INVESTMENTS IN PARTNERSHIPS

The following table presents summarized financial information of the equity investments in our unconsolidated partnerships as of June 30, 2016 and December 31, 2015:



(in thousands of dollars)	As of June 30, 2016			As of December 31, 2015
ASSETS:
Investments in real estate, at cost:
Operating properties	$	640,707		$	636,774
Construction in progress	143,538			126,199
Total investments in real estate	784,245			762,973
Accumulated depreciation	(196,458		)	(186,580		)
Net investments in real estate	587,787			576,393
Cash and cash equivalents	30,651			37,362
Deferred costs and other assets, net⁽¹⁾	38,951			39,890
Total assets	657,389			653,645
LIABILITIES AND PARTNERS’ INVESTMENT:
Mortgage loans payable⁽¹⁾	446,512			440,450
Other liabilities	24,957			30,425
Total liabilities	471,469			470,875
Net investment	185,920			182,770
Partners’ share	95,607			95,165
PREIT’s share	90,313			87,605
Excess investment⁽²⁾	7,949			7,877
Net investments and advances	$	98,262		$	95,482

Investment in partnerships, at equity	$	161,450		$	161,029
Distributions in excess of partnership investments	(63,188		)	(65,547		)
Net investments and advances	$	98,262		$	95,482

_________________________


⁽¹⁾	The December 31, 2015 balance has been adjusted in connection with the Company's adoption of ASU No. 2015-03 “Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs” (Note 1).


⁽²⁾	Excess investment represents the unamortized difference between our investment and our share of the equity in the underlying net investment in the partnerships. The excess investment is amortized over the life of the properties, and the amortization is included in “Equity in income of partnerships.”

We record distributions from our equity investments as cash from operating activities up to an amount equal to the equity in income of partnerships. Amounts in excess of our share of the income in the equity investments are treated as a return of partnership capital and recorded as cash from investing activities.

The following table summarizes our share of equity in income of partnerships for the three and six months ended June 30, 2016 and 2015:



	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands of dollars)	2016			2015			2016			2015
Real estate revenue	$	27,201		$	24,356		$	56,392		$	50,853
Operating expenses:
Property operating expenses	(6,908		)	(9,290		)	(17,022		)	(20,052		)
Interest expense	(5,384		)	(5,146		)	(10,776		)	(10,441		)
Depreciation and amortization	(5,804		)	(5,932		)	(11,527		)	(12,303		)
Total expenses	(18,096		)	(20,368		)	(39,325		)	(42,796		)
Net income	9,105			3,988			17,067			8,057
Less: Partners’ share	(4,883		)	(1,981		)	(9,099		)	(4,017		)
PREIT’s share	4,222			2,007			7,968			4,040
Amortization of and adjustments to excess investment	(30		)	25			107			74
Equity in income of partnerships	$	4,192		$	2,032		$	8,075		$	4,114

Significant Unconsolidated Subsidiary

One of our unconsolidated subsidiaries, Lehigh Valley Associates LP, the owner of the substantial majority of Lehigh Valley Mall, in which we have a 50% partnership interest, met the conditions of significant unconsolidated subsidiaries as of June 30, 2016. The financial information of this entity is included in the amounts above. Summarized balance sheet information as of June 30, 2016 and December 31, 2015 and summarized statement of operations information for the three and six months ended June 30, 2016 and 2015 for this entity, which is accounted for using the equity method, are as follows:



	As of
(in thousands of dollars)	June 30, 2016		December 31, 2015
Summarized balance sheet information
Total assets	$	49,228	$	48,352
Mortgage loan payable	127,719		128,883



	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands of dollars)	2016			2015			2016			2015
Summarized statement of operations information
Revenue	$	9,121		$	8,960		$	18,169		$	17,904
Property operating expenses	(1,956		)	(2,537		)	(4,183		)	(5,017		)
Interest expense	(1,897		)	(1,931		)	(3,803		)	(3,871		)
Net income	4,727			3,858			8,477			7,319
PREIT’s share of equity in income
of partnership	2,197			1,929			4,239			3,659