Brandywine Realty Trust Announces Fourth Quarter and Full Year 2004 Earnings.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. -- 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 (NYSE NYSE See: New York Stock Exchange :BDN BDN Borland Developer Network BDN Bangor Daily News (Maine, USA) BDN Business Development Network BDN Bell Data Network BDN Bulk Data Network BDN Busy Doing Nothing (band) BDN Buffered Delta Network ) announced today that 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 $0.11 for the fourth quarter of 2004, a decrease of $0.35 per share as compared to $0.46 for the fourth quarter of 2003. Net income was $8.5 million for the fourth quarter, a decrease of $33.3 million, as compared to $41.8 million for the fourth quarter of 2003. The decrease in net income in the fourth quarter of 2004 as compared to the similar period in 2003 was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to $26.4 million of aggregate net gains on the sale of interests in real estate 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 of discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. in 2003 as compared to $0.5 million in 2004. 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 $1.15 for the year ended December December: see month. 31, 2004, a decrease of $0.28 per share as compared to $1.43 per share for the year ended December 31, 2003. Net income was $60.3 million for the year ended December 31, 2004, a decrease of $26.4 million, as compared to $86.7 million for the year ended December 31, 2003. The decrease in net income was primarily the result of $30.2 million of aggregate net gains on the sale of interests in real estate and disposition of discontinued operations in 2003 as compared to $6.1 million in 2004. 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 ) was $38.9 million or $0.68 per share for the fourth quarter of 2004 compared to $34.6 million or $0.69 per share for the fourth quarter of 2003. FFO for the fourth quarter of 2004 excludes a $3.0 million or $0.05 per share write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of deferred financing costs associated with the Company's repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan of its 2007 and 2008 unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. term loans. This charge was previously disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). in the Company's 2004 financial outlook included in its press release dated November November: see month. 4, 2004. FFO for the fourth quarter of 2003 excludes a charge of $20.6 million associated with the redemption The liberation of an estate in real property from a mortgage. Redemption is the process by which land that has been mortgaged or pledged is bought back or reclaimed. It is accomplished through a payment of the debt owed or a fulfillment of the other conditions. of the Series B 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. .
Quarters ended December 31
----------------------------
2004 2003
-------------- -------------
FFO per share, as adjusted $0.68 $0.69
Write-off of deferred financing fees on
2007 and 2008 term loans (0.05) -
Series B preferred share
redemption charge - (0.41)
-------------- -------------
FFO per share including these items $0.63 $0.28
============== =============
FFO for the year ended December 31, 2004 was $133.9 million or $2.61 per share as compared to $130.4 million or $2.70 per share in 2003. FFO for 2004 excludes a gain of $4.5 million related to the Series B preferred unit redemption in February February: see month. 2004 and a $3.0 million write-off of deferred financing costs in the fourth quarter of 2004. FFO for 2003 excludes a charge of $20.6 million related to the redemption of the Series B preferred shares in December 2003.
Years ended December 31
----------------------------
2004 2003
-------------- -------------
FFO per share, as adjusted $2.61 $2.70
Series B preferred unit redemption
gain 0.08 -
Write-off of deferred financing fees
on 2007 and 2008 term loans (0.05) -
Series B preferred share redemption
charge - (0.42)
-------------- -------------
FFO per share including these items $2.64 $2.28
============== =============
FFO represents a non-generally accepted accounting principle (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) financial measure. A table reconciling FFO to net income, the GAAP measure that the Company believes to be most directly comparable, is within the consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge included in this release. 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 Chief Executive Officer, 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 , commented, "Our recent leasing activity continues to point to slowly improving conditions in our core markets. In 2004 we achieved positive absorption absorption [Lat.,=sucking from], taking of molecules of one substance directly into another substance. It is contrasted with adsorption, in which the molecules adhere only to the surface of the second substance. , reduced our capital costs by 18% as compared to the prior year, made significant strides in our strategic plan and positioned the Company for strong growth in 2006 and beyond. We enter 2005 focused on realizing the internal growth inherent in our core portfolio and capitalizing on the financial capacity to opportunistically seize seize v. To exhibit symptoms of seizure activity, usually with convulsions. strategic external growth opportunities." Brandywine Realty Trust Summary Portfolio Performance --The 2004 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. of FFO was 64.9% for the fourth quarter and 67.5% for the full year --In 2004 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. rate growth on new leases computed on a straight-line straight-line adj. 1. Lying in a straight line. 2. Relating to a device whose linkage produces or copies motion in straight lines. 3. basis declined 11.7% for the fourth quarter and 5.0% for the full year --In 2004 rental rate growth on renewals computed on a straight-line basis declined 2.1% for the fourth quarter and 2.8% for the full year --The 2004 retention rate was 85.5% for the fourth quarter and 79.2% for the full year --The Portfolio was 91.8% 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 92.7% leased as of December 31, 2004 --In the fourth quarter 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 ter·mi·nate v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates v.tr. 1. To bring to an end or halt: for approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 1,026,000 square feet, leases were renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. for approximately 877,000 square feet and new leases were signed for approximately 458,000 square feet --In 2004, leases expired or were terminated for approximately 4,258,000 square feet, leases were renewed for approximately 3,374,000 square feet and new leases were signed for approximately 1,000,000 square feet Distributions On December 21, 2004, 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 January January: see month. 17, 2005 to shareholders of record as of December 31, 2004. The Company also declared its dividend for the fourth quarter of $0.46875 per 7.50% Series C Cumulative Redeemable Redeemable Eligible for redemption under the terms of an indenture. Preferred Share and $0.46094 per 7.375% Series D Cumulative Redeemable Preferred Share that was paid on January 17, 2005 to holders of record of the Series C and Series D Preferred Shares as of December 31, 2004. Significant Transactions On October October: see month. 22, 2004, the Company's operating partnership completed a public offering of $275 million, 4.50% senior unsecured notes due November 1, 2009 and $250 million, 5.40% unsecured notes due November 1, 2014. The notes were rated Baa3 by Moody's Investors Service Moody's Investors Service A leading global credit rating, research and risk analysis firm. Moody's Investors Service A leading firm engaged in credit rating, risk analysis, and research of fixed-income securities and their issuers. and BBB- by Standard & Poor's and Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. . Net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from the offering were used to repay outstanding indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. . On November 18, 2004, the holder of our 7.25% Series A Cumulative Convertible Preferred Shares converted such shares into an aggregate of 1,339,286 of our common shares. The Company no longer has any convertible preferred shares or convertible preferred units in its capital structure. On December 16, 2004, the Company's operating partnership sold $113 million, 4.34% unsecured notes due December 14, 2008. The net proceeds were used to repay outstanding indebtedness. Leasing Update for the Radnor Radnor may refer to:
Subsequent to the end of the third quarter of 2004, the Company had the following leasing activity at the assets located in Radnor, PA acquired in connection with the acquisition of the Rubenstein Rubenstein may refer to:
Philadelphia, name of several ancient cities. One was in Lydia, W Asia Minor (now W Turkey). At the foot of Mt. Tmolus and near the location of modern Alaşehir, it was founded in the 2d cent. B.C. . Cira Centre: We continue to attract businesses that desire to re-locate into the City of Philadelphia. We are in advanced stages of lease negotiation or under letter of intent with six such tenants. Based on this activity we expect Cira Noun 1. CIRA - a terrorist organization formed in Ireland in 1994 as a clandestine armed wing of Sinn Fein Continuity Army Council, Continuity Irish Republican Army to be 75% pre-leased by March 31, 2005. Radnor Financial Center: We have executed leases totaling 97,600 square feet subsequent to September September: see month. 30, 2004. In the fourth quarter we signed 15,600 square feet of new leases with tenants who took 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 in 2004 and we signed new leases for 69,400 square feet with occupancy expected to take place in the first quarter of 2005. In January of 2005 we signed new leases totaling 12,600 square feet with occupancy expected to take place by the second quarter of 2005. Radnor Corporate Center: We have executed renewals totaling 213,800 square feet subsequent to September 30, 2004. Transactions totaling 122,500 square feet were completed by December 31, 2004 and we completed an additional 91,300 square feet of renewals in January of 2005. 2005 Financial Outlook The Company's 2005 financial outlook continues to be predicated upon the following key and variable assumptions: --The same-store portfolio (which represents approximately 79% of total square footage and 77% of projected 2005 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. ) to achieve the following percentage changes from 2004 results: --GAAP rents and reimbursements (not including termination fees termination fee The one-time charge for terminating or transferring an individual retirement account. If a financial institution charges a termination fee, the fee must be spelled out in the original agreement that is signed when the account is opened. ) to decline 0.50% to 1.50% --Net operating income to range from unchanged to a decline of 2.0% --Average occupancy to range from an increase of 0.50% to a decrease of 0.50% --The completion of all development projects 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 the estimates identified in our supplemental disclosure as of December 31, 2004. --While targeted acquisitions are a component of the Company's 2005 strategy, there are no acquisitions factored into the 2005 financial outlook. In January 2005, we received a termination fee relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc space leased to a tenant in our Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York West region. This transaction will positively effect our full year 2005 expectations by approximately $0.05 per share and was not factored into our previous estimates. Based on these key assumptions, we have updated our guidance from our November 4, 2004 press release and expect our full year 2005 EPS to be $0.41 to $0.48 and FFO per share to be $2.48 to $2.55. We expect first quarter 2005 FFO per share to be $0.63 to $0.64 and EPS to be $0.11 to $0.12. These estimates may be positively or negatively impacted primarily by the timing and terms of property leases, and actual operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. and interest rates as compared to our forecast. 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 earnings per share and FFO per share and certain other statements in this release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act 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 Report for the year ended December 31, 2003. 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. Non-GAAP Supplemental Financial Measures Funds from Operations (FFO) FFO is a widely recognized measure of REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). performance. Although FFO is a non-GAAP financial measure, the Company believes that information regarding FFO is helpful to shareholders and potential investors. The Company computes FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (NAREIT NAREIT National Association of Real Estate Investment Trusts ), which may not be comparable to FFO reported by other REITs that do not compute To perform mathematical operations or general computer processing. For an explanation of "The 3 C's," or how the computer processes data, see computer. FFO in accordance with the NAREIT definition, or that interpret To run a program one line at a time. Each line of source language is translated into machine language and then executed. the NAREIT definition differently than the Company. NAREIT defines FFO as net income (loss) before minority interest of unit holders (preferred and common) and excluding gains (losses) on sales of depreciable depreciable Of, relating to, or being a long-term tangible asset that is subject to depreciation. operating property and extraordinary items (computed in accordance with GAAP); plus real estate related depreciation and amortization (excluding amortization of deferred financing costs), and after adjustment for unconsolidated joint ventures. The GAAP measure that the Company believes to be most directly comparable to FFO, net income, includes depreciation and amortization expenses, gains or losses on property sales and minority interest. In computing computing - computer FFO, the Company eliminates substantially all of these items because, in the Company's view, they are not indicative indicative: see mood. of the results from the Company's property operations. To facilitate a clear understanding of the Company's historical operating results, FFO should be examined 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 (determined in accordance with GAAP) as presented in the financial statements included elsewhere in this release. FFO does not represent cash generated from operating activities 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 the Company's financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company's liquidity, nor is it indicative of funds available for the Company's cash needs, including its ability to make cash distributions to shareholders. Cash Available for Distribution (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. ) Cash available for distribution, CAD, is a non-GAAP financial measure that is not intended to represent cash flow for the period and is not indicative of cash flow provided by operating activities as determined under GAAP. CAD is presented solely as a supplemental disclosure with respect to liquidity because the Company believes it provides useful information regarding the Company's ability to fund its dividends. Because all companies do not calculate CAD the same way, the presentation of CAD may not be comparable to similarly titled measures of other companies. Fourth Quarter Earnings Call and Supplemental Information Package Brandywine 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 25, 2005 at 11:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . Call 1-888-889-5602. After the conference, a taped replay of the call can be accessed 24 hours a day through Friday, March 4, 2005 by calling 1-877-519-4471 - access code 5599770. In addition, the conference call can be accessed via a webcast located on the Company's website @ brandywinerealty.com. 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 @ brandywinerealty.com. The Supplemental Information package can be found in the "Investor Relations Investor relations The process by which the corporation communicates with its investors. - Financial Reports" section of the web page. About Brandywine Realty Trust Brandywine Realty Trust, with headquarters in Plymouth Meeting, PA and regional offices in Mt. 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, Philadelphia, PA 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 real estate companies. Brandywine owns, manages or has an ownership interest in 292 office and industrial properties, aggregating 23.7 million square feet. For more information, visit Brandywine's website at www.brandywinerealty.com. Note: Certain 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 the actual results, performance, achievements or transactions of the Company and its affiliates or industry results 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 leases at expected levels, the potential loss of major tenants, interest rate levels, the availability and terms of debt and equity financing, competition with other real estate companies for tenants and acquisitions, risks of real estate acquisitions, dispositions and developments, including cost overruns and construction delays, unanticipated operating costs operating costs npl → gastos mpl operacionales and the effects of general and local economic and real estate conditions. Additional information or 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. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
BRANDYWINE REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share and per share information)
December 31,
-----------------------
2004 2003
----------- -----------
ASSETS
Real estate investments:
Operating properties $2,483,134 $1,869,744
Accumulated depreciation (325,802) (268,091)
----------- -----------
2,157,332 1,601,653
Construction-in-progress 145,016 29,787
Land held for development 61,517 63,915
----------- -----------
2,363,865 1,695,355
Cash and cash equivalents 15,346 8,552
Escrowed cash 17,980 14,388
Accounts receivable, net 11,999 5,206
Accrued rent receivable 32,641 26,652
Investment in marketable securities 423 12,052
Assets held for sale - 5,317
Investment in unconsolidated joint ventures, at
equity 12,754 15,853
Deferred costs, net 34,449 26,071
Intangible assets, net 101,056 7,433
Other assets 43,471 38,897
----------- -----------
Total assets $2,633,984 $1,855,776
=========== ===========
LIABILITIES AND BENEFICIARIES' EQUITY
Mortgage notes payable $518,234 $462,659
Borrowings under Credit Facility 152,000 305,000
Unsecured senior notes, net of discounts 636,435 -
Unsecured term loan - 100,000
Accounts payable and accrued expenses 49,243 30,290
Distributions payable 27,363 20,947
Tenant security deposits and deferred rents 20,046 16,123
Acquired lease intangibles 39,271 1,305
Other liabilities 1,525 14,055
Liabilities related to assets held for sale - 52
----------- -----------
Total liabilities 1,444,117 950,431
Minority interest 42,866 133,488
Beneficiaries' equity:
Preferred Shares (shares authorized-
10,000,000):
7.25% Series A Preferred
Shares, $0.01 par value; shares issued
and outstanding-no shares in 2004 and
750,000 in 2003 - 8
7.50% Series C Preferred Shares, $0.01
par value; shares issued and
outstanding-2,000,000 in 2004 and 2003 20 20
7.375% Series D Preferred Shares, $0.01
par value; shares issued and outstanding-
2,300,000 in 2004 and no shares in 2003 23 -
Common Shares of beneficial interest, $0.01
par value; shares authorized-100,000,000;
issued and outstanding-55,292,752 in 2004
and 41,040,710 in 2003 550 410
Additional paid-in capital 1,346,654 936,730
Share warrants - 401
Cumulative earnings 370,514 310,212
Accumulated other comprehensive loss (3,130) (2,158)
Cumulative distributions (567,630) (473,766)
----------- -----------
Total beneficiaries' equity 1,147,001 771,857
----------- -----------
Total liabilities and beneficiaries' equity $2,633,984 $1,855,776
=========== ===========
BRANDYWINE REALTY TRUST
FUNDS FROM OPERATIONS AND CASH AVAILABLE FOR DISTRIBUTION
(unaudited, in thousands, except share and per share data)
Three Months Ended Year Ended
December 31, December 31,
----------------------- -----------------------
2004 2003 2004 2003
----------- ----------- ----------- -----------
Reconciliation of Net
Income to Funds from
Operations (FFO):
Net income $8,527 $41,837 $60,303 $86,678
Add (deduct):
Minority interest
attributable to
continuing
operations 332 2,307 2,472 9,294
Net gain on sale of
interests in real
estate (74) (19,385) (2,975) (20,537)
Minority interest
attributable to
discontinued
operations 11 300 101 495
Net gain on
disposition of
discontinued
operations (401) (6,998) (3,136) (9,690)
----------- ----------- ----------- -----------
Income before net gains
on sales of interests
in real estate and
minority interest 8,395 18,061 56,765 66,240
Add:
Depreciation:
Real property 20,468 13,687 63,192 54,176
Real estate
ventures 782 870 2,389 2,759
Amortization of
leasing costs 8,275 1,985 15,890 7,209
Prepetual Preferred
Share distributions (1,998) - (7,332) -
Redemption of
Preferred Shares - (20,598) 4,500 (20,598)
----------- ----------- ----------- -----------
Funds from operations
(FFO) $35,922 $14,005 $135,404 $109,786
=========== =========== =========== ===========
FFO, excluding non-
recurring items (2) $38,917 $34,603 $133,899 $130,384
=========== =========== =========== ===========
Number of weighted-
average Common Shares 57,415,193 50,503,184 51,358,343 48,223,542
=========== =========== =========== ===========
FFO per weighted-
average Common Share -
fully diluted $0.63 $0.28 $2.64 $2.28
=========== =========== =========== ===========
FFO per weighted-
average Common Share -
fully diluted,
excluding non-
recurring items (2) $0.68 $0.69 $2.61 $2.70
=========== =========== =========== ===========
Dividend per Common
Share $0.44 $0.44 $1.76 $1.76
Payout ratio of FFO (1) 70.3% 158.7% 66.8% 77.3%
Payout ratio of FFO,
excluding non-
recurring items (1)(2) 64.9% 64.2% 67.5% 65.1%
EPS per weighted-
average Common Share -
diluted $0.11 $0.46 $1.15 $1.43
Cash Available for
Distribution (CAD):
FFO, excluding non-
recurring items(2) $38,917 $34,603 $133,899 $130,384
Add (deduct):
Rental income from
straight-line rents (2,142) (1,488) (6,023) (5,917)
Deferred market
rental income (526) (25) (406) (287)
Amortization:
Deferred financing
costs 408 771 1,967 2,304
Deferred
compensation
costs 467 678 2,114 2,869
Impairment loss - - - 861
Second generation
capital expenditures
(3):
Building and tenant
improvements (10,271) (9,626) (33,813) (29,642)
Lease commissions (1,231) (956) (4,692) (4,482)
----------- ----------- ----------- -----------
Cash available for
distribution $25,622 $23,957 $93,046 $96,090
=========== =========== =========== ===========
Number of weighted-
average Common Shares 57,415,193 50,503,184 51,358,343 48,223,542
=========== =========== =========== ===========
Dividend per Common
Share $0.44 $0.44 $1.76 $1.76
Cash flows from:
Operating activities $49,813 $34,258 $150,788 $118,741
Investing activities (45,620) (6,134) (680,601) (34,016)
Financing activities 1,290 (27,065) 536,607 (102,974)
(1) Payout ratio is calculated by dividing dividend per Common
Share by FFO per weighted-average Common Share
(2) Represents FFO excluding the write off of deferred financing
costs of $3.0 million in 4th Quarter 2004 associated with the
repayment of our unsecured term loans, a gain of $4.5 million
related to Series B Preferred Unit redemption in February 2004,
and a charge of $20.6 million associated with the redemption of
the Series B Preferred Shares in December 2003.
(3) 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).
BRANDYWINE REALTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share data)
Three Months Ended Year Ended
December 31, December 31,
----------------------- -----------------------
2004 2003 2004 2003
----------- ----------- ----------- -----------
Revenue
Rents $81,107 $63,896 $275,631 $256,616
Tenant reimbursements 11,909 11,456 37,572 37,518
Other 3,122 3,272 12,858 10,959
----------- ----------- ----------- -----------
Total revenue 96,138 78,624 326,061 305,093
Operating Expenses
Property operating
expenses 25,763 20,927 89,857 80,244
Real estate taxes 9,687 7,168 31,062 27,681
Interest 19,535 13,542 55,061 57,835
Depreciation and
amortization 28,991 15,543 79,904 60,332
Administrative
expenses 4,123 3,511 15,100 14,464
----------- ----------- ----------- -----------
Total operating
expenses 88,099 60,691 270,984 240,556
----------- ----------- ----------- -----------
Income from continuing
operations before
equity in income of
real estate ventures,
net gain on sales of
interests in real
estate and minority
interest 8,039 17,933 55,077 64,537
Equity in income (loss)
of real estate
ventures 451 14 2,024 52
----------- ----------- ----------- -----------
Income from continuing
operations before net
gain on sales of
interests in real
estate and minority
interest 8,490 17,947 57,101 64,589
Net gain on sales of
interests in real
estate 74 19,385 2,975 20,537
Minority interest
attributable to
continuing operations (332) (2,307) (2,472) (9,294)
----------- ----------- ----------- -----------
Income from continuing
operations 8,232 35,025 57,604 75,832
Discontinued
operations:
Income (loss) from
discontinued
operations (95) 114 (336) 1,651
Net gain on
disposition of
discontinued
operations 401 6,998 3,136 9,690
Minority interest (11) (300) (101) (495)
----------- ----------- ----------- -----------
295 6,812 2,699 10,846
----------- ----------- ----------- -----------
Net Income 8,527 41,837 60,303 86,678
Income allocated to
Preferred Shares (2,348) (2,978) (9,720) (11,906)
Redemption of Preferred
Units - (20,598) 4,500 (20,598)
----------- ----------- ----------- -----------
Income allocated to
Common Shares $6,179 $18,261 $55,083 $54,174
=========== =========== =========== ===========
Earnings per Common
Share after discontinued
operations:
Basic income per Common
Share $0.11 $0.46 $1.15 $1.43
=========== =========== =========== ===========
Basic weighted-average
shares outstanding 54,382,030 39,436,362 47,781,789 36,937,467
=========== =========== =========== ===========
Diluted income per
Common Share $0.11 $0.46 $1.15 $1.43
=========== =========== =========== ===========
Diluted weighted-
average shares
outstanding 54,654,967 39,664,652 48,018,704 37,087,869
=========== =========== =========== ===========
BRANDYWINE REALTY TRUST
SAME STORE OPERATIONS -- YEAR
(unaudited and in thousands)
Of the 246 Properties owned by the Company as of December 31, 2004, a
total of 221 Properties ("Same Store Properties") containing an
aggregate of 14.7 million net rentable square feet were owned for the
entire years ended December 31, 2004 and 2003. Average occupancy for
the Same Store Properties was 91.0% during 2004 and 91.1% during 2003.
The following table sets forth revenue and expense information for the
Same Store Properties:
Year Ended December 31, Dollar Percent
-----------------------
2004 2003 Variance Variance
------------ ---------- -------- --------
Revenue
Rents (a) $240,248 $240,165 $83 0.0%
Tenant reimbursements 32,803 31,021 1,782 5.7%
Other (b) 3,953 4,543 (590) -13.0%
------------ ---------- --------
277,004 275,729 1,275 0.5%
Operating expenses
Property operating expenses 85,302 83,506 1,796 2.2%
Real estate taxes 26,493 24,975 1,518 6.1%
------------ ---------- --------
111,795 108,481 3,314 3.1%
------------ ---------- --------
Net operating income $165,209 $167,248 $(2,039) -1.2%
============ ========== ========
(a) Includes straight-line rental income of $4,014 for 2004 and $4,789
for 2003
(b) Includes net termination fee income of $1,454 for 2004 and $2,108
for 2003
The following table is a reconciliation of Net Income to Same Store
net operating income:
Year Ended December 31,
-----------------------
2004 2003
----------- -----------
Net Income $60,303 $86,678
Add/(deduct):
Interest expense 55,061 57,835
Administrative expenses 15,100 14,464
Equity in income of real estate ventures (2,024) (52)
Depreciation and amortization -- continuing
operations 79,904 60,332
Depreciation and amortization -- discontinued
operations 224 1,053
Net gain on sale of interests in real estate
-- continuing operations (2,975) (20,537)
Net gain on sale of interests in real estate
-- discontinued operations (3,136) (9,690)
Minority interest attributable to continuing
operations 2,472 9,294
Minority interest attributable to
discontinued operations 101 495
----------- -----------
Consolidated net operating income 205,030 199,872
Less: Net operating income of non same store
properties (22,651) (14,009)
Less: Eliminations and non-property specific
net operating income (17,170) (18,615)
----------- -----------
Same Store net operating income $165,209 $167,248
=========== ===========
BRANDYWINE REALTY TRUST
SAME STORE OPERATIONS -- QUARTER
(unaudited and in thousands)
Of the 246 Properties owned by the Company as of December 31, 2004, a
total of 221 Properties ("Same Store Properties") containing an
aggregate of 14.7 million net rentable square feet were owned for the
entire three-month periods ended December 31, 2004 and 2003. Average
occupancy for the Same Store Properties was 91.5% during 2004 and
91.3% during 2003. The following table sets forth revenue and expense
information for the Same Store Properties:
Quarter Ended December 31, Dollar Percent
--------------------------
2004 2003 Variance Variance
------------ ------------ -------- --------
Revenue
Rents (a) $60,237 $59,933 $304 0.5%
Tenant reimbursements 8,891 9,856 (965) -9.8%
Other (b) 935 1,260 (325) -25.8%
------------ ------------ --------
70,063 71,049 (986) -1.4%
Operating expenses
Property operating
expenses 20,295 21,553 (1,258) -5.8%
Real estate taxes 6,792 6,503 289 4.4%
------------ ------------ --------
27,087 28,056 (969) -3.5%
------------ ------------ --------
Net operating income $42,976 $42,993 $(17) 0.0%
============ ============ ========
(a) Includes straight-line rental income of $1,079 for 2004 and $1,083
for 2003
(b) Includes net termination fee income of $347 for 2004 and $840 for
2003
The following table is a reconciliation of Net Income to Same Store
net operating income:
Quarter Ended December 31,
--------------------------
2004 2003
------------- ------------
Net Income $8,527 $41,837
Add/(deduct):
Interest expense 19,535 13,542
Administrative expenses 4,123 3,511
Equity in income of real estate ventures (451) (14)
Depreciation and amortization --
continuing operations 28,991 15,543
Depreciation and amortization --
discontinued operations 18 129
Net gain on sale of interests in real
estate -- continuing operations (74) (19,385)
Net gain on sale of interests in real
estate -- discontinued operations (401) (6,998)
Minority interest attributable to
continuing operations 332 2,307
Minority interest attributable to
discontinued operations 11 300
------------- ------------
Consolidated net operating income 60,611 50,772
Less: Net operating income of non same
store properties (12,160) (2,636)
Less: Eliminations and non-property
specific net operating income (5,475) (5,143)
------------- ------------
Same Store net operating income $42,976 $42,993
============= ============
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