Brandywine Realty Trust Announces Fourth Quarter and Full Year 2002 Results.Business Editors PLYMOUTH Plymouth, city, England Plymouth, city (1991 pop. 238,583) and district, Devon, SW England, on Plymouth Sound. The three towns that Plymouth has comprised since 1914 are Plymouth, Stonehouse, and Devonport. MEETING, Pa.--(BUSINESS WIRE)--Feb. 27, 2003 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 fully diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of (EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ) was $0.27 for the fourth quarter of 2002, an increase of $0.17 per share as compared to $0.10 for the fourth quarter of 2001. Net income was $12.7 million for the fourth quarter of 2002, an increase of $5.8 million, as compared to $6.9 million for the fourth quarter of 2001. The increase in net income and EPS in the fourth quarter of 2002 as compared to the similar period in 2001, was primarily due to $6.6 million of non-recurring charges incurred in the fourth quarter of 2001. Fully 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. EPS was $1.40 for the year 2002, an increase of $0.83 per share as compared to $0.57 for the year 2001. Net income was $63.0 million for year 2002, an increase of $29.3 million, as compared to $33.7 million for the year 2001. The increase in net income in 2002 was primarily the result of the net acquisition, development and disposition Act of disposing; transferring to the care or possession of another. The parting with, alienation of, or giving up of property. The final settlement of a matter and, with reference to decisions announced by a court, a judge's ruling is commonly referred to as disposition, regardless of activity during 2002, a decrease in depreciation and amortization expense in 2002 resulting from the change in the estimated lives of various buildings from 25 to 40 years and the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. 2001 non-recurring charges. Fully diluted 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 ) were $31.7 million or $0.68 per share for the fourth quarter of 2002 compared to $32.6 million or $0.69 per share for the fourth quarter of 2001. The Company ended the quarter with its portfolio 91.0% occupied oc·cu·py tr.v. oc·cu·pied, oc·cu·py·ing, oc·cu·pies 1. To fill up (time or space): a lecture that occupied three hours. 2. To dwell or reside in. 3. and experienced same-store revenue growth for the fourth quarter of 2002 of 1.9% as compared to the same quarter of 2001. FFO for the year 2002 was $126.4 million or $2.69 per share as compared to $127.3 million or $2.69 per share for 2001. FFO per share is calculated on a diluted 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 encouraged by our fourth quarter results given the uncertain economic climate. Our sound business strategy and seasoned management team, along with our commitment to tenant retention and our high-quality assets will benefit us in the challenging leasing environment we expect will remain in 2003. This economy provides wonderful opportunities for companies with strong operating platforms to outperform Outperform An analyst recommendation meaning a stock is expected to do slightly better than the market return. Notes: Exact definitions vary by brokerage, but in general this rating is better than neutral and worse than buy or strong buy. ," 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 Chief Executive Officer. Brandywine Realty Trust Summary Portfolio Performance -- FFO payout ratio was 64.5% for the quarter and 65.3% for the year -- Cash available for distribution (CAD) payout ratio was 79.7% for the quarter and 80.6% for the year -- Decrease in same-store net operating income (NOI) for the quarter of 5.2% with rental income on a cash basis and 4.2% with rental income on a straight-line basis (based on 225 properties or 93.2% of the portfolio) -- Decrease in same-store net operating income (NOI) for the year of 3.7% with rental income on a cash basis and 4.0% with rental income on a straight-line basis (based on 194 properties or 82.3% of the portfolio) -- Quarterly new lease rental rate decrease of 2.1% on a cash basis and an increase of 1.6% on a straight-line basis -- Quarterly rental rate increases on renewals were 0.3% on a cash basis and 3.7% on a straight-line basis -- YTD rental rate increases on new leases were 0.3% on a cash basis and 4.5% on a straight-line basis -- YTD rental rate increases on renewals were 3.5% on a cash basis and 7.1% on a straight-line basis -- Quarterly retention rate was 86.9% and YTD retention rate was 78.0% -- Portfolio was 91.0% occupied and 91.6% leased as of December 31, 2002 -- Leases expired or were terminated for approximately 785,000 square feet during the quarter -- Leases were renewed for 682,000 square feet during the quarter -- New leases were signed during the quarter for 228,000 square feet and for 703,000 square feet YTD -- The Company's three development projects consist of approximately 428,000 square feet that were 43% pre-leased as of December 31, 2002. Distributions On December December: see month. 20, 2002, the Board of Trustees board of trustees Politics The posse of thugs who oversee an institution's administration. See Board of directors. declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. a regular quarterly dividend distribution of $0.44 per common share that was paid on January January: see month. 15, 2003 to shareholders of record as of December 31, 2002. 2003 Financial Outlook As a result of economic conditions in the Company's markets, we continue to experience operational challenges that result in difficult earnings visibility. Our expectations for 2003 are based on the following key factors: -- A slight decline in average occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy from levels achieved in 2002 -- A decrease in same-store net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. ranging from 1.5% to 3.0% -- Operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: and general and administrative margins consistent with those experienced in 2002 Based on these key assumptions, we affirm our guidance from our October October: see month. 29, 2002 press release and continue to expect the first quarter 2003 FFO to be $0.64 - $0.66 per share and EPS to be $0.23 - $0.26 per share and full year 2003 FFO to be $2.62 to $2.69 and EPS to be $1.01 - $1.10 per share. These estimates reflect management's view of current market conditions and certain assumptions with regard to rental RENTAL. A roll or list of the rents of an estate containing the description of the lands let, the names of the tenants, and other particulars connected with such estate. This is the same as rent roll, from which it is said to be corrupted. rates, occupancy levels and various other assumptions and projections. The estimates may be positively or negatively impacted primarily by the timing and terms of property leases. 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. Estimates of future FFO per share and certain other statements in this release constitute "forward-looking statements" 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 Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. 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 geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. markets, and general and local economic and real estate conditions, 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. Funds From Operations Management believes FFO should be considered in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with net income and cash flows to facilitate a clear understanding of our operating results. FFO should not be considered as an alternative to net income, as a measure of our financial performance or as an alternative to cash flows from operating activities as a measure of liquidity. FFO does not represent cash generated from operating activities in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting and is not necessarily indicative indicative: see mood. of cash available to fund cash needs. The principal difference between net income and FFO is that depreciation and amortization are not components of FFO. The Company follows the National Association of Real Estate Investment Trust's definition of FFO, which may differ from the methodology for computing computing - computer FFO used by other REIT's, and accordingly, the Company's calculation of FFO may not be comparable to such other REIT's.
BRANDYWINE REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
December 31, December 31,
2002 2001
--------------------------------
ASSETS
Real estate investments:
Operating properties $1,889,158 $1,893,039
Accumulated depreciation (245,230) (230,793)
--------------------------------
1,643,928 1,662,246
Construction-in-progress 58,127 111,378
Land held for development 43,075 39,285
--------------------------------
1,745,130 1,812,909
Cash and cash equivalents 26,801 13,459
Escrowed cash 16,318 16,311
Accounts receivable, net 3,657 6,394
Accrued rent receivable 28,333 25,222
Investment in marketable securities 11,872 10,735
Assets held for sale 8,517 -
Investment in joint ventures, at equity 14,842 19,067
Deferred costs, net 29,271 24,261
Other assets 34,547 31,845
-------------------------------
Total assets $1,919,288 $1,960,203
===============================
LIABILITIES AND BENEFICIARIES' EQUITY
Mortgage notes payable $597,729 $614,840
Borrowings under Credit Facility 307,000 394,325
Unsecured term loan 100,000 -
Accounts payable and accrued expenses 27,576 35,054
Distributions payable 21,186 21,525
Tenant security deposits and deferred
rents 22,276 22,290
Other liabilities 22,006 20,179
Liabilities related to assets held for
sale 20 -
------------------------------
Total liabilities 1,097,793 1,108,213
Minority interest 135,052 143,834
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 2002
and 2001 8 8
8.75% Series B Preferred Shares, $0.01 par
value; shares authorized-10,000,000;
issued and outstanding-4,375,000
in 2002 and 2001 44 44
Common Shares of beneficial interest,
$0.01 par value; shares authorized-
100,000,000; issued and outstanding-
35,226,315 in 2002 and 35,640,935 in
2001 351 355
Additional paid-in capital 841,660 848,214
Share warrants 401 401
Cumulative earnings 225,010 163,502
Accumulated other comprehensive loss (6,402) (4,587)
Cumulative distributions (374,629) (299,781)
--------------------------------
Total beneficiaries' equity 686,443 708,156
--------------------------------
Total liabilities and beneficiaries'
equity $1,919,288 $1,960,203
================================
BRANDYWINE REALTY TRUST
SELECTED FINANCIAL DATA
(unaudited, in thousands, except share and per share data)
Quarter Ended Year Ended
December 31, December 31,
-----------------------------------------------
2002 2001 2002 2001
-----------------------------------------------
Revenue
Rents $65,653 $57,855 $253,338 $233,612
Tenant reimbursements 9,254 7,146 33,624 32,470
Other 1,677 3,543 9,768 10,464
-----------------------------------------------
Total revenue 76,584 68,544 296,730 276,546
Operating Expenses
Property operating
expenses 20,392 18,082 76,746 72,492
Real estate
taxes 6,950 5,720 25,854 23,077
Interest 15,358 16,116 63,522 66,385
Depreciation and
amortization 15,339 16,750 58,632 69,047
Administrative
expenses 2,992 3,461 14,804 15,177
Non-recurring
charges - 6,600 - 6,600
Unrealized loss
on assets
held-for-sale 665 - 665 -
-----------------------------------------------
Total operating
expenses 61,696 66,729 240,223 252,778
-----------------------------------------------
Income from continuing
operations before equity
in income of real
estate ventures, net gain
on sales of interests in
real estate, minority
interest and extraordinary
item 14,888 1,815 56,507 23,768
Equity in income of
real estate ventures (65) 545 987 2,768
-----------------------------------------------
Income from continuing
operations
before net gain
on sales of
interests
in real estate,
minority interest
and extraordinary
item 14,823 2,360 57,494 26,536
Net gain on sales of
interests in real
estate - 3,227 - 4,524
Minority interest
attributable to
continuing operations (2,332) (1,877) (9,283) (7,915)
-----------------------------------------------
Income from continuing
operations 12,491 3,710 48,211 23,145
Income from
discontinued
operations, net of
minority interest 256 3,178 6,694 11,688
Net gain on disposition
of discontinued
operations, net of
minority interest - - 8,079 -
-----------------------------------------------
Income before
extraordinary item 12,747 6,888 62,984 34,833
Extraordinary item - - - (1,111)
-----------------------------------------------
Net Income 12,747 6,888 62,984 33,722
Income allocated to
Preferred Shares (2,976) (2,975) (11,906) (11,906)
-----------------------------------------------
Income allocated to
Common Shares $9,771 $3,913 $51,078 $21,816
===============================================
Earnings per Common
Share after
discontinued
operations:
Basic income per Common
Share $0.27 $0.10 $1.40 $0.57
===============================================
Basic weighted-average
shares outstanding 35,226,315 35,546,344 35,513,813 35,646,571
===============================================
Diluted income per
Common Share $0.27 $0.10 $1.40 $0.57
===============================================
Diluted weighted-
average shares
outstanding 35,251,565 35,576,844 35,548,043 35,674,380
===============================================
BRANDYWINE REALTY TRUST
SELECTED FINANCIAL DATA
(unaudited, in thousands, except share and per share data)
Quarter Ended Year Ended
December 31, December 31,
-----------------------------------------------
2002 2001 2002 2001
-----------------------------------------------
Funds From Operations
(FFO):
Income before gains on
sales of interests in
real estate, minority
interest and extraordinary
item:
Continuing
operations $14,823 $2,360 $57,494 $26,536
Discontinued
operations 270 3,370 7,080 12,395
Non-recurring
charges - 6,600 - 6,600
-----------------------------------------------
Income before gains on
sales, minority
interest,
extraordinary item and
non-recurring charges 15,093 12,330 64,574 45,531
Add:
Depreciation:
Real property 13,525 17,503 52,944 73,031
Real estate
ventures 639 1,199 2,422 3,479
Amortization
of leasing
costs 1,814 1,599 5,820 5,158
Gain on sale
of land
interests - - - 881
Unrealized
loss on
assets
held-for-sale 665 - 665 -
Less:
Gain included
in equity in
income of
real estate
ventures - - - (785)
-----------------------------------------------
Funds from operations,
excluding non-
recurring charges $31,736 $32,631 $126,425 $127,295
===============================================
Number of weighted-
average Common Shares 46,508,350 47,197,842 46,928,420 47,297,302
===============================================
FFO per weighted-
average Common Share,
excluding non-
recurring charges $0.68 $0.69 $2.69 $2.69
=========== =========== =========== ===========
FFO per weighted-
average Common Share $0.68 $0.55 $2.69 $2.55
=========== =========== =========== ===========
Payout ratio of FFO (1) 64.5% 63.6% 65.3% 63.2%
Cash Available for
Distribution (CAD):
FFO (excluding non-
recurring charges) $31,736 $32,631 $126,425 $127,295
Add (deduct):
Rental income
from straight-line
rents (1,719) (1,498) (5,930) (6,206)
Deferred market rental
income (459) - (459) -
Amortization:
Deferred financing
costs 252 540 1,795 2,679
Deferred compensation
costs 765 982 3,182 3,710
Second generation
capital
expenditures (2):
Building and
tenant
improvements (3,235) (2,996) (16,548) (12,677)
Lease commissions (1,661) (718) (6,042) (3,577)
-----------------------------------------------
Cash available for
distribtution $25,679 $28,941 $102,423 $111,224
=========== =========== =========== ===========
FFO per weighted-
average Common Share $0.55 $0.61 $2.18 $2.35
=========== =========== =========== ===========
Payout ratio of CAD (1) 79.7% 71.8% 80.6% 72.3%
Dividend per Common
Share $0.44 $0.44 $1.76 $1.70
=========== =========== =========== ===========
(1) Payout ratio is calculated by dividing dividend per Common
Share by FFO or CAD per weighted-average Common Share
(2) Represents expenditures incurred during the period (regardless
if lease commencement is after quarter end). Excludes first generation
costs, which consist of capital expenditures, tenant improvements and
leasing commissions associated with development and purchase price
adjustments relating to acquisitions (including seller escrows,
purchase price reduction or costs anticipated to initially lease-up
acquired properties).
Fourth Quarter Earnings Call and Supplemental Information Package Brandywine Bran·dy·wine A creek of southeast Pennsylvania and northern Delaware. It was the site of a major defeat of the Continental Army on September 11, 1777, thus allowing British troops to enter Philadelphia on September 27. 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. , Gerard H. Sweeney, will be hosting a conference call on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , February February: see month. 28, 2003 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 14, 2003 by calling 1-800-615-3210 - access code 6375008. The Company has prepared a Supplemental Information package that includes financial results and operational statistics to support the announcement of fourth quarter earnings. The Supplemental Information package is available through the Company's website @www.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 Plymouth Meeting, PA and regional offices in 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 Richmond, cities, United States Richmond. 1 City (1990 pop. 87,425), Contra Costa co., W Calif., on San Pablo Bay, an inlet of San Francisco Bay; inc. 1905. , VA, is one of the Mid-Atlantic Adj. 1. mid-Atlantic - of a region of the United States generally including Delaware; Maryland; Virginia; and usually New York; Pennsylvania; New Jersey; "mid-Atlantic states" middle Atlantic Region's largest full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. real estate companies. Brandywine owns, manages or has an ownership interest in 288 office and industrial properties, aggregating 19.9 million square feet. |
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