Cover and table of contents

127K characters. Original on sec.gov · Markdown

Cover and table of contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-12298 (Regency Centers Corporation)

Commission File Number 0-24763 (Regency Centers, L.P.)

REGENCY CENTERS CORPORATION

REGENCY CENTERS, L.P.

(Exact name of registrant as specified in its charter)

florida (REGENCY CENTERS CORPORATION)img39176444_0.jpg59-3191743
Delaware (REGENCY CENTERS, L.P)59-3429602
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
One Independent Drive**,** Suite 114 Jacksonville**,** Florida 32202(904) 598-7000
(Address of principal executive offices) (zip code)(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Regency Centers Corporation

Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $0.01 par valueREGThe Nasdaq Stock Market LLC
6.250% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per shareREGCPThe Nasdaq Stock Market LLC
5.875% Series B Cumulative Redeemable Preferred Stock, par value $0.01 per shareREGCOThe Nasdaq Stock Market LLC

Regency Centers, L.P.

Title of each classTrading SymbolName of each exchange on which registered
NoneN/AN/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Regency Centers Corporation Yes ☒ No ☐ Regency Centers, L.P. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Regency Centers Corporation Yes ☒ No ☐ Regency Centers, L.P. Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Regency Centers Corporation:

Large accelerated filer☒Accelerated filer☐Emerging growth company☐
Non-accelerated filer☐Smaller reporting company☐

Regency Centers, L.P.:

Large accelerated filer☐Accelerated filer☐Emerging growth company☐
Non-accelerated filer☒Smaller reporting company☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Regency Centers Corporation Yes ☐ No ☐ Regency Centers, L.P. Yes ☐ No ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Regency Centers Corporation Yes ☐ No ☒ Regency Centers, L.P. Yes ☐ No ☒

The number of shares outstanding of Regency Centers Corporation's common stock was 181,496,694 as of July 31, 2024.

EXPLANATORY NOTE

This Quarterly Report on Form 10-Q (this "Report") combines the quarterly reports on Form 10-Q for the quarter ended June 30, 2024, of Regency Centers Corporation and Regency Centers, L.P. Unless stated otherwise or the context otherwise requires, references to "Regency Centers Corporation" or the "Parent Company" mean Regency Centers Corporation and its controlled subsidiaries and references to "Regency Centers, L.P." or the "Operating Partnership" mean Regency Centers, L.P. and its controlled subsidiaries. The terms "the Company," "Regency Centers," "Regency," "we," "our," and "us" as used in this Report mean the Parent Company and the Operating Partnership, collectively.

The Parent Company is a real estate investment trust ("REIT") and the general partner of the Operating Partnership. As the sole general partner of the Operating Partnership, the Parent Company has exclusive control of the Operating Partnership's day-to-day management. The Operating Partnership's capital includes general and limited common partnership units ("Common Units"). As of June 30, 2024, the Parent Company owned approximately 99.4% of the Common Units in the Operating Partnership. The remaining Common Units, which are all limited Common Units, are owned by third party investors. In addition to the Common Units, the Operating Partnership has also issued two series of preferred units: the 6.250% Series A Cumulative Redeemable Preferred Units (the “Series A Preferred Units”) and the 5.875% Series B Cumulative Redeemable Preferred Units (the “Series B Preferred Units”). The Parent Company currently owns all of the Series A Preferred Units and Series B Preferred Units. The Series A Preferred Units and Series B Preferred Units are sometimes referred to collectively as the “Preferred Units."

The Company believes combining the quarterly reports on Form 10-Q of the Parent Company and the Operating Partnership into this single report provides the following benefits:

Enhances investors' understanding of the Parent Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;

Eliminates duplicative disclosure and provides a more streamlined and readable presentation; and

Creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

Management operates the Parent Company and the Operating Partnership as one business. The management of the Parent Company consists of the same individuals as the management of the Operating Partnership. These individuals are officers of the Parent Company, and officers and employees of the Operating Partnership.

The Company believes it is important to understand the key differences between the Parent Company and the Operating Partnership in the context of how the Parent Company and the Operating Partnership operate as a consolidated company. The Parent Company is a REIT, whose only material asset is its ownership of Common and Preferred Units of the Operating Partnership. As a result, the Parent Company does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public equity from time to time and guaranteeing certain debt of the Operating Partnership. Except for $200 million of unsecured private placement debt, the Parent Company does not hold any indebtedness, but guarantees all of the unsecured debt of the Operating Partnership. The Operating Partnership, directly or indirectly, is also the co-issuer and guarantor of the $200 million Parent Company’s unsecured private placement debt referenced above. The Operating Partnership holds all the assets of the Company and ownership of the Company's subsidiaries and equity interests in its joint ventures. Except for net proceeds from public equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for Common Units or Preferred Units, the Operating Partnership generates all other capital required by the Company's business. These sources include the Operating Partnership's operations, its direct or indirect incurrence of indebtedness, and the issuance of Common Units and Preferred Units.

Shareholders' equity, partners' capital, and noncontrolling interests are the main areas of difference between the Consolidated Financial Statements of the Parent Company and those of the Operating Partnership. The Operating Partnership's capital includes the Common Units and the Preferred Units. The limited partners' Common Units in the Operating Partnership owned by third parties are accounted for in partners' capital in the Operating Partnership's financial statements and outside of shareholders' equity in noncontrolling interests in the Parent Company's financial statements. The Preferred Units owned by the Parent Company are eliminated in consolidation in the accompanying consolidated financial statements of the Parent Company and are classified as preferred units of the general partner in the accompanying consolidated financial statements of the Operating Partnership.

In order to highlight the differences between the Parent Company and the Operating Partnership, there are sections in this Report that separately discuss the Parent Company and the Operating Partnership, including separate financial statements, controls and procedures sections, and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure for the Parent Company and the Operating Partnership, this Report refers to actions or holdings as being actions or holdings of the Company.

As general partner with control of the Operating Partnership, the Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have assets other than its investment in the Operating Partnership. Therefore, while shareholders' equity and partners' capital differ as discussed above, the assets and liabilities of the Parent Company and the Operating Partnership are the same on their respective financial statements.

TABLE OF CONTENTS

Form 10-Q Report Page
PART I - FINANCIAL INFORMATION
Item 1.Financial Statements (Unaudited)
Regency Centers Corporation:
Consolidated Balance Sheets as of June 30, 2024 and December 31, 20231
Consolidated Statements of Operations for the periods ended June 30, 2024 and 20232
Consolidated Statements of Comprehensive Income for the periods ended June 30, 2024 and 20233
Consolidated Statements of Equity for the periods ended June 30, 2024 and 20234
Consolidated Statements of Cash Flows for the periods ended June 30, 2024 and 20236
Regency Centers, L.P.:
Consolidated Balance Sheets as of June 30, 2024 and December 31, 20238
Consolidated Statements of Operations for the periods ended June 30, 2024 and 20239
Consolidated Statements of Comprehensive Income for the periods ended June 30, 2024 and 202310
Consolidated Statements of Capital for the periods ended June 30, 2024 and 202311
Consolidated Statements of Cash Flows for the periods ended June 30, 2024 and 202313
Notes to Consolidated Financial Statements15
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations27
Item 3.Quantitative and Qualitative Disclosures about Market Risk46
Item 4.Controls and Procedures47
PART II - OTHER INFORMATION
Item 1.Legal Proceedings48
Item 1A.Risk Factors48
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds48
Item 3.Defaults Upon Senior Securities48
Item 4.Mine Safety Disclosures48
Item 5.Other Information48
Item 6.Exhibits49
SIGNATURES50

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

REGENCY CENTERS CORPORATION

Consolidated Balance Sheets

June 30, 2024 and December 31, 2023

(in thousands, except share data)

20242023
Assets(unaudited)
Net real estate investments:
Real estate assets, at cost$13,532,04613,454,391
Less: accumulated depreciation2,822,2722,691,386
Real estate assets, net10,709,77410,763,005
Investments in sales-type lease, net15,8268,705
Investments in real estate partnerships378,091370,605
Net real estate investments11,103,69111,142,315
Properties held for sale, net—18,878
Cash, cash equivalents, and restricted cash, including $6,109 and $6,383 of restricted cash at June 30, 2024 and December 31, 2023, respectively79,92391,354
Tenant and other receivables, net236,999206,162
Deferred leasing costs, less accumulated amortization of $126,867 and $124,107 at June 30, 2024 and December 31, 2023, respectively77,83673,398
Acquired lease intangible assets, less accumulated amortization of $374,411 and $364,413 at June 30, 2024 and December 31, 2023, respectively256,639283,375
Right of use assets, net323,015328,002
Other assets306,077283,429
Total assets$12,384,18012,426,913
Liabilities and Equity
Liabilities:
Notes payable, net$4,055,3904,001,949
Unsecured credit facility310,000152,000
Accounts payable and other liabilities357,232358,612
Acquired lease intangible liabilities, less accumulated amortization of $208,900 and $211,067 at June 30, 2024 and December 31, 2023, respectively380,505398,302
Lease liabilities243,318246,063
Tenants' security, escrow deposits and prepaid rent74,56578,052
Total liabilities5,421,0105,234,978
Commitments and contingencies——
Equity:
Shareholders' equity:
Preferred stock $0.01 par value per share, 30,000,000 shares authorized; 9,000,000 shares issued and outstanding, in the aggregate, in Series A and Series B at June 30, 2024 and December 31, 2023 with liquidation preference of $25 per share225,000225,000
Common stock $0.01 par value per share, 220,000,000 shares authorized; 181,493,494 and 184,581,070 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively1,8151,846
Treasury stock at cost, 468,068 and 448,140 shares held at June 30, 2024 and December 31, 2023, respectively(27,234)(25,488)
Additional paid-in-capital8,502,7538,704,240
Accumulated other comprehensive income (loss)5,135(1,308)
Distributions in excess of net income(1,911,741)(1,871,603)
Total shareholders' equity6,795,7287,032,687
Noncontrolling interests:
Exchangeable operating partnership units, aggregate redemption value of $68,390 and $74,199 at June 30, 2024 and December 31, 2023, respectively40,73842,195
Limited partners' interests in consolidated partnerships126,704117,053
Total noncontrolling interests167,442159,248
Total equity6,963,1707,191,935
Total liabilities and equity$12,384,18012,426,913

The accompanying notes are an integral part of the financial statements.

REGENCY CENTERS CORPORATION

Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

Three months ended June 30,Six months ended June 30,
2024202320242023
Revenues:
Lease income$347,845304,458$700,951613,259
Other property income2,6702,6837,0205,821
Management, transaction, and other fees6,7357,10613,13113,144
Total revenues357,250314,247721,102632,224
Operating expenses:
Depreciation and amortization100,96883,161198,553165,868
Property operating expense59,49154,394122,765105,416
Real estate taxes45,47838,50989,78576,986
General and administrative24,23825,06550,37050,345
Other operating expenses3,0661,6825,7091,185
Total operating expenses233,241202,811467,182399,800
Other expense, net:
Interest expense, net43,17836,95686,04673,349
Gain on sale of real estate, net of tax(11,081)(81)(22,484)(331)
Loss on early extinguishment of debt——180—
Net investment income(703)(1,742)(3,134)(3,469)
Total other expense, net31,39435,13360,60869,549
Income before equity in income of investments in real estate partnerships92,61576,303193,312162,875
Equity in income of investments in real estate partnerships12,31411,86924,27523,785
Net income104,92988,172217,587186,660
Noncontrolling interests:
Exchangeable operating partnership units(601)(550)(1,243)(970)
Limited partners' interests in consolidated partnerships(1,660)(840)(3,902)(1,627)
Net income attributable to noncontrolling interests(2,261)(1,390)(5,145)(2,597)
Net income attributable to the Company102,66886,782212,442184,063
Preferred stock dividends(3,413)—(6,826)—
Net income attributable to common shareholders$99,25586,782$205,616184,063
Net income attributable to common shareholders:
Per common share - basic$0.540.51$1.121.08
Per common share - diluted$0.540.51$1.121.07

The accompanying notes are an integral part of the financial statements.

REGENCY CENTERS CORPORATION

Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)

Three months ended June 30,Six months ended June 30,
2024202320242023
Net income$104,92988,172$217,587186,660
Other comprehensive income (loss):
Effective portion of change in fair value of derivative instruments:
Effective portion of change in fair value of derivative instruments3,1245,45711,7172,721
Reclassification adjustment of derivative instruments included in net income(2,440)(1,649)(4,807)(3,141)
Unrealized (loss) gain on available-for-sale debt securities(1)(115)(120)77
Other comprehensive income (loss)6833,6936,790(343)
Comprehensive income105,61291,865224,377186,317
Less: comprehensive income attributable to noncontrolling interests:
Net income attributable to noncontrolling interests2,2611,3905,1452,597
Other comprehensive income (loss) attributable to noncontrolling interests13284347(119)
Comprehensive income attributable to noncontrolling interests2,2741,6745,4922,478
Comprehensive income attributable to the Company$103,33890,191$218,885183,839

The accompanying notes are an integral part of the financial statements.

REGENCY CENTERS CORPORATION

Consolidated Statements of Equity

For the three months ended June 30, 2024 and 2023

(in thousands, except per share data)

(unaudited)

Noncontrolling Interests
Preferred StockCommon StockTreasury StockAdditional Paid In CapitalAccumulated Other Comprehensive IncomeDistributions in Excess of Net IncomeTotal Shareholders' EquityExchangeable Operating Partnership UnitsLimited Partners' Interest in Consolidated PartnershipsTotal Noncontrolling InterestsTotal Equity
Balance at March 31, 2023$—1,710(25,699)7,856,4263,927(1,779,043)6,057,32134,41147,70382,1146,139,435
Net income—————86,78286,7825508401,39088,172
Other comprehensive income
Other comprehensive income before reclassification————4,886—4,886324244565,342
Amounts reclassified from accumulated other comprehensive income————(1,477)—(1,477)(10)(162)(172)(1,649)
Deferred compensation plan, net——1,023(1,023)———————
Restricted stock issued, net of amortization———4,105——4,105———4,105
Common stock repurchased for taxes withheld for stock based compensation, net———(406)——(406)———(406)
Common stock issued under dividend reinvestment plan———157——157———157
Common stock issued, net of issuance costs———(10)——(10)———(10)
Contributions from partners————————1,4281,4281,428
Issuance of exchangeable operating partnership units——————20,000—20,00020,000
Distributions to partners————————(941)(941)(941)
Cash dividends declared:
Common stock/unit ($0.650 per share)—————(111,145)(111,145)(702)—(702)(111,847)
Balance at June 30, 2023$—1,710(24,676)7,859,2497,336(1,803,406)6,040,21354,28149,292103,5736,143,786
Balance at March 31, 2024$225,0001,848(26,321)8,703,7564,465(1,889,037)7,019,71141,606116,702158,3087,178,019
Net income—————102,668102,6686011,6602,261104,929
Other comprehensive income
Other comprehensive income before reclassification————2,955—2,955181501683,123
Amounts reclassified from accumulated other comprehensive income————(2,285)—(2,285)(14)(141)(155)(2,440)
Adjustment for noncontrolling interests———(8,694)——(8,694)—8,6948,694—
Deferred compensation plan, net——(913)913———————
Restricted stock issued, net of amortization———6,561——6,561———6,561
Common stock repurchased for taxes withheld for stock based compensation, net———84——84———84
Common stock repurchased and retired—(33)—(200,033)——(200,066)———(200,066)
Common stock issued under dividend reinvestment plan———166——166———166
Contributions from partners————————1,5291,5291,529
Distributions to partners————————(1,890)(1,890)(1,890)
Cash dividends declared:
Preferred stock/unit—————(3,413)(3,413)———(3,413)
Common stock/unit ($0.670 per share)—————(121,959)(121,959)(1,473)—(1,473)(123,432)
Balance at June 30, 2024$225,0001,815(27,234)8,502,7535,135(1,911,741)6,795,72840,738126,704167,4426,963,170

The accompanying notes are an integral part of the financial statements.

REGENCY CENTERS CORPORATION

Consolidated Statements of Equity

For the six months ended June 30, 2024 and 2023

(in thousands, except per share data)

(unaudited)

Noncontrolling Interests
Preferred StockCommon StockTreasury StockAdditional Paid In CapitalAccumulated Other Comprehensive Income (Loss)Distributions in Excess of Net IncomeTotal Shareholders' EquityExchangeable Operating Partnership UnitsLimited Partners' Interest in Consolidated PartnershipsTotal Noncontrolling InterestsTotal Equity
Balance at December 31, 2022$—1,711(24,461)7,877,1527,560(1,764,977)6,096,98534,48946,56581,0546,178,039
Net income—————184,063184,0639701,6272,597186,660
Other comprehensive income
Other comprehensive income before reclassification————2,570—2,570212072282,798
Amounts reclassified from accumulated other comprehensive income————(2,794)—(2,794)(15)(332)(347)(3,141)
Deferred compensation plan, net——(215)215———————
Restricted stock issued, net of amortization—2—8,922——8,924———8,924
Common stock repurchased for taxes withheld for stock based compensation, net———(7,326)——(7,326)———(7,326)
Common stock repurchased and retired—(3)—(20,003)——(20,006)———(20,006)
Common stock issued under dividend reinvestment plan———299——299———299
Common stock issued, net of issuance costs———(10)——(10)———(10)
Contributions from partners————————3,2053,2053,205
Issuance of exchangeable operating partnership units——————20,000—20,00020,000
Distributions to partners————————(1,980)(1,980)(1,980)
Cash dividends declared:
Common stock/unit ($1.300 per share)—————(222,492)(222,492)(1,184)—(1,184)(223,676)
Balance at June 30, 2023$—1,710(24,676)7,859,2497,336(1,803,406)6,040,21354,28149,292103,5736,143,786
Balance at December 31, 2023$225,000$1,846(25,488)8,704,240(1,308)(1,871,603)7,032,68742,195117,053159,2487,191,935
Net income—————212,442212,4421,2433,9025,145217,587
Other comprehensive income
Other comprehensive income before reclassification————10,942—10,9426658965511,597
Amounts reclassified from accumulated other comprehensive income————(4,499)—(4,499)(27)(281)(308)(4,807)
Adjustment for noncontrolling interests———(8,694)——(8,694)—8,6948,694—
Deferred compensation plan, net——(1,746)1,746———————
Restricted stock issued, net of amortization—2—13,135——13,137———13,137
Common stock repurchased for taxes withheld for stock based compensation, net———(8,494)——(8,494)———(8,494)
Common stock repurchased and retired—(33)—(200,033)——(200,066)———(200,066)
Common stock issued under dividend reinvestment plan———324——324———324
Common stock issued for exchangeable operating partnership units———529——529(529)—(529)—
Contributions from partners————————3,0013,0013,001
Distributions to partners————————(6,254)(6,254)(6,254)
Cash dividends declared:
Preferred stock—————(6,826)(6,826)———(6,826)
Common stock ($1.340 per share/unit)—————(245,754)(245,754)(2,210)—(2,210)(247,964)
Balance at June 30, 2024$225,0001,815(27,234)8,502,7535,135(1,911,741)6,795,72840,738126,704167,4426,963,170

The accompanying notes are an integral part of the financial statements.

REGENCY CENTERS CORPORATION

Consolidated Statements of Cash Flows

For the six months ended June 30, 2024 and 2023

(in thousands)

(unaudited)

20242023
Cash flows from operating activities:
Net income$217,587186,660
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization198,553165,868
Amortization of deferred loan costs and debt premiums6,2322,983
Accretion of above and below market lease intangibles, net(12,193)(13,842)
Stock-based compensation, net of capitalization12,5398,854
Equity in income of investments in real estate partnerships(24,275)(23,785)
Gain on sale of real estate, net of tax(22,484)(331)
Loss on early extinguishment of debt180—
Distribution of earnings from investments in real estate partnerships32,44031,869
Deferred compensation expense2,6952,940
Realized and unrealized gain on investments(3,013)(3,376)
Changes in assets and liabilities:
Tenant and other receivables(3,565)(14,549)
Deferred leasing costs(6,311)(3,591)
Other assets(13,793)(17,951)
Accounts payable and other liabilities(9,776)6,091
Tenants' security, escrow deposits and prepaid rent(3,602)6,837
Net cash provided by operating activities371,214334,677
Cash flows from investing activities:
Acquisition of operating real estate(45,208)—
Real estate development and capital improvements(141,775)(100,114)
Proceeds from sale of real estate92,1593,745
Proceeds from property insurance casualty claims4,638—
Issuance of notes receivable(32,651)(4,000)
Collection of notes receivable3,004—
Investments in real estate partnerships(8,582)(3,109)
Return of capital from investments in real estate partnerships10,0383,644
Dividends on investment securities263420
Acquisition of investment securities(95,519)(2,748)
Proceeds from sale of investment securities99,49010,751
Net cash used in investing activities(114,143)(91,411)
Cash flows from financing activities:
Net proceeds from common stock issuance—(10)
Repurchase of common shares in conjunction with equity award plans(8,776)(7,621)
Common shares repurchased through share repurchase program(200,066)(20,006)
Proceeds from sale of treasury stock21028
Contributions from non-controlling interests3,0011,225
Distributions to and redemptions of non-controlling interests(6,254)—
Distributions to exchangeable operating partnership unit holders(1,479)(964)
Dividends paid to common shareholders(247,138)(222,275)
Dividends paid to preferred shareholders(6,825)—
Repayment of fixed rate unsecured notes(250,000)—
Proceeds from issuance of fixed rate unsecured notes, net of debt discount398,468—
Proceeds from unsecured credit facilities422,419235,000
Repayment of unsecured credit facilities(264,419)(235,000)
Proceeds from notes payable—15,500
Repayment of notes payable(88,069)(29,616)
Scheduled principal payments(6,121)(5,054)
Payment of loan costs(13,453)(141)
Net cash used in financing activities(268,502)(268,934)
Net decrease in cash and cash equivalents and restricted cash(11,431)(25,668)
Cash and cash equivalents and restricted cash at beginning of the period91,35468,776
Cash and cash equivalents and restricted cash at end of the period$79,92343,108

The accompanying notes are an integral part of the financial statements.

REGENCY CENTERS CORPORATION

Consolidated Statements of Cash Flows

For the six months ended June 30, 2024 and 2023

(in thousands)

(unaudited)

20242023
Supplemental disclosure of cash flow information:
Cash paid for interest (net of capitalized interest of $3,176 and $2,534 in 2024 and 2023, respectively)$77,40871,091
Cash paid for income taxes, net of refunds$6,405573
Supplemental disclosure of non-cash transactions:
Common and Preferred stock, and exchangeable operating partnership dividends declared but not paid$125,709111,847
Sale of leased asset in exchange for net investment in sales-type lease$2,808—
Common stock issued for partnership units exchanged$529—
Reallocation of equity upon acqusition of non-controlling interest$8,694—
Exchangeable operating partnership units issued for acquisition of real estate$—20,000
Change in accrued capital expenditures$3,0949,011
Common stock issued under dividend reinvestment plan$324299
Stock-based compensation capitalized$880366
Contributions to investments in real estate partnerships$17,984—
Common stock issued for dividend reinvestment in trust$604617
Contribution of stock awards into trust$1,6591,844
Distribution of stock held in trust$4762,245
Change in fair value of securities$12098

The accompanying notes are an integral part of the financial statements.

REGENCY CENTERS, L.P.

Consolidated Balance Sheets

June 30, 2024 and December 31, 2023

(in thousands, except unit data)

20242023
Assets(unaudited)
Net real estate investments:
Real estate assets, at cost$13,532,04613,454,391
Less: accumulated depreciation2,822,2722,691,386
Real estate assets, net10,709,77410,763,005
Investments in sales-type lease, net15,8268,705
Investments in real estate partnerships378,091370,605
Net real estate investments11,103,69111,142,315
Properties held for sale, net—18,878
Cash, cash equivalents, and restricted cash, including $6,109 and $6,383 of restricted cash at June 30, 2024 and December 31, 2023, respectively79,92391,354
Tenant and other receivables, net236,999206,162
Deferred leasing costs, less accumulated amortization of $126,867 and $124,107 at June 30, 2024 and December 31, 2023, respectively77,83673,398
Acquired lease intangible assets, less accumulated amortization of $374,411 and $364,413 at June 30, 2024 and December 31, 2023, respectively256,639283,375
Right of use assets, net323,015328,002
Other assets306,077283,429
Total assets$12,384,18012,426,913
Liabilities and Capital
Liabilities:
Notes payable, net$4,055,3904,001,949
Unsecured credit facility310,000152,000
Accounts payable and other liabilities357,232358,612
Acquired lease intangible liabilities, less accumulated amortization of $208,900 and $211,067 at June 30, 2024 and December 31, 2023, respectively380,505398,302
Lease liabilities243,318246,063
Tenants' security, escrow deposits and prepaid rent74,56578,052
Total liabilities5,421,0105,234,978
Commitments and contingencies——
Capital:
Partners' capital:
Preferred units $0.01 par value per unit, 30,000,000 units authorized; 9,000,000 units issued and outstanding, in the aggregate, in Series A and Series B at June 30, 2024 and December 31, 2023 with liquidation preference of $25 per unit225,000225,000
General partner's common units, 181,493,494 and 184,581,070 units issued and outstanding at June 30, 2024 and December 31, 2023, respectively6,565,5936,808,995
Limited partners' common units, 1,099,516 and 1,107,454 units issued and outstanding at June 30, 2024 and December 31, 2023 respectively40,73842,195
Accumulated other comprehensive income (loss)5,135(1,308)
Total partners' capital6,836,4667,074,882
Noncontrolling interest: Limited partners' interests in consolidated partnerships126,704117,053
Total capital6,963,1707,191,935
Total liabilities and capital$12,384,18012,426,913

The accompanying notes are an integral part of the financial statements.

REGENCY CENTERS, L.P.

Consolidated Statements of Operations

(in thousands, except per unit data)

(unaudited)

Three months ended June 30,Six months ended June 30,
2024202320242023
Revenues:
Lease income$347,845304,458$700,951613,259
Other property income2,6702,6837,0205,821
Management, transaction, and other fees6,7357,10613,13113,144
Total revenues357,250314,247721,102632,224
Operating expenses:
Depreciation and amortization100,96883,161198,553165,868
Property operating expense59,49154,394122,765105,416
Real estate taxes45,47838,50989,78576,986
General and administrative24,23825,06550,37050,345
Other operating expenses3,0661,6825,7091,185
Total operating expenses233,241202,811467,182399,800
Other expense, net:
Interest expense, net43,17836,95686,04673,349
Gain on sale of real estate, net of tax(11,081)(81)(22,484)(331)
Loss on early extinguishment of debt——180—
Net investment income(703)(1,742)(3,134)(3,469)
Total other expense, net31,39435,13360,60869,549
Income before equity in income of investments in real estate partnerships92,61576,303193,312162,875
Equity in income of investments in real estate partnerships12,31411,86924,27523,785
Net income104,92988,172217,587186,660
Limited partners' interests in consolidated partnerships(1,660)(840)(3,902)(1,627)
Net income attributable to the Partnership103,26987,332213,685185,033
Preferred unit distributions(3,413)—(6,826)—
Net income attributable to common unit holders$99,85687,332$206,859185,033
Net income attributable to common unit holders:
Per common unit - basic$0.540.51$1.121.08
Per common unit - diluted$0.540.51$1.121.07

The accompanying notes are an integral part of the financial statements.

REGENCY CENTERS, L.P.

Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)

Three months ended June 30,Six months ended June 30,
2024202320242023
Net income$104,92988,172$217,587186,660
Other comprehensive income (loss):
Effective portion of change in fair value of derivative instruments:
Effective portion of change in fair value of derivative instruments3,1245,45711,7172,721
Reclassification adjustment of derivative instruments included in net income(2,440)(1,649)(4,807)(3,141)
Unrealized (loss) gain on available-for-sale debt securities(1)(115)(120)77
Other comprehensive income (loss)6833,6936,790(343)
Comprehensive income105,61291,865224,377186,317
Less: comprehensive income attributable to noncontrolling interests:
Net income attributable to noncontrolling interests1,6608403,9021,627
Other comprehensive income (loss) attributable to noncontrolling interests9262308(125)
Comprehensive income attributable to noncontrolling interests1,6691,1024,2101,502
Comprehensive income attributable to the Partnership$103,94390,763$220,167184,815

The accompanying notes are an integral part of the financial statements.

REGENCY C****ENTERS, L.P.

Consolidated Statements of Capital

For the three months ended June 30, 2024 and 2023

(in thousands)

(unaudited)

General Partner Preferred and Common UnitsLimited PartnersAccumulated Other Comprehensive IncomeTotal Partners’ CapitalNoncontrolling Interests in Limited Partners’ Interest in Consolidated PartnershipsTotal Capital
Balance at March 31, 2023$6,053,39434,4113,9276,091,73247,7036,139,435
Net income86,782550—87,33284088,172
Other comprehensive income
Other comprehensive income before reclassification—324,8864,9184245,342
Amounts reclassified from accumulated other comprehensive loss—(10)(1,477)(1,487)(162)(1,649)
Contributions from partners————1,4281,428
Issuance of exchangeable operating partnership units—20,000—20,000—20,000
Distributions to partners(111,145)(702)—(111,847)(941)(112,788)
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization4,105——4,105—4,105
Common units issued as a result of common stock issued by Parent Company, net of issuance costs(10)——(10)—(10)
Common units repurchased as a result of common stock repurchased by Parent Company, net of issuances(249)——(249)—(249)
Balance at June 30, 2023$6,032,87754,2817,3366,094,49449,2926,143,786
Balance at March 31, 2024$7,015,24641,6064,4657,061,317116,7027,178,019
Net income102,668601—103,2691,660104,929
Other comprehensive income
Other comprehensive income before reclassification—182,9552,9731503,123
Amounts reclassified from accumulated other comprehensive loss—(14)(2,285)(2,299)(141)(2,440)
Adjustment for noncontrolling interests(8,694)——(8,694)8,694—
Contributions from partners————1,5291,529
Distributions to partners(121,959)(1,473)—(123,432)(1,890)(125,322)
Preferred unit distributions(3,413)——(3,413)—(3,413)
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization6,561——6,561—6,561
Preferred units issued as a result of preferred stock issued by Parent Company, net of issuance costs——————
Common units repurchased and retired as a result of common stock repurchased and retired by Parent Company(200,066)——(200,066)—(200,066)
Common units issued as a result of common stock issued by Parent Company, net of issuance costs——————
Common units repurchased as a result of common stock repurchased by Parent Company, net of issuances250——250—250
Common units exchanged for common stock of Parent Company——————
Balance at June 30, 2024$6,790,59340,7385,1356,836,466126,7046,963,170

The accompanying notes are an integral part of the financial statements.

REGENCY CENTERS, L.P.

Consolidated Statements of Capital

For the six months ended June 30, 2024 and 2023

(in thousands)

(unaudited)

General Partner Preferred and Common UnitsLimited PartnersAccumulated Other Comprehensive Income (Loss)Total Partners' CapitalNoncontrolling Interests in Limited Partners' Interest in Consolidated PartnershipsTotal Capital
Balance at December 31, 2022$6,089,42534,4897,5606,131,47446,5656,178,039
Net income184,063970—185,0331,627186,660
Other comprehensive income
Other comprehensive income before reclassification—212,5702,5912072,798
Amounts reclassified from accumulated other comprehensive income—(15)(2,794)(2,809)(332)(3,141)
Contributions from partners————3,2053,205
Issuance of exchangeable operating partnership units—20,000—20,000—20,000
Distributions to partners(222,492)(1,184)—(223,676)(1,980)(225,656)
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization8,924——8,924—8,924
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 issued as a result of common stock issued by Parent Company, net of issuance costs(10)——(10)—(10)
Common units repurchased as a result of common stock repurchased by Parent Company, net of issuances(7,027)——(7,027)—(7,027)
Balance at June 30, 2023$6,032,87754,2817,3366,094,49449,2926,143,786
Balance at December 31, 2023$7,033,99542,195(1,308)7,074,882117,0537,191,935
Net income212,4421,243—213,6853,902217,587
Other comprehensive income
Other comprehensive income before reclassification—6610,94211,00858911,597
Amounts reclassified from accumulated other comprehensive income—(27)(4,499)(4,526)(281)(4,807)
Adjustment for noncontrolling interests(8,694)——(8,694)8,694—
Contributions from partners————3,0013,001
Distributions to partners(245,754)(2,210)—(247,964)(6,254)(254,218)
Preferred unit distributions(6,826)——(6,826)—(6,826)
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization13,137——13,137—13,137
Common units repurchased and retired as a result of common stock repurchased and retired by Parent Company(200,066)——(200,066)—(200,066)
Common units repurchased as a result of common stock repurchased by Parent Company, net of issuances(8,170)——(8,170)—(8,170)
Exchangeable operating partnership units converted to common stock of Parent Company529(529)————
Balance at June 30, 2024$6,790,59340,7385,1356,836,466126,7046,963,170

The accompanying notes are an integral part of the financial statements.

REGENCY CENTERS, L.P.

Consolidated Statem****ents of Cash Flows

For the six months ended June 30, 2024 and 2023

(in thousands)

(unaudited)

20242023
Cash flows from operating activities:
Net income$217,587186,660
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization198,553165,868
Amortization of deferred loan costs and debt premiums6,2322,983
(Accretion) and amortization of above and below market lease intangibles, net(12,193)(13,842)
Stock-based compensation, net of capitalization12,5398,854
Equity in income of investments in real estate partnerships(24,275)(23,785)
Gain on sale of real estate, net of tax(22,484)(331)
Loss on early extinguishment of debt180—
Distribution of earnings from investments in real estate partnerships32,44031,869
Deferred compensation expense2,6952,940
Realized and unrealized gain on investments(3,013)(3,376)
Changes in assets and liabilities:
Tenant and other receivables(3,565)(14,549)
Deferred leasing costs(6,311)(3,591)
Other assets(13,793)(17,951)
Accounts payable and other liabilities(9,776)6,091
Tenants' security, escrow deposits and prepaid rent(3,602)6,837
Net cash provided by operating activities371,214334,677
Cash flows from investing activities:
Acquisition of operating real estate(45,208)—
Real estate development and capital improvements(141,775)(100,114)
Proceeds from sale of real estate92,1593,745
Proceeds from property insurance casualty claims4,638—
Issuance of notes receivable(32,651)(4,000)
Collection of notes receivable3,004—
Investments in real estate partnerships(8,582)(3,109)
Return of capital from investments in real estate partnerships10,0383,644
Dividends on investment securities263420
Acquisition of investment securities(95,519)(2,748)
Proceeds from sale of investment securities99,49010,751
Net cash used in investing activities(114,143)(91,411)
Cash flows from financing activities:
Net proceeds from common stock issuance—(10)
Repurchase of common shares in conjunction with equity award plans(8,776)(7,621)
Common units repurchased through share repurchase program(200,066)(20,006)
Proceeds from sale of treasury stock21028
Contributions from non-controlling interests3,0011,225
Distributions to and redemptions of non-controlling interests(6,254)—
Distributions to partners(248,617)(223,239)
Dividends paid to preferred unit holders(6,825)—
Repayment of fixed rate unsecured notes(250,000)—
Proceeds from issuance of fixed rate unsecured notes, net of debt discount398,468—
Proceeds from unsecured credit facilities422,419235,000
Repayment of unsecured credit facilities(264,419)(235,000)
Proceeds from notes payable—15,500
Repayment of notes payable(88,069)(29,616)
Scheduled principal payments(6,121)(5,054)
Payment of loan costs(13,453)(141)
Net cash used in financing activities(268,502)(268,934)
Net decrease in cash and cash equivalents and restricted cash(11,431)(25,668)
Cash and cash equivalents and restricted cash at beginning of the period91,35468,776
Cash and cash equivalents and restricted cash at end of the period$79,92343,108

The accompanying notes are an integral part of the financial statements.

REGENCY CENTERS, L.P.

Consolidated Statements of Cash Flows

For the six months ended June 30, 2024 and 2023

(in thousands)

(unaudited)

20242023
Supplemental disclosure of cash flow information:
Cash paid for interest (net of capitalized interest of $3,176 and $2,534 in 2024 and 2023, respectively)$77,40871,091
Cash paid for income taxes, net of refunds$6,405573
Supplemental disclosure of non-cash transactions:
Common and Preferred stock, and exchangeable operating partnership dividends declared but not paid$125,709111,847
Sale of leased asset in exchange for net investment in sales-type lease$2,808—
Common stock issued by Parent Company for partnership units exchanged$529—
Reallocation of equity upon acqusition of non-controlling interest$8,694—
Exchangeable operating partnership units issued for acquisition of real estate$—20,000
Change in accrued capital expenditures$3,0949,011
Common stock issued by Parent Company for dividend reinvestment plan$324299
Stock-based compensation capitalized$880366
Contributions to investments in real estate partnerships$17,984—
Contributions from limited partners in consolidated partnerships$——
Common stock issued for dividend reinvestment in trust$604617
Contribution of stock awards into trust$1,6591,844
Distribution of stock held in trust$4762,245
Change in fair value of securities$12098

The accompanying notes are an integral part of the financial statements.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

June 30, 2024

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. 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 June 30, 2024, the Parent Company, the Operating Partnership, and their controlled subsidiaries on a consolidated basis owned 380 properties and held partial interests in an additional 101 properties through unconsolidated Investments in real estate partnerships (also referred to as "joint ventures" or "investment partnerships").

Basis of Presentation

The information included in this Report should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2023, as certain disclosures in this Report that would duplicate those included in such Annual Report on Form 10-K are not included in these consolidated financial statements. 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.

Acquisition of Urstadt Biddle Properties Inc.

On August 18, 2023, the Company acquired Urstadt Biddle Properties Inc. ("UBP") which was accounted for as an asset acquisition. Under the terms of the merger agreement, each share of Urstadt Biddle common stock and Urstadt Biddle Class A common stock was converted into 0.347 of a share of common stock of the Parent Company. Additionally, each share of UBP’s 6.25% Series H Cumulative Redeemable Preferred Stock and 5.875% Series K Cumulative Redeemable Preferred Stock was converted into one share of newly issued Parent Company 6.25% Series A Cumulative Redeemable Preferred Stock (“Parent Company Series A preferred stock”) and 5.875% Series B Cumulative Redeemable Preferred Stock (“Parent Company Series B preferred stock”), respectively (collectively referred to as the “Preferred Stock”).

As a result of the acquisition, the Company acquired 74 properties representing 5.3 million square feet of GLA, including 10 properties held through real estate partnerships. See the Company's audited Annual Report on Form 10-K for the year ended December 31, 2023 for further disclosure regarding the acquisition transaction.

Risks and Uncertainties

The success of the Company's tenants in operating their businesses and their corresponding ability to pay rent continue to be influenced by current economic challenges, which may impact their cost of doing business, including but not limited to the impact of inflation, the cost and availability of labor, increasing energy prices and interest rates, and access to credit. Additionally, geopolitical and macroeconomic challenges, including the war involving Russia and Ukraine, current Middle East conflicts and wars, and the economic conflicts with China, as well as the slowing of its economy, could impact aspects of the U.S. economy and, therefore, consumer spending. The policies implemented by the U.S. government to address these and related issues, including changes by the Board of Governors of the Federal Reserve System of its benchmark federal funds rate, increases or decreases in federal government spending, and economic sanctions and tariffs, 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 macroeconomic and geopolitical 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. See Item 1A of Part I of the Company's Annual Report on Form 10-K for a more detailed discussion of the Risk Factors potentially impacting the Company's business and results of operations.

Investment Risk Concentrations

As of June 30, 2024, no single tenant comprised 10% or more of our aggregate annualized base rent ("ABR"). As of June 30, 2024, the Company had three geographic concentrations that accounted for at least 10.0% of our aggregate ABR. Real estate

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

June 30, 2024

properties located in California, Florida and the New York-Newark-Jersey City core-based statistical area accounted for 23.4%, 20.6% and 11.0% of ABR respectively. As a result, this geographic concentration of our portfolio makes it potentially more susceptible to adverse weather or economic events that impact these locations.

Consolidation

In addition to properties that are wholly-owed, the Company consolidates properties where it owns less than 100% but holds a controlling financial interest in the entity.Controlling financial interest 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 Parent Company

The Parent Company currently has a single class of common stock and two series of preferred stock outstanding.

Ownership of the Operating Partnership

The Operating Partnership's capital includes Common Units and Preferred Units. As of June 30, 2024, the Parent Company owned approximately 99.4% of the outstanding Common Units, with the remaining Common Units held by third parties ("Exchangeable operating partnership units" or "EOP units"). The Parent Company currently owns all of the Preferred Units.

Real Estate Partnerships

As of June 30, 2024, Regency held partial ownership interests in 119 properties through real estate partnerships, of which 18 are consolidated. Regency's partners include institutional investors, real estate developers and/or operators, and passive investors (the "Partners" or "Limited Partners"). These partnerships have been established to own and operate real estate properties. The Company’s involvement with these entities is through its ownership and management of the properties. The entities were deemed VIEs primarily because the unrelated investors do not have substantive kick-out rights to remove the general or managing partner by a vote of a simple majority or less, and they do not have substantive participating rights. Regency has variable interests in these entities through its equity ownership, with Regency being the primary beneficiary in certain of these real estate partnerships. 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 have a controlling financial interest, but has significant influence, Regency recognizes its equity investments in them in accordance with the equity method of accounting.

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

The carrying amounts of VIEs' assets and liabilities included in the Company's consolidated financial statements, exclusive of the Operating Partnership, are as follows:

(in thousands)June 30, 2024December 31, 2023
Assets
Real estate assets, net$276,831270,674
Cash, cash equivalents and restricted cash6,7928,201
Tenant and other receivables, net5,2323,883
Deferred costs, net2,5042,494
Acquired lease intangible assets, net7,18412,099
Right of use assets, net18,39844,377
Other assets1,791893
Total Assets$318,732342,621
Liabilities
Notes payable$32,97333,211
Accounts payable and other liabilities6,78529,919
Acquired lease intangible liabilities, net10,94621,456
Tenants' security, escrow deposits and prepaid rent1,1391,239
Lease liabilities19,28021,433
Total Liabilities$71,123107,258

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

June 30, 2024

Revenues, and Tenant 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 is primarily derived 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 June 30,Six months ended June 30,
(in thousands)Timing of satisfaction of performance obligations2024202320242023
Management, transaction, and other fees:
Property management servicesOver time$3,8953,487$7,8566,945
Asset management servicesOver time1,6201,6483,2223,277
Leasing servicesPoint in time1,0161,0961,5911,814
Other feesPoint in time2048754621,108
Total management, transaction, and other fees$6,7357,106$13,13113,144

The accounts receivable for management, transactions, and other fees, which are included within Tenant and other receivables in the accompanying Consolidated Balance Sheets, are $17.9 million and $18.5 million, as of June 30, 2024 and December 31, 2023, respectively.

Recent Accounting Pronouncements

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

StandardDescriptionEarlier of Effective Date or the Date of adoptionEffect on the financial statements or other significant matters
Recently adopted**:**
ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment DisclosuresThe amendments are aimed at enhancing the disclosures public entities provide regarding significant segment expenses so that investors can “better understand an entity’s overall performance” and assess “potential future cash flows.”January 1, 2024The standard became effective for the Company on January 1, 2024 and the required disclosures for the Company will begin with its Annual Report on Form 10-K for the fiscal year ending December 31, 2024. The adoption and implementation of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.
ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures.ASU 2023-09 requires public business entities to disclose additional information in specified categories with respect to the reconciliation of the effective tax rate to the statutory rate for federal, state, and foreign income taxes. It also requires greater detail about individual reconciling items in the rate reconciliation to the extent the impact of those items exceeds a specified threshold.January 1, 2025The Company will review the extent of new disclosures necessary prior to implementation. Other than additional disclosure, the adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

June 30, 2024

2.Real Estate Investments

The following tables detail the properties acquired for the periods set forth below:

(in thousands)Six months ended June 30, 2024
Date PurchasedProperty NameCity/StateProperty TypeRegency OwnershipPurchase Price (1)Debt Assumed, Net of Discounts (1)Intangible Assets (1)Intangible Liabilities (1)
2/23/2024The Shops at Stone BridgeCheshire, CTDevelopment100%$8,000———
5/3/2024Compo Acres North shopping centerWestport, CTOperating100%45,500—5,3602,175
Total property acquisitions$53,500—5,3602,175
(in thousands)Six months ended June 30, 2023
Date PurchasedProperty NameCity/StateProperty TypeRegency OwnershipPurchase Price (1)Debt Assumed, Net of Discounts (1)Intangible Assets (1)Intangible Liabilities (1)
5/1/2023Sienna Phase 1Houston, TXDevelopment75%$2,695———
5/18/2023SunVetHolbrook, NYDevelopment99%24,140———
Total property acquisitions$26,835———

(1)

Amounts 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 June 30,Six months ended June 30,
(in thousands, except number sold data)2024202320242023
Net proceeds from sale of real estate investments$62,126142$92,1593,065
Gain on sale of real estate, net of tax11,0818122,484331
Number of operating properties sold2—3—
Number of land parcels sold———1
Percent interest sold100%100%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)June 30, 2024December 31, 2023
Goodwill$167,062167,062
Investments50,65651,992
Prepaid and other54,34140,635
Derivative assets16,29314,213
Furniture, fixtures, and equipment, net ("FF&E")6,7116,662
Deferred financing costs, net(1)11,0142,865
Total other assets$306,077283,429

(1)

The Company incurred additional financing costs related to recasting its Line of Credit. See Note 5 — Notes Payable and Unsecured Credit Facilities for discussion regarding these transactions.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

June 30, 2024

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)Maturing ThroughWeighted Average Contractual RateWeighted Average Effective RateJune 30, 2024December 31, 2023
Notes payable:
Fixed rate mortgage loans6/1/20373.9%4.4%$358,158449,615
Variable rate mortgage loans (1)1/31/20324.2%4.2%297,200299,579
Fixed rate unsecured debt3/15/20494.0%4.2%3,400,0323,252,755
Total notes payable, net4,055,3904,001,949
Unsecured credit facilities:
$1.5 Billion Line of Credit (the "Line") (2)3/23/20286.2%6.5%310,000152,000
Total unsecured credit facilities310,000152,000
Total debt outstanding$4,365,3904,153,949

(1)

As of June 30, 2024, 98.2% of the variable rate mortgage loans are fixed through interest rate swaps.

(2)

The Company has the option to extend the maturity date by two additional six-month periods. Weighted average effective rate for the Line is calculated based on a fully drawn Line balance using the period end variable rate.

Significant financing activity during 2024 includes:

On January 8, 2024, the Company priced a public offering of $400 million of senior unsecured notes due in 2034, and the notes were issued on January 18, 2024 at 99.617% of par value with a coupon of 5.250%.

On January 18, 2024, the Company entered into a Sixth Amended and Restated Credit Agreement (the "Credit Agreement"), with the financial institutions party thereto, as lenders, and Wells Fargo Bank, National Association, as Administrative Agent. The Credit Agreement provides for an unsecured revolving credit facility in the amount of $1.50 billion for a term of four years (plus two six-month extension options) and includes an accordion feature which permits the borrower to request increases in the size of the revolving loan facility by up to an additional $1.50 billion. The interest rate on the revolving credit facility is equal to the Secured Overnight Financing Rate ("SOFR") plus a margin that is determined based on the borrower’s long-term unsecured debt ratings and ratio of indebtedness to total asset value. At the time of the closing, the effective interest rate was SOFR plus a credit spread adjustment of 10 basis points plus a margin of 72.5 basis points. The Credit Agreement also incorporates sustainability-linked adjustments to the interest rate, which provide for upward or downward adjustments to the applicable margin if the Company achieves, or fails to achieve, certain specified targets based on Scope 1 and Scope 2 emission standards as set forth in the Credit Agreement. At the time of the closing, a 1 basis point downward sustainability-linked adjustment to the interest rate was applicable. The Credit Agreement was further amended on July 8, 2024 to update the baseline metric used to calculate sustainability-linked performance targets.

On June 17, 2024, the Company paid off $250 million of unsecured public debt that had matured, utilizing a portion of the proceeds from the January 2024 public debt offering, and the Company paid off a $78.3 million fixed rate mortgage loan.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

June 30, 2024

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

(in thousands)June 30, 2024
Scheduled Principal Payments and Maturities by Year:Scheduled Principal PaymentsMortgage Loan MaturitiesUnsecured Maturities (1)Total
2024 (2)$5,05253,108—58,160
20259,67852,537250,000312,215
20269,920147,850200,000357,770
20277,013222,558525,000754,571
20285,31236,570610,000651,882
Beyond 5 Years7,956106,0892,150,0002,264,045
Unamortized debt premium/(discount) and issuance costs—(8,285)(24,968)(33,253)
Total$44,931610,4273,710,0324,365,390

(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 June 30, 2024, with all financial and other covenants under its unsecured public and private placement debt and unsecured credit facilities.

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.

Detail on the Company's interest rate derivatives outstanding as of June 30, 2024 and December 31, 2023 is as follows:

Number of Instruments
Interest Rate SwapsJune 30, 2024December 31, 2023
Notional amount322,451294,928
Number of instruments1615

Detail on the fair value of the Company's interest rate derivatives as of June 30, 2024 and December 31, 2023 is as follows:

(in thousands)Fair Value
Interest rate swaps classified as:June 30, 2024December 31, 2023
Derivative assets$16,29314,213
Derivative liabilities(261)(1,335)

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 June 30, 2024, 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.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

June 30, 2024

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 DerivativeLocation and Amount of Gain (Loss) Reclassified from AOCI into IncomeTotal amounts presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded
Three months ended June 30,Three months ended June 30,Three months ended June 30,
(in thousands)202420232024202320242023
Interest rate swaps$3,1245,457Interest income$(2,440)(1,649)Interest expense, net$43,17836,956
Six months ended June 30,Six months ended June 30,Six months ended June 30,
(in thousands)202420232024202320242023
Interest rate swaps$11,7172,721Interest income$(4,807)(3,141)Interest expense, net$86,04673,349

As of June 30, 2024, the Company expects approximately $6.0 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

Substantially 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 (collectively, "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:

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.

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 as either fixed or variable lease income based on the criteria specified in ASC Topic 842:

(in thousands)Three months ended June 30,Six months ended June 30,
2024202320242023
Operating lease income
Fixed and in-substance fixed lease income$256,991220,191$513,616439,831
Variable lease income86,08274,337178,372155,118
Other lease related income, net:
Above/below market rent and tenant rent inducement amortization, net7,4418,75113,26414,616
Uncollectible straight-line rent (1)(811)1,522(1,210)2,100
Uncollectible amounts billable in lease (loss) income(1,858)(343)(3,091)1,594
Total lease income$347,845304,458$700,951613,259

(1)

The amounts include straight-line rent adjustments associated with converting between cash basis and accrual basis of accounting for certain leases.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

June 30, 2024

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

(in thousands)June 30, 2024December 31, 2023
Tenant receivables$24,93534,814
Straight-line rent receivables147,409138,590
Notes receivable31,9432,109
Other receivables(1)32,71230,649
Total tenant and other receivables$236,999206,162

(1)

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

During the six months ended June 30, 2024 the Company issued a note receivable in the amount of $29.8 million at an interest rate of 6.9% maturing in January 2027, secured by a grocery-anchored shopping center.

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 those instruments listed below:

June 30, 2024December 31, 2023
(in thousands)Carrying AmountFair ValueCarrying AmountFair Value
Financial assets:
Notes receivable$31,94331,5522,1092,109
Financial liabilities:
Notes payable, net$4,055,3903,799,9884,001,9493,763,152
Unsecured credit facilities(1)$310,000310,000152,000152,000

(1)

The carrying amounts approximated its fair values due to the variable nature of the terms.

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 June 30, 2024, and December 31, 2023, 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.

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) Recurring Fair Value

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 in the accompanying Consolidated Statements of Operations, and include unrealized gains of $0.7 million and unrealized gains of $1.4 million during the three months ended June 30, 2024 and 2023, respectively, and unrealized gains of $3.1 million and unrealized gains of $3.0 million during the six months ended June 30, 2024 and 2023, respectively.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

June 30, 2024

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.

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 June 30, 2024
Quoted Prices in Active Markets for Identical AssetsSignificant Other Observable InputsSignificant Unobservable Inputs
(in thousands)Balance(Level 1)(Level 2)(Level 3)
Assets:
Securities$36,90136,901——
Available-for-sale debt securities13,755—13,755—
Interest rate derivatives16,293—16,293—
Total$66,94936,90130,048—
Liabilities:
Interest rate derivatives$(261)—(261)—
Fair Value Measurements as of December 31, 2023
Quoted Prices in Active Markets for Identical AssetsSignificant Other Observable InputsSignificant Unobservable Inputs
(in thousands)Balance(Level 1)(Level 2)(Level 3)
Assets:
Securities$37,03937,039——
Available-for-sale debt securities14,953—14,953—
Interest rate derivatives14,213—14,213—
Total$66,20537,03929,166—
Liabilities:
Interest rate derivatives$(1,335)—(1,335)—

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

June 30, 2024

9.Equity and Capital

Preferred Stock of the Parent Company

Terms and conditions of the preferred stock outstanding are summarized as follows:

Preferred Stock Outstanding as of June 30, 2024 and December 31, 2023
Date of IssuanceShares Issued and OutstandingLiquidation PreferenceDistribution RateCallable By Company
Series A8/18/20234,600,000$115,000,0006.250%On demand
Series B8/18/20234,400,000110,000,0005.875%On or after 10/1/2024
9,000,000$225,000,000

Dividends Declared

On July 31, 2024, the Board:

Declared dividends on the Series A Preferred Stock, which will be paid at a rate of $0.390625 per share on October 31, 2024. The dividends will be payable to holders of record of the Series A Preferred Stock as of the close of business on October 16, 2024; and

Declared dividend on the Series B Preferred Stock, which will be paid at a rate of $0.367200 per share on October 31, 2024. The dividend will be payable to holders of record of the Series B Preferred Stock as of the close of business on October 16, 2024.

Common Stock of the Parent Company

Dividends Declared

On July 31, 2024, the Board declared a common stock dividend of $0.67 per share, payable on October 3, 2024, to shareholders of record as of September 12, 2024.

On August 1, 2023, our Board declared a common stock dividend of $0.65 per share, payable on October 4, 2023, to shareholders of record as of September 14, 2023.

At the Market ("ATM") Program

Under the Parent Company's ATM program, as authorized by the Board, the Parent Company may sell up to $500 million of common stock at prices determined by the market at the time of sale. The timing of sales, if any, will be dependent on market conditions and other factors. No sales occurred under the ATM program during both the six months ended June 30, 2024 and 2023. As of June 30, 2024, $500 million of common stock remained available for issuance under this ATM equity program.

Stock Repurchase Program

On February 8, 2023, the Board authorized a common stock repurchase program under which the Company may purchase 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 stock repurchases, if any, are dependent upon market conditions and other factors. The stock repurchased, if not retired, is be treated as treasury stock. The Board's authorization for the Repurchase Program was to expire on February 7, 2025, unless modified, extended or earlier terminated by the Board in its discretion.

During the six months ended June 30, 2024, the Company executed multiple trades by which it repurchased 3.3 million common shares under the Repurchase Program for a total of $200 million at a weighted average price of $60.48 per share. These shares were repurchased through open market purchases in accordance with applicable federal securities laws, including Rule 10b-18 of the Exchange Act of 1934 (the "Exchange Act"). All repurchased shares were retired on the respective settlement dates. At June 30, 2024, $30.0 million remained available under the Repurchase Program.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

June 30, 2024

During the six months ended June 30, 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.

On July 31, 2024, the Board authorized and approved a new common stock repurchase program under which the Company may purchase up to $250 million of shares of the Company’s outstanding common stock (the “New Repurchase Program”). The New Repurchase Program replaces and supercedes, in all respects, the Repurchase Program noted above. Under the New Repurchase Program, the Company intends to repurchase shares through open market purchases in accordance with applicable federal securities laws, including Rule 10b-18 of the Exchange Act. The Board's authorization for the New Repurchase Program expires on June 30, 2026, unless modified, extended or earlier terminated by the Board in its discretion.

Preferred Units of the Operating Partnership

The number of Series A Preferred Units and Series B Preferred Units, respectively, issued by the Operating Partnership is equal to the number of Series A Preferred Stock and Series B Preferred Stock, respectively, issued by the Parent Company.

Common Units of the Operating Partnership

Common Units are issued, or redeemed and retired, for each share of the Parent Company stock issued or redeemed, or retired, as described above. During the six months ended June 30, 2024, 7,938 Partnership Units were converted to Parent Company common stock. During the six months ended June 30, 2023 the Operating Partnership issued 338,704 exchangeable operating partnership units, valued at $20.0 million, as partial purchase price consideration for a development property.

10.Stock-Based Compensation

During the six months ended June 30, 2024, the Company granted 343,014 shares of restricted stock with a weighted-average grant-date fair value of $60.25 per share. During the six months ended June 30, 2023, the Company granted 301,099 shares of restricted stock with a weighted-average grant-date fair value of $68.29 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 June 30,Six months ended June 30,
(in thousands, except per share data)2024202320242023
Numerator:
Net income attributable to common shareholders - basic$99,25586,782$205,616184,063
Net income attributable to common shareholders - diluted$99,25586,782$205,616184,063
Denominator:
Weighted average common shares outstanding for basic EPS183,703170,990184,188171,100
Weighted average common shares outstanding for diluted EPS (1)183,868171,275184,332171,369
Net income per common share – basic$0.540.51$1.121.08
Net income per common share – diluted$0.540.51$1.121.07

(1)

Includes the dilutive impact of unvested restricted stock.

The effect of the assumed conversion of the EOP units and certain other convertible units had an anti-dilutive effect upon the calculation of net income to the common shareholders per share. Accordingly, the impact of such assumed conversions has not been included in the determination of diluted net income per share calculations. Weighted average EOP units outstanding were 1,099,516 and 901,480 for the three months ended June 30, 2024 and 2023, and 1,100,305 and 822,346 for the six months ended June 30, 2024 and 2023, respectively.

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

June 30, 2024

Operating Partnership Earnings per Unit

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

Three months ended June 30,Six months ended June 30,
(in thousands, except per unit data)2024202320242023
Numerator:
Net income attributable to common unit holders - basic$99,85687,332$206,859185,033
Net income attributable to common unit holders - diluted$99,85687,332$206,859185,033
Denominator:
Weighted average common units outstanding for basic EPU184,803171,891185,288171,922
Weighted average common units outstanding for diluted EPU (1)184,968172,176185,433172,192
Net income per common unit – basic$0.540.51$1.121.08
Net income per common unit – diluted$0.540.51$1.121.07

(1)

Includes the dilutive impact of unvested restricted stock.

The effect of the assumed conversion of certain other convertible units had an anti-dilutive effect upon the calculation of net income to the common unit holders per share. Accordingly, the impact of such assumed conversions has not been included in the determination of diluted net income per unit calculations.

12.Commitments and Contingencies

Litigation

The Company is a party to litigation and other disputes 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 of the Company taken as a whole as of June 30, 2024.

Environmental

The Company is subject to numerous environmental laws and regulations. With respect to applicability to 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, 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 contamination; 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.

The Company had accrued liabilities of $17.2 million and $16.5 million for environmental remediation, which are included in Accounts payable, and other liabilities on the Company’s Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023, respectively.

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. The Company had $10.9 million and $8.5 million in letters of credit outstanding as of June 30, 2024 and December 31, 2023, respectively.

Next: Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations