** **

**FORM10-Q**

**QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF**

**THE SECURITIES EXCHANGE ACT OF 1934**

** **

** **

**UNITEDSTATES**

**SECURITIESAND EXCHANGE COMMISSION**

**Washington, D.C.20549**

**FORM 10-Q**

 

 

 

(Mark One)

ý                              **QUARTERLYREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**For the quarterly period ended   June 30, 2002**

 

**or**

 

o                              **TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**For the transition period from                     to                   **

 

**Commission file Number    1-12286**

 

 

**Mid-Atlantic Realty Trust**

(Exact Name of Registrantas Specified in its Charter)

 

 

| **Maryland**                                                                        |   | **52-1832411**                        |
|-------------------------------------------------------------------------------------|--------|---------------------------------------|
| (State or Other  Jurisdiction of Incorporation or Organization)                     |   | (I.R.S. Employer  Identification No.) |
|                                                                                |   |                                  |
| **170  West Ridgely Road, Suite 300 - Lutherville, Maryland**                       |   | **21093**                             |
| (Address of Principal  Executive Offices)                                           |   | (Zip Code)                            |
|                                                                                |   |                                  |
| Registrant’s Telephone  Number, Including Area Code                            |   | **(410)  684-2000**                   |
|                                                                                |   |                                  |
|                                                                                |   |                                  |
| (Former Name, Former  Address and Former Fiscal Year, if Changed Since Last Report) |

 

Indicate by check mark whether the registrant (1) has filed all reportsrequired to be filed by Section 13 or 15 (d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject to suchfiling requirements for the past 90 days.

 

ý  Yes     o  No

 

 

17,775,872 Common Shareswere outstanding as of July 25, 2002*.*

 

 

----

 

## **MID-ATLANTIC REALTYTRUST**

**AND SUBSIDIARIES**

 

 

### **Part I.                     FINANCIAL INFORMATION**

 

 

**Item 1.                    CONSOLIDATEDFINANCIAL STATEMENTS**

 

**                                                CONSOLIDATED BALANCE SHEETS**

 

**                                                CONSOLIDATEDSTATEMENTS OF OPERATIONS**

 

**                                                CONSOLIDATEDSTATEMENTS OF CASH FLOWS**

 

**                                                NOTES TOCONSOLIDATED FINANCIAL STATEMENTS**

 

**Item 2.****                                                          ****MANAGEMENT’SDISCUSSION AND ANAYLSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

 

**Item3.                    QUANTITATIVEAND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

 

 

 

**PartII.                   OTHERINFORMATION**

 

 

**                Item 1.                    LEGALPROCEEDINGS**

 

**                Item2.                    CHANGESIN SECURITIES AND USE OF PROCEEDS**

 

**                Item 3.                    DEFAULTS UPONSENIOR SECURITIES**

 

**                Item4.                    SUBMISSIONOF MATTERS TO A VOTE OF SECURITY HOLDERS**

 

**                Item 5.                    OTHERINFORMATION**

 

**                Item 6.                    EXHIBITS ANDREPORTS ON FORM 8-K**

 

 

2

----

 

**MID-ATLANTIC REALTY TRUST AND SUBSIDIARIES**

**ConsolidatedBalance Sheets**

 
|                                                                                                                                                       |   | **As of**          |            |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|-----------------|
|                                                                                                                                                       |   | **June  30, 2002** |            | **December 31, 2001** |   |
|                                                                                                                                                       |   | **(UNAUDITED)**    |            |   |   |
| **ASSETS**                                                                                                                                                 |   |               |            |   |   |
|                                                                                                                                                       |   |               |            |   |   |
| **Properties:**                                                                                                                                            |   |               |            |   |   |
| Operating properties                                                                                                                                       |   | **$**              | **455,732,682** |   | 441,313,588 |   |
| Less accumulated depreciation and amortization                                                                                                             |   | **87,297,768**     |            | 81,465,520 |   |
|                                                                                                                                                       |   | **368,434,914**    |            | 359,848,068 |   |
| Properties in development                                                                                                                                  |   | **11,072,461**     |            | 16,010,962 |   |
| Properties held for development or sale                                                                                                                    |   | **3,288,171**      |            | 3,288,171 |   |
|                                                                                                                                                       |   | **382,795,546**    |            | 379,147,201 |   |
|                                                                                                                                                       |   |               |            |   |   |
| Cash and cash equivalents                                                                                                                                  |   | **2,830,730**      |            | 2,602,202 |   |
| Notes and accounts receivable - tenants and other                                                                                                          |   | **1,804,381**      |            | 2,304,973 |   |
| Prepaid expenses and deposits                                                                                                                              |   | **1,679,357**      |            | 3,270,013 |   |
| Deferred financing costs, net                                                                                                                              |   | **2,050,171**      |            | 2,239,174 |   |
|                                                                                                                                                       |   | **$**              | **391,160,185** |   | 389,563,563 |   |
|                                                                                                                                                       |   |               |            |   |   |
| **LIABILITIES AND SHAREHOLDERS' EQUITY**                                                                                                                   |   |               |            |   |   |
|                                                                                                                                                       |   |               |            |   |   |
| **Liabilities:**                                                                                                                                           |   |               |            |   |   |
| Accounts payable and accrued expenses                                                                                                                      |   | **$**              | **6,539,510**   |   | 9,269,339 |   |
| Notes payable                                                                                                                                              |   | **32,000,000**     |            | 42,500,000 |   |
| Construction loans payable                                                                                                                                 |   | **16,110,542**     |            | 24,387,289 |   |
| Mortgages payable                                                                                                                                          |   | **161,614,702**    |            | 170,270,077 |   |
| Convertible subordinated debentures                                                                                                                        |   | **2,784,000**      |            | 4,784,000 |   |
| Deferred income                                                                                                                                            |   | **137,671**        |            | 938,596 |   |
|                                                                                                                                                       |   | **219,186,425**    |            | 252,149,301 |   |
|                                                                                                                                                       |   |               |            |   |   |
| Minority interest in consolidated joint ventures                                                                                                           |   | **32,338,194**     |            | 32,819,374 |   |
|                                                                                                                                                       |   |               |            |   |   |
| **Shareholders' equity:**                                                                                                                                  |   |               |            |   |   |
| Preferred shares of beneficial interest, $.01 par value, authorized2,000,000 shares, issued and outstanding, none                                          |   | **-**              |            | - |   |
| Common shares of beneficial interest, $.01 par value, authorized100,000,000 shares, issued and outstanding  17,772,063 and 15,103,221 shares, respectively |   | **177,721**        |            | 151,032 |   |
| Additional paid-in capital                                                                                                                                 |   | **174,728,591**    |            | 138,267,358 |   |
| Distributions in excess of accumulated earnings                                                                                                            |   | **(35,270,746**    | )               | (33,823,502 | ) |
|                                                                                                                                                       |   | **139,635,566**    |            | 104,594,888 |   |
|                                                                                                                                                       |   |               |            |   |   |
|                                                                                                                                                       |   | **$**              | **391,160,185** |   | 389,563,563 |   |

 

*See accompanying notes to consolidated financialstatements.*

 

3

----

 

**MID-ATLANTICREALTY TRUST AND SUBSIDIARIES**

**ConsolidatedStatements of Operations**

**(UNAUDITED)**

 
|                                                      |   | **Three  months ended June 30,** |           | **Six  months ended June 30,** |       |
|-----------------------------------------------------------|--------|----------------------------------|----------------|--------------------------------|------------|
|                                                      |   | **2002**                         |           | **2001**                       |       | **2002** |   | **2001** |   |
|                                                      |   |                             |           |                           |       |   |   |   |   |
| **REVENUES:**                                             |   |                             |           |                           |       |   |   |   |   |
| Minimum rents                                             |   | **$**                            | **13,952,481** |                           | 12,366,616 | ** ** | **26,662,755** |   | 24,609,892 |   |
| Percentage rents                                          |   | **341,844**                      |           | 256,875                        | ** ** | **698,576** |   | 592,716 |   |
| Tenant recoveries                                         |   | **2,841,853**                    |           | 2,518,903                      | ** ** | **5,494,934** |   | 4,970,368 |   |
| Other                                                     |   | **76,768**                       |           | 129,203                        | ** ** | **252,229** |   | 212,461 |   |
|                                                      |   | **17,212,946**                   |           | 15,271,597                     | ** ** | **33,108,494** |   | 30,385,437 |   |
|                                                      |   |                             |           |                           |       |   |   |   |   |
| **EXPENSES:**                                             |   |                             |           |                           |       |   |   |   |   |
| Interest                                                  |   | **4,124,453**                    |           | 4,362,712                      | ** ** | **8,318,724** |   | 8,718,715 |   |
| Depreciation and amortizationof property and improvements |   | **2,982,990**                    |           | 2,741,217                      | ** ** | **5,889,459** |   | 5,374,922 |   |
| Operating                                                 |   | **3,584,921**                    |           | 3,288,164                      | ** ** | **7,018,203** |   | 6,379,884 |   |
| General and administrative                                |   | **974,482**                      |           | 729,315                        | ** ** | **1,693,396** |   | 1,540,031 |   |
|                                                      |   | **11,666,846**                   |           | 11,121,408                     | ** ** | **22,919,782** |   | 22,013,552 |   |
|                                                      |   |                             |           |                           |       |   |   |   |   |
| **EARNINGS FROM OPERATIONS****BEFORE MINORITY INTEREST**  |   | **5,546,100**                    |           | 4,150,189                      | ** ** | **10,188,712** |   | 8,371,885 |   |
|                                                      |   |                             |           |                           |       |   |   |   |   |
| Minority Interest                                         |   | **(934,643**                     | **)**          | (888,729                       | )          | **(1,799,115** | **)** | (1,815,761 | ) |
|                                                      |   |                             |           |                           |       |   |   |   |   |
| **EARNINGS BEFORE EXTRAORDINARY LOSS**                    |   | **4,611,457**                    |           | 3,261,460                      | ** ** | **8,389,597** |   | 6,556,124 |   |
|                                                      |   |                             |           |                           |       |   |   |   |   |
| Extraordinary loss from early extinguishment of debt      |   | **(108,953**                     | **)**          | -                              | ** ** | **(108,953** | **)** | - |   |
|                                                      |   |                             |           |                           |       |   |   |   |   |
| **NET EARNINGS**                                          |   | **$**                            | **4,502,504**  |                           | 3,261,460  | ** ** | **8,280,644** |   | 6,556,124 |   |
|                                                      |   |                             |           |                           |       |   |   |   |   |
| **NET EARNINGS PER SHARE - BASIC:**                       |   |                             |           |                           |       |   |   |   |   |
| Earnings before extraordinary loss                        |   | **$**                            | **0.26**       |                           | 0.22       | ** ** | **0.50** |   | 0.46 |   |
| Extraordinary loss from early extinguishment of debt      |   | **(0.01**                        | **)**          | -                              | ** ** | **(0.01** | **)** | - |   |
| Net earnings                                              |   | **$**                            | **0.25**       |                           | 0.22       | ** ** | **0.49** |   | 0.46 |   |
|                                                      |   |                             |           |                           |       |   |   |   |   |
| **NET EARNINGS PER SHARE - DILUTED:**                     |   |                             |           |                           |       |   |   |   |   |
| Earnings before extraordinary loss                        |   | **$**                            | **0.26**       |                           | 0.22       | ** ** | **0.50** |   | 0.45 |   |
| Extraordinary loss from early extinguishment of debt      |   | **(0.01**                        | **)**          | -                              | ** ** | **(0.01** | **)** | - |   |
| Net earnings                                              |   | **$**                            | **0.25**       |                           | 0.22       | ** ** | **0.49** |   | 0.45 |   |

 

*See accompanying notes to consolidated financial statements.*

 

4

----

 

**MID-ATLANTICREALTY TRUST AND SUBSIDIARIES**

**Consolidated Statements of Cash Flows**

**(UNAUDITED)**

 
|                                                                               |   | **Six  months ended June 30,** |          |
|------------------------------------------------------------------------------------|--------|--------------------------------|---------------|
|                                                                               |   | **2002**                       |          | **2001** |   |
|                                                                               |   |                           |          |   |   |
| **CASH FLOWS FROM OPERATING ACTIVITIES:**                                          |   |                           |          |   |   |
| Net earnings                                                                       |   | **$**                          | **8,280,644** |   | 6,556,124 |   |
| Adjustments to reconcile net earnings to netcash provided by operating activities: |   |                           |          |   |   |
| Extraordinary loss from early extinguishment of debt                               |   | **108,953**                    |          | - |   |
| Depreciation and amortization                                                      |   | **5,889,459**                  |          | 5,374,922 |   |
| Minority interest in earnings                                                      |   | **1,799,115**                  |          | 1,815,761 |   |
| Amortization of deferred financing costs                                           |   | **295,422**                    |          | 257,010 |   |
| Changes in operating assets and liabilities:                                       |   |                           |          |   |   |
| Decrease in assets                                                                 |   | **2,091,248**                  |          | 2,263,527 |   |
| Increase (decrease) in liabilities                                                 |   | **(3,530,754**                 | **)**         | 75,624 |   |
| Other, net                                                                         |   | **173,715**                    |          | 101,284 |   |
| Total adjustments                                                                  |   | **6,827,158**                  |          | 9,888,128 |   |
| **NET CASH PROVIDED BY OPERATING ACTIVITIES**                                      |   | **15,107,802**                 |          | 16,444,252 |   |
|                                                                               |   |                           |          |   |   |
| **CASH FLOWS FROM INVESTING ACTIVITIES:**                                          |   |                           |          |   |   |
| Additions to properties                                                            |   | **(9,178,198**                 | **)**         | (9,838,518 | ) |
| Payments to minority partners                                                      |   | **(2,221,627**                 | **)**         | (1,791,459 | ) |
| **NET CASH USED BY INVESTING ACTIVITIES**                                          |   | **(11,399,825**                | **)**         | (11,629,977 | ) |
|                                                                               |   |                           |          |   |   |
| **CASH FLOWS FROM FINANCING ACTIVITIES:**                                          |   |                           |          |   |   |
| Proceeds from notes payable                                                        |   | **49,500,000**                 |          | 46,000,000 |   |
| Principal payments on notes payable                                                |   | **(60,000,000**                | **)**         | (39,000,000 | ) |
| Proceeds from mortgages payable                                                    |   | **10,700,000**                 |          | - |   |
| Principal payments on mortgages payable                                            |   | **(19,464,328**                | **)**         | (1,377,210 | ) |
| Proceeds from construction loans payable                                           |   | **2,868,477**                  |          | - |   |
| Principal payments on construction loans payable                                   |   | **(11,145,224**                | **)**         | - |   |
| Deferred interest on construction loans payable                                    |   | **-**                          |          | 320,117 |   |
| Deferred financing costs                                                           |   | **(100,157**                   | **)**         | (106,511 | ) |
| Proceeds from exercise of share options                                            |   | **1,045,568**                  |          | 304,268 |   |
| Net proceeds from sale of common shares                                            |   | **32,844,103**                 |          | - |   |
| Dividends paid                                                                     |   | **(9,727,888**                 | **)**         | (8,065,604 | ) |
| **NET CASH USED BY FINANCING ACTIVITIES**                                          |   | **(3,479,449**                 | **)**         | (1,924,940 | ) |
|                                                                               |   |                           |          |   |   |
| **NET INCREASE IN CASH AND CASH EQUIVALENTS**                                      |   | **228,528**                    |          | 2,889,335 |   |
|                                                                               |   |                           |          |   |   |
| **CASH AND CASH EQUIVALENTS,**beginning of  period                                 |   | **2,602,202**                  |          | 109,686 |   |
|                                                                               |   |                           |          |   |   |
| **CASH AND CASH EQUIVALENTS,**end of period                                        |   | **$**                          | **2,830,730** |   | 2,999,021 |   |
|                                                                               |   |                           |          |   |   |
| **SCHEDULE OF NONCASH INVESTING AND FINANCING  ACTIVITIES**                        |   |                           |          |   |   |
| Conversion of subordinated debentures, net of deferredfinancing costs              |   | **$**                          | **1,985,397** |   | 8,077,255 |   |
| Conversion of Operating Partnership Units                                          |   | **340,280**                    |          | 520,578 |   |
| Additional Operating Partnership Units issued                                      |   | **281,612**                    |          | - |   |

 

*See accompanying notes to consolidated financialstatements.*

 

5

----

 

## **MID-ATLANTIC REALTYTRUST**

## **Notes To Consolidated Financial Statements**

**(UNAUDITED)**

 

**Organization**

 

Mid-Atlantic Realty Trust was incorporated June 29, 1993, and commencedoperations effective with the completion of its initial public share offeringon September 11, 1993.  Mid-AtlanticRealty Trust qualifies as a real estate investment trust (“REIT”) for Federalincome tax purposes. As used herein, the term “MART” or the “Company” refers toMid-Atlantic Realty Trust and entities owned or controlled by MART, includingMART Limited Partnership (the “Operating Partnership”).

 

**Descriptionof Business**

 

The Company is a fully integrated, self-administered real estateinvestment trust which owns, acquires, develops, redevelops, leases and managesprimarily neighborhood or community shopping centers in the Middle Atlanticregion of the United States of America.

     The Company has an equityinterest in 40 operating shopping centers, 34 of which are wholly owned by theCompany and six in which the Company has interests ranging from 50% to 93%, aswell as other commercial properties. The Company also owns approximately 78 acres of undeveloped land parcelsvarying in size from three to thirty-one acres.

     All of MART’s interests inproperties are held directly or indirectly by, and all of its operationsrelating to the properties are conducted through, the Operating Partnership.  Subject to certain conditions, units ofpartnership interest in the Operating Partnership (“Units”) may be exchanged bythe limited partners for cash or, at the option of MART, the obligation may beassumed by MART and paid either in cash or in common shares of beneficialinterest in MART on a one-for-one basis. MART controls the Operating Partnership as the sole general partner, andowns approximately 85% of the Units at June 30, 2002.

 

#### **ConsolidatedFinancial Statements**

 

The accompanying consolidated financial statements have been preparedin accordance with the instructions for Form 10-Q and, therefore, do notinclude all of the information necessary for a fair presentation of financialcondition, results of operations and cash flows in accordance with accountingprinciples generally accepted in the United States of America.  The financial statements have been preparedusing the accounting policies described in the Company’s 2001 annual report onForm 10-K.  The consolidated balancesheets as of June 30, 2002, the consolidated statements of operations for thethree and six month periods ended June 30, 2002 and June 30, 2001 and theconsolidated statements of cash flows for the six month periods ended June 30,2002 and 2001 have been prepared by the Company without audit.  In the opinion of management, alladjustments (which include only normal recurring adjustments) necessary topresent fairly the financial position, results of operations and cash flowshave been included.   The results ofoperations for the period ended June 30, 2002 are not necessarily indicative ofthe operating results for the full year.

 

#### **SegmentInformation**

 

The Company’s only reportable segment is Shopping Centers.  This segment includes the operation andmanagement of shopping center properties, and revenues are derived primarilyfrom rents and services to tenants. These properties are managed separately from the other property typesowned by the Company because they require different operating strategies andmanagement expertise.

     Segmentoperating results are measured and assessed based on a performance measureknown as Funds from Operations (“FFO”). FFO is defined as net earnings (computed in accordance with accountingprinciples generally accepted in the United States of America), excludingcumulative effects of changes in accounting principles, extraordinary items andgains or losses from sales of operating properties, plus depreciation andamortization, and after adjustments to record unconsolidated partnerships and jointventures on the same basis.  FFO is nota measure of operating results or cash flows from operating activities asmeasured by accounting principles generally accepted in the United States ofAmerica, is not necessarily indicative of cash available to fund cash needs andshould not be considered an alternative to cash flows as a measure ofliquidity.

 

6

----

 

Operating results for the segments are summarized asfollows for the three month periods ended June 30, 2002 and June 30, 2001:

 
|                                                                             |   | **Three  months ended June 30,** |           |
|----------------------------------------------------------------------------------|--------|----------------------------------|----------------|
|                                                                             |   | **2002**                         |           | **2001** |   |
|                                                                             |   | **Shopping**                     |           | **All** |   |   |   | **Shopping** |   | **All** |   |   |   |
|                                                                             |   | **Centers**                      |           | **Other** |   | **Total** |   | **Centers** |   | **Other** |   | **Total** |   |
| Revenues                                                                         |   | **$**                            | **16,599,256** | ** ** | **613,690** | ** ** | **17,212,946** |   | 14,704,321 |   | 567,276 |   | 15,271,597 |   |
|                                                                             |   |                             |           |   |   |   |   |   |   |   |   |   |   |
| Expenses, exclusive ofdepreciation  andamortization of propertyand  improvements |   | **8,453,868**                    | ** **     | **229,988** | ** ** | **8,683,856** |   | 8,154,394 |   | 225,797 |   | 8,380,191 |   |
| Minority Interest                                                                |   | **916,264**                      | ** **     | **18,379** | ** ** | **934,643** |   | 879,425 |   | 9,304 |   | 888,729 |   |
| FFO                                                                              |   | **$**                            | **7,229,124**  | ** ** | **365,323** | ** ** | **7,594,447** |   | 5,670,502 |   | 332,175 |   | 6,002,677 |   |

 

A reconciliation of FFOreported above to net earnings in the financial statements is summarized asfollows:

 
|                                                                    |   | **Three  months ended June 30,** |          |
|-------------------------------------------------------------------------|--------|----------------------------------|---------------|
|                                                                    |   | **2002**                         |          | **2001** |   |
| Operating  results:                                                     |   |                             |          |   |   |
| FFO                                                                     |   | **$**                            | **7,594,447** |   | 6,002,677 |   |
| Depreciation  and  amortization of property and  improvements |   | **2,982,990**                    |          | 2,741,217 |   |
|                                                                    |   |                             |          |   |   |
| Earnings from  operations                                               |   | **$**                            | **4,611,457** |   | 3,261,460 |   |

 

Operating results for the segments aresummarized as follows for the six month periods ended June 30, 2002 and June30, 2001:

 
|                                                                              |   | **Six months ended June 30,** |           |
|-----------------------------------------------------------------------------------|--------|-------------------------------|----------------|
|                                                                              |   | **2002**                      |           | **2001** |   |
|                                                                              |   | **Shopping**                  |           | **All** |   |   |   | **Shopping** |   | **All** |   |   |   |
|                                                                              |   | **Centers**                   |           | **Other** |   | **Total** |   | **Centers** |   | **Other** |   | **Total** |   |
| Revenues                                                                          |   | **$**                         | **31,937,926** | ** ** | **1,170,568** | ** ** | **33,108,494** |   | 29,298,858 |   | 1,086,579 |   | 30,385,437 |   |
|                                                                              |   |                          |           |   |   |   |   |   |   |   |   |   |   |
| Expenses, exclusive ofdepreciation  and amortization of property and improvements |   | **16,592,054**                |           | **438,269** |   | **17,030,323** |   | 16,199,939 |   | 438,691 |   | 16,638,630 |   |
| Minority Interest                                                                 |   | **1,762,511**                 | ** **     | **36,604** | ** ** | **1,799,115** |   | 1,796,673 |   | 19,088 |   | 1,815,761 |   |
| FFO                                                                               |   | **$**                         | **13,583,361** | ** ** | **695,695** | ** ** | **14,279,056** |   | 11,302,246 |   | 628,800 |   | 11,931,046 |   |

 

7

----

 

**A reconciliation of FFO reportedabove to earnings from operations in the financial statements is summarized asfollows:**

 
|                                                                  |   | **Six months  ended June 30,** |           |
|-----------------------------------------------------------------------|--------|--------------------------------|----------------|
|                                                                  |   | **2002**                       |           | **2001** |   |
| Operating  results:                                                   |   |                           |           |   |   |
| FFO                                                                   |   | **$**                          | **14,279,056** |   | 11,931,046 |   |
| Depreciation  and amortization of property and improvements |   | **5,889,459**                  |           | 5,374,922 |   |
| Earnings from  operations                                             |   | **$**                          | **8,389,597**  |   | 6,556,124 |   |
|                                                                       |        |                                |                |  |  |  |  |

 

**EarningsPer Share**

 

Basic earnings per share (“EPS”) is computed by dividing earningsavailable to common shareholders by the weighted average number of commonshares outstanding.  Diluted EPS iscomputed after adjusting the numerator and denominator of the basic EPScomputation for the effects of all dilutive potential common shares outstandingduring the period.  The dilutive effectsof convertible securities are computed using the “if-converted” method and thedilutive effects of options, warrants and their equivalents (including fixedawards and nonvested shares issued under share-based compensation plans) arecomputed using the “treasury stock” method.

 

The following table sets forth information relating to the computationof basic and diluted earnings per share:

 
|                                                                                     |   | **Three  months ended June 30,** |          | **Six  months ended June 30,** |       |
|------------------------------------------------------------------------------------------|--------|----------------------------------|---------------|--------------------------------|------------|
|                                                                                     |   | **2002**                         |          | **2001**                       |       | **2002** |   | **2001** |   |
|                                                                                     |   |                             |          |                           |       |   |   |   |   |
| Numerator:                                                                               |   |                             |          |                           |       |   |   |   |   |
| Earnings before extraordinary loss                                                       |   | **$**                            | **4,611,457** |                           | 3,261,460  | ** ** | **8,389,597** |   | 6,556,124 |   |
| Dividends on unvested restricted share awards                                            |   | **(61,451**                      | **)**         | (70,680                        | )          | **(123,971** | **)** | (140,762 | ) |
| Numerator for basic earnings per share—earnings available to common  shareholders   |   | **4,550,006**                    |          | 3,190,780                      | ** ** | **8,265,626** |   | 6,415,362 |   |
| Interest on subordinated debentures                                                      |   | **51,224**                       |          | 87,923                         | ** ** | **141,654** |   | 342,787 |   |
| Numerator for diluted earnings per share—earnings available to common  shareholders |   | **$**                            | **4,601,230** |                           | 3,278,703  | ** ** | **8,407,280** |   | 6,758,149 |   |
|                                                                                     |   |                             |          |                           |       |   |   |   |   |
| Denominator: (1)                                                                         |   |                             |          |                           |       |   |   |   |   |
| Denominator for basic earnings per share—weighted average shares  outstanding       |   | **17,501,026**                   |          | 14,214,916                     | ** ** | **16,470,129** |   | 13,948,758 |   |
| Effect of dilutive securities:                                                           |   |                             |          |                           |       |   |   |   |   |
| Debentures                                                                               |   | **290,637**                      |          | 669,431                        | ** ** | **367,537** |   | 927,113 |   |
| Unvested portion of restricted share awards and share options                            |   | **93,448**                       |          | 87,732                         | ** ** | **88,404** |   | 91,940 |   |
| Denominator for diluted earnings per share—adjusted weighted average  shares        |   | **17,885,111**                   |          | 14,972,079                     | ** ** | **16,926,070** |   | 14,967,811 |   |
|                                                                                          |        |                                  |               |                                |            |  |  |  |  |  |  |

----

*(1)**Effects of potentially dilutive securities are presentedonly in periods in which they are dilutive. At June 30, 2002, the convertible subordinated debentures, if converted,would produce an additional 265,143 shares and the Units, if exchanged, wouldproduce an additional 3,020,776 shares.*

## ** **

## ** **

**ConvertibleSubordinated Debentures**

 

Effective September 11, 1993, the Company issued $60,000,000 ofconvertible subordinated debentures at 7.625% scheduled to mature in September2003.  Interest on the debentures ispaid semi-annually on March 15 and September 15.  The debentures are convertible, unless previously redeemed, atany time prior to maturity into common shares of beneficial interest of theCompany at $10.50 per share, subject to certain adjustments. The balance of thedebentures, at June 30, 2002, of $2,784,000, if fully converted, would producean additional 265,143 shares.  Thedebentures are redeemable by the Company at any time at 100% of the principalamount thereof, together with accrued interest.  The debentures are subordinate to all mortgages payable.

 

8

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**Saleof Common Shares of Beneficial Interest**

 

On March 12, 2002, the Company completed thepublic offering and sale of 2,000,000 common shares of beneficial interest at aprice of $15.10 per share and on April 4, 2002, an additional 300,000 shareswere sold at the same price upon exercise of the underwriters’ over-allotmentoption.  The net proceeds of the salesof approximately $32,844,000 were used to repay two mortgage loans and pay downthe line of credit.

 

**NewFinancial Accounting Standards Not Yet Adopted**

 

In April 2002, the Financial AccountingStandards Board issued SFAS No. 145, “Rescission of FASB Statements No. 4, 44,and 64, Amendment of FASB Statement No. 13, and Technical Corrections.”  Upon adoption of SFAS No. 145, the Companywill be required to apply the criteria in Accounting Principles Board OpinionNo. 30, “Reporting the Results of Operations-Reporting the Effects of Disposalof a Segment of a Business, and Extraordinary, Unusual and InfrequentlyOccurring Events and Transactions,” in determining the classification of gainsand losses resulting from the extinguishment of debt.

 

SFAS No. 145 is effective on January 1, 2003with early adoption of the provisions related to the rescission of SFAS No. 4encouraged.  Upon adoption, the Companywill reclassify any extraordinary gains and losses from extinguishment of debtto continuing operations.  The Companywill adopt the provisions relating to the rescission of SFAS No. 4 in the firstquarter of 2003.

 

9

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#### **Part I. FINANCIALINFORMATION**

**ITEM 2.**

 

**MID-ATLANTIC REALTY TRUST**

**Management’s Discussion And Analysis**

**Of Financial Condition And Results OfOperations**

 

The following discussionand analysis of operating results covers each of the Company’s business segmentsfor the three and six month periods ended June 30, 2002 and June 30, 2001.

     Managementbelieves that a segment analysis provides the most effective means ofunderstanding the business.  Segmentdata are reported using the accounting policies followed by the Company forinternal reporting to management.  Thesepolicies are the same as those used for external reporting.

 

**PortfolioChanges**

 

The operating results ofshopping center properties are affected significantly by acquisition anddisposition transactions and openings of newly developed or redevelopedproperties.  Information related toshopping center acquisitions and developments/redevelopments completed during2002 and 2001 is summarized in the following table:

 
|                                    |   | **Transaction or** |   |
|-----------------------------------------|--------|--------------------|--------|
| **Property**                            |   | **Opening Date**   |   |
|                                    |   |               |   |
| Acquisition                             |   |               |   |
|                                    |   |               |   |
| Pottstown Plaza  Shopping Center        |   | October 2001       |   |
|                                    |   |               |   |
| Development/Redevelopment               |   |               |   |
|                                    |   |               |   |
| Perry Hall Super  Fresh Shopping Center |   | April 2002         |   |
| Waverly Woods  Shopping Center          |   | March 2001         |   |
| Security Square  Shopping Center        |   | February 2001      |   |

 

**Comparison of three months ended June 30, 2002 to threemonths ended June 30, 2001:**

 

**Shopping Center Properties**

 

Operating results aresummarized as follows (in thousands):

 
|                                                                         |   | **Three  months ended June 30,** |       |
|------------------------------------------------------------------------------|--------|----------------------------------|------------|
|                                                                         |   | **2002**                         |       | **2001** |   |
| Revenues                                                                     |   | **$**                            | **16,599** |   | 14,704 |   |
| Operating and  interest expenses, exclusive of depreciation and amortization |   | **8,454**                        |       | 8,154 |   |
| Depreciation and  amortization                                               |   | **2,863**                        |       | 2,625 |   |
| Minority  interest                                                           |   | **916**                          |       | 879 |   |
| Earnings from  operations                                                    |   | **$**                            | **4,366**  |   | 3,046 |   |

 

**     Revenues fromshopping centers increased by $1,895,000 in 2002 due primarily to theoperations of the property acquired in 2001 and development/redevelopmentprojects opened in 2001 and 2002, $820,000, higher termination fees from formertenants, $639,000, and other net rental and occupancy changes.**

** **

    Operating and interest expenses (exclusiveof depreciation and amortization) for shopping center properties increased by$300,000 in 2002.  Increases inoperating expenses, due primarily to the operations of the property acquired in2001 and development/redevelopment projects opened in 2001 and 2002, $438,000,were partially offset by a decrease in interest expense due to lower rates onvariable rate debt and the effects of debt refinancings and retirements($364,000).  Depreciation andamortization expense increased by $238,000 in 2002 due primarily to theacquisition and development/redevelopment projects referred to above.

 

10

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**All Other Properties**

 

Operating results aresummarized as follows (in thousands):

 
|                                                                         |   | **Three  months ended June 30,** |    |
|------------------------------------------------------------------------------|--------|----------------------------------|---------|
|                                                                         |   | **2002**                         |    | **2001** |   |
| Revenues                                                                     |   | **$**                            | **614** |   | 567 |   |
| Operating and  interest expenses, exclusive of depreciation and amortization |   | **230**                          |    | 226 |   |
| Depreciation and  amortization                                               |   | **120**                          |    | 116 |   |
| Minority  interest                                                           |   | **19**                           |    | 9 |   |
| Earnings from  operations                                                    |   | **$**                            | **245** |   | 216 |   |

 

**Comparison of six months ended June30, 2002 to six months ended June 30, 2001:**

 

**Shopping Center Properties**

 

Operating results aresummarized as follows (in thousands):

 
|                                                                         |   | **Six months  ended June 30,** |       |
|------------------------------------------------------------------------------|--------|--------------------------------|------------|
|                                                                         |   | **2002**                       |       | **2001** |   |
| Revenues                                                                     |   | **$**                          | **31,938** |   | 29,299 |   |
| Operating and  interest expenses, exclusive of depreciation and amortization |   | **16,592**                     |       | 16,200 |   |
| Depreciation and  amortization                                               |   | **5,652**                      |       | 5,146 |   |
| Minority  interest                                                           |   | **1,762**                      |       | 1,797 |   |
| Earnings from  operations                                                    |   | **$**                          | **7,932**  |   | 6,156 |   |

 

**     Revenues fromshopping centers increased by $2,639,000 in 2002 due primarily to theoperations of the property acquired in 2001 and development/redevelopmentprojects opened in 2001 and 2002, $1,880,000, higher termination fees fromformer tenants, $760,000, and other net rental and occupancy changes.**

** **

    Operating and interest expenses (exclusiveof depreciation and amortization) for shopping center properties increased by$392,000 in 2002.  Increases inoperating expenses, due primarily to the operations of the property acquired in2001 and development/redevelopment projects opened in 2001 and 2002,$1,066,000, were partially offset by a decrease in interest expense due tolower rates on variable rate debt and the effects of debt refinancings andretirements ($691,000). Depreciation and amortization expense increased by$506,000 in 2002 due primarily to the acquisition and development/redevelopmentprojects referred to above.

 

**All Other Properties**

 

Operating results aresummarized as follows (in thousands):

 
|                                                                         |   | **Six months  ended June 30,** |      |
|------------------------------------------------------------------------------|--------|--------------------------------|-----------|
|                                                                         |   | **2002**                       |      | **2001** |   |
| Revenues                                                                     |   | **$**                          | **1,171** |   | 1,086 |   |
| Operating and  interest expenses, exclusive of depreciation and amortization |   | **438**                        |      | 439 |   |
| Depreciation and  amortization                                               |   | **238**                        |      | 228 |   |
| Minority interest                                                            |   | **37**                         |      | 19 |   |
| Earnings from  operations                                                    |   | **$**                          | **458**   |   | 400 |   |

 

11

----

 

**Funds from Operations**

 

The Company uses asupplemental performance measure along with net earnings to report itsoperating results. This measure is referred to as Funds from Operations(“FFO”). FFO is defined by the National Association of Real Estate InvestmentTrusts, Inc. (NAREIT) as net earnings computed in accordance with accountingprinciples generally accepted in the United States of America (GAAP), excludingcumulative effects of changes in accounting principles, extraordinary items andgains or losses on sales of properties, plus depreciation and amortization, andafter adjustments to record unconsolidated partnerships and joint ventures on thesame basis.  FFO does not represent cashflows from operations as defined by GAAP. FFO is not indicative that cash flows are adequate to fund all cashneeds and should not be considered as an alternative to cash flows as a measureof liquidity.  The Company’s FFO may notbe comparable to the FFO of other REIT’s because they may not use the currentNAREIT definition or they may interpret the definition differently.

 

FFO was$14,279,000 and $11,931,000 for the six months ended June 30, 2002 and 2001,respectively.  The reasons forsignificant changes in revenues and expenses comprising FFO by segment aredescribed above.

 

**Liquidity and Capital Resources**

 

On March 12, 2002, the Company completed the public offering and saleof 2,000,000 common shares of beneficial interest at a price of $15.10 pershare and on April 4, 2002, an additional 300,000 shares were sold at the sameprice upon exercise of the underwriters’ over-allotment option.  The net proceeds of the sales ofapproximately $32,844,000 were used to repay two mortgage loans and pay downthe line of credit.

 

The Company had cash and cash equivalents of  $2,830,730 at June 30, 2002.

 

Net cash provided by operating activities was$15,108,000 and $16,444,000 for the six months ended June 30, 2002 and 2001,respectively.  The change in cashprovided by operating activities was due in part to the factors discussed abovein the comparisons of operating results. The level of net cash provided by operating activities is also affectedby the timing of receipt of revenues and the payment of operating and interestexpenses.

 

Net cash used by investing activities decreased by$230,000 to $11,400,000 in 2002 from $11,630,000 in 2001.  The decrease was due primarily to lowerlevels of development/redevelopment activity in 2002.

 

Net cash used by financing activities increased by$1,554,000 to $3,479,000 in 2002 from $1,925,000 in 2001.  The increase was primarily a result of netdebt principal pay downs of $27,432,000 in 2002 compared to net debt issuancesof $5,943,000 in 2001, and an increase in dividends paid of $1,662,000 due toincreases in the number of common shares outstanding and the dividend pershare, partly offset by the proceeds from sale of common shares of $32,844,000and an increase in proceeds from exercise of share options of $741,000.

 

12

----

 

**CautionaryDisclosure Relating to Forward Looking Statements**

 

Statements made in this document include forward looking statementsunder the federal securities laws. Statements that are not historical in nature, including the words“anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” and similarexpressions are intended to identify forward looking statements.  While these statements reflect the Company’sgood faith beliefs based on current expectations, estimates and projectionsabout (among other things) the industry and the markets in which the Companyoperates, they are not guarantees of future performance, involve known andunknown risks and uncertainties that could cause actual results to differmaterially from those in the forward looking statements, and should not berelied upon as predictions of future events. Factors which could impact future results include (among other things)general economic conditions, local real estate conditions, oversupply ofavailable space, financial condition of tenants, timely ability to lease orre-lease space upon favorable economic terms, agreements with anchor tenants,interest rates, availability of financing, competitive factors, and similarconsiderations.  The Company disclaimsany obligation to publicly update or revise any forward looking statement,whether as a result of new information, future events or otherwise.  For a discussion of risks and uncertaintiesthat could cause actual results to differ materially from those contained inthe forward looking statements, see “Risk Factors” filed as Exhibit 99.1 to theCompany’s Form 10-K for the year ended December 31, 2001.

 

**Item 3.  Quantitative and Qualitative Disclosuresabout Market Risk**- There have been nomaterial changes in the Company’s market risk information since December 31,2001, except that variable rate debt outstanding decreased from $57,998,000 atDecember 31, 2001 to $39,367,000 at June 30, 2002.

 

13

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#### **Part II. OTHER INFORMATION**

 

**Item 1.  Legal Proceedings******-****Inthe ordinary course of business, the Company is involved in legalproceedings.  However, there are nomaterial legal proceedings pending against the Company.

 

#### **Item 2.  Changes in Securities and Use of Proceeds**- None

#### ** **

#### **Item 3.  Defaults upon Senior Securities**- None

 

**Item4.  Submission of Matters to a Vote ofSecurity Holders******— The annualmeeting of Shareholders was held on May 10, 2002.  Elected to serve as trustees for the following year and until theelection and qualification of their successors were:  David F. Benson, Marc P. Blum, Robert A. Frank, LeRoy E.Hoffberger, F. Patrick Hughes, M. Ronald Lipman and Daniel S. Stone.

 
| **Matter  Voted Upon**                                                                                                                                                             |   | **For**    |   | **Against** |   | **Withheld** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|--------|-------------|--------|--------------|--------|
|                                                                                                                                                                               |   |       |   |        |   |         |   |
| a.     Election of Trustees:                                                                                                                                   |   |       |   |        |   |         |   |
| David F. Benson                                                                                                                                                                    |   | 15,600,768 |   | —      |   | 61,414       |   |
| Marc P. Blum                                                                                                                                                                       |   | 15,538,259 |   | —      |   | 123,923      |   |
| Robert A. Frank                                                                                                                                                                    |   | 15,602,486 |   | —      |   | 59,696       |   |
| LeRoy E.  Hoffberger                                                                                                                                                               |   | 15,596,257 |   | —      |   | 65,925       |   |
| F. Patrick  Hughes                                                                                                                                                                 |   | 15,600,268 |   | —      |   | 61,914       |   |
| M. Ronald Lipman                                                                                                                                                                   |   | 15,599,868 |   | —      |   | 62,314       |   |
| Daniel S. Stone                                                                                                                                                                    |   | 15,593,693 |   | —      |   | 68,489       |   |
|                                                                                                                                                                               |   |       |   |        |   |         |   |
| b.     Proposal to approve the appointment of  KPMG LLP as the independent certified public accountants of MART for the  fiscal year ending December 31, 2002: |   | 15,600,154 |   | 26,467      |   | 35,561       |   |

 

Becausethe matters voted upon at the meeting required the approval of a majority ofthe votes cast at the meeting, votes withheld, abstentions, and brokernon-votes had no effect upon the ultimate outcome of the vote.

 

14

----

 

#### **Item 5.  OtherInformation** —

#### **Summary FinancialData**

 

The following sets forthsummary financial data which has been prepared by the Company withoutaudit.  Management believes thefollowing data should be used as a supplement to the historical statements ofoperations.  The data should be read inconjunction with the historical financial statements and the notes thereto.

 

**MID-ATLANTIC REALTY TRUST**

**Summary Financial Data**

**(In thousands, except share data and per share data)**

 
|                                                                                |   | **Three  months ended June 30,** |       | **Six  months ended June 30,** |   |
|-------------------------------------------------------------------------------------|--------|----------------------------------|------------|--------------------------------|--------|
|                                                                                |   | **2002**                         |       | **2001**                       |   | **2002** |   | **2001** |   |
|                                                                                |   |                             | ** ** |                           |   |   | ** ** |   |   |
| **Revenues**                                                                        |   | **$**                            | **17,213** | ** **                     | 15,272 |   | **33,109** | ** ** | 30,385 |   |
|                                                                                |   |                             | ** ** |                           |   |   | ** ** |   |   |
| **Net earnings**                                                                    |   | **$**                            | **4,502**  | ** **                     | 3,262  |   | **8,281** | ** ** | 6,556 |   |
|                                                                                |   |                             | ** ** |                           |   |   | ** ** |   |   |
| **NET EARNINGS PER SHARE - BASIC:**                                                 |   |                             | ** ** |                           |   |   | ** ** |   |   |
| Earnings before extraordinary loss                                                  |   | **$**                            | **0.26**   | ** **                     | 0.22   |   | **0.50** | ** ** | 0.46 |   |
| Extraordinary loss from early extinguishment of debt                                |   | **(0.01**                        | **)**      | -                              |   | **(0.01** | **)** | - |   |
| Net earnings                                                                        |   | **$**                            | **0.25**   | ** **                     | 0.22   |   | **0.49** | ** ** | 0.46 |   |
|                                                                                |   |                             | ** ** |                           |   |   | ** ** |   |   |
| **NET EARNINGS PER SHARE - DILUTED:**                                               |   |                             | ** ** |                           |   |   | ** ** |   |   |
| Earnings before extraordinary loss                                                  |   | **$**                            | **0.26**   | ** **                     | 0.22   |   | **0.50** | ** ** | 0.45 |   |
| Extraordinary loss from early extinguishment of debt                                |   | **(0.01**                        | **)**      | -                              |   | **(0.01** | **)** | - |   |
| Net earnings                                                                        |   | **$**                            | **0.25**   | ** **                     | 0.22   |   | **0.49** | ** ** | 0.45 |   |
|                                                                                |   |                             | ** ** |                           |   |   | ** ** |   |   |
| **Total assets**                                                                    |   |                             | ** ** |                           |   | **$** | **391,160** | ** ** | 376,102 |   |
|                                                                                |   |                             | ** ** |                           |   |   | ** ** |   |   |
| **Indebtedness -**                                                                  |   |                             | ** ** |                           |   |   | ** ** |   |   |
| Total mortgages, convertible debentures, constructionloans, notes and loans payable |   |                             | ** ** |                           |   | **$** | **212,509** | ** ** | 230,730 |   |
|                                                                                |   |                             | ** ** |                           |   |   | ** ** |   |   |
| **Funds from Operations (FFO) -****(1)**                                            |   | **$**                            | **7,594**  | ** **                     | 6,003  |   | **14,279** | ** ** | 11,931 |   |
|                                                                                |   |                             | ** ** |                           |   |   | ** ** |   |   |
| **Net cash flow:**                                                                  |   |                             | ** ** |                           |   |   | ** ** |   |   |
| Provided by operating activities                                                    |   | **$**                            | **6,295**  | ** **                     | 7,046  |   | **15,108** | ** ** | 16,444 |   |
| Used in investing activities                                                        |   | **$**                            | **(6,691** | **)**                          | (3,185 | ) | **(11,400** | **)** | (11,630 | ) |
| Used by financing activities                                                        |   | **$**                            | **(2,342** | **)**                          | (977   | ) | **(3,479** | **)** | (1,925 | ) |
|                                                                                |   |                             | ** ** |                           |   |   | ** ** |   |   |
| **Cash dividends paid per share**                                                   |   | **$**                            | **0.2950** | ** **                     | 0.2825 |   | **0.5900** | ** ** | 0.5650 |   |
|                                                                                |   |                             | ** ** |                           |   |   | ** ** |   |   |
| **Weighted average number of shares outstanding - EPS:**                            |   |                             | ** ** |                           |   |   | ** ** |   |   |
| Basic                                                                               |   | **17,501,026**                   | ** ** | 14,214,916                     |   | **16,470,129** | ** ** | 13,948,758 |   |
| Diluted                                                                             |   | **17,885,111**                   | ** ** | 14,972,079                     |   | **16,926,070** | ** ** | 14,967,811 |   |
|                                                                                |   |                             | ** ** |                           |   |   | ** ** |   |   |
| **RECONCILIATION OF NET EARNINGS TO FFO**                                           |   |                             | ** ** |                           |   |   | ** ** |   |   |
|                                                                                |   |                             | ** ** |                           |   |   | ** ** |   |   |
| Net earnings                                                                        |   | **$**                            | **4,502**  | ** **                     | 3,262  |   | **8,281** | ** ** | 6,556 |   |
| Depreciation                                                                        |   | **2,983**                        | ** ** | 2,741                          |   | **5,889** | ** ** | 5,375 |   |
| Extraordinary loss from early extinguishment of debt                                |   | **109**                          | ** ** | -                              |   | **109** | ** ** | - |   |
| FFO                                                                                 |   | **$**                            | **7,594**  | ** **                     | 6,003  |   | **14,279** | ** ** | 11,931 |   |

----

(1) The Company believes that Funds from Operations (FFO) provides relevantand meaningful information about its operating performance that is necessary,along with net earnings, for an understanding of its operating results.  Funds from operations is defined by theNational Association of Real Estate Investment Trusts, Inc. (NAREIT) as netearnings (computed in accordance with accounting principles generally acceptedin the United States of America), excluding cumulative effects of changes inaccounting principles, extraordinary items and gains or losses on sales ofproperties, plus depreciation and amortization, and after adjustments to recordunconsolidated partnerships and joint ventures on the same basis. FFO does notrepresent cash flows from operations as defined by accounting principlesgenerally accepted in the United States of America (GAAP).  FFO is not indicative that cash flows areadequate to fund all cash needs and should not be considered as an alternativeto cash flows as a measure of liquidity. The Company’s FFO may not becomparable to the FFO of other REIT’s because they may not use the currentNAREIT definition or they may interpret the definition differently.

 

15

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### **Item 6. Exhibits and Reports on Form 8-K**

 

                (b) Form 8-Kfiled July 29, 2002reporting selected financial information under Items 7 and 9.

 

16

----

 

##### **MID-ATLANTIC REALTY TRUST AND SUBSIDIARIES**

##### **SIGNATURES**

 

 

                Pursuant to the requirements of the SecuritiesExchange Act of 1934, the registrant has duly caused this report to be signedon its behalf by the undersigned thereunto duly authorized.

 

 

 
|   |     |   |   | **MID-ATLANTIC  REALTY TRUST AND SUBSIDIARIES** |
|--------|----------|--------|--------|-------------------------------------------------|
|   |     |   |   | **(Registrant)**                                |
|   |     |   |   |                                            |
| Date:  | 07/29/02 |   |   | /s/ F. Patrick Hughes                           |
|   |     |   |   | F. Patrick Hughes                               |
|   |     |   |   | President and Chief Executive Officer           |
|   |     |   |   |                                            |
|   |     |   |   |                                            |
| Date:  | 07/29/02 |   |   | /s/ Deborah R. Cheek                            |
|   |     |   |   | Deborah R. Cheek                                |
|   |     |   |   | Controller                                      |

 

17

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