approach consists of estimating the fair value of each reporting unit 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 a goodwill impairment charge for the

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

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. The fair value of securities is determined using quoted market prices.

Debt securities are classified as held to maturity when the Company has the positive intent and ability to hold the securities to maturity. Debt 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 through earnings in Investment income in the Consolidated Statements of Operations. Debt 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.

Equity securities with readily determinable fair values are measured at fair value with changes in the fair value recognized through net income and presented within Investment income in the Consolidated Statements of Operations.

	(f)	Deferred Leasing Costs

Deferred leasing costs consist of costs 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.

The adoption of Topic 842 on January 1, 2019 changed the treatment of leasing costs, such that non-contingent internal leasing and legal costs associated with leasing activities can no longer be capitalized. The Company, as a lessor, may only defer as initial direct costs the incremental costs of a tenant’s operating lease that would not have been incurred if the lease had not been obtained. These costs generally consist of third party broker payments.

	(g)	Derivative Financial Instruments

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 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 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 generally 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 Company also utilizes cash flow hedges to lock U.S. Treasury rates in anticipation of future fixed-rate debt issuances. The gains or losses resulting from changes in fair value of derivatives that qualify as cash flow hedges are recognized in Accumulated other comprehensive income (“AOCI”). Upon the settlement of a hedge, gains and losses remaining in AOCI are amortized through earnings over the underlying term of the hedged transaction. The cash receipts or payments related to

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

interest rate swaps are presented in cash flows provided by operating activities in the accompanying Consolidated Statements of Cash Flows.

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.

	(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 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 99.6% 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 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 and projected 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 (2015 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”) was signed into law in December 2017. 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 were recognized in the Company's December 2017 financial statements, even though the effective date of the law for most provisions is January 1, 2018. The Company calculated the tax impact of the change in tax law. The revaluation of the deferred tax assets and liabilities at the appropriate tax rate resulted in a $9.7 million benefit recognized in earnings for 2017. To the extent that all information necessary was not available, prepared or analyzed, companies were allotted a measurement period to make adjustments for the effect of the law. The Company completed its analysis of the Act during 2018 and recorded an immaterial benefit in earnings.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

	(i)	Lease Obligations

The Company has certain properties within its consolidated real estate portfolio that are either partially or completely on land subject to ground leases with third parties, which are all classified as operating leases. Accordingly, the Company owns only a long-term leasehold or similar interest in these properties. The building and improvements constructed on the leased land are capitalized as Real estate assets in the accompanying Consolidated Balance Sheets 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. Leasehold improvements are capitalized as tenant improvements, included in Other assets in the Consolidated Balance Sheets, and depreciated over the shorter of the useful life of the improvements or the lease term.

Upon the adoption of Topic 842, the Company recognized Lease liabilities on its Consolidated Balance Sheets for its ground and office leases of $225.4 million at January 1, 2019, and corresponding Right of use assets of $297.8 million, net of or including the opening balance for straight-line rent and above / below market ground lease intangibles related to these same ground and office leases. A key input in estimating the Lease liabilities and resulting Right of use assets is establishing the discount rate in the lease, which since the rates implicit in the lease contracts are not readily determinable, requires additional inputs for the longer-term ground leases, including market-based interest rates that correspond with the remaining term of the lease, the Company's credit spread, and a securitization adjustment necessary to reflect the collateralized payment terms present in the lease. This discount rate is applied to the remaining unpaid minimum rental payments for each lease to measure the operating lease liabilities.

The ground and office lease expenses continue to be recognized on a straight-line basis over the term of the leases, including management's estimate of expected option renewal periods. For ground leases, the Company generally assumes it will exercise options through the latest option date of that shopping center's anchor tenant lease.

	(j)	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.

	(k)	Stock-Based Compensation

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

When the Parent Company issues common stock 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 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.

	(l)	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, through acquisitions, new developments, or redevelopment of existing centers, 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

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

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.

	(m)	Business Concentration

Grocer anchor tenants represent approximately 23% 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.

	(n)	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.

	(o)	Reclassifications

Certain prior year amounts have been reclassified to conform to current year presentation, including amounts in Lease income and Other property income in the accompanying Consolidated Statements of Operations.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

	(p)	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:

Leases (Topic 842) and related updates: ASU 2016-02, February 2016, Leases (Topic 842) ASU 2018-10, July 2018: Codification Improvements to Topic 842, Leases ASU 2018-11, July 2018, Leases (Topic 842): Targeted Improvements ASU 2018-20, December 2018, Leases (Topic 842): Narrow-Scope Improvements for Lessors ASU 2019-01, March 2019, Leases (Topic 842): Codification Improvements	Topic 842 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets. It also makes targeted changes to lessor accounting. The provisions of these ASUs were effective as of January 1, 2019, with early adoption permitted. Topic 842 provides a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief or an additional transition method, allowing for initial application at the date of adoption and a cumulative-effect adjustment to opening retained earnings. See the updated Leases accounting policy disclosed in Note 1 and the added Leases disclosures in Note 7.	January 2019	The Company has completed its evaluation and adoption of this standard, as discussed in Note 1. The Company utilized the alternative modified retrospective transition method provided in ASU 2018-11 (the “effective date method”), under which the effective date of January 1, 2019, is also the date of initial application. See the updated Leases accounting policy disclosed in Note 1 and the added disclosures in Note 7, Leases. Beyond the policy, presentation and disclosure changes discussed, the following changes had direct impact to Net Income from the adoptions of Topic 842: Capitalization of indirect internal non-contingent lease costs and legal leasing costs are no longer permitted upon the adoption of this standard, which is resulting in an increase to Total operating expenses in the Consolidated Statements of Operations. Previous capitalization of internal leasing costs was $6.5 million and $10.4 million during the years ended December 31, 2018 and 2017, respectively. Previous capitalization of internal legal costs was $1.6 million and $1.2 million during the years ended December 31, 2018 and 2017, respectively, including our pro rata share recognized through Equity in income of investments in real estate partnerships.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019



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





ASU 2016-13, June 2016, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments	This ASU replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This ASU also applies to how the Company evaluates impairments of any available-for-sale debt securities and any lease receivables arising from leases classified as sales-type or direct finance leases.	January 2020	The Company has evaluated this ASU and, based on the nature of financial instruments within scope of the standard, has determined that the impact of adoption is limited to recognizing impairments of available-for-sale debt securities in earnings. The Company’s available-for-sale debt securities have a fair value of $10.8 million at December 31, 2019, as seen in note 11. Additional disclosures, if material, are also required.

ASU 2018-19, November 2018: Codification Improvements to Topic 326, Financial Instruments - Credit Losses	This ASU clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases.	January 2020	The adoption of this ASU will not have a material impact on the Company’s financial statements and related disclosures. See Leases section of Note 1 for disclosure of collectibility policy over lease receivables from operating leases.

ASU 2018-13, August 2018: Fair Value Measurements (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement	This ASU modifies the disclosure requirements for fair value measurements within the scope of Topic 820, Fair Value Measurements, including the removal and modification of certain existing disclosures, and the additional of new disclosures for certain types of fair value measurements.	January 2020	The Company has evaluated the impact of adopting this new accounting standard, whose impact is limited to fair value measurement disclosures. Based on the nature of the Company’s fair value measurements and disclosure requirements, the adoption of this standard is not expected to have an impact on the Company’s financial statements or related disclosures.

ASU 2018-15, August 2018, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract	The amendments in this ASU align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The ASU provides further clarification of the appropriate presentation of capitalized costs, the period over which to recognize the expense, the presentation within the Statements of Operations and Statements of Cash Flows, and the disclosure requirements. Early adoption of the standard is permitted.	January 2020	The Company has evaluated the accounting standard, which is consistent with existing practice, and therefore it will not have a material impact on the Company’s financial statements and related disclosures.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

2.	Real Estate Investments

Acquisitions

The following tables detail the shopping centers acquired or land acquired for development or redevelopment:

(in thousands)		December 31, 2019
Date Purchased	Property Name	City/State	Property Type	Purchase Price		Debt Assumed, Net of Premiums		Intangible Assets		Intangible Liabilities
1/8/2019	Pablo Plaza (1)	Jacksonville, FL	Operating	$	600		—		—		—
2/8/2019	Melrose Market	Seattle, WA	Operating		15,515		—		941		358
6/18/2019	The Field at Commonwealth Ph II (2)	Chantilly, VA	Development		4,083		—		—		—
6/21/2019	Culver Public Market	Culver City, CA	Development		1,279		—		—		—
6/28/2019	6401 Roosevelt	Seattle, WA	Operating		3,550		—		—		—
7/1/2019	The Pruneyard	Campbell, CA	Operating		212,500		—		16,991		5,833
9/17/2019	Circle Marina Center	Long Beach, CA	Operating		50,000		—		3,717		962
Total property acquisitions				$	287,527		—		21,649		7,153

(1)	The Company purchased a land parcel adjacent to the Company’s existing operating Pablo Plaza for redevelopment.

(2)	The Company purchased The Field at Commonwealth Ph II, which is land adjacent to an existing operating property, for future development.

(in thousands)		December 31, 2018
Date Purchased	Property Name	City/State	Property Type	Purchase Price		Debt Assumed, Net of Premiums		Intangible Assets		Intangible Liabilities
01/10/18	Hewlett Crossing I & II	Hewlett, NY	Operating	$	30,900		9,700		3,114		1,868
04/03/18	Rivertowns Square	Dobbs Ferry, NY	Operating		68,933		—		4,993		5,554
12/14/18	Pablo Plaza (1)	Jacksonville, FL	Operating		1,310		—		—		—
12/27/18	The Village at Hunter's Lake	Tampa, FL	Development		1,812		—		—		—
12/31/18	Carytown Exchange (2)	Richmond, VA	Development		13,284		—		264		—
Total property acquisitions				$	116,239		9,700		8,371		7,422

(1)	The Company purchased a 5,000 square foot building adjacent to the Company's existing operating Pablo Plaza for redevelopment.

(2)	The Company closed on the Carytown Exchange development, with a partner contributing land valued at $13 million which is recorded within Limited partners' interest 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, with a total purchase price of $5.2 billion.

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

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

The Company incurred $80.7 million of merger-related transaction costs during the year ended December 31, 2017, which is recorded in Other operating expenses in the accompanying Consolidated Statements of Operations.

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:

(in thousands, except per share data)	Year ended December 31, 2017
Total revenues	$	1,052,221
Income from operations (1)		281,393
Net income attributable to common stockholders (1)		262,270
Income per common share - basic		1.54
Income per common share - diluted		1.54

	(1)	The pro forma earnings for the year ended December 31, 2017, were adjusted to exclude $103.6 million of merger costs, as if they had occurred during 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.

3.	Property Dispositions

Dispositions

The following table provides a summary of consolidated shopping centers and land parcels disposed of during the periods set forth below:

	Year ended December 31,
(in thousands, except number sold data)	2019		2018		2017
Net proceeds from sale of real estate investments	$	137,572		250,445		110,015
Gain on sale of real estate, net of tax	$	24,242		28,343		27,432
Provision for impairment of real estate sold	$	1,836		31,041		—
Number of operating properties sold		7		10		6
Number of land parcels sold		6		9		9

At December 31, 2019, the Company also had one property classified as Properties held for sale on the Consolidated Balance Sheets, which sold in January 2020.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

4.	Investments in Real Estate Partnerships

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

	December 31, 2019
(in thousands)	Regency's Ownership	Number of Properties		Total Investment		Total Assets of the Partnership		The Company's Share of Net Income of the Partnership			Net Income of the Partnership
GRI - Regency, LLC (GRIR)	40.00%		68	$	187,597		1,612,459		43,536			96,721
New York Common Retirement Fund (NYC) (1)	30.00%		6		41,422		260,512		(9,967	)		(5,832	)
Columbia Regency Retail Partners, LLC (Columbia I)	20.00%		7		9,201		139,253		1,626			8,406
Columbia Regency Partners II, LLC (Columbia II)	20.00%		13		39,453		385,960		1,748			8,742
Cameron Village, LLC (Cameron)	30.00%		1		10,641		96,101		1,062			3,572
RegCal, LLC (RegCal)	25.00%		6		26,417		109,226		3,796			16,276
US Regency Retail I, LLC (USAA) (2)	20.01%		7		—		87,231		1,028			5,137
Other investments in real estate partnerships (3)	18.38% - 50.00%		8		154,791		468,142		18,127			38,182
Total investments in real estate partnerships			116	$	469,522		3,158,884		60,956			171,204

(1)	During the third quarter of 2019, a $10.9 million impairment of real estate was recognized within the NYC partnership from changes in the expected hold periods of various properties.

(2)	The USAA partnership has 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 of $3.9 million, which is recorded within Accounts Payable and other liabilities in the Consolidated Balance Sheets.

(3)	Includes our investment in the Town and Country shopping center, which began with an initial 9.38% ownership percent in 2018, with an additional 9.0% interest acquired during 2019. In January 2020, we purchased our remaining 16.62% interest, bringing our total ownership interest to 35%.

	December 31, 2018
(in thousands)	Regency's Ownership	Number of Properties		Total Investment		Total Assets of the Partnership		The Company's Share of Net Income of the Partnership		Net Income of the Partnership
GRI - Regency, LLC (GRIR)	40.00%		70	$	189,381		1,646,448		29,614		74,139
New York Common Retirement Fund (NYC)	30.00%		6		54,250		277,626		490		2,239
Columbia Regency Retail Partners, LLC (Columbia I)	20.00%		7		13,625		141,807		1,311		6,650
Columbia Regency Partners II, LLC (Columbia II)	20.00%		13		38,110		377,121		4,673		23,367
Cameron Village, LLC (Cameron)	30.00%		1		11,169		98,633		943		3,177
RegCal, LLC (RegCal)	25.00%		7		31,235		139,844		1,542		6,167
US Regency Retail I, LLC (USAA) (1)	20.01%		7		—		89,524		937		4,685
Other investments in real estate partnerships	9.38% - 50.00%		9		125,231		456,828		3,464		8,661
Total investments in real estate partnerships			120	$	463,001		3,227,831		42,974		129,085

(1)	The USAA partnership has 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.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

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

	December 31,
(in thousands)	2019		2018
Investments in real estate, net	$	2,917,415		3,001,481
Acquired lease intangible assets, net		40,549		57,053
Other assets		200,920		169,297
Total assets	$	3,158,884		3,227,831
Notes payable	$	1,577,467		1,609,647
Acquired lease intangible liabilities, net		44,387		49,501
Other liabilities		96,388		90,577
Capital - Regency		508,875		498,852
Capital - Third parties		931,767		979,254
Total liabilities and capital	$	3,158,884		3,227,831

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:

	December 31,
(in thousands)	2019			2018
Capital - Regency	$	508,875			498,852
Basis difference		(43,296	)		(39,364	)
Negative investment in USAA (1)		3,943			3,513
Investments in real estate partnerships	$	469,522			463,001

	(1)	The USAA partnership has 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.

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)	2019			2018			2017
Total revenues	$	417,053			414,631			396,596
Operating expenses:
Depreciation and amortization		97,844			99,847			99,327
Operating and maintenance		65,811			66,299			58,283
General and administrative		6,201			5,697			5,582
Real estate taxes		53,410			54,119			49,904
Other operating expenses		2,709			2,700			4,574
Total operating expenses	$	225,975			228,662			217,670
Other expense (income):
Interest expense, net		75,449			73,508			73,244
Gain on sale of real estate		(64,798	)		(16,624	)		(34,276	)
Provision for impairment, net of tax		9,223			—			—
Total other expense (income)		19,874			56,884			38,968
Net income of the Partnerships	$	171,204			129,085			139,958
The Company's share of net income of the Partnerships	$	60,956			42,974			43,341

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

Acquisitions

The following table provides a summary of shopping centers and land parcels acquired through our unconsolidated real estate partnerships, which had no such acquisitions in 2019:

(in thousands)		Year ended December 31, 2018
Date Purchased	Property Name	City/State	Property Type	Co-investment Partner	Ownership %			Purchase Price		Debt Assumed, Net of Premiums		Intangible Assets		Intangible Liabilities
01/02/18	Ballard Blocks I	Seattle, WA	Operating	Other		49.90	%	$	54,500		—		3,668		2,350
01/02/18	Ballard Blocks II	Seattle, WA	Development	Other		49.90	%		4,000		—		—		—
01/05/18	The District at Metuchen	Metuchen, NJ	Operating	Columbia II		20.00	%		33,830		—		3,147		1,905
05/18/18	Crossroads Commons II	Boulder, CO	Operating	Columbia I		20.00	%		10,500		—		447		769
09/07/18	Ridgewood Shopping Center	Raleigh, NC	Operating	Columbia II		20.00	%		45,800		10,233		3,372		2,278
12/17/18	Shoppes at Bartram Park	Jacksonville, FL	Operating (1)	Other		50.00	%		984		—		—		—
12/14/18	Town and Country Center	Los Angeles, CA	Operating	Other		9.38	%		197,248		90,000		3,255		5,650
Total property acquisitions								$	346,862		100,233		13,889		12,952

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

Dispositions

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

	Year ended December 31,
(in thousands)	2019		2018		2017
Proceeds from sale of real estate investments	$	142,754		27,144		73,122
Gain on sale of real estate	$	64,798		16,624		34,276
The Company's share of gain on sale of real estate	$	29,422		3,608		6,591
Number of operating properties sold		4		1		3
Number of land out-parcels sold		—		2		1

Notes Payable

Scheduled principal repayments on notes payable held by our unconsolidated investments in real estate partnerships as of December 31, 2019 were as follows:

(in thousands) Scheduled Principal Payments and Maturities by Year:	Scheduled Principal Payments
2020	$	17,043	338,608		—	355,651		115,953
2021		11,048	269,942		19,635	300,625		104,375
2022		7,811	170,702		—	178,513		68,417
2023		2,989	171,608		—	174,597		65,096
2024		1,513	33,690		—	35,203		14,160
Beyond 5 Years		6,555	534,233		—	540,788		160,472
Net unamortized loan costs, debt premium / (discount)		—	(7,910	)	—	(7,910	)	(2,425	)
Total notes payable	$	46,959	1,510,873		19,635	1,577,467		526,048

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

These fixed and variable rate loans are all non-recourse to the partnerships, and mature through 2034, with 91.4% having a weighted average fixed interest rate of 4.48%. The remaining notes payable float over LIBOR and had a weighted average variable interest rate of 3.95% at December 31, 2019. Maturing loans 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 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)		2019				2018				2017
Asset management, property management, leasing, and investment and financing services		$	28,878				27,873				25,260

5.	Other Assets

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

(in thousands)	December 31, 2019
Goodwill	$	307,434	314,143
Investments		50,354	41,287
Prepaid and other		18,169	17,937
Derivative assets		2,987	17,482
Furniture, fixtures, and equipment, net		7,098	6,127
Deferred financing costs, net		4,687	6,851
Total other assets	$	390,729	403,827

The following table presents the goodwill balances and activity during the year to date periods ended:

	December 31, 2019									December 31, 2018
(in thousands)	Goodwill			Accumulated Impairment Losses			Total			Goodwill			Accumulated Impairment Losses			Total
Beginning of year balance	$	316,858			(2,715	)		314,143			331,884			—			331,884
Goodwill resulting from Equity One merger		—			—			—			500			—			500
Goodwill allocated to Provision for impairment		—			(2,954	)		(2,954	)		—			(12,628	)		(12,628	)
Goodwill allocated to Properties held for sale		(2,472	)		—			(2,472	)		(1,159	)		—			(1,159	)
Goodwill associated with disposed reporting units:
Goodwill allocated to Provision for impairment		(1,779	)		1,779			—			(9,913	)		9,913			—
Goodwill allocated to Gain on sale of real estate		(2,219	)		936			(1,283	)		(4,454	)		—			(4,454	)
End of year balance	$	310,388			(2,954	)		307,434			316,858			(2,715	)		314,143

During the year ended December 31, 2019, the Company recognized a $3.0 million provision for impairment of goodwill on two reporting units due to changes in the use and expected hold period of the operating properties. During the year ended December 31, 2018, the Company recognized $12.6 million provision for impairment of goodwill on ten reporting units that sold or were expected to sell.

As the Company identifies properties (“reporting units”) that no longer meet its investment criteria, it will evaluate the property for potential sale. A decision to sell a reporting unit results in the need to evaluate its goodwill for recoverability and may result in impairment. Additionally, other changes impacting a reporting unit may be considered a triggering event. If events occur that trigger an impairment evaluation at multiple reporting units, a goodwill impairment may be significant.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

6.	Acquired Lease Intangibles

The Company had the following acquired lease intangibles:

	December 31,
(in thousands)	2019			2018
In-place leases	$	438,188		$	457,379
Above-market leases		63,944			57,294
Below-market ground leases (1)		—			92,085
Total intangible assets	$	502,132			606,758
Accumulated amortization		(259,310	)		(219,689	)
Acquired lease intangible assets, net	$	242,822			387,069
Below-market leases		558,936		$	584,371
Above-market ground leases (1)		—			5,101
Total intangible liabilities		558,936			589,472
Accumulated amortization		(131,676	)		(92,746	)
Acquired lease intangible liabilities, net	$	427,260			496,726

	(1)	On January 1, 2019, the Company adopted the new accounting guidance in ASC Topic 842, Leases, including all related ASUs, and correspondingly reclassified Below-market ground leases and Above-market ground leases against the Company’s Right of use asset.

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

	Year ended December 31,
(in thousands)	2019		2018		2017		Line item in Consolidated Statements of Operations
In-place lease amortization	$	60,250		76,649		88,284	Depreciation and amortization
Above-market lease amortization		9,112		10,433		9,443	Lease income
Below-market ground lease amortization (1)		—		1,688		1,886	Operating and maintenance
Acquired lease intangible asset amortization	$	69,362		88,770		99,613

Below-market lease amortization	$	54,730		45,561		34,786	Lease income
Above-market ground lease amortization (1)		—		94		136	Operating and maintenance
Acquired lease intangible liability amortization	$	54,730		45,655		34,922

	(1)	On January 1, 2019, the Company adopted the new accounting guidance in ASC Topic 842, Leases, including all related ASUs, and correspondingly reclassified Below-market ground leases and Above-market ground leases against the Company’s Right of use asset.

The estimated aggregate amortization and net accretion amounts from acquired lease intangibles for the next five years are as follows:

(in thousands)
In Process Year Ending December 31,	Amortization of In-place lease intangibles		Net accretion of Above / Below market lease intangibles
2020		42,998	$	37,593
2021		32,551		24,120
2022		24,928		22,228
2023		19,682		21,379
2024		15,395		19,346

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

7.	Leases

Lessor Accounting

The Company's Lease income is comprised of both fixed and variable income, as follows:

Fixed and in-substance fixed lease income includes stated amounts per the lease contract, which are primarily related to base rent, and in some cases stated amounts for CAM, real estate taxes, and insurance. Income for these amounts is recognized on a straight- line basis.

Variable lease income includes the following two main items in the lease contracts:

	(i)	Recoveries from tenants represents amounts which tenants are contractually obligated to reimburse the Company for the tenants’ portion of actual Recoverable Costs incurred. Generally the Company’s leases provide for the tenants to reimburse the Company based on the tenants’ share of the actual costs incurred in proportion to the tenants’ share of leased space in the property.

	(ii)	Percentage rent represents amounts billable to tenants based on the tenants' actual sales volume in excess of levels specified in the lease contract.

The following table provides a disaggregation of lease income recognized under ASC Topic 842, Leases, as either fixed or variable lease income based on the criteria specified in ASC 842:

(in thousands)	December 31, 2019
Operating lease income
Fixed and in-substance fixed lease income	$	806,442
Variable lease income		247,861
Other lease related income, net:
Above/below market rent and tenant rent inducement amortization		45,392
Uncollectible amounts in lease income		(5,394	)
Total lease income	$	1,094,301

Future minimum rents under non-cancelable operating leases, excluding variable lease payments, are as follows:

(in thousands)
For the year ended December 31,	December 31, 2019
2020	$	775,723
2021		706,016
2022		615,224
2023		511,104
2024		411,308
Thereafter		1,500,745
Total	$	4,520,120

(in thousands)
For the year ended December 31,	December 31, 2018
2019	$	761,151
2020		693,848
2021		608,587
2022		516,369
2023		414,424
Thereafter		1,691,203
Total	$	4,685,582

Lessee Accounting

The Company has shopping centers that are subject to non-cancelable, long-term ground leases where a third party owns the underlying land and has leased the land to the Company to construct and/or operate a shopping center.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

The Company has 22 properties within its consolidated real estate portfolio that are either partially or completely on land subject to ground leases with third parties. Accordingly, the Company owns only a long-term leasehold or similar interest in these properties. These ground leases expire through the year 2101, and in most cases, provide for renewal options.

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 many cases, provide for renewal options.

The ground and office lease expense is recognized on a straight-line basis over the term of the leases, including management's estimate of expected option renewal periods. Operating lease expense under the Company's ground and office leases was as follows, including straight-line rent expense and variable lease expenses such as CPI increases, percentage rent and reimbursements of landlord costs:

(in thousands)	December 31, 2019
Fixed operating lease expense
Ground leases	$	13,982
Office leases		4,229
Total fixed operating lease expense		18,211
Vaiable lease expense
Ground leases		1,693
Office leases		552
Total variable lease expense		2,245
Total lease expense	$	20,456
Cash paid for amounts included in the measurement of operating lease liabilities
Operating cash flows for operating leases	$	14,815

Operating lease expense under the Company's ground and office leases was $20.5 million, $19.1 million and $18.4 million for the years ended December 31, 2019, 2018, and 2017 respectively, which includes fixed and variable rent expense.

The following table summarizes the undiscounted future cash flows by year attributable to the operating lease liabilities under ground and office leases as of December 31, 2019, and provides a reconciliation to the Lease liability included in the accompanying Consolidated Balance Sheets:

(in thousands)	Lease Liabilities
For the year ended December 31,	Ground Leases			Office Leases			Total
2020	$	10,697			5,152			15,849
2021		10,671			4,149			14,820
2022		10,698			3,188			13,886
2023		10,915			2,410			13,325
2024		10,964			1,939			12,903
Thereafter		553,116			4,404			557,520
Total undiscounted lease liabilities	$	607,061			21,242			628,303
Present value discount		(403,237	)		(2,148	)		(405,385	)
Lease liabilities	$	203,824			19,094			222,918
Weighted average discount rate		5.2	%		3.9	%
Weighted average remaining term (in years)		49.2			5.5

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

The following table summarizes the future obligations under non-cancelable operating leases, excluding unexercised renewal options, as of December 31, 2018:

(in thousands)	Future Lease Obligations
For the year ended December 31,	Ground Leases		Office Leases		Total
2019	$	10,672		4,405		15,077
2020		10,439		4,294		14,733
2021		10,344		3,549		13,893
2022		10,258		2,893		13,151
2023		10,369		2,189		12,558
Thereafter		461,762		5,944		467,706
Total	$	513,844		23,274		537,118

8.	Income Taxes

The Company has elected to be taxed as a REIT under the applicable provisions of the Internal Revenue Code with certain of its subsidiaries treated as taxable REIT subsidiary (“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)	2019			2018			2017
Dividend per share	$	2.34			2.22			2.10
Ordinary income		97	%		98	%		86	%
Capital gain		3	%		—	%		10	%
Return of capital		—	%		—	%		4	%
Qualified dividend income		—	%		2	%		—	%
Section 199A dividend		97	%		98	%		—	%

Our consolidated expense (benefit) for income taxes for the years ended December 31, 2019, 2018, and 2017 was as follows:

	Year ended December 31,
(in thousands)	2019			2018			2017
Income tax expense (benefit):
Current	$	1,576			5,667			1,168
Deferred		(331	)		(5,145	)		(10,815	)
Total income tax expense (benefit) (1)	$	1,245			522			(9,647	)

	(1)	Includes $757,000, $706,000 and $90,000 of tax expense presented within Other operating expenses during the years ended December 31, 2019, 2018, and 2017, respectively. Additionally, $488,000 and ($184,000) of tax expense (benefit) is presented within Gain on sale of real estate (or Provision for impairment), net of tax, during the years ended December 31, 2019 and 2018, respectively.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

The TRS entities are subject to federal and state income taxes and file separate tax returns. Income tax expense (benefit) 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)	2019			2018			2017
Computed expected tax expense (benefit)	$	1,587			(584	)		1,190
State income tax, net of federal benefit		650			636			108
Valuation allowance		(91	)		(392	)		(1,512	)
Tax rate change		—			—			(9,737	)
Permanent items		(819	)		1,067			—
All other items		(82	)		(205	)		304
Total income tax expense (benefit) (1)		1,245			522			(9,647	)
Income tax expense (benefit) attributable to operations (1)	$	1,245			522			(9,647	)

	(1)	Includes $757,000, $706,000, and $90,000 of tax expense presented within Other operating expenses during the years ended December 31, 2019, 2018, and 2017, respectively. Additionally, $488,000 and ($184,000) of tax expense (benefit) is presented within Gain on sale of real estate (or Provision for impairment), net of tax, during the years ended December 31, 2019 and 2018, respectively.

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

	December 31,
(in thousands)	2019			2018
Deferred tax assets
Provision for impairment	$	—			3,785
Deferred interest expense		1,341			2,617
Capitalized costs under Section 263A		—			713
Net operating loss carryforward		106			166
Other		88			2,123
Deferred tax assets		1,535			9,404
Valuation allowance		(680	)		(7,907	)
Deferred tax assets, net	$	855			1,497
Deferred tax liabilities
Straight line rent	$	(100	)		(565	)
Fixed assets		(14,404	)		(14,829	)
Deferred tax liabilities		(14,504	)		(15,394	)
Net deferred tax liabilities	$	(13,649	)		(13,897	)

The net deferred tax liability decreased during 2019 primarily due to the depreciation of property at TRS entities. Also, during 2019, the Company converted one of its TRS entities to a REIT which resulted in the reversal of that entities’ deferred tax assets, liabilities, and valuation allowance. The Company believes it is more likely than not that a portion of the remaining deferred tax assets, which primarily consist of net operating losses and deferred interest expense, will not be realized unless tax planning strategies are implemented.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

9.	Notes Payable and Unsecured Credit Facilities

The Company’s outstanding debt consists of the following:

	Maturing Through	Weighted Average Contractual Rate	Weighted Average Effective Rate	December 31,
(in thousands)				2019		2018
Notes payable:
Fixed rate mortgage loans	10/1/2036	4.4%	4.0%	$	342,020	$	403,306
Variable rate mortgage loans (1)	6/2/2027	3.2%	3.3%		148,389		127,850
Fixed rate unsecured public and private debt	3/15/2049	3.9%	4.1%		2,944,752		2,475,322
Total notes payable				$	3,435,161		3,006,478
Unsecured credit facilities:
Line of Credit (2)	3/23/2022	2.7%	2.9%	$	220,000	$	145,000
Term Loans	1/5/2022	2.0%	2.1%		264,383		563,734
Total unsecured credit facilities				$	484,383		708,734
Total debt outstanding				$	3,919,544		3,715,212

(1)	Includes six mortgages, whose interest varies on LIBOR based formulas. Four of these variable rate loans have interest rate swaps in place to fix the interest rates at a range of 2.5% to 4.1%. The weighted average contractual and effective rates above are based on the rates with the interest rate swaps.

(2)	Maturity is subject to two six month extensions at the Company's option. The weighted average contractual and effective interest rates for the Line are calculated based on a fully drawn Line balance.

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, and are generally due in monthly installments of principal and interest or interest only. Unsecured public debt may be prepaid subject to accrued and unpaid interest through the proposed redemption date and a make-whole premium. 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, 2019, management of the Company believes it is in compliance with all financial covenants for its unsecured public debt.

Unsecured Credit Facilities

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

The Line has a borrowing capacity of $1.25 billion, which is reduced by the balance of outstanding borrowings and commitments under outstanding letters of credit. The Line bears interest at a variable rate of LIBOR plus 0.875% and is subject to a commitment fee of 0.15%, both of which are based on the Company's corporate credit rating.

The Term Loan bears interest at a variable rate based on LIBOR plus 0.95% and has an interest rate swap in place to fix the interest rate at 2.0%, as discussed further in note 10.

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 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 31, 2019, management of the Company believes it is in compliance with all financial covenants for the Line and Term Loans.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

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

(in thousands)	December 31, 2019
Scheduled Principal Payments and Maturities by Year:	Scheduled Principal Payments		Mortgage Loan Maturities		Unsecured Maturities (1)			Total
2020	$	11,285		39,074		—			50,359
2021		11,598		74,101		—			85,699
2022		11,797		5,848		785,000			802,645
2023		10,124		59,374		—			69,498
2024		5,301		90,742		250,000			346,043
Beyond 5 Years		21,712		145,303		2,425,000			2,592,015
Unamortized debt premium/(discount) and issuance costs		—		4,150		(30,865	)		(26,715	)
Total notes payable	$	71,817		418,592		3,429,135			3,919,544

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

The Company has $39.1 million of debt maturing over the next twelve months, which is in the form of non-recourse mortgage loans. The Company currently intends to repay the maturing balances and leave the properties unencumbered. The Company has sufficient capacity on its Line to repay the maturing debt, if necessary.

10.	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			2019			2018
12/6/18	6/28/19	$	250,000	30 year U.S. Treasury (2)		3.147	%	$	—		$	(5,491	)
4/3/17	12/2/20		300,000	1 Month LIBOR with Floor (3)		1.824	%		—			3,759
8/1/16	1/5/22		265,000	1 Month LIBOR with Floor		1.053	%		2,674			10,838
4/7/16	4/1/23		19,767	1 Month LIBOR		1.303	%		148			880
12/1/16	11/1/23		32,952	1 Month LIBOR		1.490	%		84			1,376
9/17/19	3/17/25		24,000	1 Month LIBOR		1.542	%		81			—
6/2/17	6/2/27		37,166	1 Month LIBOR with Floor		2.366	%		(1,515	)		629

Total derivative financial instruments								$	1,472			11,991

(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.

(2)	On March 7, 2019, the Company settled its 30 year Treasury rate lock in connection with its issuance of the $300 million 4.65% unsecured notes due March 2049 for $5.7 million, which is included in the balance of Accumulated other comprehensive income (loss) ("AOCI") and will be amortized and reclassified to earnings over the 30 year term of the hedged transaction.

(3)	On August 14, 2019, the Company paid an interest rate swap breakage fee of approximately $1.1 million to settle its interest rate swap in connection with the repayment in full of its $300 million term loan that was due to mature in December 2020. This breakage fee is included in Early extinguishment of debt in the accompanying Consolidated Statements of Operations.

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, as of December 31, 2019, 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.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

The changes in the fair value of derivatives designated and qualifying as cash flow hedges are recorded in accumulated other comprehensive income (“AOCI”) and subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The following table represents the effect of the derivative financial instruments on the accompanying consolidated financial statements:

Location and Amount of Gain (Loss) Recognized in OCI on Derivative								Location and Amount of Gain (Loss) Reclassified from AOCI into Income							Total amounts presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded
	Year ended December 31,								Year ended December 31,							Year ended December 31,
(in thousands)	2019			2018		2017			2019		2018		2017			2019		2018		2017
Interest rate swaps	$	(15,585	)		402		1,151	Interest expense, net	$	3,269		5,342		11,103	Interest expense, net	$	151,264		148,456		132,629

As of December 31, 2019, the Company expects $4.1 million of net deferred losses on derivative instruments in AOCI, 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 reclassification is $4.3 million which is related to previously settled swaps on the Company's ten and thirty year fixed rate unsecured debt.

11.	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,
	2019				2018
(in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial liabilities:
Notes payable	$	3,435,161		3,688,604	$	3,006,478		2,961,769
Unsecured credit facilities	$	484,383		489,496	$	708,734		710,902

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, 2019 and 2018. 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.

	(b)	Fair Value Measurements

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

Securities

The Company has investments in marketable securities that are included within Other assets on the accompanying Consolidated Balance Sheets. The fair value of the securities was determined using quoted prices in active markets, which are considered Level 1 inputs of the fair value hierarchy. Changes in the value of securities are recorded within Net investment (income) loss in the accompanying Consolidated Statements of Operations, and includes unrealized (gains) losses of ($3.8) million, $3.3 million, and ($1.1) million for the years ended December 31, 2019, 2018, and 2017, respectively.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

Available-for-Sale Debt Securities

Available-for-sale debt 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 debt 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 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, 2019
(in thousands)	Balance			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets:
Securities	$	39,599			39,599		—			—
Available-for-sale debt securities		10,755			—		10,755			—
Interest rate derivatives		2,987			—		2,987			—
Total	$	53,341			39,599		13,742			—
Liabilities:
Interest rate derivatives	$	(1,515	)		—		(1,515	)		—

	Fair Value Measurements as of December 31, 2018
(in thousands)	Balance			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets:
Securities	$	33,354			33,354		—			—
Available-for-sale debt securities		7,933			—		7,933			—
Interest rate derivatives		17,482			—		17,482			—
Total	$	58,769			33,354		25,415			—
Liabilities:
Interest rate derivatives	$	(5,491	)		—		(5,491	)		—

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

The following tables present the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a non-recurring basis:

		Fair Value Measurements as of December 31, 2019
(in thousands)		Balance				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)				Total Gains (Losses)
Operating properties		$	71,131				—				28,131				43,000				(50,553	)

		Fair Value Measurements as of December 31, 2018
(in thousands)		Balance				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)				Total Gains (Losses)
Operating properties		$	42,760				—				42,760				—				(6,579	)

During the year ended December 31, 2019, the Company recorded a $50.5 million Provision for impairment on two operating properties which are classified as held and used. One property was remeasured to fair value based on its expected selling price, which is reflected in the above Level 2 category, and resulted in a $10.2 million Provision for impairment. The second property impairment was triggered as a result of an expected early move out of a tenant at a single-tenant retail center that has declared bankruptcy, resulting in the Company re-evaluating the highest and best use of the asset and its expected hold period. The fair value of the property was derived using a discounted cash flow model, which included assumptions around redevelopment of the asset to its highest and best use as a mixed-use project and re-leasing the space. The discount rate of 8.58% and terminal capitalization rate of 4.75% used in the discounted cash flow model are considered significant inputs and assumptions to estimating the non-recurring fair value measurement of $43.0 million, which is considered a Level 3 input per the fair value hierarchy. The amount by which the carrying value exceeded the fair value resulted in a $40.3 million Provision for impairment.

During the year ended December 31, 2018, the Company recognized a $38.4 million provision for impairment, net of tax, which included $31.8 million on real estate sold or held and used and $6.6 million on three properties classified as held for sale. The impairment of the real estate assets was determined based on the expected selling price as compared to the Company's carrying value of its investment.

12.	Equity and Capital

Common Stock of the Parent Company

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. During September 2019, the Company entered into forward sale agreements under its ATM program through which the Company will issue 1,894,845 shares of its common stock at an average offering price of $67.99. The shares under the forward sales agreements may be settled at any time before the settlement date, which is September 12, 2020. No shares have been settled at December 31, 2019. Proceeds from the issuance of shares are expected to be used to fund acquisitions of operating properties, to fund developments and redevelopments, and for general corporate purposes. There were no shares issued under the ATM equity program during the year ended December 31, 2018. As of December 31, 2019, $500.0 million of common stock remained available for issuance under this ATM equity program, before settlement of the forward shares described above.

Share Repurchase Program

On February 4, 2020, the Company's Board authorized a new 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 set to expire on February 5, 2021. 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.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

In January 2019, the Company settled 563,229 shares, which were repurchased in December 2018 under a previously active repurchase program, for $32.8 million at an average price of $58.17 per share. The program closed in February 2019, with a newly authorized program that ended February 2020 with no repurchases made under it.

Common Units of the Operating Partnership

Common units of the operating partnership are issued or redeemed and retired for each of the shares of Parent Company common stock issued or repurchased and retired, as described above.

In September 2019, the Operating Partnership issued 396,531 exchangeable operating partnership units, valued at $25.9 million, as partial purchase price consideration for the acquisition of an operating shopping center.

General Partners

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

	December 31,
(in thousands)	2019			2018
Partnership units owned by the general partner		167,571			167,904
Partnership units owned by the limited partners		746			350
Total partnership units outstanding		168,317			168,254
Percentage of partnership units owned by the general partner		99.6	%		99.8	%

13.	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)	2019			2018			2017
Restricted stock (1)	$	16,254			16,745			15,525
Directors' fees paid in common stock (1)		410			399			303
Capitalized stock-based compensation (2)		(2,325	)		(3,509	)		(3,210	)
Stock based compensation attributable to post-combination service from Equity One merger		—			—			7,931
Stock-based compensation, net of capitalization	$	14,339			13,635			20,549

	(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 redevelopment activities. During 2018 and 2017, these amounts also include compensation expense specifically identifiable to leasing activities, as non-contingent internal leasing costs were capitalizable prior to the adoption of Topic 842, Leases, on January 1, 2019.

The Company established its Omnibus Incentive 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 5.6 million shares in the form of the Parent Company's common stock or stock options. As of December 31, 2019, there were 5.0 million shares available for grant under the Plan either through stock options or restricted stock awards.

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.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

Compensation expense is measured at the grant date and recognized on a straight-line basis over the requisite vesting period for the entire award.

The following table summarizes non-vested restricted stock activity:

	Year ended December 31, 2019
	Number of Shares			Intrinsic Value (in thousands)		Weighted Average Grant Price
Non-vested as of December 31, 2018		595,171
Time-based awards granted (1) (4)		122,488				$	65.21
Performance-based awards granted (2) (4)		11,722				$	65.00
Market-based awards granted (3) (4)		121,225				$	65.03
Change in market-based awards earned for performance (3)		53,865				$	64.58
Vested (5)		(272,827	)			$	64.82
Forfeited		(8,554	)			$	65.30
Non-vested as of December 31, 2019 (6)		623,090		$	39,311

	(1)	Time-based awards vest beginning on the first anniversary following the grant date over a one 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,
	2019			2018			2017
Volatility		19.30	%		19.20	%		18.00	%
Risk free interest rate		2.43	%		2.26	%		1.48	%

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

		Year ended December 31,
		2019				2018				2017
Weighted-average grant price for restricted stock		$	65.11			$	63.50			$	72.05

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

		Year ended December 31,
		2019				2018				2017
Intrinsic value of restricted stock vested		$	17,684			$	17,306			$	14,376

	(6)	As of December 31, 2019 there was $12.9 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, 2019

14.	Saving and Retirement Plans

401(k) Retirement Plan

The Company maintains a 401(k) retirement plan covering substantially all employees and permits participants to defer eligible compensation up to the maximum allowable amount determined by the IRS. 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, 2019. Additionally, an annual profit sharing contribution may be made, which vests over a three year period. Costs for Company contributions to the plan totaled $3.5 million, $3.9 million, and $4.1 million for the years ended December 31, 2019, 2018, and 2017, respectively.

Non-Qualified Deferred Compensation Plan (“NQDCP”)

The Company maintains a 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 and related participant account obligations in the accompanying Consolidated Balance Sheets, excluding Regency stock:

	Year ended December 31,
(in thousands)	2019		2018		Location in Consolidated Balance Sheets
Assets:
Securities	$	36,849		31,351	Other assets
Liabilities:
Deferred compensation obligation	$	36,755		31,166	Accounts payable and other liabilities

Realized and unrealized gains and losses on securities held in the NQDCP are recognized within Net investment income 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.

15.	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)	2019		2018		2017
Numerator:
Income attributable to common stockholders - basic	$	239,430	$	249,127		159,949
Income attributable to common stockholders - diluted	$	239,430	$	249,127		159,949
Denominator:
Weighted average common shares outstanding for basic EPS		167,526		169,724		159,536
Weighted average common shares outstanding for diluted EPS (1) (2)		167,771		170,100		159,960
Income per common share – basic	$	1.43	$	1.47		1.00
Income per common share – diluted	$	1.43	$	1.46		1.00

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

	(2)	Using the treasury stock method, weighted average common shares outstanding for basic and diluted earnings per share excludes 1.9 million and 1.3 million shares issuable under the forward ATM equity offering and the forward equity offering outstanding during 2019 and 2017, respectively, as they would be anti-dilutive.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

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 be anti-dilutive. Weighted average exchangeable Operating Partnership units outstanding for the years ended December 31, 2019, 2018, and 2017, were 464,286 , 349,902, and 295,054, 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)	2019		2018		2017
Numerator:
Income attributable to common unit holders - basic	$	240,064	$	249,652		160,337
Income attributable to common unit holders - diluted	$	240,064	$	249,652		160,337
Denominator:
Weighted average common units outstanding for basic EPU		167,990		170,074		159,831
Weighted average common units outstanding for diluted EPU (1) (2)		168,235		170,450		160,255
Income per common unit – basic	$	1.43	$	1.47		1.00
Income per common unit – diluted	$	1.43	$	1.46		1.00

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

	(2)	Using the treasury stock method, weighted average common shares outstanding for basic and diluted earnings per share excludes 1.9 million and 1.3 million shares issuable under the forward ATM equity offering and the forward equity offering outstanding during 2019 and 2017, respectively, as they would be anti-dilutive.

16.	Commitments and Contingencies

Litigation

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.

Environmental

The Company is subject to numerous environmental laws and regulations pertaining primarily 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.

Letters 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, 2019 and 2018, the Company had $12.5 million and $9.4 million, respectively, in letters of credit outstanding.

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. At December 31, 2019, the Company had a commitment to purchase an additional 16.62% ownership interest in the Town and Country shopping center, bringing our ownership interest to 35%. We closed on the purchase in January 2020 for $18.1 million.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Consolidated Financial Statements

December 31, 2019

17.	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, 2019 and 2018:

(in thousands except per share and per unit data)	First Quarter
Year ended December 31, 2019
Operating Data:
Revenue	$	286,257	275,872	282,276	288,733
Net income attributable to common stockholders	$	90,446	51,728	56,965	40,291
Net income attributable to exchangeable operating partnership units		190	109	157	178
Net income attributable to common unit holders	$	90,636	51,837	57,122	40,469
Net income attributable to common stock and unit holders per share and unit:
Basic	$	0.54	0.31	0.34	0.24
Diluted	$	0.54	0.31	0.34	0.24

Year ended December 31, 2018
Operating Data:
Revenue	$	276,693	281,412	278,310	284,560
Net income attributable to common stockholders	$	52,660	47,841	69,722	78,904
Net income attributable to exchangeable operating partnership units		111	100	147	167
Net income attributable to common unit holders	$	52,771	47,941	69,869	79,071
Net income attributable to common stock and unit holders per share and unit:
Basic	$	0.31	0.28	0.41	0.47
Diluted	$	0.31	0.28	0.41	0.46

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Schedule III - Consolidated Real Estate and Accumulated Depreciation

December 31, 2019

(in thousands)

	Initial Cost							Total Cost									Net Cost
Shopping Centers (1)	Land & Land Improvements		Building & Improvements		Cost Capitalized Subsequent to Acquisition (2)			Land & Land Improvements		Building & Improvements		Total		Accumulated Depreciation			Net of Accumulated Depreciation		Mortgages
101 7th Avenue	$	48,340		34,895		(38,993	)		26,196		18,046		44,242		(1,304	)		42,938		—
1175 Third Avenue		40,560		25,617		1			40,560		25,618		66,178		(2,118	)		64,060		—
1225-1239 Second Ave		23,033		17,173		45			23,033		17,218		40,251		(1,533	)		38,718		—
200 Potrero		4,860		2,251		124			4,860		2,375		7,235		(190	)		7,045		—
22 Crescent Road		2,198		272		(318	)		2,152		—		2,152		—			2,152		—
4S Commons Town Center		30,760		35,830		1,405			30,812		37,183		67,995		(25,944	)		42,051		(85,000	)
6401 Roosevelt		2,685		934		2			2,685		936		3,621		(12	)		3,609		—
90 - 30 Metropolitan Avenue		16,614		24,171		41			16,614		24,212		40,826		(2,094	)		38,732		—
91 Danbury Road		732		851		—			732		851		1,583		(104	)		1,479		—
Alafaya Village		3,004		5,852		93			3,004		5,945		8,949		(702	)		8,247		—
Amerige Heights Town Center		10,109		11,288		798			10,109		12,086		22,195		(5,209	)		16,986		—
Anastasia Plaza		9,065		—		704			3,338		6,431		9,769		(2,844	)		6,925		—
Ashford Place		2,584		9,865		1,143			2,584		11,008		13,592		(8,057	)		5,535		—
Atlantic Village		4,282		18,827		1,067			4,282		19,894		24,176		(2,403	)		21,773		—
Aventura Shopping Center		2,751		10,459		10,841			9,441		14,610		24,051		(1,821	)		22,230		—
Aventura Square		88,098		20,771		1,776			89,657		20,988		110,645		(2,306	)		108,339		(6,008	)
Balboa Mesa Shopping Center		23,074		33,838		14,082			27,758		43,236		70,994		(14,003	)		56,991		—
Banco Popular Building		2,160		1,137		(32	)		2,160		1,105		3,265		(1,247	)		2,018		—
Belleview Square		8,132		9,756		3,735			8,323		13,300		21,623		(8,543	)		13,080		—
Belmont Chase		13,881		17,193		(494	)		14,372		16,208		30,580		(4,738	)		25,842		—
Berkshire Commons		2,295		9,551		2,652			2,965		11,533		14,498		(8,189	)		6,309		—
Bird 107 Plaza		10,371		5,136		(25	)		10,371		5,111		15,482		(640	)		14,842		—
Bird Ludlam		42,663		38,481		336			42,663		38,817		81,480		(4,066	)		77,414		—
Black Rock		22,251		20,815		497			22,251		21,312		43,563		(4,879	)		38,684		(19,767	)
Bloomingdale Square		3,940		14,912		1,690			4,559		15,983		20,542		(9,432	)		11,110		—
Boca Village Square		43,888		9,726		(72	)		43,888		9,654		53,542		(1,475	)		52,067		—
Boulevard Center		3,659		10,787		2,606			3,659		13,393		17,052		(7,636	)		9,416		—
Boynton Lakes Plaza		2,628		11,236		5,019			3,606		15,277		18,883		(7,985	)		10,898		—
Boynton Plaza		12,879		20,713		125			12,879		20,838		33,717		(2,313	)		31,404		—
Brentwood Plaza		2,788		3,473		353			2,788		3,826		6,614		(1,540	)		5,074		—
Briarcliff La Vista		694		3,292		551			694		3,843		4,537		(3,012	)		1,525		—
Briarcliff Village		4,597		24,836		2,572			4,597		27,408		32,005		(19,493	)		12,512		—
Brick Walk		25,299		41,995		1,365			25,299		43,360		68,659		(7,988	)		60,671		(32,952	)
BridgeMill Market		7,521		13,306		429			7,522		13,734		21,256		(1,842	)		19,414		(4,582	)
Bridgeton		3,033		8,137		605			3,067		8,708		11,775		(2,915	)		8,860		—
Brighten Park		3,983		18,687		11,560			4,234		29,996		34,230		(17,540	)		16,690		—
Broadway Plaza		40,723		42,170		1,453			40,723		43,623		84,346		(4,207	)		80,139		—
Brooklyn Station on Riverside		7,019		8,688		118			6,998		8,827		15,825		(1,892	)		13,933		—
Brookside Plaza		35,161		17,494		130			35,161		17,624		52,785		(2,841	)		49,944		—

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Schedule III - Consolidated Real Estate and Accumulated Depreciation

December 31, 2019

(in thousands)

	Initial Cost																Net Cost
Shopping Centers (1)	Land & Land Improvements		Building & Improvements		Cost Capitalized Subsequent to Acquisition (2)			Land & Land Improvements		Building & Improvements		Total		Accumulated Depreciation			Net of Accumulated Depreciation		Mortgages
Buckhead Court		1,417		7,432		4,300			1,417		11,732		13,149		(7,666	)		5,483		—
Buckhead Station		70,411		36,518		1,445			70,448		37,926		108,374		(4,917	)		103,457		—
Buckley Square		2,970		5,978		1,327			2,970		7,305		10,275		(4,515	)		5,760		—
Caligo Crossing		2,459		4,897		101			2,546		4,911		7,457		(3,114	)		4,343		—
Cambridge Square		774		4,347		796			774		5,143		5,917		(3,435	)		2,482		—
Carmel Commons		2,466		12,548		5,412			3,422		17,004		20,426		(10,414	)		10,012		—
Carriage Gate		833		4,974		3,491			1,302		7,996		9,298		(6,478	)		2,820		—
Carytown Exchange		4,378		1,328		(54	)		4,378		1,274		5,652		(55	)		5,597		—
Cashmere Corners		3,187		9,397		124			3,187		9,521		12,708		(1,314	)		11,394		—
Centerplace of Greeley III		6,661		11,502		1,265			5,694		13,734		19,428		(5,468	)		13,960		—
Charlotte Square		1,141		6,845		842			1,141		7,687		8,828		(1,074	)		7,754		—
Chasewood Plaza		4,612		20,829		5,719			6,886		24,274		31,160		(18,237	)		12,923		—
Chastain Square		30,074		12,644		1,680			30,074		14,324		44,398		(2,105	)		42,293		—
Cherry Grove		3,533		15,862		4,491			3,533		20,353		23,886		(11,239	)		12,647		—
Chimney Rock		23,587		47,377		—			23,587		47,377		70,964		(5,788	)		65,176		—
Circle Center West		22,930		9,028		134			22,930		9,162		32,092		(1,137	)		30,955		(9,513	)
Circle Marina Center		29,303		18,408		—			29,303		18,408		47,711		(186	)		47,525		(24,000	)
CityLine Market		12,208		15,839		161			12,306		15,902		28,208		(3,129	)		25,079		—
CityLine Market Phase II		2,744		3,081		(1	)		2,744		3,080		5,824		(540	)		5,284		—
Clayton Valley Shopping Center		24,189		35,422		3,012			24,538		38,085		62,623		(26,143	)		36,480		—
Clocktower Plaza Shopping Ctr		49,630		19,624		223			49,630		19,847		69,477		(2,012	)		67,465		—
Clybourn Commons		15,056		5,594		229			15,056		5,823		20,879		(1,321	)		19,558		—
Cochran's Crossing		13,154		12,315		1,640			13,154		13,955		27,109		(10,247	)		16,862		—
Compo Acres Shopping Center		28,627		10,395		765			28,627		11,160		39,787		(1,097	)		38,690		—
Concord Shopping Plaza		30,819		36,506		638			31,272		36,691		67,963		(3,708	)		64,255		(27,750	)
Copps Hill Plaza		29,515		40,673		411			29,514		41,085		70,599		(4,405	)		66,194		(12,307	)
Coral Reef Shopping Center		14,922		15,200		3,414			15,011		18,525		33,536		(1,769	)		31,767		—
Corkscrew Village		8,407		8,004		620			8,407		8,624		17,031		(3,703	)		13,328		—
Cornerstone Square		1,772		6,944		1,701			1,772		8,645		10,417		(5,964	)		4,453		—
Corvallis Market Center		6,674		12,244		468			6,696		12,690		19,386		(6,226	)		13,160		—
Costa Verde Center		12,740		26,868		1,623			12,798		28,433		41,231		(21,159	)		20,072		—
Countryside Shops		17,982		35,574		14,750			23,154		45,152		68,306		(5,292	)		63,014		—
Courtyard Shopping Center		5,867		4		3			5,867		7		5,874		(2	)		5,872		—
Culver Center		108,841		32,308		854			108,841		33,162		142,003		(4,025	)		137,978		—
Danbury Green		30,303		19,255		211			30,303		19,466		49,769		(2,024	)		47,745		—
Dardenne Crossing		4,194		4,005		433			4,343		4,289		8,632		(2,023	)		6,609		—
Darinor Plaza		693		32,140		787			711		32,909		33,620		(3,498	)		30,122		—
Diablo Plaza		5,300		8,181		2,129			5,300		10,310		15,610		(5,605	)		10,005		—
Dunwoody Village		3,342		15,934		4,780			3,342		20,714		24,056		(15,219	)		8,837		—

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Schedule III - Consolidated Real Estate and Accumulated Depreciation

December 31, 2019

(in thousands)

	Initial Cost																Net Cost
Shopping Centers (1)	Land & Land Improvements		Building & Improvements		Cost Capitalized Subsequent to Acquisition (2)			Land & Land Improvements		Building & Improvements		Total		Accumulated Depreciation			Net of Accumulated Depreciation		Mortgages
East Pointe		1,730		7,189		2,142			1,941		9,120		11,061		(5,962	)		5,099		—
El Camino Shopping Center		7,600		11,538		12,906			10,328		21,716		32,044		(8,742	)		23,302		—
El Cerrito Plaza		11,025		27,371		2,463			11,025		29,834		40,859		(11,474	)		29,385		—
El Norte Pkwy Plaza		2,834		7,370		3,404			3,263		10,345		13,608		(5,820	)		7,788		—
Encina Grande		5,040		11,572		20,057			10,518		26,151		36,669		(12,525	)		24,144		—
Fairfield Center		6,731		29,420		1,069			6,731		30,489		37,220		(5,529	)		31,691		—
Falcon Marketplace		1,340		4,168		429			1,340		4,597		5,937		(2,465	)		3,472		—
Fellsway Plaza		30,712		7,327		10,017			34,923		13,133		48,056		(6,030	)		42,026		(37,166	)
Fenton Marketplace		2,298		8,510		(8,092	)		512		2,204		2,716		(981	)		1,735		—
Fleming Island		3,077		11,587		3,047			3,111		14,600		17,711		(8,409	)		9,302		—
Folsom Prairie City Crossing		4,164		13,032		838			4,164		13,870		18,034		(6,657	)		11,377		—
Fountain Square		29,650		29,048		(98	)		29,712		28,888		58,600		(8,062	)		50,538		—
French Valley Village Center		11,924		16,856		298			11,822		17,256		29,078		(13,204	)		15,874		—
Friars Mission Center		6,660		28,021		1,913			6,660		29,934		36,594		(15,937	)		20,657		—
Gardens Square		2,136		8,273		696			2,136		8,969		11,105		(5,234	)		5,871		—
Gateway 101		24,971		9,113		1,271			24,971		10,384		35,355		(3,779	)		31,576		—
Gateway Shopping Center		52,665		7,134		10,736			55,346		15,189		70,535		(16,617	)		53,918		—
Gelson's Westlake Market Plaza		3,157		11,153		5,876			4,654		15,532		20,186		(7,607	)		12,579		—
Glen Oak Plaza		4,103		12,951		955			4,103		13,906		18,009		(4,344	)		13,665		—
Glengary Shoppes		9,120		11,541		887			9,120		12,428		21,548		(1,592	)		19,956		—
Glenwood Village		1,194		5,381		331			1,194		5,712		6,906		(4,481	)		2,425		—
Golden Hills Plaza		12,699		18,482		3,602			11,518		23,265		34,783		(9,736	)		25,047		—
Grand Ridge Plaza		24,208		61,033		6,171			24,918		66,494		91,412		(20,355	)		71,057		—
Greenwood Shopping Centre		7,777		24,829		468			7,777		25,297		33,074		(2,898	)		30,176		—
Hammocks Town Center		28,764		25,113		565			28,764		25,678		54,442		(3,140	)		51,302		—
Hancock		8,232		28,260		1,453			8,232		29,713		37,945		(16,470	)		21,475		—
Harpeth Village Fieldstone		2,284		9,443		766			2,284		10,209		12,493		(5,595	)		6,898		—
Harris Crossing		7,199		3,687		(1,523	)		5,508		3,855		9,363		(2,744	)		6,619		—
Heritage Plaza		12,390		26,097		14,156			12,215		40,428		52,643		(18,704	)		33,939		—
Hershey		7		808		10			7		818		825		(464	)		361		—
Hewlett Crossing I & II		11,850		18,205		749			11,850		18,954		30,804		(1,253	)		29,551		(9,400	)
Hibernia Pavilion		4,929		5,065		188			4,929		5,253		10,182		(3,289	)		6,893		—
Hickory Creek Plaza		5,629		4,564		452			5,629		5,016		10,645		(4,687	)		5,958		—
Hillcrest Village		1,600		1,909		51			1,600		1,960		3,560		(1,047	)		2,513		—
Hilltop Village		2,995		4,581		3,696			3,104		8,168		11,272		(2,950	)		8,322		—
Hinsdale		5,734		16,709		11,686			8,343		25,786		34,129		(13,837	)		20,292		—
Holly Park		8,975		23,799		1,719			8,828		25,665		34,493		(5,315	)		29,178		—
Homestead McDonald's		2,229		—		—			2,229		—		2,229		(22	)		2,207		—
Howell Mill Village		5,157		14,279		2,687			5,157		16,966		22,123		(6,852	)		15,271		—

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Schedule III - Consolidated Real Estate and Accumulated Depreciation

December 31, 2019

(in thousands)

	Initial Cost							Total Cost									Net Cost
Shopping Centers (1)	Land & Land Improvements		Building & Improvements		Cost Capitalized Subsequent to Acquisition (2)			Land & Land Improvements		Building & Improvements		Total		Accumulated Depreciation			Net of Accumulated Depreciation		Mortgages
Hyde Park		9,809		39,905		3,998			9,809		43,903		53,712		(26,363	)		27,349		—
Indian Springs Center		24,974		25,903		668			25,034		26,511		51,545		(4,986	)		46,559		—
Indigo Square		8,088		9,697		8			8,088		9,705		17,793		(610	)		17,183		—
Inglewood Plaza		1,300		2,159		829			1,300		2,988		4,288		(1,583	)		2,705		—
Jefferson Square		5,167		6,445		(7,219	)		1,894		2,499		4,393		(945	)		3,448		—
Keller Town Center		2,294		12,841		758			2,404		13,489		15,893		(7,144	)		8,749		—
Kent Place		4,855		3,586		963			5,269		4,135		9,404		(1,160	)		8,244		(8,250	)
Kirkman Shoppes		9,364		26,243		543			9,367		26,783		36,150		(2,806	)		33,344		—
Kirkwood Commons		6,772		16,224		909			6,802		17,103		23,905		(5,095	)		18,810		(8,050	)
Klahanie Shopping Center		14,451		20,089		578			14,451		20,667		35,118		(2,705	)		32,413		—
Kroger New Albany Center		3,844		6,599		1,385			3,844		7,984		11,828		(5,744	)		6,084		—
Lake Mary Centre		24,036		57,476		1,682			24,036		59,158		83,194		(7,003	)		76,191		—
Lake Pine Plaza		2,008		7,632		860			2,029		8,471		10,500		(4,834	)		5,666		—
Lantana Outparcels		3,710		1,004		—			3,710		1,004		4,714		(242	)		4,472		—
Lebanon/Legacy Center		3,913		7,874		866			3,913		8,740		12,653		(6,184	)		6,469		—
Littleton Square		2,030		8,859		(3,671	)		2,423		4,795		7,218		(2,422	)		4,796		—
Lloyd King Center		1,779		10,060		1,279			1,779		11,339		13,118		(6,542	)		6,576		—
Lower Nazareth Commons		15,992		12,964		4,040			16,343		16,653		32,996		(9,759	)		23,237		—
Mandarin Landing		7,913		27,230		342			7,913		27,572		35,485		(3,158	)		32,327		—
Market at Colonnade Center		6,455		9,839		87			6,160		10,221		16,381		(4,363	)		12,018		—
Market at Preston Forest		4,400		11,445		1,695			4,400		13,140		17,540		(7,313	)		10,227		—
Market at Round Rock		2,000		9,676		6,634			1,996		16,314		18,310		(10,225	)		8,085		—
Market at Springwoods Village		12,570		12,841		—			12,570		12,841		25,411		(1,818	)		23,593		(7,350	)
Market Common Clarendon		154,932		126,328		(5,914	)		154,932		120,414		275,346		(14,375	)		260,971		—
Marketplace at Briargate		1,706		4,885		155			1,727		5,019		6,746		(2,877	)		3,869		—
Mellody Farm		35,455		63,979		—			35,455		63,979		99,434		(3,725	)		95,709		—
Melrose Market		4,451		10,807		5			4,451		10,812		15,263		(899	)		14,364		—
Millhopper Shopping Center		1,073		5,358		5,981			1,901		10,511		12,412		(7,233	)		5,179		—
Mockingbird Commons		3,000		10,728		2,516			3,000		13,244		16,244		(6,964	)		9,280		—
Monument Jackson Creek		2,999		6,765		878			2,999		7,643		10,642		(5,760	)		4,882		—
Morningside Plaza		4,300		13,951		956			4,300		14,907		19,207		(8,224	)		10,983		—
Murrayhill Marketplace		2,670		18,401		14,021			2,903		32,189		35,092		(14,326	)		20,766		—
Naples Walk		18,173		13,554		1,567			18,173		15,121		33,294		(6,677	)		26,617		—
Newberry Square		2,412		10,150		1,147			2,412		11,297		13,709		(8,668	)		5,041		—
Newland Center		12,500		10,697		8,449			16,276		15,370		31,646		(8,745	)		22,901		—
Nocatee Town Center		10,124		8,691		7,893			10,606		16,102		26,708		(6,426	)		20,282		—
North Hills		4,900		19,774		1,385			4,900		21,159		26,059		(11,676	)		14,383		—
Northgate Marketplace		5,668		13,727		(50	)		4,995		14,350		19,345		(5,580	)		13,765		—
Northgate Marketplace Ph II		12,189		30,171		(82	)		12,189		30,089		42,278		(4,592	)		37,686		—

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Schedule III - Consolidated Real Estate and Accumulated Depreciation

December 31, 2019

(in thousands)

	Initial Cost							Total Cost									Net Cost
Shopping Centers (1)	Land & Land Improvements		Building & Improvements		Cost Capitalized Subsequent to Acquisition (2)			Land & Land Improvements		Building & Improvements		Total		Accumulated Depreciation			Net of Accumulated Depreciation		Mortgages
Northgate Plaza (Maxtown Road)		1,769		6,652		4,961			2,840		10,542		13,382		(5,265	)		8,117		—
Northgate Square		5,011		8,692		1,145			5,011		9,837		14,848		(4,446	)		10,402		—
Northlake Village		2,662		11,284		2,087			2,686		13,347		16,033		(7,111	)		8,922		—
Oak Shade Town Center		6,591		28,966		673			6,591		29,639		36,230		(9,146	)		27,084		(6,954	)
Oakbrook Plaza		4,000		6,668		5,769			4,766		11,671		16,437		(4,733	)		11,704		—
Oakleaf Commons		3,503		11,671		415			3,190		12,399		15,589		(6,417	)		9,172		—
Ocala Corners		1,816		10,515		522			1,816		11,037		12,853		(4,276	)		8,577		(3,891	)
Old St Augustine Plaza		2,368		11,405		8,211			3,178		18,806		21,984		(7,954	)		14,030		—
Pablo Plaza		11,894		21,407		(815	)		11,937		20,549		32,486		(2,413	)		30,073		—
Paces Ferry Plaza		2,812		12,639		15,438			8,342		22,547		30,889		(9,745	)		21,144		—
Panther Creek		14,414		14,748		5,667			15,212		19,617		34,829		(13,453	)		21,376		—
Pavillion		15,626		22,124		770			15,626		22,894		38,520		(2,913	)		35,607		—
Peartree Village		5,197		19,746		878			5,197		20,624		25,821		(12,904	)		12,917		—
Persimmon Place		25,975		38,114		187			26,692		37,584		64,276		(9,660	)		54,616		—
Piedmont Peachtree Crossing		45,502		16,642		165			45,502		16,807		62,309		(2,210	)		60,099		—
Pike Creek		5,153		20,652		2,598			5,251		23,152		28,403		(13,178	)		15,225		—
Pine Island		21,086		28,123		2,869			21,086		30,992		52,078		(4,327	)		47,751		—
Pine Lake Village		6,300		10,991		1,510			6,300		12,501		18,801		(6,831	)		11,970		—
Pine Ridge Square		13,951		23,147		287			13,951		23,434		37,385		(2,692	)		34,693		—
Pine Tree Plaza		668		6,220		686			668		6,906		7,574		(3,888	)		3,686		—
Pinecrest Place		3,792		13,496		(201	)		3,591		13,496		17,087		(1,032	)		16,055		—
Plaza Escuela		24,829		104,395		1,657			24,829		106,052		130,881		(8,560	)		122,321		—
Plaza Hermosa		4,200		10,109		3,472			4,202		13,579		17,781		(7,045	)		10,736		—
Pleasanton Plaza		21,839		24,743		(17,196	)		14,440		14,946		29,386		(1,502	)		27,884		—
Point 50		15,239		11,367		(16,447	)		10,159		—		10,159		—			10,159		—
Point Royale Shopping Center		18,201		14,889		6,435			19,383		20,142		39,525		(2,975	)		36,550		—
Post Road Plaza		15,240		5,196		153			15,240		5,349		20,589		(579	)		20,010		—
Potrero Center		133,422		116,758		84			133,422		116,842		250,264		(9,593	)		240,671		—
Powell Street Plaza		8,248		30,716		1,921			8,248		32,637		40,885		(15,895	)		24,990		—
Powers Ferry Square		3,687		17,965		9,441			5,758		25,335		31,093		(17,050	)		14,043		—
Powers Ferry Village		1,191		4,672		721			1,191		5,393		6,584		(3,995	)		2,589		—
Preston Oaks		763		30,438		(19,379	)		569		11,253		11,822		(2,427	)		9,395		—
Prestonbrook		7,069		8,622		1,161			7,069		9,783		16,852		(6,999	)		9,853		—
Prosperity Centre		11,682		26,215		21			11,681		26,237		37,918		(2,934	)		34,984		—
Ralphs Circle Center		20,939		6,317		98			20,939		6,415		27,354		(856	)		26,498		—
Red Bank Village		10,336		9,500		1,966			10,514		11,288		21,802		(3,366	)		18,436		—
Regency Commons		3,917		3,616		291			3,917		3,907		7,824		(2,568	)		5,256		—
Regency Square		4,770		25,191		7,003			5,060		31,904		36,964		(24,565	)		12,399		—
Rivertowns Square		15,505		52,505		1,308			15,786		53,532		69,318		(2,759	)		66,559		—

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Schedule III - Consolidated Real Estate and Accumulated Depreciation

December 31, 2019

(in thousands)

	Initial Cost							Total Cost									Net Cost
Shopping Centers (1)	Land & Land Improvements		Building & Improvements		Cost Capitalized Subsequent to Acquisition (2)			Land & Land Improvements		Building & Improvements		Total		Accumulated Depreciation			Net of Accumulated Depreciation		Mortgages
Rona Plaza		1,500		4,917		287			1,500		5,204		6,704		(3,116	)		3,588		—
Roosevelt Square		40,371		32,108		2,012			40,382		34,109		74,491		(2,118	)		72,373		—
Russell Ridge		2,234		6,903		1,442			2,234		8,345		10,579		(5,402	)		5,177		—
Ryanwood Square		10,581		10,044		101			10,573		10,153		20,726		(1,509	)		19,217		—
Salerno Village		1,355		—		—			1,355		—		1,355		(14	)		1,341		—
Sammamish-Highlands		9,300		8,075		8,477			9,592		16,260		25,852		(9,231	)		16,621		—
San Carlos Marketplace		36,006		57,886		320			36,006		58,206		94,212		(4,843	)		89,369		—
San Leandro Plaza		1,300		8,226		632			1,300		8,858		10,158		(4,855	)		5,303		—
Sandy Springs		6,889		28,056		3,430			6,889		31,486		38,375		(7,745	)		30,630		—
Sawgrass Promenade		10,846		12,525		214			10,846		12,739		23,585		(1,654	)		21,931		—
Scripps Ranch Marketplace		59,949		26,334		503			59,949		26,837		86,786		(2,004	)		84,782		(27,000	)
Sequoia Station		9,100		18,356		2,000			9,100		20,356		29,456		(11,081	)		18,375		—
Serramonte Center		390,106		172,652		53,895			409,839		206,814		616,653		(30,646	)		586,007		—
Shaw's at Plymouth		3,968		8,367		—			3,968		8,367		12,335		(1,029	)		11,306		—
Sheridan Plaza		82,260		97,273		(579	)		82,260		96,694		178,954		(10,019	)		168,935		—
Sherwood Crossroads		2,731		6,360		1,183			2,731		7,543		10,274		(3,473	)		6,801		—
Shoppes @ 104		11,193		—		2,382			7,078		6,497		13,575		(2,792	)		10,783		—
Shoppes at Homestead		5,420		9,450		2,181			5,420		11,631		17,051		(6,271	)		10,780		—
Shoppes at Lago Mar		8,323		11,347		(52	)		8,323		11,295		19,618		(1,498	)		18,120		—
Shoppes at Sunlake Centre		16,643		15,091		339			16,643		15,430		32,073		(2,299	)		29,774		—
Shoppes of Grande Oak		5,091		5,985		561			5,091		6,546		11,637		(5,286	)		6,351		—
Shoppes of Jonathan's Landing		4,474		5,628		260			4,474		5,888		10,362		(699	)		9,663		—
Shoppes of Oakbrook		20,538		42,992		440			20,538		43,432		63,970		(4,558	)		59,412		(3,670	)
Shoppes of Silver Lakes		17,529		21,829		56			17,529		21,885		39,414		(2,755	)		36,659		—
Shoppes of Sunset		2,860		1,316		(12	)		2,860		1,304		4,164		(210	)		3,954		—
Shoppes of Sunset II		2,834		715		5			2,834		720		3,554		(176	)		3,378		—
Shops at County Center		9,957		11,296		978			10,254		11,977		22,231		(9,511	)		12,720		—
Shops at Erwin Mill		9,082		6,124		245			9,082		6,369		15,451		(2,660	)		12,791		(10,000	)
Shops at John's Creek		1,863		2,014		(313	)		1,501		2,063		3,564		(1,399	)		2,165		—
Shops at Mira Vista		11,691		9,026		177			11,691		9,203		20,894		(2,133	)		18,761		(215	)
Shops at Quail Creek		1,487		7,717		629			1,448		8,385		9,833		(3,766	)		6,067		—
Shops at Saugus		19,201		17,984		(9	)		18,811		18,365		37,176		(10,191	)		26,985		—
Shops at Skylake		84,586		39,342		1,793			85,117		40,604		125,721		(5,422	)		120,299		—
Shops on Main		17,020		27,055		10,659			18,527		36,207		54,734		(9,935	)		44,799		—
Sope Creek Crossing		2,985		12,001		3,093			3,332		14,747		18,079		(8,714	)		9,365		—
South Bay Village		11,714		15,580		1,741			11,776		17,259		29,035		(4,570	)		24,465		—
South Beach Regional		28,188		53,405		862			28,188		54,267		82,455		(6,567	)		75,888		—
South Point		6,563		7,939		25			6,563		7,964		14,527		(1,038	)		13,489		—
Southbury Green		26,661		34,325		1,900			26,686		36,200		62,886		(3,807	)		59,079		—

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Schedule III - Consolidated Real Estate and Accumulated Depreciation

December 31, 2019

(in thousands)

	Initial Cost							Total Cost									Net Cost
Shopping Centers (1)	Land & Land Improvements		Building & Improvements		Cost Capitalized Subsequent to Acquisition (2)			Land & Land Improvements		Building & Improvements		Total		Accumulated Depreciation			Net of Accumulated Depreciation		Mortgages
Southcenter		1,300		12,750		2,087			1,300		14,837		16,137		(8,065	)		8,072		—
Southpark at Cinco Ranch		18,395		11,306		7,426			21,438		15,689		37,127		(6,426	)		30,701		—
SouthPoint Crossing		4,412		12,235		1,186			4,382		13,451		17,833		(7,217	)		10,616		—
Starke		71		1,683		9			71		1,692		1,763		(814	)		949		—
Star's at Cambridge		31,082		13,520		(1	)		31,082		13,519		44,601		(1,421	)		43,180		—
Star's at Quincy		27,003		9,425		1			27,003		9,426		36,429		(1,562	)		34,867		—
Star's at West Roxbury		21,973		13,386		(8	)		21,973		13,378		35,351		(1,433	)		33,918		—
Sterling Ridge		12,846		12,162		783			12,846		12,945		25,791		(9,911	)		15,880		—
Stroh Ranch		4,280		8,189		661			4,280		8,850		13,130		(6,529	)		6,601		—
Suncoast Crossing		9,030		10,764		4,587			13,374		11,007		24,381		(7,040	)		17,341		—
Talega Village Center		22,415		12,054		67			22,415		12,121		34,536		(1,391	)		33,145		—
Tamarac Town Square		12,584		9,221		373			12,584		9,594		22,178		(1,403	)		20,775		—
Tanasbourne Market		3,269		10,861		(340	)		3,149		10,641		13,790		(5,409	)		8,381		—
Tassajara Crossing		8,560		15,464		1,907			8,560		17,371		25,931		(9,081	)		16,850		—
Tech Ridge Center		12,945		37,169		(4,340	)		12,945		32,829		45,774		(12,072	)		33,702		(4,554	)
The Abbot		72,910		6,086		(5,444	)		72,910		642		73,552		(63	)		73,489		—
The Field at Commonwealth		30,700		16,890		—			30,700		16,890		47,590		(2,318	)		45,272		—
The Gallery at Westbury Plaza		108,653		216,771		2,581			108,653		219,352		328,005		(19,898	)		308,107		—
The Hub Hillcrest Market		18,773		61,906		5,347			19,611		66,415		86,026		(14,462	)		71,564		—
The Marketplace (fka The Marketplace Shopping Center)		10,927		36,052		336			10,927		36,388		47,315		(3,639	)		43,676		—
The Plaza at St. Lucie West		1,718		6,204		(1	)		1,718		6,203		7,921		(660	)		7,261		—
The Point at Garden City Park		741		9,764		5,855			2,559		13,801		16,360		(2,193	)		14,167		—
The Pruneyard		112,136		86,916		56			112,136		86,972		199,108		(1,515	)		197,593		(2,200	)
The Shops at Hampton Oaks		843		372		65			843		437		1,280		(85	)		1,195		—
The Village at Riverstone		15,075		12,706		—			15,075		12,706		27,781		(846	)		26,935		—
The Village Center		43,597		16,428		714			44,070		16,669		60,739		(2,176	)		58,563		—
Town and Country		4,664		5,207		27			4,664		5,234		9,898		(977	)		8,921		—
Town Square		883		8,132		473			883		8,605		9,488		(5,263	)		4,225		—
Treasure Coast Plaza		7,553		21,554		626			7,553		22,180		29,733		(2,513	)		27,220		(2,388	)
Tustin Legacy		13,829		23,922		(1	)		13,828		23,922		37,750		(2,606	)		35,144		—
Twin City Plaza		17,245		44,225		2,389			17,263		46,596		63,859		(17,603	)		46,256		—
Twin Peaks		5,200		25,827		1,893			5,200		27,720		32,920		(14,853	)		18,067		—
Unigold Shopping Center		5,490		5,144		6,627			5,561		11,700		17,261		(1,842	)		15,419		—
University Commons		4,070		30,785		247			4,070		31,032		35,102		(5,490	)		29,612		(35,824	)
Valencia Crossroads		17,921		17,659		1,334			17,921		18,993		36,914		(16,248	)		20,666		—
Village at La Floresta		13,140		20,571		(301	)		13,156		20,254		33,410		(4,433	)		28,977		—
Village at Lee Airpark		11,099		12,971		3,355			11,803		15,622		27,425		(10,153	)		17,272		—
Village Center		3,885		14,131		9,496			5,480		22,032		27,512		(10,298	)		17,214		—
Von's Circle Center		49,037		22,618		674			49,037		23,292		72,329		(2,583	)		69,746		(7,083	)

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Schedule III - Consolidated Real Estate and Accumulated Depreciation

December 31, 2019

(in thousands)

	Initial Cost							Total Cost									Net Cost
Shopping Centers (1)	Land & Land Improvements		Building & Improvements		Cost Capitalized Subsequent to Acquisition (2)			Land & Land Improvements		Building & Improvements		Total		Accumulated Depreciation			Net of Accumulated Depreciation		Mortgages
Walker Center		3,840		7,232		4,189			3,878		11,383		15,261		(7,278	)		7,983		—
Walmart Norwalk		20,394		21,261		9			20,394		21,270		41,664		(2,642	)		39,022		—
Waterstone Plaza		5,498		13,500		60			5,498		13,560		19,058		(1,506	)		17,552		—
Welleby Plaza		1,496		7,787		1,572			1,496		9,359		10,855		(7,827	)		3,028		—
Wellington Town Square		2,041		12,131		159			2,041		12,290		14,331		(7,433	)		6,898		—
West Bird Plaza		12,934		18,594		(30	)		12,934		18,564		31,498		(7,876	)		23,622		—
West Chester Plaza		1,857		7,572		630			1,857		8,202		10,059		(5,855	)		4,204		—
West Lake Shopping Center		10,561		9,792		157			10,561		9,949		20,510		(1,532	)		18,978		—
West Park Plaza		5,840		5,759		1,609			5,840		7,368		13,208		(4,391	)		8,817		—
Westbury Plaza		116,129		51,460		3,373			116,129		54,833		170,962		(6,877	)		164,085		(88,000	)
Westchase		5,302		8,273		1,048			5,302		9,321		14,623		(3,860	)		10,763		—
Westchester Commons		3,366		11,751		10,792			4,894		21,015		25,909		(8,151	)		17,758		—
Westlake Village Plaza		7,043		27,195		30,129			17,620		46,747		64,367		(25,579	)		38,788		—
Westport Plaza		9,035		7,455		11			9,035		7,466		16,501		(1,018	)		15,483		(2,385	)
Westbard - Manor Care		12,808		2,420		—			12,808		2,420		15,228		(1,204	)		14,024		—
Westbard Square		115,051		19,094		(117	)		115,051		18,977		134,028		(11,405	)		122,623		—
Westwood Village		19,933		25,301		(1,597	)		18,972		24,665		43,637		(14,339	)		29,298		—
Whole Foods at Swampscott		7,399		8,322		—			7,399		8,322		15,721		(886	)		14,835		—
Williamsburg at Dunwoody		7,435		3,721		827			7,444		4,539		11,983		(719	)		11,264		—
Willow Festival		1,954		56,501		2,826			1,976		59,305		61,281		(16,549	)		44,732		—
Willow Oaks		6,664		7,908		6			6,664		7,914		14,578		(2,053	)		12,525		—
Willows Shopping Center		51,964		78,029		1,555			51,992		79,556		131,548		(7,601	)		123,947		—
Woodcroft Shopping Center		1,419		6,284		1,136			1,421		7,418		8,839		(4,776	)		4,063		—
Woodman Van Nuys		5,500		7,195		423			5,500		7,618		13,118		(4,146	)		8,972		—
Woodmen Plaza		7,621		11,018		959			7,621		11,977		19,598		(10,982	)		8,616		—
Woodside Central		3,500		9,288		662			3,489		9,961		13,450		(5,391	)		8,059		—
Young Circle Shopping Center		5,986		10,394		(684	)		5,986		9,710		15,696		(1,019	)		14,677		—
Corporate Assets		—		—		2,303			—		2,303		2,303		(1,646	)		657		—
Land held for future development		37,520		—		(6,862	)		30,571		87		30,658		(2	)		30,656		—
Construction in progress		—		—		151,880			—		151,880		151,880		—			151,880		—
	$	4,845,004		5,582,040		668,250			4,896,319		6,198,975		11,095,294		(1,766,162	)		9,329,132		(486,259	)

(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.

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

December 31, 2019

(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, 2019.

The changes in total real estate assets for the years ended December 31, 2019, 2018, and 2017 are as follows:

(in thousands)	2019
Beginning balance	$	10,863,162		10,892,821		4,933,499
Acquired properties and land		268,366		113,911		5,772,265
Developments and improvements		159,149		198,005		273,871
Sale of properties		(60,195	)	(277,270	)	(86,814	)
Properties held for sale		(58,527	)	(59,438	)	—
Provision for impairment		(76,661	)	(4,867	)	—
Ending balance	$	11,095,294		10,863,162		10,892,821

The changes in accumulated depreciation for the years ended December 31, 2019, 2018, and 2017 are as follows:

(in thousands)	2019
Beginning balance	$	1,535,444		1,339,771		1,124,391
Depreciation expense		260,814		249,489		222,395
Sale of properties		(4,643	)	(45,901	)	(7,015	)
Accumulated depreciation related to properties held for sale		(19,031	)	(7,729	)	—
Provision for impairment		(6,422	)	(186	)	—
Ending balance	$	1,766,162		1,535,444		1,339,771

See accompanying report of independent registered public accounting firm.

Previous: Item 7A. Quantitative and Qualitative Disclosures about Market Risk · Next: Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure