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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 28, 2010
Brandywine Realty Trust
Brandywine Operating Partnership, L.P.
Brandywine Operating Partnership, L.P.
(Exact name of registrant as specified in charter)
| MARYLAND | ||||
| (Brandywine Realty Trust) | 001-9106 | 23-2413352 | ||
| DELAWARE | ||||
| (Brandywine Operating Partnership, L.P.) | 000-24407 | 23-2862640 | ||
| (State or Other Jurisdiction of Incorporation or | (Commission file number) | (I.R.S. Employer | ||
| Organization) | Identification Number) |
555 East Lancaster Avenue, Suite 100
Radnor, PA 19087
(Address of principal executive offices)
Radnor, PA 19087
(Address of principal executive offices)
(610) 325-5600
(Registrant’s telephone number, including area code)
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
|
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition
The information in this Current Report on Form 8-K is furnished under Item 2.02 — “Results of
Operations and Financial Condition.” Such information, including the exhibits attached hereto,
shall not be deemed to be “filed” for any purpose, including for the purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the
liabilities of that Section. The information in this Current Report on Form 8-K shall not be
deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or
the Exchange Act regardless of any general incorporation language in such filing.
On April 28, 2010, we issued a press release announcing our financial results for the
three-months ended March 31, 2010. That press release is attached hereto as Exhibit 99.1 and is
incorporated by reference herein.
The press release includes “non-GAAP financial measures” within the meaning of the Securities
and Exchange Commission’s Regulation G. With respect to such non-GAAP financial measures, we have
disclosed in the press release the most directly comparable financial measure calculated and
presented in accordance with generally accepted accounting principles (“GAAP”) and have provided a
reconciliation of such non-GAAP financial measures to the most directly comparable GAAP financial
measure.
Item 9.01 Financial Statements and Exhibits
Exhibits
| 99.1 | Brandywine Realty Trust Press Release dated April 28, 2010 |
Signatures
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| Brandywine Realty Trust |
||||
| By: | /s/ Howard M. Sipzner | |||
| Howard M. Sipzner | ||||
| Executive Vice President and Chief Financial Officer |
||||
| Brandywine Operating Partnership, its sole General Partner |
||||
| By: | /s/ Howard M. Sipzner | |||
| Howard M. Sipzner | ||||
| Executive Vice President and Chief Financial Officer |
||||
Date: April 28, 2010
Exhibit 99.1
Investor/Press Contact: Marge Boccuti Manager, Investor Relations 610-832-7702 marge.boccuti@bdnreit.com |
|
Company Contact: Howard M. Sipzner EVP & CFO 610-832-4907 howard.sipzner@bdnreit.com |
Brandywine Realty Trust Announces First Quarter 2010 Earnings
Raises 2010 FFO Guidance Range to $1.27 to $1.34 per Diluted Share
Radnor, PA, April 28, 2010 — Brandywine Realty Trust (NYSE:BDN), a real estate investment trust
focused on the ownership, management and development of Class A, suburban and urban office
properties in the mid-Atlantic region and other selected markets throughout the United States,
today reported its financial and operating results for the three-month period ended March 31, 2010.
“2010 began with excellent execution of our business plan during the first quarter. Tenant
psychology is improving as evidenced by our high leasing activity levels and strong tenant
retention rates — both of which lay the foundation for future solid portfolio performance. The
jobs climate remains challenging, and while the pace of corporate space reductions has slowed, it
continues to impact our business. As such, during the quarter our portfolio performed as expected
with anticipated declines in occupancy and same store operating metrics. However, we expect real
estate fundamentals to gradually improve as the year progresses,” stated Gerard H. Sweeney,
President and Chief Executive Officer of Brandywine Realty Trust. “During the quarter, we began
execution of our continuous equity program raising $33.5 million of net proceeds to further
strengthen our balance sheet and enhance our financial flexibility.”
Financial Highlights — First Quarter
| • | Net loss allocated to common shares totaled ($2.5 million) or ($0.02) per diluted share
in the first quarter of 2010 compared to ($2.8 million) or ($0.03) per diluted share in
the first quarter of 2009. Our weighted average diluted share count increased to 128.8
million shares in the first quarter of 2010 from 88.2 million shares in the first quarter
of 2009 due primarily to our issuance of 40.25 million common shares on June 2, 2009. |
||
| • | Funds from operations available to common shares and units (FFO) in the first quarter
of 2010 totaled $45.6 million or $0.34 per diluted share compared to $50.5 million or
$0.55 per diluted share in the first quarter of 2009 ($54.2 million or $0.60 per diluted
share excluding a $3.7 million impairment provision). Our first quarter 2010 FFO payout
ratio was 44.1% ($0.15 common share dividend paid / $0.34 FFO per share). Our weighted
average fully diluted share count for FFO (and CAD) calculations increased to 133.3
million shares in the first quarter of 2010 from 91.0 million shares in the first quarter
of 2009 due primarily to the aforementioned common share issuance. |
||
| • | In the first quarter of 2010, we incurred $9.0 million of revenue maintaining capital
expenditures which along with our other adjustments to FFO, resulted in $33.9 million of
cash available for distribution (CAD) or $0.25 per diluted share compared to $43.9 million
of CAD or $0.48 per diluted share in the first quarter of 2009 when we incurred $8.5
million of revenue maintaining capital expenditures. Our first quarter 2010 CAD payout
ratio was 60.0% ($0.15 common share dividend paid / $0.25 CAD per share). |
Portfolio Highlights
| • | In the first quarter of 2010, our net operating income (NOI) excluding termination
revenues and other income items declined 4.9% on a GAAP basis and 6.2% on a cash basis for
our 232 same store properties which were 87.8% occupied on March 31, 2010. |
| 555 East Lancaster Avenue, Suite 100; Radnor, PA 19087 | Phone: (610) 325-5600 • Fax: (610) 325-5622 |
| • | During the first quarter of 2010, we commenced occupancy on 788,060 square feet of total
leasing activity including 570,620 square feet of renewals, 93,379 square feet of new
leases and 124,061 square feet of tenant expansions. We currently have an additional
1,891,194 square feet of executed leasing in place scheduled to commence subsequent to
March 31, 2010 including 427,248 square feet attributable to our core portfolio and the
balance attributable to our developments and redevelopments. During the first quarter of
2010, we achieved a 77.2% retention rate in our core portfolio with negative net absorption
of 111,807 square feet excluding 168,376 square feet of early terminations, or 65.0%
overall. During the first quarter of 2010, we experienced a 4.0% decline on our renewal
rental rates and a 1.8% decline on our new lease and expansion rental rates, both on a GAAP
basis. |
||
| • | At March 31, 2010, our core portfolio was 87.2% occupied and 89.1% leased (reflecting
leases which will commence after March 31, 2010). We owned 241 properties at March 31,
2010, encompassing 237 core properties aggregating 23.5 million square feet and four
development/redevelopment properties aggregating 1.6 million square feet. |
Investment Highlights
| • | During the first quarter of 2010 we completed the previously disclosed sale of a
vacant, 121,815 square foot office/flex building in Richmond, Virginia for an aggregate
purchase price of $10.8 million and realized an associated gain on the sale of $6.3
million. The net proceeds of the sale were used to repay balances on our unsecured
revolving credit facility and for general corporate purposes. |
||
| • | At March 31, 2010, we were proceeding on two developments and two redevelopments with
total project costs of $387.1 million of which a total of $109.7 million remained to be
funded in 2010 and which are now 96.2% leased. These amounts include $355.5 million of
total project costs for the combined 30th Street Post Office (100% leased to
the Internal Revenue Service) and Cira South Garage (up to 92.6% leased to the Internal
Revenue Service) in Philadelphia, Pennsylvania of which $104.0 million remained to be
funded in 2010. Upon completion and delivery of this combined project, we will receive
$256.5 million from our forward financing that has been escrowed pending completion as
well as approximately $30.0 million of additional gross proceeds related to our historic
rehabilitation financing program. |
Capital Markets Highlights
| • | During the first quarter of 2010, we issued 1.3 million shares of our common stock under
our continuous equity program realizing $16.1 million of net proceeds. Subsequent to
quarter-end, we issued an additional 1.4 million shares of our common stock under the
program realizing $17.4 million of net proceeds. The net proceeds of the issuances were
used to repay balances on our unsecured revolving credit facility and for general corporate
purposes. We have remaining authorization of 12.3 million shares of common stock under the
program. |
||
| • | During the first quarter of 2010, we repurchased a total of $48.0 million of our 2010,
2011 (our exchangeable notes due 2026 with a put date in October 2011) and 2012 unsecured
senior notes in a series of open-market transactions and incurred an aggregate loss of
($1.2 million) on the early extinguishment of debt. We funded these repurchases with draws
on our unsecured revolving credit facility and with available corporate funds. |
||
| • | At March 31, 2010, our net debt to gross assets measured 45.3% compared to a peak of
54.3% at September 30, 2007, reflecting a cumulative $814.7 million reduction in our net
debt over that period. At March 31, 2010, we had $160.0 million outstanding on our $600.0
million unsecured revolving credit facility with $375.0 million available for use and
drawdown. |
||
| • | For the quarter ended March 31, 2010, we achieved a 2.5 EBITDA to interest coverage
ratio and a 7.5 ratio of net debt to annualized quarterly EBITDA based on consolidated
EBITDA excluding non-recurring items, and inclusive of our pro rata share of unconsolidated
EBITDA, interest and net debt. |
- 2 -
Distributions
On March 24, 2010, our Board of Trustees declared a quarterly dividend distribution of $0.15 per
common share that was paid on April 19, 2010 to shareholders of record as of April 5, 2010,
bringing total year-to-date 2010 dividend payments to $0.30 per common share. Our Board also
declared regular quarterly dividend distributions of $0.46875 per 7.50% Series C Cumulative
Redeemable Preferred Share and $0.460938 per 7.375% Series D Cumulative Redeemable Preferred Share
that were paid on April 15, 2010 to holders of record as of March 30, 2010 of the Series C and
Series D Preferred Shares, respectively.
2010 Earnings and FFO Guidance
Based on current plans and assumptions and subject to the risks and uncertainties more fully
described in our Securities and Exchange Commission filings, we are revising our previously issued
guidance for full year 2010 FFO per diluted share to be in a range of $1.27 to $1.34 versus the
prior range of $1.25 to $1.34. This guidance is provided for informational purposes and is subject
to change. The following is a reconciliation of the calculation of 2010 FFO per diluted share and
earnings per diluted share:
| Guidance for 2010 | Range or Value | |||||||
Earnings (loss) per diluted share allocated to common shareholders |
$ | (0.29 | ) | to | $ | (0.22 | ) | |
Less: gains on sale of depreciable real estate |
(0.05 | ) | (0.05 | ) | ||||
Plus: real estate depreciation and amortization |
1.61 | 1.61 | ||||||
FFO per diluted share |
$ | 1.27 | to | $ | 1.34 | |||
Our 2010 FFO guidance does not include income arising from future sales or impairments which may be
taken in the future should the circumstances arise, and does not include any income from the sale
of undepreciated real estate in accordance with our current practice.
Accounting Disclosure
During the quarter ended March 31, 2010, we adopted the new accounting standard for the
consolidation of variable interest entities. The new standard revises the prior guidance related
to the consolidation of variable interest entities, and among other provisions, includes a new
approach for determining which party should consolidate a variable interest entity and the
frequency as to when each party should reassess its consolidation decision. As a result of our
adoption of the new standard, we will no longer consolidate three variable interest entities that
were previously consolidated in our financial statements. The new standard was applied
prospectively beginning January 1, 2010 and accordingly, only our current period financial
statements reflect this adoption.
Non-GAAP Supplemental Financial Measures
We compute our financial results in accordance with generally accepted accounting principles
(GAAP). Although FFO, NOI and CAD are non-GAAP financial measures, we believe that FFO, NOI and
CAD calculations are helpful to shareholders and potential investors and are widely recognized
measures of real estate investment trust performance. At the end of this press release, we have
provided a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP
measure.
- 3 -
Funds from Operations (FFO)
We compute FFO in accordance with standards established by the National Association of Real Estate
Investment Trusts (NAREIT), which may not be comparable to FFO reported by other REITs that do not
compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition
differently than us. NAREIT defines FFO as net income (loss) before non-controlling interests and
excluding gains (losses) on sales of property and extraordinary items (computed in accordance with
GAAP); plus real estate related depreciation and amortization (excluding amortization of deferred
financing costs), and after similar adjustments for unconsolidated joint ventures. Net income, the
GAAP measure that we believe to be
most directly comparable to FFO, includes depreciation and amortization expenses, gains or losses on
property sales, extraordinary items and non-controlling interests. To facilitate a clear
understanding of our historical operating results, FFO should be examined in conjunction with net
income (determined in accordance with GAAP) as presented in the financial statements included
elsewhere in this release. FFO does not represent cash flow from operating activities (determined
in accordance with GAAP) and should not be considered to be an alternative to net income (loss)
(determined in accordance with GAAP) as an indication of our financial performance or to be an
alternative to cash flow from operating activities (determined in accordance with GAAP) as a
measure of our liquidity, nor is it indicative of funds available for our cash needs, including our
ability to make cash distributions to shareholders.
For information purposes, we may also provide FFO adjusted for impairment charges. Although our
calculation of FFO as adjusted differs from NAREIT’s definition of FFO and may not be comparable to
that of other REITs and real estate companies, we believe it provides a meaningful supplemental
measure of our operating performance because we believe that by excluding impairment charges,
shareholders and potential investors are presented with an indicator of our operating performance
that more closely achieves the objectives of the real estate industry in presenting FFO.
Net Operating Income (NOI)
NOI is a non-GAAP financial measure equal to net income available to common shareholders, the most
directly comparable GAAP financial measure, plus corporate general and administrative expense,
depreciation and amortization, interest expense, non-controlling interests and losses from early
extinguishment of debt, less interest income, development and management income, gains from
property dispositions, gains on sale from discontinued operations, gains on early extinguishment of
debt, income from discontinued operations, income from unconsolidated joint ventures and
non-controlling interests. In some cases, we also present NOI on a cash basis, which is NOI after
eliminating the effect of straight-lining of rent and deferred market intangible amortization. NOI
presented by us may not be comparable to NOI reported by other REITs that define NOI differently.
NOI should not be considered an alternative to net income as an indication of our performance, or
as an alternative to cash flow from operating activities as a measure of our liquidity or ability
to make cash distributions to shareholders.
Cash Available for Distribution (CAD)
CAD is a non-GAAP financial measure that is not intended as an alternative to cash flow from
operating activities as determined under GAAP. CAD is presented solely as a supplemental
disclosure with respect to liquidity because we believe it provides useful information regarding
our ability to fund our distributions. Because other companies do not necessarily calculate CAD
the same way as we do, our presentation of CAD may not be comparable to similarly titled measures
provided by other companies.
Revenue Maintaining Capital Expenditures
Revenue maintaining capital expenditures, a non-GAAP financial measure, are a component of our CAD
calculation and represent the portion of capital expenditures required to maintain our current
level of funds available for distribution. Revenue maintaining capital expenditures include
current tenant improvement and allowance expenditures for all tenant spaces that have been owned
for at least one year, and that were not vacant during the twelve-month period prior to the date
that the tenant improvement or allowance expenditure was approved. Revenue maintaining capital
expenditures also include other expenditures intended to maintain our current revenue base.
Accordingly, we exclude capital expenditures related to development and redevelopment projects, as
well as certain projects at our core properties that are intended to attract prospective tenants in
order to increase revenues and/or occupancy rates.
- 4 -
First Quarter Earnings Call and Supplemental Information Package
We will host a conference call on Thursday, April 29 at 10:00 a.m. EDT. The conference call can be
accessed by calling 1-800-683-1525 and referencing conference ID #62520108. Beginning two hours
after the conference call, a taped replay of the call can be accessed 24 hours a day through
Thursday, May 13, 2010 by calling 1-800-642-1687 and providing access code 62520108. In addition,
the conference call can be accessed via a webcast located on our website at
www.brandywinerealty.com.
We have prepared a supplemental information package that includes financial results and operational
statistics related to the first quarter earnings report. The supplemental information package is
available in the “Investor Relations — Financial Reports” section of our website at
www.brandywinerealty.com.
Looking Ahead — Second Quarter 2010 Conference Call
As previously announced, we will release our second quarter 2010 earnings on Wednesday, July 28,
2010, after the market close and will host our second quarter 2010 conference call on Thursday,
July 29, 2010, at 10:00 a.m. EDT. We expect to issue a press release in advance of these events to
reconfirm the dates and times and provide all related information.
About Brandywine Realty Trust
Brandywine Realty Trust is one of the largest, publicly traded, full-service, integrated real
estate companies in the United States. Organized as a real estate investment trust and operating
in select markets, Brandywine owns, develops, manages and has ownership interests in a primarily
Class A, suburban and urban office portfolio comprising 346 properties and 35.0 million square
feet, including 241 properties and 25.1 million square feet owned on a consolidated basis. For
more information, please visit our website at www.brandywinerealty.com.
Forward-Looking Statements
Estimates of future earnings per share, FFO per share, common share dividend distributions and
certain other statements in this release constitute “forward-looking statements” within the meaning
of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors that may cause our and our affiliates’
actual results, performance, achievements or transactions to be materially different from any
future results, performance, achievements or transactions expressed or implied by such
forward-looking statements. Such risks, uncertainties and other factors relate to, among others:
our ability to lease vacant space and to renew or relet space under expiring leases at expected
levels; competition with other real estate companies for tenants; the potential loss or bankruptcy
of major tenants; interest rate levels; the availability of debt, equity or other financing; risks
of acquisitions, dispositions and developments, including the cost of construction delays and cost
overruns; unanticipated operating and capital costs; our ability to obtain adequate insurance,
including coverage for terrorist acts; dependence upon certain geographic markets; and general and
local economic and real estate conditions, including the extent and duration of adverse changes
that affect the industries in which our tenants operate. Additional information on factors which
could impact us and the forward-looking statements contained herein are included in our filings
with the Securities and Exchange Commission, including our Form 10-K for the year ended December
31, 2009. We assume no obligation to update or supplement forward-looking statements that become
untrue because of subsequent events except as required by law.
- 5 -
BRANDYWINE REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
| March 31, | December 31, | |||||||
| 2010 | 2009 | |||||||
ASSETS |
||||||||
Real estate investments: |
||||||||
Operating properties |
$ | 4,452,085 | $ | 4,512,618 | ||||
Accumulated depreciation |
(731,626 | ) | (716,956 | ) | ||||
| $ | 3,720,459 | 3,795,662 | ||||||
Construction-in-progress |
307,144 | 271,962 | ||||||
Land inventory |
105,556 | 97,368 | ||||||
| 4,133,159 | 4,164,992 | |||||||
Cash and cash equivalents |
7,590 | 1,567 | ||||||
Accounts receivable, net |
16,476 | 10,934 | ||||||
Accrued rent receivable, net |
86,570 | 87,173 | ||||||
Investment in real estate ventures |
77,472 | 75,458 | ||||||
Deferred costs, net |
103,117 | 106,097 | ||||||
Intangible assets, net |
95,085 | 105,163 | ||||||
Notes receivable |
59,474 | 59,008 | ||||||
Other assets |
56,185 | 53,358 | ||||||
Total assets |
$ | 4,635,128 | $ | 4,663,750 | ||||
LIABILITIES AND EQUITY |
||||||||
Mortgage notes payable, including premiums |
$ | 506,156 | $ | 551,720 | ||||
Borrowings under credit facilities |
160,000 | 92,000 | ||||||
Unsecured term loan |
183,000 | 183,000 | ||||||
Unsecured senior notes, net of discounts |
1,581,693 | 1,627,857 | ||||||
Accounts payable and accrued expenses |
95,621 | 88,599 | ||||||
Distributions payable |
21,999 | 21,799 | ||||||
Tenant security deposits and deferred rents |
53,745 | 58,572 | ||||||
Acquired lease intangibles, net |
34,847 | 37,087 | ||||||
Deferred Income |
47,184 | 47,379 | ||||||
Other liabilities |
30,965 | 33,997 | ||||||
Total liabilities |
2,715,210 | 2,742,010 | ||||||
Brandywine Realty Trust’s equity: |
||||||||
Preferred shares — Series C |
20 | 20 | ||||||
Preferred shares — Series D |
23 | 23 | ||||||
Common shares |
1,299 | 1,286 | ||||||
Additional paid-in capital |
2,626,342 | 2,610,421 | ||||||
Deferred compensation payable in common stock |
5,988 | 5,549 | ||||||
Common shares in treasury |
(4,518 | ) | (7,205 | ) | ||||
Common shares held in grantor trust |
(5,988 | ) | (5,549 | ) | ||||
Cumulative earnings |
500,828 | 501,384 | ||||||
Accumulated other comprehensive loss |
(7,375 | ) | (9,138 | ) | ||||
Cumulative distributions |
(1,235,017 | ) | (1,213,359 | ) | ||||
Total Brandywine Realty Trust’s equity |
1,881,602 | 1,883,432 | ||||||
Non-controlling interests |
38,316 | 38,308 | ||||||
Total equity |
1,919,918 | 1,921,740 | ||||||
Total liabilities and equity |
$ | 4,635,128 | $ | 4,663,750 | ||||
- 6 -
BRANDYWINE REALTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share data)
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share data)
| Three Months Ended March 31, | ||||||||
| 2010 | 2009 | |||||||
Revenue |
||||||||
Rents |
$ | 115,509 | $ | 120,285 | ||||
Tenant reimbursements |
21,483 | 20,688 | ||||||
Termination fees |
1,754 | 113 | ||||||
Third party management fees, labor reimbursement and leasing |
3,467 | 4,764 | ||||||
Other |
921 | 881 | ||||||
Total revenue |
143,134 | 146,731 | ||||||
Operating Expenses |
||||||||
Property operating expenses |
45,148 | 43,422 | ||||||
Real estate taxes |
13,052 | 14,832 | ||||||
Third party management expenses |
1,412 | 2,115 | ||||||
Depreciation and amortization |
52,622 | 51,215 | ||||||
General & administrative expenses |
6,092 | 4,958 | ||||||
Total operating expenses |
118,326 | 116,542 | ||||||
Operating income |
24,808 | 30,189 | ||||||
Other income (expense) |
||||||||
Interest income |
865 | 579 | ||||||
Interest expense |
(31,524 | ) | (35,646 | ) | ||||
Deferred financing costs |
(1,011 | ) | (1,252 | ) | ||||
Equity in income of real estate ventures |
1,296 | 586 | ||||||
Loss (gain) on early extinguishment of debt |
(1,192 | ) | 6,639 | |||||
(Loss) income from continuing operations |
(6,758 | ) | 1,095 | |||||
Discontinued operations: |
||||||||
Income from discontinued operations |
10 | 1,538 | ||||||
Net gain on disposition of discontinued operations |
6,349 | 194 | ||||||
Provision for impairment |
— | (3,700 | ) | |||||
Total discontinued operations |
6,359 | (1,968 | ) | |||||
Net loss |
(399 | ) | (873 | ) | ||||
Net (loss) income from discontinued operations attributable
to non-controlling interests — LP units |
(136 | ) | 61 | |||||
Net income (loss) attributable to non-controlling interests — partners’ share
of consolidated real estate ventures |
— | 6 | ||||||
Net income (loss) attributable to non-controlling interests — LP units |
187 | 28 | ||||||
Net income (loss) attributable to non-controlling interests |
51 | 95 | ||||||
Net loss attributable to Brandywine Realty Trust |
(348 | ) | (778 | ) | ||||
Preferred share dividends |
(1,998 | ) | (1,998 | ) | ||||
Amount allocated to unvested restricted shareholders |
(128 | ) | (37 | ) | ||||
Net loss attributable to Common Shareholders |
$ | (2,474 | ) | $ | (2,813 | ) | ||
PER SHARE DATA |
||||||||
Basic loss per Common Share |
$ | (0.02 | ) | $ | (0.03 | ) | ||
Basic weighted-average shares outstanding |
128,767,718 | 88,210,384 | ||||||
Diluted loss per Common Share |
$ | (0.02 | ) | $ | (0.03 | ) | ||
Diluted weighted-average shares outstanding |
128,767,718 | 88,210,384 | ||||||
- 7 -
BRANDYWINE REALTY TRUST
FUNDS FROM OPERATIONS AND CASH AVAILABLE FOR DISTRIBUTION
(unaudited, in thousands, except share and per share data)
FUNDS FROM OPERATIONS AND CASH AVAILABLE FOR DISTRIBUTION
(unaudited, in thousands, except share and per share data)
| Three Months Ended March 31, | ||||||||
| 2010 | 2009 | |||||||
Reconciliation of Net Loss to Funds from Operations: |
||||||||
Net loss attributable to common shareholders |
$ | (2,474 | ) | $ | (2,813 | ) | ||
Add (deduct): |
||||||||
Net loss attributable to non-controlling interests — LP units |
(187 | ) | (28 | ) | ||||
Amount allocated to unvested restricted shareholders |
128 | 37 | ||||||
Net income (loss) from discontinued operations attributable to non-controlling interests — LP units |
136 | (61 | ) | |||||
Net gain on disposition of discontinued operations |
(6,349 | ) | (194 | ) | ||||
Depreciation and amortization: |
||||||||
Real property — continuing operations |
39,977 | 37,751 | ||||||
Leasing costs (includes acquired intangibles) — continuing operations |
12,350 | 12,952 | ||||||
Real property — discontinued operations |
10 | 1,142 | ||||||
Leasing costs (includes acquired intangibles) — discontinued operations |
1 | 270 | ||||||
Company’s share of unconsolidated real estate ventures |
2,328 | 1,855 | ||||||
Partners’ share of consolidated real estate ventures |
— | (220 | ) | |||||
Funds from operations |
$ | 45,920 | $ | 50,691 | ||||
Funds from operations allocable to unvested restricted shareholders |
(301 | ) | (207 | ) | ||||
Funds from operations available to common share and unit holders (FFO) |
$ | 45,619 | $ | 50,484 | ||||
FFO per share — fully diluted |
$ | 0.34 | $ | 0.55 | ||||
FFO, excluding provision for impairments |
$ | 45,619 | $ | 54,184 | ||||
FFO per share, excluding provision for impairments — fully diluted |
$ | 0.34 | $ | 0.60 | ||||
Weighted-average shares/units outstanding — fully diluted |
133,282,961 | 91,027,005 | ||||||
Distributions paid per Common Share |
$ | 0.15 | $ | 0.30 | ||||
Payout ratio of FFO (Dividends paid per Common Share divided / FFO per Diluted Share) |
44.1 | % | 54.5 | % | ||||
Payout ratio of FFO, excluding provision for impairments |
44.1 | % | 50.0 | % | ||||
CASH AVAILABLE FOR DISTRIBUTION (CAD): |
||||||||
Funds from operations available to common share and unit holders |
$ | 45,619 | $ | 50,484 | ||||
Add (deduct): |
||||||||
Rental income from straight-line rent, including discontinued operations |
(2,915 | ) | (2,171 | ) | ||||
Deferred market rental income, including discontinued operations |
(1,549 | ) | (1,741 | ) | ||||
Company’s share of unconsolidated real estate ventures’ straight-line and deferred market rent |
164 | 90 | ||||||
Partners’ share of consolidated real estate ventures’ straight-line and deferred market rent |
— | (2 | ) | |||||
Operating expense from straight-line rent |
370 | 363 | ||||||
Provision for impairment of discontinued operations |
— | 3,700 | ||||||
Deferred compensation costs |
1,069 | 1,221 | ||||||
Fair market value amortization — mortgage notes payable |
(395 | ) | (428 | ) | ||||
Debt discount amortization — exchangeable notes |
524 | 956 | ||||||
Revenue maintaining capital expenditures |
||||||||
Building improvements |
(1,195 | ) | (1,375 | ) | ||||
Tenant improvements |
(4,504 | ) | (4,660 | ) | ||||
Lease commissions |
(3,322 | ) | (2,512 | ) | ||||
Total revenue maintaining capital expenditures |
(9,021 | ) | (8,547 | ) | ||||
Cash available for distribution |
$ | 33,866 | $ | 43,925 | ||||
CAD per share — fully diluted |
$ | 0.25 | $ | 0.48 | ||||
Weighted-average shares/units outstanding — fully diluted |
133,282,961 | 91,027,005 | ||||||
Distributions per Common Share |
$ | 0.15 | $ | 0.30 | ||||
Payout ratio of CAD (Dividends paid per Common Share / CAD per Diluted Share) |
60.0 | % | 62.5 | % | ||||
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BRANDYWINE REALTY TRUST
SAME STORE OPERATIONS — 1ST QUARTER
(unaudited and in thousands)
SAME STORE OPERATIONS — 1ST QUARTER
(unaudited and in thousands)
Of the 241 properties owned by the Company as of March 31, 2010, a total of 232 properties (“Same
Store Properties”) containing an aggregate of 22.8 million net rentable square feet were owned for
the entire three-month periods ended March 31, 2010 and 2009. Average occupancy for the Same Store
Properties was 88.2% during 2010 and 89.6% during 2009. The following table sets forth revenue and
expense information for the Same Store Properties:
| Three Months Ended March 31, | ||||||||
| 2010 | 2009 | |||||||
Revenue |
||||||||
Rents |
$ | 113,430 | $ | 115,580 | ||||
Tenant reimbursements |
20,820 | 19,678 | ||||||
Termination fees |
1,647 | 113 | ||||||
Other |
329 | 309 | ||||||
| 136,226 | 135,680 | |||||||
Operating expenses |
||||||||
Property operating expenses |
45,065 | 40,382 | ||||||
Real estate taxes |
12,428 | 14,162 | ||||||
Net operating income |
$ | 78,733 | $ | 81,136 | ||||
Net operating income — percentage change over prior year |
-3.0 | % | ||||||
Net operating income, excluding termination fees & other |
$ | 76,757 | $ | 80,714 | ||||
Net operating income, excluding termination fees & other — percentage change over prior year |
-4.9 | % | ||||||
Net operating income |
$ | 78,733 | $ | 81,136 | ||||
Straight line rents |
(2,705 | ) | (1,608 | ) | ||||
Above/below market rent amortization |
(1,419 | ) | (1,667 | ) | ||||
Non-cash ground rent |
370 | 370 | ||||||
Cash — Net operating income |
$ | 74,979 | $ | 78,231 | ||||
Cash — Net operating income — percentage change over prior year |
-4.2 | % | ||||||
Cash — Net operating income, excluding termination fees & other |
$ | 73,003 | $ | 77,809 | ||||
Cash — Net operating income, excluding termination fees & other — percentage change over prior year |
-6.2 | % | ||||||
The following table is a
reconciliation of Net Income to Same Store net operating income:
| Three Months Ended March 31, | ||||||||
| 2010 | 2009 | |||||||
Net loss |
$ | (399 | ) | $ | (873 | ) | ||
Add/(deduct): |
||||||||
Interest income |
(865 | ) | (579 | ) | ||||
Interest expense |
31,524 | 35,646 | ||||||
Deferred financing costs |
1,011 | 1,252 | ||||||
Equity in income of real estate ventures |
(1,296 | ) | (586 | ) | ||||
Depreciation and amortization |
52,622 | 51,215 | ||||||
Gain on early extinguishment of debt |
1,192 | (6,639 | ) | |||||
General & administrative expenses |
6,092 | 4,958 | ||||||
Total discontinued operations |
(6,359 | ) | 1,968 | |||||
Consolidated net operating income |
83,522 | 86,362 | ||||||
Less: Net operating income of non same store properties |
(962 | ) | (1,852 | ) | ||||
Less: Eliminations and non-property specific net operating income |
(3,827 | ) | (3,374 | ) | ||||
Same Store net operating income |
$ | 78,733 | $ | 81,136 | ||||
- 9 -