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): July 21, 2005
BRANDYWINE REALTY TRUST
(Exact name of issuer as specified in charter)
MARYLAND |
001-9106 |
23-2413352 |
|||||||||||
| (State or Other Jurisdiction of Incorporation or Organization) |
(Commission file number) |
(I.R.S. Employer Identification Number) |
401 Plymouth Road, Suite 500
Plymouth Meeting, Pennsylvania 19462
(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 2.02 Results of Operations and Financial Condition
Furnished pursuant to Exhibit 99.1 of this Form 8-K is a press release of the Company dated July 21, 2005.
The press release includes a “non-GAAP financial measure” within the meaning of the Securities and Exchange Commission’s Regulation G. With respect to such non-GAAP financial measure, the Company has disclosed in the press release the most directly comparable financial measure calculated and presented in accordance with generally accepted accounting principles (“GAAP”) and has provided a reconciliation of such non-GAAP financial measure to the most directly comparable GAAP financial measure.
Item 9.01 Financial Statements and Exhibits
Exhibits
| 99.1 | Press Release dated July 21, 2005 |
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 | |||
| Date: July 22, 2005 | By: | /s/ Gerard H. Sweeney | |
| Gerard H. Sweeney | |||
| President and Chief Executive Officer | |||
EXHIBIT INDEX
| Exhibit No. | Description | |||
| 99.1 | Press Release dated July 21, 2005 |
Exhibit 99.1
FOR IMMEDIATE RELEASE
| Contact: | |||||
| Press Contact: | Investor Contact: | ||||
| Press Contact: Michael Beckerman Beckerman Public Relations 908-781-6420 michael@beckermanpr.com |
Gerard H. Sweeney Christopher P. Marr Brandywine Realty Trust 610-325-5600 info@brandywinerealty.com |
||||
Brandywine Realty Trust Announces Second Quarter 2005 Earnings
PLYMOUTH MEETING, PA, July 21, 2005– Brandywine Realty Trust (NYSE:BDN) announced today that diluted earnings per share (EPS) was $0.12 for the second quarter of 2005, a decrease of $0.22 per share as compared to $0.34 for the second quarter of 2004. Net income was $8.9 million for the second quarter, a decrease of $9.3 million, as compared to $18.2 million for the second quarter of 2004.
Diluted EPS was $0.26 for the six-months ended June 30, 2005, a decrease of $0.41 per share, as compared to $0.67 per share for the six months ended June 30, 2004. Net income was $18.3 million for the six months ended June 30, 2005, a decrease of $12.3 million, as compared to $30.6 million for the six months ended June 30, 2004.
The change in net income reflects increased depreciation and amortization expense of $11.1 million and $23.7 million for the three and six-months ended June 30, 2005, respectively. This non-cash increase is largely due to depreciation and amortization related to the 14 assets included in the Company’s acquisition of The Rubenstein Company, L.P.
Funds from operations (FFO) was $35.3 million or $0.61 per share for the second quarter 2005 compared to $32.7 million or $0.67 per share for the second quarter of 2004. FFO for the six months ended June 30, 2005 was $71.5 million or $1.24 per share as compared to $61.3 million or $1.25 per share for the same period of 2004.
FFO represents a non-generally accepted accounting principle (GAAP) financial measure. A table reconciling FFO to net income, the GAAP measure that the Company believes to be most directly comparable, is within the consolidated financial statements included in this release.
Brandywine President and Chief Executive Officer, Gerard H. Sweeney, commented, “We are pleased to report very solid quarterly results in what remains a challenging environment. Our asset quality and market focus have our core portfolio occupancies remaining above 91% and enhance our ability to renew tenants at average rent levels consistent with their existing leases. We continue to be pleased with our results at Cira Centre, now 93% pre-leased, Radnor Financial Center, currently 26% leased and our quarterly tenant retention ratio of 80%. Achieving these levels and continuing our track record of market out-performance is a true testimony to the quality of our tenant service and leasing team.” Mr. Sweeney went on to state, “Our focus continues to be on creating shareholder value by actively managing our existing assets and selectively pursuing development and acquisition opportunities that will enhance our portfolio.”
| 401 Plymouth Road, Suite 500 • Plymouth Meeting, PA 19462 | Phone: (610) 325-5600 • Fax: (610) 325-5622 • www.brandywinerealty.com |
Brandywine Realty Trust Summary Portfolio Performance
| • | FFO payout ratio was 72.2% for the quarter |
| • | Quarterly rental rates on new leases declined 5.3% on a straight-line basis |
| • | Quarterly rental rates on renewals declined 0.8% on a straight-line basis |
| • | Quarterly retention rate was 80.4% |
| • | Portfolio was 91.4% occupied and 92.9% leased as of June 30, 2005 |
| • | Leases expired or were terminated for approximately 1,151,000 square feet during the quarter |
| • | Leases were renewed for approximately 925,000 square feet during the quarter |
| • | New leases were signed for approximately 213,000 square feet during the quarter |
Distributions
On June 15, 2005, the Board of Trustees declared a regular quarterly dividend distribution of $0.44 per common share that was paid July 15, 2005 to shareholders of record as of July 6, 2005. The Company also declared its dividend for the second quarter of $0.46875 per 7.50% Series C Cumulative Redeemable Preferred Share and $0.46094 per 7.375% Series D Cumulative Redeemable Preferred Share that was paid on July 15, 2005 to holders of record of the Series C and Series D Preferred Shares as of June 30, 2005.
2005 Financial Outlook
The Company’s 2005 financial outlook continues to be predicated upon the following key and variable assumptions:
| • | The same-store portfolio (which represents approximately 79% of total square footage and 77% of projected 2005 net operating income) to achieve the following percentage changes from 2004 results: | |||
| o | GAAP rents and reimbursements (not including termination fees) to decline 0.50% to 1.50% |
| o | Net operating income to range from unchanged to a decline of 2.0% |
| o | Average occupancy to range from an increase of 0.50% to a decrease of 0.50% |
| • | The completion of all development projects in accordance with the estimates identified in our supplemental disclosure as of December 31, 2004. |
| • | While targeted acquisitions and dispositions are a component of the Company’s 2005 strategy, there are no acquisitions or dispositions factored into the 2005 financial outlook. |
Based on these key assumptions, we have updated our EPS guidance from our April 21, 2005 press release and expect our full year 2005 EPS to be $0.50 to $0.56 and we reiterate our FFO per share guidance of $2.48 to $2.55 per share.
We are introducing third quarter 2005 guidance and expect FFO per share to be $0.60 to $0.61 and EPS to be $0.10 to $0.11. These estimates may be positively or negatively impacted primarily by the timing and terms of property leases, actual operating expenses and interest rates as compared to our forecast.
Forward-Looking Statements
Estimates of future earnings per share and FFO per share 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 the actual results, performance, achievements or transactions of the Company and its affiliates 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: the Company’s 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 and equity financing, competition for real estate acquisitions and risks of acquisitions, dispositions and developments, including the cost of construction delays and cost overruns, unanticipated operating and capital costs, the Company’s 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 the Company’s tenants compete.
Additional information on factors which could impact the Company and the forward-looking statements contained herein are included in the Company’s filings with the Securities and Exchange Commission, including the Company’s Annual Report for the year ended December 31, 2004. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
Non-GAAP Supplemental Financial Measures
Funds from Operations (FFO)
FFO is a widely recognized measure of REIT performance. Although FFO is a non-GAAP financial measure, the Company believes that information regarding FFO is helpful to shareholders and potential investors. The Company computes 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 the Company. NAREIT defines FFO as net income (loss) before minority interest of unit holders (preferred and common) and excluding gains (losses) on sales of depreciable operating property and extraordinary items (computed in accordance with GAAP); plus real estate related depreciation and amortization (excluding amortization of deferred financing costs), and after adjustment for unconsolidated joint ventures. The GAAP measure that the Company believes to be most directly comparable to FFO, net income, includes depreciation and amortization expenses, gains or losses on property sales and minority interest. In computing FFO, the Company eliminates substantially all of these items because, in the Company’s view, they are not indicative of the results from the Company’s property operations. To facilitate a clear understanding of the Company’s 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 generated from operating activities 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 the Company’s financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company’s liquidity, nor is it indicative of funds available for the Company’s cash needs, including its ability to make cash distributions to shareholders.
Cash Available for Distribution (CAD)
Cash available for distribution, CAD, is a non-GAAP financial measure that is not intended to represent cash flow for the period and is not indicative of cash flow provided by operating activities as determined under GAAP. CAD is presented solely as a supplemental disclosure with respect to liquidity because the Company believes it provides useful information regarding the Company’s ability to fund its dividends. Because all companies do not calculate CAD the same way, the presentation of CAD may not be comparable to similarly titled measures of other companies.
Second Quarter Earnings Call and Supplemental Information Package
Brandywine President and CEO, Gerard H. Sweeney, will be hosting a conference call on Friday, July 22, 2005 at 11:00 a.m. Eastern Time. Call 1-888-889-5602. After the conference, a taped replay of the call can be accessed 24 hours a day through Friday, August 5, 2005 by calling 1-877-519-4471 – access code 6234812. In addition, the conference call can be accessed via a webcast located on the Company’s website at www.brandywinerealty.com.
The Company has prepared a Supplemental Information package that includes financial results and operational statistics to support the announcement of second quarter earnings. The Supplemental Information package is available through the Company’s website at www.brandywinerealty.com.
The Supplemental Information package can be found in the “Investor Relations – Financial Reports” section of the web page.
About Brandywine Realty Trust
Brandywine Realty Trust, with headquarters in Plymouth Meeting, PA and regional offices in Mt. Laurel, NJ, Philadelphia, PA and Richmond, VA, is one of the Mid-Atlantic region's largest full service real estate companies. Brandywine owns, manages or has an ownership interest in 296 office and industrial properties, aggregating 24.2 million square feet.
For more information, visit Brandywine’s website at www.brandywinerealty.com.
# # #
Note: Certain 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 the actual results, performance, achievements or transactions of the Company and its affiliates or industry results 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, the Company’s ability to lease vacant space and to renew or relet space under expiring leases at expected levels, the potential loss of major tenants, interest rate levels, the availability and terms of debt and equity financing, competition with other real estate companies for tenants and acquisitions, risks of real estate acquisitions, dispositions and developments, including cost overruns and construction delays, unanticipated operating costs and the effects of general and local economic and real estate conditions. Additional information or factors, which could impact the Company and the forward-looking statements contained herein, are included in the Company’s filings with the Securities and Exchange Commission. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
# # #
BRANDYWINE REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
| June 30, | December 31, | |||||
| 2005 | 2004 | |||||
| ASSETS | ||||||
| Real estate investments: | ||||||
Operating
properties |
$ | 2,515,399 | $ | 2,483,134 | ||
Accumulated
depreciation |
(356,416 | ) | (325,802 | ) | ||
| 2,158,983 | 2,157,332 | |||||
Construction-in-progress |
213,246 | 145,016 | ||||
Land
held for development |
85,708 | 61,517 | ||||
| 2,457,937 | 2,363,865 | |||||
| Cash and cash equivalents | 9,321 | 15,346 | ||||
| Escrowed cash | 18,090 | 17,980 | ||||
| Accounts receivable, net | 8,736 | 11,999 | ||||
| Accrued rent receivable, net | 38,687 | 32,641 | ||||
| Investment in marketable securities | 661 | 423 | ||||
| Investment in real estate ventures | 13,308 | 12,754 | ||||
| Deferred costs, net | 34,447 | 34,449 | ||||
| Intangible assets, net | 85,634 | 101,056 | ||||
| Other assets | 39,088 | 43,471 | ||||
Total
assets |
$ | 2,705,909 | $ | 2,633,984 | ||
| LIABILITIES AND BENEFICIARIES' EQUITY | ||||||
| Mortgage notes payable | $ | 508,189 | $ | 518,234 | ||
| Borrowings under credit facilities | 265,000 | 152,000 | ||||
| Unsecured senior notes, net of discounts | 636,534 | 636,435 | ||||
| Accounts payable and accrued expenses | 43,877 | 49,242 | ||||
| Distributions payable | 27,583 | 27,363 | ||||
| Tenant security deposits and deferred rents | 18,417 | 20,046 | ||||
| Acquired lease intangibles, net | 36,520 | 39,271 | ||||
| Other liabilities | 3,825 | 1,525 | ||||
Total
liabilities |
1,539,945 | 1,444,116 | ||||
| Minority interest | 41,336 | 42,866 | ||||
| Beneficiaries' equity: | ||||||
| Preferred shares – Series C | 20 | 20 | ||||
| Preferred shares – Series D | 23 | 23 | ||||
| Common shares | 558 | 553 | ||||
| Additional paid-in capital | 1,358,758 | 1,346,651 | ||||
| Cumulative earnings | 388,859 | 370,515 | ||||
| Accumulated other comprehensive loss | (2,666 | ) | (3,130 | ) | ||
| Cumulative distributions | (620,924 | ) | (567,630 | ) | ||
Total
beneficiaries' equity |
1,124,628 | 1,147,002 | ||||
| 1,165,964 | 1,189,868 | |||||
| Total liabilities and beneficiaries' equity | $ | 2,705,909 | $ | 2,633,984 | ||
BRANDYWINE REALTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share data)
| Three Months Ended | Six Months Ended | ||||||||||||
| June 30, | June 30, | June 30, | June 30, | ||||||||||
| 2005 | 2004 | 2005 | 2004 | ||||||||||
| Revenue | |||||||||||||
Rents |
$ | 81,788 | $ | 64,316 | $ | 163,016 | $ | 127,996 | |||||
Tenant
reimbursements |
11,078 | 8,058 | 23,160 | 16,051 | |||||||||
Other |
2,377 | 3,840 | 7,991 | 5,366 | |||||||||
Total
revenue |
95,243 | 76,214 | 194,167 | 149,413 | |||||||||
| Operating Expenses | |||||||||||||
Property
operating expenses |
27,801 | 20,054 | 57,680 | 42,204 | |||||||||
Real
estate taxes |
9,683 | 6,846 | 19,340 | 13,727 | |||||||||
Depreciation
and amortization |
27,948 | 16,829 | 56,383 | 32,633 | |||||||||
Administrative
expenses |
4,378 | 3,954 | 9,130 | 7,443 | |||||||||
Total
operating expenses |
69,810 | 47,683 | 142,533 | 96,007 | |||||||||
| Operating income | 25,433 | 28,531 | 51,634 | 53,406 | |||||||||
| Other income (expense) | |||||||||||||
Interest
income |
687 | 541 | 1,467 | 1,052 | |||||||||
Interest
expense |
(17,807 | ) | (11,948 | ) | (35,604 | ) | (24,052 | ) | |||||
Equity
in income of real estate ventures |
993 | 674 | 1,551 | 908 | |||||||||
Net
gain on sale of interests in real estate |
— | 1,148 | — | 1,148 | |||||||||
| Income before minority interest | 9,306 | 18,946 | 19,048 | 32,462 | |||||||||
| Minority interest attributable to continuing operations | (376 | ) | (624 | ) | (703 | ) | (1,885 | ) | |||||
| Income from continuing operations | 8,930 | 18,322 | 18,345 | 30,577 | |||||||||
| Discontinued operations: | |||||||||||||
(Loss)
income from discontinued operations |
— | (213 | ) | — | (214 | ) | |||||||
Net
gain on disposition of discontinued operations |
— | 45 | — | 249 | |||||||||
Minority
interest |
— | 6 | — | (2 | ) | ||||||||
| — | (162) | — | 33 | ||||||||||
| Net income | 8,930 | 18,160 | 18,345 | 30,610 | |||||||||
| Income allocated to Preferred Shares | (1,998 | ) | (2,677 | ) | (3,996 | ) | (4,695 | ) | |||||
| Preferred Share redemption gain (charge) | — | — | — | 4,500 | |||||||||
| Income allocated to Common Shares | $ | 6,932 | $ | 15,483 | $ | 14,349 | $ | 30,415 | |||||
| PER SHARE DATA | |||||||||||||
| Basic income per Common Share | $ | 0.12 | $ | 0.34 | $ | 0.26 | $ | 0.68 | |||||
| Basic weighted-average shares outstanding | 55,681,668 | 45,665,274 | 55,562,384 | 44,876,459 | |||||||||
| Diluted income per Common Share | $ | 0.12 | $ | 0.34 | $ | 0.26 | $ | 0.67 | |||||
| Diluted weighted-average shares outstanding | 55,844,239 | 45,811,946 | 55,786,070 | 45,096,735 | |||||||||
BRANDYWINE REALTY TRUST
FUNDS FROM OPERATIONS AND CASH AVAILABLE FOR DISTRIBUTION
(unaudited, in thousands, except share and per share data)
| Three Months Ended | Six Months Ended | ||||||||||||
| 6/30/05 | 6/30/04 | 6/30/05 | 6/30/04 | ||||||||||
| Reconciliation of Net Income to Funds from Operations (FFO): | |||||||||||||
| Net income | $ | 8,930 | $ | 18,160 | $ | 18,345 | $ | 30,610 | |||||
| Add (deduct): | |||||||||||||
Minority
interest attributable to continuing operations |
376 | 624 | 703 | 1,885 | |||||||||
Net
gains on sale of interests in real estate |
— | (1,148 | ) | — | (1,148 | ) | |||||||
Minority
interest attributable to discontinued operations |
— | (6 | ) | — | 2 | ||||||||
Net
gains on disposition of discontinued operations |
— | (45 | ) | — | (249 | ) | |||||||
Income
before net gains on sale of interests in real estate and minority interest |
9,306 | 17,585 | 19,048 | 31,100 | |||||||||
| Add: | |||||||||||||
Depreciation: |
|||||||||||||
Real
property |
19,981 | 14,314 | 40,905 | 27,651 | |||||||||
Real
estate ventures |
576 | 494 | 930 | 1,243 | |||||||||
Amortization
of leasing costs |
7,419 | 2,342 | 14,651 | 4,643 | |||||||||
Perpetual
Preferred Share distributions |
(1,998 | ) | (1,998 | ) | (3,996 | ) | (3,336 | ) | |||||
Preferred
Share redemption gain (charge) |
— | — | — | 4,500 | |||||||||
| Funds from operations (FFO) | $ | 35,284 | $ | 32,737 | $ | 71,538 | $ | 65,801 | |||||
| FFO, excluding non-recurring items (1) | $ | 35,284 | $ | 32,737 | $ | 71,538 | $ | 61,301 | |||||
| FFO per share – fully diluted | $ | 0.61 | $ | 0.67 | $ | 1.24 | $ | 1.35 | |||||
| FFO per share – fully diluted, excluding non-recurring items (1) | $ | 0.61 | $ | 0.67 | $ | 1.24 | $ | 1.25 | |||||
Weighted-average
shares/units outstanding – fully diluted |
57,897,198 | 48,874,021 | 57,843,068 | 48,854,797 | |||||||||
| EPS – diluted | $ | 0.12 | $ | 0.34 | $ | 0.26 | $ | 0.67 | |||||
| Weighted-average shares outstanding – fully diluted | 55,844,239 | 45,811,946 | 55,786,070 | 45,096,735 | |||||||||
| Dividend per Common Share | $ | 0.44 | $ | 0.44 | $ | 0.88 | $ | 0.88 | |||||
Payout
ratio of FFO (Dividend per Common Share divided by FFO per Common Share) |
72.2 | % | 65.7 | % | 71.2 | % | 65.3 | % | |||||
Payout
ratio of FFO, excluding non recurring items (1) |
72.2 | % | 65.7 | % | 71.2 | % | 70.1 | % | |||||
| CASH AVAILABLE FOR DISTRIBUTION (CAD): | |||||||||||||
| FFO, excluding non-recurring items (1) | $ | 35,284 | $ | 32,737 | $ | 71,538 | $ | 61,301 | |||||
| Add (deduct): | |||||||||||||
Rental
income from straight-line rents |
(3,225 | ) | (913 | ) | (6,500 | ) | (2,838 | ) | |||||
Deferred
market rental income |
(283 | ) | 93 | (788 | ) | 117 | |||||||
Amortization: |
|||||||||||||
Deferred
financing costs |
487 | 549 | 968 | 1,032 | |||||||||
Deferred
compensation costs |
696 | 574 | 1,387 | 1,127 | |||||||||
Second
generation capital expenditures (2): |
|||||||||||||
Building
and tenant improvements |
(9,108 | ) | (8,186 | ) | (15,745 | ) | (14,871 | ) | |||||
Lease
commissions |
(1,076 | ) | (979 | ) | (1,992 | ) | (1,863 | ) | |||||
| Cash available for distribution | $ | 22,775 | $ | 23,875 | $ | 48,868 | $ | 44,005 | |||||
| Weighted-average shares/units outstanding – fully diluted | 57,897,198 | 48,874,021 | 57,843,068 | 48,854,797 | |||||||||
| Dividend per Common Share | $ | 0.44 | $ | 0.44 | $ | 0.88 | $ | 0.88 | |||||
| Cash flows from: | |||||||||||||
Operating
activities |
$ | 36,110 | $ | 40,816 | $ | 62,731 | $ | 73,884 | |||||
Investing
activities |
(77,690 | ) | (13,003 | ) | (126,563 | ) | (31,645 | ) | |||||
Financing
activities |
35,428 | (24,825 | ) | 57,807 | (40,246 | ) | |||||||
| (1) | Represents FFO excluding a gain of $4.5 million related to the Series B Preferred Unit redemption in February 2004. |
| (2) | Represents expenditures incurred during the period (regardless if lease commencement is after quarter end).Excludes first generation costs, which consist of capital expenditures, tenant improvements and leasing commissions associated with development and purchase price adjustments relating to acquisitions (including seller escrows, purchase price reduction or costs anticipated to initially lease-up acquired properties). |
BRANDYWINE REALTY TRUST
SAME STORE OPERATIONS – QUARTER
(unaudited and in thousands)
Of the 248 Properties owned by the Company as of June 30, 2005, a total of 226 Properties (“Same Store Properties”) containing an aggregate of 15.0 million net rentable square feet were owned for the entire three-month periods ended June 30, 2005 and 2004. Average occupancy for the Same Store Properties was 92.3% during 2005 and 90.9% during 2004.The following table
sets forth revenue and expense information for the Same Store Properties:
| Quarter Ended June 30, | |||||||
| 2005 | 2004 | ||||||
|
|
|
||||||
| Revenue | |||||||
Rents
(a) |
$ | 62,091 | $ | 61,946 | |||
Tenant
reimbursements |
7,596 | 7,816 | |||||
Other
(b) |
916 | 1,260 | |||||
|
|
|
||||||
| 70,603 | 71,022 | ||||||
| Operating expenses | |||||||
Property
operating expenses |
22,360 | 21,321 | |||||
Real
estate taxes |
6,969 | 6,629 | |||||
|
|
|
||||||
| 29,329 | 27,950 | ||||||
|
|
|
||||||
Net
operating income |
$ | 41,274 | $ | 43,072 | |||
|
|
|
||||||
| (a) Includes straight-line rental income of $1,720 for 2005 and $840 for 2004 | |||||||
| (b) Includes net termination fee income of $626 for 2005 and $989 for 2004 | |||||||
| The following table is a reconciliation of Net Income to Same Store net operating income: | |||||||
| Quarter Ended June 30, | |||||||
| 2005 | 2004 | ||||||
|
|
|
||||||
| Net Income | $ | 8,930 | $ | 18,160 | |||
| Add/(deduct): | |||||||
Interest
income |
(687 | ) | (541 | ) | |||
Interest
expense |
17,807 | 11,948 | |||||
Administrative
expenses |
4,378 | 3,954 | |||||
Equity
in income of real estate ventures |
(993 | ) | (674 | ) | |||
Depreciation
and amortization – continuing operations |
27,948 | 16,829 | |||||
Depreciation
and amortization – discontinued operations |
— | 77 | |||||
Net
gain on sale of interests in real estate – continued operations |
— | (1,148 | ) | ||||
Net
gain on sale of interests in real estate – discontinued operations |
— | (45 | ) | ||||
Minority
interest attributable to continuing operations |
376 | 624 | |||||
Minority
interest attributable to discontinued operations |
— | (6 | ) | ||||
|
|
|
||||||
Consolidated
net operating income |
57,759 | 49,178 | |||||
| Less: Net operating income of non same store properties | (13,026 | ) | (1,146 | ) | |||
| Less: Eliminations and non-property specific net operating income | (3,459 | ) | (4,960 | ) | |||
|
|
|
||||||
Same
Store net operating income |
$ | 41,274 | $ | 43,072 | |||
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