Item 1. Financial Statements

REGENCY CENTERS CORPORATION

Consolidated Balance Sheets

March 31, 2023 and December 31, 2022

(in thousands, except share data)

		2023				2022
Assets		(unaudited)
Net real estate investments:
Real estate assets, at cost		$	11,886,697				11,858,064
Less: accumulated depreciation			2,484,960				2,415,860
Real estate assets, net			9,401,737				9,442,204
Investments in real estate partnerships			346,390				350,377
Net real estate investments			9,748,127				9,792,581
Cash, cash equivalents, and restricted cash, including $2,955 and $2,310 of restricted cash at March 31, 2023 and December 31, 2022, respectively			68,143				68,776
Tenant and other receivables			181,579				188,863
Deferred leasing costs, less accumulated amortization of $118,766 and $117,137 at March 31, 2023 and December 31, 2022, respectively			68,567				68,945
Acquired lease intangible assets, less accumulated amortization of $344,460 and $338,053 at March 31, 2023 and December 31, 2022, respectively			188,636				197,745
Right of use assets, net			273,702				275,513
Other assets			276,926				267,797
Total assets		$	10,805,680				10,860,220
Liabilities and Equity
Liabilities:
Notes payable		$	3,711,784				3,726,754
Unsecured credit facility			30,000				—
Accounts payable and other liabilities			289,297				317,259
Acquired lease intangible liabilities, less accumulated amortization of $199,840 and $193,315 at March 31, 2023 and December 31, 2022, respectively			346,939				354,204
Lease liabilities			212,582				213,722
Tenants' security, escrow deposits and prepaid rent			75,643				70,242
Total liabilities			4,666,245				4,682,181
Commitments and contingencies			—				—
Equity:
Shareholders' equity:
Common stock; $0.01 par value per share, 220,000,000 shares authorized; 170,958,422 and 171,124,593 shares issued at March 31, 2023 and December 31, 2022, respectively			1,710				1,711
Treasury stock at cost; 483,782 and 465,415 shares held at March 31, 2023 and December 31, 2022, respectively			(25,699	)			(24,461	)
Additional paid-in-capital			7,856,426				7,877,152
Accumulated other comprehensive income			3,927				7,560
Distributions in excess of net income			(1,779,043	)			(1,764,977	)
Total shareholders' equity			6,057,321				6,096,985
Noncontrolling interests:
Exchangeable operating partnership units, aggregate redemption value of $45,361 and $46,340 at March 31, 2023 and December 31, 2022, respectively			34,411				34,489
Limited partners' interests in consolidated partnerships			47,703				46,565
Total noncontrolling interests			82,114				81,054
Total equity			6,139,435				6,178,039
Total liabilities and equity		$	10,805,680				10,860,220

See accompanying notes to consolidated financial statements.

REGENCY CENTERS CORPORATION

Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

		Three months ended March 31,
		2023				2022
Revenues:
Lease income		$	308,801				293,645
Other property income			3,138				3,104
Management, transaction, and other fees			6,038				6,684
Total revenues			317,977				303,433
Operating expenses:
Depreciation and amortization			82,707				77,842
Property operating expense			51,022				46,461
Real estate taxes			38,477				36,869
General and administrative			25,280				18,792
Other operating (income) expenses			(497	)			2,173
Total operating expenses			196,989				182,137
Other expense (income):
Interest expense, net			36,393				36,738
Gain on sale of real estate, net of tax			(250	)			(101,948	)
Net investment (income) loss			(1,727	)			2,494
Total other expense (income)			34,416				(62,716	)
Income from operations before equity in income of investments in real estate partnerships			86,572				184,012
Equity in income of investments in real estate partnerships			11,916				12,804
Net income			98,488				196,816
Noncontrolling interests:
Exchangeable operating partnership units			(420	)			(863	)
Limited partners' interests in consolidated partnerships			(787	)			(725	)
Income attributable to noncontrolling interests			(1,207	)			(1,588	)
Net income attributable to common shareholders		$	97,281				195,228
Income per common share - basic		$	0.57				1.14
Income per common share - diluted		$	0.57				1.14

See accompanying notes to consolidated financial statements.

REGENCY CENTERS CORPORATION

Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)

		Three months ended March 31,
		2023				2022
Net income		$	98,488				196,816
Other comprehensive income:
Effective portion of change in fair value of derivative instruments:
Effective portion of change in fair value of derivative instruments			(2,736	)			8,968
Reclassification adjustment of derivative instruments included in net income			(1,492	)			1,010
Unrealized gain (loss) on available-for-sale debt securities			192				(754	)
Other comprehensive (loss) income			(4,036	)			9,224
Comprehensive income			94,452				206,040
Less: comprehensive income attributable to noncontrolling interests:
Net income attributable to noncontrolling interests			1,207				1,588
Other comprehensive (loss) income attributable to noncontrolling interests			(403	)			761
Comprehensive income attributable to noncontrolling interests			804				2,349
Comprehensive income attributable to the Company		$	93,648				203,691

See accompanying notes to consolidated financial statements.

REGENCY CENTERS CORPORATION

C****onsolidated Statements of Equity

For the three months ended March 31, 2023 and 2022

(in thousands, except per share data)

(unaudited)

																										Noncontrolling Interests
		Common Stock				Treasury Stock				Additional Paid In Capital				Accumulated Other Comprehensive Income (Loss)				Distributions in Excess of Net Income				Total Shareholders' Equity				Exchangeable Operating Partnership Units				Limited Partners' Interest in Consolidated Partnerships				Total Noncontrolling Interests				Total Equity
Balance at December 31, 2021		$	1,712				(22,758	)			7,883,458				(10,227	)			(1,814,814	)			6,037,371				35,447				37,114				72,561				6,109,932
Net income			—				—				—				—				195,228				195,228				863				725				1,588				196,816
Other comprehensive income
Other comprehensive income before reclassification			—				—				—				7,537				—				7,537				37				640				677				8,214
Amounts reclassified from accumulated other comprehensive income			—				—				—				926				—				926				4				80				84				1,010
Deferred compensation plan, net			—				(1,073	)			1,073				—				—				—				—				—				—				—
Restricted stock issued, net of amortization			2				—				4,206				—				—				4,208				—				—				—				4,208
Common stock repurchased for taxes withheld for stock based compensation, net			—				—				(6,091	)			—				—				(6,091	)			—				—				—				(6,091	)
Common stock issued under dividend reinvestment plan			—				—				118				—				—				118				—				—				—				118
Distributions to partners			—				—				—				—				—				—				—				(1,070	)			(1,070	)			(1,070	)
Cash dividends declared:
Common stock/unit ($0.625 per share)			—				—				—				—				(106,970	)			(106,970	)			(475	)			—				(475	)			(107,445	)
Balance at March 31, 2022		$	1,714				(23,831	)			7,882,764				(1,764	)			(1,726,556	)			6,132,327				35,876				37,489				73,365				6,205,692
Balance at December 31, 2022		$	1,711				(24,461	)			7,877,152				7,560				(1,764,977	)			6,096,985				34,489				46,565				81,054				6,178,039
Net income			—				—				—				—				97,281				97,281				420				787				1,207				98,488
Other comprehensive loss
Other comprehensive loss before reclassification			—				—				—				(2,316	)			—				(2,316	)			(11	)			(217	)			(228	)			(2,544	)
Amounts reclassified from accumulated other comprehensive loss			—				—				—				(1,317	)			—				(1,317	)			(5	)			(170	)			(175	)			(1,492	)
Deferred compensation plan, net			—				(1,238	)			1,238				—				—				—				—				—				—				—
Restricted stock issued, net of amortization			2				—				4,817				—				—				4,819				—				—				—				4,819
Common stock repurchased for taxes withheld for stock based compensation, net			—				—				(6,920	)			—				—				(6,920	)			—				—				—				(6,920	)
Common stock repurchased and retired			(3	)			—				(20,003	)			—				—				(20,006	)			—				—				—				(20,006	)
Common stock issued under dividend reinvestment plan			—				—				142				—				—				142				—				—				—				142
Contributions from partners			—				—				—				—				—				—				—				1,777				1,777				1,777
Distributions to partners			—				—				—				—				—				—				—				(1,039	)			(1,039	)			(1,039	)
Cash dividends declared:
Common stock/unit ($0.650 per share)			—				—				—				—				(111,347	)			(111,347	)			(482	)			—				(482	)			(111,829	)
Balance at March 31, 2023		$	1,710				(25,699	)			7,856,426				3,927				(1,779,043	)			6,057,321				34,411				47,703				82,114				6,139,435

See accompanying notes to consolidated financial statements.

REGENCY CENTERS CORPORATION

Consolidated Statements of Cash Flows

For the three months ended March 31, 2023 and 2022

(in thousands)

(unaudited)

		2023				2022
Cash flows from operating activities:
Net income		$	98,488				196,816
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			82,707				77,842
Amortization of deferred loan costs and debt premiums			1,490				1,379
(Accretion) and amortization of above and below market lease intangibles, net			(5,478	)			(5,302	)
Stock-based compensation, net of capitalization			4,810				4,164
Equity in income of investments in real estate partnerships			(11,916	)			(12,804	)
Gain on sale of real estate, net of tax			(250	)			(101,948	)
Distribution of earnings from investments in real estate partnerships			14,524				16,736
Deferred compensation expense (income)			1,448				(2,256	)
Realized and unrealized (gain) loss on investments			(1,674	)			2,533
Changes in assets and liabilities:
Tenant and other receivables			6,710				3,396
Deferred leasing costs			(672	)			(2,014	)
Other assets			(12,631	)			(4,724	)
Accounts payable and other liabilities			(20,858	)			(29,387	)
Tenants' security, escrow deposits and prepaid rent			5,401				(1,539	)
Net cash provided by operating activities			162,099				142,892
Cash flows from investing activities:
Acquisition of operating real estate			—				(30,166	)
Real estate development and capital improvements			(44,569	)			(53,605	)
Proceeds from sale of real estate and FF&E			3,603				124,924
Investments in real estate partnerships			(604	)			(7,173	)
Return of capital from investments in real estate partnerships			—				23,892
Dividends on investment securities			187				109
Acquisition of investment securities			(2,171	)			(5,554	)
Proceeds from sale of investment securities			4,504				5,927
Net cash (used in) provided by investing activities			(39,050	)			58,354
Cash flows from financing activities:
Repurchase of common shares in conjunction with equity award plans			(7,066	)			(6,246	)
Common shares repurchased through share repurchase program			(20,006	)			—
Proceeds from sale of treasury stock			2				63
Contributions from (distributions to) limited partners in consolidated partnerships, net			738				(1,070	)
Distributions to exchangeable operating partnership unit holders			(482	)			(475	)
Dividends paid to common shareholders			(111,085	)			(106,887	)
Proceeds from unsecured credit facilities			115,000				40,000
Repayment of unsecured credit facilities			(85,000	)			(40,000	)
Proceeds from notes payable			15,500				—
Repayment of notes payable			(28,306	)			—
Scheduled principal payments			(2,836	)			(2,846	)
Payment of loan costs			(141	)			(82	)
Net cash used in financing activities			(123,682	)			(117,543	)
Net (decrease) increase in cash and cash equivalents and restricted cash			(633	)			83,703
Cash and cash equivalents and restricted cash at beginning of the period			68,776				95,027
Cash and cash equivalents and restricted cash at end of the period		$	68,143				178,730

See accompanying notes to consolidated financial statements.

REGENCY CENTERS CORPORATION

Consolidated Statements of Cash Flows

For the three months ended March 31, 2023 and 2022

(in thousands)

(unaudited)

		2023				2022
Supplemental disclosure of cash flow information:
Cash paid for interest (net of capitalized interest of $1,250 and $796 in 2023 and 2022, respectively)		$	44,107				44,317
Cash paid for income taxes, net of refunds		$	112				165
Supplemental disclosure of non-cash transactions:
Common stock and exchangeable operating partnership dividends declared but not paid		$	111,829				107,445
Change in accrued capital expenditures		$	10,596				11,603
Common stock issued under dividend reinvestment plan		$	142				118
Stock-based compensation capitalized		$	155				199
Common stock issued for dividend reinvestment in trust		$	303				267
Contribution of stock awards into trust		$	1,201				1,177
Distribution of stock held in trust		$	265				329
Change in fair value of securities		$	243				754

See accompanying notes to consolidated financial statements.

REGENCY CENTERS, L.P.

Consolidated Balance Sheets

March 31, 2023 and December 31, 2022

(in thousands, except unit data)

		2023				2022
Assets		(unaudited)
Net real estate investments:
Real estate assets, at cost		$	11,886,697				11,858,064
Less: accumulated depreciation			2,484,960				2,415,860
Real estate assets, net			9,401,737				9,442,204
Investments in real estate partnerships			346,390				350,377
Net real estate investments			9,748,127				9,792,581
Cash, cash equivalents, and restricted cash, including $2,955 and $2,310 of restricted cash at March 31, 2023 and December 31, 2022, respectively			68,143				68,776
Tenant and other receivables			181,579				188,863
Deferred leasing costs, less accumulated amortization of $118,766 and $117,137 at March 31, 2023 and December 31, 2022, respectively			68,567				68,945
Acquired lease intangible assets, less accumulated amortization of $344,460 and $338,053 at March 31, 2023 and December 31, 2022, respectively			188,636				197,745
Right of use assets, net			273,702				275,513
Other assets			276,926				267,797
Total assets		$	10,805,680				10,860,220
Liabilities and Capital
Liabilities:
Notes payable		$	3,711,784				3,726,754
Unsecured credit facility			30,000				—
Accounts payable and other liabilities			289,297				317,259
Acquired lease intangible liabilities, less accumulated amortization of $199,840 and $193,315 at March 31, 2023 and December 31, 2022, respectively			346,939				354,204
Lease liabilities			212,582				213,722
Tenants' security, escrow deposits and prepaid rent			75,643				70,242
Total liabilities			4,666,245				4,682,181
Commitments and contingencies			—				—
Capital:
Partners' capital:
General partner; 170,958,422 and 171,124,593 units outstanding at March 31, 2023 and December 31, 2022, respectively			6,053,394				6,089,425
Limited partners; 741,433 units outstanding at March 31, 2023 and December 31, 2022			34,411				34,489
Accumulated other comprehensive income			3,927				7,560
Total partners' capital			6,091,732				6,131,474
Noncontrolling interest: Limited partners' interests in consolidated partnerships			47,703				46,565
Total capital			6,139,435				6,178,039
Total liabilities and capital		$	10,805,680				10,860,220

See accompanying notes to consolidated financial statements.

REGENCY CENTERS, L.P.

Consolidated Statements of Operations

(in thousands, except per unit data)

(unaudited)

		Three months ended March 31,
		2023				2022
Revenues:
Lease income		$	308,801				293,645
Other property income			3,138				3,104
Management, transaction, and other fees			6,038				6,684
Total revenues			317,977				303,433
Operating expenses:
Depreciation and amortization			82,707				77,842
Property operating expense			51,022				46,461
Real estate taxes			38,477				36,869
General and administrative			25,280				18,792
Other operating (income) expenses			(497	)			2,173
Total operating expenses			196,989				182,137
Other expense (income):
Interest expense, net			36,393				36,738
Gain on sale of real estate, net of tax			(250	)			(101,948	)
Net investment (income) loss			(1,727	)			2,494
Total other expense (income)			34,416				(62,716	)
Income from operations before equity in income of investments in real estate partnerships			86,572				184,012
Equity in income of investments in real estate partnerships			11,916				12,804
Net income			98,488				196,816
Limited partners' interests in consolidated partnerships			(787	)			(725	)
Net income attributable to common unit holders		$	97,701				196,091
Income per common share - basic		$	0.57				1.14
Income per common share - diluted		$	0.57				1.14

See accompanying notes to consolidated financial statements.

REGENCY CENTERS, L.P.

Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)

		Three months ended March 31,
		2023				2022
Net income		$	98,488				196,816
Other comprehensive income:
Effective portion of change in fair value of derivative instruments:
Effective portion of change in fair value of derivative instruments			(2,736	)			8,968
Reclassification adjustment of derivative instruments included in net income			(1,492	)			1,010
Unrealized gain (loss) on available-for-sale debt securities			192				(754	)
Other comprehensive (loss) income			(4,036	)			9,224
Comprehensive income			94,452				206,040
Less: comprehensive income attributable to noncontrolling interests:
Net income attributable to noncontrolling interests			787				725
Other comprehensive (loss) income attributable to noncontrolling interests			(387	)			720
Comprehensive income attributable to noncontrolling interests			400				1,445
Comprehensive income attributable to the Partnership		$	94,052				204,595

See accompanying notes to consolidated financial statements.

REGENCY CENTERS, L.P.

C****onsolidated Statements of Capital

For the three months ended March 31, 2023 and 2022

(in thousands)

(unaudited)

		General Partner Preferred and Common Units				Limited Partners				Accumulated Other Comprehensive Income (Loss)				Total Partners' Capital				Noncontrolling Interests in Limited Partners' Interest in Consolidated Partnerships				Total Capital
Balance at December 31, 2021		$	6,047,598				35,447				(10,227	)			6,072,818				37,114				6,109,932
Net income			195,228				863				—				196,091				725				196,816
Other comprehensive income
Other comprehensive income before reclassification			—				37				7,537				7,574				640				8,214
Amounts reclassified from accumulated other comprehensive loss			—				4				926				930				80				1,010
Distributions to partners			(106,970	)			(475	)			—				(107,445	)			(1,070	)			(108,515	)
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization			4,208				—				—				4,208				—				4,208
Common units repurchased as a result of common stock repurchased by Parent Company, net of issuances			(5,973	)			—				—				(5,973	)			—				(5,973	)
Balance at March 31, 2022		$	6,134,091				35,876				(1,764	)			6,168,203				37,489				6,205,692
Balance at December 31, 2022		$	6,089,425				34,489				7,560				6,131,474				46,565				6,178,039
Net income			97,281				420				—				97,701				787				98,488
Other comprehensive loss
Other comprehensive loss before reclassification			—				(11	)			(2,316	)			(2,327	)			(217	)			(2,544	)
Amounts reclassified from accumulated other comprehensive loss			—				(5	)			(1,317	)			(1,322	)			(170	)			(1,492	)
Contributions from partners			—				—				—				—				1,777				1,777
Distributions to partners			(111,347	)			(482	)			—				(111,829	)			(1,039	)			(112,868	)
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization			4,819				—				—				4,819				—				4,819
Common units repurchased and retired as a result of common stock repurchased and retired by Parent Company			(20,006	)			—				—				(20,006	)			—				(20,006	)
Common units repurchased as a result of common stock repurchased by Parent Company, net of issuances			(6,778	)			—				—				(6,778	)			—				(6,778	)
Balance at March 31, 2023		$	6,053,394				34,411				3,927				6,091,732				47,703				6,139,435

See accompanying notes to consolidated financial statements.

REGENCY CENTERS, L.P.

Consolidated Statem****ents of Cash Flows

For the three months ended March 31, 2023 and 2022

(in thousands)

(unaudited)

		2023				2022
Cash flows from operating activities:
Net income		$	98,488				196,816
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			82,707				77,842
Amortization of deferred loan costs and debt premiums			1,490				1,379
(Accretion) and amortization of above and below market lease intangibles, net			(5,478	)			(5,302	)
Stock-based compensation, net of capitalization			4,810				4,164
Equity in income of investments in real estate partnerships			(11,916	)			(12,804	)
Gain on sale of real estate, net of tax			(250	)			(101,948	)
Distribution of earnings from investments in real estate partnerships			14,524				16,736
Deferred compensation expense (income)			1,448				(2,256	)
Realized and unrealized (gain) loss on investments			(1,674	)			2,533
Changes in assets and liabilities:
Tenant and other receivables			6,710				3,396
Deferred leasing costs			(672	)			(2,014	)
Other assets			(12,631	)			(4,724	)
Accounts payable and other liabilities			(20,858	)			(29,387	)
Tenants' security, escrow deposits and prepaid rent			5,401				(1,539	)
Net cash provided by operating activities			162,099				142,892
Cash flows from investing activities:
Acquisition of operating real estate			—				(30,166	)
Real estate development and capital improvements			(44,569	)			(53,605	)
Proceeds from sale of real estate and FF&E			3,603				124,924
Collection of notes receivable			—				—
Investments in real estate partnerships			(604	)			(7,173	)
Return of capital from investments in real estate partnerships			—				23,892
Dividends on investment securities			187				109
Acquisition of investment securities			(2,171	)			(5,554	)
Proceeds from sale of investment securities			4,504				5,927
Net cash (used in) provided by investing activities			(39,050	)			58,354
Cash flows from financing activities:
Repurchase of common shares in conjunction with equity award plans			(7,066	)			(6,246	)
Common units repurchased through share repurchase program			(20,006	)			—
Proceeds from sale of treasury stock			2				63
Contributions from (distributions to) limited partners in consolidated partnerships, net			738				(1,070	)
Distributions to partners			(111,567	)			(107,362	)
Proceeds from unsecured credit facilities			115,000				40,000
Repayment of unsecured credit facilities			(85,000	)			(40,000	)
Proceeds from notes payable			15,500				—
Repayment of notes payable			(28,306	)			—
Scheduled principal payments			(2,836	)			(2,846	)
Payment of loan costs			(141	)			(82	)
Net cash used in financing activities			(123,682	)			(117,543	)
Net (decrease) increase in cash and cash equivalents and restricted cash			(633	)			83,703
Cash and cash equivalents and restricted cash at beginning of the period			68,776				95,027
Cash and cash equivalents and restricted cash at end of the period		$	68,143				178,730

See accompanying notes to consolidated financial statements.

REGENCY CENTERS, L.P.

Consolidated Statements of Cash Flows

For the three months ended March 31, 2023 and 2022

(in thousands)

(unaudited)

		2023				2022
Supplemental disclosure of cash flow information:
Cash paid for interest (net of capitalized interest of $1,250 and $796 in 2023 and 2022, respectively)		$	44,107				44,317
Cash paid for income taxes, net of refunds		$	112				165
Supplemental disclosure of non-cash transactions:
Common stock and exchangeable operating partnership dividends declared but not paid		$	111,829				107,445
Change in accrued capital expenditures		$	10,596				11,603
Common stock issued by Parent Company for dividend reinvestment plan		$	142				118
Stock-based compensation capitalized		$	155				199
Common stock issued for dividend reinvestment in trust		$	303				267
Contribution of stock awards into trust		$	1,201				1,177
Distribution of stock held in trust		$	265				329
Change in fair value of securities		$	243				754

See accompanying notes to consolidated financial statements.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

March 31, 2023

1.	Organization and Significant Accounting Policies

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, and has no other assets other than through its investment in the Operating Partnership, and its only liabilities are $200 million of unsecured 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 March 31, 2023, the Parent Company, the Operating Partnership, and their controlled subsidiaries on a consolidated basis owned 308 properties and held partial interests in an additional 96 properties through unconsolidated Investments in real estate partnerships (also referred to as "joint ventures" or "investment partnerships").

The consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to fairly state the results for the interim periods presented. These adjustments are considered to be of a normal recurring nature.

Risks and Uncertainties

The success of the Company's tenants in operating their businesses and their corresponding ability to pay rent continue to be significantly influenced by current economic challenges, which impact their cost of doing business, including but not limited to the impact of inflation, the cost and availability of labor, supply chain constraints, increasing energy prices and interest rates, and access to credit. Additionally, macroeconomic and geopolitical risks create challenges that may exacerbate current market conditions in the United States of America ("U.S.", "USA" or "United States"). The policies implemented by the U.S. government to address these issues, including raising interest rates, could result in adverse impacts on the U.S. economy, including a slowing of growth and potentially a recession, thereby impacting consumer spending, tenants' businesses, and/or decreasing future demand for space in shopping centers. The potential impact of current economic challenges on the Company's financial condition, results of operations, and cash flows is subject to change and continues to depend on the extent and duration of these risks and uncertainties.

Consolidation

The Company consolidates properties that are wholly-owned and properties where it owns less than 100%, but 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 Variable Interest Entities ("VIEs") and voting interest entities.

Ownership of the Operating Partnership

The Operating Partnership's capital includes general and limited common Partnership Units. As of March 31, 2023, the Parent Company owned approximately 99.6% of the 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"). Each EOP unit is exchangeable for cash or one share of common stock of the Parent Company, at the discretion of the Parent Company, and the unit holder cannot require redemption in cash or other assets (i.e. registered shares of the Parent). The Parent Company has evaluated the conditions as specified under Accounting Standards Codification ("ASC") Topic 480, Distinguishing Liabilities from Equity, as it relates to EOP units outstanding and concluded that the Parent Company has the right to satisfy the redemption requirements of the units by delivering shares of unregistered common stock. Accordingly, the Parent Company classifies EOP units as permanent equity in the accompanying Consolidated Balance Sheets and Consolidated Statements of Equity and Comprehensive Income. 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.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

March 31, 2023

Real Estate Partnerships

As of March 31, 2023, Regency had a partial ownership interest in 107 properties through partnerships, of which 11 are consolidated. Regency's partners include institutional investors and other real estate developers and/or operators (the "Partners" or "Limited Partners"). Regency has a variable interest in these entities through its equity interests, with Regency the primary beneficiary in certain of these real estate partnerships. As such, Regency consolidates the partnerships into its financial statements for which it is the primary beneficiary and reports the limited partners' interests as noncontrolling interests. For those partnerships which Regency is not the primary beneficiary and does not control, but has significant influence, Regency recognizes its investment in them using the equity method of accounting.

The assets of these partnerships are restricted to the use of the partnerships and cannot be used by general creditors of the Company. Similarly, the obligations of the partnerships can only be settled by the assets of these partnerships or additional contributions by the partners.

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

(in thousands)		March 31, 2023				December 31, 2022
Assets
Net real estate investments		$	106,916				107,725
Cash, cash equivalents and restricted cash			2,487				2,420
Liabilities
Notes payable			3,695				4,188
Equity
Limited partners' interests in consolidated partnerships			24,337				24,364

Revenues and Other Receivables

Other property income includes parking fees and other incidental income from the properties and is generally recognized at the point in time that the performance obligation is met. Income within Management, transaction, and other fees on the Consolidated Statements of Operations is primarily from contracts with the Company's real estate partnerships. The primary components of these revenue streams, the timing of satisfying the performance obligations, and amounts are as follows:

				Three months ended March 31,
(in thousands)		Timing of satisfaction of performance obligations		2023				2022
Management, transaction, and other fees:
Property management services		Over time		$	3,458				3,618
Asset management services		Over time			1,629				1,755
Leasing services		Point in time			718				996
Other transaction fees		Point in time			233				315
Total management, transaction, and other fees				$	6,038				6,684

The accounts receivable for management services, which are included within Tenant and other receivables in the accompanying Consolidated Balance Sheets, are $16.8 million and $16.4 million, as of March 31, 2023 and December 31, 2022, respectively.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

March 31, 2023

Recent Accounting Pronouncements

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

Standard		Description		Date of adoption		Effect on the financial statements or other significant matters
Recently adopted**:**
ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting		In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related to activities that impact debt, leases, derivatives, and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. The amendments in this update provide exceptions to the guidance in Topic 815 related to changes to the critical terms of a hedging relationship due to reference rate reform, which if criteria are met, provide such changes should not result in the dedesignation and redesignation of the hedging relationship.		March 2020 through March 31, 2023		The Company has elected to apply the hedge accounting expedients and exceptions related to changes to the reference rate from LIBOR to SOFR in the Company's interest rate swaps, which it completed during the three months ended March 31, 2023. Application of these exceptions preserves the hedge designation of interest rate swaps and the related accounting and presentation consistent with past presentation.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

March 31, 2023

2.	Real Estate Investments

The Company had no acquisitions of shopping centers or land for development during the three months ended March 31, 2023, as compared to those detailed in the table below for the three months ended March 31, 2022:

(in thousands)				Three months ended March 31, 2022
Date Purchased		Property Name		City/State		Property Type		Regency Ownership		Purchase Price (1)				Debt Assumed, Net of Discounts (1)				Intangible Assets (1)				Intangible Liabilities (1)
Consolidated
3/1/2022		Glenwood Green		Old Bridge, NJ		Development		70%		$	11,000				—				—				—
3/31/2022		Island Village		Bainbridge Island, WA		Operating		100%			30,650				—				2,900				6,839
Total consolidated										$	41,650				—				2,900				6,839
Unconsolidated
3/25/2022		Naperville Plaza		Naperville, IL		Operating		20%			52,380				22,074				4,336				814
Total unconsolidated										$	52,380				22,074				4,336				814
Total property acquisitions										$	94,030				22,074				7,236				7,653

(1)

Amounts reflected for purchase price and allocation are reflected at 100%.

3.	Property Dispositions

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

		Three months ended March 31,
(in thousands, except number sold data)		2023				2022
Net proceeds from sale of real estate investments		$	2,923				124,924
Gain on sale of real estate, net of tax			250				101,948
Number of operating properties sold			—				1
Number of land parcels sold			1				1
Percent interest sold		100%				100%

4.	Other Assets

The following table represents the components of Other assets in the accompanying Consolidated Balance Sheets as of the dates set forth below:

(in thousands)		March 31, 2023				December 31, 2022
Goodwill		$	167,062				167,062
Investments			53,967				54,581
Prepaid and other			41,363				28,615
Furniture, fixtures, and equipment, net ("FF&E")			5,044				5,808
Derivative assets			4,907				6,575
Deferred financing costs, net			4,583				5,156
Total other assets		$	276,926				267,797

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

March 31, 2023

5.	Notes Payable and Unsecured Credit Facilities

The Company's outstanding debt, net of unamortized debt premium (discount) and debt issuance costs, consisted of the following as of the dates set forth below:

(in thousands)		Weighted Average Contractual Rate		Weighted Average Effective Rate		March 31, 2023				December 31, 2022
Notes payable:
Fixed rate mortgage loans		3.9%		3.4%		$	330,047				342,135
Variable rate mortgage loans (1)		3.8%		3.9%			132,269				136,246
Fixed rate unsecured debt		3.8%		4.0%			3,249,468				3,248,373
Total notes payable							3,711,784				3,726,754
Unsecured credit facilities:
$1.25 Billion Line of Credit (the "Line") (2)		5.8%		6.2%			30,000				—
Total debt outstanding						$	3,741,784				3,726,754

(1)

Five of these six variable rate loans, representing $130.1 million of debt in the aggregate, have interest rate swaps in place to mitigate interest rate fluctuation risk. Based on these swap agreements, the effective fixed rates of the five loans range from 2.5% to 6.0%.

(2)

Weighted average effective rate for the Line is calculated based on a fully drawn Line balance using the period end variable rate.

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

(in thousands)		March 31, 2023
Scheduled Principal Payments and Maturities by Year:		Scheduled Principal Payments				Mortgage Loan Maturities				Unsecured Maturities (1)				Total
2023 (2)		$	6,765				31,843				—				38,608
2024			5,044				90,742				250,000				345,786
2025			3,942				43,750				280,000				327,692
2026			4,127				127,096				200,000				331,223
2027			3,788				137,915				525,000				666,703
Beyond 5 Years			2,873				322				2,050,000				2,053,195
Unamortized debt premium/(discount) and issuance costs			—				4,109				(25,532	)			(21,423	)
Total		$	26,539				435,777				3,279,468				3,741,784

(1)

Includes unsecured public and private debt and unsecured credit facilities.

(2)

Reflects scheduled principal payments and maturities for the remainder of the year.

The Company was in compliance as of March 31, 2023, with all financial and other covenants under its unsecured public and private placement debt and unsecured credit facilities and expects to remain in compliance thereafter.

6.	Derivative Financial Instruments

The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors, and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company's operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for speculative transactions or purposes other than mitigation of interest rate risk. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with quality credit ratings. The Company does not anticipate that any of the counterparties will fail to meet their obligations.

The Company's objectives in using interest rate derivatives are to attempt to stabilize interest expense where possible and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

March 31, 2023

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
(in thousands)												Assets (Liabilities) (1)
Effective Date		Maturity Date		Notional Amount				Bank Pays Variable Rate of		Regency Pays Fixed Rate of		March 31, 2023				December 31, 2022
12/1/16		11/1/23			30,969			SOFR		1.490%			621				883
9/17/19		3/17/25			24,000			SOFR		1.443%			1,177				1,443
12/20/19		12/19/26			24,365			SOFR		1.684%			1,523				1,939
2/24/23		12/31/26			15,479			SOFR		4.229%			(370	)			152
6/2/17		6/2/27			35,303			SOFR		2.261%			1,586				2,158
												$	4,537				6,575

(1)

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

These derivative financial instruments are all interest rate swaps, which are designated and qualify as cash flow hedges. The Company does not use derivatives for trading or speculative purposes and, as of March 31, 2023, does not have any derivatives that are not designated as hedges.

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
		Three months ended March 31,										Three months ended March 31,										Three months ended March 31,
(in thousands)		2023				2022						2023				2022						2023				2022
Interest rate swaps		$	(2,736	)			8,968			Interest expense		$	(1,492	)			1,010			Interest expense, net		$	36,393				36,738

As of March 31, 2023, the Company expects approximately $4.7 million of accumulated comprehensive income 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.

7.	Leases

All of the Company's leases are classified as operating leases. The Company's Lease income is comprised of both fixed and variable income. 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 common area maintenance ("CAM"), real estate taxes, and insurance ("Recoverable Costs"). 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 the tenants' contractual obligations to reimburse the Company for their portion of 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.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

March 31, 2023

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

(in thousands)		Three months ended March 31,
		2023				2022
Operating lease income
Fixed and in-substance fixed lease income		$	219,641				207,502
Variable lease income			80,780				72,026
Other lease related income, net:
Above/below market rent and tenant rent inducement amortization, net			5,865				5,689
Uncollectible straight-line rent			578				2,282
Uncollectible amounts billable in lease income			1,937				6,146
Total lease income		$	308,801				293,645

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 in which collectibility is considered probable. At lease commencement, the Company generally expects that collectibility of substantially all payments due under the lease is probable due to the Company's credit checks on tenants and other credit worthiness 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 straight-line rent receivables are reversed in the period in which the Lease income is determined not to be probable of collection. Should collectibility of Lease income become probable again, through evaluation of qualitative and quantitative measures on a tenant by tenant basis, accrual basis accounting resumes and all commencement-to-date straight-line rent is recognized in that period. In addition to the lease-specific collectibility assessment performed under ASC Topic 842, the Company may also recognize 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, net of amounts considered uncollectible, in the accompanying Consolidated Balance Sheets:

(in thousands)		March 31, 2023				December 31, 2022
Tenant receivables		$	21,546				31,486
Straight-line rent receivables			130,811				128,214
Other receivables (1)			29,222				29,163
Total tenant and other receivables		$	181,579				188,863

(1)

Other receivables include construction receivables, insurance receivables, and amounts due from real estate partnerships for Management, transaction, and other fee income.

8.	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 approximate their fair values, except for the following:

		March 31, 2023								December 31, 2022
(in thousands)		Carrying Amount				Fair Value				Carrying Amount				Fair Value
Financial liabilities:
Notes payable		$	3,711,784				3,409,128				3,726,754				3,333,378
Unsecured credit facilities		$	30,000				30,000				—				—

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 March 31, 2023, and December 31, 2022, respectively. These fair value measurements maximize the use of observable inputs which are classified within Level 2 of the fair value hierarchy. 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.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

March 31, 2023

The Company develops its judgments based on the best information available at the measurement date, including expected cash flows, appropriate 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 include unrealized gains of $1.6 million and unrealized losses of $3.0 million during the three months ended March 31, 2023 and 2022, respectively.

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 either recent trade prices for the identical debt instrument or comparable instruments by issuers of similar industry sector, issuer rating, and size, 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.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

March 31, 2023

The following tables present 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 March 31, 2023
					Quoted Prices in Active Markets for Identical Assets				Significant Other Observable Inputs				Significant Unobservable Inputs
(in thousands)	Balance				(Level 1)				(Level 2)				(Level 3)
Assets:
Securities	$	38,788				38,788				—				—
Available-for-sale debt securities		15,179				—				15,179				—
Interest rate derivatives		4,907				—				4,907				—
Total	$	58,874				38,788				20,086				—
Liabilities:
Interest rate derivatives	$	(370	)			—				(370	)			—

	Fair Value Measurements as of December 31, 2022
					Quoted Prices in Active Markets for Identical Assets				Significant Other Observable Inputs				Significant Unobservable Inputs
(in thousands)	Balance				(Level 1)				(Level 2)				(Level 3)
Assets:
Securities	$	40,089				40,089				—				—
Available-for-sale debt securities		14,492				—				14,492				—
Interest rate derivatives		6,575				—				6,575				—
Total	$	61,156				40,089				21,067				—

9.	Equity and Capital

Common Stock of the Parent Company

Dividends Declared

On May 2, 2023, our Board of Directors declared a common stock dividend of $0.65 per share, payable on July 6, 2023, to shareholders of record as of June 14, 2023.

At the Market ("ATM") Program

Under the Parent Company's ATM equity offering program, the Parent Company could have sold up to $350.4 million of common stock available for issuance. No sales occurred during the three months ended March 31, 2023, and the program expired on March 12, 2023.

Share Repurchase Program

The Company has a common share repurchase program under which it may purchase, from time to time, up to a maximum of $250 million of its outstanding common stock through open market purchases, and/or in privately negotiated transactions (referred to as the "Repurchase Program"). The timing and price of share repurchases, if any will be dependent upon market conditions and other factors. The shares repurchased, if not retired, would be treated as treasury shares. The authorization for this repurchase program will expire on February 7, 2025, unless modified or earlier terminated by the Board.

During the three months ended March 31, 2023, the Company executed multiple trades to repurchase 349,519 common shares under the Repurchase Program for a total of $20.0 million at a weighted average price of $57.22 per share. All repurchased shares were retired on the respective settlement dates. At March 31, 2023, $230.0 million remained available under the Repurchase Program.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

March 31, 2023

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 shares issued or repurchased, as described above.

10.	Stock-Based Compensation

During the three months ended March 31, 2023, the Company granted 282,100 shares of restricted stock with a weighted-average grant-date fair value of $68.87 per share. The Company records stock-based compensation expense within General and administrative expenses in the accompanying Consolidated Statements of Operations, and recognizes forfeitures as they occur.

11.	Earnings per Share and Unit

Parent Company Earnings per Share

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

		Three months ended March 31,
(in thousands, except per share data)		2023				2022
Numerator:
Income attributable to common shareholders - basic		$	97,281				195,228
Income attributable to common shareholders - diluted		$	97,281				195,228
Denominator:
Weighted average common shares outstanding for basic EPS			171,212				171,312
Weighted average common shares outstanding for diluted EPS (1)			171,494				171,671
Income per common share – basic		$	0.57				1.14
Income per common share – diluted		$	0.57				1.14

(1)

Includes the dilutive impact of unvested restricted stock.

Income attributable to noncontrolling interests of the Operating Partnership has been excluded from the numerator and EOP 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 EOP units outstanding were 741,433 and 760,046 for the three months ended March 31, 2023 and 2022, respectively.

Operating Partnership Earnings per Unit

The following summarizes the calculation of basic and diluted earnings per unit ("EPU"):

		Three months ended March 31,
(in thousands, except per share data)		2023				2022
Numerator:
Income attributable to common unit holders - basic		$	97,701				196,091
Income attributable to common unit holders - diluted		$	97,701				196,091
Denominator:
Weighted average common units outstanding for basic EPU			171,953				172,072
Weighted average common units outstanding for diluted EPU (1)			172,235				172,431
Income per common unit – basic		$	0.57				1.14
Income per common unit – diluted		$	0.57				1.14

(1)

Includes the dilutive impact of unvested restricted stock.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

March 31, 2023

12.	Commitments and Contingencies

Litigation

The Company is involved in litigation on a number of matters, and is subject to other disputes, in each case that arise in the ordinary course of business. While the outcome of any particular lawsuit or dispute cannot be predicted with certainty, in the opinion of management, the Company's currently pending litigation and disputes are not 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. With respect to impact on the Company, these pertain primarily to chemicals historically used by certain current and former dry cleaning tenants, the existence of asbestos in older shopping centers, older underground petroleum storage tanks and other historic land uses. 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 its shopping centers have revealed all potential environmental contaminants; that its estimate of liabilities will not change as more information becomes available; that any previous owner, occupant or tenant did not create any material environmental condition not known to the Company; 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; and that changes in applicable environmental laws and regulations or their interpretation will not result in additional environmental liability to the Company.

Letters of Credit

The Company has the right to issue letters of credit under the Line up to an aggregate 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 subsidiary and to facilitate the construction of development projects. As of March 31, 2023 and December 31, 2022, the Company had $9.4 million in letters of credit outstanding.