United States SECURITIES AND EXCHANGE COMMISSION Washington DC 20549 FORM 10-Q (Mark One) [X] For the quarterly period ended September 30, 2000 -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 REALTY CORPORATION (Exact name of registrant as specified in its charter) Florida 59-3191743 ------- ---------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 121 West Forsyth Street, Suite 200 Jacksonville, Florida 32202 (Address of principal executive offices) (Zip Code) (904) 356-7000 (Registrant's telephone number, including area code) Unchanged (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No[ ] (Applicable only to Corporate Registrants) As of November 6, 2000, there were 56,928,870 shares outstanding of the Registrant's common stock.
Part I Item 1. Financial Statements REGENCY REALTY CORPORATION Consolidated Balance Sheets September 30, 2000 and December 31, 1999 (unaudited) <TABLE> <CAPTION> 2000 1999 ---- ---- <S> <C> <C> Assets Real estate investments: Land $ 585,041,902 567,673,872 Buildings and improvements 1,865,609,460 1,834,279,432 --------------- --------------- 2,450,651,362 2,401,953,304 Less: accumulated depreciation 137,085,242 104,467,176 --------------- --------------- 2,313,566,120 2,297,486,128 Properties in development 258,683,760 167,300,893 Operating properties held for sale 124,098,255 - Investments in real estate partnerships 66,159,432 66,938,784 --------------- --------------- Net real estate investments 2,762,507,567 2,531,725,805 Cash and cash equivalents 36,870,913 54,117,443 Notes receivable 37,962,720 15,673,125 Tenant receivables, net of allowance for uncollectible accounts of $3,257,390 and $1,883,547 at September 30, 2000 and December 31, 1999 29,672,141 33,515,040 Deferred costs, less accumulated amortization of $12,285,823 and $8,802,559 at September 30, 2000 and December 31, 1999 18,340,711 12,530,546 Other assets 7,710,185 7,374,019 --------------- --------------- $ 2,893,064,237 2,654,935,978 =============== =============== Liabilities and Stockholders' Equity Liabilities: Notes payable 894,733,544 764,787,207 Unsecured line of credit 305,000,000 247,179,310 Accounts payable and other liabilities 39,887,575 48,886,111 Tenants' security and escrow deposits 8,413,577 7,952,707 --------------- --------------- Total liabilities 1,248,034,696 1,068,805,335 --------------- --------------- Preferred units 375,438,252 283,816,274 Exchangeable operating partnership units 35,125,451 44,589,873 Limited partners' interest in consolidated partnerships 6,514,687 10,475,321 --------------- --------------- Total minority interest 417,078,390 338,881,468 --------------- --------------- Stockholders' equity: Cumulative convertible preferred stock Series 1 and paid in capital $.01 par value per share: 542,532 shares authorized; 537,107 issued and outstanding at September 30, 2000 and December 31, 1999, respectively; liquidation preference $20.83 per share 12,528,032 12,528,032 Cumulative convertible preferred stock Series 2 and paid in capital $.01 par value per share: 1,502,532 shares authorized; 950,400 shares issued and outstanding at September 30, 2000 and December 31, 1999, respectively liquidation preference $20.83 per share 22,168,080 22,168,080 Common stock $.01 par value per share: 150,000,000 shares authorized; 60,198,129 and 59,639,536 shares issued at September 30, 2000 and December 31, 1999 601,981 596,395 Treasury stock; 3,284,947 and 2,715,851 shares held at September 30, 2000 and December 31, 1999, at cost (65,864,705) (54,536,612) Additonal paid in capital 1,316,651,553 1,304,257,610 Distributions in excess of net income (47,298,641) (26,779,538) Stock loans (10,835,149) (10,984,792) --------------- --------------- Total stockholders' equity 1,227,951,151 1,247,249,175 --------------- --------------- Commitments and contingencies $ 2,893,064,237 2,654,935,978 =============== =============== </TABLE> See accompanying notes to consolidated financial statements
REGENCY REALTY CORPORATION Consolidated Statements of Operations For the Three Months ended September 30, 2000 and 1999 (unaudited) <TABLE> <CAPTION> 2000 1999 ---- ---- <S> <C> <C> Revenues: Minimum rent $ 65,487,039 59,410,015 Percentage rent 325,785 291,303 Recoveries from tenants 17,999,790 14,664,162 Service operations revenue 6,021,017 4,014,664 Equity in income of investments in real estate partnerships 2,804,787 1,218,075 --------------- --------------- Total revenues 92,638,418 79,598,219 --------------- --------------- Operating expenses: Depreciation and amortization 14,776,780 13,112,164 Operating and maintenance 11,992,681 10,733,732 General and administrative 4,996,685 4,795,323 Real estate taxes 9,004,241 7,835,440 Other expenses 830,000 375,000 --------------- --------------- Total operating expenses 41,600,387 36,851,659 --------------- --------------- Interest expense (income): Interest expense 18,791,545 15,575,115 Interest income (1,160,925) (491,730) --------------- --------------- Net interest expense 17,630,620 15,083,385 --------------- --------------- Income before minority interests 33,407,411 27,663,175 Minority interest preferred unit distributions (7,977,919) (2,334,376) Minority interest of exchangeable partnership units (662,600) (769,851) Minority interest of limited partners (186,203) 83,702 --------------- --------------- Net income 24,580,689 24,642,650 Preferred stock dividends (699,459) (677,165) --------------- --------------- Net income for common stockholders $ 23,881,230 23,965,485 =============== =============== Net income per share: Basic $ 0.42 0.40 =============== =============== Diluted $ 0.42 0.40 =============== =============== </TABLE> See accompanying notes to consolidated financial statements
REGENCY REALTY CORPORATION Consolidated Statements of Operations For the Nine Months ended September 30, 2000 and 1999 (unaudited) <TABLE> <CAPTION> 2000 1999 ---- ---- <S> <C> <C> Revenues: Minimum rent $ 189,389,963 157,352,236 Percentage rent 1,378,246 1,179,302 Recoveries from tenants 51,081,827 39,042,943 Service operations revenue 15,387,761 9,755,287 Equity in income of investments in real estate partnerships 2,865,450 3,354,278 --------------- --------------- Total revenues 260,103,247 210,684,046 --------------- --------------- Operating expenses: Depreciation and amortization 43,163,768 34,893,216 Operating and maintenance 33,095,724 27,602,063 General and administrative 13,253,951 13,576,216 Real estate taxes 25,326,122 20,073,559 Other expenses 1,749,715 900,000 --------------- --------------- Total operating expenses 116,589,280 97,045,054 --------------- --------------- Interest expense (income): Interest expense 52,681,417 43,567,458 Interest income (2,823,483) (1,612,733) --------------- --------------- Net interest expense 49,857,934 41,954,725 --------------- --------------- Income before minority interests, gain and provision on real estate investments 93,656,033 71,684,267 Gain on sale of operating properties 18,310 - Provison for loss on operating properties held for sale (6,909,625) - --------------- --------------- Income before minority interests 86,764,718 71,684,267 Minority interest preferred unit distributions (21,232,432) (5,584,378) Minority interest of exchangeable partnership units (1,848,094) (2,108,362) Minority interest of limited partners (666,517) (663,331) --------------- --------------- Net income 63,017,675 63,328,196 Preferred stock dividends (2,098,377) (1,577,165) --------------- --------------- Net income for common stockholders $ 60,919,298 61,751,031 =============== =============== Net income per share: Basic $ 1.07 1.16 =============== =============== Diluted $ 1.07 1.16 =============== =============== </TABLE> See accompanying notes to consolidated financial statements
REGENCY REALTY CORPORATION Consolidated Statement of Stockholders' Equity For the Nine Months ended September 30, 2000 (unaudited) <TABLE> <CAPTION> Series 1 Series 2 Common Treasury Preferred Stock Preferred Stock Stock Stock --------------- ---------------- ------------- --------------- <S> <C> <C> <C> <C> Balance at December 31, 1999 $ 12,528,032 22,168,080 596,395 (54,536,612) Common stock issued as compensation or purchased by directors or officers, or issued under stock options - - 1,606 - Common stock cancelled under stock loans - - 5 (239,674) Common stock issued for partnership units redeemed - - 3,940 - Common stock issued to acquire real estate - - 35 - Reallocation of minority interest - - - - Repurchase of common stock - - - (11,088,419) Cash dividends declared: Common stock ($.48 per share) and preferred stock - - - - Net income - - - - -------------- -------------- ------------ -------------- Balance at September 30, 2000 $ 12,528,032 22,168,080 601,981 (65,864,705) ============== ============== ============ ============== </TABLE> See accompanying notes to consolidated financial statements.
REGENCY REALTY CORPORATION Consolidated Statement of Stockholders' Equity For the Nine Months ended September 30, 2000 (unaudited) <TABLE> <CAPTION> Additional Distributions Total Paid In in exess of Stock Stockholders' Capital Net Income Loans Equity ---------------- --------------- ----------- --------------- <S> <C> <C> <C> <C> Balance at December 31, 1999 1,304,257,610 (26,779,538) (10,984,792) 1,247,249,175 Common stock issued as compensation or purchased by directors or officers, or issued under stock options 3,665,194 - - 3,666,800 Common stock cancelled under stock loans (55,829) - 149,643 (145,855) Common stock issued for partnership units redeemed 9,270,937 - - 9,274,877 Common stock issued to acquire real estate 88,889 - - 88,924 Reallocation of minority interest (575,248) - - (575,248) Repurchase of common stock - - - (11,088,419) Cash dividends declared: Common stock ($.48 per share) and preferred stock - (83,536,778) - (83,536,778) Net income - 63,017,675 - 63,017,675 -------------- -------------- -------------- --------------- Balance at September 30, 2000 1,316,651,553 (47,298,641) (10,835,149) 1,227,951,151 ================ ============== ============== =============== </TABLE> See accompanying notes to consolidated financial statements.
REGENCY REALTY CORPORATION Consolidated Statements of Cash Flows For the Nine Months Ended September 30, 2000 and 1999 (unaudited) <TABLE> <CAPTION> 2000 1999 ------ ------ <S> <C> <C> Cash flows from operating activities: Net income $ 63,017,675 63,328,196 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 43,163,768 34,893,216 Deferred financing cost and debt premium amortization 554,273 347,204 Stock based compensation 3,592,406 1,921,831 Minority interest preferred unit distribution 21,232,432 5,584,378 Minority interest of exchangeable partnership units 1,848,094 2,108,362 Minority interest of limited partners 666,517 663,331 Equity in income of investments in real estate partnerships (2,865,450) (3,354,278) Gain on sale of operating properties (18,310) - Provision for loss on operating properties held for sale 6,909,625 - Changes in assets and liabilities: Tenant receivables 5,549,265 (9,368,533) Deferred costs (5,385,197) (3,378,467) Other assets (1,448,389) 1,439,804 Tenants' security and escrow deposits 313,158 711,577 Accounts payable and other liabilities (9,448,374) 5,347,438 ---------------- --------------- Net cash provided by operating activities 127,681,493 100,244,059 ---------------- --------------- Cash flows from investing activities: Acquisition and development of real estate, net (238,488,759) (145,301,370) Acquisition of Pacific, net of cash acquired - (9,046,230) Acquistion of partners' interest in investments in real estate partnerships, net of cash acquired (1,402,371) - Investment in real estate partnerships (49,515,795) (23,714,109) Capital improvements (12,920,698) (10,894,912) Proceeds from sale of operating properties 7,491,870 - Repayment of notes receivable 15,673,125 - Distributions received from investments in real estate partnerships - 704,474 ---------------- --------------- Net cash used in investing activities (279,162,628) (188,252,147) ---------------- --------------- Cash flows from financing activities: Net proceeds from common stock issuance 22,476 105,809 Repurchase of common stock (11,088,419) - Purchase of limited partner's interest in consolidated partnership (2,527,264) - Redemption of partnership units (1,396,946) (1,377,523) Net distributions to limited partners in consolidated partnerships (2,099,886) (940,763) Distributions to exchangeable partnership unit holders (2,847,960) (2,576,197) Distributions to preferred unit holders (21,232,432) (5,584,378) Dividends paid to common stockholders (81,438,401) (67,978,066) Dividends paid to preferred stockholders (2,098,377) (1,352,165) Net proceeds from fixed rate unsecured notes 149,728,500 249,845,300 Net proceeds from issuance of preferred units 91,621,978 205,250,000 Proceeds (repayment) of unsecured line of credit, net 57,820,690 (245,051,875) Proceeds from mortgage loans 8,118,953 2,555,836 Repayment of mortgage loans (40,881,096) (32,536,707) Scheduled principal payments (4,785,445) (4,339,228) Deferred financing costs (2,681,766) (4,346,828) ---------------- --------------- Net cash provided by financing activities 134,234,605 91,673,215 ---------------- --------------- Net (decrease) increase in cash and cash equivalents (17,246,530) 3,665,127 Cash and cash equivalents at beginning of period 54,117,443 19,919,693 ---------------- --------------- Cash and cash equivalents at end of period $ 36,870,913 23,584,820 ================ =============== </TABLE>
REGENCY REALTY CORPORATION Consolidated Statements of Cash Flows For the nine Months Ended September 30, 2000 and 1999 (unaudited) continued <TABLE> <CAPTION> 2000 1999 ------ ------ <S> <C> <C> Supplemental disclosure of cash flow information - cash paid for interest (net of capitalized interest of approximately $8,873,000 and $7,485,000 in 2000 and 1999, respectively) $ 59,643,181 43,333,640 ================ =============== Supplemental disclosure of non-cash transactions: Mortgage loans assumed for the acquisition of Pacific and real estate $ 19,947,565 402,582,015 ================ =============== Exchangeable operating partnership units and common stock issued for investments in real estate partnerships $ 329,948 1,949,020 ================ =============== Exchangeable operating partnership units and common stock issued for the acquisition of partners' interest in investments in real estate partnerships $ 1,287,111 - ================ =============== Exchangeable operating partnership units, preferred and common stock issued for the acquisition of Pacific and real estate $ 103,885 771,351,617 ================ =============== Other liabilities assumed to acquire Pacific $ - 13,897,643 ================ =============== Notes receivable taken in connection with sales of development properties $ 37,962,720 - ================ =============== </TABLE> See accompanying notes to consolidated financial statements.
REGENCY REALTY CORPORATION Notes to Consolidated Financial Statements September 30, 2000 (unaudited) 1. Summary of Significant Accounting Policies (a) Organization and Principles of Consolidation The accompanying consolidated financial statements include the accounts of Regency Realty Corporation, its wholly owned qualified REIT subsidiaries, and its majority owned or controlled subsidiaries and partnerships (the "Company" or "Regency"). All significant intercompany balances and transactions have been eliminated in the consolidated financial statements. The Company owns approximately 97% of the outstanding common partnership units ("Units") of Regency Centers, L.P., ("RCLP" or the "Partnership") and partnership interests ranging from 51% to 55% in two majority owned real estate partnerships (the "Majority Partnerships"). The equity interests of third parties held in RCLP and the Majority Partnerships are included in the consolidated financial statements as preferred or exchangeable operating partnership units and limited partners' interests in consolidated partnerships. The Company is a qualified real estate investment trust ("REIT") which began operations in 1993. The financial statements reflect all adjustments which are of a normal recurring nature, and in the opinion of management, are necessary to properly state the results of operations and financial position. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted although management believes that the disclosures are adequate to make the information presented not misleading. The financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 1999 Form 10-K filed with the Securities and Exchange Commission. (b) Investments in Real Estate Partnerships The Company accounts for all investments in which it owns less than 50% and does not have controlling financial interest using the equity method. (c) Reclassifications Certain reclassifications have been made to the 1999 amounts to conform to classifications adopted in 2000. 2. Acquisition and Development of Shopping Centers On August 3, 2000, the Company acquired the non-owned portion of two properties in one joint venture for $2.5 million in cash. The net assets of the joint venture were and continue to be consolidated by the Company. Prior to acquiring the non-owned portion, the joint venture partner's interest was reflected as limited partners' interest in consolidated partnerships in the Company's financial statements.
REGENCY REALTY CORPORATION Notes to Consolidated Financial Statements September 30, 2000 (unaudited) 2. Acquisition and Development of Shopping Centers (continued) On June 30, 2000 the Company acquired the non-owned portion of nine properties in five joint ventures, previously accounted for using the equity method, for $4.4 million in cash, common stock and Units. As a result, these joint ventures are wholly-owned by the Company and are consolidated for financial reporting purposes. On February 28, 1999, the Company acquired Pacific Retail Trust ("Pacific") for approximately $1.157 billion. The operating results of Pacific are included in the Company's consolidated financial statements from the date each property was acquired. The following unaudited pro forma information presents the consolidated results of operations as if the acquisition of Pacific had occurred on January 1, 1999. Such pro forma information reflects adjustments to 1) increase depreciation, interest expense, and general and administrative costs, 2) adjust the weighted average common shares, and common equivalent shares outstanding issued to acquire the properties. Pro forma revenues would have been $233.0 million as of September 30, 1999. Pro forma net income for common stockholders would have been $68.2 million as of September 30, 1999. Pro forma basic net income per share and pro forma diluted net income per share would have been $1.14 and $1.14, respectively, as of September 30, 1999. This data does not purport to be indicative of what would have occurred had the Pacific acquisition been made on January 1, 1999, or of results which may occur in the future. 3. Operating Properties Held for Sale Operating properties held for sale include properties that no longer fit the Company's long-term investment strategies and properties acquired or developed with the intent to sell. These properties are carried at the lower of cost or fair value less the estimated cost to sell. Depreciation and amortization are suspended during the period held for sale. During the second quarter, the Company recorded a provision for loss on operating properties held for sale of $6.9 million. 4. Segments The Company was formed, and currently operates, for the purpose of 1) operating and developing Company owned retail shopping centers (Retail segment), and 2) providing services including property management and commissions earned from third parties, and development related profits and fees earned from the sales of shopping centers and build to suit properties to third parties (Service operations segment). The Company's reportable segments offer different products or services and are managed separately because each requires different strategies and management expertise. There are no material inter-segment sales or transfers. The accounting policies of the segments are the same as those described in note 1. The revenues, diluted FFO, and assets for each of the reportable segments are summarized as follows for the nine month periods ended September 30, 2000 and 1999. Assets not attributable to a particular segment consist primarily of cash and deferred costs.
REGENCY REALTY CORPORATION Notes to Consolidated Financial Statements September 30, 2000 (unaudited) <TABLE> <CAPTION> 4. Segments (continued) 2000 1999 ---- ---- <S> <C> <C> Revenues: Retail segment $ 244,715,486 200,928,759 Service operations segment 15,387,761 9,755,287 ---------------- ------------------ Total revenues $ 260,103,247 210,684,046 ================ ================== Funds from Operations: Retail segment net operating income $ 186,311,950 153,253,137 Service operations segment income 15,387,761 9,755,287 Adjustments to calculate diluted FFO: Interest expense (52,681,417) (43,567,458) Interest income 2,823,483 1,612,733 General and administrative and other (15,003,666) (14,476,216) Non-real estate depreciation (970,908) (661,600) Minority interest of limited partners (666,517) (663,331) Minority interest in depreciation and amortization (411,774) (433,578) Share of joint venture depreciation and amortization 1,102,167 461,768 Distributions on preferred units (21,232,432) (5,584,378) ---------------- ------------------ Funds from Operations - diluted 114,658,647 99,696,364 ---------------- ------------------ Reconciliation to net income for common stockholders: Real estate related depreciation and amortization (42,211,170) (34,231,616) Minority interest in depreciation and amortization 411,774 433,578 Share of joint venture depreciation and amortization (1,102,167) (461,768) Provision for loss on operating properties held for sale (6,909,625) - Gain on sale of operating properties 18,310 - Minority interest of exchangeable partnership units (1,848,094) (2,108,362) ---------------- ------------------ Net income $ 63,017,675 63,328,196 ================ ================== Sept. 30, December 31, Assets (in thousands): 2000 1999 ---------------------- ---- ---- Retail segment $ 2,483,350 2,463,808 Service operations segment 346,792 117,106 Cash and other assets 62,922 74,022 ---------------- ------------------ Total assets $ 2,893,064 2,654,936 ================ ================== </TABLE>
REGENCY REALTY CORPORATION Notes to Consolidated Financial Statements September 30, 2000 (unaudited) 5. Notes Payable and Unsecured Line of Credit The Company's outstanding debt at September 30, 2000 and December 31, 1999 consists of the following (in thousands): <TABLE> <CAPTION> 2000 1999 ---- ---- <S> <C> <C> Notes Payable: Fixed rate mortgage loans $ 342,233 382,715 Variable rate mortgage loans 32,438 11,376 Fixed rate unsecured loans 520,063 370,696 -------------- --------------- Total notes payable 894,734 764,787 Unsecured line of credit 305,000 247,179 -------------- --------------- Total $ 1,199,734 1,011,966 ============== =============== </TABLE> On August 29, 2000 the Company, through RCLP, completed a $150 million unsecured debt offering with an interest rate of 8.45%. The notes were priced at 99.819%, are due on September 1, 2010 and are guaranteed by the Company. The net proceeds of the offering were used to reduce the balance of the unsecured line of credit (the "Line"). During July, 2000, the Company modified the terms of its Line by reducing the commitment to $625 million. The Line matures in March 2002, but may be extended annually for one-year periods. Borrowings under the Line bear interest at a variable rate based on LIBOR plus a 1% spread (7.625% at September 30, 2000) compared to LIBOR plus a 1.075% spread (6.5125% at September 30, 1999), and is dependent on the Company maintaining its investment grade rating. The Company is required to comply and is in compliance with certain financial and other covenants customary with this type of unsecured financing. The Line is used primarily to finance the acquisition and development of real estate, but is also available for general working capital purposes. On April 15, 1999 the Company, through RCLP, completed a $250 million unsecured debt offering in two tranches. The Company, through RCLP, issued $200 million 7.4% notes due April 1, 2004, priced at 99.922% to yield 7.42%, and $50 million 7.75% notes due April 1, 2009, priced at 100%, each guaranteed by the Company. The net proceeds of the offering were used to reduce the balance of the Line.
REGENCY REALTY CORPORATION Notes to Consolidated Financial Statements September 30, 2000 (unaudited) 5. Notes Payable and Unsecured Line of Credit (continued) As of September 30, 2000, scheduled principal repayments on notes payable and the Line were as follows (in thousands): <TABLE> <CAPTION> Scheduled Principal Term Loan Total Scheduled Payments by Year Payments Maturities Payments -------------------------- -------------- --------------- --------------- <S> <C> <C> <C> 2000 $ 1,462 56,985 58,447 2001 5,631 69,445 75,076 2002 (includes the Line) 4,955 349,094 354,049 2003 4,946 13,302 18,248 2004 5,342 199,890 205,232 Beyond 5 Years 36,604 441,782 478,386 Net unamortized debt premiums - 10,296 10,296 -------------- --------------- --------------- Total $ 58,940 1,140,794 1,199,734 ============== =============== =============== </TABLE> Unconsolidated partnerships and joint ventures had mortgage loans payable of $14.9 million at September 30, 2000, and the Company's proportionate share of these loans was $6.2 million. The fair value of the Company's notes payable and Line are estimated based on the current rates available to the Company for debt of the same remaining maturities. Variable rate notes payable, and the Line, are considered to be at fair value since the interest rates on such instruments reprice based on current market conditions. Notes payable with fixed rates, that have been assumed in connection with acquisitions, are recorded in the accompanying financial statements at fair value. The Company considers the carrying value of all other fixed rate notes payable to be a reasonable estimation of their fair value based on the fact that the rates of such notes are similar to rates available to the Company for debt of the same terms. 6. Stockholders' Equity and Minority Interest On September 8, 2000, the Company through RCLP issued $24 million of 8.75% Series F Cumulative Redeemable Preferred Units ("Series F Preferred Units") to an institutional investor in a private placement. The issuance involved the sale of 240,000 Series F Preferred Units for $100.00 per unit. The Series F Preferred Units, which may be called by the Partnership at par on or after September 8, 2005 have no stated maturity or mandatory redemption, and pay a cumulative, quarterly dividend at an annualized rate of 8.75%. At any time after September 8, 2010, the Series F Preferred Units may be exchanged for shares of 8.75% Series F Cumulative Redeemable Preferred Stock ("Series F Preferred Stock") of the Company at an exchange rate of one share of Series F Preferred Stock for one Series F Preferred Unit. The Series F Preferred Units and Series F Preferred Stock are not convertible into common stock of the Company. The net proceeds of the offering were used to reduce the Line.
REGENCY REALTY CORPORATION Notes to Consolidated Financial Statements September 30, 2000 (unaudited) 6. Stockholders' Equity and Minority Interest (continued) On May 25, 2000, the Company through RCLP issued $70 million of 8.75% Series E Cumulative Redeemable Preferred Units ("Series E Preferred Units") to an institutional investor in a private placement. The issuance involved the sale of 700,000 Series E Preferred Units for $100.00 per unit. The Series E Preferred Units, which may be called by the Partnership at par on or after May 25, 2005 have no stated maturity or mandatory redemption, and pay a cumulative, quarterly dividend at an annualized rate of 8.75%. At any time after May 25, 2010, the Series E Preferred Units may be exchanged for shares of 8.75% Series E Cumulative Redeemable Preferred Stock ("Series E Preferred Stock") of the Company at an exchange rate of one share of Series E Preferred Stock for one Series E Preferred Unit. The Series E Preferred Units and Series E Preferred Stock are not convertible into common stock of the Company. The net proceeds of the offering were used to reduce the Line. During 1999, the Board of Directors authorized the repurchase of approximately $65 million of the Company's outstanding shares through periodic open market transactions or privately negotiated transactions. At March 31, 2000 the Company had completed the program by purchasing 3.25 million shares.
REGENCY REALTY CORPORATION Notes to Consolidated Financial Statements September 30, 2000 (unaudited) 7. Earnings Per Share The following summarizes the calculation of basic and diluted earnings per share for the three month periods ended, September 30, 2000 and 1999, respectively (in thousands except per share data): <TABLE> <CAPTION> 2000 1999 ---- ---- <S> <C> <C> Basic Earnings Per Share (EPS) Calculation: Weighted average common shares outstanding 56,895 59,572 ============== ============== Net income for Basic EPS $ 23,881 23,965 ============== ============== Basic EPS $ 0.42 0.40 ============== ============== Diluted Earnings Per Share (EPS) Calculation Weighted average shares outstanding for Basic 56,895 59,572 EPS Exchangeable operating partnership units 1,685 2,085 Incremental shares to be issued under common stock options using the Treasury Method 103 5 -------------- -------------- Total diluted shares 58,683 61,662 ============== ============== Net income for Basic EPS $ 23,881 23,965 Add: minority interest of exchangeable partnership units 663 770 -------------- -------------- Net income for Diluted EPS $ 24,544 24,735 ============== ============== Diluted EPS $ 0.42 0.40 ============== ============== </TABLE> The Preferred Series 1 and Series 2 stock are not included in the above calculation because their effects are anti-dilutive.
REGENCY REALTY CORPORATION Notes to Consolidated Financial Statements September 30, 2000 (unaudited) 7. Earnings Per Share (continued) The following summarizes the calculation of basic and diluted earnings per share for the nine month periods ended, September 30, 2000 and 1999, respectively (in thousands except per share data): <TABLE> <CAPTION> 2000 1999 ---- ---- <S> <C> <C> Basic Earnings Per Share (EPS) Calculation: Weighted average common shares outstanding 56,697 51,796 ============== ============== Net income for common stockholders $ 60,919 61,751 Less: dividends paid on Class B common stock - (1,410) -------------- -------------- Net income for Basic EPS $ 60,919 60,341 ============== ============== Basic EPS $ 1.07 1.16 ============== ============== Diluted Earnings Per Share (EPS) Calculation Weighted average shares outstanding for Basic 56,697 51,796 EPS Exchangeable operating partnership units 1,909 1,979 Incremental shares to be issued under common stock options using the Treasury Method 45 4 -------------- -------------- Total diluted shares 58,651 53,779 ============== ============== Net income for Basic EPS $ 60,919 60,341 Add: minority interest of exchangeable partnership units 1,848 2,109 -------------- -------------- Net income for Diluted EPS $ 62,767 62,450 ============== ============== Diluted EPS $ 1.07 1.16 ============== ============== </TABLE> The Preferred Series 1 and Series 2 stock are not included in the above calculation because their effects are anti-dilutive.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the accompanying Consolidated Financial Statements and Notes thereto of Regency Realty Corporation ("Regency" or "Company") appearing elsewhere within. Organization The Company is a qualified real estate investment trust ("REIT") which began operations in 1993. The Company invests in real estate primarily through its general partnership interest in Regency Centers, L.P., ("RCLP" or "Partnership") an operating partnership, in which the Company currently owns approximately 97% of the outstanding common partnership units ("Units"). Of the 235 properties included in the Company's portfolio at September 30, 2000, 217 properties were owned either fee simple or through partnership interests by RCLP. At September 30, 2000, the Company had an investment in real estate of approximately $2.9 billion of which $2.8 billion was owned by RCLP. Shopping Center Business The Company's principal business is owning, operating and developing grocery anchored neighborhood infill retail shopping centers. The Company's properties summarized by state and in order by largest holdings including their gross leasable areas (GLA) follows: <TABLE> <CAPTION> September 30, 2000 December 31, 1999 Location # Properties GLA % Leased * # Properties GLA % Leased * -------- ------------ --------- ---------- ------------ ----------- ---------- <S> <C> <C> <C> <C> <C> <C> Florida 52 6,268,882 92.8% 48 5,909,534 91.7% California 38 4,661,349 97.9% 36 3,858,628 98.2% Texas 32 4,089,891 94.3% 29 3,849,549 94.2% Georgia 27 2,729,150 95.0% 27 2,716,763 92.3% Ohio 12 1,706,295 97.4% 13 1,822,854 94.0% North Carolina 13 1,302,751 98.0% 12 1,241,639 97.9% Washington 10 1,180,009 98.7% 9 1,066,962 98.1% Colorado 10 897,788 98.7% 10 903,502 98.0% Oregon 8 738,460 94.3% 7 616,070 94.2% Alabama 5 516,062 97.9% 5 516,061 99.5% Arizona 6 454,574 99.6% 2 326,984 99.7% Tennessee 4 423,326 99.6% 3 271,697 98.9% Missouri 2 369,045 95.8% 1 82,498 95.8% Kentucky 2 304,347 90.7% 2 305,307 91.8% Virginia 3 297,965 95.1% 2 197,324 96.1% Michigan 3 251,212 94.7% 3 250,655 98.7% Delaware 1 228,169 98.6% 1 232,754 96.3% Mississippi 2 185,061 97.7% 2 185,061 96.6% Illinois 1 178,601 86.4% 1 178,600 85.9% South Carolina 2 162,056 98.2% 2 162,056 98.8% New Jersey 1 88,867 - - - - Wyoming 1 87,771 - 1 75,000 - -------------- --------------- ---------------- -------------- --------------- ------------- Total 235 27,121,631 95.6% 216 24,769,498 95.0% ============== =============== ================ ============== =============== ============= </TABLE> * Excludes properties under construction The Company is focused on building a platform of grocery anchored neighborhood shopping centers because grocery stores provide convenience shopping of daily necessities, foot traffic for adjacent local tenants, and should withstand adverse economic conditions. The Company's current investment markets have continued to offer strong stable economies, and accordingly, the Company expects to realize growth in net income as a result of increasing occupancy in the portfolio, increasing rental rates, development and acquisition of shopping centers in targeted markets, and redevelopment of existing shopping centers.
The following table summarizes the four largest grocery tenants (based on annualized base rent) occupying the Company's shopping centers at September 30, 2000: <TABLE> <CAPTION> Grocery Anchor Number of % of % of Annualized Avg Remaining Stores * Total GLA Base Rent Lease Term --------------- ----------- ---------- ---------------- -------------- <S> <C> <C> <C> <C> Kroger 57 12.3% 11.1% 16 yrs Safeway 41 5.5% 4.9% 12 yrs Publix 41 6.8% 4.8% 13 yrs Albertsons 21 2.6% 2.3% 13 yrs * Includes grocery owned stores </TABLE> Periodically, the Company identifies operating shopping centers that no longer meet its long-term investment standards. Once identified, these properties are segregated on the balance sheet as operating properties held for sale, and are carried at the lower of cost or fair value less estimated selling costs. Acquisition and Development of Shopping Centers The Company has implemented a growth strategy dedicated to developing high-quality shopping centers and build to suit properties. This development process can require 12 to 36 months from initial land or redevelopment acquisition through construction and leaseup and finally stabilized income, depending upon the size and type of project. Generally, anchor tenants begin operating their stores prior to construction completion of the entire center, resulting in rental income during the development phase. At September 30, 2000, the Company had 57 projects under construction or undergoing major renovations, which when complete will represent an investment of $598.9 million. Total cost necessary to complete these developments is estimated to be $240.0 million and will be expended through 2001. These developments are approximately 63% complete and 70% leased. On August 3, 2000, the Company acquired the non-owned portion of two properties in one joint venture for $2.5 million in cash. The net assets of the joint venture were and continue to be consolidated by the Company. Prior to acquiring the non-owned portion, the joint venture partner's interest was reflected as limited partners' interest in consolidated partnerships in the Company's financial statements. On June 30, 2000, the Company acquired the non-owned portion of nine properties in five joint ventures, previously accounted for using the equity method, for $4.4 million in cash, common stock and Units. As a result, these joint ventures are wholly-owned by the Company and are consolidated for financial reporting purposes. On February 28, 1999, the Company acquired Pacific Retail Trust ("Pacific") for approximately $1.157 billion. At the date of the acquisition, Pacific was operating or had under development 71 retail shopping centers representing 8.4 million SF of gross leaseable area. Liquidity and Capital Resources Management anticipates that cash generated from operating activities will provide the necessary funds on a short-term basis for its operating expenses, interest expense and scheduled principal payments on outstanding indebtedness, recurring capital expenditures necessary to properly maintain the shopping centers, and distributions to share and unit holders. Net cash provided by operating activities was $127.7 million and $100.2 million for the nine months ended September 30, 2000 and 1999, respectively. The Company incurred recurring and non-recurring capital expenditures (non-recurring expenditures pertain to immediate building improvements on new acquisitions and tenant improvements on new leases) of $12.9 million and $10.9 million during the first nine months of 2000 and 1999, respectively. The Company paid scheduled principal payments of $4.8 million and $4.3 million for the nine months ended September 30, 2000 and 1999, respectively. The Company paid dividends and distributions of $107.6 million and $77.5 million, for the nine months ended September 30, 2000 and 1999, respectively, to its share and unit holders.
Management expects to meet long-term liquidity requirements for term debt payoffs at maturity, non-recurring capital expenditures, and acquisition, renovation and development of shopping centers from: (i) excess cash generated from operating activities, (ii) working capital reserves, (iii) additional debt borrowings, and (iv) additional equity raised in the private and public markets. Net cash used in investing activities was $279.2 million and $188.3 million, during 2000 and 1999, respectively, primarily for the acquisition and development of shopping centers and build to suit projects. Net cash provided by financing activities was $134.2 million and $91.7 for the nine months ended September 30, 2000 and 1999, respectively. During 1999, the Board of Directors authorized the repurchase of approximately $65 million of the Company's outstanding shares through periodic open market transactions or privately negotiated transactions. At March 31, 2000 the Company had completed the program by purchasing 3.25 million shares. The Company's outstanding debt at September 30, 2000 and December 31, 1999 consists of the following (in thousands): 2000 1999 ---- ---- Notes Payable: Fixed rate mortgage loans $ 342,233 382,715 Variable rate mortgage loans 32,438 11,376 Fixed rate unsecured loans 520,063 370,696 -------------- --------------- Total notes payable 894,734 764,787 Unsecured line of credit 305,000 247,179 -------------- --------------- Total $ 1,199,734 1,011,966 ============== =============== On September 8, 2000, the Company through RCLP issued $24 million of 8.75% Series F Cumulative Redeemable Preferred Units ("Series F Preferred Units") to an institutional investor in a private placement. The issuance involved the sale of 240,000 Series F Preferred Units for $100.00 per unit. The Series F Preferred Units, which may be called by the Partnership at par on or after September 8, 2005 have no stated maturity or mandatory redemption, and pay a cumulative, quarterly dividend at an annualized rate of 8.75%. At any time after September 8, 2010, the Series F Preferred Units may be exchanged for shares of 8.75% Series F Cumulative Redeemable Preferred Stock ("Series F Preferred Stock") of the Company at an exchange rate of one share of Series F Preferred Stock for one Series F Preferred Unit. The Series F Preferred Units and Series F Preferred Stock are not convertible into common stock of the Company. The net proceeds of the offering were used to reduce the unsecured line of credit (the "Line"). On August 29, 2000 the Company, through RCLP, completed a $150 million unsecured debt offering with an interest rate of 8.45%. The notes were priced at 99.819%, are due on September 1, 2010 and are guaranteed by the Company. The net proceeds of the offering were used to reduce the balance of the unsecured line of credit (the "Line"). During July, 2000, the Company modified the terms of the Line by reducing the commitment to $625 million and extending the term. The Line matures in March 2002, but may be extended annually for one-year periods. Borrowings under the Line bear interest at a variable rate based on LIBOR plus 1% (7.625% at September 30, 2000) compared to LIBOR plus a 1.075% spread (6.5125% at September 30, 1999), which is dependent on the Company maintaining its investment grade rating. The Company is required to comply and is in compliance with certain financial and other covenants customary with this type of unsecured financing. The Line is used primarily to finance the acquisition and development of real estate, but is also available for general working capital purposes.
On May 25, 2000, the Company issued $70 million of 8.75% Series E Cumulative Redeemable Preferred Units ("Series E Preferred Units") to an institutional investor in a private placement. The issuance involved the sale of 700,000 Series E Preferred Units for $100.00 per unit. The Series E Preferred Units, which may be called by the Partnership at par on or after May 25, 2005 have no stated maturity or mandatory redemption, and pay a cumulative, quarterly dividend at an annualized rate of 8.75%. At any time after May 25, 2010, the Series E Preferred Units may be exchanged for shares of 8.75% Series E Cumulative Redeemable Preferred Stock ("Series E Preferred Stock") of the Company at an exchange rate of one share of Series E Preferred Stock for one Series E Preferred Unit. The Series E Preferred Units and Series E Preferred Stock are not convertible into common stock of the Company. The net proceeds of the offering were used to reduce the Line. During September 1999, the Company issued similar preferred units in several series in the amount of $210.0 million with an average fixed distribution rate of 8.93%. At September 30, 2000, the face value of total preferred units issued was $384.0 million with an average fixed distribution rate of 8.72% vs. $290.0 million with an average fixed distribution rate of 8.71%% at September 30, 1999. On April 15, 1999 the Company, through RCLP, completed a $250 million unsecured debt offering in two tranches. The Company, through RCLP, issued $200 million 7.4% notes due April 1, 2004, priced at 99.922% to yield 7.42%, and $50 million 7.75% notes due April 1, 2009, priced at 100%, each guaranteed by the Company. The net proceeds of the offering were used to reduce the balance of the Line. As of September 30, 2000, scheduled principal repayments on notes payable and the Line were as follows (in thousands): <TABLE> <CAPTION> Scheduled Principal Term Loan Total Scheduled Payments by Year Payments Maturities Payments -------------------------- -------------- --------------- --------------- <S> <C> <C> <C> 2000 $ 1,462 56,985 58,447 2001 5,631 69,445 75,076 2002 (includes the Line) 4,955 349,094 354,049 2003 4,946 13,302 18,248 2004 5,342 199,890 205,232 Beyond 5 Years 36,604 441,782 478,386 Net unamortized debt premiums - 10,296 10,296 -------------- --------------- --------------- Total $ 58,940 1,140,794 1,199,734 ============== =============== =============== </TABLE> Unconsolidated partnerships and joint ventures had mortgage loans payable of $14.9 million at September 30, 2000, and the Company's proportionate share of these loans was $6.2 million. The Company qualifies and intends to continue to qualify as a REIT under the Internal Revenue Code. As a REIT, the Company is allowed to reduce taxable income by all or a portion of its distributions to stockholders. As distributions have exceeded taxable income, no provision for federal income taxes has been made. While the Company intends to continue to pay dividends to its stockholders, it also will reserve such amounts of cash flow as it considers necessary for the proper maintenance and improvement of its real estate, while still maintaining its qualification as a REIT. The Company intends to continue to acquire and develop shopping centers and expects to meet the related capital requirements from borrowings on the Line. The Company expects to repay the Line from time to time from additional public and private equity or debt offerings, such as those transactions previously completed. Because such acquisition and development activities are discretionary in nature, they are not expected to burden the Company's capital resources currently available for liquidity requirements. The Company expects that cash provided by operating activities, unused amounts available under the Line, and cash reserves are adequate to meet liquidity requirements and costs necessary to complete properties in development.
Results from Operations Comparison of the nine months ended September 30, 2000 to 1999 Revenues increased $49.4 million or 23.5% to $260.1 million in 2000. The increase was due to the Pacific acquisition, revenues from new developments that began operating after September 30, 1999, and from same property growth in rental rates and occupancy increases. Minimum rent increased $32.0 million or 20.4%, and recoveries from tenants increased $12.0 million or 30.8%. At September 30, 2000, the Company was operating or developing 235 shopping centers of which 187 centers were considered stabilized and 95.6% leased. At September 30, 1999, the stabilized properties were 95.8% leased. Rental rates grew by 7.3% from renewal leases and new leases replacing previously occupied spaces in the stabilized properties. Service operations revenue includes fees earned as part of the Company's service operations segment and includes property management and commissions earned from third parties, and development related profits and fees earned from the sales of shopping centers and build to suit properties to third parties. Service operations revenue increased by $5.6 million to $15.4 million in 2000, or 57.7%. The increase was primarily due to a $8.1 million increase in development related profits and fees, offset by a $2.5 million reduction in property management fees. Operating expenses increased $19.5 million or 20.1% to $116.6 million in 2000. Combined operating and maintenance and real estate taxes increased $10.7 million or 22.5% during 2000 to $58.4 million. The increase was due to the Pacific acquisition, expenses incurred by new developments that began operating after September 30, 1999, and general increases in costs on the stabilized properties. General and administrative expenses were $13.3 million during 2000 vs. $13.6 million in 1999 or 2.4% lower as a result of increased capitalization of direct costs incurred during 2000 related to development activities. Depreciation and amortization increased $8.3 million during 2000 or 23.7% primarily due to the Pacific acquisition and developments that began operating after September 30, 1999. Operating properties held for sale include properties held for investment that no longer fit the Company's long-term investment strategies and properties acquired or developed with the intent to sell. These properties are carried at the lower of cost or fair value less the estimated cost to sell. Depreciation and amortization are suspended during the period held for sale. At June 30, 2000, the Company recorded a provision for loss on operating properties held for sale of $6.9 million. Interest expense increased to $52.7 million in 2000 from $43.6 million in 1999 or 20.9%. The increase was due to higher LIBOR rates, higher average balances on the Line, the assumption of $402.6 million of debt of Pacific, the financing cost of new developments that began operating after September 30, 1999, and the higher fixed interest rate of the $250 million debt offering completed in April, 1999. Preferred unit distributions increased $15.6 million to $21.2 million during 2000 as a result of the preferred units issued in 1999 and 2000. Weighted average fixed rates of the preferred units were 8.72% at September 30, 2000 vs. 8.71% at September 30, 1999. Net income for common stockholders was $60.9 million in 2000 vs. $61.8 million in 1999, a $832,000 or 1.4% decrease primarily a result of the provision for loss on operating properties held for sale and the other reasons as described above. Diluted earnings per share in 2000 was $1.07 vs. $1.16 in 1999, a result of the decline in net income and the increased weighted average shares in 2000 issued in connection with the acquisition of Pacific in 1999.
Comparison of the three months ended September 30, 2000 to 1999 Revenues increased $13.0 million or 16.4% to $92.6 million in 2000. Minimum rent increased $6.1 million or 10.2%, and recoveries from tenants increased $3.3 million or 22.8%. The increase was due to revenues from new developments that began operating after September 30, 1999, and from same property growth in rental rates and occupancy increases as described in the nine month comparison. Service operations revenue includes fees earned as part of the Company's service operations segment and includes property management and commissions earned from third parties, and development related profits and fees earned from the sales of shopping centers and build to suit properties to third parties. Service operations revenue increased by $2.0 million to $6.0 million in 2000, or 50.0%. The increase was primarily due to a $2.6 million increase in development related profits and fees, offset by a $600,000 reduction in property management fees. Operating expenses increased $4.7 million or 12.9% to $41.6 million in 2000. Combined operating and maintenance, and real estate taxes increased $2.4 million or 13.1% during 2000 to $21.0 million. The increase was due primarily to expenses incurred by new developments that began operating after September 30, 1999 and general increases in operating costs on the stabilized properties. General and administrative expenses were $5.0 million in 2000 vs. $4.8 million in 1999 a 4.2% increase. Depreciation and amortization increased $1.7 million during 2000 or 12.7% primarily related to developments that began operating after September 30, 1999. Interest expense increased to $18.8 million in 2000 from $15.6 million in 1999 or 20.7%. The increase was due to higher LIBOR rates, higher average balances on the Line, and the financing cost of new developments that began operating after September 30, 1999. Preferred unit distributions increased $5.6 million to $8.0 million during 2000 as a result of the preferred units issued in 1999 and 2000. Weighted average fixed rates of the preferred units were 8.72% at September 30, 2000 vs. 8.71% at September 30, 1999. Net income for common stockholders was $23.9 million in 2000 vs. $24.0 million in 1999, a $100,000 decrease primarily a result of the reasons as described above. Diluted earnings per share in 2000 was $0.42 vs. $0.40 in 1999, due to the decrease in 2000 of the weighted average number of shares outstanding from the stock repurchase program initiated in the fourth quarter of 1999. New Accounting Standards and Accounting Changes The Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities " (FAS 133), which is effective for all fiscal quarters of all fiscal years beginning after June 15, 2000. FAS 133 establishes accounting and reporting standards for derivative instruments and hedging activities. FAS 133 requires entities to recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value. FAS 133 will have no impact to the financial statements as the Company has no derivative instruments. Environmental Matters The Company, like others in the commercial real estate industry, is subject to numerous environmental laws and regulations and the operation of dry cleaning plants at the Company's shopping centers is the principal environmental concern. The Company believes that the dry cleaners are operating in accordance with current laws and regulations and has established procedures to monitor their operations. The Company has approximately 39 properties that will require or are currently undergoing varying levels of environmental remediation. These remediations are not expected to have a material financial effect on the Company due to financial statement reserves and various state-regulated programs that shift the responsibility and cost for remediation to the state. Based on information presently available, no additional environmental accruals were made and management believes that the ultimate disposition of currently known matters will not have a material effect on the financial position, liquidity, or operations of the Company.
Inflation Inflation has remained relatively low during 2000 and 1999 and has had a minimal impact on the operating performance of the shopping centers; however, substantially all of the Company's long-term leases contain provisions designed to mitigate the adverse impact of inflation. Such provisions include clauses enabling the Company to receive percentage rentals based on tenants' gross sales, which generally increase as prices rise, and/or escalation clauses, which generally increase rental rates during the terms of the leases. Such escalation clauses are often related to increases in the consumer price index or similar inflation indices. In addition, many of the Company's leases are for terms of less than ten years, which permits the Company to seek increased rents upon re-rental at market rates. Most of the Company's leases require the tenants to pay their share of operating expenses, including common area maintenance, real estate taxes, insurance and utilities, thereby reducing the Company's exposure to increases in costs and operating expenses resulting from inflation. Item 3. Quantitative and Qualitative Disclosures About Market Risk Market Risk The Company is exposed to interest rate changes primarily as a result of its Line and long-term debt used to maintain liquidity and fund capital expenditures and expansion of the Company's real estate investment portfolio and operations. The Company's interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flows and to lower its overall borrowing costs. To achieve its objectives the Company borrows primarily at fixed rates and may enter into derivative financial instruments such as interest rate swaps, caps and treasury locks in order to mitigate its interest rate risk on a related financial instrument. The Company has not been party to any market risk sensitive instruments during the reporting period ending September 30, 2000 and does not plan to enter into derivative or interest rate transactions for speculative purposes. The Company's interest rate risk is monitored using a variety of techniques. The table below presents the principal amounts maturing (in thousands), weighted average interest rates of remaining debt, and the fair value of total debt (in thousands), by year of expected maturity to evaluate the expected cash flows and sensitivity to interest rate changes. <TABLE> <CAPTION> Fair 2000 2001 2002 2003 2004 Thereafter Total Value ---- ---- ---- ---- ---- ---------- ----- ----- <S> <C> <C> <C> <C> <C> <C> <C> <C> Fixed rate debt 58,413 42,671 49,049 18,248 205,232 478,387 852,000 862,296 Avg. interest rate for all 7.93% 7.92% 7.86% 7.84% 8.02% 8.19% - - debt Variable rate LIBOR debt 33 32,405 305,000 - - - 337,438 337,438 Avg. interest rate for all debt 7.60% 7.59% - - - - - - </TABLE> As the table incorporates only those exposures that exist as of December 31, 1999, it does not consider those exposures or positions which could arise after that date. Moreover, because firm commitments are not presented in the table above, the information presented therein has limited predictive value. As a result, the Company's ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during the period, the Company's hedging strategies at that time, and interest rates. Forward Looking Statements This report contains certain forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) and information relating to the Company that is based on the beliefs of the Company's management, as well as, assumptions made by and information currently available to management. When used in this report, the words "estimate," "project," "believe," "anticipate," "intend," "expect" and similar expressions are intended to identify forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions; changes in customer preferences; competition; changes in technology; the integration of acquisitions, including Pacific; changes in business strategy; the indebtedness of the Company; quality of management, business abilities and judgment of the Company's personnel; the availability, terms and deployment of capital; and various other factors referenced in this report. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Part II Item 2 Changes in Securities and Use of Proceeds (c) See the first paragraph of Note 6 to the Consolidated Financial Statements included herein, which is incorporated by reference. Item 6 Exhibits and Reports on Form 8-K: (a) Exhibits 3 Restated Articles of Incorporation of Regency Realty Corporation as amended to date. 10. Material Contracts Wells Fargo Second Amended and Restated Credit Agreement 27. Financial Data Schedule (b) Reports on Form 8-K None
SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: November 6, 2000 REGENCY REALTY CORPORATION By: /s/ J. Christian Leavitt ------------------------- Senior Vice President, and Chief Accounting Officer