United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549


                                    FORM 10-Q

[X]      Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934 for the Quarterly Period Ended June 30, 2001

                                                              or

  [ ]    Transition Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934, for the Transition Period From -----------
         to ------------

                Commission file number                 001-13301
                                                 ----------------------

                                PRIME RETAIL, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

             Maryland                                        38-2559212
---------------------------------------     ------------------------------------
   (State or other jurisdiction of           I.R.S. Employer Identification No.)
    incorporation or organization)


      100 East Pratt Street
      Nineteenth Floor
      Baltimore, Maryland                                       21202
---------------------------------------      -----------------------------------
(Address of principal executive offices)                      (Zip Code)


                                (410) 234-0782
--------------------------------------------------------------------------------
             (Registrant's telephone number, including area code)

                                NOT APPLICABLE
--------------------------------------------------------------------------------
Former  name,  former  address,  or  former  fiscal  year, if changed since last
report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such shorter  periods that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

Yes   X           No

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practical date.

As of August 13, 2001, the issuer had  outstanding  43,577,916  shares of Common
Stock, $.01 par value per share.
<PAGE>
                               Prime Retail, Inc.
                                    Form 10-Q


                                      INDEX



PART I:  FINANCIAL INFORMATION                                              PAGE


Item 1.  Financial Statements (Unaudited)

     Consolidated Balance Sheets as of June 30, 2001 and
       December 31, 2000................................................       1

     Consolidated Statements of Operations for the three and six
       months ended June 30, 2001 and 2000..............................       2

     Consolidated Statements of Cash Flows for the six
       months ended June 30, 2001 and 2000..............................       3

     Notes to the Consolidated Financial Statements.....................       5

Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations..........................      13

Item 3.  Quantitative and Qualitative Disclosures of Market Risk........      29

PART II:  OTHER INFORMATION

Item 1.  Legal Proceedings..............................................      30

Item 2.  Changes in Securities..........................................      31

Item 3.  Defaults Upon Senior Securities................................      31

Item 4.  Submission of Matters to a Vote of Security Holders............      31

Item 5.  Other Information..............................................      31

Item 6.  Exhibits or Reports on Form 8-K................................      31

Signatures..............................................................      32
<PAGE>
                               Prime Retail, Inc.

                      Unaudited Consolidated Balance Sheets

               (Amounts in thousands, except share information)
<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
                                                                                         June 30, 2001             December 31, 2000
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                         <C>                           <C>
Assets
Investment in rental property:
     Land                                                                                   $  152,023                   $  151,941
     Buildings and improvements                                                              1,330,241                    1,322,368
     Property under development                                                                  3,726                        3,573
     Furniture and equipment                                                                    15,401                       15,225
                                                                                            ----------                   ----------
                                                                                             1,501,391                    1,493,107
     Accumulated depreciation                                                                 (243,218)                    (217,569)
                                                                                            ----------                   ----------
                                                                                             1,258,173                    1,275,538
Cash and cash equivalents                                                                        4,073                        8,906
Restricted cash                                                                                 37,798                       54,920
Accounts receivable, net                                                                        10,982                       13,480
Deferred charges, net                                                                           14,913                       19,533
Assets held for sale                                                                             8,460                       43,230
Investment in partnerships                                                                      22,713                       22,372
Other assets                                                                                    26,476                       24,042
                                                                                            ----------                   ----------
          Total assets                                                                      $1,383,588                   $1,462,021
                                                                                            ==========                   ==========
Liabilities and Shareholders' Equity
Bonds payable                                                                               $   32,455                   $   32,455
Notes payable                                                                                  953,468                      997,698
Accrued interest                                                                                 7,966                        5,267
Real estate taxes payable                                                                        9,971                        8,555
Accounts payable and other liabilities                                                          36,219                       62,063
                                                                                            ----------                   ----------
     Total liabilities                                                                       1,040,079                    1,106,038

Minority interests                                                                               1,494                        1,495

Shareholders' equity:
  Shares of preferred stock, 24,315,000 shares authorized:
     10.5% Series A Senior Cumulative Preferred Stock, $0.01
          par value (liquidation preference of $67,311), 2,300,000
          shares issued and outstanding                                                             23                           23
     8.5% Series B Cumulative Participating Convertible Preferred
          Stock, $0.01 par value (liquidation preference of $222,735),
          7,828,125 shares issued and outstanding                                                   78                           78
  Shares of common stock, 150,000,000 shares authorized:
     Common stock, $0.01 par value, 43,577,916 shares
          issued and outstanding                                                                   436                          436
  Additional paid-in capital                                                                   709,373                      709,373
  Distributions in excess of net income                                                       (367,895)                    (355,422)
                                                                                            ----------                   ----------
      Total shareholders' equity                                                               342,015                      354,488
                                                                                            ----------                   ----------
          Total liabilities and shareholders' equity                                        $1,383,588                   $1,462,021
                                                                                            ==========                   ==========
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to financial statements.
<PAGE>
                               Prime Retail, Inc.

                 Unaudited Consolidated Statements of Operations

            (Amounts in thousands, except per share information)
<TABLE>
<CAPTION>

                                                                Three Months Ended                             Six Months Ended
                                                                     June 30,                                      June 30,
                                                           ---------------------------                   ---------------------------
                                                              2001              2000                        2001              2000
------------------------------------------------------------------------------------------------------------------------------------
Revenues
<S>                                                        <C>               <C>                         <C>               <C>
Base rents                                                 $ 35,305          $ 44,461                    $ 72,237          $ 88,709
Percentage rents                                                736             1,106                       1,453             2,593
Tenant reimbursements                                        18,005            20,368                      35,729            42,380
Interest and other                                            3,058             2,649                       5,802             7,743
                                                           --------          --------                    --------          --------
  Total revenues                                             57,104            68,584                     115,221           141,425

Expenses
Property operating                                           13,646            15,958                      27,779            33,490
Real estate taxes                                             5,140             5,507                      10,366            11,238
Depreciation and amortization                                13,723            15,783                      27,398            32,020
Corporate general and administrative                          3,352             8,019                       6,653            13,452
Interest                                                     23,334            23,714                      47,777            47,737
Other charges                                                 4,972             4,503                       8,674             6,032
Provision for asset impairment                                    -             8,538                           -             8,538
Loss on eOutlets.com                                              -             1,315                           -            14,279
Loss on Designer Connection                                       -             1,006                           -             2,085
                                                           --------          --------                    --------          --------
  Total expenses                                             64,167            84,343                     128,647           168,871
                                                           --------          --------                    --------          --------
Loss before gain (loss)on sale of real estate                (7,063)          (15,759)                    (13,426)          (27,446)
Gain on sale of real estate                                    (180)                -                         552                 -
                                                           --------          --------                    --------          --------
Loss before minority interests                               (7,243)          (15,759)                    (12,874)          (27,446)
(Income) loss allocated to minority interests                   400                 -                         401               (32)
                                                           --------          --------                    --------          --------
Net loss                                                     (6,843)          (15,759)                    (12,473)          (27,478)
Income allocated to preferred shareholders                   (5,668)           (5,668)                    (11,336)          (11,336)
                                                           --------          --------                    --------          --------
Net loss applicable to common shares                       $(12,511)         $(21,427)                   $(23,809)         $(38,814)
                                                           ========          ========                    ========          ========
Basic and diluted loss per common share                    $  (0.29)         $  (0.49)                   $  (0.55)         $  (0.89)
                                                           ========          ========                    ========          ========
Weighted-average basic and diluted
  common shares outstanding                                  43,578            43,532                      43,578            43,456
                                                           ========          ========                    ========          ========
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to financial statements.
<PAGE>
                               Prime Retail, Inc.

                 Unaudited Consolidated Statements of Cash Flows

                             (Amounts in thousands)
<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Six months ended June 30,                                                                           2001                      2000
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                             <C>                       <C>

Operating Activities
Net loss                                                                                        $ (12,473)                $ (27,478)
Adjustments to reconcile net loss to net cash
  provided by operating activities:
     Income (loss) allocated to minority interests                                                   (401)                       32
     Gain on sale of real estate                                                                     (552)                        -
     Depreciation                                                                                  27,160                    31,689
     Amortization of deferred financing costs                                                       3,659                     1,708
     Amortization of debt premiums                                                                 (1,638)                   (1,562)
     Amortization of leasing commissions                                                              238                       331
     Provision for uncollectible accounts receivable                                                6,877                     3,529
     Provision for asset impairment                                                                     -                     8,538
     Loss on eOutlets.com                                                                               -                    14,279
     Loss on Designer Connection                                                                        -                     2,085
     Gain on sale of land                                                                               -                    (2,472)
Changes in operating assets and liabilities:
     Increase in accounts receivable                                                               (4,566)                   (1,999)
     Decrease in restricted cash                                                                   17,061                        81
     Increase in other assets                                                                      (2,814)                   (1,107)
     Decrease in accounts payable and other liabilities                                           (19,112)                   (1,954)
     Increase in real estate taxes payable                                                          2,022                     6,133
     Increase in accrued interest                                                                   2,699                       141
                                                                                                ---------                 ---------
       Net cash provided by operating activities                                                   18,160                    31,974
                                                                                                ---------                 ---------
Investing Activities
Additions to investment in rental property                                                        (11,853)                  (32,551)
Payments made for eOutlets.com                                                                     (2,170)                   (9,434)
Proceeds from sale of land                                                                              -                     4,622
Proceeds from sales of operating properties                                                        33,547                    11,063
                                                                                                ---------                 ---------
       Net cash provided by (used in) investing activities                                         19,524                   (26,300)
                                                                                                ---------                 ---------
Financing Activities
Proceeds from notes payable                                                                        16,899                    12,734
Principal repayments on notes payable                                                             (59,491)                  (18,396)
Contributions from minority interests                                                                 400                         -
Financing costs                                                                                      (325)                     (750)
                                                                                                ---------                 ---------
       Net cash used in financing activities                                                      (42,517)                   (6,412)
                                                                                                ---------                 ---------
Decrease in cash and cash equivalents                                                              (4,833)                     (738)
Cash and cash equivalents at beginning of period                                                    8,906                     7,343
                                                                                                ---------                 ---------
Cash and cash equivalents at end of period                                                      $   4,073                 $   6,605
                                                                                                =========                 =========
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to financial statements.
<PAGE>
                               Prime Retail, Inc.

           Unaudited Consolidated Statements of Cash Flows (continued)

                             (Amounts in thousands)



Supplemental Disclosure of Non-cash Investing and Financing Activities:

The following assets and liabilities were sold in connection with the sale of
Prime Outlets at Williamsburg on February 23, 2000:

    Book value of assets disposed, net..........................       $ 53,563
    Cash received..............................................         (11,063)
    Promissory note received...................................         (10,000)
                                                                       --------
    Debt disposed...............................................       $ 32,500
                                                                       ========
================================================================================


See accompanying notes to financial statements.
<PAGE>


                               Prime Retail, Inc.
              Notes to Unaudited Consolidated Financial Statements
           (Amounts in thousands, except share and unit information)


Note 1 -- Interim Financial Presentation

     The  accompanying  unaudited  consolidated  financial  statements have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States ("GAAP") for interim financial information and the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all
of the  information  and  footnotes  required  by GAAP  for  complete  financial
statements.  In the opinion of management,  all  adjustments  consisting only of
recurring  accruals  considered  necessary  for a fair  presentation  have  been
included.  Operating  results  for  such  interim  periods  are not  necessarily
indicative  of the results  that may be expected  for a full  fiscal  year.  For
further  information,   refer  to  the  consolidated  financial  statements  and
footnotes included in Prime Retail, Inc.'s (the "Company") Annual Report on Form
10-K for the year ended December 31, 2000.

     Unless the context requires otherwise, all references to the Company herein
mean Prime Retail,  Inc. and those entities owned or controlled by Prime Retail,
Inc.,   including  Prime  Retail,  L.P.  (the  "Operating   Partnership").   The
consolidated  financial  statements  include the  accounts of the  Company,  the
Operating  Partnership and the partnerships in which the Company has operational
control.  Profits and losses are allocated in  accordance  with the terms of the
agreement of limited  partnership of the Operating  Partnership.  Investments in
partnerships  in  which  the  Company  does  not have  operational  control  are
accounted for under the equity method of accounting. Income (loss) applicable to
minority interests and common shares as presented in the consolidated statements
of operations is allocated  based on income  (loss)  before  minority  interests
after income allocated to preferred shareholders.

     The  preparation of financial  statements in conformity  with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities  and disclosure of contingent  liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting  period.  Actual results could differ from those estimates.
Significant  inter-company  accounts and  transactions  have been  eliminated in
consolidation.  Certain prior period financial information has been reclassified
to conform to the current period presentation.

Note 2 -- Dispositions

     On February 2, 2001, the Company sold Northgate  Plaza, a community  center
located  in  Lombard,   Illinois  to  Arbor   Northgate,   Inc.  for   aggregate
consideration of $7,050. After the repayment of mortgage  indebtedness of $5,966
and closing  costs,  the net cash proceeds  from the  Northgate  Plaza sale were
$510.  On March 16, 2001,  the Company sold Prime  Outlets at  Silverthorne,  an
outlet center  located in  Silverthorne,  Colorado  consisting of 257,000 square
feet of GLA, to Silverthorne Factory Stores, LLC for aggregate  consideration of
$29,000.  The net cash proceeds  from the sale of Prime Outlets at  Silverthorne
were $8,993, after the repayment of certain mortgage  indebtedness of $18,078 on
Prime  Outlets  at  Lebanon  (see  below) and  closing  costs and fees.  The net
proceeds  from these sales of were used to prepay an  aggregate of $9,137 of the
Company's  outstanding  mezzanine loan (the "Mezzanine Loan") in accordance with
the terms of such loan agreement.  In connection  with these sales,  the Company
recorded an  aggregate  gain on the sale of real estate of $732 during the first
quarter of 2001. The operating  results of these  properties are included in the
Company's results of operations through the respective dates of disposition.  At
December 31, 2000,  these  properties were classified as assets held for sale in
the Consolidated Balance Sheet with an aggregate carrying value of $34,770.
<PAGE>
     Prior to the  sale of  Prime  Outlets  at  Silverthorne,  it was one of the
fifteen properties securing the Company's first mortgage and expansion loan (the
"First Mortgage and Expansion Loan"), which had an outstanding principal balance
of $344,510 at June 30, 2001. In  conjunction  with the sale of Prime Outlets at
Silverthorne, the Company substituted Prime Outlets at Lebanon for Prime Outlets
at  Silverthorne in the  cross-collateral  asset pool securing the Firt Mortgage
and Expansion Loan pursuant to the collateral  substitution provisions contained
in the loan agreement.

     On May 8, 2001, Prime Outlets at New River, an outlet center located in New
River,  Arizona  consisting  of 326,000  square  feet of GLA,  was sold  through
foreclosure. An affiliate of the Company and an affiliate of Fru-Con Development
Corporation ("Fru-Con") each own 50% of the partnership which owned the project.
The Company  accounted for its ownership  interest in the partnership that owned
the project in accordance with the equity method of accounting  through the date
of  foreclosure  sale.  In connection  with the  foreclosure  sale,  the Company
recorded a loss on the sale of real estate of $180 during the three months ended
June  30,  2001.

Note 3 -- Bonds and Notes Payable

Debt Transactions

     In  connection  with the sales of  Northgate  Plaza and  Prime  Outlets  at
Silverthorne  during the first  quarter of 2001,  the  Company  repaid  mortgage
indebtedness of $5,966 and $18,078, respectively. In addition, net cash proceeds
from  these  property  sales were used to prepay an  aggregate  of $9,137 of the
Company's  outstanding  Mezzanine  Loan.  As of June 30, 2001,  the  outstanding
principal balance of the Mezzanine Loan was $75,863. See Note 2 - "Dispositions"
for additional information.

     The  Company,  through  affiliates,  holds a 51%  interest  in the owner of
Phases II and III of an outlet  center in Bellport,  New York on which the first
mortgage loan of $7,795 matured on May 1, 2001. On May 21, 2001, the Company, on
behalf of the  owner,  made a  principal  payment  of  $2,295  to the  lender in
exchange  for a  modification  to the  terms  and a  one-year  extension  of the
maturity of this mortgage  indebtedness.  The  outstanding  balance of the first
mortgage loan was $5,500 as of June 30, 2001.

     On June 8, 2001,  the  Company,  through  affiliates,  obtained a two-month
extension  through  August 10, 2001 to the terms and maturity  date of a $16,330
first  mortgage  loan  secured by Prime  Outlets at  Edinburgh  (the  "Edinburgh
Project") located in Edinburgh,  Indiana. On June 29, 2001, the Company, through
affiliates,  completed a refinancing  of this first mortgage loan. The new first
mortgage loan (the  "Edinburgh  First Mortgage  Loan") provides for an aggregate
commitment up to $18,000 and is non-recourse to the Company. The Edinburgh First
Mortgage Loan,  which is secured by the Edinburgh  Project,  has a term of three
years,  requires monthly  principal  payments based upon a 15-year  amortization
schedule and is pre-payable  at any time subject to certain  prepayment and exit
fees. The Edinburgh  First Mortgage Loan bears interest at a floating rate based
on six-month LIBOR plus 350 basis points, subject to an 8.0% minimum, and may be
adjusted  semi-annually with a maximum 1.0% increase or decrease per adjustment.
At closing, $16,700 of the Edinburgh First Mortgage Loan was funded resulting in
net proceeds of $88 after  repayment of the old first  mortgage loan and closing
costs. The remaining  commitment provides for the funding of up to an additional
$1,300 for leasing related capital expenditures at the Edinburgh Project.
<PAGE>
     On August 7, 2001, the Company, through affiliates,  obtained an additional
one-month  extension to September  10, 2001 to the terms and maturity  date of a
$10,003  first  mortgage  loan secured by Prime Outlets at Birch Run (the "Birch
Run Project") located in Birch Run, Michigan. The terms and maturity date of the
$10,003 first mortgage loan had previously been extended to August 10, 2001. The
Company, through affiliates, has a 30.0% ownership interest in the joint venture
partnership (the "Venture") that owns the Birch Run Project. The Company expects
to complete a refinancing  of first mortgage  loans  aggregating  $51,866 (as of
June 30, 2001) on the Birch Run Project during August 2001. These first mortgage
loans are  included  in a  "wrap-around"  first  mortgage  loan  provided by the
Company to the  Venture in  connection  with the  November  19, 1999 sale of the
Birch Run Project.

     The new first  mortgage  loan (the  "Birch  Run  First  Mortgage  Loan") is
expected  to be in the amount of $63,000,  be secured by the Birch Run  Project,
have a term of ten-years,  and require monthly principal amortization based upon
a  25-year  schedule.  The Birch Run First  Mortgage  Loan is  expected  to bear
interest at a fixed rate based upon ten-year U.S.  Treasury Notes plus 310 basis
points at the time of closing.  In  addition,  the Company  would  continue  its
interest rate subsidy  agreement  with the Venture  whereby the interest rate on
the Birch Run First  Mortgage  Loan is fixed at 7.75%.  To the  extent  that the
actual  interest rate on the Birch Run First  Mortgage Loan exceeds  7.75%,  the
Company would be obligated to make  payments to Venture.  To the extent that the
actual  interest  rate on the Birch Run First  Mortgage Loan is less than 7.75%,
the Venture  would be  obligated to make  payments to the  Company.  The Venture
expects to use the net proceeds from the Birch Run First  Mortgage Loan to repay
in full the Company's  net  investment in the  "wrap-around"  first  mortgage of
$10,729 (as of June 30, 2001).  There can be no assurance  that the  refinancing
will occur or will be in accordance with the terms set forth in this paragraph.

Debt Service Obligations

     The Company's aggregate indebtedness,  excluding unamortized debt premiums,
was  $973,417  at June 30,  2001.  At June 30,  2001,  such  indebtedness  had a
weighted-average  maturity  of 3.7  years  and bore  contractual  interest  at a
weighted-average  rate of 8.98% per annum. At June 30, 2001, $801,878, or 82.4%,
of such  indebtedness  bore interest at fixed rates and $171,540,  or 17.6%,  of
such  indebtedness  bore  interest  at  variable  rates.  The  Company  utilizes
derivative  financial  instruments  to manage its interest rate risk  associated
with variable rate debt.

     As of June 30, 2001, the Company's  remaining  scheduled principal payments
for  2001  were  $22,769.  These  scheduled  principal  payments  include  (i) a
non-recourse  first mortgage loan of $3,481 on Western Plaza (the "Western Plaza
First Mortgage Loan"), a community center located in Knoxville, Tennessee, which
matures on October 31, 2001 and (ii) a recourse first mortgage of $6,527 on land
located in Camarillo,  California which matures on November 1, 2001.  Certain of
the  Company's   fixed-rate  bonds  aggregating  $7,000  contain   cross-default
provisions  with respect to certain of the  Company's  other credit  agreements,
including the Western Plaza First  Mortgage  Loan. In the event of default,  the
holders  of such  bonds may elect to put such  obligations  to the  Company at a
price equal to par plus accrued interest.
<PAGE>
     The  Company  plans to either  refinance  or  extend  the  maturity  of the
indebtedness  maturing  during  2001.  In the  event  the  Company  is unable to
refinance or extend the maturity of such indebtedness,  it will attempt to repay
the outstanding balance through proceeds from potential sales of property,  cash
flow from operations,  or proceeds from additional borrowings.  In addition, the
Company may attempt to give the property  securing such indebtedness back to the
mortgage lenders.  There can be no assurance that the Company will be successful
in obtaining the required amount of funds for the maturing  indebtedness or that
the terms of the refinancings or extensions of maturities, if they should occur,
will be as favorable as the Company has experienced in prior periods.

     As of June 30, 2001, the Company is a guarantor or otherwise obligated with
respect  to an  aggregate  of  $12,499  of the  indebtedness  of  Horizon  Group
Properties,  Inc. and its affiliates  ("HGP"),  including $10,000 of obligations
under a secured credit facility (the "HGP Secured Facility").  HGP is a publicly
traded  company that was formed in  connection  with the  Company's  merger with
Horizon Group Properties, Inc. in June 1998.

     At June 30, 2001, the HGP Secured  Credit  Facility bore interest at a rate
of  30-day  LIBOR  plus  1.90% was  collateralized  by five  properties  located
throughout  the United  States and matured on July 11, 2001.  On August 2, 2001,
HGP announced it had  refinanced one of the properties in the HGP Secured Credit
Facility and used the proceeds  from the new first  mortgage  loan to reduce the
principal  balance  of the HGP  Secured  Credit  Facility.  Simultaneously,  HGP
obtained  an  extension  to the  remaining  principal  balance of  approximately
$33,500,  including  a 2%  extension  fee, on the HGP  Secured  Credit  Facility
through July 11, 2002.  Commencing on the extension date, the HGP Secured Credit
Facility bears interest at a rate of 30-day LIBOR (but not less than 4.10%) plus
3.95%, requires monthly principal amortization of $225, and is collateralized by
four properties  located throughout the United States. The Company confirmed its
obligations  as  guarantor  with respect to the HGP Secured  Credit  Facility in
connection  with the  extension  and partial  paydown.  No claims have been made
against the Company's guaranty by the HGP Secured Credit Facility lender.

Debt Compliance

     As of June 30, 2001, the Company was in compliance  with all financial debt
covenants under its recourse loan agreements. However, there can be no assurance
that the Company will be in  compliance  with its  financial  debt  covenants in
future periods since the Company's  future  financial  performance is subject to
various risks and uncertainties,  including,  but not limited to, the effects of
increases in market  interest rates from current  levels,  the risk of potential
increases in vacancy  rates and the resulting  impact on the Company's  revenue,
and risks associated with refinancing the Company's  current debt obligations or
obtaining new financing  under terms as favorable as the Company has experienced
in prior periods.

Defaults on Certain Non-recourse Mortgage Indebtedness

     Subsidiaries of the Company have suspended regularly scheduled monthly debt
service payments on two non-recourse  mortgage loans  aggregating  $33,517 which
are  cross-collateralized  by Prime  Outlets at  Jeffersonville  II,  located in
Jeffersonville, Ohio, and Prime Outlets at Conroe, located in Conroe, Texas. The
Company  remains in discussions  with the holder of the mortgage loans regarding
potential  restructuring of their existing terms. There can be no assurance that
such  discussions  will lead to any  modification  to the terms of the  mortgage
loans and that the lender will not bring a foreclosure action concerning the two
properties.  Because the two mortgage loans are  non-recourse and the Company is
currently not  receiving any cash flow from these two centers,  the Company does
not  believe  the  existing  defaults  or any  related  foreclosure  will have a
material impact on its results of operations or financial position.
<PAGE>
Defaults   on  Certain  Non-Recourse  Mortgage  Indebtedness  of  Unconsolidated
Partnerships

     Various  mortgage  loans related to projects in which the Company,  through
subsidiaries,  indirectly  owns joint venture  interests have matured and are in
default.  The mortgage loans are (i) a $10,389 first mortgage loan on Phase I of
the Bellport  Outlet Center located in Bellport,  New York,  held by Union Labor
Life Insurance  Company ("Union Labor");  and (ii) a $13,438 first mortgage loan
on the Oxnard Outlet Center located in Oxnard,  California,  held by Fru-Con. An
affiliate of the Company has a 50% ownership  interest in the partnership  which
owns Phase I of the Bellport  Outlet Center.  Fru-Con and the Company are each a
50.0% partner in the partnership that owns the Oxnard Outlet Center.

     Union Labor has filed for  foreclosure  on Phase I of the  Bellport  Outlet
Center.  A receiver was  appointed  March 27, 2001 by the court  involved in the
foreclosure action. Effective May 1, 2001, a manager hired by the receiver began
managing  Phase I of the  Bellport  Outlet  Center.  The  Company  continues  to
negotiate the terms of a transfer of its ownership interest in the Oxnard Outlet
Center to Fru-Con.

     The  Company  believes  none of these  mortgage  loans is  recourse  to the
Company. In addition,  the Company and its affiliates is currently not receiving
any cash flow from the Oxnard Outlet Center and were not receiving any cash flow
from Phase I of the Bellport  Outlet Center prior to the loss of control of this
project.  Therefore,  the Company does not believe the existing  defaults  under
these loans or any related  foreclosures on the mortgaged properties will have a
material impact on its results of operations or financial position.

Note 4 - Shareholders' Equity

Proposed Reverse Common Stock Split

     The Company has  received  notification  from the NYSE that it believes the
Company is "below  criteria"  for  continued  listing of its common stock on the
NYSE.  In order to avoid  delisting of its common stock,  the Company  currently
intends to seek  shareholder  approval  for a reverse  stock split at its annual
meeting of  shareholders  to be held on August 21, 2001.  The  proposed  reverse
stock split of the Company's  common stock will be at a ratio of ten-to-one  and
will  effect a related  reduction  in the  number of shares of common  stock the
Company is authorized to issue (from 150,000 to 15,000). If the Company proceeds
with the reverse stock split as proposed to the Company's stockholders, each ten
(10)  shares  of the  Company's  Common  Stock  issued  and  outstanding  on the
effective  date of the split will be  automatically  changed into and become one
share of the  Company's  new common  stock,  $0.01 par value per share (the "New
Common Stock"). To avoid the existence of fractional shares of New Common Stock,
stockholders who would otherwise be entitled to receive fractional shares of New
Common  Stock as a  result  of the  reverse  stock  split  will  receive  a cash
distribution  in lieu thereof.  The par value per share of the common stock will
remain at $0.01 per share.  As of June 30,  2001,  the  Company  had  43,577,916
shares of common stock issued and  outstanding  and following  completion of the
reverse stock split, if approved, the Company would have approximately 4,357,790
shares of New Common Stock issued and outstanding.
<PAGE>
     The reduction in the number of outstanding shares of common stock caused by
the reverse stock split is anticipated to increase the per share market price of
the common stock,  although there can be no assurance that the increase in price
will be  proportional  to the decrease in the number of shares.  Moreover,  some
investors  may view the  reverse  stock  split  negatively  since it reduces the
number of shares  available in the public  market.  In addition,  the  Company's
financial results,  market conditions,  the market perception of the real estate
industry  and other  factors may  adversely  affect the market  price of the New
Common  Stock.  As a result,  there can be no assurance  that, subsequent to the
reverse  stock split,  the market price of the New Common Stock will not decline
from its initial level.

     In addition to satisfying the minimum  average  closing price  requirement,
the Company  would also need to continue  to satisfy all other  applicable  NYSE
listing  criteria.  Moreover,  even if the  Company  were to satisfy  all of the
substantive  listing  requirements,  the NYSE has broad  discretion  to delist a
company's  securities  for any reason if, in the opinion of the NYSE,  events or
circumstances  have  made  listing  of  a  company's   securities  on  the  NYSE
inadvisable  or  unwarranted.  As a result,  there can be no assurance  that the
Company will be successful  in meeting  these and other listing  criteria of the
NYSE or that,  in the event the  Common  Stock is  delisted  from the NYSE,  the
Company will be successful in obtaining an initial  registration  on either AMEX
or NASDAQ.

Dividends and Distributions

     In order to qualify as a real estate  investment trust ("REIT") for federal
income tax purposes,  the Company is required to pay distributions to its common
and  preferred  shareholders  of at least  90% of its  REIT  taxable  income  in
addition to satisfying other requirements.  Although the Company intends to make
distributions  in accordance with the  requirements of the Internal Revenue Code
of 1986, as amended, necessary to remain qualified as a REIT, it also intends to
retain such amounts as it considers  necessary from time to time for capital and
liquidity needs of the Company.

     The Company's  current  policy is to pay  distributions  only to the extent
necessary  to  maintain  its status as a REIT for federal  income tax  purposes.
Based on the Company's  current federal income tax projections for 2001, it does
not  expect to pay any  distributions  on its 10.5%  Series A Senior  Cumulative
Preferred   Stock  ("Senior   Preferred   Stock"),   8.5%  Series  B  Cumulative
Participating  Convertible  Preferred  Stock  ("Series B  Convertible  Preferred
Stock"),  common  stock or common units of limited  partnership  interest in the
Operating Partnership during 2001.

     The Company is prohibited from paying dividends or distributions  except to
the  extent  necessary  to  maintain  its REIT  status  under  the  terms of its
Mezzanine Loan. In addition, the Company may make no distributions to its common
shareholders or its holders of common units of limited  partnership  interest in
the Operating  Partnership unless it is current with respect to distributions to
its preferred shareholders. As of June 30, 2001, unpaid dividends for the period
November 16, 1999 through June 30, 2001 on the Senior Preferred Stock and Series
B Convertible Preferred Stock aggregated $9,811 and $27,031,  respectively.  The
annual dividends on the Company's 2,300,000 shares of Senior Preferred Stock and
7,828,125 shares of Series B Convertible  Preferred Stock are $6,038 ($2.625 per
share) and $16,636 ($2.125 per share), respectively.
<PAGE>
     The Company is  currently  in arrears on six  quarters of  preferred  stock
distributions  due February  15, 2000  through May 15, 2001.  The holders of the
Series A Preferred  Stock and Series B  Preferred  Stock,  voting  together as a
single  class,  will  have the  right to elect  two  additional  members  to the
Company's  Board  of  Directors  so long as the  equivalent  of six  consecutive
quarterly  dividends on these series of preferred stock remain in arrears.  Each
of such  directors  would be  elected  to serve  until  the  earlier  of (i) the
election and qualification of such director's successor,  or (ii) payment of the
dividend  arrearage.  The Company will issue a press  release  subsequent to its
annual  meeting of  shareholders  specifying  the  procedures  and timeframe for
election of the two additional directors.

Note 5-- Risk Management Activities

     In June 2000, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 138,  "Accounting  for Certain  Derivative  Instruments  and Certain Hedging
Activities," which amends SFAS No. 133,  "Accounting for Derivative  Instruments
and Hedging  Activities."  SFAS No. 133 was previously  amended by SFAS No. 137,
"Accounting for Derivative Instruments and Hedging  Activities--Deferral  of the
Effective  Date of FASB Statement No. 133," which deferred the effective date of
SFAS No. 133 to fiscal years  beginning after June 15, 2000. The Company adopted
SFAS No. 138 and SFAS No. 133  effective  January 1, 2001 and such  adoption did
not have a material impact on its results of operations or financial position.

Note 6 -- Legal Proceedings

        On October 13, 2000 and thereafter, eight complaints were filed in the
     United  States  District  Court for the  District of  Maryland  against the
Company and five  individual  defendants.  The five  individual  defendants are:
Glenn D. Reschke,  the President,  Chief  Executive  Officer and Chairman of the
Board of  Directors  of the  Company;  William  H.  Carpenter,  Jr.,  the former
President  and Chief  Operating  Officer and a current  director of the Company;
Abraham  Rosenthal,  the former Chief Executive Officer and a former director of
the Company;  Michael W. Reschke, the former Chairman of the Board and a current
director of the Company;  and Robert P.  Mulreaney,  the former  Executive  Vice
President - Chief Financial Officer and Treasurer of the Company. The complaints
were  brought  by  alleged   stockholders  of  the  Company,   individually  and
purportedly as class actions on behalf of all other stockholders of the Company.
The complaints  allege that the individual  defendants made statements about the
Company that were in violation of the federal  securities  laws.  The complaints
seek unspecified damages and other relief. Lead plaintiffs and lead counsel were
subsequently  appointed. A consolidated complaint was filed. The Company and the
individual  defendants filed a motion to dismiss.  The Company believes that the
complaints are without merit and intends to defend against them vigorously.  The
outcome of these lawsuits, and the ultimate liability of the defendants, if any,
cannot be predicted.

     The Company and its affiliates were defendants in a lawsuit filed on August
10, 1999 in the Circuit Court for  Baltimore  City and removed to U. S. District
Court for the  District of Maryland  (the "U.S.  District  Court") on August 20,
1999.  The  plaintiff   alleged  that  the  Company  and  its  related  entities
overcharged  tenants for common area  maintenance  charges  and  promotion  fund
charges.  The U.S.  District  Court  dismissed the lawsuit on June 19, 2000. The
plaintiff has appealed the U.S.  District  Court's decision and briefs have been
filed.  Management  believes that the Company has acted  properly and intends to
defend this lawsuit  vigorously.  The outcome of this lawsuit,  and the ultimate
liability of the defendants, if any, cannot be predicted.
<PAGE>
     Several  entities (the  "Plaintiffs")  have filed or stated an intention to
file lawsuits (the  "Lawsuits")  against the Company and its affiliates in which
the Plaintiffs are seeking to hold them responsible under various legal theories
for  liabilities  incurred by  primeoutlets.com,  inc.,  also known as eOutlets,
including the theory that the Company guaranteed the obligations of eOutlets and
the theory that the Company was the alter ego of eOutlets. primeoutlets.com inc.
is also a defendant in some, but not all, of the Lawsuits.  The Company believes
that it is not liable to the  Plaintiffs  as there was no  privity  of  contract
between  it and the  various  Plaintiffs.  The  Company  intends  to defend  all
Lawsuits vigorously.  primeoutlets.com inc. filed for protection under Chapter 7
of the  United  States  Bankruptcy  Code  during  November  2000  under the name
E-Outlets  Resolution  Corp.  The trustee for  E-Outlets  Resolution  Corp.  has
notified the Company that he is  contemplating an action against the Company and
the Operating Partnership in which he may assert that E-Outlets Resolution Corp.
was the "alter-ego" of the Company and the Operating  Partnership and that, as a
result,  the Company and the Operating  Partnership  are liable for the debts of
E-Outlets  Resolution  Corp. If the trustee pursues such an action,  the Company
and the Operating  Partnership will defend  themselves  vigorously.  In the case
captioned  Convergys Customer  Management Group, Inc. v. Prime Retail,  Inc. and
primeoutlets.com  inc. in the Court of Common Pleas for Hamilton  County (Ohio),
the  Company  prevailed  in a motion to dismiss the  plaintiff's  claim that the
Company was liable for  primeoutlets.com  inc.'s breach of contract based on the
doctrine of piercing the corporate veil. The outcome of these Lawsuits,  and the
ultimate liability of the Company, if any, cannot be predicted.

     Dinnerware Plus Holdings, Inc., which operates under the trade name Mikasa,
and affiliates filed on March 29, 2001 a lawsuit against the Company and various
affiliates.  The  plaintiffs  allege that the Company  and its  affiliates  have
breached  various  provisions  in  the  plaintiffs'  leases  and,  as a  result,
overcharged  the  plaintiffs for common area  maintenance  charges and promotion
fund charges at various  centers where the plaintiffs  are tenants.  The Company
has not filed its  response to the  complaint.  Other  tenants  (in  addition to
Dinnerware  Plus  Holdings,  Inc.) in the  Company's  outlet  centers  have made
similar allegations to those made by Dinnerware Plus Holdings,  Inc.  One of the
tenants  has  stated  an  intention  to file a  counterclaim  in  response  to a
collection action brought by the Company and its affiliates.  The outcome of the
Dinnerware  Plus Holdings,  Inc.  lawsuit and other  potential  claims,  and the
ultimate liability of the defendants, if any, cannot be predicted.

     The New York  Stock  Exchange  ("NYSE")  and the  Securities  and  Exchange
Commission have notified the Company that they are reviewing transactions in the
stock of the Company  prior to the  Company's  January  18,  2000 press  release
concerning financial matters.  The initial notice of such review was received on
March 13, 2000.
<PAGE>
Item 2.    Management's Discussion and Analysis of
           Financial Condition and Results of Operations

  (Amounts in thousands, except share, unit and square foot information)


Introduction

     The  following  discussion  and  analysis  of  the  consolidated  financial
condition and results of operations of the Company should be read in conjunction
with the Consolidated Financial Statements and Notes thereto appearing elsewhere
in this Quarterly  Report on Form 10-Q.  The Company's  operations are conducted
through  the  Operating   Partnership.   The  Company   controls  the  Operating
Partnership as its sole general partner and is dependent upon the  distributions
or  other  payments  from  the  Operating  Partnership  to  meet  its  financial
obligations.  Historical  results and percentage  relationships set forth herein
are not necessarily indicative of future operations.

Cautionary Statements

     The  following  discussion  in  "Management's  Discussion  and  Analysis of
Financial Condition and Results of Operations" contains certain  forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995, which reflect management's current views with respect to future events and
financial  performance.  These  statements  are subject to  potential  risks and
uncertainties  and,  therefore,  actual  results  may  differ  materially.  Such
forward-looking  statements  are  subject  to certain  risks and  uncertainties,
including, but not limited to, risks associated with the Company's high level of
leverage and its ability to refinance such  indebtedness  as it becomes due; the
risk that the Company or its  subsidiaries  will not remain in  compliance  with
existing loan covenants; the effects of future events on the Company's financial
performance;  risks related to the retail industry in which the Company's outlet
centers  compete,  including the potential  adverse impact of external  factors,
such as inflation,  consumer confidence,  unemployment rates and consumer tastes
and preferences;  risks associated with tenant bankruptcies,  store closings and
the  non-payment  of  contractual  rents;  risks  associated  with the Company's
potential asset sales;  the risk of potential  increase in market interest rates
from current levels;  risks associated with real estate  ownership,  such as the
potential  adverse impact of changes in local  economic  climate on the revenues
and the value of the Company's properties; risks associated with litigation; and
risks associated with competition from web-based and catalogue retailers.

Outlet Center Portfolio

Portfolio GLA and Occupancy

     The Company's outlet center portfolio  consisted of 45 properties  totaling
12,670,000 square feet of gross leasable area ("GLA") at June 30, 2001, compared
to 48 properties totaling 13,497,000 square feet of GLA at December 31, 2000 and
51  properties  totaling  14,913,000  square feet of GLA at June 30,  2000.  The
changes  in the  Company's  outlet  center  GLA are  due to  certain  (i)  sales
transactions during 2001 and 2000, (ii) development  activities during 2000, and
(iii) the loss of an outlet center through  foreclosure  sale.  Such changes are
discussed  below  and  are  collectively  referred  to  as  the  "Portfolio  GLA
Activity".
<PAGE>
     The Company's  outlet center portfolio was 89.5% and 90.7% occupied on June
30,  2001 and 2000,  respectively.  For the three and six months  ended June 30,
2001,  weighted-average  occupancy in the outlet center  portfolio was 89.5% and
89.8%,  respectively,  compared to 90.8% and 90.9% for the same periods in 2000.
The  decline  in  the  2001  weighted-average  and  period-end  occupancies  was
primarily  attributable to certain tenant  bankruptcies,  abandonments and store
closings.

2001 Sales Transactions

     On March 16,  2001,  the  Company  completed  the sale of Prime  Outlets at
Silverthorne,  an outlet center located in Silverthorne,  Colorado consisting of
257,000 square feet of GLA, to Silverthorne  Factory Stores,  LLC. The operating
results of Prime Outlets at Silverthorne  are included in the Company's  results
of operations through the date of disposition.

     On May 8, 2001, Prime Outlets at New River, an outlet center located in New
River,  Arizona  consisting  of 326,000  square  feet of GLA,  was sold  through
foreclosure. An affiliate of the Company and an affiliate of Fru-Con Development
Corporation ("Fru-Con") each own 50% of the partnership which owned the project.
The Company  accounted for its ownership  interest in the partnership that owned
the project in accordance with the equity method of accounting  through the date
of  foreclosure  sale.  In connection  with the  foreclosure  sale,  the Company
recorded a loss on the sale of real estate of $180 during the three months ended
June 30, 2001.

2000 Sales Transactions

     On February 23, 2000, the Company sold Prime Outlets at Williamsburg, which
containes  274,000  square feet for GLA,  to a joint  venture  partnership  (the
"Prime/Estein  Venture").  The Company owns a 30%  interest in the  Prime/Estein
Venture.  Commencing on the date of  disposition,  the Company  accounts for the
operating  results of this outlet center in accordance with the equity method of
accounting.

     On December 22, 2000, the Company completed the sale of four outlet centers
aggregating  1,592,000  square  feet  of  GLA  to a  joint  venture  partnership
comprised of Chelsea Property Group, Inc. and Fortress  Investment Group, L.L.C.
The four  outlet  centers  that were sold are  located  in  Gilroy,  California;
Michigan City, Indiana; Waterloo, New York; and Kittery, Maine.

2000 Development Activities

     During 2000 the Company  completed the  development of 390,000 square feet
of GLA  consisting of the opening of (i) Prime Outlets of Puerto Rico, the first
outlet center in Puerto Rico,  which  contains  176,000  square feet of GLA, and
(ii) four expansions to outlet centers totalling 214,000 square feet of GLA.
<PAGE>
     The  following  table sets forth  certain  information  with respect to the
Company's outlet center portfolio as of June 30, 2001.

<TABLE>
<CAPTION>
                                                                                                 Grand        GLA        Occupancy
Outlet Centers                                                                            Opening Date     (Sq. Ft.)   Percentage(1)
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>                     <C>               <C>

Prime Outlets at Fremont-- Fremont, Indiana..................................           October 1985          229,000            88%

Prime Outlets at Birch Run (2)-- Birch Run, Michigan.........................         September 1986          724,000            95

Prime Outlets at Latham-- Latham, New York...................................            August 1987           43,000            88

Prime Outlets at Williamsburg (2)-- Williamsburg, Virginia...................             April 1988          274,000           100

Prime Outlets at Pleasant Prairie-- Kenosha, Wisconsin.......................         September 1988          269,000            91

Prime Outlets at Edinburgh-- Edinburgh, Indiana..............................         September 1989          298,000            94

Prime Outlets at Burlington-- Burlington, Washington ........................               May 1989          174,000            91

Prime Outlets at Queenstown-- Queenstown, Maryland...........................              June 1989          221,000           100

Prime Outlets at Hillsboro-- Hillsboro, Texas................................           October 1989          359,000            91

Prime Outlets at Oshkosh-- Oshkosh, Wisconsin................................          November 1989          260,000            90

Prime Outlets at Warehouse Row (3)-- Chattanooga, Tennessee..................          November 1989           95,000            74

Prime Outlets at Perryville-- Perryville, Maryland...........................              June 1990          148,000            95

Prime Outlets at Sedona-- Sedona, Arizona ...................................            August 1990           82,000           100

Prime Outlets at San Marcos-- San Marcos, Texas..............................            August 1990          549,000            92

Prime Outlets at Anderson-- Anderson, California.............................            August 1990          165,000            96

Prime Outlets at Post Falls-- Post Falls, Idaho .............................              July 1991          179,000            80

Prime Outlets at Ellenton-- Ellenton, Florida................................           October 1991          481,000            98

Prime Outlets at Morrisville-- Raleigh - Durham, North Carolina..............           October 1991          187,000            82

Prime Outlets at Naples-- Naples/Marco Island, Florida.......................          December 1991          146,000            88

Prime Outlets at Conroe-- Conroe, Texas......................................           January 1992          282,000            85

Bellport Outlet Center (4)-- Bellport, New York--  Phases II/III.............          November 1996          197,000            68

Prime Outlets at Niagara Falls USA-- Niagara Falls, New York.................              July 1992          534,000            94

Prime Outlets at Woodbury-- Woodbury, Minnesota..............................              July 1992          250,000            73

Prime Outlets at Calhoun-- Calhoun, Georgia..................................           October 1992          254,000            85

Prime Outlets at Castle Rock-- Castle Rock, Colorado.........................          November 1992          480,000            97

Prime Outlets at Bend-- Bend, Oregon.........................................          December 1992          132,000            96

Prime Outlets at Jeffersonville II-- Jeffersonville, Ohio....................             March 1993          314,000            51
</TABLE>
<PAGE>
<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
                                                                                                 Grand      GLA         Occupancy
Outlet Centers                                                                            Opening Date    (Sq. Ft.)    Percentage(1)
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>                   <C>                  <C>
Prime Outlets at Jeffersonville I-- Jeffersonville, Ohio.....................              July 1993          407,000            92%

Prime Outlets at Gainesville-- Gainesville, Texas............................            August 1993          316,000            78

Prime Outlets at Loveland-- Loveland, Colorado...............................               May 1994          328,000            92

Prime Outlets at Grove City-- Grove City, Pennsylvania.......................            August 1994          533,000            98

Prime Outlets at Huntley-- Huntley, Illinois.................................            August 1994          282,000            79

Prime Outlets at Florida City-- Florida City, Florida........................         September 1994          208,000            73

Prime Outlets at Pismo Beach-- Pismo Beach, California.......................          November 1994          148,000            94

Prime Outlets at Tracy-- Tracy, California...................................          November 1994          153,000            93

Prime Outlets at Vero Beach-- Vero Beach, Florida............................          November 1994          326,000            91

Prime Outlets at Odessa-- Odessa, Missouri...................................              July 1995          296,000            80

Prime Outlets at Darien (5)-- Darien, Georgia................................              July 1995          307,000            79

Prime Outlets at Gulfport (6)-- Gulfport, Mississippi........................          November 1995          306,000            82

Prime Outlets at Lodi-- Burbank, Ohio........................................          November 1996          313,000            91

Prime Outlets at Gaffney (6)-- Gaffney, South Carolina.......................          November 1996          305,000            95

Prime Outlets at Lee-- Lee, Massachusetts....................................              June 1997          224,000            99

Prime Outlets at Lebanon--  Lebanon, Tennessee...............................             April 1998          229,000            92

Prime Outlets at Hagerstown-- Hagerstown, Maryland...........................            August 1998          487,000            98

Prime Outlets of Puerto Rico-- Barceloneta, Puerto Rico......................              July 2000          176,000            98
                                                                                                           ----------           ----
Total Outlet Centers (7)                                                                                   12,670,000            89%
                                                                                                           ==========           ====
====================================================================================================================================
</TABLE>
Notes:
(1) Percentage  reflects  occupied  space  as  of  June 30, 2001 as a percent of
    available square feet of GLA.
(2) The  Company,  through affiliates, has a 30% ownership interest in the joint
    venture partnership that owns this outlet center.
(3) The  Company  owns  a 2% partnership interest as the sole general partner in
    Phase I  of this property but is entitled to 99% of the property's operating
    cash  flow  and  net  proceeds  from  a  sale or refinancing. This mixed-use
    development  includes  154,000  square feet of office space, not included in
    this table, which was 75% occupied as of June 30, 2001.
(4) The Company,  through  affiliates, has a 51% ownership interest in the joint
    venture  partnership  that  owns  Phases  II  and III of the Bellport Outlet
    Center.
(5) The  Company operates this  outlet  center  pursuant  to  a long-term ground
    lease  under  which  the  Company  receives  the  economic benefit of a 100%
    ownership interest.
(6) The real property on which this outlet center is located is subject to a
    long-term ground lease.
(7) The  Company  owns  two  community  centers,  not  included  in  this table,
    containing  219,000  square  feet  of  GLA  in  the  aggregate that were 80%
    occupied as of June 30, 2001.
<PAGE>
Results of Operations

Comparison of the three months ended June 30, 2001 to the three months ended
June 30, 2000

Summary

     The Company  reported net losses of $6,843 and $15,759 for the three months
ended June 30, 2001 and 2000, respectively.  For the three months ended June 30,
2001, the net loss applicable to common  shareholders was $12,511,  or $0.29 per
common share on a basic and diluted  basis.  For the three months ended June 30,
2000, the net loss applicable to common  shareholders was $21,427,  or $0.49 per
common share on a basic and diluted basis.

     The 2001 results include a non-recurring loss on the sale of real estate of
$180. The 2000 results  reflect  certain  non-recurring  items,  including (i) a
provision for asset  impairment of $8,538,  (ii)  professional  fees included in
general and administrative expenses of $1,455 related to refinancing activities,
(iii)  general and  administrative  expenses  consisting  of severance and other
compensation  costs aggregating $671, (iv) a loss on eOutlets.com of $1,315, and
(v) a loss on Designer Connection of $1,006.

Revenues

     Total  revenues  were  $57,104  for the three  months  ended June 30,  2001
compared  to $68,584 for the three  months  ended June 30,  2000,  a decrease of
$11,480,  or 16.7%.  Base rents decreased by $9,156, or 20.6%, to $35,305 during
the three  months  ended June 30, 2001 from $44,461 for the same period in 2000.
These  decreases  were  primarily  due to the  Portfolio  GLA  Activity  and the
reduction in outlet center occupancy during the 2001 period.  Straight-line rent
expense (income), included in base rent, was $213 and $(25) for the three months
ended June 30, 2001 and 2000, respectively.

     Percentage  rents,  which  represent  rents based on a percentage  of sales
volume above a specified threshold,  decreased by $370, or 33.5%, to $736 during
the three  months  ended June 30,  2001 from $1,106 for the same period in 2000.
This decline was primarily due to the Portfolio GLA Activity.

     Tenant  reimbursements,  which  represent  the  contractual  recovery  from
tenants of certain operating expenses, decreased by $2,363, or 11.6%, to $18,005
in 2001 from $20,368 in 2000.  This decline was  primarily  due to the Portfolio
GLA  Activity  and the  reduction  in outlet  center  occupancy  during the 2001
period.  Tenant reimbursements as a percentage of recoverable property operating
expenses  and real estate taxes was 95.8% during the three months ended June 30,
2001 compared to 94.9% for the same period in 2000.

     Interest and other income increased by $409, or 15.4%, to $3,058 during the
three  months  ended June 30, 2001 from $2,649 for the same period in 2000.  The
increase  was  primarily  attributable  to  a  reduction  in  equity  losses  on
unconsolidated partnerships of $660.

Expenses

     Property  operating  expenses  decreased  by $2,312,  or 14.5%,  to $13,646
during the three  months ended June 30, 2001 from $15,958 for the same period in
2000. Real estate taxes expense decreased by $367, or 6.7%, to $5,140 during the
three months ended June 30, 2001 from $5,507 for the same period in 2000.  These
decreases were primarily due to the Portfolio GLA Activity.
<PAGE>
     As shown in TABLE 1,  depreciation  and amortization  expense  decreased by
$2,060,  or 13.1%,  to $13,723  during the three months ended June 30, 2001 from
$15,783 for the same period in 2000. This decrease was primarily attributable to
the depreciation of assets associated with the Portfolio GLA Activity  partially
offset by depreciation expense of $746 on Prime Outlets at Hagerstown during the
2001 period.  The Company had classified Prime Outlets at Hagerstown as held for
sale from for the period from January 1, 2000 through September 30, 2000.

Table 1--Components of Depreciation and Amortization Expense

        The components of depreciation and amortization expense were as follows:

 -------------------------------------------------------------------------------
 Three months ended June 30,                                  2001          2000
 -------------------------------------------------------------------------------

 Building and improvements...............................   $6,869        $8,658
 Land improvements.......................................    1,540         1,365
 Tenant improvements.....................................    4,484         5,007
 Furniture and fixtures..................................      709           589
 Leasing commissions.....................................      121           164
                                                           -------       -------
       Total.............................................  $13,723       $15,783
                                                           =======       =======
================================================================================

     As shown in  TABLE 2,  interest  expense  decreased  by $380,  or 1.6%,  to
$23,334  during the three  months  ended June 30, 2001 from $23,714 for the same
period in 2000. This decrease reflects (i) lower interest incurred of $2,378 and
(ii) an increase in amortization of debt premiums of $43.  Partially  offsetting
these items was (i) an increase in amortization  of deferred  financing costs of
$782 and (ii) a reduction in the amount of interest  capitalized  in  connection
with development projects of $1,259.

     The decrease in interest incurred was primarily attributable to a reduction
of $231,784 in the Company's  weighted average debt outstanding,  excluding debt
premiums,  during the three  months  ended June 30,  2001  compared  to the same
period in 2000. The effect of the reduction in weighted-average debt outstanding
was partially offset by an increase of 0.98% in the weighted-average contractual
interest rate on  outstanding  indebtedness  for the three months ended June 30,
2001  compared  to the same  period in 2000.  The  weighted-average  contractual
interest rates for the 2001 and 2000 periods were 9.25% and 8.27%, respectively.

Table 2--Components of Interest Expense

        The components of interest expense were as follows:

 -------------------------------------------------------------------------------
 Three months ended June 30,                                  2001          2000
 -------------------------------------------------------------------------------

 Interest incurred.................................       $22,516       $24,894
 Amortization of debt premiums.....................          (827)         (784)
 Interest capitalized..............................             -        (1,259)
 Amortization of deferred financing costs..........         1,645           863
                                                          -------       -------
       Total.........................................     $23,334       $23,714
                                                          =======       =======
 ===============================================================================

     Other charges  increased by $469, or 10.4%,  to $4,972 for the three months
ended June 30, 2001 from $4,503 for the same period in 2000.  The  increase  was
primarily   attributable  to  a  higher  provision  for  uncollectible  accounts
receivable  of  $1,304  resulting  in part  from  certain  tenant  bankruptcies,
abandonments  and store  closings  during the three  months ended June 30, 2001.
Partially  offsetting this item were (i) reduced  pre-development  costs of $498
and (ii) a decrease in all other expenses of $337.
<PAGE>
Comparison  of  the  six  months  ended  June 30, 2001  to  the six months ended
June 30, 2000

Summary

     The Company  reported  net losses of $12,473 and $27,478 for the six months
ended June 30, 2001 and 2000,  respectively.  For the six months  ended June 30,
2001, the net loss applicable to common  shareholders was $23,809,  or $0.55 per
common  share on a basic and diluted  basis.  For the six months  ended June 30,
2000, the net loss applicable to common  shareholders was $38,814,  or $0.89 per
common share on a basic and diluted basis.

     The 2001 results include a non-recurring gain on the sale of real estate of
$552. The 2000 results  reflect  certain  non-recurring  items,  including (i) a
provision for asset  impairment of $8,538,  (ii) a gain on the sale of outparcel
land of $2,472 included in interest and other income,  (iii)  professional  fees
included in general and administrative expenses of $1,455 related to refinancing
activities, (iv) general and administrative expenses consisting of severance and
other  compensation  costs  aggregating  $2,421,  (v) a loss on  eOutlets.com of
$14,279 and (vi) a loss on Designer Connection of $2,085.

Revenues

     Total  revenues  were  $115,221  for the six  months  ended  June 30,  2001
compared  to  $141,425  for the six months  ended June 30,  2000,  a decrease of
$26,204,  or 18.5%. Base rents decreased by $16,472, or 18.6%, to $72,237 during
the six months  ended June 30,  2001 from  $88,709  for the same period in 2000.
These  decreases  are  primarily  due to the  Portfolio  GLA  Activity  and  the
reduction in outlet center occupancy during the 2001 period.  Straight-line rent
expense,  included in base rent, was $413 and $380 for the six months ended June
30, 2001 and 2000, respectively.

     Percentage  rents,  which  represent  rents based on a percentage  of sales
volume above a specified  threshold,  decreased by $1,140,  or 44.0%,  to $1,453
during the six months  ended June 30,  2001 from  $2,593 for the same  period in
2000. This decline was primarily due to the Portfolio GLA Activity.

     Tenant  reimbursements,  which  represent  the  contractual  recovery  from
tenants of certain operating expenses, decreased by $6,651, or 15.7%, to $35,729
in 2001 from $42,380 in 2000.  This decline was  primarily  due to the Portfolio
GLA  Activity  and the  reduction  in outlet  center  occupancy  during the 2001
period.  Tenant reimbursements as a percentage of recoverable property operating
expenses  and real estate  taxes was 93.7%  during the six months ended June 30,
2001 compared to 94.8% for the same period in 2000.

     Interest and other income  decreased by $1,941,  or 25.1%, to $5,802 during
the six months ended June 30, 2001 from $7,743 for the same period in 2000.  The
decease was primarily  attributable to a non-recurring gain on sale of outparcel
land of $2,472 during the 2000 period  partially offset by a reduction in equity
losses on unconsolidated partnerships of $663.

Expenses

     Property  operating  expenses  decreased  by $5,711,  or 17.1%,  to $27,779
during the six months  ended June 30,  2001 from  $33,490 for the same period in
2000.  Real estate taxes expense  decreased by $872, or 7.8%, to $10,366  during
the six months  ended June 30,  2001 from  $11,238  for the same period in 2000.
These decreases are primarily due to the Portfolio GLA Activity.
<PAGE>
     As shown in TABLE 3,  depreciation  and amortization  expense  decreased by
$4,622,  or 14.4%,  to $27,398  during the six months  ended June 30,  2001 from
$32,020 for the same period in 2000. This decrease was primarily attributable to
the depreciation of assets associated with the Portfolio GLA Activity  partially
offset by depreciation  expense of $1,479 on Prime Outlets at Hagerstown  during
the 2001 period.  The Company had classified Prime Outlets at Hagerstown as held
for sale from for the period from January 1, 2000 through September 30, 2000.

Table 3--Components of Depreciation and Amortization Expense

        The components of depreciation and amortization expense were as follows:

 -------------------------------------------------------------------------------
 Six months ended June 30,                                    2001          2000
 -------------------------------------------------------------------------------

 Building and improvements...............................  $13,758       $17,456
 Land improvements.......................................    3,077         2,765
 Tenant improvements.....................................    8,858        10,460
 Furniture and fixtures..................................    1,467         1,008
 Leasing commissions.....................................      238           331
                                                           -------       -------
       Total.............................................  $27,398       $32,020
                                                           =======       =======
================================================================================

     As shown in TABLE 4, interest expense increased by $40, or 0.1%, to $47,777
during the six months  ended June 30,  2001 from  $47,737 for the same period in
2000.  This  increase  reflects  (i) an  increase  in  amortization  of deferred
financing  costs of  $1,951  and (ii) a  reduction  in the  amount  of  interest
capitalized  in  connection  with  development  projects  of  $2,359.  Partially
offsetting  these  items was (i) lower  interest  incurred of $4,194 and (ii) an
increase  in  amortization  of debt  premiums  of $76.

     The decrease in interest incurred was primarily attributable to a reduction
of $231,460 in the Company's  weighted average debt outstanding,  excluding debt
premiums,  during the six months ended June 30, 2001 compared to the same period
in 2000. The effect of the reduction in  weighted-average  debt  outstanding was
partially  offset by an  increase of 1.07% in the  weighted-average  contractual
interest rate on outstanding indebtedness for the six months ended June 30, 2001
compared to the same period in 2000. The  weighted-average  contractual interest
rates for the 2001 and 2000 periods were 9.31% and 8.24%, respectively.

Table 4--Components of Interest Expense

        The components of interest expense were as follows:

 -------------------------------------------------------------------------------
 Six months ended June 30,                                    2001          2000
 -------------------------------------------------------------------------------

 Interest incurred......................................  $45,756       $49,950
 Amortization of debt premiums..........................   (1,638)       (1,562)
 Interest capitalized...................................        -        (2,359)
 Amortization of deferred financing costs...............    3,659         1,708
                                                          -------       -------
       Total............................................  $47,777       $47,737
                                                          =======       =======
 ===============================================================================

     Other charges increased by $2,642, or 43.8%, to $8,674 for the three months
ended June 30, 2001 from $6,032 for the same period in 2000.  The  increase  was
primarily   attributable  to  a  higher  provision  for  uncollectible  accounts
receivable  of  $3,348  resulting  in part  from  certain  tenant  bankruptcies,
abandonments  and store  closings  during  the six months  ended June 30,  2001.
Partially offsetting this item was a decrease in ground lease expense of $660.
<PAGE>
Special Charges

     During the second quarter of 2000, management  established a formal plan to
sell two of its  properties  and,  accordingly,  reclassified  their  respective
carrying values to held for sale in the  Consolidated  Balance Sheets as of June
30,  2000.  In  accordance  with the  requirements  of  Statement  of  Financial
Accounting  Standards  No. 121,  "Accounting  for the  Impairment  of Long-Lived
Assets  and  Long-Lived  Assets to be  Disposed  of",  the  Company  incurred  a
provision for asset impairment  aggregating  $8,538 to reduce the carrying value
of these properties to their estimated sales value, less cost to dispose. One of
these properties, Northgate Plaza was subsequently sold in February of 2001. See
"Liquidity  and Capital  Resources  - 2001 Sales  Transactions"  for  additional
information.

     The operating results for the Company's  Designer  Connection outlet stores
are reflected in loss on Designer  Connection in the Consolidated  Statements of
Operations  for all periods  presented.  The Company  ceased  operations  of its
Designer Connection outlet stores in 2000.

     On April  12,  2000,  the  Company  announced  that it had been  unable  to
conclude an  agreement  to transfer  ownership  of its wholly  owned  e-commerce
subsidiary,   primeoutlets.com   inc.,   also  known  as   eOutlets.com,   to  a
management-led  investor group comprised of eOutlets.com  management and outside
investors.  Effective April 12, 2000,  eOutlets.com ceased all operations and on
November 6, 2000 filed for  bankruptcy  under Chapter 7. In connection  with the
discontinuance  of eOutlets.com,  the Company  incurred a non-recurring  loss of
$1,315  and  $14,279  during  the  three and six  months  ended  June 30,  2000,
respectively.  The  non-recurring  loss for the six months  ended June 30,  2000
includes the write-off of $3,497 of costs previously capitalized during 1999.

Capital Expenditures

     In connection with re-leasing space to new merchants,  the Company incurred
$5,697 and $509 in  capital  expenditures  during the six months  ended June 30,
2001 and 2000, respectively.

Merchant Sales

     For the six months ended June 30, 2001,  same-space  sales in the Company's
outlet center  portfolio  decreased  1.7%  compared to the same period in 2000.
"Same-space  sales" is defined  as the  weighted-average  sales per square  foot
reported by merchants for space open since  January 1, 2000.  For the six months
ended June 30, 2001,  same-store  sales  decreased by 4.3%  compared to the same
period in 2000.  "Same-store sales" is defined as the weighted-average sales per
square foot  reported by  merchants  for stores  opened and operated by the same
merchant  since  January 1, 2000.  The  weighted-average  sales per square  foot
reported by all merchants were $245 for the year ended December 31, 2000.

Liquidity and Capital Resources

Sources and Uses of Cash

     For the six months  ended June 30,  2001,  net cash  provided by  operating
activities  was $18,160,  net cash provided by investing  activities was $19,524
and net cash used in financing activities was $42,517.
<PAGE>
     The gross cash provided by investing activities during the six months ended
June 30, 2001 was $33,547  which  consisted of (i) $27,071 of net proceeds  from
the sale of Prime Outlets at  Silverthorne  on March 16, 2001 and (ii) $6,476 of
net  proceeds  from the  February  2, 2001 sale of  Northgate  Plaza.  Partially
offsetting  theses sources were gross uses of cash totaling $14,023 comprised of
(i) $11,853 of additions to rental property and (ii) $2,170 of payments  related
to eOutlets.com.  The additions to rental property are primarily attributable to
the payment of  remaining  construction  costs for Prime  Outlets of Puerto Rico
that opened on July 27, 2000.

     The gross uses of cash for financing  activities of $59,816  during the six
months ended June 30, 2001 consisted of (i) scheduled principal  amortization on
notes payable of $9,980, (ii) repayment in full of certain mortgage indebtedness
aggregating  $40,374,   (iii)  principal  prepayments  totaling  $9,137  on  the
Company's  mezzanine loan (the  "Mezzanine  Loan") and (iv)  financing  costs of
$325.  Partially  offsetting  these items were  proceeds  from (i) the Edinburgh
First  Mortgage  Loan of $16,700,  (ii) other new  borrowings  of $199 and (iii)
contributions from minority interests of $400.

     Although  the Company  believes  that cash flow from (i)  operations,  (ii)
lender escrow reserves,  (iii) refinancing of certain maturing debt and (iv) the
potential sale of certain properties will be sufficient to sustain its operating
cash needs, satisfy its required debt service obligations and fund its remaining
development   costs   (associated  with  2000  openings)  and  expected  capital
expenditure  costs for the next year, there can be no assurance that the Company
will be successful in obtaining the required  amount of funds for these items or
that the terms of capital  raising  activities,  if any, will be as favorable as
the Company has experienced in prior periods.

2001 Sales Transactions

     On May 8, 2001, Prime Outlets at New River, an outlet center located in New
River,  Arizona  consisting  of 326,000  square  feet of GLA,  was sold  through
foreclosure. An affiliate of the Company and an affiliate of Fru-Con Development
Corporation ("Fru-Con") each own 50% of the partnership which owned the project.
The Company  accounted for its ownership  interest in the partnership that owned
the project in accordance with the equity method of accounting  through the date
of  foreclosure  sale.  In connection  with the  foreclosure  sale,  the Company
recorded a loss on the sale of real estate of $177 during the three months ended
June 30, 2001.

     On February 2, 2001, the Company sold Northgate  Plaza, a community  center
located  in  Lombard,   Illinois  to  Arbor   Northgate,   Inc.  for   aggregate
consideration of $7,050. After the repayment of mortgage  indebtedness of $5,966
and closing  costs,  the net cash proceeds  from the  Northgate  Plaza sale were
$510.  On March 16, 2001,  the Company sold Prime  Outlets at  Silverthorne,  an
outlet center  located in  Silverthorne,  Colorado  consisting of 257,000 square
feet of GLA, to Silverthorne Factory Stores, LLC for aggregate  consideration of
$29,000.  The net cash proceeds  from the sale of Prime Outlets at  Silverthorne
were $8,993, after the repayment of certain mortgage  indebtedness of $18,078 on
Prime  Outlets  at  Lebanon  (see  below) and  closing  costs and fees.  The net
proceeds  from these sales of were used to prepay an  aggregate of $9,137 of the
Company's  outstanding  mezzanine loan (the "Mezzanine Loan") in accordance with
the terms of such loan agreement.  In connection  with these sales,  the Company
recorded an  aggregate  gain on the sale of real estate of $732 during the first
quarter of 2001. The operating  results of these  properties are included in the
Company's results of operations through the respective dates of disposition.  At
December 31, 2000,  these  properties were classified as assets held for sale in
the Consolidated Balance Sheet with an aggregate carrying value of $34,770.
<PAGE>
     Prior to the sale of Prime Outlets at  Silverthorne,  it was one of fifteen
properties  securing the Company's first mortgate and expansion loan (the "First
Mortgage and Expansion  Loan"),  which had an outstanding  principal  balance of
$344,510 at June 30,  2001.  In  conjunction  with the sale of Prime  Outlets at
Silverthorne, the Company substituted Prime Outlets at Lebanon for Prime Outlets
at Silverthorne in the  cross-collateral  asset pool securing the First Mortgage
and Expansion Loan pursuant to the collateral  substitution provisions contained
in the loan agreement.

Dividends and Distributions

     In order to qualify as a real estate  investment trust ("REIT") for federal
income tax purposes,  the Company is required to pay distributions to its common
and  preferred  shareholders  of at least  90% of its  REIT  taxable  income  in
addition to satisfying other requirements.  Although the Company intends to make
distributions  in accordance with the  requirements of the Internal Revenue Code
of 1986, as amended, necessary to remain qualified as a REIT, it also intends to
retain such amounts as it considers  necessary from time to time for capital and
liquidity needs of the Company.

     The Company's  current  policy is to pay  distributions  only to the extent
necessary  to  maintain  its status as a REIT for federal  income tax  purposes.
Based on the Company's  current federal income tax projections for 2001, it does
not  expect to pay any  distributions  on its 10.5%  Series A Senior  Cumulative
Preferred   Stock  ("Senior   Preferred   Stock"),   8.5%  Series  B  Cumulative
Participating  Convertible  Preferred  Stock  ("Series B  Convertible  Preferred
Stock"),  common  stock or common units of limited  partnership  interest in the
Operating Partnership during 2001.

     The Company is prohibited from paying dividends or distributions  except to
the  extent  necessary  to  maintain  its REIT  status  under  the  terms of its
Mezzanine Loan. In addition, the Company may make no distributions to its common
shareholders or its holders of common units of limited  partnership  interest in
the Operating  Partnership unless it is current with respect to distributions to
its preferred shareholders. As of June 30, 2001, unpaid dividends for the period
November 16, 1999 through June 30, 2001 on the Senior Preferred Stock and Series
B Convertible Preferred Stock aggregated $9,811 and $27,031,  respectively.  The
annual dividends on the Company's 2,300,000 shares of Senior Preferred Stock and
7,828,125 shares of Series B Convertible  Preferred Stock are $6,038 ($2.625 per
share) and $16,636 ($2.125 per share), respectively.

     The Company is  currently  in arrears on six  quarters of  preferred  stock
distributions  due February  15, 2000  through May 15, 2001.  The holders of the
Series A Preferred  Stock and Series B  Preferred  Stock,  voting  together as a
single  class,  will  have the  right to elect  two  additional  members  to the
Company's  Board  of  Directors  so long as the  equivalent  of six  consecutive
quarterly  dividends on these series of preferred stock remain in arrears.  Each
of such  directors  would be  elected  to serve  until  the  earlier  of (i) the
election and qualification of such director's successor,  or (ii) payment of the
dividend  arrearage.  The Company will issue a press  release  subsequent ot its
annual  meeting of  shareholders  specifying  the  procedures  and timeframe for
election of the two additional directors.

Debt Transactions

     In  connection  with the sales of  Northgate  Plaza and  Prime  Outlets  at
Silverthorne  during the first  quarter of 2001,  the  Company  repaid  mortgage
indebtedness of $5,966 and $18,078, respectively. In addition, net cash proceeds
from  these  property  sales were used to prepay an  aggregate  of $9,137 of the
Company's  outstanding  Mezzanine  Loan.  As of June 30, 2001,  the  outstanding
principal balance of the Mezzanine Loan was $75,863.
<PAGE>
     The  Company,  through  affiliates,  holds a 51%  interest  in the owner of
Phases II and III of an outlet  center in Bellport,  New York on which the first
mortgage loan of $7,795 matured on May 1, 2001. On May 21, 2001, the Company, on
behalf of the  owner,  made a  principal  payment  of  $2,295  to the  lender in
exchange  for a  modification  to the  terms  and a  one-year  extension  of the
maturity of this mortgage  indebtedness.  The  outstanding  balance of the first
mortgage loan was $5,500 as of June 30, 2001.

     On June 8, 2001,  the  Company,  through  affiliates,  obtained a two-month
extension  through  August 10, 2001 to the terms and maturity  date of a $16,330
first  mortgage  loan  secured by Prime  Outlets at  Edinburgh  (the  "Edinburgh
Project") located in Edinburgh,  Indiana. On June 29, 2001, the Company, through
affiliates,  completed a refinancing  of this first mortgage loan. The new first
mortgage loan (the  "Edinburgh  First Mortgage  Loan") provides for an aggregate
commitment up to $18,000 and is non-recourse to the Company. The Edinburgh First
Mortgage Loan,  which is secured by the Edinburgh  Project,  has a term of three
years,  requires monthly  principal  payments based upon a 15-year  amortization
schedule and is pre-payable  at any time subject to certain  prepayment and exit
fees. The Edinburgh  First Mortgage Loan bears interest at a floating rate based
on six-month LIBOR plus 350 basis points, subject to an 8.0% minimum, and may be
adjusted  semi-annually with a maximum 1.0% increase or decrease per adjustment.
At closing, $16,700 of the Edinburgh First Mortgage Loan was funded resulting in
net proceeds of $88 after  repayment of the old first  mortgage loan and closing
costs. The remaining  commitment provides for the funding of up to an additional
$1,300 for leasing related capital expenditures at the Edinburgh Project.

     On August 7, 2001, the Company, through affiliates,  obtained an additional
one-month  extension to September  10, 2001 to the terms and maturity  date of a
$10,003  first  mortgage  loan secured by Prime Outlets at Birch Run (the "Birch
Run Project") located in Birch Run, Michigan. The terms and maturity date of the
$10,003 first mortgage loan had previously been extended to August 10, 2001. The
Company, through affiliates, has a 30.0% ownership interest in the joint venture
partnership (the "Venture") that owns the Birch Run Project. The Company expects
to complete a refinancing  of first mortgage  loans  aggregating  $51,866 (as of
June 30, 2001) on the Birch Run Project during August 2001. These first mortgage
loans are  included  in a  "wrap-around"  first  mortgage  loan  provided by the
Company to the  Venture in  connection  with the  November  19, 1999 sale of the
Birch Run Project.

     The new first  mortgage  loan (the  "Birch  Run  First  Mortgage  Loan") is
expected  to be in the amount of $63,000,  be secured by the Birch Run  Project,
have a term of ten-years,  and require monthly principal amortization based upon
a  25-year  schedule.  The Birch Run First  Mortgage  Loan is  expected  to bear
interest at a fixed rate based upon ten-year U.S.  Treasury Notes plus 310 basis
points at the time of closing.  In  addition,  the Company  would  continue  its
interest rate subsidy  agreement  with the Venture  whereby the interest rate on
the Birch Run First  Mortgage  Loan is fixed at 7.75%.  To the  extent  that the
actual  interest rate on the Birch Run First  Mortgage Loan exceeds  7.75%,  the
Company would be obligated to make  payments to Venture.  To the extent that the
actual  interest  rate on the Birch Run First  Mortgage Loan is less than 7.75%,
the Venture  would be  obligated to make  payments to the  Company.  The Venture
expects to use the net proceeds from the Birch Run First  Mortgage Loan to repay
in full the Company's  net  investment in the  "wrap-around"  first  mortgage of
$10,729 (as of June 30, 2001).  There can be no assurance  that the  refinancing
will occur or will be in accordance with the terms set forth in this paragraph.
<PAGE>
Debt Service Obligations

     The Company's aggregate indebtedness,  excluding unamortized debt premiums,
was  $973,417  at June 30,  2001.  At June 30,  2001,  such  indebtedness  had a
weighted-average  maturity  of 3.7  years  and bore  contractual  interest  at a
weighted-average  rate of 8.98% per annum. At June 30, 2001, $801,878, or 82.4%,
of such  indebtedness  bore interest at fixed rates and $171,540,  or 17.6%,  of
such  indebtedness  bore  interest  at  variable  rates.  The  Company  utilizes
derivative  financial  instruments  to manage its interest rate risk  associated
with variable rate debt.

     As of June 30, 2001, the Company's  remaining  scheduled principal payments
for  2001  were  $22,769.  These  scheduled  principal  payments  include  (i) a
non-recourse  first mortgage loan of $3,481 on Western Plaza (the "Western Plaza
First Mortgage Loan"), a community center located in Knoxville, Tennessee, which
matures on October 31, 2001 and (ii) a recourse first mortgage of $6,527 on land
located in Camarillo,  California which matures on November 1, 2001.  Certain of
the  Company's   fixed-rate  bonds  aggregating  $7,000  contain   cross-default
provisions  with respect to certain of the  Company's  other credit  agreements,
including the Western Plaza First  Mortgage  Loan. In the event of default,  the
holders  of such  bonds may elect to put such  obligations  to the  Company at a
price equal to par plus accrued interest.

     The  Company  plans to either  refinance  or  extend  the  maturity  of its
mortgage  indebtedness  maturing during 2001. In the event the Company is unable
to  refinance or extend the  maturity of such  indebtedness,  it will attempt to
repay the outstanding balance through proceeds from potential sales of property,
cash flow from operations,  or proceeds from additional borrowings. In addition,
the Company may attempt to give the property  securing such indebtedness back to
the  mortgage  lenders.  There  can be no  assurance  that the  Company  will be
successful  in  obtaining  the  required   amount  of  funds  for  the  maturing
indebtedness or that the terms of the  refinancings or extensions of maturities,
if they should  occur,  will be as favorable as the Company has  experienced  in
prior periods.

     As of June 30, 2001, the Company is a guarantor or otherwise obligated with
respect  to an  aggregate  of  $12,499  of the  indebtedness  of  Horizon  Group
Properties,  Inc. and its affiliates  ("HGP"),  including $10,000 of obligations
under a secured credit facility (the "HGP Secured Facility").  HGP is a publicly
traded  company that was formed in  connection  with the  Company's  merger with
Horizon Group Properties, Inc. in June 1998.

     At June 30, 2001, the HGP Secured  Credit  Facility bore interest at a rate
of 30-day LIBOR plus 1.90% was  collateralized  by the five  properties  located
throughout  the United  States and matured on July 11, 2001.  On August 2, 2001,
HGP announced it had  refinanced one of the properties in the HGP Secured Credit
Facility and used the proceeds  from the new first  mortgage  loan to reduce the
principal  balance  of the HGP  Secured  Credit  Facility.  Simultaneously,  HGP
obtained  an  extension  to the  remaining  principal  balance of  approximately
$33,500,  including  a 2%  extension  fee, on the HGP  Secured  Credit  Facility
through July 11, 2002.  Commencing on the extension date, the HGP Secured Credit
Facility bears interest at a rate of 30-day LIBOR (but not less than 4.10%) plus
3.95%, requires monthly principal amortization of $225, and is collateralized by
four properties  located throughout the United States. The Company confirmed its
obligations  as  guarantor  with respect to the HGP Secured  Credit  Facility in
connection  with the  extension  and partial  paydown.  No claims have been made
against the Company's guaranty by the HGP Secured Credit Facility lender.
<PAGE>
Debt Compliance

     As of June 30, 2001, the Company was in compliance  with all financial debt
covenants under its recourse loan agreements. However, there can be no assurance
that the Company will be in  compliance  with its  financial  debt  covenants in
future periods since the Company's  future  financial  performance is subject to
various risks and uncertainties,  including,  but not limited to, the effects of
increases in market  interest rates from current  levels,  the risk of potential
increases in vacancy  rates and the resulting  impact on the Company's  revenue,
and risks associated with refinancing the Company's  current debt obligations or
obtaining new financing  under terms as favorable as the Company has experienced
in prior periods.

Defaults on Certain Non-recourse Mortgage Indebtedness

     Subsidiaries of the Company have suspended regularly scheduled monthly debt
service payments on two non-recourse  mortgage loans  aggregating  $33,517 which
are  cross-collateralized  by Prime  Outlets at  Jeffersonville  II,  located in
Jeffersonville, Ohio, and Prime Outlets at Conroe, located in Conroe, Texas. The
Company  remains in discussions  with the holder of the mortgage loans regarding
potential  restructuring of their existing terms. There can be no assurance that
such  discussions  will lead to any  modification  to the terms of the  mortgage
loans and that the lender will not bring a foreclosure action concerning the two
properties.  Because the two mortgage loans are  non-recourse and the Company is
currently not  receiving any cash flow from these two centers,  the Company does
not  believe  the  existing  defaults  or any  related  foreclosure  will have a
material impact on its results of operations or financial position.

Defaults   on  Certain  Non-recourse  Mortgage  Indebtedness  of  Unconsolidated
Partnerships

     Various  mortgage  loans related to projects in which the Company,  through
subsidiaries,  indirectly  owns joint venture  interests have matured and are in
default.  The mortgage loans are (i) a $10,389 first mortgage loan on Phase I of
the Bellport  Outlet Center located in Bellport,  New York,  held by Union Labor
Life Insurance  Company ("Union Labor");  and (ii) a $13,438 first mortgage loan
on the Oxnard Outlet Center located in Oxnard,  California,  held by Fru-Con. An
affiliate of the Company has a 50% ownership  interest in the partnership  which
owns Phase I of the Bellport  Outlet Center.  Fru-Con and the Company are each a
50.0% partner in the partnership that owns the Oxnard Outlet Center.

     Union Labor has filed for  foreclosure  on Phase I of the  Bellport  Outlet
Center.  A receiver was  appointed  March 27, 2001 by the court  involved in the
foreclosure action. Effective May 1, 2001, a manager hired by the receiver began
managing  Phase I of the  Bellport  Outlet  Center.  The  Company  continues  to
negotiate the terms of a transfer of its ownership interest in the Oxnard Outlet
Center to Fru-Con.

     The  Company  believes  none of these  mortgage  loans is  recourse  to the
Company. In addition,  the Company and its affiliates is currently not receiving
any cash flow from the Oxnard Outlet Center and were not receiving any cash flow
from Phase I of the Bellport  Outlet Center prior to the loss of control of this
project.  Therefore,  the Company does not believe the existing  defaults  under
these loans or any related  foreclosures on the mortgaged properties will have a
material impact on its results of operations or financial position.

Development Activity

     As of June 30, 2001, the Company had $629 of lender escrow reserves to fund
the remaining  expected  development  costs for Prime  Outlets of Puerto,  which
opened on July 27, 2000.
<PAGE>
Interest Rate Risk

     In the ordinary course of business, the Company is exposed to the impact of
interest  rate  changes  and,  therefore,   employs  established   policies  and
procedures to manage its exposure to interest  rate changes.  The Company uses a
mix of fixed and  variable  rate debt to (i) limit the impact of  interest  rate
changes on its results from operations and cash flows and (ii) lower its overall
borrowing costs.

     The Company also uses derivative  financial  instruments to manage interest
rate risk associated with certain of its debt. Generally,  the Company purchases
interest  rate  protection  agreements,  such as caps,  which are  designated as
hedges for underlying variable rate debt obligations.  The Company does not hold
derivative financial instruments for trading purposes. The Company is exposed to
credit  losses  in the  event  of  counterparty  nonperformance,  but  does  not
anticipate any such losses based on the creditworthiness of the counterparties.

     Although derivative financial instruments are an important component of the
Company's interest rate management program, their incremental effect on interest
expense  for the  three  and six  months  ended  June 30,  2001 and 2000 was not
material.

Funds from Operations

     Industry  analysts  generally  consider Funds from Operations  ("FFO"),  as
defined by the National Association of Real Estate Investment Trusts ("NAREIT"),
an  alternative  measure of  performance  of an equity  REIT.  FFO is  currently
defined by NAREIT as net income (loss)  determined in accordance with accounting
principles generally accepted in the United States ("GAAP"),  excluding gains or
losses  from  provisions  for  impairment  and  sales of  depreciable  operating
property,  plus  depreciation  and  amortization  (other  than  amortization  of
deferred  financing costs and  depreciation of non-real estate assets) and after
adjustment for unconsolidated partnership and joint ventures.

     Management believes that FFO is an important and widely used measure of the
operating  performance of REITs,  which provides a relevant basis for comparison
to other REITs. Therefore, FFO is presented to assist investors in analyzing the
performance  of the Company.  The  Company's FFO may not be comparable to FFO as
reported  by other  REITs that do not define the term using the  current  NAREIT
definition or that interpret the current NAREIT definition differently than does
the Company.  Therefore,  the Company  cautions that the  calculation of FFO may
vary from  entity to entity and as such the  presentation  of FFO by the Company
may not be  comparable to other  similarly  titled  measures of other  reporting
companies.   The  Company   believes   that  in  order  to  facilitate  a  clear
understanding  of its operating  results,  FFO should be examined in conjunction
with net income  determined in accordance with GAAP. FFO does not represent cash
generated  from operating  activities in accordance  with GAAP and should not be
considered  as an  alternative  to net income as an  indication of the Company's
performance  or to cash  flows as a measure  of  liquidity  or  ability  to make
distributions.

     TABLE 5  provides  a  reconciliation  of the  loss  before  allocations  to
minority  interests  and  preferred  shareholders  to FFO for the  three and six
months  ended June 30,  2001 and 2000.  FFO was $7,131 and $14,430 for the three
and six months  ended  June 30,  2001,  respectively,  compared  to $11,628  and
$30,623  for the same  periods in 2000,  respectively.  The FFO  results for the
three and six  months  ended  June 30,  2000  include  net  non-recurring  items
totaling $(2,126) and $(1,404), respectively, consisting of the following:

o        a first quarter gain on the sale of outparcel land of $2,472;
<PAGE>
o        severance  and other  compensation  costs  aggregating  $2,421  through
         the first two  quarters  ($671  incurred in the second quarter); and

o        second  quarter  professional  fees  of  $1,455  related to refinancing
         activities.

Excluding  the net impact of these  non-recurring  items,  FFO was  $13,754  and
$32,027 for the three and six months ended June 30, 2000, respectively.

     The  decrease in FFO for the 2001  periods  compared to the same periods in
2000 is primarily attributable to the following factors:

|X|      the December 2000 sale of four outlet centers, including the assumption
         of mortgage indebtedness by the purchaser, which resulted in a decrease
         in net operating income  during the three and six months ended June 30,
         2001 of $6,854  and $13,650, respectively, partially offset by interest
         savings on  the  debt assumed by the purchaser of $3,150 and $6,301 for
         the three and six months ended June 30, 2000, respectively;

|X|      higher  interest expense during the three and six months ended June 30,
         2001  of   $2,770  and  $6,731,  respectively,  reflecting  (i)  higher
         borrowing  costs  and  (ii) reduced capitalized interest on development
         projects;

|X|      an increase in the provision for uncollectible accounts receivable of
         $1,305 and $3,348 for the three and six months ended June 30, 2001,
         respectively, resulting in part from certain tenant bankruptcies,
         abandonments and store-closings;

|X|      reduced average occupancy in the outlet center portfolio; and

|X|      the February 2000 sale of a 70% joint venture interest in Prime Outlets
         at Williamsburg which resulted in a decrease in net operating income of
         $1,020 partially offset by decreased interest expense of $390.

Table 5--Funds from Operations
<TABLE>

------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
                                                                                Three Months Ended               Six Months Ended
                                                                                     June 30,                        June 30,
                                                                        ------------------------------------------------------------
                                                                               2001            2000            2001            2000
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>             <C>             <C>             <C>

FFO:
Loss before minority interests.......................................      $ (7,243)       $(15,759)       $(12,874)       $(27,446)

FFO adjustments:
  Gain (Loss) on sale of real estate.................................           180               -            (552)              -
  Depreciation and amortization......................................        13,723          15,783          27,398          32,020
  Non-real estate depreciation and amortization......................          (562)           (383)         (1,130)           (567)
  Unconsolidated joint venture adjustments...........................         1,033           1,128           1,588            1,714
  Discontinued operations - eOutlets.com.............................             -           1,315               -          14,2794
  Discontinued operations - Designer Connection......................             -           1,006               -           2,085
                                                                           --------         -------        --------         -------
FFO before adjustment for asset impairment                                    7,131           3,090          14,430          22,085
  Provision for asset impairment - operating properties                           -           8,538               -           8,538
                                                                           --------         -------        --------         -------
FFO before allocations to minority interests
  and preferred shareholders.........................................        $7,131         $11,628        $ 14,430         $30,623
                                                                           ========         =======        ========         =======
Other Data:
Net cash provided by operating activities............................       $10,200         $22,990         $18,160         $31,974
Net cash provided by (used in)  investing activities.................        (7,022)        (13,265)         19,524         (26,300)
Net cash used in financing activities................................        (4,794)         (3,896)        (42,517)         (6,412)
====================================================================================================================================
</TABLE>
<PAGE>
Item 3.    Quantitative and Qualitative Disclosures of Market Risk

Market Risk Sensitivity

Interest Rate Risk

     In the ordinary course of business, the Company is exposed to the impact of
interest rate changes.  The Company employs established  policies and procedures
to manage its exposure to interest  rate changes.  See  "Interest  Rate Risk" of
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations  for additional  information.  The Company uses a mix of fixed and
variable  rate debt to (i) limit the  impact of  interest  rate  changes  on its
results from  operations and cash flows and (ii) to lower its overall  borrowing
costs.  The  following  table  provides  a summary of  principal  cash flows and
related contractual interest rates by fiscal year of maturity. Variable interest
rates are based on the weighted-average rates of the portfolio at June 30, 2001.
<TABLE>

------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
                                                      Year of Maturity
------------------------------------------------------------------------------------------------------------------------------------
                                                  2001        2002        2003         2004        2005    Thereafter         Total
------------------------------------------------------------------------------------------------------------------------------------

<S>                                            <C>         <C>          <C>         <C>          <C>         <C>           <C>
Fixed rate:
Principal...........................           $15,448     $41,873     $454,324      $6,831      $50,945     $232,457       $801,878
Average interest rate...............            10.15%        9.07%        9.05%       7.31%        7.95%        8.13%         8.76%
Variable rate:
Principal...........................           $7,321      $23,836      $72,853     $67,530                                $171,540
Average interest rate...............            13.13%       13.26%       12.27%       6.18%                                   9.07%

====================================================================================================================================
</TABLE>

Economic Conditions

     Most of the merchants' leases contain provisions that somewhat mitigate the
impact of inflation.  Such provisions include clauses providing for increases in
base rent and clauses enabling the Company to receive  percentage  rentals based
on merchants'  gross sales.  Most of the leases  require  merchants to pay their
proportionate   share  of  all  operating   expenses,   including   common  area
maintenance,  real estate taxes and  promotion,  thereby  reducing the Company's
exposure to increased costs and operating expenses resulting from inflation.
<PAGE>
                           PART II: OTHER INFORMATION

Item 1.           Legal Proceedings

     On October  13, 2000 and  thereafter,  eight  complaints  were filed in the
United States  District  Court for the District of Maryland  against the Company
and five individual  defendants.  The five  individual  defendants are: Glenn D.
Reschke,  the President,  Chief  Executive  Officer and Chairman of the Board of
Directors of the Company;  William H. Carpenter,  Jr., the former  President and
Chief  Operating  Officer  and  a  current  director  of  the  Company;  Abraham
Rosenthal,  the former  Chief  Executive  Officer  and a former  director of the
Company;  Michael W.  Reschke,  the former  Chairman  of the Board and a current
director of the Company;  and Robert P.  Mulreaney,  the former  Executive  Vice
President - Chief Financial Officer and Treasurer of the Company. The complaints
were  brought  by  alleged   stockholders  of  the  Company,   individually  and
purportedly as class actions on behalf of all other stockholders of the Company.
The complaints  allege that the individual  defendants made statements about the
Company that were in violation of the federal  securities  laws.  The complaints
seek unspecified damages and other relief. Lead plaintiffs and lead counsel were
subsequently  appointed. A consolidated complaint was filed. The Company and the
individual  defendants filed a motion to dismiss.  The Company believes that the
complaints are without merit and intends to defend against them vigorously.  The
outcome of these lawsuits, and the ultimate liability of the defendants, if any,
cannot be predicted.

     The Company and its affiliates were defendants in a lawsuit filed on August
10, 1999 in the Circuit Court for  Baltimore  City and removed to U. S. District
Court for the  District of Maryland  (the "U.S.  District  Court") on August 20,
1999.  The  plaintiff   alleged  that  the  Company  and  its  related  entities
overcharged  tenants for common area  maintenance  charges  and  promotion  fund
charges.  The U.S.  District  Court  dismissed the lawsuit on June 19, 2000. The
plaintiff has appealed the U.S.  District  Court's decision and briefs have been
filed.  Management  believes that the Company has acted  properly and intends to
defend this lawsuit  vigorously.  The outcome of this lawsuit,  and the ultimate
liability of the defendants, if any, cannot be predicted.

     Several  entities (the  "Plaintiffs")  have filed or stated an intention to
file lawsuits (the  "Lawsuits")  against the Company and its affiliates in which
the Plaintiffs are seeking to hold them responsible under various legal theories
for  liabilities  incurred by  primeoutlets.com,  inc.,  also known as eOutlets,
including the theory that the Company guaranteed the obligations of eOutlets and
the theory that the Company was the alter ego of eOutlets. primeoutlets.com inc.
is also a defendant in some, but not all, of the Lawsuits.  The Company believes
that it is not liable to the  Plaintiffs  as there was no  privity  of  contract
between  it and the  various  Plaintiffs.  The  Company  intends  to defend  all
Lawsuits vigorously.  primeoutlets.com inc. filed for protection under Chapter 7
of the  United  States  Bankruptcy  Code  during  November  2000  under the name
E-Outlets  Resolution  Corp.  The trustee for  E-Outlets  Resolution  Corp.  has
notified the Company that he is  contemplating an action against the Company and
the Operating Partnership in which he may assert that E-Outlets Resolution Corp.
was the "alter-ego" of the Company and the Operating  Partnership and that, as a
result,  the Company and the Operating  Partnership  are liable for the debts of
E-Outlets  Resolution  Corp. If the trustee pursues such an action,  the Company
and the Operating  Partnership will defend  themselves  vigorously.  In the case
captioned  Convergys Customer  Management Group, Inc. v. Prime Retail,  Inc. and
primeoutlets.com  inc. in the Court of Common Pleas for Hamilton  County (Ohio),
the  Company  prevailed  in a motion to dismiss the  plaintiff's  claim that the
Company was liable for  primeoutlets.com  inc.'s breach of contract based on the
doctrine of piercing the corporate veil. The outcome of these Lawsuits,  and the
ultimate liability of the Company, if any, cannot be predicted.
<PAGE>
    Dinnerware Plus Holdings, Inc., which operates under the trade name Mikasa,
and affiliates filed on March 29, 2001 a lawsuit against the Company and various
affiliates.  The  plaintiffs  allege that the Company  and its  affiliates  have
breached  various  provisions  in  the  plaintiffs'  leases  and,  as a  result,
overcharged  the  plaintiffs for common area  maintenance  charges and promotion
fund charges at various  centers where the plaintiffs  are tenants.  The Company
has not filed its  response to the  complaint.  Other  tenants  (in  addition to
Dinnerware  Plus  Holdings,  Inc.) in the  Company's  outlet  centers  have made
similar allegations to those made by Dinnerware Plus Holdings,  Inc.  One of the
tenants  has  stated  an  intention  to file a  counterclaim  in  response  to a
collection action brought by the Company and its affiliates.  The outcome of the
Dinnerware  Plus Holdings,  Inc.  lawsuit and other  potential  claims,  and the
ultimate liability of the defendants, if any, cannot be predicted.

     The New York  Stock  Exchange  ("NYSE")  and the  Securities  and  Exchange
Commission have notified the Company that they are reviewing transactions in the
stock of the Company  prior to the  Company's  January  18,  2000 press  release
concerning financial matters.  The initial notice of such review was received on
March 13, 200.

Item 2.           Changes in Securities

None

Item 3.           Defaults Upon Senior Securities

     The Company is currently in arrears in the payment of  distributions on its
10.5% Series A Senior Cumulative  Preferred Stock ("Senior Preferred Stock") and
8.5% Series B Cumulative  Participating  Convertible  Preferred Stock ("Series B
Convertible  Preferred Stock").  As of June 30, 2001, the aggregate arrearage on
the Senior  Preferred  Stock and the Series B  Convertible  Preferred  Stock was
$9,811 and $27,031, respectively.

Item 4.           Submission of Matters to a Vote of Security Holders

None

Item 5.           Other Information

None

Item 6.           Exhibits or Reports on Form 8-K

(a)      The following exhibits are included in this Form 10-Q:

         Exhibit 12.1  -  Ratio of Earnings to Fixed Charges and Preferred Stock
         Distributions and Dividends

(b)      Reports on Form 8-K:

         None
<PAGE>
                                   SIGNATURES



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                           PRIME RETAIL, INC.
                                           Registrant



Date: August 13, 2001                      /s/ Robert A. Brvenik
      ---------------                      -------------------------------------
                                           Robert A. Brvenik
                                           Executive Vice President,
                                           Chief Financial Officer and Treasurer