Pan Pacific Retail Properties Reports Strong 2nd Quarter Results; 9% Increase in Funds From Operations Per Share to $0.73

Business Wire, August 1, 2002

The White Paper on Funds from Operations approved by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT") in March 1995 (the "White Paper") defines Funds from Operations as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from debt restructuring and sales of property, plus real estate related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. Management considers Funds from Operations an appropriate measure of performance of an equity REIT because it is predicated on cash flow analyses. The company computes Funds from Operations in accordance with standards established by the White Paper, except that one-time merger related expenses are excluded for comparability from period to period. The company's computation of Funds from Operations may, however, differ from the methodology for calculating Funds from Operations utilized by other equity REITs and, therefore, may not be comparable to such other REITs. Funds from Operations should not be considered as an alternative to net income (determined in accordance with GAAP) as a measure of the company's liquidity, nor is it indicative of funds available to fund the company's cash needs, including its ability to make distributions.

The company also cautions that the calculation of Funds Available for Distribution (FAD) may vary from entity to entity and, as such, the presentation of FAD by the company may not be comparable to other similarly titled measures of other equity REITs. FAD does not represent cash generated from operating activities in accordance with generally accepted accounting principles; is not necessarily indicative of cash available to fund the company's cash needs; and should not be considered as an alternative to cash flow as a measure of liquidity.