RADNOR, Pa., July 28 /PRNewswire-FirstCall/ -- 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, announced today its financial and operating results for the three and six-month periods ended June 30, 2009. The highlights are as follows:
Financial Highlights - Second Quarter
- Net income allocated to common shares totaled $3.5 million or $0.03 per diluted share in the second quarter of 2009 compared to net income of $5.7 million or $0.06 per diluted share in the second quarter of 2008. The second quarter of 2009 included $12.0 million of gains on the early extinguishment of debt and a charge of $1.2 million attributable to discontinued operations, while the second quarter of 2008 included $0.5 million of gains on the early extinguishment of debt and $8.5 million of income attributable to discontinued operations. Our weighted average diluted share count increased to 102.7 million shares in the second quarter of 2009 from 87.5 million shares in the second quarter of 2008 due 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 second quarter of 2009 totaled $59.2 million or $0.56 per diluted share compared to $50.4 million or $0.55 per diluted share in the second quarter of 2008 ($57.3 million or $0.63 per diluted share excluding a $6.9 million impairment charge). Our second quarter 2009 FFO payout ratio was 17.9% ($0.10 common share dividend paid / $0.56 FFO per share). Our weighted average fully diluted share count for FFO (and CAD) calculations increased to 105.6 million shares in the second quarter of 2009 from 91.0 million shares in the second quarter of 2008 due to the aforementioned share issuance.
- In the second quarter of 2009, we incurred $12.9 million of revenue maintaining capital expenditures which along with our other adjustments to FFO, resulted in $44.9 million of cash available for distribution (CAD) or $0.43 per diluted share compared to $42.8 million of CAD or $0.47 per diluted share in the second quarter of 2008 when we incurred $9.3 million of revenue maintaining capital expenditures. Our second quarter 2009 CAD payout ratio was 23.3% ($0.10 common share dividend paid / $0.43 CAD per share).
Financial Highlights - Six Months
- Net income allocated to common shares totaled $0.7 million or $0.01 per diluted share in the first six months of 2009 compared to net income of $16.6 million or $0.19 per diluted share in the first six months of 2008. The 2009 period included $18.7 million of gains on the early extinguishment of debt, $1.1 million of termination revenues and a charge of $4.4 million attributable to discontinued operations, while the 2008 period included $3.1 million of gains on the early extinguishment of debt, $4.1 million of termination revenues and $19.6 million of income attributable to discontinued operations. Our weighted average diluted share count increased to 95.5 million shares in the first six months of 2009 from 87.3 million shares in the first six months of 2008 due to the afore-mentioned common share issuance.
- FFO available to common shares and units in the first six months of 2009 totaled $109.7 million or $1.12 per diluted share ($113.4 million or $1.15 per diluted share excluding a $3.7 million impairment charge) compared to $110.9 million or $1.22 per diluted share in the first six months of 2008 ($117.8 million or $1.30 per diluted share excluding a $6.9 million impairment charge). Our FFO payout ratio for the first six months of 2009 was 35.7% ($0.40 common share dividend paid / $1.12 FFO per share). Our weighted average fully diluted share count for FFO (and CAD) calculations increased to 98.3 million shares for the first half of 2009 from 90.9 million shares in the first half of 2008 due to the aforementioned share issuance.
- During the first six months of 2009, we incurred $21.4 million of revenue maintaining capital expenditures which along with our other adjustments to FFO, resulted in $88.8 million of CAD or $0.90 per diluted share compared to $89.2 million of CAD or $0.98 per diluted share for the first six months of 2008 when we incurred $16.1 million of revenue maintaining capital expenditures. Our CAD payout ratio for the first six months of 2009 was 44.4% ($0.40 common share dividend paid / $0.90 CAD per share).
Portfolio Highlights
- In the second quarter of 2009, our net operating income (NOI) excluding termination revenues and other income items decreased 4.0% on a GAAP basis and 1.0% on a cash basis for our 234 same store properties which were 89.7% and 92.9% occupied on June 30, 2009 and June 30, 2008, respectively.
- During the second quarter of 2009, we completed 1,014,928 square feet of total leasing activity including 520,002 square feet of renewals, 368,984 square feet of new leases and 125,942 square feet of tenant expansions. We currently have an additional 1,937,788 square feet of executed leasing which will commence subsequent to June 30, 2009. During the second quarter of 2009, we achieved a 67.1% retention rate in our core portfolio with positive net absorption of 52,553 square feet excluding 125,799 square feet of early terminations, or 59.4% overall. During the second quarter of 2009, we achieved a 3.4% increase on our renewal rental rates and a 7.8% increase on our new lease and expansion rental rates, both on a GAAP basis.
- At June 30, 2009, our core portfolio (excluding four recently completed but not yet stabilized developments) was 89.7% occupied and 90.9% leased (reflecting leases which will commence after June 30, 2009). With the four recently completed developments included, our core portfolio was 88.8% occupied and 90.8% leased at June 30, 2009. We owned 247 properties at June 30, 2009, encompassing 238 core properties aggregating 23.7 million square feet and nine development/ redevelopment properties aggregating 2.3 million square feet.
Investment Highlights
- In the second quarter of 2009, we sold one property, generating $26.5 million of gross consideration and bringing year to date sales to $36.6 million, or just over 25% of our $145 million 2009 sales goal. Net of transaction costs and a twelve month $1.0 million seller financing on one of the earlier sales, we have realized $33.5 million of aggregate net proceeds from these sales which we used for debt repayments and other general corporate purposes. We currently have approximately $300 million of sales transactions in the market with $85 million of that under contract and $35 million in active discussions with prospective buyers.
- At June 30, 2009, we were proceeding on two developments and seven redevelopments with total project costs of $455.1 million of which a total of $243.6 million remained to be funded - $113.6 million in the remainder of 2009 and $130.0 million in 2010. These amounts include $355.5 million of total project costs for the combined 30(th) Street Post Office (100% leased to the Internal Revenue Service) and Cira South Garage (up to 94.3% leased to the Internal Revenue Service) in Philadelphia, Pennsylvania of which $215.8 million remained to be funded at June 30, 2009. We are also finishing the lease-up of the four recently completed developments for which we expect to spend up to an additional $16.9 million, all in 2009.
Capital Markets Highlights
- During the second quarter of 2009, we completed a public offering of 40,250,000 of our common shares at an offering price of $6.30 per share, including 5,250,000 shares sold to the underwriters to cover overallotments. The net proceeds from the offering, after underwriting commissions, discounts and offering expenses, totaled approximately $242.5 million which we used to reduce outstanding borrowings under our unsecured revolving credit facility and for general corporate purposes.
- During the second quarter of 2009, we repurchased $88.0 million face amount of our unsecured senior notes maturing in 2009, 2010, 2011 (our exchangeable notes due 2026 with a put date in October 2011) and 2012 in open-market transactions and completed a tender for $34.5 million of our 2010 Notes generating aggregate gains of $12.0 million on the early extinguishment of debt.
- During the second quarter of 2009, we closed an $89.8 million first mortgage financing on Two Logan Square, a 702,006 square foot, 99.1% leased, class A, office tower in Philadelphia, PA. The loan features a 7.57% rate and a seven-year term with three years of interest only payments followed by a thirty-year amortization schedule. $68.6 million of the proceeds was used to repay without penalty the balance of the former Two Logan first mortgage loan and $21.2 million was used for general corporate purposes including the repayment of existing indebtedness. Subsequent to quarter end, we closed a $60.0 million first mortgage financing on One Logan Square, a previously unencumbered, 594,361 square foot, 99% leased, class A, office tower in Philadelphia, PA. The loan features a floating rate of LIBOR plus 350 basis points (subject to a LIBOR floor) and a seven-year term with three years of interest only followed by a thirty-year amortization schedule derived using a 7.50% rate. The net proceeds of the One Logan loan were used for general corporate purposes including the repayment of existing indebtedness.
- During the second quarter of 2009, we completed definitive agreements for $256.5 million of aggregate forward financing commitments on the 30th Street Post Office and Cira South Garage projects in Philadelphia, Pennsylvania. The $256.5 million of aggregate proceeds was funded by the underlying lenders and was deposited along with our gross forward commitment fee of approximately $17.7 million into an escrow account to be administered by The Bank of New York Mellon, as trustee. The interest earned on the escrow account and the forward commitment fee will be used to pay the interest costs of the underlying loans through August 26, 2010, the anticipated completion date of the projects and the date on which the then remaining escrow balance of $256.5 million is expected to be released to us. The loans bear interest at 5.93% with interest-only through September 10, 2010 following which they will amortize monthly over a twenty-year period beginning with the October 10, 2010 debt service payment. The loans will be non-recourse and will be secured by mortgages on the Post Office and Garage and by the leases of space at those facilities upon completion of those projects by us and their acceptance by the IRS for occupancy along with other customary conditions, all expected to occur on or about August 26, 2010.
- At June 30, 2009, our net debt to gross assets measured 46.3% compared to a peak of 54.3% at September 30, 2007, reflecting a cumulative $753.9 million reduction in our net debt over that twenty-one-month period. At June 30, 2009, we had $495.5 million available for use and drawdown under our $600.0 million unsecured revolving credit facility.
- We achieved a 2.8 times EBITDA interest coverage ratio for the quarter ended June 30, 2009 versus the 2.6 ratio we achieved for the quarter ended June 30, 2008. We recorded a 6.1 net debt to annualized quarterly EBITDA ratio for the quarter ended June 30, 2009.
"Our common share equity issuance, the finalization of the terms and escrow funding of the Post Office/Garage financing, our property financings and sales and steady property operations in the second quarter combined to further strengthen Brandywine's financial foundation," stated Gerard H. Sweeney, President and Chief Executive Officer of Brandywine Realty Trust. "While we recognize that economic conditions are likely to affect both our tenants and our leasing activity, we also note that it is during these down cycles that Brandywine has historically outperformed its competitors and emerged stronger than ever. We are committed to that same level of performance and tenacity in this current environment and are confident of our ability to meet and take advantage of the challenges and opportunities ahead."
Distributions
Our dividend policy is to match aggregate 2009 common share dividends to 2009 taxable income and to evaluate the mix of cash and common shares on an ongoing basis. On June 2, 2009, our Board of Trustees declared a quarterly dividend distribution of $0.10 per common share that was paid on July 17, 2009 to shareholders of record as of July 3, 2009. 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 July 15, 2009 to holders of record as of June 30, 2009 of the Series C and Series D Preferred Shares, respectively.
2009 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 increasing our previously issued guidance for full year 2009 FFO per diluted share to be in a range of $1.75 to $1.80 versus the prior guidance of $1.60 to $1.74 including impairment charges in both instances. When applicable, we will report our FFO with and without impairment charges. Our earnings and FFO guidance is provided for informational purposes and is subject to change. The following is a reconciliation of the calculation of 2009 earnings and FFO per diluted share:
Guidance for 2009 Range or Value
----------------- --------------
Earnings (loss) per diluted share
allocated to common shareholders $ (0.12) to $ (0.07)
Plus: real estate depreciation and
amortization 1.87 1.87
---- ----
FFO per diluted share $ 1.75 to $ 1.80
Plus: impairment charges (incurred to date) 0.03 0.03
---- ----
Adjusted FFO per diluted share $ 1.78 to $ 1.83
==== ====
Our 2009 FFO guidance does not include income arising from future sales or impairments which may be taken in the future should the circumstances arise. Our 2009 FFO guidance does not include any income from the sale of undepreciated real estate, in accordance with our current practice. Our revised 2009 guidance is based on the expectation that our weighted average fully diluted shares for 2009 will be approximately 115.0 million.
Accounting Disclosures
On January 1, 2009, we adopted FSP APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement), which requires retrospective application. This adoption impacts our exchangeable notes due 2026 with a put date in 2011 that had an outstanding balance of $264.5 million as of March 31, 2009 and which were originally issued in October 2006. The retrospective treatment requires us to bifurcate the net proceeds of the exchangeable notes on a relative fair value basis (based on the then market "straight debt" interest rate) between unsecured debt and the equity conversion options issued in the transaction and affects previously recognized interest expense, capitalized interest and gain on extinguishment of debt associated with the convertible notes, and all related calculations such as net income per diluted share of the Company.
On January 1, 2009, we adopted FAS 160, Non-controlling Interests in Consolidated Financial Statements an Amendment to ARB 51, which affects the classification and potential recognition of any non-controlling interest (formerly called minority interest) relating to Operating Partnership unit-holders and outside owners of our three consolidated real estate ventures. The non-controlling interests related to the Operating Partnership are reflected as a component of the Equity section of our Consolidated Balance Sheet, instead of within the "mezzanine" section. In addition, the non-controlling interests' portion of earnings is now presented below net income. This presentation is applied retrospectively.
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.
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 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.
Second Quarter Earnings Call and Supplemental Information Package
We will host a conference call on Wednesday, July 29, 2009 at 10:00 a.m. EDT. The conference call can be accessed by calling 1-800-683-1525 and referencing conference ID #12136187. Beginning two hours after the conference call, a taped replay of the call can be accessed 24 hours a day through Wednesday, August 12, 2009 by calling 1-800-642-1687 and providing access code 12136187. 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 second 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 - Third Quarter 2009 Conference Call
We anticipate that we will release our third quarter 2009 earnings on Wednesday, October 28, 2009, after the market close and will host our third quarter 2009 conference call on Thursday, October 29, 2009, at 11:00 a.m. EDT. We expect to issue a press release in advance of these events to confirm 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 and manages a primarily Class A, suburban and urban office portfolio aggregating approximately 37.3 million square feet, including 26.1 million square feet which it owns on a consolidated basis. For more information, 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, 2008. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events except as required by law.
BRANDYWINE REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
June 30, December 31,
2009 2008
---- ----
ASSETS
Real estate investments:
Operating properties $4,586,580 $4,608,320
Accumulated depreciation (690,490) (639,688)
-------- --------
3,896,090 3,968,632
Construction-in-progress 197,404 122,219
Land inventory 97,430 100,516
------ -------
4,190,924 4,191,367
Cash and cash equivalents 3,936 3,924
Cash in escrow - 31,385
Accounts receivable, net 8,950 11,762
Accrued rent receivable, net 85,669 86,362
Investment in real estate ventures 75,688 71,028
Deferred costs, net 100,852 89,327
Intangible assets, net 124,106 145,757
Notes receivable 49,676 48,048
Other assets 47,831 59,008
------ ------
Total assets $4,687,632 $4,737,968
========== ==========
LIABILITIES AND EQUITY
Mortgage notes payable, including premiums $502,961 $487,525
Borrowings under credit facilities 74,000 153,000
Unsecured term loan 183,000 183,000
Unsecured senior notes, net of discounts 1,724,582 1,917,970
Accounts payable and accrued expenses 85,474 74,824
Distributions payable 15,177 29,288
Tenant security deposits and deferred rents 54,595 58,692
Acquired lease intangibles, net 42,036 47,626
Other liabilities 53,696 63,545
------ ------
Total liabilities 2,735,521 3,015,470
Brandywine Realty Trust's equity:
Preferred shares - Series C 20 20
Preferred shares - Series D 23 23
Common shares 1,284 882
Additional paid-in capital 2,607,628 2,351,428
Deferred compensation payable in common
stock 5,858 6,274
Common shares in treasury (7,893) (14,121)
Common shares held in grantor trust (5,858) (6,274)
Cumulative earnings 498,280 498,716
Accumulated other comprehensive loss (10,652) (17,005)
Cumulative distributions (1,176,141) (1,150,406)
---------- ----------
Total Brandywine Realty Trust's equity 1,912,549 1,669,537
--------- ---------
Non-controlling interests 39,562 52,961
------ ------
Total equity 1,952,111 1,722,498
--------- ---------
Total liabilities and equity $4,687,632 $4,737,968
========== ==========
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,
------------------ ----------------
2009 2008 2009 2008
---- ---- ---- ----
Revenue
Rents $121,598 $123,111 $244,208 $245,879
Tenant
reimbursements 18,636 20,786 41,069 39,807
Termination fees 963 892 1,076 4,124
Third party
management fees,
labor
reimbursement
and leasing 4,097 5,170 8,861 10,849
Other 583 807 1,501 1,589
--- --- ----- -----
Total revenue 145,877 150,766 296,715 302,248
Operating Expenses
Property operating
expenses 40,595 40,171 85,460 80,881
Real estate taxes 14,517 15,320 29,887 30,801
Third party
management
expenses 1,968 2,381 4,083 4,627
Depreciation and
amortization 53,308 51,492 105,461 102,430
General &
administrative
expenses 5,515 6,127 10,473 11,039
----- ----- ------ ------
Total operating
expenses 115,903 115,491 235,364 229,778
------- ------- ------- -------
Operating income 29,975 35,275 61,352 72,470
Other income (expense)
Interest income 642 179 1,222 382
Interest expense (34,944) (36,742) (70,590) (73,785)
Deferred financing
costs (1,894) (1,198) (3,146) (2,706)
Recognized hedge
activity (305) - (305) -
Equity in income
of real estate
ventures 1,533 1,664 2,119 2,779
Net (loss) on
disposition of
undepreciated
real estate - - - (24)
Gain on early
extinguishment of
debt 12,013 543 18,651 3,106
------ --- ------ -----
Income (loss) from
continuing
operations 7,020 (279) 9,303 2,222
Discontinued operations:
Income from
discontinued
operations (14) 1,922 336 5,037
Net (loss) gain on
disposition of
discontinued
operations (1,225) 13,420 (1,031) 21,401
Provision for
impairment - (6,850) (3,700) (6,850)
----- ------ ------ ------
Total discontinued
operations (1,239) 8,492 (4,395) 19,588
------ ----- ------ ------
Net income (loss) 5,781 8,213 4,908 21,810
Net (loss) income from
discontinued operations
attributable to
non-controlling
interests - LP units 35 (324) 132 (791)
Net income (loss)
attributable
to non-controlling
interests - partners' share
of consolidated real estate
ventures (28) (38) (22) (78)
Net income (loss)
attributable
to non-controlling
interests - LP units (174) 61 (183) 41
---- -- ---- --
Net (loss) income
attributable to non-
controlling
interests (168) (301) (73) (828)
---- ---- --- ----
Net income (loss)
attributable to
Brandywine Realty
Trust 5,607 7,912 4,829 20,982
Preferred share
dividends (1,998) (1,998) (3,996) (3,996)
Amount allocated to
unvested restricted
shareholders (73) (227) (110) (394)
------ ------ ---- -------
Net income (loss)
available to Common
Shareholders $3,543 $5,687 $730 $16,592
====== ====== ==== =======
PER SHARE DATA
Basic income per
Common Share $0.03 $0.07 $0.01 $0.19
===== ===== ===== =====
Basic weighted-
average shares
outstanding 101,583,997 87,280,576 94,934,134 87,092,271
Diluted income per
Common Share $0.03 $0.06 $0.01 $0.19
===== ===== ===== =====
Diluted weighted-
average shares
outstanding 102,742,343 87,512,345 95,495,392 87,300,005
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
June 30, June 30,
------------------ -----------------
2009 2008 2009 2008
---- ---- ---- ----
Reconciliation of Net Income
(Loss)to Funds from Operations:
Net income (loss) available to
common shareholders $3,543 $5,687 $730 $16,592
Add (deduct):
Net income (loss) attributable
to non-controlling
interests - LP units 181 (61) 189 (41)
Amount allocated to unvested
restricted shareholders 73 227 110 394
Net loss on disposition of
undepreciated real estate - - - 24
Net (loss) income from
discontinued operations
attributable to
non-controlling interests - LP
units (35) 324 (132) 791
Net loss (gain) on disposition
of discontinued operations 1,225 (13,420) 1,031 (21,401)
Depreciation and amortization:
Real property - continuing
operations 40,167 37,646 78,807 73,985
Leasing costs (includes
acquired
intangibles)
-continuing operations 12,676 13,271 25,678 27,257
Real property -
discontinued operations 71 3,363 324 6,773
Leasing costs (includes
acquired
intangibles)
-discontinued
operations 71 1,636 291 3,228
Company's share of
unconsolidated real
estate ventures 1,852 2,256 3,707 4,323
Partners' share of
consolidated real
estate ventures (220) (226) (440) (444)
---- ---- ---- ----
Funds from operations $59,597 $50,703 $110,288 $111,481
Funds from operations allocable
to unvested restricted
shareholders (413) (286) (620) $(539)
------- ------- -------- --------
Fund from operations available to
common share and unit
holders (FFO) $59,184 $50,417 $109,668 $110,942
======= ======= ======== ========
FFO per share - fully diluted $0.56 $0.55 $1.12 $1.22
===== ===== ===== =====
FFO, excluding provision for
impairments $59,184 $57,267 $113,368 $117,792
======= ======= ======== ========
FFO per share, excluding
provision for
impairments -fully diluted $0.56 $0.63 $1.15 $1.30
===== ===== ===== =====
Weighted-average
shares/units
outstanding -
fully diluted 105,558,964 90,979,203 98,312,013 90,944,076
Distributions paid per
Common Share $0.10 $0.44 $0.40 $0.88
===== ===== ===== =====
Payout ratio of FFO (Dividends
paid per Common Share
divided /FFO per Share) 17.9% 80.0% 35.7% 72.1%
Payout ratio of FFO, excluding
provision for impairments 17.9% 69.8% 34.8% 67.7%
CASH AVAILABLE FOR DISTRIBUTION
(CAD):
Fund from operations available
to common share and
unit holders $59,184 $50,417 $109,668 $110,942
Add (deduct):
Rental income from straight-
line rent, including
discontinued operations (2,182) (4,624) (4,353) (11,233)
Deferred market rental
income, including
discontinued operations (1,746) (2,408) (3,487) (4,686)
Company's share of
unconsolidated real estate
ventures'
straight-line and deferred
market rent 119 81 209 155
Partners' share of consolidated
real estate ventures'
straight-line and deferred
market rent (2) (39) (4) (78)
Operating expense from
straight-line rent 370 383 733 766
Net (loss) on disposition of
undepreciated real estate - - - (24)
Provision for impairment of
discontinued operations - 6,850 3,700 6,850
Deferred compensation costs 1,307 1,416 2,528 2,574
Fair market value
amortization -
mortgage notes payable (360) (1,105) (788) (2,178)
Recognized hedge activity 305 - 305 -
Debt discount amortization -
exchangeable notes 810 1,135 1,766 2,182
Revenue maintaining capital
expenditures
Building improvements (944) (1,339) (2,319) (1,579)
Tenant improvements (6,442) (4,526) (11,102) (8,351)
Lease commissions (5,506) (3,453) (8,018) (6,184)
------ ------ ------ ------
Total revenue
maintaining
capital
expenditures (12,892) (9,318) (21,439) (16,114)
Cash available for
distribution $44,913 $42,788 $88,838 $89,156
======= ======= ======= =======
CAD per share - fully diluted $0.43 $0.47 $0.90 $0.98
===== ===== ===== =====
Weighted-average
shares/units
outstanding -
fully diluted 105,558,964 90,979,203 98,312,013 90,944,076
Distributions
per Common Share $0.10 $0.44 $0.40 $0.88
===== ===== ===== =====
Payout ratio of CAD (Dividends
paid per Common
Share /CAD per Share) 23.3% 93.6% 44.4% 89.8%
BRANDYWINE REALTY TRUST
SAME STORE OPERATIONS - 2nd QUARTER
(unaudited and in thousands)
Of the 247 properties owned by the Company as of June 30, 2009, a total
of 234 properties ("Same Store Properties") containing an aggregate of
23.1 million net rentable square feet were owned for the entire three-
month periods ended June 30, 2009 and 2008. Average occupancy for the
Same Store Properties was 90.0% during 2009 and 92.8% during 2008. The
following table sets forth revenue and expense information for the Same
Store Properties:
Three Months
Ended June 30,
---------------
2009 2008
---- ----
Revenue
Rents $117,225 $120,088
Tenant reimbursements 17,552 19,771
Termination fees 963 892
Other 419 383
--- ---
136,159 141,134
Operating expenses
Property operating expenses 39,730 40,298
Real estate taxes 13,362 14,449
------ ------
Net operating income $83,067 $86,387
======= =======
Net operating income - percentage
change over prior year -3.8%
Net operating income, excluding
termination fees & other $81,685 $85,112
======= =======
Net operating income, excluding
termination fees & other - percentage
change over prior year -4.0%
Net operating income $83,067 $86,387
Straight line rents (1,454) (4,190)
FAS 141R rents (1,679) (1,589)
Non-cash ground rent 370 383
--- ---
Cash - Net operating income $80,304 $80,991
======= =======
Cash - Net operating income -
percentage change over prior year -0.8%
Cash - Net operating income,
excluding termination fees & other $78,922 $79,716
======= =======
Cash - Net operating income,
excluding termination fees & other -
percentage change over prior year -1.0%
The following table is a reconciliation
of Net Income to Same Store
net operating income:
Three Months
Ended June 30,
---------------
2009 2008
---- ----
Net income $5,781 $8,213
Add/(deduct):
Interest income (642) (179)
Interest expense 34,944 36,742
Deferred financing costs 1,894 1,198
Recognized hedge activity 305 -
Equity in income of real estate
ventures (1,533) (1,664)
Depreciation and amortization 53,308 51,492
Gain on early extinguishment of debt (12,013) (543)
General & administrative expenses 5,515 6,127
Income from discontinued operations 1,239 (8,492)
----- ------
Consolidated net operating income 88,798 92,894
Less: Net operating income of non same
store properties (2,322) (2,362)
Less: Eliminations and non-property
specific net operating income (3,409) (4,145)
------ ------
Same Store net operating income $83,067 $86,387
======= =======
BRANDYWINE REALTY TRUST
SAME STORE OPERATIONS - YEAR
(unaudited and in thousands)
Of the 247 properties owned by the Company as of June 30, 2009, a total
of 234 properties ("Same Store Properties") containing an aggregate of
23.1 million net rentable square feet were owned for the entire six
month periods ended June 30, 2009 and 2008. Average occupancy for the
Same Store Properties was 90.9% during 2009 and 93.1% during 2008. The
following table sets forth revenue and expense information for the Same
Store Properties:
Six Months Ended
June 30,
----------------
2009 2008
---- ----
Revenue
Rents $236,035 $239,976
Tenant reimbursements 38,814 37,635
Termination fees 1,076 4,124
Other 765 908
--- ---
276,690 282,643
Operating expenses
Property operating expenses 81,343 79,368
Real estate taxes 27,598 28,991
------ ------
Net operating income $167,749 $174,284
======== ========
Net operating income - percentage
change over prior year -3.7%
Net operating income, excluding
termination fees & other $165,908 $169,252
======== ========
Net operating income, excluding
termination fees & other - percentage
change over prior year -2.0%
Net operating income $167,749 $174,284
Straight line rents (3,067) (10,142)
FAS 141 rents (3,346) (3,010)
Non-cash ground rent 733 766
--- ---
Cash - Net operating income $162,069 $161,898
======== ========
Cash - Net operating income -
percentage change over prior year 0.1%
Cash - Net operating income,
excluding termination fees & other $160,228 $156,866
======== ========
Cash - Net operating income,
excluding termination fees & other -
percentage change over prior year 2.1%
The following table is a reconciliation
of Net Income to Same Store net
operating income:
Six Months Ended
June 30,
----------------
2009 2008
---- ----
Net Income $4,908 $21,810
Add/(deduct):
Interest income (1,222) (382)
Interest expense 70,590 73,785
Deferred financing costs 3,146 2,706
Recognized hedge activity 305 -
Equity in income of real estate
ventures (2,119) (2,779)
Depreciation and amortization 105,461 102,430
Net loss on sale of undepreciated
real estate - 24
Gain on early extinguishment of debt (18,651) (3,106)
General & administrative expenses 10,473 11,039
Income from discontinued operations 4,395 (19,588)
----- -------
Consolidated net operating income 177,286 185,939
Less: Net operating income of non same
store properties (4,045) (4,530)
Less: Eliminations and non-property
specific net operating income (loss) (5,492) (7,125)
------ ------
Same Store net operating income $167,749 $174,284
======== ========
