REGENCY CENTERS CORP (REG)

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

Forward-Looking Statements

Certain statements in this document regarding anticipated financial, business, legal or other outcomes including business and market conditions, outlook and other similar statements relating to Regency's future events, developments, or financial or operational performance or results, are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are identified by the use of words such as "may," "will," "could," "should," "would," "expect," "estimate," "believe," "intend," "forecast," "project," "plan," "anticipate," "guidance," and other similar language. However, the absence of these or similar words or expressions does not mean a statement is not forward-looking. While we believe these forward-looking statements are reasonable when made, forward-looking statements are not guarantees of future performance or events and undue reliance should not be placed on these statements. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance these expectations will be attained, and it is possible actual results may differ materially from those indicated by these forward-looking statements due to a variety of risk factors, including, without limitation, risk factors relating to:

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the current economic and geopolitical environments

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pandemics or other health crises

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operating retail-based shopping centers

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real estate investments

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the environment affecting our properties

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corporate matters

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our partnerships and joint ventures

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funding strategies and capital structure

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information management and technology

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taxes and the Parent Company’s qualification as a REIT

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the Company’s stock,

As more specifically described in Part I, Item 1A. “Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 Form 10-K") and in Part II, Item 1A. "Risk Factors" in this Report. When considering an investment in our securities, you should carefully read and consider these risks, together with all other information in our most recent 2025 Form 10-K, subsequent Quarterly Reports on Form 10-Q, and our other filings with and submissions to the SEC. If any of the events described in the risk factors actually occur, our business, financial condition or operating results, as well as the market price of our securities, could be materially adversely affected. Forward-looking statements are only as of the date they are made, and Regency undertakes no duty to update its forward-looking statements, whether as a result of new information, future events or developments or otherwise, except as and to the extent required by law.

Non-GAAP Financial Measures

In addition to the required Generally Accepted Accounting Principles ("GAAP") presentations, we use and report certain non-GAAP financial measures as we believe these measures improve the understanding of our operational results. We believe these non-GAAP financial measures provide useful information to our Board of Directors, management and investors regarding certain trends relating to our financial condition and results of operations. Our management uses these non-GAAP financial measures to compare our performance to that of prior periods for trend analyses, purposes of determining management incentive compensation and budgeting, forecasting and planning purposes. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP financial measures to determine how best to provide relevant information to the public, and thus such reported measures could change.

We do not consider non-GAAP financial measures an alternative to financial measures determined in accordance with GAAP, rather they supplement GAAP measures by providing additional information we believe to be useful to our shareholders. The principal limitation of these non-GAAP financial measures is that they may exclude significant expense and income items that are required by GAAP to be recognized in our Consolidated Financial Statements. In addition, they reflect the exercise of management's judgment about which expense and income items are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, reconciliations of the non-GAAP financial measures we use to their most directly comparable GAAP measures are provided. Non-GAAP financial measures should not be relied upon in evaluating the financial condition, results of operations, or future prospects of the Company.

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Our non-GAAP financial measures include the following:

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Adjusted Funds From Operations ("AFFO") is an additional performance measure we use that reflects cash available to fund the Company’s business needs and distribution to shareholders. AFFO is calculated by adjusting Core Operating Earnings ("COE") for (i) capital expenditures necessary to maintain and lease our portfolio of properties, (ii) debt cost and derivative adjustments and (iii) stock-based compensation.

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Core Operating Earnings is an additional non-GAAP performance measure that adjusts Nareit Funds from Operations ("Nareit FFO") to exclude certain non-cash and other items that impact the comparability of the Company's period-over-period performance. Core Operating Earnings excludes from Nareit FFO: (i) certain income or expenses related to non-comparable events and transactions; (ii) gains or losses from the early extinguishment of debt; (iii) certain non-cash items derived from straight-line rents, above and below market rent amortization, and debt and derivative mark-to-market amortization, and (iv) other non-cash or non-comparable amounts as they occur.

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Nareit Funds from Operations ("Nareit FFO") is a commonly used measure of REIT performance, which Nareit defines as net income, computed in accordance with GAAP, excluding gains on sales and impairments of real estate, net of tax, plus depreciation and amortization, and after adjustments for unconsolidated real estate investment partnerships and joint ventures. We compute Nareit FFO for all periods presented in accordance with Nareit's definition.

Companies use different depreciable lives and methods, and real estate values historically fluctuate with market conditions. Since Nareit FFO excludes depreciation and amortization and gains on sale and impairments of real estate, it provides a performance measure that, when compared year over year, reflects the impact on operations from trends in percent leased, rental rates, operating costs, acquisition and development activities, and financing costs. This provides a perspective of our financial performance not immediately apparent from net income determined in accordance with GAAP. Thus, Nareit FFO is a supplemental non-GAAP financial measure of our operating performance, which does not represent cash generated from operating activities in accordance with GAAP; and, therefore, should not be considered a substitute measure of cash flows from operations.

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Net Operating Income ("NOI") is the sum of base rent, percentage rent, termination fee income, tenant recoveries, other lease income, and other property income, less operating and maintenance expenses, real estate taxes, ground rent, termination expense, and uncollectible lease income. NOI excludes straight-line rental income and expense, above and below market rent and ground rent amortization, tenant lease inducement amortization, and other fees. We also provide disclosure of NOI excluding termination fees, which excludes both termination fee income and expenses.

Management believes that NOI is a useful measure for investors because it provides insight into the core operations and performance of our properties, independent of the capital structure, financing activities, and non-operating factors. By focusing on property-level performance, NOI allows investors to compare the performance of our real estate assets across periods and with those of other REIT peers in the industry, facilitating a clearer understanding of trends in occupancy, rental income, and operating expense management. In addition to its relevance for investors, management uses NOI as a key performance metric in making operational and strategic decisions. NOI is used to evaluate income generated from shopping centers (i.e., return on assets) and to guide decisions on capital investments. These decisions may include acquisitions, redevelopments, and investments in capital improvements.

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Pro-rata information includes 100% of our consolidated properties plus our economic share (based on our ownership interest) in our unconsolidated real estate investment partnerships.

We provide Pro-rata financial information because we believe it assists investors and analysts in estimating our economic interest in our consolidated and unconsolidated real estate investment partnerships, when read in conjunction with our reported results under GAAP. We believe presenting our Pro-rata share of assets, liabilities, operating results, and other metrics, along with certain other non-GAAP financial measures, makes comparisons of our operating results to those of other REITs more meaningful. The Pro-rata information provided is not, nor is it intended to be, presented in accordance with GAAP. The Pro-rata supplemental details of assets and liabilities and supplemental details of operations reflect our proportionate economic ownership of the assets, liabilities, and operating results of the properties in our portfolio.

The Pro-rata information is prepared on a basis consistent with the comparable consolidated amounts and is intended to more accurately reflect our proportionate economic interest in the assets, liabilities, and operating results of properties in our portfolio. We do not control the unconsolidated real estate investment partnerships, and the Pro-rata presentations of the assets and liabilities, and revenues and expenses do not represent our legal claim to such items. The partners are entitled to profit or loss allocations and distributions of cash flows according to the operating agreements, which generally provide for such allocations according to their invested capital. Our share of invested capital establishes the ownership interests we use to prepare our Pro-rata share.

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The presentation of Pro-rata information has limitations which include, but are not limited to, the following:

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The amounts shown on the individual line items were derived by applying our overall economic ownership interest percentage determined when applying the equity method of accounting and do not necessarily represent our legal claim to the assets and liabilities, or the revenues and expenses; and

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Other companies in our industry may calculate their Pro-rata interest differently, limiting the comparability of Pro-rata information.

Because of these limitations, the Pro-rata financial information should not be considered independently or as a substitute for our financial statements as reported under GAAP. We compensate for these limitations by relying primarily on our GAAP financial statements, using the Pro-rata information as a supplement.

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Same Property NOI is a key non-GAAP financial measure commonly used by REITs to evaluate operating performance. It is calculated on a Pro-rata ownership basis for properties owned and operated for the entirety of both the current and prior comparable reporting periods.

Same property NOI includes revenues and operating expenses associated with these properties but excludes items that are not indicative of ongoing operating performance. These include, without limitation, termination fees, as well as corporate-level expenses, financing costs, a

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executing on our Strategy

During the year ended December 31, 2025, we had Net income attributable to common shareholders of $513.8 million as compared to $386.7 million during the year ended December 31, 2024. The increase was primarily attributable to a $72.2 million gain recognized from a partial distribution-in-kind transaction and a $45.2 million increase in base rent from same properties, reflecting improved operating performance.

During the year ended December 31, 2025:

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Our Pro-rata same property NOI, excluding termination fees, grew 5.3%, as compared to the year ended December 31, 2024, primarily attributable to improvements in base rent and recoveries from increases in year over year occupancy rates, contractual rent steps in existing leases, and positive rent spreads on comparable new and renewal leases.

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We executed 1,899 new and renewal leasing transactions representing 7.4 million Pro-rata SF with positive rent spreads of 10.8% during 2025, compared to 2,032 leasing transactions representing 9.9 million Pro-rata SF with positive rent spreads of 9.5% in 2024. Rent spreads are calculated on all executed leasing transactions for comparable Retail Operating Property spaces, including spaces vacant greater than 12 months.

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At December 31, 2025, our total property portfolio was 96.1% leased while our same property portfolio was 96.5% leased, compared to 96.3% and 96.6%, respectively, at December 31, 2024.

We continued our development and redevelopment of high-quality shopping centers:

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Estimated Pro-rata project costs of our current in process development and redevelopment projects totaled $597.4 million compared to $497.3 million at December 31, 2024.

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Development and redevelopment projects completed during 2025 represented $212.4 million of estimated net project costs, with an average stabilized yield of 10.1%. A stabilized yield for development and redevelopment projects represents the incremental NOI (estimated stabilized NOI less NOI prior to project commencement) divided by the total project costs.

We maintained liquidity and financial flexibility to cost effectively fund investment opportunities and debt maturities:

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In February 2025, the Company received a credit rating upgrade to A- with a stable outlook, from S&P Global Ratings. The Company maintains an A3 rating with a stable outlook from Moody’s Investors Service.

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In May 2025, the Company issued $400 million of senior unsecured notes due 2032, at a par value of 99.279% and a coupon of 5.0% (the "2025 Notes").

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In July 2025, as consideration for the acquisition of five operating properties, the Operating Partnership issued 2,773,087 Common Units, and assumed $150 million of secured mortgage debt with a weighted average interest rate of 4.2% and an average remaining term of approximately 12 years.

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The Company settled forward sales agreements entered into during 2024 under its At-the-Market ("ATM") program as follows:

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In August 2025, the Company issued 673,172 shares of common stock and received $49.2 million of net proceeds.

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In October 2025, the Company issued an additional 666,205 shares of common stock and received $49.1 million of net proceeds. Upon completion of these settlements, the Company had fully settled all forward sales agreements entered into during 2024.

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In October 2025, the Company received a property distribution from its Regency-GRI real estate investment partnership. The distribution involved 11 of the 66 properties within the partnership, and the Company received five of these properties, which had an aggregate fair value of $113.9 million. In addition, the Company assumed an existing fixed rate mortgage loan on one property of $10 million, maturing January 2026 with an interest rate of 3.95%. The remaining six properties were distributed to the Company's partner. The Company repaid the assumed mortgage loan in full in December 2025.

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In November 2025, the Company repaid $250 million of fixed-rate unsecured debt upon maturity.

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As of December 31, 2025, we had $441.8 million of loans maturing during the next 12 months, including Regency's share of maturities within our unconsolidated real estate partnerships, which we intend to refinance or pay off as they mature. Of this amount, $88.0 million was repaid at maturity on February 2, 2026.

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At December 31, 2025, we had $1.4 billion available on the Line, which expires on March 23, 2028 unless we exercise the available options to extend the expiration for the first of two additional consecutive six-month periods, in which case the term will be extended in accordance with any such option exercise.

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Leasing Activity and Significant Tenants

We believe our high-quality, neighborhood and community shopping centers located in suburban trade areas with compelling demographics create attractive spaces for retail and service providers to operate their businesses.

Pro-rata Percent Leased

The following table summarizes Pro-rata percent leased of our combined consolidated and unconsolidated shopping center portfolio:

Pro-rata Leasing Activity

The following table summarizes leasing activity, including our Pro-rata share of activity within the portfolio of our real estate partnerships (totals as a weighted-average PSF):

The weighted-average base rent PSF on signed Shop Space leases during 2025 was $41.67 PSF, which is higher than the weighted average annual base rent PSF of all Shop Space leases due to expire during the next 12 months of $37.85 PSF. New and renewal rent spreads, compared to prior rents on these same spaces leased, were positive at 10.8% for the 12 months ended December 31, 2025, compared to 9.5% for the 12 months ended December 31, 2024.

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Diversification and Concentration of Tenant Risk

We seek to reduce our risk by limiting concentration. For example, we utilize geographic diversification, as described in "Item 2. Properties" of this Report, and also seek to avoid dependence on any single property, market, or tenant. Based on percentage of annualized base rent, the following table summarizes our most significant tenants, of which four of the top five are grocers:

(1)
Includes Regency's share of unconsolidated properties and excludes those owned by anchors.

Bankruptcies and Credit Concerns

Our management team devotes significant time to researching and monitoring consumer preferences and trends, customer shopping behaviors, changes in delivery methods, shifts to e-commerce, and changing demographics in order to anticipate the challenges and opportunities impacting our industry. We seek to mitigate potentially adverse impacts through maintaining a high quality portfolio, diversifying our geographic and tenant mix, replacing less successful tenants with stronger operators, anchoring our centers with market leading grocery stores that drive customer traffic, and investing in suburban trade areas with compelling demographic populations benefiting from high levels of disposal income.

We recognize that current domestic and global economic policies and conditions such as tariffs, trade deal activity, inflation, labor cost and availability, energy prices, interest rate volatility, supply chain disruptions, access to and cost of credit, and tax and regulatory changes, have introduced additional business uncertainty to some of our tenants. These economic policies and conditions could place further financial strain on our tenants by impacting sales, raising costs and compressing margins. The impacts of these policies and conditions, which could included an economic downturn or recession, could negatively impact our tenants and their ability to continue to meet their lease obligations.

Although base rent is derived from long-term lease contracts, tenants that file for bankruptcy generally have the legal right to reject any or all of their leases and close related stores. Any unsecured claim we hold against a bankrupt tenant for unpaid rent might be paid only to the extent that funds are available and only in the same percentage as is paid to all other holders of unsecured claims. As a result, in a tenant bankruptcy situation it is likely that we would recover substantially less than the full value of any unsecured claims we hold. Additionally, we may incur significant expense to adjudicate our claim and significant downtime to re-lease the vacated space. In the event that a tenant with a significant number of leases in our shopping centers files for bankruptcy and rejects its leases, we could experience a significant reduction in our revenues. As of December 31, 2025, the tenants who are currently in bankruptcy and continue to occupy space in our shopping centers represent an aggregate of 0.69% of our Pro-rata annual base rent with no single tenant exceeding 0.5% of Pro-rata annual base rent.

For a discussion and analysis of the year ended December 31, 2024, compared to the same period in 2023, see "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 14, 2025.

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Results of Operations

Comparison of the years ended December 31, 2025 and 2024:

Changes in revenues are summarized in the following table:

Lease income increased by $100.0 million primarily due to the following:

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$62.9 million increase in Base rent, mainly driven by the following:

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$45.2 million increase resulting from same properties, including:

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$25.7 million increase due to increases from occupancy, contractual rent steps in existing leases, and positive rental spreads on new and renewal leases;

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$14.0 million increase due to redevelopment projects that commenced operations in 2025; and

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$5.5 million increase related to our acquisitions of the remaining ownership interests in and resulting consolidation of properties previously held in unconsolidated real estate partnerships;

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$16.2 million increase from acquisitions of operating properties in 2025 as compared to 2024 activity; and

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$5.0 million increase from rent commencements at completed development properties; partially offset by

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$3.5 million decrease due to disposition of operating properties.

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$31.1 million increase from contractual Recoveries from tenants which represents their proportionate share of the operating, maintenance, insurance, and real estate tax expenses that we incur to operate our shopping centers. Recoveries from tenants increased, mainly from the following:

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$23.2 million increase primarily driven by higher operating costs and higher recovery rates due to increased occupancy in the current year;

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$6.5 million increase driven by the acquisition of operating properties in 2025 as compared to 2024 and rent commencements at development properties; and

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$2.0 million increase related to our acquisitions of the remaining ownership interests in and resulting consolidation of properties previously held in unconsolidated real estate partnerships; partially offset by

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$0.5 million decrease due to disposition of operating properties.

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$1.6 million increase in Other lease income mainly due to increase in lease termination fee income.

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$4.2 million increase in Straight-line rent mainly due to timing and degree of contractual rent steps and new lease commencements.

There were no significant changes in Other property income, or Management, transaction, and other fees.

Changes in our operating expenses are summarized in the following table:

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Depreciation and amortization increased by $10.3 million, mainly due to the following:

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$16.7 million increase from acquisitions of operating properties and development properties becoming available for occupancy; and

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$3.9 million increase related to acquisitions of the remaining ownership interests in and resulting consolidation of properties previously held in unconsolidated real estate partnerships; partially offset by

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$9.1 million decrease from same properties mainly driven by the timing of capital expenditures being placed in service within our redevelopment projects and accelerated amortization of certain early tenant move-outs; and

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$1.4 million decrease from dispositions of operating properties.

Property operating expense increased by $16.2 million, mainly due to the following:

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$11.7 million increase from same properties primarily due to higher recoverable common area maintenance, management and utility expenses;

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$4.1 million increase in acquisitions of operating properties and development properties; and

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$1.4 million increase related to our acquisitions of the remaining ownership interests in and resulting consolidation of properties previously held in unconsolidated real estate partnerships; partially offset by

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$1.0 million decrease due to disposition of operating properties.

Real estate taxes increased by $7.9 million, mainly due to the following:

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$5.4 million increase from same properties primarily due to increases in real estate tax assessments across the portfolio;

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$2.4 million increase from the acquisitions of other operating properties and development properties; and

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$1.0 million increase related to our acquisitions of the remaining ownership interests in and resulting consolidation of properties previously held in unconsolidated real estate partnerships; partially offset by

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$1.0 million decrease from dispositions of operating properties.

General and administrative costs decreased by $2.1 million, mainly due to the following:

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$8.5 million decrease due to higher overhead capitalization resulting from increased development, redevelopment and leasing activity; and

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$2.0 million decrease due to changes in the fair value of participant obligations within the deferred compensation plan, which were attributable to changes in the fair values of those investments recognized in Net investment income; partially offset by

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$5.4 million increase in compensation costs primarily driven by performance-based incentive compensation; and

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$3.0 million increase primarily attributable to higher costs in business promotion, charitable contributions, professional fees and other general and administrative expenses.

Other operating expenses decreased by $2.0 million, mainly due to the $7.7 million of transition costs recognized in 2024 related to the UBP acquisition, partially offset by $5.7 million increase in environmental reserve costs, development pursuit costs, and other fees.

Changes in Other expense, net are summarized in the following table:

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Interest expense, net increased by $19.4 million primarily due to the following:

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$21.3 million increase in Interest on notes payable primarily due to new net public debt issuances in 2025 at higher rates as compared to 2024; and

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$1.9 million decrease in Interest income primarily due to lower interest rates in 2025 as compared to 2024 as well as lower average balances in interest bearing accounts and shorter durations of short term investment vehicles; partially offset by

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$3.7 million increase in Capitalized interest based on the timing and progress of our development and redevelopment projects.

In 2025, Provision for impairment of real estate of $4.6 million was recognized related to sales of five operating properties. In 2024 Provision for impairment of real estate of $14.3 million was recognized related to a sale of an operating property and the change in expected hold period of another operating property, which was subsequently sold in 2025.

During 2025, we recognized Gain on sale of real estate, net of tax of $24.5 million primarily from sales of two operating properties and two outparcels. During 2024, we recognized Gain on sale of real estate, net of tax of $34.2 million primarily from sales of five operating properties and recognition of two sales-type leases.

There were no significant changes in Loss (gain) on early extinguishments of debt.

Net investment income decreased by $2.1 million primarily driven by market volatility during the current period, including a $2.0 million decrease in returns on investments held in the non-qualified deferred compensation plan.

Equity in income of investments in real estate partnerships increased by $83.2 million due to:

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$76.0 million increase related to a gain recognized from a partial distribution-in-kind transaction and partial sales of real estate; and

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$7.2 million increase driven from increased occupancy and positive rental spreads on new and renewal leases.

The following represents the remaining components that comprise Net income attributable to common shareholders and unit holders:

Income attributable to noncontrolling interests increased by $4.0 million, primarily due to a $4.7 million increase associated with the issuance of 2.8 million exchangeable operating partnership units to unrelated third-party sellers in connection with the acquisition of five properties in July 2025, partially offset by a $0.7 million decrease in net income from other consolidated real estate partnerships.

There was no change in Preferred stock dividends.

Net income attributable to exchangeable operating partnership units increased by $4.7 million, mainly due to the issuance of 2.8 million exchangeable operating partnership units to unrelated third-party sellers in consideration for the acquisition of five properties in July 2025.

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Supplemental Earnings Information on Non-GAAP Financial Measures

We use certain non-GAAP financial measures, in addition to certain performance metrics determined under GAAP, as we believe these measures improve the understanding of the operating results. We believe these non-GAAP financial measures provide useful information to our Board of Directors, management and investors regarding certain trends relating to our financial condition and results of operations. Our management uses these non-GAAP measures to compare our performance to that of prior periods for trend analyses, purposes of determining management incentive compensation and budgeting, forecasting and planning purposes. We provide Pro-rata financial information because we believe it assists investors and analysts in estimating our economic interest in our consolidated and unconsolidated real estate partnerships, when read in conjunction with our reported results under GAAP. We believe presenting our Pro-rata share of operating results, along with other non-GAAP financial measures, may assist in comparing our operating results to other REITs. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP measures to determine how best to provide relevant information to the public, and thus such reported non-GAAP financial measures could change. See "Non-GAAP Financial Measures" in "Item 1. Business" for additional information regarding the definition of and other information regarding the non-GAAP financial measures we present in this Report.

We do not consider non-GAAP financial measures as an alternative to financial measures determined in accordance with GAAP, rather they supplement GAAP measures by providing additional information we believe to be useful to our shareholders. The principal limitation of these non-GAAP financial measures is that they may exclude significant expense and income items that are required by GAAP to be recognized in our Consolidated Financial Statements. In addition, they reflect the exercise of management's judgment about which expense and income items are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, reconciliations of the non-GAAP financial measures we use to their most directly comparable GAAP measures are provided, including as set forth below. Non-GAAP financial measures should not be relied upon in evaluating the financial condition, results of operations, or future prospects.

Pro-rata Same Property NOI (Non-GAAP Financial Measures):

Pro-rata same property NOI, excluding termination fees/expenses, changed from the following major components:

Total real estate revenue increased by $73.7 million, on a net basis, as follows:

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Base rent increased by $44.6 million due to contractual rent steps in existing leases, positive rental spreads on new and renewal leases, and increases in occupancy, as well as redevelopment projects completing and operating.

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Recoveries from tenants increased by $26.3 million due to higher recoverable expenses and increased occupancy.

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Uncollectible lease income decreased by $1.1 million primarily driven by higher collection rates in the current period resulting in reduced levels of uncollectible lease income.

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Total real estate operating expenses increased by $18.5 million, on a net basis, as follows:

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Operating and maintenance increased by $12.6 million primarily due to increases in common area maintenance, management fees, utility costs and other tenant-recoverable costs.

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Real estate taxes increased by $6.0 million primary due to an increase in real estate assessments across the portfolio.

Reconciliation of Pro-rata Same Property NOI to Net Income Attributable to Common Shareholders:

(1)
Includes straight-line rental income and expense, net of reserves, above and below market rent amortization, other fees, and noncontrolling interests.

(2)
Includes non-NOI income earned and expenses incurred at our unconsolidated real estate partnerships, including those separated out above for our consolidated properties.

(3)
Includes revenues and expenses attributable to Non-Same Property, Projects in Development, corporate activities, and noncontrolling interests.

Same Property Roll-forward:

Our same property pool includes the following property count, Pro-rata GLA, and changes therein:

(1)
SF adjustments arising from re-measurements or redevelopments.

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Nareit FFO, Core Operating Earnings and AFFO:

Our reconciliation of net income attributable to common shareholders to Nareit FFO, to Core Operating Earnings, and to AFFO is as follows:

(1)
Includes Regency's share of unconsolidated investment partnerships, net of amounts attributable to noncontrolling interests.

Liquidity and Capital Resources

General

We use cash flows generated from operating, investing, and financing activities to strengthen our balance sheet, finance our development and redevelopment projects, fund our investment activities, and maintain financial flexibility. A significant portion of our cash flows from operations is distributed to our common shareholders in the form of dividends in order to maintain our status as a REIT.

Except for $200 million of private placement debt, our Parent Company has no capital commitments other than its guarantees of the commitments of our Operating Partnership. All remaining debt is held by our Operating Partnership, its subsidiaries, or by our real estate partnerships. The Operating Partnership is a guarantor of the $200 million of outstanding debt of our Parent Company, which we expect to pay off at maturity in 2026 using available liquidity. The Parent Company will from time to time access the capital markets for the purpose of issuing new equity, and will simultaneously contribute all of the offering proceeds to the Operating Partnership in exchange for additional partnership units.

We continually assess our available liquidity and our expected cash requirements, including monitoring our tenant rent collections. We have access to and draw on multiple financing sources to fund our operations and our long-term capital needs, including the requirements of our in process and planned developments, redevelopments, other capital expenditures, and the repayment of debt. We expect to meet these needs by using a combination of the following: cash flows from operations after funding our common stock and preferred stock dividends, borrowings from our Line, proceeds from the sale of real estate, mortgage loan and unsecured bank financing, distributions received from our real estate partnerships, and when the capital markets are favorable, proceeds from the sale of equity securities or the issuance of new unsecured debt. We continually evaluate alternative financing options, and we believe we can obtain new financing on reasonable terms, although likely at higher interest rates than that of our debt currently outstanding, due to the current interest rate environment.

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On May 13, 2025, the Company issued $400 million of senior unsecured notes due 2032, at a par value of 99.279% and a coupon of 5.0%. The net proceeds were used (i) to reduce the outstanding balance on the Line, (ii) for the repayment of $250 million of 3.90% unsecured public debt due November 1, 2025, upon its maturity and (iii) for general corporate purposes, which may include the future repayment of other outstanding debt.

As of December 31, 2025, we had $441.8 million of loans maturing during the next 12 months, including Regency's share of maturities within our unconsolidated real estate partnerships, which we intend to refinance or pay off as they mature. We actively monitor the capital markets and maintain flexibility to access them opportunistically, while proactively managing our debt maturity profile to support a strong balance sheet. We currently expect to address these maturing obligations through a combination of cash flows from operations, refinancing, available liquidity under our Line, and proceeds from potential property sales. Of this amount, $88 million was repaid upon maturity on February 2, 2026.

Based upon our available cash balance, sources of capital, our current credit ratings, and the number of high quality, unencumbered properties we own, we believe our available capital resources are sufficient to meet our expected capital needs for the next year, although, in the longer term, we can provide no assurances.

In addition to our $104.7 million of unrestricted cash, we have the following additional sources of capital available:

(1)
Net of letters of credit issued against our Line.

(2)
The Company has the option to extend the maturity for two additional six-month periods.

The declaration of dividends is determined quarterly by, and in the discretion of, our Board of Directors.

Subsequent to December 31, 2025, our Board of Directors declared the following dividends:

While future dividends on shares of our common stock will be determined at the discretion of our Board of Directors, we plan to continue paying an aggregate amount of distributions to our stock and unit holders that, at a minimum, meet the requirements to continue qualifying as a REIT for federal income tax purposes.

We have historically generated sufficient cash flow from operations to fund our dividend distributions. During the years ended December 31, 2025 and 2024, we generated cash flows from operating activities of $827.7 million and $790.2 million, respectively, and paid $530.2 million and $507.0 million in dividends to our common and preferred stock and unit holders, in the same respective periods.

We currently have development and redevelopment projects in various stages of planning, design and construction, along with a pipeline of potential projects for future development or redevelopment. After funding the January 2026 dividends for our common and preferred stock and Operating Partnership units, we estimate that we will require capital during the next 12 months of approximately $910 million related to leasing commissions, tenant improvements, in-process developments and redevelopments, capital contributions to our real estate partnerships, and repaying maturing debt. These capital requirements may be impacted by increased costs of construction caused by, without limitation, tariffs and inflation affecting materials, labor, and services from third party contractors and suppliers. We continue to implement mitigation strategies including, but not limited to, entering into fixed cost construction contracts, pre-ordering materials, and other planning efforts. Further, continued challenges from permitting delays and labor and material shortages may extend the time to completion of these projects.

If we start new developments or redevelopments, commit to property acquisitions, repay debt with cash, declare future dividends, or repurchase shares of our common stock, our cash requirements will increase. If we refinance maturing debt, our cash requirements will decrease.

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We endeavor to maintain a high percentage of unencumbered assets. As of December 31, 2025, 87.3% of our consolidated real estate assets were unencumbered. Our low level of encumbered assets allows us to more readily access the secured and unsecured debt markets and to maintain borrowing capacity on the Line.

Our Line and unsecured debt require that we remain in compliance with various customary financial covenants, which are described in Note 8 of the Consolidated Financial Statements. We were in compliance with these covenants at December 31, 2025, and expect to remain in compliance.

Summary of Cash Flow Activity

The following table summarizes net cash flows related to operating, investing, and financing activities of the Company:

Net cash provided by operating activities:

Net cash provided by operating activities increased by $37.5 million due to:

•
$42.2 million increase in cash from operations due to the timing of receipts and payments, partially offset by

•
$4.7 million decrease in operating cash flow distributions from Investments in real estate partnerships.

Net cash used in investing activities:

Net cash used in investing activities increased by $94.5 million as follows:

Significant changes in investing activities include:

•
We paid $104.2 million in 2025 to purchase nine operating properties. In 2024, we paid $45.4 million to purchase one operating property.

•
During 2025, we invested $91.7 million more on real estate development and capital improvements than the comparable prior year period, as further detailed in a table below.

•
We sold seven operating properties and three land parcels in 2025 for proceeds of $125.0 million compared to six operating properties in 2024 for proceeds of $108.6 million.

•
We received property insurance claim proceeds of $5.3 million in 2024 primarily attributable to a single property that was impacted by a weather event in 2019.

•
During 2024, in connection with a secured lending transaction entered into by the Company, we issued a note receivable in the amount of $29.8 million at an interest rate of 6.8% maturing in January 2027, secured by a grocery-anchored shopping center. In addition, we issued $2.9 million of short-term notes receivable to real estate partners in 2024.

•
We collected $0.7 million in short-term note receivables from real estate partners in 2025, compared to $3.1 million in 2024.

•
Investments in real estate partnerships:

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o
In 2025, we invested $44.3 million, including $32.6 million to fund our share of debt repayments, $3.2 million to fund our share of an acquisition of an operating property, and $8.6 million to fund our share of development and redevelopment activities.

o
In 2024, we invested $41.3 million, to fund our share of acquiring one operating property within an existing real estate partnership, and for our share of development and redevelopment activities, including investing in two new ground-up development projects.

•
Return of capital from our unconsolidated investments in real estate partnerships includes sales or financing proceeds:

o
During 2025, we received $32.5 million, from our share of proceeds from outparcel sales and debt financing activities.

o
During 2024, we received $13.0 million, from our share of proceeds from debt financing activities and for the partial sale of an ownership interest in a real estate partnership.

•
Purchase of investment securities and proceeds from sale of investment securities pertain to investment activities held in our captive insurance company and our deferred compensation plan, as well as:

o
During 2025, we invested approximately $90 million in commercial time deposits with proceeds received from the 2025 Notes. These commercial deposits were subsequently settled at maturity during the third and fourth quarters of 2025.

o
During 2024, we invested approximately $90 million in commercial deposits with proceeds received from the sale of the January 2024 public offering of senior unsecured notes. These commercial deposits were subsequently settled at maturity during the second quarter of 2024.

We plan to continue developing and redeveloping shopping centers for long-term investment. During 2025, we deployed capital of $435.1 million for the development, redevelopment, and capital improvement of our real estate properties, comprised of the following:

•
We acquired four land parcels for development and one for redevelopment in 2025, compared to three land parcels for development and two income-producing outparcels in 2024.

•
Building and tenant improvements increased $7.1 million in 2025, primarily related to the timing and volume of capital projects.

•
Redevelopment costs are $7.0 million lower than the prior year. We intend to continuously improve our portfolio of shopping centers through redevelopment which can include adjacent land acquisition, existing building expansions, facade renovations, new out-parcel building construction, and redevelopments related to tenant improvement costs. The size and magnitude of each redevelopment project varies with each redevelopment plan. The timing and duration of these projects could also result in volatility in NOI. See the tables below for more details about our redevelopment projects.

•
Development costs are higher in 2025 due to the progress towards completion of our development projects in process. See the tables below for more details about our development projects.

•
Interest is capitalized on our development and redevelopment projects and is based on cumulative actual costs incurred. We cease interest capitalization when the property is no longer being developed or is available for occupancy upon substantial completion of tenant improvements, but in no event would we capitalize interest on the project beyond 12 months after the anchor tenant opens for business. If we reduce our development and redevelopment activity, the amount of interest that we capitalize may be lower than historical averages.

•
We have a dedicated staff of employees who directly support our development program, which includes redevelopment of our existing properties. Internal compensation costs directly attributable to these activities are capitalized as part of each project.

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The following table summarizes our development projects in-process and completed:

(1)
Estimated net development costs and GLA are reported based on the Company’s ownership interest in the real estate partnership at completion.

(2)
Estimated Stabilization Year represents the estimated first full calendar year that the project will reach our expected stabilized yield.

(3)
Includes leasing costs and is net of tenant reimbursements.

(4)
The values are reflected at the Company's pro-rata share of 50.0%, as the project was completed prior to the Company's purchase of its partner's 50.0% ownership interest.

The following table summarizes our redevelopment projects in process and completed:

(1)
Estimated net development costs are reported based on the Company's ownership interest in the real estate partnership at completion.

(2)
Estimated Stabilization Year represents the estimated first full calendar year that the project will reach our expected stabilized yield.

(3)
Includes leasing costs and is net of tenant reimbursements.

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Net cash used in financing activities:

Net cash flows used in financing activities decreased by $145.2 million during 2025, as follows:

Significant changes in financing activities include the following:

•
During 2025, we received $98.2 million in Net proceeds from common stock issuance upon settling forward sales agreements under our ATM program.

•
Tax withholding on stock-based compensation totaled $6.8 million and $19.5 million during the years ended December 31, 2025 and 2024, respectively.

•
During 2024, we paid $200.1 million to repurchase 3,306,709 shares of our common stock under our prior stock repurchase program.

•
During 2025, we paid $2.0 million for the Redemption of exchangeable operating partnership units.

•
During 2025, we received $16.6 million in Contributions from noncontrolling interests for the limited partners' share of development funding compared to $6.8 million in 2024.

•
During 2025, we distributed $41.0 million to limited partners, including redemption of non-controlling interest in two real estate partnerships. During 2024, we distributed $12.2 million to limited partners, including proceeds to partially redeem a non-controlling interest in one real estate partnership.

•
We paid $23.3 million more in Dividends paid to common shareholders and Distributions to exchangeable operating partnership unit holders in 2025 as a result of a higher dividend rate and an increase in the total number of shares and units outstanding.

•
We had the following debt related activity during 2025:

o
We repaid $250.0 million in unsecured public debt,

o
We received $397.1 million in proceeds from issuing unsecured public debt,

o
We received $55.0 million in net proceeds from our Line,

o
We received $10.0 million in proceeds from a mortgage refinancing,

o
We paid $91.3 million for debt repayments, including:

▪
$80.1 million for repaying seven mortgage loans at maturity, and

▪
$11.1 million in principal mortgage payments.

o
We paid $3.8 million in loan costs relating to the unsecured public debt offering.

•
We had the following debt related activity during 2024:

o
We repaid $250.0 million in unsecured public debt,

o
We received $722.9 million from issuing unsecured public debt

o
We repaid a net $87.0 million on our Line,

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o
We received $12.0 million from a mortgage refinancing,

o
We paid $142.5 million for debt repayments, including:

▪
$131.3 million for repaying three mortgage loans at maturity, and

▪
$11.2 million in principal mortgage payments.

o
We paid $16.7 million in loan costs relating to the recast of the Line as well as the unsecured public debt offering.

Contractual Obligations and Other Commitments

We have material cash obligations at December 31, 2025, which are discussed in our notes to Consolidated Financial Statements and include:

•
Mortgage loans, unsecured notes, and unsecured credit facilities as discussed in note 8, and related interest rate swaps as discussed in note 9;

•
We have shopping centers that are subject to non-cancelable long-term ground leases where a third party owns and has leased the underlying land to us to construct and/or operate a shopping center. We also have non-cancelable operating leases pertaining to office space from which we conduct our business. These lease obligations are discussed in note 7;

•
Our share of mortgage loans within our Investments in real estate partnerships, as discussed in note 4;

•
Letters of credit of $12.9 million issued to cover our captive insurance program and performance obligations on certain development projects, the latter of which will be satisfied upon completion of the development projects;

•
Obligations for retirement savings plans due to uncertainty around timing of participant withdrawals, which are solely within the control of the participant, and are further discussed in note 13; and

•
We will also incur obligations related to construction or development contracts on projects in process, as further described in the Liquidity and Capital Resources section; however, future amounts under these construction contracts are not due until future satisfactory performance under the contracts.

Critical Accounting Estimates

Knowledge about our significant accounting policies is necessary for a complete understanding of our Consolidated Financial Statements. The preparation of our Consolidated Financial Statements requires that we make certain estimates, judgments, and assumptions that impact the balance of assets and liabilities as of the financial statement date and the reported amount of income and expenses during the financial reporting period. These accounting estimates, judgments and assumptions are based upon, but not limited to historical experience, current trends, expected future results, current market conditions, and interpretation of industry accounting standards. While the following is not intended to be a comprehensive list of our accounting estimates, the estimates discussed below are believed to be critical because of their significance to the Consolidated Financial Statements and the possibility that future events may differ from those judgments, or that the use of different assumptions could result in materially different estimates. We review these estimates on a periodic basis to ensure reasonableness; however, the amounts we may ultimately realize could differ from such estimates.

Impairment of Real Estate Investments

In accordance with GAAP, we evaluate our real estate for impairment whenever there are events or changes in circumstances, including property operating performance, general market conditions or changes in expected hold periods, that indicate that the carrying value of our real estate properties (including any related amortizable intangible assets or liabilities) may not be recoverable. If such events or changes occur, we compare the current carrying value of the asset to the estimated undiscounted cash flows that are directly associated with the use and ultimate disposition of the asset. Our estimated cash flows are based on several key assumptions, including rental rates, expected leasing activity, costs of tenant improvements, leasing commissions, expected hold period, comparable sales information, and assumptions regarding the residual value upon disposition, including the exit capitalization rate. These key assumptions are subjective in nature and the resulting impairment, if any, could differ from the actual gain or loss recognized upon ultimate sale in an arm's length transaction. If the carrying value of the asset exceeds the estimated undiscounted cash flows, an impairment loss is recognized equal to the excess of carrying value over the estimated fair value.

The estimated fair value of real estate assets is subjective and is estimated through comparable sales information and other market data if available, as well as the use of an income approach such as the direct capitalization method or the discounted cash flow approach. The discounted cash flow method uses similar assumptions to the undiscounted cash flow method above, as well as a discount rate. Such cash flow projections and rates are subject to management judgment and changes in those assumptions could impact the estimation of fair value. In estimating the fair value of undeveloped land, we generally use market data and comparable sales information. Changes in events or changes in circumstances may alter the expected hold period of an asset or asset group, which may result in an impairment loss and such loss could be material to the Company's financial condition or operating performance.

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Recent Accounting Pronouncements

See note 1 to Consolidated Financial Statements.