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BDN 8-K - 02252013


UNITED STATES
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
Date of Report (Date of earliest event reported): February 25, 2013

Brandywine Realty Trust
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 
(Commission file number)
 
23-2862640
(I.R.S. Employer
Identification Number)
(State or Other Jurisdiction of
Incorporation or Organization)
 
 
 
 
555 East Lancaster Avenue, Suite 100
Radnor, PA 19087
(Address of principal executive offices)

(610) 325-5600
(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):
[ ]
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ]
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Item 2.01 Completion of Acquisition or Disposition Assets.
On February 25, 2013, Brandywine Operating Partnership, L.P. (the "Operating Partnership"), the limited partnership through which Brandywine Realty Trust, as sole general partner (the "Parent Company" and, together with the Operating Partnership, the "Company"), owns its assets and conducts its operations, sold a portfolio of eight properties containing an aggregate of 800,546 square feet (the "Properties") within an office park located in Lawrenceville, New Jersey for a gross sales price, payable in cash, of $121.0 million. We are not affiliated with the buyers, and the terms of the transaction were determined through arm's-length negotiations. As part of the transaction, we also granted the buyers a 7.5-year option to purchase our three remaining development parcels within the office park. The Properties were 86.9% leased at closing and they were built between the years of 1982 and 2007. The individual listing of the Properties, and their respective buyers, is shown below:
Property Name
 
City
 
State
 
Buyer
100 Lenox Drive
 
Lawrenceville
 
NJ
 
AG-Prism NJPP 100 Lenox, LLC
989 Lenox Drive
 
Lawrenceville
 
NJ
 
AG-Prism NJPP 989 Lenox, LLC
993 Lenox Drive
 
Lawrenceville
 
NJ
 
AG-Prism NJPP 993 Lenox, LLC
997 Lenox Drive
 
Lawrenceville
 
NJ
 
AG-Prism NJPP 997 Lenox, LLC
1000 Lenox Drive
 
Lawrenceville
 
NJ
 
AG-Prism NJPP 1000 Lenox, LLC
1009 Lenox Drive
 
Lawrenceville
 
NJ
 
AG-Prism NJPP 1009 Lenox, LLC
1200 Lenox Drive
 
Lawrenceville
 
NJ
 
AG-Prism NJPP 1200 Lenox, LLC
2000 Lenox Drive
 
Lawrenceville
 
NJ
 
AG-Prism NJPP 2000 Lenox, LLC
The operations of the Properties and related assets and liabilities are included in discontinued operations in the accompanying unaudited pro forma consolidated financial statements for all periods presented, unless otherwise noted. In connection with this sale, we estimate that we will recognize a gain on sale in the amount of $5.9 million during the three-month period ending March 31, 2013.
Item 9.01 Financial Statements and Exhibits.
(b) Pro Forma Financial Information
The unaudited pro forma consolidated balance sheets of each of Brandywine Realty Trust and Brandywine Operating Partnership, L.P. as of December 31, 2012 and unaudited pro forma consolidated statements of operations of each of Brandywine Realty Trust and Brandywine Operating Partnership, L.P. for the years ended December 31, 2012, 2011 and 2010, including notes thereto, and filed as Exhibit 99.1 hereto incorporated herein by reference.
(d) Exhibits 99.1 Description
Exhibit 99.1 Unaudited pro forma consolidated balance sheets of each of Brandywine Realty Trust and Brandywine Operating Partnership, L.P. as of December 31, 2012 and unaudited pro forma consolidated statements of operations of Brandywine Realty Trust and Brandywine Operating Partnership, L.P. for the years ended December 31, 2012, 2011 and 2010, including notes hereto.


2



Signatures
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned, hereunto duly authorized.
 
 
 
 
 
 
Brandywine Realty Trust
 
 
By:  
/s/ Howard Sipzner
 
 
Howard Sipzner
 
 
Executive Vice President and Chief Financial Officer 
 

 
 
 
 
 
 
Brandywine Operating Partnership, its sole
General Partner
 
 
By:  
/s/ Howard Sipzner
 
 
Howard Sipzner
 
 
Executive Vice President and Chief Financial Officer 

Date: February 25, 2013


3
Exhibit 99.1 - 02252013



Exhibit Index

Exhibit
No.

99.1
Unaudited pro forma consolidated balance sheets of Brandywine Realty Trust and Brandywine Operating Partnership, L.P. as of December 31, 2012 and unaudited pro forma consolidated statements of operations of Brandywine Realty Trust and Brandywine Operating Partnership, L.P. for the years ended December 31, 2012, 2011 and 2010, including the notes hereto.




BRANDYWINE REALTY TRUST AND BRANDYWINE OPERATING PARTNERSHIP, L.P.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
On February 25, 2013, Brandywine Operating Partnership, L.P. (the "Operating Partnership"), the limited partnership through which Brandywine Realty Trust, as sole general partner (the "Parent Company" and, together with the Operating Partnership, the "Company"), owns its assets and conducts its operations, sold a portfolio of eight properties containing an aggregate of 800,546 square feet (the "Properties") within an office park located in Lawrenceville, New Jersey for a gross sales price, payable in cash, of $121.0 million. We are not affiliated with the buyers, and the terms of the transaction were determined through arm's-length negotiations. As part of the transaction, we also granted the buyers a 7.5-year option to purchase our three remaining development parcels within the office park. The Properties were 86.9% leased at closing and they were built between the years of 1982 and 2007. The individual listing of the Properties, and their respective buyers, is shown below:
Property Name
 
City
 
State
 
Buyer
100 Lenox Drive
 
Lawrenceville
 
NJ
 
AG-Prism NJPP 100 Lenox, LLC
989 Lenox Drive
 
Lawrenceville
 
NJ
 
AG-Prism NJPP 989 Lenox, LLC
993 Lenox Drive
 
Lawrenceville
 
NJ
 
AG-Prism NJPP 993 Lenox, LLC
997 Lenox Drive
 
Lawrenceville
 
NJ
 
AG-Prism NJPP 997 Lenox, LLC
1000 Lenox Drive
 
Lawrenceville
 
NJ
 
AG-Prism NJPP 1000 Lenox, LLC
1009 Lenox Drive
 
Lawrenceville
 
NJ
 
AG-Prism NJPP 1009 Lenox, LLC
1200 Lenox Drive
 
Lawrenceville
 
NJ
 
AG-Prism NJPP 1200 Lenox, LLC
2000 Lenox Drive
 
Lawrenceville
 
NJ
 
AG-Prism NJPP 2000 Lenox, LLC
The following unaudited pro forma consolidated financial statements of each of the Parent Company and the Operating Partnership have been prepared to reflect the effect of the sale as described in Item 2.01 of the Current Report on Form 8-K with which this Exhibit 99.1 is filed. The following unaudited pro forma consolidated financial statements of the Company are presented to comply with Article 11 of Regulation S-X and follow guidelines of the Securities and Exchange Commission (“SEC”). The unaudited pro forma consolidated statements of operations for years ended December 31, 2012, 2011 and 2010 are based on the historical consolidated statements of operations of each the Parent Company and the Operating Partnership, and give effect to the sale as if it had occurred on January 1, 2010. The unaudited pro forma consolidated balance sheet as of December 31, 2012 is based on the balance sheet on that date of each of the Parent Company and Operating Partnership, and gives effect to the sale as if it occurred on December 31, 2012.
The unaudited pro forma consolidated financial statements presented below are based on assumptions and adjustments set forth in the notes thereto. The unaudited pro forma adjustments made in the compilation of the unaudited pro forma consolidated financial statements were directly attributable to the sale, are factually supportable, are based upon available information and assumptions that the Company considers reasonable, and have been made solely for purposes of developing such unaudited pro forma financial information for illustrative purposes in compliance with the disclosure requirements of the SEC. The unaudited pro forma consolidated financial information is presented for informational purposes only and should not be considered indicative of actual results that would have been achieved had the sale actually been consummated on the dates indicated and does not purport to be indicative of the financial condition as of any future date or results of operation for any future period.
The unaudited pro forma consolidated financial information, and the accompanying notes, should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012 filed with the SEC on February 26, 2013.

1


Exhibit 99.1
Brandywine Realty Trust
Unaudited Pro Forma Consolidated Balance Sheet
As of December 31, 2012
(in thousands, except per share data)
 
 
 
 
 
 
 
As Reported
Property Sold
 
Use of Proceeds
 
 
 (A)
(B)
 
(C)
Pro Forma
ASSETS
 
 
 
 
 
Real estate investments:
 
 
 
 
 
Rental properties
$
4,726,169

(134,285
)
 (B1)
—

$
4,591,884

Accumulated depreciation
(954,665
)
35,988

 (B1)
—

(918,677
)
Operating real estate investments, net
3,771,504

(98,297
)
 
—

3,673,207

Construction-in-progress
48,950

(354
)
 
—

48,596

Land inventory
102,439

—

 
—

102,439

Total real estate investments, net
3,922,893

(98,651
)
 
—

3,824,242

Cash and cash equivalents
1,549

113,524

 (B2)
(69,000
)
46,073

Accounts receivable, net
13,943

—

 
—

13,943

Accrued rent receivable, net
122,066

(6,299
)
 (B1)
—

115,767

Investment in real estate ventures, at equity
192,844

—

 
—

192,844

Deferred costs, net
122,243

(4,584
)
 (B1)
—

117,659

Intangible assets, net
70,620

(20
)
 (B1)
—

70,600

Notes receivable
7,226

—

 
—

7,226

Other assets
53,325

(41
)
 (B1)
—

53,284

Total assets
$
4,506,709

3,929

 
(69,000
)
$
4,441,638

 
 
 
 
 
 
LIABILITIES AND BENEFICIARIES’ EQUITY
  
 
 
 
 
Mortgage notes payable
$
442,974

—

 
—

$
442,974

Unsecured credit facility
69,000

—

 
(69,000
)
—

Unsecured term loan
450,000

—

 
—

450,000

Unsecured senior notes, net of discounts
1,503,356

—

 
—

1,503,356

Accounts payable and accrued expenses
71,579

—

 
—

71,579

Distributions payable
23,652

—

 
—

23,652

Deferred income, gains and rent
82,947

—

 
—

82,947

Acquired lease intangibles, net
33,859

(24
)
 (B1)
—

33,835

Other liabilities
55,826

(527
)
 (B1)
—

55,299

 
 
 
 
 
 
Total liabilities
2,733,193

(551
)
 
(69,000
)
2,663,642

Commitments and contingencies
 
 
 
 
 
 
 
 
 
 
 
Brandywine Realty Trust’s equity:
  
 
 
 
 
Preferred Shares (shares authorized-20,000,000):
  
 
 
 
 
7.50% Series C Preferred Shares
—

—

 
—

—

7.375% Series D Preferred Shares
—

—

 
—

—

6.90% Series E Preferred Shares
40

—

 
 
40

Common Shares of Brandywine Realty Trust’s beneficial interest
1,434

—

 
—

1,434

Additional paid-in capital
2,780,194

—

 
—

2,780,194

Deferred compensation payable in common shares
5,352

—

 
—

5,352

Common shares in grantor trust
(5,352
)
—

 
—

(5,352
)
Cumulative earnings
479,734

4,402

 
—

484,136

Accumulated other comprehensive loss
(15,918
)
—

 
—

(15,918
)
Cumulative distributions
(1,493,206
)
—

 
—

(1,493,206
)
Total Brandywine Realty Trust’s equity
1,752,278

4,402

 
—

1,756,680

Non-controlling interests
21,238

78

 
—

21,316

Total beneficiaries' equity
1,773,516

4,480

(B3)
—

1,777,996

Total liabilities and equity
$
4,506,709

3,929

 
(69,000
)
$
4,441,638


The accompanying notes are an integral part of the unaudited pro forma consolidated financial statements.


2


Exhibit 99.1
Brandywine Realty Trust
Unaudited Pro Forma Consolidated Income Statement
For the year ended December 31, 2012
(in thousands, except per share data)
 
 
 
 
 
 
As Reported (D)
Amounts transferred to discontinued operations (E)
Other (F)
Pro Forma
Revenue:
 
 
 
 
Rents
$
459,855

(18,330
)
—

$
441,525

Tenant reimbursements
78,613

(1,331
)
—

77,282

Termination fees
3,233

—

—

3,233

Third party management fees, labor reimbursement and leasing
12,116

—

—

12,116

Other
6,016

(238
)
—

5,778

Total revenue
559,833

(19,899
)
—

539,934

Operating Expenses:
  
 
 
 
Property operating expenses
159,296

(5,596
)
—

153,700

Real estate taxes
55,969

(2,204
)
—

53,765

Third party management expenses
5,127

—

—

5,127

Depreciation and amortization
195,841

(5,921
)
—

189,920

General and administrative expenses
25,413

—

—

25,413

Total operating expenses
441,646

(13,721
)
—

427,925

Operating income
118,187

(6,178
)
—

112,009

Other Income (Expense):
  
 
 
 
Interest income
3,012

(2
)
—

3,010

Historic tax credit transaction income
11,840

—

—

11,840

Interest expense
(132,939
)
—

310

(132,629
)
Interest expense — amortization of deferred financing costs
(6,208
)
—

—

(6,208
)
Recognized hedge activity
(2,985
)
 
 
(2,985
)
Interest expense-financing obligation
(850
)
 
 
(850
)
Equity in income of real estate ventures
2,741

—

—

2,741

Loss on real estate venture formation
(950
)
—

—

(950
)
Loss on early extinguishment of debt
(22,002
)
—

—

(22,002
)
Income (loss) from continuing operations before non-controlling interests
(30,154
)
(6,180
)
310

(36,024
)
Net income attributable to non-controlling interests — partners’ share of consolidated real estate ventures
—

—

—

—

Net (income) loss from continuing operations attributable to non-controlling interests — LP units
736

107

—

843

Net income (loss) attributable to continuing operations
(29,418
)
(6,073
)
310

(35,181
)
 
 
 
 
 
Income allocated to Preferred Shares
(10,405
)
—

—

(10,405
)
Preferred share redemption charge
(4,052
)
—

—

(4,052
)
Amount allocated to unvested restricted shareholders
(376
)
—

—

(376
)
Net income (loss) from continuing operations allocated to Common Shareholders of Brandywine Realty Trust
$
(44,251
)
$
(6,073
)
310

$
(50,014
)
 
 
 
 
 
Per share data:
 
 
 
 
Basic loss per Common Share:
  
 
 
 
Continuing operations
$
(0.31
)
 
 
$
(0.35
)
Diluted loss per Common Share:
  
 
 
  
Continuing operations
$
(0.31
)
 
 
$
(0.35
)
 
 
 
 
 
Basic weighted average shares outstanding
143,257

 
 
143,257

 
 
 
 
 
Diluted weighted average shares outstanding
143,257

 
 
143,257


The accompanying notes are an integral part of the unaudited pro forma consolidated financial statements.


3


Exhibit 99.1
Brandywine Realty Trust
Unaudited Pro Forma Consolidated Income Statement
For the year ended December 31, 2011
(in thousands, except per share data)
 
 
 
 
 
 
As Reported (D)
Amounts transferred to discontinued operations (E)
Other (F)
Pro Forma
Revenue:
 
 
 
 
Rents
$
462,771

(17,478
)
—

$
445,293

Tenant reimbursements
79,108

(1,455
)
—

77,653

Termination fees
2,951

—

—

2,951

Third party management fees, labor reimbursement and leasing
11,536

—

—

11,536

Other
5,387

(28
)
—

5,359

Total revenue
561,753

(18,961
)
—

542,792

Operating Expenses:
  
 
 
 
Property operating expenses
167,077

(5,953
)
—

161,124

Real estate taxes
54,171

(2,176
)
—

51,995

Third party management expenses
5,590

—

—

5,590

Depreciation and amortization
210,334

(5,573
)
—

204,761

General and administrative expenses
24,602

—

—

24,602

Total operating expenses
461,774

(13,702
)
—

448,072

Operating income (loss)
99,979

(5,259
)
—

94,720

Other Income (Expense):
  
 
 
 
Interest income
1,813

—

—

1,813

Historic tax credit transaction income
12,026

—

—

12,026

Interest expense
(131,405
)
—

6,153

(125,252
)
Interest expense — amortization of deferred financing costs
(4,991
)
—

—

(4,991
)
Equity in income of real estate ventures
3,775

—

—

3,775

Net gain on sale of interests in real estate
2,791

—

—

2,791

Net gain on sale of undepreciated real estate
45

—

—

45

Loss on real estate venture formation
(222
)
—

—

(222
)
Loss on early extinguishment of debt
(2,776
)
—

—

(2,776
)
Income (loss) from continuing operations before non-controlling interests
(18,965
)
(5,259
)
6,153

(18,071
)
Net income attributable to non-controlling interests
 
 
 
 
Net income attributable to non-controlling interests — partners’ share of consolidated real estate ventures
—

—

—

—

Net (income) loss from continuing operations attributable to non-controlling interests — LP units
769

202

—

971

Net income (loss) attributable to continuing operations
(18,196
)
(5,057
)
6,153

(17,100
)
 
 
 
 
 
Income allocated to Preferred Shares
(7,992
)
—

—

(7,992
)
Amount allocated to unvested restricted shareholders
(505
)
—

—

(505
)
Net income (loss) from continuing operations allocated to Common Shareholders of Brandywine Realty Trust
$
(26,693
)
$
(5,057
)
$
6,153

$
(25,597
)
 
 
 
 
 
Per share data:
 
 
 
 
Basic loss per Common Share:
  
 
 
 
Continuing operations
$
(0.20
)
 


$
(0.19
)
Diluted loss per Common Share:
  
 
 
 
Continuing operations
$
(0.20
)
 
 
$
(0.19
)
 
 
 
 
 
Basic weighted average shares outstanding
135,444

 
 
135,444

 
 
 
 
 
Diluted weighted average shares outstanding
135,444

 
 
135,444


The accompanying notes are an integral part of the unaudited pro forma consolidated financial statements.



4


Exhibit 99.1
Brandywine Realty Trust
Unaudited Pro Forma Consolidated Income Statement
For the year ended December 31, 2010
(in thousands, except per share data)
 
 
 
 
 
 
As Reported (D)
Amounts transferred to discontinued operations (E)
Other (F)
Pro Forma
Revenue:
 
 
 
 
Rents
$
443,485

(17,292
)
—

$
426,193

Tenant reimbursements
75,330

(2,021
)
—

73,309

Termination fees
5,516

—

—

5,516

Third party management fees, labor reimbursement and leasing
11,830

—

—

11,830

Other
4,271

(23
)
—

4,248

Total revenue
540,432

(19,336
)
—

521,096

Operating Expenses:
  
 
 
 
Property operating expenses
163,294

(6,457
)
—

156,837

Real estate taxes
51,927

(2,321
)
—

49,606

Third party management expenses
5,866

—

—

5,866

Depreciation and amortization
203,345

(5,904
)
—

197,441

General and administrative expenses
23,306

—

—

23,306

Total operating expenses
447,738

(14,682
)
—

433,056

Operating income
92,694

(4,654
)
—

88,040

Other Income (Expense):
  
 
 
 
Interest income
3,218

—

—

3,218

Interest expense
(132,640
)
—

5,850

(126,790
)
Interest expense — amortization of deferred financing costs
(3,770
)
—

—

(3,770
)
Equity in income of real estate ventures
5,305

—

—

5,305

Net loss on sale of interests in real estate
(22
)
—

—

(22
)
Gain on early extinguishment of debt
(2,110
)
—

—

(2,110
)
Income (loss) from continuing operations before non-controlling interests
(37,325
)
(4,654
)
5,850

(36,129
)
Net income attributable to non-controlling interests
 
 
 
 
Net income attributable to non-controlling interests — partners’ share of consolidated real estate ventures
—

—

—

—

Net (income) loss from continuing operations attributable to non-controlling interests — LP units
946

97

—

1,043

Net (income) loss attributable to non-controlling interests
(36,379
)
(4,557
)
5,850

(35,086
)
Distribution to Preferred Shares
(7,992
)
—

—

(7,992
)
Amount allocated to unvested restricted shareholders
(512
)
—

—

(512
)
Net income (loss) from continuing operations attributable to Common Shareholders of Brandywine Realty Trust
$
(44,883
)
$
(4,557
)
$
5,850

$
(43,590
)
 
 
 
 
 
Per share data:
 
 
 
 
Basic loss per Common Share:
  
 
 
 
Continuing operations
$
(0.34
)
 
 
$
(0.33
)
Diluted loss per Common Share:
  
 
 
 
Continuing operations
$
(0.34
)
 
 
$
(0.33
)
 
 
 
 
 
Basic weighted average shares outstanding
131,743

 
 
131,743

 
 
 
 
 
Diluted weighted average shares outstanding
131,743

 
 
131,743


The accompanying notes are an integral part of the unaudited pro forma consolidated financial statements.




5


Exhibit 99.1
Brandywine Operating Partnership, L.P.
Unaudited Pro Forma Consolidated Balance Sheet
As of December 31, 2012
(in thousands, except per share data)
 
 
 
 
 
 
 
As Reported
Property Sold
 
Use of Proceeds
Reported as
 
 (A)
(B)
 
(C)
Pro Forma
ASSETS
 
 
 
 
 
Real estate investments:
 
 
 
 
 
Rental properties
$
4,726,169

(134,285
)
 (B1)
—

$
4,591,884

Accumulated depreciation
(954,665
)
35,988

 (B1)
—

(918,677
)
Operating real estate investments, net
3,771,504

(98,297
)
 
—

3,673,207

Construction-in-progress
48,950

(354
)
 
—

48,596

Land inventory
102,439

—

 
—

102,439

Total real estate investments, net
3,922,893

(98,651
)
 
—

3,824,242

Cash and cash equivalents
1,549

113,524

 (B2)
(69,000
)
46,073

Accounts receivable, net
13,943

—

 (B1)
—

13,943

Accrued rent receivable, net
122,066

(6,299
)
 (B1)
—

115,767

Investment in real estate ventures, at equity
192,844

—

 
—

192,844

Deferred costs, net
122,243

(4,584
)
 (B1)
—

117,659

Intangible assets, net
70,620

(20
)
 
—

70,600

Notes receivable
7,226

—

 
—

7,226

Other assets
53,325

(41
)
 (B1)
—

53,284

Total assets
$
4,506,709

3,929

 
(69,000
)
$
4,441,638

 
 
 
 
 
 
LIABILITIES AND BENEFICIARIES’ EQUITY
  
 
 
 
 
Mortgage notes payable
$
442,974

—

 
—

$
442,974

Unsecured credit facility
69,000

—

 
(69,000
)
—

Unsecured term loan
450,000

—

 
—

450,000

Unsecured senior notes, net of discounts
1,503,356

—

 
—

1,503,356

Accounts payable and accrued expenses
71,579

—

 
—

71,579

Distributions payable
23,652

—

 
—

23,652

Deferred income, gains and rent
82,947

—

 
—

82,947

Acquired lease intangibles, net
33,859

(24
)
 (B1)
—

33,835

Other liabilities
55,826

(527
)
 (B1)
—

55,299

Total liabilities
2,733,193

(551
)
 
(69,000
)
2,663,642

Commitments and contingencies
 
 
 

 
Redeemable limited partnership units at redemption value
26,777

—

 
—

26,777

Brandywine Operating Partnership's Equity:
 
 
 
 


7.50% Series D Preferred Mirror Units
—

—

 
 
—

7.375% Series E Preferred Mirror Units
—

—

 
 
—

6.90% Series E-Linked Preferred Mirror Units
96,850

—

 
—

96,850

General Partnership Capital
1,665,965

4,480

 (B3)
—

1,670,445

Accumulated other comprehensive loss
(16,076
)
—

 
—

(16,076
)
       Total Brandywine Operating Partnership's Equity
1,746,739

4,480

 
—

1,751,219

Total liabilities and partners' equity
$
4,506,709

$
3,929

 
$
(69,000
)
$
4,441,638


The accompanying notes are an integral part of the unaudited pro forma consolidated financial statements.





6


Exhibit 99.1
Brandywine Operating Partnership, L.P.
Unaudited Pro Forma Consolidated Income Statement
For the year ended December 31, 2012
(in thousands, except per share data)
 
 
 
 
 
 
As Reported (D)
Amounts transferred to discontinued operations (E)
Other (F)
Pro Forma
Revenue:
 
 
 
 
Rents
$
459,855

(18,330
)
—

$
441,525

Tenant reimbursements
78,613

(1,331
)
—

77,282

Termination fees
3,233

—

—

3,233

Third party management fees, labor reimbursement and leasing
12,116

—

—

12,116

Other
6,016

(238
)
—

5,778

Total revenue
559,833

(19,899
)
—

539,934

Operating Expenses:
  
 
 
 
Property operating expenses
159,296

(5,596
)
—

153,700

Real estate taxes
55,969

(2,204
)
—

53,765

Third party management expenses
5,127

—

—

5,127

Depreciation and amortization
195,841

(5,921
)
—

189,920

General and administrative expenses
25,413

—

—

25,413

Total operating expenses
441,646

(13,721
)
—

427,925

Operating income
118,187

(6,178
)
—

112,009

Other Income (Expense):
  
 
 
 
Interest income
3,012

(2
)
—

3,010

Historic tax credit transaction income
11,840

—

—

11,840

Interest expense
(132,939
)
—

310

(132,629
)
Interest expense — amortization of deferred financing costs
(6,208
)
—

—

(6,208
)
Interest expense - financing obligation
(850
)
—

—

(850
)
Recognized hedge activity
(2,985
)
—

—

(2,985
)
Equity in income of real estate ventures
2,741

—

—

2,741

Loss on real estate venture formation
(950
)
—

—

(950
)
Loss on early extinguishment of debt
(22,002
)
—

—

(22,002
)
Income (loss) from continuing operations
(30,154
)
(6,180
)
310

(36,024
)
 
 
 
 
 
Income allocated to Preferred Units
(10,405
)
—

—

(10,405
)
Preferred unit redemption
(4,052
)
 
 
(4,052
)
Amount allocated to unvested restricted shareholders
(376
)
—

—

(376
)
Net income (loss) from continuing operations allocated to Common Partnership Units
$
(44,987
)
$
(6,180
)
$
310

$
(50,857
)
 
 
 
 
 
Per share Data:
 
 
 
 
Basic loss per Common Partnership Unit:
  
 
 
 
Continuing operations
$
(0.31
)
 
 
$
(0.35
)
Diluted loss per Common Partnership Unit:
  
 
 
  
Continuing operations
$
(0.31
)
 
 
$
(0.35
)
 
 
 
 
 
Basic weighted average common partnership units outstanding
145,883

 
 
145,883

 
 
 
 
 
Diluted weighted average common partnership units outstanding
145,883

 
 
145,883


The accompanying notes are an integral part of the unaudited pro forma consolidated financial statements.



7


Exhibit 99.1
Brandywine Operating Partnership, L.P.
Unaudited Pro Forma Consolidated Income Statement
For the year ended December 31, 2011
(in thousands, except per share data)
 
 
 
 
 
 
As Reported (D)
Amounts transferred to discontinued operations (E)
Other (F)
Pro Forma
Revenue:
 
 
 
 
Rents
$
462,771

(17,478
)
—

$
445,293

Tenant reimbursements
79,108

(1,455
)
—

77,653

Termination fees
2,951

—

—

2,951

Third party management fees, labor reimbursement and leasing
11,536

—

—

11,536

Other
5,387

(28
)
—

5,359

Total revenue
561,753

(18,961
)
—

542,792

Operating Expenses:
  
 
 
 
Property operating expenses
167,077

(5,953
)
—

161,124

Real estate taxes
54,171

(2,176
)
—

51,995

Third party management expenses
5,590

—

—

5,590

Depreciation and amortization
210,334

(5,573
)
—

204,761

General and administrative expenses
24,602

—

—

24,602

Total operating expenses
461,774

(13,702
)
—

448,072

Operating income
99,979

(5,259
)
—

94,720

Other Income (Expense):
  
 
 
 
Interest income
1,813

—

—

1,813

Historic tax credit transaction income
12,026

—

—

12,026

Interest expense
(131,405
)
—

6,153

(125,252
)
Interest expense — amortization of deferred financing costs
(4,991
)
—

—

(4,991
)
Equity in income of real estate ventures
3,775

—

—

3,775

Net gain on sale of interests in real estate
2,791

—

—

2,791

Net gain on sale of undepreciated real estate
45

—

—

45

Loss on real estate venture formation
(222
)
—

—

(222
)
Loss on early extinguishment of debt
(2,776
)
—

—

(2,776
)
Income (loss) from continuing operations
(18,965
)
(5,259
)
6,153

(18,071
)
 
 
 
 
 
Distribution to Preferred Shares
(7,992
)
—

—

(7,992
)
Amount allocated to unvested restricted shareholders
(505
)
—

—

(505
)
Net income (loss) from continuing operations  allocated to Common Partnership Units
$
(27,462
)
$
(5,259
)
$
6,153

$
(26,568
)
 
 
 
 
 
Per share data:
 
 
 
 
Basic loss per Common Partnership Unit:
  
 
 
 
Continuing operations
$
(0.19
)
 
 
$
(0.18
)
Diluted loss per Common Partnership Unit:
  
 
 
  
Continuing operations
$
(0.19
)
 
 
$
(0.18
)
 
 
 
 
 
Basic weighted average common partnership units outstanding
145,119

 
 
145,119

 
 
 
 
 
Diluted weighted average common partnership units outstanding
145,119

 
 
145,119


The accompanying notes are an integral part of the unaudited pro forma consolidated financial statements.





8


Exhibit 99.1
Brandywine Operating Partnership, L.P.
Unaudited Pro Forma Consolidated Income Statement
For the year ended December 31, 2010
(in thousands, except per share data)
 
 
 
 
 
 
As Reported (D)
Amounts transferred to discontinued operations (E)
Other (F)
Pro Forma
Revenue:
 
 
 
 
Rents
$
443,485

(17,292
)
—

$
426,193

Tenant reimbursements
75,330

(2,021
)
—

73,309

Termination fees
5,516

—

—

5,516

Third party management fees, labor reimbursement and leasing
11,830

—

—

11,830

Other
4,271

(23
)
—

4,248

Total revenue
540,432

(19,336
)
—

521,096

Operating Expenses:
  
 
 
 
Property operating expenses
163,294

(6,457
)
—

156,837

Real estate taxes
51,927

(2,321
)
—

49,606

Third party management expenses
5,866

—

—

5,866

Depreciation and amortization
203,345

(5,904
)
—

197,441

General and administrative expenses
23,306

—

—

23,306

Total operating expenses
447,738

(14,682
)
—

433,056

Operating income
92,694

(4,654
)
—

88,040

Other Income (Expense):
  
 
 
 
Interest income
3,218

—

—

3,218

Interest expense
(132,640
)
—

5,850

(126,790
)
Interest expense — amortization of deferred financing costs
(3,770
)
—

—

(3,770
)
Equity in income of real estate ventures
5,305

—

—

5,305

Net gain on sale of interests in real estate
(22
)
—

—

(22
)
Loss on early extinguishment of debt
(2,110
)
—

—

(2,110
)
Income (loss) from continuing operations
(37,325
)
(4,654
)
5,850

(36,129
)
 
 
 
 
 
Distribution to Preferred Shares
(7,992
)
—

—

(7,992
)
Amount allocated to unvested restricted shareholders
(512
)
—

—

(512
)
Net income (loss) from continuing operations  allocated to Common Partnership Units
$
(45,829
)
$
(4,654
)
$
5,850

$
(44,633
)
 
 
 
 
 
Per share data:
 
 
 
 
Basic loss per Common Partnership Unit:
  
 
 
 
Continuing operations
$
(0.33
)
 
 
$
(0.32
)
Diluted loss per Common Partnership Unit:
  
 
 
  
Continuing operations
$
(0.33
)
 
 
$
(0.32
)
 
 
 
 
 
Basic weighted average common partnership units outstanding
137,455

 
 
137,455

 
 
 
 
 
Diluted weighted average common partnership units outstanding
137,455

 
 
137,455


The accompanying notes are an integral part of the unaudited pro forma consolidated financial statements.

9


Exhibit 99.1
BRANDYWINE REALTY TRUST AND BRANDYWINE OPERATING PARTNERSHIP, L.P.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Pro Forma Adjustments

(A)
Reflects the Company's consolidated balance sheet as of December 31, 2012, as contained in the historical financial statements and notes thereto presented in the Company's Annual Report on Form 10-K for the year ended December 31, 2012.

(B)
The pro forma adjustments represent the elimination of the assets and liabilities of the Properties sold. These adjustments also include the receipt of proceeds of approximately $113.5 million, net of adjustments and costs of approximately $7.5 million.

(B1) Represents the sale of the Properties' assets and liabilities.
(B2) Represents net proceeds received by Brandywine upon sale of the Properties.
(B3) Represents the estimated gain on sale recognized by Brandywine upon completion of the sale transaction as if the sale occurred as of December 31, 2012, and was calculated as follows:

Sale price of the Properties
$
121,000,000

Less: Estimated closing costs and other adjustments
(7,475,530
)
Less: Property basis as of December 31, 2012
(109,044,190
)
Total estimated gain as of December 31, 2012 (i)
$
4,480,280


(i) The Company expects to record an estimated $5.9 million gain on sale from this transaction as of February 25, 2013 as a result of additional depreciation expense and changes in the basis from December 31, 2012.

(C) Represents use of proceeds to reduce outstanding balances under the Company unsecured revolving credit facility.
    
(D) Reflects the consolidated results of operations for the Company for the years ended December 31, 2012, 2011 and 2010, respectively, as contained in the historical financial statements and notes thereto in the Company's Annual Report on Form 10-K for the year ended December 31, 2012.

(E)
Represents revenues and expenses of the Properties sold for the years ended December 31, 2012, 2011 and 2010, respectively.
 
(F)
Represents an adjustment made to interest expense in connection with the sale of the Properties. Interest expense represents the elimination of interest expense on a portion of the Company's unsecured revolving credit facility that was repaid with proceeds from the sale as if the sale occurred on January 1, 2010 using actual monthly interest rates on the revolving credit facility over the periods. Each 1/8 of 1% decrease in the interest rate of the revolving credit facility will decrease interest expense by a nominal amount for the year ended December 31, 2012 and by approximately $0.1 million for each of the years ended December 31, 2011 and 2010, respectively. The nominal decrease to interest expense for the year ended December 31, 2012 is due to the fact that we had an outstanding balance on our revolving credit facility from January 1, 2012 through February 1, 2012. We used proceeds from term loan borrowings to pay down the line in full. We did not have an outstanding balance until December 31, 2012 resulting in nominal interest expense incurred related to the credit facility during 2012.

10