Brandywine Realty Trust Announces Fourth Quarter 2001 Earnings.Business Editors NEWTOWN Newtown, town (1990 pop. 20,779), Fairfield co., SW Conn., on the Housatonic; inc. 1711. Pressure gauges, plastics, and paper and metal products are made, and dairy and fruit farms are in the area. SQUARE, Pa.--(BUSINESS WIRE)--Feb. 28, 2002 Brandywine Realty Trust Brandywine Realty Trust (NYSE: BDN) is a real estate development trust (REIT) in the United States that buys, sells, leases and manages approximately 225 commercial properties, no more than 25 industrial parcels of land, mixed-use property, and over 200 acres of undeveloped (BDN-NYSE) announced today that funds from operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. (FFO FFO See: Funds from operations ), excluding non-recurring charges, for the fourth quarter of 2001 increased to $32.6 million or $.69 per share from $30.0 million or $.63 per share for the fourth quarter of 2000, an increase of 9.5%. FFO, excluding non-recurring charges, for the year was $127.3 million or $2.69 per share for 2001 as compared to $120.5 million or $2.54 per share for 2000. FFO, after non-recurring charges, was $.55 per share for the fourth quarter of 2001 compared to $.63 per share for the same period in 2000 and $2.55 per share for the year 2001 compared to $2.54 for the year 2000. FFO per share is calculated on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis which assumes full conversion of the convertible preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. . "We are very pleased with our 2001 results and are delighted that we exceeded our key financial and operational benchmarks. Our 2001 tenant retention rate of 77.5% exceeded our stretch goal of 75% established in 2000. We believe this retention rate reflects the quality and location of our properties as well as the strength of our marketing and management staffs. Our leverage neutral capital strategy maintained our debt level within our targeted range. In addition, our capital recycling recycling, the process of recovering and reusing waste products—from household use, manufacturing, agriculture, and business—and thereby reducing their burden on the environment. program enables us to continuously improve our asset quality, market concentration and operational efficiency," commented Gerard Gerard is a male forename of Germanic origin, variations of which exist in many Germanic and Romance languages. The name derives from Old Germanic 'ger' ('spear') and 'hard' ('hard/strong/brave'). Its meaning is 'strong/brave with the spear'. H. Sweeney Sweeney in poems by T. S. Eliot, symbolizes the sensual, brutal, and materialistic 20th-century man. [Br. Poetry, Benét, 978] See : Virility , Brandywine's President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Our management reorganization will further sharpen sharp·en tr. & intr.v. sharp·ened, sharp·en·ing, sharp·ens To make or become sharp or sharper. sharp our operational, tenant service and investment activities, while effectively reducing our general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. ." Brandywine Realty Trust Summary Portfolio Performance - Anthony Nichols, Sr., the Company's Chairman, will transition into a non-management, non-executive role. In his new capacity, Mr. Nichols will be available to assist Jerry Sweeney and the Board of Trustees. - Jeff DeVouno, currently Senior Vice President of Pennsylvania Operations, will assume additional responsibility for the Central/Southern New Jersey operations. In these efforts, he will be assisted by Barbara Yamarick, Senior Vice President of Tenant Services; Anthony Nichols, Jr., Senior Vice President of Leasing; Phil Schenkel, Vice President of Operations; and Jeff Weinstein, Vice President of Construction. - George Sowa, currently Senior Vice President of Central/Southern New Jersey Operations, will assume responsibility for the Company's investment activities including its sales and dispositions efforts, Corporate Services Program and structured financing activities. Management Reorganization The Company has recently implemented several changes within its executive ranks: - Anthony Nichols, Sr., the Company's Chairman, will transition into a non-management, non-executive role. In his new capacity, Mr. Nichols will be available to assist Jerry Sweeney and the Board of Trustees. - Jeff DeVouno, currently Senior Vice President of Pennsylvania Operations, will assume additional responsibility for the Central/Southern New Jersey operations. In these efforts, he will be assisted by Barbara Yamarick, Senior Vice President of Tenant Services; Anthony Nichols, Jr., Senior Vice President of Leasing; Phil Schenkel, Vice President of Operations; and Jeff Weinstein, Vice President of Construction. - George Sowa, currently Senior Vice President of Central/Southern New Jersey Operations, will assume responsibility for the Company's investment activities including its sales and dispositions efforts, Corporate Services Program and structured financing activities. The Company is in advanced discussions with several candidates for a Chief Financial Officer and anticipates making an announcement on a new hire or an internal allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as of responsibilities in the near future. Non-Recurring Charge During the fourth quarter of 2001, the Company recorded a $6.6 million non-recurring charge related to the conversion of Mr. Anthony Nichols, Sr., the Company's Chairman, to a non-executive, non-managerial status and to reflect the write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of its investment in US Realtel, Inc. The charge relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Mr. Nichols, Sr. reflects the Company's obligation per his existing employment contract, includes the vesting Vesting The process by which employees accrue non-forfeitable rights over employer contributions that are made to the employee's qualified retirement plan account. Notes: of the Founders Grant awarded and deemed earned in 1998, the vesting of an additional restricted stock award and the forgiveness Forgiveness Angelica, Suor is forgiven by the Virgin Mary for ill-considered suicide. [Ital. Opera: Puccini, Suor Angelica, Westerman, 364] Bishop of Digne of his executive stock loan. The Company also wrote-down its $2.5 million investment in US Realtel, a rooftop management and broadband service provider An ISP, telephone company, cable company or other carrier that offers high-speed communications to homes and businesses, typically for Internet access. Cable modems, DSL and T1 lines are the common technologies. See broadband, cable modem, DSL and T1. . While US Realtel continues its operations, recently acquired Cypress Cypress, city, United States Cypress (sī`prəs), city (1990 pop. 42,655), Orange co., S Calif. near Long Beach; inc. 1956. Forest Lawn–Cypress, a branch of the famous cemetery in Glendale, Calif. Communications and is executing its strategy, the Company believes this write-down to be prudent given the significant multiple compression Multiple Compression The effect that arises when a stock trades at a certain multiple and, while earnings may be strong, the stock price doesn't move up (or even goes down). in the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. industry. US Realtel is the Company's only technology investment. Sales and Acquisitions During 2001, the Company acquired $247 million of properties, including the Prentiss Asset Exchange, and sold $136 million of properties generating a net gain of $4.5 million. Subsequent to 2001, the Company has closed on or reached a definitive agreement on the sale of 19 properties that contain an aggregate of 1.3 million net rentable square feet for approximately $126 million generating a net gain of approximately $12.9 million. The Company has also reached a definitive agreement to purchase four office buildings containing an aggregate of 360,000 net rentable square feet located in Plymouth Meeting, Pennsylvania Plymouth Meeting is a census-designated place (CDP) in Montgomery County, Pennsylvania, United States. The population was 5,593 at the 2000 census. It is home to the Colonial School District as well as the Plymouth Meeting Mall. . Property Development As of December 31, 2001, the Company's development pipeline, totaling approximately 580,000 square feet with a projected cost of $107.9 million, is 49% pre-leased and is expected to generate a stabilized sta·bi·lize v. sta·bi·lized, sta·bi·liz·ing, sta·bi·liz·es v.tr. 1. To make stable or steadfast. 2. yield of 12.5%. These projects are scheduled for completion on various dates through July 2002. During the fourth quarter of 2001, the Company successfully delivered its Gateway Centre II project in Richmond, Virginia Richmond IPA: [ɹɯʒmɐnɖ] is the capital of the Commonwealth of Virginia, in the United States. , which is 100% leased to Phillip Morris. Consolidated Financial Results The Company reported net income before non-recurring charges, net gain on sales, minority interest and extraordinary item of $12.3 million for the fourth quarter of 2001 compared to $11.2 million for the fourth quarter of 2000 and $45.5 million for the year ended December 31, 2001 compared to $50.1 million for 2000. After the impact of non-recurring charges, net income before net gain on sales, minority interest and extraordinary item was $5.7 million and $38.9 million for the three- and twelve-month periods ended December 31, 2001. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Leasing Activity Leases expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. or were terminated for approximately 1.5 million square feet during the fourth quarter of 2001. Leases were renewed for 1.0 million square feet and new leases were signed for 99,000 square feet. Net effective rental rate increases were 5.5% on renewals and 6.0% on new leases on a cash basis and 7.6% on renewals and 10.0% on new leases on a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis. The total property portfolio was 92.2% leased as of December 31, 2001. Same store growth (231 properties, including 15.3 million square feet) was 1.2% on a cash basis and 0.9% on a GAAP basis for the fourth quarter of 2001. Distributions On December 12, 2001, the Board of Trustees board of trustees Politics The posse of thugs who oversee an institution's administration. See Board of directors. declared a regular quarterly dividend distribution of $0.44 per share that was paid on January 15, 2002 to shareholders of record as of December 31, 2001. Based on fourth quarter 2001 results, Brandywine achieved a payout ratio Payout Ratio The percentage of earnings paid out in dividends. It is calculated by dividing dividends per share by earnings per share. Notes: The payout ratio indicates how well earnings support the dividend payments: the lower the ratio, the more secure the dividend. (excluding non-recurring charges) of 63.2% of FFO and 71.8% of CAD CAD: see computer-aided design. (Computer-Aided Design) Using computers to design products. CAD systems are high-speed workstations or desktop computers with CAD software. . Earnings Guidance The Company is estimating FFO per diluted share in the range of $.63 to $.65 per share for the first quarter 2002 and a range of $2.72 to $2.82 per share for the year 2002. These estimates reflect management's view of current market conditions and certain assumptions with regard to rental rates, occupancy levels and various other assumptions and projections. The estimates for the first quarter and the year 2002 may be positively or negatively impacted by the timing and terms of property sales and the corresponding use of the proceeds from these sales. The Company intends to use the proceeds from such sales to invest in property acquisitions and development projects in its core markets, fund stock repurchases Stock repurchase A firm's repurchase of outstanding shares of its common stock. and repay debt. Note: Estimates of future FFO per share and certain other statements in this release constitute "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance, achievements or transactions of the Company and its affiliates to be materially different from any future results, performance, achievements or transactions expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors relate to, among others: the Company's ability to lease vacant space and to renew or relet space under expiring ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. leases at expected levels, competition with other real estate companies for tenants, the potential loss or bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most of major tenants, interest rate levels, the availability of debt and equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. , competition for real estate acquisitions and risks of acquisitions, dispositions and developments, including the cost of construction delays and cost overruns Noun 1. cost overrun - excess of cost over budget; "the cost overrun necessitated an additional allocation of funds in the budget" cost - the total spent for goods or services including money and time and labor , unanticipated operating and capital costs, the Company's ability to obtain adequate insurance, including coverage for terrorist acts, dependence upon certain geographic markets, and general and local economic and real estate condition, including the extent and duration of adverse changes that affect the industries in which the Company's tenants compete. Additional information on factors which could impact the Company and the forward-looking statements contained herein are included in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Reports on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. . The Company assumes no obligation to update or supplement forward-looking statements that become untrue un·true adj. un·tru·er, un·tru·est 1. Contrary to fact; false. 2. Deviating from a standard; not straight, even, level, or exact. 3. Disloyal; unfaithful. because of subsequent events.
BRANDYWINE REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
December 31, December 31,
2001 2000
----------- -----------
(restated)
ASSETS
Real estate investments:
Operating properties $ 1,893,039 $ 1,754,895
Accumulated depreciation (230,793) (179,558)
----------- -----------
1,662,246 1,575,337
Construction-in-progress 111,378 59,979
Land held for development 39,285 39,025
----------- -----------
1,812,909 1,674,341
Cash and cash equivalents 13,459 16,060
Escrowed cash 16,311 14,788
Accounts receivable, net 6,394 8,065
Accrued rent receivable 25,222 21,221
Investment in marketable securities 10,735 769
Investment in joint ventures, at equity 19,067 33,566
Deferred costs, net 24,261 19,828
Other assets 31,845 34,382
----------- -----------
Total assets $ 1,960,203 $ 1,823,020
=========== ===========
LIABILITIES AND BENEFICIARIES' EQUITY
Mortgage notes payable $ 614,840 $ 527,877
Borrowings under Credit Facility 394,325 338,325
Accounts payable and accrued expenses 39,678 22,094
Distributions payable 21,525 20,428
Tenant security deposits and deferred rents 22,290 17,232
Other liabilities 15,555 -
---------- -----------
Total liabilities 1,108,213 925,956
Minority interest 143,834 144,896
Beneficiaries' equity:
Preferred Shares:
7.25% Series A Preferred Shares,
$0.01 par value; shares
authorized-10,000,000; issued and
outstanding-750,000 in 2000 and 1999 8 8
8.75% Series B Preferred Shares,
$0.01 par value; shares
authorized-10,000,000; issued and
outstanding-4,375,000 in 2000 and 1999 44 44
Common Shares of beneficial interest,
$0.01 par value; shares
authorized-100,000,000;
issued and outstanding-35,541,925
in 2001 and 35,681,314 in 2000 355 357
Additional paid-in capital 848,214 847,538
Share warrants 401 908
Cumulative earnings 163,502 131,256
Accumulated other comprehensive loss (4,587) (1,731)
Cumulative distributions (299,781) (226,212)
----------- -----------
Total beneficiaries' equity 708,156 752,168
----------- -----------
Total liabilities
and beneficiaries' equity $ 1,960,203 $ 1,823,020
=========== ===========
BRANDYWINE REALTY TRUST
SELECTED FINANCIAL DATA
(unaudited, in thousands, except per share data)
Quarter Ended Year Ended
December 31, December 31,
-------------------- --------------------
2001 2000 2001 2000
--------- --------- --------- ---------
(restated) (restated)
Revenue
Rents $ 65,394 $ 61,471 $ 262,780 $ 245,460
Tenant reimbursements 8,275 8,201 37,251 34,506
Other 3,707 2,428 10,794 11,554
-------- -------- --------- ---------
Total revenue 77,376 72,100 310,825 291,520
Operating Expenses
Property operating expenses 20,010 16,761 80,543 71,365
Real estate taxes 6,902 6,755 27,767 26,200
Interest 16,116 16,272 66,385 64,783
Depreciation and amortization 19,102 17,301 78,189 67,646
Administrative expenses 3,461 4,511 15,178 14,194
Non-recurring charges 6,600 - 6,600 -
-------- -------- -------- ---------
Total operating expenses 72,191 61,600 274,662 244,188
-------- -------- -------- ---------
Income before equity in
income of real estate
ventures, net gain on
sales, minority interest
and extraordinary item 5,185 10,500 36,163 47,332
Equity in income
of real estate ventures 545 690 2,768 2,790
-------- -------- -------- ---------
Income before net gain on
sales, minority interest
and extraordinary item 5,730 11,190 38,931 50,122
Net gain on sales of
interests in real estate 3,227 2,074 4,524 11,638
Minority interest (2,069) (2,340) (8,622) (9,602)
-------- -------- -------- ---------
Income before
extraordinary item 6,888 10,924 34,833 52,158
Extraordinary item - - (1,111) -
-------- -------- -------- ---------
Net income 6,888 10,924 33,722 52,158
Income allocated
to Preferred Shares (2,975) (2,975) (11,906) (11,906)
-------- -------- -------- ---------
Income allocated
to Common Shares $ 3,913 $ 7,949 $ 21,816 $ 40,252
======== ======== ======== =========
Funds From Operations (FFO):
Income before gains on
sales, minority interest
and extraordinary item $ 5,730 $ 11,190 $ 38,931 $ 50,122
Non-recurring charges 6,600 - 6,600 -
-------- -------- -------- ---------
Income before gains on sales,
minority interest,
extraordinary item
and non-recurring charges 12,330 11,190 45,531 50,122
Add:
Depreciation:
Real property 17,503 16,259 73,031 64,041
Real estate ventures 1,199 788 3,479 2,513
Amortization of leasing costs 1,599 861 5,158 2,971
Gain on sale of land interests - 862 881 862
Less:
Gain included in
equity in income of
real estate ventures - - (785) -
-------- -------- -------- --------
Funds from
Operations, excluding
non-recurring charges $ 32,631 $ 29,960 $ 127,295 $ 120,509
======== ======== ========= =========
Funds from Operations $ 26,031 $ 29,960 $ 120,695 $ 120,509
======== ======== ========= =========
Number of
weighted-average
Common Shares 47,197,842 47,339,295 47,297,302 47,449,673
========== ========== ========== ==========
FFO per weighted-average
Common Share, excluding
non-recurring charges $ 0.69 $ 0.63 $ 2.69 $ 2.54
======= ======= ======= =======
FFO per weighted-average
Common Share $ 0.55 $ 0.63 $ 2.55 $ 2.54
======= ======= ======= =======
Fourth Quarter Earnings Call and Supplemental Information Package Brandywine President and CEO, Gerard H. Sweeney, will be hosting a conference call on Friday, March 1, 2002 at 1:00 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. . Call 1-877-679-9045. After the conference, a taped replay of the call can be accessed 24 hours a day through Friday, March 15, 2002 by calling 1-800-615-3210 - access code 5814361. The Company has prepared a Supplemental Information package that includes financial results and operational statistics to support the announcement of third quarter earnings. The Supplemental Information package is available through the Company's website @ brandywinerealty.com. The Supplemental Information Package will be found in both the "About The Company" section and the "Investor Relations Investor relations The process by which the corporation communicates with its investors. - Annual Reports" section of the web page. Brandywine Realty Trust, with headquarters in Newtown Square and regional offices in King of Prussia King of Prussia, industrialized suburban area (1990 pop. 18,406), Montgomery co., SE Pa. It has glass and steel fabricating, food processing, printing and publishing, and varied manufacturing (textiles, liquified petroleum gas, water-treatment and electrical , PA; Mount Laurel Laurel, cities, United States Laurel. 1 Town (1990 pop. 19,438), Prince Georges co., central Md., about halfway between Washington, D.C., and Baltimore; patented in the late 1600s, inc. 1870. , NJ; and Richmond, VA, is one of the Mid-Atlantic Region's largest full-service real estate companies. Brandywine owns, manages or has an ownership interest in 303 office and industrial properties, aggregating 20.5 million square feet. |
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