Brandywine Realty Trust Announces Third Quarter 2001 Earnings -- FFO Increases 9.4% to $.70 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)--Oct. 25, 2001 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 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 :NYSE NYSE See: New York Stock Exchange ) announced today that funds from operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. (FFO FFO See: Funds from operations ) for the third quarter of 2001 increased to $33.0 million from $30.5 million for the third quarter of 2000. Third quarter 2001 FFO increased to $.70 per share from $.64 for the third quarter of 2000. FFO per share is calculated on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis which assumes full conversion of the convertible preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. . FFO on a basic per share basis (excluding conversion of convertible preferred shares) increased to $.75 per share for the third quarter of 2001 from $.68 per share for the third quarter of 2000. "We are pleased with our third quarter results. In these uncertain times, tenant retention is a key driver of profitability. We are delighted with our quarterly retention rate of 84.6% and believe it reflects the strength of our tenant service and marketing programs," commented Gerard 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. . "Major priorities continue to be the leasing of our remaining development pipeline, maintaining a high tenant retention rate and continuing our capital recycling recycling, the process of recovering and reusing waste products—from household use, manufacturing, agriculture, and business—and thereby reducing their burden on the environment. program." Brandywine Realty Trust Summary for Third Quarter of 2001 -- FFO of $33.0 million, $0.70 per share -- Payout ratios of 63.0% for FFO and 74.7% for CAD -- Same Store growth of 4.2% on cash basis and 3.0% on GAAP basis (based on 230 properties or 87.9% of the portfolio) -- Quarterly net effective rental increases (cash basis): 8.1% on new leases, 10.5% on renewals -- Quarterly net effective rental increases (GAAP basis): 13.9% on new leases, 15.9% on renewals -- Quarterly retention rate of 84.6% -- Portfolio occupancy rate of 94.3% Property Development As of September 30, 2001, the Company's development pipeline, totaling approximately 655,000 square feet with a projected cost of $115.5 million, is 51% pre-leased and is expected to generate a stabilized sta·bi·lize v. sta·bi·lized, sta·bi·liz·ing, sta·bi·liz·es v.tr. 1. To make stable or steadfast. 2. yield of 12.5%. These projects are scheduled for completion between December 2001 and July 2002. Consolidated Financial Results For the quarter ended September 30, 2001, the Company reported net income before net gain on sales, minority interest and extraordinary item of $11.6 million compared to $13.2 million for the third quarter of 2000. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Financing and Capital Transactions During the third quarter of 2001, the Company entered into forward swap Forward Swap A swap agreement created through the synthesis of two swaps differing in duration for the purpose of fulfilling the specific time-frame needs of an investor. Also referred to as a "forward start swap," "delayed start swap," and a "deferred start swap. agreements, fixing the LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). component of the interest rate under the Credit Facility for the period from September 2002 through June 2004 on $100 million at 4.230% and on $75 million at 4.215%. During the third quarter of 2001, the Board of Trustees board of trustees Politics The posse of thugs who oversee an institution's administration. See Board of directors. authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: an additional 1 million share increase to the Company's Share Repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. Program from 3 million shares to 4 million shares. In addition, the Board also authorized a $2 million increase in its program for employees to purchase stock. Leasing Activity Leases for approximately 1.1 million square feet 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 terminated during the third quarter of 2001. Leases were renewed for 945,000 square feet and new leases were signed for 118,000 square feet. Net effective rental rate increases were 10.5% on renewals and 8.1% on new leases on a cash basis and 15.9% on renewals and 13.9% 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 94.3% leased as of September 30, 2001. Same store growth (230 properties, including 15.2 million square feet) was 4.2% on a cash basis and 3.0% on a GAAP basis for the third quarter of 2001. Distributions On September 25, 2001, the Board of Trustees declared a regular quarterly dividend distribution of $0.44 per share, paid on October 15, 2001 to shareholders of record as of October 5, 2001. This dividend represents a 7.3% dividend increase from last quarter and is the Company's tenth quarterly dividend increase of the last 21 quarters. Based on third quarter 2001 results, Brandywine achieved a payout ratio Payout Ratio The percentage of earnings paid out in dividends. It is calculated by dividing dividends per share by earnings per share. Notes: The payout ratio indicates how well earnings support the dividend payments: the lower the ratio, the more secure the dividend. of 63.0% of FFO and 74.7% 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. . Note: Certain 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 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 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, the potential loss 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 with other real estate companies for tenants and acquisitions, risks of real estate acquisitions and developments, dependence upon certain geographic markets, and general economic, business and real estate conditions. 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.
BRANDYWINE REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
September 30, December 31,
2001 2000
------------- ------------
(restated)
ASSETS
Real estate investments:
Operating properties $ 1,883,725 $ 1,754,895
Accumulated depreciation (216,526) (179,558)
---------------- ---------------
1,667,199 1,575,337
Land held for development 89,799 59,979
Construction-in-progress 39,172 39,025
---------------- ---------------
1,796,170 1,674,341
Cash and cash equivalents 10,536 16,060
Escrowed cash 16,579 14,788
Accounts receivable, net 10,648 8,065
Accrued rent receivable 24,450 21,221
Due from affiliates 3,933 4,591
Investment in marketable
securities 11,505 769
Investment in joint
ventures, at equity 21,065 33,566
Deferred costs, net 24,838 19,828
Other assets 35,381 34,128
---------------- ---------------
Total assets $ 1,955,105 $ 1,827,357
================ ===============
LIABILITIES AND BENEFICIARIES'
EQUITY
Mortgage notes payable $ 612,415 $ 527,877
Borrowings under
Credit Facility 393,325 338,325
Accounts payable and
accrued expenses 35,223 22,094
Distributions payable 21,523 20,428
Tenant security deposits
and deferred rents 15,753 17,232
Other liabilities 14,857 -
---------------- ---------------
Total liabilities 1,093,096 925,956
Minority interest 143,372 144,896
Beneficiaries' equity:
Preferred Shares:
7.25% Series A
Preferred Shares,
$0.01 par value;
shares authorized
- 10,000,000;
issued and
outstanding-750,000
in 2000 and 1999 8 8
8.75% Series B
Preferred Shares,
$0.01 par value;
shares authorized
- 10,000,000;
issued and
outstanding
- 4,375,000
in 2000 and 1999 44 44
Common Shares of
beneficial interest,
$0.01 par value;
shares authorized
- 100,000,000;
issued and
outstanding
- 35,534,149
in 2001 and
35,681,314 in 2000 355 357
Additional paid-in
capital 848,920 851,875
Share warrants 908 908
Cumulative earnings 156,983 131,256
Accumulated other
comprehensive loss (7,614) (1,731)
Cumulative distributions (280,967) (226,212)
---------------- ---------------
Total beneficiaries'
equity 718,637 756,505
---------------- ---------------
Total liabilities and
beneficiaries' equity $ 1,955,105 $ 1,827,357
================ ===============
BRANDYWINE REALTY TRUST
SELECTED FINANCIAL DATA
(unaudited, in thousands, except per share data)
Quarter Ended Year Ended
September 30, September 30,
2001 2000 2001 2000
(restated) (restated)
Revenue
Rents $ 67,152 $ 62,215 $ 197,386 $ 183,989
Tenant
reimbursements 9,505 8,302 28,976 26,305
Other 2,654 3,409 7,087 9,126
Total revenue 79,311 73,926 233,449 219,420
Operating Expenses
Property
operating expenses 20,202 18,224 60,533 54,604
Real estate taxes 7,169 6,756 20,865 19,445
Interest 17,346 16,177 50,269 48,511
Depreciation and
amortization 19,781 16,812 59,087 50,345
Administrative
expenses 3,445 3,394 11,717 9,683
Total operating
expenses 67,943 61,363 202,471 182,588
Income before equity
in income of real
estate ventures,
net gain on sales,
minority interest
and extraordinary
item 11,368 12,563 30,978 36,832
Equity in income of
real estate ventures 235 591 2,223 2,100
Income before net
gain on sales,
minority interest and 11,603 13,154 33,201 38,932
extraordinary item
Net gain on sales of
interests in real
estate 929 9,496 1,297 9,564
Minority interest (2,261) (2,805) (6,553) (7,262)
Income before
extraordinary item 10,271 19,845 27,945 41,234
Extraordinary item - - (1,111) -
Net income 10,271 19,845 26,834 41,234
Income allocated to
Preferred Shares (2,977) (2,977) (8,931) (8,931)
Income allocated to
Common Shares $ 7,294 $ 16,868 $ 17,903 $ 32,303
Funds From Operations
(FFO):
Income before gains
on sales and
minority interest $ 11,603 $ 13,154 $ 33,201 $ 38,932
Add:
Depreciation:
Real property 18,526 15,910 55,528 47,782
Real estate
ventures 816 601 2,280 1,725
Amortization of
leasing costs 1,255 862 3,559 2,110
Gain on sale of
land interests 840 - 881 -
Less:
Gain included in
equity in income
of real estate
ventures - - (785) -
FFO $ 33,040 $ 30,527 $ 94,664 $ 90,549
Number of
weighted-average
Common Shares 47,296,710 47,381,592 47,334,935 48,060,748
FFO per
weighted-average
Common Share $ 0.70 $ 0.64 $ 2.00 $ 1.88
Third Quarter Earnings Call and Supplemental Information Package Brandywine President and CEO, Gerard H. Sweeney, will be hosting a conference call on Friday, October 26, 2001 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, November 9, 2001 by calling 1-800-615-3210 -- access code 5572718. The Company has prepared a Supplemental Information package that includes financial results and operational statistics to support the announcement of third quarter earnings. The Supplemental Information package is available through the Company's website at brandywinerealty.com. The Supplemental Information Package will be found in both the "About The Company" section and the "Investor Relations Investor relations The process by which the corporation communicates with its investors. -- Annual Reports" section of the web page. Brandywine Realty Trust, with headquarters in Newtown Square and regional offices in King of Prussia King of Prussia, industrialized suburban area (1990 pop. 18,406), Montgomery co., SE Pa. It has glass and steel fabricating, food processing, printing and publishing, and varied manufacturing (textiles, liquified petroleum gas, water-treatment and electrical , PA; Mount Laurel Laurel, cities, United States Laurel. 1 Town (1990 pop. 19,438), Prince Georges co., central Md., about halfway between Washington, D.C., and Baltimore; patented in the late 1600s, inc. 1870. , NJ; and Richmond, VA, is one of the Mid-Atlantic Region's largest full-service real estate companies. Brandywine owns, manages or has an ownership interest in 320 office and industrial properties, aggregating 21.3 million square feet. |
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