PENNSYLVANIA REAL ESTATE INVESTMENT TRUST - FORM 8-K - EX-99.1

Attached files

file	filename
8-K - 8-K - PENNSYLVANIA REAL ESTATE INVESTMENT TRUST	pei-8k_20201106.htm

Exhibit 99.1

Supplemental Financial and Operating Information

September 30, 2020

www.preit.com

NYSE: PEI

NYSE: PEIPRB, PEIPRC, PEIPRD

Pennsylvania Real Estate Investment Trust

Supplemental Financial and Operating Information

September 30, 2020


Table of Contents
Introduction

Company Information	1

Earnings Release	2

Changes in Funds from Operations for the Three and Nine Months Ended September 30, 2020	5

Market Capitalization and Capital Resources	6

Operating Results

Statements of Operations – Three and Nine Months Ended September 30, 2020 and 2019	7

Computation of Earnings Per Share	8

Reconciliation of Net Operating Income and EBITDAre – Three and Nine Months Ended September 30, 2020 and 2019	9

Reconciliation of Net Income (Loss) (GAAP Measure) to Net Operating Income from Consolidated Properties (Non-GAAP Measure) - Three Months Ended September 30, 2020 and 2019	10

Reconciliation of Equity in Income of Partnerships to Net Operating Income from Equity Method Investments, at Ownership Share (Non-GAAP Measure) - Three Months Ended September 30, 2020 and 2019	11
Reconciliation of Net Income (Loss) (GAAP Measure) to Net Operating Income from Consolidated Properties (Non-GAAP Measure) - Nine Months Ended September 30, 2020 and 2019	12

Reconciliation of Equity in Income of Partnerships to Net Operating Income from Equity Method Investments, at Ownership Share (Non-GAAP Measure) - Nine Months Ended September 30, 2020 and 2019	13

Reconciliation of Funds From Operations and Funds Available for Distribution – Three and Nine Months Ended September 30, 2020 and 2019	14

Condensed Consolidated Balance Sheet	15

Assets and Liabilities - Equity Method Investments, at Ownership Share	16

Operating Statistics

Leasing Activity Summary – Three and Nine Months Ended September 30, 2020	17

Summarized Sales and Rent Per Square Foot and Occupancy Percentages	19

Mall Occupancy Percentage and Sales Per Square Foot	20

Top Twenty Tenants	21

Lease Expirations	22

Property Information	23

Balance Sheet

Investment in Real Estate - Consolidated Properties	25

Investment in Real Estate - Equity Method Investments at Ownership Share	26

Capital Expenditures – Three and Nine Months Ended September 30, 2020	27

Debt Analysis	28

Debt Schedule	30

Selected Debt Ratios	31

Forward Looking Statements	32

Definitions	33

Pennsylvania Real Estate Investment Trust

Company Information

Background

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. PREIT is focused on enhancing the quality of its portfolio through redevelopment, anchor repositioning, diversifying its tenant mix and densifying properties by adding a mix of uses. Since 2012, the Company has driven a transformation guided by an emphasis on portfolio quality and balance sheet strength driven by disciplined capital expenditures. The portfolio consists of 26 retail properties, 25 of which are operating properties and one is a development property. The 25 operating retail properties have a total of 19.8 million square feet and include 20 shopping malls and five other retail properties.

If you would like to learn more about PREIT or participate in our quarterly earnings conference call, please visit preit.com or contact:

Heather Crowell

EVP, Strategy and Communications

One Commerce Square

2005 Market Street, Suite 1000

Philadelphia, PA 19103

Telephone: (215) 875-0735

Fax: (215) 546-2504

Email: Heather.Crowell@preit.com

Press release announcements are available on the Company's website at www.preit.com.

CONTACT: AT THE COMPANY

Mario Ventresca

EVP & CFO

(215) 875-0703

Heather Crowell

EVP, Strategy and Communications

(215) 454-1241

heather.crowell@preit.com

PREIT Reports Third Quarter 2020 Results

Commenced Process to Implement Pre-packaged Plan that Received 95% Support from Lenders

Core Mall Total Leased Space reached 93.4%

Collections continue improving toward normal levels

Philadelphia, November 6, 2020 - PREIT (NYSE: PEI) today reported results for the three and nine months ended September 30, 2020. 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.

	Three Months Ended September 30,					Nine Months Ended September 30,
(per share amounts)	2020			2019		2020			2019
Net income (loss) - basic and diluted	$	(0.46	)	$	0.22	$	(1.10	)	$	(0.23	)
FFO	$	0.12		$	0.63	$	0.20		$	1.05
FFO, as adjusted	$	0.03		$	0.23	$	0.12		$	0.71
FFO from assets sold in 2019	$	-		$	-	$	-		$	(0.01	)
FFO, as adjusted for assets sold	$	0.03		$	0.23	$	0.12		$	0.70

“We are pleased to be moving closer to a normal state in our business while moving forward with strengthening the Company’s balance sheet and positioning it for long-term success through our prepackaged plan. Our court-approved expedited case timeline should allow us to emerge and quickly move to the next phase of our evolution bringing new and innovative uses to our properties as the landscape continues to rapidly evolve,” said Joseph F. Coradino, Chairman and CEO of PREIT. “We look forward to the upcoming Holiday season, meeting our shoppers’ demands through an array of shopping options and opportunities to visit with Santa.”

•

Same Store NOI, excluding lease termination revenue, decreased 33.0% for the three months ended September 30, 2020 compared to September 30, 2019.

•

The quarter was impacted by a decrease in revenue of $16.5 million primarily resulting from bankruptcies and related store closings, an increase in credit losses for challenged tenants, the accounting for rental abatements as well as decreased percentage sales revenue resulting from mall closures related to the COVID-19 pandemic.

•

Cash collections continued to improve, increasing to 127% of billings in October. During the third quarter cash collections totaled 99% of billings.

•

Core Mall total occupancy was 93.2%, a decrease of 120 basis points compared to September 30, 2019. Core Mall non-anchor occupancy declined by 200 basis points from last year.

•

Core mall non-anchor Leased space, at 89.4%, exceeds occupied space by 30 basis points when factoring in executed new leases slated for future occupancy.

•

Through September 30, 2020, average renewal spreads declined 2.5% for spaces less than 10,000 square feet.

Leasing and Redevelopment

•

134,000 square feet of leases are signed for future openings, which is expected to contribute annual gross rent of over $6.0 million.

•

Leasing progress continued with 197,000 square feet of new stores opened in the core portfolio and 82,000 square feet opening at Fashion District between May 1 and October 31, 2020.

Property Re-openings and COVID-19 Response

•

Core mall traffic at comparable properties is approximately 68% of 2019 non-holiday averages.

•

Cash collections for April through October totaled 74% of billings for those months.

•

Deferral agreements have been reached with 79% of PREIT’s key national tenants by number.

•

In continuous support of its tenants, PREIT has developed and implemented its own contactless pick up solution, Mall2Go, and has developed a branded parking lot activation series, Park and Play, that has resulted in two dozen events being held between late July and mid-September across its portfolio.

•

Across its portfolio, the Company has hosted blood drives and food donation drives, provided meals to area essential workers, and donated much needed protective supplies. Read more about our efforts here.

•

The Company launched sMALL surprises, an innovative e-commerce platform delivering curated surprise packs from our mall retailers based on the recipient’s interests.

Primary Factors Affecting Financial Results for the Three Months Ended September 30, 2020 and 2019:

•

Net loss attributable to PREIT common shareholders was $35.7 million (which takes into consideration the accrual of preferred dividends that accumulated during the quarter but have not been paid), or $0.46 per basic and diluted share for the three months ended September 30, 2020, compared to net income attributable to PREIT common shareholders of $17.4 million, or $0.22 per basic and diluted share for the three months ended September 30, 2019.

•

Same Store NOI, including lease terminations, decreased by $14.8 million, or 29.1%. The decrease is primarily due to lost revenues from bankrupt tenants, an increase in credit losses, accounting for rental abatements and a decrease in percentage of sales revenue due to COVID-19 related mall closures, partially offset by new store openings, including contributions from replacement anchors.

•

Non Same Store NOI decreased by $3.1 million, primarily due to lost revenues from bankrupt tenants, an increase in credit losses and a decrease in percentage of sales revenue due to COVID-19 related mall closures. Other decreases in NOI from Non-Same Store properties is due to the conveyance of Wyoming Valley Mall during the third quarter of 2019 and derecognition of property at Valley View Mall during the third quarter of 2019.

•

FFO for the three months ended September 30, 2020 was $0.12 per diluted share and OP Unit compared to $0.63 per diluted share and OP Unit for the three months ended September 30, 2019. Adjustments to FFO in the third quarter of 2020 were related to gain on derecognition of property related to Valley View Mall and less than $0.01 per share of provision for employee separation expenses. Adjustments to FFO in the 2019 quarter included $0.38 per share of debt extinguishment gains related to the conveyance of Wyoming Valley Mall and $0.04 per share of Insurance recoveries.

•

General and administrative expenses decreased by $1.1 million compared to the third quarter of 2019 due to lower payroll and incentive compensation expenses.

All NOI and FFO amounts referenced as primary factors affecting financial results above include our share of unconsolidated properties’ revenues and expenses. Additional information regarding changes in operating results for the three months ended September 30, 2020 and 2019 is included on page 15.

Debt Restructuring and Chapter 11 Process

On October 7, the Company executed a Restructuring Support Agreement (RSA) with over 80% of our lenders supporting either an out of court or in court “prepackaged” restructuring of our bank facilities. On October 17, we completed the expansion of our Bridge Facility by $25M to a total of $55M to maintain liquidity through the restructuring timeline.

On November 1, 2020, the Company filed voluntary Chapter 11 petitions in order to implement its prepackaged restructuring plan, which is supported by 95% of its lender group.

Asset Dispositions

Multifamily Land Parcels: The Company has executed agreements of sale for land parcels for anticipated multifamily development in the amount of $107.3 million. The agreements are with three different buyers across five properties for 2,650 units as part of Phase I of the Company’s previously announced multifamily land sale plan. Closing on the transactions is subject to customary due diligence provisions and securing entitlements. One buyer for two other land parcels had terminated its agreement and PREIT has now executed letters of intent with another buyer. One of the two parcels was placed under contract in the third quarter.

Hotel Parcels: The Company has executed two agreements of sale to convey land parcels for anticipated hotel development in the amount of $3.75 million. The agreements are with two separate buyers for approximately 250 rooms. Closings on the transactions are subject to customary due diligence provisions and securing entitlements.

Non-Core Malls: In August 2020, Valley View Mall was transferred to a special servicer as part of our non-core property disposition program.

Retail Operations

Due to COVID-related mall closures impacting a significant portion of the year, the Company is not reporting tenant sales at this time.

2020 Outlook

On March 31, 2020, the Company withdrew its financial outlook for 2020 provided in its February 25, 2020 earnings press release. The Company is not providing updated guidance at this time.

About PREIT

Rounding

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

Pennsylvania Real Estate Investment Trust

Changes in Funds from Operations

for the Three and Nine Months Ended September 30, 2020 as compared to the Three and Nine Months Ended September 30, 2019

(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)	Three Months Ended September 30, 2020			Per Diluted Share and OP Unit			Nine Months Ended September 30, 2020			Per Diluted Share and OP Unit
Funds from Operations, as adjusted September 30, 2019	$	50,052		$	0.63		$	82,777		$	1.05

Changes - Q3 2019 to Q3 2020

Other leasing activity, including base rent and net CAM and real estate tax recoveries		(7,881	)		(0.100	)		(23,775	)		(0.300	)
Lease termination revenue		2,000			0.025			1,773			0.025
Credit losses		(6,427	)		(0.080	)		(11,468	)		(0.145	)
Other		(886	)		(0.010	)		(1,571	)		(0.020	)
Same Store NOI from unconsolidated properties		(1,608	)		(0.020	)		(3,638	)		(0.045	)
Same Store NOI		(14,803	)		(0.190	)		(38,679	)		(0.490	)
Non Same Store NOI		(3,068	)		(0.040	)		(8,209	)		(0.105	)
Dilutive effect of asset sales		(161	)		-			(1,117	)		(0.015	)
General and administrative expenses		1,079			0.015			2,629			0.035
Capitalization of leasing costs		-			-			150			-
Gain on Debt Extinguishment		(29,600	)		(0.375	)		(24,832	)		(0.315	)
Gain on sales of non-operating real estate		16			-			(174	)		-
Other		(5,769	)		(0.075	)		(11,011	)		(0.140	)
Interest expense, net		4,974			0.065			7,879			0.100
Increase in weighted average shares		-			0.005			-			-
Funds from Operations, as adjusted September 30, 2020	$	2,719		$	0.03		$	9,413		$	0.12
Insurance recoveries, net		-			-			586			0.005
Gain on derecognition of property		7,006			0.090			7,006			0.090
Provision for employee separation expense		(60	)		-			(1,173	)		(0.015	)
Funds from Operations September 30, 2020	$	9,665		$	0.12		$	15,832		$	0.20

Pennsylvania Real Estate Investment Trust

Market Capitalization and Capital Resources

(in thousands)

	September 30, 2020			December 31, 2019
MARKET CAPITALIZATION

EQUITY CAPITALIZATION
Common Shares Outstanding		79,490			77,550
OP Units Outstanding		2,023			2,023
Total Common Shares and OP Units Outstanding		81,513			79,573
Equity Market Capitalization—Common Shares and OP Units	$	44,832		$	424,124
Series B Preferred Shares, Nominal Value		86,250			86,250
Series C Preferred Shares, Nominal Value		172,500			172,500
Series D Preferred Shares, Nominal Value		125,000			125,000
Total Equity Market Capitalization	$	428,582		$	807,874


DEBT CAPITALIZATION
Secured Debt Balance ⁽¹⁾	$	1,268,121		$	1,280,208
Unsecured Debt Balance ^{(2) (3)}		935,500			805,000
Debt Capitalization	$	2,203,621		$	2,085,208
TOTAL MARKET CAPITALIZATION	$	2,632,203		$	2,893,082

Equity Capitalization/Total Market Capitalization		16.3	%		27.9	%
Debt Capitalization/Total Market Capitalization		83.7	%		72.1	%
Unsecured Debt Balance/Total Debt		42.5	%		38.6	%


CAPITAL RESOURCES
Cash and Cash Equivalents	$	49,333		$	26,922
Revolving Facility		375,000			400,000
Amount Outstanding		(375,000	)		(255,000	)
Available Revolving Facility ⁽⁴⁾	$	-		$	145,000
Term Loans		711,000			700,500
Amount Borrowed		(711,000	)		(700,500	)
Available Term Loans	$	-		$	-
TOTAL	$	49,333		$	171,922
Shelf Registration	$	500,000		$	1,000,000

⁽¹⁾	Includes consolidated mortgage debt, our share of mortgage debt from equity method investments, and $150,500 of secured debt from our share of the FDP Term Loan.

⁽²⁾	The unsecured debt balance includes a 2018 Revolving Facility balance of $375,000 as of September 30, 2020 and $255,000 as of December 31, 2019.

⁽³⁾	The unsecured debt balance includes a Term Loan balance of $560,500 as of September 30, 2020 and $550,000 as of December 31, 2019.

⁽⁴⁾

The available Credit Facility borrowings are subject to covenants that may restrict amounts that can be borrowed. Certain of those covenants were suspended, effective as of September 30, 2020, by the amendments of our Credit Agreements on July 27, 2020. The suspension period under those amendments extends until October 31, 2020. Following recent property sales and the amendments of our Credit Agreements on March 30, 2020 and July 27, 2020, the NOI from the Company’s remaining unencumbered properties was at a level such that the Company was able to fully draw as of September 30, 2020 under the $375.0 million 2018 Revolving Facility.

Pennsylvania Real Estate Investment Trust

Statement of Operations – Three and Nine Months Ended September 30, 2020 and 2019

	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands of dollars)	2020			2019			2020			2019
REVENUE:
Real estate revenue:
Lease revenue	$	58,473		$	73,310		$	178,313		$	223,668
Expense reimbursements		4,040			5,364			11,321			15,342
Other real estate revenue		1,336			2,202			4,803			7,619
Total real estate revenue		63,849			80,876			194,437			246,629
Other income		340			498			764			1,440
Total revenue		64,189			81,374			195,201			248,069
EXPENSES:
Operating expenses:
Property operating expenses:
CAM and real estate taxes		(27,688	)		(28,320	)		(80,418	)		(85,891	)
Utilities		(3,530	)		(4,009	)		(8,971	)		(11,350	)
Other property operating expenses		(1,827	)		(1,836	)		(5,699	)		(5,815	)
Total property operating expenses		(33,045	)		(34,165	)		(95,088	)		(103,056	)
Depreciation and amortization		(34,420	)		(31,236	)		(95,597	)		(98,085	)
General and administrative expenses		(9,526	)		(10,605	)		(30,790	)		(33,419	)
Provision for employee separation expenses		(60	)		(218	)		(1,173	)		(1,078	)
Insurance recoveries, net		-			2,878			586			4,494
Project costs and other expenses		(124	)		(80	)		(287	)		(267	)
Total operating expenses		(77,175	)		(73,426	)		(222,349	)		(231,411	)
Interest expense, net⁽¹⁾		(20,260	)		(15,534	)		(54,300	)		(46,986	)
Gain on debt extinguishment, net		-			29,600			-			24,832
Gain on derecognition of property		7,006			-			7,006			-
Impairment of development land parcel		-			-			-			(1,464	)
Total expenses		(90,429	)		(59,360	)		(269,643	)		(255,029	)
(Loss) income before equity in (loss) income of partnerships, gain on sales of real estate by equity method investee, (loss) gain on sales of real estate, net, and gain (loss) on sales of interests in non operating real estate		(26,240	)		22,014			(74,442	)		(6,960	)
Equity in income of partnerships⁽²⁾		(3,259	)		1,531			(2,798	)		6,136
Gain on sales of real estate by equity method investee		-			-			-			553
(Loss) gain on sales of real estate, net		(94	)		1,171			11,169			2,684
Gain (loss) on sales of interests in non operating real estate		16			-			(174	)		-
Net (loss) income		(29,577	)		24,716			(66,245	)		2,413
Less: net loss (income) attributable to noncontrolling interest		734			(454	)		1,996			1,563
Net (loss) income attributable to PREIT		(28,843	)		24,262			(64,249	)		3,976
Less: preferred share dividends		(6,843	)		(6,843	)		(20,531	)		(20,531	)
Net (loss) income attributable to PREIT common shareholders	$	(35,686	)	$	17,419		$	(84,780	)	$	(16,555	)

⁽¹⁾	Net of capitalized interest expense of $489 and $2,646 for the three months ended September 30, 2020 and 2019, respectively, and $1,844 and $6,969 for the nine months ended September 30, 2020 and 2019, respectively.

⁽²⁾	Equity in income of partnerships is net of capitalized interest expense of $467 and $1,602 for the three months ended September 30, 2020 and 2019, respectively, and $2,394 and $4,554 for the nine months ended September 30, 2020 and 2019, respectively.

Pennsylvania Real Estate Investment Trust

Computation of Earnings Per Share – Three and Nine Months Ended September 30, 2020 and 2019

(in thousands, except per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands, except per share amounts)	2020			2019			2020			2019
Net (loss) income	$	(29,577	)	$	24,716		$	(66,245	)	$	2,413
Noncontrolling interest		734			(454	)		1,996			1,563
Cumulative preferred share dividends		(6,843	)		(6,843	)		(20,531	)		(20,531	)
Dividends on unvested restricted shares		—			(222	)		(363	)		(663	)
Net (loss) income used to calculate (loss) income per share—basic and diluted	$	(35,686	)	$	17,197		$	(85,143	)	$	(17,218	)
Basic and diluted (loss) income per share:	$	(0.46	)	$	0.22		$	(1.10	)	$	(0.23	)

(in thousands of shares)
Weighted average shares outstanding—basic		77,401			76,492			77,149			74,771
Effect of common share equivalents⁽¹⁾		—			332			—			—
Weighted average shares outstanding—diluted		77,401			76,824			77,149			74,771


⁽¹⁾ The Company had net losses used to calculate earnings per share for the three months ended September 30, 2020 and the nine months ended September 30, 2020 and 2019. Therefore, the effects of common share equivalents of 357 for the three months ended September 30, 2020 and, 411 and 375 for the nine months ended September 30, 2020 and 2019, respectively, are excluded from the calculation of diluted loss per share for these periods because they would be antidilutive.

Pennsylvania Real Estate Investment Trust

Reconciliation of Net Operating Income and Earnings Before Interest, Income Taxes, Depreciation, and Amortization for Real Estate– Three Months Ended September 30, 2020 and 2019 (Non-GAAP Measures)

(in thousands)

Net Operating Income ("NOI") Reconciliation for the Three Months Ended September 30, 2020⁽¹⁾

	Same Store				Change						Non Same Store						Total
(in thousands of dollars)	2020		2019		$			%			2020			2019			2020		2019
NOI from consolidated properties	$	30,662	$	43,858	$	(13,196	)		(30.1	%)	$	144		$	2,853		$	30,806	$	46,711
NOI attributable to equity method investments, at ownership share		5,421		7,029		(1,608	)		(22.9	%)		(655	)		(296	)		4,766		6,733
Total NOI		36,083		50,887		(14,804	)		(29.1	%)		(511	)		2,557			35,572		53,444
Less: lease termination revenue		2,011		55		1,956			3556.4	%		-			-			2,011		55
Total NOI excluding lease termination revenue	$	34,072	$	50,832	$	(16,760	)		(33.0	%)	$	(511	)	$	2,557		$	33,561	$	53,389

⁽¹⁾	NOI is a non-GAAP measure. See definition of NOI on page 33.

Net Operating Income ("NOI") Reconciliation for the Nine Months Ended September 30, 2020⁽¹⁾

	Same Store				Change						Non Same Store					Total
(in thousands of dollars)	2020		2019		$			%			2020		2019			2020		2019
NOI from consolidated properties	$	98,169	$	133,210	$	(35,041	)		(26.3	%)	$	1,179	$	10,363		$	99,348	$	143,573
NOI attributable to equity method investments, at ownership share		17,510		21,148		(3,638	)		(17.2	%)		784		(191	)		18,294		20,957
Total NOI		115,679		154,358		(38,679	)		(25.1	%)		1,963		10,172			117,642		164,530
Less: lease termination revenue		2,236		513		1,723			335.9	%		-		17			2,236		530
Total NOI excluding lease termination revenue	$	113,443	$	153,845	$	(40,402	)		(26.3	%)	$	1,963	$	10,155		$	115,406	$	164,000

⁽¹⁾	NOI is a non-GAAP measure. See definition of NOI on page 33.

Earnings Before Interest, Income Taxes, Depreciation, and Amortization for Real Estate ("EBITDAre") Reconciliation⁽¹⁾

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Net (loss) income	$	(29,577	)	$	24,716		$	(66,245	)	$	2,413
Depreciation and amortization:
Consolidated		34,420			31,236			95,597			98,085
Unconsolidated properties at ownership share		5,095			2,403			12,396			6,453
Interest expense:					-						-
Consolidated		20,260			15,534			54,300			46,986
Unconsolidated properties at ownership share		2,906			2,656			8,562			7,997
(Gain) loss on sales of real estate by equity method investee		-			-			-			(553	)
Gain on sales of interests in real estate, net		94			(1,171	)		(11,169	)		(2,684	)
Loss on debt extinguishment, net		-			(29,600	)		-			(24,832	)
Gain on derecognition of property		(7,006	)		-			(7,006	)		-
EBITDAre	$	26,192		$	45,774		$	86,435		$	133,865

⁽¹⁾	EBITDAre is a non-GAAP measure. See definition on page 34.

Pennsylvania Real Estate Investment Trust

Reconciliation of Net Income (Loss) to Net Operating Income from Consolidated Properties (Non-GAAP Measure)

Three Months Ended September 30, 2020 and 2019

(in thousands)

	Three Months Ended September 30,
	2020			2019
Net (loss) income	$	(29,577	)	$	24,716
Other income		(338	)		(498	)
Depreciation and amortization		34,420			31,236
General and administrative expenses		9,526			10,605
Insurance recoveries, net		-			(2,878	)
Provision for employee separation expenses		60			218
Project costs and other expenses		124			80
Interest expense, net		20,260			15,534
Equity in (loss) income of partnerships		3,259			(1,531	)
Gain on debt extinguishment, net		-			(29,600	)
Gain on derecognition of property		(7,006	)		-
Loss (gain) on sales of interests in real estate, net		94			(1,171	)
Gain on sales of interest in non operating real estate		(16	)		-
NOI from consolidated properties⁽¹⁾	$	30,806		$	46,711

⁽¹⁾	NOI is a non-GAAP measure. See definition of NOI on page 33.

	Same Store						Non Same Store						Total
	2020			2019			2020			2019			2020			2019
Real estate revenue
Base rent	$	45,304		$	49,102		$	1,954		$	4,586		$	47,258		$	53,688
CAM reimbursement income		8,647			9,971			327			845			8,974			10,816
Real estate tax income		7,900			8,615			99			499			7,999			9,114
Percentage rent		85			771			-			-			85			771
Lease termination revenue		2,011			11			-			-			2,011			11
		63,947			68,469			2,380			5,930			66,327			74,399
Less: credit losses		(7,521	)		(1,094	)		(332	)		4			(7,853	)		(1,090	)
Lease revenue		56,426			67,376			2,048			5,934			58,474			73,310
Expense reimbursements		3,850			4,820			190			544			4,040			5,364
Other real estate revenue		1,269			2,050			67			151			1,336			2,201
Total real estate revenue		61,546			74,246			2,305			6,629			63,850			80,875
Property operating expenses					-						-
CAM and real estate taxes		(25,866	)		(25,243	)		(1,822	)		(3,077	)		(27,688	)		(28,320	)
Utilities		(3,299	)		(3,533	)		(231	)		(476	)		(3,530	)		(4,009	)
Other property operating expenses		(1,718	)		(1,613	)		(107	)		(223	)		(1,825	)		(1,836	)
Total property operating expenses		(30,883	)		(30,389	)		(2,160	)		(3,776	)		(33,043	)		(34,165	)
NOI from consolidated properties⁽¹⁾	$	30,662		$	43,857		$	144		$	2,853		$	30,806		$	46,710
Less: Lease termination revenue		2,011			11			-			-			2,011			11
NOI from consolidated properties excluding lease termination revenue⁽¹⁾	$	28,651		$	43,846		$	144		$	2,853		$	28,795		$	46,699
% change in Same Store NOI from consolidated properties excluding lease termination revenue				(34.7%)			$	(15,195	)								(34.7	%)

⁽¹⁾	NOI is a non-GAAP measure. See definition of NOI on page 33.

Pennsylvania Real Estate Investment Trust

Reconciliation of Equity in Income of Partnerships to Net Operating Income from Equity Method Investments, at Ownership Share

(Non-GAAP Measure)

Three Months Ended September 30, 2020 and 2019

(in thousands)

	Three Months Ended September 30,
(in thousands of dollars)	2020			2019
Equity in (loss) income of partnerships	$	(3,259	)	$	1,531
Other income		(12	)		(24	)
Depreciation and amortization		5,095			2,403
Interest expense and other expenses, net		2,942			2,823
NOI from equity method investments at ownership share⁽¹⁾	$	4,766		$	6,733

⁽¹⁾	NOI is a non-GAAP measure. See definition of NOI on page 33.

	Same Store						Non Same Store						Total
	2020			2019			2020			2019			2020			2019
Real estate revenue
Base rent	$	5,538		$	6,539		$	980		$	258		$	6,518		$	6,797
CAM reimbursement income		1,402			1,489			581			76			1,983			1,565
Real estate tax income		1,046			913			73			51			1,119			964
Percentage rent		33			124			112			-			145			124
Lease termination revenue		-			44			-			-			-			44
		8,019			9,109			1,746			385			9,765			9,494
Less: credit losses		(578	)		8			(1,339	)		-			(1,917	)		8
Lease revenue		7,441			9,117			407			385			7,848			9,502
Expense reimbursements		491			466			191			57			682			523
Other real estate revenue		81			255			564			313			645			568
Total real estate revenue		8,013			9,838			1,162			755			9,175			10,593
Property operating expenses
CAM and real estate taxes		(1,995	)		(2,072	)		(1,483	)		(526	)		(3,478	)		(2,598	)
Utilities		(189	)		(205	)		(166	)		(39	)		(355	)		(244	)
Other property operating expenses		(408	)		(532	)		(168	)		(486	)		(576	)		(1,018	)
Total property operating expenses		(2,592	)		(2,809	)		(1,817	)		(1,051	)		(4,409	)		(3,860	)
NOI from equity method investments at ownership share⁽¹⁾	$	5,421		$	7,029		$	(655	)	$	(296	)	$	4,766		$	6,733
Less: Lease termination revenue		-			44			-			-			-			44
NOI from equity method investments at ownership share excluding lease termination revenue⁽¹⁾	$	5,421		$	6,985		$	(655	)	$	(296	)	$	4,766		$	6,689
% change in Same Store NOI from equity method investments at ownership share excluding lease termination revenue				(22.4%)

⁽¹⁾	NOI is a non-GAAP measure. See definition of NOI on page 33.

Pennsylvania Real Estate Investment Trust

Reconciliation of Net Income (Loss) to Net Operating Income from Consolidated Properties (Non-GAAP Measure)

Nine Months Ended September 30, 2020 and 2019

(in thousands)

	Nine Months Ended September 30,
	2020			2019

Net (loss) income	$	(66,245	)	$	2,413
Other income		(765	)		(1,440	)
Depreciation and amortization		95,597			98,085
General and administrative expenses		30,790			33,419
Insurance recoveries, net		(586	)		(4,494	)
Provision for employee separation expenses		1,173			1,078
Project costs and other expenses		287			267
Interest expense, net		54,300			46,986
Impairment of development land parcel		-			1,464
Equity in loss (income) of partnerships		2,798			(6,136	)
Gain on debt extinguishment, net		-			(24,832	)
Gain on derecognition of property		(7,006	)		-
Gain on sales of real estate by equity method investee		-			(553	)
Gain on sales of interests in real estate, net		(11,169	)		(2,684	)
Loss on sales of interest in non operating real estate		174			-
NOI from consolidated properties⁽¹⁾	$	99,348		$	143,573

	Same Store						Non Same Store						Total
	2020			2019			2020			2019			2020			2019
Real estate revenue
Base rent	$	129,861		$	148,620		$	6,224		$	15,056		$	136,085		$	163,676
CAM reimbursement income		27,777			30,646			1,266			2,719			29,043			33,365
Real estate tax income		24,583			26,006			432			1,488			25,015			27,494
Percentage rent		79			928			5			7			84			935
Lease termination revenue		2,236			463			-			17			2,236			480
		184,536			206,663			7,927			19,287			192,463			225,950
Less: credit losses		(13,417	)		(1,949	)		(732	)		(333	)		(14,149	)		(2,282	)
Lease revenue		171,118			204,714			7,195			18,954			178,313			223,668
Expense reimbursements		10,598			13,642			723			1,700			11,321			15,342
Other real estate revenue		4,527			5,993			276			1,626			4,803			7,619
Total real estate revenue		186,243			224,349			8,194			22,280			194,437			246,629
Property operating expenses					-						-
CAM and real estate taxes		(74,546	)		(76,094	)		(5,872	)		(9,797	)		(80,418	)		(85,891	)
Utilities		(8,305	)		(9,926	)		(666	)		(1,425	)		(8,971	)		(11,351	)
Other property operating expenses		(5,224	)		(5,119	)		(477	)		(695	)		(5,701	)		(5,814	)
Total property operating expenses		(88,075	)		(91,139	)		(7,015	)		(11,917	)		(95,090	)		(103,056	)
NOI from consolidated properties⁽¹⁾	$	98,169		$	133,210		$	1,179		$	10,363		$	99,348		$	143,573
Less: Lease termination revenue		2,236			463			-			17			2,236			480
NOI from consolidated properties excluding lease termination revenue⁽¹⁾	$	95,933		$	132,747		$	1,179		$	10,346		$	97,112		$	143,093
% change in Same Store NOI from consolidated properties excluding lease termination revenue				(27.7%)

(1)

NOI is a non-GAAP measure. See definition of NOI on page 33.

Reconciliation of Equity in Income of Partnerships to Net Operating Income from Equity Method Investments, at Ownership Share

(Non-GAAP Measure)

Nine Months Ended September 30, 2020 and 2019

(in thousands)

	Nine Months Ended September 30,
(in thousands of dollars)	2020			2019
Equity in (loss) income of partnerships	$	(2,798	)	$	6,136
Other income		(38	)		(46	)
Depreciation and amortization		12,396			6,453
Interest expense and other expenses, net		8,734			8,414
NOI from equity method investments at ownership share⁽¹⁾	$	18,294		$	20,957

	Same Store						Non Same Store						Total
	2020			2019			2020			2019			2020			2019
Real estate revenue
Base rent	$	17,688		$	19,831		$	3,488		$	604		$	21,176		$	20,435
CAM reimbursement income		4,233			4,790			1,768			90			6,001			4,880
Real estate tax income		2,954			2,800			319			134			3,273			2,934
Percentage rent		84			250			184			-			268			250
Lease termination revenue		-			50			-			-			-			50
		24,959			27,721			5,759			828			30,718			28,549
Less: credit losses		(1,344	)		19			(2,032	)		59			(3,376	)		78
Lease revenue		23,615			27,740			3,727			887			27,342			28,627
Expense reimbursements		1,273			1,402			508			150			1,781			1,552
Other real estate revenue		353			805			1,721			716			2,074			1,521
Total real estate revenue		25,241			29,947			5,956			1,753			31,197			31,700
Property operating expenses
CAM and real estate taxes		(5,955	)		(6,459	)		(4,160	)		(1,244	)		(10,115	)		(7,703	)
Utilities		(476	)		(586	)		(417	)		(119	)		(893	)		(705	)
Other property operating expenses		(1,300	)		(1,754	)		(595	)		(581	)		(1,895	)		(2,335	)
Total property operating expenses		(7,731	)		(8,799	)		(5,172	)		(1,944	)		(12,903	)		(10,743	)
NOI from equity method investments at ownership share⁽¹⁾	$	17,510		$	21,148		$	784		$	(191	)	$	18,294		$	20,957
Less: Lease termination revenue		-			50			-			-			-			50
NOI from equity method investments at ownership share excluding lease termination revenue⁽¹⁾	$	17,510		$	21,098		$	784		$	(191	)	$	18,294		$	20,907
% change in Same Store NOI from equity method investments at ownership share excluding lease termination revenue				(17.0%)

(1)

NOI is a non-GAAP measure. See definition of NOI on page 33.

Pennsylvania Real Estate Investment Trust

Reconciliation of Net Income to Funds From Operations and Funds Available for Distribution (Non-GAAP Measures)

Three and Nine Months Ended September 30, 2020 and 2019

(in thousands, except per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
FUNDS FROM OPERATIONS

Net (loss) income	$	(29,577	)	$	24,716		$	(66,245	)	$	2,413
Depreciation and amortization on real estate					-						-
Consolidated properties		34,053			30,948			94,538			97,126
PREIT's share of equity method investments		5,095			2,402			12,396			6,453
Gain on sales of interests in real estate, net		94			(1,171	)		(11,170	)		(2,684	)
Dividends on preferred shares		-			(6,843	)		(13,687	)		(20,531	)
Funds from operations attributable to common shareholders and OP Unit holders⁽¹⁾	$	9,665		$	50,052		$	15,832		$	82,777
Insurance recoveries, net		-			(2,878	)		(586	)		(4,494	)
Gain on debt extinguishment, net		-			(29,600	)		-			(24,832	)
Gain on derecognition of property		(7,006	)		-			(7,006	)		-
Impairment of development land parcel		-			-			-			1,464
Provision for employee separation expenses		60			218			1,173			1,078
Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders	$	2,719		$	17,792		$	9,413		$	55,993

FUNDS AVAILABLE FOR DISTRIBUTION⁽¹⁾

Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders⁽¹⁾	$	2,719		$	(20,063	)	$	9,413		$	42,855
Adjustments:					-						-
Straight line rent		(308	)		(1,316	)		(1,918	)		(4,422	)
Recurring capital expenditures		(739	)		(6,193	)		(2,400	)		(13,296	)
Tenant allowances		(8,391	)		(2,613	)		(14,132	)		(6,082	)
Amortization of non-cash deferred compensation		1,726			(3,811	)		5,021			-
Capitalized leasing costs		-			(192	)		(150	)		(668	)
Amortization of above- and below-market lease intangibles		(16	)		(23	)		(65	)		(51	)
Funds available for distribution to common shareholders and OP Unit holders⁽¹⁾	$	(5,009	)	$	(34,211	)	$	(4,231	)	$	18,336

Funds from operations attributable to common shareholders and OP Unit holders per diluted share and OP Unit⁽¹⁾	$	0.12		$	0.63		$	0.20		$	1.05
Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders per diluted share and OP Unit	$	0.03		$	0.23		$	0.12		$	0.71
Funds available for distribution to common shareholders and OP Unit holders per diluted share and OP Unit⁽¹⁾	$	(0.06	)	$	0.12		$	(0.05	)	$	0.47

Weighted average number of shares outstanding	77,401	76,492	77,149	74,771
Weighted average effect of full conversion of OP Units	2,023	2,023	2,023	3,625
Effect of common share equivalents	357	332	411	375
Total weighted average shares outstanding, including OP Units	79,781	78,847	79,583	78,771

⁽¹⁾Non-GAAP measures. See definitions on page 33.

Pennsylvania Real Estate Investment Trust

Condensed Consolidated Balance Sheet

	September 30, 2020			December 31, 2019
(in thousands, except per share amounts)	(Unaudited)
ASSETS:
INVESTMENTS IN REAL ESTATE, at cost:
Operating properties	$	3,163,656		$	3,099,034
Construction in progress		46,872			106,011
Land held for development		5,881			5,881
Total investments in real estate		3,216,409			3,210,926
Accumulated depreciation		(1,280,117	)		(1,202,722	)
Net investments in real estate		1,936,292			2,008,204
INVESTMENTS IN PARTNERSHIPS, at equity:		176,070			159,993
OTHER ASSETS:
Cash and cash equivalents		36,373			12,211
Tenant and other receivables		64,367			41,261
Intangible assets (net of accumulated amortization of $19,896 and $18,248 at September 30, 2020 and December 31, 2019, respectively)		11,756			13,404
Deferred costs and other assets, net		138,821			103,688
Assets held for sale		1,384			12,506
Total assets	$	2,365,063		$	2,351,267
LIABILITIES:
Mortgage loans payable, net	$	890,848		$	899,753
Term Loans, net		559,040			548,025
Revolving Facilities		375,000			255,000
Tenants’ deposits and deferred rent		10,601			13,006
Distributions in excess of partnership investments		77,848			87,916
Fair value of derivative liabilities		27,694			13,126
Accrued expenses and other liabilities		105,638			107,016
Total liabilities		2,046,669			1,923,842
COMMITMENTS AND CONTINGENCIES:
EQUITY:
Series B Preferred Shares, $.01 par value per share; 25,000 shares authorized; 3,450 shares issued and outstanding; liquidation preference of $87,840 and $86,250 at September 30, 2020 and December 31, 2019, respectively		35			35
Series C Preferred Shares, $.01 par value per share; 25,000 shares authorized; 6,900 shares issued and outstanding; liquidation preference of $175,605 and $172,500 at September 30, 2020 and December 31, 2019, respectively		69			69
Series D Preferred Shares, $.01 par value per share; 25,000 shares authorized; 5,000 shares issued and outstanding; liquidation preference of $127,149 and $125,000 at September 30, 2020 and December 31, 2019, respectively		50			50
Shares of beneficial interest, $1.00 par value per share; 200,000 shares authorized; 79,490 and 77,550 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively		79,490			77,550
Capital contributed in excess of par		1,770,070			1,766,883
Accumulated other comprehensive (loss) income		(27,828	)		(12,556	)
Distributions in excess of net income		(1,504,372	)		(1,408,352	)
Total equity—Pennsylvania Real Estate Investment Trust		317,514			423,679
Noncontrolling interest		880			3,746
Total equity		318,394			427,425
Total liabilities and equity	$	2,365,063		$	2,351,267

Pennsylvania Real Estate Investment Trust

Assets and Liabilities - Equity Method Investments, at Ownership Share (Non-GAAP)

(in thousands)

	September 30,
(in thousands of dollars)	2020			2019
ASSETS:
Investments in real estate, at cost:
Operating properties	$	567,323		$	355,933
Construction in progress		18,071			188,127
Total investments in real estate		585,394			544,060
Accumulated depreciation		(126,583	)		(110,893	)
Net investments in real estate		458,811			433,167
Cash and cash equivalents		12,961			16,056
Deferred costs and other assets, net		55,949			20,344
Total assets		527,721			469,567
LIABILITIES AND PARTNERS’ INVESTMENT:
Mortgage loans payable, net		223,249			227,216
FDP Term Loan		150,500			150,500
Other liabilities		55,750			35,965
Total liabilities		429,499			413,681
Net investment	$	98,222		$	55,886
Reconciliation to comparable GAAP balance sheet item:
Investment in partnerships, at equity	$	176,070		$	143,440
Distributions in excess of partnership investments		(77,848	)		(87,554	)
Net investment	$	98,222		$	55,886

The non-GAAP financial information presented above includes financial information attributable to our share of unconsolidated properties. This proportionate financial information is non-GAAP financial information, but we believe that it is helpful information because it reflects the pro rata contribution from our unconsolidated properties that are owned through investments accounted for under GAAP using the equity method of accounting. Under such method, our investments in these entities are recorded in the balance sheet caption entitled “Investment in partnerships, at equity.” In the case of deficit investment balances, such amounts are recorded in “Distributions in excess of partnership investments.”

To derive the proportionate financial information reflected in the tables above we multiplied the percentage of our economic interest in each partnership on a property-by-property basis by each line item. Under the partnership agreements relating to our current unconsolidated partnerships with third parties, we own a 25% to 50% economic interest in such partnerships, and there are generally no provisions in such partnership agreements relating to special non-pro rata allocations of income or loss, and there are no preferred or priority returns of capital or other similar provisions. While this method approximates our indirect economic interest in our pro rata share of the assets and liabilities of our unconsolidated partnerships, we do not control these partnerships or have a direct legal claim to the assets, liabilities, revenues or expenses of the unconsolidated partnerships beyond our rights as an equity owner in the event of any liquidation of such entity. Our percentage ownership is not necessarily indicative of the legal and economic implications of our ownership interest.

Pennsylvania Real Estate Investment Trust

Leasing Activity Summary – Three Months Ended September 30, 2020

		Number		GLA		Term		Initial Rent per square foot ("psf")		Previous Rent psf		Initial Gross Rent Renewal Spread⁽¹⁾						Average Rent Renewal Spread⁽²⁾			Annualized Tenant Improvements psf⁽³⁾
												$			%			%
Non Anchor
New Leases
Under 10k square feet ("sf")	Consolidated		5		8,194		1.8	$	36.78	N/A		N/A			N/A			N/A			$	-
	Unconsolidated⁽⁴⁾		-		-		-		-	N/A		N/A			N/A			N/A				-
Total Under 10k sf			5		8,194		1.8	$	36.78	N/A		N/A			N/A			N/A			$	-
Total New Leases			5		8,194		1.8	$	36.78	N/A		N/A			N/A			N/A			$	-

Renewal Leases
Under 10k sf	Consolidated		17		27,051		1.9	$	62.93	$	64.97	$	(2.04	)		(3.1	%)		(5.4	%)	$	-
	Unconsolidated⁽⁴⁾		2		2,958		2.2	$	102.35	$	126.63		(24.28	)		(19.2	%)		(26.7	%)		-
Total Under 10k sf			19		30,009		1.9	$	66.82	$	71.05	$	(4.23	)		(6.0	%)		(9.1	%)	$	-

Total Over 10k sf	Consolidated		1		12,608		5.0		14.00		13.50		0.50			3.7	%		3.7	%		-
Total Fixed Rent			20		42,617		2.8	$	51.19	$	54.02	$	(2.83	)		(5.2	%)		(8.1	%)	$	-
Total Percentage in Lieu	Consolidated		6		28,535		1.3		39.14		46.98		(7.85	)		(16.7	%)	N/A				-
Total Renewal Leases			26		71,152		2.2	$	46.36	$	51.20	$	(4.84	)		(9.5	%)				$	-
Total Non Anchor			31		79,346		2.2	$	45.37

⁽¹⁾

Initial gross rent renewal spread is computed by comparing the initial rent psf in the new lease to the final rent psf amount in the expiring lease. For purposes of this computation, the rent amount includes minimum rent, CAM charges, estimated real estate tax reimbursements and marketing charges, but excludes percentage rent. In certain cases, a lower rent amount may be payable for a period of time until specified conditions in the lease are satisfied.

⁽²⁾

Average rent renewal spread is computed by comparing the average rent psf over the new lease term to the final rent psf amount in the expiring lease. For purposes of this computation, the rent amount includes minimum rent and fixed CAM charges, but excludes pro rata CAM charges, estimated real estate tax reimbursements, marketing charges and percentage rent.

⁽³⁾	Tenant improvements and certain other leasing costs are presented as annualized amounts per square foot and are spread uniformly over the initial lease term.

⁽⁴⁾

We own a 25% to 50% interest in each of our unconsolidated properties and do not control such properties. Our percentage ownership is not necessarily indicative of the legal and economic implications of our ownership interest. See “—Non-GAAP Supplemental Financial Measures” in our Annual Report on Form 10-K for the year ended December 31, 2019 for further details on our ownership interests in our unconsolidated properties.

Pennsylvania Real Estate Investment Trust

Leasing Activity Summary – Nine Months Ended September 30, 2020

		Number		GLA		Term		Initial Rent per square foot ("psf")		Previous Rent psf		Initial Gross Rent Renewal Spread⁽¹⁾						Average Rent Renewal Spread⁽²⁾			Annualized Tenant Improvements psf⁽³⁾
												$			%			%
Non Anchor
New Leases
Under 10k square feet ("sf")	Consolidated		32		69,077		6.0	$	39.93	N/A		N/A			N/A			N/A			$	9.28
	Unconsolidated⁽⁴⁾		2		6,581		6.0		47.63	N/A		N/A			N/A			N/A				6.76
Total Under 10k sf			34		75,658		6.0	$	40.60	N/A		N/A			N/A			N/A			$	9.06
Total New Leases			34		75,658		6.0	$	40.60	N/A		N/A			N/A			N/A			$	9.06

Renewal Leases
Under 10k sf	Consolidated		72		174,155		2.7	$	54.60	$	55.70	$	(1.10	)		(2.0	%)		2.9	%	$	0.01
	Unconsolidated⁽⁴⁾		9		26,929		2.1	$	42.34	$	60.40		(18.06	)		(29.9	%)		(32.6	%)		-
Total Under 10k sf			81		201,084		2.6	$	52.96	$	56.33	$	(3.37	)		(6.0	%)		(2.5	%)	$	0.01

Total Over 10k sf	Consolidated		3		61,345		4.5		15.92		16.28		(0.36	)		(2.2	%)		(12.8	%)
Total Fixed Rent			84		262,429		3.1	$	44.30	$	46.97	$	(2.67	)		(5.7	%)		(3.4	%)	$	0.01
Total Percentage in Lieu	Consolidated		24		76,509		1.3		33.64		44.38		(10.74	)		(24.2	%)	N/A				-
Total Renewal Leases ⁽⁴⁾			108		338,938		2.7	$	41.89	$	46.38	$	(4.49	)		(9.7	%)				$	0.01
Total Non Anchor			142		414,596		3.3	$	41.66

⁽¹⁾

⁽²⁾

⁽³⁾	Tenant improvements and certain other leasing costs are presented as annualized amounts per square foot and are spread uniformly over the initial lease term.

⁽⁴⁾

Pennsylvania Real Estate Investment Trust

Summarized Sales and Rent Per Square Foot and Occupancy Percentages

	September 30, 2020																					September 30, 2019
										Actual Occupancy						Leased Occupancy																Actual Occupancy
	% Rolling 12 Mo. NOI			Average Comp Sales ⁽¹⁾	Average Gross Rent⁽²⁾⁽³⁾		Occupancy Cost			Total			Non- Anchor			Total			Non- Anchor			% Rolling 12 Mo. NOI			Average Comp Sales		Average Gross Rent⁽²⁾⁽³⁾		Occupancy Cost			Total			Non- Anchor
Malls		90.9	%	n/a	$	58.09		12.3	%		93.2	%		89.1	%		93.4	%		89.4	%		89.5	%	$	536	$	59.56		12.2	%		94.4	%		91.1	%
Non-Core Malls		1.4	%	n/a		37.37		15.3	%		70.8	%		52.1	%		70.8	%		52.1	%		3.3	%	$	325	$	46.86		14.6	%		76.2	%		64.0	%
Malls Total		92.3	%	n/a	$	57.55		12.4	%		91.8	%		87.4	%		92.0	%		87.6	%		92.8	%	$	528	$	59.12		12.2	%		93.2	%		89.8	%
Other Retail Properties		7.3	%	n/a	$	25.28	n/a				92.7	%		92.1	%		94.5	%		94.1	%		5.7	%	n/a		$	25.90	n/a				92.7	%		92.1	%
Total Retail Properties		99.6	%	n/a	$	48.23		12.4	%		91.9	%		88.1	%		92.2	%		88.7	%		98.4	%	n/a		$	49.90	n/a				93.2	%		89.8	%
Sold Properties		0.1	%	n/a	n/a		n/a			n/a			n/a			n/a			n/a				1.1	%	$	351	$	31.41	n/a				69.0	%		87.6	%
Other Properties ⁽⁴⁾		0.3	%	n/a	n/a		n/a			n/a			n/a			n/a			n/a				0	%	n/a		n/a		n/a			n/a			n/a
Total Portfolio		100.0	%	n/a	$	48.23		12.4	%		91.9	%		88.1	%		92.2	%		88.7	%		100.0	%	$	515	$	49.33		12.2	%		92.5	%		90.1	%

⁽¹⁾	Average comp sales are not reported due to COVID-19 related mall closures impacting the majority of the second quarter of 2020.

⁽²⁾	Average gross rent for malls includes all non-anchor space owned by the Company and leased to tenants that occupy individual spaces of less than 10,000 square feet. Average gross rent for other retail properties includes all non-anchor space owned by the Company regardless of size.

⁽³⁾	Average gross rent for mall tenants greater than 10,000 sf was $20.13 per square foot as of September 30, 2020 and $21.87 per square foot as of September 30, 2019.

⁽⁴⁾	Operating metrics for Fashion District Philadelphia as of September 30, 2020 and 2019, respectively, are excluded because the property was under redevelopment until September 2019 and has not yet stabilized.

Pennsylvania Real Estate Investment Trust

Mall Occupancy Percentage and Sales Per Square Foot

	September 30, 2020										September 30, 2019								Change
	% of Mall NOI			Avg Comp Sales ⁽¹⁾	Total Occupancy %			Non- Anchor Occupancy %			Avg Comp Sales ⁽²⁾		Total Occupancy %			Non-Anchor Occupancy %			Avg Comp Sales ⁽¹⁾	Total Occupancy %			Non- Anchor Occupancy %
Top 6 Malls
Willow Grove Park		6.1	%	n/a		92.6	%		87.8	%		780		92.8	%		87.4	%	n/a		(0.2	%)		0.4	%
Cherry Hill Mall		13.2	%	n/a		91.4	%		89.7	%		712		95.6	%		94.7	%	n/a		(4.2	%)		(5.0	%)
Woodland Mall		5.6	%	n/a		96.8	%		96.2	%		615		96.6	%		96.6	%	n/a		0.2	%		(0.4	%)
Lehigh Valley Mall		6.9	%	n/a		88.9	%		82.0	%		592		90.6	%		84.4	%	n/a		(1.7	%)		(2.4	%)
Mall at Prince Georges		7.6	%	n/a		98.3	%		96.6	%		558		98.5	%		96.8	%	n/a		(0.2	%)		(0.2	%)
Springfield Town Center		10.8	%	n/a		90.3	%		87.0	%		554		92.8	%		90.4	%	n/a		(2.5	%)		(3.4	%)
		50.3	%	n/a		92.7	%		89.3	%		642		94.3	%		91.6	%	n/a		(1.6	%)		(2.3	%)

Malls 7-12
Dartmouth Mall		4.9	%	n/a		96.9	%		95.6	%		539		97.4	%		96.6	%	n/a		(0.5	%)		(1.0	%)
Jacksonville Mall		4.5	%	n/a		99.2	%		98.4	%		507		98.7	%		97.4	%	n/a		0.5	%		1.0	%
Magnolia Mall		3.5	%	n/a		95.2	%		91.7	%		476		97.4	%		95.6	%	n/a		(2.2	%)		(3.9	%)
Capital City Mall		6.1	%	n/a		97.2	%		95.8	%		457		99.5	%		99.3	%	n/a		(2.3	%)		(3.5	%)
Patrick Henry Mall		4.8	%	n/a		95.8	%		93.8	%		445		94.9	%		92.6	%	n/a		0.9	%		1.2	%
Viewmont Mall		4.3	%	n/a		95.8	%		91.4	%		442		96.4	%		92.5	%	n/a		(0.6	%)		(1.1	%)
		28.1	%	n/a		96.6	%		94.4	%		471		97.4	%		95.8	%	n/a		(0.8	%)		(1.4	%)

Malls 13-18
Valley Mall		5.0	%	n/a		98.0	%		95.4	%		425		97.7	%		95.4	%	n/a		0.3	%		0.0	%
Moorestown Mall		2.3	%	n/a		94.0	%		86.6	%		413		92.7	%		83.0	%	n/a		1.3	%		3.6	%
Springfield Mall		1.5	%	n/a		81.9	%		81.9	%		412		92.4	%		92.4	%	n/a		(10.5	%)		(10.5	%)
Cumberland Mall		3.2	%	n/a		90.3	%		84.1	%		396		91.6	%		86.2	%	n/a		(1.3	%)		(2.1	%)
Francis Scott Key Mall		4.0	%	n/a		93.9	%		90.5	%		378		91.6	%		86.9	%	n/a		2.3	%		3.6	%
Plymouth Meeting Mall		4.1	%	n/a		83.5	%		75.6	%		342		88.0	%		81.4	%	n/a		(4.5	%)		(5.8	%)
		20.0	%	n/a		91.3	%		84.9	%		396		92.3	%		86.8	%	n/a		(1.0	%)		(1.9	%)

All Core Malls		98.5	%	n/a		93.2	%		89.1	%		536		94.4	%		91.1	%	n/a		(1.2	%)		(2.0	%)

Non-Core Malls
Valley View Mall		1.4	%	n/a								703		91.5	%		87.6	%	n/a		(91.5	%)		(87.6	%)
Exton Square Mall		0.2	%	n/a		70.8	%		52.1	%		325		76.2	%		64.0	%	n/a		(5.4	%)		(11.9	%)
All Non-Core Malls		3.6	%	n/a		70.8	%		52.1	%		343		73.8	%		72.5	%	n/a		(3.0	%)		(20.4	%)

All Malls		100.0	%	n/a		91.8	%		87.4	%		515		92.5	%		89.8	%	n/a		(0.7	%)		(2.4	%)

⁽¹⁾	Average comp sales are not reported due to COVID-19 related mall closures impacting 2020.

⁽²⁾	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.

Pennsylvania Real Estate Investment Trust

Top Twenty Tenants

September 30, 2020

Tenant	Brands	Locations at Consolidated Properties		Locations at Unconsolidated Properties		Total Number of Locations ⁽¹⁾		Percentage of Annualized Gross Rent⁽²⁾
Foot Locker, Inc.	Champs, Foot Locker, Footaction, House of Hoops by Foot Locker, Kids Foot Locker, Lady Foot Locker, Nike Yardline, Footaction Flight 23	41		8		49			4.9	%
L Brands, Inc.	Bath & Body Works, Pink, Victoria's Secret	32		6		38			4.0	%
Signet Jewelers Limited	Kay Jewelers, Piercing Pagoda, Totally Pagoda, Zales Jewelers, Silver & Gold Connection	48		9		57			3.2	%
Dick's Sporting Goods, Inc.	Dick's Sporting Goods	11		1		12			3.0	%
American Eagle Outfitters, Inc.	Aerie, American Eagle Outfitters	15		4		19			2.4	%
Express, Inc	Express, Express Factory Outlet, Express Men	12		3		15			2.0	%
Gap, Inc.	Banana Republic, Gap/Gap Kids/Gap Outlet, Old Navy, Old Navy Outlet, Banana Republic Factory Store	12		8		20			1.8	%
Dave & Buster's, Inc.	Dave & Buster's	3		1		4			1.8	%
Macy's	Bloomingdale's, Macy's	12		2		14			1.6	%
Cineworld Group	Regal Cinemas	4		0		4			1.6	%
Home Depot	Home Depot	1		2		3			1.6	%
Genesco Inc.	Johnston & Murphy, Journeys, Journeys Kidz, Underground by Journeys	24		4		28			1.6	%
J.C. Penney Company, Inc.	JC Penney, Penneys Firestone	12		1		13			1.5	%
Luxottica Group S.p.A.	Lenscrafters, Pearle Vision, Sunglass Hut, Sunglass Hut Outlet	22		6		28			1.3	%
Darden Concepts, Inc.	Bahama Breeze, Capital Grille, Olive Garden, Seasons 52, Yard House	8		0		8			1.3	%
Shoe Show, Inc.	Shoe Department, Shoe Dept. Encore, Shoe Show	20		2		22			1.1	%
Sycamore Partners	Hot Topic, Talbots, Torrid	24		4		28			1.1	%
The TJX Companies, Inc.	HomeGoods, HomeSense, Marshalls, Sierra Trading Post, TJ Maxx	7		1			8		1.1	%
The Children's Place, Inc.	The Children's Place	13		3		16			1.0	%
Focus Brands	Auntie Anne's, Cinnabon, Jamba Juice, Moe's Southwest Grill	29		3			32		1.0	%
Total Top 20 Tenants		350		68		418			38.9	%
Total Leases			1,346		299		1,645		100.0	%

⁽¹⁾	Excludes tenants from Fashion District Philadelphia.

⁽²⁾	Includes our share of tenant gross rent from partnership properties based on PREIT’s ownership percentage in the respective equity method investments as of September 30, 2020.

Pennsylvania Real Estate Investment Trust

Lease Expirations as of September 30, 2020

(dollars in thousands except per square foot (“psf”) amounts)

Non-Anchors ⁽¹⁾
			Gross Leasable Area ("GLA")					Annualized Gross Rent
Lease Expiration Year	Number of Leases Expiring		Expiring GLA ⁽²⁾		Percent of Total			Gross Rent in Expiring Year		PREIT’s Share of Gross Rent in Expiring Year ⁽³⁾		Percent of PREIT’s Total			Average Expiring Gross Rent psf
2020 and Prior		172		541,667		6.9	%		22,478		20,758		7.3	%		41.50
2021		237		840,706		10.7	%		32,768		28,797		10.2	%		38.98
2022		214		700,698		8.9	%		32,120		27,890		9.9	%		45.84
2023		181		1,035,709		13.2	%		38,545		33,964		12.0	%		37.22
2024		164		704,148		9.0	%		36,392		33,173		11.7	%		51.68
2025		171		918,278		11.7	%		43,150		34,122		12.0	%		46.99
2026		117		700,190		8.9	%		32,481		24,447		8.6	%		46.39
2027		85		616,210		7.8	%		23,703		22,268		7.9	%		38.47
2028		72		612,100		7.8	%		22,308		20,879		7.4	%		36.44
2029		56		473,061		6.0	%		16,875		16,040		5.7	%		35.67
Thereafter		67		712,892		9.1	%		23,051		20,681		7.3	%		32.33
Total/Average		1,536		7,855,659		100.0	%	$	323,871	$	283,019		100.0	%	$	41.23

Anchors⁽¹⁾
			Gross Leasable Area ("GLA")					Annualized Gross Rent
Lease Expiration Year	Number of Leases Expiring		Expiring GLA ⁽²⁾		Percent of Total			Gross Rent in Expiring Year		PREIT’s Share of Gross Rent in Expiring Year ⁽³⁾		Percent of PREIT’s Total			Average Expiring Gross Rent psf
2020 and prior		1		85,212		1.8	%		689		689		2.2	%		8.08
2021		5		508,467		10.5	%		2,313		1,798		5.6	%		4.55
2022		7		1,001,974		20.8	%		3,475		3,121		9.7	%		3.47
2023		3		348,592		7.2	%		1,895		1,895		5.9	%		5.44
2024		5		702,674		14.6	%		6,988		6,988		21.9	%		9.94
2025		4		635,169		13.1	%		2,211		2,211		6.9	%		3.48
2026		3		198,066		4.1	%		2,526		1,823		5.7	%		12.75
2028		9		982,424		20.3	%		6,830		6,830		21.4	%		6.95
2029		1		65,155		1.3	%		2,210		2,210		6.9	%		33.92
Thereafter		5		304,304		6.3	%		4,404		4,404		13.8	%		14.47
Total/Average		43		4,832,037		100.0	%	$	33,541	$	31,969		100.0	%	$	6.94

⁽¹⁾	Only includes owned space. Excludes tenants from Fashion District Philadelphia.

⁽²⁾	Does not include tenants occupying space under license agreements with initial terms of less than one year.

⁽³⁾	Includes our share of tenant rent from partnership properties based on PREIT’s ownership percentage in the respective equity method investments.

Pennsylvania Real Estate Investment Trust

Property Information as of September 30, 2020

		Landlord Owned Anchors/ Large Format Non Anchor				Anchor Stores Not Owned			Non-anchor occupied GLA
Properties	Location	Tenant	Expiration Year	GLA		Tenant	GLA		Large Format		Small Shop		Vacant		Total GLA

Core Malls
Capital City Mall	Camp Hill, PA	JCPenney	2028		102,825	Macy's		120,000		104,806		162,815		14,085		616,510
		Dick's Sporting Goods	2028		61,677
		Sportsman's Warehouse	2031							50,302
Cherry Hill Mall	Cherry Hill, NJ	Nordstrom	2025		138,000	JCPenney		174,285		239,234		384,871		71,686		1,312,676
						Macy's		304,600
Cumberland Mall	Vineland, NJ	Burlington	2021		80,983	BJ's Wholesale Club		117,889		168,249		136,426		65,921		951,267
		The Home Depot	2024		132,013	Boscov's		155,341
		Dick's Sporting Goods	2028		50,000
		Regal Cinemas	2024							44,445
Dartmouth Mall	Dartmouth, MA	JCPenney	2024		100,020	Macy's		140,000		119,050		146,244		14,313		608,455
		Burlington	2030		43,840
		AMC Theaters	2026							44,988
Francis Scott Key Mall	Frederick, MD	JCPenney	2021		101,293	Macy's		139,333		139,863		165,322		37,423		754,267
		Sears	2023		120,883
		Dick's Sporting Goods	2025							50,150
Jacksonville Mall	Jacksonville, NC	Belk	2026		72,510					123,079		124,043		3,908		493,145
		JCPenney	2025		51,812
		Sears	2021		117,793
Lehigh Valley Mall	Allentown, PA	Boscov's	2022		164,694	JCPenney		207,292		182,637		313,840		109,306		1,189,769
		Macy's	2022		212,000
Magnolia Mall	Florence, SC	Belk	2028		115,793					96,175		124,924		28,118		591,860
		Best Buy	2023		32,054
		JCPenney	2022		104,107
		Dick's Sporting Goods	2023							45,000
		Burlington	2028							45,689
Moorestown Mall	Moorestown, NJ	Boscov's	2028		202,765					232,014		171,308		57,232		955,239
		Sears	2022		205,591
		Regal Cinemas	2028							57,843
		HomeSense	2028		28,486
Patrick Henry Mall	Newport News, VA	Dick's Sporting Goods	2022		50,250	Dillard's		144,157		60,095		219,776		18,341		717,831
		JCPenney	2020		85,212	Macy's		140,000
Plymouth Meeting Mall	Plymouth Meeting, PA	Boscov's	2028		188,429					159,504		167,762		150,346		911,888
		Whole Foods	2029		65,155
		Burlington	2030		41,883
		Dick's Sporting Goods	2031							57,588
		AMC Theaters	2027							48,000
		LEGOLAND Discovery Center	2032							33,221
Springfield Mall	Springfield, PA					Macy's		192,000		20,577		161,938		40,321		610,735
						Target		195,899
Springfield Town Center	Springfield, VA	Macy's	2025		252,245	JCPenney		209,144		168,618		301,576		95,229		1,373,877
						Target		180,841
		Dick's Sporting Goods	2025							53,891
		Nordstrom Rack	2025							33,107
		Regal Cinemas	2029							49,788
		Saks OFF 5th	2026							29,438
The Mall at Prince Georges	Hyattsville, MD	JCPenney	2021		148,778					177,988		250,814		15,290		923,711
		Macy's	2023		195,655
		Target	2024		135,186
Valley Mall	Hagerstown, MD	JCPenney	2024		157,455					95,023		201,993		16,854		827,735
		Belk	2028		123,094
		Regal Cinemas	2029							53,059
		Dick's Sporting Goods	2031		62,416
		Onelife Fitness	2033		70,000
		Tilt Studio	2028		47,841

Pennsylvania Real Estate Investment Trust

Property Information as of September 30, 2020

		Landlord Owned Anchors/ Large Format Non Anchor				Anchor Stores Not Owned			Non-anchor occupied GLA
Properties	Location	Tenant	Expiration Year	GLA		Tenant	GLA		Large Format		Small Shop		Vacant		Total GLA

Viewmont Mall	Scranton, PA	JCPenney	2025		193,112	Macy's		139,801		65,843		154,936		22,957		689,226
		Dick's Sporting Goods/Field & Stream	2028		90,000
		HomeGoods	2027							22,577
Willow Grove Park	Willow Grove, PA	Macy's	2022		225,000	Bloomingdale's		237,537		129,219		228,743		49,910		1,086,325
		Nordstrom Rack	2022		40,332	Sears⁽¹⁾		175,584
Woodland Mall	Grand Rapids, MI	Von Maur	2119		86,165	JCPenney		254,905		162,636		286,584		17,855		965,461
						Macy's		157,316
Total Core Malls					4,497,347			3,385,924		3,163,696		3,703,915		829,095		15,579,977

Other Malls and Retail Properties
Exton Square Mall	Exton, PA	Boscov's	2024		178,000	Macy's		181,200		186,185		150,449		236,737		990,942
		Round 1	2026		58,371
Fashion District Philadelphia	Philadelphia, PA	Burlington	2032		85,162					179,365		135,740		167,857		826,352
		Century 21	2026		95,157
		AMC	2034							36,535
		Round 1	2029							58,080
		City Winery	2037							29,762
		H&M	2030							38,694
Gloucester Premium Outlets	Blackwood, NJ									37,303		266,466		64,380		368,149
Metroplex Shopping Center	Plymouth Meeting, PA	Giant Food Store	2026		67,185	Lowe's		163,215		304,209		43,387		37,505		777,695
						Target		137,514
		Saks OFF 5th	2026							24,680
The Court at Oxford Valley	Fairless Hills, PA	Best Buy	2021		59,620	BJ's Wholesale Club		116,872		293,144		37,570		16,571		703,909
						The Home Depot		130,751
		Dick's Sporting Goods	2021							49,381
Valley View Center	La Crosse, WI											15,272				60,272
		Dick's Sporting Goods	2025							45,000
Red Rose Commons	Lancaster, PA					The Home Depot		134,558		248,086		15,207		-		462,883
						Weis Market		65,032
Total Other Malls and Retail Properties					543,495			929,142		1,530,424		664,091		523,050		4,190,202
Total Portfolio					5,040,842			4,315,066		4,694,120		4,368,006		1,352,145		19,770,179

⁽¹⁾ Approximately 69,000 square feet of this space has been subleased to Primark.

Pennsylvania Real Estate Investment Trust

Investment in Real Estate - Consolidated Properties

(in thousands)

	September 30, 2020
	Operating Properties and Land Held for Development		Construction in Progress		Accumulated Depreciation		Net Real Estate		Debt⁽¹⁾
Core Malls
Capital City Mall	$	137,114	$	-	$	55,389	$	81,725	$	-
Cherry Hill Mall		487,498		258		274,861		212,895		265,748
Cumberland Mall		84,051		-		33,597		50,454		41,519
Dartmouth Mall		91,038		76		47,079		44,035		57,599
Francis Scott Key Mall		98,196		-		45,524		52,672		68,469
Jacksonville Mall		93,945		-		42,533		51,412		-
Magnolia Mall		108,001		2		52,773		55,230		-
Moorestown Mall		190,616		-		79,093		111,523		-
Patrick Henry Mall		156,517		-		76,561		79,956		87,534
Plymouth Meeting Mall		232,126		8,840		106,537		134,429		-
The Mall at Prince Georges		144,407		2,227		68,811		77,823		-
Springfield Town Center		496,490		-		78,537		417,953		-
Valley Mall		147,116		1,229		52,255		96,090		-
Viewmont Mall		121,806		-		53,166		68,640		67,185
Willow Grove Park		233,482		34,133		112,015		155,600		153,764
Woodland Mall		284,990		107		86,014		199,083		123,000
Total Core Malls		3,107,393		46,872		1,264,745		1,889,520		864,818

Non-Core Malls
Exton Square Mall		48,973		-		12,664		36,309		-
Valley View Mall		7,289		-		2,707		4,582	$	27,212
Total Non-Core Malls		56,262		-		15,371		40,891		27,212

Total Malls	$	3,163,655	$	46,872	$	1,280,116	$	1,930,411	$	892,030
Other Properties
Land held for development		5,881		-		-		5,881		-
Total Other Properties	$	5,881	$	-	$	-	$	5,881	$	-
Total Investment in Real Estate	$	3,169,536	$	46,872	$	1,280,116	$	1,936,292	$	892,030

Land parcels held for sale
Moorestown Mall		434		-		-		434		-
Woodland Mall		1,054		-		-		1,054		-
Total held for sale	$	1,488	$	-	$	-	$	1,488	$	-

⁽¹⁾	Refer to page 28 for further debt information.

Pennsylvania Real Estate Investment Trust

Investment in Real Estate – Equity Method Investments at Ownership Share

(in thousands)

	September 30, 2020
	Operating Properties and Land Held for Development		Construction in Progress		Accumulated Depreciation			Net Real Estate		Debt⁽²⁾
Unconsolidated Malls
Fashion District Philadelphia⁽¹⁾	$	336,606	$	8,339	$	(17,582	)	$	327,363	$	150,500
Lehigh Valley Mall		51,370		4,337		(29,603	)		26,104		95,042
Springfield Mall		58,732		60		(25,157	)		33,635		29,897
Total Unconsolidated Malls	$	446,708	$	12,736	$	(72,342	)	$	387,102	$	275,439

Unconsolidated Other Retail Properties
Gloucester Premium Outlets		27,507		679		(5,588	)		22,598		21,500
Metroplex Shopping Center		43,722		3,854		(27,611	)		19,965		37,005
The Court at Oxford Valley		28,411		8		(13,231	)		15,188		26,368
Red Rose Commons		14,629		-		(5,410	)		9,199		12,703
Total Unconsolidated Other Retail Properties	$	114,269	$	4,541	$	(51,840	)	$	66,950	$	97,576
Unconsolidated Property Under Development
Pavilion at Market East		6,346		814		(2,401	)		4,759	$	3,076
Total Investment in Real Estate	$	567,323	$	18,091	$	(126,583	)	$	458,811	$	376,091

⁽¹⁾	CIP includes less than $1.0 million of existing building shell that was reclassified from operating properties.

⁽²⁾	Refer to page 28 for further debt information.

Pennsylvania Real Estate Investment Trust

Capital Expenditures

Three and Nine Months Ended September 30, 2020

(in thousands)

	Three Months Ended September 30, 2020						Nine Months Ended September 30, 2020
	Consolidated		PREIT's Share of Equity Method Investments		Total			Consolidated		PREIT's Share of Equity Method Investments		Total
Redevelopment projects with incremental GLA and/or anchor replacement ⁽¹⁾	$	2,678	$	8,147	$	10,825		$	20,996	$	25,814	$	46,810
Tenant allowances		6,194		2,197		8,391			10,849		3,283		14,132
Recurring capital expenditures:
CAM expenditures		322		23		345			1,560		319		1,879
Non-CAM expenditures		360		34		394			470		51		521
Total recurring capital expenditures		682		57		739			2,030		370		2,400
Total	$	9,554	$	10,401	$	19,955		$	33,875	$	29,467	$	63,342

⁽¹⁾	Net of any tenant reimbursements, parcel sales, tax credits or other incentives.

Pennsylvania Real Estate Investment Trust

Debt Analysis as of September 30, 2020

(in thousands)

	Outstanding Debt
	Fixed Rate ⁽¹⁾			% of Total Indebtedness			Variable Rate			% of Total Indebtedness			Total			% of Total Indebtedness
Consolidated mortgage loans payable ⁽²⁾	$	878,176			39.9	%	$	13,854			0.6	%	$	892,030			42.5	%
Unconsolidated mortgage loans payable ⁽³⁾		201,015			9.0	%		24,576			1.2	%		225,591			10.7	%
Consolidated Term Loans ⁽⁴⁾		438,000			19.9	%		122,500			5.6	%		560,500			26.0	%
Unconsolidated Term Loan ⁽⁵⁾		-			0.0	%		150,500			6.8	%		150,500			7.1	%
2018 Revolving Facility		12,000			0.0	%		363,000			16.5	%		375,000			13.7	%
Total Outstanding Debt	$	1,529,191			69.4	%	$	674,430			30.6	%	$	2,203,621			100.0	%
Average Stated Interest Rate		4.71	%					3.49	%					4.34	%

⁽¹⁾	Includes variable rate debt swapped to fixed rate debt.

⁽²⁾	Excludes deferred financing costs of $1,182.

⁽³⁾	Reflects our share of mortgage debt of equity method investees. Excludes our share of deferred financing costs of $304.

⁽⁴⁾	Excludes deferred financing costs of $1,460.

⁽⁵⁾	Reflects our share of Term Loan debt of equity method investee. Excludes our share of deferred financing costs of $1,405.

		Average Debt Balance
		Mortgage Debt			Revolving Facility		Term Loans			Total
Beginning Balance	6/30/2020	$	1,121,329		$	375,000	$	694,500		$	2,190,829
2018 Term Loan Repayment	7/30/2020		-			-		(1,091	)		(1,091	)
2018 Term Loan Repayment	8/31/2020		-			-		(1,091	)		(1,091	)
2018 Term Loan Repayment	9/30/2020		-			-		(1,091	)		(1,091	)
2014 Term Loan Repayment	7/30/2020		-			-		(909	)		(909	)
2014 Term Loan Repayment	8/31/2020		-			-		(909	)		(909	)
2014 Term Loan Repayment	9/30/2020		-			-		(909	)		(909	)
Bridge Facility Borrowing	8/11/2020		-			-		11,000			11,000
Bridge Facility Borrowing	9/4/2020		-			-		11,500			11,500
Mortgage loan amortization, including our share of debt of equity method investees	9/30/2020		(3,708	)		-		-			(3,708	)
Ending Balance	9/30/2020	$	1,117,621		$	375,000	$	711,000		$	2,203,621
Weighted Average Balance		$	1,120,505		$	375,000	$	701,808		$	2,197,313

(continued next page)

Pennsylvania Real Estate Investment Trust

Debt Analysis as of September 30, 2020

(in thousands)

Debt Maturities⁽¹⁾
Year	Scheduled Amortization		Deferred Financing Cost Amortization - Mortgages			Mortgage Balance at Initial Maturity Date		2018 Revolving Facility		Term Loans		Deferred Financing Cost Amortization - Term Loans			Total Debt
2020	$	7,503	$	(232	)	$	27,161	$	-	$	22,500	$	(319	)	$	56,613
2021		22,543		(353	)		230,375		-		244,545		(1,168	)		495,942
2022		17,201		(301	)		377,489		375,000		-		(740	)		768,649
2023		10,204		(195	)		86,801		-		443,955		(210	)		540,555
2024		6,405		(185	)		-		-		-		(75	)		6,145
Thereafter		14,506		(220	)		317,433		-		-		(354	)		331,365
	$	78,362	$	(1,486	)	$	1,039,259	$	375,000	$	711,000	$	(2,865	)	$	2,199,270

⁽¹⁾	The weighted average period to total debt maturity is 2.30 years, excluding extension options. Includes 100% of revolver, term loan and mortgage loan debt from consolidated properties and our share of term loan and mortgage loan debt of equity method investees.

Weighted Average Mortgage Interest Rates
Year	Balance ⁽¹⁾		Interest Rate
2020	$	27,212		5.95	%
2021		232,332		3.74	%
2022		397,236		4.08	%
2023		94,604		4.37	%
2024		-		-
Thereafter		366,237		4.08	%
Total	$	1,117,621		4.08	%

⁽¹⁾	Includes our share of debt of equity method investees.

Pennsylvania Real Estate Investment Trust

Debt Schedule as of September 30, 2020

(in thousands)

	Debt			Interest Rate			Annual Debt Service		Balance at Maturity		Initial Maturity Date	Fully Extended Maturity Date
Fixed Rate Mortgage Loans
Valley View Mall	$	27,212			5.95	%	$	2,290	$	27,161	July 2020	July 2020
Viewmont Mall ⁽¹⁾		57,000			4.37	%		2,491		-	March 2021	March 2021
Woodland Mall ⁽¹⁾		123,000			3.02	%		5,389		122,020	April 2021	April 2021
Red Rose Commons ⁽²⁾		12,703			5.14	%		978		12,379	July 2021	July 2021
The Court at Oxford Valley ⁽²⁾		26,368			5.56	%		2,058		25,782	July 2021	July 2021
Cumberland Mall		41,519			4.40	%		3,433		38,157	August 2022	August 2022
Cherry Hill Mall		265,748			3.90	%		16,980		251,120	September 2022	September 2022
Francis Scott Key Mall ⁽¹⁾		64,800			5.52	%		3,574		-	January 2022	January 2023
Dartmouth Mall		57,599			3.97	%		3,825		53,299	April 2023	April 2023
Metroplex Shopping Center ⁽²⁾		37,005			5.00	%		2,818		33,502	October 2023	October 2023
Patrick Henry Mall		87,534			4.35	%		5,748		77,591	July 2025	July 2025
Springfield Mall ⁽²⁾		29,897			4.45	%		1,964		26,299	October 2025	October 2025
Willow Grove Park		153,764			3.88	%		9,599		133,754	October 2025	October 2025
Lehigh Valley Mall ⁽²⁾		95,042			4.06	%		5,768		79,789	November 2027	November 2027
Total Fixed Rate Mortgage Loans	$	1,079,191			4.15	%	$	66,915	$	880,853

Variable Rate Mortgage Loans
Pavilion East Associates ⁽²⁾	$	3,076			3.73	%	$	214	$	3,009	February 2021	February 2021
Viewmont Mall		10,185			2.51	%		255		67,185	March 2021	March 2021
Gloucester Premium Outlets ⁽²⁾		21,500			1.66	%		356		21,500	March 2022	March 2023
Francis Scott Key Mall		3,669			2.76	%		101		66,712	January 2022	January 2023
Total Variable Rate Mortgage Loans	$	38,430			2.15	%	$	926	$	158,406
Total Mortgage Loans	$	1,117,621			4.08	%	$	67,841	$	1,039,259

Consolidated Mortgage Loans	$	892,030			4.04	%	$	53,685	$	836,999
Consolidated Deferred Financing Fees		(1,182	)	n/a			n/a		n/a
Unconsolidated Mortgage Loans		225,591			4.27	%		14,156		202,260
Unconsolidated Deferred Financing Fees ⁽²⁾		(304	)	n/a			n/a		n/a
2014 7 Year Term Loan ⁽¹⁾		244,545			3.39	%		9,967		244,545	December 2021	December 2021
2018 5 Year Term Loan ⁽¹⁾		293,455			7.04	%		20,652		293,455	May 2023	May 2023
Unconsolidated Term Loan		150,500			2.16	%		30,973		150,500	January 2023	January 2023
Term Loan Deferred Financing Fees		(2,865	)	n/a			n/a		n/a
2018 Revolving Facility		375,000			4.22	%		415		375,000	May 2022	May 2023
Bridge Facility		22,500			9.00	%		2,025		22,500	October 2020	October 2020
Total	$	2,199,270			4.34	%	$	131,872	$	2,125,259
Amortization of Deferred Financing Fees	0				0.15	%	—		—
Effective Interest Rate	$	2,199,270			4.34	%	$	131,872	$	2,125,259

⁽¹⁾	All or a portion of the loan has been effectively swapped to the fixed interest rate presented.

⁽²⁾	Includes our share of debt of equity method investees, based on our ownership percentage.

Pennsylvania Real Estate Investment Trust

Selected Debt Ratios ⁽¹⁾

	September 30, 2020
Consolidated Liabilities to Gross Asset Value	(2)
Ratio of Consolidated Liabilities to Gross Asset Value shall not exceed 65% (suspended as of September 30, 2020)
Secured Indebtedness to Gross Asset Value	N/A
Secured Indebtedness to Gross Asset Value may not exceed 60%
Adjusted EBITDA to Fixed Charges	(2)
Adjusted EBITDA may not be less than 1.40 to 1.00 (suspended as of September 30, 2020)
Unencumbered Adjusted NOI to Unsecured Interest Expense	N/A
Unencumbered Adjusted NOI to Unsecured Interest Expense may not be less than 1.75 to 1.00
Unencumbered Debt Yield	(2)
Ratio of Unencumbered Adjusted NOI to Unsecured Debt may not be less than 10% (suspended as of September 30, 2020)

⁽¹⁾

The 2018 Revolving Facility Agreement, as amended, and 2018 Term Loan Agreement, as amended, each dated May 24, 2018, and the 7-Year 2014 Term Loan Agreement, as amended, dated September 5, 2018 (collectively, the "Credit Facility Agreements"), contain identical affirmative and negative covenants customarily found in such agreements, including requirements that the Company, on a consolidated basis, maintain certain financial ratios. All capitalized terms used on this page have the meanings ascribed to such terms in the Credit Facility Agreements. In addition to the ratios set forth herein, there are several other ratios set forth in the covenants under the Credit Facility Agreements with which the Company must comply, which are described in the Company’s quarterly report on Form 10-Q for the quarterly period ended September 30, 2020.

⁽²⁾

The Credit Facility Agreements were amended on March 30, 2020 and again on July 27, 2020, and the covenants and ratios, as amended, and several of which were suspended as of September 30, 2020, as noted in this table, are described in the Company’s quarterly report on Form 10-Q for the quarterly period ended September 30, 2020.

Pennsylvania Real Estate Investment Trust

Forward Looking Statements

FORWARD LOOKING STATEMENTS

This Supplemental Financial and Operating Information for the quarter ended September 30, 2020, together with other statements and information publicly disseminated by us, contain certain forward-looking statements that can be identified by the use of words such as “anticipate,” “believe,” “estimate,” “expect,” “project,” “intend,” “may” or similar expressions. Forward-looking statements relate to expectations, beliefs, projections, future plans, strategies, anticipated events, trends and other matters, including our expectations regarding the impact of COVID-19 on our business, that are not historical facts. These forward-looking statements reflect our current views about future events, achievements, results, cost reductions, dividend payments and the impact of COVID-19 and are 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. In particular, our business might be materially and adversely affected by the following:

•

the ability to implement the prepackaged restructuring plan in accordance with the RSA;

•

risks attendant to the bankruptcy process, including our ability to obtain court approvals with respect to motions filed in the chapter 11 cases, the outcomes of court rulings and the chapter 11 cases in general and the length of time that we may be required to operate in bankruptcy;

•

the effectiveness of the restructuring pursuant to the chapter 11 cases and any additional strategies that we may employ to address our liquidity and capital resources;

•

the actions and decisions of creditors, regulators and other third parties that have an interest in the chapter 11 cases, which may interfere with the ability to confirm and consummate the prepackaged restructuring plan;

•

restrictions on us due to the terms of any interim and final orders that we may seek from the Bankruptcy Court authorizing our use of cash collateral securing indebtedness;

•

our ability to achieve forecasted revenue and pro forma leverage ratio and generate free cash flow to further reduce indebtedness;

•

the COVID-19 global pandemic and the public health and governmental actions in response, which have and may continue to exacerbate many of the risks listed below;

•

our ability to implement plans and initiatives to adequately address the “going concern” considerations described in Note 1 to consolidated financial statements in our Form 10-K for the year ended December 31, 2019;

•

changes in the retail and real estate industries, including bankruptcies, consolidation and store closings, particularly among anchor tenants;

•

current economic conditions, including current high rates of unemployment and its effects on consumer confidence and spending, and the corresponding effects on tenant business performance, prospects, solvency and leasing decisions;

•

our inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise;

•

our ability to maintain and increase property occupancy, sales and rental rates;

•

increases in operating costs that cannot be passed on to tenants;

•

the effects of online shopping and other uses of technology on our retail tenants;

•

risks related to our development and redevelopment activities, including delays, cost overruns and our inability to reach projected occupancy or rental rates;

•

social unrest and acts of vandalism or violence at malls, including our properties, or at other similar spaces, and the potential effect on traffic and sales;

•

our ability to sell properties that we seek to dispose of or our ability to obtain prices we seek;

•

potential losses on impairment of certain long-lived assets, such as real estate, including losses that we might be required to record in connection with any disposition of assets;

•

our substantial debt and the liquidation preference of our preferred shares and our high leverage ratio and our ability to remain in compliance with our financial covenants;

•

our ability to raise capital, including through sales of properties or interests in properties; and

•

potential dilution from any equity issuances.

Additional factors that might cause future events, achievements or results to differ materially from those expressed or implied by our forward-looking statements include those discussed herein and in the sections entitled “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019 and in our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2020 and any subsequent reports we file with the SEC. We do not intend to update or revise any forward-looking statements to reflect new information, future events or otherwise.

Pennsylvania Real Estate Investment Trust

Definitions

Funds From Operations (FFO)

The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO, which is a non-GAAP measure commonly used by REITs, as net income (computed in accordance with GAAP) excluding (i) depreciation and amortization related to real estate, (ii) gains and losses from the sale of certain real estate assets, (iii) gains and losses from change in control, and (iv) impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. We compute 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 we do. NAREIT’s established guidance provides that excluding impairment write downs of depreciable real estate is consistent with the NAREIT definition.

FFO is a commonly used measure of operating performance and profitability among REITs. We use FFO and FFO per diluted share and unit of limited partnership interest in our operating partnership (“OP Unit”) and, when applicable, related measures such as Funds From Operations, as adjusted, in measuring our performance against our peers and as one of the performance measures for determining incentive compensation amounts earned under certain of our performance-based executive compensation programs.

FFO does not include gains and losses on sales of operating real estate assets or impairment write downs of depreciable real estate, which are included in the determination of net income in accordance with GAAP. Accordingly, FFO is not a comprehensive measure of our operating cash flows. In addition, since FFO does not include depreciation on real estate assets, FFO may not be a useful performance measure when comparing our operating performance to that of other non-real estate commercial enterprises. We compensate for these limitations by using FFO in conjunction with other GAAP financial performance measures, such as net income and net cash provided by operating activities, and other non-GAAP financial performance measures, such as NOI. 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 our financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available for our cash needs, including our ability to make cash distributions. We believe that net income is the most directly comparable GAAP measurement to FFO.

When applicable, we also present Funds From Operations, as adjusted, and Funds From Operations per diluted share and OP Unit, as adjusted, which are non-GAAP measures, to show the effect of such items as gain or loss on debt extinguishment (including accelerated amortization of financing costs), impairment of assets, provision for employee separation expense and insurance recoveries or losses, net, which can have a significant effect on our results of operations, but are not, in our opinion, indicative of our operating performance. We also present FFO on a further adjusted basis to isolate the impact on FFO caused by property dispositions.

We believe that FFO is helpful to management and 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 gains on sales of operating real estate and depreciation and amortization of real estate, among others. We believe that Funds From Operations, as adjusted, is helpful to management and investors as a measure of operating performance because it adjusts FFO to exclude items that management does not believe are indicative of our operating performance, such as provision for employee separation expense and accelerated amortization of financing costs.

Net Operating Income (NOI)

NOI (a non-GAAP measure) is derived from real estate revenue (determined in accordance with GAAP, including lease termination revenue), minus property operating expenses (determined in accordance with GAAP), plus our pro rata share of revenue and property operating expenses of our unconsolidated partnership investments. NOI excludes other income, general and administrative expenses, insurance recoveries, employee separation expenses, interest expense, depreciation and amortization, impairment of assets, equity in income of partnerships, gains/losses and adjustment to gains/losses on sales of interest in non operating real estate, gains/losses on sales of interest in real estate by equity method investee, gains/losses on sales of interests in real estate, net, gain or loss on debt extinguishment, and project costs and other expenses. We believe that net income is the most directly comparable GAAP measure to NOI.

We believe that NOI is helpful to management and investors as a measure of operating performance because it is an indicator of the return on property investment and provides a method of comparing property performance over time. We use NOI and related terms, like Same Store NOI, as performance measures for determining incentive compensation amounts under certain of our performance-based incentive compensation programs.

Same Store NOI

Same Store NOI is calculated using retail properties owned for the full periods presented and excludes properties acquired, disposed, under redevelopment or designated as non-core during the periods presented. In 2018, Wyoming Valley Mall was designated as non-core and subsequently conveyed to the lender in September 2019. In 2019, Exton Square and Valley View Malls, as well as power centers and Gloucester Premium Outlets, were designated as non-core and are excluded from Same Store NOI. In 2020, Exton Square and Valley View Malls were designated as non-core and are excluded from Same Store NOI. Non Same Store NOI is calculated using the retail properties excluded from the calculation of Same Store NOI.

Funds Available for Distribution (FAD)

FAD is a measure of a real estate company’s cash flows generated by operations and capacity to pay dividends. The Company calculates FAD by starting with FFO as adjusted and subtracting (1) straight-line rent, (2) normalized recurring capital expenditures that are capitalized but necessary to maintain our properties, (3) operational tenant allowances, (4) capitalized leasing costs, (5) non-cash compensation charges, and (6) amortization of above- and below-market lease intangibles.

We believe that net income is the most directly comparable GAAP measurement to FAD. We believe FAD provides a meaningful indicator of our ability to fund cash needs and to make cash distributions to equity owners. In addition, we believe that to further understand our liquidity, FAD should be compared with our cash flow from operating activities determined in accordance with GAAP, as presented in our consolidated financial statements. The computation of FAD may not be comparable to FAD reported by other REITs or real estate companies and FAD does not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance, or as an alternative to net cash flow from operating activities (determined in accordance with GAAP), as a measure of our liquidity.

Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre)

NAREIT defines Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”), which is a non-GAAP measure, as net income (computed in accordance with GAAP) plus interest expense, income tax expense, depreciation and amortization; plus or minus losses and gains on the disposition of depreciated property, including losses/ gains on change in control; plus impairment write downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate; plus or minus adjustments to reflect the entity’s share of EBITDAre of unconsolidated affiliates. We compute EBITDAre in accordance with the standards established by NAREIT, which may not be comparable to EBITDAre 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 we do.

EBITDAre does not include interest expense, income tax expense, gains or losses on sales of operating real estate or impairment writedowns of depreciable real estate, which are included in the determination of net income in accordance with GAAP. Accordingly, EBITDAre is not a comprehensive measure of our operating cash flows. EBITDAre 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 our financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available for our cash needs, including our ability to make cash distributions. We believe that net income is the most directly comparable GAAP measurement to EBITDAre.

We believe that EBITDAre is helpful to management and investors as a measure of operating performance because it provides an additional performance measure to management and investors to facilitate the evaluation and comparison of the Company to other REITs and to other non-real estate commercial enterprises.

Attached files

Stock widget

Investing forum

PENNSYLVANIA REAL ESTATE INVESTMENT TRUST Reports