Brandywine Realty Trust Announces Third Quarter 2009 Earnings, Increases Guidance for 2009, Provides Initial 2010 Guidance and Raises 2010 Dividend
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RADNOR, Pa., Oct. 28 PA-BDN-Q309-earns
RADNOR, Pa., Oct. 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 nine-month periods ended September 30, 2009. The highlights are as follows:
Financial Highlights - Third Quarter
- Net income allocated to common shares totaled $5.1 million or $0.04 per diluted share in the third quarter of 2009 compared to a net loss of ($0.5) million or ($0.01) per diluted share in the third quarter of 2008. Our weighted average diluted share count increased to 129.9 million shares in the third quarter of 2009 from 87.7 million shares in the third 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 third quarter of 2009 totaled $58.2 million or $0.44 per diluted share compared to $52.3 million or $0.58 per diluted share in the third quarter of 2008. Our third quarter 2009 FFO payout ratio was 22.7% ($0.10 common share dividend paid / $0.44 FFO per share). Our weighted average fully diluted share count for FFO (and CAD) calculations increased to 132.7 million shares in the third quarter of 2009 from 91.0 million shares in the third quarter of 2008 due to the aforementioned common share issuance.
- In the third quarter of 2009, we incurred $10.5 million of revenue maintaining capital expenditures which along with our other adjustments to FFO, resulted in $47.2 million of cash available for distribution (CAD) or $0.36 per diluted share compared to $41.2 million of CAD or $0.45 per diluted share in the third quarter of 2008 when we incurred $8.9 million of revenue maintaining capital expenditures. Our third quarter 2009 CAD payout ratio was 27.8% ($0.10 common share dividend paid / $0.36 CAD per share).
Financial Highlights - Nine Months
- Net income allocated to common shares totaled $5.8 million or $0.05 per diluted share in the first nine months of 2009 compared to net income of $16.1 million or $0.18 per diluted share in the first nine months of 2008. Our weighted average diluted share count increased to 107.2 million shares in the first nine months of 2009 from 87.4 million shares in the first nine months of 2008 primarily due to the aforementioned common share issuance.
- FFO available to common shares and units in the first nine months of 2009 totaled $167.9 million or $1.53 per diluted share ($171.6 million or $1.56 per diluted share excluding a $3.7 million impairment provision) compared to $163.3 million or $1.79 per diluted share in the first nine months of 2008 ($170.1 million or $1.87 per diluted share excluding a $6.9 million impairment provision). Our FFO payout ratio for the first nine months of 2009 was 32.7% ($0.50 common share dividend paid / $1.53 FFO per share). Our weighted average fully diluted share count for FFO (and CAD) calculations increased to 110.0 million shares for the first nine months of 2009 from 91.0 million shares in the first nine months of 2008 primarily due to the aforementioned common share issuance.
- During the first nine months of 2009, we incurred $31.9 million of revenue maintaining capital expenditures which along with our other adjustments to FFO, resulted in $136.0 million of CAD or $1.24 per diluted share compared to $130.4 million of CAD or $1.43 per diluted share for the first nine months of 2008 when we incurred $25.0 million of revenue maintaining capital expenditures. Our CAD payout ratio for the first nine months of 2009 was 40.3% ($0.50 common share dividend paid / $1.24 CAD per share).
Portfolio Highlights
- In the third quarter of 2009, our net operating income (NOI) excluding termination revenues and other income items decreased 0.8% on a GAAP basis and 0.5% on a cash basis for our 232 same store properties which were 88.8% and 92.4% occupied on September 30, 2009 and September 30, 2008, respectively.
- During the third quarter of 2009, we completed 1,156,904 square feet of total leasing activity including 713,625 square feet of renewals, 261,761 square feet of new leases and 181,518 square feet of tenant expansions. We currently have an additional 1,752,243 square feet of executed leasing which will commence subsequent to September 30, 2009. During the third quarter of 2009, we achieved an 82.9% retention rate in our core portfolio with positive net absorption of 77,027 square feet excluding 105,344 square feet of early terminations, or 75.5% overall. During the third quarter of 2009, we experienced a 1.5% decline on our renewal rental rates and a 0.2% decline on our new lease and expansion rental rates, both on a GAAP basis.
- At September 30, 2009, our core portfolio was 88.4% occupied and 89.7% leased (reflecting leases which will commence after September 30, 2009). We owned 247 properties at September 30, 2009, encompassing 241 core properties aggregating 24.1 million square feet and six development/ redevelopment properties aggregating 2.0 million square feet. Two core properties and a portion of a redevelopment property were characterized as held-for-sale at September 30, 2009.
Investment Highlights
- We sold no properties in the third quarter of 2009. Subsequent to quarter end, we completed the previously disclosed sale of two properties in Trenton, New Jersey for an aggregate purchase price of $85.0 million ($22.5 million of which we deferred as a second mortgage loan to the buyer) and also completed a $7.9 million sale to the underlying tenant of a 40,508 square foot condominium interest in our 100 Lenox Drive redevelopment property in Lawrenceville, New Jersey. Our completed 2009 sales now total $129.5 million, or just over 89% of our $145 million sales goal.
- At September 30, 2009, we were proceeding on two developments and four redevelopments with total project costs of $417.7 million of which a total of $192.4 million remained to be funded - $45.7 million in the remainder of 2009 and $146.7 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 $174.2 million remained to be funded at September 30, 2009. We are also finishing the lease-up of four recently completed developments and three recently completed redevelopments for which we expect to spend up to an additional $16.3 million in late 2009 and early 2010.
Capital Markets Highlights
- During the third quarter of 2009, we closed a previously disclosed $250.0 million unsecured senior note financing due May 15, 2015 with a coupon rate of 7.50% and a yield to maturity of 7.625%, or 7.750% including the associated hedging costs.
- During the third quarter of 2009, we closed a previously disclosed $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 interest only followed by a thirty-year principal amortization schedule at a 7.50% constant.
- During the third quarter of 2009, we repurchased a total of $203.3 million of our unsecured senior notes including $55.7 million of open-market transactions in our unsecured senior notes maturing in 2009, 2011 (our exchangeable notes due 2026 with a put date in October 2011), 2012 and 2014; a $47.6 million tender for a portion of our 2009 Notes and a $100.0 million tender for a portion of our 2012 Notes, generating aggregate gains of $5.1 million on the early extinguishment of debt.
- At September 30, 2009, our net debt to gross assets measured 46.4% compared to a peak of 54.3% at September 30, 2007, reflecting a cumulative $728.5 million reduction in our net debt over that two-year period. At September 30, 2009, we had a zero balance on our $600.0 million unsecured revolving credit facility with $568.8 million available for use and drawdown.
- We achieved a 2.9 EBITDA to interest coverage ratio for the quarter ended September 30, 2009 versus the 2.5 ratio we achieved for the quarter ended September 30, 2008. We recorded a 6.5 net debt to annualized quarterly EBITDA ratio for the quarter ended September 30, 2009.
"Having completed a variety of successful capital market initiatives, we remain fully focused on maintaining strong operating metrics, aggressively pursuing all tenant prospects and completing our remaining development activities on time and on budget. While challenging operating conditions will persist through 2010, our capital capacity and inherent submarket competitive advantage will enable us to continue our long track record of market outperformance. Given our market position, we are also poised to take advantage of opportunities as they arise and ultimately position Brandywine for future growth," stated Gerard H. Sweeney, President and Chief Executive Officer of Brandywine Realty Trust. "A positive result of our capital market activities and financial condition is our ability to raise our common share dividend distribution by 50% to a $0.15 quarterly rate beginning January 2010."
Distributions
On September 16, 2009, our Board of Trustees declared a quarterly dividend distribution of $0.10 per common share that was paid in the fourth quarter on October 19, 2009 to shareholders of record as of October 5, 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 October 15, 2009 to holders of record as of September 30, 2009 of the Series C and Series D Preferred Shares, respectively.
Our dividend policy is to match our aggregate distributions to our projected taxable income and to evaluate the mix of cash and common shares on an ongoing basis. We now believe that our year-to-date aggregate distributions are sufficient to match our projected 2009 taxable income and do not expect any further distributions to be made with respect to calendar year 2009.
For 2010, we anticipate that our quarterly common share distributions will increase to $0.15 per common share or $0.60 per common share on an annualized basis, subject to quarterly declaration by our Board of Trustees. This represents a 50% increase from the current distribution rate of $0.10 per common share.
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 $1.82 to 1.85 versus the prior guidance of $1.75 to $1.80 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 $(0.03) to $0.00
Plus: real estate depreciation and
Amortization 1.85 1.85
FFO per diluted share $1.82 to $1.85
Plus: impairment charges
(incurred to date) 0.03 0.03
Adjusted FFO per diluted share $1.85 to $1.88
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, does not include any income from the sale of undepreciated real estate in accordance with our current practice and is based on the expectation that our weighted average fully diluted shares for 2009 will be approximately 116.0 million.
Introduction of 2010 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 estimate that full year 2010 FFO per diluted share will be in a range of $1.23 to $1.34. This guidance is provided for informational purposes and is subject to change. The following is a reconciliation of the calculation of 2010 FFO per diluted share and earnings per diluted share:
Guidance for 2010 Range or Value
----------------- --------------
Earnings (loss) per diluted share allocated
to common shareholders $(0.38) to $(0.27)
Plus: real estate depreciation and
Amortization 1.61 1.61
FFO per diluted share $1.23 to $1.34
Our 2010 FFO guidance does not include income arising from future sales or impairments which may be taken in the future should the circumstances arise, does not include any income from the sale of undepreciated real estate in accordance with our current practice and is based on the expectation that our weighted average fully diluted shares for 2010 will be approximately 133.0 million.
Accounting Disclosures
On January 1, 2009, we adopted a newly issued accounting standard for convertible debt instruments which requires retrospective application. This adoption impacts our exchangeable notes due 2026 with a put date in 2011 that had an outstanding balance of $159.5 million as of September 30, 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 a newly issued accounting standard for non-controlling interest. The accounting standard 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.
Third Quarter Earnings Call and Supplemental Information Package
We will host a conference call on Thursday, October 29, 2009 at 12:00 noon EDT. The conference call can be accessed by calling 1-800-683-1525 and referencing conference ID #27619074. Beginning two hours after the conference call, a taped replay of the call can be accessed 24 hours a day through Thursday, November 12, 2009 by calling 1-800-642-1687 and providing access code 27619074. 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 2009 Conference Call
We anticipate that we will release our fourth quarter 2009 earnings on Wednesday, February 24, 2010, after the market close and will host our fourth quarter 2009 conference call on Thursday, February 25, 2010, 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 36.1 million square feet, including 25.6 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 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)
September 30, December 31,
2009 2008
---- ----
ASSETS
Real estate investments:
Operating properties $4,513,378 $4,608,320
Accumulated depreciation (695,870) (639,688)
-------- --------
3,817,508 3,968,632
Construction-in-progress 229,259 122,219
Land inventory 97,390 100,516
------ -------
4,144,157 4,191,367
Cash and cash equivalents 3,296 3,924
Cash in escrow - 31,385
Accounts receivable, net 7,282 11,762
Accrued rent receivable, net 85,708 86,362
Assets held for sale, net 74,006 -
Investment in real estate ventures 75,929 71,028
Deferred costs, net 109,503 89,327
Intangible assets, net 114,080 145,757
Notes receivable 49,114 48,048
Other assets 58,227 59,008
------ ------
Total assets $4,721,302 $4,737,968
========== ==========
LIABILITIES AND EQUITY
Mortgage notes payable, including premiums $554,616 $487,525
Borrowings under credit facilities - 153,000
Unsecured term loan 183,000 183,000
Unsecured senior notes, net of discounts 1,771,903 1,917,970
Accounts payable and accrued expenses 96,877 74,824
Distributions payable 15,238 29,288
Tenant security deposits and deferred rents 52,012 58,692
Acquired lease intangibles, net 39,639 47,626
Other liabilities 61,539 63,545
Liabilities related to assets held for sale 666 -
--- ---
Total liabilities 2,775,490 3,015,470
Brandywine Realty Trust's equity:
Preferred shares - Series C 20 20
Preferred shares - Series D 23 23
Common shares 1,286 882
Additional paid-in capital 2,609,212 2,351,428
Deferred compensation payable in common
stock 6,167 6,274
Common shares in treasury (7,893) (14,121)
Common shares held in grantor trust (6,167) (6,274)
Cumulative earnings 505,468 498,716
Accumulated other comprehensive loss (10,349) (17,005)
Cumulative distributions (1,191,352) (1,150,406)
---------- ----------
Total Brandywine Realty Trust's equity 1,906,415 1,669,537
--------- ---------
Non-controlling interests 39,397 52,961
------ ------
Total equity 1,945,812 1,722,498
--------- ---------
Total liabilities and equity $4,721,302 $4,737,968
========== ==========
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,
2009 2008 2009 2008
---- ---- ---- ----
Revenue
Rents $119,599 $120,285 $359,513 $362,342
Tenant reimbursements 19,164 18,553 56,853 55,920
Termination fees 1,764 338 2,840 4,462
Third party
management fees,
labor reimbursement
and leasing 5,194 4,390 14,055 15,239
Other 872 772 2,323 2,348
--- --- ----- -----
Total revenue 146,593 144,338 435,584 440,311
Operating Expenses
Property operating
expenses 40,050 39,143 122,857 118,032
Real estate taxes 14,248 14,522 43,059 44,376
Third party
management expenses 2,256 1,790 6,339 6,417
Depreciation and
amortization 51,422 50,019 155,852 151,627
General &
administrative
expenses 5,018 6,863 15,491 17,902
Total operating
expenses 112,994 112,337 343,598 338,354
------- ------- ------- -------
Operating income 33,599 32,001 91,986 101,957
Other income (expense)
Interest income 473 221 1,695 603
Interest expense (31,455) (36,037) (102,045) (109,822)
Deferred financing
costs (1,579) (1,092) (4,725) (3,798)
Recognized hedge
activity (1,517) - (1,822) -
Equity in income of
real estate ventures 1,331 1,059 3,450 3,838
Net (loss) on
disposition of
undepreciated real
estate - - - (24)
Gain on early
extinguishment of
debt 5,073 - 23,724 3,106
----- ------ ------ ------
Income (loss) from
continuing operations 5,925 (3,848) 12,263 (4,140)
Discontinued operations:
Income from
discontinued
operations 1,390 5,594 4,690 13,145
Net (loss) gain on
disposition of
discontinued
operations (6) - (1,037) 21,401
Provision for
impairment - - (3,700) (6,850)
--- --- ------ ------
Total discontinued
operations 1,384 5,594 (47) 27,696
----- ----- --- ------
Net income (loss) 7,309 1,746 12,216 23,556
Net (loss) income from
discontinued operations
attributable
to non-controlling
interests - LP units (30) (202) 14 (1,094)
Net income (loss)
attributable to
non-controlling
interests - partners'
share of consolidated
real estate ventures (47) (39) (69) (117)
Net income (loss)
attributable to non-
controlling interests -
LP units (84) 192 (179) 334
--- --- ---- ---
Net (loss) income
attributable to non-
controlling interests (161) (49) (234) (877)
---- --- ---- ----
Net income (loss)
attributable to
Brandywine Realty Trust 7,148 1,697 11,982 22,679
Preferred share
dividends (1,998) (1,998) (5,994) (5,994)
Amount allocated to
unvested restricted
shareholders (73) (226) (183) (620)
------ ----- ------ -------
Net income (loss)
available to Common
Shareholders $5,077 $(527) $5,805 $16,065
====== ===== ====== =======
PER SHARE DATA
Basic income per Common
Share $0.04 $(0.01) $0.05 $0.18
===== ====== ===== =====
Basic weighted-average
shares outstanding 128,582,498 87,695,892 106,273,509 87,423,108
Diluted income per
Common Share $0.04 $(0.01) $0.05 $0.18
===== ====== ===== =====
Diluted weighted-
average shares
outstanding 129,926,110 87,695,892 107,206,551 87,437,133
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,
2009 2008 2009 2008
---- ---- ---- ----
Reconciliation of Net
Income (Loss) to Funds
from Operations:
Net income (loss)
available to common
shareholders $5,077 $(527) $5,805 $16,065
Add (deduct):
Net income (loss)
attributable to non-
controlling
interests - LP
units 84 (192) 179 (334)
Amount allocated to
unvested restricted
shareholders 73 226 183 620
Net loss on
disposition of
undepreciated real
estate - - - 24
Net (loss) income
from discontinued
operations
attributable to non-
controlling
interests - LP
units 30 202 (14) 1,094
Net loss (gain) on
disposition of
discontinued
operations 6 - 1,037 (21,401)
Depreciation and
amortization:
Real property -
continuing
operations 38,441 36,382 116,290 109,573
Leasing costs
(includes
acquired
intangibles) -
continuing
operations 12,571 13,063 38,176 40,292
Real property -
discontinued
operations 473 1,280 1,755 8,847
Leasing costs
(includes
acquired
intangibles) -
discontinued
operations 39 347 403 3,603
Company's share
of unconsolidated
real estate
ventures 1,917 2,054 5,624 6,377
Partners' share
of consolidated
real estate
ventures (184) (217) (624) (661)
---- ---- ---- ----
Funds from operations $58,527 $52,618 $168,814 $164,099
Funds from
operations
allocable to
unvested restricted
shareholders (332) (296) (952) $(835)
---- ---- ---- -----
Funds from operations
available to common
share and unit
holders (FFO) $58,195 $52,322 $167,862 $163,264
======= ======= ======== ========
FFO per share - fully
diluted $0.44 $0.58 $1.53 $1.79
===== ===== ===== =====
FFO, excluding
provision for
impairments $58,195 $52,322 $171,562 $170,114
======= ======= ======== ========
FFO per share,
excluding provision
for impairments -
fully diluted $0.44 $0.58 $1.56 $1.87
===== ===== ===== =====
Weighted-average
shares/units
outstanding - fully
diluted 132,742,731 90,985,002 110,023,172 90,957,841
Distributions paid
per Common Share $0.10 $0.44 $0.50 $1.32
===== ===== ===== =====
Payout ratio of FFO
(Dividends paid per
Common Share divided /
FFO per Share) 22.7% 75.9% 32.7% 73.7%
Payout ratio of FFO,
excluding provision
for impairments 22.7% 75.9% 32.1% 70.6%
CASH AVAILABLE FOR
DISTRIBUTION (CAD):
Funds from operations
available to common
share and unit
holders $58,195 $52,322 $167,862 $163,264
Add (deduct):
Rental income from
straight-line rent,
including
discontinued
operations (2,684) (2,497) (7,037) (13,730)
Deferred market
rental income,
including
discontinued
operations (1,530) (1,807) (5,017) (6,493)
Company's share of
unconsolidated real
estate ventures'
straight-line and
deferred market
rent 205 129 414 284
Partners' share of
consolidated real
estate ventures'
straight-line and
deferred market
rent (1) (40) (5) (118)
Operating expense
from straight-line
rent 370 383 1,103 1,149
Net (loss) on
disposition of
undepreciated real
estate - - - (24)
Provision for
impairment of
discontinued
operations - - 3,700 6,850
Deferred
compensation costs 1,039 1,265 3,567 3,839
Fair market value
amortization -
mortgage notes
payable (363) (676) (1,151) (2,854)
Recognized hedge
activity 1,517 - 1,822 -
Debt discount
amortization -
exchangeable notes 866 1,100 2,632 3,282
Revenue maintaining
capital expenditures
Building
improvements (1,973) (957) (4,292) (2,536)
Tenant
improvements (5,854) (5,253) (16,956) (13,604)
Lease
commissions (2,637) (2,721) (10,655) (8,905)
------ ------ ------- ------
Total revenue
maintaining
capital
expenditures (10,464) (8,931) (31,903) (25,045)
Cash available for
distribution $47,150 $41,248 $135,987 $130,404
======= ======= ======== ========
CAD per share - fully
diluted $0.36 $0.45 $1.24 $1.43
===== ===== ===== =====
Weighted-average
shares/units
outstanding - fully
diluted 132,742,731 90,985,002 110,023,172 90,957,841
Distributions per
Common Share $0.10 $0.44 $0.50 $1.32
===== ===== ===== =====
Payout ratio of CAD
(Dividends paid per
Common Share / CAD
per Share) 27.8% 97.8% 40.3% 92.3%
BRANDYWINE REALTY TRUST
SAME STORE OPERATIONS - 3rd QUARTER
(unaudited and in thousands)
Of the 245 properties owned by the Company as of September 30, 2009,
a total of 232 properties ("Same Store Properties") containing an
aggregate of 22.6 million net rentable square feet were owned for the
entire three-month periods ended September 30, 2009 and 2008. Average
occupancy for the Same Store Properties was 89.0% during 2009 and 92.4%
during 2008. The following table sets forth revenue and expense
information for the Same Store Properties:
Three Months
Ended September 30,
2009 2008
---- ----
Revenue
Rents $113,429 $116,664
Tenant reimbursements 18,044 17,154
Termination fees 548 338
Other 598 527
--- ---
132,619 134,683
Operating expenses
Property operating expenses 39,545 41,013
Real estate taxes 13,200 13,437
------ ------
Net operating income $79,874 $80,233
======= =======
Net operating income - percentage change over
prior year -0.4%
Net operating income, excluding termination
fees & other $78,728 $79,368
======= =======
Net operating income, excluding termination
fees & other - percentage change over prior
year -0.8%
Net operating income $79,874 $80,233
Straight line rents (1,395) (1,747)
Above/below market rent amortization (1,464) (1,366)
Non-cash ground rent 370 383
--- ---
Cash - Net operating income $77,385 $77,503
======= =======
----
Cash - Net operating income - percentage
change over prior year -0.2%
----
Cash - Net operating income, excluding
termination fees & other $76,239 $76,638
======= =======
Cash - Net operating income, excluding
termination fees & other - percentage change
over prior year -0.5%
The following table is a reconciliation of
Net Income to Same Store net operating income:
Three Months
Ended September 30,
2009 2008
---- ----
Net income $7,309 $1,746
Add/(deduct):
Interest income (473) (221)
Interest expense 31,455 36,037
Deferred financing costs 1,579 1,092
Recognized hedge activity 1,517 -
Equity in income of real estate ventures (1,331) (1,059)
Depreciation and amortization 51,422 50,019
Gain on early extinguishment of debt (5,073) -
General & administrative expenses 5,018 6,863
Total discontinued operations (1,384) (5,594)
------ ------
Consolidated net operating income 90,039 88,883
Less: Net operating income of non same store
properties (5,415) (2,654)
Less: Eliminations and non-property specific
net operating income (4,750) (5,996)
------ ------
Same Store net operating income $79,874 $80,233
======= =======
BRANDYWINE REALTY TRUST
SAME STORE OPERATIONS - YEAR
(unaudited and in thousands)
Of the 245 properties owned by the Company as of September 30, 2009,
a total of 232 properties ("Same Store Properties") containing an
aggregate of 22.6 million net rentable square feet were owned for the
entire nine month periods ended September 30, 2009 and 2008. Average
occupancy for the Same Store Properties was 90.2% during 2009 and 92.8%
during 2008. The following table sets forth revenue and expense
information for the Same Store Properties:
Nine Months Ended
September 30,
2009 2008
---- ----
Revenue
Rents $345,444 $352,821
Tenant reimbursements 53,684 52,350
Termination fees 1,625 4,462
Other 1,312 1,425
----- -----
402,065 411,058
Operating expenses
Property operating expenses 118,367 118,378
Real estate taxes 39,765 41,497
------ ------
Net operating income $243,933 $251,183
======== ========
Net operating income - percentage change over
prior year -2.9%
Net operating income, excluding termination
fees & other $240,996 $245,296
======== ========
Net operating income, excluding termination
fees & other - percentage change over prior
year -1.8%
Net operating income $243,933 $251,183
Straight line rents (4,293) (11,829)
Above/below market rent amortization (4,809) (4,376)
Non-cash ground rent 1,103 1,149
----- -----
Cash - Net operating income $235,934 $236,127
======== ========
Cash - Net operating income - percentage
change over prior year -0.1%
Cash - Net operating income, excluding
termination fees & other $232,997 $230,240
======== ========
Cash - Net operating income, excluding
termination fees & other - percentage change
over prior year 1.2%
The following table is a reconciliation of Net Income to Same Store
net operating income:
Nine Months Ended
September 30,
2009 2008
---- ----
Net Income $12,216 $23,556
Add/(deduct):
Interest income (1,695) (603)
Interest expense 102,045 109,822
Deferred financing costs 4,725 3,798
Recognized hedge activity 1,822 -
Equity in income of real estate ventures (3,450) (3,838)
Depreciation and amortization 155,852 151,627
Net loss on sale of undepreciated real estate - 24
Gain on early extinguishment of debt (23,724) (3,106)
General & administrative expenses 15,491 17,902
Total discontinued operations 47 (27,696)
-- -------
Consolidated net operating income 263,329 271,486
Less: Net operating income of non same store
properties (9,158) (7,187)
Less: Eliminations and non-property specific
net operating income (loss) (10,238) (13,116)
------- -------
Same Store net operating income $243,933 $251,183
======== ========
SOURCE Brandywine Realty Trust
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Copyright © 2008
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