CORRECTING and REPLACING PREIT Reports Fourth Quarter and Full Year 2012 Results

Wed Feb 27, 2013 4:48pm EST

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PHILADELPHIA--(Business Wire)--
Please replace the release dated February 25, 2013 with the following corrected
version due to revisions to the "Primary Factors Affecting Financial Results"
bullets, as well as several edits to the definitions for FFO and NOI. 

The corrected release reads: 

PREIT REPORTS FOURTH QUARTER AND FULL YEAR 2012 RESULTS

Pennsylvania Real Estate Investment Trust (NYSE: PEI) today reported results for
the fourth quarter and full year ended December 31, 2012. 

"In 2012, we transformed PREIT, delivering a stronger balance sheet, improved
operating metrics, a higher quality portfolio and outstanding returns to our
shareholders," said Joseph F. Coradino, Chief Executive Officer. "We enter 2013
a stronger Company, and based on improvements in our operating performance, we
increased our dividend by 12.5%." 

The following tables set forth information regarding Funds From Operations
("FFO") and the adjustments to FFO related to a provision for employee
separation expense, accelerated amortization of deferred financing costs and the
loss on hedge ineffectiveness for the fourth quarter and full year 2012:

                                                                                                                                         
                                                                                                                                         
                                                                   Fourth Quarter                        Full Year                       
 (In millions, except per share amounts)                           2012                 2011             2012                2011        
 FFO                                                               $    29.7            $    36.0        $    95.6           $    105.6  
 Provision for employee separation expense                              3.7                  --               9.4                 --     
 Accelerated amortization of deferred financing costs                   0.7                  --               0.7                 --     
 Loss on hedge ineffectiveness                                          1.2                  --               1.2                 --     
 FFO, as adjusted                                                  $    35.2            $    36.0        $    106.9          $    105.6  
                                                                                                                                         
                                                                                                                                         


                                            Fourth Quarter                        Full Year                     
 Per Diluted Share and OP Unit              2012                 2011             2012               2011       
 FFO                                        $    0.51            $    0.63        $    1.63          $    1.84  
                                                                                                                
 FFO, as adjusted                           $    0.60            $    0.63        $    1.83          $    1.84  
                                                                                                                
                                                                                                                


Same store NOI excluding lease termination revenue for the quarter ended
December 31, 2012 was $76.5 million, compared to $75.1 million for the quarter
ended December 31, 2011. Lease termination revenue for the quarters ended
December 31, 2012 and December 31, 2011 was $0.1 million and $0.9 million,
respectively. Same store NOI excluding lease termination revenue for the year
ended December 31, 2012 was $268.7 million, compared to $264.6 million for the
year ended December 31, 2011. Lease termination revenue for the years ended
December 31, 2012 and December 31, 2011 was $1.8 million and $1.2 million,
respectively. Same store results represent results of retail properties owned
for the full periods presented, excluding properties acquired or disposed of or
classified as held for sale. A description of each non-GAAP financial measure
and the related reconciliation to the comparable GAAP measure are located at the
end of this press release. 

Net Operating Income ("NOI") for the quarter ended December 31, 2012 was $80.5
million, including discontinued operations, compared to $80.7 million for the
quarter ended December 31, 2011. NOI for the year ended December 31, 2012 was
$285.4 million, including discontinued operations, compared to $282.4 million
for the year ended December 31, 2011. 

Net loss attributable to PREIT common shareholders ("net loss") was $10.4
million, or $0.19 per diluted share, for the quarter ended December 31, 2012,
compared to a net loss of $0.6 million, or $0.01 per diluted share, for the
quarter ended December 31, 2011. Net loss for the year ended December 31, 2012
was $48.8 million, or $0.89 per diluted share, compared to a net loss of $90.2
million, or $1.66 per diluted share, for the year ended December 31, 2011. 

Primary Factors Affecting Financial Results

Results for the quarter ended December 31, 2012 reflect:

* A $3.7 million provision for employee separation expense; 
* A $3.8 million impairment charge related to the sale of Phillipsburg Mall; 
* Series A and Series B preferred share dividends of $3.8 million following the
issuance of such shares in April and October 2012, respectively, and the
dilutive effects of such issuances; 
* A $1.2 million loss on hedge ineffectiveness and accelerated amortization of
$0.7 million of deferred financing costs related to the anticipated or early
repayment of debt.

Results for the year ended December 31, 2012 included:

* $9.4 million in aggregate employee separation expense in connection with
separations or contract modification of executive officers and others; 
* Series A and Series B preferred share dividends of an aggregate $8.0 million
following the issuance of such shares in April and October 2012, respectively,
and the dilutive effects of such issuances; 
* A decrease of $7.9 million in interest expense resulting from lower overall
debt balances (from repayments following issuances of preferred shares) and
lower weighted average interest rates; and 
* An increase of $3.0 million in net operating income.

Results for the year ended December 31, 2011 included:

* Impairment charges of $52.3 million, including $28.0 million related to
Phillipsburg Mall in Phillipsburg, New Jersey and $24.1 million related to North
Hanover Mall in Hanover, Pennsylvania; 
* $1.6 million of gains on sales of real estate, of which $0.9 million is
included in FFO; and 
* $1.5 million in other income from a bankruptcy settlement related to the
Valley View Downs development in western Pennsylvania.

Financing Activities

In October 2012, the Company issued 3.45 million 7.375% Series B preferred
shares (NYSE: PEIPrB), and received net proceeds of approximately $83.3 million.
The Company used $58.0 million to permanently reduce borrowings under the 2010
Term Loan and $15.0 million of the net proceeds to repay the then-outstanding
amount under the Revolving Facility. In connection with this repayment, we
obtained the release of security interests in three properties. 

In December 2012, because our ratio of Total Liabilities to Gross Asset Value
had been less than 65% for two consecutive fiscal quarters, we were able to
exercise an Optional Amendment under the 2010 Credit Facility to amend certain
financial covenants in order to reduce the applicable marginal interest rates.
The terms have been revised to, among other things, (i) decrease the range of
interest rates to between 2.0% and 3.0% per annum over LIBOR depending on our
leverage, resulting in a reduction of 50 basis points in the rate that is
currently applicable, (ii) decrease the maximum permitted ratio of Total
Liabilities to Gross Asset Value from 70% to 65%, and (iii) increase the minimum
ratio of Adjusted EBITDA to Fixed Charges to 1.40:1. 

In February 2013, we refinanced the mortgages on Viewmont Mall, Lycoming Mall
and Francis Scott Key Mall in the aggregate amount of $146.1 million at an
average rate of 3.91% over terms of five years. These new loans generated excess
proceeds of approximately $9.7 million and reduced applicable interest rates by
172 basis points, after giving effect to interest rate swaps and forwards
entered into in connection with these loans. 

Asset Dispositions

In January 2013, we sold our interests in Paxton Towne Centre, Harrisburg,
Pennsylvania, for $76.8 million in cash. We used a portion of the proceeds to
repay a $50.0 million mortgage loan secured by the property, and the remaining
cash proceeds for debt reduction and general corporate purposes. We remain
subject to some contingent obligations of up to $3.3 million. We expect to
recognize a gain on sale from this transaction of approximately $32.7 million,
net of our contingent obligations, in the quarter ending March 31, 2013. 

In January 2013, we sold Phillipsburg Mall in Phillipsburg, New Jersey for $11.5
million in cash. In connection with this sale, we used the proceeds, together
with approximately $4.5 million of our cash, to pay the release price of this
property, which secured a portion of the 2010 Credit Facility. 

In February 2013, we sold Orlando Fashion Square in Orlando, Florida for $35.0
million in cash. In connection with this sale, we used the proceeds and a
nominal amount of cash to pay the release price of this property, which secured
a portion of the 2010 Credit Facility. We expect to recognize a gain on sale
from this transaction of approximately $0.6 million in the quarter ending March
31, 2013. 

Retail Operations

The following tables set forth information regarding sales per square foot and
occupancy in the Company`s same store retail portfolio, including properties
owned by partnerships in which the Company owns a 50% interest:

                                                                                                                                                                           
                                                                                                                                                                           
                                                                                           Twelve Months Ended:                                                            
                                                                                           December 31, 2012                                       December 31, 2011       
      Sales per square foot(1)                                                             $       378                                             $       370             
                                                                                                                                                                           
 (1)  Includes enclosed malls in the Company`s portfolio as of the respective dates, excluding held for                                                                    
      sale malls. Including such malls, sales per square foot were $372 and $365 on December 31, 2012                                                                      
      and 2011, respectively. Based on sales reported by tenants leasing 10,000 square feet or less of                                                                     
      non-anchor space for at least 24 months.                                                                                                                             
                                                                                                                                                                           
                                                                                           Occupancy as of:                                                                
                                                                                           December 31, 2012                                       December 31, 2011       
      Same Store Malls:                                                                                                                                                    
      Total including anchors                                                                      94.3    %                                               93.1    %       
      Total excluding anchors                                                                      91.7    %                                               90.3    %       
      Same Store Power and Strip Centers:                                                                                                                                  
      Total including anchors                                                                      94.0    %                                               92.1    %       
      Total excluding anchors                                                                      91.9    %                                               92.9    %       
      Held for Sale Properties:                                                                                                                                            
      Total including anchors                                                                      92.3    %                                               93.1    %       
      Total excluding anchors                                                                      84.1    %                                               85.8    %       
      Aggregate Total Occupancy:                                                                                                                                           
      Total including anchors                                                                      94.1    %                                               93.0    %       
      Total excluding anchors                                                                      91.1    %                                               90.2    %       
                                                                                                                                                                           
                                                                                                                                                                           


2013 Outlook

The Company estimates that net loss and FFO per diluted share will be as
follows:

                                                                                                                            
                                                                                                                            
 Estimates Per Diluted Share                                                  Lower End                  Upper End          
 FFO, as adjusted                                                             $     1.95                 $     2.05         
 Provision for employee separation expenses                                         (0.03  )                   (0.03  )     
 Accelerated amortization of deferred financing costs                               (0.01  )                   (0.01  )     
 FFO                                                                          $     1.91                 $     2.01         
 Depreciation and amortization (includes the Company`s proportionate                (2.42  )                   (2.45  )     
 share of unconsolidated properties), net of other adjustments                                                              
 Net loss attributable to PREIT common shareholders                           $     (0.51  )             $     (0.44  )     
                                                                                                                            
                                                                                                                            


Our 2013 guidance is based on our current assumptions and expectations about
market conditions, and 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. 

Our guidance incorporates the following assumptions, among others:

* 2013 same store NOI growth in the range of 1.5% to 3.0%, excluding lease
termination revenue; 
* Lease termination revenue of $1.5 million to $2.0 million; 
* $2.0 million of executive separation costs in the first two quarters of 2013
and $0.8 million of accelerated amortization of deferred financing costs in the
first quarter relating to the permanent reduction in the term loan using
proceeds from the non-core asset sales; 
* A decrease in general and administrative expenses of approximately 3%; 
* Interest rates on new and amended loans will be based on market spreads over
the current forward rates for LIBOR and 10-year U.S. Treasury Bonds; 
* Recurring capital expenditures and redevelopment capital expenditures will
both in the range of $35 to $45 million; 
* Aside from the completed 2013 sales of Paxton Towne Centre, Phillipsburg Mall
and Orlando Fashion Square, and the pending sale of Christiana Center, our
guidance does not contemplate any other material property dispositions or
acquisitions; and 
* Our guidance does not assume any capital market transactions, other than
mortgage refinancings in the ordinary course of business.

Conference Call Information

Management has scheduled a conference call for 11:00 a.m. Eastern Time on
February 26, 2013, to review the Company`s fourth quarter results and future
outlook. To listen to the call, please dial (877) 941-1427 (domestic) or (480)
629-9664 (international), at least five minutes before the scheduled start time,
and provide conference ID number 4589189. Investors can also access the call in
a "listen only" mode via the Internet at the Company website, www.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 interested individuals unable to join the conference call, a replay of the
call will be available through March 12, 2013 at (877) 870-5176 (domestic) or
(858) 384-5517 (international), (Replay reservation code: 4589189). The online
archive of the webcast will be available for 14 days following the call. 

About Pennsylvania Real Estate Investment Trust

Pennsylvania Real Estate Investment Trust, founded in 1960 and one of the first
equity REITs in the U.S., has a primary investment focus on retail shopping
malls. Currently, the Company's portfolio of 46 properties comprises 36 shopping
malls, seven community and power centers, and three development properties. The
Company`s properties are located in 13 states in the eastern half of the United
States, primarily in the Mid-Atlantic region. The operating retail properties
have approximately 31.0 million total square feet of space. PREIT, headquartered
in Philadelphia, Pennsylvania, is publicly traded on the NYSE under the symbol
PEI. The Company's website can be found at www.preit.com. 

Definitions

Funds From Operations ("FFO") 

The National Association of Real Estate Investment Trusts ("NAREIT") defines
Funds From Operations ("FFO"), which is a non-GAAP measure commonly used by
REITs, as net income excluding gains and losses on sales of operating
properties, extraordinary items (computed in accordance with GAAP) and
significant non-recurring events that materially distort the comparative
measurement of Company performance over time, plus real estate depreciation and
amortization; and after adjustments for unconsolidated partnerships and joint
ventures to reflect funds from operations on the same basis. 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. 

We use FFO and FFO per diluted share and unit of limited partnership interest in
our operating partnership ("OP Unit") 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 is a commonly used measure of operating performance
and profitability among REITs, and we use FFO and FFO per diluted share and OP
Unit as supplemental non-GAAP measures to compare our performance for different
periods to that of our industry peers. 

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. 

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, for the
three months and year ended December 31, 2012 and 2011 to show the effect of the
provision for employee separation expense, accelerated amortization of deferred
financing costs and loss on hedge ineffectiveness, which had a significant
effect on our results of operations, but are not, in our opinion, indicative of
our operating performance. 

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 its operating performance, such as provision for employee
separation expense. 

Net Operating Income ("NOI") 

NOI (a non-GAAP measure) is derived from real estate revenue (determined in
accordance with generally accepted accounting principles, or GAAP, including
lease termination revenue) minus operating expenses (determined in accordance
with GAAP), plus our share of revenue and operating expenses of our partnership
investments, and includes real estate revenue and operating expenses from
properties included in discontinued operations, if any. It 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 expense, interest expense, depreciation and amortization,
gains on sales of interests in real estate, gains on sales of non-operating real
estate, gains on sales of discontinued operations, gain on extinguishment of
debt, impairment losses, project costs and other expenses. 

Forward Looking Statements

This press release contains certain "forward-looking statements" within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. 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 uncertainties affecting real estate
businesses generally as well as the following, among other factors: our
substantial debt and our high leverage ratio; constraining leverage, interest
and tangible net worth covenants under our 2010 Credit Facility; potential
losses on impairment of certain long-lived assets, such as real estate, or of
intangible assets, such as goodwill; potential losses on impairment of assets
that we might be required to record in connection with any dispositions of
assets; recent changes to our corporate management team and any resulting
modifications to our business strategies; our ability to refinance our existing
indebtedness when it matures, on favorable terms or at all, due in part to the
effects on us of dislocations and liquidity disruptions in the capital and
credit markets; our ability to raise capital, including through the issuance of
equity or equity-related securities if market conditions are favorable, through
joint ventures or other partnerships, through sales of properties or interests
in properties, or through other actions; our short- and long-term liquidity
position; current economic conditions and their effect on employment, consumer
confidence and spending and the corresponding effects on tenant business
performance, prospects, solvency and leasing decisions and on our cash flows,
and the value and potential impairment of our properties; general economic,
financial and political conditions, including credit market conditions, changes
in interest rates or unemployment; changes in the retail industry, including
consolidation and store closings, particularly among anchor tenants; our ability
to maintain and increase property occupancy, sales and rental rates, in light of
the relatively high number of leases that have expired or are expiring in the
next two years; increases in operating costs that cannot be passed on to
tenants; risks relating to development and redevelopment activities; the effects
of online shopping and other uses of technology on our retail tenants;
concentration of our properties in the Mid-Atlantic region; changes in local
market conditions, such as the supply of or demand for retail space, or other
competitive factors; potential dilution from any capital raising transactions;
possible environmental liabilities; our ability to obtain insurance at a
reasonable cost; and existence of complex regulations, including those relating
to our status as a REIT, and the adverse consequences if we were to fail to
qualify as a REIT. 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 in the section of our
Annual Report on Form 10-K in the section entitled "Item 1A. Risk Factors." 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**

                                                                                                                                                                                                     
                                                                                                                                                                                                     
 Pennsylvania Real Estate Investment Trust                                                                                                                                                           
 
Selected Financial Data                                                                                                                                                                            
                                                                                                                                                                                                     
 STATEMENTS OF OPERATIONS                                                                  Quarter Ended                                         Year Ended                                          
 (In thousands, except per share amounts)                                                  December 31,                December 31,              December 31,                December 31,            
                                                                                           2012                        2011                      2012                        2011                    
 REVENUE:                                                                                                                                                                                            
 Real estate revenue:                                                                                                                                                                                
 Base rent                                                                                 $      74,426               $      73,068             $      276,524              $      271,314          
 Expense reimbursements                                                                           29,716                      30,716                    121,108                     125,250          
 Percentage rent                                                                                  3,615                       3,906                     5,714                       6,368            
 Lease termination revenue                                                                        62                          917                       1,760                       1,091            
 Other real estate revenue                                                                        6,667                       6,651                     16,542                      16,268           
 Real estate revenue                                                                              114,486                     115,258                   421,648                     420,291          
 Other income                                                                                     1,280                       1,004                     5,534                       6,712            
 Total revenue                                                                                    115,766                     116,262                   427,182                     427,003          
 EXPENSES:                                                                                                                                                                                           
 Property operating expenses:                                                                                                                                                                        
 CAM and real estate tax                                                                          (34,318   )                 (33,824   )               (135,049  )                 (133,850  )      
 Utilities                                                                                        (4,674    )                 (5,578    )               (22,198   )                 (24,265   )      
 Other                                                                                            (5,694    )                 (6,860    )               (20,677   )                 (22,611   )      
 Total operating expenses                                                                         (44,686   )                 (46,262   )               (177,924  )                 (180,726  )      
 Depreciation and amortization                                                                    (33,894   )                 (32,345   )               (129,459  )                 (129,704  )      
 Other expenses:                                                                                                                                                                                     
 General and administrative expenses                                                              (8,720    )                 (10,390   )               (37,538   )                 (38,901   )      
 Provision for employee separation expenses                                                       (3,683    )                 -                         (9,437    )                 -                
 Impairment of assets                                                                             -                           -                         -                           (24,359   )      
 Project costs and other expenses                                                                 (1,159    )                 (532      )               (1,936    )                 (964      )      
 Total other expenses                                                                             (13,562   )                 (10,922   )               (48,911   )                 (64,224   )      
 Interest expense, net                                                                            (30,587   )                 (30,885   )               (122,118  )                 (127,148  )      
 Total expenses                                                                                   (122,729  )                 (120,414  )               (478,412  )                 (501,802  )      
                                                                                                                                                                                                     
 Loss before equity in income of partnerships                                                     (6,963    )                 (4,152    )               (51,230   )                 (74,799   )      
 Equity in income of partnerships                                                                 2,229                       2,021                     8,338                       6,635            
 Gains on sales of real estate                                                                    -                           140                       -                           1,590            
 Net loss from continuing operations                                                              (4,734    )                 (1,991    )               (42,892   )                 (66,574   )      
 Discontinued operations:                                                                                                                                                                            
 Operating results from discontinued operations                                                   720                         1,411                     3,200                       616              
 Impairment of assets of discontinued operations                                                  (3,805    )                 -                         (3,805    )                 (27,977   )      
 Gains on sales of discontinued operations                                                        947                         -                         947                         -                
 (Loss) income from discontinued operations                                                       (2,138    )                 1,411                     342                         (27,361   )      
 Net loss                                                                                         (6,872    )                 (580      )               (42,550   )                 (93,935   )      
 Less: net loss attributed to noncontrolling interest                                             273                         23                        1,713                       3,774            
 Net loss attributable to Pennsylvania Real Estate Investment Trust                               (6,599    )                 (557      )               (40,837   )                 (90,161   )      
 Less: preferred share dividends                                                                  (3,768    )                 -                         (7,984    )                 -                
 Net loss attributable to Pennsylvania Real Estate Investment Trust                                                                                                                                  
 common shareholders                                                                       $      (10,367   )          $      (557      )        $      (48,821   )          $      (90,161   )      
                                                                                                                                                                                                     
 Basic loss per share - Pennsylvania Real Estate Investment Trust                          $      (0.19     )          $      (0.01     )        $      (0.89     )          $      (1.66     )      
 Diluted loss per share - Pennsylvania Real Estate Investment Trust (1)                    $      (0.19     )          $      (0.01     )        $      (0.89     )          $      (1.66     )      
                                                                                                                                                                                                     
 Weighted average number of shares outstanding for diluted EPS                                    55,247                      54,717                    55,122                      54,639           
                                                                                                                                                                                                     
 (1) For the three and twelve month periods ended December 31, 2012 and 2011, respectively, there are net losses from continuing operations, so the effect of common share equivalents is excluded from the calculation of diluted loss per share for these periods. 
                                                                                                                                                                                                     
 OTHER COMPREHENSIVE LOSS                                                                  Quarter Ended                                         Year Ended                                          
 (In thousands)                                                                            December 31,                December 31,              December 31,                December 31,            
                                                                                           2012                        2011                      2012                        2011                    
                                                                                                                                                                                                     
 Net loss                                                                                  $      (6,872    )          $      (580      )        $      (42,550   )          $      (93,935   )      
 Unrealized gain on derivatives                                                                   4,063                       3,410                     11,370                      6,118            
 Other                                                                                            1,622                       344                       2,419                       24               
 Total comprehensive loss                                                                         (1,187    )                 3,174                     (28,761   )                 (87,793   )      
 Less: Comprehensive income attributable to noncontroling interest                                43                          (129      )               1,156                       3,526            
 Comprehensive loss attributable to Pennsylvania Real Estate Investment Trust              $      (1,144    )          $      3,045              $      (27,605   )          $      (84,267   )      
                                                                                                                                                                                                     
                                                                                                                                                                                                     


                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                              
 Pennsylvania Real Estate Investment Trust                                                                                                                                                                                                                                                                    
 
Selected Financial Data                                                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                                                                                              
                                                                      Quarter Ended December 31, 2012                                                                                          Quarter Ended December 31, 2011                                                                                
 RECONCILIATION OF NOI AND FFO TO NET LOSS                                                                                                                                                                                                                                                                    
                                                                      Consolidated                   PREIT's Share                    Discontinued                  Total                      Consolidated                   PREIT's Share                    Discontinued                  Total            
                                                                                                     unconsolidated                   operations                                                                              unconsolidated                   operations                                     
                                                                                                     partnerships                                                                                                             partnerships                                                                    
 (In thousands, except per share amounts)                                                                                                                                                                                                                                                                     
 Real estate revenue(1)                                               $      114,486                 $       9,910                    $      7,140                  $   131,536                $      115,258                 $       9,975                    $      7,874                  $   133,107      
 Operating expenses                                                          (44,686  )                      (3,013   )                      (3,315  )                  (51,014  )                    (46,262  )                      (2,917   )                      (3,213  )                  (52,392  )   
 NET OPERATING INCOME                                                        69,800                          6,897                           3,825                      80,522                        68,996                          7,058                           4,661                      80,715       
 General and administrative expenses                                         (8,720   )                      -                               -                          (8,720   )                    (10,390  )                      -                               -                          (10,390  )   
 Provision for employee separation expenses                                  (3,683   )                      -                                                          (3,683   )                    -                               -                               -                          -            
 Other income                                                                1,280                           -                               -                          1,280                         1,004                           -                               -                          1,004        
 Project costs and other expenses                                            (1,159   )                                                      -                          (1,159   )                    (532     )                      -                               -                          (532     )   
 Interest expense, net                                                       (30,587  )                      (2,809   )                      (1,171  )                  (34,567  )                    (30,885  )                      (2,828   )                      (970    )                  (34,683  )   
 Gains on sales of non-operating real estate                                 -                               -                               -                          -                             140                             -                               -                          140          
 Depreciation on non real estate assets                                      (220     )                      -                               -                          (220     )                    (228     )                      -                               -                          (228     )   
 Preferred share dividends                                                   (3,768   )                      -                                                          (3,768   )                    -                               -                               -                          -            
 FUNDS FROM OPERATIONS                                                       22,943                          4,088                           2,654                      29,685                        28,105                          4,230                           3,691                      36,026       
 Depreciation on real estate assets                                          (33,674  )                      (1,859   )                      (1,934  )                  (37,467  )                    (32,117  )                      (2,209   )                      (2,280  )                  (36,606  )   
 Equity in income of partnerships                                            2,229                           (2,229   )                      -                          -                             2,021                           (2,021   )                      -                          -            
 Operating results from discontinued operations                              720                             -                               (720    )                  -                             1,411                           -                               (1,411  )                  -            
 Impairment of assets of discontinued operations                             (3,805   )                      -                                                          (3,805   )                    -                               -                               -                          -            
 Gain on sales of discontinued operations                                    947                             -                               -                          947                           -                                                               -                          -            
 Preferred share dividends                                                   3,768                           -                               -                          3,768                         -                               -                               -                          -            
 Net Loss                                                             $      (6,872   )              $       -                        $      -                      $   (6,872   )             $      (580     )              $       -                        $      -                      $   (580     )   
                                                                                                                                                                                                                                                                                                              
 (1) Total includes the non-cash effect of straight-line rent                                                                                                                                                                                                                                                 
             of $938 and $186 for the quarters ended December 31, 2012 and                                                                                                                                                                                                                                    
             2011, respectively.                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                 -            
 Weighted average number of shares outstanding                                                                                                                          55,247                                                                                                                   54,717       
 Weighted average effect of full conversion of OP Units                                                                                                                 2,301                                                                                                                    2,329        
 Effect of common share equivalents                                                                                                                                     1,149                                                                                                                    369          
 Total weighted average shares outstanding, including OP Units                                                                                                          58,697                                                                                                                   57,415       
                                                                                                                                                                                                                                                                                                              
 FUNDS FROM OPERATIONS                                                                                                                                              $   29,685                                                                                                               $   36,026       
 Provision for employee separation expenses                                                                                                                             3,683                                                                                                                    -            
 Accelerated amortization of deferred financing costs                                                                                                                   690                                                                                                                      -            
 Loss on hedge ineffectiveness                                                                                                                                          1,162                                                                                                                    -            
 FUNDS FROM OPERATIONS AS ADJUSTED                                                                                                                                  $   35,220                                                                                                               $   36,026       
 Accelerated amortization of deferred financing costs                                                                                                                                                                                                                                                         
 FUNDS FROM OPERATIONS PER DILUTED SHARE AND OP UNIT                                                                                                                $   0.51                                                                                                                 $   0.63         
 FUNDS FROM OPERATIONS PER DILUTED SHARE AND OP UNIT AS ADJUSTED                                                                                                    $   0.60                                                                                                                 $   0.63         
                                                                                                                                                                                                                                                                                                              
 SAME STORE RECONCILIATION                                            Quarter Ended December 31,                                                                                                                                                                                                              
                                                                      Same Store                                                      Non-Same Store                                           Total                                                                                                          
                                                                      2012                           2011                             2012                          2011                       2012                           2011                                                                            
 Real estate revenue                                                  $      123,863                 $       124,743                  $      7,673                  $   8,364                  $      131,536                 $       133,107                                                                 
 Operating expenses                                                          (47,284  )                      (48,752  )                      (3,730  )                  (3,640   )                    (51,014  )                      (52,392  )                                                              
 NET OPERATING INCOME (NOI)                                           $      76,579                  $       75,991                   $      3,943                  $   4,724                  $      80,522                  $       80,715                                                                  
 Less: Lease termination revenue                                             78                              941                             -                          80                            78                              1,021                                                                   
 NOI - EXCLUDING LEASE TERMINATION REVENUE                            $      76,501                  $       75,050                   $      3,943                  $   4,644                  $      80,444                  $       79,694                                                                  


                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                      
 Pennsylvania Real Estate Investment Trust                                                                                                                                                                                                                                                                                            
 
Selected Financial Data                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                                                      
                                                                                      Year Ended December 31, 2012                                                                                                 Year Ended December 31, 2011                                                                                       
 RECONCILIATION OF NOI AND FFO TO NET LOSS                                            Consolidated                    PREIT's Share                     Discontinued                   Total                       Consolidated                    PREIT's Share                     Discontinued                   Total             
                                                                                                                      unconsolidated                    operations                                                                                 unconsolidated                    operations                                       
                                                                                                                      partnerships                                                                                                                 partnerships                                                                       
 (In thousands, except per share amounts)                                                                                                                                                                                                                                                                                             
 Real estate revenue(1)                                                               $      421,648                  $       38,471                    $      27,339                  $   487,458                 $      420,291                  $       37,834                    $      29,557                  $   487,682       
 Operating expenses                                                                          (177,924  )                      (11,477   )                      (12,674  )                  (202,075  )                    (180,726  )                      (11,455   )                      (13,107  )                  (205,288  )   
 NET OPERATING INCOME                                                                        243,724                          26,994                           14,665                      285,383                        239,565                          26,379                           16,450                      282,394       
 General and administrative expenses                                                         (37,538   )                      -                                -                           (37,538   )                    (38,901   )                      -                                -                           (38,901   )   
 Provision for employee separation expenses                                                  (9,437    )                      -                                -                           (9,437    )                    -                                -                                                            -             
 Other income                                                                                5,534                            -                                -                           5,534                          6,712                            -                                -                           6,712         
 Project costs and other expenses                                                            (1,936    )                      (2        )                      -                           (1,938    )                    (964      )                      -                                -                           (964      )   
 Interest expense, net                                                                       (122,118  )                      (11,258   )                      (4,202   )                  (137,578  )                    (127,148  )                      (11,341   )                      (5,108   )                  (143,597  )   
 Gains on sales of non-operating real estate                                                 -                                -                                -                           -                              850                              -                                -                           850           
 Depreciation on non real estate assets                                                      (825      )                      -                                -                           (825      )                    (909      )                      -                                -                           (909      )   
 Preferred share dividends                                                                   (7,984    )                      -                                -                           (7,984    )                    -                                -                                -                           -             
 FUNDS FROM OPERATIONS                                                                       69,420                           15,734                           10,463                      95,617                         79,205                           15,038                           11,342                      105,585       
 Gains on sales of real estate                                                               -                                -                                -                           -                              740                              -                                -                           740           
 Depreciation on real estate assets                                                          (128,634  )                      (7,396    )                      (7,263   )                  (143,293  )                    (128,795  )                      (8,403    )                      (10,726  )                  (147,924  )   
 Impairment of assets                                                                        -                                -                                -                           -                              (24,359   )                      -                                -                           (24,359   )   
 Equity in income of partnerships                                                            8,338                            (8,338    )                      -                           -                              6,635                            (6,635    )                      -                           -             
 Operating results from discontinued operations                                              3,200                                                             (3,200   )                  -                              616                                                               (616     )                  -             
 Impairment of assets of discontinued operations                                             (3,805    )                      -                                -                           (3,805    )                    (27,977   )                      -                                -                           (27,977   )   
 Gain on sales of discontinued operations                                                    947                              -                                -                           947                            -                                -                                -                           -             
 Preferred share dividends                                                                   7,984                            -                                -                           7,984                          -                                -                                                            -             
 Net Loss                                                                             $      (42,550   )              $       -                         $      -                       $   (42,550   )             $      (93,935   )              $       -                         $      -                       $   (93,935   )   
                                                                                                                                                                                                                                                                                                                                      
 (1) Total includes the non-cash effect of straight-line rent of                                                                                                                                                                                                                                                                      
           $2,171 and $98 for the years ended December 31, 2012 and 2011,                                                                                                                                                                                                                                                             
           respectively.                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                      
 Weighted average number of shares outstanding                                                                                                                                             55,122                                                                                                                       54,639        
 Weighted average effect of full conversion of OP Units                                                                                                                                    2,310                                                                                                                        2,329         
 Effect of common share equivalents                                                                                                                                                        1,131                                                                                                                        502           
 Total weighted average shares outstanding, including OP Units                                                                                                                             58,563                                                                                                                       57,470        
                                                                                                                                                                                                                                                                                                                                      
 FUNDS FROM OPERATIONS                                                                                                                                                                 $   95,617                                                                                                                   $   105,585       
 Provision for employee separation expenses                                                                                                                                                9,437                                                                                                                        -             
 Accelerated amortization of deferred financing costs                                                                                                                                      690                                                                                                                          -             
 Loss on hedge ineffectiveness                                                                                                                                                             1,162                                                                                                                        -             
 FUNDS FROM OPERATIONS AS ADJUSTED                                                                                                                                                     $   106,906                                                                                                                  $   105,585       
                                                                                                                                                                                                                                                                                                                                      
 FUNDS FROM OPERATIONS PER DILUTED SHARE AND OP UNIT                                                                                                                                   $   1.63                                                                                                                     $   1.84          
 FUNDS FROM OPERATIONS PER DILUTED SHARE AND OP UNIT AS ADJUSTED                                                                                                                       $   1.83                                                                                                                     $   1.84          
                                                                                                                                                                                                                                                                                                                                      
 SAME STORE RECONCILIATION                                                            Year Ended December 31,                                                                                                                                                                                                                         
                                                                                      Same Store                                                        Non-Same Store                                             Total                                                                                                              
                                                                                      2012                            2011                              2012                           2011                        2012                            2011                                                                               
 Real estate revenue                                                                  $      458,135                  $       456,224                   $      29,323                  $   31,458                  $      487,458                  $       487,682                                                                    
 Operating expenses                                                                          (187,629  )                      (190,429  )                      (14,446  )                  (14,859   )                    (202,075  )                      (205,288  )                                                                
 NET OPERATING INCOME (NOI)                                                           $      270,506                  $       265,795                   $      14,877                  $   16,599                  $      285,383                  $       282,394                                                                    
 Less: Lease termination revenue                                                             1,834                            1,168                            68                          769                            1,902                            1,937                                                                      
 NOI - EXCLUDING LEASE TERMINATION REVENUE                                            $      268,672                  $       264,627                   $      14,809                  $   15,830                  $      283,481                  $       280,457                                                                    
                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                      


                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
 Pennsylvania Real Estate Investment Trust                                                                                                                                                                                
 
Selected Financial Data                                                                                                                                                                                                 
                                                                                                                                                                                                                          
 CONSOLIDATED BALANCE SHEETS                                                                                                                                                                                              
                                                                                                                                                        December 31, 2012                      December 31, 2011          
 (In thousands)                                                                                                                                                                                                           
 ASSETS:                                                                                                                                                                                                                  
          INVESTMENTS IN REAL ESTATE, at cost:                                                                                                                                                                            
                                    Operating properties                                                                                                $       3,395,681                      $       3,470,167          
                                    Construction in progress                                                                                                    68,619                                 91,538             
                                    Land held for development                                                                                                   13,240                                 15,292             
                                                                          Total investments in real estate                                                      3,477,540                              3,576,997          
                                    Accumulated depreciation                                                                                                    (907,928   )                           (844,010   )       
                                    Net investments in real estate                                                                                              2,569,612                              2,732,987          
                                                                                                                                                                                                                          
          INVESTMENTS IN PARTNERSHIPS, at equity:                                                                                                               14,855                                 16,009             
                                                                                                                                                                                                                          
          OTHER ASSETS:                                                                                                                                                                                                   
                                    Cash and cash equivalents                                                                                                   33,990                                 21,798             
                                    Tenant and other receivables (net of allowance for doubtful accounts of                                                                                                               
                                                                          $14,042 and $17,930 at December 31, 2012 and 2011, respectively)                      38,473                                 39,832             
                                    Intangible assets (net of accumulated amortization of $14,940 and                                                                                                                     
                                                                          $51,625 at December 31, 2012 and 2011, respectively)                                  8,673                                  9,921              
                                    Deferred costs and other assets, net                                                                                        97,399                                 89,707             
                                    Assets held for sale                                                                                                        114,622                                -                  
                                                                          Total assets                                                                  $       2,877,624                      $       2,910,254          
                                                                                                                                                                                                                          
 LIABILITIES:                                                                                                                                                                                                             
          Mortgage loans (including debt premium of $282 at December 31, 2011)                                                                          $       1,718,052                      $       1,691,381          
          Exchangeable Notes (net of debt discount of $849 at December 31, 2011)                                                                                -                                      136,051            
          Term loans                                                                                                                                            182,000                                240,000            
          Revolving facility                                                                                                                                    -                                      95,000             
          Tenants' deposits and deferred rent                                                                                                                   14,862                                 13,278             
          Distributions in excess of partnership investments                                                                                                    64,874                                 64,938             
          Fair value of derivative liabilities                                                                                                                  9,742                                  21,112             
          Liabilities on assets held for sale                                                                                                                   102,417                                -                  
          Accrued expenses and other liabilities                                                                                                                72,448                                 60,456             
                                    Total liabilities                                                                                                           2,164,395                              2,322,216          
                                                                                                                                                                                                                          
 EQUITY:                                                                                                                                                        713,229                                588,038            
                                                                                                                                                                                                                          
                                                                          Total liabilities and equity                                                  $       2,877,624                      $       2,910,254          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          


Pennsylvania Real Estate Investment Trust
Robert McCadden, 215-875-0735
EVP & CFO 



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