Brandywine Realty Trust Announces Second Quarter 2002 Earnings FFO of $.67 Per Share.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)--July 25, 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 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. ) were $0.26 for the second quarter 2002 as compared to $ 0.11 for the second quarter 2001. Net income increased to $12.8 million for the second quarter of 2002 as compared to $7.4 million for the second quarter of 2001, an increase of $5.4 million or $.15 per share. The increase was primarily due to a decrease in depreciation and amortization expense of $2.8 million or $.08 per share, an increase in rental revenue of $3.1 million or $.08 per share and the 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 unamortized deferred financing costs primarily related to the Company's refinancing Refinancing An extension and/or increase in amount of existing debt. of its revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility during the second quarter of 2001 of $1.1 million or $.03 per share offset by a decrease in income from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. (including net gain on dispositions included in discontinued operations) of $1.4 million or $.04 per share. The decrease in depreciation is primarily due to the change in the estimated useful lives of various buildings from 25 years to 40 years and the increase in rental revenue was due to increased rental rates. 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 $0.82 for the six-month period ended June June: see month. 30, 2002 as compared to $ 0.28 for the six-month period ended June 30, 2001. Net income increased to $36.3 million for the six-month period ended June 30, 2002 as compared to $16.6 million in 2001, an increase of $19.7 million or $.55 per share. The increase was the result of decreased depreciation and amortization of $5.5 million or $.16 per share, increased in income from discontinued operations (including net gain on dispositions included in discontinued operations) of $8.4 million or $.24 per share, increased rental revenues of $7.1 million or $.19 per share and the write-off of unamortized deferred financing costs primarily related to the Company's refinancing of its revolving credit facility during the second quarter of 2001 of $1.1 million or $.03 per share. The decrease in depreciation and the increase in rental revenue are due to the reasons noted above. "We are very pleased with our second quarter results. Despite continuing difficult market conditions, our portfolio performed well. Our 75.8% retention rate exceeded the benchmark we achieved last year and our rental rate increases on both new and renewal tenancies remained strong with occupancy levels consistent with our expectations. The combination of these factors are a clear indication of our market position, asset quality and the strength of our operating and leasing teams. Our disposition program is running ahead of target. The success of our leverage neutral 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 has enabled us to continually con·tin·u·al adj. 1. Recurring regularly or frequently: the continual need to pay the mortgage. 2. improve our market concentration and operating 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. . Supplemental Reporting Measures The Company's 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 $31.6 million or $.67 per share for the second quarter 2002 compared to $31.7 million or $.67 per share for the second quarter 2001. FFO per share is calculated on a fully diluted basis, which assumes full conversion of the Company's outstanding 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. . Earnings from continuing and discontinued operations before interest, taxes, depreciation and amortization (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) for the quarter was $49.4 million as compared to $50.7 million for the same quarter of the prior year. Brandywine Realty Trust Summary Portfolio Performance - FFO was $31.6 million or $.67 per share for the quarter - FFO payout ratio was 65.6% for the quarter and 65.1% for YTD - CAD payout ratio was 86.8% for the quarter and 81.0% for YTD - Decrease in Same Store growth of 1.6% on cash basis and 2.3% on GAAP basis (based on 230 properties or 95% of the portfolio) - Quarterly rental rate increases (cash basis) were 4.9% on new leases and 7.2% on renewals - Quarterly rental rate increases (GAAP basis) were 10.1% on new leases and 9.9% on renewals - YTD rental rate increases (cash basis) were 5.4% on new leases and 6.1% on renewals - YTD rental rate increases (GAAP basis) were 9.9% on new leases and 8.8% on renewals - Quarterly retention rate was 75.8% and YTD retention rate was 78.4% - Portfolio was 91.0% occupied and 91.9% leased as of June 30, 2002 Sales and Acquisitions During the second quarter of 2002, the Company sold six office properties and eleven industrial properties containing 661,000 net rentable square feet and one parcel of land for an aggregate of $50.2 million realizing a net gain of $.1 million. In addition, the Company acquired one office property containing 142,000 net rentable square feet for $14.8 million. Property Development As of June 30, 2002, the Company's development pipeline, totaling approximately 428,000 square feet with a projected cost of $83.7 million, was 41% 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 11.8%. During the second quarter of 2002, the Company completed development of an office property containing 50,000 net rentable square feet located in Newtown Square, Pa that is 100% leased. 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 1,281,000 square feet during the second quarter of 2002. Leases were renewed for 971,000 square feet and new leases were signed for 204,000 square feet. Rental rate increases were 7.2% on renewals and 4.9% on new leases on a cash basis and 9.9% on renewals and 10.1% 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 91.0% occupied and 91.9% leased as of June 30, 2002. Same store growth (230 properties, containing 15.2 million square feet) decreased 1.6% on a cash basis and 2.3% on a GAAP basis for the second quarter of 2002. Distributions On June 21, 2002, 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 common share that was paid on July July: see month. 15, 2002 to shareholders of record as of July 5, 2002. Based on second quarter 2002 results, 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. 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. of 65.6% of FFO and 86.8% 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 EPS, excluding net gains (losses) on dispositions of real estate, is estimated to be in the range of $1.46 to $1.49 for the year 2002 and in the range of $.30 to $.31 for the third quarter 2002. Based on a continuation of existing market conditions, the Company is projecting FFO for 2002 to range from $2.68 to $2.70 per share and is estimating third quarter 2002 FFO between $.65 and $.66 per share. 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 third quarter and the balance of the year may be positively or negatively impacted by the timing and terms of property leases and property sales and the corresponding use of sales proceeds. The Company intends to use the proceeds from property sales to invest in property acquisitions and development projects in its core markets, repay debt and, as market conditions warrant, repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. shares. 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 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.
BRANDYWINE REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
June 30, December 31,
2002 2001
----------- -----------
ASSETS
Real estate investments:
Operating properties $ 1,832,735 $ 1,860,377
Accumulated depreciation (221,685) (226,345)
----------- -----------
1,611,050 1,634,032
Construction-in-progress 62,724 111,378
Land held for development 40,407 39,285
----------- -----------
1,714,181 1,784,695
Cash and cash equivalents 24,476 13,459
Escrowed cash 16,231 16,311
Accounts receivable, net 3,048 6,394
Accrued rent receivable 25,461 24,855
Investment in marketable securities 10,850 10,735
Assets held for sale 28,523 28,962
Investment in joint ventures, at equity 19,082 19,067
Deferred costs, net 24,462 24,030
Other assets 58,714 31,695
----------- -----------
Total assets $ 1,925,028 $ 1,960,203
=========== ===========
LIABILITIES AND BENEFICIARIES' EQUITY
Mortgage notes payable $ 617,100 $ 614,840
Borrowings under Credit Facility 383,325 394,325
Accounts payable and accrued expenses 26,884 39,678
Distributions payable 21,382 21,525
Tenant security deposits and deferred rents 15,924 22,155
Other liabilities 13,973 15,555
Liabilities related to assets held for sale 130 135
----------- -----------
Total liabilities 1,078,718 1,108,213
Minority interest 137,285 143,834
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 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-35,689,115
in 2002 and 35,640,935 in 2001 355 355
Additional paid-in capital 851,223 848,214
Share warrants 401 401
Cumulative earnings 199,034 163,502
Accumulated other comprehensive loss (4,676) (4,587)
Cumulative distributions (337,364) (299,781)
----------- -----------
Total beneficiaries' equity 709,025 708,156
----------- -----------
Total liabilities and beneficiaries' equity $ 1,925,028 $ 1,960,203
=========== ===========
BRANDYWINE REALTY TRUST
SELECTED FINANCIAL DATA
(unaudited, in thousands, except per share data)
Quarter Ended
June 30, Year Ended June 30,
-------------------- --------------------
2002 2001 2002 2001
-------- -------- -------- --------
Revenue
Rents $ 62,976 $ 59,875 $ 123,066 $ 115,955
Tenant reimbursements 8,192 8,685 15,652 16,962
Other 2,758 2,064 5,639 4,319
-------- -------- --------- ---------
Total revenue 73,926 70,624 144,357 137,236
Operating Expenses
Property
operating expenses 18,501 18,149 37,001 36,160
Real estate taxes 6,231 5,738 12,088 11,295
Interest 16,105 16,925 31,835 32,923
Depreciation
and amortization 15,818 18,575 29,406 34,874
Administrative expenses 3,808 4,271 7,841 8,271
-------- -------- ---------- ---------
Total operating expenses 60,463 63,658 118,171 123,523
-------- -------- ---------- ---------
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 13,463 6,966 26,186 13,713
Equity in income of
real estate ventures 229 522 693 1,988
--------- -------- ---------- ---------
Income from
continuing operations
before net gain on
sales of interests in
real estate, minority
interest and
extraordinary item 13,692 7,488 26,879 15,701
Net gain on sales
of interests
in real estate - 186 - 368
Minority interest
attributable to
continuing operations (2,274) (1,930) (4,575) (3,956)
---------- -------- ---------- ---------
Income from
continuing operations 11,418 5,744 22,304 12,113
Income from
discontinued
operations, net
of minority interest 1,272 2,790 5,886 5,561
Net gain on
disposition of
discontinued
operations, net
of minority interest 110 - 8,079 -
-------- -------- ---------- ---------
Income before
extraordinary item 12,800 8,534 36,269 17,674
Extraordinary item - (1,111) - (1,111)
-------- -------- ---------- ----------
Net Income 12,800 7,423 36,269 16,563
Income allocated
to Preferred Shares (2,977) (2,977) (5,954) (5,954)
-------- -------- ---------- ----------
Income allocated
to Common Shares $ 9,823 $ 4,446 $ 30,315 $ 10,609
======== ======== ========== ==========
Earnings per
Common Share
after discontinued
operations:
Basic income
per Common Share $ 0.26 $ 0.11 $ 0.83 $ 0.28
Basic
weighted-average
shares outstanding 35,684,100 35,665,182 35,692,678 35,705,335
Diluted income
per Common Share $ 0.26 $ 0.11 $ 0.82 $ 0.28
Diluted
weighted-average
shares outstanding 35,758,768 35,702,110 35,854,894 35,736,682
Funds From
Operations (FFO):
Income before gains
on sales of interests
in real estate and
minority interest:
Continuing operations $ 13,692 $ 7,488 $ 26,879 $ 15,701
Discontinued
operations 1,339 2,959 6,229 5,897
---------- --------- --------- ---------
Income before
gains on sales
and minority interest 15,031 10,447 33,108 21,598
Add:
Depreciation:
Real property 14,522 19,550 26,875 37,002
Real estate ventures 739 411 1,320 1,464
Amortization
of leasing costs 1,339 1,258 2,706 2,304
Gain on sale
of land interests - - - 41
Less:
Gain included in
equity in
income of real
estate ventures - - - (785)
---------- ---------- --------- ---------
Funds from operations $ 31,631 $ 31,666 $ 64,009 $ 61,624
========== ========== ========= =========
Number of
weighted-average
Common Shares 47,152,178 47,326,364 47,355,479 47,361,479
========== ========== ========== ==========
FFO per
weighted-average
Common Share $ 0.67 $ 0.67 $ 1.35 $ 1.30
========== ========== ========== ==========
Second Quarter Earnings Call and Supplemental Information Package Brandywine President and CEO, 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 , July 26, 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 1-800-513-1181. After the conference, a taped replay of the call can be accessed 24 hours a day through Friday, August 9, 2002 by calling 1-800-615-3210 - access code 6070191. The Company has prepared a Supplemental Information package that includes financial results and operational statistics to support the announcement of second 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 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 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 Region's largest full-service real estate companies. Brandywine owns, manages or has an ownership interest in 287 office and industrial properties, aggregating 20.0 million square feet. |
|
||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion