Exhibit 99.1
[GRAPHIC OMITTED] [GRAPHIC OMITTED] Pennsylvania Real Estate Investment Trust
200 South Broad Street
Philadelphia, PA 19102
www.preit.com
Phone: 215-875-0700
Fax: 215-546-7311
Toll Free: 866-875-0700
FOR FURTHER INFORMATION:
AT THE COMPANY AT KCSA PUBLIC RELATIONS WORLDWIDE
Edward A. Glickman Todd Fromer Evan Smith, CFA
Executive Vice President and CFO (Investor Relations) (Media Relations)
(215) 875-0700 (212) 896-1215 (212) 896-1251
FOR IMMEDIATE RELEASE
March 31, 2003
Pennsylvania Real Estate Investment Trust Reports
2002 Fourth Quarter & Calendar Year 2002 Results:
FFO per share increases 11.5% and 5.3% respectively
Philadelphia, PA, March 31, 2003-- Pennsylvania Real Estate Investment Trust
(NYSE: PEI) ("PREIT") today announced the financial results for the fourth
quarter ended December 31, 2002 and the calendar year ended December 31, 2002.
FFO for the calendar year 2002 was $2.85 per share and exceeded the Company's
guidance of $2.77 to $2.81 per share that was provided in November 2002.
Highlights for the 2002 Fourth Quarter
o Funds from operations (FFO) in the 2002 fourth quarter increased 14.1% to
$15.6 million from $13.6 million in the 2001 fourth quarter.
o FFO per share for the 2002 fourth quarter increased 11.5% to $0.85 from
$0.77 for the 2001 fourth quarter.
o Combined net operating income (NOI) increased 16.2% to $28.6 million in the
fourth quarter of 2002 from $24.6 million in the 2001 fourth quarter.
o Same store NOI for the Company's retail portfolio increased by 2.9%
from the 2001 fourth quarter.
o Net income per share for the 2002 fourth quarter increased by 7.1% to $0.45
from $0.42 for the 2001 fourth quarter.
Fourth Quarter Results
For the fourth quarter ended December 31, 2002, the Company's FFO increased by
14.1% to $15,552,000 from $13,631,000 for the comparable three-month period in
2001. FFO per share was $0.85 in the fourth quarter of 2002 as compared to $0.77
in the fourth quarter of 2001, an increase of 11.5%. This increase is a result
of completed development projects; the acquisition of a 30% interest in Willow
Grove Park; the acquisition of Beaver Valley Mall; and internal growth
PREIT Announces Fourth Quarter 2002 Results
March 31, 2003
Page 2
in the Company's retail portfolio. The increase is also the result of the
capitalization of approximately $600,000 for the calendar year 2002,
reclassified in the fourth quarter, for internal costs related to development
activities in accordance with GAAP. The capitalization of these costs increased
FFO per share by $0.03 for the quarter ended December 31, 2002. A reconciliation
of net income to FFO is provided in the table attached to this press release.
Weighted average shares of beneficial interest/Operating Partnership units
(collectively, shares) increased by 2.4% to 18,210,000 for the quarter ended
December 31, 2002 from 17,788,000 for the quarter ended December 31, 2001,
reflecting additional shares and units issued. The revised weighted average
share count for the purpose of calculating net income per share and FFO per
share was reduced for the fourth quarter and the calendar year 2002 to reflect
only previously restricted shares that have vested.
NOI from wholly-owned properties and the Company's proportionate share of
partnerships and joint venture properties increased by 16.2% to $28,593,000 in
the fourth quarter of 2002 from $24,610,000 in the fourth quarter of 2001. This
increase is a result of completed development projects; the acquisition of a 30%
interest in Willow Grove Park; the acquisition of Beaver Valley Mall; and
internal growth in the Company's retail portfolio. A reconciliation of net
income to NOI is provided in the table attached to this press release.
Net income for the fourth quarter ended December 31, 2002 was $7,331,000, or
$0.45 per share, on 16,451,000 weighted average shares of beneficial interest
outstanding compared to $6,641,000 or $0.42 per share, on 15,843,000 weighted
average shares of beneficial interest outstanding for the 2001 fourth quarter.
The increase is the result of completed development projects; the acquisition of
a 30% interest in Willow Grove Park; the acquisition of Beaver Valley Mall; and
internal growth in the Company's retail portfolio. It is also the result of the
capitalization of approximately $600,000 for internal costs related to
development activities. The capitalization of these costs increases net income
per share by $0.04 for the quarter ended December 31, 2002. The weighted average
share count for the purpose of calculating net income per share was revised to
reflect only previously restricted shares that have vested resulting in an
increase in net income per share of $0.01 for the quarter ended December 31,
2002.
In the fourth quarter of 2002, the Company's dividend payout ratio was 60.0% of
FFO compared to 67.0% of FFO in the fourth quarter of 2001.
Calendar Year Results
For the calendar year ended December 31, 2002, FFO totaled $51,167,000, an
increase of 14.5% over $44,699,000 for the calendar year ended December 31,
2001. FFO for the calendar year 2002 was $2.85 per share on 17,967,000 weighted
average shares outstanding for the calendar year ended December 31, 2002,
including the adjustment to reflect only previously restricted shares that have
vested, compared to $2.70 per share on 16,526,000 weighted average shares
outstanding for the calendar year ended December 31, 2001, an increase of 5.3%
in FFO per share. As noted above, the increases are attributable to completed
development projects; the
PREIT Announces Fourth Quarter 2002 Results
March 31, 2003
Page 3
acquisition of a 30% interest in Willow Grove Park; the acquisition of Beaver
Valley Mall; and internal growth in the Company's retail portfolio. The increase
is also the result of the capitalization of approximately $600,000 for the
calendar year 2002, for internal costs related to development activities in
accordance with GAAP. The capitalization of these costs increased FFO per share
by $0.03 for the calendar year ended December 31, 2002.
NOI from wholly-owned properties and the Company's proportionate share of
partnerships and joint venture properties totaled $105,643,000 for the calendar
year ended December 31, 2002, compared to $91,091,000 for the calendar year
ended December 31, 2001. This increase is a result of completed development
projects; the acquisition of a 30% interest in Willow Grove Park; the
acquisition of Beaver Valley Mall; and internal growth in the Company's retail
portfolio.
Net income for the calendar year ended December 31, 2002 was $23,678,000 or
$1.47 per share, on 16,162,000 weighted average shares of beneficial interest
outstanding, reflecting the adjustment for only previously restricted shares
that have vested, compared to $19,789,000, or $1.35 per share, on 14,657,000
weighted average shares of beneficial interest outstanding for the calendar year
ended December 31, 2001. Net income for 2002 included a gain of $4,085,000, or
$0.25 per share, from the sale of the Company's interest in Mandarin Corners in
Jacksonville, FL. Net income for 2001 included a net gain of $2,107,000, or
$0.14 per share, which was comprised of a $1,806,000 gain from the sale of the
Company's interest in Ingleside Shopping Center, Thorndale, PA, a $1,276,000
gain from the sale of land at Paxton Towne Centre, Harrisburg, PA and a loss of
$975,000 on the sale of land at The Commons at Magnolia, Florence, SC. As noted
above, the increase in net income is attributable to completed development
projects; the acquisition of a 30% interest in Willow Grove Park; and the
acquisition of Beaver Valley Mall; internal growth in the Company's retail
portfolio; and the capitalization of approximately $600,000 of internal costs
related to development activities. The capitalization of these internal costs
related to development activities increased net income per share by $0.04 for
the calendar year ended December 31, 2002. The weighted average share count for
the purpose of calculating net income per share was revised to reflect only
previously restricted shares that have vested resulting in an increase in net
income per share of $0.02 for the calendar year ended December 31, 2002.
For the calendar year ended December 31, 2002, the Company's dividend payout
ratio was 71.6% of FFO compared to 75.4% of FFO for the calendar year ended
December 31, 2001.
Portfolio Performance - Same Store NOI Growth & Occupancy Levels
In the fourth quarter of 2002, same store NOI for the Company's retail portfolio
increased 2.9% over the fourth quarter of 2001. Same store NOI growth for the
comparable period was primarily driven by higher revenues from the leasing of
previously vacant space, lease renewals at higher rents and scheduled rent
increases. For calendar year 2002, same store NOI for the Company's retail
portfolio increased by 6.5% over calendar year 2001.
PREIT Announces Fourth Quarter 2002 Results
March 31, 2003
Page 4
Retail same store occupancy levels in the fourth quarter 2002 increased to
94.8%, 50 basis points higher than the 94.3% occupancy in the fourth quarter
2001. The Company's power centers and enclosed malls were 98.0% and 91.7%
occupied, respectively, as of December 31, 2002. The Company's same store mall
properties reported that sales decreased 1.6% to $381 per square foot in the
trailing twelve months ended December 31, 2002, from $387 per square foot for
the comparable period ended December 31, 2001.
In the fourth quarter of 2002, same store NOI for the Company's multifamily
properties increased 0.1% over the 2001 fourth quarter. A 2.9% increase in rents
adjusted for an 11.9% increase in vacancies and concessions, resulted in a 2.3%
increase in revenues. The revenue increase was offset by 5.6% higher operating
expenses due primarily to increases in real estate taxes for the Florida
portfolio and insurance costs in the fourth quarter 2002 as compared to the
fourth quarter 2001. Same store NOI for the Company's multifamily portfolio for
calendar year 2002 increased by 1.0% over calendar year 2001.
Occupancy in the Company's multifamily portfolio was 94.4% as of the end of the
fourth quarter of 2002, or 30 basis points lower than the 94.7% occupancy level
reported in 2001 for the fourth quarter.
Leasing Update
During the 2002 fourth quarter the Company executed forty leases encompassing
102,860 square feet at an average rent per square foot of $27.71. New leases for
previously leased space accounted for ten transactions totaling 28,171 square
feet at an average rent of $33.76 or $6.40 higher than the average prior rent.
Nineteen tenants renewed leases, representing 56,424 square feet at an average
renewal rent of $23.88 per square foot, an increase of $4.61 per square foot
over the rent at expiration. The Company also executed transactions for eleven
formerly vacant spaces totaling 18,265 square feet. The average rent for these
formerly vacant spaces was $30.23 per square foot.
Portfolio Composition
The Company ended the 2002 fourth quarter with investments in real estate of
$953,012,000, an increase of $26,590,000 from $926,422,000 in the third quarter
of 2002. The increase is primarily a result of the acquisition of a partner's
share of Regency Lakeside Apartments in Omaha, Nebraska. Investments in real
estate at December 31, 2002 included $24,109,000 of construction in progress. On
a cost basis, the Company's portfolio is 65.1% retail, 32.0% multifamily, 2.6%
retail construction in progress and 0.3% industrial.
Strategic Update
Ronald Rubin, Chairman and Chief Executive Officer of PREIT said, "The 2002
fourth quarter was highlighted by 14.1% FFO growth, an 11.5% increase in FFO per
share and a 16.2% increase in combined net operating income. These results were
driven by strong performance in our retail portfolio where our management team
continues to demonstrate its ability to improve occupancy levels and increase
base rents for new leases. Delivering strong improvements in performance from
our retail portfolio underscores the opportunity represented by our recently
announced acquisition of six Philadelphia-area shopping malls from The Rouse
Company. As we
PREIT Announces Fourth Quarter 2002 Results
March 31, 2003
Page 5
plan to integrate the Rouse assets into our existing retail
portfolio, and complete the sale of our multifamily portfolio, our performance
in 2002 provides us with a solid base upon which to build and grow. As our
strategy shifts to the retail sector, we are focused on delivering long-term
growth for our shareholders. We are confident that through our operating
expertise, market knowledge and tenant relationships, we will maximize the
performance of our existing properties, unleash the value of new assets and
position PREIT as one of the clear leaders in the value retail sector."
Jonathan B. Weller, PREIT's President and Chief Operating Officer commented,
"Our 16.2% increase in NOI for fiscal year 2002 reflects management's expertise
in the redevelopment, renovation and retenanting of properties. In 2002,
redevelopment activities continued to play an important role as we completed The
Commons at Magnolia in Florence, SC. The shopping center is currently 99%
occupied. In addition, we are now redeveloping the adjoining Magnolia Mall,
where Best Buy opened in November, and renovating the mall common areas. These
redevelopment activities will be a key driver for future performance as PREIT
transforms its strategic focus to the retail market. The recently announced
multifamily and Rouse transactions provide significant long-term growth
prospects. The sale of our non-core apartment communities at an attractive price
will enable management to reinvest the funds in the high quality retail assets
purchased from Rouse under favorable tax conditions, while maintaining a
flexible capital structure. PREIT continues to deliver strong shareholder value
amid an uncertain economic environment. We expect our ability to execute our
retail growth strategy in core markets to provide steady returns over the long
run."
Development Pipeline
The Company had two retail properties under development, totaling 0.8 million
square feet as of December 31, 2002. The expected investment in the current
development pipeline is $54,000,000, with $6,300,000 funded as of December 31,
2002.
South Brunswick
During the 2002 fourth quarter, the Company, following entitlement and tenanting
issues, decided not to proceed with a development project in South Brunswick,
NJ, resulting in a write off of approximately $540,000 against a preestablished
reserve for abandoned development projects. The Company recorded a total charge
of approximately $600,000 for abandoned development properties in 2002.
Acquisition
As previously announced, in October 2002, the Company acquired its joint venture
partner's interest in Regency Lakeside Apartments in Omaha, Nebraska for
$14,200,000. The Company assumed the partner's share of the first mortgage of
$9,600,000 at an interest rate of 7.56%. The balance was financed by $2,500,000
from the Company's line of credit facility and $2,100,000 in cash. The purchase
price reflects a 10.0% NOI cap rate, based on the trailing 12 months. The
Company assumed the management of the property as of the date of closing.
PREIT Announces Fourth Quarter 2002 Results
March 31, 2003
Page 6
Capital Resources
Edward Glickman, Chief Financial Officer of PREIT commented, "During 2002, we
increased our investment in real estate by $118,600,000. Our primary sources of
funds for this investment were increases of $ 82,800,000 in mortgage debt and
$32,300,000 in our line of credit. With interest rates at historical lows and
credit available for retail asset purchases, we are biased toward long-term
fixed-rate financing. The timing of our recently announced transactions will
require the Company to borrow funds to acquire the Rouse assets under an
acquisition term loan, which will result in an increase in the Company's
leverage. We intend, however, to apply the proceeds from the sale of our
multifamily portfolio to repay the acquisition term loan and to reduce our
leverage to historical levels. With that said, we are confident that the Company
has the ability to obtain capital and has positioned itself with sufficient
liquidity to meet both its operational and investment goals for the coming
year."
Line of Credit
As of December 31, 2002, the Company had approximately $131,474,000 outstanding
under the Company's $200,000,000 revolving line of credit facility. At December
31, 2002 the Company had $22,600,000 of availability remaining with the existing
property collateral pool.
Subsequent Events
On March 6, 2003, the Company announced that it is pursuing transactions for the
acquisition of additional retail properties, including a transaction with
affiliates of The Rouse Company (NYSE:RSE), and for the disposition of its
entire multifamily portfolio to an affiliate of Morgan Properties of King of
Prussia, Pennsylvania. The Company's Annual Report on Form 10-K, to be filed
with the SEC today will include additional details regarding the Rouse and the
multifamily transactions.
Ames Lease at Dartmouth Mall
During the first quarter 2003, the Company purchased the Ames store lease at
Dartmouth Mall, Dartmouth, MA from Ames Realty II, Inc. for $1,750,000. The
annualized revenues were $1.42 per square foot including $1.09 per square foot
of base rent. Ames occupied approximately 93,000 square feet in one of the
mall's three anchor positions, and the Company is working to replace Ames with a
tenant which will generate higher sales volume and better complement the mall's
other tenants. Negotiations are proceeding with such prospective tenants.
Crest Plaza
During the first quarter of 2003, the Company sold a parcel of land located at
Crest Plaza Shopping Center, Allentown, PA to Target for a purchase price of
$3,200,000. The Company expects to recognize a gain of approximately $2,000,000
from the sale in the first quarter of 2003.
2003 Forecast
The Company confirmed its 2003 FFO per share guidance for the calendar year 2003
of $3.16 to $3.28 as provided on March 6, 2003. The FFO estimate assumes the
completion of the Rouse and multifamily transactions.
PREIT Announces Fourth Quarter 2002 Results
March 31, 2003
Page 7
Definitions
NAREIT defines FFO as income before gains (losses) on property sales and
extraordinary items (computed in accordance with GAAP); plus real estate
depreciation and similar adjustments for unconsolidated joint ventures after
adjustments for non-real estate depreciation and amortization of financing
costs. The Company computes FFO in accordance with standards established by
NAREIT, which may not be comparable to FFO reported by other REITs that do not
define the term in accordance with the current NAREIT definition, or that
interpret the current NAREIT definition differently than the Company. FFO does
not represent cash generated from operating activities in accordance with GAAP
and should not be considered to be an alternative to net income (determined in
accordance with GAAP) as an indication of the Company's financial performance or
to be an alternative to cash flow from operating activities (determined in
accordance with GAAP) as a measure of the Company's liquidity, nor is it
indicative of funds available for the Company's cash needs, including its
ability to make cash distributions. The Company believes that net income is the
most directly comparable GAAP measurement to FFO. The Company believes that FFO
is helpful to investors as a measure of operating performance because it
excludes various items included in net income that do not relate to or are not
indicative of operating performance, such as various non-recurring items, gains
on sales of real estate and depreciation and amortization of real estate.
NOI is derived from real estate revenues (determined in accordance with GAAP)
minus property operating expenses (determined in accordance with GAAP). NOI does
not represent cash generated from operating activities in accordance with GAAP
and should not be considered to be an alternative to net income (determined in
accordance with GAAP) as an indication of the Company's financial performance or
to be an alternative to cash flow from operating activities (determined in
accordance with GAAP) as a measure of the Company's liquidity; nor is it
indicative of funds available for the Company's cash needs, including its
ability to make cash distributions. The Company believes that net income is the
most directly comparable GAAP measurement to NOI. The Company believes that NOI
is helpful to investors as a measure of operating performance because it is an
indicator of the return on investment on the properties, and provides a
comparison measurement of the properties over time. NOI excludes general and
administrative expenses, management company revenues, interest income, interest
expense, depreciation and amortization, income from discontinued operations and
gains on sales of interest in real estate.
Conference Call Information
Management has scheduled a conference call for 11:00 am Eastern Standard Time on
March 31, 2003 to review the Company's fourth quarter results, market trends and
future outlook. To listen to the call, please dial (877) 375-2162 or (973)
582-2737 at least five minutes before the scheduled start time. Investors can
also access the call in a "listen only" mode via the Internet on the Company
website at www.preit.com or at www.vcall.com. Please allow extra time prior to
the call to visit the site and download the necessary software to listen to the
Internet broadcast. Financial and statistical information expected to be
discussed on the call is available on the Company's website at www.preit.com.
PREIT Announces Fourth Quarter 2002 Results
March 31, 2003
Page 8
For interested individuals unable to join the conference call, a replay of the
call will be available through April 7, 2003 at (877) 519-4471 or (973) 341-3080
(Passcode 3831182). The online archive of the webcast will be available for 14
days following the call.
About Pennsylvania Real Estate Investment Trust
Pennsylvania Real Estate Investment Trust, founded in 1960 and one of the first
equity REITs in the U.S., has a primary investment focus on shopping centers
(approximately 11.8 million square feet) and apartment communities
(approximately 7,242 units) located primarily in the eastern United States. The
Company's portfolio currently consists of 45 properties in 10 states. In
addition, there are 2 retail properties under development, which PREIT expects
will add approximately 0.8 million square feet to its portfolio. PREIT is
headquartered in Philadelphia, Pennsylvania.
This press release contains certain "forward-looking statements" within the
meaning of Section 21E of the Securities Exchange Act of 1934 and the U.S.
Private Securities Litigation Reform Act of 1995. Forward-looking statements
relate to expectations, beliefs, projections, future plans and strategies,
anticipated events or trends and other matters that are not historical facts.
These forward-looking statements reflect PREIT's current views about future
events and are subject to risks, uncertainties, assumptions and changes in
circumstances that may cause future events, achievements or results to differ
materially from those expressed by the forward-looking statements. In
particular, PREIT may not be able to consummate the proposed transactions on
previously announced terms, favorable terms to PREIT, or at all, or if such
transactions are consummated, PREIT's actual results may differ significantly
from those expressed in any forward-looking statement. Certain factors that
could cause PREIT not to consummate such transactions or could cause PREIT's
actual results to differ materially from expected results include, without
limitation, PREIT's ability to raise capital through public and private
offerings of debt and/or equity securities, the availability of adequate
financing at reasonable cost, or at all, PREIT's ability to negotiate and enter
into definitive agreements with respect to the transactions and the satisfaction
of closing conditions applicable to such transactions (some of which are beyond
PREIT's control). In addition, PREIT's business is subject to uncertainties
regarding the revenues, operating expenses, leasing activities, occupancy rates,
and other competitive factors relating to PREIT's portfolio and the properties
proposed to be acquired and changes in local market conditions as well as
general economic, financial and political conditions, including the possibility
of outbreak or escalation of war or terrorist attacks, any of which may cause
future events, achievements or results to differ materially from those expressed
by the forward-looking statements.. PREIT does not intend to and disclaims any
duty or obligation to update or revise any forward-looking statements or
industry information set forth in this press release to reflect new information,
future events or otherwise.
Financial Tables Follow
** A supplemental quarterly financial package **
is available on the Company's web site at www.preit.com.
# # #
PREIT Announces Fourth Quarter 2002 Results
March 31, 2003
Page 9
Pennsylvania Real Estate Investment Trust
Selected Financial Data
- ----------------------------------------------------------------------------------------------------------------------
FUNDS FROM OPERATIONS Three Months Ended
(In thousands, except per share results) Dec 31, 2002 Dec 31, 2001
- ----------------------------------------------------------------------------------------------------------------------
Net income $ 7,331 $ 6,641
Minority interest in operating partnership 789 802
Minority interest in discontinued operations (7) 22
Gains on sales of interests in real estate - -
Gains on dispositions of discontinued operations - -
Depreciation and amortization:
Wholly owned & consolidated partnership, net 5,808 (a) 4,545 (a)
Unconsolidated partnerships & joint ventures 1,631 (a) 1,394 (a)
Discontinued operations 121
Excess purchase price over net assets acquired - 106
Prepayment fee - -
-------- --------
FUNDS FROM OPERATIONS $ 15,552 (c) $ 13,631 (c)
======== ========
FUNDS FROM OPERATIONS PER SHARE AND OP UNITS $0.85 $0.77
======== ========
Weighted average number of shares outstanding 16,451 15,843
Weighted average effect of full conversion of OP units 1,759 1,945
-------- --------
Total weighted average shares outstanding, including OP units 18,210 17,788
-------- --------
[RESTUBBED]
- ------------------------------------------------------------------------------------------------------------------
FUNDS FROM OPERATIONS Twelve Months Ended
(In thousands, except per share results) Dec 31, 2002 Dec 31, 2001
- ------------------------------------------------------------------------------------------------------------------
Net income $ 23,678 $ 19,789
Minority interest in operating partnership 2,194 2,499
Minority interest in discontinued operations 421 25
Gains on sales of interests in real estate - (2,107) (3)
Gains on dispositions of discontinued operations (4,085) (2) -
Depreciation and amortization:
Wholly owned & consolidated partnership, net 21,151 (a) 17,145 (a)
Unconsolidated partnerships & joint ventures 7,446 (a) 6,264 (a)
Discontinued operations 285 406
Excess purchase price over net assets acquired - 423
Prepayment fee 77 255 (b)
-------- --------
FUNDS FROM OPERATIONS $ 51,167 (c) $ 44,699 (c)
======== ========
FUNDS FROM OPERATIONS PER SHARE AND OP UNITS $2.85 $2.70
======== ========
Weighted average number of shares outstanding 16,162 14,657
Weighted average effect of full conversion of OP units 1,805 1,869
-------- --------
Total weighted average shares outstanding, including OP units 17,967 16,526
-------- --------
a) Excludes depreciation of non-real estate assets, amortization of deferred financing costs and discontinued operations. These
amounts were previously included in the depreciation amounts and deducted in a separate line.
b) Prepayment fee for the refinancing of the mortgage on Countrywood Apartments in Tampa, FL.
c) Includes the non-cash effect of straight-line rents of $298 and $214 for the 4th quarter 2002 and 2001and $1,042 and $1,148 for
year to date 2002 and 2001, respectively.
- ----------------------------------------------------------------------------------------------------------------------
OPERATING RESULTS Three Months Ended
(In thousands, except per share results) Dec 31, 2002 Dec 31, 2001 (1)
- ----------------------------------------------------------------------------------------------------------------------
REAL ESTATE REVENUES
Base rent $ 25,839 $ 21,680
Percent rent 1,025 922
Expense reimbursement 3,838 2,635
Lease termination (38) 77
Other real estate revenue 1,258 1,327
-------- --------
Total real estate revenues 31,922 26,641
-------- --------
Management company revenue 4,234 4,326
Interest and other income 192 6
-------- --------
36,348 30,973
-------- --------
EXPENSES
Property payroll and benefits 2,027 1,775
Real estate and other taxes 2,554 1,958
Utilities 1,231 1,029
Other operating expenses 4,756 3,935
-------- --------
Total property operating expenses 10,568 8,697
-------- --------
Depreciation and amortization 5,872 4,574
Corporate payroll and benefits 3,396 3,643
Other general and administrative expenses 3,013 3,489
-------- --------
Total general & administrative expenses 6,409 7,132
-------- --------
Interest expense 7,640 5,677
-------- --------
30,489 26,080
-------- --------
Income before equity in partnerships and joint ventures, minority
interest and gains on sales of interests in real estate 5,859 4,893
-------- --------
Equity in income of partnerships and joint ventures 2,271 2,383
Gains on sales of interests in real estate - -
-------- --------
Income before minority interest and discontinued operations 8,130 7,276
Minority interest in operating partnership (789) (802)
-------- --------
Income from continuing operations 7,341 6,474
-------- --------
Discontinued Operations:
Income from discontinued operations (17) 189
Minority interest in discontinued operations 7 (22)
Gains on dispositions of discontinued operations - -
-------- --------
Income from discontinued operations (10) 167
-------- --------
NET INCOME $ 7,331 $ 6,641
======== ========
PER SHARE DATA
Net income before gains on sales $0.45 $0.42
Gains on sales of interests in real estate - -
-------- --------
BASIC INCOME PER SHARE $0.45 $0.42
======== ========
DILUTED INCOME PER SHARE $0.44 $0.42
======== ========
Weighted average number of shares outstanding 16,451 15,843
-------- --------
[RESTUBBED]
- ------------------------------------------------------------------------------------------------------------------
OPERATING RESULTS Twelve Months Ended
(In thousands, except per share results) Dec 31, 2002 Dec 31, 2001 (1)
- ------------------------------------------------------------------------------------------------------------------
REAL ESTATE REVENUES
Base rent $ 94,636 $ 83,439
Percent rent 1,948 1,680
Expense reimbursement 13,068 9,964
Lease termination 1,034 1,162
Other real estate revenue 3,913 3,970
-------- --------
Total real estate revenues 114,599 100,215
-------- --------
Management company revenue 11,003 11,336
Interest and other income 711 361
-------- --------
126,313 111,912
-------- --------
EXPENSES
Property payroll and benefits 7,819 7,059
Real estate and other taxes 9,057 7,597
Utilities 4,282 4,189
Other operating expenses 16,390 14,192
-------- --------
Total property operating expenses 37,548 33,037
-------- --------
Depreciation and amortization 21,411 17,370
Corporate payroll and benefits 14,138 13,286
Other general and administrative expenses 10,609 10,291
-------- --------
Total general & administrative expenses 24,747 23,577
-------- --------
Interest expense 28,000 24,485
-------- --------
111,706 98,469
-------- --------
Income before equity in partnerships and joint ventures, minority
interest and gains on sales of interests in real estate 14,607 13,443
-------- --------
Equity in income of partnerships and joint ventures 7,449 6,540
Gains on sales of interests in real estate - 2,107 (3)
-------- --------
Income before minority interest and discontinued operations 22,056 22,090
Minority interest in operating partnership (2,194) (2,499)
-------- --------
Income from continuing operations 19,862 19,591
-------- --------
Discontinued Operations:
Income from discontinued operations 152 223
Minority interest in discontinued operations (421) (25)
Gains on dispositions of discontinued operations 4,085 (2) -
-------- --------
Income from discontinued operations 3,816 198
-------- --------
NET INCOME $ 23,678 $ 19,789
======== ========
PER SHARE DATA
Net income before gains on sales $1.22 $1.21
Gains on sales of interests in real estate 0.25 (2) 0.14 (3)
-------- --------
BASIC INCOME PER SHARE $1.47 $1.35
======== ========
DILUTED INCOME PER SHARE $1.44 $1.35
======== ========
Weighted average number of shares outstanding 16,162 14,657
-------- --------
1) Prior periods' revenues and expenses were adjusted for discontinued operations, which consist of disposed real estate assets.
2) Year to date 2002 includes gains on sale of Mandarin Corners, a shopping center in Jacksonville, FL.
3) Year to date 2001 includes net gains on sales of land at The Commons at Magnolia in Florence, SC and at Paxton Towne Centre,
Harrisburg, PA, and sale of interest in Ingleside Shopping Center, Thorndale, PA.
PREIT Announces Fourth Quarter 2002 Results
March 31, 2003
Page 10
Pennsylvania Real Estate Investment Trust
Selected Financial Data
(In thousands)
- --------------------------------------------------------------------------------------------------------------------------------
EQUITY IN INCOME OF PARTNERSHIPS Three Months Ended
AND JOINT VENTURES Dec 31, 2002 Dec 31, 2001
- --------------------------------------------------------------------------------------------------------------------------------
Gross revenues from real estate $ 25,570 $ 26,477
======= =======
Expenses:
Property operating expenses 8,935 9,755
Mortgage and bank loan interest 7,695 7,888
Prepayment fee - -
Depreciation and amortization 4,146 3,533
------- -------
20,776 21,176
------- -------
4,794 5,301
Partner's share (2,523) (2,918)
EQUITY IN INCOME OF PARTNERSHIPS
AND JOINT VENTURES $ 2,271 $ 2,383
======= =======
[RESTUBED]
(In thousands)
- ------------------------------------------------------------------------------------------------------------------------------
EQUITY IN INCOME OF PARTNERSHIPS Twelve Months Ended
AND JOINT VENTURES Dec 31, 2002 Dec 31, 2001
- ------------------------------------------------------------------------------------------------------------------------------
Gross revenues from real estate $ 97,903 $ 94,272
======= =======
Expenses:
Property operating expenses 33,868 33,981
Mortgage and bank loan interest 31,417 30,229
Prepayment fee - 510 (a)
Depreciation and amortization 17,434 16,363
------- -------
82,719 81,083
------- -------
15,184 13,189
Partner's share (7,735) (6,649)
EQUITY IN INCOME OF PARTNERSHIPS
AND JOINT VENTURES $ 7,449 $ 6,540
======= =======
a) Prepayment fee for the refinancing of the mortgage on Countrywood Apartments in Tampa, FL.
Supplemental Information for Wholly Owned Properties
and the Company's Proportionate Share of Partnerships and Joint Ventures
(In thousands)
- -----------------------------------------------------------------------------------------------------------------------------------
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION Three Months Ended
AND AMORTIZATIONS ("EBITDA") Dec 31, 2002 Dec 31, 2001 (1)
- -----------------------------------------------------------------------------------------------------------------------------------
Gross revenues $ 31,922 $ 26,641
Operating expenses (10,568) (8,697)
-------- --------
Net operating income: wholly-owned properties 21,354 17,944
Company's proportionate share of partnerships and
joint ventures net operating income 7,239 6,666
-------- --------
Combined net operating income 28,593 (2) 24,610 (2)
Interest income 192 6
Management company revenue 4,234 4,326
Total general & administrative expenses (6,409) (7,132)
-------- --------
EBITDA $ 26,610 (3) $ 21,810 (3)
======== ========
[RESTUBBED]
(In thousands)
- ------------------------------------------------------------------------------------------------------------------------------
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION Twelve Months Ended
AND AMORTIZATIONS ("EBITDA") Dec 31, 2002 Dec 31, 2001 (1)
- ------------------------------------------------------------------------------------------------------------------------------
Gross revenues $ 114,599 $ 100,215
Operating expenses (37,548) (33,037)
--------- ---------
Net operating income: wholly-owned properties 77,051 67,178
Company's proportionate share of partnerships and
joint ventures net operating income 28,592 23,913
--------- ---------
Combined net operating income 105,643 (2) 91,091 (2)
Interest income 711 361
Management company revenue 11,003 11,336
Total general & administrative expenses (24,747) (23,577)
--------- ---------
EBITDA $ 92,610 (3) $ 79,211 (3)
======== ========
1) Prior periods' revenues and expenses were adjusted for discontinued operations, which consist of disposed real estate assets.
2) NOI including the impact of disposed real estate assets for the 3 months ended 12/31/02 and 12/31/01 was $28,577 and $25,086,
respectively, and for the 12 months ended 12/31/02 and 12/30/01 was $106,460 and $92,396, respectively.
3) EBITDA including the impact of disposed real estate assets for the 3 months ended 12/31/02 and 12/31/01 was $9,394 and
$211,163, respectively, and for the 12 months ended 12/31/02 and 12/30/01 was $244,487 and $302,321, respectively.
- ------------------------------------------------------------------------------------------------------------------------------------
RECONCILIATION OF NET INCOME TO PROPERTY LEVEL EBITDA Three Months Ended
AND TO PROPERTY LEVEL NET OPERATING INCOME Dec 31, 2002 Dec 31, 2001
- ------------------------------------------------------------------------------------------------------------------------------------
Net income $ 7,331 $ 6,641
Minority interest in operating partnership 789 802
Income from partnerships and joint ventures (2,271) (1) (2,383) (1)
Company's proportionate share of partnerships and
joint ventures net operating income 7,239 (1) 6,666 (1)
Gains on sales of interests in real estate - -
Income from discontinued operations 10 (167)
Depreciation and amortization 5,872 4,574
Interest expense 7,640 5,677
-------- --------
Property Level EBITDA 26,610 21,810
Interest income (192) (6)
Management company revenue (4,234) (4,326)
Total general & administrative expenses 6,409 7,132
-------- --------
PROPERTY LEVEL NET OPERATING INCOME $ 28,593 $ 24,610
======== ========
[RESTUBBED]
- ------------------------------------------------------------------------------------------------------------------------------
RECONCILIATION OF NET INCOME TO PROPERTY LEVEL EBITDA Twelve Months Ended
AND TO PROPERTY LEVEL NET OPERATING INCOME Dec 31, 2002 Dec 31, 2001
- ------------------------------------------------------------------------------------------------------------------------------
Net income $ 23,678 $ 19,789
Minority interest in operating partnership 2,194 2,499
Income from partnerships and joint ventures (7,449) (1) (6,540) (1)
Company's proportionate share of partnerships and
joint ventures net operating income 28,592 (1) 23,913 (1)
Gains on sales of interests in real estate - (2,107)
Income from discontinued operations (3,816) (198)
Depreciation and amortization 21,411 17,370
Interest expense 28,000 24,485
--------- --------
Property Level EBITDA 92,610 79,211
Interest income (711) (361)
Management company revenue (11,003) (11,336)
Total general & administrative expenses 24,747 23,577
--------- --------
PROPERTY LEVEL NET OPERATING INCOME $ 105,643 $ 91,091
========= ========
1) Reference SEC Form 10K Notes to Consolidated Financial Statements 12. Segment Information; Adjustments to Equity Method, Equity
in income of partnerships and joint ventures.
(In thousands)
- ------------------------------------------------------------------------------------------------------------------------------
MORTGAGE NOTES, BANK AND CONSTRUCTION LOANS PAYABLE December 31, December 31,
Wholly-owned properties 2002 2001
- ------------------------------------------------------------------------------------------------------------------------------
Mortgage notes payable $ 319,751 $ 257,873
Bank loans payable 130,800 98,500
Construction loan payable - 4,000
--------- ---------
450,551 360,373
Company's proportionate share of
partnerships and joint ventures
Mortgage notes payable 166,728 145,803
--------- ---------
Total mortgage notes and bank loans payable $ 617,279 $ 506,176
========= =========