-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HYgPObE2xCRUHt8k1fS4rgv/OUZnQncsTv/ti4GssTJfAKmBP+Bweao3smKWA7Jm SYtkgKTJ6/0twTKQH9qgxw== 0000950116-97-001304.txt : 19970716 0000950116-97-001304.hdr.sgml : 19970716 ACCESSION NUMBER: 0000950116-97-001304 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970531 FILED AS OF DATE: 19970715 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PENNSYLVANIA REAL ESTATE INVESTMENT TRUST CENTRAL INDEX KEY: 0000077281 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 236216339 STATE OF INCORPORATION: PA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06300 FILM NUMBER: 97640703 BUSINESS ADDRESS: STREET 1: 455 PENNSYLVANIA AVE STREET 2: STE 135 CITY: FORT WASHINGTON STATE: PA ZIP: 19034 BUSINESS PHONE: 2155429250 MAIL ADDRESS: STREET 1: 455 PENNSYLVANIA AVE STREET 2: STE 135 CITY: FORT WASHINGTON STATE: PA ZIP: 19034 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q [X] Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act Of 1934 For the quarterly period ended May 31, 1997 -------------------------- [ ] Transition Report Pursuant To Section 13 or 15(d) Of The Securities Exchange Act Of 1934 For the transition period from ______________________ to _______________________ Commission File Number 1-6300 -------------------------------------------------------- Pennsylvania Real Estate Investment Trust - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Pennsylvania 23-6216339 - -------------------------------------------------------------- ------------------------------------------------- (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 455 Pennsylvania Avenue, Suite 135, Ft. Washington, PA 19034 - -------------------------------------------------------------- ------------------------------------------------- (Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (215) 542-9250 ----------------------------- N/A - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 of 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. Yes |X| No |_| Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the period covered by this report (applicable only to corporate issuers). Shares of beneficial interest outstanding at May 31, 1997: 8,678,098 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- This report includes a total of 13 pages. - -------------------------------------------------------------------------------- PENNSYLVANIA REAL ESTATE INVESTMENT TRUST CONTENTS Page Part I. Financial Information Financial Statements (Unaudited): Consolidated Balance Sheets--May 31, 1997 and August 31, 1996 (Audited) 1-2 Consolidated Statements of Income--Three and Nine Months Ended May 31, 1997 and 1996 3 Consolidated Statements of Cash Flows--Nine Months Ended May 31, 1997 and 1996 4 Notes to Unaudited Consolidated Financial Statements 5-7 Management's Discussion and Analysis of Financial Condition and Results of Operations 8-11 Part II. Other Information (Items 1 through 4 not applicable) 12 Item 5 12 Item 6 12 Signatures 13 PENNSYLVANIA REAL ESTATE INVESTMENT TRUST CONSOLIDATED BALANCE SHEETS ASSETS
May 31, August 31, 1997 1996 (Unaudited) ------------ ------------ INVESTMENTS IN REAL ESTATE, at cost: Apartment buildings $158,865,000 $156,102,000 Industrial properties 5,078,000 5,078,000 Shopping centers and retail stores 37,393,000 37,362,000 ------------ ------------ Total investments in real estate 201,336,000 198,542,000 Less- Accumulated depreciation 49,172,000 44,693,000 ------------ ------------ 152,164,000 153,849,000 INVESTMENTS IN PARTNERSHIPS AND JOINT VENTURES, at equity (Note 2) 1,710,000 16,995,000 NOTES RECEIVABLE -- 1,649,000 ------------ ------------ 153,874,000 172,493,000 LESS- Allowance for possible losses 1,880,000 2,042,000 ------------ ------------ 151,994,000 170,451,000 OTHER ASSETS: Cash and cash equivalents 3,554,000 1,030,000 Rents and sundry receivables 370,000 608,000 Deferred costs, prepaid real estate taxes and expenses, net 5,961,000 5,636,000 ------------ ------------ $161,879,000 $177,725,000 ============ ============
The accompanying notes are an integral part of these statements. 1 PENNSYLVANIA REAL ESTATE INVESTMENT TRUST CONSOLIDATED BALANCE SHEETS LIABILITIES AND BENEFICIARIES' EQUITY
May 31, August 31, 1997 1996 (Unaudited) ------------- ------------- LIABILITIES: Mortgage notes payable $ 83,844,000 $ 84,833,000 Bank loans payable 28,623,000 39,315,000 Tenants' deposits and deferred rents 1,246,000 1,422,000 Accrued pension and retirement benefits 1,117,000 1,207,000 Accrued expenses and other liabilities 3,624,000 3,901,000 ------------- ------------- 118,454,000 130,678,000 ------------- ------------- MINORITY INTEREST IN CONSOLIDATED PARTNERSHIP (Note 2) 718,000 542,000 ------------- ------------- COMMITMENTS AND CONTINGENCIES (Note 5) BENEFICIARIES' EQUITY (Note 3): Shares of beneficial interest, $1 par; authorized, unlimited; issued and outstanding 8,678,098 shares at May 31, 1997 and 8,676,098 at August 31, 1996 8,678,000 8,676,000 Capital contributed in excess of par 53,164,000 53,133,000 Distributions in excess of net income (19,135,000) (15,304,000) ------------- ------------- 42,707,000 46,505,000 ------------- ------------- $ 161,879,000 $ 177,725,000 ============= =============
The accompanying notes are an integral part of these statements. 2 PENNSYLVANIA REAL ESTATE INVESTMENT TRUST CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended Nine Months Ended May 31 May 31 ---------------------------- ----------------------------- 1997 1996 1997 1996 ------------- ------------- ------------- ------------- REVENUES: Gross revenues from real estate $ 10,031,000 $ 9,926,000 $ 30,116,000 $ 29,183,000 Interest and other income 54,000 42,000 218,000 127,000 -------------- ------------- ------------- ------------- 10,085,000 9,968,000 30,334,000 29,310,000 -------------- ------------- ------------- ------------- EXPENSES: Property operating expenses 3,967,000 3,979,000 12,154,000 11,891,000 Depreciation and amortization 1,565,000 1,529,000 4,661,000 4,386,000 General and administrative expenses 861,000 860,000 2,433,000 2,283,000 Mortgage and bank loan interest 2,258,000 2,483,000 6,864,000 7,340,000 Provision for losses on investments -- -- 500,000 -- -------------- ------------- ------------- ------------ 8,651,000 8,851,000 26,612,000 25,900,000 -------------- ------------- ------------- ------------- Income before minority interest, equity in income of partnerships and joint ventures and gains on sales of interests in real estate 1,434,000 1,117,000 3,722,000 3,410,000 MINORITY INTEREST (91,000) (38,000) (265,000) (180,000) EQUITY IN INCOME OF PARTNERSHIPS AND JOINT VENTURES (Note 2) 1,442,000 1,546,000 3,487,000 4,576,000 GAINS ON SALES OF INTERESTS IN REAL ESTATE -- 411,000 1,461,000 411,000 -------------- ------------- ------------- ------------- NET INCOME $ 2,785,000 $ 3,036,000 $ 8,405,000 $ 8,217,000 ============== ============= ============= ============= NET INCOME PER SHARE $ 0.32 $ 0.35 $ 0.97 $ 0.95 ============== ============= ============= ============= WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 8,678,098 8,676,098 8,677,698 8,676,098 ============== ============= ============= =============
The accompanying notes are an integral part of these statements. 3 PENNSYLVANIA REAL ESTATE INVESTMENT TRUST CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended May 31 ------------------------------- 1997 1996 ------------ ------------ (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 8,405,000 $ 8,217,000 Adjustments to reconcile net income to net cash provided by operating activities- Minority interest in income of consolidated partnership 265,000 180,000 Depreciation and amortization 4,661,000 4,386,000 Gains on sales of interests in real estate (1,461,000) (411,000) Provision for losses on investments 500,000 -- Expenses charged against allowance for possible losses (662,000) (694,000) Change in assets and liabilities- Rents and sundry receivables 238,000 (108,000) Deferred costs, prepaid real estate taxes and expenses (267,000) 183,000 Accrued pension and retirement benefits (90,000) (64,000) Accrued expenses and other liabilities (277,000) 22,000 Tenants' deposits and deferred rents (175,000) (112,000) ------------ ------------ Net cash provided by operating activities 11,137,000 11,599,000 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Investments in wholly owned real estate (2,794,000) (2,720,000) Investments in partnerships and joint ventures (2,193,000) (514,000) Increase in advances to partnerships and joint ventures (264,000) (274,000) Cash distributions from partnerships and joint ventures in excess of equity in income 17,134,000 1,212,000 Cash proceeds from sales of interests in partnerships and joint ventures 2,069,000 4,000,000 Decrease in notes receivable 1,649,000 -- Cash distributions to minority partners (89,000) (185,000) Other (240,000) -- ------------ ------------ Net cash provided by investing activities 15,272,000 1,519,000 ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Principal installments on mortgage notes payable (989,000) (874,000) Repayment of bank loans payable (10,693,000) (6,557,000) Increase in mortgage notes payable -- 8,800,000 Repayment of mortgage notes payable -- (1,749,000) Payment of deferred financing costs -- (704,000) Shares of beneficial interest issued 33,000 -- Distributions paid to beneficiaries (12,236,000) (12,233,000) ------------ ------------ Net cash used in financing activities (23,885,000) (13,317,000) ------------ ------------ NET INCREASE IN CASH AND CASH EQUIVALENTS 2,524,000 (199,000) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,030,000 1,099,000 ------------ ------------ CASH AND CASH EQUIVALENTS, END OF PERIOD $ 3,554,000 $ 900,000 ============ ============
The accompanying notes are an integral part of these statements. 4 PENNSYLVANIA REAL ESTATE INVESTMENT TRUST NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS NINE MONTHS ENDED MAY 31, 1997 AND 1996 1. BASIS OF PRESENTATION: The consolidated financial statements have been prepared by the Registrant, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Registrant believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these consolidated financial statements be read in conjunction with the audited financial statements and the notes thereto included in the Registrant's latest annual report on Form 10-K. In the opinion of the Registrant, all adjustments and eliminations, consisting only of normal recurring adjustments, necessary to present fairly the consolidated financial position of the Registrant as of May 31, 1997 and August 31, 1996 and the consolidated results of its operations for the three and nine months ended May 31, 1997 and 1996 and cash flows for the nine months ended May 31, 1997 and 1996, have been included. The results of operations for such interim periods are not necessarily indicative of the results for the full year. Certain reclassifications of prior year amounts have been made to conform with the current year presentation. 2. INVESTMENTS IN PARTNERSHIPS AND JOINT VENTURES: The following presents summarized information as to the Registrant's equity in the assets and liabilities of 25 partnerships and joint ventures at May 31, 1997 and August 31, 1996, and the Registrant's equity in income for the three and nine months ended May 31, 1997 and 1996:
May 31, August 31, ASSETS 1997 1996 ------------- ------------- (Unaudited) Investments in real estate, at cost: Apartment buildings $ 107,232,000 $ 105,480,000 Industrial property 1,264,000 1,264,000 Shopping centers and retail stores 122,281,000 128,936,000 Land 4,446,000 4,446,000 ------------- ------------- Total investments in real estate 235,223,000 240,126,000 Less- Accumulated depreciation 70,624,000 73,989,000 ------------- ------------- 164,599,000 166,137,000 Cash and cash equivalents 6,674,000 5,589,000 Other assets 5,738,000 6,020,000 ------------- ------------- Total assets 177,011,000 177,746,000 ------------- ------------- LIABILITIES AND EQUITY Mortgage notes payable 163,055,000 133,578,000 Bank loans payable 10,145,000 9,124,000 Other liabilities 7,196,000 4,436,000 ------------- ------------- Total liabilities 180,396,000 147,138,000 ------------- ------------- Net equity (deficit) (3,385,000) 30,608,000 Partners' share (5,095,000) 13,613,000 ------------- ------------- Investments in partnerships and joint ventures $ 1,710,000 $ 16,995,000 ============= =============
5 EQUITY IN INCOME OF PARTNERSHIPS AND JOINT VENTURES
Three Months Ended Nine Months Ended May 31 May 31 -------------------------------- ------------------------------- 1997 1996 1997 1996 ------------ ------------ ------------ ------------ (Unaudited) (Unaudited) Gross revenues from real estate $ 12,907,000 $ 13,203,000 $ 39,410,000 $ 40,125,000 ------------ ------------ ------------ ------------ Expenses: Property operating expenses 4,983,000 5,503,000 15,561,000 16,536,000 Mortgage and bank loan interest expense 3,326,000 2,879,000 10,136,000 9,111,000 Refinancing prepayment penalty -- -- 1,465,000 -- Depreciation and amortization 1,660,000 1,690,000 5,068,000 5,178,000 ------------ ------------ ------------ ------------ 9,969,000 10,072,000 32,230,000 30,825,000 ------------ ------------ ------------ ------------ 2,938,000 3,131,000 7,180,000 9,300,000 Partners' share (1,496,000) (1,585,000) (3,693,000) (4,724,000) ------------ ------------ ------------ ------------ Equity in income of partnerships and joint ventures $ 1,442,000 $ 1,546,000 $ 3,487,000 $ 4,576,000 ============ ============ ============ ============
One partnership in which the Registrant is a general partner, and has control as provided in the partnership agreement, has been consolidated for financial statement presentation. All of the assets and liabilities are included in the consolidated financial statements at 100%. The minority partner's interest is 35%. 3. DISTRIBUTIONS: The per share amount declared at the date of this report and the per share amount declared in the comparable period in fiscal 1996 for distribution was as follows: Amount Per Date Declared Record Date Payment Date Share ------------- ----------- ------------ ----- July 8, 1997 July 31, 1997 August 15, 1997 $.47 July 16, 1996 July 31, 1996 August 15, 1996 $.47 4. CASH FLOW INFORMATION: Cash paid for interest was $2,324,000 and $2,624,000 for the three months ended May 31, 1997 and 1996, and $6,806,000 and $7,567,000 for the nine months ended May 31, 1997 and 1996, respectively. 6 5. COMMITMENTS AND CONTINGENCIES: Environmental matters have arisen at certain properties in which the Registrant has an interest for which reserves have previously been established. During the nine months ended May 31, 1997, the Registrant advanced funds totaling $7,800 which were recorded against the previously established reserves. The Registrant has been named as a defendant in a suit brought by persons and their affiliates who are partners of the Registrant in three partnerships. The Registrant is vigorously defending the suit and has denied the plaintiffs' allegations. The Registrant also believes that it has viable claims against certain of the same partners (or their affiliates) which it is asserting. As the pleadings are not yet closed and discovery is still in the preliminary stages, it is not possible to judge the ultimate outcome of these suits at this time. However, Management does not believe that resolution of these matters will have a material adverse effect on the Registrant's financial condition or results of operations. 6. RECENT ACCOUNTING PRONOUNCEMENTS: On March 3, 1997, the Financial Accounting Standards Board issued Statement No. 128, "Earnings Per Share." The new statement is effective for fiscal years ending after December 15, 1997. When adopted, the statement will require implementing a new definition of earnings per share including restatement of prior year amounts. Management has determined there will be no significant impact upon adoption of the statement. 7 PENNSYLVANIA REAL ESTATE INVESTMENT TRUST MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources In March 1997, a Partnership in which the Registrant has a 50% interest in Palmer Park Mall, Easton, PA, acquired the adjoining former Clover Store from Kimco Realty for $1,750,000. The Partnership is now negotiating with a regional department store chain to open a renovated and expanded store at this center. In April 1997, the Registrant acquired a 50% co-tenancy interest in 60,000 square feet of a 207,000 square foot condominium, known as Springfield Park, Springfield, PA, for a consideration of $1,850,000. The remaining interest in this property is owned by Target. The co-owners are in discussion with various tenants for occupancy at this center. Funds from operations (FFO) increased by $191,000 and $588,000 for the three and nine months ended May 31, 1997, as compared to the same periods in 1996 as follows:
Three Months Ended Nine Months Ended May 31 May 31 ------------------------------- ------------------------------- 1997 1996 1997 1996 ------------ ------------ ------------ ------------ Funds from Operations(1) Net income $ 2,785,000 $ 3,036,000 $ 8,405,000 $ 8,217,000 Less- Gains on sales of interests in real -- (411,000) (1,461,000) (411,000) estate Plus- Provision for losses on investments -- -- 500,000 -- ------------ ------------ ------------ ------------ 2,785,000 2,625,000 7,444,000 7,806,000 Plus: Depreciation and amortization- Wholly owned and consolidated partnership(2) 1,497,000 1,464,000 4,461,000 4,193,000 Unconsolidated partnerships and joint ventures 803,000 809,000 2,454,000 2,520,000 Refinancing prepayment penalty -- -- 733,000 -- Less: Depreciation of non-real estate assets (56,000) (50,000) (165,000) (150,000) Amortization of deferred financing costs (70,000) (80,000) (216,000) (246,000) ------------ ------------ ------------ ------------ Funds from operations $ 4,959,000 $ 4,768,000 $ 14,711,000 $ 14,123,000 ============ ============ ============ ============
(1)Funds from operations ("FFO") is defined as income before gains (losses) on investments and extraordinary items (computed in accordance with generally accepted accounting principles "GAAP") plus real estate depreciation and similar adjustments for unconsolidated joint ventures after adjustments for non-real estate depreciation and amortization of financing costs. FFO should not be construed as an alternative to net income (as determined in accordance with GAAP) as an indicator of the Trust's operating performance, or to cash flows from operating activities (as determined in accordance with GAAP) as a measure of liquidity. In addition, the Trust's measure of FFO as presented may not be comparable to similarly titled measures reported by other companies. (2)Net of minority interest for three months of $67,000 in 1997 and $64,000 in 1996 and for nine months of $200,000 in 1997 and $192,000 in 1996. 8 Net cash provided by operating activities decreased to $11,137,000 from $11,599,000 for the nine months ended May 31, 1997, as compared to the same period last year. Net cash provided by investing activities was $15,272,000 for the nine months ended May 31, 1997 as compared to $1,519,000 provided in the same period last year. The increase is primarily attributable to aggregate partnership distributions of $15,400,000 the Registrant received from the refinancing of Lehigh Valley Mall and Cambridge Hall Apartments in the First Quarter 1997. Net cash used in financing activities was $23,885,000 for the nine months ended May 31, 1997 as compared to $13,317,000 used in the same period last year. Financing activities in the nine months ended May 31, 1997 included a reduction in bank loans payable of $10,693,000 and distributions paid to beneficiaries of $12,236,000. Financing activities in the nine months ended May 31, 1996 included a reduction in bank and mortgage loans payable of $8,306,000, an increase in mortgage notes payable of $8,800,000 on Shenandoah Apartments, and distributions paid to beneficiaries of $12,233,000. Results of Operations Three-Month Periods Ended May 31, 1997 and 1996 Gross revenues from real estate increased by $105,000 to $10,031,000 for the three month period ended May 31, 1997 as compared to the same period in the prior year. The 1996 period included $131,000 of revenues attributable to Chateau Apartments which the Registrant sold in June 1996. Revenues from properties owned during both periods increased by $236,000 primarily as a result of increases in apartment revenues. Operating expenses decreased by $12,000 to $3,967,000. The 1996 period included $94,000 of expenses attributable to Chateau Apartments which the Registrant sold in the prior year. Operating expenses from properties owned during both periods increased by $82,000. Depreciation and amortization increased by $36,000 to $1,565,000 primarily as a result of the sale of the Chateau property and increases in depreciation arising from capital improvements to apartments. Mortgage and bank loan interest expense decreased by $225,000 to $2,258,000 as a result of decreased borrowing under the Registrant's credit facility. For the three months ended May 31, 1997, $50,000 of carrying costs on land held for sale were charged against the allowance for investment losses. Equity in income of partnerships and joint ventures decreased by $104,000 to $1,442,000, primarily as a result of an increase in mortgage interest expense of $300,000 associated with the refinancing of Lehigh Valley Mall and Cambridge Hall Apartments during the First Quarter 1997 and Regency Apartments in the Second Quarter 1997. In addition, equity in income from properties owned during both periods exclusive of the increase in mortgage interest mentioned above increased by $184,000. 9 Operating results for the three months ended May 31, 1996 included a $411,000 gain on the sales of land. Net income for the quarter ended May 31, 1997 decreased to $2,785,000 from $3,036,000 as reported in the comparable period in the prior year. Nine-Month Periods Ended May 31, 1997 and 1996 Gross revenues from real estate increased by $933,000 to $30,116,000 for the nine month period ended May 31, 1997 as compared to the same period in the prior year. The 1997 period included $369,000 of revenues attributable to Forestville Plaza in which the Registrant acquired its partners' remaining 25% interest in the prior fiscal year. The 1996 period included $388,000 of revenues attributable to Chateau Apartments which the Registrant sold in June 1996. Revenues from properties owned during both periods increased by $952,000 primarily as a result of increases in apartment revenues. Operating expenses increased by $263,000 to $12,154,000. The 1997 period included $145,000 of expenses attributable to Forestville Plaza in which the Registrant acquired its partners' remaining 25% interest in the prior fiscal year. The 1996 period included $259,000 of expenses attributable to Chateau Apartments which the Registrant sold in the prior year. Operating expenses from properties owned during both periods increased by $377,000. Depreciation and amortization increased by $275,000 to $4,661,000 primarily as a result of the additional interest in the Forestville property, the sale of the Chateau property, and increases in depreciation on apartments. General and administrative expenses increased by $150,000 to $2,443,000 primarily as a result of costs associated with litigation. Mortgage and bank loan interest expense decreased $476,000 to $6,864,000 as a result of decreased borrowing against the Registrant's credit facility. In June 1996, a partnership in which the Registrant has a 50% interest signed an option to sell a parcel of land at a stipulated price, subject to the buyer's obtaining certain zoning variance approvals. In December 1996, the option expired. As a result, management revised its estimate of the property's selling price and recorded a $500,000 provision for investment losses in the second quarter to reduce the property held for sale to its estimated net realizable value. Equity in income of partnerships and joint ventures decreased by $1,089,000 to $3,487,000, primarily as a result of an increase in mortgage interest expense of $2,490,000 ($1,253,000 of which was the Registrant's proportional share). The increase in partnership mortgage interest expense is attributable to prepayment penalties of $1,465,000 ($733,000 of which was the Registrant's proportional share) in connection with refinancings, as well as additional interest associated with the refinancings of Regency Apartments during the Second Quarter 1997 and Lehigh Valley Mall and Cambridge Hall Apartments during the First Quarter 1997. The above described decrease was offset in part by an increase in equity in income of $123,000 associated with the sale of the partnership interest in three shopping centers in the 1997 period. In addition, equity in income from properties owned during both periods exclusive of the increase in mortgage interest mentioned above increased by $287,000. 10 Operating results for the nine month period ended May 31, 1997 included $1,461,000 of gains on sales of interests in real estate. Operating results for the nine months ended May 31, 1996 included a $411,000 gain on the sale of land. Net income for the nine months period ended May 31, 1997 increased to $8,405,000 from $8,217,000 as reported in the comparable period in the prior year. 11 Part II. Other Information Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits - (27.)--Financial Data Schedule (included in electronic filing format) (b) Reports on Form 8-K - None 12 PENNSYLVANIA REAL ESTATE INVESTMENT TRUST SIGNATURE OF REGISTRANT Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned on its behalf by the undersigned thereunto duly authorized. PENNSYLVANIA REAL ESTATE INVESTMENT TRUST Registrant By /s/ Jonathan B. Weller -------------------------------------------- Jonathan B. Weller, President and Chief Operating Officer By /s/ Dante J. Massimini -------------------------------------------- Dante J. Massimini, Senior Vice-President and Treasurer Date: July 15, 1997 EX-27 2
5 0000077281 PENNSYLVANIA REAL ESTATE INVESTMENT TRUST DOLLARS 9-MOS AUG-31-1997 SEP-01-1996 MAY-31-1997 1 3,554,000 0 8,041,000 1,880,000 0 0 201,336,000 49,172,000 161,879,000 6,705,000 112,467,000 0 0 8,678,000 34,029,000 161,879,000 30,116,000 35,017,000 0 19,248,000 0 500,000 6,864,000 8,405,000 0 8,405,000 0 0 0 8,405,000 $.97 $.97
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