-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EE2Tjqu29OlX0/7wiCADH9EpJvO352QVyKw/d0xLHPKlQTqGXjhag8vwoh1ACZJJ EHBgpq+y4ZWetpg1XnOC4Q== 0000893220-07-002551.txt : 20070726 0000893220-07-002551.hdr.sgml : 20070726 20070726100640 ACCESSION NUMBER: 0000893220-07-002551 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20070725 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070726 DATE AS OF CHANGE: 20070726 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BRANDYWINE OPERATING PARTNERSHIP LP /PA CENTRAL INDEX KEY: 0001060386 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 232862640 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-24407 FILM NUMBER: 071001047 BUSINESS ADDRESS: STREET 1: 14 CAMPUS BOULEVARD STREET 2: 610-325-5600 CITY: NEWTOWN SQUARE STATE: PA ZIP: 19073 BUSINESS PHONE: 6103255600 MAIL ADDRESS: STREET 1: BRANDYWINE OPERATING PARTNERSHIP LP STREET 2: 16 CAMPUS BOULEVARD CITY: NEWTRON SQUARE STATE: PA ZIP: 19073 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BRANDYWINE REALTY TRUST CENTRAL INDEX KEY: 0000790816 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 232413352 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09106 FILM NUMBER: 071001048 BUSINESS ADDRESS: STREET 1: 14 CAMPUS BLVD STREET 2: STE 100 CITY: NEWTOWN SQUARE STATE: PA ZIP: 19073 BUSINESS PHONE: 6103255600 MAIL ADDRESS: STREET 1: TWO GREENTREE CENTRE STREET 2: SUITE 100 CITY: MARLTON STATE: NJ ZIP: 08053 FORMER COMPANY: FORMER CONFORMED NAME: LINPRO SPECIFIED PROPERTIES DATE OF NAME CHANGE: 19920703 8-K 1 w37584e8vk.htm FORM 8-K BRANDYWINE REALTY TRUST e8vk
Table of Contents

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 25, 2007
Brandywine Realty Trust
Brandywine Operating Partnership, L.P.
(Exact name of registrant as specified in charter)
         
MARYLAND   001-9106   23-2413352
(Brandywine Realty Trust)        
DELAWARE        
(Brandywine Operating Partnership, L.P.)   000-24407   23-2862640
(State or Other Jurisdiction of Incorporation or
Organization)
  (Commission file number)   (I.R.S. Employer
Identification Number)
555 East Lancaster Avenue, Suite 100
Radnor, PA 19087
(Address of principal executive offices)
(610) 325-5600
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 


TABLE OF CONTENTS

Item 2.02 Results of Operations and Financial Condition
Item 9.01 Financial Statements and Exhibits
Signatures
EXHIBIT INDEX
Brandywine Realty Trust Press Release dated July 25, 2007


Table of Contents

Item 2.02 Results of Operations and Financial Condition
     The information in this Current Report on Form 8-K is furnished under Item 2.02 – “Results of Operations and Financial Condition.” Such information, including the exhibits attached hereto, shall not be deemed to be “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.
     On July 25, 2007, we issued a press release announcing our financial results for the three- and six-months ending June 30, 2007. That press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
     The press release includes “non-GAAP financial measures” within the meaning of the Securities and Exchange Commission’s Regulation G. With respect to such non-GAAP financial measures, we have disclosed in the press release the most directly comparable financial measure calculated and presented in accordance with generally accepted accounting principles (“GAAP”) and have provided a reconciliation of such non-GAAP financial measures to the most directly comparable GAAP financial measure.
Item 9.01 Financial Statements and Exhibits
Exhibits
     
99.1
  Brandywine Realty Trust Press Release dated July 25, 2007

 


Table of Contents

Signatures
     Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
           
  Brandywine Realty Trust
 
 
    By:   /s/ Howard M. Sipzner    
      Howard M. Sipzner  
      Executive Vice President and Chief
Financial Officer 
 
 
           
  Brandywine Operating Partnership, its sole
General Partner
 
 
    By:   /s/ Howard M. Sipzner    
      Howard M. Sipzner  
      Executive Vice President and Chief
Financial Officer 
 
 
Date: July 26, 2007

 


Table of Contents

EXHIBIT INDEX
     
Exhibit    
   No.   Description
99.1
  Press Release dated July 25, 2007

 

EX-99.1 2 w37584exv99w1.htm BRANDYWINE REALTY TRUST PRESS RELEASE DATED JULY 25, 2007 exv99w1
 

EXHIBIT 99.1
         
Press Contact:
     Amy Biemiller
     Director of Communications
     610-832-7705
     amy.biemiller@bdnreit.com
  (BRANDYWINEREALTYTRUST LOGO)   Investor Contact:
      Howard M. Sipzner
      EVP & CFO
      610-832-4907
      howard.sipzner@bdnreit.com
Brandywine Realty Trust Second Quarter FFO per Share Increases 8.3%
Radnor, PA, July 25, 2007 — Brandywine Realty Trust (NYSE:BDN), a real estate investment trust focused on the ownership, management and development of Class A, suburban and urban office properties in selected markets throughout the United States, announced today its financial and operating results for the three and six month periods ended June 30, 2007.
Financial Highlights
  §   Funds from operations (FFO) totaled $59.0 million or $0.65 per diluted share in the second quarter of 2007, compared to $57.0 million or $0.60 per diluted share in the second quarter of 2006. The second quarter of 2007 included a $3.8 million gain on the dissolution of a real estate partnership. Our FFO payout ratio for the second quarter of 2007 was 67.7%.
 
  §   We incurred a $0.8 million loss or ($0.01) per diluted share in the second quarter of 2007, compared to a $13.6 million loss or ($0.15) per diluted share in the second quarter of 2006. These losses are primarily attributable to non-cash real estate amortization and depreciation charges which are added back in the calculation of FFO.
 
  §   Funds from operations totaled $117.6 million or $1.28 per diluted share for the six months ended June 30, 2007, compared to $112.2 million or $1.19 per diluted share for the six months ended June 30, 2006. Our FFO payout ratio for the first six months of 2007 was 68.8%.
 
  §   Net income totaled $16.6 million or $0.19 per diluted share for the six months ended June 30, 2007, compared to an $18.2 million loss or ($0.20) per diluted share for the six months ended June 30, 2006. There was a $25.2 million gain on the disposition of discontinued operations during the six months ended June 30, 2007, as well as the aforementioned $3.8 million gain on the dissolution of a real estate partnership.
Portfolio Highlights
  §   At June 30, 2007, our core portfolio was 93.9% occupied and 95.0% leased (reflecting recently executed leases) versus 91.6% and 93.1%, respectively, at June 30, 2006. We owned 281 properties at June 30, 2007, encompassing 265 properties in our core portfolio and 16 properties under development or redevelopment.
 
  §   Net operating income (NOI) on a same store basis increased 2.0% on a GAAP basis and 2.5% on a cash basis in the second quarter of 2007 versus the second quarter of 2006 for the 256 same store properties which were 93.6% occupied on June 30, 2007 versus 93.0% occupied on June 30, 2006. Our consolidated NOI margin on a GAAP basis was 62.0% for the second quarter of 2007. Year to date, our net operating income on a same store basis has increased 2.4% on a GAAP basis and 3.7% on a cash basis.
 
  §   For the second quarter of 2007, our core portfolio retention rate was 85.5% with positive net absorption of 181,656 square feet. In the second quarter of 2007, we achieved a 7.2% increase on our new lease rental rates and a 1.4% increase on our renewal rental rates, both on a GAAP basis. Year to date, we have achieved positive net absorption of 326,766 square feet in our core portfolio.
     
555 East Lancaster Avenue, Suite 100, Radnor, PA 19087   Phone: (610) 325-5600 • Fax: (610) 325-5622 • www.brandywinerealty.com

 


 

Investment Highlights
  §   During the second quarter of 2007, we acquired 155 Grand Avenue, a 97.9% occupied, 204,278 square foot office building in Oakland, CA, for $72.0 million. Subsequent to quarter end, we acquired a package of five buildings in the Boulders office park in Richmond, VA aggregating 508,607 square feet and 94.0% occupied, for $96.5 million.
 
  §   During the second quarter of 2007, we sold our Cityplace office building in Dallas, TX for $115.0 million and incurred a $0.6 million loss on the sale attributable to certain closing adjustments.
 
  §   At June 30, 2007, we were actively proceeding on six ground-up office developments and eight office redevelopments with a total identified cost of $514.6 million of which $130.2 million remained to be funded. In addition, we are in the planning and design phase on two office redevelopments, nine land development projects and several other projects with a total, current investment of $113.3 million; held $60.6 million of other land for future development and are completing a series of tenant and building improvement projects aggregating $55.1 million.
Capital Markets Highlights
  §   On April 30, 2007, we closed the sale of $300 million of 5.70% senior unsecured notes due May 1, 2017, with a yield of 5.72%, representing a spread of 1.10% to the yield on the underlying 2017 Treasury note on the day of the pricing. We used the net proceeds of the notes to reduce outstanding indebtedness under our unsecured credit facility.
 
  §   On June 29, 2007, we amended and restated our $600 million unsecured credit facility achieving a reduction in the base pricing, a change in various covenants, a reduced capitalization rate for valuation calculations and an extension of the maturity to June 29, 2011.
 
  §   Subsequent to quarter end, we repaid $136.0 million of fixed-rate mortgage loans without incurring any prepayment penalty. We used our unsecured credit facility to fund the repayment.
“We are extremely pleased with our second quarter performance,” stated Gerard H. Sweeney, President and CEO of Brandywine Realty Trust. “We experienced improving operating and leasing metrics evidenced by robust absorption, meaningful occupancy gains and improving rental rates. Our construction activities remain on schedule and our development pipeline continues to experience strong activity. Our sales and investment activities have reinforced our market strategies and will maintain our competitive advantage. We are pleased to have completed the dissolution of our Invesco partnership and the realization of $3.8 million in incremental revenue from that process. Lastly, we executed a series of capital market transactions to enhance our balance sheet and provide greater flexibility and capacity for future investment opportunities.”
Distributions
On June 12, 2007, our Board of Trustees declared a quarterly dividend distribution of $0.44 per common share that was paid on July 19, 2007 to shareholders of record as of July 5, 2007. Our Board also declared quarterly dividend distributions of $0.46875 per 7.50% Series C Cumulative Redeemable Preferred Share and $0.460938 per 7.375% Series D Cumulative Redeemable Preferred Share that were paid on July 16, 2007 to holders of record as of June 30, 2007 of the Series C and Series D Preferred Shares, respectively.
Share Repurchase Program
Year to date, we have purchased a total of 1,780,600 common shares at an average price of $33.37 per common share under our Board-approved share repurchase program. We are authorized to purchase an additional 539,200 common shares and may make repurchases from time to time in the open market or in privately negotiated transactions, subject to market conditions and compliance with legal requirements. The share

-2-


 

repurchase program does not contain any time limitation and does not obligate us to repurchase any shares. We may discontinue the program at any time.
2007 FFO Guidance
Based on current plans and assumptions and subject to the risks and uncertainties more fully described in Brandywine’s reports filed with the Securities and Exchange Commission, we are maintaining our previously announced guidance for full year 2007 FFO per diluted share to be in a range of $2.57 to $2.65. This guidance is provided for informational purposes and is subject to change. The following is a reconciliation of the calculation of FFO per diluted share and earnings per diluted share:
                     
Guidance for 2007   Range or Value  
Earnings (loss) per diluted share allocated to common shareholders
  $ 0.17   to     $ 0.24  
Less: gains on sales of real estate
    (0.29 )         (0.29 )
Plus: real estate depreciation and amortization
    2.69   to       2.70  
 
               
FFO per diluted share
  $ 2.57   to     $ 2.65  
 
               
For guidance purposes, we have not considered any future gains from the sale of real estate not previously disclosed, the impact on operating income from future sales of properties or losses from impairment write-downs of our assets or securities. Our 2007 FFO guidance does not include any income from the sale of undepreciated real estate, in accordance with our prior practice.
Forward-Looking Statements
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 of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our and our affiliates’ actual results, performance, achievements or transactions 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: our ability to lease vacant space and to renew or relet space under expiring leases at expected levels; competition with other real estate companies for tenants; the potential loss or bankruptcy of major tenants; interest rate levels; the availability of debt, equity or other financing; competition for real estate acquisitions; risks of acquisitions, dispositions and developments, including the cost of construction delays and cost overruns; unanticipated operating and capital costs; our 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 our tenants operate.
Additional information on factors which could impact us and the forward-looking statements contained herein are included in our filings with the Securities and Exchange Commission, including our Annual Report for the year ended December 31, 2006. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events except as required by law.
Non-GAAP Supplemental Financial Measures
We compute our financial results in accordance with generally accepted accounting principles (GAAP). Although FFO, NOI and CAD are non-GAAP financial measures, we believe that FFO, NOI and CAD calculations are helpful to shareholders and potential investors and are widely recognized measures of real estate investment trust performance. At the end of this press release, we have provided a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measure.

-3-


 

Funds from Operations (FFO)
We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (NAREIT), which may not be comparable to FFO reported by other REITs that do not compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently than us. NAREIT defines FFO as net income (loss) before minority interest of unit holders (preferred and common) and excluding gains (losses) on sales of property and extraordinary items (computed in accordance with GAAP); plus real estate related depreciation and amortization (excluding amortization of deferred financing costs), and after similar adjustments for unconsolidated joint ventures. Net income, the GAAP measure that we believe to be most directly comparable to FFO, includes depreciation and amortization expenses, gains or losses on property sales, extraordinary items and minority interest. To facilitate a clear understanding of our historical operating results, FFO should be examined in conjunction with net income (determined in accordance with GAAP) as presented in the financial statements included elsewhere in this release. FFO does not represent cash flow from operating activities (determined 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 our financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available for our cash needs, including our ability to make cash distributions to shareholders.
For information purposes, we may provide FFO adjusted for debt extinguishment costs. Although our calculation of FFO as adjusted differs from NAREIT’s definition of FFO, and may not be comparable to that of other REITs and real estate companies, we believe it provides a meaningful supplemental measure of our operating performance because we believe that by excluding the effects of debt extinguishment, shareholders and potential investors are presented with an indicator of our operating performance that more closely achieves the objectives of the real estate industry in presenting FFO.
Net Operating Income (NOI)
NOI is a non-GAAP financial measure equal to net income available to common shareholders, the most directly comparable GAAP financial measure, plus corporate general and administrative expense, depreciation and amortization, interest expense, minority interest in the Operating Partnership and losses from early extinguishment of debt, less interest income, development and management income, gains from property dispositions, gains on sale from discontinued operations, income from discontinued operations, income from unconsolidated joint ventures and minority interest in property partnerships. In some cases, we also present NOI on a cash basis, which is NOI after eliminating the effect of straight-lining of rent and deferred market intangible amortization. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. NOI should not be considered an alternative to net income as an indication of our performance, or as an alternative to cash flow from operating activities as a measure of our liquidity or ability to make cash distributions to shareholders.
Cash Available for Distribution (CAD)
CAD is a non-GAAP financial measure that is not intended as an alternative to cash flow from operating activities as determined under GAAP. CAD is presented solely as a supplemental disclosure with respect to liquidity because we believe it provides useful information regarding our ability to fund our distributions. Because other companies do not necessarily calculate CAD the same way as we do, our presentation of CAD may not be comparable to similarly titled measures provided by other companies.

-4-


 

Second Quarter Earnings Call and Supplemental Information Package
We will host a conference call on Thursday, July 26, 2007 at 11:00 a.m. EDT. The conference call can be accessed by calling 1-800-683-1525 and referencing conference ID #8901182. Beginning two hours after the conference call, a taped replay of the call can be accessed 24 hours a day through Thursday, August 9, 2007 by calling 1-877-519-4471 and providing access code 8901182. In addition, the conference call can be accessed via a web cast located on our website at www.brandywinerealty.com.
We have prepared a supplemental information package that includes financial results and operational statistics related to the second quarter earnings report. The supplemental information package is available in the “Investor Relations — Financial Reports” section of our website at www.brandywinerealty.com.
Looking Ahead — Third Quarter 2007 Conference Call
We anticipate that we will release our third quarter 2007 earnings on Wednesday, October 31, 2007, after the market close and will host our third quarter 2007 conference call on Thursday, November 1, 2007, at 11:00 a.m. EDT. We expect to issue a press release in advance of these events to confirm the dates and times and provide all related information.
About Brandywine Realty Trust
Brandywine Realty Trust is one of the largest, publicly-traded, full-service, integrated real estate companies in the United States. Organized as a real estate investment trust and operating in select markets, Brandywine owns, develops and manages a primarily Class A, suburban and urban office portfolio aggregating approximately 44.3 million square feet, including 29.8 million square feet which it currently owns on a consolidated basis. For more information, visit our website at www.brandywinerealty.com.

-5-


 

BRANDYWINE REALTY TRUST
CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands)
                 
    June 30,     December 31,  
    2007     2006  
ASSETS
               
Real estate investments:
               
Operating properties
  $ 4,862,726     $ 4,927,305  
Accumulated depreciation
    (554,417 )     (515,698 )
 
           
 
    4,308,309       4,411,607  
Development land and construction-in-progress
    373,497       328,119  
 
           
 
    4,681,806       4,739,726  
 
               
Cash and cash equivalents
    28,522       25,379  
Cash in escrow
    36,590        
Accounts receivable, net
    16,972       19,957  
Accrued rent receivable, net
    77,922       71,589  
Assets held for sale, net
          126,016  
Investment in real estate ventures
    72,748       74,574  
Deferred costs, net
    81,823       73,708  
Intangible assets, net
    239,469       281,251  
Other assets
    92,221       96,818  
 
           
 
               
Total assets
  $ 5,328,073     $ 5,509,018  
 
           
 
               
LIABILITIES AND BENEFICIARIES’ EQUITY
               
Mortgage notes payable
  $ 757,145     $ 883,920  
Borrowings under credit facilities
    210,000       60,000  
Unsecured senior notes, net of discounts
    2,208,070       2,208,310  
Accounts payable and accrued expenses
    79,473       108,400  
Distributions payable
    42,131       42,760  
Tenant security deposits and deferred rents
    59,429       55,697  
Acquired lease intangibles, net
    72,259       92,527  
Other liabilities
    12,682       14,661  
Mortgage note payable and other liabilities held for sale, net
          20,826  
 
           
Total liabilities
    3,441,189       3,487,101  
 
               
Minority interest
    85,829       123,991  
 
               
Beneficiaries’ equity:
               
Preferred shares — Series C
    20       20  
Preferred shares — Series D
    23       23  
Common shares
    872       883  
Additional paid-in capital
    2,275,319       2,311,541  
Cumulative earnings
    444,340       423,764  
Accumulated other comprehensive income
    1,322       1,576  
Cumulative distributions
    (920,841 )     (839,881 )
 
           
Total beneficiaries’ equity
    1,801,055       1,897,926  
 
           
 
               
Total liabilities and beneficiaries’ equity
  $ 5,328,073     $ 5,509,018  
 
           

-6-


 

BRANDYWINE REALTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except share and per share data)
                                   
    Three Months Ended June 30,       Six Months Ended June 30,  
    2007     2006       2007     2006  
Revenue
                                 
Rents
  $ 138,597     $ 130,467       $ 276,537     $ 253,536  
Tenant reimbursements
    21,016       15,496         41,839       32,130  
Other
    4,691       4,466         9,029       8,681  
 
                         
Total revenue
    164,304       150,429         327,405       294,347  
 
                                 
Operating Expenses
                                 
Property operating expenses
    45,965       41,504         91,170       82,478  
Real estate taxes
    16,435       14,388         32,462       28,595  
Depreciation and amortization
    58,227       64,145         120,274       115,357  
Administrative expenses
    6,993       7,724         14,262       16,214  
 
                         
Total operating expenses
    127,620       127,761         258,168       242,644  
 
                         
 
                                 
Operating income
    36,684       22,668         69,237       51,703  
 
                                 
Other income (expense)
                                 
Interest income
    1,603       2,573         2,390       5,223  
Interest expense
    (40,803 )     (41,596 )       (81,161 )     (81,974 )
Deferred financing costs
    (1,065 )     (794 )       (2,323 )     (1,273 )
Equity in income of real estate ventures
    4,504       463         5,258       1,428  
Net gain on sale of interests in real estate
          2,608               2,608  
 
                         
Income (loss) before minority interest
    923       (14,078 )       (6,599 )     (22,285 )
Minority interest — partners’ share of consolidated real estate ventures
    8       (17 )       (108 )     281  
Minority interest attributable to continuing operations — LP units
    46       707         457       1,142  
 
                                 
 
                         
Income (loss) from continuing operations
    977       (13,388 )       (6,250 )     (20,862 )
 
                                 
Discontinued operations:
                                 
Income from discontinued operations
    1,093       2,119         2,869       7,365  
Net gain on disposition of discontinued operations
    (856 )             25,153        
Minority interest — partners’ share of consolidated real estate venture
          (195 )             (382 )
Minority interest attributable to discontinued operations — LP units
    (10 )     (92 )       (1,196 )     (319 )
 
                         
 
    227       1,832         26,826       6,664  
 
                         
Net income (loss)
    1,204       (11,556 )       20,576       (14,198 )
Income allocated to Preferred Shares
    (1,998 )     (1,998 )       (3,996 )     (3,996 )
 
                         
(Loss) income allocated to Common Shares
  $ (794 )   $ (13,554 )     $ 16,580     $ (18,194 )
 
                         
 
                                 
PER SHARE DATA
                                 
Basic (loss) income per Common Share
  $ (0.01 )   $ (0.15 )     $ 0.19     $ (0.20 )
 
                         
 
                                 
Basic weighted-average shares outstanding
    87,080,785       90,540,237         87,680,773       89,923,528  
 
                                 
Diluted (loss) income per Common Share
  $ (0.01 )   $ (0.15 )     $ 0.19     $ (0.20 )
 
                         
 
                                 
Diluted weighted-average shares outstanding
    87,080,785       90,540,237         88,298,521       89,923,528  

-7-


 

BRANDYWINE REALTY TRUST
FUNDS FROM OPERATIONS AND CASH AVAILABLE FOR DISTRIBUTION

(unaudited, in thousands, except share and per share data)
                                   
    Three Months Ended June 30,       Six Months Ended June 30,  
    2007     2006       2007     2006  
Reconciliation of Net Income to Funds from Operations (FFO):
                                 
Net income (loss) allocated to common shares
  $ (794 )   $ (13,554 )     $ 16,580     $ (18,194 )
 
                                 
Add (deduct):
                                 
Minority interest attributable to continuing operations — LP units
    (46 )     (707 )       (457 )     (1,142 )
Net gains on sale of undepreciated real estate
          (2,608 )             (2,608 )
Minority interest attributable to discontinued operations — LP units
    10       92         1,196       319  
Net loss (gain) on disposition of discontinued operations
    856               (25,153 )      
 
                         
Income (loss) before net gains on sale of interests in real estate and minority interest
    26       (16,777 )       (7,834 )     (21,625 )
 
                                 
Add:
                                 
Depreciation and amortization:
                                 
Real property — continuing operations
    41,291       47,911         86,538       83,746  
Leasing costs (includes acquired intangibles) — continuing operations
    16,339       15,951         32,457       31,199  
Real property — discontinued operations
          5,823         2,622       10,974  
Leasing costs (includes acquired intangibles) — discontinued operations
          3,923         1,972       7,894  
Company’s share of unconsolidated real estate ventures
    1,596       1,852         3,040       3,367  
Partners’ share of consolidated real estate ventures
    (218 )     (1,696 )       (1,172 )     (3,353 )
 
                                 
 
                         
Funds from operations
  $ 59,034     $ 56,986       $ 117,623     $ 112,202  
 
                         
 
                                 
FFO per share — fully diluted
  $ 0.65     $ 0.60       $ 1.28     $ 1.19  
 
                         
 
                                 
Weighted-average shares/units outstanding — fully diluted
    91,418,933       94,929,355         92,237,966       94,329,327  
 
                                 
Distributions per Common Share
  $ 0.44     $ 0.44       $ 0.88     $ 0.88  
 
                         
Payout ratio of FFO (Distribution per Common Share divided by FFO per Share)
    67.7 %     73.3 %       68.8 %     73.9 %
 
                                 
CASH AVAILABLE FOR DISTRIBUTION (CAD):
                                 
Funds from operations
  $ 59,034     $ 56,986       $ 117,623     $ 112,202  
 
                                 
Add (deduct):
                                 
Rental income from straight-line rent
    (6,143 )     (8,209 )       (14,775 )     (15,917 )
Deferred market rental income
    (2,692 )     (1,968 )       (6,305 )     (3,907 )
Operating expense from straight-line rent
    383               757        
Net gains on sale of undepreciated real estate
          2,608               2,608  
Revenue maintaining capital expenditures
                                 
Building improvements
    (2,201 )     (2,184 )       (2,908 )     (2,565 )
Tenant improvements
    (12,121 )     (7,024 )       (23,357 )     (14,305 )
Lease commissions
    (3,006 )     (2,135 )       (6,149 )     (3,032 )
 
                         
Total revenue maintaining capital expenditures
    (17,328 )     (11,343 )       (32,414 )     (19,902 )
 
                                 
Cash available for distribution
  $ 33,254     $ 38,074       $ 64,886     $ 75,084  
 
                         
 
                                 
CAD per share — fully diluted
  $ 0.36     $ 0.40       $ 0.70     $ 0.80  
 
                         
 
                                 
Weighted-average shares/units outstanding — fully diluted
    91,418,933       94,929,355         92,237,966       94,329,327  
 
                                 
Distributions per Common Share
  $ 0.44     $ 0.44       $ 0.88     $ 0.88  
 
                         
 
                                 
Payout ratio of CAD (Distribution per Common Share divided by CAD per Share)
    122.2 %     110.0 %       125.7 %     110.0 %

-8-


 

BRANDYWINE REALTY TRUST
SAME STORE OPERATIONS — QUARTER

(unaudited and in thousands)
Of the 281 properties owned by the Company as of June 30, 2007, a total of 256 properties (“Same Store Properties”) containing an aggregate of 24.0 million net rentable square feet were owned for the entire three month periods ended June 30, 2007 and 2006. Average occupancy for the Same Store Properties was 93.2% during 2007 and 92.9% during 2006. The following table sets forth revenue and expense information for the Same Store Properties:
                 
    Three-months ended June 30,  
    2007     2006  
Revenue
               
Rents
  $ 120,076     $ 119,365  
Tenant reimbursements
    19,482       14,337  
Termination fees
    464       1,276  
Other, excluding termination fees
    661       681  
 
           
 
    140,683       135,659  
 
               
Operating expenses
               
Property operating expenses
    41,934       39,875  
Real estate taxes
    14,393       13,099  
 
           
 
               
Net operating income
  $ 84,356     $ 82,685  
 
           
 
               
Net operating income percentage increase over prior year
    2.0 %        
 
             
 
               
Net operating income
  $ 84,356     $ 82,685  
Straight line rents
    (3,342 )     (4,416 )
FAS 141 rents
    (2,414 )     (1,612 )
 
           
 
               
Cash — Net operating income
  $ 78,600     $ 76,657  
 
           
 
               
Cash — Net operating income percentage increase over prior year
    2.5 %        
 
             
The following table is a reconciliation of Net Income to Same Store net operating income:
                 
    Three-months ended June 30,  
    2007     2006  
Net Income (loss)
  $ 1,204     $ (11,556 )
Add/(deduct):
               
Interest income
    (1,603 )     (2,573 )
Interest expense
    40,803       41,596  
Deferred financing costs
    1,065       794  
Equity in income of real estate ventures
    (4,504 )     (463 )
Depreciation and amortization
    58,227       64,145  
Net gain on sale of undepreciated real estate
          (2,608 )
Administrative expenses
    6,993       7,724  
Minority interest — partners’ share of consolidated real estate ventures
    (8 )     17  
Minority interest attributable to continuing operations — LP units
    (46 )     (707 )
Income from discontinued operations
    (227 )     (1,832 )
 
           
 
               
Consolidated net operating income
    101,904       94,537  
Less: Net operating income of non same store properties
    (12,542 )     (6,178 )
Less: Eliminations and non-property specific net operating income (loss)
    (5,006 )     (5,674 )
 
           
 
               
Same Store net operating income
  $ 84,356     $ 82,685  
 
           

-9-


 

BRANDYWINE REALTY TRUST
SAME STORE OPERATIONS — YEAR

(unaudited and in thousands)
Of the 281 properties owned by the Company as of June 30, 2007, a total of 256 properties (“Same Store Properties”) containing an aggregate of 24.0 million net rentable square feet were owned for the entire six month periods ended June 30, 2007 and 2006. Average occupancy for the Same Store Properties was 93.1% during 2007 and 92.3% during 2006. The following table sets forth revenue and expense information for the Same Store Properties:
                 
    Six-months ended June 30,  
    2007     2006(1)  
Revenue
               
Rents
  $ 239,056     $ 236,519  
Tenant reimbursements
    38,828       30,076  
Termination fees
    1,021       1,866  
Other, excluding termination fees
    1,324       1,465  
 
           
 
    280,229       269,926  
 
               
Operating expenses
               
Property operating expenses
    84,366       80,309  
Real estate taxes
    28,400       26,031  
 
           
 
               
Net operating income
  $ 167,463     $ 163,586  
 
           
 
               
Net operating income percentage increase over prior year
    2.4 %        
 
           
 
               
Net operating income
  $ 167,463     $ 163,586  
Straight line rents
    (6,713 )     (9,420 )
FAS 141 rents
    (4,671 )     (3,677 )
 
           
 
               
Cash — Net operating income
  $ 156,079     $ 150,489  
 
           
 
               
Cash — Net operating income percentage increase over prior year
    3.7 %        
 
             
The following table is a reconciliation of Net Income to Same Store net operating income:
                 
    Six-months ended June 30,  
    2007     2006  
Net Income (loss)
  $ 20,576     $ (14,198 )
Add/(deduct):
               
Interest income
    (2,390 )     (5,223 )
Interest expense
    81,161       81,974  
Deferred financing costs
    2,323       1,273  
Equity in income of real estate ventures
    (5,258 )     (1,428 )
Depreciation and amortization
    120,274       115,357  
Net gain on sale of undepreciated real estate
          (2,608 )
Administrative expenses
    14,262       16,214  
Minority interest — partners’ share of consolidated real estate ventures
    108       (281 )
Minority interest attributable to continuing operations — LP units
    (457 )     (1,142 )
Income from discontinued operations
    (26,826 )     (6,664 )
 
           
 
               
Consolidated net operating income
    203,773       183,274  
Less: Net operating income of non same store properties
    (26,120 )     (9,963 )
Less: Eliminations and non-property specific net operating income (loss)
    (10,190 )     (9,725 )
 
           
 
               
Same Store net operating income
  $ 167,463     $ 163,586  
 
           
 
(1)   The Prentiss properties were acquired on January 5, 2006. For comparative purposes, the Prentiss assets in the same store portfolio have been adjusted to reflect a full six-month period for 2006 and allow a more meaningful comparison, with the addition of $1,529 and $1,455 to net operating income and cash net operating income, respectively.

-10-

GRAPHIC 3 w37584w3758400.gif GRAPHIC begin 644 w37584w3758400.gif M1TE&.#EAH0!0`.8``/GZ\Q,U;/KZ^OW]_(25M>/I[8.4J]/4B3A6A,K,;)2C MN;K$T:FVQ4ED1\3,UJVR&!0T?HP_;X M]2Y.4?O[^EEQDTMEB(63+*^[RO3UWH>8M_;Y^/CZ^/CZ^FV%J6!V.3A4?(66 MN(N=LC%->VV"G>SP\H28M(B5LZ:M)96B+9RKOA4X7*^T(Y&>MQ,S:=#7WJ*K MM2='9J*H/**PPA(X;/CX]^WMTGB2L]W>HD)=A&5^H59NE%5MC>#CJALY;+3` MS?#QV.OO[.[OROO\_(B4N/KY^(R>N'Z0J96:'45BCB%"9%=RB]O;F:*F&Q\_ M'?J/CY^1$S83)1>Q4X M9!0P:/S[^_CX\XZ=K\2_5J^P(*VR.OS\_/W]_1,W;+&P%_[^_B'Y!``````` M+`````"A`%````?_@'^"@WQ9!7%*B8J+C(V.CY"1B@$T#!H[`A9[%BIJ@Y^@ MH:*CI*6FIZB%AP&LK:ZOL+&RL[2N-#P\.%4%`@)[=7S!J,/$Q<:EJG%]R\S- MSL_0T=+3S)0W/`0$/3@+.RK!?,?BX^2B`Q8%1-3K[.W.K1`T-S#T,#?S21H8 M*@)U%@/E`@H\=2Z=NX,(H4%8&.]>O7K9AE2I@$'&GH$8,PXJ2"11PH\'&<8C M,.\AO7LW""@8D46C2X%\]ASR"+(F-8:4M%SC89*G%AXW'%Q\251/'AE58D$%YQX@J,$@^ MY#JX\ZA":MJ*'4VZM.G3J%.K'HU8Q8"8,C`4J3*$7C8'X3SK)J1)@)K5P(,+ M/SU#0`8!X.J(W8)7+P'_4`<22X^0`.L04+O994 MJ&`A^FZ.M*Z[^EZKOGU6-'K`L(0AB_(]*E"606&!N3=8,M.X(A)#-JTC$@T$ M:"$A%U5XH\E_N1GH&8+2*+@@!`W>Q!`-].`"%`%#N(&!`(=EJ.&!AL0Q2Q^L M$#%'``O-40:(K$!PWX\]CHA2B=@0P$4^`F0Q0/^!+Q8UW8<,$9%&"C744$8* M#=0P00HI4*$$E&"&*::/\OCET$,I7E%'DX+!!PL$9]20APD/>#%!`W3Z\<`8 M/X!!A(]``MF07UK9PX-0;'[%1PQ<1'!B^48$() M%#RP[L.6]OI`L/&VM8?_BS!M$ML("PQ!TCP#$ZQ1,/ZHD<4+>%RZ`;J_/JRN MI1XX;&D>(6QQ7A8XYZSSSCSO7`B`SZI01ZU%+*"`?@ZH(+)+A7T@PM,7^)#I M!EX\P*G+6/?:0AA/=^WUUV"'_702!6PA@QIU)!93'?UJ(,/2`R571P%T0,!& M'V=0&JRO+6>]K@;J1='$&XZ)1_WH,`"1:QX7@8R<*(&.),?$XP%&6`1`APG3#`& MIE>''OH&$^`8Z)LCFI221`7`H8+B*@!0AS\8UVY*,!$DL`$'%/`J_/?I>I#' M_P2)L`+2@\JC1``.B"\!N5BSWVL]*<$X836FX.?OL!]>-!`$!#1!"/H*A0NL M*``$;W@!`"PBO_F%XA\".(`0'/:KX.4O:Y?BE`FVU(`4`$I0"Z'$7B2D!>7U M`!=($!\>G("%!69"$XBIWN30`X`#6.V"..R5"<9`IQH8[W@!(`*$>*(J0Z6P M4K[BP`%.8`<`[6%`,H1;!K9@A1)8S8(Y_!ZF\@`"!WCQBV`,HQB].`('`&&$ M`=L*#X[8J0<\(`\<2,`47@"[BPG#>BHX`0=Z%;$L@J]E#^"`';;0BT(:\I"% M/`\GZ@`'&>S``=CZF!K9V"D^6LU=4V#"@)9DQP8VZ?\$>0"='W-(@6-!QC%9 M@%:X8E`!H^GG&@1``J;PES434.``3`!`+W#GC_-XRSUX\-PHL[@!)VQA"\,I M308`T!9P_$8M!;@,%WJ`A/`-3WQQG`(`I(>V3;SFCNX10@6'F<.%&0$'=TBG M.M?)SG9VXQOZ&LUQX("7`[PK#S?$&O`NY8>%)4`,+93,-Z,X&'3=L()7)*>Z M?M6W.IVA#THX2"N$V(-\8&"*DH&AT`!4APA@00P4*`$M8\:I65:JI#.[Y0O( M8K+S;$*1,(VI3&V;@#`UHW MH$V4YXD9N)5'03K!DIIT79C_"L"4^#`&YC@ M!"98X0!CP.(H2:HN-S8@(>B[P;\`9B0&.(`B+6IL"8L M?QK@L9"-K&0G2UG)`J$(:``0.!?(3#5DKU(F\%P?8297QGK@!PUH`5!;4(,^ M@$BB/2(1#/33%VWU0"(5B$`&%*F"#OQFMP(X6_1>$()[;LJ2I'68#W8$Q/I\ M@0!WV(7)-O$'<$Q&#$"=V,2TI#)19FT##ZA!"I1PA#R,80P/:$$9O@022A3Q M)#]!`ASQ<(`06,&K,C"+K'JA'`'8P0I.>-?^P)M!'P2AN8`HGL,("VV*!#IC%H_8$ M@0T00.,ZSG:'0@VP0P!X1JL!&+)>!*]Q!`589`@A^@.@['(`">W/9 M+'\E3A`880B(SK2F-\WI3DODC"31Q@C[PF!*A@]F?$QN"?"0`!;B%P6%W"8R M.R`96K>YUKB^M:YMS6O)T.J12<`&+@@@:$&4IRQ+$)IR[/^0@`/H<@8G.*ZE M\DE:#RQ1#R^(\?2VS>UN>_O;+!(`!BI0!!=X;,'S$+:IA4=:8)6`Q6((P0LB ML`4X$!*1^,ZWOI>YA1CLH`)N.%JQ/]&XZ25&!B](`!U5$`$.7,J*0K@::KF2`/)0"!!%;.\I:[_.4P=[D"BO`! M%&@B0`7`P`-OKL@]"&`+)\`#,YD]L0/DP>@42``>S)``,TRA!*%,0%E>2M.J MT_0PO^!$6CJ!@7X-(84F137%W$CV[DXZ6'3UPW)-QW:&?"$SJZL`K+?@K<8! M(`8SR+O>9<`!,S#K`!Z0XP9.P`3_.S02`'8X`1:Z5X(#+$$&`M"[Y"=/^T]O@$)>V`$!Z`A M%#&)P0KR7(,?/`$!$WA``R[P@-_;V09IN,`%?C`^/3O_^72V`0^JX(8B7`$% M_""+=:%JFF4"(/0AF,+H[9D`"H1T@J&=L@?6'J)G*.&YZM/6P'F#!@28;QDU M:D$:(%`##Z0A#0\`!@K""G%P!$TV!TH0`.U'(P'`9WIE`$.0!'^%`>91&.>A M!GO`3(OT4KLT%F)1%H8%?DY`?CJE!T=``BB8@BJX@BS8@BH8!7UF(CS1`_-G M;+Z%`-"@_P1@\`,!4`,F``9R4@8*Z`P,0F(+V(";<1(1H@`NH`$?`'H1X%7; MM%L6,#3'D3:-@SNC,3VD@7D?F$S#02MH4``.D`1[I04U6%TWF(-*4`-QHEX3 MX`,W\@PX883MAX2%DA*:H05((`3$P@'[ MY1JA<`YJ8'^Q``%`Z`4M<`9Y4`/JL&/'0P10D"KV0$"R]#+5-O^.)&=-Z[)< M./)ZA/-VLQ6!"S`".^`M,3$#T`@+?3`'U:AD)I`"VMAA3 MY[@CZKB.0*&'UT"#N)<%,<`"0"3DFSY4-0!9H#ZD",4`9.DD9"Q0#5W`"Q64& M*'!Y.UF41GF42'F44X1,O0`'2X`!._`!%3`"1:`!#N`&5>`"((`'YM>5Y@>( M8!F68@F6Q%*6Q&*"+IB6:KF"4D`/>Y4-:/@9^0(.;W4`3A`"`%`8<[F7?-F7 M?AE#P:"7N(,697%,9F$'=@")B@F)\'/_B8YIB0+PE%!9`.M!$7*YER_055/P M!EO027[YF:#9E]5U+X-%(!;X#YQT,9V4FHCQ;:[YFMZV"983.0!B%'P0`58@ M`*!G,[]D/;"R),`Y4.`0G,"I2(T3F!F7G(G1`1W0FZ>`+PZ$>[1C;'/Y"?52 M,-<9G=JYG=S9G1C!!S"5!3&1$CY&4_$#P$*"N!)6!W`GJG`!_S03/69!1T05N9Y M,2/#H)+!(I(!3N7@)VT0Z^0#]9@`!*P`(B<`0!8`/&80&_H0;]1FL1V@D&QZ4B0)%4`3+-`)N,/\>/Y'V`M M;E`!Q\$B&*`!`QMC`B`%4K`$*/`!9-`%^24#!4!SD(,['U`$(Q`#NR6KMK<# M"-`%.P"52Q"8&(`!HEH%4#!%<```2_`!&8`"H7$><)")_H8&_.`&+!`#K?*0 M"$`$"[`%.T`"<8`!2[`&8-`%1!`%:*`#U`@&@`QWC(PR`!BPPJULP`GT@!05`!E\0`RB0`P@``0L``%`` M`7]%!#D@`'!`!&0@!RX@`G20`TN`!BA8?>ZJ`2A`JAWW!"RP`QF@`%30.E4P M!YGJ`".`!@M`!0Q0!QZ[`T4@!SK0.CKP!+W@`%10`0%RNFK!!3;@`!B@!BQ0 M`!E0![(K`S$@!QO[_P$5X0`L(`-1%*T0P+Y4@``,8+]R0`0*@`+]IAYNL``X MN`-+\`7O^K]/$``C4`!MT`QP%K$0%):H&)$`%9%#/;:#'$G"]-D`&.L#( MCHP"D=P!!6#!5T`&+E`'A;K).)`$6-?"YS'#?EH!4B`'F9H!J2RG]O>^2R`! M2PH'#+PSP9PEP$Z4`%'_`\+*#%/B<"1.S%A%0$ M=``%7\`"QTP&7_OC$#)$`$9`@!$E``=OP!.P`'81`&,F`'78"] MD-P#,<`L`(`"#-#`=A"1.J`"'JL"`-T%*6H'-"`%;C`'+CP#6:#029`!R,H" M!*L"&'`$K*H>:^`"%LT"JFR@P`L$&C`$)!``!/S_T>RA!C@``4"0IDF=TE]` M!R`J`^&+63-M`!7``(?-`.@AJSG0!AI@'*,K!R30!1F0!$0PQE$ZI81+OZ`J MSW%0`#M`!3G@!C,0`T50LU&P`F51`52@`!N=`SMP3$:+`R3`Q$7`SYD[JS*, M`#JP!!FP!!I`!5`@`N(9$RI['@O="2J@`PRP!$OPN<(U%B+@R1K``@`0V(0` MO!#P)W0@`B8M!W10`1U0!P[0!A`@!V4@!W/P`0+PRWM@V0%0!"B@`6W`"FR` MS&U1?Q!@`S'0"0```S0"S`,-`5"0).D@!\P2`#D`UT@]VP``!'/0!SE`M&BP M!+U]&`(`!3F``B-``CG0_P5=L`:R0012T`1K\`4ZD`5N0`=)4\`DT,''\01` M:T=[4`4Z0"L+G0&T5@5@``0XP`)/,`,[8`!54+NI6@!'X&`"Z@8N$.8.4'/' ML0`NT!]B40!)P`!D?.8"X``NH"8RT(E7L$P[D`1`\`']4@%G(P/NRM"(2ZY5 M4`5H(`,H`.:PJP88X`(+T$A5L``FHP99>5$"4`!`T`4I8C8.H`%VD%_]L@0" MX-40",Q;4`%&D`0':^`?P`"]K`)WK@#SF@%0@``H8$FDYYL&:AC%%&`#=G;E]P8GDT.XX66B! <,7$>W^)S5$L$=[`$R.2=?*H`ITK".CH.@0``.S\_ ` end
-----END PRIVACY-ENHANCED MESSAGE-----