-----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, MHEE0i/6TnDQXmiKASgodc8hAAbt51ivOHFx9GUcwpsvvCOgB4suWLCKvhimj1N6 fqW8h70J1+daSmSNYDy+Gw== 0000912057-97-024708.txt : 19970723 0000912057-97-024708.hdr.sgml : 19970723 ACCESSION NUMBER: 0000912057-97-024708 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970722 SROS: AMEX 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: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-09106 FILM NUMBER: 97643394 BUSINESS ADDRESS: STREET 1: 16 CAMPUS BOULEVARD STREET 2: STE 100 CITY: NEWTOWN SQUARE STATE: PA ZIP: 19073 BUSINESS PHONE: 1-610-325-5600 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 10-Q/A 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q/A NO. 1 (Mark One) X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 1997 or Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (No Fee Required) For the transition period from to Brandywine Realty Trust (Exact name of registrant as specified in its charter) Maryland 23-2413352 State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification No.) (610) 325-5600 Registrant's Telephone number Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] A total of 9,570,062 Common Shares of Beneficial Interest were outstanding as of May 5, 1997. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS Comparison of the Three Months Ended March 31, 1997 to the Three Months Ended March 31, 1996. Primarily as a result of the Company's acquisition program during 1996 and 1997, total revenue increased by approximately $7.6 million or 723% and property operating and management fee expenses increased by approximately $2.7 million or 576% for the three months ended March 31, 1997 as compared to the three months ended March 31, 1996. Depreciation and amortization expense increased by approximately $2.1 million or 855% for the three months ended March 31, 1997 as compared to the three months ended March 31, 1996, primarily as a result of the Company's acquisition of real estate during 1996 and 1997. Interest expense increased by approximately $768,000 or 371% primarily as a result of additional indebtedness associated with certain of the Company's acquisitions. Administrative expenses increased by $47,000 or 38.5% primarily as a result of the increase in management personnel associated with the Company's growth. As a result of the foregoing, the Company's consolidated net income was approximately $2.1 million, and, after income allocated to Preferred Shares of approximately $499,000, the Company's income allocated to Common Shares was approximately $1.6 million or $0.20 per share for the three months ended March 31, 1997 compared to consolidated net income of $10,000 or $0.02 per share for the three months ended March 31, 1996. LIQUIDITY AND CAPITAL RESOURCES As of March 31, 1997 and December 31, 1996, cash and cash equivalents totaled $18.4 million and $18.3 million, respectively. During the first quarter of 1997, net cash provided by operating activities totaled approximately $5.1 million. On March 4, 1997, the Company consummated the 1997 Offering generating net proceeds of approximately $45.5 million. During the first quarter of 1997, the Company used its cash sources primarily: (i) to acquire additional Properties totaling approximately $58.1 million using cash of approximately $36.5 million and approximately $21.6 million in additional indebtedness; (ii) to repay approximately $9.6 million in debt; (iii) to fund approximately $2.1 million in distributions paid to shareholders; and (iv) to fund approximately $2.3 million in capital expenditures and leasing commissions, using cash of approximately $1.7 million and additional borrowings and escrowed cash reserves totaling $607,000 available for such expenditures. As of March 31, 1997, the Company had approximately $46.8 million of debt outstanding consisting of mortgage loans totaling $43.5 million and deferred payments totaling $3.8 million (which amount has been discounted, as of March 31, 1997 to $3.3 million based on its terms). 2 The mortgages mature between December 1997 and November 2004. For the three months ended March 31, 1997, the weighted average interest on the Company's debt was 8.0%. The Company's Properties require periodic investments of capital for tenant related capital expenditures and for general capital improvements. For the three months ended March 31, 1997, such expenditures totaled $2.3 million. Sources covering these expenditures included approximately $115,000 in financing pursuant to an existing commitment from the lender on one of the Properties and approximately $492,000 in escrowed cash reserves in connection with eleven of the Company's Properties. The Company's primary sources of cash available for distribution will be from rental revenues and operating expense reimbursements from tenants and the management services income from providing services to third parties. The Company intends to use these funds to pay operating expenses, pay debt service, fund recurring capital expenditures, fund tenant allowances and pay regular quarterly distributions to shareholders. For the quarter ended March 31, 1997, the Company declared distributions totaling $0.35 per Common Share amounting to approximately $3.3 million. In addition, during this period, the Company declared distributions to Preferred Shares totaling approximately $499,000. The Company expects to meet its short-term liquidity requirements generally through its working capital and net cash provided by operations. The Company believes that its net cash provided by operations will be sufficient to allow the Company to make distributions necessary to enable the Company to continue to remain qualified as a REIT. The Company also believes that the foregoing sources of liquidity will be sufficient to fund its short-term liquidity needs for the foreseeable future. The Company expects to meet its long-term liquidity requirements, such as for property acquisitions, scheduled debt maturities, renovations, expansions and other non-recurring capital improvements, through long-term secured and unsecured indebtedness and the issuance of additional equity securities. The Company also expects to use funds available under the Credit Facility to finance acquisitions and capital improvements on an interim basis. CASH FLOWS Comparison of the Three Months Ended March 31, 1997 to the Three Months Ended March 31, 1996. Net cash provided by operating activities increased in the three months ended March 31, 1997 by $4.9 million in comparison to the three months ended March 31, 1996. The increase was primarily attributable to operating activities of the 46 Properties acquired by the Company during 1996 and through March 31, 1997. Net cash used in investing activities increased in the three months ended March 31, 1997 by $60.0 million in comparison to the three months ended March 31, 1996. The increased cash 3 use was primarily attributable to the Company's acquisition of 13 Properties during the first three months of 1997 and capital expenditures and leasing costs associated with the Company's Properties. Net cash provided by financing activities increased by $54.7 million in the three months ended March 31, 1997 in comparison to the three months ended March 31, 1996. The increase was primarily attributable to net proceeds received in connection with the 1997 Offering and proceeds from mortgage notes in connection with certain of the Properties acquired by the Company during 1997, offset, in part, by the repayment of certain mortgage loans and distributions to shareholders. FUNDS FROM OPERATIONS Management generally considers Funds from Operations as one measure of REIT performance. The Company adopted the NAREIT definition of Funds from Operations in 1996 and has used this definition for all periods presented in the financial statements included herein. Funds from Operations is calculated as net income (loss) adjusted for depreciation expense attributable to real property, amortization expense attributable to capitalized leasing costs, tenant allowances and improvements, gains on sales of real estate investments and extraordinary and nonrecurring items. Funds from Operations should not be considered as an alternative to net income as an indication of the Company's performance or to cash flows as a measure of liquidity. Funds from Operations for the three months ended March 31, 1997 and March 31, 1996 is summarized in the following table (in thousands, except share and per share data). 4 Three Months Three Months Ended Ended March 31, 1996 March 31, 1997 FUNDS FROM OPERATIONS Income before minority interest and equity in income of management company $ 2,019 $ 12 Add (Deduct): Depreciation attributable to real property 1,969 202 Amortization attributable to leasing costs, tenant allowances and improvements 179 32 Equity in income of management company 125 -- Minority interest not attributable to unit holders (11) (2) --------- -------- Funds from Operations before Minority Interest $ 4,281 $ 244 --------- -------- --------- -------- Weighted average Common Shares outstanding, including common share equivalents(1) 9,758,066 625,648 --------- -------- --------- -------- Funds from Operations, per share $0.44 $0.39 ---- ---- ---- ----
(1) Includes the weighted average effect of 1,424,737 Common Shares issuable upon the conversion of the Preferred Shares, the weighted average effect of 399,567 Common Shares issuable upon the conversion of 399,567 Operating Partnership units and 762,104 Common Shares reserved for issuance upon the exercise of outstanding warrants and options. 5 BRANDYWINE REALTY TRUST SIGNATURES OF REGISTRANT Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BRANDYWINE REALTY TRUST (Registrant) Date: July 21, 1997 By:/s/ Gerard H. Sweeney --------------------------------------- Gerard H. Sweeney, President and Chief Executive Officer (Principal Executive Officer) Date: July 21, 1997 By:/s/ Mark S. Kripke --------------------------------------- Mark S. Kripke, Chief Financial Officer and Secretary (Principal Financial and Accounting Officer) 6 -----END PRIVACY-ENHANCED MESSAGE-----