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Brandywine Realty Trust Reports Second Quarter 2008 Results RADNOR, PA--(MARKET WIRE)--Jul 31, 2008 -- Brandywine Realty Trust (BDN - News), 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, 2008. The highlights are
as follows: Financial Highlights - Second Quarter
-- Net income allocated to common shares totaled $7.4 million or $0.08
per diluted share in the second quarter of 2008 compared to a loss of $0.8
million or ($0.01) per diluted share in the second quarter of 2007. Net
income in the second quarter of 2008 included a $13.4 million gain on the
disposition of discontinued real estate offset by a previously disclosed,
$6.85 million impairment charge related to a portfolio of five held-for-
sale properties, while net income in the second quarter of 2007 included a
$0.9 million loss on the disposition of discontinued real estate.
-- Funds from operations (FFO) in the second quarter of 2008 totaled
$52.2 million ($59.0 million excluding the $6.85 million impairment charge)
or $0.57 per diluted share ($0.65 per diluted share excluding the
impairment charge), compared to $59.0 million or $0.65 per diluted share in
the second quarter of 2007. FFO in the second quarter of 2008 included a
$1.0 million gain ($0.01 per diluted share) attributable to the early
extinguishment of a portion of an unsecured debt obligation.
-- In the second quarter of 2008, we incurred $9.3 million of revenue
maintaining capital expenditures which along with other adjustments to FFO,
resulted in $43.4 million of cash available for distribution (CAD) or $0.48
per diluted share compared to $33.5 million of CAD or $0.37 per diluted
share in the second quarter of 2007 when we incurred $17.3 million of
revenue maintaining capital expenditures. Our second quarter 2008 CAD
payout ratio ($0.44 common share dividend / $0.48 CAD) was 91.7%.Financial Highlights - Six Months
-- Net income allocated to common shares totaled $20.1 million or $0.23
per diluted share in the first six months of 2008 compared to $16.4 million
or $0.19 per diluted share in the first six months of 2007. Net income in
the first six months of 2008 included $21.4 million of gains on the
disposition of discontinued real estate offset by the $6.85 million
impairment charge, while net income in the first six months of 2007
included $25.2 million of gains on the disposition of discontinued real
estate.
-- FFO for the first six months of 2008 totaled $114.7 million ($121.5
million excluding the $6.85 million impairment charge) or $1.26 per diluted
share ($1.34 per diluted share excluding the impairment charge), compared
to $117.5 million or $1.27 per diluted share for the first six months of
2007. FFO in the first half of 2008 included a $4.3 million gain ($0.05
per diluted share) attributable to the early extinguishment of a portion of
an unsecured debt obligation.
-- For the first six months of 2008, CAD totaled $90.7 million or $1.00
per diluted share versus $65.4 million or $0.71 per diluted share for the
first six months of 2007. Our CAD payout ratio (on $0.88 of aggregate
common share dividends) for the first six months of 2008 was 88.0%.Portfolio Highlights
-- At June 30, 2008, our core portfolio was 92.9% occupied and 94.2%
leased (reflecting leases commencing after June 30, 2008). We owned 254
properties at June 30, 2008, encompassing 237 core portfolio properties
aggregating 23.7 million square feet, 12 development/redevelopment
properties aggregating 3.2 million square feet and 5 properties aggregating
1.7 million square feet designated as held for sale.
-- During the second quarter of 2008, our net operating income (NOI)
declined 0.9% on a GAAP basis and increased 0.9% on a cash basis for our
225 same store properties which were 92.9% and 93.8% occupied on June 30,
2008 and June 30, 2007, respectively. For the first six months of 2008,
NOI for our same store portfolio increased 0.7% on a GAAP basis and
increased 3.4% on a cash basis.
-- Our overall NOI margin on a GAAP basis for the second quarter of 2008
was 61.5% versus 61.2% for the second quarter of 2007.
-- For the second quarter of 2008, our core portfolio retention rate was
62.5% with overall negative net absorption of 115,404 square feet. During
the second quarter of 2008, we achieved a 5.9% increase on our renewal
rental rates and a 5.0% increase on our new lease rental rates, both on a
GAAP basis.Investment Highlights
-- We acquired no properties in the second quarter of 2008.
-- During the second quarter of 2008, we sold 100 Brandywine Boulevard in
Newtown, Pennsylvania for $28.0 million with a gain on sale of $13.4
million, bringing year-to-date sales to $56.2 million with aggregate gains
of $21.4 million. We also announced the pending sale of a five-property
portfolio in Oakland, California for an aggregate gross price of $412.5
million, which we expect to close in the third quarter of 2008.
-- At June 30, 2008, we were actively proceeding on six ground-up
developments and six redevelopments with total estimated costs of $637.3
million of which $376.0 million remained to be funded. These amounts
include $365.0 million of costs for the combined 30th Street Post Office
and garage development in Philadelphia, Pennsylvania of which $296.6
million remained to be funded at June 30, 2008, primarily in 2009 and 2010.
As of July 25, 2008, our six ground-up developments and six redevelopments
were collectively 74.6% leased, reflecting a recently completed 195,000
square foot lease at our South Lake at Dulles Corner project and other
leasing activity.Capital Markets Highlights
-- During the second quarter of 2008, we repurchased $7.0 million of our
$345.0 million 3.875% Guaranteed Exchangeable Notes at an average price of
85.9% which resulted in a $1.0 million gain for the early extinguishment of
debt. We funded this repurchase from a combination of proceeds from asset
sales, cash flow from operations and borrowings under our unsecured
revolving credit facilities. We now have $313.5 million of this note issue
outstanding, reflecting cumulative repurchase activity.
-- During the second quarter of 2008, we exercised the accordion feature
on our $150.0 million unsecured term loan and funded an additional $33.0
million, bringing its total outstanding balance to $183.0 million. All
amounts outstanding under the term loan bear interest at a periodic rate of
LIBOR plus 80 basis points. The net proceeds of the term loan increase
were used to reduce indebtedness under our unsecured revolving credit
facilities.
-- At June 30, 2008, our net debt to gross assets measured 52.4% compared
to 53.6% at December 31, 2007, marking three consecutive quarters during
which we have reduced this leverage metric. At June 30, 2008, we had
$442.5 million available for use and drawdown under our various credit
facilities.
-- We achieved a 2.7 times interest coverage ratio for the quarter ended
June 30, 2008 versus 2.5 for the quarter ended June 30, 2007."The second quarter of 2008 reflects our continued focus on core portfolio performance, ongoing lease-up of our development projects and prudent balance sheet management," stated Gerard H. Sweeney, President and Chief Executive Officer of Brandywine Realty Trust. "These activities, punctuated by the pending sale of a portfolio of five Oakland assets, the substantial lease-up of our Metro DC development and efficient use of our capital to support our leasing program bolster our ability to successfully navigate the challenging economic climate." Distributions On June 18, 2008, our Board of Trustees declared a quarterly dividend distribution of $0.44 per common share that was paid on July 18, 2008 to shareholders of record as of July 3, 2008. Our Board also declared 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, 2008 to holders of record as of June 30, 2008 of the Series C and Series D Preferred Shares, respectively. Share Repurchase Program We are authorized to purchase an additional 539,200 common shares and may make repurchases from time to time in the open market or in privately negotiated transactions, subject to market conditions and compliance with legal requirements. The share repurchase program does not contain any time limitation and does not obligate us to repurchase any shares. We did not purchase any shares in the second quarter of 2008 and may discontinue the program at any time. 2008 Earnings and FFO Guidance Based on current plans and assumptions including the expected closing of our five-property Oakland sale on or about August 31, 2008 and subject to the risks and uncertainties more fully described in Brandywine's reports filed with the Securities and Exchange Commission, we are maintaining our previously announced guidance for full year 2008 FFO per diluted share to be in a range of $2.40 to $2.50 reflecting the add-back of the $6.85 million (approximately $0.08 per diluted share) impairment charge. Going forward, we will report FFO both with and without the impairment charge. This guidance is provided for informational purposes and is subject to change. The following is a reconciliation of the calculation of FFO per diluted share (with and without the impairment charge) and earnings per diluted share:
Guidance for 2008 Range or Value
----------------- --------------------
Earnings per diluted share allocated to common
shareholders $ 0.14 to $ 0.24
Less: gains on the sale of real estate (0.24) (0.24)
Plus: real estate depreciation and amortization 2.42 2.42
------ ------
FFO per diluted share $ 2.32 to $ 2.42
Plus: impairment charge 0.08 0.08
------ ------
Adjusted FFO per diluted share $ 2.40 to $ 2.50
====== ======For guidance purposes, we have not considered any future gains, losses or impairments from the sale of real estate not previously disclosed. Our 2008 FFO guidance does not include any income from the sale of undepreciated real estate, in accordance with our current practice. 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 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; competition for real estate acquisitions; 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 and Form 10-K/A for the year ended December 31, 2007. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events except as required by law. Accounting Disclosure During the quarter ended June 30, 2008, we identified certain instances dating back to 1998 in which we canceled, upon the vesting of restricted shares, a portion of such shares in settlement of tax withholdings in excess of statutory rates. As a result, we have changed the classification of the affected restricted share grants from equity to liability awards with corresponding immaterial changes in individual period net income amounts. While no single period impact is material, the error requires correction. We will make corresponding revisions as appropriate to our prior period financial statements in our supplemental information package and in future SEC filings. No Form 8-K or prior period restatement filings are required. 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 minority interest of unit holders (preferred and common) 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 minority interest. 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, minority interest in the Operating Partnership 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 minority interest in property partnerships. 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 the Company's CAD calculation and represent the portion of capital expenditures required to maintain the Company's 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, the Company excludes 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 Thursday, July 31, 2008 at 11:00 a.m. EDT. The conference call can be accessed by calling 1-800-683-1525 and referencing conference ID #52019041. Beginning two hours after the conference call, a taped replay of the call can be accessed 24 hours a day through Thursday, August 14, 2008 by calling 1-800-642-1687 and providing access code 52019041. 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 2008 Conference Call We anticipate that we will release our third quarter 2008 earnings on Wednesday, October 29, 2008, after the market close and will host our third quarter 2008 conference call on Thursday, October 30, 2008, 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 40 million square feet, including 29 million square feet which it currently owns on a consolidated basis. For more information, visit our website at www.brandywinerealty.com.
BRANDYWINE REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
June 30, December 31,
2008 2007
----------- -----------
ASSETS
Real estate investments:
Operating properties $ 4,478,032 $ 4,813,563
Accumulated depreciation (595,209) (558,908)
----------- -----------
3,882,823 4,254,655
Development land and
construction-in-progress 363,936 402,270
----------- -----------
4,246,759 4,656,925
Cash and cash equivalents 4,791 5,600
Accounts receivable, net 11,888 17,057
Accrued rent receivable, net 86,783 83,098
Assets held for sale, net 417,127 -
Investment in real estate ventures 71,078 71,598
Deferred costs, net 85,665 87,123
Intangible assets, net 167,115 218,149
Other assets 59,712 74,549
----------- -----------
Total assets $ 5,150,918 $ 5,214,099
=========== ===========
LIABILITIES AND BENEFICIARIES' EQUITY
Mortgage notes payable, including premiums $ 493,505 $ 611,898
Unsecured term loan 183,000 150,000
Borrowings under credit facilities 163,000 130,727
Unsecured senior notes, net of discounts 2,177,118 2,208,344
Accounts payable and accrued expenses 68,267 80,732
Distributions payable 42,419 42,368
Tenant security deposits and deferred rents 58,469 65,241
Acquired lease intangibles, net 53,662 67,281
Other liabilities 26,719 29,586
Mortgage note payable and other liabilities held
for sale, net 113,897 -
----------- -----------
Total liabilities 3,380,056 3,386,177
Minority interest 66,940 83,990
Beneficiaries' equity:
Preferred shares - Series C 20 20
Preferred shares - Series D 23 23
Common shares 877 870
Additional paid-in capital 2,320,305 2,320,857
Common shares in treasury (29,970) (53,449)
Cumulative earnings 494,704 477,150
Accumulated other comprehensive loss (1,151) (1,885)
Cumulative distributions (1,080,886) (999,654)
----------- -----------
Total beneficiaries' equity 1,703,922 1,743,932
----------- -----------
Total liabilities and beneficiaries' equity $ 5,150,918 $ 5,214,099
=========== ===========
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,
---------------------- ----------------------
2008 2007 2008 2007
---------- ---------- ---------- ----------
Revenue
Rents $ 126,051 $ 125,660 $ 251,656 $ 251,315
Tenant reimbursements 20,859 19,419 39,966 38,744
Termination fees 892 498 4,124 1,764
Third party management
fees, labor reimbursement
and leasing 5,170 5,369 10,849 9,704
Other 815 1,274 1,599 2,439
---------- ---------- ---------- ----------
Total revenue 153,787 152,220 308,194 303,966
Operating Expenses
Property operating
expenses 41,282 41,280 82,904 82,299
Real estate taxes 15,581 15,214 31,328 29,956
Management expenses 2,381 2,496 4,627 4,991
Depreciation and
amortization 52,472 53,542 104,324 111,340
General & administrative
expenses 6,127 7,007 11,039 14,417
---------- ---------- ---------- ----------
Total operating expenses 117,843 119,539 234,222 243,003
---------- ---------- ---------- ----------
Operating income 35,944 32,681 73,972 60,963
Other income (expense)
Interest income 179 1,597 382 2,378
Interest expense (35,709) (39,423) (71,807) (78,396)
Deferred financing costs (1,198) (1,065) (2,706) (2,323)
Equity in income of real
estate ventures 1,664 4,504 2,779 5,258
Net gain on disposition of
undepreciated real estate - - (24) -
Gain on early extinguishment
of debt 986 - 4,342 -
---------- ---------- ---------- ----------
Income (loss) before
minority interest and
discontinued operations 1,866 (1,706) 6,938 (12,120)
Minority interest -
partners' share of
consolidated real estate
ventures (38) 8 (78) (108)
Minority interest
attributable to continuing
operations - LP units 16 158 (103) 681
---------- ---------- ---------- ----------
Income (loss) from
continuing operations 1,844 (1,540) 6,757 (11,547)
Discontinued operations:
Income from discontinued
operations 1,253 3,708 3,535 8,235
Net gain on disposition
of discontinued
operations 13,420 (856) 21,401 25,153
Provision for impairment (6,850) - (6,850) -
Minority interest
attributable to
discontinued operations
- LP units (299) (123) (731) (1,427)
---------- ---------- ---------- ----------
7,524 2,729 17,355 31,961
---------- ---------- ---------- ----------
Net income (loss) 9,368 1,189 24,112 20,414
Income allocated to
Preferred Shares (1,998) (1,998) (3,996) (3,996)
Income (loss) allocated to
Common Shares $ 7,370 $ (809) $ 20,116 $ 16,418
========== ========== ========== ==========
PER SHARE DATA
Basic income (loss) per
Common Share $ 0.08 $ (0.01) $ 0.23 $ 0.19
========== ========== ========== ==========
Basic weighted-average
shares outstanding 87,280,576 87,080,785 87,092,271 87,680,773
Diluted income (loss) per
Common Share $ 0.08 $ (0.01) $ 0.23 $ 0.19
========== ========== ========== ==========
Diluted weighted-average
shares outstanding 87,512,345 87,080,785 87,300,005 88,298,521
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,
---------------------- ----------------------
2008 2007 2008 2007
---------- ---------- ---------- ----------
Reconciliation of Net
Income to Funds from
Operations (FFO):
Net income (loss) allocated
to common shares $ 7,370 $ (809) $ 20,116 $ 16,418
Add (deduct):
Minority interest
attributable to
continuing operations
- LP units (16) (158) 103 (681)
Net gains on sale of
undepreciated real
estate - - 24 -
Minority interest
attributable to
discontinued operations
- LP units 299 123 731 1,427
Net loss (gain) on
disposition of
discontinued operations (13,420) 856 (21,401) (25,153)
---------- ---------- ---------- ----------
Loss before net gains on
sale of interests in real
estate and minority
interest (5,767) 12 (427) (7,989)
Add:
Depreciation and
amortization:
Real property -
continuing
operations 38,382 38,010 75,419 80,530
Leasing costs
(includes acquired
intangibles) -
continuing
operations 13,515 14,933 27,717 29,529
Real property -
discontinued
operations 2,627 3,151 5,339 8,499
Leasing costs
(includes acquired
intangibles) -
discontinued
operations 1,392 1,534 2,768 5,029
Company's share of
unconsolidated real
estate ventures 2,256 1,596 4,323 3,040
Partners' share of
consolidated real
estate ventures (226) (218) (444) (1,172)
---------- ---------- ---------- ----------
Funds from operations $ 52,179 $ 59,018 $ 114,695 $ 117,466
========== ========== ========== ==========
FFO per share -
fully diluted $ 0.57 $ 0.65 $ 1.26 $ 1.27
========== ========== ========== ==========
FFO, excluding provision
for impairment $ 59,029 $ 59,018 $ 121,545 $ 117,466
========== ========== ========== ==========
FFO per share, excluding
provision for impairment -
fully diluted $ 0.65 $ 0.65 $ 1.34 $ 1.27
========== ========== ========== ==========
Weighted-average
shares/units outstanding -
fully diluted 90,979,203 91,418,933 90,944,076 92,237,966
Distributions per Common
Share $ 0.44 $ 0.44 $ 0.88 $ 0.88
========== ========== ========== ==========
Payout ratio of FFO
(Distribution per Common
Share divided by FFO per
Share) 77.2% 67.7% 69.8% 69.3%
Payout ratio of FFO,
excluding provision for
impairment 67.7% 67.7% 65.7% 69.3%
CASH AVAILABLE FOR
DISTRIBUTION (CAD):
Funds from operations $ 52,179 $ 59,018 $ 114,695 $ 117,466
Add (deduct):
Rental income from
straight-line rent,
including discontinued
operations (4,624) (6,143) (11,233) (14,775)
Deferred market rental
income, including
discontinued operations (2,408) (2,692) (4,686) (6,305)
Company's share of
unconsolidated real
estate ventures'
straight-line rent and
deferred market rent (1) 81 133 155 327
Partners' share of
consolidated real
estate ventures'
straight-line rent and
deferred market rent (39) (39) (78) (78)
Operating expense from
straight-line rent 383 383 766 757
Net gains on sale of
undepreciated real
estate - - (24) -
Provision for impairment 6,850 - 6,850 -
Deferred compensation
costs 1,416 1,280 2,574 2,552
Fair market value
amortization - mortgage
notes payable (1,105) (1,069) (2,178) (2,088)
Revenue maintaining
capital expenditures
Building
improvements (1,339) (2,201) (1,579) (2,908)
Tenant improvements (4,526) (12,121) (8,351) (23,357)
Lease commissions (3,453) (3,006) (6,184) (6,149)
---------- ---------- ---------- ----------
Total revenue
maintaining capital
expenditures (9,318) (17,328) (16,114) (32,414)
Cash available for
distribution $ 43,415 $ 33,543 $ 90,727 $ 65,442
========== ========== ========== ==========
CAD per share - fully
diluted $ 0.48 $ 0.37 $ 1.00 $ 0.71
========== ========== ========== ==========
Weighted-average
shares/units outstanding -
fully diluted 90,979,203 91,418,933 90,944,076 92,237,966
Distributions per Common
Share $ 0.44 $ 0.44 $ 0.88 $ 0.88
========== ========== ========== ==========
Payout ratio of CAD
(Distribution per Common
Share divided by CAD per
Share) 91.7% 118.9% 88.0% 123.9%
(1) Prior period figures for unconsolidated straight-line rent and deferred
market rent have been updated and/or reclassified to reflect more
recent data.
BRANDYWINE REALTY TRUST
SAME STORE OPERATIONS - QUARTER
(unaudited and in thousands)
Of the 249 properties owned by the Company as of June 30, 2008, a total of
225 properties ("Same Store Properties") containing an aggregate of 21.9
million net rentable square feet were owned for the entire three month
periods ended June 30, 2008 and 2007. Average occupancy for the Same Store
Properties was 92.9% during 2008 and 93.3% during 2007. The following table
sets forth revenue and expense information for the Same Store Properties:
Three Months Ended
June 30,
--------------------
2008 2007
--------- ---------
Revenue
Rents $ 112,205 $ 112,118
Tenant reimbursements 18,919 17,454
Termination fees 792 1,123
Other 347 652
--------- ---------
132,263 131,347
Operating expenses
Property operating expenses 38,135 36,745
Real estate taxes 13,382 13,089
--------- ---------
Net operating income $ 80,746 $ 81,513
========= =========
Net operating income - percentage change over
prior year -0.9%
=========
Net operating income, excluding termination fees &
other $ 79,607 $ 79,738
========= =========
Net operating income, excluding termination fees &
other - percentage change over prior year -0.2%
=========
Net operating income $ 80,746 $ 81,513
Straight line rents (3,264) (4,242)
FAS 141 rents (1,637) (2,109)
--------- ---------
Cash - Net operating income $ 75,845 $ 75,162
========= =========
Cash - Net operating income - percentage change
over prior year 0.9%
=========
Cash - Net operating income, excluding termination
fees & other $ 74,706 $ 73,387
========= =========
Cash - Net operating income, excluding termination
fees & other - percentage change over prior year 1.8%
=========
The following table is a reconciliation of Net Income to Same Store net
operating income:
Three Months Ended
June 30,
--------------------
2008 2007
--------- ---------
Net Income $ 9,368 $ 1,189
Add/(deduct):
Interest income (179) (1,597)
Interest expense 35,709 39,423
Deferred financing costs 1,198 1,065
Equity in income of real estate ventures (1,664) (4,504)
Depreciation and amortization 52,472 53,542
Gain on early extinguishment of debt (986) -
General & administrative expenses 6,244 6,993
Minority interest - partners' share of
consolidated real estate ventures 38 (8)
Minority interest attributable to continuing
operations - LP units (16) (158)
Income from discontinued operations (7,524) (2,729)
--------- ---------
Consolidated net operating income 94,543 93,230
Less: Net operating income of non same store
properties (9,566) (4,373)
Less: Eliminations and non-property specific net
operating income (4,231) (7,344)
--------- ---------
Same Store net operating income $ 80,746 $ 81,513
========= =========
BRANDYWINE REALTY TRUST
SAME STORE OPERATIONS - YEAR
(unaudited and in thousands)
Of the 249 properties owned by the Company as of June 30, 2008, a total of
225 properties ("Same Store Properties") containing an aggregate of 21.9
million net rentable square feet were owned for the entire six month
periods ended June 30, 2008 and 2007. Average occupancy for the Same Store
Properties was 93.1% during 2008 and 93.0% during 2007. The following
table sets forth revenue and expense information for the Same Store
Properties:
Six Months Ended
June 30,
--------------------
2008 2007
--------- ---------
Revenue
Rents $ 224,058 $ 223,889
Tenant reimbursements 35,753 34,859
Termination fees 4,024 1,617
Other 858 1,347
--------- ---------
264,693 261,712
Operating expenses
Property operating expenses 74,778 74,421
Real estate taxes 26,949 25,478
--------- ---------
Net operating income $ 162,966 $ 161,813
========= =========
Net operating income - percentage change over
prior year 0.7%
=========
Net operating income, excluding termination fees &
other $ 158,084 $ 158,849
========= =========
Net operating income, excluding termination fees &
other - percentage change over prior year -0.5%
=========
Net operating income $ 162,966 $ 161,813
Straight line rents (7,292) (9,615)
FAS 141 rents (3,107) (4,581)
--------- ---------
Cash - Net operating income $ 152,567 $ 147,617
========= =========
Cash - Net operating income - percentage change
over prior year 3.4%
=========
Cash - Net operating income, excluding termination
fees & other $ 147,685 $ 144,653
========= =========
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,
--------------------
2008 2007
--------- ---------
Net Income $ 24,112 $ 20,414
Add/(deduct):
Interest income (382) (2,378)
Interest expense 71,807 78,396
Deferred financing costs 2,706 2,323
Equity in income of real estate ventures (2,779) (5,258)
Depreciation and amortization 104,324 111,340
Net gain on sale of undepreciated real estate 24 -
Gain on early extinguishment of debt (4,342) -
General & administrative expenses 11,248 14,262
Minority interest - partners' share of
consolidated real estate ventures 78 108
Minority interest attributable to continuing
operations - LP units 103 (681)
Income from discontinued operations (17,355) (31,961)
--------- ---------
Consolidated net operating income 189,335 186,720
Less: Net operating income of non same store
properties (19,090) (9,113)
Less: Eliminations and non-property specific net
operating income (loss) (7,279) (15,794)
--------- ---------
Same Store net operating income $ 162,966 $ 161,813
========= =========Contact: Press Contact:
Marge Boccuti
Manager, Investor Relations
610-832-7702
marge.boccuti@bdnreit.com
Investor Contact:
Howard M. Sipzner
EVP & CFO
610-832-4907
howard.sipzner@bdnreit.com
Source: Brandywine Realty Trust
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