Greetings, and welcome to the Regency Centers' Fourth Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode and interactive question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Michael Mas. Thank you, you may begin.

Good morning and welcome to Regency's fourth quarter 2016 earnings conference call. Joining me today are Hap Stein, our Chairman and CEO; Lisa Palmer our President and Chief Financial Officer; Mac Chandler, Executive Vice President of Development; Jim Thompson, Executive Vice President of Operations; and Chris Leavitt, Senior Vice President and Treasurer. Before we begin, I'd like to address forward-looking statements that may be discussed on the call. Forward-looking statements involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements. Please refer to the documents filed by Regency Centers Corporation with the SEC, specifically the most recent reports on Forms 10-K and 10-Q, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. In addition, on today's call we will reference certain non-GAAP financial measures. In accordance with SEC rules, we've provided a reconciliation of these non-GAAP measures to their respective and most directly comparable GAAP measures, which may be found in the tables included in today's earnings release. As an added note, we request that callers observe a two question limit during the Q&A portion of our call to allow everyone a chance to participate. If you have additional questions, please rejoin the queue. Finally, please understand that given our pending merger with Equity One, we will be unable to answer any questions related to that transaction and refer you to our filings for the latest information. I will now turn the call over to Hap.

Thanks Mike. Good morning everyone, and thank you for joining us. 2016 was an exceptional year for Regency on all fronts. As I've said many times Regency's year-end and year-out performance is the direct results are forward thrives and through principles. First, the [Indiscernible] replaceable portfolio at high quality assets driving superior NOI growth. In 2016, NOI growth was a strong 3.5%, representing the fifth consecutive year of growth at or above these levels. Second, the development and redevelopment driven investments strategy executed by an experienced and disciplined team, producing great centers that add meaningfully to our NAV per share; in 2016, we profitably executed on our strategy starting $220 million of high quality developments and redevelopments at attractive returns. Third, a fortress balance sheet that supports our growth, allowing us uninterrupted access to capital at the most advantageous pricing; throughout 2016 and in January of this year, we strengthened our balance sheet even further to the prudent use of capital markets, resulting in one of the most pristine balance sheets in the business. Finally, Regency's talented, dedicated and B team the best in the business. As always, I want to thank my colleagues for their hard work and dedication. The results of their exemplary efforts had led to average growth in core FFO over the last three years of almost 8%, and total shareholder return over that same period at the top of our peer group. Before I turn the call over to Mac and Lisa, let me remind you why we are so excited about our pending merger with Equity One. The transaction combines two high-quality, highly complementary platforms and firmly establishes our position as the premier national shopping center company, with several unique advantages. We will own an unparallel portfolios with an excellent mix of first-class neighborhood and community centers for the growth we anchored focus. As important, this merger deepens our concentrations in affluent and in-field trade areas with strong demographics to attract leading retailers, combined these factors will produce better merchandizing and higher rental and occupancy rates, driving stronger organic growth. Also the two portfolios have significant overlaps in many of the countries, but as attractive metro areas, providing us with enhanced brand presence and economies of scale contributing to the transaction substantial synergies. In addition, considerable value from the unmatched pipeline of development and redevelopment opportunities will be unlocked by our experienced team. The merger preserves our balance sheet strength and flexibility, maintaining our access to multiple sources of capital, at the lowest cost. Results of these compelling attributes will be a diversified cash flow stream with better NOI, better earnings and better NAV growth potential. I cannot overstate our excitement and enthusiasm, and we look forward to closing the merger and creating substantial value for many years to come. I’ll now like to turn the call over to Mac Chandler.

Thanks Hap and good morning. 2016 was an impressive year for development and redevelopment. During the year, we started 16 new projects representing a total investment of more than $200 million and a weighted 7.6% return. Despite significant competition for the best projects, we continue to source and execute on compelling opportunities in target markets that enhance our high-quality portfolio. I’ll quickly highlight a couple of our recent developments. In December, we started Chimney Rock Crossing, a 218,000 square feet center located with an affluent New York suburb, anchored by Whole Foods, Nordstrom Rack, and Saks Off 5th. This location will create a true regional drop, creating a dominate center for both best-in-class anchors and shopping center. We took ownership of the property with complex entitlements in place and anchored leases substantially negotiated, which created mitigated risks. The Village at Riverstone located within Houston’s fastest growing master-planned community also started in December. It would be a dominated Kroger-anchored center, aligned with meeting national and regional restaurants and restaurant providers, already more than 80% in Houston community before even start construction. This project will be an outstanding addition to our premier to Houston presence. These terrific new additions totaled more than $100 million of net new investments. At year end 2016, our in process developments and redevelopments represented a total investment nearly $300 million, yielding a blended return nearly 8%. Our ability to continue to execute on these great projects is a testament to our industry-leading national development platform, which is driven by a joint relationship, local market expertise and attractive cost of capital. This is why we are able to consistently source and deliver of the most compelling investment opportunities. As we look forward to 2017, I am enthusiastic about our pipeline. To that end, we have great visibility a couple of first half 2017 starts. The first [Indiscernible] anchored center in the DC market and the second a Whole Foods opportunity located outside of Chicago. In addition, we have other promising opportunities that are progressing nicely in target markets like Seattle, Miami and Raleigh. Likewise, I am particularly excited about the prospects of sharing with you our vision of Equity One's redevelopment pipeline in the months become. I would now like to turn call over to Lisa.

Thank you, Mac. Good morning all. Our high-quality portfolio continues to perform extremely well. At year end, our same property percent lease is more than 96%, including 93% of shop basis. This is especially impressive given the team's accomplishment in the face of a handful of retailer bankruptcies. The benefit of such a strong portfolio running a historically high occupancy continues to translate in the better merchandizing and pricing color. Leasing spread for the quarter where the mid-teens including rent growth of more than 12% for new deals. This strength and core fundamentals led the same property NOI growth for the year of 3.5%, including nearly 4% in the fourth quarter primarily driven by growth in base rents. But as a reminder for 2017, we do anticipate moderating same property NOI growth impacted by last year's bankruptcy-related store closings. While we've largely backfilled these anchor boxes, the new tenants will be up and running until the second half of this year. Turning to the capital markets, maintaining a fortress balance sheet continues to be the foundational principle for Regency; and as we entered 2017, we have the strongest balance sheet in the Company's history. Subsequent to year-end, we issued our first ever third-year bonds with proceeds of $300 million at a 4.4% coupon. These currencies will be used to fund the full redemptions of our 6 and 5 days percent preferred stock. This issuance and the redemption significantly improved free cash flows and fixed charge coverage. At the same time, we also issued $350 million of 10-year bonds at a 3.6% coupon. These proceeds will be used for certain transaction cost related to the pending merger, including the refinancing of some of the in place Equity One's short-term debt. Importantly, in the unlikely event, if the merger does not close,…

[Operator Instructions] Our first question comes from Craig Schmidt from Bank of America. Please go ahead.

I wondered if you could comment on retailers appetite to participate in redevelopments, is that interest growing whole in steady or somewhat decreasing?

Thanks Craig. This is Mac. I'd be happy to answer that. I think it's steady to just growing, I mean retailers are constantly looking for shopping centers that are relevant, that are contemporary and we have a robust pipeline of active redevelopments, and one step we're working on some in the near future, but some also many years away. So, it's a healthy trend and we feel it's continuing to want to play a part in an active redevelopment.

And then just on transactions. Are you noticing that transaction pace is slowing nationally? Or what should read on transactions for 2017?

You're talking about capital market transactions or you are telling about our leasing transactions?

I am sorry, buying and selling of shopping centers. Maybe not that’s so much your outlook, but a national of its staying is active to '16 or slowing?

We haven't seen any material change. And if you think about the arena that we play in, it's a much smaller set on the buying side than national. So, we may not even necessarily see everything that’s coming nationally because I think it's pretty clear to our broker relationships to sell a relationship of the higher quality set we are targeting to buy. But at this point in time, there is still a lot of capital pursuing, the higher quality premier shopping centers, and we continue to see demand for the lower growth, slightly higher cap rate properties, but we intend to sell.

Our next question comes from Christy McElroy from Citi. Please go ahead.

Lisa, I am thinking about the components of your same-property NOI growth in '17, realizing the slower growth rate is mostly bankruptcy related from 2016 closures. What are you assuming for releasing spreads? And has anything changed in terms of pricing power and lease negotiation given the tougher retail environment?

I’ll start that and Mac or Jim, if anybody wants to add any color after. For same property NOI growth, we do have the headwinds of the bankruptcies we saw that a little bit in obviously latter half of 2016 as well. We also have -- we are also going to be in 2017 comping off relatively higher other income line item, I think you've probably saw that in our actual results of rather large easy payment, actually at one of our future redevelopments that Mac just kind of alluded to. But with regards to rents spreads, it's still really healthy robust demand, and we would expect that leasing spread will be very similar to what we have achieved in the past few years, which is double digit. I think that overtime, you may see us maybe stabilizing the high single digits, but we are still assuming that we are going to have very healthy double digit rent growth.

The only thing I would add is, I think at 96% lease we still have -- we're enjoying pretty strong landlord leverage. And with the qualities of portfolio, we feel good to see the spreads are going to maintain around the levels we have been doing.

Great, thanks. And then just a higher level, in your comments recent with groceries especially some of these specialty groceries, how often is the topic of on line new tick providers and sort of growth over that business come up in discussion of its future competitive thread, in a contents of sort of the overall thread from e-commerce to grocery?

Christy, it's Mac, I’ll be happy to answer that. We heard in conversations, the grocers actually especially groceries are well aware of it, but it's hasn’t dampened their expansion efforts whether desire to open new stores. So, some are trying to do it themselves. Some are outsourcing as we all know. But it hasn’t affected their core business, it's a sort of a unique component of that business, but it's not the first topic of conversation, but eventually it comes up, but it's not prominent in the size.

Ironically, they're focused from a new-store standpoint as investment filled in urban areas, which is why there is more off and online competition. So, like Mac said, they're not all mindful of it as we are not, but at the same time -- and they are being highly selective, but it doesn’t seem like it's we still got healthy demand for space.

Our next question is from Jeremy Metz from UBS. Please go ahead.

I know you specifically can't talk about the Equity One deal here, but one of the attractive aspects is obviously the robust development pipeline, they had a lot of that was mixed used intensifying sites. So, maybe a question for Mac, but I was hoping if you could just more broadly talk about taking on bigger mixed used projects in today's environments, given the increasing pressure on retailers possibly for slowing demand for space and couple of this one is increasing sale and supply we're hearing about?

Well, I'll try to answer this in a broad sense I suppose to specifically to Equity One. The best way to perform on big larger scale mixed used projects is [Indiscernible] because you can be thoughtful and patient, and you can wait for the best possible outcomes in terms of entitlement and [Indiscernible] and design. So, those are easier to execute on, and we prefer those a lot. You are still seeing larger scale mixed used projects come out as well, that's apparent, but the trend you see in every major city. But most of those projects were conceived years ago, but there are still many people have equal number of projects that are on the boards and will see if they come out of ground. But the appetite doesn't appear to be accelerating or decelerating, if so pretty stay there, there is a clear demand from tenants and consumers to be in this box.

And we will be starting knock on wood, a mixed used development within next quarter. But just once again, Jeremy, our focus -- and we had substantially enhanced with Mac and his team and the teams did well. Our capabilities from mixed used standpoint and our focus is on being better to mixed used to get to the retail portions of those mixed used opportunities where they are within our owned portfolio or new development opportunities.

Meaning to continue to partner with best-in-class developers and operators for the other sectors that would be part of the mixed used --

Like we get in clear with and we have a long day

And like from this opportunity that we expect to start in the next quarter.

Got it. Appreciated. And then just Lisa one for you, you had mentioned having a shopping center in a contract and using the outstanding forward to fund that. So, in terms of the zero to 90 million of dispositions, should we think about that only happening, if you identified additional acquisitions from here and therefore and maybe more of a source of funding? Do you find additional deals?

The dispositions will fund our developments, and we do have developments in process that have spent that will happen this year. So, it's not even necessarily related to the new start although we have great visibility as Mac said in his prepared remarks on the call to several of those as well. If you think about free cash flows, which is almost a $100 million in 2016 and then disposed funding our developments.

And anything on the contract today?

The one that we have in -- you mean the acquisition that we have in contract in the Northeast, we will use the equity to fund that.

Sorry, on the disposition front, you had any under contract?

We do not.

We had late close in December and that was one of the close-in into the first quarter of this year, but it was --

Correct, the larger, the team across that you saw on our discloser, close to $50 million.

[Operator Instruction] And our next question comes from Ki Bin Kim from SunTrust. Please go ahead.

Could you just give a quick update on some of your development projects? I noticed that a couple of your projects expect the yield went down, any commentary on there?

Ki, this is Mac, I’ll answer that. We feel really good about our in process pipeline. It's performing well. There, we really have no specific terms to talk about. We did take a case in our Northeast project where we converted a pad, which we're going to ground lease and we converted it to building, a building that cause their cost to go up, but that’s pretty standard figure. But our returns are solid and we are hitting our underwriting lease. We feel good about that.

I think its new development that we brought online that was a lower -- that's not so much shift in what was already in process.

Okay, I might be looking at the wrong column. So, never mind about that. Yes, and I am not sure how much you want to talk about the merger? But just broadly speaking, I was wondering if -- since announcement, if there is any kind of new things that you've learned whether it'd be synergies or the way you want to run the corporate structure overall, any kind of commentary on there?

We love to talk about it, because we are really excited about it. But unfortunately the good point, we are really limited in what we can say. And since announcement, we work through separately operating companies and we have been operating in that way and are required to operate in that way. So, we can't wait to talk about it and we will do that at the appropriate time.

Our next question comes from Floris van Dijkum from Boenning. Please go ahead.

Question for Hap or Lisa. You guys -- you are about embark on this merger, you got fortress balance sheet, 4.4 times net to EBITDA and be of most of the sector. You have got all the markets to that everybody wants and the coastal markets, and you've increased that with the -- if you add the Equity Once. The question I have is, so what are your biggest worries? Or what are the biggest concerns? Or what you think are the biggest risks to the business?

Let me just say, I think we've got it indicated before. While we are not on mindful of the economic challenges that are out there of the disruptors that are out there, but there is still a strong conviction on our part that well-anchored, well-located community and neighborhood shopping centers particularly those that grocery anchored are going to continue -- is going to be strong demand from the better retailers for those shopping centers. So that's number one. Number two, we believe that our development program is a great way to feel great shopping centers and redeveloped great shopping centers at attractive returns on capital that are adding to NAV. And I think you can have a high-quality portfolio and a right side and top core development program, and a fortress balance sheet that's the best way to navigate and an experienced management team to the challenges that are going to be out there. And I think, we are going to be very well positioned to the extent there is a downturn or a storm out there to weather that storm and even profit from those opportunities.

And does that mean that you feel pretty good where you are, but you are nimble enough to be able to withstand any sort of unforeseen events. Is that how we should read that answer?

Well, to think that any entity in the world is going to be totally immune to changes and technology to changes in economic conditions, I think that is that's not going to be the case. But at the same time, I think we are extremely well positioned to not only survive what may happen economically and what may happen from a in a very changing world. I think it's a thriving true formula and I think also to not only survive, but to thrive. And it doesn’t mean that we are going to sit fast. Because as we said to ourselves, we are a -- we think we are good, but we think that there is an opportunity to continue to improve in every aspect of our business, on a journey of building a great company.

Our next question comes from Michael Gorman from BTIG. Please go ahead.

Just had a question on disposition, if you look back over call at the last five years or so, you sold or counting the 2017 guidance -- you've sold about a 1.2 billion in assets kind of ranging from 6.5 caps up to kind of sub-8. I'm just wondering as you look at portfolio today kind of what if anything is less than that potential disposition bucket, as we go through 2017 and start looking out into 2018 and beyond?

We significantly reduce the number of properties and the percent of the value of our company that would fit in kind of the 6.5% to 8% cap rate and I mean significantly by virtue of selling and close to a $1 billion in property. So, we have very little out there. Shopping centers and neighborhoods half even just kind of alluded to a little there constantly evolving and changing, and there are always going to be centers that are going to be towards the lower quality and lower or above end of the spectrum in our portfolio. I don’t think it towards incident, if you will, but it's a really small percentage of what we owned. And when you think about our strategic funding model, we will use dispositions to continue to fund our development spend. And we will when appropriate access the capital market that’s we did in 2016. So, the best way to answer is this is very small part and what we would consider the low end of our spectrum is a pretty high bar, because I think we have one of the best portfolios in the business.

Great. So, Lisa, if I take your comments, is it's sort of fair to say that kind of going forward it's more -- it's less about, it will be less about getting rate of sort of a lower quality, but in a more just about preening and trading out what you consider to be the bottom end versus what's a better comp and development. So if there is future funding to developments at a disposition, the cap rates could be even lower than we are seeing right now?

That’s going to be property specific, but even looking at the properties that we sold last year. We sold them that had a five in front of this. So, yes, I mean that’s the case because it's not only just necessarily lower quality, but its lower growth, because part of the model is top recycle the lower growth then it maybe because of the lower quality, but it could do business there. There is not allowed inherent growth in that asset, so recycling capital from lower growth into higher quality, higher growth property.

[Operator Instruction] Our next question comes from Chris Lucas from Capital One Securities. Please go ahead.

Just a big general question and it relates to sort of the amount of time it gets between a lease is signed to win rent commences. Has there been any shift either quick, more quickly or longer in that process say over the last year or so?

Chris, this is Jim. We really haven't seen any noticeable difference quite frankly. It does take time, it's probably close -- it's probably tough around the front end to have tenants really there very focus, they are very picky, once you execute to delivery, we are not saying expanded period of time.

Okay and then maybe expand a little bit on the Chimney Rock development, the yield is definitely lower than what we are using to see from you guys from a roundup perspective. What was the underwriting approach? And what is unique about this been has sort of value add beyond that sort of expected going in 6.5 yield?

Chris, really it's a risk adjusted return, that’s what the big picture we have looking at it. The family that has owned the site for decade or so, spent a long time getting a very complex rate entitlements, including some very expensive off sites, which were not only entitled, but actually delivered in site. So, they also brought along with the opportunity really all four incur leases, which were substantially negotiated in final lease form and one of them was actually signed. So from a risk adjusted basis, we were comfortable stepping into that project. The site was also 30% graded and had some very complex grading that went along with that and risky. And because they had taken on the first started it, they had mitigated the risk out of the project and determined how much [Indiscernible] was there, which they moved and remediated. So, we stepped into with it, it was not completely a layout, but very much different than the typical development. We feel that return was appropriate, still a good 150 to probably 200 basis points spread between that where we could sell it today, got good growth. They did a good job, negotiating the four anchored leases. So, they have good growth and good visibility towards the shopping leasing, and we're getting really good quality tenants with good growth, and we love the location well too. This is a high, high very density location, very affluent and just to be for the one of a kind center. It's the closest of those within 30-minute drive time, and we feel really good about it. It's failing to attract a lot of very affluent customers that triggers.

I would say to that I agree what Mac said, it's 200 basis points instead of saying or where we could sell today or where we could buy it today. So, this is fairly long and very long time, for a very long time.

Our next question comes from Christy McElroy with Citi. Please go ahead.

Hey, it's Michael Dorman from Citi. Lisa you mentioned just you're operating two separate companies today and you still wanted to stay close in the merger to share more information. Can you just sort of let us know what the plan is in terms of timing of sharing that information? I know, you are planning a larger conference call post merger or you just kind of wait for 1Q results? Just for that we should know at what point you are going to come out with a more full from document and opportunity for us those questions?

The Shareholder Meeting is on February 24th and then I'm certain that you read every page of the merger agreement, so you will then know that the schedule close would be March 1st based on the number of days post the Shareholder Meeting. And then, at this time our plan is to wait until our first quarter earnings call and certainly if that changes you guys will know, but there is a lot of complexities around the non-cash mark-to-market and we just want to be sure that we have all of that fully done so that we can give 100% disclosure rather than seeing it up to you guys and pieces. We are very competitive to being very transparent and we will do our best so I'll give the best disclosure at they all return. But will reiterate what we told all of you when we made the announcement in November and in subsequent Investor Meeting. We still expect it to be accretive to core FFO even before of that incremental non-cash mark-to-market and we expect it to be even more accretive to same property NOI growth than it is to core FFO.

Well, I don’t think the non-cash comes on cash and there is really no impact on our valuation really and I'm curious too much about that I think they care more you can see from the questions on the call about the integration the development the redevelopment operating structural personnel things like that. I'm just curious as you will you sort of host a more in-depth Analyst Day to go through the go forward as we see entities come together?

Sure. Hi, Michael, this is Mike. A more fulsome Analyst Day and Investor Day is certainly in our minds, we haven’t hosted one in quite a long-time, and this would actually be the time to reach to reengage on that front. We are working on plans those plans would likely to be included event towards the end of the year and we are looking forward to that very much and introducing our thoughts around many of these projects that will be inheriting as well as go forward plans for the combined company.

And then just lastly just in terms of transition as we think about it. How much of the senior seats we exactly going to see from Equity One would come over? And that deal closes March 1st, should we expect any transition from the B team or is it more lower level, market level people that you are assuming of it initially?

There would be done -- that can be pretty clear that there will be no sea sweep [ph] coming over to the combined company. And then the addition would basically be operation exposure field level and back half of this which lead to be new employee hires or Equity One plus.

Even on a transitionary period, so there is no one even coming over full period of time at all?

We look at -- we'll address that.

Not from the C.

Not from C sweep [ph].

Okay.

From transition a standpoint, we would obviously address which necessary to operate the properties to do the appropriate amount of accounting and the transition from, on from redevelopments.

Okay thank you.

There wide work to be done but we feel very, very comfortable what I find as more to come on specifics.

Thank you. This does conclude the question-and-answer session. I would like to turn the floor back over to management for any closing comments.

We appreciate your time and we wish you to rest -- a good rest of the week and a great weekend. Thank you very much.