PHILADELPHIA, Oct. 29, 2019 /PRNewswire/ -- PREIT (NYSE:
PEI) today reported results for the three and nine months ended
September 30, 2019. A
description of each non-GAAP financial measure and the related
reconciliation to the comparable GAAP financial measure is located
in the tables accompanying this release.
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
(per share
amounts)
|
|
2019
|
|
2018
|
2019
|
|
2018
|
|
Net income (loss) -
basic and diluted
|
|
$
|
0.22
|
$
|
(0.11)
|
$
|
(0.23)
|
$
|
(0.75)
|
|
FFO
|
|
$
|
0.63
|
$
|
0.34
|
$
|
1.05
|
$
|
1.00
|
|
FFO, as
adjusted
|
|
$
|
0.23
|
$
|
0.35
|
$
|
0.71
|
$
|
1.02
|
|
FFO from assets sold
in 2018
|
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
(0.01)
|
|
FFO, as adjusted
for assets sold
|
|
$
|
0.23
|
$
|
0.35
|
$
|
0.71
|
$
|
1.01
|
|
"PREIT's 2019 performance has been impacted by a challenging
backdrop resulting from major bankruptcies, including Charlotte Russe, Forever 21 and others, as well
as anchor downtime. At the same time, we opened
transformative projects - Fashion District, which has welcomed over
a million visitors thus far, along with Woodland and Plymouth Meeting Malls, where
traffic is up 40% and 23%, respectively, since opening. We
are very pleased with early results and are confident that our
strategy has paved the way to deliver strong results for 2020 and
beyond," said Joseph F. Coradino,
Chairman and Chief Executive Officer of PREIT. "PREIT is a
different company than we were seven years ago and we are well
aware that our ability to demonstrate earnings growth and
meaningful balance sheet improvement following our multi-year
redevelopment program is paramount to generating strong shareholder
returns. With the majority of our projects complete, our
attention is focused on driving top line revenue growth and
continuing to creatively improve our balance sheet."
- Same Store NOI, excluding lease termination revenue, decreased
5.8% for the three months ended September
30, 2019 compared to September 30,
2018.
-
- The quarter was impacted by an incremental $2.6 million of lower revenue as a result of
bankruptcies, related store closings and associated write-offs.
This was partially offset by incremental revenues from anchor
replacements and box openings of $0.7
million in the quarter.
- Same Store NOI, excluding lease termination revenue, decreased
2.3% for the nine months ended September 30,
2019 compared to September 30,
2018. Excluding the impact of revenue lost from
bankruptcy-related store closings, Same Store NOI, excluding lease
termination was positive.
-
- On a year-to-date basis through September 30, 2019, the Company has been impacted
by $4.3 million of lower revenue as a
result of bankruptcies, related store closings and associated
write-offs, which was partially offset by $2.0 million in incremental rent from anchor
replacements and box openings.
- NOI-weighted sales at our Core Malls increased to $545 per square foot. Core Mall sales per square
foot reached $536, a 5.5% increase
over the prior year. Average comparable sales per square foot at
our top 6 properties rose 5.1% to $642.
- Core Mall total occupancy was 94.4%, an increase of 60 basis
points compared to September 30,
2018. Core Mall non-anchor occupancy declined by only 20
basis points from last year despite the impact from bankruptcies
and chain liquidations that resulted in 66 store closures in
236,000 square feet year-to-date.
- Non-anchor Leased space exceeds occupied space by 160 basis
points when factoring in 537,000 square feet of executed new leases
slated for future occupancy, representing $11.6 million in annualized future revenue,
excluding Fashion District.
- Average renewal spreads were strong in our wholly-owned
portfolio at 13.2% for spaces less than 10,000 square feet and 6.5%
for large format spaces. Average renewal spreads for the entire
portfolio were 2.2% for the quarter.
- During the quarter, the Company completed financing and asset
sales transactions generating incremental liquidity of
approximately $12.5 million since
last quarter. The Company has no material debt maturities until
2021.
- The Company has received offers from twelve bidders on its
multifamily land parcels and is calling for best and final offers,
currently expecting to move to Agreements of Sale before the end of
2019.
- The Company opened Fashion District Philadelphia on
September 19, 2019. During September,
three replacement tenants opened in Plymouth Meeting Mall's former
Macy's store with one following in October. Additionally, Woodland
Mall's expansion wing, resulting from a proactive Sears recapture
in 2016, opened on October 12,
2019.
Leasing and Redevelopment
- Excluding Fashion District Philadelphia, 537,000 square feet of
leases are signed for future openings. This is comprised of 249,000
square feet of space expected to open in 2019 which is expected to
contribute annual gross rent of $6.1
million and 288,000 square feet opening in 2020 expected to
contribute annual gross rent of $5.5
million.
- On September 19, the Company's
50/50 joint venture with Macerich opened Fashion District
Philadelphia, a four-level retail hub in Center City spanning nearly 900,000 square
feet across three city blocks in the heart of downtown Philadelphia. The project, which represents an
unrivaled collection of retail, entertainment and co-working uses,
is expected to be 70% occupied by Holiday 2019. Noteworthy tenants
include Century 21, Primark, Burlington, Industrious, H&M, Nike, AMC
Theaters, Round One, City Winery, Wonderspaces, Candytopia, Ulta,
Forever 21, Kate Spade, Sephora, A/X
Armani, DSW Shoes, American Eagle/Aerie, Hollister, Columbia
Sportswear, Guess Factory and Skechers, among others.
- At Plymouth Meeting Mall, Burlington, DICK's Sporting Goods, Miller's
Ale House and Edge Fitness have opened in the location of the
former Macy's. This convenient and sought-after collection of
tenants, will be joined by Michaels in Spring 2020.
- On October 12, 2019, the
expansion wing at Woodland Mall opened anchored by a brand new,
top-quality Von Maur Department Store. New tenants in the wing
include: Urban Outfitters, Tricho Salon & Spa, Williams-Sonoma,
Black Rock Bar & Grill, Paddle North and Made in Michigan. The Cheesecake Factory plans to open
its second Michigan location in
early November. In Spring 2020,
the mall is slated to welcome White House | Black Market and
Sephora.
- At Willow Grove Park, Yard House
is under construction for a December
2019 opening and construction continues on the 51,000 square
foot Studio Movie Grill, which is projected to open in early
2020.
- At Valley Mall, both Macy's and The Bon Ton were replaced in
2018. DICK's Sporting Goods is under construction in a former Sears
location and is expected to open in Spring 2020.
- At Dartmouth Mall, construction is underway for a new
Burlington as the lead tenant for
a proactively recaptured Sears store. Occupying 43,000 square feet,
the store is expected to open in Spring 2020. The redevelopment plan also
includes approximately 35,000 square feet of new outparcels to
capitalize on the property's location.
Primary Factors Affecting Financial Results for the Three
Months Ended September 30, 2019 and
September 30, 2018:
- Net income attributable to PREIT common shareholders was
$17.4 million, or $0.22 per basic and diluted share for the three
months ended September 30, 2019,
compared to net loss attributable to PREIT common shareholders of
$7.6 million, or $0.11 per basic and diluted share for the three
months ended September 30, 2018.
- Same Store NOI decreased by $3.4
million, or 6.2%. Revenue from new store openings, including
contributions from replacement anchors, mitigated the impact of
revenue lost to bankruptcies and associated store closings.
- Non Same Store NOI decreased by $2.2
million primarily driven by anchor closings and associated
co-tenancy rents at Valley View
and Wyoming Valley Malls and the sale of the Whole Foods parcel at
Exton Square.
- FFO for the three months ended September
30, 2019 was $0.63 per share
and OP Unit compared to $0.34 per
share and OP Unit in the prior year. Adjustments to FFO in the 2019
quarter included $0.38 per share of
gain from extinguishment of debt at Wyoming Valley Mall,
$0.03 per share of net insurance
proceeds related to claims for hurricane damage. Adjustments to FFO
in the 2018 quarter included a loss on debt extinguishment and
provision for employee separation expenses that totaled
$0.01 per share.
- General and administrative expenses were impacted by the new
lease accounting standard that now limits the capitalization of
certain leasing costs. We expensed $1.2
million ($0.02 per share) of
costs in the three months ended September
30, 2019 that would have been capitalized under the prior
standard.
All NOI and FFO amounts referenced as primary factors affecting
financial results above include our share of unconsolidated
properties' revenues and expenses. Additional information
regarding changes in operating results for the three and nine month
periods ended September 30, 2019 and
2018 is included on page 18.
Asset Dispositions
In July 2019, we closed on the sale of a Texas
Roadhouse outparcel located at Valley View Mall in LaCrosse, WI for
$1.4 million. We recorded a
gain of $1.2 million in connection
with this sale.
In September, the Company completed the conveyance of Wyoming
Valley Mall back to its mortgage loan lender. In connection
with this transaction, the Company recorded a gain on debt
extinguishment of $29.6
million. The Company had previously recognized an
asset impairment loss of approximately $32.2
million.
Year-to- Date Capital Transaction Summary
The
table below summarizes year-to-date capital activity that impacts
the Company's liquidity position:
|
|
Closed
|
|
Under
Contract
|
|
Total
|
|
Gainesville
Development Parcel(1)
|
|
$
|
5,000
|
$
|
10,000
|
$
|
15,000
|
|
New Garden Township
Parcel(2)
|
|
|
8,250
|
|
-
|
|
8,250
|
|
Wiregrass mortgage
loan sale
|
|
|
8,000
|
|
-
|
|
8,000
|
|
Whole Foods
Parcel(3)
|
|
|
10,500
|
|
-
|
|
10,500
|
|
Capital City
transaction - incremental capacity(4)
|
|
|
40,000
|
|
-
|
|
40,000
|
|
Gloucester Premium
Outlets Parcel
|
|
|
937
|
|
-
|
|
937
|
|
Fashion District
Philadelphia Term Loan expansion (5)
|
|
|
25,500
|
|
-
|
|
25,500
|
|
Valley View Mall
Outparcel Sale
|
|
|
1,400
|
|
-
|
|
1,400
|
|
Total
|
|
$
|
99,587
|
$
|
10,000
|
$
|
109,587
|
|
|
|
|
|
|
|
|
|
|
(1) Under contract and expected to
close in the fourth quarter of 2019.
|
|
(2) Represents cash proceeds; does
not include $2.8 million of preferred stock received by the
Company.
|
|
(3) Represents the net liquidity to
the Company after adjusting for line capacity. Sale price was
$22.1 million.
|
|
(4) Represents the Company's
approximate incremental borrowing capacity by the end of 2019, net
of the Capital City mortgage loan defeasance.
|
|
(5) Represents the Company's share of
amounts drawn under the expanded capacity of the Fashion District
Philadelphia term loan.
|
|
Retail Operations
The following table sets
forth information regarding sales per square foot in the Company's
mall portfolio, including unconsolidated properties:
A reconciliation of portfolio sales per square foot
(1) for the Core Mall portfolio can be found below:
Comp store sales for
the rolling twelve months ended September 30, 2018
|
|
$490
|
|
Organic sales
growth
|
|
28
|
|
Impact of non-core
malls
|
|
18
|
|
Comp store sales
for the rolling twelve months ended September 30,
2019
|
$
|
536
|
|
(1) Based on reported sales by all
comparable non-anchor tenants that lease individual spaces of less
than 10,000 square feet and have occupied the space for at least 24
months.
|
|
2019 Outlook
The Company is revising its
July 31, 2019 guidance for GAAP net
loss allocable to common shareholders to $0.38 and $0.31 per
diluted share for the year ending December
31, 2019 due to the inclusion of the gain on conveyance of
Wyoming Valley Mall and the factors set forth below.
The Company is revising its July 31,
2019 guidance for FFO as adjusted to $1.08 to $1.14 per
share. FFO is expected to be between $1.37 and $1.44 per
share. Same Store NOI, excluding termination revenue, is expected
to decline between 2.5% and 1.5% with wholly-owned properties
declining 2.1% to 1.1 % and joint venture properties declining
between 5.1% and 3.7%.
Key drivers accounting for our change in FFO as adjusted
guidance include:
- Lower land sale gains. Previously, we guided to a range of
$8.1 million to $11.1 million. We now expect land sale gains to
be in the range of $4.0 million to
$4.6 million. At the mid-point, this
decrease is $5.3 million, or
$0.07 per share. We currently expect
to enter into one or more contracts to sell land parcels as part of
our multifamily program before the end of 2019, with the first
closing anticipated in the first half of 2020.
- Lower lease termination revenues. Previously, we guided to a
range of $3.0 million to $4.0 million based on our historical experience
and potential lease terminations. We now expect lease termination
fees in a range of $1.4 million to
$1.6 million. At the mid-point, this
decrease is $2.0 million, or
$0.03 per share.
- A reduction in our Same Store NOI guidance due to the impact of
additional bankruptcies in the third and fourth quarters, lower
than expected revenues from our common area program and delays in
the opening of certain stores, among other factors.
A reconciliation between GAAP net loss and FFO is as
follows:
|
|
2019 Guidance
Range
|
|
(Estimates per
diluted share)
|
|
Low
|
|
High
|
|
Net loss attributable
to common shareholders
|
|
$
|
(0.38)
|
$
|
(0.31)
|
|
Depreciation and
amortization, non-controlling interest and other
|
|
|
1.75
|
|
1.75
|
|
FFO per
share
|
|
$
|
1.37
|
$
|
1.44
|
|
Gain on debt
extinguishment, net
|
|
|
(0.31)
|
|
(0.31)
|
|
Impairment of
development land parcel
|
|
|
0.02
|
|
0.02
|
|
Provision for
employee separation expenses
|
|
|
0.05
|
|
0.05
|
|
Insurance recoveries,
net
|
|
|
(0.06)
|
|
(0.06)
|
|
FFO per share, as
adjusted
|
|
$
|
1.08
|
$
|
1.14
|
|
(1) Estimates per diluted share
totals might not foot due to rounding
|
|
Our 2019 guidance is based on our current assumptions and
expectations about market conditions, our projections regarding
occupancy, retail sales and rental rates, and planned capital
spending. Our guidance is forward-looking, and is subject to risks,
uncertainties and changes in circumstances that might cause future
events, achievements or results to differ materially from those
expressed or implied by the forward-looking statements.
Conference Call Information
Management has scheduled a conference call for 11:00 a.m. Eastern Time on Wednesday, October 30,
2019, to review the Company's results and future outlook. To
listen to the call, please dial 1-844-885-9139 (domestic toll
free), or 1-647-689-4441 (international), and request to join the
PREIT call, Conference ID 2181645, at least five minutes before the
scheduled start time. Investors can also access the call in a
"listen only" mode via the internet at the Company's website,
preit.com. Please allow extra time prior to the call to visit
the site and download the necessary software to listen to the
Internet broadcast. Financial and statistical information
expected to be discussed on the call will also be available on the
Company's website. For best results when listening to the webcast,
the Company recommends using Flash Player.
For interested individuals unable to join the conference call,
the online archive of the webcast will also be available for one
year following the call.
About PREIT
PREIT (NYSE:PEI) is a publicly
traded real estate investment trust that owns and manages quality
properties in compelling markets. PREIT's robust portfolio of
carefully curated retail and lifestyle offerings mixed with
destination dining and entertainment experiences are located
primarily in the densely-populated eastern U.S. with concentrations
in the mid-Atlantic's top MSAs. Since 2012, the Company has driven
a transformation guided by an emphasis on portfolio quality and
balance sheet strength driven by disciplined capital expenditures.
Additional information is available at www.preit.com or on
Twitter or LinkedIn.
Rounding
Certain summarized information in the tables above may not total
due to rounding.
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.
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, 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, loss on debt
extinguishment, accelerated amortization of financing costs and
insurance losses and recoveries.
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 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. It is not
indicative of funds available for our cash needs, including our
ability to make cash distributions. 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 believe that net income is the most directly
comparable GAAP measurement to NOI.
NOI excludes other income, general and administrative expenses,
provision for employee separation expenses, interest expense,
depreciation and amortization, impairment of assets,
gains/adjustments to gains on sale of interest in non operating
real estate, gain/adjustments to gain on sale of interest in real
estate by equity method investee, gains/losses on sales of
interests in real estate, net, project costs, gain or loss on debt
extinguishment, insurance losses or recoveries, net and other
expenses.
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. In 2019, Exton Square and Valley View
Malls were designated as non-core and will be excluded from Same
Store NOI. Non Same Store NOI is calculated using the retail
properties excluded from the calculation of Same Store NOI.
Financial Information of our Unconsolidated Properties
The non-GAAP financial measures of FFO and NOI presented in this
press release incorporate financial information attributable to our
share of unconsolidated properties. This proportionate financial
information is also non-GAAP financial information, but we believe
that it is helpful information because it reflects the
proportionate contribution from our unconsolidated properties that
are owned through investments accounted for under GAAP using the
equity method of accounting. Under such method, earnings from
these unconsolidated partnerships are recorded in our statements of
operations prepared in accordance with GAAP under the caption
entitled "Equity in income of partnerships."
To derive the proportionate financial information from our
unconsolidated properties, 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-proportionate
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 revenue and expenses of our
unconsolidated partnerships, we do not 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. Accordingly, NOI and FFO results
based on our share of the results of unconsolidated partnerships do
not represent cash generated from our investments in these
partnerships.
Core Properties
Core Properties include all operating retail properties except
for Exton Square Mall, Valley View Mall and Fashion District
Philadelphia. Core Malls excludes these properties, power
centers and Gloucester Premium Outlets.
Forward Looking Statements
This press release
contains certain forward-looking statements that can be identified
by the use of words such as "anticipate," "believe," "estimate,"
"expect," "intend," "may," "project" or similar expressions.
Forward-looking statements relate to expectations, beliefs,
projections, future plans, strategies, anticipated events, trends
and other matters that are not historical facts. These
forward-looking statements reflect our current views about future
events, achievements or results 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:
- changes in the retail and real estate industries, including
consolidation and store closings, particularly among anchor
tenants;
- current economic conditions 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;
- acts of 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;
- our ability to refinance our existing indebtedness when it
matures, on favorable terms or at all;
- our ability to raise capital, including through sales of
properties or interests in properties and through the issuance of
equity or equity-related securities if market conditions are
favorable; and
- potential dilution from any capital raising transactions or
other 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 our Annual Report on Form 10-K for the year ended December 31, 2018 in the section entitled "Item
1A. Risk Factors", our Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2019
in the section entitled "Item 1A. Risk Factors" and any subsequent
reports we may file with the SEC. We do not intend to update or
revise any forward-looking statements to reflect new information,
future events or otherwise.
** Quarterly
supplemental financial and operating
**
** information will be
available on www.preit.com **
CONTACT: AT THE COMPANY
Robert McCadden
EVP & CFO
(215) 875-0735
Heather Crowell
EVP, Strategy and Communications
(215) 454-1241
heather.crowell@preit.com
|
|
2018
|
|
|
2019
Guidance
|
|
|
Same Store NOI
Growth
|
|
|
|
Actual
|
|
|
Low
|
|
|
High
|
|
|
Low
|
|
|
High
|
|
Same store NOI,
excluding termination fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholly-owned
properties
|
|
$
|
188.7
|
|
|
$
|
184.7
|
|
|
$
|
186.5
|
|
|
|
-2.1
|
%
|
|
|
-1.1
|
%
|
Joint venture
properties
|
|
|
29.7
|
|
|
|
28.2
|
|
|
|
28.6
|
|
|
|
-5.1
|
%
|
|
|
-3.7
|
%
|
|
|
|
218.4
|
|
|
|
212.9
|
|
|
|
215.1
|
|
|
|
-2.5
|
%
|
|
|
-1.5
|
%
|
Non-same store
NOI
|
|
|
20.1
|
|
|
|
13.0
|
|
|
|
13.4
|
|
|
|
|
|
|
|
|
|
NOI, excluding lease
termination fees
|
|
|
238.5
|
|
|
|
225.9
|
|
|
|
228.5
|
|
|
|
|
|
|
|
|
|
Lease termination
fees
|
|
|
9.2
|
|
|
|
1.4
|
|
|
|
1.6
|
|
|
|
|
|
|
|
|
|
Total NOI
|
|
$
|
247.7
|
|
|
$
|
227.3
|
|
|
$
|
230.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
G&A and leasing
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
G&A
|
|
|
(38.3)
|
|
|
|
(38.5)
|
|
|
|
(38.0)
|
|
|
|
|
|
|
|
|
|
Leasing costs expensed
under ASC 842
|
|
|
-
|
|
|
|
(5.7)
|
|
|
|
(5.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expenses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
revenues
|
|
|
4.3
|
|
|
|
1.5
|
|
|
|
1.7
|
|
|
|
|
|
|
|
|
|
Land sale
gains
|
|
|
8.1
|
|
|
|
4.0
|
|
|
|
4.6
|
|
|
|
|
|
|
|
|
|
Provision for employee
separation expenses
|
|
|
(1.1)
|
|
|
|
(4.2)
|
|
|
|
(4.0)
|
|
|
|
|
|
|
|
|
|
Impairment of mortgage
loan/land parcel
|
|
|
(8.1)
|
|
|
|
(1.5)
|
|
|
|
(1.5)
|
|
|
|
|
|
|
|
|
|
Other, including
non-real estate depreciation
|
|
|
(1.5)
|
|
|
|
(2.2)
|
|
|
|
(2.0)
|
|
|
|
|
|
|
|
|
|
Insurance losses
(recoveries)
|
|
|
-
|
|
|
|
4.5
|
|
|
|
4.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
gross
|
|
|
(83.3)
|
|
|
|
(88.4)
|
|
|
|
(88.2)
|
|
|
|
|
|
|
|
|
|
Capitalized
interest
|
|
|
11.1
|
|
|
|
14.4
|
|
|
|
14.6
|
|
|
|
|
|
|
|
|
|
Preferred
dividends
|
|
|
(27.4)
|
|
|
|
(27.4)
|
|
|
|
(27.4)
|
|
|
|
|
|
|
|
|
|
Mortgage loan
defeasance
|
|
|
-
|
|
|
|
24.8
|
|
|
|
24.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from
Operations (FFO)
|
|
$
|
111.5
|
|
|
$
|
108.6
|
|
|
$
|
113.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of mortgage
loan/land parcel
|
|
|
8.1
|
|
|
|
1.5
|
|
|
|
1.5
|
|
|
|
|
|
|
|
|
|
Provision for employee
separation expenses
|
|
|
1.1
|
|
|
|
4.2
|
|
|
|
4.0
|
|
|
|
|
|
|
|
|
|
Insurance recoveries,
net
|
|
|
(0.3)
|
|
|
|
(4.5)
|
|
|
|
(4.5)
|
|
|
|
|
|
|
|
|
|
Gain on debt
extinguishment, net
|
|
|
-
|
|
|
|
(24.8)
|
|
|
|
(24.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO as
adjusted
|
|
$
|
120.4
|
|
|
$
|
85.0
|
|
|
$
|
89.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares, including OP units
|
|
|
78.3
|
|
|
|
79.0
|
|
|
|
79.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per
share
|
|
$
|
1.42
|
|
|
$
|
1.37
|
|
|
$
|
1.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO, as adjusted
per share
|
|
$
|
1.54
|
|
|
$
|
1.08
|
|
|
$
|
1.14
|
|
|
|
|
|
|
|
|
|
The following table
presents a reconciliation of Net (loss) Income to FFO and FFO as
adjusted (Non-GAAP measures) for the 2019 Earnings
Guidance.
(in millions, except
per share amounts):
|
|
|
|
|
2018
|
|
2019
Guidance
|
|
|
|
Actual
|
Low
|
|
High
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(126.5)
|
$
|
(1.9)
|
$
|
4.1
|
|
Depreciation and
amortization
|
|
|
140.3
|
|
140.6
|
|
139.6
|
|
Gain on sales of
operating assets
|
|
|
(4.3)
|
|
(2.7)
|
|
(2.7)
|
|
Impairment of real
estate assets
|
|
|
129.4
|
|
-
|
|
-
|
|
Preferred share
dividends
|
|
|
(27.4)
|
|
(27.4)
|
|
(27.4)
|
|
Funds From
Operations (FFO)
|
|
$
|
111.5
|
$
|
108.6
|
$
|
113.6
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
Impairment of mortgage
loan/land parcel
|
|
|
8.1
|
|
1.5
|
|
1.5
|
|
Provision for employee
separation expenses
|
|
|
1.1
|
|
4.2
|
|
4.0
|
|
Insurance recoveries,
net
|
|
|
(0.3)
|
|
(4.5)
|
|
(4.5)
|
|
Gain on debt
extinguishment, net
|
|
|
-
|
|
(24.8)
|
|
(24.8)
|
|
FFO as
adjusted
|
|
$
|
120.4
|
$
|
85.0
|
$
|
89.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
|
(126.5)
|
|
(1.9)
|
|
4.1
|
|
Preferred share
dividends
|
|
|
(27.4)
|
|
(27.4)
|
|
(27.4)
|
|
Noncontrolling
interest
|
|
|
16.2
|
|
1.2
|
|
1.0
|
|
Dividends on unvested
restricted shares
|
|
|
(0.5)
|
|
(0.9)
|
|
(0.9)
|
|
Net loss used to
calculate EPS
|
|
$
|
(138.2)
|
$
|
(29.0)
|
$
|
(23.2)
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares
|
|
69.7
|
75.5
|
75.5
|
|
Weighted average
shares, including OP units
|
|
78.3
|
|
79.0
|
|
79.0
|
|
|
|
|
|
|
|
|
|
|
Net loss per
share
|
|
$
|
(1.98)
|
$
|
(0.38)
|
$
|
(0.31)
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
(in thousands of
dollars)
|
|
2019
|
|
2018
|
2019
|
|
2018
|
|
REVENUE:
|
|
|
|
|
|
|
|
|
|
|
Real estate
revenue:
|
|
|
|
|
|
|
|
|
|
|
Lease
revenue
|
|
$
|
73,310
|
$
|
78,219
|
$
|
223,668
|
$
|
239,669
|
|
Expense
reimbursements
|
|
|
5,364
|
|
5,677
|
|
15,342
|
|
16,307
|
|
Other real estate
revenue
|
|
|
2,202
|
|
2,493
|
|
7,619
|
|
6,928
|
|
Total real estate
revenue
|
|
|
80,876
|
|
86,389
|
|
246,629
|
|
262,904
|
|
Other
income
|
|
|
498
|
|
1,714
|
|
1,440
|
|
3,454
|
|
Total
revenue
|
|
|
81,374
|
|
88,103
|
|
248,069
|
|
266,358
|
|
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
CAM and real estate
taxes
|
|
|
(28,320)
|
|
(27,826)
|
|
(85,891)
|
|
(84,569)
|
|
Utilities
|
|
|
(4,009)
|
|
(4,430)
|
|
(11,350)
|
|
(12,143)
|
|
Other property
operating expenses
|
|
|
(1,836)
|
|
(2,444)
|
|
(5,815)
|
|
(8,752)
|
|
Total property
operating expenses
|
|
|
(34,165)
|
|
(34,700)
|
|
(103,056)
|
|
(105,464)
|
|
Depreciation and
amortization
|
|
|
(31,236)
|
|
(33,119)
|
|
(98,085)
|
|
(100,505)
|
|
General and
administrative expenses
|
|
|
(10,605)
|
|
(8,441)
|
|
(33,419)
|
|
(27,969)
|
|
Provision for
employee separation expenses
|
|
|
(218)
|
|
(561)
|
|
(1,078)
|
|
(956)
|
|
Insurance recoveries,
net
|
|
|
2,878
|
|
-
|
|
4,494
|
|
-
|
|
Project costs and
other expenses
|
|
|
(80)
|
|
(214)
|
|
(267)
|
|
(465)
|
|
Total operating
expenses
|
|
|
(73,426)
|
|
(77,035)
|
|
(231,411)
|
|
(235,359)
|
|
Interest expense,
net
|
|
|
(15,534)
|
|
(15,181)
|
|
(46,986)
|
|
(46,064)
|
|
Gain on debt
extinguishment, net
|
|
|
29,600
|
|
-
|
|
24,832
|
|
-
|
|
Impairment of
assets
|
|
|
-
|
|
-
|
|
-
|
|
(34,286)
|
|
Impairment of
development land parcel
|
|
|
-
|
|
-
|
|
(1,464)
|
|
-
|
|
Total
expenses
|
|
|
(59,360)
|
|
(92,216)
|
|
(255,029)
|
|
(315,709)
|
|
Income (loss) before
equity in income of partnerships, gain on
sales of real estate by equity method investee, gain on sales
of real estate, net, and adjustment to gain on sales of
interests in non operating real estate
|
|
|
22,014
|
|
(4,113)
|
|
(6,960)
|
|
(49,351)
|
|
Equity in income of
partnerships
|
|
|
1,531
|
|
2,477
|
|
6,136
|
|
8,186
|
|
Gain on sales of real
estate by equity method investee
|
|
|
-
|
|
-
|
|
553
|
|
2,773
|
|
Gain on sales of real
estate, net
|
|
|
1,171
|
|
-
|
|
2,684
|
|
748
|
|
Adjustment to gain on
sales of interests in non operating real
estate
|
|
|
-
|
|
-
|
|
-
|
|
(25)
|
|
Net income
(loss)
|
|
|
24,716
|
|
(1,636)
|
|
2,413
|
|
(37,669)
|
|
Less: net (income)
loss attributable to noncontrolling
interest
|
|
|
(454)
|
|
891
|
|
1,563
|
|
6,122
|
|
Net income (loss)
attributable to PREIT
|
|
|
24,262
|
|
(745)
|
|
3,976
|
|
(31,547)
|
|
Less: preferred share
dividends
|
|
|
(6,843)
|
|
(6,843)
|
|
(20,531)
|
|
(20,531)
|
|
Net income (loss)
attributable to PREIT common
shareholders
|
|
$
|
17,419
|
$
|
(7,588)
|
$
|
(16,555)
|
$
|
(52,078)
|
|
|
|
Three Months
Ended
September
30,
|
|
|
Nine Months
Ended
September
30,
|
|
(in thousands,
except per share amounts)
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Net income
(loss)
|
|
$
|
24,716
|
|
|
$
|
(1,636)
|
|
|
$
|
2,413
|
|
|
$
|
(37,669)
|
|
Noncontrolling
interest
|
|
|
(454)
|
|
|
|
891
|
|
|
|
1,563
|
|
|
|
6,122
|
|
Preferred share
dividends
|
|
|
(6,843)
|
|
|
|
(6,843)
|
|
|
|
(20,531)
|
|
|
|
(20,531)
|
|
Dividends on unvested
restricted shares
|
|
|
(222)
|
|
|
|
(136)
|
|
|
|
(663)
|
|
|
|
(412)
|
|
Net income (loss)
used to calculate loss per share—basic and diluted
|
|
$
|
17,197
|
|
|
$
|
(7,724)
|
|
|
$
|
(17,218)
|
|
|
$
|
(52,490)
|
|
Basic and diluted
income (loss) per share:
|
|
$
|
0.22
|
|
|
$
|
(0.11)
|
|
|
$
|
(0.23)
|
|
|
$
|
(0.75)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of
shares)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding—basic
|
|
|
76,492
|
|
|
|
69,803
|
|
|
|
74,771
|
|
|
|
69,718
|
|
Effect of common
share equivalents(1)
|
|
|
332
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Weighted average
shares outstanding—diluted
|
|
|
76,824
|
|
|
|
69,803
|
|
|
|
74,771
|
|
|
|
69,718
|
|
|
(1)The company had net losses for
the three months ended September 30, 2018 and the nine months ended
September 30, 2019 and 2018, respectively, therefore, the effects
of common share equivalents are excluded from the calculation of
diluted loss per share for these periods because they would be
antidilutive.
|
|
|
|
|
Three Months
Ended
September
30,
|
|
|
Nine Months
Ended
September
30,
|
|
(in thousands of
dollars)
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Comprehensive income
(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
24,716
|
|
|
$
|
(1,636)
|
|
|
$
|
2,413
|
|
|
$
|
(37,669)
|
|
Unrealized (loss) gain
on derivatives
|
|
|
(3,607)
|
|
|
|
1,905
|
|
|
|
(21,838)
|
|
|
|
9,662
|
|
Amortization of
settled swaps
|
|
|
3
|
|
|
|
180
|
|
|
|
82
|
|
|
|
719
|
|
Total comprehensive
income (loss)
|
|
|
21,112
|
|
|
|
449
|
|
|
|
(19,343)
|
|
|
|
(27,288)
|
|
Less: comprehensive
(income) loss attributable to noncontrolling interest
|
|
|
(363)
|
|
|
|
669
|
|
|
|
2,524
|
|
|
|
5,020
|
|
Comprehensive income
(loss) attributable to PREIT
|
|
$
|
20,749
|
|
|
$
|
1,118
|
|
|
$
|
(16,819)
|
|
|
$
|
(22,268)
|
|
The following table
presents a reconciliation of net income (loss) determined in
accordance with GAAP to (i) Funds from operations attributable to
common shareholders and OP Unit holders, (ii) Funds from
operations, as adjusted, attributable to common shareholders and OP
Unit holders , (iii) Funds from operations, as adjusted for assets
sold, (iv) Funds from operations attributable to common
shareholders and OP Unit holders per diluted share and OP Unit (v)
Funds from operations, as adjusted, attributable to common
shareholders and OP Unit holders per diluted share and OP Unit, and
(vi) Funds from operations, as adjusted for assets sold per diluted
share and OP Unit for the three and nine months ended September 30,
2019 and 2018, respectively:
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
(in thousands,
except per share amounts)
|
|
2019
|
|
2018
|
2019
|
|
2018
|
|
Net income
(loss)
|
|
$
|
24,716
|
$
|
(1,636)
|
$
|
2,413
|
$
|
(37,669)
|
|
Depreciation and
amortization on real estate:
|
|
|
|
|
|
|
|
|
|
|
Consolidated
properties
|
|
|
30,948
|
|
32,764
|
|
97,126
|
|
99,428
|
|
PREIT's share of
equity method investments
|
|
|
2,402
|
|
2,132
|
|
6,453
|
|
6,518
|
|
Gain on sales of real
estate by equity method
investee
|
|
|
-
|
|
-
|
|
-
|
|
(2,773)
|
|
Gain on sales of
interests in real estate, net
|
|
|
(1,171)
|
|
-
|
|
(2,684)
|
|
(748)
|
|
Impairment of
assets
|
|
|
-
|
|
-
|
|
-
|
|
34,286
|
|
Preferred share
dividends
|
|
|
(6,843)
|
|
(6,843)
|
|
(20,531)
|
|
(20,531)
|
|
Funds from
operations attributable to common
shareholders and OP Unit holders
|
|
$
|
50,052
|
$
|
26,417
|
$
|
82,777
|
$
|
78,511
|
|
Gain on debt
extinguishment, net
|
|
|
(29,600)
|
|
-
|
|
(24,832)
|
|
-
|
|
Accelerated
amortization of financing costs
|
|
|
-
|
|
-
|
|
-
|
|
363
|
|
Impairment of
development land parcel
|
|
|
-
|
|
-
|
|
1,464
|
|
-
|
|
Provision for employee
separation expenses
|
|
|
218
|
|
561
|
|
1,078
|
|
956
|
|
Insurance recoveries,
net
|
|
|
(2,878)
|
|
-
|
|
(4,494)
|
|
-
|
|
Funds from
operations, as adjusted, attributable to
common shareholders and OP Unit holders
|
|
$
|
17,792
|
$
|
26,978
|
$
|
55,993
|
$
|
79,830
|
|
Less: Funds from
operations from assets sold in 2019
and 2018
|
|
|
-
|
|
-
|
|
-
|
|
(412)
|
|
Funds from
operations, as adjusted for assets sold
|
|
$
|
17,792
|
$
|
26,978
|
$
|
55,993
|
$
|
79,418
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from
operations attributable to common
shareholders and OP Unit holders per diluted share
and OP Unit
|
|
$
|
0.63
|
$
|
0.34
|
$
|
1.05
|
$
|
1.00
|
|
Funds from
operations, as adjusted, attributable to
common shareholders and OP Unit holders per
diluted share and OP Unit
|
|
$
|
0.23
|
$
|
0.35
|
$
|
0.71
|
$
|
1.02
|
|
Funds from
operations, as adjusted for assets sold
per diluted share and OP Unit
|
|
$
|
0.23
|
$
|
0.35
|
$
|
0.71
|
$
|
1.01
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of
shares)
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding
|
|
|
76,492
|
|
69,803
|
|
74,771
|
|
69,718
|
|
Weighted average
effect of full conversion of OP Units
|
|
|
2,023
|
|
8,273
|
|
3,625
|
|
8,273
|
|
Effect of common
share equivalents
|
|
|
332
|
|
38
|
|
375
|
|
272
|
|
Total weighted
average shares outstanding, including
OP Units
|
|
|
78,847
|
|
78,114
|
|
78,771
|
|
78,263
|
|
NOI for the three
months ended September 30, 2019 and 2018:
|
|
|
|
|
Same
Store
|
|
Change
|
|
|
Non Same
Store
|
|
Total
|
|
|
|
2019
|
|
2018
|
$
|
|
%
|
|
|
2019
|
|
|
2018
|
2019
|
|
2018
|
|
NOI from consolidated
properties
|
|
$
|
43,858
|
$
|
46,888
|
$
|
(3,030)
|
|
-6.5
|
%
|
|
$
|
2,853
|
$
|
4,801
|
$
|
46,711
|
$
|
51,689
|
|
NOI attributable to
equity method
investments, at ownership share
|
|
|
7,029
|
|
7,351
|
|
(322)
|
|
-4.4
|
%
|
|
|
(296)
|
|
(41)
|
|
6,733
|
|
7,310
|
|
Total
NOI
|
|
|
50,887
|
|
54,239
|
|
(3,352)
|
|
-6.2
|
%
|
|
|
2,557
|
|
4,760
|
|
53,444
|
|
58,999
|
|
Less: lease
termination revenue
|
|
|
55
|
|
252
|
|
(197)
|
|
-78.2
|
%
|
|
|
-
|
|
14
|
|
55
|
|
266
|
|
Total NOI excluding
lease termination
revenue
|
|
$
|
50,832
|
$
|
53,987
|
$
|
(3,155)
|
|
-5.8
|
%
|
|
$
|
2,557
|
$
|
4,746
|
$
|
53,389
|
$
|
58,733
|
|
|
|
|
NOI for the nine
months ended September 30, 2019 and 2018:
|
|
|
|
|
Same
Store
|
|
Change
|
|
|
Non Same
Store
|
|
Total
|
|
|
|
2019
|
|
2018
|
$
|
|
%
|
|
|
2019
|
|
|
2018
|
2019
|
|
2018
|
|
NOI from consolidated
properties
|
|
$
|
133,210
|
$
|
142,237
|
$
|
(9,027)
|
|
-6.3
|
%
|
|
$
|
10,363
|
$
|
15,203
|
$
|
143,573
|
$
|
157,440
|
|
NOI attributable to
equity method
investments, at ownership share
|
|
|
21,148
|
|
22,280
|
|
(1,132)
|
|
-5.1
|
%
|
|
|
(191)
|
|
479
|
|
20,957
|
|
22,759
|
|
Total
NOI
|
|
|
154,358
|
|
164,517
|
|
(10,159)
|
|
-6.2
|
%
|
|
|
10,172
|
|
15,682
|
|
164,530
|
|
180,199
|
|
Less: lease
termination revenue
|
|
|
513
|
|
7,066
|
|
(6,553)
|
|
-92.7
|
%
|
|
|
17
|
|
577
|
|
530
|
|
7,643
|
|
Total NOI excluding
lease termination
revenue
|
|
$
|
153,845
|
$
|
157,451
|
$
|
(3,606)
|
|
-2.3
|
%
|
|
$
|
10,155
|
$
|
15,105
|
$
|
164,000
|
$
|
172,556
|
|
The table below
reconciles net loss to NOI of our consolidated properties for the
three and nine months ended September 30, 2019 and 2018.
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
(in thousands of
dollars)
|
|
2019
|
|
2018
|
2019
|
|
2018
|
|
Net income
(loss)
|
|
$
|
24,716
|
$
|
(1,636)
|
$
|
2,413
|
$
|
(37,669)
|
|
Other
income
|
|
|
(498)
|
|
(1,714)
|
|
(1,440)
|
|
(3,454)
|
|
Depreciation and
amortization
|
|
|
31,236
|
|
33,119
|
|
98,085
|
|
100,505
|
|
General and
administrative expenses
|
|
|
10,605
|
|
8,441
|
|
33,419
|
|
27,969
|
|
Insurance recoveries,
net
|
|
|
(2,878)
|
|
-
|
|
(4,494)
|
|
-
|
|
Provision for
employee separation expense
|
|
|
218
|
|
561
|
|
1,078
|
|
956
|
|
Project costs and
other expenses
|
|
|
80
|
|
214
|
|
267
|
|
466
|
|
Interest expense,
net
|
|
|
15,534
|
|
15,181
|
|
46,986
|
|
46,063
|
|
Impairment of
assets
|
|
|
-
|
|
-
|
|
1,464
|
|
34,286
|
|
Gain on debt
extinguishment, net
|
|
|
(29,600)
|
|
-
|
|
(24,832)
|
|
-
|
|
Equity in income of
partnerships
|
|
|
(1,531)
|
|
(2,477)
|
|
(6,136)
|
|
(8,186)
|
|
Gain on sales of real
estate by equity method investee
|
|
|
-
|
|
-
|
|
(553)
|
|
(2,773)
|
|
Gain on sales of
interests in real estate, net
|
|
|
(1,171)
|
|
-
|
|
(2,684)
|
|
(748)
|
|
Adjustment to gain on
sales of interest in non operating real estate
|
|
|
-
|
|
-
|
|
-
|
|
25
|
|
NOI from
consolidated properties
|
|
$
|
46,711
|
$
|
51,689
|
$
|
143,573
|
$
|
157,440
|
|
Less: Non Same Store
NOI of consolidated properties
|
|
|
2,853
|
|
4,801
|
|
10,363
|
|
15,203
|
|
Same Store NOI
from consolidated properties
|
|
$
|
43,858
|
$
|
46,888
|
$
|
133,210
|
$
|
142,237
|
|
Less: Same Store
lease termination revenue
|
|
|
11
|
|
31
|
|
463
|
|
6,589
|
|
Same Store NOI
excluding lease termination revenue
|
|
$
|
43,847
|
$
|
46,857
|
$
|
132,747
|
$
|
135,648
|
|
The table below
reconciles equity in income of partnerships to NOI of equity method
investments at ownership share for the three and nine months ended
September 30, 2019 and 2018:
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
|
|
2019
|
|
2018
|
2019
|
|
2018
|
|
Equity in income of
partnerships
|
|
$
|
1,531
|
$
|
2,477
|
$
|
6,136
|
$
|
8,186
|
|
Other
income
|
|
|
(24)
|
|
(12)
|
|
(46)
|
|
(35)
|
|
Depreciation and
amortization
|
|
|
2,403
|
|
2,132
|
|
6,453
|
|
6,518
|
|
Interest and other
expenses
|
|
|
2,823
|
|
2,713
|
|
8,414
|
|
8,090
|
|
Net operating
income from equity method
investments at ownership share
|
|
$
|
6,733
|
$
|
7,310
|
$
|
20,957
|
$
|
22,759
|
|
Less: Non Same Store
NOI from equity method
investments at ownership share
|
|
|
(296)
|
|
(41)
|
|
(191)
|
|
479
|
|
Same Store NOI of
equity method investments at
ownership share
|
|
$
|
7,029
|
$
|
7,351
|
$
|
21,148
|
$
|
22,280
|
|
Less: Same Store
lease termination revenue
|
|
|
44
|
|
221
|
|
50
|
|
477
|
|
Same Store NOI
from equity method investments
excluding lease termination revenue at ownership
share
|
|
$
|
6,985
|
$
|
7,130
|
$
|
21,098
|
$
|
21,803
|
|
|
|
September
30,
2019
|
|
December
31,
2018
|
|
(in thousands of
dollars)
|
|
(unaudited)
|
|
|
|
ASSETS:
|
|
|
|
|
|
|
INVESTMENTS IN REAL
ESTATE, at cost:
|
|
|
|
|
|
|
Operating
properties
|
|
$
|
3,043,937
|
$
|
3,063,531
|
|
Construction in
progress
|
|
|
151,787
|
|
115,182
|
|
Land held for
development
|
|
|
5,881
|
|
5,881
|
|
Total investments in
real estate
|
|
|
3,201,605
|
|
3,184,594
|
|
Accumulated
depreciation
|
|
|
(1,181,848)
|
|
(1,118,582)
|
|
Net investments in
real estate
|
|
|
2,019,757
|
|
2,066,012
|
|
INVESTMENTS IN
PARTNERSHIPS, at equity:
|
|
|
143,440
|
|
131,124
|
|
OTHER
ASSETS:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
11,709
|
|
18,084
|
|
Tenant and other
receivables, net
|
|
|
35,374
|
|
38,914
|
|
Intangible
assets
|
|
|
15,286
|
|
17,868
|
|
Deferred costs and
other assets, net
|
|
|
99,017
|
|
110,805
|
|
Assets held for
sale
|
|
|
9,463
|
|
22,307
|
|
Total
assets
|
|
$
|
2,334,046
|
$
|
2,405,114
|
|
LIABILITIES:
|
|
|
|
|
|
|
Mortgage loans
payable, net
|
|
$
|
904,641
|
$
|
1,047,906
|
|
Term Loans,
net
|
|
|
547,834
|
|
547,289
|
|
Revolving
Facilities
|
|
|
213,000
|
|
65,000
|
|
Tenants' deposits
and deferred rent
|
|
|
11,296
|
|
15,400
|
|
Distributions in
excess of partnership investments
|
|
|
87,554
|
|
92,057
|
|
Fair value of
derivative liabilities
|
|
|
16,324
|
|
3,010
|
|
Accrued expenses and
other liabilities
|
|
|
90,907
|
|
87,901
|
|
Total
liabilities
|
|
|
1,871,556
|
|
1,858,563
|
|
EQUITY:
|
|
|
|
|
|
|
Total
equity
|
|
|
462,490
|
|
546,551
|
|
Total liabilities and
equity
|
|
$
|
2,334,046
|
$
|
2,405,114
|
|
Changes in Funds from
Operations for the Three and Nine Months Ended September 30, 2019
as compared to the Three and Nine Months Ended September 30, 2018
(all per share amounts on a diluted basis unless otherwise noted;
rounded to the nearest half penny; amounts may not total due to
rounding)
|
|
|
(in
thousands, except per share amounts)
|
|
Three
Months
Ended
September
30,
2019
|
|
Per
Diluted
Share and
OP
Unit
|
|
Nine
Months
Ended
September
30,
2019
|
|
Per
Diluted
Share and
OP
Unit
|
|
Funds from
Operations, as adjusted September 30,
2018
|
|
$
|
26,978
|
$
|
0.35
|
$
|
79,830
|
$
|
1.02
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes - Q3 2018
to Q3 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contribution from
anchor replacements and new
box tenants
|
|
|
669
|
|
0.010
|
|
2,040
|
|
0.025
|
|
Impact from 2019
bankruptcies
|
|
|
(1,809)
|
|
(0.025)
|
|
(3,439)
|
|
(0.045)
|
|
Other leasing
activity, including base rent and net
CAM and real estate tax recoveries
|
|
|
(1,143)
|
|
(0.015)
|
|
(1,898)
|
|
(0.025)
|
|
Lease termination
revenue
|
|
|
(20)
|
|
-
|
|
(6,126)
|
|
(0.080)
|
|
Credit
losses
|
|
|
(776)
|
|
(0.010)
|
|
(140)
|
|
-
|
|
Other
|
|
|
49
|
|
-
|
|
536
|
|
0.005
|
|
Same Store NOI from
unconsolidated properties
|
|
|
(322)
|
|
(0.005)
|
|
(1,133)
|
|
(0.015)
|
|
Same Store
NOI
|
|
|
(3,352)
|
|
(0.045)
|
|
(10,160)
|
|
(0.130)
|
|
Non Same Store
NOI
|
|
|
(2,203)
|
|
(0.030)
|
|
(5,509)
|
|
(0.070)
|
|
Dilutive effect of
asset sales
|
|
|
-
|
|
-
|
|
(412)
|
|
(0.005)
|
|
General and
administrative expenses
|
|
|
(874)
|
|
(0.010)
|
|
(695)
|
|
(0.010)
|
|
Capitalization of
leasing costs
|
|
|
(1,290)
|
|
(0.015)
|
|
(4,755)
|
|
(0.060)
|
|
Gain on sales of
non-operating real estate
|
|
|
-
|
|
-
|
|
589
|
|
0.010
|
|
Other
|
|
|
(1,170)
|
|
(0.015)
|
|
(2,063)
|
|
(0.025)
|
|
Interest expense,
net
|
|
|
(297)
|
|
(0.005)
|
|
(832)
|
|
(0.010)
|
|
Increase in weighted
average shares
|
|
|
-
|
|
-
|
|
-
|
|
(0.010)
|
|
Funds from
Operations, as adjusted September 30,
2019
|
|
$
|
17,792
|
$
|
0.23
|
$
|
55,993
|
$
|
0.71
|
|
Insurance recoveries,
net
|
|
|
2,878
|
|
0.035
|
|
4,494
|
|
0.055
|
|
Gain on debt
extinguishment, net
|
|
|
29,600
|
|
0.380
|
|
24,832
|
|
0.315
|
|
Impairment of
development land parcel
|
|
|
-
|
|
-
|
|
(1,464)
|
|
(0.020)
|
|
Provision for
employee separation expense
|
|
|
(218)
|
|
(0.005)
|
|
(1,078)
|
|
(0.015)
|
|
Funds from
Operations September 30, 2019
|
|
$
|
50,052
|
$
|
0.63
|
$
|
82,777
|
$
|
1.05
|
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/preit-reports-third-quarter-2019-results-and-updates-full-year-expectations-300947572.html
SOURCE PREIT