EX-99.1 2 a2019q1exhibit991earningsr.htm EXHIBIT 99.1 Exhibit
Exhibit 99.1


preitlogoa22.jpg
CONTACT: AT THE COMPANY
Robert McCadden
EVP & CFO
(215) 875-0735

Heather Crowell
EVP, Strategy and Communications
(215) 454-1241
heather.crowell@preit.com

PREIT Reports First Quarter 2019 Results

Core Mall Sales Per Square Foot reached record high of $517
Completed $43 million in asset sales and improved liquidity position by over $70 million
Core Mall Occupancy increased 100 bps to 94.7%
Full Year FFO as adjusted guidance reaffirmed

Philadelphia, PA, May 2, 2019 - PREIT (NYSE: PEI) today reported results for the quarter ended March 31, 2019. A description of each non-GAAP financial measure and the related reconciliation to the comparable GAAP financial measure is located in the tables accompanying this release.


 
Quarter Ended
March 31,
(per share amounts)
2019
 
2018
Net loss - basic and diluted
$(0.30)
 
$(0.14)
FFO
$0.17
 
$0.29
FFO, as adjusted
$0.26
 
$0.29
FFO from assets sold in 2018
—

 
$(0.01)
FFO, as adjusted for assets sold
$0.26
 
$0.28


•
Same Store NOI, both including and excluding lease termination revenue, was up 2.2% for the quarter compared to March 31, 2018.
◦
Same Store NOI, excluding lease termination revenue, in PREIT’s wholly-owned portfolio was up 3.2% compared to March 31, 2018.
◦
Lower revenues from tenants that filed for bankruptcy protection in 2018 and 2019 reduced first quarter 2019 Same Store NOI by $0.5 million compared to last year’s first quarter. The impact of co-tenancy adjustments on same store NOI was not material.
•
NOI-weighted sales at our core malls increased to $531 per square foot. Core Mall sales per square foot reached $517, a 2.8% increase over the prior year and a sequential increase of 1.4%. Average comparable sales per square foot increased 4.2% in PREIT’s top 6 properties to $621.
•
Core Mall total occupancy was 94.7%, a 100 bps increase over March 31, 2018. Leased space continues to exceed 95%, when factoring in 613,000 square feet of executed new leases slated for future occupancy.


PREIT / 2

◦
Executed leases are comprised of 494,000 square feet of space expected to open in 2019 contributing annual gross rent of $10.4 million and 119,000 square feet opening in 2020 contributing annual gross rent of $2.3 million.
•
Average renewal spreads were 2.2% for the quarter, impacted by two lease renewals at contracting rents. Excluding these transactions, spreads would have been 7.5%. We expect this metric to normalize in the high single digits for the year.
•
Percentage in lieu renewal leases for the quarter resulted from portfolio transactions with several underperforming tenants. On average, the term of these leases is 1.9 years as we seek replacements throughout our portfolio. 66% of these transactions include fixed rent floors, mitigating downside risk.
•
Year-to-date, the Company has completed asset sales generating cash proceeds of $43 million and improved its liquidity position by over $70 million.The Company has no material debt maturities until 2021.

"As catalyst projects are set to come online this Fall and we progress on our densification initiatives, PREIT continues to lead the way in redefining the mall experience with results that validate our strategy,” said Joseph F. Coradino, Chairman and Chief Executive Officer of PREIT. “With sales per square foot approaching the next milestone of $550, no unleased anchor space in our core mall portfolio and progress on delivering over 5,000 apartment units, our portfolio is attractive to tenants and reflective of the future of our industry. We continue to place a strong emphasis on delivering new and differentiated customer experiences to our malls and have a strategy to generate proceeds to recapitalize the Company for sustainable growth in the future.”

Primary Factors Affecting Financial Results for the Quarters Ended March 31, 2019 and March 31, 2018:

•
Net loss attributable to PREIT common shareholders was $21.4 million, or $0.30 per basic and diluted share for the quarter ended March 31, 2019, compared to net loss attributable to PREIT common shareholders of $9.4 million, or $0.14 per basic and diluted share for the quarter ended March 31, 2018. 
•
Same Store NOI increased by $1.1 million, or 2.2%, from $51.2 million for the quarter ended March 31, 2018 to $52.3 million for the quarter ended March 31, 2019. Revenue from new store openings, including contributions from replacement anchors, mitigated the impact of revenue lost to bankruptcies and associated store closings. Non Same Store NOI decreased by $1.3 million primarily due to lower rents and associated co-tenancy revenue adjustments from multiple anchor closings at Wyoming Valley and Valley View malls and the sale of an office property at Fashion District in the first quarter of 2018.  
•
Same Store NOI, excluding lease termination revenue, at unconsolidated properties declined 3.7%.
•
FFO, as adjusted, for the quarter was $0.26 per share and OP Unit, compared to $0.29 per share and OP Unit in the prior year.
•
FFO for the quarter was $0.17 per share and OP Unit compared to $0.29 per share and OP Unit in the prior year. Adjustments to FFO in the 2019 quarter included $0.06 per share loss on debt extinguishment, $0.02 per share impairment of a development land parcel, and $0.01 per share provision for employee separation expense. There were no such adjustments in the 2018 period. However, net dilution from assets sold in 2018 was approximately $0.01 per share.
•
General and administrative expenses were impacted by the new lease accounting standard that now limits the capitalization of certain leasing costs. We expensed $1.5 million ($0.02 per share) of costs in the first quarter of 2019 that would have been capitalized under the prior standard.

All NOI and FFO amounts referenced as primary factors affecting financial results above include our share of unconsolidated properties’ revenues and expenses.



PREIT / 3


Asset Dispositions
In March 2019, we sold a portion of our undeveloped land located in Gainesville, Florida for consideration of $5.0 million. The remaining portion of the land is expected to close in the second half of 2019 for approximately $10.0 million.

In April 2019, we closed on the sale of the Whole Foods parcel located at Exton Square Mall for $22.1 million.

In April 2019, we sold an undeveloped land parcel located in New Garden Township, Pennsylvania, for total consideration of $11.0 million consisting of $8.25 million in cash and $2.75 million of preferred stock.

Financing Activity
In March 2018, we repaid a $58.5 million mortgage loan including accrued interest, secured by Capital City Mall in Camp Hill, Pennsylvania using funds from our 2013 Revolving Facility and the balance from available working capital. We recorded a loss on debt extinguishment of $4.8 million in March 2019 in connection with this repayment. The addition of Capital City Mall to our unencumbered pool is expected to generate approximately $40 million in incremental capacity under our Revolving Facility.

Capital Transaction Summary

 
Closed
Under Contract
Total
 
Gainesville Development Parcel
$5,000

$10,000
$15,000

(1) 
New Garden Township Parcel
8,250

 
8,250

(2) 
Wiregrass mortgage loan sale
8,000

 
8,000

 
Whole Foods Parcel
10,500

 
10,500

(3) 
Capital City transaction - incremental capacity
40,000

 
40,000

(4) 
Total
$71,750

$10,000
$81,750

 

(1) Under contract and expected to close in the second half of 2019
(2) Represents cash proceeds; does not include $2.8 million of preferred stock received by the Company
 
(3) Represents the net liquidity to the Company after adjusting for line capacity. Sale price was $22.1 million
(4) Represents the Company's approximate incremental borrowing capacity by the end of 2019, net of the Capital City mortgage loan defeasance
 

Leasing and Redevelopment
•
Excluding Fashion District Philadelphia, 613,000 square feet of leases are signed for future openings. This is comprised of 494,000 square feet of space expected to open in 2019 contributing annual gross rent of $10.4 million and 119,000 square feet opening in 2020 contributing annual gross rent of $2.3 million.
•
At Moorestown Mall, Sierra opened in the former Macy’s space, joining Five Below and the region’s first HomeSense.
•
At Willow Grove Park, construction continues on the 51,000 square foot Studio Movie Grill, which is projected to open in first quarter of 2020. During the quarter, a lease was executed with Yard House which will complement the movie theater along with an additional entertainment operator, for which a lease is being negotiated.

PREIT / 4

•
At Valley Mall, both Macy’s and The Bon Ton were replaced in 2018. In December 2018, the Company signed a lease with DICK’s Sporting Goods to replace a former Sears that was acquired in 2018. DICK’s Sporting Goods is expected to open in 2020.
•
At Fashion District Philadelphia, leases for over 85% of the leasable area are signed or are in active negotiation. Noteworthy commitments joining Century 21 and Burlington include H&M, Nike, Forever 21, AMC Theaters, Round One, City Winery, Ulta, Columbia Sportswear and Guess Factory. The first wave of tenants is expected to open in September 2019.
•
At Plymouth Meeting Mall, work continues to replace a former Macy’s with five new tenants - Burlington, DICK’s Sporting Goods, Miller’s Ale House, Michael’s and Edge Fitness. All five tenants are expected to open in October 2019.
•
The redevelopment at Woodland Mall is in its final stages, with opening of the new wing planned for October 2019. The first REI in our portfolio will open here this month and, during the quarter, we executed a lease with The Cheesecake Factory which will open this Fall.

Retail Operations
The following tables set forth information regarding sales per square foot and occupancy in the Company’s mall portfolio, including unconsolidated properties:

A reconciliation of portfolio sales per square foot (1) for the core mall portfolio can be found below:
Comp store sales for the rolling twelve months ended March 31, 2018
$485

 
Organic sales growth
14

 
Impact of non-core malls
18

 
Comp store sales for the rolling twelve months ended March 31, 2019
$517

 

(1)
Based on reported sales by all comparable non-anchor tenants that lease individual spaces of less than 10,000 square feet and have occupied the space for at least 24 months.

2019 Outlook
The Company expects a GAAP net loss of between $0.63 and $0.46 per diluted share for the year ending December 31, 2019.

The Company is reaffirming its February 13, 2019 guidance for FFO as adjusted of $1.20 to $1.34 per share. FFO is expected to be between $1.17 and $1.31 per share. Same Store NOI, excluding termination revenue, is expected to grow between 1.0% and 1.9% with wholly-owned properties in the range of 1.6% to 2.6% and joint venture properties declining between 3.0% and 2.4%.

A reconciliation between GAAP net loss and FFO is as follows:

 
2019 Guidance Range
(Estimates per diluted share)
Low
High
Net loss attributable to common shareholders
$(0.63)
$(0.46)
Depreciation and amortization, non-controlling interest and other
  1.80
1.77
FFO per share
$1.17
$1.31
Loss on debt extinguishment
0.06
0.06
Impairment of development land parcel
0.02
0.02
Provision for employee separation expense
0.01
0.01
Insurance recoveries
(0.06)
(0.06)
FFO per share, as adjusted
$1.20
$1.34


PREIT / 5

Detailed guidance assumptions are included herein in our financial tables.

Our 2019 guidance is based on our current assumptions and expectations about market conditions, our projections regarding occupancy, retail sales and rental rates, and planned capital spending. Our guidance is forward-looking, and is subject to risks, uncertainties and changes in circumstances that might cause future events, achievements or results to differ materially from those expressed or implied by the forward-looking statements.

Conference Call Information
Management has scheduled a conference call for 11:00 a.m. Eastern Time on Friday, May 3, 2019, to review the Company’s results and future outlook. To listen to the call, please dial 1-844-885-9139 (domestic toll free), or 1-647-689-4441 (international), and request to join the PREIT call, Conference ID 4279998, at least five minutes before the scheduled start time. Investors can also access the call in a "listen only" mode via the internet at the Company’s website, preit.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 will also be available on the Company’s website. For best results when listening to the webcast, the Company recommends using Flash Player.

For interested individuals unable to join the conference call, the online archive of the webcast will also be available for one year following the call.

About PREIT
PREIT (NYSE:PEI) is a publicly traded real estate investment trust that owns and manages quality properties in compelling markets. PREIT’s robust portfolio of carefully curated retail and lifestyle offerings mixed with destination dining and entertainment experiences are located primarily in the densely-populated eastern U.S. with concentrations in the mid-Atlantic’s top MSAs. Since 2012, the Company has driven a transformation guided by an emphasis on portfolio quality and balance sheet strength driven by disciplined capital expenditures. Additional information is available at www.preit.com or on Twitter or LinkedIn.

Rounding

Certain summarized information in the tables above may not total due to rounding.




PREIT / 6             Pennsylvania Real Estate Investment Trust
Selected Financial Data


 
2018 Actual
 
2019 Guidance
 
Same Store NOI Growth
 
 
Low
 
High
 
Low
 
High
Same Store NOI, excluding termination revenue
 
 
 
 
 
 
 
 
 
Wholly-owned properties
$
188.7

 
$
191.7

 
$
193.6

 
1.6
 %
 
2.6
 %
Unconsolidated properties
29.7

 
28.8

 
29.0

 
(3.0
)%
 
(2.4
)%
 
218.4

 
220.5

 
222.6

 
1.0
 %
 
1.9
 %
Non-Same Store NOI
20.1

 
13.7

 
14.0

 
 
 
 
NOI, excluding lease termination revenue
238.5

 
234.2

 
236.6

 
 
 
 
Lease termination revenue of consolidated and unconsolidated properties
9.2

 
2.0

 
4.0

 
 
 
 
Total NOI
$
247.7

 
$
236.2

 
$
240.6

 
 
 
 
General and administrative and leasing expenses
 
 
 
 
 
 
 
 
 
General and administrative expenses
(38.3
)
 
(38.0
)
 
(37.5
)
 
 
 
 
Leasing costs expensed under ASC 842
—

 
(5.7
)
 
(6.0
)
 
 
 
 
Other income (expenses)
 
 
 
 
 
 
 
 
 
Corporate revenues
4.3

 
1.1

 
1.3

 
 
 
 
Land sale gains
8.1

 
5.5

 
10.0

 
 
 
 
Provision for employee separation expense
(1.1
)
 
(0.7
)
 
(0.7
)
 
 
 
 
Impairment of mortgage loan receivable/land parcel
(8.1
)
 
(1.5
)
 
(1.5
)
 
 
 
 
Other, including non-real estate depreciation
(1.5
)
 
(2.2
)
 
(2.0
)
 
 
 
 
Insurance losses (recoveries)
—

 
4.0

 
5.0

 
 
 
 
Capital costs
 
 
 
 
 
 
 
 
 
Interest expense, gross
(83.3
)
 
(88.9
)
 
(88.5
)
 
 
 
 
Capitalized interest
11.1

 
14.2

 
14.6

 
 
 
 
Preferred share dividends
(27.4
)
 
(27.4
)
 
(27.4
)
 
 
 
 
Loss on debt extinguishment
—

 
(4.8
)
 
(4.8
)
 
 
 
 
Funds from Operations (FFO)
$
111.5

 
$
91.8

 
$
103.1

 
 
 
 
Adjustments:
 
 
 
 
 
 
 
 
 
Impairment of mortgage loan receivable/land parcel
8.1

 
1.5

 
1.5

 
 
 
 
Provision for employee separation expense
1.1

 
0.7

 
0.7

 
 
 
 
Insurance recoveries and other
(0.3
)
 
(4.0
)
 
(5.0
)
 
 
 
 
Loss on debt extinguishment
—

 
4.8

 
4.8

 
 
 
 
FFO as adjusted
$
120.4

 
$
94.8

 
$
105.1

 
 
 
 
FFO per share
$
1.42

 
$
1.17

 
$
1.31

 
 
 
 
FFO, as adjusted per share
$
1.54

 
$
1.20

 
$
1.34

 
 
 
 






PREIT / 7             Pennsylvania Real Estate Investment Trust
Selected Financial Data

 
2018 Actual
 
2019 Guidance
 
 
Low
 
High
 
 
 
 
 
 
Net loss
$
(126.5
)
 
$
(20.7
)
 
$
(7.4
)
Depreciation and amortization
140.3

 
138.0

 
136.0

Gains on sales of operating assets
(4.3
)
 
1.9

 
1.9

Impairment of real estate assets
129.4

 
—

 
—

Preferred share dividends
(27.4
)
 
(27.4
)
 
(27.4
)
Funds From Operations
$
111.5

 
$
91.8

 
$
103.1

Adjustments:
 
 
 
 
 
Impairment of mortgage loan receivable/land parcel
8.1

 
1.5

 
1.5

Provision for employee separation expense
1.1

 
0.7

 
0.7

Insurance recoveries and other
(0.3
)
 
(4.0
)
 
(5.0
)
Loss on debt extinguishment
—

 
4.8

 
4.8

FFO as adjusted
$
120.4

 
$
94.8

 
$
105.1

 
 
 
 
 
 
Net loss
$
(126.5
)
 
$
(20.7
)
 
$
(7.4
)
Preferred share dividends
(27.4
)
 
(27.4
)
 
(27.4
)
Noncontrolling interest
16.2

 
2.0

 
1.4

Dividends on unvested restricted shares
(0.5
)
 
(0.9
)
 
(0.9
)
Net loss used to calculate earnings per share
$
(138.2
)
 
$
(47.0
)
 
$
(34.3
)
 
 
 
 
 
 
Weighted average shares
69.7

 
75.1

 
75.1

Weighted average shares, including OP units
78.3

 
78.3

 
78.3

 
 
 
 
 
 
Net loss per share
$
(1.98
)
 
$
(0.63
)
 
$
(0.46
)























PREIT / 8             Pennsylvania Real Estate Investment Trust
Selected Financial Data

STATEMENTS OF OPERATIONS (Unaudited)
 
Quarter Ended
March 31,
 
(in thousands)
 
2019
 
2018
 
 
 
 
 
 
 
REVENUE:
 
 
 
 
 
   Real estate revenue:
 
 
 
 
 
Lease revenue
 
$
76,615

 
$
77,998

 
Expense reimbursements
 
5,062

 
5,234

 
Other real estate revenue
 
3,001

 
2,161

 
Total real estate revenue
 
84,678

 
85,393

 
Other income
 
627

 
889

 
Total revenue
 
85,305

 
86,282

 
EXPENSES:
 
 
 
 
 
Operating expenses
 
 
 
 
 
Property operating expenses:
 
 
 
 
 
CAM and real estate taxes
 
(29,403
)
 
(29,396
)
 
Utilities
 
(3,660
)
 
(3,909
)
 
Credit losses
 
—

 
(1,062
)
 
Other property operating expenses
 
(2,065
)
 
(2,338
)
 
Total property operating expenses
 
(35,128
)
 
(36,705
)
 
Depreciation and amortization
 
(34,904
)
 
(34,030
)
 
General and administrative expenses
 
(11,205
)
 
(10,132
)
 
Provision for employee separation expense
 
(719
)
 
—

 
Project costs and other expenses
 
(294
)
 
(112
)
 
Total operating expenses
 
(82,250
)
 
(80,979
)
 
Interest expense, net
 
(15,898
)
 
(14,901
)
 
Loss on debt extinguishment
 
(4,768
)
 
—

 
Impairment of development land parcel
 
(1,464
)
 
—

 
Total expenses
 
(104,380
)
 
(95,880
)
 
Loss before equity in income of partnerships, gain on sale of real estate by equity method investee, and adjustment to gains on sales of interests in non operating real estate
 
(19,075
)
 
(9,598
)
 
Equity in income of partnerships
 
2,289

 
3,138

 
Gain on sale of real estate by equity method investee
 
563

 
2,773

 
Adjustment to gains on sales of interests in non operating real estate
 
—

 
(25
)
 
Net loss
 
(16,223
)
 
(3,712
)
 
Less: net loss attributable to noncontrolling interest
 
1,688

 
1,111

 
Net loss attributable to PREIT
 
(14,535
)
 
(2,601
)
 
Less: preferred share dividends
 
(6,844
)
 
(6,844
)
 
Net loss attributable to PREIT common shareholders
 
$
(21,379
)
 
$
(9,445
)
 




PREIT / 9             Pennsylvania Real Estate Investment Trust
Selected Financial Data

EARNINGS PER SHARE (Unaudited)
Quarter Ended
March 31,
 
(in thousands of dollars, except per share amounts)
2019
 
2018
 
Net loss
$
(16,223
)
 
$
(3,712
)
 
Noncontrolling interest
1,688

 
1,111

 
Preferred share dividends
(6,844
)
 
(6,844
)
 
Dividends on unvested restricted shares
(218
)
 
(138
)
 
Net loss used to calculate loss per share—basic and diluted
$
(21,597
)
 
$
(9,583
)
 
 
 
 
 
 
Basic and diluted loss per share:
$
(0.30
)
 
$
(0.14
)
 
 
 
 
 
 
(in thousands of shares)
 
 
 
 
Weighted average shares outstanding—basic
71,358

 
69,601

 
Effect of common share equivalents (1) 
—

 
—

 
Weighted average shares outstanding—diluted
71,358

 
69,601

 
 (1)The company had net losses for the quarters ended March 31, 2019 and 2018, respectively, therefore, the effects of common share equivalents are excluded from the calculation of diluted loss per share for these periods because they would be antidilutive.






OTHER COMPREHENSIVE INCOME (LOSS) (Unaudited)
 
Quarter Ended
March 31,
 
 
 
2019
 
2018
 
(in thousands)
 
 
 
 
 
Comprehensive (loss) income:
 
 
 
 
 
Net loss
 
$
(16,223
)
 
$
(3,712
)
 
Unrealized (loss) gain on derivatives
 
(6,508
)
 
4,828

 
Amortization of settled swaps
 
2

 
275

 
Total comprehensive (loss) income
 
(22,729
)
 
1,391

 
Less: comprehensive loss attributable to noncontrolling interest
 
2,253

 
570

 
Comprehensive (loss) income attributable to PREIT
 
$
(20,476
)
 
$
1,961

 



PREIT / 10             Pennsylvania Real Estate Investment Trust
Selected Financial Data



The following table presents a reconciliation of net income (loss) determined in accordance with GAAP to (i) Funds from operations attributable to common shareholders and OP Unit holders, (ii) Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders , (iii) Funds from operations, as adjusted for assets sold, (iv) Funds from operations attributable to common shareholders and OP Unit holders per diluted share and OP Unit (v) Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders per diluted share and OP Unit, and (vi) Funds from operations, as adjusted for assets sold per diluted share and OP Unit for the quarters ended March 31, 2019 and 2018, respectively: 

 
Quarter Ended
March 31,
 
(in thousands, except per share amounts)
2019
 
2018
 
Net loss
$
(16,223
)
 
$
(3,712
)
 
    Depreciation and amortization on real estate:
 
 
 
 
    Consolidated properties
34,565

 
33,663

 
    PREIT’s share of equity method investments
1,970

 
2,241

 
     Gain on sale of real estate by equity method investee
—

 
(2,773
)
 
     Preferred share dividends
(6,844
)
 
(6,844
)
 
Funds from operations attributable to common shareholders and OP Unit holders
13,468

 
22,575

 
Loss on debt extinguishment
4,768

 
—

 
Impairment of development land parcel
1,464

 
—

 
Provision for employee separation expense
719

 
—

 
Insurance losses, net
236

 
—

 
Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders
20,655

 
22,575

 
Less: Funds from operations from assets sold in 2019 and 2018
—

 
(412
)
 
Funds from operations, as adjusted for assets sold
$
20,655

 
$
22,163

 
 
 
 
 
 
Funds from operations attributable to common shareholders and OP Unit holders per diluted share and OP Unit
$
0.17

 
$
0.29

 
Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders per diluted share and OP Unit
$
0.26

 
$
0.29

 
Funds from operations, as adjusted for assets sold per diluted share and OP Unit
$
0.26

 
$
0.28

 
 
 
 
 
 
Weighted average number of shares outstanding
71,358

 
69,601

 
Weighted average effect of full conversion of OP Units
6,884

 
8,274

 
Effect of common share equivalents
309

 
209

 
Total weighted average shares outstanding, including OP Units
78,551

 
78,084

 
 



PREIT / 11             Pennsylvania Real Estate Investment Trust
Selected Financial Data



NOI for the quarters ended March 31, 2019 and 2018:
 
 
Same Store
 
Non-Same Store
 
Total
 (in thousands)
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
NOI from consolidated properties
 
$
45,271

 
$
43,607

 
$
4,278

 
$
5,081

 
$
49,549

 
$
48,688

NOI from equity method investments at ownership share
 
7,052

 
7,575

 
(29
)
 
463

 
7,023

 
8,038

Total NOI
 
52,323

 
51,182

 
4,249

 
5,544

 
56,572

 
56,726

Less: lease termination revenue
 
300

 
261

 
16

 
21

 
316

 
282

Total NOI excluding lease termination revenue
 
$
52,023

 
$
50,921

 
$
4,233

 
$
5,523

 
$
56,256

 
$
56,444

  



  

















PREIT / 12             Pennsylvania Real Estate Investment Trust
Selected Financial Data

The table below reconciles net loss to NOI of our consolidated properties for the quarters ended March 31, 2019 and 2018.

 
Quarter Ended
March 31,
 
(in thousands)
2019
 
2018
 
Net loss
$
(16,223
)
 
$
(3,712
)
 
Other income
(628
)
 
(889
)
 
Depreciation and amortization
34,904

 
34,030

 
General and administrative expenses
11,205

 
10,132

 
Provision for employee separation expense
719

 
—

 
Project costs and other expenses
294

 
112

 
Interest expense, net
15,898

 
14,901

 
Impairment of development land parcel
1,464

 
—

 
Loss on debt extinguishment
4,768

 
—

 
Equity in income of partnerships
(2,289
)
 
(3,138
)
 
Gain on sale of real estate by equity method investee
(563
)
 
(2,773
)
 
(Adjustment to gains) gains on sales of interest in non operating real estate
—

 
25

 
NOI from consolidated properties
49,549

 
48,688

 
Less: Non Same Store NOI of consolidated properties
4,278

 
5,081

 
Same Store NOI from consolidated properties
45,271

 
43,607

 
Less: Same Store lease termination revenue
297

 
10

 
Same Store NOI excluding lease termination revenue
$
44,974

 
$
43,597

 


The table below reconciles equity in income of partnerships to NOI of equity method investments at ownership share for the quarters ended March 31, 2019 and 2018:

 
Quarter Ended
March 31,
 
(in thousands)
2019
 
2018
 
Equity in income of partnerships
$
2,289

 
$
3,138

 
Other income
(12
)
 
(12
)
 
Depreciation and amortization
1,970

 
2,241

 
Interest and other expenses
2,776

 
2,671

 
Net operating income from equity method investments at ownership share
7,023

 
8,038

 
Less: Non Same Store NOI from equity method investments at ownership share
(29
)
 
463

 
Same Store NOI of equity method investments at ownership share
7,052

 
7,575

 
Less: Same Store lease termination revenue
3

 
251

 
Same Store NOI from equity method investments excluding lease termination revenue at ownership share
$
7,049

 
$
7,324

 








PREIT / 13             Pennsylvania Real Estate Investment Trust
Selected Financial Data

CONSOLIDATED BALANCE SHEETS
 
March 31, 2019
 
December 31, 2018
 
 
(Unaudited)
 
 
(in thousands)
 
 
 
 
ASSETS:
 
 
 
 
INVESTMENTS IN REAL ESTATE, at cost:
 
 
 
 
Operating properties
 
$
3,058,422

 
$
3,063,531

Construction in progress
 
119,873

 
115,182

Land held for development
 
5,881

 
5,881

Total investments in real estate
 
3,184,176

 
3,184,594

Accumulated depreciation
 
(1,148,794
)
 
(1,118,582
)
Net investments in real estate
 
2,035,382

 
2,066,012

INVESTMENTS IN PARTNERSHIPS, at equity:
 
149,795

 
131,124

OTHER ASSETS:
 
 
 
 
Cash and cash equivalents
 
10,416

 
18,084

Tenant and other receivables, net
 
35,344

 
38,914

Intangible assets (net of accumulated amortization of $16,391 and $15,543 at March 31, 2019 and December 31, 2018, respectively)
 
17,020

 
17,868

Deferred costs and other assets, net
 
107,239

 
110,805

Assets held for sale
 
35,275

 
22,307

Total assets
 
$
2,390,471

 
$
2,405,114

LIABILITIES:
 
 
 
 
Mortgage loans payable, net
 
$
985,763

 
$
1,047,906

Term Loans, net
 
547,478

 
547,289

Revolving Facilities
 
162,000

 
65,000

Tenants' deposits and deferred rent
 
10,261

 
15,400

Distributions in excess of partnership investments
 
91,227

 
92,057

Fair value of derivative liabilities
 
6,364

 
3,010

Accrued expenses and other liabilities
 
85,431

 
87,901

Total liabilities
 
1,888,524

 
1,858,563

EQUITY:
 
501,947

 
546,551

Total liabilities and equity
 
$
2,390,471

 
$
2,405,114




PREIT / 14             Pennsylvania Real Estate Investment Trust
Selected Financial Data

Changes in Funds from Operations for the Quarter Ended March 31, 2019 as compared to the Quarter Ended March 31, 2018 (all per share amounts on a diluted basis unless otherwise noted; rounded to the nearest half penny; amounts may not total due to rounding)
(in thousands, except per share amounts)

Quarter Ended
March 31, 2019

Per Diluted Share
and OP Unit

Funds from Operations, as adjusted March 31, 2018

$
22,575


$
0.29








Changes - Q1 2018 to Q1 2019











Contribution from anchor replacements, increase in base rents and net CAM and real estate tax recoveries

1,290


0.015


Impact from bankruptcies

(462
)

(0.005
)

Lease termination revenue

287


0.005


Bad debt expense

455


0.005


Other

93


—


Same Store NOI from unconsolidated properties

(522
)

(0.005
)

Same Store NOI
 
1,141

 
0.015

 
Non Same Store NOI

(803
)

(0.010
)

Dilutive effect of asset sales

(412
)

(0.005
)

General and administrative expenses

110


—


Capitalization of leasing costs

(1,184
)

(0.015
)

Gain on sale of non-operating real estate

589


0.010


Other

(294
)

(0.005
)

Interest expense

(1,067
)

(0.015
)

Funds from Operations, as adjusted March 31, 2019

$
20,655


$
0.26


      Loss on debt extinguishment

(4,768
)

(0.060
)

      Impairment of development land parcel

(1,464
)

(0.020
)

      Provision for employee separation expense

(719
)

(0.010
)

      Insurance losses, net

(236
)

—


Funds from Operations March 31, 2019

$
13,468


$
0.17





###