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Brandywine Realty Trust Reports Third Quarter 2008 Results, Increases 2008 Earnings Guidance and Provides 2009 Earnings and Common Share Dividend Guidance RADNOR, PA--(MARKET WIRE)--Nov 5, 2008 -- Brandywine Realty Trust (NYSE: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
nine-month periods ended September 30, 2008. The highlights
are as
follows: Financial Highlights - Third Quarter
-- Net income allocated to common shares totaled $0.7 million or $0.01
per diluted share in the third quarter of 2008 compared to $0.4 million or
$0.00 per diluted share in the third quarter of 2007.
-- Funds from operations (FFO) in the third quarter of 2008 totaled $53.6
million or $0.59 per diluted share compared to $62.0 million or $0.68 per
diluted share in the third quarter of 2007. The third quarter 2008 results
included $0.3 million of termination revenues while the third quarter 2007
results included $7.6 million of termination revenues. Our third quarter
2008 FFO payout ratio was 74.6% ($0.44 common share dividend / $0.59 FFO
per share).
-- In the third quarter of 2008, we incurred $8.9 million of revenue
maintaining capital expenditures which along with our other adjustments to
FFO, resulted in $41.4 million of cash available for distribution (CAD) or
$0.46 per diluted share compared to $35.7 million of CAD or $0.39 per
diluted share in the third quarter of 2007 when we incurred $14.8 million
of revenue maintaining capital expenditures. Our third quarter 2008 CAD
payout ratio was 95.7% ($0.44 common share dividend / $0.46 CAD per share).Financial Highlights - Nine Months
-- Net income allocated to common shares totaled $20.8 million or $0.24
per diluted share in the first nine months of 2008 compared to $16.8
million or $0.19 per diluted share in the first nine months of 2007. Net
income in the first nine months of 2008 included $21.4 million of gains on
the disposition of discontinued real estate, a $6.85 million impairment
charge related to assets held for sale and a $4.3 million gain on the early
extinguishment of debt, while net income in the first nine months of 2007
included $25.5 million of gains on the disposition of discontinued real
estate.
-- FFO for the first nine months of 2008 totaled $168.3 million ($175.2
million excluding the $6.85 million impairment charge) or $1.85 per diluted
share ($1.93 per diluted share excluding the impairment charge), compared
to $179.5 million or $1.95 per diluted share for the first nine months of
2007. The results for the first nine months of 2008 also included $4.5
million of termination revenues while the results for the first nine months
of 2007 included $9.4 million of termination revenues. Our FFO payout
ratio for the first nine months of 2008 was 71.4% ($1.32 common share
dividends / $1.85 FFO per diluted share).
-- For the first nine months of 2008, CAD totaled $132.2 million or $1.45
per diluted share versus $101.3 million or $1.10 per diluted share for the
first nine months of 2007. Our CAD payout ratio for the first nine months
of 2008 was 91.0% ($1.32 common share dividends / $1.45 CAD per diluted
share).Portfolio Highlights
-- At September 30, 2008, our core portfolio was 92.1% occupied and 93.3%
leased (reflecting leases commencing after September 30, 2008). We owned
254 properties at September 30, 2008, encompassing 237 core properties
aggregating 23.4 million square feet, 11 development/redevelopment
properties aggregating 3.1 million square feet and 6 properties designated
as held for sale aggregating 2.1 million square feet.
-- During the third quarter of 2008, net operating income (NOI) excluding
termination revenues and other income items declined 3.6% on a GAAP basis
and increased 0.8% on a cash basis for our 226 same store properties which
were 92.4% and 93.9% occupied on September 30, 2008 and September 30, 2007,
respectively. For the first nine months of 2008, NOI excluding termination
revenues and other income items for our same store portfolio decreased 2.0%
on a GAAP basis and increased 1.0% on a cash basis.
-- For the third quarter of 2008, our core portfolio retention rate was
60.7% with overall negative net absorption of 86,033 square feet. During
the third quarter of 2008, we achieved a 10.0% increase on our renewal
rental rates and a 3.6% increase on our new lease rental rates, both on a
GAAP basis.Investment Highlights
-- We did not acquire any properties in the third quarter of 2008 nor in
all of 2008.
-- We did not sell any properties in the third quarter of 2008.
Subsequent to quarter end, we sold a five-property office portfolio in
Oakland, California for aggregate consideration of $412.5 million and an
office building in Richmond, Virginia for $48.8 million, bringing year-to-
date completed sales volume to $517.5 million. Net of $95.3 million of
buyer debt assumptions, $40.0 million of seller financing and $8.5 million
of transaction costs, these two sales provided aggregate net proceeds of
approximately $317.5 million which were used for debt repayments and to
establish cash balances for future needs.
-- At September 30, 2008, we were actively proceeding on five existing
developments and six existing redevelopments with total estimated costs of
$608.7 million of which $351.8 million remained to be funded. These
amounts include $370.0 million of total project costs for the combined 30th
Street Post Office (100% leased to the U.S. Government) and Cira South
garage (76% leased to the U.S. Government) in Philadelphia, Pennsylvania of
which $291.7 million remained to be funded at September 30, 2008, primarily
in 2009 and 2010. As of October 31, 2008, our five developments and six
redevelopments were collectively 77.8% leased, reflecting a recently
completed 235,000 square foot lease at our South Lake at Dulles Corner
project and other leasing activity.Capital Markets Highlights
-- At September 30, 2008, our net debt to gross assets measured 52.5%
compared to 54.3% at September 30, 2007. At September 30, 2008, we had
$430.3 million available for use and drawdown under our various credit
facilities. Subsequent to quarter end, we utilized the $317.5 million of
net proceeds from the aforementioned two sales to fully pay down the
balance on our $620.0 million of revolving credit facilities and provide
approximately $145.0 million of initial cash balances for future needs. We
expect to fully utilize all of this cash by year-end 2008 for a variety of
general corporate purposes including the repayment of existing
indebtedness.
-- We achieved a 2.5 times interest coverage ratio for the quarter ended
September 30, 2008 versus 2.6 times for the quarter ended September 30,
2007."Our third quarter 2008 results reflect the continued strong performance of our core portfolio, the 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, together with the sales we completed subsequent to quarter end, position us favorably in a challenging business environment and underscore our commitment to liquidity, capital availability and financial flexibility." Distributions On September 17, 2008, our Board of Trustees declared a quarterly dividend distribution of $0.44 per common share that was paid on October 17, 2008 to shareholders of record as of October 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 October 15, 2008 to holders of record as of September 30, 2008 of the Series C and Series D Preferred Shares, respectively. For our 2009 common share distributions beginning with our January 2009 quarterly distribution, our Board has adopted a dividend policy designed to match our distributions to our projected, normalized taxable income. As such, we anticipate that our quarterly 2009 distributions will be $0.30 per share ($1.20 annually) subject to declaration by our Board. Taxable gains or income items beyond this normalized level would be addressed through a combination of special distributions and/or other tax planning techniques. 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 third quarter of 2008 and may discontinue the program at any time. Increase of 2008 Earnings and FFO Guidance Based on current plans and assumptions and subject to the risks and uncertainties more fully described in our reports filed with the Securities and Exchange Commission, we are increasing our previously announced guidance for full year 2008 FFO per diluted share to be in a range $2.39 to $2.43 versus the prior range of $2.32 to $2.42 (including the deduction of $6.85 million or approximately $0.08 per diluted share for an impairment charge incurred in the second quarter of 2008). Earnings and FFO guidance are provided for informational purposes and are subject to change. The following is a reconciliation of the calculation of 2008 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 $ 0.20 to $ 0.24
Less: gains on the sale of real estate (0.24) (0.24)
Plus: real estate depreciation and amortization 2.43 2.43
---- ----
FFO per diluted share $ 2.39 to $ 2.43
Plus: impairment charge 0.08 0.08
---- ----
FFO per diluted share, excluding impairment charge $ 2.47 to $ 2.51
==== ====For information purposes, we have provided FFO guidance both with and without the impairment charge. 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. Introduction of 2009 Earnings and FFO Guidance Based on current plans and assumptions and subject to the risks and uncertainties more fully described in our reports filed with the Securities and Exchange Commission, we estimate that full year 2009 FFO per diluted share will be in a range of $2.17 to $2.27. This guidance is provided for informational purposes and is subject to change. The following is a reconciliation of the calculation of 2009 FFO per diluted share and earnings per diluted share:
Guidance for 2009 Range or Value
----------------- --------------
Earnings per diluted share allocated to
common shareholders $ 0.21 to $ 0.31
Plus: real estate depreciation and amortization 1.96 1.96
---- ----
FFO per diluted share $ 2.17 to $ 2.27Our 2009 FFO guidance does not include any income from the sale of undepreciated real estate, in accordance with our current practice. 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 have made corresponding revisions as appropriate to our prior period financial statements in our supplemental information package and will do so 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. Third Quarter Earnings Call and Supplemental Information Package We will host a conference call on Thursday, November 6, 2008 at 11:00 a.m. EST. The conference call can be accessed by calling 1-800-683-1525 and referencing conference ID #64504703. Beginning two hours after the conference call, a taped replay of the call can be accessed 24 hours a day through Thursday, November 20, 2008 by calling 1-800-642-1687 and providing access code 64504703. 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 third 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 - Fourth Quarter 2008 Conference Call We anticipate that we will release our fourth quarter 2008 earnings on Wednesday, February 18, 2009, after the market close and will host our fourth quarter 2008 conference call on Thursday, February 19, 2009, at 11:00 a.m. EST. 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 39.8 million square feet, including 26.5 million square feet which it currently 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 the 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.
BRANDYWINE REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
September 30, December 31,
2008 2007
------------- -------------
ASSETS
Real estate investments:
Operating properties $ 4,467,405 $ 4,813,563
Accumulated depreciation (609,566) (558,908)
------------- -------------
3,857,839 4,254,655
Development land and construction-
in-progress 353,904 402,270
------------- -------------
4,211,743 4,656,925
Cash and cash equivalents 2,674 5,600
Accounts receivable, net 8,018 17,057
Accrued rent receivable, net 87,783 83,098
Assets held for sale, net 459,197 -
Investment in real estate ventures 71,036 71,598
Deferred costs, net 83,133 87,123
Intangible assets, net 156,109 218,149
Other assets 73,584 74,549
------------- -------------
Total assets $ 5,153,277 $ 5,214,099
============= =============
LIABILITIES AND BENEFICIARIES' EQUITY
Mortgage notes payable, including premiums $ 490,593 $ 611,898
Unsecured term loan 183,000 150,000
Borrowings under credit facilities 175,000 130,727
Unsecured senior notes, net of discounts 2,177,255 2,208,344
Accounts payable and accrued expenses 99,368 76,919
Distributions payable 42,124 42,368
Tenant security deposits and deferred rents 57,194 65,241
Acquired lease intangibles, net 50,446 67,281
Other liabilities 31,075 30,154
Mortgage note payable and other liabilities
held for sale, net 111,230 -
------------- -------------
Total liabilities 3,417,285 3,382,932
Minority interest 65,521 83,990
Beneficiaries' equity:
Preferred shares - Series C 20 20
Preferred shares - Series D 23 23
Common shares 877 870
Additional paid-in capital 2,326,988 2,324,342
Deferred compensation payable in
common stock 6,272 5,651
Common shares in treasury (29,949) (53,449)
Common shares held in grantor trust (6,272) (5,651)
Cumulative earnings 497,038 476,910
Accumulated other comprehensive loss (2,836) (1,885)
Cumulative distributions (1,121,690) (999,654)
------------- -------------
Total beneficiaries' equity 1,670,471 1,747,177
------------- -------------
Total liabilities and beneficiaries'
equity $ 5,153,277 $ 5,214,099
============= =============
BRANDYWINE REALTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2008 2007 2008 2007
---------- ---------- ---------- ----------
Revenue
Rents $ 123,571 $ 128,277 $ 371,605 $ 375,933
Tenant reimbursements 19,732 20,525 59,676 59,255
Termination fees 338 7,649 4,462 9,418
Third party management
fees, labor
reimbursement and
leasing 4,390 4,415 15,239 14,119
Other 784 2,274 2,378 4,711
---------- ---------- ---------- ----------
Total revenue 148,815 163,140 453,360 463,436
Operating Expenses
Property operating
expenses 40,978 43,410 122,531 124,316
Real estate taxes 15,148 15,232 46,179 44,886
Third party management
expenses 1,790 2,508 6,417 7,499
Depreciation and
amortization 51,060 56,876 154,527 167,315
General & administrative
expenses 6,863 7,402 17,902 21,819
---------- ---------- ---------- ----------
Total operating expenses 115,839 125,428 347,556 365,835
---------- ---------- ---------- ----------
Operating income 32,976 37,712 105,804 97,601
Other income (expense)
Interest income 221 1,054 603 3,432
Interest expense (35,039) (39,496) (106,846) (117,892)
Deferred financing costs (1,092) (1,058) (3,798) (3,381)
Equity in income of real
estate ventures 1,059 763 3,838 6,021
Net gain on disposition
of undepreciated real
estate - 421 (24) 421
Gain on early
extinguishment of debt - - 4,342 -
---------- ---------- ---------- ----------
Income (loss) before
minority interest and
discontinued operations (1,875) (604) 3,919 (13,798)
Minority interest -
partners' share of
consolidated real estate
ventures (39) 5 (117) (103)
Minority interest
attributable to continuing
operations - LP units 141 116 84 843
---------- ---------- ---------- ----------
Income (loss) from
continuing operations (1,773) (483) 3,886 (13,058)
Discontinued operations:
Income from discontinued
operations 4,619 2,694 9,298 12,003
Net gain on disposition
of discontinued
operations - 338 21,401 25,491
Provision for impairment - - (6,850) -
Minority interest
attributable to
discontinued operations
- LP units (167) (130) (944) (1,603)
---------- ---------- ---------- ----------
4,452 2,902 22,905 35,891
---------- ---------- ---------- ----------
Net income (loss) 2,679 2,419 26,791 22,833
Income allocated to
Preferred Shares (1,998) (1,998) (5,994) (5,994)
Income (loss) allocated to
Common Shares $ 681 $ 421 $ 20,797 $ 16,839
========== ========== ========== ==========
PER SHARE DATA
Basic income (loss) per
Common Share $ 0.01 $ 0.00 $ 0.24 $ 0.19
========== ========== ========== ==========
Basic weighted-average
shares outstanding 87,695,892 86,897,335 87,423,108 87,416,757
Diluted income (loss) per
Common Share $ 0.01 $ 0.00 $ 0.24 $ 0.19
========== ========== ========== ==========
Diluted weighted-average
shares outstanding 87,695,892 87,114,598 87,437,133 87,882,401
BRANDYWINE REALTY TRUST
FUNDS FROM OPERATIONS AND CASH AVAILABLE FOR DISTRIBUTION
(unaudited, in thousands, except share and per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2008 2007 2008 2007
---------- ---------- ---------- ----------
Reconciliation of Net
Income to Funds from
Operations (FFO):
Net income (loss) allocated
to common shares $ 681 $ 421 $ 20,797 $ 16,839
Add (deduct):
Minority interest
attributable to
continuing operations -
LP units (141) (116) (84) (843)
Net gains on sale of
undepreciated real
estate - (421) 24 (421)
Minority interest
attributable to
discontinued operations
- LP units 167 130 944 1,603
Net loss (gain) on
disposition of
discontinued operations - (338) (21,401) (25,491)
---------- ---------- ---------- ----------
Loss before net gains on
sale of interests in real
estate and minority
interest 707 (324) 279 (8,313)
Add:
Depreciation and
amortization:
Real property -
continuing
operations 37,120 40,920 111,739 120,604
Leasing costs
(includes acquired
intangibles) -
continuing
operations 13,366 15,308 41,026 44,782
Real property -
discontinued
operations 542 3,346 6,681 12,691
Leasing costs
(includes acquired
intangibles) -
discontinued
operations 44 1,294 2,869 6,378
Company's share of
unconsolidated real
estate ventures 2,054 1,662 6,377 4,702
Partners' share of
consolidated real
estate ventures (217) (183) (661) (1,355)
---------- ---------- ---------- ----------
Funds from operations $ 53,616 $ 62,023 $ 168,310 $ 179,489
========== ========== ========== ==========
FFO per share - fully
diluted $ 0.59 $ 0.68 $ 1.85 $ 1.95
========== ========== ========== ==========
FFO, excluding provision
for impairment $ 53,616 $ 62,023 $ 175,160 $ 179,489
========== ========== ========== ==========
FFO per share, excluding
provision for impairment -
fully diluted $ 0.59 $ 0.68 $ 1.93 $ 1.95
========== ========== ========== ==========
Weighted-average
shares/units outstanding -
fully diluted 90,985,002 90,989,460 90,957,841 92,237,966
Distributions per Common
Share $ 0.44 $ 0.44 $ 1.32 $ 1.32
========== ========== ========== ==========
Payout ratio of FFO
(Distribution per Common
Share divided by FFO per
Share) 74.6% 64.7% 71.4% 67.7%
Payout ratio of FFO,
excluding provision for
impairment 74.6% 64.7% 68.4% 67.7%
CASH AVAILABLE FOR
DISTRIBUTION (CAD):
Funds from operations $ 53,616 $ 62,023 $ 168,310 $ 179,489
Add (deduct):
Rental income from
straight-line rent,
including discontinued
operations (2,497) (5,486) (13,730) (20,261)
Deferred market rental
income, including
discontinued operations (1,807) (3,007) (6,493) (9,312)
Company's share of
unconsolidated real
estate ventures'
straight-line rent and
deferred market rent 129 178 284 505
Partners' share of
consolidated real
estate ventures'
straight-line rent and
deferred market rent (40) (39) (118) (117)
Operating expense from
straight-line rent 383 383 1,149 1,268
Net gains (loss) on sale
of undepreciated real
estate - 421 (24) 421
Provision for impairment - - 6,850 -
Loss on settlement of
treasury lock
agreements - (3,698) - (3,698)
Deferred compensation
costs 1,265 796 3,839 3,348
Fair market value
amortization - mortgage
notes payable (676) (1,077) (2,854) (3,165)
Revenue maintaining
capital expenditures
Building
improvements (957) (2,416) (2,536) (5,324)
Tenant improvements (5,253) (9,424) (13,604) (32,781)
Lease commissions (2,721) (2,911) (8,905) (9,060)
---------- ---------- ---------- ----------
Total revenue
maintaining capital
expenditures (8,931) (14,751) (25,045) (47,165)
Cash available for
distribution $ 41,442 $ 35,743 $ 132,168 $ 101,313
========== ========== ========== ==========
CAD per share - fully
diluted $ 0.46 $ 0.39 $ 1.45 $ 1.10
========== ========== ========== ==========
Weighted-average
shares/units outstanding -
fully diluted 90,985,002 90,989,460 90,957,841 92,237,966
Distributions per Common
Share $ 0.44 $ 0.44 $ 1.32 $ 1.32
========== ========== ========== ==========
Payout ratio of CAD
(Distribution per Common
Share divided by CAD per
Share) 95.7% 112.8% 91.0% 120.0%
BRANDYWINE REALTY TRUST
SAME STORE OPERATIONS - QUARTER-TO-DATE
(unaudited and in thousands)
Of the 248 properties owned by the Company as of September 30, 2008, a
total of 226 properties ("Same Store Properties") containing an aggregate
of 21.9 million net rentable square feet were owned for the entire three
month periods ended September 30, 2008 and 2007. Average occupancy for the
Same Store Properties was 92.4% during 2008 and 93.7% during 2007. The
following table sets forth revenue and expense information for the Same
Store Properties:
Three Months Ended
September 30,
----------------------
2008 2007
---------- ----------
Revenue
Rents $ 111,864 $ 113,642
Tenant reimbursements 17,963 18,380
Termination fees 338 7,699
Other 529 842
---------- ----------
130,694 140,563
Operating expenses
Property operating expenses 40,485 39,979
Real estate taxes 13,269 13,095
---------- ----------
Net operating income $ 76,940 $ 87,489
========== ==========
Net operating income - percentage change over
prior year -12.1%
Net operating income, excluding termination fees
& other $ 76,073 $ 78,948
========== ==========
Net operating income, excluding termination fees
& other - percentage change over prior year -3.6%
Net operating income $ 76,940 $ 87,489
Straight line rents (1,006) (3,785)
FAS 141 rents (1,317) (2,009)
Non-cash ground rent 383 383
---------- ----------
Cash - Net operating income $ 75,000 $ 82,078
========== ==========
Cash - Net operating income - percentage change
over prior year -8.6%
Cash - Net operating income, excluding
termination fees & other $ 74,133 $ 73,537
========== ==========
Cash - Net operating income, excluding
termination fees & other - percentage change
over prior year 0.8%
The following table is a reconciliation of Net
Income to Same Store net operating income:
Three Months Ended
September 30,
----------------------
2008 2007
---------- ----------
Net Income $ 2,679 $ 2,419
Add/(deduct):
Interest income (221) (1,054)
Interest expense 35,039 39,496
Deferred financing costs 1,092 1,058
Equity in income of real estate ventures (1,059) (763)
Depreciation and amortization 51,060 56,876
Net loss on sale of undepreciated real estate - (421)
General & administrative expenses 6,863 7,402
Minority interest - partners' share of
consolidated real estate ventures 39 (5)
Minority interest attributable to continuing
operations - LP units (141) (116)
Income from discontinued operations (4,452) (2,902)
---------- ----------
Consolidated net operating income 90,899 101,990
Less: Net operating income of non same store
properties (7,890) (6,334)
Less: Eliminations and non-property specific net
operating income (6,069) (8,167)
---------- ----------
Same Store net operating income $ 76,940 $ 87,489
========== ==========
BRANDYWINE REALTY TRUST
SAME STORE OPERATIONS - YEAR-TO-DATE
(unaudited and in thousands)
Of the 248 properties owned by the Company as of September 30, 2008, a
total of 224 properties ("Same Store Properties") containing an aggregate
of 21.5 million net rentable square feet were owned for the entire nine
month periods ended September 30, 2008 and 2007. Average occupancy for the
Same Store Properties was 93.0% during 2008 and 93.2% during 2007. The
following table sets forth revenue and expense information for the Same
Store Properties:
Nine Months Ended
September 30,
----------------------
2008 2007
---------- ----------
Revenue
Rents $ 329,464 $ 330,643
Tenant reimbursements 53,386 53,966
Termination fees 4,362 9,320
Other 1,375 2,183
---------- ----------
388,587 396,112
Operating expenses
Property operating expenses 113,169 112,103
Real estate taxes 39,651 37,823
---------- ----------
Net operating income $ 235,767 $ 246,186
========== ==========
Net operating income - percentage change over
prior year -4.2%
Net operating income, excluding termination fees
& other $ 230,030 $ 234,683
========== ==========
Net operating income, excluding termination fees
& other - percentage change over prior year -2.0%
Net operating income $ 235,767 $ 246,186
Straight line rents (8,309) (13,131)
FAS 141 rents (4,497) (6,667)
Non-cash ground rent 1,149 1,268
---------- ----------
Cash - Net operating income $ 224,110 $ 227,656
========== ==========
Cash - Net operating income - percentage change
over prior year -1.6%
Cash - Net operating income, excluding
termination fees & other $ 218,373 $ 216,153
========== ==========
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:
Nine Months Ended
September 30,
----------------------
2008 2007
---------- ----------
Net Income $ 26,791 $ 22,833
Add/(deduct):
Interest income (603) (3,432)
Interest expense 106,846 117,892
Deferred financing costs 3,798 3,381
Equity in income of real estate ventures (3,838) (6,021)
Depreciation and amortization 154,527 167,315
Net gain on sale of undepreciated real estate 24 (421)
Gain on early extinguishment of debt (4,342) -
General & administrative expenses 17,902 21,819
Minority interest - partners' share of
consolidated real estate ventures 117 103
Minority interest attributable to continuing
operations - LP units (84) (843)
Income from discontinued operations (22,905) (35,891)
---------- ----------
Consolidated net operating income 278,233 286,735
Less: Net operating income of non same store
properties (29,116) (17,774)
Less: Eliminations and non-property specific net
operating income (loss) (13,350) (22,775)
---------- ----------
Same Store net operating income $ 235,767 $ 246,186
========== ==========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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