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Funds from Operations (FFO) available to common shares and units in the second quarter of 2014 totaled $57.3 million or $0.36 per diluted share versus $48.8 million or $0.31 per diluted share in the second quarter of 2013. FFO for the three months of 2013 was impacted by a $1.1 million loss on the early extinguishment of debt and $0.3 million of various transaction costs included within G&A expense. Our second quarter 2014 payout ratio ($0.15 common share distribution / $0.36 FFO per diluted share) was 41.7%.

▪	Net Income allocated to common shares totaled $0.4 million or $0.00 per diluted share in the second quarter of 2014 compared to a net income of $5.3 million or $0.03 per diluted share in the second quarter of 2013.

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In the second quarter of 2014, we incurred $22.9 million of revenue maintaining capital expenditures which along with other adjustments to FFO, resulted in $28.4 million or $0.18 per diluted share of Cash Available for Distribution (CAD). In the second quarter of 2013, we incurred $14.4 million of revenue maintaining capital expenditures that resulted in $30.3 million or $0.19 per diluted share of CAD. Our second quarter 2014 CAD payout ratio was 83.3% ($0.15 common share distribution / $0.18 CAD per diluted share).

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Our FFO available to common shares and units in the first six months of 2014 totaled $110.9 million or $0.69 per diluted share versus $100.5 million or $0.66 per diluted share in the first six months of 2013. FFO for the first six months of 2014 was impacted by (i) G&A expense includes $0.6 million due to employee severance costs, (ii) $1.2 million gain on the sale of a vacant land parcel, (iii) $0.8 million of unrecovered weather-related costs, and (iv) $0.2 million of transaction costs included within G&A expense associated with the acquisition of a land development project in Austin, Texas. FFO for the six months of 2013 was impacted by a $1.1 million loss on the early extinguishment of debt and $0.3 million of various transaction costs included within G&A expense. Our first six months 2014 FFO payout ratio ($0.30 common share distribution / $0.69 FFO per diluted share) was 43.5%.

▪	Net loss allocated to common shares totaled $3.7 million or ($0.02) per diluted share in the first six months of 2014 compared to net income of $7.4 million or $0.05 per diluted share in the first six months of 2013.

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In the first six months of 2014, we incurred $37.6 million of revenue maintaining capital expenditures which along with other adjustments to FFO, resulted in $62.9 million or $0.39 per diluted share of CAD. In the first six months of 2013, we incurred $27.7 million of revenue maintaining capital expenditures which resulted in $63.4 million, or $0.42 per diluted share of CAD. Our first six months 2014 CAD payout ratio was 76.9% ($0.30 common share distribution / $0.39 CAD per diluted share).

▪	In the second quarter of 2014, our Net Operating Income (NOI) excluding termination revenues and other income items increased 3.5% on a GAAP basis and 6.7% on a cash basis for our 196 same store properties, which were 89.5% and 87.5% occupied on June 30, 2014 and June 30, 2013, respectively.

▪	During the second quarter of 2014, we leased over 1.0 million square feet and commenced occupancy on 587,000 square feet. The second quarter occupancy activity includes 272,000 square feet of renewals, 148,000 square feet of new leases and 167,000 square feet of tenant expansions. We have an additional 564,000 square feet of executed new leasing scheduled to commence subsequent to June 30, 2014.

▪	During the second quarter of 2014, we achieved a 77.9% tenant retention ratio in our core portfolio with net absorption of 23,000 square feet. Second quarter rental rate growth was 2.6% as our renewal rental rates increased 1.3% and our new lease/expansion rental rates increased 6.0%, both on a GAAP basis.

▪	At June 30, 2014, our core portfolio of 201 properties comprising 24.0 million square feet was 89.3% occupied and we are now 91.7% leased (reflecting new leases commencing after June 30, 2014).

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As previously announced, on April 3, 2014, we contributed two, Class A office buildings totaling 192,000 of net rentable square feet known as Four Points Centre in Austin, Texas to our existing Austin Joint Venture (the “Venture”) with DRA Advisors, LLC (“DRA”). The contribution fair value of the properties total $41.5 million which equaled the acquisition price we paid in December 2013. In order for the Venture to purchase the properties DRA contributed $5.9 million, Brandywine equity contribution totaled $5.9 million, and the Venture borrowed $29.0 million. As a result, we received a cash distribution of $34.4 million from the Venture. The secured loan bears interest at a fixed rate of 4.50% and matures on April 6, 2019.

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During the first quarter 2014, we acquired a 54 acre development site and land improvements in the southwest submarket in Austin, Texas known as Encino Trace for $14.0 million, representing a land value of $29.00 per buildable square foot. The site is fully entitled and permitted to develop two 4-story office buildings totaling 320,000 rentable square feet and a 1,375 space parking deck. One building, totaling 159,000 square feet, is 75% pre-leased to an anchor tenant and we commenced development during the first quarter 2014. During the second quarter 2014, we commenced construction of the second building totaling 161,000 square feet. We anticipate both buildings will be completed during the second quarter of 2015 and upon each building reaching stabilization, will be contributed to our existing Venture with DRA. Our total anticipated project costs are approximately $87.4 million with $18.7 million funded as of June 30, 2014. We anticipate funding the remaining development costs, totaling $68.8 million from available corporate funds resulting in an 8% yield on cost.

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We are underway with the development of FMC Tower at Cira Centre South, a trophy class, mixed-use office tower designed by the architectural firms of Pelli Clark Pelli and Bower Lewis Thrower to be located at the southern-end of our Cira Centre complex in University City. Groundbreaking occurred on May 14, 2014 with completion scheduled for June 2016. Upon completion, we anticipate FMC Tower at Cira Centre South will approximate 870,000 rentable square feet comprising 635,000 square feet of office space, 4,000 square feet of retail space and 268 luxury apartment suites, of which up to 100 units will be fully furnished with concierge services and the balance to be market rate rental apartments. Given the increased size of the project, our total anticipated investment is approximately $385 million including costs to complete the furnished residential units.

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We are continuing the $158.5 million development of evo at Cira Centre South, a 33-story, 850-bed student housing tower in the University City submarket of Philadelphia, Pennsylvania, which we are developing in a 30/30/40 joint venture with Campus Crest Communities, Inc. (30%) and Harrison Street Real Estate Capital (40%), with delivery by September 1, 2014. The partners have fulfilled their $60.7 million equity contributions and funding through the $97.8 million construction loan is underway with $60.1 million advanced as of June 30, 2014.

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As previously announced, we and an affiliate of The Shooshan Company entered into a 50/50 joint venture to build 4040 Wilson Boulevard, a 426,900 square foot office building representing the final phase of the eight-building, mixed-use, Liberty Center complex developed by Shooshan in the Ballston submarket of Arlington, Virginia. Shooshan contributed its land parcel to the venture, and we will contribute up to $36.0 million of which $16.4 million has been funded as of June 30, 2014. The joint venture commenced construction of the 544-space garage in May 2014. The garage will cost approximately $21.0 million. Groundbreaking of the building will occur upon reaching certain pre-leasing levels, at which point the joint venture expects to seek third-party construction financing.

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We are continuing the $77.0 million development of The Parc at Plymouth Meeting, a 398-unit multi-family project in Plymouth Meeting, Pennsylvania, in a 50/50 joint venture with Toll Brothers which we expect to complete by the end of 2015. The partners fully funded $31.0 million of initial project equity with our share fully satisfied by our contribution of the underlying land parcel. The remaining construction costs are being funded from a $56.0 million construction facility whose closing in December 2013 resulted in a $3.0 million return of capital to each partner. As of June 30, 2014, $28.0 million had been spent on the development of which $6.2 million has been funded by draws on the construction loan.

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In April 2014, the U.S. Environmental Protection Agency recognized Brandywine as a 2014 ENERGY STAR Partner of the Year for strategically managing and improving the energy efficiency of our entire portfolio. Through our partnership with the ENERGY STAR program, we have improved our energy performance, reduced consumption, saved money, and helped to protect the environment for future generations. The 2014 Partner of the Year Awards are given to a variety of organizations to recognize their contributions to reducing greenhouse gas emissions through superior energy efficiency. The award winners are selected from the 16,000 partners that participate in the ENERGY STAR program.

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In June 2014, NAIOP, the Commercial Real Estate Development Association, announced the selection of Brandywine as the 2014 Developer of the Year - the association’s highest honor. “Brandywine’s unique ability to adapt to changing market conditions coupled with its financial stability, longstanding record of community engagement, commitment to the environment by establishing an award-winning sustainability program and dedication to industry service and leadership make it ‘the’ company to emulate across our industry and one in which we are proud to recognize as the 2014 Developer of the Year,” said Thomas J. Bisacquino, NAIOP President and CEO. The 2014 Developer of the Year award will be presented on October 28th at NAIOP’s Development ’14: The Meeting for Commercial Real Estate in Denver, Colorado. Brandywine was selected from an impressive slate of nominees and was evaluated by a team of seasoned developers on the following criteria: outstanding quality of projects and services; active support of the industry through NAIOP; financial consistency and stability; ability to adapt to market conditions; and support of the local community.

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▪	At June 30, 2014, our net debt to gross assets measured 42.8%, reflecting no outstanding balance on our $600.0 million unsecured revolving credit facility and $234.8 million of cash and cash equivalents on hand.

▪	For the quarter ended June 30, 2014, we had a 2.8 EBITDA to interest coverage ratio and a 6.9 ratio of net debt to annualized quarterly consolidated EBITDA.

•	Occupancy improving to a range of 91 - 92% by year-end 2014 with 93 - 94% leased;

•	6.0% - 8.0% GAAP increase in overall lease rates with a resulting 3.0% - 5.0% increase in 2014 same store GAAP NOI;

•	Solely for the purpose of computing guidance, no equity or debt capital markets activity, including no share issuances under our ATM Program, and no acquisition activity;

•	$150.0 million of net sales activity at an 8.5% capitalization rate weighted to the second half of 2014; and

•	FFO per diluted share based on 160.2 million fully diluted weighted average common shares.

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